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Section 414(d) constitute employer contributions under Amendments to the plan for changes in law and
Code Section 414(h)(2), nor on whether a governmental guidance. A favorable determination letter issued for
excess benefit arrangement satisfies the requirements an individually designed plan provides reliance for the
of Code Section 415(m). specified required amendments list identified on the
Express an opinion on whether the plan is a church determination letter. Rev. Proc. 2022-40
plan within the meaning of Code Section 414(e). A favorable determination letter issued to an adopting
Express an opinion on whether a Code Section employer of a pre-approved non standardized plan with
403(b) plan meets requirements of Title I of ERISA. If minor modifications expires on the earlier of the date of
applicable. the employer’s next determination letter, or the end of the
Express an opinion, for a Code Section 403(b) plan next two-year period we announce that makes up part
that is not a governmental plan within the meaning of of the next six-year remedial amendment/approval cycle
Section 414(d), with respect to whether the plan meets applicable to adopting employers of pre-approved defined
any requirements that apply due to a plan’s coverage contribution, defined benefit, or Code Section 403(b) plans,
of multiple employers that are not in a single controlled conditioned upon the timely adoption of any necessary
group for purposes of Section 414(b), (c), (m), or (o) interim amendments as required by Rev. Proc. 2016-37.
and the regulations thereunder. Also see Rev. Proc. 2017-41.
Express an opinion, for a Code Section 403(b) plan that
is a governmental plan within the meaning of Section Plan Must Qualify in Operation
414(d), with respect to whether the plan meets any Generally, a plan qualifies in operation if it satisfies the
requirements that apply due to a plan’s coverage of applicable coverage and nondiscrimination requirements
multiple employers that are not aggregated in a single and is maintained according to its terms. However, a plan
controlled group in a manner consistent with Notice generally must be operated in a manner that satisfies any
89-23, 1989-1 CB 654. change in the qualification requirements or Code Section
Express an opinion whether the sponsor of a Code 403(b) requirements for the period beginning when the
change is effective, even if the plan has not yet been
Section 403(b) plan is an employer that is eligible to
amended for the change. Changes in facts on which
sponsor a Code Section 403(b) plan.
the determination letter was issued may mean that the
Become familiar with the terms of the determination
determination letter may no longer be relied upon.
letter. Call the contact person listed on the determination
Some examples of the effect of a plan’s operation on a
letter if you do not understand any of the terms in your
favorable determination are:
determination letter.
Retention of information. Whether a plan meets the Contributions or benefits in excess of the limitations
qualification requirements or Code Section 403(b) under Code Section 415. A retirement plan may
not provide retirement benefits or, in the case of a
requirements is determined from the information in
defined contribution plan or Code Section 403(b) plan,
the written plan document, the application form and
contributions and other annual additions, that exceed
the supporting information submitted by the employer.
the limitations specified in Code Section 415. The plan
Therefore, the employer must retain a copy of the
contains provisions designed to provide benefits within
application, information submitted with the application
these limitations. The plan, or the affected contract
and all other correspondence.
under the plan in the case of a Code Section 403 plan,
Other conditions for reliance. We have not verified
is no longer entitled to favorable tax treatment if these
the information submitted with the application. The
limitations are exceeded.
determination letter will not provide reliance if:
Top heavy minimums under Code Section 416. If a
(1) there has been a misstatement or omission of
qualified plan is top heavy in accordance with Code
material facts, (for example, the application
Section 416, the plan must provide certain minimum
indicated that the plan was a governmental plan
benefits and vesting for non-key employees. If the plan
and it was not a governmental plan);
document provides for minimum benefits and accelerated
(2) the facts subsequently developed are vesting only for years during which the plan is top
materially different than the facts on which the heavy, failure to identify these years and to provide the
determination was made; or accelerated vesting and benefits in operation of the plan
(3) there is a change in applicable law. will disqualify the plan.
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