Rev. Proc. 75-51

Section 1. Purpose

.01 This Revenue Procedure provides supplemental and revised procedures of the Internal Revenue Service pertaining to the issuance of opinion letters by the National Office as to the acceptability of the form of certain master and prototype pension, annuity, and profit-sharing plans that include self-employed individuals, and the status for exemption of related trusts or custodial accounts.

.02 This revision is made to permit the issuance of opinion letters with respect to the acceptability of the form of these plans 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), approved September 2, 1974, (hereinafter referred to as "the Act").

Sec. 2. Background and General Information

.01 Rev. Rul. 72-7, 1972-1 C.B. 715, contains procedures relating to the issuance of opinion letters as to the acceptability of the form of master and prototype plans designed to include self-employed individuals.

.02 Rev. Proc. 74-39, 1974-2. C.B. 494, was issued to temporarily limit the issuance of opinion letters until guidelines could be developed for determining whether plans meet the requirements of section 401 of the Code, as amended by the Act. Rev. Proc. 75-38, page 567, this Bulletin, authorized the issuance of opinion letters with respect to those master and prototype plans for which guidelines had been developed. Additional guidelines have now been developed permitting the publication of this Revenue Procedure extending the area in which opinion letters on master and prototype plans may be issued.

Sec. 3. Rulings and opinion letters

.01 Except for the plans described in subsection .02 below, the National Office of the Service, upon request, will furnish a written opinion as to the acceptability (for purposes of section 401 of the Code, as amended by the Act, and section 501(a)) of the form of any defined contribution master or prototype plan designed to include self-employed individuals who may adopt the plan. If the form of plan includes a master trust or custodial account, a ruling will also be issued with respect to the exempt status of the trust or custodial account which forms part of the master plan.

.02 Subsection .01 above does not permit the issuance of opinion letters and rulings with respect to the following:

(1) a plan submitted by a sponsoring organization other than a trade or professional association, a bank within the meaning of section 401(d)(1), an insurance company, or a regulated investment company;

(2) a plan (including a target benefit plan) under which the test for prohibited discrimination under section 401(a)(4) is to be made by reference to benefits rather than contributions.

.03 Plans with respect to which favorable opinion letters are issued pursuant to subsection .01 above will have to be amended in the future if any provisions therein fail to meet the requirements of regulations or other guidelines adopted subsequent to the time the opinion letters are issued.

.04 Where an employer adopts a master or prototype plan and any related master or prototype trust or custodial account previously approved as to form pursuant to this Revenue Procedure, the employer's plan will be deemed to satisfy the requirements of sections 401 and 501(a) of the Code provided the following conditions are met:

(1) the requirements of section 3.02 of Rev. Proc. 72-7 are satisfied;

(2) the employer properly notified all interested parties of the adoption of the plan in accordance with the provisions of subsection .05 below;

(3) the employer does not receive notice from the Service that his plan will not be treated as qualified pursuant to this subsection within 90 days after the adoption of the plan.

.05 An employer who adopts a master or prototype plan approved as to form under this Revenue Procedure must notify all persons who qualify as interested parties under the regulations under section 7476 (determined by treating the adoption of the plan as an application for a determination letter with respect to the plan). Such notice shall be given in the same manner as if an application for a determination letter were being submitted except that the time for giving notice shall be determined by reference to the date of the adoption rather than date of an application. The contents of the notice shall be modified (as appropriate) to indicate that a master or prototype plan is being adopted rather than that an application is being submitted. The notice shall include the date of adoption of the plan, the address of the District Director for the district where the employer would have properly filed a request for a determination had one been filed, the address of the employer, the total number of plan participants (including retirees and terminated employees), and shall advise interested parties of their right to comment on whether the plan as adopted is a qualified plan.

.06 An interested party who requests the Department of Labor to comment on the adoption of the plan may include a copy of the notice given by the employer in lieu of the information he would otherwise be required to give with respect to the plan.

