Rev. Proc. 79-28

Section 1. Purpose

This Revenue Procedure establishes a simplified procedure for requesting opinion, notification and determination letters in connection with plan amendments made to satisfy final regulations issued under the Employee Retirement Income Security Act of 1974 (ERISA) [Pub. L. 93-406, 1974-3 C.B. 1] and for obtaining assurance that such amendments satisfy these final regulations.

Sec. 2. Background and General Information

.01 Amendments are required for many plans because some of the final regulations issued under ERISA contain more restrictive provisions than the temporary regulations or other ERISA guidelines they superseded. IR-1974 dated January 24, 1978, lists examples of these more restrictive provisions.

.02 The general rule for compliance with new regulations is that an employee plan that meets the requirements of a prior regulation must be amended to conform with any new regulation by the end of the first plan year that begins after the new regulation is adopted, and the amendment must be effective by the first day of that plan year. Exceptions apply where new regulations prescribe the time or effective date of any required amendment.

.03 Where individually designed plans that met prior temporary regulations or other ERISA guidelines are amended to meet the requirements of final regulations special rules apply. First, such amendments must be made before the later of June 30, 1979, or the time provided in the general rule in Sec. 2.02 above. Second, if the plan met the conditions of the Special Reliance Procedure (SRP), Rev Proc. 76-31, 1976-2 C.B. 649, the plan amendment need not be made effective before the later of the first day of the first plan year that begins after December 31, 1977, or the time provided in the general rule above.

.04 Where master or prototype, pattern, field prototype or basic plans that met prior temporary regulations or other ERISA guidelines are amended to meet the requirements of final regulations such amendments must be made by the later of June 30, 1979, or twelve months after the date of issuance of the final regulations. The adopting employer will have six months from the time the Service issues a new opinion, notification, or determination letter on the amendments to make the necessary conforming plan amendments. See Ann. 78-175, 1978-47 I.R.B. 19.

Sec. 3. Definitions

.01 "Employee plan" or "plan" means (1) a pension, annuity, profit-sharing, stock bonus, or bond purchase plan, or (2) an employee stock ownership plan (ESOP) under section 409A of the Internal Revenue Code of 1954. The term employee plan or plan includes an individually designed, multiple employer, multi-employer, master or prototype, pattern, field prototype, or basic plan.

.02 A "master plan" is a plan made available by a "sponsoring organization" (see section 3.07) for adoption by employers and for which a single funding medium (for example a trust or custodial account) is established, as part of the plan, for the joint use of all adopting employers.

.03 A "prototype plan" is a plan made available by a sponsoring organization for adoption by employers and under which a separate funding medium is established for each adopting employer.

.04 A "pattern plan" is a plan submitted to the District Director by a law firm that contemplates using the form of such plan in submitting its determination letter applications on behalf of several adopting employers. See Rev. Proc. 76-15, 1976-1 C.B. 553.

.05 A "field prototype plan" is a defined contribution or defined benefit plan submitted to the Key District Director by a sponsor of plans which contemplates using the form of such plan in submitting determination letter requests on behalf of the sponsor's clients. See Rev. Proc. 77-23, 1977-2 C.B. 530.

.06 A "basic plan" is a plan, other than one described in subsections .04 or .05 above that is submitted to a District Director for approval, the form of which is intended to be adopted by more than one employer.

.07 A "sponsoring organization" is a trade or professional association having characteristics similar to those described in section 1.501(c)(6)-1 of the Income Tax Regulations, a bank (as defined in section 401(d)(1) of the Code), an insurance company, a regulated investment company (as defined in section 851 of the Code), an investment advisor that has an advisory contract with one or more regulated investment companies, a principal underwriter that has a principal underwriting contract with one or more regulated investment companies, or, in the case of an H.R. 10 (Keogh) plan, a person who, under regulations, may serve as a trustee or custodian.

