Areas in which determination letters will not be issued .02 Determination letters issued in accordance with this revenue procedure do not include determinations on the following issues within the jurisdiction of the Commissioner, TE/GE: (1) Issues involving $$ 72, 79, 105, 125, 127, 129, 402, 403 (other than 403(a)), 404, 409(1), 409(m), 412, 457, 511 through 515, and 4975 (other than 4975(e)(7)), unless these determination letters are authorized under section 7 of Rev. Proc. 2003–4, page 123, this Bulletin. (2) Plans or plan amendments for which automatic approval is granted pursuant to section 8.02 below. (3) Plan amendments described below (these amendments will, to the extent provided, be deemed not to alter the qualified status of a plan under $ 401(a)). (a) An amendment solely to permit a trust forming part of a plan to participate in a pooled fund arrangement described in Rev. Rul. 81–100, 1981–1 C.B. 326; (b) An amendment that merely adjusts the maximum limitations under $ 415 to reflect annual cost-of-living increases, other than an amendment that adds an automatic costof-living adjustment provision to the plan; and (c) An amendment solely to include language pursuant to § 403(c)(2) of Title I of the Employee Retirement Income Security Act of 1974 (ERISA) concerning the reversion of employer contributions made as a result of mistake of fact. (4) This section applies to determination letter requests with respect to plans that combine an ESOP (as defined in § 4975(e)(7) of the Code) with retiree medical benefit features described in § 401(h) (HSOPs). (a) In general, determination letters will not be issued with respect to plans that combine an ESOP with an HSOP with respect to: (i) whether the requirements of § 4975(e)(7) are satisfied; (ii) whether the requirements of § 401(h) are satisfied; or (iii) whether the combination of an ESOP with an HSOP in a plan adversely affects its qualification under $ 401(a). (b) A plan is considered to combine an ESOP with an HSOP if it contains ESOP provisions and § 401(h) provisions. (c) However, an arrangement will not be considered covered by section 3.02(4) of this revenue procedure if, under the provisions of the plan, the following conditions are satisfied: (i) No individual accounts are maintained in the $ 401(h) account (except as required by $ 401(h)(6)); (ii) No employer securities are held in the § 401(h) account; (iii) The $ 401(h) account does not contain the proceeds (directly or otherwise) of an exempt loan as defined in $ 54.4975–7(b)(1)(iii) of the Pension Excise Tax Regulations; and (iv) The amount of actual contributions to provide $ 401(h) benefits (when added to actual contributions for life insurance protection under the plan) does not exceed 25 percent of the sum of: (1) the amount of cash contributions actually allocated to participants' accounts in the plan and (2) the amount of cash contributions used to repay principal with respect to the exempt loan, both determined on an aggregate basis since the inception of the § 401(h) arrangement. EGTRRA .03 As provided in Notice 2001–42, until further notice, determination, opinion and advisory letters will not consider and may not be relied on with respect to whether a plan satisfies the qualification requirements of the Code as amended by EGTRRA. However, an employer's ability to rely on a favorable determination, opinion or advisory letter will not be adversely affected by the timely adoption of good faith EGTRRA plan amendments. Other applicable procedures .04 The following are some recent sources of additional procedures and guidance pertaining to determination letter applications made under this revenue procedure: (1) Rev. Rul. 2001–62, 2001–2 C.B. 632, as modified by Rev. Proc. 2002–73, 2002–49 I.R.B. 932, regarding changes to the mortality tables under $ 417(e). (2) Notice 2002–1, 2002–2 I.R.B. 283, regarding changes made by $ 620 of EGTRRA to user fees for employee plans determination letter applications. (3) Rev. Proc. 2002–21, 2002–19 I.R.B. 911, regarding professional employer organizations. (4) Rev. Proc. 2002–29, 2002–24 I.R.B. 1176, as modified by Rev. Proc. 2003-10, 2003-2 I.R.B. (Jan.13, 2003), regarding plan amendments for final and temporary regulations under $ 401(a)(9). (5) Rev. Proc. 2002–73, regarding extensions of time for making various amendments to qualified plans. SECTION 4. ON WHAT TE/GE .01 Other procedures for obtaining rulings, determination letters, opinion letters, etc., on matters within the jurisdiction of the Commissioner, TE/GE are contained in the following revenue procedures: (1) Employee Plans Technical (EP Technical) letter rulings, information letters, etc.: See Rev. Proc. 2003–4. (2) M&P plans: See Rev. Proc. 2000–20, as modified by Rev. Proc. 2000–27, Notice 2001– 42, Rev. Proc. 2001–55, 2001–2 C.B. 552, Rev. Proc. 2002–6, Rey. Proc. 2002–29 (modified by Rev. Proc. 2003-10) and Rev. Proc. 2002–73. (3) Technical advice requests: See Rev. Proc. 2003–5, page 163, this Bulletin. Chief Counsel's revenue procedure .02 For the procedures for obtaining letter rulings, determination letters, etc., on matters within the jurisdiction of the Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities), or within the jurisdiction of other offices of Chief Counsel, see Rev. Proc. 2003–1, page 1, this Bulletin. SECTION 5. WHAT IS THE Scope of this section .01 This section delineates, generally, the scope of an employee plan determination letter. It identifies certain qualification requirements, relating to nondiscrimination, that are considered by the Service in its review of a plan only at the election of the applicant. This section also identifies certain qualification requirements that are not considered by the Service in its review of a plan and with respect to which determination letters do not provide reliance. This section applies to all determination letters other than letters issued in response to an application filed on