SECTION 5. WHAT IS A § 403(b)

PROTOTYPE PLAN?

.01 A § 403(b) prototype plan is a defined contribution plan that is intended to satisfy the requirements of § 403(b) and is made available by a prototype sponsor for adoption by eligible employers. (A § 403(b) prototype plan is one of two types of § 403(b) pre-approved plans, the other being a § 403(b) volume submitter plan which is described in section 7 of this revenue procedure.) See section 11 of this revenue procedure regarding the entities that are permitted to sponsor a § 403(b) prototype plan. Each pre-approved form of a § 403(b) prototype plan, as made available for adoption by eligible employers, consists of one (and only one) basic plan document and one (and only one) adoption agreement. The basic plan document contains all the nonelective provisions of the prototype plan that apply to the plans of all adopting eligible employers. The basic plan document may not include any options or blanks to be completed. The adoption agreement facilitates the selec

tion of plan design alternatives available under the basic plan document. By completing the adoption agreement, an eligible employer may establish a plan (that is, the combination of the basic plan document and the completed adoption agreement) that in form satisfies the requirements of § 403(b).

.02 In pre-approved form, an adoption agreement can be used with only one basic plan document. A basic plan document can be used with more than one adoption agreement, but each basic plan document/adoption agreement pair constitutes one separate § 403(b) prototype plan. Thus, for example, if a prototype sponsor sponsors one basic plan document and offers adopting employers the choice of three adoption agreements to be used with the basic plan document to establish a plan, the prototype sponsor has three separate § 403(b) prototype plans and would need to submit three applications for opinion letters under this procedure. A § 403(b) prototype plan that is adopted by an eligible employer is a single plan regardless of whether there are multiple investment arrangements or multiple vendors (that is, insurance companies or regulated investment company custodians) under the plan. Adoption of two § 403(b) prototype plans (that is, execution of two separate adoption agreements) constitutes the adoption of two separate § 403(b) plans, regardless of whether the two plans use the same basic plan document.

.03 A prototype sponsor may maintain more than one basic plan document. For example, a prototype sponsor may maintain one or more basic plan documents to be used only with plans that limit contributions to elective deferrals as well as one or more basic plan documents to be used with plans that provide for elective deferrals and employer nonelective contributions, whether or not such plans also provide for matching contributions and/or after-tax employee contributions.

.04 A single basic plan document may not be used for both a § 403(b) plan that is a retirement income account and a § 403(b) plan that is not a retirement income account. Thus, a separate basic plan document is required for a plan that is intended to constitute a retirement income account under § 403(b)(9).

.05 As described above, a basic plan document may have more than one adop

2013–18 I.R.B. 992 April 29, 2013

one or more specimen plans that limit contributions to elective deferrals as well as one or more specimen plans that provide for elective deferrals and employer nonelective contributions, whether or not the plans also provide for matching contributions and/or after-tax employee contributions.

.04 A single specimen plan may not be used for both a § 403(b) plan that is a retirement income account and a § 403(b) plan that is not a retirement income account. Thus, a separate specimen plan is required for a plan that is intended to constitute a retirement income account under § 403(b)(9).