Rev. Proc. 76-15

Section 1. Purpose

This Revenue Procedure sets forth the procedures of the Internal Revenue Service for issuing notification and determination letters relating to certain qualified corporate defined contribution plans, and any related trusts or custodial accounts, under sections 401 and 501(a) of the Internal Revenue Code of 1954, as amended by the Employee Retirement Income Security Act of 1974 (Public Law 93-406) [1974-3 C.B.], approved September 2, 1974 (hereafter referred to as the "Act"). It establishes a means whereby certain practitioners may submit pattern plans with requests for notification letters that will enable such pattern plans to be used repeatedly on behalf of several or more adopting employers represented by such practitioners.

Sec. 2. Background and General Information

.01 Rev. Proc. 75-47, 1975-2 C.B. 581, sets forth guidelines under which determination letters with respect to certain types of defined contribution plans will be issued. The development of those guidelines also permits publication of this Revenue Procedure authorizing the issuance of notification letters with respect to the acceptability of the form of certain defined contribution plans that may be submitted from time to time on behalf of several adopting employers.

.02 This Revenue Procedure provides a program whereby a law firm may obtain approval from a district director of the form of a pattern plan which the law firm contemplates using in submitting determination letter applications on behalf of several or more adopting employers. A law firm using this procedure must represent to the Service, in connection with the initial submission of a plan for consideration pursuant to this procedure, that it can reasonably expect the plan to be adopted by other clients of the law firm.

.03 Limiting issuance of notification letters under this procedure to law firms does not in any way restrict the right of non-lawyers to represent taxpayers before the Service, in accordance with section 6.06 of Rev. Proc. 72-3, 1972-1 C.B. 698. This will mean that non-lawyers who are authorized to practice before the Service will not be precluded from representing a taxpayer with regard to a pattern plan approved for use by a law firm, whether or not on the occasion of the initial submission of the pattern plan on behalf of an adopting employer.

.04 After approval by the appropriate district director, a pattern plan, bearing a pattern plan identification number but otherwise without identification of the law firm or of any adopting employer, trustee or custodian, will be made available for inspection by the public at the office of the district director approving the form of the plan.

Sec. 3. Definitions

.01 "Law firm" means, for purposes of this procedure, a firm primarily engaged in the practice of law, at least one of whose members, or, in case of a professional association or corporation, one of whose shareholder-employees, is authorized to practice before the Treasury Department. The term is limited to a firm of attorneys, and does not apply to an individual attorney within a firm unless the individual attorney is a sole practitioner.

.02 "Defined contribution plan" means a plan described in section 414(i) of the Code, but for purposes of this procedure does not include target benefit, stock bonus, bond purchase, or employee stock ownership plans, or plans adopted by employers doing business in partnership form.

.03 "District--approved defined contribution pattern plan" means a defined contribution plan for which a notification letter is issued pursuant to this procedure.

.04 "Notification letter" means the letter informing a law firm that the plan is acceptable as to form and may be submitted on behalf of adopting employers.

Sec. 4. Determination Letters and Notification Letters

.01 Each law firm will be limited to the receipt of notification letters for two district-approved defined contribution plans of each type permitted by this procedure, i.e., corporate money purchase pension and corporate profit-sharing plans.

.02 There is no limitation on the number of employers who may adopt a district-approved pattern plan and trust or custodial account under this procedure.

.03 A separate plan instrument must be submitted for each district-approved money purchase pattern plan and each profit-sharing pattern plan.

.04 District Directors will issue determination letters on pattern plans submitted under this procedure pursuant to the provisions of Rev. Proc. 75-47, 1975-2 C.B. 581. Except for amendments by employers pursuant to section 6.05 below, each request for a determination letter under this procedure must contain a complete plan and trust or custodial account. Each pattern plan may be used either for initial adoptions of a plan or, with appropriate modifications, for amendments of an existing plan.

.05 Generally, approval of a pattern plan in a district will be honored in all districts.

Sec. 5. Instructions to practitioners and employers

.01 A law firm requesting a notification letter must submit its request concurrently with an adopting employer's request for a determination letter. The employer must file Form 5301, Application for Determination for Defined Contribution Plan, and Form 5302, Employee Census, which must be complete in all respects. The employer's request for a determination letter must be submitted to the District Director for the district in which the employer's principal place of business is located. The employer's request must contain a covering letter identifying (i) the law firm concurrently requesting a notification letter, and (ii) the District Director to which such request for a notification letter was submitted. The law firm's request for a notification letter must be submitted to the District Director for the district in which the law firm's principal place of business is located.

.02 The law firm is required to submit an unexecuted copy of the plan and the trust or custodial account (omitting therefrom the identify of the law firm and any adopting employer, trustee or custodian, and leaving blank any elective provisions), and a covering letter requesting application of this procedure. The letter must contain the identity of the adopting employer who is concurrently requesting a determination letter, the identity of the District Director to which such request for a determination letter was submitted, and the representation required by section 2.02 above.

.03 Elections by adopting employers will be permitted in the following areas:

(1) Provisions which, by necessity, must vary among adopting employers, such as the effective date, plan year, and the names of fiduciaries.

(2) Age and number of years of service required for participation.

(3) Job classification required as a condition of participation in the plan.

(4) Vesting schedule.

(5) Contribution and/or allocation formulas. (6) Whether or not voluntary employee contributions shall be permitted and, if so, the maximum rate of such contributions.

(7) Whether or not authority to amend the plan and trust or custodial account on behalf of an adopting employer is to be delegated as provided in section 6.01 below.

All elective areas must be designated by subject and page number in an index which is a part of the plan.