.08 A "sponsor" means a firm (other than a trade or professional association, bank, insurance company, or regulated investment company) that has at least 10 clients that are adopting employers. A sponsor also means a submitter of basic plans as defined in Sec. 3.06.

Sec. 4. Determination Letter Procedures

Subject to the exceptions contained in this Revenue Procedure, determination letters on amendments designed to conform plans to final regulations shall be requested and issued in accordance with the procedures contained in Rev. Proc. 72-6, 1972-1 C.B. 710, Rev. Proc. 75-47, 1975-2 C.B. 581, and Rev. Proc. 77-22, 1977-2 C.B. 529.

Sec. 5. Instructions to Sponsoring Organizations, Sponsors, and Law Firms

.01 Subject to subsections .02 and .03 below, opinion letters on amendments designed to conform master or prototype plans to final regulations should be requested in accordance with Rev. Proc. 72-7, 1972-1 C.B. 715, Rev. Proc. 72-8, 1972-1 C.B. 716, Rev. Proc. 75-51, 1975-2 C.B. 590, and Rev. Proc. 75-52, 1975-2 C.B. 592, and notification letters on amendments to conform pattern plans or field prototype plans to final regulations should be requested in accordance with Rev. Proc. 76-15, 1976-1 C.B. 553, or Rev. Proc. 77-23, 1977-2 C.B. 530.

.02 Until June 30, 1979, each sponsor or law firm with plans entitled to the benefits of the SRP may request a notification letter without filing an application form, whether or not the request also includes plan amendments other than those solely to conform with the final regulations under ERISA. The sponsor or law firm must include a copy of the amendments, a statement indicating the request is made pursuant to this section 5.02, and a list of the plan sections amended and final regulations sections corresponding to those amendments. Each sponsoring organization conforming its master or prototype plan to final regulations should request an opinion letter in accordance with the Revenue Procedures mentioned in subsection .01 above. In considering a request concerning an SRP plan by a sponsoring organization, sponsor, or law firm, the Internal Revenue Service generally will limit its consideration to the following:

(1) Changes described as "Required Amendments" in section 8.01 of Rev. Proc. 76-31, 1976-2 C.B. 649, 652 (SRP), and

(2) The effect of amendments on the qualification of the form of the plan under section 401(a), 403(a) or 405(a) of the Code.

.03 Until June 30, 1979, each sponsor or law firm with non-SRP plans may request a notification letter by submitting with each request a copy of the first page of the application form that was previously filed for the receipt of a favorable notification letter under the temporary regulations. Such request must include a copy of the amendments, a list of the plan sections amended and final regulations sections corresponding to those amendments, and a statement that the plan amendments are made solely to comply with final regulations. Each sponsoring organization conforming its master or prototype plan to final regulations should request an opinion letter in accordance with the Revenue Procedures mentioned in subsection .01 above. In considering a request concerning a non-SRP plan by a sponsoring organization, sponsor, or law firm the Service generally will consider only the effect of such amendments on the qualification of the form of the plan under section 401(a), 403(a), or 405(a) of the Code. The Service will not consider whether the plan lacks other elements of qualification under section 401(a), 403(a), or 405(a) of the Code.

.04 Each sponsor and law firm must submit to the appropriate Key District Director, within seven months following receipt of its notification letter, a list of the following items:

1. Name and address of each employer adopting its plan amendments in accordance with Secs. 6.01 and 6.02 below;

2. name of the plan;

3. plan number;

4. employer indentification number (EIN) of each adopting employer;

5. designation of whether the plan is an SRP or non-SRP plan.

