Part 7. Rulings and Agreements

Chapter 11. Employee Plans Determination Letter Program

Section 7. Multiple Employer Plans

7.11.7 Multiple Employer Plans

Manual Transmittal

August 21, 2025

Purpose

(1) This transmits revised IRM 7.11.7, Employee Plans Determination Letter Program, Multiple Employer Plans.

Material Changes

(1) Updated Program Scope and Objectives, to add Primary Stakeholders.

(2) Updated Authority and changed the Delegation Orders from 7-1 and 7-16 to 7-1-1 and 7-16-1.

(3) Added Roles and Responsibilities.

(4) Added Program Management and Review.

(5) Added Program Controls.

(6) Updated to change the name from Acronyms to Terms and Acronyms and added Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations and Employment Taxes) (EEE) and Rulings and Agreements (R&A).

(7) Various edits have been made throughout the IRM for clarity, removal of outdated items and for plain language.

Effect on Other Documents

This supersedes IRM 7.11.7 dated July 31, 2023.

Audience

Tax Exempt and Government Entities
Employee Plans

Effective Date

(08-21-2025)

Eric D. Slack
Director, Employee Plans
Tax Exempt and Government Entities

7.11.7.1 (08-21-2025)

Program Scope and Objectives

  1. Purpose: This IRM describes the procedures for reviewing Employee Plans (EP) Determination Letter (DL) applications for multiple employer plans.

  2. Audience: EP Determinations and Quality Assurance (QA) staff

  3. Policy Owner: Director, EP

  4. Program Owner: EP

  5. Primary Stakeholders::

    1. Internal - Director, Employee Plans; Director, Rulings and Agreements; EP Tax Law Specialist and Agents; Actuaries; Associate Chief Counsel (EEE), TE/GE Division.

    2. External - Plan sponsors, plan representatives, and plan participants.

  6. Program Goals: EP Determinations helps plan sponsors ensure their plans comply with the tax laws by issuing determination and opinion letters and protects the public interest by applying the tax law with integrity and fairness.

7.11.7.1.1 (10-13-2022)

Background

  1. A plan is qualified if it meets the requirements of IRC 401(a) in form and operation. A qualified plan is entitled to favorable tax treatment.

  2. To help taxpayers ensure their plans comply with the tax law, EP issues DLs and opinion letters on whether the plan’s form meets the qualification requirements. See IRM 7.11.1.

  3. A multiple employer plan (MEP) is maintained by two or more employers who aren’t related under:

    • IRC 414(b), controlled groups.

    • IRC 414(c), trades or businesses under common control.

    • IRC 414(m), affiliated service groups.

      Note:

      If a group of employers are related under these code sections, they’d be treated as a single employer.

  4. Multiple employer plans aren’t the same as multiemployer plans. For multiemployer plans, see IRC 414(f) and IRM 7.11.6, Multiemployer Plans.

  5. Multiple employer plans must comply with the qualification rules under IRC 413(c).

7.11.7.1.2 (08-21-2025)

Authority

  1. Delegation Order 7-1-1, delegates authority to issue DLs on the qualified status of pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans to the Director, EP. (IRM 1.2.68.2.9)) .

  2. Delegation Order 7-16-1, delegates authority to amend a plan after the expiration of its IRC 401(b) remedial amendment period to the Director, EP Rulings and Agreements, see IRM 1.2.68.2.14

  3. Find a complete list of delegation orders governing EP Rulings and Agreements at Delegation Orders by Process.

  4. See IRM 7.1.1 , IRM Exhibit 7.1.1-1 for a complete list of the major EP revenue procedures currently in effect.

7.11.7.1.3 (08-21-2025)

Roles and Responsibilities

  1. The mission of Employee Plans is to provide EP’s customers top-quality service by helping them understand and comply with applicable tax laws and to protect the public interest by applying the tax laws with integrity and fairness to all.

  2. The Director, EP, reports to Deputy Commissioner, TE/GE, and is responsible for planning, managing, directing and executing nationwide EP activities.

