Bulletin No. 2021–38

Agency decision

Ask Donna

What actually matters in this document.

Text

HIGHLIGHTS

OF THIS ISSUE

Bulletin No. 2021–38

September 20, 2021

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

ADMINISTRATIVE

EMPLOYEE PLANS

Notice 2021-52, page 381.

Rev. Proc. 2021-37, page 385.

Optional special per diem rates. This notice provides the

2021-2022 special per diem rates for taxpayers to use in

substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home. The

notice includes (1) the special transportation industry meal

and incidental expenses rates, (2) the rate for the incidental

expenses only deduction, and (3) the rates and list of highcost localities for the high-low substantiation method. This

notice also modifies Notice 2020-71, 2020-40 I.R.B. 786, to

correct the portion of the year Sedona, Arizona is a high-cost

locality under section 5 of Notice 2020-71.

Rev. Proc. 2021-39, page 426.

This revenue procedure provides temporary guidance regarding the public approval requirement under § 147(f) of the

Internal Revenue Code for tax-exempt qualified private activity bonds. Specifically, in light of the continuing Coronavirus

Disease 2019 (COVID-19) pandemic, this revenue procedure

extends until March 31, 2022, the time period described in

section 4.02 of Rev. Proc. 2020-21, 2020-22 I.R.B. 872,

as modified by Rev. Proc. 2020-49, 2020-48 I.R.B. 1121,

during which certain telephonic hearings are permitted.

Finding Lists begin on page ii.

This revenue procedure sets forth the procedures of the

IRS for issuing opinion letters regarding the satisfaction in

form of § 403(b) pre-approved plans with respect to the requirements of § 403(b) of the Internal Revenue Code for the

second remedial amendment cycle (Cycle 2). This revenue

procedure also sets forth the rules for determining when remedial amendment periods expire for § 403(b) pre-approved

plans.

Rev. Proc. 2021-38, page 425.

This revenue procedure modifies Rev. Proc. 2016-37 to extend the deadline for adopting an interim amendment for a

§ 401(a) pre-approved plan to match the deadline for adopting an interim amendment for a § 403(b) pre-approved plan,

which is set forth in Rev. Proc. 2021-37.

EXEMPT ORGANIZATIONS

Rev. Proc. 2021-40, page 426.

The IRS will not issue letter rulings on whether certain transactions are self-dealing within the meaning of section 4941(d)

of the Code. Rev. Proc. 2021-3 is amplified.

The IRS Mission

Provide America’s taxpayers top-quality service by helping

them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.

Introduction

The Internal Revenue Bulletin is the authoritative instrument

of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service

and for publishing Treasury Decisions, Executive Orders, Tax

Conventions, legislation, court decisions, and other items of

general interest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application

of the tax laws, including all rulings that supersede, revoke,

modify, or amend any of those previously published in the

Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of

internal practices and procedures that affect the rights and

duties of taxpayers are published.

Revenue rulings represent the conclusions of the Service

on the application of the law to the pivotal facts stated in

the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,

identifying details and information of a confidential nature are

deleted to prevent unwarranted invasions of privacy and to

comply with statutory requirements.

Rulings and procedures reported in the Bulletin do not have the

force and effect of Treasury Department Regulations, but they

may be used as precedents. Unpublished rulings will not be

relied on, used, or cited as precedents by Service personnel in

the disposition of other cases. In applying published rulings and

procedures, the effect of subsequent legislation, regulations,

court decisions, rulings, and procedures must be considered,

and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless

the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.

This part includes rulings and decisions based on provisions

of the Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A,

Tax Conventions and Other Related Items, and Subpart B,

Legislation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.

To the extent practicable, pertinent cross references to these

subjects are contained in the other Parts and Subparts. Also

included in this part are Bank Secrecy Act Administrative

Rulings. Bank Secrecy Act Administrative Rulings are issued

by the Department of the Treasury’s Office of the Assistant

Secretary (Enforcement).

Part IV.—Items of General Interest.

This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index

for the matters published during the preceding months. These

monthly indexes are cumulated on a semiannual basis, and are

published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

September 20, 2021

Bulletin No. 2021–38

Part III

Notice 2021-52

SECTION 1. PURPOSE

This annual notice provides the 20212022 special per diem rates for taxpayers

to use in substantiating the amount of ordinary and necessary business expenses

incurred while traveling away from home,

specifically (1) the special transportation

industry meal and incidental expenses

(M&IE) rates, (2) the rate for the incidental expenses only deduction, and (3) the

rates and list of high-cost localities for

purposes of the high-low substantiation

method. This notice also modifies Notice

2020-71, 2020-40 I.R.B. 786, to change

the portion of the year Sedona, Arizona

is a high-cost locality under section 5 of

Notice 2020-71.

SECTION 2. BACKGROUND

Rev. Proc. 2019-48, 2019-51 I.R.B.

1392 (or successor), provides rules for using a per diem rate to substantiate, under

§ 274(d) of the Internal Revenue Code and

§ 1.274-5 of the Income Tax Regulations,

the amount of ordinary and necessary

business expenses paid or incurred while

traveling away from home. Taxpayers using the rates and list of high-cost localities

provided in this notice must comply with

Rev. Proc. 2019-48 (or successor). Notice 2020-71, as modified by this notice,

provides the rates and list of high-cost localities for the period October 1, 2020, to

September 30, 2021.

SECTION 3. SPECIAL M&IE

RATES FOR TRANSPORTATION

INDUSTRY

The special M&IE rates for taxpayers

in the transportation industry are $69 for

any locality of travel in the continental

United States (CONUS) and $74 for any

locality of travel outside the continental

United States (OCONUS). See section

4.04 of Rev. Proc. 2019-48 (or successor).

SECTION 4. RATE FOR

INCIDENTAL EXPENSES ONLY

DEDUCTION

The rate for any CONUS or OCONUS

locality of travel for the incidental expenses only deduction is $5 per day. See

County or Other

Defined Location

Arizona

Key City

Sedona

Los Angeles

SECTION 5. HIGH-LOW

SUBSTANTIATION METHOD

1. Annual high-low rates. For purposes of the high-low substantiation method,

the per diem rates in lieu of the rates described in Notice 2020-71 (the per diem

substantiation method) are $296 for travel to any high-cost locality and $202 for

travel to any other locality within CONUS. The amount of the $296 high rate

and $202 low rate that is treated as paid

for meals for purposes of § 274(n) is $74

for travel to any high-cost locality and $64

for travel to any other locality within CONUS. See section 5.02 of Rev. Proc. 201948 (or successor). The per diem rates in

lieu of the rates described in Notice 202071 (the meal and incidental expenses only

substantiation method) are $74 for travel

to any high-cost locality and $64 for travel

to any other locality within CONUS.

2. High-cost localities. The following

localities have a federal per diem rate of

$249 or more, and are high-cost localities

for the specified portion of the calendar

year.

Portion of Calendar Year

October 1 – December 31, March 1 – April 30,

and September 1 – September 30

City Limits of Sedona

California

Los Angeles, Orange, Ventura, Edwards

AFB less the city of Santa Monica

Mill Valley/San Rafael/Novato

Marin

Monterey

Napa

Oakland

San Diego

San Francisco

San Mateo/Foster City/Belmont

Santa Barbara

Santa Monica

Sunnyvale/Palo Alto/San Jose

Alameda

San Diego

San Francisco

San Mateo

Santa Barbara

City limits of Santa Monica

Santa Clara

Bulletin No. 2021–38

section 4.05 of Rev. Proc. 2019-48 (or

successor).

381

October 1 - October 31 and January 1 September 30

October 1 – October 31 and June 1 –

September 30

June 1 – August 31

October 1 – November 30 and April 1 –

September 30

October 1 – September 30

February 1 – July 31

October 1 – September 30

September 20, 2021

County or Other

Defined Location

Colorado

Key City

Portion of Calendar Year

October 1 – March 31 and June 1 – September

December 1 – March 31

Aspen

Pitkin

Crested Butte/Gunnison

Gunnison

Denver/Aurora

Denver, Adams, Arapahoe, and Jefferson

October 1 – October 31 and April 1 –

September 30

Grand Lake

Silverthorne/Breckenridge

Telluride

Vail

Grand

Summit

San Miguel

Eagle

December 1 – March 31

October 1 – September 30

Delaware

Lewes

Sussex

July 1 – August 31

District of Columbia

Washington D.C. (also the cities of Alexandria, Falls Church, and Fairfax,

and the counties of Arlington and Fairfax, in Virginia; and the counties of

Montgomery and Prince George's in Maryland) (See also Maryland and

Virginia)

Florida

Boca Raton/Delray Beach/Jupiter

Palm Beach and Hendry

Fort Lauderdale

Broward

Fort Myers

Lee

Fort Walton Beach/De Funiak

Okaloosa and Walton

Springs

Key West

Monroe

Miami

Miami-Dade

Naples

Collier

Vero Beach

Indian River

Georgia

Jekyll Island/Brunswick

Glynn

Illinois

Chicago

October 1 – September 30

December 1 – April 30

January 1 – April 30

February 1 – March 31

June 1 – July 31

October 1 – July 31

December 1 – March 31

December 1 – April 30

March 1 – July 31

October 1 – November 30 and April 1 –

September 30

Cook and Lake

Maine

Bar Harbor/Rockport

Kennebunk/Kittery/Sanford

Hancock and Knox

York

July 1 – August 31

Maryland

Ocean City

Worcester

July 1 – August 31

Washington, DC Metro Area

Montgomery and Prince George’s

October 1 – September 30

Boston/Cambridge

Falmouth

Massachusetts

Suffolk, city of Cambridge

City limits of Falmouth

October 1 – September 30

July 1 – August 31

Hyannis

Barnstable less the city of Falmouth

July 1 – August 31

Martha's Vineyard

Dukes

June 1 – September 30

September 20, 2021

382

Bulletin No. 2021–38

County or Other

Defined Location

Key City

Nantucket

Portion of Calendar Year

June 1 – September 30

Michigan

Petoskey

Traverse City

Emmet

Grand Traverse

July 1 – August 31

Montana

Big Sky/West Yellowstone/Gardiner

Gallatin and Park

June 1 – September 30

New Mexico

Carlsbad

Eddy

October 1 – September 30

New York

Lake Placid

Essex

July 1 – August 31

New York City

Bronx, Kings, New York, Queens, and

Richmond

October 1 – December 31 and March 1 –

September 30

Oregon

Portland

Multnomah

Seaside

Clatsop

October 1 – October 31 and June 1 –

September 30

July 1 – August 31

Pennsylvania

Hershey

Philadelphia

June 1 – August 31

October 1 – November 30, March 1 – June 30,

and September 1 – September 30

Rhode Island

Jamestown/ Middletown/Newport

Newport

June 1 – August 31

South Carolina

Charleston

Charleston, Berkeley, and Dorchester

October 1 – November 30 and March 1 –

September 30

Hilton Head

Beaufort

June 1 – August 31

Tennessee

Nashville

Davidson

October 1 – September 30

Utah

Park City

Summit

December 1 – March 31

Virginia Beach

Wallops Island

Virginia

City of Virginia Beach

Accomack

June 1 – August 31

July 1 – August 31

Washington, DC Metro Area

Cities of Alexandria, Falls Church,

and Fairfax; Counties of Arlington and

Fairfax

Seattle

King

Vancouver

Clark, Cowlitz, and Skamania

October 1 – September 30

Washington

October 1 – September 30

October 1 – October 31 and June 1 –

September 30

Wyoming

Cody

Jackson/Pinedale

Bulletin No. 2021–38

Park

Teton and Sublette

June 1 – September 30

383

September 20, 2021

3. Changes in high-cost localities. The

list of high-cost localities in this notice

differs from the list of high-cost localities

in section 5 of Notice 2020-71.

a. The following locality has been added to the list of high-cost localities:

Hilton Head, South Carolina.

b. The following locality has changed

the portion of the year in which it is

a high-cost locality: Jamestown/Middletown/Newport, Rhode Island.

c. The following locality has been removed from the list of high-cost localities: Gulf Breeze, Florida.

SECTION 6. MODIFICATION TO

NOTICE 2020-71

The specified period for which Sedona,

Arizona is a high cost locality under section 5, paragraph 2 of Notice 2020-71 is

modified to be October 1, 2020 - Decem-

September 20, 2021

ber 31, 2020; March 1, 2021 - April 30,

2021; and September 1, 2021 - September 30, 2021. This section 6 is effective

for per diem allowances for lodging, meal

and incidental expenses, or for meal and

incidental expenses only, that are paid to

any employee on or after October 1, 2020,

for travel away from home on or after October 1, 2020.

fective for meal and incidental expenses

or for incidental expenses only paid or

incurred on or after October 1, 2021. See

sections 4.06 and 5.04 of Rev. Proc. 201948 (or successor) for transition rules for

the last 3 months of calendar year 2021.

SECTION 7. EFFECTIVE DATE

Notice 2020-71 is modified and superseded.

Except as provided in section 6 of this

notice, this notice is effective for per diem

allowances for lodging, meal and incidental expenses, or for meal and incidental

expenses only, that are paid to any employee on or after October 1, 2021, for

travel away from home on or after October 1, 2021. For purposes of computing

the amount allowable as a deduction for

travel away from home, this notice is ef-

384

SECTION 8. EFFECT ON OTHER

DOCUMENTS

DRAFTING INFORMATION

The principal author of this notice is

James Liechty of the Office of Associate

Chief Counsel (Income Tax & Accounting). For further information regarding

this notice contact James Liechty at (202)

317-7005 (not a toll-free number).

Bulletin No. 2021–38

Rev. Proc. 2021-37

TABLE OF CONTENTS

PART I – OVERVIEW

SECTION 1. PURPOSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .386

SECTION 2. BACKGROUND. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 387

SECTION 3. SIGNIFICANT PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391

SECTION 4. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392

PART II – PROCEDURES FOR APPLICATIONS FOR § 403(b) PRE-APPROVED PLANS

SECTION 5. PROVISIONS REQUIRED IN § 403(b) PRE-APPROVED PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396

SECTION 6. OPINION LETTERS – SCOPE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401

SECTION 7. ELIGIBILITY FOR THE CYCLE SYSTEM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402

SECTION 8. EMPLOYER RELIANCE ON OPINION LETTER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402

SECTION 9. PLAN AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405

SECTION 10. OPINION LETTER APPLICATIONS – INSTRUCTIONS TO PROVIDERS AND

OTHER RULES FOR APPLICATIONS AND OPINION LETTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408

SECTION 11. ADDITIONAL REQUIREMENTS FOR MASS SUBMITTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411

SECTION 12. OFF-CYCLE FILINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414

SECTION 13. REVIEW OF OPINION LETTER APPLICATIONS; ISSUANCE OF

OPINION LETTERS; EMPLOYER ADOPTION WINDOW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414

SECTION 14. WITHDRAWAL OF APPLICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415

SECTION 15. NONTRANSFERABILITY OF OPINION LETTER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416

SECTION 16. NOTIFICATION OF ADOPTING EMPLOYER REGARDING FAILURE OF

THE FORM OF THE PLAN TO SATISFY § 403(b) REQUIREMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 416

SECTION 17. DISCONTINUED PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416

SECTION 18. REVOCATION OF OPINION LETTER BY THE IRS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417

SECTION 19. RECORD KEEPING REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417

SECTION 20. WHERE TO FILE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418

PART III – REMEDIAL AMENDMENT PERIOD FOR A FORM DEFECT IN A § 403(b) PRE-APPROVED PLAN

SECTION 21. EXPIRATION OF REMEDIAL AMENDMENT PERIOD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418

SECTION 22. INTERIM AMENDMENT DEADLINE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419

SECTION 23. EXPIRATION OF LIMITED EXTENSION OF INITIAL REMEDIAL

AMENDMENT PERIOD FOR CYCLE 1 § 403(b) PRE-APPROVED PLANS;

EXTENSION OF DEADLINE FOR INITIAL AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419

SECTION 24. OPERATIONAL COMPLIANCE LIST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419

PART IV – SPECIAL RULE FOR RETIREMENT INCOME ACCOUNT § 403(b) PRE-APPROVED PLANS

SECTION 25. INCLUSION OF § 414(e)(3)(B) EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420

PART V – MISCELLANEOUS

SECTION 26. EFFECT ON OTHER DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420

SECTION 27. EFFECTIVE DATE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420

SECTION 28. PUBLIC COMMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421

SECTION 29. PAPERWORK REDUCTION ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421

SECTION 30. DRAFTING INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422

APPENDIX A – Application for Approval of § 403(b) Pre-approved Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423

Bulletin No. 2021–38

385

September 20, 2021

PART I – OVERVIEW

SECTION 1. PURPOSE

.01 This revenue procedure sets forth the procedures of the Internal Revenue Service (IRS) for

issuing Opinion Letters1 regarding the satisfaction in form of § 403(b) Pre-approved Plans with

respect to the requirements of § 403(b) of the Internal Revenue Code (Code) for the second Remedial Amendment Cycle (Cycle 2). This revenue procedure also sets forth the rules for determining

when Remedial Amendment Periods expire for § 403(b) Pre-approved Plans.

