SECTION 10. OPINION — Internal Revenue Bulletin 2023-51

.01 General limits on Opinion Letters . An Opinion Letter constitutes a determination that the form of a Pre-approved Plan satisfies the Qualification Requirements or the Section 403(b) Requirements, as applicable, subject to the requirements and limitations of this revenue procedure. An Opinion Letter is issued only to a Provider or Mass Submitter. The IRS’s review of a Provider’s or Mass Submitter’s application for an Opinion Letter for a Pre-approved Plan will consider only the terms

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of the single plan document or the basic plan document and adoption agreement, as applicable. The IRS’s review will not consider, and an Opinion Letter will not express an opinion with respect to, the terms of any Trust or Custodial Account Document for (or Investment Arrangement under) the plan of any Adopting Employer or any other documents that may be incorporated by reference into an Adopting Employer’s plan. An Opinion Letter for a Qualified Pre-approved Plan does not constitute a ruling or a determination as to the exempt status of related trusts or custodial accounts under § 501(a).

.02 Plans for which an Opinion Letter will not be issued .

(1) For a Pre-approved Plan, an Opinion Letter will not be issued for:

(a) A plan under which the § 415 limitations are incorporated by reference;

(b) A plan under which the actual contribution percentage (ACP) test under § 401(m)(2) is incorporated by reference;

(c) A Nonstandardized Plan that provides for hardship distributions under circumstances not described in the safe harbor standards in the regulations under § 401(k), unless these distributions are subject to nondiscriminatory and objective criteria included in the plan;

(d) A plan that includes blanks or fill-in provisions for the Adopting Employer to complete, unless the provisions have parameters that preclude the Adopting Employer from completing the provisions in a manner that could violate the Qualification Requirements or Section 403(b) Requirements, as applicable;

(e) A plan designed to satisfy the provisions of § 105;

(f) A plan that includes § 401(h) accounts; or

(g) A plan that includes purported fail-safe provisions for § 401(a)(4) or the average benefit test under § 410(b).

(2) For a Qualified Pre-approved Plan, in addition to the circumstances described in section 10.02(1), an Opinion Letter will not be issued for:

(a) A multiemployer plan;

(b) A single-employer collectively bargained plan (however, this rule does not preclude an employer from covering employees of the employer that are included in a unit covered by a collective bargaining agreement if it is adopting a Pre-approved Plan for its non-bargaining employees or from adopting a Pre-approved Plan pursuant to such agreement as a single-employer plan that covers only bargaining employees of the employer);

(d) An ESOP that is a combination of a stock bonus plan and a money purchase plan;

(e) An ESOP that provides for the holding of preferred employer stock, including an ESOP that holds stock described in § 409(l)(3);

(f) A Statutory Hybrid Plan with any of the following features:

(i) A statutory hybrid benefit formula that is not a Cash Balance Formula, such as a formula under which benefits are determined by reference to the current value of an accumulated percentage of the participant’s average compensation (a Pension Equity Plan or PEP);

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(ii) A provision under which Interest Credits are based on rates of return that are subject to participant choice, or any rate that does not meet the requirements of § 1.411(b)(5)-1(d);

(iii) A provision under which a rate used to determine Interest Credits is based on the actual rate of return on aggregate assets of the plan described in § 1.411(b)(5)-1(d)(5)(ii)(A) or the rate of return on certain regulated investment companies (RICs) described in § 1.411(b)(5)-1(d)(5)(iv) (unless the plan provides that the rate used to determine Interest Credits is equal to the actual rate of return on the aggregate assets of the plan), or is based on or equal to the actual rate of return on a subset of plan assets (as described in § 1.411(b)(5)-1(d)(5)(ii)(B));

(iv) A Conversion Amendment, except for plans providing that, after the effective date of the Conversion Amendment, a participant’s accrued benefit is equal to the sum of accruals under the prior formula plus the benefit based on the Cash Balance Formula (“A+B Conversion”);

(v) A provision that uses the 3-percent accrual rule or the fractional accrual rule under § 411(b)(1) (A) or (C) to satisfy the accrued benefit requirements under § 411(b)(1);

(vi) A provision for funding exclusively through insurance contracts as described in § 412(e)(3); or

