Rev. Proc. 76-38

Section 1. Purpose

This Revenue Procedure authorizes Key District Directors to issue determination letters relating to the qualification of target benefit plans under the Internal Revenue Code of 1954, as amended by the Employee Retirement Income Security Act of 1974 (ERISA). This Revenue Procedure also authorizes the National Office to issue opinion letters as to the acceptability of the form of master and prototype target benefit plans.

Sec. 2. Background and General Information

.01 Rev. Proc. 72-6, 1972-1 C.B. 710, sets forth the detailed procedures of the Internal Revenue Service with respect to the issuance of determination letters on the qualification of employees' plans under sections 401 and 405(a) of the Code and the exempt status of related trusts or custodial accounts, if any, under section 501(a). Rev. Proc. 75-47, 1975-2 C.B. 581, sets forth supplemental and revised procedures of the Internal Revenue Service for issuing determination letters on such plans. Section 3.02 of Rev. Proc. 75-47 specifically provides that such determination letters will not be issued on defined contribution plans (including target benefit plans) under which the test for prohibited discrimination under section 401(a) is to be made by reference to benefits rather than contributions.

.02 Rev. Procs. 72-7, 1972-1 C.B. 715, and 72-8, 1972-1 C.B. 716, contain procedures relating to the issuance of opinion letters as to the acceptability of the form of master and prototype plans, including plans which cover self-employed individuals. Rev. Procs. 75-51, 1975-2 C.B. 590, and 75-52, 1975-2 C.B. 592, set forth supplemental and revised procedures pertaining to the issuance of opinion letters by the National Office as to the acceptability of the form of certain master and prototype plans, including plans covering self-employed individuals. Section 3.02(2) of each Rev. Proc. provides that opinion letters will not be issued with respect to plans (including target benefit plans) under which the test for prohibited discrimination under section 401(a)(4) of the Code is to be made by reference to benefits rather than contributions.

.03 Revenue Ruling 76-464, page 115, this Bulletin, provides guidelines with respect to earnings assumptions on contributions to target benefit plans for purposes of determining whether there exists prohibited discrimination under section 401(a)(4) of the Code.

Sec. 3. Determination and Opinion Letters

.01 The Key District Directors are now authorized to issue determination letters with respect to the qualification of target benefit plans and the status for exemption, from Federal income tax, of related trusts or custodial accounts (if any).

.02 The National Office is now authorized to issue opinion letters as to the acceptability of the form of master and prototype target benefit plans, including plans designed to benefit self-employed individuals, and issue rulings as to the status for exemption, from Federal income tax, of related master trusts or custodial accounts (if any).

.03 The determination and opinion letters authorized by this section are those on plans that have not previously received a determination or opinion letter, and plans that have been amended to meet the requirements of Rev. Rul. 76-464.

Sec. 4. Effect on Other Documents

.01 Rev. Proc. 75-47 is hereby modified by deleting from the last sentence in section 3.02 the word "including" and substituting therefor the words "except for".

.02 Rev. Proc. 75-51 is hereby modified by deleting the word "including" from section 3.02(2) and substituting therefor the words "except for".

.03 Rev. Proc. 75-52 is hereby modified by deleting the word "including" from section 3.02(2) and substituting therefor the words "except for".

.04 All other provisions of these Revenue Procedures are applicable to requirements for determination and opinion letters on target benefit plans.

Sec. 5. Effective Date

This Revenue Procedure is effective November 5, 1976.

¹ Also released as IR-690, dated November 5, 1976.