  3. EP responsibilities include:

    1. Employee plans (including the qualification of pension, annuity, profit-sharing, and stock bonus plans, simplified employee pensions, saving incentive match plans for employees, and tax-sheltered annuities) and related trusts.

    2. Tax treatment of participants and their beneficiaries and deductions for employer contributions.

    3. Procedural and administrative provisions with respect to such plans.

  4. The Director, EP R&A, reports to the Director, EP, and is responsible for three types of services for retirement plans— voluntary compliance, determination letters, and technical guidance.

  5. Responsibilities of the EP R & A staff include:

    1. Processing determination letter requests from employers regarding the qualified status of their pension, annuity, profit sharing and stock bonus plans.

    2. Issuing opinion and advisory letters to specific requestors regarding preapproved pension, annuity, and profit-sharing plans, including individual retirement accounts, simplified employee pensions and savings incentive match plans for employees, and tax-sheltered annuities.

    3. Developing and operating voluntary correction programs, such as the Employee Plans Compliance Resolution System (EPCRS) program and issuing compliance statements or entering into closing agreements under these programs.

    4. Processing requests for changes in funding method and making other actuarial determinations and interpretations.

    5. Coordinating with Chief Counsel on requests for funding waivers.

    6. Developing and maintaining responsibility for actuarial publications and other standards for the valuation of transfers of future interests for income, estate and gift tax purposes.

    7. Coordinating with TE/GE Division Counsel, Associate Chief Counsel and the DOJ on litigation issues and declaratory judgment cases under the Internal Revenue Code.(IRC 7476).

7.11.7.1.4 (08-21-2025)

Program Management and Review

  1. Program reports:

    1. The EP Determinations program uses Business Objects to view, create, and modify inventory and employee records. Business Objects uses tools to provide a built-in interface to query and analyze data and to build reports.

    2. Monthly reports detailing the current inventory of cases by area and their status are produced and provided to the Director, EP R&A, Area Managers, and frontline managers.

    3. Ad-hoc reports are produced as requested by determinations personnel with appropriate permission.

    4. Each quarter, EP Determinations Quality Assurance issues reports to summarize the results of their TEQMS reviews. See IRM 7.11.3, Tax Exempt Quality Measurement System (TEQMS)

  2. Program effectiveness: EP Determinations monitors business unit progress toward completing and closing cases in inventory. They provide status and progress reports to IRS leadership on a regular, recurring basis. Effectiveness is measured by analysis of compliance trends and results.

7.11.7.1.5 (08-21-2025)

Program Controls

  1. The IRS receives EP determination letter applications and user fees from taxpayers on Pay.gov.

  2. The user fee information is then transferred to LINUS to ensure it is properly recorded.

  3. The application information from Pay.gov is transferred to Tax Exempt Determination System (TEDS) and EP/EO Determination System (EDS), which are the systems that EP Determinations uses to control their inventory.

  4. TEDS contains roles and permissions to ensure proper separation of duties. (IRM 7.15.4).

  5. The EP Determinations Area Managers coordinate the assignment of inventory.

  6. In order to ensure a consistent level of managerial engagement in the process of making key strategic decisions during a determination letter review, the specialist submits requests for approval by their manager through TEDS.

  7. The manager approves or rejects any request through TEDS.

  8. EP Determinations QA reviewers perform reviews on mandatory review cases and for cases selected for the Tax Exempt Quality Measurement System (TEQMS) to ensure that specialists are conducting their determination letter reviews per technical, procedural and administrative requirements. See IRM 7.11.3 and IRM 7.11.9 for more information.

  9. The IRS is fully committed to protecting the privacy rights of taxpayers and employees. Privacy laws are included in the IRC, the Privacy Act of 1974, the Freedom of Information Act, and IRS policies and practices. For more information about these laws, visit the FOIA Library.

