Cycle 3 Defined Contribution Plan Descriptions

Profit Sharing/401(k) Plan – Standardized (Full Adoption Agreement)

This plan is designed to satisfy the IRS requirements for a “standardized” plan. The adoption agreement will reflect all options available. A standardized plan provides a higher level of reliance on the plan’s opinion letter; but does not allow the design flexibility of a “nonstandardized” plan. For example, the definition of compensation is restricted to total compensation and generally all employees (other than statutorily excludable employees) must be eligible for the plan. Other limitations also apply. The plan will provide a more streamlined (and simpler) approach to plan design. The plan will be similar to ASC’s Standardized Prototype Profit Sharing/401(k) Plan used for Cycle 2 (PPA) plans.

Profit Sharing/401(k) Plan – Standardized (Collapsed Adoption Agreement)

This plan includes all of the same provisions as the Standardized Profit Sharing/401(k) Plan described above. However, the difference is that when the adoption agreement is generated, only the options selected will appear. Options not selected will be eliminated, resulting in a “collapsed” and, in many cases, much shorter adoption agreement.

Profit Sharing/401(k) Plan – Nonstandardized (Full Adoption Agreement)

This plan is ASC’s most flexible and comprehensive plan, allowing maximum design options for the plan sponsor. The adoption agreement will reflect all options available. This plan accommodates all plan design options allowed under the IRS procedures for pre-approved plans, including cross-tested plan designs. This plan is similar to ASC’s Volume Submitter and Nonstandardized Profit Sharing/401(k) Plans used for Cycle 2 (PPA) plans.

Profit Sharing/401(k) Plan – Nonstandardized (Collapsed Adoption Agreement)

This plan includes all of the same provisions as the Nonstandardized Profit Sharing/401(k) Plan described above. However, the difference is that when the adoption agreement is generated, only the options selected will appear. Options not selected will be eliminated, resulting in a “collapsed” and, in many cases, much shorter adoption agreement.

Owners Only Plan – Nonstandardized

This plan is designed for “owners only” and generally is exempt from the requirements of Title I of ERISA. The plan is appropriate for certain sole proprietors, partnerships and LLCs that do not have common law employees. This plan is similar to ASC’s Volume Submitter Owners-Only Plan used for Cycle 2 (PPA) plans.

Money Purchase Pension Plan – Nonstandardized

This plan is designed for money purchase pension plans only. This plan is similar to ASC’s Volume Submitter and Nonstandardized Money Purchase Pension Plan used for Cycle 2 (PPA) plans.

Governmental Profit Sharing/Grandfathered 401(k) Plan – Nonstandardized

This plan is designed for governmental entities and Indian tribal governments adopting or maintaining a profit sharing plan, including a plan with “grandfathered” 401(k) plan features. (Note that such entities MUST use this pre-approved plan document and CANNOT use the Nonstandardized Profit Sharing/401(k) Plan.) The plan is exempt from the requirements of Title I of ERISA and the coverage and nondiscrimination requirements. This plan is similar to ASC’s Volume Submitter Governmental Profit Sharing/Grandfathered 401(k) Plan used for Cycle 2 (PPA) plans.

Governmental Money Purchase Pension Plan – Nonstandardized

This plan is designed for governmental entities and Indian tribal governments adopting or maintaining a money purchase pension plan. (Note that such entities MUST use this pre-approved plan document and CANNOT use the Nonstandardized Money Purchase Pension Plan.) The plan is exempt from the requirements of Title I of ERISA and the coverage and nondiscrimination requirements. This plan is similar to ASC’s Volume Submitter Governmental Money Purchase Pension Plan used for Cycle 2 (PPA) plans.

ESOP/KSOP (Leveraged & Non-Leveraged) Plan – Nonstandardized

This plan is designed for entities adopting or maintaining employee stock ownership plans (ESOPs). The plan includes nonleveraged, leveraged and 401(k) features. This is a newly allowed type of pre-approved plan under IRS procedures.

Non-Electing Church Profit Sharing/401(k) Plan – Nonstandardized

This plan is designed for “non-electing” churches adopting or maintaining a profit sharing plan, including a plan with 401(k) plan features. (Note that such non-electing churches MUST use this pre-approved plan document and CANNOT use the Nonstandardized Profit Sharing/401(k) Plan.) The plan is exempt from the requirements of Title I of ERISA. This is a newly allowed type of pre-approved plan under IRS procedures.

Non-Electing Church Money Purchase Pension Plan – Nonstandardized

This plan is designed for “non-electing” churches adopting or maintaining a money purchase pension plan. (Note that such non-electing churches MUST use this pre-approved plan document and CANNOT use the Nonstandardized Money Purchase Pension Plan.) The plan is exempt from the requirements of Title I of ERISA. This is a newly allowed type of pre-approved plan under IRS procedures.