SECTION 12. EMPLOYER — Internal Revenue Bulletin 2023-51

.01 Standardized Plans .

16 For purposes of this section 11, the term Pre-approved Plan includes a plan that was not in existence in the immediately preceding Cycle and that has been submitted for (but has not yet received) an Opinion Letter for the Cycle.

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(1) Except as set forth in section 12.01(2), (3) and (4), an Adopting Employer of a Standardized Plan may rely on the plan’s Opinion Letter that the form of the Adopting Employer’s plan satisfies, in the case of a Section 403(b) Pre-approved Plan, the Section 403(b) Requirements (including, if applicable, the requirements of §§ 401(a)(4) and 410(b)) or, in the case of a Qualified Preapproved Plan, the Qualification Requirements, if:

(a) The Standardized Plan has a currently valid Opinion Letter,

(b) The coverage and contributions or benefits under the Adopting Employer’s plan are not more favorable for highly compensated employees (as defined in § 414(q)) than for other employees,

(c) The Adopting Employer has not amended the Standardized Plan other than to choose options provided under the Standardized Plan or to make amendments as described in section 13.02 relating to employer amendments that will not affect reliance, and

(d) In the case of a Section 403(b) Pre-approved Plan, either (i) the only contributions under the plan are elective deferrals, or (ii) the plan provides for contributions other than elective deferrals and all of the Adopting Employer’s Related Employers are employers described in § 403(b)(1)(A). If the plan provides for contributions other than elective deferrals and the Adopting Employer’s controlled group includes any employer that is not an employer described in § 403(b)(1)(A), the Adopting Employer may rely on the plan’s Opinion Letter, except with respect to whether contributions other than elective deferrals under the plan satisfy the requirements of §§ 401(a)(4) and 410(b).

(2) An Adopting Employer may not rely on an Opinion Letter for a Standardized Plan with respect to the requirements of § 415 (and § 416, in the case of a Qualified Pre-approved Plan) without obtaining a determination letter (see section 25) if the Adopting Employer, or, in the case of a Section 403(b) Pre-approved Plan, any of its Related Employers, maintains or maintained at any time, another plan, including a Standardized Plan, that was qualified or determined to be qualified or a 403(b) plan and that covers or covered some of the same participants. An Employer that adopts a Standardized Plan that is a defined contribution plan is not considered to have maintained another plan merely because the Employer has maintained another defined contribution plan, provided such other plan has been terminated prior to the effective date of the Standardized Plan and no annual additions have been credited to the account of any participant under such other plan as of any date within a limitation year of the Standardized Plan. For this purpose, a plan that has been amended from an individually designed plan to a Standardized Plan is not considered another plan. To be a plan that has been amended from an individually designed plan to a Standardized Plan and thus for the Employer to be able to rely on the Standardized Plan with respect to the requirements of §§ 415 and 416 without obtaining a determination letter, the individually designed plan that has been amended into the Standardized Plan must be of the same type (for example, both defined benefit plans).

(3) An Adopting Employer of a Standardized Plan may not rely on an Opinion Letter for the Standardized Plan with respect to:

(a) Whether the timing of any amendment to the Adopting Employer’s plan (or series of amendments) satisfies the nondiscrimination requirements of § 1.401(a)(4)‑5(a), except with respect to plan amendments granting past service that meet the safe harbor described in § 1.401(a) (4)-5(a)(3) and are not part of a pattern of amendments that significantly discriminates in favor of highly compensated employees; or

(b) Whether the Adopting Employer’s plan satisfies the effective availability requirement of § 1.401(a)(4)-4(c) with respect to any benefit, right, or feature.

An Employer that adopts a Standardized Plan as an amendment to a plan other than a Standardized Plan may not rely on the Opinion Letter with respect to whether a benefit, right, or feature that

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is prospectively eliminated satisfies the current availability requirements of § 1.401(a)(4)-4, if applicable.

(4) In the case of a Qualified Pre-approved Plan, an Adopting Employer of a Standardized Plan that is a defined benefit plan may rely on the plan’s Opinion Letter with respect to the requirements of § 401(a)(26) only if the plan satisfies the requirements of § 401(a)(26) with respect to its prior benefit structure (within the meaning of § 1.401(a)(26)-3) or is deemed to satisfy § 401(a)(26) pursuant to regulations thereunder.

(5) For SIMPLE plans described in § 401(k)(11) and (m)(10), an Adopting Employer may also rely on the plan’s Opinion Letter regarding whether the form of the Adopting Employer’s plan satisfies the requirements of those sections.