(vii) A provision for Offsets of benefits accrued under another plan (the “offsetting plan”), unless:

(A) The Offset is applied on an accumulated basis at the participant’s annuity starting date, rather than offsetting each year’s Principal Credit by that year’s accruals or contributions under the offsetting plan;

(B) If plan provisions are consistent with treatment of the Cash Balance Formula as a lump sum-based benefit formula under § 1.411(a)(13)-1(d)(3), then the offsetting plan is a defined contribution plan, and the Offset is applied by subtracting the account balance under the defined contribution plan from the hypothetical account balance under the Cash Balance Formula prior to converting the balance to an annuity benefit;

(C) The Offset satisfies the safe-harbor requirements of § 1.401(a)(4)‑8(d) (except that the Offset can be computed by subtracting the account balance under the offsetting plan from the hypothetical account balance under the Cash Balance Formula), including the requirement that the offsetting plan may not be a § 401(k) plan or a § 401(m) plan;

(D) For the purpose of determining the amount of the Offset against any defined benefit formula, the Offset reflects the value of any distributions from the offsetting plan made prior to the participant’s annuity starting date under the Cash Balance Plan;

(E) The Offset is applied on a uniform basis for all participants;

(F) The plan provides a minimum accrued benefit to participants (expressed as a lifetime annuity commencing at normal retirement age) of no less than 0.5% of compensation for each year of credited service, which is not reduced by the Offset applied to other formulas under the plan;

(G) Accrued benefits, considered in conjunction with defined contribution accounts subject to any Offset, meet nondiscrimination requirements; and

(H) The amount of the Offset, including any procedures and actuarial assumptions for converting a defined contribution account balance (under a specifically named defined contribution plan) to an annuity amount, is definitely determinable;

(g) A plan described in § 414(k) (relating to a defined benefit plan that provides a benefit derived from employer contributions that is based partly on the balance of the separate account of a participant);

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(h) A target benefit plan, other than a plan that, by its terms, satisfies each of the safe harbor requirements described in § 1.401(a)(4)-8(b)(3)(i), as well as the additional rules in § 1.401(a) (4)-8(b)(3)(ii) through (vii);

(i) A governmental defined benefit plan that includes a “deferred retirement option plan” (DROP) feature, or similar provisions in which a participant earns additional benefits for continued employment post-normal retirement age in the form of credits to a separate account (including a cash balance account or other arrangement) under the same plan;

(j) A plan under which the actual deferral percentage (ADP) test under § 401(k)(3) is incorporated by reference;

(k) A fully insured § 412(e)(3) plan, other than a non-statutory hybrid plan that by its terms satisfy the safe harbor in § 1.401(a)(4)-3(b)(5);

(l) An eligible combined plan within the meaning of § 414(x)(2); or

(m) A Variable Annuity Plan.

(3) For Section 403(b) Pre-approved Plans, in addition to the circumstances described in section 10.02(1), an Opinion Letter will also not be issued for:

(a) A TEFRA church defined benefit plan (see § 1.403(b)-10(f)(2)); or

(b) A plan grandfathered under Rev. Rul. 82-102, 1982-1 CB 62.

.03 Issues an Opinion Letter will not consider.

(1) Title I issues . Except as otherwise provided in guidance, an Opinion Letter does not express an opinion, and may not be relied upon, with respect to whether any plan is subject to the requirements of Title I of ERISA or whether a plan satisfies any of those requirements.

(2) Issues related to a Section 403(b) Pre-approved Plan’s coverage of multiple employers that are not Related Employers . An Opinion Letter does not express an opinion, and may not be relied upon, with respect to whether the plan satisfies § 403(b)(15) or any other requirements that apply related to a plan’s coverage of multiple employers that are not Related Employers.

.04 IRS discretion to decline to issue an Opinion Letter . The IRS may, in its discretion, decline to issue an Opinion Letter for other types of plans or issues not described in this section 10.

.05 Nonapplicability of this revenue procedure to IRAs (including traditional IRAs, Roth IRAs, SEPs, and Simple IRAs) . An Opinion Letter will not be issued under this revenue procedure for prototype plans intended to meet the requirements for individual retirement arrangements under § 408. ¹⁵