Many employers adopt defined contribution retirement plans that have been pre-approved by the IRS. Plan sponsors of pre-approved plans submit the plans to the IRS to obtain approval of whether the form of the plan meets the requirements of Internal Revenue Code Section 401. These pre-approved plans are often referred to as “volume submitter plans” or “master and prototype plans.” An adopting employer of a pre-approved plan must then adopt the plan within a two-year period announced by the IRS. The adoption period for the latest round of pre-approved defined contribution plans is open from May 1, 2014 to April 30, 2016.
Even though the end of the current adoption period is more than a year and a half away, sponsors of pre-approved plans have begun to contact employers about adopting their most current pre-approved plan. Adopting the new pre-approved plan document may require the employer to make some decisions regarding plan options before signing the adoption agreement. In addition, employers may want to pay special attention to making sure that prior plan amendments are carried through to the new plan documents. Accordingly, employers may wish to be on the lookout for any communications from the sponsor of their pre-approved defined contribution plans so that they have time to carefully review any decisions they must make. Employers may wish to contact competent benefits counsel if they have any questions regarding their pre-approved plan document.