SECTION 4. DEFINITIONS

.01 Master Plan - A “master plan” is a plan (including a plan covering selfemployed individuals) that is made available by a sponsor for adoption by employers and for which a single funding medium (for example, a trust or custodial account) is established, as part of the plan, for the joint use of all adopting employers. A master plan consists of a basic plan document, an adoption agreement, and, unless included in the basic plan document, a trust or custodial account document.

.02 Prototype Plan - A “prototype plan” is a plan (including a plan covering self-employed individuals) that is made available by a sponsor for adoption by employers and under which a separate funding medium is established for each adopting employer. A prototype plan consists of a basic plan document, an adoption agreement, and, unless the basic plan document incorporates a trust or custodial account agreement the provisions of which are applicable to all adopting em

2Employers currently using individually designed plans who wish to use the six-year remedial amendment cycle, as described in Part IV of Rev. Proc. 2007–44, as an adopter of a pre-approved plan, should complete Form 8905 Certification of Intent to Adopt Pre-Approved Plan, no later than the end of their applicable remedial amendment cycle. For further information, see http://www.irs.gov/Retirement-Plans .

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ployers, a trust or custodial account document.

.03 Basic Plan Document - A “basic plan document” is the portion of a plan containing all of the non-elective provisions applicable to all adopting employers. No options (including blanks to be completed) may be provided in the basic plan document, except as provided in section 12.03(1) of this revenue procedure regarding flexible plans.

.04 Adoption Agreement - An “adoption agreement” is the portion of the plan containing the options that may be selected by an adopting employer.

.05 Trust or Custodial Account Document (Note: This definition does not apply if the basic plan document includes a trust or custodial account agreement the provisions of which apply to all adopting employers.)

(1) A “trust or custodial account document” is the portion of a M&P plan that contains the trust agreement or custodial account agreement and includes provisions covering such matters as the powers and duties of trustees, investment authority, and the kinds of investments that may be made.

(2) Except as provided in section 5.09 and this section 4.05, all provisions of the trust or custodial account document must be applicable to all adopting employers of that trust, and no options (including blanks to be completed) may be provided in the trust or custodial account document.

(3) With respect to prototype plans, a sponsor or mass submitter may provide up to 10 separate trust or custodial account documents that are intended for use with any single basic plan document. Notwithstanding the preceding sentence, a sponsor or mass submitter may submit more than 10 separate trust or custodial account documents intended for use with any single basic plan document, provided that an additional user fee is submitted for each trust document in excess of 10. See section 6 of Rev. Proc. 2015–8.

(4) As provided in section 5.09, a sponsor or M&P mass submitter may provide a trust or custodial account document designated for use only by adopters of nonstandardized plans that provides for blanks to be completed with respect to administrative provisions of the trust or custodial account agreement.

(5) Any trust or custodial account document (including one to be used by adopters of standardized plans) may provide for blanks to be completed that merely enable the adopting employer to specify the names of the plan, employer, trustee or custodian, plan administrator and other fiduciaries, the trust year, and the name of any pooled trust in which the plan’s trust will participate.

.06 Opinion Letter - An “opinion letter” is a written statement issued by the IRS to a sponsor or M&P mass submitter as to the acceptability of the form of a M&P plan under § 401(a), 403(a), or both §§ 401(a) and 4975(e)(7) and, in the case of a master plan, the acceptability of the master trust under § 501(a).

.07 Sponsor - A “sponsor” is any person that (1) has an established place of business in the United States where it is accessible during every business day and (2) represents to the IRS that it has at least 15 employer-clients, each of which is reasonably expected to adopt the same basic plan document of the plan sponsor.

A sponsor may request an opinion letter for more than one basic plan document provided it represents to the IRS that it has at least 30 employer-clients in the aggregate, each of which is reasonably expected to adopt at least one of the sponsor’s basic plan documents. The IRS reserves the right at any time to request from the sponsor a list of the employers that have adopted or are expected to adopt the sponsor’s M&P plans, including the employers’ business addresses and employer identification numbers.

