Definition
A plan that is made available by a prototype sponsor for adoption by employers and under which a separate funding medium is established for each adopting employer. For example: ABC Custodian has a prototype profit sharing plan that was approved by the IRS. The following employers adopted ABC Custodian’s profit sharing plan for their business
- Employer # 1
- Employer # 2
- Employer # 3
- Employer # 4
- And so on…
Each of these employers are considered plan sponsors, as they have adopted/sponsored the plan for their businesses
ABC Custodian is the prototype sponsor
A prototype plan consists of a basic plan document, an adoption agreement, and, unless the basic plan document incorporates a trust or custodial account agreement the provisions of which are applicable to all adopting employers, a trust or custodial account document.
Referring Cite
Revenue Procedure 2000-20, the plan document
Additional Helpful Information
- Prototype plans include those covering self-employed individuals
- Determination letter requests for prototype plans are submitted on Form 5307
