Announcement 2001-77

[Guest Robin S. Vatalaro]

If a 401(k) plan uses a non-standardized prototype document, and the only reason for not using a standardized prototype is that the plan needed to be able to only benefit collectively bargained ee's, am I correct that this plan can rely on the determination letter issued to the prototype sponsor and that the plan need not file for its own determination letter? This plan does not have a "last day rule" for any contribution types. That is how I am interpreting Announcement 2001-77, can anyone verify?

Thank you!

[Guest b2kates]

Robin,

Remember there is no requirement that a Plan ever obtain a determination letter. If the Plan Sponsor is comfortable, and the plan is truly collectively bargained, any plan document may be utilized (if permitted by sponsor).

[Lynn Campbell]

But Announcement 2001-77 appears to be a Big Deal, which seems to say that in certain situations, using a Non-Std. prototype or Volume Submitter, no DL need be requested but the ER can rely on the Prototype or Volume Submitter Plan's opinion or advisory letter. This will save TPAs many hours of work, if it means what it looks like?

[Bob R]

You are reading it correctly. Adopters of non-standardized and volume submitter plans can generally rely on the opinion letter or advisory as to the form of the plan. You have no reliance for the coverage and non-discrimination requirements, but most people won't care because these are annual tests.

Some people may still want to obtain determination letters for a variety of reasons. But, I think the IRS will see a significant decrease in the number of determination letters requested.