VS or Prototype

[R. Butler]

We currently sponsor a Corbel prototype document. We are cponsidiering a VS doucment instead of the prototype with the next restatement. Any reason not to sponsor the VS instead?

Thanks for any input.

[John Feldt ERPA CPC QPA]

By using a volume submitter, you'll get IRS advisory letters for your document instead of IRS opinion letters. You'll be a volume submitter practitioner instead of prototype sponsor. The reliance is basically the same however. You'll probably want to sign up as both a prototype sponsor and as a volume submitter practitioner anyway.

If you are accustomed to using a standardized prototype now, the volume submitter document will not be able to give you reliance on the operational coverage and nondiscrimination. You will need to list each participating employer and have each one sign up (adopt the plan) if you do not use a standardized prototype document.

If you cross-test, the volume submitter will not be restictive like the prototype document regarding the number of allocation rate groups. LRM #94 only applies to the prototype.

I don't think you can exclude certain types of compensation under the prototype if the allocation is integrated, but you can in a volume submitter document (needs to pass testing).

Under GUST, the volume submitter practitioner could not adopt an amendment on behalf of all employers, but now under EGTRRA the volume submitter document can be written to give the document practitioner such authority (be careful when choosing a provider if you are wanting this feature). This was an important feauture from a my perspective.

Volume submitter documents can have minor modifications for an employer, and unlike a prototype these can be submitted under form 5307. The IRS gets to determine what "minor" means. Side comment: the IRS may someday remove the 5307 option however - I could be guessing wrong here.

If filing a 5307 for a minor modifier, the volume submitter practitioner must be on the form 2848 - so if are going to be a minor modifier, you might need an ERPA, EA, CPA, attorney, etc. on staff (although I think you could use a Form 5300 instead and that requirement goes away, but the IRS user fee is higher).

If you are a TPA, based on your type of client base, you might strategically decide to put everyone on the volume submitter document just to keep the data handling easier for the restatements, the amendments, and to keep it consistent for your administrators.

A government plan sponsor can also have reliance if they are on a volume submitter document. I think such a document would need to be a specific government provision written document, or perhaps could be written in such a manner to clarify which provisions do and do not apply for a govenrment sponsor.

[Bird]

VS is pretty much just as easy to spit out as a prototype, with a little bit of flexibility. We are 100% VS or nearly so. I used to use standardized prototypes for tiny employers who would have to make contributions anyway for terms over 500 hours but got stuck one too many times and found the decision-making time on that to be unproductive.