A Master&Prototype( M&P) plan that meets requirements that include the following:
- The provisions governing eligibility and participation are such that the plan by its terms must benefit all employees under a controlled group of companies
- The adoption agreement may provide options as to whether some or all of the employees
- who have reached age 21,
- completes 1-year of service, or 2-years of service if participants would be 100% vested after 2-years of service
- a year of service is defined as no more than 1,000 hours of service
- these provisions are applied on a uniform basis .
- The plan generally may not deny an accrual or allocation to an employee eligible to participate merely because the employee is not an active employee on the last day of the plan year ( cannot have a last-day requirement)
- The plan generally may not deny an accrual or allocation to an employee eligible to participate merely because the employee has failed to complete a specified number of hours of service during the year. However, the plan may deny an allocation or accrual to an employee who is eligible to participate if the employee terminates service during the plan year with not more than 500 hours of service and is not an active employee on the last day of the plan year.
- The eligibility requirements under the plan are not more favorable for highly compensated employees than for other employees.
- Under the plan, allocations, in the case of a defined contribution plan (other than any cash or deferred arrangement part of the plan), or benefits, in the case of a defined benefit plan, are determined on the basis of total compensation.
- Generally, unless the plan is a target benefit plan or a § 401(k) and\or § 401(m) plan, the plan must, by its terms, satisfy certain of the design based safe harbors
- All benefits, rights, and features under the plan (other than those, if any, that have been prospectively eliminated) are currently available to all employees benefiting under the plan.
- Any past service credit under the plan must meet the safe harbor for certain grants of benefits for past periods ( described in § 1.401(a)(4)-5(a)(3)).
Revenue Procedure 2000-20
Additional Helpful Information
- Standardized plans automatically satisfy the requirements of the Code, such as nondiscrimination requirements.
- An employer that sponsors a standardized plan and operates the plan within the confines allowed by the plan need not apply for their own opinion letter