A Prototype Plan is a pre-approved retirement plan that’s created by a financial institution or service provider and offered to businesses as a ready-to-use option. Instead of building a custom plan from scratch, employers can adopt a prototype plan that already meets IRS requirements. This makes it easier and more affordable to set up and maintain a retirement plan, since much of the legal and administrative work has already been handled. Prototype plans are commonly used for 401ks and other workplace retirement plans, especially by small businesses that want a compliant and streamlined setup.