by Todd A. Solomon, Brett R. Johnson and Kay Kemp

In Revenue Procedure 2011-49, the Internal Revenue Service (IRS) has modified the procedures by which it issues opinion and advisory letters to Master or Prototype (M&P) and Volume Submitter retirement plans (together, pre-approved plans).  In addition, the guidance clarifies the limited types of employer modifications and amendments that can be made without causing an M&P or Volume Submitter plan to fail to be “identical” to an approved M&P or Volume Submitter plan (and, therefore, to fail to be covered by the pre-approved plan’s advisory or opinion letter).  Acceptable changes include the following:

• Selecting options permitted under the applicable plan
• Specifying or changing the effective date of a provision (to the extent allowed under the applicable plan)
• Adopting certain interim or discretionary amendments
• Adopting certain IRS-approved model or sample amendments

Prior guidance that allowed employers to modify or amend plans to correct typographical errors and/or cross-references has been eliminated.

The new guidance also provides that neither M&P opinion letters nor Volume Submitter advisory letters will cover hybrid plans, plans with section 401(h) accounts (medical benefits), or plans covered by Internal Revenue Code Section 414(x) (small employer combined defined benefit/defined contribution plans).  Numerous other pre-approved plan filing requirements are specified in the guidance (revising Revenue Procedures 2005-16 and 2007-44), including, for example, requirements that amendments adopted by a pre-approved sponsor or practitioner on behalf of adopting employers must be provided to the adopting employers.

Mass submitters, sponsors, practitioners and adopting employers should review Revenue Procedure 2011-49 prior to undertaking opinion or advisory letter submissions or amendments.  Please contact your regular McDermott lawyer if you have any questions regarding Revenue Procedure 2011-49.