.02 This revenue procedure modifies the procedures for the § 403(b) Pre-approved Plan program

to be more similar to the procedures applicable under the § 401(a) pre-approved plan program in

several ways, including:

•

simplifying the § 403(b) Pre-approved Plan program by eliminating the distinction between

prototype and volume submitter plans;

•

providing that the IRS will issue a Cumulative List of Changes in the § 403(b) Requirements

(Cumulative List) identifying the § 403(b) Requirements that the IRS will take into account

in reviewing § 403(b) Pre-approved Plans submitted for Cycle 2;

•

making § 403(b) Pre-approved Plan program provisions regarding reliance on an Opinion

Letter more similar to the provisions applicable under the § 401(a) pre-approved plan program, including provisions that permit the submission during the Employer Adoption Window of an application for a determination letter using Form 5307, Application for Determination for Adopters of Modified Volume Submitter Plans, by (1) an Adopting Employer of a

Nonstandardized Plan that makes amendments to the plan that are not extensive, or (2) an

Adopting Employer of any § 403(b) Pre-approved Plan (whether a Standardized Plan or a

Nonstandardized Plan) that adds language to satisfy the requirements of § 415 due to the

required aggregation of plans;2 and

•

providing details regarding the system of cyclical Remedial Amendment Periods that follows

the Initial Remedial Amendment Period.

.03 This revenue procedure provides that the On-Cycle Submission Period for Cycle 2 applications will begin on May 2, 2022, and end on May 1, 2023.

.04 This revenue procedure extends the plan amendment deadline for making interim amendments

with respect to a change in § 403(b) Requirements, for most plans, until the end of the second calendar year following the calendar year in which the change in § 403(b) Requirements is effective

with respect to the plan.

.05 This revenue procedure sets forth the date on which the limited extension of the Initial Remedial Amendment Period described in section 4.113 expires and extends the deadline for adopting

an initial amendment (if applicable) that is required under certain circumstances in order for the

limited extension of the Initial Remedial Amendment Period to apply.

In general, capitalized terms are defined in section 4 of this revenue procedure.

The Department of the Treasury and the IRS also anticipate, subject to available resources, establishing a determination letter program for § 403(b) individually designed plans that will be

similar to the determination letter program for § 401(a) individually designed plans. See Rev. Proc. 2016-37, 2016‑29 I.R.B. 136 (as modified by Rev. Proc. 2017-41, 2017-29 I.R.B. 92, and

Rev. Proc. 2020-40, 2020‑38 I.R.B. 575), and Rev. Proc. 2021-4, 2021-1 I.R.B. 157 (as updated annually).

Unless otherwise specified, references to revenue procedure section numbers refer to sections of this revenue procedure.

September 20, 2021

386

Bulletin No. 2021–38

.06 This revenue procedure provides rules for permitting the participation of employees of certain

church-related organizations, as described in § 414(e)(3)(B), in a § 403(b) Pre-approved Plan that

is intended to be a Retirement Income Account, including special rules for amending a Cycle 1

§ 403(b) Pre-approved Plan that is intended to be a Retirement Income Account to permit the

participation of employees of certain church-related organizations, as described in § 414(e)(3)(B)

retroactive to the beginning of Cycle 2.

SECTION 2. BACKGROUND

.01 Final regulations under § 403(b) were published on July 26, 2007 (T.D. 9340, 72 FR 41128).

Section 1.403(b)-3(b)(3)(i) generally provides that a contract does not satisfy the requirements of

§ 1.403(b)-3(a) (regarding exclusion of contributions from gross income) unless it is maintained

pursuant to a plan. For this purpose, a plan is a written defined contribution plan that, in both form

and operation, satisfies the requirements of the final regulations under § 403(b).4

.02 Rev. Proc. 2013-22, 2013‑18 I.R.B. 985, as modified by Rev. Proc. 2014-28, 2014-16

I.R.B. 944, and Rev. Proc. 2015-22, 2015‑11 I.R.B. 754, and clarified by Rev. Proc. 2017-18,

2017‑5 I.R.B. 743,5 sets forth the procedures of the IRS for issuing opinion and advisory letters

for § 403(b) Pre-approved Plans for Cycle 1, which began on the later of January 1, 2010, or the

effective date of the plan, and that, ended on June 30, 2020. The IRS began accepting Cycle 1

applications for opinion and advisory letters regarding the acceptability under § 403(b) of the

form of prototype plans and volume submitter plans, respectively, on June 28, 2013. Section 16.01

of Rev. Proc. 2013‑22 provides that the IRS expects future guidance to require the restatement

of every § 403(b) Pre-approved Plan by the plan’s Provider every six years. It further provides

that upon issuance of a new opinion or advisory letter for the restated plan, Adopting Employers

generally are required to adopt the restated plan. Section 4.01(3) of Rev. Proc. 2013-22 noted that

the IRS was not establishing a determination letter program for § 403(b) plans at that time, so that

an employer adopting a § 403(b) Pre-approved Plan would not be able to apply for an individual

determination letter for the plan.

.03 Rev. Proc. 2013-22 provides that an employer that adopts a volume submitter plan and amends

the terms of the approved specimen plan loses reliance on the advisory letter only to the extent

of the amendment (as long as, after the amendment, the plan remains substantially similar to the

terms of the approved specimen plan), but that the employer has no option to obtain a determination letter on the amended portions of the plan.

.04 The IRS issued Cycle 1 opinion and advisory letters for § 403(b) Pre-approved Plans beginning in March 2017. As provided in those letters, the IRS considered changes set forth in the final

regulations under § 403(b) and the applicable requirements of the 2012 Cumulative List of Changes in Plan Qualification Requirements set forth in Notice 2012-76, 2012-52 I.R.B. 775.

.05 Rev. Proc. 2013-22 provides that a § 403(b) Pre-approved Plan that is intended to be a Retirement Income Account may be maintained only by a Church or convention or association

of churches, including an organization described in § 414(e)(3)(A), to provide benefits under

§ 403(b) for its employees or their beneficiaries as described in § 1.403(b)-9. Accordingly, under Rev. Proc. 2013-22, employees of a Qualified Church-Controlled Organization (QCCO) or a

non-QCCO may not participate in a § 403(b) Pre-approved Plan that is intended to be a Retirement Income Account.

The written plan document requirement applies to a § 403(b) plan maintained by a Church or a Qualified Church-Controlled Organization only if the plan is a Retirement Income Account

plan under § 403(b)(9). Section 1.403(b)-3(b)(3)(iii).

For purposes of this revenue procedure, references to Rev. Proc. 2013-22 are to Rev. Proc. 2013-22, as modified by Rev. Proc. 2014-28 and Rev. Proc. 2015-22, and clarified by Rev. Proc.

2017-18.

Bulletin No. 2021–38

387

September 20, 2021

.06 Section 21.02 of Rev. Proc. 2013-22 establishes an Initial Remedial Amendment Period, which

permits an Eligible Employer to retroactively correct defects in the form of its written § 403(b)

plan in order to satisfy the written plan requirement in the § 403(b) regulations by timely adopting

a § 403(b) Pre-approved Plan or by otherwise timely amending its plan. Pursuant to section 21.02

of Rev. Proc. 2013-22, a defect in the form of a plan is a provision, or the absence of a required

provision, that causes the plan to fail to satisfy the § 403(b) Requirements. Under this Initial Remedial Amendment Period, an Eligible Employer must amend its plan to the extent necessary to

correct any Form Defects retroactive to the first day of the plan’s Initial Remedial Amendment Period. Section 21.02 of Rev. Proc. 2013-22 provides that the first day of the plan’s Initial Remedial

Amendment Period is the later of January 1, 2010, or the effective date of the plan.

.07 Section 21.03 of Rev. Proc. 2013-22 provides, in general, that the form of a plan will be treated

as satisfying the requirements of the § 403(b) regulations as of the first day of the plan’s Initial

Remedial Amendment Period if (1) on or before that day, the Eligible Employer adopts a written

plan that is intended to satisfy the § 403(b) Requirements, and (2) on or before the last day of the

Initial Remedial Amendment Period, the employer amends the plan to the extent necessary to

correct any Form Defects retroactive to the first day of the Initial Remedial Amendment Period.

.08 Section 21.05 of Rev. Proc. 2013-22 provides that the IRS will announce, in subsequent guidance, the expiration date of the Initial Remedial Amendment Period for all Eligible Employers.

.09 Rev. Proc. 2014-28 modifies Rev. Proc. 2013-22 to reduce the number of employers required

to adopt a § 403(b) Pre-approved Plan, to permit an application for an advisory letter for a volume

submitter specimen plan to be filed by a Mass Submitter on behalf of a minor modifier of the Mass

Submitter’s plan, and to extend the deadline for submitting a § 403(b) Pre-approved Plan to the

IRS for an opinion or advisory letter.

.10 Rev. Proc. 2015-22 modifies Rev. Proc. 2013-22 to change the address to which applications

for an opinion or advisory letter should be submitted and to insert a user fee that was previously

omitted.

.11 Rev. Proc. 2017-18 provides that the last day of the Initial Remedial Amendment Period is

March 31, 2020. Rev. Proc. 2017-18 further provides that a plan that does not satisfy the § 403(b)

Requirements in form on any day during the Initial Remedial Amendment Period will be considered to have satisfied those requirements if, on or before March 31, 2020, all provisions of the plan

that are necessary to satisfy § 403(b) have been adopted and made effective in form and operation

from the beginning of the Initial Remedial Amendment Period.6

.12 Rev. Proc. 2019-39, 2019-42 I.R.B. 945, as modified by Notice 2020-35, 2020‑25 I.R.B. 948,

and Rev. Proc. 2020-40, 2020‑38 I.R.B. 575,7 establishes a system of § 403(b) Pre-approved

Plan cycles during which a Provider may submit a § 403(b) Pre-approved Plan for review and

approval by the IRS. Further, it sets forth a system of recurring Remedial Amendment Periods for

correcting Form Defects in § 403(b) Pre-approved Plans first occurring after the Initial Remedial

Amendment Period (that is, after June 30, 2020), and provides a limited extension of the Initial

Remedial Amendment Period for certain Form Defects.

.13 Section 5 of Rev. Proc. 2019-39 establishes a system of recurring Remedial Amendment Periods for § 403(b) individually designed plan Form Defects first occurring after the Initial Remedial

Amendment Period expires (that is, after June 30, 2020).

(1) Beginning of Remedial Amendment Period – Under this system, unless otherwise specified in

guidance published in the Internal Revenue Bulletin, a Remedial Amendment Period for a Form

Defect in a § 403(b) individually designed plan first occurring after the Initial Remedial Amendment Period, begins:

See section 2.20 of this revenue procedure for the extension of the expiration date of March 31, 2020, to June 30, 2020, by Notice 2020-35, 2020-25 I.R.B. 948.

For purposes of this revenue procedure, references to Rev. Proc. 2019-39 are to Rev. Proc. 2019-39, as modified by Rev. Proc. 2020-40 and Notice 2020-35.

September 20, 2021

388

Bulletin No. 2021–38

(a) in the case of a provision of, or absence of a provision from, a new plan, the date the plan is

put into effect;

(b) in the case of an amendment to an existing plan (other than a Form Defect that is related to a

change in § 403(b) Requirements, or that is integral to such a change), the date the plan amendment is adopted or put into effect, whichever is earlier;

change in those requirements, the date on which the change becomes effective with respect to

the plan; or

(d) in the case of a provision that is integral to a § 403(b) Requirement that has been changed, the

date the plan is first operated in accordance with the provision, as amended.

(2) Expiration of Remedial Amendment Period – Unless otherwise specified in guidance published

in the Internal Revenue Bulletin, the expiration date for a Remedial Amendment Period for a Form

Defect first occurring after the Initial Remedial Amendment Period is described in this section

2.13(2).

(a) New plan – In the case of a new plan, on the later of (i) the last day of the second calendar year

following the calendar year in which the plan is put into effect, or (ii) in the case of a Governmental Plan, 90 days after the close of the third regular legislative session of the legislative body with

the authority to amend the plan that begins after the end of the plan’s initial plan year.

(b) Amendment to existing plan – In the case of an amendment to an existing plan not relating

to, or integral to, a change in § 403(b) Requirements, on the later of (i) the last day of the second calendar year following the calendar year in which the amendment is adopted or effective,

whichever is later, or (ii) in the case of a Governmental Plan, 90 days after the close of the

third regular legislative session of the legislative body with the authority to amend the plan that

begins following the calendar year in which the amendment is adopted or effective, whichever

is later.

to, a change in § 403(b) Requirements, on the later of (i) the last day of the second calendar

year that begins after the issuance of the Required Amendments List (described in section 8

of Rev. Proc. 2019-39) in which the change in § 403(b) Requirements appears, or (ii) in the

case of a Governmental Plan, 90 days after the close of the third regular legislative session

of the legislative body with the authority to amend the plan that begins on or after the date

of issuance of the Required Amendments List in which the change in § 403(b) Requirements

appears.

.14 Sections 10 and 11 of Rev. Proc. 2019-39 establish a system of cyclical § 403(b) Pre-approved

Plan Remedial Amendment Periods following the expiration of the Initial Remedial Amendment

Period (that is, after June 30, 2020). Section 10.02 and 10.03 of Rev. Proc. 2019‑39 provide that

the period covered by the Initial Remedial Amendment Period is referred to as Cycle 1 and that

Cycle 2 begins after the Initial Remedial Amendment Period expires.

.15 Section 11.02 of Rev. Proc. 2019-39 provides that the beginning date of the Remedial Amendment Period with respect to a Form Defect first occurring in a § 403(b) Pre-approved Plan after the

Initial Remedial Amendment Period is the same date that would be applicable if that Form Defect

had occurred in an individually designed plan (see section 2.13(1) of this revenue procedure for a

description of the date a Remedial Amendment Period begins).

.16 Section 11.03 of Rev. Proc. 2019-39 provides that, except as otherwise provided by statute, or

in regulations or other guidance published in the Internal Revenue Bulletin, and provided that an

interim amendment (if applicable) is made timely and in good faith with the intent of complying

with the § 403(b) Requirements, the Remedial Amendment Period with respect to a § 403(b)

Bulletin No. 2021–38

389

September 20, 2021

Pre-approved Plan Form Defect first occurring after the Initial Remedial Amendment Period will

end no earlier than the end of Cycle 2 and that the IRS intends to issue guidance providing additional rules for determining the end of the Remedial Amendment Period.

.17 Section 11.04 of Rev. Proc. 2019-39 provides that an Eligible Employer adopting a § 403(b)

Pre-approved Plan generally must adopt an interim amendment with respect to a change in

§ 403(b) Requirements.

.18 Section 12 of Rev. Proc. 2019-39 sets forth plan amendment deadlines for interim amendments made to a § 403(b) Pre-approved Plan. In relevant part, section 12 of Rev. Proc. 201939 provides that a Provider (or Eligible Employer) is considered to have adopted an interim

amendment timely if the amendment is adopted by the later of (1) the end of the calendar year

following the calendar year in which the change in § 403(b) Requirements is effective with respect to the plan, or (2) in the case of a Governmental Plan, the later of (a) the end of the calendar year following the calendar year in which the change in § 403(b) Requirements is effective

with respect to the plan, or (b) 90 days after the close of the third regular legislative session of

the legislative body with the authority to amend the plan that begins on or after the date the plan

amendment becomes effective.

.19 Section 13 of Rev. Proc. 2019-39 provides a limited extension of the Initial Remedial Amendment Period with respect to certain § 403(b) Pre-approved Plan Form Defects first occurring

during Cycle 1, so that the Initial Remedial Amendment Period will end no earlier than the end of

Cycle 2. Section 13 of Rev. Proc. 2019-39 also provides that, prior to the end of Cycle 2, the IRS

will issue guidance providing rules for determining when the limited extension of the Initial Remedial Amendment Period expires with respect to a § 403(b) Pre-approved Plan Form Defect first

occurring during Cycle 1. See section 4.11 of this revenue procedure for more details regarding

the limited extension of the Initial Remedial Amendment Period.

.20 Notice 2020-35, in relevant part, modifies Rev. Proc. 2017-18 and Rev. Proc. 2019-39 to

change the expiration date of the Initial Remedial Amendment Period, and all dates that are based

on the expiration of the Initial Remedial Amendment Period, from March 31, 2020 to June 30,

2020.

.21 Rev. Proc. 2020-40 modifies Rev. Proc. 2019-39 to expand the situations in which the plan

amendment deadline for discretionary amendments made to a § 403(b) Pre-approved Plan may

be extended.

.22 Section 111 of Division O of the Further Consolidated Appropriations Act, 2020, Pub. L. 11694, 133 Stat. 2534 (2019), known as the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), provides that a Retirement Income Account may provide benefits for an employee described in § 414(e)(3)(B) (which includes employees of a tax-exempt

organization that is controlled by or associated with a church or convention or association of

churches, such as employees of a QCCO or a Non-QCCO).

.23 Rev. Proc. 2016-37, 2016-29 I.R.B. 136, as modified by Rev. Proc. 2017-41, 2017-29 I.R.B.

