Multiple Employer Plans on Prototype

[Guest jgordon]

Can a Multiple Employer Plan be on a prototype document? Simple question but I am a little confused. Thanks.

[Kirk Maldonado]

No.

[Guest jgordon]

So here is my follow up question . . . does anyone have a cite for the fact that multiple employers cannot be on prototype. And now for the dozie . . . if multiple employers have been on a prototype because there was a mistaken belief that they were a control group what is the best way to correct?

[Lame Duck]

I've always heard that you can't use a master or prototype plan for a multiple employer plan, but doesn't 1.413-2(a)(2)(ii) say differently? It's my understanding that a multiple employer plan is a 413© plan and the reg specifically says that a "master or prototype plan is not a section 413© plan unless such plan is described in this subparagraph. From that, it would appear that a master or prototype plan, in theory, can be used for a multiple employer plan if it meets the requirements of 1.413-2(a)(2). I think I'm as confused as jgordon.

[KJohnson]

Under Rev. Proc. 2000-20 the IRS will not issue opinion letters for a prototype on any of the following types of plans:

.03 Areas Not Covered by Opinion Letters - Opinion letters will not be issued for:

1 Multiemployer plans or multiple employer plans, within the meaning of § 413(b) and § 413© respectively;

2 Plans that have been negotiated pursuant to a collective bargaining agreement and submitted to the Service as a plan maintained pursuant to a collective bargaining agreement. This does not preclude an M&P plan from covering employees of the employer who are included in a unit covered by a collective bargaining agreement or the adoption of an M&P plan pursuant to such agreement as a single employer plan which covers only employees of the employer;

3 Stock bonus plans;

4 Employee stock ownership plans;

5 Pooled fund arrangements contemplated by Rev. Rul. 81-100, 1981-1 C.B. 326;

6 Annuity contracts under § 403(b);

7 Defined contribution plans (other than target benefit plans) under which the test for nondiscrimination under § 401(a)(4) is made by reference to benefits rather than contributions;

8 Cash balance or similar plans or defined benefit plans under which the test for nondiscrimination under § 401(a)(4) is made by reference to contributions rather than benefits;

9 Plans described in § 414(k) (relating to a defined benefit plan which provides a benefit derived from employer contributions which is based partly on the balance of the separate account of a participant);

10 Target benefit plans, other than plans which, by their terms, satisfy each of the safe harbor requirements described in § 1.401(a)(4)-8(b)(3)(i), as well as the additional rules in § 1.401(a)(4)-8(b)(3)(ii) through (vii);

11 Plans that provide for the disparity permitted under § 401(l), other than plans which use a definition of compensation that includes all compensation within the meaning of § 415©(3) and excludes all other compensation, or that otherwise satisfies § 414(s) under § 1.414(s)-©;

12 Defined benefit plans that provide for employee contributions not allocated to separate accounts, other than plans that provide the minimum benefit described in § 1.401(a)(4)-6(b)(3)(ii);

13 Plans that would not satisfy the qualification requirements except as a governmental plan as described in § 414(d);

14 Church plans described in § 414(e) that have not made the election provided by § 410(d);

15 Plans under which the § 415 limitations are incorporated by reference;

16 Plans that do not contain a § 414(q) definition of highly compensated employee or under which the definition is incorporated by reference;

17 Fully-insured § 412(i) plans, other than plans that, by their terms, satisfy the safe harbor for § 412(i) plans in § 1.401(a)(4)-3(b)(5);

18 Plans that fail to contain a provision reflecting the requirements of § 414(u) (see Rev. Proc. 96-49).