.07 If the Service receives one or more comments from interested parties or from the Secretary of Labor with respect to an employer's adoption of a master or prototype plan, the Service will evaluate the comments. If the Service determines that the matters mentioned can not affect the qualification of the plan, the employer and the interested parties who commented will be so notified. If the Service does not determine that the matters can not affect the qualification of the plan, the Service will notify the employer that the employer cannot rely on the provisions of subsection .04 above but should request a determination letter under the procedures of Rev. Proc. 75-47, page 581, this Bulletin (relating to individually designed plans). If a determination letter is requested and the determination is favorable with respect to the qualification of the plan, the employer's adoption of the plan will thereafter be treated as any other adoption of a master or prototype plan in accordance with this Revenue Procedure.

Sec. 4. Amendments

.01 A sponsoring organization described in section 3.02(1) above may amend its pre-existing plan (including any related master trust or custodial account) and the National Office will entertain a request for a written opinion as to the acceptability (for purposes of section 401 of the Code, as amended by the Act, and section 501(a)) of the form of the plan as amended. For purposes of this section a pre-existing plan means a master or prototype plan and any related trust or custodial account which is the subject of a favorable written opinion issued by the National Office, prior to the effective date of this Revenue Procedure, pursuant to section 3.01 of Rev. Proc. 72-7.

.02 Opinion letters and rulings referred to in subsection .01 above may not be issued unless the sponsoring organization represents to the Service that within 90 days after it receives a favorable opinion letter it will:

(1) Contact each employer who has previously adopted its pre-existing plan and give such employer an opportunity to decide whether he will continue in the master or prototype plan and, if so, to amend his adoption agreement to participate under a plan which has been amended pursuant to subsection .01 above or to adopt a new plan pursuant to section 4.04(2) below.

(2) Advise those employers who cannot or do not adopt an amended plan or a new plan that such employers may not continue to participate under the master or prototype plan.

(3) In the case of a prototype plan, advise each adopting employer of the possible need to amend the related trust agreement.

.03 No opinion letter will be issued regarding the effect of an amendment solely to conform a master or prototype plan to the requirements of section 402(a) of the Act, relating to naming fiduciaries, and section 503 of the Act, relating to claims procedures. If the sole effect of such an amendment is to conform the plan to the requirements of section 402(a) of the Act, the amendment will not affect the status of any favorable opinion letter issued with respect to the plan.

.04 An employer that has adopted a pre-existing plan may amend its plan to conform to the new requirements of the Act by either:

(1) Amending its adoption agreement to participate under a plan of a sponsor which has been amended pursuant to this Revenue Procedure; or

(2) Adopting a new plan of a sponsor provided:

(a) the new plan contains provisions for it to be adopted in substitution for the pre-existing plan;

(b) the new plan as adopted provides for contributions at a rate at least as great as under the pre-existing plan; and

(c) in the case of a prototype plan, the trust agreement is amended, if necessary, to meet the requirements of the Act.

.05 An employer that amends its plan pursuant to subsection .04 above will be deemed to satisfy the requirements of sections 401 and 501(a) of the Code if the conditions of section 3.04 above are met.

.06 In the event an employer amends his adoption agreement under a master or prototype plan, and such amendment is not contemplated or permitted under the plan, then such amendment will in effect substitute an individually designed plan for the master or prototype plan and the amendment procedure described in Rev. Proc. 72-6, as modified by Rev. Proc. 75-47, will be applicable.

Sec. 5. Instructions to sponsoring organizations and employers

.01 A sponsoring organization of the type referred to in section 3.02(1) 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 of the Service in accordance with the provisions of section 4 of Rev. Proc. 72-7.

.02 Amendments to plans with respect to which favorable opinion letters have been issued under the authority of this Revenue Procedure will also be processed in accordance with the provisions of section 4 of Rev. Proc. 72-7.

.03 Requests for opinion letters authorized by this Revenue Procedure shall be submitted on Form 3672, Approval of Master or Prototype Defined Contribution Plan for Self-Employed Individuals.

Sec. 6. Effect on other documents

.01 Rev. Proc. 74-39 and Rev. Proc. 75-38 are hereby superseded.

.02 The general procedures of Rev. Proc. 72-7 continue to apply except to the extent they are inconsistent with this Revenue Procedure.

Sec. 7. Effective date

This Revenue Procedure is effective on November 10, 1975.

¹ Also released as TIR-1419, dated November 10, 1975.