Form 6406, Short Form Application for Determination for Minor Amendment of Employee Benefit Plan; letters relating to the qualified status of group trusts; and letters relating solely to the requirements of $ 420, regarding the transfer of assets in a defined benefit plan to a health benefit account described in § 401(h). For additional information pertaining to the scope of reliance on a determination letter, see sections 8, 9 and 21 of this revenue procedure. Scope of determination letters .02 In general, employee plans are reviewed by the Service for compliance with the form requirements (that is, those plan provisions that are required as a condition of qualification under § 401(a)). In addition, as described below, certain nondiscrimination requirements are considered if the applicant specifically requests that they be considered. Unless otherwise stated, a plan is reviewed on the basis of the requirements that apply to the plan as of the date the application is received, except for terminating plans. For terminating plans, the requirements those that apply as of the date of termination. Nondiscrimination in amount requirement .03 Unless the applicant elects otherwise, a plan will not be reviewed for, and a determination letter may not be relied on with respect to, whether a plan satisfies one of the safe harbors or the general test for nondiscrimination in amount of contributions or benefits requirement under § 1.401(a)(4)-1(b)(2) of the Income Tax Regulations. Minimum coverage and .04 Unless the applicant elects otherwise, a plan will not be reviewed for, and a determination letter may not be relied on with respect to, the minimum coverage requirements of § 410(b). If the applicant demonstrates that the plan satisfies the coverage requirements of § 410(b), the determination letter may also be relied on with respect to the participation requirements of $ 401(a)(26). Nondiscriminatory current availability requirement .05 If the applicant demonstrates that the plan satisfies the coverage requirements of $ 410(b), the determination letter may also be relied on as to whether the plan satisfies the nondiscriminatory current availability requirements of § 1.401(a)(4) 4(b) with respect to those benefits, rights, and features that are currently available (within the meaning of $ 1.401(a)(4), 4(b)(2)) to all employees in the plan's coverage group. The plan's coverage group consists of those employees who are treated as currently benefiting under the plan (within the meaning of $ 1.410(b)–3(a)) for purposes of demonstrating that the plan satisfies the minimum coverage requirements of $ 410(b). Applications will not be reviewed for, and determination letters may not be relied on with respect to, whether the plan satisfies the requirements of $ 1.401(a)(4) 4(b) with respect to any benefit, right, or feature other than the ones described above, except those that are specified by the applicant and for which the applicant has provided information relevant to the determination. Other nondiscrimination requirements .06 An applicant may also ask that the review of its plan consider certain other nondiscrimination requirements which are described in Schedule Q (Form 5300), such as whether a definition of compensation satisfies § 414(s). Reliance conditioned on retention of information .07 A favorable determination letter may be relied on with respect to whether a plan satisfies a coverage or nondiscrimination requirement only if the application, demonstrations and other information submitted to the Service in support of a favorable determination are retained by the applicant. Effective availability requirement .08 In no event will any plan be reviewed to determine, and a determination letter may not be relied on with respect to, whether any benefit, right, or feature under the plan satisfies the effective availability requirement of $ 1.401(a)(4) 4(c). Other limits on scope of determination letter .09 Determination letters may generally be relied on with respect to whether the timing of a plan amendment (or series of amendments) satisfies the nondiscrimination requirements of $ 1.401(a)(4)–5(a) of the regulations, unless the plan amendment is part of a pattern of amendments that significantly discriminates in favor of highly compensated employees. A favorable determination letter does not provide reliance for purposes of § 404 and § 412 with respect to whether an interest rate (or any other actuarial assumption) is reasonable. Furthermore, a favorable determination letter will not constitute a determination with respect to the use of the substantiation guidelines contained in Rev. Proc. 93–42, 1993–2 C.B. 540, e.g., a determination letter will not consider whether data submitted with an application is substantiation quality. Lastly, a favorable determination letter will not constitute a determination with respect to whether any requirements of § 414(r), relating to whether an employer is operating qualified separate lines of business, are satisfied. However, if an employer is relying on § 414(r) to satisfy the minimum coverage or $ 401(a)(26) participation requirements, and the applicant so requests, a determination letter will take into account whether the plan satisfies the nondiscriminatory classification test of § 410(b)(5)(B). In this case, if the requirements of $ 410(b) or § 401(a)(26) are to be applied on an employer-wide basis under the special rules for employer-wide plans, a determination letter will take into account whether the requirements of the applicable special rule set forth in § 1.414(r)1(c)(2)(ii) or § 1.414(r)-1(c)(3)(ii) are met. Publication 794 .10 Publication 794, Favorable Determination Letter, contains other information regarding the scope of a determination letter, including the requirement that all information submitted with the application be retained as a condition of reliance. In addition, the specific terms of each letter may further define its scope