Sec. 6. Instructions to Employers

.01 Adopting employers of master or prototype, pattern, field prototype, or basic plans should not request determination letters on amendments described in Secs. 5.02 and 5.03, nor will determination letters be issued, if the following conditions are met:

1. The sponsoring organization, sponsor, or law firm submits the conforming amendments to the Service by June 30, 1979 for the appropriate opinion, notification, or determination letter;

2. The amendments approved by the Service are adopted by the employer without change within six months (without regard to the employer's plan year) after the sponsoring organization, sponsor, or law firm receives the letter referred to in paragraph 1 above on the amendments necessary to confirm the plan to the final regulations under ERISA; and

3. The notice to interested parties has been made and the Service has not notified the adopting employer that an application for a determination letter must be filed under Sec. 7.02 below.

.02 Adopting employers who have timely adopted Service approved plan amendments to their master or prototype, pattern, field prototype, or basic plans that meet the conditions of Sec. 6.01 above, shall be considered by the Service as having received a favorable determination letter on the date of such adoption.

.03 Until June 30, 1979, employers with plans that are entitled to the benefits of the SRP but are not plans described in Sec. 6.01 above, may make a request for a determination letter without submitting an application form, whether or not the request also includes plan amendments other than those to conform with the final regulations under ERISA. The applicant must include a statement indicating that such request is made pursuant to this Sec. 6.03 and that interested parties have been notified of the request. In addition, the request must include a copy of the amendments, a list of the amended plan sections and final regulations sections corresponding to those amendments. In considering such request the Service generally will limit its consideration to the following:

(1) Changes described as "Required Amendments" in section 8.01 of Rev. Proc. 76-31, 1976-2 C.B. 649, 652 (SRP), and

(2) The effect of amendments on the qualification of the plan under section 401(a), 403(a), or 405(a) of the Code.

.04 Until June 30, 1979, adopters of non-SRP plans that are not plans described in subsection .01, above, may file requests for determination letters by using a copy of the first page of Form 5300, 5301, or 5303 which was previously filed for the receipt of a favorable determination letter under the temporary regulations. Such request must also include a statement that interested parties have been notified, a copy of the amendments, a list of the plan sections amended and final regulations sections corresponding to those amendments and a statement that the plan amendments are solely to conform with final regulations. The Service generally will consider only the effect of such amendments on the qualification of the plan under section 401(a), 403(a), or 405(a) of the Code. Consideration will not be given as to whether the plan lacks other elements of qualification under section 401(a), 403(a), or 405(a) of the Code.

Sec. 7. Notice to Interested Parties

.01 The general requirement for Notices to Interested Parties (Notice) shall be as described in Rev. Proc. 75-31, 1975-2 C.B. 551 and Rev. Proc. 75-37, 1975-2 C.B. 566, except that the evidence of such Notice shall be included in the request for the determination letter or, in the case of those employers referred to in Sec. 6.01 above that do not file a request for a determination letter, adoption of the plan amendments shall be treated as an application for a determination letter for the purpose of notifying interested parties.

.02 The special rules in Secs. 6.01 and 6.02 do not apply to a plan of an adopting employer when the Service receives a comment regarding plan qualification from an interested party. Instead, the Service will request the adopting employer to submit a determination letter application within 60 days of the Service's request. The adopting employer will not be entitled to the special rule for compliance with new regulations in Sec. 2.04 if it fails to timely submit the requested application.

Sec. 8. Scope of Revenue Procedure

This Revenue Procedure applies only to those plans that must be amended to conform with the final regulations under ERISA.

Sec. 9. Effect on Other Documents

Rev. Proc. 72-6 and Rev. Proc. 76-31 are hereby modified to reflect the changes described in this Revenue Procedure with respect to determination letters on plan amendments to conform to final ERISA regulations.

Sec. 10. Effective Date

This Revenue Procedure is effective on April 27, 1979. Plans submitted to the Service to comply with final regulations before the effective date of this Revenue Procedure shall be treated in accordance with the Revenue Procedures mentioned in Sections 4 and 5 above unless the sponsor, practitioner, or employer requests that its submission be processed in accordance with this Revenue Procedure.

¹ Also released as News Release IR-2124, dated April 27, 1979.