    1. For questions about privacy, email *Privacy.

    2. For questions about disclosure, email *Disclosure.

7.11.7.1.6 (08-21-2025)

Terms and Acronyms

  1. Acronyms used in this IRM:

    Acronym Term
    ACP Actual Contribution Percentage
    ADP Actual Deferral Percentage
    CARES Act The Coronavirus Aid, Relief, and Economic Security Act
    DL Determination Letter
    EEE Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes)
    EP Employee Plans
    IRC Internal Revenue Code
    MEP Multiple Employer Plan
    PEP Pooled Employer Plan
    QA Quality Assurance
    R&A Rulings and Agreements
    RAC Remedial Amendment Cycle
    SECURE Act Setting Every Community Up for Retirement Enhancement Act

  2. Use these terms when working with MEPs:

    Term Definition
    Controlling Member (Plan Sponsor or Lead Employer) The participating employer who sponsors the MEP
    Controlling Plan (Lead Plan) The plan submitted by the controlling member
    Single Plan A plan under which all assets, on an ongoing basis, are available to pay the benefits to employees covered by the plan and their beneficiaries. 26 CFR 1.414(l)-1(b)(1). A MEP is a single plan (not to be confused with a single employer plan). See 26 CFR 1.413-2(a)(2) and then 26 CFR 1.413-1(a)(2)
    Single Employer Plan A plan maintained by one employer. All employers related under IRC 414(b), IRC 413(c), or IRC 414(m) are treated as a single employer. A single employer plan isn’t a MEP

7.11.7.1.7 (08-21-2025)

Related Resources

  1. See Rev. Proc. 2025-4, Section 14, is the DL filing procedures for multiple employer plans.

  2. See IRM 7.11.1.

  3. See Rev. Proc. 2016-37.

  4. See Rev. Proc. 2023-37.

7.11.7.2 (08-09-2024)

Qualification Requirements for a Multiple Employer Plan

  1. Multiple employer plans must comply with the qualification rules under IRC 401(a), such as eligibility, vesting, distribution rules, etc. However, some rules are applied differently. Certain qualification requirements are applied as if all employees of each participating employer are employed by a single employer. These include:

    • IRC 401(a), exclusive benefit requirements.

    • IRC 410(a), eligibility to participate.

    • IRC 411, vesting.

    • IRC 415, limits on benefits and contributions.

    • Exhibit 7.11.7-1 Specific Law Provisions and How They Apply to A Multiple Employer Plan.

      Example:

      An employee's service with one employer is treated as service with the other employers to determine if the employee is eligible to participate. See 26 CFR 1.413-2(b).

      Example:

      A participant's benefits/contributions and compensation received from all of the employers maintaining the plan must be counted when applying the IRC 415 limits. See 26 CFR 1.415(a)-1(e).

  2. Other qualification requirements are applied to each participating employer as if that employer maintained a separate plan. These include:

    • IRC 410(a)(4), nondiscrimination.

    • IRC 410(b), coverage.

    • IRC 416, top heavy.

    • Exhibit 7.11.7-1, Specific Law Provisions and How They Apply to A Multiple Employer Plan.

    Example:

    The coverage requirements under IRC 410(b) are applied to a MEP on an employer-by-employer basis. Therefore, each unrelated employer performs separate coverage testing for its part of the plan and they don’t have to use the same testing rules. See 26 CFR 1.413-2(a)(3)(ii), 26 CFR 410(b)-7(c)(4)(i)(A), and26 CFR 1.410(b)-7(c)(4)(ii). The Actual Deferral Percentage (ADP) test under IRC 401(k)(3) and the Actual Contribution Percentage (ACP) test under IRC 401(m)(2) are also applied on an employer-by-employer basis. See 26 CFR 1.401(k)-1(g)(11). Participating employers don’t have to meet the same ADP/ACP testing rules. Review the plan document for testing and correction provisions.

