Michael A. Webb, Vice President, Retirement Plan Services, Cammack LaRhette Consulting, answers:
The Experts share in your enthusiasm, but you won’t have an IRS-approved prototype just yet. According to the revenue procedure (see “IRS Establishes Program for Preapproved 403(b) Plans”), your vendor must apply for an opinion letter for its plan document under the prototype (or volume submitter, if applicable) program. The earliest that a vendor may even submit an application to the IRS is June 28, 2013. However, the latest that a vendor may submit an application under the revenue procedure is more than a year from now—April 30, 2014. Thus, it is certainly possible that your vendor could file its application as late as that date.
Once the IRS receives the application, it may take several months for the agency to issue the applicable opinion letter to the plan vendor. Thus, it is not unreasonable to expect that it could take a year or more for the approved vendor prototype to arrive at plan sponsors for adoption. In fact, the IRS has not even announced the timeframe for plan sponsors to adopt approved vendor prototype and volume submitter documents, known as the “remedial amendment period,” although it has set a deadline (October 28, 2013) for comments as to timing of this period.
If you wish to obtain a better sense of your vendor’s particular timeframe for submitting an application, you may wish to contact them about. However, given how recently the guidance was issued, it is quite possible that your vendor has yet to establish a timeframe for its submission.
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NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.