92, and Rev. Proc. 2020-40, sets forth rules for a regular six-year remedial amendment cycle for

§ 401(a) pre-approved plans and an extension of the remedial amendment period and adoption

deadline for plan amendments for § 401(a) pre-approved plans.

.24 Rev. Proc. 2017-41, as modified by Rev. Proc. 2018-21, 2018-14 I.R.B. 467, Rev. Proc. 201842, 2018-36 I.R.B. 424, Rev. Proc. 2020-10, 2020-2 I.R.B. 295, and Notice 2020-35, sets forth the

procedures of the IRS for issuing opinion letters regarding the qualification in form of § 401(a)

pre-approved plans.

.25 Rev. Proc. 2021-4, 2021-1 I.R.B. 157 (as updated annually), sets forth the general procedures

of the IRS regarding the issuance of Employee Plans determination letters, including determination letters for § 401(a) pre-approved plans.

September 20, 2021

390

Bulletin No. 2021–38

SECTION 3. SIGNIFICANT PROVISIONS

.01 This revenue procedure significantly modifies the procedures set forth in Rev. Proc. 2013-22

for issuing an Opinion Letter regarding the satisfaction of the form of a § 403(b) Pre-approved

Plan with respect to the § 403(b) Requirements. These modifications generally make the § 403(b)

Pre-approved Plan program more similar to the § 401(a) pre-approved plan program.

.02 The prototype and volume submitter programs are combined and replaced by a single Opinion

Letter program that provides for two types of plans: Standardized Plans and Nonstandardized

Plans. See section 4.27.

.03 A § 403(b) Pre-approved Plan may utilize either of two formats: a single plan document or a

basic plan document with an adoption agreement. See section 4.27.

.04 An Adopting Employer of a Nonstandardized Plan that makes amendments to the plan that

are not extensive will lose reliance on the Nonstandardized Plan’s Opinion Letter, but may obtain

reliance that the form of the plan, as amended, satisfies the § 403(b) Requirements by requesting

a determination letter using Form 5307 (as updated), under procedures similar to the procedures

applicable to § 401(a) pre-approved plans. See section 8.04. In addition, an Adopting Employer

of any § 403(b) Pre-approved Plan (whether a Standardized Plan or a Nonstandardized Plan) that

adds language to satisfy the requirements of § 415 due to the required aggregation of plans may

obtain reliance with regard to § 415 by applying for a determination letter using Form 5307 (as

updated), under procedures similar to the procedures applicable to § 401(a) pre-approved plans.

See section 8.04.

.05 The On-Cycle Submission Period for Cycle 2 will begin on May 2, 2022, and end on May 1,

2023. See section 10.02.

.06 Prior to the On-Cycle Submission Period for Cycle 2, the IRS will issue a Cumulative List that

identifies changes in the § 403(b) Requirements that will be taken into account with respect to a

plan document submitted to the IRS for Cycle 2 and that were not taken into account by the IRS

in its review during Cycle 1. See section 13.02.

.07 Applications for a minor modifier adopter of a Mass Submitter’s § 403(b) Pre-approved Plan

with respect to a Cycle will no longer be accepted after that Cycle’s Employer Adoption Window

begins. See section 12.02.

.08 All § 403(b) Pre-approved Plans are required to provide a definition of Employee. See section

5.13.

.09 Any Nonstandardized Plan may provide for either safe harbor or non-safe harbor hardship

distributions. See section 6.03.

.10 An employee described in § 414(e)(3)(B) is permitted to participate in a § 403(b) Pre-approved Plan that is intended to be a Retirement Income Account. See section 4.26. Additionally,

a Cycle 1 § 403(b) Pre-approved Plan that is intended to be a Retirement Income Account may

be amended to permit the participation of employees of certain church-related organizations, as

described in § 414(e)(3)(B), retroactive to the beginning of Cycle 2. See section 25.

.11 The expiration date of the Remedial Amendment Period for Form Defects first occurring after

June 30, 2020, in a § 403(b) Pre-approved Plan is provided. See section 21.

Bulletin No. 2021–38

391

September 20, 2021

.12 The amendment deadline for an interim amendment to a § 403(b) Pre-approved Plan that is

not a Governmental Plan is the end of the second calendar year following the calendar year in

which the change in § 403(b) Requirements is effective. Similarly, a later deadline is provided for

a § 403(b) Pre-approved Plan that is a Governmental Plan. See section 22.

.13 The expiration date of the limited extension of the Initial Remedial Amendment Period for certain Form Defects is provided. See section 23.01. In addition, the deadline for the initial amendment related to that extension for certain Form Defects is delayed until the later of June 30, 2020,

or the end of the second calendar year following the calendar year in which the change in § 403(b)

Requirements is effective with respect to a plan. See section 23.02.

.14 The Department of the Treasury (Treasury Department) and the IRS expect to continue to

update this Opinion Letter program revenue procedure, in whole or in part, from time to time,

including providing further improvements based on comments received. Accordingly, the Treasury Department and the IRS continue to invite further comments on how to improve the Opinion

Letter program. For information on how to submit comments, see section 28.

SECTION 4. DEFINITIONS

.01 Adopting Employer – An “Adopting Employer” is an Eligible Employer that adopts a § 403(b)

Pre-approved Plan offered by a Provider, including a plan that is word-for-word identical to, or a

Minor Modification of, a plan of a Mass Submitter.

.02 Adoption Agreement Plan – See section 4.27(2).

.03 Church – A “Church” is a church within the meaning of § 3121(w)(3)(A).

.04 Cycle – A “Cycle” is a Remedial Amendment Cycle, as defined in section 4.24.

.05 Eligible Employer – An “Eligible Employer” is an employer described in § 403(b)(1)(A).

.06 Employer Adoption Window – See section 4.24.

.07 Existing § 403(b) Pre-approved Plan – See section 4.27(3)(c).

.08 Flexible Plan – See section 4.14.

.09 Form Defect – A “Form Defect” is:

(1) a provision that causes a plan to fail to satisfy the § 403(b) Requirements;

(2) the absence of a provision that causes a plan to fail to satisfy the § 403(b) Requirements;

(3) a provision of a plan that is integral to a § 403(b) Requirement that has been changed (either by

statute, or in regulations or other guidance published in the Internal Revenue Bulletin); or

(4) the absence from a plan of a provision required by a change to the § 403(b) Requirements

(either by statute, or in regulations or other guidance published in the Internal Revenue Bulletin)

or integral to the change.

.10 Governmental Plan – A “Governmental Plan” is a governmental plan within the meaning of

§ 414(d).

September 20, 2021

392

Bulletin No. 2021–38

.11 Initial Remedial Amendment Period

(1) A plan’s “Initial Remedial Amendment Period” is the Remedial Amendment Period provided under Rev. Proc. 2013-22 that began on the later of January 1, 2010, or the effective date of

the plan, and that, pursuant to Rev. Proc. 2017-18, as modified by Notice 2020-35, expired on

June 30, 2020.

(2) Section 13 of Rev. Proc. 2019-39 provides a “limited extension of the Initial Remedial Amendment Period,” so that the Initial Remedial Amendment Period will end no earlier than the end of

Cycle 2. See section 23.01 of this revenue procedure for more details on the expiration of the

limited extension of the Initial Remedial Amendment Period. The limited extension of the Initial

Remedial Amendment Period applies to a Form Defect that: (a) either (i) results in the failure

of the plan to satisfy the § 403(b) Requirements by reason of a change in those requirements, or

(ii) is integral to the § 403(b) Requirement that has been changed, and (b) first occurs on or after

January 1, 2018.

(3) Section 13.03 of Rev. Proc. 2019-39 provides that an “initial amendment” that is intended in

good faith to correct a Form Defect must be timely adopted by the Provider (or the Adopting Employer, if applicable) for the limited extension of the Initial Remedial Amendment Period to apply.

To be considered timely, section 13.03 of Rev. Proc. 2019-39 provides that the initial amendment

must be adopted by the later of (a) the expiration of the Initial Remedial Amendment Period (that

is, June 30, 2020), or (b) the end of the calendar year following the calendar year in which the

change in § 403(b) Requirements is effective with respect to the plan. However, section 23.02 of

this revenue procedure extends the deadline for the initial amendment.

.12 Interim § 403(b) Pre-approved Plan – See section 4.27(3)(a).

.13 Investment Arrangement – An “Investment Arrangement” is a funding arrangement under a

§ 403(b) plan. An Investment Arrangement may be an annuity contract under § 1.403(b)-2(b)(2),

a custodial account under § 403(b)(7), or a Retirement Income Account.

.14 Mass Submitter – A “Mass Submitter” is any person that: (1) has an established place of business in the United States where it is accessible during every business day, and (2) submits Opinion

Letter applications on behalf of at least 15 unaffiliated Providers, each of which is offering, on a

word-for-word identical basis, the same plan. A Flexible Plan, as defined in section 11.03(1), that

is offered by a Provider is considered a word-for-word identical plan. For purposes of determining

whether 15 unaffiliated Providers offer, on a word-for-word basis, the same § 403(b) Pre-approved

Plan, a Mass Submitter that is also a Provider is treated as an unaffiliated Provider. For purposes of this definition, affiliation is determined under § 414(b) and (c). Any law firm, accounting

firm, consulting firm, or similar organization, will be considered to be affiliated with its partners,

members, associates, or similar affiliated persons. A Mass Submitter is treated as a Mass Submitter with respect to all of its plans, provided the 15 unaffiliated Provider requirement is met with

respect to at least one plan. See section 11 for rules relating to Mass Submitter plans.

.15 Minor Modification – See section 11.03(2).

.16 Newly Approved § 403(b) Pre-approved Plan – See section 4.27(3)(b).

.17 Non-qualified Church-Controlled Organization or Non-QCCO – A “Non-qualified

Church-Controlled Organization” or “Non-QCCO” is a church-controlled tax-exempt organization described in § 501(c)(3) that is not a QCCO.

.18 Nonstandardized Plan – A “Nonstandardized Plan” is a § 403(b) Pre-approved Plan that is not

a Standardized Plan.

.19 On-Cycle Submission Period – See section 4.24.

Bulletin No. 2021–38

393

September 20, 2021

.20 Opinion Letter – An “Opinion Letter” is a written statement issued by the IRS to a Provider or

Mass Submitter that the form of a § 403(b) Pre-approved Plan satisfies the § 403(b) Requirements.

For purposes of this revenue procedure, an opinion letter for a prototype plan or an advisory letter

for a volume submitter plan issued pursuant to Rev. Proc. 2013-22 is considered a Cycle 1 Opinion

Letter. An Opinion Letter issued under this revenue procedure is referred to as a Cycle 2 Opinion

Letter.

.21 Provider

(1) A “Provider” is any person (including, if applicable, a Mass Submitter) that: (a) has an established place of business in the United States where it is accessible during every business day, and

(b) represents to the IRS in its application for an Opinion Letter that it reasonably expects at least

15 Eligible Employers to adopt one of the § 403(b) Pre-approved Plans of the Provider. Notwithstanding the preceding sentence, a person that is otherwise eligible to be a Provider generally may

apply for an Opinion Letter for a plan that is intended to be a Retirement Income Account without

satisfying the 15‑Eligible-Employer requirement with respect to that plan. However, if that person

also applies for an Opinion Letter with respect to a § 403(b) Pre-approved Plan that is not a Retirement Income Account, the person would need to meet the 15-Eligible-Employer requirement

for the plan that is not a Retirement Income Account. A Provider may apply for Opinion Letters

for any number of § 403(b) Pre-approved Plans.

(2) The IRS reserves the right at any time to request from a Provider a list of the Eligible Employers that have adopted or are expected to adopt the Provider’s plans, including the employers’

business addresses and employer identification numbers.

(3) Notwithstanding the preceding provisions of this section 4.21, any person that has an established place of business in the United States where it is accessible during every business day may

be a Provider that offers a plan that is word-for-word identical to a plan of a Mass Submitter (as

an identical adopter) or a plan that includes Minor Modifications to a plan of a Mass Submitter

(as a minor modifier adopter) regardless of the number of Eligible Employers that are expected to

adopt the plan. See section 11 for rules relating to Mass Submitter plans, including procedures for

identical adopters and minor modifier adopters of Mass Submitter plans.

(4) By submitting an application for an Opinion Letter for a § 403(b) Pre-approved Plan under this

revenue procedure (or by having an application filed on its behalf by a Mass Submitter), a person

represents to the IRS that it is a Provider, and that it agrees to comply with any requirements

imposed on Providers by this revenue procedure. Failure to comply with these requirements may

result in the loss of eligibility to offer § 403(b) Pre-approved Plans and the revocation of Opinion

Letters that have been issued to the Provider.

.22 Qualified Church-Controlled Organization or QCCO – A “Qualified Church-Controlled Organization” or “QCCO” is a church-controlled tax-exempt organization described in § 501(c)(3) that

is a qualified church-controlled organization within the meaning of § 3121(w)(3)(B).

.23 Related Employers – For a plan that is not a Governmental Plan, “Related Employers” means

all employers that are aggregated with the Adopting Employer under § 414(b) and (c) (each as

modified by § 415(h)), (m), and (o) and the regulations thereunder. For a Governmental Plan,

“Related Employers” means all employers that are aggregated with the Adopting Employer in a

manner consistent with Notice 89-23, 1989-1 C.B. 654.

.24 Remedial Amendment Cycle – A “Remedial Amendment Cycle” or “Cycle” means one of

a series of recurring Remedial Amendment Periods applicable to § 403(b) Pre-approved Plans,

during which a Provider submits a proposed § 403(b) Pre-approved Plan for review and approval

by the IRS, and during which the plan, once approved, is adopted by Eligible Employers. Providers and Mass Submitters must submit applications for an Opinion Letter during the one-year

submission period (referred to as the On-Cycle Submission Period) that relates to an applicable

Cycle. When the review of § 403(b) Pre-approved Plan documents for a specific Cycle is close

September 20, 2021

394

Bulletin No. 2021–38

to being completed, the IRS will announce the date by which Adopting Employers must adopt

Newly Approved § 403(b) Pre-approved Plans. Depending upon the length of the IRS review

process, Eligible Employers will have approximately a two-year period to adopt the updated plan

(Employer Adoption Window). A Cycle ends at the end of the last day of the Employer Adoption

Window for that Cycle. The next Cycle begins on the following day. The On-Cycle Submission

Period for a Cycle may begin after the start of that Cycle.

.25 Remedial Amendment Period – The “Remedial Amendment Period” is the period during which

a § 403(b) plan may be amended to comply retroactively with the § 403(b) Requirements. As

provided in section 11.01 of Rev. Proc. 2019-39, as part of the correction of a Form Defect within

the Remedial Amendment Period for the Form Defect, an Adopting Employer must conform the

operation of the § 403(b) Pre-approved Plan to match the correction of the Form Defect retroactive to the beginning of the Remedial Amendment Period for the Form Defect. See section 2.13(1)

of this revenue procedure for a description of when the Remedial Amendment Period for a Form

Defect in a § 403(b) Pre-approved Plan begins. See section 21 of this revenue procedure for a description of when the Remedial Amendment Period for a Form Defect in a § 403(b) Pre-approved

Plan expires.

.26 Retirement Income Account – A “Retirement Income Account” is a defined contribution program established or maintained by a Church, including an organization described in § 414(e)(3)(A),

to provide benefits under § 403(b) for an employee described in § 403(b)(1) (including an employee described in § 414(e)(3)(B)) or his or her beneficiaries, as described in § 403(b)(9).

.27 § 403(b) Pre-approved Plan

(1) A “§ 403(b) Pre-approved Plan” is a § 403(b) plan (including a plan covering self-employed individuals) that is made available by a Provider for adoption by Eligible Employers. The two types

of § 403(b) Pre-approved Plans are Standardized Plans and Nonstandardized Plans. A § 403(b)

Pre-approved Plan includes an Interim § 403(b) Pre-approved Plan, a Newly Approved § 403(b)

Pre-approved Plan, and an Existing § 403(b) Pre-approved Plan, as described in this section 4.27.

(2) A § 403(b) Pre-approved Plan may be structured as an “Adoption Agreement Plan” or as a

“Single Document Plan.” An Adoption Agreement Plan consists of a basic plan document and

an adoption agreement. The basic plan document includes all of the nonelective provisions applicable to all Adopting Employers, and the adoption agreement includes the options that may

be selected by each Adopting Employer. No options (including blanks to be completed) may be

provided in the basic plan document portion of the Adoption Agreement Plan (except as provided

in section 11.03(1) regarding Flexible Plans). A Single Document Plan consists of a single plan

document offered by a Provider without an adoption agreement. A Single Document Plan may

include alternate paragraphs and options (including blanks to be completed by the Adopting Employer in accordance with specified parameters) that may be selected by an Adopting Employer.

(3) Categories of § 403(b) Pre-approved Plans. The following categories of § 403(b) Pre-approved Plans apply with respect to a Cycle.

(a) Interim § 403(b) Pre-approved Plan – An “Interim § 403(b) Pre-approved Plan,” which is a

plan (other than a Newly Approved § 403(b) Pre-approved Plan) that was not in existence in the

immediately preceding Cycle and that has been or will be submitted for an Opinion Letter for the

Cycle.