    Example:

    Top-heavy status under IRC 416 is applied on an employer-by-employer basis. Each participating employer whose portion of the plan is top-heavy must apply the correct vesting schedule under IRC 416(b) and provide the appropriate minimum benefit/contribution. See 26 CFR 1.416-1, Q&A G-2 and T-8.

  3. Pay careful attention to IRC 415, limits on benefits/contributions and IRC 416, top-heavy requirements, when an employer participates in a MEP and also sponsors other plans. You must consider all plans in which an employer participates when applying IRC 415 limits and IRC 416 top-heavy requirements. The MEP should state that when a participating employer sponsors another plan, the IRC 415 and IRC 416 requirements include all plans of the participating employer.

  4. For plan years beginning prior to January 1, 2021, under what is known as the" unified plan" or "one-bad-apple rule," the failure of any participating employer or the failure of the plan itself to satisfy an applicable qualification requirement, results in disqualification of the plan for all participating employers. See Treas. Reg. 1.413-2(a)(3)(iv).

  5. The SECURE Act added IRC 413(e)(1), which, for plan years beginning after December 31, 2020, creates a statutory exception to the unified plan rule for certain types of MEPs. A MEP is eligible for the exception to the unified plan rule if it is an IRC 413(c) defined contribution plan described in IRC 401(a), or consists of individual retirement accounts described in IRC 408, including by reason of IRC 408(c), provided the MEP is maintained by employers that have either a common interest other than having adopted the plan, or has a “pooled plan provider,” as defined in IRC 413(e)(3)(A). Such plans are called pooled employer plans (PEPs).

    Note:

    SECURE 2.0 Act, Section 105, pooled employer plan modification. Section 105 clarifies that a pooled employer plan ("PEP" ) may designate a named fiduciary (other than an employer in the plan) to collect contributions to the plan. Such fiduciary would be required to implement written contribution collection procedures that are reasonable, diligent, and systematic. Section 105 is effective for plan years beginning after December 31, 2022.

  6. Proposed Treas. Regs., released on March 25, 2022, provide that for the relief to apply, plan documents must contain language that describes procedures to be followed to address a failure caused by a participating employer. These procedures include a description of notices that the IRC 413(e) plan administrator will send to the participating employer with a goal of correcting the failure; the actions the plan administrator will take if the employer does not remedy the failure or initiate a spinoff of its portion of the plan, and a statement that participants will become fully vested in their benefits if the employer does not correct the failure or initiate a spinoff.

  7. IRC 413(e)(2)(A) provides that IRC 413(e)(1) will not apply unless the terms of the plan provide that, in the case of any employer in the plan failing to take actions described in IRC 413(e)(1),

    1. The assets of the plan attributable to employees of that employer (or beneficiaries of those employees) will be transferred to a plan maintained only by that employer (or its successor), or

    2. To another eligible retirement plan as defined in IRC 402(c)(8)(B), or to any other arrangement that the Secretary determines is appropriate, unless the Secretary determines it is in the best interests of those employees (and their beneficiaries) to retain the assets in the plan.

  8. IRC 413(e)(2)(A) also provides that IRC 413(e)(1) will not apply unless the terms of the plan provide that, in the case any employer in the plan failing to take actions described in IRC 413(e)(1), the employer (and not the plan or any other employer in the plan) will be liable for any liabilities with respect to the plan attributable to employees of that employer (or their beneficiaries), except to the extent provided by the Secretary.

  9. If the participating employer does not take action by the final deadline (60 days after the final notice is provided) to correct the failure or initiate a spinoff, the plan administrator must:

    1. Stop accepting contributions from the unresponsive participating employer and its employees.

    2. Provide notice to participants (and their beneficiaries) that contributions have ceased; and

    3. Provide participants with an election either to roll over their benefits to an eligible retirement plan, or leave their benefits in the plan, in which case they must remain in the plan until distribution is permitted under the terms of the plan.

