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Eased Requirements for 403(b) Prototype Plans Soon to Kick In

It will be easier for plan sponsors and employers to participate in the 403(b) pre-approved plan program beginning April 14. That’s the effective date IRS Revenue Procedure (Rev. Proc.) 2014-28. The new guidance modifies guidance the IRS issued last year, Rev. Proc. 2013-22, to make it easier for a person to qualify as a pre-approved 403(b) plan sponsor and as a mass submitter.

A 403(b) prototype plan consists of:

  • a basic plan document that contains all of the plan’s nonelective provisions that apply to all adopting eligible employers and that does not have any options or blanks, and
  • an adoption agreement that allows an adopting eligible employer to select among plan design alternatives available under the basic plan document to customize its plan.

Although a basic plan document can be used with more than one adoption agreement, an adoption agreement can be used with only one basic plan document. The IRS considers each basic plan document and adoption agreement pair to be one separate 403(b) prototype plan, even if there are multiple investment arrangements or vendors under the plan, and requires a separate application under its 403(b) Pre-approved Plan Program.

Rev. Proc. 2014-28 cuts in half — to 15 — the number of:

  • eligible employers a 403(b) pre-approved plan sponsor must expect to adopt either its: (1) 403(b) prototype plan basic plan document; or (2) 403(b) volume submitter plan (a model plan document and an adoption agreement); and 
  • the number of prototype sponsors or volume submitters — each of which is sponsoring the same basic plan document or specimen plan — on behalf of which a person must submit opinion or advisory letter applications in order to qualify as a mass submitter. 

Rev. Proc. 2014-28 also:

  • makes it easier for a person to sponsor a plan as a minor modifier of a 403(b) volume submitter plan of a mass submitter;
  • allows a mass submitter to file,  on behalf of a minor modifier of its plan, an application for an advisory letter under certain circumstances; and 
  • extends to April 30, 2015 the deadline to submit 403(b) pre-approved plans for opinion and advisory letters from the IRS.


John Iekel is Senior Writer at ASPPA, as well as Editor of the ASPPA Net and NTSA Net web portals.