and the extent to which it may be relied upon. SECTION 6. WHAT IS THE Scope .01 This section contains procedures that are generally applicable to all determination letter requests. Additional procedures for specific requests are contained in sections 7 through 16. Qualified trusteed plans .02 A trust created or organized in the United States and forming part of a pension, profitsharing, stock bonus or annuity plan of an employer for the exclusive benefit of its employees or their beneficiaries that meets the requirements of $ 401 is a qualified trust and is exempt from federal income tax under $ 501(a) unless the exemption is denied under § 502, relating to feeder organizations, or $ 503, relating to prohibited transactions, if, in the latter case, the plan is one described in § 503(a)(1)(B). Qualified nontrusteed annuity plans .03 A nontrusteed annuity plan that meets the applicable requirements of g 401 and other additional requirements as provided under $ 403(a) and § 404(a)(2), (relating to deductions of employer contributions for the purchase of retirement annuities), qualifies for the special tax treatment under $ 404(a)(2), and the other sections of the Code, if the additional provisions of such other sections are also met. Complete information required .04 An applicant requesting a determination letter must file the material required by this revenue procedure with the Employee Plans Determinations manager (EP Determinations) at the address in section 6.18. The filing of the application, when accompanied by all information and documents required by this revenue procedure, will generally serve to provide the Service with the information required to make the requested determination. However, in making the determination, the Service may require the submission of additional information. Information submitted to the Service in connection with an application for determination may be subject to public inspection to the extent provided by $ 6104. Complete copy of plan and trust instrument required .05 Except in the case of applications involving certain plans filed on Form 5307, or minor amendments described in section 11, a complete copy of the plan and trust instrument is required to be included with the determination letter application. See sections 7.03 and 7.04 for what must be included with applications involving plan amendments that are not minor amendments. Section 9 of Rev. Proc. 2003–4 applies .06 Section 9 of Rev. Proc. 2003–4 is generally applicable to requests for determination letters under this revenue procedure. Separate application for each single § 414(1) plan .07 A separate application is required for each single plan within the meaning of § 414(1). This requirement does not pertain to applications regarding the qualified status of group trusts. Coverage and nondiscrimination requirements .08 An applicant may request that the plan be reviewed to determine that the ratio percentage test of § 410(b)(1) is satisfied or that the plan satisfies one of the design-based safe harbors under $ 401(a)(4) by completing the appropriate elective lines on Form 5300 or Form 5307. Schedule Q (Form 5300) may be filed with the application, other than an application filed on Form 6406, to request consideration of the general test under § 401(a)(4), the average benefit test of $ 410(b)(2), or any of the other requirements described on Schedule Q. The applicant must include with the application form the material and demonstrations called for in the instructions to Form 5300 or Form 5307, and, if applicable, Schedule Q. Prior letters .09 If the plan has received a favorable determination letter in the past, the application must include a copy of the latest determination letter, if available. If the letter is not available, an explanation must be included with the application. Reliance on section 19 of Rev. a .10 In general, the remedial amendment period for GUST ends on the later of February 28, 2002, or the last day of the first plan year beginning on or after January 1, 2001. Section 19 of Rev. Proc. 2000–20, as modified, provides an extension of the GUST remedial amendment period for employers who, by the deadline described in the preceding sentence, have adopted an M&P or volume submitter plan (a “pre-approved plan”) or certified their intent to adopt a pre-approved plan that has been restated for GUST. If the requirements for the extension are satisfied, the GUST remedial amendment period for the employer's plan will not end before the later of the end of the 12th month beginning after the date on which the Service issues a GUST opinion or advisory letter for the pre-approved plan or September 30, 2003. As a condition of the extension, a plan that is eligible for the extension must request a determination letter by the end of the extended period if a determination letter is required for reliance. Most adopting employers of M&P plans and many adopting employers of volume submitter plans will be entitled to at least limited reliance on their plan's opinion or advisory letter pursuant to section 8 of this revenue procedure and therefore will not have to request a determination letter as a condition of the extension. If an employer files an application for the initial GUST determination letter for a plan in reliance on section 19 of Rev. Proc. 2000–20 (that is, after the later of February 28, 2002, or the last day of the first plan year beginning on or after January 1, 2001), the employer must include with the application evidence of eligibility for the extension under Rev. Proc. 2000–20. That is, the employer must include a copy of the prior plan or adoption agreement, including the opinion or advisory letter, a copy of a timely completed certification, or other acceptable evidence of eligibility. The plan sponsor should describe any special circumstances in a cover letter. 1 The term “GUST” refers to the following: • the Uruguay Round Agreements Act, Pub. L. 103–465; |