  10. Pursuant to IRC 413(e)(4)(B), until final Treasury Regulations are published, an employer or pooled plan provider may rely on a good faith, reasonable interpretation of the provisions of IRC 413(e) to which the final Treasury Regulations relate. Compliance with these proposed regulations is considered reliance on a good faith, reasonable interpretation of the provisions of IRC 413(e) to which the final Treasury Regulations relate.

  11. A determination letter for a multiple employer plan issued under Rev. Proc. 2025-4 (revised annually), Section 14, will provide reliance for purposes of the requirements of IRC 413(c). However, pending issuance of final Treasury Regulations under IRC 413(e), a favorable determination letter for a multiple employer plan will not provide reliance for purposes of IRC 413(e). An applicant that has a determination letter application for a multiple employer plan pending with the Service as of January 3, 2022, may withdraw the pending application, receive a refund of the user fee relating to the application, and resubmit the application following the issuance of final Treasury Regulations under IRC 413(e). If the withdrawn application had been submitted for initial qualification of the plan, the resubmission of that application will not cause the application to fail to be considered as an application for initial qualification.

7.11.7.3 (10-13-2022)

Submission Period

  1. A plan sponsor of an individually-designed plan is permitted to submit a DL application using Form 5300, Application for Determination for Employee Benefit Plan at any time for:

    1. Initial plan qualification.

    2. Qualification upon plan termination.

    3. Individually-designed plan resulting from merged plans of previously unrelated entities.

    4. In other circumstances that the IRS will announce.

      Note:

      See Rev. Proc. 2025-4, Section 11.01.

  2. A MEP can file for an initial qualification as either an individually-designed plan or use a pre-approved plan. In either instance, Form 5300 must be filed. See Rev. Proc. 2025-4, Sections 12.03 and 14.

  3. In the case of a MEP, the controlling member may adopt a pre-approved plan but must still file the application using Form 5300, following the rules of Rev. Proc. 2025-4, Section 12.

  4. The controlling member may submit an application based on a pre-approved plan for initial qualification, as outlined in Rev. Proc. 2016-37, Section 4.03(1), but only if the plan has never been issued a DL with respect to that plan. The application can be submitted at any time during the submission period for the applicable six-year remedial amendment cycle for a plan that:

    1. Makes any modification to a standardized plan (an amendment to add overriding language necessary to satisfy IRC 415 or IRC 416 due to required aggregation is not considered a modification).

    2. Makes extensive modifications to a nonstandardized plan.

    3. Adopts a pre-approved pension plan that is:
      (i) Not a governmental plan in which the normal retirement age under the plan is lower than the age 62 safe harbor, requesting a ruling, including, but not limited to, whether the plan satisfies Treas. Reg. 1.401(a)-1(b)(2).
      (ii) Is a governmental plan in which the normal retirement age doesn’t satisfy any of the safe harbors described in proposed Treas. Reg. 1.401(a)-1(b)(2)(v), requesting a ruling, including, but not limited to, whether the plan satisfies proposed Treas. Reg. 1.401(a)-1(b)(2).

  5. The controlling member may submit an application regardless of whether the plan has received a DL with respect to that plan. The application can be submitted at any time during the submission period for the applicable six-year remedial amendment cycle for a pre-approved plan that:

    1. Is a controlling member with a nonstandardized MEP that makes modifications to a nonstandardized plan that are not extensive.

    2. Is not a governmental plan that files a DL request that is limited to a ruling to determine whether the plan’s normal retirement age which is lower than the age 62 safe harbor in Treas. Reg. 401(a)-1(b)(2) is satisfied.

    3. Is a governmental plan with a normal retirement age that does not satisfy any of the safe harbors described in proposed Treas. Reg. 1.401(a)-1(b)(2)(v) that files a DL request that is limited to a determination as to whether the plan’s normal retirement age satisfies the requirements of proposed Treas. Reg. 1.401(a)-1(b)(2).

7.11.7.4 (10-13-2022)

Submission Procedures

  1. A controlling member may submit an application for a DL using their name only. See Rev. Proc. 2025-4, Section 14.02.

    Note:

    Before January 1, 2017, participating employers could request their own DLs when the controlling member requested one.

