By
Federal regulators have come up with a procedure for taking the Economic Growth and Tax Relief Reconciliation Act of 2001 into account when they review model plans based on sections 401 and 403(a) of the Internal Revenue Code.
The Internal Revenue Service has published the rules in a document, Revenue Ruling 2005-16, that explains the schedules life insurers, accounting firms and other organizations should use when submitting “master and prototype” plans and “volume submitter” plans.
Companies that get IRS opinion and advisory letters approving those types of model plans can sell new plans based on them without necessarily having to go back to the IRS for further review.
The IRS had to change plan review procedures to accommodate changes made by EGTRRA, according to an explanation of the changes by Ingrid Grinde, an IRS employee plans specialist.
The IRS announced in 2001 that it would not issue advisory, opinion or determination letters that took the EGTRRA changes in plan rules into account until further notice.
Section 401 plans include stock bonus plans, profit-sharing plans and pension plans. One of the best known 401 plans is the 401(k) retirement savings plan. A 403(a) plan is an annuity-based plan. Sponsors of that type of plan fund employee retirement benefits by purchasing individual annuities for each employee.