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IRS Establishes Program for Pre-approved 403(b) Plans in Revenue Procedure 2013-22
Practical Law Legal Update 4-525-5131 (Approx. 3 pages)
IRS Establishes Program for Pre-approved 403(b) Plans in Revenue Procedure 2013-22
by PLC Employee Benefits & Executive Compensation
| Published on 29 Mar 2013 • USA (National/Federal) |
The Internal Revenue Service (IRS) issued Revenue Procedure 2013-22, which establishes a program for the issuance of opinion and advisory letters for Internal Revenue Code (IRC) Section 403(b) pre-approved plans. Under this program, the IRS will accept applications for opinion and advisory letters for prototype and volume submitter plans under IRC Section 403(b) starting June 28, 2013.
On March 28, 2013, the IRS issued Revenue Procedure 2013-22, which establishes a program for the issuance of opinion and advisory letters for Internal Revenue Code (IRC) Section 403(b) plans (403(b) plans). Under this program, the IRS will accept applications for opinion and advisory letters for prototype and volume submitter plans under IRC Section 403(b) starting June 28, 2013.
The program offers employers that maintain a 403(b) plan an alternative to adopting an individually designed plan in order to satisfy the written plan requirement of the 403(b) regulations issued in 2007 (2007 Regulations). Under the program, the IRS issues opinion or advisory letters as to whether the form of a 403(b) prototype or 403(b) volume submitter plan meets the requirements of 403(b).
By adopting a 403(b) plan that has received an opinion or advisory letter, an employer may:
- Satisfy the written plan requirement under the 2007 Regulations.
- Obtain assurance that its plan meets the requirements of IRC Section 403(b).
Although the pre-approval program has many similarities to the program for IRC Section 401(a) plans in Revenue Procedure 2011-49, key differences include:
- Employers adopting a pre-approved 403(b) plan are not able to apply for an individual determination letter for the plan at this time.
- A 403(b) volume submitter plan must provide that the volume submitter practitioner can amend the plan on behalf of adopting employers. This permits changes in the IRC, regulations, revenue rulings or other guidance to be applied to all eligible employers that have adopted the plan.
Revenue Procedure 2013-22 is effective April 29, 2013 and the IRC will accept applications for opinion and advisory letters for 403(b) pre-approved plans beginning June 28, 2013.
The IRS also separately published sample provisions and information package to address requirements that the IRS will consider in reviewing 403(b) pre-approved plans.