  2. If a participating employer (who’s not the controlling member) submits an application, close the case incomplete, issue a refund (if applicable), and issue a 1924 letter with caveat 10 with variable "Rev. Proc. 2025-4" .

  3. An applicant requesting a letter in the name of the controlling member only submits a Form 5300, Application for Determination for Employee Benefit Plan, either including or omitting the design-based safe harbor questions. The user fee should be submitted in accordance with Rev. Proc. 2025-4. For current filing fees for multiple employer plans, see Appendix A, Section .07 (1)(f) and (g). Any other participating employer and any other employer who adopts the plan may rely on the favorable DL except for IRC 401(a)(4), IRC 401(a)(26), IRC 401(l), IRC 410(b), and IRC 414(s), and if the employer maintains or has ever maintained another plan, IRC 415 and IRC 416.

7.11.7.5 (10-13-2022)

Scope of Review

  1. For applications filed with respect to nonstandardized plans, as described in Rev. Proc. 2025-4, Section 12.03, review the applicable Cumulative List (CL) that was used to review the underlying pre-approved plan.

  2. For applications filed for a standardized plan that has been amended, as outlined in Rev. Proc. 2023-37, Section 13.05(1), the adopting employer will lose reliance on the opinion letter as of the effective date of the amendment but the plan will remain eligible for the cycle system (provided that the adopting employer adopts timely Interim Amendments) until the end of the cycle that includes the effective date. Also see Rev. Proc. 2025-4, Sections 12.03(1)(a) and 12.04(4).

Exhibit 7.11.7-1

Specific Law Provisions and How They Apply to a Multiple Employer Plan

This chart indicates how specific law provisions are applied to a Multiple Employer Plan

Code Section Must be Met by Multiple Employer Plan Must be Met by Each Participating Employer Authority
IRC 401(a) - Qualification requirements Yes   26 CFR 1.413-2(a)(3)(iv)
IRC 401(a) -Exclusive benefit rule Yes   IRC 413(c)(2) and Professional Employer Organization Rules in Rev. Proc. 2002-21
IRC 401(a)(4) - Nondiscrimination   Yes 26 CFR 1.413-2(a)(3)(iii) and 26 CFR 1.401(a)(4)-1(c)(4)
IRC 401(a)(26) - Minimum Participation (DB Plans)   Yes 26 CFR 1.401(a)(26)-2
IRC 401(k) /IRC 401(m) - ADP/ACP   Yes 26 CFR 1.401(k)-2(a)3(ii)(A) and 26 CFR 1.401(k)-1(b)(4)
IRC 404 - Deduction Adopted before 1989 Adopted after 1988 IRC 413(c)(6)
IRC 410(a) - Eligibility Yes   IRC 413(c)(1)
IRC 410(b) - Coverage   Yes 26 CFR 1.410(b)-7(c)(4)(i)(A) and 26 CFR 1.410(b)-7(c)(4)(ii)
IRC 411 - Vesting Yes   IRC 413(c)(3) and 26 CFR 1.413-2(d)
IRC 412 / IRC 430 - Funding Adopted before 1989 Adopted after 1988 IRC 413(c)(4)
26 CFR 1.414(l)-1 - Mergers or Transfer of Assets - see note below Yes   26 CFR 1.414(l)-1(b)(1)
IRC 414(q) - Definition of Highly Compensated Employee   Determination is made separately by each adopting employer 26 CFR 1.414(q)-1(T) Q&A-1
IRC 414(v) - Catch-up Contributions Yes   25 CFR 1.414(v)-1(f)
IRC 415 - Limitations on Benefits All compensation is included   26 CFR 1.415(a)-1(e)
IRC 416 - Top-Heavy   Yes 26 CFR 1.416-1, Q&A G-2 and T-8

Note:

Mergers or Transfer of Assets - All assets available to pay benefits of employees covered under the plan must apply to the multiple employer plan as a whole.