(b) Newly Approved § 403(b) Pre-approved Plan – A “Newly Approved § 403(b) Pre-approved

Plan,” which is a plan for which an Opinion Letter has been issued for the Cycle.

a plan (other than a Newly Approved § 403(b) Pre-approved Plan) that has received an Opinion

Letter for the immediately preceding Cycle.

Bulletin No. 2021–38

395

September 20, 2021

.28 § 403(b) Requirements – The “§ 403(b) Requirements” are the requirements of § 403(b),

including requirements provided in the Code, regulations, and other guidance published in the

Internal Revenue Bulletin.

.29 Single Document Plan – See section 4.27(2).

.30 Standardized Plan – A “Standardized Plan” is a § 403(b) Pre-approved Plan that meets the

requirements set forth in section 5.18.

PART II – PROCEDURES FOR APPLICATIONS FOR § 403(b) PRE-APPROVED PLANS

SECTION 5. PROVISIONS REQUIRED IN § 403(b) PRE-APPROVED PLANS

.01 Provisions required in all § 403(b) Pre-approved Plans – Each § 403(b) Pre-approved Plan

must comply with the requirements set forth in sections 5.03 through 5.17.

.02 Additional provisions – Section 5.18 sets forth additional provisions required for all Standardized Plans. If a § 403(b) Pre-approved Plan is intended to be a Retirement Income Account, the

plan also must include the provisions set forth in section 5.19.

.03 Inclusion of Investment Arrangements in the § 403(b) Pre-approved Plan – A § 403(b) Pre-approved Plan includes the Investment Arrangements under the plan in addition to the single plan

document or the basic plan document and adoption agreement. Every § 403(b) Pre-approved Plan

must therefore incorporate by reference the terms of the Investment Arrangements under the plan.

While the IRS’s review of an application for an Opinion Letter is limited to the terms of the single plan document or the basic plan document and adoption agreement, as applicable, the terms

of Investment Arrangements and other documents that are incorporated by reference in the plan

must satisfy applicable law and may not have any provisions that are inconsistent with § 403(b).

For example, if the forms of annuity benefit available under a plan are described in Investment

Arrangements under the plan, the terms of the Investment Arrangements must satisfy, if applicable

to the plan, the joint and survivor annuity requirements of ERISA § 205 and any applicable related

rules, such as rules relating to transfers of benefits that are subject to the joint and survivor annuity

requirement, and may not have any provisions that are inconsistent with § 403(b).

.04 Provision regarding conflicting provisions in Investment Arrangement or other documents –

Each § 403(b) Pre-approved Plan must provide that, in the event of any conflict between the terms

of the single plan document or the basic plan document and adoption agreement, as applicable,

and the terms of Investment Arrangements under the plan (or of any other documents incorporated

by reference into the plan), the terms of the single plan document or the basic plan document and

adoption agreement, as applicable, shall govern. See section 8.03(4) for the effect on reliance in

the event of a conflict. An Eligible Employer that adopts a § 403(b) Pre-approved Plan should

take this requirement into account in considering Investment Arrangements to be offered under

the plan as well as other documents that may be incorporated by reference. Since the terms of

Investment Arrangements under a § 403(b) Pre-approved Plan must be incorporated by reference

into the plan and those arrangements may not have any provisions that are inconsistent with

§ 403(b), plan terms that are required in a single plan document or the basic plan document and

adoption agreement, as applicable, under this section 5 should not create a conflict with the terms

of the Investment Arrangements under a properly drafted § 403(b) Pre-approved Plan. If there

nevertheless is a conflict, the terms of the single plan document or the basic plan document and

adoption agreement, as applicable, must control. The IRS anticipates providing updated sample

September 20, 2021

396

Bulletin No. 2021–38

plan language (Listing of Required Modifications or LRMs) before the On-Cycle Submission

Period with respect to a Cycle begins.

.05 Plan must satisfy § 403(b) Requirements independent of Investment Arrangements – The IRS’s

review of a § 403(b) Pre-approved Plan will consider only the terms of the single plan document

or the basic plan document and adoption agreement, as applicable. Accordingly, the provisions described in sections 5.03 through 5.17 (and sections 5.18 and 5.19, if applicable) must be included

in the single plan document or the basic plan document or adoption agreement, as appropriate, of

every § 403(b) Pre-approved Plan, regardless of the terms of any Investment Arrangements under

the plan or any other documents that may be incorporated by reference. This does not preclude the

adoption of a § 403(b) Pre-approved Plan (including a Standardized Plan) if different Investment

Arrangements under a plan have different features or prevent the inclusion of additional provisions

in the terms of the Investment Arrangements under the plan or other documents incorporated by

reference. Nor does it prevent a § 403(b) Pre-approved Plan from using Investment Arrangements

that are more restrictive than required by § 403(b) or the single plan document or the basic plan

document and adoption agreement. However, the terms of the single plan document or the basic

plan document and adoption agreement, as applicable, must satisfy the requirements of applicable law and sections 5.03 through 5.17 (and sections 5.18 and 5.19, if applicable) independent

of any Investment Arrangements under the plan or any other documents incorporated by reference. For example, an Adopting Employer’s Adoption Agreement Plan may offer both Investment

Arrangements that permit loans and Investment Arrangements that do not permit loans. In this

case, (1) the basic plan document must include provisions reflecting the § 403(b) Requirements,

including § 1.403(b)-6, and § 1.72(p)-1, and (2) the basic plan document and adoption agreement,

as completed by the Adopting Employer, must provide that, to the extent permitted by the terms

governing the applicable Investment Arrangement, participant loans are available. Similarly, for

example, if an Adopting Employer’s Single Document Plan offers both Investment Arrangements

that permit loans and Investment Arrangements that do not permit loans, then the single plan document must include provisions reflecting the § 403(b) Requirements, including § 1.403(b)-6, and

§ 1.72(p)-1, and must provide that, to the extent permitted by the terms governing the applicable

Investment Arrangement, participant loans are available. The IRS anticipates providing updated

LRMs before the On-Cycle Submission Period with respect to a Cycle begins.

.06 Vesting – A § 403(b) Pre-approved Plan may provide a vesting schedule for contributions other

than elective deferrals, rather than provide for full and immediate vesting of the contributions. Except in the case of certain Nonstandardized Plans described in this section 5.06, contributions other than elective deferrals (and earnings thereon) under a § 403(b) Pre-approved Plan must vest at

least as rapidly as would be required to satisfy the minimum vesting requirements of § 411(a)(2)(B)

applicable to a qualified plan under § 401(a), even if the plan is not subject to the parallel minimum vesting requirements under ERISA § 203. A Nonstandardized Plan that is designed to be

used for a plan that is not subject to the minimum vesting requirements of ERISA § 203 (for

example, a Governmental Plan) is not required to provide that contributions other than elective

deferrals will vest at least as rapidly as would be required to satisfy § 411(a)(2)(B). Every § 403(b)

Pre-approved Plan that provides a vesting schedule for contributions other than elective deferrals

must also satisfy the following requirements: (1) the portion of a participant’s interest in the plan

that is not vested must be maintained in a separate account for the participant that is treated as a

separate contract to which § 403(c) (or, in case of a Custodial Account, § 401(a)) applies, (2) as

amounts in the participant’s separate account become nonforfeitable, they must be removed from

the separate account and treated as amounts held under a § 403(b) plan, to the extent permitted

under § 1.403(b)-3(d)(2)(ii), and (3) all nonvested amounts remaining in the participant’s separate

account must become nonforfeitable upon termination of the plan.

.07 Appendix of administrative responsibilities – Every § 403(b) Pre-approved Plan must provide

that an appendix to the plan will identify the parties responsible for the various administrative

functions under the plan that are necessary to comply with the § 403(b) Requirements and other

tax requirements, including the requirements that apply on the basis of the aggregated Investment

Arrangements issued to a participant under the plan, and will list all the vendors of Investment Ar-

Bulletin No. 2021–38

397

September 20, 2021

rangements approved for use under the plan. Changes to the information in the required appendix

will not affect the Adopting Employer’s ability to rely on an Opinion Letter.

.08 Provider amendments – Each § 403(b) Pre-approved Plan must include a procedure for amendments by the Provider, so that changes in the Code, regulations, or other guidance published in

the Internal Revenue Bulletin, and any correction of the plan, may be applied to all Adopting

Employers. The procedure for amendments by the Provider also must state that, for purposes of

reliance on the Opinion Letter, the Provider will no longer have the authority to amend the plan

on behalf of the Adopting Employer as of the date the plan is treated as an individually designed

plan pursuant to section 9.05.

.09 Adopting Employer modification to satisfy § 415 – Each § 403(b) Pre-approved Plan must

provide that plan provisions may be amended by the Adopting Employer to the extent necessary to

satisfy § 415 because of the required aggregation of multiple plans under that section. Generally, a

space should be provided in the plan with instructions for the Adopting Employer to add language

as necessary to satisfy § 415. These provisions must be included in the adoption agreement of an

Adoption Agreement Plan.

.10 Provisions regarding reliance – Each § 403(b) Pre-approved Plan must include, in close proximity to the signature line, a statement that describes the limitations on employer reliance on an

Opinion Letter. See section 8.

.11 Requirements regarding dated signatures and adoption agreement provisions – Each § 403(b)

Pre-approved Plan must include an Adopting Employer signature and date line. The plan also

must include a statement that the Provider will inform the Adopting Employer of any amendments made to the plan or of the discontinuance of the plan. The Adopting Employer must sign

and date the adoption agreement or signature page of the plan when it first adopts the plan and

must complete, sign, and date a new adoption agreement or signature page if the plan has been

restated. In addition, the Adopting Employer must complete a new dated adoption agreement or

signature page if it modifies any prior elections or makes new elections. The signature requirement

may be satisfied by an electronic signature that reliably authenticates and verifies the adoption of

the adoption agreement or single plan document, or the restatement, amendment, or modification

thereof, by the Adopting Employer. In the case of an Adoption Agreement Plan, the adoption

agreement must state that it is to be used with only one basic plan document and must identify that

document. In addition, the adoption agreement must include a cautionary statement to the effect

that the failure to properly complete the adoption agreement may result in failure of the form of

the plan to meet the § 403(b) Requirements.

.12 Provider telephone numbers – Each § 403(b) Pre-approved Plan must include the Provider’s

name, address, and telephone number (or a space for the address and telephone number of the

Provider’s authorized representative) for inquiries by Adopting Employers regarding the adoption

of the plan, the meaning of plan provisions, or the effect of the Opinion Letter.

.13 Definition of employee – Each § 403(b) Pre-approved Plan that is not a Governmental Plan

must define an employee as any employee of the Adopting Employer maintaining the plan or

any other Eligible Employer aggregated with that Adopting Employer under § 414(b), (c), (m),

or (o) and the regulations thereunder. Each § 403(b) Pre-approved Plan that is a Governmental

Plan must define an employee as any employee of the Adopting Employer maintaining the plan

or any other Eligible Employer aggregated with that Adopting Employer in a manner consistent

with Notice 89-23.

.14 Crediting of service taking into account § 414(b), (c), (m), and (o) – Each § 403(b) Pre-approved Plan that is not a Governmental Plan must credit all service with any employer aggregated

with the Adopting Employer under § 414(b), (c), (m), or (o) and the regulations thereunder, as

service with the Adopting Employer maintaining the plan. Each § 403(b) Pre-approved Plan that

is a Governmental Plan must credit all service with any employer aggregated with the Adopting

Employer in a manner consistent with Notice 89-23, as service with the Adopting Employer maintaining the plan.

September 20, 2021

398

Bulletin No. 2021–38

.15 Uniformed Services Employment and Reemployment Rights Act and § 414(u) – Each § 403(b)

Pre-approved Plan must include a provision reflecting the requirements of § 414(u). See Rev.

Proc. 96-49, 1996-2 C.B. 369.

.16 Separate § 403(b) Pre-approved Plan for Retirement Income Account – A single § 403(b)

Pre-approved Plan may not be used for both a § 403(b) Pre-approved Plan that is a Retirement

Income Account and a § 403(b) Pre-approved Plan that is not a Retirement Income Account.

Thus, a separate § 403(b) Pre-approved Plan is required for a plan that is intended to constitute a

Retirement Income Account.

.17 Identifying category of Eligible Employer and plan – The adoption agreement or single plan

document of every § 403(b) Pre-approved Plan must satisfy the following requirements:

(1) Although a single adoption agreement may be made available to different categories of Eligible Employers, the adoption agreement must require the Adopting Employer to show its status as

an Eligible Employer by indicating whether the Adopting Employer is:

(a) a government-sponsored educational organization described in § 170(b)(1)(A)(ii) (a public

school);

(b) a tax-exempt organization described in § 501(c)(3) that is exempt from tax under § 501(a);

(d) a minister described in § 414(e)(5)(A).

(2) The adoption agreement or single plan document must require the Adopting Employer to show

its status with respect to the nondiscrimination requirements in § 1.403(b)-5 by indicating whether

the plan is:

(a) a Governmental Plan;

(b) a plan of an Adopting Employer that is a Church or QCCO for employees of the Church or

QCCO; or

.18 Provisions applicable to Standardized Plans – In addition to the requirements set forth in

sections 5.03 through 5.17, each Standardized Plan must either provide that the only contributions

that an Adopting Employer may elect to provide under the plan are elective deferrals or meet the

following requirements:

(1) Under § 1.415(f)-1(a)(3), all § 403(b) annuity contracts purchased by an employer for a participant are treated as one § 403(b) annuity contract for purposes of § 415. Section 1.415(f)-1(f)(2)

includes a special rule providing that, if a participant on whose behalf a § 403(b) annuity contract

is purchased is in control of any employer for a limitation year, the § 403(b) annuity contract

is aggregated with all other defined contribution plans maintained by that employer. For these

purposes, a custodial account and a Retirement Income Account are treated as a § 403(b) annuity

contract. Every Standardized Plan must include plan language reflecting these rules. In particular,

the plan language must coordinate the application of the § 415 limits to all the Standardized Plans

of the Adopting Employer and its Related Employers so that, if the only § 403(b) plans maintained

by the Adopting Employer and its Related Employers are Standardized Plans, the plans will satisfy § 415(c) and § 1.415(f)-1(a)(3) without requiring the addition of overriding plan language.

(2) Under the provisions governing eligibility and participation, the plan by its terms benefits all

employees except those who may be excluded under § 1.410(b)-6. The plan may provide options

as to whether some or all of the employees described in § 1.410(b)-6 are excluded, provided that

Bulletin No. 2021–38

399

September 20, 2021

the criteria for excluding employees described in § 1.410(b)-6 apply uniformly to all employees.

A Standardized Plan generally may not deny an allocation to an employee eligible to participate

merely because the employee is not an active employee on the last day of the plan year or has

failed to complete a specified number of hours of service during the year. However, the plan may

deny an allocation 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. A plan will not fail to satisfy the requirements of this section 5.18(2) with

respect to contributions other than elective deferrals merely because the plan provides, either as

the result of an elective provision or by default in the absence of an election to the contrary, that

individuals who become employees, within the meaning of section 5.13, as a result of a transaction described in § 410(b)(6)(C) are excluded from eligibility to participate in the plan during the

period beginning on the date of the transaction and ending on a date that is not later than the earlier

of the last day of the first plan year beginning after the date of the transaction or the date of a significant change in the plan or in the coverage of the plan. A transaction described in § 410(b)(6)(C)

is an asset or stock acquisition, merger, or other similar transaction involving a change in the employer of the employees of a trade or business.

(3) The eligibility requirements under the plan are not more favorable for highly compensated

employees (as defined in § 414(q)) than for other employees.

(4) Under the plan, allocations are determined on the basis of total compensation. The plan must

provide that, for purposes of allocations, the definition of total compensation is all compensation

within the meaning of § 415(c)(3), excluding all other compensation, or compensation that otherwise satisfies § 414(s) and § 1.414(s)‑1(c).

(5) If the plan provides for contributions other than elective deferrals and matching contributions,

the plan must satisfy one of the design-based safe harbors described in § 1.401(a)(4)-2(b)(2) with

respect to the contributions.

(6) 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. (For

information regarding benefits, rights, and features, and the determination of current availability,

see § 1.401(a)(4)-4.)

(7) Any hardship distribution satisfies the safe harbor standards in the regulations under § 401(k).

.19 Provisions applicable to a § 403(b) Pre-approved Plan intended to be a Retirement Income

Account

(1) Every § 403(b) Pre-approved Plan that is intended to be a Retirement Income Account must

state the intent to be a Retirement Income Account in accordance with § 1.403(b)-9(a)(2)(ii).

(2) The terms of the plan must satisfy the separate accounting, investment performance, and exclusive benefit requirements of § 1.403(b)-9(a)(2)(i).

(3) If the plan provides for benefits in the form of a life annuity, the plan must satisfy the present

value and benefit guarantee requirements of § 1.403(b)-9(a)(5), and the present value must be

based on reasonable actuarial assumptions that are either set forth in the plan or incorporated by

reference into the plan.