(6) For a starter 401(k) deferral-only plan described in § 401(k)(16) or a safe harbor deferral-only plan described in § 403(b)(16), an Adopting Employer may also rely on the plan’s Opinion Letter regarding whether the form of the Adopting Employer’s plan satisfies the requirements of those sections.

.02 Nonstandardized Plans .

(1) An Adopting Employer of a Nonstandardized Plan may rely on the plan’s Opinion Letter that the form of the Adopting Employer’s plan satisfies the Qualification Requirements or Section 403(b) Requirements, as applicable, if:

(a) The Nonstandardized Plan has a currently valid Opinion Letter, and

(b) The Adopting Employer has not amended the plan other than to choose options provided under the plan or to make amendments as described in section 13.02 relating to employer amendments that will not affect reliance.

(2) Except as otherwise provided in this section 12.02, an Adopting Employer of a Nonstandardized Plan may not rely on the plan’s Opinion Letter with respect to the requirements of:

(a) In the case of a Qualified Pre-approved Plan, §§ 401(a)(4), 401(a)(26), 401(l), 410(b), or 414(s) (or, in the case of a Section 403(b) Pre-approved Plan, §§ 401(a)(4), 410(b), or 414(s)); or

(b) Section 415 (or § 416, in the case of a Qualified Pre-approved Plan) if the Adopting Employer, or any of its Related Employers, maintains or has ever maintained another plan covering some of the same participants. For this purpose, whether an employer maintains or has ever maintained another plan is determined using principles consistent with section 12.01(1).

(3) An Adopting Employer of a Nonstandardized Plan may rely on the plan’s Opinion Letter with respect to the requirements of § 410(b), if applicable (and, in the case of a Qualified Preapproved Plan, § 401(a)(26) (other than the § 401(a)(26) requirements that apply to a prior benefit structure)), if all nonexcludable employees benefit under the Adopting Employer’s plan.

(4) Nonstandardized Plans may permit an Adopting Employer to select an allocation formula for contributions other than elective deferrals that satisfies one of the design-based safe harbors in § 1.401(a)(4)-2(b)(2) (or, in the case of a Qualified Pre-approved Plan that is a defined benefit plan, a benefit formula that satisfies one of the design-based safe harbors under § 1.401(a)(4)-3(b) (3), (4), or (5)), and to select a safe harbor compensation definition for the formula that satisfies § 1.414(s)-1(c). If the Adopting Employer selects an allocation formula for contributions other than elective deferrals that satisfies one of the design-based safe harbors in § 1.401(a)(4)-2(b) (2) (or, in the case of a Qualified Pre-approved Plan that is a defined benefit plan, § 1.401(a) (4)-3(b)(3), (4), or (5)), and, if the allocation or benefit formula is based on compensation, selects a safe harbor compensation definition that satisfies § 1.414(s)‑1(c), then the Adopting Employer of a Nonstandardized Plan may rely on the plan’s Opinion Letter with respect to the

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nondiscriminatory amounts requirement under § 401(a)(4), if applicable. An Adopting Employer of a Nonstandardized Plan that includes § 401(m) matching contributions (and/or, in the case of a Qualified Pre-approved Plan, § 401(k) contributions) may rely on the plan’s Opinion Letter with respect to whether the form of the plan satisfies the actual contribution percentage (ACP) test of § 401(m)(2) (or, in the case of a Qualified Pre-approved Plan, the actual deferral percentage (ADP) test of § 401(k)(3)) if the Adopting Employer elects to use a safe harbor definition of compensation in the test. An Adopting Employer of a Nonstandardized Plan that satisfies the safe harbor requirement described in § 401(m)(11) or 401(m)(12) (or, in the case of a Qualified Pre-approved Plan, that satisfies the safe harbor requirement described in § 401(k)(12) or 401(k) (13)) may rely on the plan’s Opinion Letter with respect to whether the form of the Adopting Employer’s plan satisfies the requirements of § 401(m) (or § 401(k), if applicable), unless the plan provides for the safe harbor contribution under § 401(m)(11) or 401(m)(12) (or § 401(k)(12) or 401(k)(13), if applicable) to be made under another plan.

(6) For starter 401(k) deferral-only plans described in § 401(k)(16) or a safe harbor deferral-only plan described in § 403(b)(16), an Adopting Employer may also rely on the plan’s Opinion Letter regarding whether the form of the Adopting Employer’s plan satisfies the requirements of those sections.

(7) Except as set forth in section 9.05(2), an Adopting Employer of a Nonstandardized Plan that is a Qualified Pre-approved Plan that includes a Cash Balance Formula with a structure of Principal Credits that increase with age, service, or any other measure during a participant’s employment may not rely on the plan’s Opinion Letter with respect to the requirements of § 411(b)(1).

