The IRS recently announced that it will begin issuing opinion letters for the second remedial amendment cycle for Section 403(b) pre-approved plans.
Section 403(b) pre-approved plans are plan documents for Section 403(b) plans established and maintained by financial institutions and other service providers (“Providers”). These plans can be offered to clients and customers (“Adopting Employers”) of Providers that would like to adopt a plan document that has been pre-approved by the IRS as satisfying the applicable Section 403(b) plan rules.
Under the IRS pre-approved plan program, Providers periodically submit their plan documents to the IRS for review, approval, and issuance of an “opinion letter,” which confirms that the plan satisfies the applicable requirements in form. Adopting Employers can then adopt the pre-approved plan documents to maintain their Section 403(b) plans.
The IRS also announced that Adopting Employers that intend to maintain a Cycle 2 Section 403(b) pre-approved plan must adopt the pre-approved plan on or before Dec. 31, 2026.
In many cases, Adopting Employers who adopt a Section 403(b) pre-approved plan can rely on the opinion letter issued to the Provider of the pre-approved plan. However, the Adopting Employers who cannot and are otherwise eligible to request an individual determination letter for a pre-approved plan can request such a letter from the IRS, and the IRS announced that Adopting Employers in this situation generally must apply for an individual determination letter (if otherwise eligible) during the period beginning Jan. 1, 2025 and ending Dec. 31, 2026.
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