(4) The terms of the plan must set forth the nondiscrimination requirements of § 403(b)(12). The

plan also must state that the nondiscrimination requirements will be applied to any employee other

than an employee of a QCCO or Church.

(5) In the case of multiple employers that are not part of the same controlled group (as determined

under § 414(b), (c), (m), or (o)) participating in the plan, each Adopting Employer must identify

whether it is a Church, QCCO, non-QCCO, or minister.

September 20, 2021

400

Bulletin No. 2021–38

SECTION 6. OPINION LETTERS – SCOPE

.01 General limits on Opinion Letters – An Opinion Letter will be issued only to a Provider or

Mass Submitter. An Opinion Letter constitutes a determination that the form of a § 403(b) Pre-approved Plan satisfies the § 403(b) Requirements, subject to the requirements and limitations of

this revenue procedure. The IRS’s review of a Provider’s or Mass Submitter’s application for an

Opinion Letter for a § 403(b) Pre-approved Plan will consider only the terms of the single plan

document or the basic plan document and adoption agreement, as applicable. The IRS’s review

will not consider, and an Opinion Letter will not express an opinion with respect to, the terms of

any Investment Arrangements under the plan of any Adopting Employer or any other documents

that may be incorporated by reference into an Adopting Employer’s plan.

.02 Nonapplicability of this revenue procedure to §§ 401, 403(a), or 4975(e)(7) plans and to IRAs

(including traditional IRAs, Roth IRAs, SEPs, and SIMPLE IRAs) – An Opinion Letter will not be

issued under this revenue procedure for § 401, 403(a), or 4975(e)(7) plans (see Rev. Proc. 2017-41

for administrative procedures for seeking an opinion letter for § 401, 403(a), or 4975(e)(7) plans).

In addition, an Opinion Letter will not be issued under this revenue procedure for prototype plans

intended to meet the requirements for individual retirement arrangements under § 408. (See the

Form 5305 series, which provides model IRA documents that have been pre-approved by the

IRS and for which an opinion letter is not needed. See also Rev. Proc. 87-50, 1987‑2 C.B. 647,

as modified by Rev. Proc. 97-29, 1997-1 C.B. 698; Rev. Proc. 98-59, 1998-2 C.B. 727; and Rev.

Proc. 2010-48, 2010-50 I.R.B. 828, for administrative procedures for seeking an opinion letter for

individual retirement arrangements under § 408.)

.03 Plans for which an Opinion Letter will not be issued – An Opinion Letter will not be issued for:

(1) a plan under which the § 415 limitations are incorporated by reference;

(2) a plan under which the actual contribution percentage (ACP) test under § 401(m)(2) is incorporated by reference;

(3) a Nonstandardized Plan that provides for hardship distributions under circumstances not described in the safe harbor standards in the regulations under § 401(k), unless the availability of

these distributions is subject to nondiscriminatory and objective criteria included in the plan;

(4) a plan that includes blanks or fill-in provisions for the Adopting Employer to complete, unless

the provisions have parameters that preclude the Adopting Employer from completing the provisions in a manner that could violate the § 403(b) Requirements;

(5) a TEFRA church defined benefit plan (see § 1.403(b)-10(f)(2)); or

(6) a plan grandfathered under Rev. Rul. 82-102, 1982-1 C.B. 62.

.04 An Opinion Letter does not consider Title I issues – An Opinion Letter does not express an

opinion, and may not be relied upon, with respect to whether any plan is subject to the requirements of Title I of ERISA or whether a plan satisfies any of those requirements.

.05 An Opinion Letter does not consider issues related to a plan’s coverage of multiple employers

that are not in a single controlled group – For a § 403(b) Pre-approved Plan that is not a Governmental Plan, an Opinion Letter does not express an opinion, and may not be relied upon, with

respect to whether the plan meets any requirements that apply due to a plan’s coverage of multiple

employers that are not in a single controlled group for purposes of § 414(b), (c), (m), or (o) and the

Bulletin No. 2021–38

401

September 20, 2021

regulations thereunder. For a § 403(b) Pre-approved Plan that is a Governmental Plan, an Opinion

Letter does not express an opinion, and may not be relied upon, with respect to whether the plan

meets any requirements that apply due to a plan’s coverage of multiple employers that are not

aggregated in a single controlled group in a manner consistent with Notice 89-23.

.06 IRS discretion – The IRS may, in its discretion, decline to issue an Opinion Letter for other

types of plans or issues not described in this section.

SECTION 7. ELIGIBILITY FOR THE CYCLE SYSTEM

An Eligible Employer may adopt a § 403(b) Pre-approved Plan (including an Interim § 403(b)

Pre-approved Plan or an Existing § 403(b) Pre-approved Plan) at any time during a Cycle. Unless otherwise provided by this revenue procedure, upon an Eligible Employer’s adoption of a

§ 403(b) Pre-approved Plan, the plan becomes eligible for the Cycle system. The preceding sentence applies to an Eligible Employer that adopts a § 403(b) Pre-approved Plan that amends or

restates a plan maintained by the Eligible Employer, as long as the form of the plan that is being

amended or restated satisfies the § 403(b) Requirements at the time of the adoption of the § 403(b)

Pre-approved Plan. In order for a plan to remain a § 403(b) Pre-approved Plan, an Adopting

Employer of the plan must adopt, by the end of the Employer Adoption Window for each Cycle,

either the newly approved version of the same plan or a newly approved version of a different

§ 403(b) Pre-approved Plan. An Adopting Employer that fails to adopt a newly approved version

of a § 403(b) Pre-approved Plan by the end of any Employer Adoption Window will no longer be

treated as maintaining a § 403(b) Pre-approved Plan. See section 9 for the effect of certain plan

amendments on a plan’s eligibility for the Cycle system.

SECTION 8. EMPLOYER RELIANCE ON OPINION LETTER

.01 Standardized Plans

(1) An Adopting Employer of a Standardized Plan may rely on the Standardized Plan’s Opinion

Letter that the form of the Adopting Employer’s plan satisfies the § 403(b) Requirements, including, if applicable, the requirements of §§ 401(a)(4) and 410(b), if:

(a) the Standardized Plan has a currently valid Opinion Letter;

(b) the Adopting Employer has not amended the Standardized Plan other than to choose options

provided under the Standardized Plan or to make amendments that are described in section 9.03

relating to employer amendments that will not affect reliance (see also section 9.05 for when a

§ 403(b) Pre-approved Plan is treated as individually designed); and

for contributions other than elective deferrals and all of the employers in the Adopting Employer’s controlled group are Eligible Employers. For this purpose, for a § 403(b) Pre-approved Plan

that is not a Governmental Plan, the Adopting Employer’s controlled group is determined under

§ 414(b), (c), (m), or (o) and the regulations thereunder; for a § 403(b) Pre-approved Plan that

is a Governmental Plan, the Adopting Employer’s controlled group is determined in a manner

consistent with Notice 89-23. If the plan provides for contributions other than elective deferrals

September 20, 2021

402

Bulletin No. 2021–38

and the Adopting Employer’s controlled group includes any employer that is not an Eligible Employer, the Adopting Employer may rely on the Opinion Letter, except with respect to whether

contributions other than elective deferrals under the plan satisfy the requirements of §§ 401(a)(4)

and 410(b).

(2) Notwithstanding the other provisions of this section 8, an Opinion Letter issued for a Standardized Plan may not be relied upon with respect to the requirements of § 415 if the Adopting

Employer or any of its Related Employers maintains another § 403(b) plan covering any of the

same participants as the Standardized Plan, unless the other plan is also a Standardized Plan. (Also

see §§ 1.415(c)-1(d) and 1.415(f)-1(f) for special rules applicable to § 403(b) plans.) However, an

Adopting Employer of a Standardized Plan that adds language to satisfy the requirements of § 415

due to the required aggregation of plans may obtain reliance with regard to § 415 by applying for

a determination letter using Form 5307 (as updated). See section 8.04.

(3) Additionally, the Adopting Employer of a Standardized Plan may not rely on the Opinion

Letter for the Standardized Plan with respect to: (a) whether the timing of any amendment to the

Adopting Employer’s plan (or series of amendments) satisfies the nondiscrimination requirements

of § 1.401(a)(4)-5(a), except with respect to plan amendments granting past service that meet the

safe harbor described in § 1.401(a)(4)‑5(a)(3) and are not part of a pattern of amendments that

significantly discriminates in favor of highly compensated employees, or (b) whether the Adopting Employer’s plan satisfies the effective availability requirement of § 1.401(a)(4)-4(c) with

respect to any benefit, right, or feature. An Eligible Employer that adopts a Standardized Plan as

an amendment to a plan other than a Standardized Plan may not rely on the Opinion Letter for the

Standardized Plan with respect to whether a benefit, right, or feature that is prospectively eliminated satisfies the current availability requirements of § 1.401(a)(4)-4, if applicable.

.02 Nonstandardized Plans – An Adopting Employer of a Nonstandardized Plan may rely on

the plan’s Opinion Letter that the form of the Adopting Employer’s plan satisfies the § 403(b)

Requirements, provided that the Nonstandardized Plan has a currently valid Opinion Letter, the

Adopting Employer’s plan is identical to the Nonstandardized Plan, and the Adopting Employer

has not amended the plan other than by choosing options provided under the plan or by making

amendments that are described in section 9.03 relating to employer amendments that will not

affect reliance.

(1) Except as otherwise provided in this section 8.02, an Adopting Employer of a Nonstandardized

Plan may not rely on the plan’s Opinion Letter with respect to the requirements, if applicable, of:

(a) § 401(a)(4), 410(b), or 414(s); or

(b) § 415, if the Adopting Employer or any of its Related Employers maintain another § 403(b)

plan covering any of the same participants as the Nonstandardized Plan. (See also §§ 1.415(c)1(d) and 1.415(f)-1(f) for special rules applicable to § 403(b) plans.) However, an Adopting Employer of a Nonstandardized Plan that adds language to satisfy the requirements of § 415 due

to the required aggregation of plans may obtain reliance with regard to § 415 by applying for a

determination letter using Form 5307 (as updated). See section 8.04.

(2) An Adopting Employer of a Nonstandardized Plan may rely on the plan’s Opinion Letter with

respect to the requirements of § 410(b), if applicable, if all nonexcludable employees benefit under

the Adopting Employer’s plan.

(3) Nonstandardized Plans may permit an Adopting Employer to select an allocation formula

for contributions other than elective deferrals that satisfies one of the design-based safe harbors

in § 1.401(a)(4)-2(b)(2), and to select a safe harbor compensation definition for the formula that

satisfies § 1.414(s)‑1(c). If the Adopting Employer selects an allocation formula for contributions

other than elective deferrals that satisfies one of the design-based safe harbors in § 1.401(a)(4)2(b)(2), and, if the allocation formula is based on compensation, selects a safe harbor compensation definition that satisfies § 1.414(s)-1(c), then the Adopting Employer may rely on an Opinion

Bulletin No. 2021–38

403

September 20, 2021

Letter with respect to the nondiscriminatory amounts requirement under § 401(a)(4), if applicable.

An Adopting Employer of a Nonstandardized Plan that includes § 401(m) matching contributions

may rely on the plan’s Opinion Letter with respect to whether the form of the plan satisfies the

ACP test of § 401(m)(2) if the Adopting Employer elects to use a safe harbor definition of compensation in the test. An Adopting Employer of a Nonstandardized Plan that meets the safe harbor

requirements described in § 401(m)(11) or 401(m)(12) may rely on the plan’s Opinion Letter

with respect to whether the form of the Adopting Employer’s plan satisfies the requirements of

§ 401(m), unless the Adopting Employer’s plan provides for the safe harbor contributions under

§ 401(m)(11) or 401(m)(12) to be made under another plan.

.03 Other limitations and conditions on reliance – Notwithstanding any provision in this section

8 to the contrary, the following conditions and limitations regarding reliance by an Adopting Employer on an Opinion Letter apply with respect to all § 403(b) Pre-approved Plans:

(1) An Adopting Employer may rely on an Opinion Letter for a § 403(b) Pre-approved Plan that

amends or restates a plan of the Adopting Employer only if the form of the plan that is being

amended or restated satisfied the § 403(b) Requirements. Accordingly, prior to being amended

or restated, the plan must either have timely corrected any Form Defects for which the Remedial

Amendment Period is closed or have corrected any plan document failures under the Employee

Plans Compliance Resolution System (EPCRS). See Rev. Proc. 2021-30, 2021-31 I.R.B. 172 (or

its successor).

(2) An Adopting Employer may not rely on an Opinion Letter if the Adopting Employer’s adoption of a § 403(b) Pre-approved Plan precedes the issuance of an Opinion Letter for the plan. In

this case, in order to have reliance, the Adopting Employer would need to re-adopt the § 403(b)

Pre-approved Plan after the issuance of the Opinion Letter for the plan.

(3) An Adopting Employer may not rely on an Opinion Letter if the adoption agreement or other

elective provisions in the plan are not completed correctly by the Adopting Employer.

(4) An Adopting Employer may not rely on an Opinion Letter if any Investment Arrangement

under the plan or any other document that may be incorporated by reference provides that the

terms of the Investment Arrangement or other document shall govern in the event of any conflict

between the terms of the Investment Arrangement or other document and the terms of the plan.

(5) The issuance of an Opinion Letter does not constitute a determination by the IRS that an

Adopting Employer’s plan is a Governmental Plan or that an Adopting Employer is a Church or

QCCO.

(6) Pursuant to section 10.10, a Provider’s failure to disclose a material fact, misrepresentation

of a material fact, or failure to accurately provide any of the information called for on any form

required by this revenue procedure (or in Appendix A, if used) may result in the inability of Adopting Employers to rely on an Opinion Letter (for example, if there is a failure to disclose a material

fact, the IRS may revoke the Opinion Letter due to the failure).

(7) Pursuant to section 11.03(2)(c), if a Mass Submitter fails to identify a significant modification,

the failure will be considered a material misrepresentation, and an Adopting Employer may not

rely on an Opinion Letter issued with respect to the plan for the modification or any other provision of the plan that may be affected by the modification.

.04 Obtaining a determination letter – An Adopting Employer of a Nonstandardized Plan that

makes amendments to the plan that are not extensive may obtain reliance that the form of the plan,

as amended, satisfies the § 403(b) Requirements by requesting a determination letter using Form

5307 (as updated) under procedures similar to the procedures applicable to § 401(a) pre-approved

plans, and may do so regardless of whether a prior determination letter has been issued with respect to the plan. In addition, if an employer adds language to a § 403(b) Pre-approved Plan to sat-

September 20, 2021

404

Bulletin No. 2021–38

isfy the requirements of § 415 due to the required aggregation of plans, the employer may obtain

reliance with regard to § 415 by applying for a determination letter on Form 5307 (as updated).

The determination letter application must be filed during the applicable Employer Adoption Window (for example, a determination letter application for a Cycle 2 plan must be filed during the

Cycle 2 Employer Adoption Window). The plan submitted for a Form 5307 determination letter

will be reviewed based on the Cumulative List applicable to the underlying § 403(b) Pre-approved

Plan. Specific eligibility requirements and submission procedures applicable to filing a Form 5307

determination letter application will be provided in a future update of Rev. Proc. 2021-4 (updated

annually).

SECTION 9. PLAN AMENDMENTS

.01 Provider plan amendments generally – Providers are required to amend their § 403(b) Pre-approved Plans to ensure that the form of their plans continues to satisfy the § 403(b) Requirements.

Providers must make reasonable and diligent efforts, as soon as practicable following the adoption

of plan amendments, to ensure that Adopting Employers of the Provider’s plan have actually received and are aware of the plan amendments. The date on which each amendment is adopted by

the Provider must be included with the amendment provided to Adopting Employers. Failure to

comply with these requirements may result in the loss of eligibility to offer § 403(b) Pre-approved

Plans and the revocation of an Opinion Letter that has been issued to the Provider.

.02 Interim amendment requirement – A § 403(b) Pre-approved Plan must be operated in accordance with its written plan document. When there are changes to § 403(b) Requirements that

affect the provisions of the written plan document, the adoption of interim amendments generally

will be required in accordance with the rules set forth in section 11.04 of Rev. Proc. 2019-39. See

section 22 of this revenue procedure regarding the deadline by which interim amendments must

be adopted. Failure to make the interim amendments may result in the form of the plan failing

to satisfy the § 403(b) Requirements. The Provider must have a procedure to notify an Adopting

Employer of amendments and restatements of the plan and to inform the Adopting Employer,

when applicable, of the need to timely adopt or amend the plan, including in the case of both initial

adoption and restatement of the plan. The Provider must also notify an Adopting Employer that

failure to timely adopt the plan or restatement, when required, or failure to take into account plan

amendments in the operation of the plan, could result in adverse tax consequences. See section

10.04 of this revenue procedure for additional application submission requirements for interim

amendments.

