The Internal Revenue Service (“IRS”) has issued Revenue Procedure 2013-22. Under this Rev. Proc., a qualifying employer-generally a 501(c)(3) tax-exempt entity, public school or state or local government- may adopt a pre-approved document for its 403(b) plan. The employer may rely on this document to meet the “written plan requirement” for 403(b) plans and to otherwise have a document which complies with IRC Sec. 403(b) in form. Employers will still not be able to obtain IRS approval (i.e., a determination letter) for individually designed 403(b) plans.
The pre-approved 403(b) plan document will be either a prototype plan or a volume submitter plan. The plan sponsor who creates the document will be responsible for obtaining IRS approval. The approval will be in the form of an opinion letter for a prototype plan and an advisory letter for a volume submitter plan. Application for IRS approvals may be made from June 28, 2013 through April 30, 2014.
According to the IRS website, the Rev. Proc. establishes the new program of IRS approval and explains certain:
• requirements that pre-approved 403(b) plans must satisfy,
• responsibilities of pre-approved plan sponsors,
• procedures for applying for opinion and advisory letters, and • conditions under which an eligible employer that adopts a pre-approved 403(b) plan has reliance that the form of the plan meets IRC section 403(b) and the final 403(b) regulations.
The Rev. Proc. also describes procedures for the retroactive remedial amendment of plans to satisfy the requirements of IRC Section 403(b) and the regulations. These procedures will permit the retroactive remedial amendment of 403(b) plans regardless of whether a plan is a pre-approved plan under the new program.