Utilizing a Pre-Approved Plan

Feb 8, 2017 | Retirement Plans

Many employers adopt a pre-approved plan for their employees’ retirement plan. Adopting a pre-approved plan means the IRS has already issued an opinion letter or advisory letter regarding the acceptability of the type of plan. There are different types of pre-approved plans. A Master and Prototype Plan includes an adoption agreement accompanied by a basic plan document. The adoption agreement is formatted with a series of questions with multiple plan options that the employer will select to compose their plan. A Volume Submitter plan is a sample plan in which the plan sponsor can choose from a selection of options regarding their specific plan provisions. The Volume Submitter plan is formatted to resemble an individually designed plan.


Regardless of the type of pre-approved plan adopted, the employer is ultimately responsible for ensuring the plan is in compliance with all legal requirements. Your service agreement should outline the plan responsibilities for you and the pre-approved plan sponsor. Asking the following questions can help you understand your service agreement and what you are responsible for:

  • Who is responsible for updating the plan document for any law changes?
  • Who will administer the plan – the pre-approved plan sponsor or a third party administrator?
  • Who gives any required plan notices to the participants?
  • Who files required forms and returns with the IRS or the Department of Labor?
  • Who determines whether any nondiscrimination testing will be required?
  • Who conducts any required nondiscrimination testing, and when will the testing be done?
  • What information do you have to give to the pre-approved plan sponsor or third party administrator and when must you provide it?

To learn more, check out the IRS’ Tips for Employers Using Pre-Approved Plans. Watkins Ross sponsors a Volume Submitter prototype formatted plan to be utilized by our clients. Additional information regarding our document services can be read at WR Document Services. Please contact us if you have questions regarding your plan provisions. For our clients that do not utilize our plan documents, we provide a document compliance review service to help you ensure your plan documents and amendments (if applicable) are in compliance with current IRS Regulations.  

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