Notwithstanding the preceding two paragraphs, any person that has an established place of business in the United States where it is accessible during every business day may sponsor a plan as a word-for-word identical adopter or minor modifier adopter of a plan of a M&P mass submitter, regardless of the number of employers that are expected to adopt the plan.

By submitting an application for an opinion letter for a M&P plan under this revenue procedure (or by having an application filed on its behalf by a M&P mass submitter), a person represents to the IRS that it is a sponsor, as defined in this section 4.07, and agrees to comply with any requirements imposed on sponsors by

this revenue procedure. Failure to comply with these requirements may result in the loss of eligibility to sponsor M&P plans and the revocation of opinion letters that have been issued to the sponsor.

.08 M&P Mass Submitter - A “M&P mass submitter” is any person that (1) has an established place of business in the United States where it is accessible during every business day and (2) submits opinion letter applications on behalf of at least 30 unaffiliated sponsors each of which is sponsoring, on a word-for-word identical basis, the same basic plan document. A flexible plan (as defined in section 12.03(1)) that is adopted by a sponsor will be considered a word-for-word identical plan. For purposes of determining whether 30 unaffiliated sponsors sponsor, on a word-for-word basis, the same basic plan document, the mass submitter is treated as an unaffiliated sponsor. For purposes of this definition, affiliation is determined under § 414(b) and (c). Additionally, the following will be considered to be affiliated: any law firm, accounting firm, consulting firm, etc., with its partners, members, associates, etc. A M&P mass submitter will be treated as a M&P mass submitter with respect to all of its M&P plans provided the 30 unaffiliated sponsor requirement is met with respect to at least one basic plan document.

Notwithstanding the preceding paragraph, any person that received a favorable opinion letter under the Tax Reform Act of 1986, Pub. L. No. 99–514, for a plan as a M&P mass submitter under Rev. Proc. 89–9, 1989–1 C.B. 780, will continue to be treated as a M&P mass submitter with respect to all of its M&P plans if it submits applications on behalf of at least 10 sponsors (regardless of affiliation), each of which is sponsoring the same basic plan document on a word-forword identical basis. For purposes of determining whether 10 sponsors sponsor the same basic plan document on a wordfor-word identical basis, the mass submitter is counted as one of the 10 sponsors.

.09 Standardized Plan - A “standardized plan” is a M&P plan (other than an ESOP or Hybrid Plan) that meets the following requirements:

(1) Under the provisions governing eligibility and participation, the plan by its terms benefits all employees described in

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section 5.13 (regardless of whether any employer is treated as operating separate lines of business under § 414(r)) except those that may be excluded under § 410(a)(1) or (b)(3). The adoption agreement may provide options as to whether some or all of the employees described in § 410(a)(1) or (b)(3) are to be excluded, provided that the criteria for excluding employees described in § 410(a)(1) or (b)(3) apply uniformly to all employees. A standardized plan generally may not deny an accrual or allocation to an employee eligible to participate merely because the employee is not an active employee on the last day of the plan year or has failed to complete a specified number of hours of service during the year. However, the plan may deny an allocation or accrual to an employee who is eligible to participate if the employee terminates service during the plan year with not more than 500 hours of service and is not an active employee on the last day of the plan year.

A plan will not fail to satisfy the requirements of this paragraph (1) merely because the plan provides, either as the result of an elective provision or by default in the absence of an election to the contrary, that individuals who become employees, within the meaning of section 5.13, as the result of a “§ 410(b)(6)(C) transaction” will be excluded from eligibility to participate in the plan during the period beginning on the date of the transaction and ending on a date that is not later than the last day of the first plan year beginning after the date of the transaction. A “§ 410(b)(6)(C) transaction” is an asset or stock acquisition, merger, or other similar transaction involving a change in the employer of the employees of a trade or business.

