SECTION 13. DEFINITIONS

.01 Volume Submitter Plan - A “volume submitter plan” or “VS plan” refers to either a specimen plan of a VS practitioner or a plan of a client of the VS practitioner that is substantially similar to the VS practitioner’s approved specimen plan.

.02 Specimen Plan - A “specimen plan” is a sample plan of a VS practitioner (rather than the actual plan of an employer). A specimen plan may be a single document that does not use an adoption agreement, or it may consist of a basic plan document and an adoption agreement, within the meaning of section 4.03 and section 4.04, respectively.

.03 Advisory Letter - An “advisory letter” is a written statement issued by the IRS to a VS practitioner or VS mass submitter as to the acceptability of the form of a specimen plan and any related trust or custodial account documents under § 401(a), 403(a), or 4975(e)(7).

.04 Trust or Custodial Account Document - A “trust or custodial account document” is the portion of a VS 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. Under this revenue procedure, each VS plan may be submitted with up to 10 separate trust or custodial account documents for approval, per specimen document, without an additional user fee. If more than 10 trust documents are submitted, a user fee is due for each trust in excess of 10.

.05 VS Practitioner - A VS practitioner 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 a plan that is substantially similar to the VS practitioner’s specimen plan.

A VS practitioner may submit more than one specimen plan for an advisory letter 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 practitioner’s specimen plans on a substantially similar basis. The IRS reserves the right at any time to request from the VS practitioner a list of the employers that have adopted or are expected to adopt the VS practitioner’s specimen plans, including the employers’ business addresses and employer identification numbers. Notwithstanding the preceding two sentences, any person that has an established place of business in the United States where it is accessible during every business day may sponsor a specimen plan as a word-forword identical adopter of a specimen plan of a VS mass submitter, regardless of the number of employers that are expected to adopt the plan.

By submitting an application for an advisory letter for a specimen plan under this revenue procedure (or by having an application filed on its behalf by a VS mass submitter), a person represents to the IRS that it is a VS practitioner, as defined in this section 13.05. If the VS practitioner’s specimen plan permits the VS practitioner to amend the VS plan on behalf of adopting employers, as permitted by section 15, the VS practitioner also agrees to comply with any requirements imposed on sponsors of M&P plans by this procedure. Failure to comply with these requirements may result in the loss of eligibility to sponsor specimen plans and the revocation of advisory letters that have been issued to the VS practitioner.

.06 VS Mass Submitter - A VS 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 advisory letter applications on behalf of at least 30 unaffiliated VS practitioners each of which is sponsoring on a word-for-word identical basis the same specimen plan. For purposes of determining whether 30 unaffiliated VS practitioners sponsor on a word-for word basis the same specimen plan, the VS mass submitter is treated as one of the 30 unaffiliated VS practitioners. 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 VS mass submitter will be treated as a VS

mass submitter with respect to all of its specimen plans provided the 30 unaffiliated VS practitioner requirement is met with respect to at least one of its specimen plans.

.07 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).

.08 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) 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

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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).