.04 Notification letters will not be issued with respect to plans and trusts or custodial accounts which contain provisions that are susceptible of resulting in prohibited discrimination. Examples of such provisions are the following:

(1) The allocation of forfeitures other than in a ratio to each participating employee's current annual compensation.

(2) Annual compensation defined as other than all of each employee's compensation that would be subject to tax under section 3101(a) of the Code (but without the dollar limitation of section 3121(a)(1) of the Code), or all of each employee's compensation that would be subject to tax under section 3101(a) of the Code (but without the dollar limitation of section 3121(a)(1) of the Code) in excess of a stated dollar amount (for plans which are integrated with the Social Security Act or Railroad Retirement Act).

(3) Mandatory employee contributions.

.05 A notification letter may be issued to a law firm for the same pattern plan, and trust or custodial account, in respect of which a notification letter has previously been issued to another law firm. However, every law firm desirous of utilizing its own notification letter must first request and obtain the same pursuant to sections 5.01 and 5.02 above.

.06 Subsequent requests for determination letters by other employers who adopt a law firm's district-approved pattern plan shall be submitted to the District Director for the district in which the employer's principal place of business is located. Such submissions shall be made on Forms 5301 and 5302, which must be complete in all respects. In addition, such submissions must include a copy of the notification letter sent to the law firm, and a certification by the person representing the employer before the Service that to the best of such person's knowledge the notification letter has not been withdrawn and is still in effect with respect to the pattern plan being submitted, and that such pattern plan has not been superseded.

.07 The issuance of a notification letter does not imply that employers who may adopt the pattern plan have a qualified plan. Adopting employers desiring a favorable determination letter with respect to such a plan should file a request in accordance with applicable regulations and procedures. With respect to an application for a determination letter on behalf of an adopting employer, the procedures set forth in section 601.201(o) of the Statement of Procedural Rules for plans designed to meet the requirements of sections 401, 403(a), or 405 of the Code shall apply.

Sec. 6. Amendments.

.01 Employers who adopt a district-approved pattern plan may delegate the authority to amend their plan to the law firm (as defined in section 3.01 above) holding the notification letter in respect of such plan, pursuant to the following:

(1) Employers may not delegate the authority to amend the provisions specified in section 5.03 above, and any delegated authority to amend an employer adopted district-approved pattern plan must expressly exclude any authority to amend the plan so as to include provisions described in section 5.04(1), (2), or (3).

(2) Employers who did not originally delegate the authority to amend their plan may later provide such authority, limited as provided in section 6.01(1), by amendment or collateral agreement. An amendment designed solely to delegate to the practitioner the right to amend a plan on behalf of an adopting employer does not affect the status of a prior determination letter issued with respect to such plan and should not be submitted to the Service.

.02 (1) Where the pattern plan and an adopting employer's plan are amended pursuant to the authority delegated to a law firm under section 6.01 above, the request for a notification letter and a determination letter with respect to such amendment must comply with sections 5.01 and 5.02 above. In addition, the law firm must specify, in its covering letter, the name of each employer maintaining a plan to which such amendment has been applied. Upon approval of the amendment by the Service, the law firm must notify each employer maintaining a plan to which such amendment applies within 90 days. The plan as amended will then constitute a pattern plan of such law firm, and will supersede the prior pattern plan of the firm.

(2) An adopting employer desiring a determination letter with respect to an amendment pursuant to this subsection must submit its request to the District Director for the district in which such employer maintains its principal place of business.

.03 (1) A district-approved pattern plan will have to be amended in order to retain its qualified status as such if any provisions therein fail to meet the requirements of law, regulations, or other guidelines affecting qualification that become effective subsequent to the time a notification letter has been issued.

(2) If a pattern plan is amended pursuant to paragraph (1) of this subsection, then each adopting employer's plan must also be amended if it is to retain its qualified status.

.04 Plans required to be amended pursuant to section 6.03 above, which the law firm intends to constitute a plan referred to in section 4.01 above, must be submitted to the office of the appropriate District Director or District Directors for issuance of a new notification letter and determination letter.

.05 If an employer desires to amend its plan other than pursuant to section 6.02 above, and if such amendment relates to areas other than those specified in section 5.03 above, such amendment will cause the employer's plan to become an individually designed plan instead of a pattern plan. An employer who desires a determination letter with respect to a plan amended pursuant to this section shall submit its request to the District Director for the district in which the employer maintains its principal place of business.

.06 The Service retains the right to withdraw a notification letter issued with respect to a district-approved pattern plan because of deficiencies not detected on initial submission. In such event, a new notification letter will be issued when at least one employer incorporates the required changes in its plan.

.07 The Service will honor no more than two requests during a twelve month period to amend a district-approved pattern plan referred to in section 4.01 above if the proposed changes are not required to maintain the qualified status of the plan. Such requests must be submitted to the appropriate district office or district offices for issuance of a new notification letter and a determination letter. The areas changed must be identified and a narrative explanation of the changes, including the reasons therefor, must be filed with the request.

.08 If a district-approved pattern plan is amended pursuant to sections 6.03, 6.06, or 6.07 above, the prior notification letter, and the plan as it existed prior to such amendment, may not be used for subsequent submissions under this procedure.

.09 A request for a notification letter with respect to an amendment pursuant to sections 6.03, 6.06, or 6.07 above must comply with sections 5.01 and 5.02 above.

Sec. 7. Effect On Other Documents

Rev. Proc. 75-47, 1975-2 C.B. 581, is hereby amplified.

Sec. 8. Effective Date

This Revenue Procedure is effective March 17, 1976.

² Based on TIR-1447, dated Mar. 17, 1976.