IRS Updates 403(b) Pre-Approved Plan Info

The IRS has revised the required modifications and information that contains samples of plan provisions that have been found to satisfy certain requirements of Code Section 403(b) and its implementing regulations, for purposes of complying with Revenue Procedure (Rev. Proc.) 2021-37. The IRS has done so to assist providers that are drafting 403(b) pre-approved plans and to accelerate their review.

The updated materials contain:

• general sample plan provisions applicable to all 403(b) pre-approved plans;
• provisions appropriate for 403(b) pre-approved plans that do not accept contributions other than elective deferrals;
• sample provisions for 403(b) pre-approved plans that accept contributions other than elective deferrals; 
• sample provisions for standardized and nonstandardized 403(b) pre-approved plans; and 
• a sample plan provision for a retirement income account.

The IRS updated these materials to reflect changes made to the various statements of requirement throughout for guidance contained in the 2022 Cumulative List of Changes in Section 403(b) Requirements for Section 403(b) Pre-approved Plans in Notice 2022-8. The IRS issued that guidance on Jan. 28, 2022. Plans submitted by Providers of 403(b) Pre-approved Plans applying to the IRS for opinion letters for the second remedial amendment cycle (Cycle 2) under the 403(b) pre-approved plan program must comply with those changes on the 2022 Cumulative List. 

The updated sample provisions address the specific requirements the IRS will consider in reviewing 403(b) pre-approved plans. Whether a 403(b) pre-approved plan must include plan provisions corresponding to particular sample provisions generally depends on the features of the plan, and the language of a sample provision may or may not be acceptable or suitable in different plans, depending on the context in which it is used. 

The updated materials are intended to help 403(b) pre-approved plan providers in drafting plan documents, and insurance companies and custodians in drafting the terms of annuity contracts and custodial accounts required by Section 403(b). 

Every 403(b) pre-approved plan must satisfy the requirements of Rev. Proc. 2021-37. Such a plan may use either a single plan document format or a basic plan document with an adoption agreement. The updated sample provisions may generally be used with either, but a plan design employing a single-document format will need to make appropriate adjustments.