Common use of Standardized Plans Clause in Contracts

Standardized Plans. A standardized plan is designed to be automatically acceptable under any fact pattern, except as indicated below. Therefore, there is no need to request a determination letter for such plans, provided the employer does not amend the plan and chooses only those options in the adoption agreement that were approved by the Service. Although a determination letter is not requested, the employer must still inform interested parties of the establishment or amendment of the plan. However, a determination letter is required for advance assurance that the provisions of the plan satisfy the qualification requirements if the employer maintains or has maintained another qualified plan. The Employer is not considered to have maintained another plan merely because the plan was previously not a standardized plan. Under certain circumstances, employers who have adopted standardized defined benefit plans may wish to request a determination letter that their plans prior benefit structure satisfies the requirements of Internal Revenue Code section 401(a)(26). Paired plans are standardized plans that are designed to work together. A paired plan may be recognized by the phrase "other than a specified paired plan" appearing in the fifth or sixth paragraph of the notification letter. If the employer maintains and has maintained only paired plans, a determination letter is not needed.