Pension Administration and Trust Accounting, PATA  Pension Administration and Trust Accounting                                                                                      






                                             
         2 Central St
         Ipswich, MA  01938
         978.356.9004
         (f) 978.418.9178

© October 2011
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Plan Document 

PATA uses an approved IRS document designed by another company… We know, another company?  Well, if the average person knew how much work goes into writing pension documents and the hoops the IRS makes the document writer go through, then you would know why PATA didn’t write its own.  

The document that PATA uses is a Volume Submitter (VS) document which offers the plan sponsor some choices that the other documents don’t.   It is a document that does not have to be amended whenever the tax law changes with regards to pensions.  The only drawback to the document that PATA uses (if you call it a drawback) is that there is an annual maintenance fee to keep the plan in compliance in-between major plan amendments.   Look at it this way, an individually designed document that an attorney might draft will cost you, oh… $1,500 - $2,500 (if you’re lucky).  If there is a change in the pension laws that document is no good and needs to be rewritten.  At what cost?  Ask the attorney.  For a simple maintenance fee you go through the law changes without a worry.  In PATA’s eyes a fee worth paying. 

In addition, like I said, the VS doc is IRS approved… it has a letter from the IRS saying it is a good plan.  That letter, called an opinion letter, allows you to feel comfortable that the plan is good.  The letter also means that you don’t need to apply to the IRS for a favorable determination, which is when you ask the IRS to give your plan their blessing.  

If you simply need a document, PATA would be happy to draft one to your specifications.  Email or call PATA for a document quote. 

Reliance on Favorable Opinion or Advisory Letter 

Why do you NOT have to file for a determination letter when you adopt a Volume Submitter or a Prototype plan?  Generally, an employer who adopts a volume submitter plan or prototype plan can rely on the favorable opinion or advisory letter if the employer adopts a plan that is identical to the approved plan and elects only options permitted under the terms of the approved plan.  The employer can then forego filing Form 5307 and rely on the favorable opinion or advisory letter issued by the IRS.  Exceptions are listed in IRS Announcement 2001-77. 

The employer has no reliance if the employer adds, modifies, or deletes any terms to the approved documents.  For example, in the case of a volume submitter plan, the employer’s plan must be identical to the approved specimen plan and variations are limited to options the document provides