Rev. Proc. 79-62

Section 1. Purpose.

The purpose of this Revenue Procedure is to outline the procedure by which a plan sponsor or administrator may request a determination that a plan amendment is reasonable and provides for only de minimis increases in plan liabilities in accordance with section 412(f)(2)(A) of the Internal Revenue Code and section 304(b)(2)(A) of the Employee Retirement Income Security Act of 1974 (ERISA), Pub. L. 93-406, 1974-3 C.B. 1, 42.

Sec. 2. Background Information.

.01 Statute -- Section 412(f) of the Code and section 304(b) of ERISA provide that, in the case of a plan for which (1) a waiver of the minimum funding standard under section 412(d) of the Code and section 303 of ERISA is in effect, (2) an extension of an amortization period under section 412(e) of the Code and section 304(a) of ERISA is in effect, or (3) a plan amendment described in section 412(c)(8) of the Code has been made in the preceding 12 months (24 months for multiemployer plans), any plan amendment which increases the liabilities of such plan by reason of any increase in benefits, any change in the accrual of benefits, or any change in the rate at which benefits under the plan become nonforfeitable shall cause the funding waiver or the extension of time to cease to apply to the plan. One of the stated exceptions is a plan amendment which the Secretary of Labor determines to be reasonable and which provides for only de minimis increases in the liabilities of the plan. See section 412(f)(2)(A) of the Code and section 304(b)(2)(A) of ERISA.

.02 Reorganization Plan -- Reorganization Plan No. 4 of 1978, 1979-2 C.B. 480, which became effective December 31, 1978, transferred the function described in subsection .01 to the Secretary of the Treasury.

Sec. 3. Requests for Determination of "Reasonable" and "De Minimis".

.01 Who may Submit -- Only a plan administrator, plan sponsor, or the authorized representative of either may make a request for a determination that a plan amendment meets the requirements described in section 1.

.02 Where to Submit -- Such requests shall be submitted to the Commissioner of Internal Revenue, Attention: E:A, 1111 Constitution Avenue, NW, Washington, DC 20224.

.03 Procedural Rules -- Any such request must be signed by the taxpayer or his authorized representative in accordance with section 601.201 of the Statement of Procedural Rules. Since a request for a determination that a plan amendment meets the requirements described in section 1 constitutes a request for a ruling, and since a ruling constitutes a written determination within the meaning of section 6110 of the Code, compliance with section 6110 is required with respect to such request.

Section 601.201 of the Statement of Procedural Rules sets forth the requirements for complying with section 6110. Section 601.201(e) furnishes specific instructions to taxpayers.

Accordingly, any such request for a determination must include both the required declaration, properly signed by either the plan administrator or the plan sponsor, and a statement of proposed deletions for disclosure purposes.

.04 Information Required -- In addition to submitting either a copy of the plan amendment or a detailed description of the changes which would be made by the plan amendment, the applicant must furnish evidence that the amendment is reasonable and provides for only de minimis increases in the liabilities of the plan. What constitutes appropriate evidence will depend on the facts and circumstances of each case. Generally, such evidence should include the following:

(a) Reasons for amendment -- A statement concerning the reasons for adopting the amendment at this time.

(b) Effect of the plan amendment -- A statement by the plan's enrolled actuary in the case of a defined benefit plan, or the plan administrator in the case of any other plan, which provides an estimate of the amount by which the liabilities of the plan will be increased by reason of the plan amendment.

(c) Prior rulings -- A list of any rulings issued to the plan which (1) became applicable within the 15 plan years preceding the request for a determination, and (2) granted waivers of the minimum funding standard or granted an extension of time over which to amortize any unfunded liability of the plan in accordance with section 412(e) of the Code and section 304(a) of ERISA. For each such ruling, a description of any special conditions under which the funding waiver or extension of time was granted must be included. A copy of each such ruling letter may be submitted to satisfy this requirement.

(d) Other facts concerning the pension plan--For the plan for which a ruling on whether a plan amendment meets the requirements described in section 1 is requested, the following information must be supplied:

(1) The name of the plan and the plan's identification number.

(2) The date the plan was adopted.

(3) The effective date of the plan.

(4) The classes of employees covered.

(5) The number of employees covered.

(6) A copy of the current plan document and a copy of the most recent summary plan description.

(7) A copy of the most recent determination letter issued to the plan.

(8) A brief description of any plan amendments during the last five years which affected plan costs, including the approximate effect of each amendment on such costs.

(9) The most recent actuarial valuation report, plus any available actuarial reports for the preceding four plan years.

(10) A description of how the plan is funded (i.e., trust fund, individual insurance policies, etc.).

(11) A copy of the most recently completed Annual Return/Report of Employee Benefit Plan (Form 5500, Form 5500C, or Form 5500K, as applicable) and in the case of a defined benefit plan, a copy of the corresponding Actuarial Information schedule (Schedule B of Form 5500).

(e) Other information.

(1) A description of the nature of any matters pertaining to the plan which are currently pending or about to be submitted to the IRS, the Department of Labor or the Pension Benefit Guaranty Corporation.

(2) Details of any existing litigation or court proceeding which involves the plan.

(3) A statement of which IRS District Office maintains files concerning the plan.

(f) In certain cases (such as, for example, cases involving plans maintained by more than one employer) some of the material described in subsections (a) through (e) may be inappropriate or burdensome to furnish. In such cases, the applicant should furnish a statement indicating why it is either inappropriate or burdensome to furnish such material.

The applicant may incorporate by reference any of the material described in subsections (a) through (e) which has previously been submitted to the National Office in connection with a request for a waiver of the minimum funding standards or other ruling under section 412 of the Code.

.05 General -- Plan Administrators who have difficulty in furnishing the information specified in this Revenue Procedure may call or write the Actuarial Division, E:A, for guidance. In some instances, preliminary conferences will be afforded in addition to conferences available under section 601.201 of the Statement of Procedural Rules. In all cases, however, the material described in the last paragraph of subsection .03 must be furnished.

Sec. 4. Requests Regarding Plan Qualification.

This Revenue Procedure addresses only the question of whether a plan amendment satisfies the requirements of section 412(f)(2)(A) of the Code and section 304(b)(2)(A) of ERISA. Any such ruling under this Revenue Procedure approving an amendment will not be a determination as to the effect the plan amendment may have on the qualification of the plan.

Any request for a determination letter regarding the effect the amendment may have on the qualification of the plan should be sent to the Key District Director. However, the determination letter will not consider whether such amendment is reasonable and de minimis within the meaning of section 412(f)(2)(A) of the Code.