Pre-approved program covering plans with cash balance and ESOP features

Plans with cash balance and ESOP features

With the release of Rev. Proc. 2015-36 in next week’s edition of the Internal Revenue Bulletin, the IRS is modifying guidance previously provided in Rev. Proc. 2011–49 by expanding the scope of the pre-approved program to include defined benefit plans containing cash balance features and defined contribution plans containing employee stock ownership plan (ESOP) features.


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Rev. Proc. 2015-36 also extends the deadline for submitting on-cycle applications for opinion and advisory letters for pre-approved defined benefit plans to October 30, 2015, and reflects changes made to the determination letter program.

Rev. Proc. 2015-36 appears in the Monday, July 6 edition of the Internal Revenue Bulletin, IRB-2015-27 [PDF 383 KB].


Under a system established in 2005, every individually designed plan qualified under section 401(a) has a regular, five-year remedial amendment cycle. The cycles are staggered and spread over five-year periods, so that plan sponsors need to apply for new determination letters generally only once every five years.

In addition, under this system, every pre-approved plan (i.e., every master and prototype (M&P) plan and volume submitter (VS) plan) generally has a regular, six-year remedial amendment cycle. Consequently, sponsors, practitioners, and adopters of pre-approved plans generally need to apply for new opinion, advisory, or determination letters only once every six years.

In October 2011, the IRS issued Rev. Proc. 2011-49 to update guidance on the requirements for requesting opinion and advisory letters regarding the acceptability under sections 401 and 403(a) of the form of pre-approved plans (M&P and VS plans). Rev. Proc. 2011-49 provided that the second six-year remedial amendment cycle for pre-approved defined contribution plans began on February 1, 2011, and ends on January 31, 2017.

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