.03 Employer amendments that will not affect reliance – As provided in section 8, an Adopting

Employer may continue to rely on an Opinion Letter for a § 403(b) Pre-approved Plan if it makes

amendments to the plan that are described in paragraphs (1) through (8) of this section 9.03. See

sections 8.01 and 8.02 for the effect of any other amendments on reliance on an Opinion Letter by

the Adopting Employer. The following types of amendments will not cause an Adopting Employer

to lose reliance on an Opinion Letter:

(1) amendments to the plan to add or change a provision (including choosing among options in the

plan) or to specify or change the effective date of a provision, provided the Adopting Employer is

permitted to make the modification or amendment under the terms of the § 403(b) Pre-approved

Plan, as well as under § 403(b), and, in the case of a Standardized Plan, the provision is identical

to a provision in the § 403(b) Pre-approved Plan, except for the effective date;

(2) sample or model amendments published by the IRS that specifically provide that their adoption

will not cause a plan to fail to be identical to the § 403(b) Pre-approved Plan;

Bulletin No. 2021–38

405

September 20, 2021

(3) amendments that adjust the limitations under §§ 415, 402(g), 401(a)(17), and 414(q)(1)(B) to

reflect annual cost-of-living increases;

(4) plan language completed by the Adopting Employer if the overriding language is necessary to

satisfy § 415 because of the required aggregation of multiple plans under that section, in accordance with section 5.09;

(5) interim amendments or discretionary amendments, as described in sections 11 and 12 of Rev.

Proc. 2019-39, that are related to a change in the § 403(b) Requirements for the form of a plan;

(6) amendments that reflect a change of a Provider’s name, in which case the Provider must notify

the IRS, in writing, of the change in name and certify that it still meets the conditions to be a Provider described in section 4.21 (see also section 15 regarding changes in employer identification

numbers);

(7) amendments to the administrative provisions in the plan (such as provisions relating to investments, plan claims procedures, or the Adopting Employer’s contact information), provided

the amended provisions are not in conflict with any other provision of the plan, still meet the

requirements of this revenue procedure, and do not cause the plan to fail to satisfy the § 403(b)

Requirements (see section 11.03(1)(b)(ii) for additional examples of administrative provisions);

and

(8) amendments with respect to which a closing agreement under the Audit Closing Agreement

Program or a compliance statement under the Voluntary Correction Program of EPCRS has been

issued (see section 6.05(2)(b) of Rev. Proc. 2021-30 regarding the ability of the Adopting Employer to rely on the Opinion Letter).

.04 Effect of employer amendments on a plan’s eligibility for the Cycle system – Except as provided in section 9.05, employer amendments made to the § 403(b) Pre-approved Plan will not affect

the plan’s eligibility for the Cycle system. See section 8.04 for situations in which an Adopting

Employer may obtain a determination letter using Form 5307 (as updated).

.05 Section 403(b) Pre-approved Plans treated as individually designed – An Adopting Employer’s § 403(b) Pre-approved Plan will be treated as individually designed (and the Adopting Employer may not rely on the plan’s Opinion Letter and will lose eligibility for the Cycle system)

under the following circumstances:

(1) An Adopting Employer makes any amendment to a Standardized Plan other than an amendment listed in section 9.03 or as otherwise described in this section 9.05. In this case, the Adopting

Employer will lose reliance on the Opinion Letter as of the effective date of the amendment but

the plan will remain eligible for the Cycle system (provided that the Adopting Employer adopts

timely interim amendments) until the end of the Cycle that includes the effective date.

(2) An Adopting Employer amends a § 403(b) Pre-approved Plan (including its adoption agreement, if applicable) within one year of the date the Adopting Employer initially adopted the

§ 403(b) Pre-approved Plan to incorporate a type of plan not permitted in the Opinion Letter

program, as described in section 6.03. In this case, the Adopting Employer will be treated as never

having had any reliance on the Opinion Letter and will be treated as never having been eligible

for the Cycle system.

(3) An Adopting Employer amends a § 403(b) Pre-approved Plan (including its adoption agreement, if applicable) more than one year after the date the Adopting Employer initially adopted

the § 403(b) Pre-approved Plan to incorporate a type of plan not permitted in the Opinion Letter

program, as described in section 6.03. In this case, the Adopting Employer will lose reliance on

the Opinion Letter as of the effective date of the amendment but the plan will remain eligible for

September 20, 2021

406

Bulletin No. 2021–38

the Cycle system (provided that the Adopting Employer adopts timely interim amendments) until

the end of the Cycle that includes the effective date.

(4) The IRS, in its sole discretion, determines that a Nonstandardized Plan is an individually designed plan due to amendments to the plan that are extensive (that is, the plan of the Adopting Employer as amended is no longer substantially similar to the Nonstandardized Plan of the Provider).

In this case, the Adopting Employer generally will lose reliance on the Opinion Letter as of the

effective date of the amendments but the plan will remain eligible for the Cycle system (provided

that the Adopting Employer adopts timely interim amendments) until the end of the Cycle that

includes the effective date.

(5) An Adopting Employer chooses to discontinue participation in a § 403(b) Pre-approved Plan

that has been amended by the Provider, without substituting another § 403(b) Pre-approved Plan.

In this case, the Adopting Employer will lose reliance on the Opinion Letter as of the date participation in the § 403(b) Pre-approved Plan ends but the plan will remain eligible for the Cycle

system (provided that the Adopting Employer adopts timely interim amendments) until the end

of the Cycle that includes the date on which participation in the § 403(b) Pre-approved Plan ends.

(6) An Adopting Employer makes an amendment to a § 403(b) Pre-approved Plan that removes

any of the required provisions of section 5. In this case, the Adopting Employer will lose reliance

on the Opinion Letter as of the effective date of the amendment but the plan will remain eligible

for the Cycle system (provided that the Adopting Employer adopts timely interim amendments)

until the end of the Cycle that includes the effective date.

.06 Example – Employer X adopts a newly approved Standardized Plan during the Cycle 2 Employer Adoption Window. During the first year of Cycle 3, Employer X makes an amendment

described in section 9.05(1), effective as of the first day of the plan year that begins during the first

year of Cycle 3. Pursuant to section 9.05(1), beginning on the first day of that plan year, Employer

X’s plan is treated as an individually designed plan. Pursuant to section 5.08, the Provider will no

longer have the authority to amend the plan on behalf of the Adopting Employer. Provided that

Employer X adopts timely interim amendments, Employer X’s plan will remain eligible for the

Cycle through the end of Cycle 3. Employer X decides to no longer be an individually designed

plan and adopts a Newly Approved § 403(b) Pre-approved Plan during the Cycle 3 Employer

Adoption Window. As a result, it will have a § 403(b) Pre-approved Plan and be eligible for the

Cycle system. However, if, instead, Employer X decides to continue to be an individually designed plan, then, by the end of Cycle 3, Employer X’s plan must be amended to reflect all changes

in § 403(b) Requirements for which the Remedial Amendment Period applicable to individually

designed plans will have expired;8 moreover, after Cycle 3, Employer X’s plan is subject to the

Remedial Amendment Period rules for individually designed plans. See EPCRS, Rev. Proc. 202130 (or its successor), for correcting a Form Defect after the expiration of the Remedial Amendment Period for the Form Defect.

.07 No Form 5307 Determination Letter for Pre-approved Plans Treated as Individually Designed

– If a plan is treated as individually designed as provided in section 9.05 of this revenue procedure,

the employer may not file for a determination letter using a Form 5307 (as updated). The IRS

anticipates establishing a program that would permit Adopting Employers to apply for a determination letter on Form 5300, Application for Determination for Employee Benefit Plan, under rules

and procedures similar to the rules and procedures applicable to § 401(a) pre-approved plans (see

section 20.03 of Rev. Proc. 2016‑37 and Rev. Proc. 2021-4 (updated annually)).

For an individually designed plan, the Remedial Amendment Period for a Form Defect related to a change in § 403(b) Requirements generally ends on the last day of the second calendar

year that begins after the issuance of the Required Amendments List in which the change in § 403(b) Requirements appears. Section 2.13. For example, if a change in § 403(b) Requirements

occurs in the 1st year of Cycle 3, and is placed on the Required Amendments List in the 2nd year of Cycle 3, then the Remedial Amendment Period for a Form Defect related to that change

would expire at the end of the 4th year of Cycle 3.

Bulletin No. 2021–38

407

September 20, 2021

SECTION 10. OPINION LETTER APPLICATIONS – INSTRUCTIONS TO PROVIDERS AND OTHER RULES FOR

APPLICATIONS AND OPINION LETTERS

.01 Issuance of an Opinion Letter – The IRS will, upon the application of a Provider, issue an

Opinion Letter as to satisfaction of the form of the Provider’s plan with the § 403(b) Requirements.

.02 Submission of Opinion Letter applications – Rev. Proc. 2019-39 provides that every § 403(b)

Pre-approved Plan will have a recurring Cycle. Rev. Proc. 2019-39 also states that a Provider must

submit an application for an Opinion Letter during the On-Cycle Submission Period that relates

to an applicable Cycle. Cycle 2 began on July 1, 2020. Pursuant to this revenue procedure, the

On-Cycle Submission Period for Providers to submit applications for an Opinion Letter for Cycle

2 begins on May 2, 2022, and ends on May 1, 2023. Providers may apply for an Opinion Letter

for Cycle 2 after this On-Cycle Submission Period, but these filings generally will be considered

“off-cycle.” See section 12 regarding IRS review of off-cycle filings.

.03 Procedure for applying for an Opinion Letter – The Provider must submit the application for

an Opinion Letter with respect to its plan. The IRS is developing the application form to be used

and will announce when the form becomes available. If the application form is available when

the application is being submitted, the Provider should use the application form. If the form is

not available when the application is being submitted, the Provider may use Appendix A of this

revenue procedure in lieu of the application form. The application must be accompanied by: (1)

the applicable required user fee that will be provided for in the successors to Rev. Proc. 2021-4

(updated annually), (2) if an Opinion Letter had been issued for the § 403(b) Pre-approved Plan

for the preceding Cycle, a signed certification that all necessary amendments required by the

IRS for the form of the Provider’s plan to continue to satisfy the § 403(b) Requirements have

been made and communicated to all Adopting Employers, and (3) any attachment or other document that the application form (or Appendix A, if used) indicates is required. All information

on the application form (or Appendix A) must be typed. The application must be sent to the address provided in section 20. The application must include a copy of the plan document and any

adoption agreement, if applicable. Copies of Investment Arrangements should not be submitted.

The IRS will not review for, and the Opinion Letter will not cover, any provisions included

in Investment Arrangements. Additionally, the IRS requests that applications be submitted by

thumb or flash drive instead of being submitted as paper files, and that the documents be saved

in Microsoft Word or Adobe Acrobat PDF format. The IRS strongly encourages Providers to

take advantage of this electronic submission format. To pay a fee, a Provider must continue to

submit a paper check and a paper Form 8717-A, User Fee for Employee Plan Opinion or Advisory Letter Request.

.04 Additional submission requirements for interim amendments – If the § 403(b) Pre-approved

Plan has received an Opinion Letter for the preceding Cycle, in addition to the application described in section 10.03, the Provider must submit a certification that all interim amendments (and

initial amendments, as described in section 4.11, if applicable) on the applicable Cumulative List

have been made, and a cover letter summarizing how the provisions of the plan are affected by

each amendment. The IRS retains the right to request and secure from the Provider in appropriate

circumstances copies of all interim amendments (and initial amendments, if applicable) reflected

on the applicable Cumulative List that the Provider has adopted on behalf of its Adopting Employers.

.05 Expediting review of substantially identical plans – The IRS reserves the right to review applications in any order that will expedite the processing of Opinion Letter applications, subject to

section 12 regarding off-cycle filing. To expedite the review of substantially identical plans that

September 20, 2021

408

Bulletin No. 2021–38

are not Mass Submitter plans, the IRS encourages plan drafters and Providers to include with each

Opinion Letter application, if appropriate, a cover letter setting forth the following information:

(1) the name and file folder number (if available) of the plan that, for review purposes, the plan

drafter designates as the “lead plan” (including the name and EIN of the Provider);

(2) a list of all plans written by the plan drafter that are substantially identical to the lead plan (including the information described in paragraph (1) of this section 10.05 for each plan);

(3) a description of each location in the plan for which the application is being submitted that is not

word-for-word identical to the language of the lead plan, including an explanation of the purpose

and effect of each difference; and

(4) a certification made under penalties of perjury by the plan drafter that the information described in paragraph (3) of this section 10.05 is true and complete.

If the Provider or plan drafter is aware that a lead plan or any substantially identical plan has been

assigned for review to a specialist, the cover letter also should indicate the name of the specialist,

if possible. To the extent feasible, lead plans and substantially identical plans should be submitted

together. The IRS will regard the information and certification described in paragraphs (3) and

(4) of this section 10.05 as a representation of a material fact for purposes of issuing an Opinion

Letter.

.06 Use of same basic plan document by multiple plans; separate applications required for different categories of Adoption Agreement Plans

(1) In general, provided that the provisions of a basic plan document are identical for all plans

using that document, separate adoption agreements may be associated with the same basic plan

document. Thus, for example, a Governmental Plan, a plan of a Church or QCCO, and a plan of

a non-QCCO that use separate adoption agreements may be associated with the same basic plan

document. In addition, a single adoption agreement may be drafted to cover multiple types of

Eligible Employers.

(2) Section 403(b) Pre-approved Plans that are intended to be Retirement Income Accounts and

plans that are not Retirement Income Accounts may not be set forth in the same basic plan document.

(3) Standardized and Nonstandardized Plans may not be set forth in a single adoption agreement.

(4) A separate application form (or Appendix A) must be submitted with respect to each adoption

agreement for which an Opinion Letter is applied. A basic plan document and all associated adoption agreements should be submitted simultaneously. Only one copy of the basic plan document

should be provided. However, if additional adoption agreements are later submitted with respect

to a basic plan document, the Provider must submit a copy of the basic plan document with each

submission and include a cover letter identifying the original submission (including the date submitted). In that case, the plan number given to the basic plan document must remain the same as

in the prior submission.

.07 Separate applications required for Single Document Plans – A separate plan and application is

required for a Single Document Plan. A Single Document Plan may accommodate usage by more

than one type of Eligible Employer; however, a Retirement Income Account plan must always be

filed as a separate Single Document Plan. Standardized and Nonstandardized Plans may not be

combined in one Single Document Plan.

.08 Sample language – The IRS anticipates providing updated LRMs before the On-Cycle Submission Period with respect to a Cycle begins. Although sample language is designed for use

Bulletin No. 2021–38

409

September 20, 2021

in plans that use an adoption agreement format, in order to expedite processing, Providers are

encouraged to refer to the sample language as a guide in drafting Single Document Plans. Specifically, to expedite the review of their plans, Providers are encouraged to use LRM language if

appropriate and to identify the location of the LRM language in their § 403(b) Pre-approved Plan.

The updated LRMs, when available, may be downloaded from the Internet at http://www.irs.gov/

Retirement-Plans/Listing-of-Required-Modifications-LRMs.

.09 Material furnished to Adopting Employers – A Provider must furnish each Adopting Employer

with a copy of the approved § 403(b) Pre-approved Plan, copies of any subsequent amendments,

and the most recently issued Opinion Letter for the plan from the IRS.

.10 Effect of failure to disclose material fact or to accurately provide information – A failure to

disclose to the IRS a material fact, a misrepresentation of a material fact in the application, or

the failure to accurately provide any of the information called for on any form or Appendix A required by this revenue procedure may result in the inability of Adopting Employers to rely on the

Opinion Letter (for example, if there is a failure to disclose a material fact, the IRS may revoke

the Opinion Letter due to the failure). See section 8.03(6) regarding limitations on reliance. The

Provider may be required by the IRS to immediately notify all Adopting Employers of any of its

§ 403(b) Pre-approved Plans affected by the failure if the Adopting Employer’s reliance on the

Opinion Letter is affected or if the failure could result in adverse tax consequences for the Adopting Employer.

.11 Additional information may be requested – When reviewing the application for an Opinion

Letter, the IRS may, in its discretion, require any additional information that it deems necessary,

including a demonstration of how the variables (options or alternatives) in the § 403(b) Pre-approved Plan interrelate to satisfy the § 403(b) Requirements. If a letter requesting changes to

the § 403(b) Pre-approved Plan is sent to the Provider or an authorized representative, changes

responsive to the letter must be received no later than 30 days from the date of the letter, and the

response must include either a copy of the plan with the changes highlighted or, if the changes

are not numerous, replacement pages. If the changes are not received within 30 days, the application may be considered withdrawn. An extension of the 30-day time limit will be granted

only for good cause.

.12 Inadequate submissions – The IRS will return, without further action or refunding the user

fee, plans that are not in substantial compliance with the § 403(b) Requirements, or plans that

are so deficient that they cannot be reviewed in a reasonable period of time. A plan may be considered not to be in substantial compliance if, for example, it omits language needed to comply

with a § 403(b) Requirement or merely incorporates requirements by reference to the applicable Code section. The IRS will not consider a plan with such an omission or cross-reference

until after the plan has been revised and resubmitted, and the modified plan will be treated as

a new application for approval as of the date it is resubmitted, and therefore will be treated as

off-cycle, as set forth in section 10.02, if resubmitted after the On-Cycle Submission Period. No

additional user fee will be charged if an inadequate submission is amended to be in substantial

compliance and is resubmitted to the IRS within 30 days following the date the Provider is

notified of the inadequacy.

