Use this checklist to determine which retirement plans can use pre-approved plan documents to satisfy the requirements for preferential tax treatment under the Internal Revenue Code (I.R.C.). The IRS maintains preapproved plan programs pursuant to Rev. Proc. 2023-37, (1) for retirement plans described in I.R.C. § 401(a) (qualified plans), and (2) for annuity contracts or custodial accounts described in I.R.C. § 403(b) (403(b) plans). The programs available for pre-approved plans are different depending on the type of plan and the type of employer.
The IRS maintains pre-approved plan programs (1) for retirement plans described in I.R.C. § 401(a) (qualified plans), and (2) for annuity contracts or custodial accounts described in I.R.C. § 403(b) (403(b) plans). A new chart shows what types of plans are and are not eligible to use the pre-approved plan program.
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Tax-exempt organizations face special legal challenges in developing compensation packages for their executives. A new article, Executive Compensation Arrangements for Tax-Exempt Organizations, published in the Lexis Practice Advisor provides practical guidance on developing benefits for executives of nonprofits.
This article is divided into the following main topics:
- Executive compensation considerations for tax-exempt entities
- Excise Tax on Excess Executive Compensation
- Deferred compensation rules
- Severance pay
- Vacation and sick leave plans
- Performance bonuses and other nonfixed payments
- Fringe benefits
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With the IRS cutting back on determination letters for individually designed plans, more and more employers are switching to pre-approved plans. An article recently published in the Lexis Practice Advisor, Pre-Approved Plan Design and Compliance, discusses practical considerations involved with such plans. Topics include:
- Pre-approved Plan Designs and Favored Regulatory Status
- General Advantages and Disadvantages of Pre-approved Plans
- Types and Requirements of Pre-Approved Plans
- Limitations on Plans That May Be Pre-approved
- Pre-approved Plan Providers
- Implementing Pre-Approved Plans
- Obtaining IRS Opinion Letters
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An article recently published in the Lexis Practice Advisor, Substantial Risk of Forfeiture Under the IRC, discusses the concept of substantial risk of forfeiture (SRF) under sections 83, 409A, 457(f), 457A, and 3121(v)(2) of the Internal Revenue Code and the different consequences of the failure to achieve a SRF under each such section.
Topics covered are:
- Significance of SRF under the Various I.R.C. Sections
- Definition of SRF
- Conditions that Generally Support the Existence of a SRF and Related Requirements
- Conditions that Generally Do Not Support the Existence of a SRF
- Other rules relating to SRF
It is accompanied by a Substantial Risk of Forfeiture Comparison Chart, which summarizes the rules.
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