Rev. Proc. 69-30

Section 1. Purpose.

The purpose of this Revenue Procedure is to set forth the procedures for the issuance of opinion letters by the National Office of the Internal Revenue Service as to the acceptability of the form of any master or prototype plan designed to include groups of self-employed individuals who may adopt such plan.

Sec. 2. Background and General Information.

.01 The Self-Employed Individuals Tax Retirement Act of 1962, Public Law 87-792, C.B. 1962-3, 89, applicable to taxable years beginning after December 31, 1962, provides certain tax benefits in connection with pension and profit-sharing plans that include self-employed individuals and that meet the applicable requirements of section 401 of the Internal Revenue Code of 1954. A related trust or custodial account, if any, is exempt from taxation as provided in section 501(a) of the Code unless exemption is denied under section 502 or 503.

.02 The general procedures of the Service relating to the issuance of rulings and determination letters are set forth in section 601.201 of the Statement of Procedural Rules ( Revenue Procedure 69-1, C.B. 1969-1, 381). Section 601.201(o) of the Statement of Procedure Rules ( Revenue Procedure 69-4, C.B. 1969-1, 391) provides the procedures relating to the issuance of determination letters as to the qualification of employees' plans or trusts under sections 401(a) and 405(a) of the Code and to the exempt status of related trusts or custodial accounts, if any, under section 501(a) of the Code.

.03 Pursuant to section 601.201(p) of the Statement of Procedural Rules (Revenue Procedure 69-5, C.B. 1969-1, 395) sponsoring organizations have applied to District Directors of Internal Revenue for opinion letters as to the acceptability of the form of such plans. In addition, District Directors have processed requests by self-employed individuals for advance determinations concerning their adoption of master or prototype plans previously approved as to form. However, this latter practice has been discontinued. See Rev. Proc. 69-24, page 306, this Bulletin.

Sec. 3. Rulings, Determination Letters and Opinion Letters.

.01 The National Office of the Service, upon request, will furnish a written opinion as to the acceptability (for the purpose of sections 401 and 501(a) of the Code) of the form of any master or prototype plan designed to include groups of self-employed individuals who may adopt the plan, where the plan is submitted by a sponsor that is a trade or professional association, bank, insurance company, or regulated investment company as defined in section 851 of the Code. Each opinion letter will bear an identifying plan serial number. If the trustee or custodian has been designated at the time of approval of a plan as to form, a ruling will be issued as to the exempt status of such trust or custodial account which forms part of the master or prototype plan. As used here, the term "master plan" refers to a standardized form of plan, with a related trust or custodial agreement, where indicated, administered by the sponsoring organization for the purpose of providing plan benefits on a standardized basis. The term "prototype plan" refers to a standardized form of plan, with or without a related form of trust or custodial agreement, that is made available by the sponsoring organization, for use without change by employers who wish to adopt such a plan, and which will not be administered by the sponsoring organization that makes such form available. The degree of relationship among the separate employers adopting either a master plan or a prototype plan or to the sponsoring organization is immaterial.

.02 Since a determination as to the qualification of a particular employer's plan can be made only with regard to facts peculiar to that employer, a letter expressing the opinion of the Service as to the acceptability of the form of a master or prototype plan will not constitute a ruling or determination as to the qualification of a plan as adopted by any individual employer or as to the exempt status of a related trust or custodial account. However, where an employer adopts a master or prototype plan and any related prototype trust or custodial account previously approved as to form, and observes the provisions thereof, such plan and trust or custodial account will be deemed to satisfy the requirements of sections 401 and 501(a) of the Code, provided the eligibility requirements and contributions or benefits under the plan for owner-employees are not more favorable than for other employees, including those required to be covered under plans of all businesses controlled by such owner-employees.

.03 Although District Directors no longer make advance determinations on plans of self-employed individuals who have adopted previously approved master or prototype plans, they will continue, upon request, to issue determination letters as to the qualification of individually designed plans (those not utilizing a master or prototype plan) and the exempt status of a related trust or custodial account, if any, in accordance with the procedures set forth in section 601.201(o) of the Statement of Procedural Rules.

Sec. 4. Determination Letters as to Qualified Bond Purchase Plans.

A determination as to the qualification of a bond purchase plan will, upon request, be made by the appropriate District Director. Form 4578, Application for Approval of Bond Purchase Plan, must be used for this purpose. When properly completed, that form will constitute a bond purchase plan.

Sec. 5. Instructions to Sponsoring Organizations and Employers.

.01 A sponsoring organization of the type referred to in section 3.01 above, that desires a written opinion as to the acceptability of the form of a master or prototype plan (or as to the exempt status of a related trust or custodial account) should submit its request to the National Office. Copies of all documents, including the plan and trust instruments and all amendments thereto, together with specimen insurance contracts (where applicable) must be submitted with the request. The request must be submitted to the Commissioner of Internal Revenue Service, Washington, D.C. 20224, Attn: T: MS: PT. Form 3672, Application for Approval of Master or Prototype Plan for Self-Employed Individuals, is to be used for this purpose.

.02 If, subsequent to obtaining approval of the form of a master or prototype plan, an amendment is to be made, the procedure will depend on whether the sponsor is authorized to act on behalf of the subscribers.

1 If the plan provides that each employer has delegated to the sponsor the power to amend the plan and that each employer shall be deemed to have consented thereto, the plan may be amended by the sponsor. If the plan contains no specific provision permitting the sponsor to amend such plan, but all employers consent in writing to permit such amendment, the sponsor may then amend the plan. However, where a sponsor is unable to secure the consent of each employer, the plan cannot be amended by the sponsor. In such cases, any change will have to be effected by the adoption of a new plan and the submission of a new Form 3672. The new plan will be complete and separate from the old plan and individual employers may, if they desire, substitute the new plan for the old plan.

2 In the first two instances mentioned above, where the plan has been properly amended, the sponsor must submit Form 3672, a copy of the amendment and, if required, copies of the signed consent of each participating employer.

3 Upon approval of the amendment by the Service, an opinion letter will be issued to the sponsor containing the serial number of the original plan, followed by a suffix: "A-1" for the first amendment, "A-2" for the second amendment, etc. Employers adopting the form of plan subsequent to the date of the amendment will use the revised serial number.

4 If a new plan is submitted, together with Form 3672 and copies of all documents evidencing the plan, an opinion letter bearing a new serial number will be issued to the sponsor and all employers who adopt the new plan shall use the new serial number. Employers who adopted the old plan will continue to use the original serial number.

Sec. 6. Effect on Other Documents.

.01 The general procedures of section 601.201 of the Statement of Procedural Rules (Revenue Procedure 69-1 and Revenue Procedure 69-4), relating to the issuance of rulings and determination letters, are applicable to requests relating to the qualification of plans covering self-employed individuals under section 401 and 405(a) of the Code and the exempt status of related trusts or custodial accounts under section 501(a), to the extent that the matter is not covered by the specific procedures and instructions contained in this Revenue Procedure.

.02 Revenue Procedure 69-5 and Revenue Procedure 69-24 are hereby superseded.

Sec. 7. Effective Date.

This Revenue Procedure is effective December 22, 1969, the date of its publication in the Internal Revenue Bulletin.