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February 17, 2009

Individually Designed Plan

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Definition

Qualified plan or SEP, where the plan document and adoption agreement are customized for a particular employer.

An employer that amends any provision of an M&P plan or its adoption agreement (other than to choose among the options offered by the sponsor if the plan permits or contemplates such options), or an employer that chooses to discontinue participation in such a plan as amended by its sponsor and does not substitute another approved plan referred to in this section is considered to have adopted an individually-designed plan

Referring Cite

Revenue Procedure 2003-6, Revenue Procedure 2000-6

Additional Helpful Information

  • Individually designed plan offer the employer more flexibility when designing features, benefits and eligibility requirements.
  • Form 5300, Application for Determination for Employee Benefit Plan, must be filed to request a determination letter for individually designed plans, including collectively bargained plans.
  • Form 6406, Short Form Application for Determination for Minor Amendment of Employee Benefit Plan, may be filed to request a determination letter on a minor plan amendment of individually-designed plans
  • An application submitted by an employer with respect to an M&P plan will be treated as an application for an individually-designed plan if it is submitted prior to the time the M&P plan is approved.
  • An employer that maintains a SEP along with another retirement plan, cannot use the IRS model SEP. The employer must adopt either a prototype SEP or an individually designed SEP.

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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