Employers who sponsor retirement plans are not required to apply for a determination letter from the Service. Requesting and receiving a favorable determination letter provides the employer with reliance that the plan is qualified under IRC section 401(a) and the trust is exempt under section 501(a). This provides the employer with additional assurance that the deduction for contributions is allowable.

There are two types of pre-approved plans: Master and Prototype (M&P;) and Volume Submitter (VS) plans. M&P; plans are categorized as either Standardized or Non-Standardized. Adopters of pre-approved plans apply for a determination letter using Form 5307 - Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans to ensure the choice of elections in the Adoption Agreement meets the requirements of IRC section 401(a). Volume submitter plans provide additional flexibility in plan design. (See Revenue Procedure 2000-20; Announcement 2001-77 and Revenue Procedure 2004-6 for additional guidance.)

Requests for a determination letter for Individually Designed Plans are submitted on Form 5300 - Application for Determination for Employee Benefit Plan. In accordance with sections 9.093 and 9.12 of Revenue Procedure 2004-6, certain modification and/or changes to pre-approved plans would require submitting Form 5300.

Requesting a determination letter usually requires payment of a User Fee. However, the employer may be eligible for an exemption if certain criteria provided under the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) are met. (See Form 8717 - User Fee for Employee Plans Determination Letter Request; Notice 2002-1; and Revenue Procedure 2004-8 for additional guidance.)