.03 Other limitations and conditions on reliance . Notwithstanding any provision in this section 12 to the contrary, the following conditions and limitations regarding reliance by an Adopting Employer on an Opinion Letter apply with respect to all Pre-approved Plans:

(1) An Adopting Employer may rely on an Opinion Letter for a plan that amends a plan of the Employer only if the form of the plan that is being amended satisfied the Qualification Requirements or Section 403(b) Requirements, as applicable. Accordingly, prior to being amended, the plan must either have timely corrected any Disqualifying Provisions or Form Defects for which the Remedial Amendment Period is closed or have corrected any plan document failures under the EPCRS. If this requirement is not met, then the employer (a) is considered to have adopted an individually designed plan, (b) may not rely on the Opinion Letter for the plan, and (c) is not considered be on the Cycle system. ¹⁷

(2) An Adopting Employer may not rely on an Opinion Letter if the Adopting Employer’s adoption of a Pre-approved Plan precedes the issuance of an Opinion Letter for the plan. ¹⁸

(3) An Adopting Employer may not rely on an Opinion Letter if the adoption agreement or other elective provisions in the plan are not completed correctly by the Adopting Employer.

(4) An Adopting Employer of any Qualified Pre-approved Plan that is not a Governmental Plan and that is a pension plan in which the normal retirement age selected by the Adopting Employer is less than age 62 may not rely on the Opinion Letter that such age is reasonably representative of the typical retirement age for the employer’s industry, as required by § 1.401(a)-1(b)(2). For an Adopting Employer of any Qualified Pre-approved Plan that is a Governmental Plan and that is a pension plan in which the normal retirement age selected by the Adopting Employer does not satisfy any of the safe harbors described in § 1.401(a)-1(b)(2)(v) of the proposed regulations may

17 The plan may still use EPCRS to correct any failures, and, after correction, then be eligible to adopt a Pre-approved Plan.

18 In this case, in order to have reliance, the Adopting Employer would need to re-adopt the Pre-approved Plan after the issuance of the Opinion Letter for the plan.

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not rely on the Opinion Letter that such age is reasonably representative of the typical retirement age for the employer’s industry, as required by § 1.401(a)-1(b)(2).

(5) An Adopting Employer may not rely on an Opinion Letter with respect to any provision of a Trust or Custodial Account Document or Investment Arrangement, as applicable, that conflicts with language in the basic plan document, adoption agreement, or single plan document, as applicable, even if the Trust or Custodial Account Document or Investment Arrangement includes language that states that the provisions of the Trust or Custodial Account Document or Investment Arrangement override the basic plan document, adoption agreement, or single plan document. ¹⁹

(6) For a Qualified Pre-approved Plan, the issuance of an Opinion Letter is not a determination by the IRS that an Adopting Employer’s plan is a Governmental Plan or a church plan (as described in § 414(e)). For a Section 403(b) Pre-approved Plan, the issuance of an Opinion Letter is not a determination by the IRS that an Adopting Employer’s plan is a Governmental Plan, or that an Adopting Employer is a Church or QCCO.

(7) Pursuant to section 14.11, a Provider’s failure to disclose to the IRS a material fact, misrepresentation of a material fact, or failure to accurately provide any of the information called for on any form required by this revenue procedure may result in the inability of Adopting Employers to rely on an Opinion Letter (for example, if there is a failure to disclose to the IRS a material fact, the IRS may revoke the Opinion Letter due to the failure).

(8) Pursuant to section 15.03(2)(c), if a Mass Submitter fails to identify a material modification, the failure is considered a material misrepresentation, and an Adopting Employer may not rely on an Opinion Letter issued with respect to the plan for the modification or any other provision of the plan that may be affected by the modification.

.04 Reliance equivalent to determination letter . If an Adopting Employer may rely on an Opinion Letter pursuant to this section 12, the Opinion Letter is equivalent to a determination letter. For example, the Opinion Letter is treated as a determination letter for purposes of section 23 of Rev. Proc. 2023-4 (as updated annually), regarding the effect of a determination letter. As provided in this section 12, the extent of the Adopting Employer’s reliance may be limited.

.05 Obtaining a determination letter . If an Adopting Employer may not rely on a Pre-approved Plan’s Opinion Letter, the Adopting Employer, if eligible as set forth in section 25, may submit an application for a determination letter to obtain reliance that the form of the plan satisfies the Qualification Requirements or Section 403(b) Requirements, as applicable.