(2) The eligibility requirements under the plan are not more favorable for highly compensated employees (as defined in § 414(q)) than for other employees.

(3) Under the plan, allocations, in the case of a defined contribution plan (other than any cash or deferred arrangement part of the plan), or benefits, in the case of a defined benefit plan, are determined on the basis of total compensation. For this purpose, total compensation means a definition of compensation that includes all compensation within the meaning of § 415(c)(3) and excludes all other com

pensation, or that otherwise satisfies § 414(s) and § 1.414(s)–1(c).

(4) Unless the plan is a target benefit plan or a § 401(k) and/or 401(m) plan, the plan must, by its terms, satisfy one of the design-based safe harbors described in § 1.401(a)(4)–2(b)(2) (taking into account § 1.401(a)(4)–2(b)(4)) or § 1.401(a)(4)– 3(b)(3), (4), or (5) (taking into account § 1.401(a)(4)–3(b)(6)).

(5) All benefits, rights, and features under the plan (other than those, if any, that have been prospectively eliminated) are currently available to all employees benefiting under the plan.

(6) Any past service credit under the plan must meet the safe harbor in § 1.401(a)(4)–5(a)(3).

(7) Any hardship distribution must satisfy the safe harbor standards in the regulations under § 401(k).

.10 Nonstandardized Plan - A “nonstandardized plan” is a M&P plan (including an ESOP or Hybrid Plan that meets the requirements of this revenue procedure) that is not a standardized plan.

.11 ESOP Definitions (1) ESOP - An “ESOP” is an employee stock ownership plan within the meaning of § 4975(e)(7).

(2) Exempt Loan - An “exempt loan” is a loan described in § 4975(d)(3) that meets the requirements for exemption from the excise tax imposed under § 4975(a) and (b) described in § 54.4975– 7(b). (3) Readily Tradable Employer Securities - “Readily tradable employer securities” are publicly traded securities as defined in § 1.401(a)(35)–1(f)(5).

.12 Hybrid Plan Definitions (1) Cash Balance Formula - A “cash balance formula” is a statutory hybrid benefit formula as defined in § 1.411(a)(13)–1(d)(4) used to determine all or any part of a participant’s accumulated benefit, under which the accumulated benefit provided under the formula is expressed as the current balance of a hypothetical account maintained for the participant. The hypothetical account balance generally consists of principal credits and hypothetical interest credits.

(2) A Cash Balance Plan - A “cash balance plan” is a defined benefit plan that includes a cash balance formula.

(3) Conversion Amendment - A “conversion amendment” is defined in § 1.411(b)(5)–1(c)(4), as (i) an amendment that reduces or eliminates the benefits that, but for the amendment, a participant would have earned after the effective date of the amendment under a benefit formula that is not a statutory hybrid benefit formula, and (ii) with respect to which, after the effective date of the amendment, all or a portion of the participant’s benefit accruals under the plan are determined under a statutory hybrid benefit formula.

(4) Hypothetical Interest - “Hypothetical interest” is an interest credit as defined in § 1.411(b)(5)–1(d)(1)(ii)(A), which refers to an adjustment to a participant’s hypothetical account balance for a period that is not conditioned on service and that is determined by applying a rate of interest or rate of return to the participant’s hypothetical account balance as of the beginning of the period.

(5) Offset - An “offset” is the reduction of benefits under an employer’s defined benefit plan by an amount attributable to the benefits payable under another plan of the employer.

(6) Principal Credit - “Principal credit” is defined in § 1.411(b)(5)–1(d)(1)(ii)(D) as any increase in a participant’s hypothetical account balance that is not hypothetical interest.

(7) Statutory Hybrid Plan - A “statutory hybrid plan” is a defined benefit plan that contains a statutory hybrid benefit formula.

(8) Variable Annuity Plan - A “variable annuity plan” is any defined benefit plan that includes a variable annuity benefit formula as defined in § 1.411(a)(13)– 1(d)(6).