.13 Nonidentification of questionable issues may cause delay – If the § 403(b) Pre-approved Plan

submitted as part of an Opinion Letter application includes a provision that gives rise to an issue

for which contrary published authorities exist, failure to disclose to the IRS and address any significant contrary authorities may result in requests for additional information, which will delay

action on the application. See section 10.11.

.14 No Opinion Letter for later plan amendments – The IRS will not issue an Opinion Letter with

respect to amendments made between applicable On-Cycle Submission Periods, and the Provider

should not submit an application for an Opinion Letter with respect to plan amendments. Instead,

the Provider should submit a restated plan, including the amendments, during the next On-Cycle

Submission Period.

September 20, 2021

410

Bulletin No. 2021–38

SECTION 11. ADDITIONAL REQUIREMENTS FOR MASS SUBMITTERS

.01 Opinion Letter issued to Mass Submitters

(1) The IRS will, upon the application by a Mass Submitter, issue an Opinion Letter as to the

satisfaction of the form of the Mass Submitter’s plan with the § 403(b) Requirements. See section

10 for the instructions for Opinion Letter applications. In the case of an initial submission of a

§ 403(b) Pre-approved Plan under this revenue procedure, the Mass Submitter’s application also

must be accompanied by applications for an Opinion Letter filed on behalf of the requisite number

of Providers that are offering the same plan on a word-for-word basis as provided in section 11.02,

unless the Mass Submitter has already satisfied this requirement in connection with a previous

application under this revenue procedure involving another § 403(b) Pre-approved Plan. Any plan

submitted by a Mass Submitter must include language designating the Mass Submitter as agent

for the Provider for purposes of making plan amendments.

(2) After satisfying the requirement as to the number of adopting Providers, the Mass Submitter

may submit additional applications on behalf of other Providers that wish to adopt a word-forword identical plan to the Mass Submitter plan (as an identical adopter) or a plan that includes

Minor Modifications to the Mass Submitter plan (as a minor modifier adopter). In addition, the

Mass Submitter may then submit applications for an Opinion Letter under this section 11.01 for

its other plans, regardless of the number of identical adopters of the other plans.

.02 Reduced procedural requirements for Providers that use Mass Submitter plans – A Provider

of a plan of a Mass Submitter must obtain an Opinion Letter. The Mass Submitter must submit on

behalf of each Provider a completed application form (or Appendix A) that includes a declaration

by the Mass Submitter under penalties of perjury that the Provider will offer a plan that is wordfor-word identical to a plan of the Mass Submitter, or a plan that is a Minor Modification of the

Mass Submitter’s plan. The application must be typed. If the Provider is offering a word-for-word

identical plan (including a Flexible Plan) a copy of the plan need not be submitted. If the Mass

Submitter submits a plan with Minor Modifications, it must comply with the requirements of section 11.03(2). The application must be accompanied by the required user fee that will be provided

in the successors to Rev. Proc. 2021-4 (updated annually) and a signed certification that all necessary amendments required by the IRS for the form of the Provider’s plan to continue to satisfy

the § 403(b) Requirements have been made and communicated to all Adopting Employers. Upon

receipt of the application for an Opinion Letter, the IRS will, as soon as administratively feasible,

issue an Opinion Letter with respect to the Provider’s plan (provided that an Opinion Letter has

been issued with respect to the Mass Submitter’s plan).

.03 Definitions for Mass Submitter plans

(1) Flexible Plan

(a) In general – A “Flexible Plan” is a plan submitted by a Mass Submitter that includes optional

provisions, as described in the immediately subsequent paragraph (b) of this section 11.03. Providers that adopt the Flexible Plan may include or delete any optional provision that is designated as

an optional provision in the Mass Submitter’s plan, provided the inclusion or deletion of specific

optional provisions conforms to the Mass Submitter’s written representation to the IRS concerning the choices available to Providers and the coordination of optional provisions. A Mass Submitter must bracket and identify the optional provisions when submitting the plan to the IRS, and also

must provide the IRS a written representation describing the choices available to Providers and the

coordination of optional provisions. Thus, the representation must indicate whether a Provider’s

plan may include only one of a certain group of optional provisions, may include only a specific

Bulletin No. 2021–38

411

September 20, 2021

combination of provisions, or may exclude the provisions entirely. Similarly, if the inclusion (or

deletion) of a specific optional provision in a Provider’s plan will automatically result in the inclusion (or deletion) of any other optional provision, this must be set forth in the Mass Submitter’s

representation. A Flexible Plan may include only optional provisions that meet the requirements

of section 11.03(1)(b), and must be drafted so that the satisfaction of the § 403(b) Requirements of

the form of any Provider’s plan will not be affected by the inclusion or deletion of optional provisions. For example, a Flexible Plan could include as an optional provision a provision permitting

participant loans, provided that the provision satisfies the § 403(b) Requirements and the plan is

drafted so that the exclusion of the provision does not cause the plan to fail to satisfy the § 403(b)

Requirements. A Flexible Plan adopted by a Provider that differs from the Mass Submitter plan

only because the Provider has deleted certain optional provisions from its plan in conformance

with the Mass Submitter’s representation described in this paragraph will be treated as a word-forword identical plan to the Mass Submitter plan. The IRS encourages Mass Submitters to limit the

number of optional provisions described in section 11.03(1)(b)(i) and (ii) that they provide under

a Flexible Plan to six investment provisions and six administrative provisions.

(b) Optional provisions – A Flexible Plan may include optional provisions that comply with the

requirements set forth in this paragraph. The optional provisions may be arranged as separate optional articles or sections within a § 403(b) Pre-approved Plan or as separate optional provisions

within a single article or section. A Flexible Plan also may include related optional provisions

in the adoption agreement. For example, if a plan document for a Mass Submitter Flexible Plan

includes an optional provision that would permit loans under a Provider’s plan, the adoption agreement may also include an optional provision that would enable an Adopting Employer to elect

whether loans will be available under the plan it adopts. If the Provider does not wish to enable

Adopting Employers to make loans available under their plans, the Provider would delete from

the Provider’s plan the optional provisions in both the plan document and the adoption agreement.

A Provider may include or delete optional provisions of a Mass Submitter plan, but once the

Provider has decided to include an optional provision, it must offer that provision to all Adopting

Employers. Any optional provision that the IRS determines does not meet the requirements of

this section 11.03(1)(b) must be changed to a non-optional provision or deleted from the Mass

Submitter’s plan. The following is an exclusive list of the permittable optional provisions that a

Flexible Plan may include:

(i) Investment provisions – A Mass Submitter may offer a variety of investment provisions in its

plan for Providers to include or delete from their version of the plan. However, the plan as adopted by a Provider must provide a method for investing assets. Investment provisions are those

provisions that describe the plan’s methods of investing assets, including provisions such as the

availability of loans and self-directed investments.

(ii) Administrative provisions – A Mass Submitter may offer a variety of administrative provisions

in its plan for Providers to include or delete from their version of the plan. However, the plan as

adopted by a Provider must describe how the plan will be administered. Administrative provisions

are those provisions that describe the administration of the plan, including the powers, duties, and

responsibilities of a plan’s custodian, administrator, Adopting Employer, and other fiduciaries.

Pursuant to section 5.07, every § 403(b) Pre-approved Plan must provide for an appendix to

identify the parties responsible for the various administrative functions under the plan. Optional

administrative provisions that a Provider may include in or delete from its version of the plan include the resignation or replacement of fiduciaries, the claims procedures under the plan, and the

record-keeping requirements. However, procedural provisions that are required for the form of a

plan to meet the § 403(b) Requirements are not administrative provisions under this section. For

example, an administrative provision does not include a provision regarding the annual notice to

participants explaining the aggregation rules for the limitation on annual additions to a plan (if a

participant is in control of any employer).

(2) Minor Modifications

September 20, 2021

412

Bulletin No. 2021–38

(a) A “Minor Modification” is a minor change to an otherwise word-for-word identical § 403(b)

Pre-approved Plan of the Mass Submitter that the IRS determines does not require an in-depth IRS

technical review. For example, a change that limits the number of participant loans or a change

that adds a new choice of plan entry date would be considered a Minor Modification. By contrast,

a change by a Provider of a plan meant to be adopted by a public school, as defined in section

5.17(1)(a), to remove any nondiscrimination provisions that do not apply to a public school from

a Mass Submitter’s § 403(b) Pre-approved Plan that was designed for a tax-exempt organization

would not be considered a Minor Modification. A Minor Modification must be submitted by the

Mass Submitter on behalf of the Provider that will adopt the modified plan. Subject to sections

11.05 and 12 and the provisions of this section 11.03, submissions with respect to Minor Modifications will be reviewed on an expedited basis, and an Opinion Letter will be issued to the Provider

as soon as possible, which might be after the issuance of Opinion Letters to other Providers (see

section 13).

(b) The IRS reserves the right to determine if the changes described in paragraph (a) of this section

11.03(2) are minor (for example, if the changes are not numerous and do not require an in-depth

technical review). If it is determined that the changes are not minor, the plan submitted under

section 11.03(2)(c) will not be entitled to expedited review and will otherwise be treated as a nonMass Submitter plan. In the event the plan is treated as a non-Mass Submitter plan, the IRS will

notify the Mass Submitter in writing of its determination. Within 30 days following the date the

notification is provided, either the Mass Submitter may revise the plan so that the modifications

are minor and resubmit the revised plan, or the Provider may submit the application form (or

Appendix A) and an additional user fee in an amount equal to the difference between a non-Mass

Submitter plan application user fee and a minor modifier adopter application user fee. If, after the

30-day period, neither action has been taken, the IRS may treat the application as having been

withdrawn.

Appendix A) as a placeholder with respect to each Provider that will offer a plan that is a Minor

Modification of the Mass Submitter’s plan during the On-Cycle Submission Period. The application form (or Appendix A) must be typed. When the IRS sends a notification to the applicable

Mass Submitter with respect to the Mass Submitter’s plan indicating that the IRS has determined

that the plan appears to be in full compliance with the applicable § 403(b) Requirements, the Mass

Submitter must submit a copy of the Mass Submitter’s plan with the modifications highlighted,

as well as a statement indicating the location and effect of each change. The Mass Submitter

must certify under penalties of perjury that the plan of the Provider, except for the delineated

changes, is word-for-word identical to the plan for which the Mass Submitter will be receiving

or has received an Opinion Letter. If a Mass Submitter fails to identify a significant modification,

the failure will be considered a material misrepresentation, and an Adopting Employer may not

rely on the Opinion Letter that may be issued with respect to the plan for the modification or any

other provision of the plan that may be affected by the modification. See section 8.03(7) regarding

limitations on reliance. The Mass Submitter must also immediately notify any affected minor

modifier adopter, and the minor modifier adopter must notify all Adopting Employers of any of

its § 403(b) Pre-approved Plans affected by the failure and the notification must explain the effect

on the reliance by Adopting Employers on the Opinion Letter. If a Mass Submitter repeatedly

fails to identify the modifications, the IRS may deny permission to that Mass Submitter to submit

additional modifications.

.04 Amendments of Mass Submitter plans – If a Mass Submitter amends one of its § 403(b) Pre-approved Plans, the Mass Submitter must provide copies of the amendment to Providers that have

adopted the plan. Any Provider that does not wish to make the amendments made by a Mass Submitter may switch to another Mass Submitter or may submit an application for an Opinion Letter

on its own behalf during the next applicable On-Cycle Submission Period for § 403(b) Pre-approved Plans. The IRS will not issue an Opinion Letter with respect to amendments made between

applicable On-Cycle Submission Periods, and a Mass Submitter should not submit an application

for an Opinion Letter with respect to plan amendments. Instead, the Mass Submitter should submit

a restated plan, including the amendments, during the next Cycle.

Bulletin No. 2021–38

413

September 20, 2021

.05 Expeditious processing accorded Mass Submitter plans – Subject to section 12, all Mass Submitter plans, including approved Mass Submitter plans adopted by Providers, will be accorded

more expeditious processing than plans submitted by non-Mass Submitters, to the extent administratively feasible.

SECTION 12. OFF-CYCLE FILINGS

.01 Identical adopter – An application for an Opinion Letter for a § 403(b) Pre-approved Plan that

is word-for-word identical to a Mass Submitter § 403(b) Pre-approved Plan will not be treated as

off-cycle, as defined in section 10.02, merely because it is submitted after the end of the applicable

On-Cycle Submission Period for the Cycle. Applications for a plan that is word-for-word identical

to a Mass Submitter’s § 403(b) Pre-approved Plan for a Cycle may be submitted until the IRS

informs the Mass Submitter that word-for-word identical applications will no longer be accepted,

which is expected to be shortly before the issuance of Opinion Letters for the next Cycle.

.02 Other applications – Any other application for an Opinion Letter (including that of a minor modifier adopter of a Mass Submitter plan) that is submitted after the applicable On-Cycle

Submission Period for a Cycle is treated as off-cycle, as defined in section 10.02. If an off-cycle

application for a Cycle is submitted before the beginning of the Employer Adoption Window for

that Cycle, the IRS generally will not review the application until it has reviewed and processed

all applications submitted during that Cycle’s On-Cycle Submission Period. However, the IRS

may, in its discretion, determine whether the processing of off-cycle filings may be prioritized

and accelerated. Off-cycle applications for a Cycle that are submitted during or after that Cycle’s

Employer Adoption Window will not be accepted.

SECTION 13. REVIEW OF OPINION LETTER APPLICATIONS; ISSUANCE OF OPINION LETTERS; EMPLOYER

ADOPTION WINDOW

.01 Scope of review – The IRS will review the plans that have been submitted during the On-Cycle

Submission Period for a Cycle (as well as later identical adopter applications and applications

that are off-cycle that the IRS will review in accordance with section 12) taking into account the

applicable Cumulative List for the Cycle. The IRS will also consider in its review of any Opinion

Letter application all § 403(b) Requirements that are not described in section 13.02(3), and not

solely those on the applicable Cumulative List.9 For example, if a Provider submits an application

for a Cycle 2 Opinion Letter for a new plan that did not receive a Cycle 1 Opinion Letter, the IRS

will review the plan taking into account the Cumulative List for Cycle 2, as well as the § 403(b)

Requirements that were reviewed during Cycle 1.

.02 Cumulative List

(1) For each Cycle, the IRS intends to publish a Cumulative List for § 403(b) Pre-approved Plans

shortly before the start of the Cycle’s On-Cycle Submission Period.

In order to satisfy the § 403(b) Requirements, a plan must comply with all relevant § 403(b) Requirements, not solely those on the applicable Cumulative List, which generally reflects only

the most recent changes to the § 403(b) Requirements.

September 20, 2021

414

Bulletin No. 2021–38

(2) The Cumulative List for a Cycle will identify changes in the § 403(b) Requirements that will

be taken into account with respect to the plan document submitted to the IRS for the Cycle and

that were not taken into account by the IRS in its review during any prior Cycle.

(3) Except as provided in the applicable Cumulative List, the IRS generally will not consider in its

review of any Opinion Letter application any:

(a) guidance issued after approximately 90 days (the exact date being stated in the Cumulative

List) prior to the date the applicable Cumulative List is issued;

(b) statutes enacted after approximately 90 days (the exact date being stated in the Cumulative

List) prior to the date the applicable Cumulative List is issued;

which there is no guidance identified on the applicable Cumulative List (regardless of when they

are enacted); or

(d) § 403(b) Requirements (either statutory or regulatory) that become effective for the plan in

a calendar year following the calendar year in which the On-Cycle Submission Period begins,

regardless of when the § 403(b) Requirements are enacted or issued (for example, § 403(b) Requirements first effective in 2023, for applications submitted during the On-Cycle Submission

Period beginning in 2022).

.03 Timing of issuance of Opinion Letters – The IRS intends to issue Opinion Letters for a Cycle

to Mass Submitters and Providers at approximately the same time within the Cycle for all applications submitted during the Cycle’s On-Cycle Submission Period (other than an application for a

plan that is a Minor Modification of a Mass Submitter plan). Prior to issuing Opinion Letters for a

Cycle, the IRS will send a notification to the applicable Mass Submitter or Provider, if the IRS determines that the plan appears to be in full compliance with the applicable § 403(b) Requirements,

based on the submissions and the review as of the date of notification. However, this notification

will only indicate that the plan appears to meet the applicable § 403(b) Requirements under review

as of the date of the notification. This notification is for the convenience of the applicable Mass

Submitter or Provider concerning the status of its application and does not constitute an official

Opinion Letter on which the Mass Submitter or Provider may rely. Also see section 8.03(2), which

provides that an Adopting Employer will not have reliance if the Adopting Employer’s adoption of

a § 403(b) Pre-approved Plan precedes the issuance of an Opinion Letter for the plan. In addition,

the IRS reserves the right to require changes after the notification is sent.

.04 Employer Adoption Window – When the review of § 403(b) Pre-approved Plan documents

for a specific Cycle is close to being completed, the IRS will announce the Employer Adoption

Window with respect to that Cycle, which will be an approximately two-year period during which

Adopting Employers may adopt Newly Approved § 403(b) Pre-approved Plans.

