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February 16, 2009

Prototype Plan



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

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