SECTION 14. WITHDRAWAL OF APPLICATIONS

.01 Notification and effect – A Provider may withdraw its application for an Opinion Letter at

any time prior to the issuance of the letter by notifying the IRS in writing of the withdrawal at

the address provided in section 20. The Provider also must notify each Adopting Employer of the

withdrawal of the application and the consequences of the withdrawal to the Adopting Employer.

As provided in section 7, the plan of such an employer will become an individually designed plan

unless the employer adopts a Newly Approved § 403(b) Pre-approved Plan during the Employer

Adoption Window for the Cycle for which the application was submitted.

Bulletin No. 2021–38

415

September 20, 2021

.02 IRS retains information – Even though an application is withdrawn, the IRS will retain all

correspondence and documents associated with that application and will not return them to the

Provider. If an application is withdrawn, the case may be referred to IRS Employee Plans Examinations.

SECTION 15. NONTRANSFERABILITY OF OPINION LETTER

An Opinion Letter issued to a Provider is not transferable. In the case of a change in entity

with respect to a Provider, an Opinion Letter issued to the Provider may not be utilized by the

changed entity. In addition, if a different entity assumes sponsorship of a § 403(b) Pre-approved

Plan, it must submit an application for a new Opinion Letter under the name of the different

entity and meet all the applicable requirements to be a Provider. Such an application may be

filed at the time of the assumption of plan sponsorship by the new Provider, and the filing is not

limited to the applicable On-Cycle Submission Period. The application will be subject to a reduced user fee as provided in Appendix A of Rev. Proc. 2021-4 (as updated annually). The new

Opinion Letter will recognize the change in sponsorship and will not modify the scope of or

change the reliance on the original Opinion Letter. The IRS may, in appropriate circumstances,

request documentation of the assumption of sponsorship prior to issuing an Opinion Letter to

the new entity. Examples of a change in entity include, but are not limited to, the acquisition of

a Provider by another entity, the sale or transfer of the stock or assets of the Provider to another

entity, and any other circumstance that results in a change in a Provider’s employer identification number.

SECTION 16. NOTIFICATION OF ADOPTING EMPLOYER REGARDING FAILURE OF THE FORM OF THE PLAN

TO SATISFY § 403(b) REQUIREMENTS

If a Provider has knowledge that an Adopting Employer’s plan may no longer satisfy the § 403(b)

Requirements and the Provider does not submit a request to correct the failure to satisfy the

§ 403(b) Requirements under EPCRS, the Provider must notify the Adopting Employer that the

plan may no longer satisfy the § 403(b) Requirements, advise the Adopting Employer that adverse

tax consequences may result from the plan’s failure to satisfy § 403(b), and inform the Adopting

Employer about the availability of EPCRS. See Rev. Proc. 2021-30 (or its successor). This section

16 does not impose a requirement on a Provider to monitor compliance of an Adopting Employer’s plan with the § 403(b) Requirements, but it provides that the Provider has a duty to inform

the Adopting Employer if the Provider has knowledge that the Adopting Employer’s plan may no

longer satisfy those requirements.

SECTION 17. DISCONTINUED PLANS

.01 Notification to the IRS – A Provider must notify the IRS in writing if a § 403(b) Pre-approved

Plan is no longer in use by any Adopting Employer or the Provider intends to discontinue the plan.

September 20, 2021

416

Bulletin No. 2021–38

The written notification must be sent to the address provided in section 20 and must refer to the

file folder number appearing on the latest Opinion Letter issued.

.02 Notification to employers – A Provider that intends to discontinue sponsorship of a § 403(b)

Pre-approved Plan that has one or more Adopting Employers must inform each Adopting Employer of the date on which the Provider will discontinue sponsorship, and that the Adopting

Employer’s plan will cease to be a § 403(b) Pre-approved Plan and convert to an individually

designed plan on that date. The Provider must also inform each Adopting Employer that, notwithstanding the Provider’s discontinuance of its sponsorship, if the Adopting Employer adopts another § 403(b) Pre-approved Plan, retroactive to the date of the discontinued sponsorship, by the end

of the calendar year following the calendar year in which the Provider discontinues sponsorship

of the plan, then the Adopting Employer’s plan will be treated as though it had continued to be a

§ 403(b) Pre-approved Plan, and not converted to an individually designed plan (and the Adopting

Employer will not be treated as having adopted the new § 403(b) Pre-approved Plan after the end

of an Employer Adoption Window, if applicable).

SECTION 18. REVOCATION OF OPINION LETTER BY THE IRS

An Opinion Letter found to be in error or not in accord with the current procedures of the IRS

or the IRS’s current interpretation of applicable law may be revoked. See also sections 4.21,

8.03(6), 9.01, 10.10 and 19.01 of this revenue procedure for other circumstances under which

an Opinion Letter may be revoked. Revocation of an Opinion Letter may be applied retroactively. For this purpose, an Opinion Letter will be given the same effect as a determination letter.

See section 23 of Rev. Proc. 2021-4 (as updated annually), disregarding references therein to

§ 7476. Revocation may be effected by a notice to the Provider to which the Opinion Letter was

originally issued. The Provider must then notify each Adopting Employer of the revocation as

soon as possible. The notification to each Adopting Employer must explain how the revocation

affects any reliance an Adopting Employer has on the applicable Opinion Letter and on any

determination letter issued.

SECTION 19. RECORD KEEPING REQUIREMENTS

.01 Filing of Opinion Letter application constitutes agreement to comply with record keeping

requirements – By submitting an application for an Opinion Letter under this revenue procedure (or by having an application filed on its behalf by a Mass Submitter), a Provider agrees,

as provided in section 4.21, to comply with the requirements imposed on the Provider by this

revenue procedure, including the record keeping requirements of this section. Failure to comply

with the requirements imposed on the Provider by this revenue procedure may result in the loss

of eligibility to be a Provider and the revocation of Opinion Letters that have been issued to the

Provider.

.02 Maintenance and availability of records of adopting employers – A Provider must maintain,

or have maintained on its behalf, for each of its plans, a record of the names, business addresses,

and taxpayer identification numbers of all Adopting Employers. However, a Provider need not

maintain records with respect to employers that, to the best of the Provider’s knowledge, ceased

to maintain its Pre-approved Plan more than three years earlier. Upon written request, a Provider

Bulletin No. 2021–38

417

September 20, 2021

must provide to the IRS a list of Adopting Employers that indicates, to the best of the Provider’s

knowledge, which of those employers continue to maintain the plan as a Pre-approved Plan and

which of those employers have ceased to maintain its § 403(b) Pre-approved Plan within the preceding three years.

SECTION 20. WHERE TO FILE

.01 Opinion Letters – Applications for an Opinion Letter, including applications filed by Mass

Submitters, should be sent to:

Internal Revenue Service

Attn: Pre-Approved Plans Coordinator Room 6-403, Group 7521

P.O. Box 2508

Cincinnati, OH 45201-2508

.02 Delivery service – An application shipped by Express Mail or a delivery service should be sent

to the attention of the Pre-Approved Plans Coordinator, to:

Internal Revenue Service

550 Main Street

Room 6-403, Group 7521

Cincinnati, OH 45202

PART III – REMEDIAL AMENDMENT PERIOD FOR A FORM DEFECT IN A § 403(b) PRE-APPROVED PLAN

SECTION 21. EXPIRATION OF REMEDIAL AMENDMENT PERIOD

Pursuant to section 11.03 of Rev. Proc. 2019-39, this section provides rules for determining the

expiration date of the Remedial Amendment Period for a Form Defect first occurring after the

expiration of the Initial Remedial Amendment Period (that is, after June 30, 2020) in a § 403(b)

Pre-approved Plan. Provided an interim amendment (as described in section 9.02 of this revenue

procedure) is made timely, except as otherwise provided by statute, regulations, or other guidance

published in the Internal Revenue Bulletin, the Remedial Amendment Period for a Form Defect

first occurring after the Initial Remedial Amendment Period, expires at the later of (1) the end of

the Cycle that includes the date on which the Remedial Amendment Period would have ended if

the plan were an individually designed plan, or (2) the end of the first Cycle in which an application for an Opinion Letter that considers the Form Defect may be submitted. This Remedial

Amendment Period applies regardless of whether the Form Defect relates to a new plan or is due

to an amendment (without regard to whether that amendment was required to be adopted) provided that the plan or amendment was adopted timely and in good faith with the intent of complying

with the § 403(b) Requirements. The IRS will make the final determination in all cases as to

whether a new plan or an amendment to an existing plan was adopted with the good faith intention

of complying with the § 403(b) Requirements.

September 20, 2021

418

Bulletin No. 2021–38

SECTION 22. INTERIM AMENDMENT DEADLINE

.01 Section 403(b) plan that is not a Governmental Plan – For a § 403(b) Pre-approved Plan that

is not a Governmental Plan, a Provider (or the Adopting Employer, if applicable) is considered to

have adopted an interim amendment described in section 9.02 timely if the amendment is adopted

by the end of the second calendar year following the calendar year in which the change in § 403(b)

Requirements is effective with respect to the plan.

.02 Section 403(b) plan that is a Governmental Plan – For a Governmental Plan, a Provider (or

the Adopting Employer, if applicable) is considered to have adopted an interim amendment described in section 9.02 timely if the plan amendment is adopted by the later of (1) the end of the

second calendar year following the calendar year in which the change in § 403(b) Requirements is

effective with respect to the plan, or (2) ninety days after the close of the third regular legislative

session of the legislative body with the authority to amend the plan that begins on or after the date

the plan amendment becomes effective.

SECTION 23. EXPIRATION OF LIMITED EXTENSION OF INITIAL REMEDIAL AMENDMENT PERIOD FOR CYCLE 1 § 403(b) PRE-APPROVED PLANS; EXTENSION OF DEADLINE FOR INITIAL AMENDMENT

.01 Expiration of the limited extension of the Initial Remedial Amendment Period – Provided that

an initial amendment is timely made in accordance with section 13.03 of Rev. Proc. 2019-39, the

limited extension of the Initial Remedial Amendment Period, as defined under Rev. Proc. 201939, with respect to certain Form Defects first occurring during Cycle 1 will end on the last day of

the Cycle in which an application for an Opinion Letter that considers the Form Defect may be

submitted.

.02 Extension of deadline for initial amendment – To be considered timely, the date by which the

initial amendment described in section 4.11 must be adopted is extended to the later of (1) June 30,

2020, or (2) the end of the second calendar year following the calendar year in which the change

in § 403(b) Requirements is effective with respect to the plan.

SECTION 24. OPERATIONAL COMPLIANCE LIST

The Remedial Amendment Period permits a plan to be amended retroactively to comply with a

change in § 403(b) Requirements; however, a plan must be operated in compliance with a change

in § 403(b) Requirements beginning on the effective date of the change. To assist Eligible Employers in achieving operational compliance, updates to the Operational Compliance List currently maintained on the IRS website include changes in § 403(b) Requirements that are effective

during a calendar year. To comply with the § 403(b) Requirements, however, a plan must comply

operationally with each relevant § 403(b) Requirement, even if the requirement is not included on

an Operational Compliance List.

Bulletin No. 2021–38

419

September 20, 2021

PART IV – SPECIAL RULE FOR RETIREMENT INCOME ACCOUNT § 403(b) PRE-APPROVED PLANS

SECTION 25. INCLUSION OF § 414(e)(3)(B) EMPLOYEES

.01 In general – A Cycle 1 § 403(b) Pre-approved Plan that is intended to be a Retirement Income

Account may be amended by a Provider, a Mass Submitter, or an Adopting Employer to permit

the participation of an employee described in § 414(e)(3)(B), retroactive to the beginning of Cycle

2, July 1, 2020.

.02 Requirements – As part of the amendment described in section 25.01, the nondiscrimination

requirements of § 403(b)(12) must be set forth in the plan. The plan also must state that the nondiscrimination requirements will be applied to any employee other than an employee of a QCCO

or Church. The amendment must be made in good faith with the intent of complying with the

§ 403(b) Requirements. The Adopting Employer will have until the end of the Cycle 2 Employer

Adoption Window to adopt a Cycle 2 Newly Approved § 403(b) Pre-approved Plan that permits

the participation of an employee described in § 414(e)(3)(B) and that includes the nondiscrimination requirements that apply to any employee other than an employee of a QCCO or Church. In

the case of multiple employers that are not part of the same controlled group (as determined under

§ 414(b), (c), (m), or (o)) participating in the plan, each Adopting Employer must identify whether

it is a Church, QCCO, or any other employer (such as a non-QCCO or minister). For example,

the adoption agreement, if applicable, should be amended to require that an Adopting Employer

identify whether it is a non-QCCO (in which case, its employees participating in the plan would

be subject to the nondiscrimination requirements of § 403(b)(12)).

.03 Reliance – The amendment described in section 25.01 will not affect the plan’s status as a

§ 403(b) Pre-approved Plan or an Adopting Employer’s reliance on the Cycle 1 Opinion Letter for

the § 403(b) Pre-approved Plan (except that the Adopting Employer may not rely on the Cycle 1

Opinion Letter with respect to the amendment permitting participation of those employees).

PART V – MISCELLANEOUS

SECTION 26. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 2013-22 is modified and superseded regarding Opinion Letter applications submitted

with respect to a § 403(b) Pre-approved Plan’s second (and subsequent) Cycles. The provisions

of Rev. Proc. 2013-22 continue to apply to opinion and advisory letter applications for § 403(b)

Pre-approved Plans submitted for Cycle 1. Rev. Proc. 2019-39 is modified.

SECTION 27. EFFECTIVE DATE

.01 In general – This revenue procedure is effective on July 1, 2020, the day Cycle 2 began, and,

except as otherwise stated, applies to applications for an Opinion Letter submitted solely with

respect to Cycle 2 and subsequent Cycles.

September 20, 2021

420

Bulletin No. 2021–38

.02 Extended deadline for interim and initial amendments – Sections 22 and 23.02, relating to

deadlines for interim and initial amendments, are effective for Form Defects first occurring on or

after July 1, 2020, the day Cycle 2 began.

SECTION 28. PUBLIC COMMENTS

The Treasury Department and the IRS invite comments on this revenue procedure. Comments

should be submitted in writing and should include a reference to Rev. Proc. 2021-37. Comments

may be submitted in one of two ways:

(1) Electronically via the Federal eRulemaking Portal at www.regulations.gov (type “IRS2021-0011” in the search field on the regulations.gov homepage to find this revenue procedure and submit comments).

(2) Alternatively, by mail to: Internal Revenue Service, Attn: CC:PA:LPD:PR (Rev. Proc.

2021-37), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20044.

All commenters are strongly encouraged to submit comments electronically, as access to mail

may be limited. The IRS expects to have limited personnel available to process public comments

that are submitted on paper through mail. Until further notice, any comments submitted on paper

will be considered to the extent practicable. The Treasury Department and the IRS will publish for

public availability any comment submitted electronically, and to the extent practicable on paper,

to its public docket.

SECTION 29. PAPERWORK REDUCTION ACT

The collection of information included in this revenue procedure has been reviewed and approved

by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44

U.S.C. 3507) under control number 1545-0047.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of

information unless the collection of information displays a valid OMB control number.

The collections of information in this revenue procedure are in sections 5.11, 9.01, 9.02, 10.03, 11,

and 19. This information is required to enable the Commissioner, Tax Exempt and Government

Entities Division of the Internal Revenue Service, to make determinations in connection with

compliance with the § 403(b) Requirements. This information will be used to determine whether a

plan is entitled to favorable tax treatment. The likely respondents are banks, insurance companies,

other financial institutions, law, actuarial, and consulting firms, employee benefit practitioners and

Eligible Employers.

The estimated total annual reporting and/or recordkeeping burden is 29,149 hours.

The estimated annual burden per respondent/recordkeeper varies from 1/2 to 2,000 hours, depending on individual circumstances, with an estimated average of 3.56 hours. The estimated number

of respondents and/or recordkeepers is 8,188.

Bulletin No. 2021–38

421

September 20, 2021

The estimated frequency of responses is occasional.

Books or records relating to a collection of information must be retained as long as their contents

may become material in the administration of any internal revenue law. Generally, tax returns and

tax return information are confidential, as required by 26 U.S.C. § 6103.

SECTION 30. DRAFTING INFORMATION

The principal author of this revenue procedure is Patrick Gutierrez of the Office of Associate

Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes). For further

information regarding this revenue procedure, contact Employee Plans at (513) 975-6319 (not a

toll-free number).

September 20, 2021

422

Bulletin No. 2021–38

APPENDIX A

Application for Approval of § 403(b) Pre-approved Plan

Enter amount of user fee submitted: $

Name of applicant:

a. EIN:

b. Address:

c. Phone:

3. Person to contact:

a. Phone:

b. Email address:

c. Power of attorney attached?

4. Type of applicant (check one):

_____a. Provider

_____b. Mass Submitter

_____c. Identical adopter of Mass Submitter plan

_____d. Minor modifier adopter of Mass Submitter plan

5. Form of plan (check one):

_____a. Single Document Plan

_____b. Adoption Agreement Pla

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.