SIMPLIFIED METHOD AVAILABLE FOR AMENDING PLANS TO COMPLY WITH NEW ROLLOVER RULES.

Rev. Proc. 93-12

SECTION 1. PURPOSE

01 This revenue procedure provides a simplified method for sponsors of master and prototype (M & P), regional prototype, volume submitter specimen, and individually designed plans which have received favorable opinion, notification, advisory, and determination letters to amend their plans to comply with section 401(a)(31) of the Internal Revenue Code by adopting either a model amendment or a non- model amendment for approval by the Service.

02 This revenue procedure also provides that the Service will consider whether the requirements of section 401(a)(31) of the Code are met with respect to:

1 Any opinion, notification, and advisory letters issued by the Service after December 31, 1992, and

2 Any determination letters issued by the Service to employers who have adopted individually designed plans (including volume submitter plans) in response to an application for such letter that is received by the Service after December 31, 1992.

SEC. 2. REQUIREMENT FOR DIRECT ROLLOVERS

The Unemployment Compensation Amendments of 1992, Pub. L. 102- 318, added section 401(a)(31) to the Code. In general, section 401(a)(31) of the Code requires a plan to permit distributees to elect to have an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. This requirement applies to distributions made after December 31, 1992.

SEC. 3. SCOPE OF OPINION, NOTIFICATION, ADVISORY, AND DETERMINATION LETTERS

01 The Service, in issuing letters under Rev. Proc. 89-9, 1989-1 C.B. 780, Rev. Proc. 89-13, 1989-1 C.B. 801, Rev. Proc. 91-66, 1991-2 C.B. 870, and Rev. Proc. 92-60, 1992-30 I.R.B. 15, will consider whether the form of a plan meets the requirements of section 401(a)(31) of the Code with respect to:

1 Opinion, notification, and advisory letters issued by the Service after December 31, 1992, and

2 Determination letters issued by the Service to employers who have adopted individually designed plans (including volume submitter plans) in response to applications for such letters received by the Service after December 31, 1992.

02 Notwithstanding section 3.01 2, above, a determination letter issued with respect to an individually designed plan (including a volume submitter plan) will include consideration of whether the form of the plan meets the requirements of section 401(a)(31) of the Code if the employer requests such consideration in writing prior to the issuance of the determination letter.

SEC. 4. PLAN AMENDMENT DATES

01 Sponsors of M & P, regional prototype, and volume submitter specimen plans and employers who have adopted volume submitter specimen or individually designed plans that have received an opinion, notification, advisory, or determination letter for the Tax Reform Act of 1986 must amend their plans by December 31, 1993, to include language that meets the requirements of section 401(a)(31) of the Code.

02 Employers who have adopted M & P or regional prototype plans need not adopt an amendment intended to meet the requirements of section 401(a)(31) of the Code, but may await notification from the sponsor of the original M & P or regional prototype plan that it has adopted an amendment to the original plan that conforms to the requirements of section 401(a)(31). However, the plan must be operated in accordance with section 401(a)(31) beginning January 1, 1993, and any amendment required by section 401(a)(31) must be applied retroactively to January 1, 1993.

03 With respect to terminating plans, Notice 87-57, 1987-2 C.B. 368, provides that a plan must be amended to meet the qualification requirements of the Code in effect at the time of the plan's termination in order for the termination of the plan not to adversely affect its qualified status. Therefore, beginning January 1, 1993, terminating plans must be amended at the time of termination to comply with section 401(a)(31).

SEC. 5. GENERAL INSTRUCTIONS FOR AMENDMENTS

01 Generally, a sponsor wishing to amend a plan must comply with the instructions in Rev. Procs. 89-9, 89-13, 92-6, 1992-1 C.B. 611, as supplemented by Rev. Procs. 91-66 and 92-60, as appropriate, and pay the user fee set forth in Rev. Proc. 90-17, 1990-1 C.B. 479.

02 Pursuant to this revenue procedure, sponsors may adopt the model amendment, as described in section 6, to comply with section 401(a)(31) of the Code and incur no user fee.

03 In lieu of the model amendment:

1 M & P, M & P mass submitter, and regional prototype mass submitter sponsors may adopt non-model language, as described in section 7, to comply with section 401(a)(31) of the Code.

2 Regional prototype sponsors may adopt non-model language, as described in section 8, to comply with section 401(a)(31).

3 Volume submitter specimen plan sponsors may adopt non-model language, as described in section 9, to comply with section 401(a)(31).

4 Adopters of individually designed plans, including previously approved volume submitter specimen plans, may adopt non-model language, as described in section 10, to comply with section 401(a)(31).

SEC. 6. MODEL AMENDMENT

01 Use of the Model Amendment -- Sponsors who amend their plans may adopt on a word-for-word basis the language in the appendix to this revenue procedure. This model language is available for use by M & P, regional prototype, and volume submitter specimen plan sponsors as well as individually designed plan sponsors. No application to the Service is required. The Service will not issue new opinion, notification, advisory, or determination letters for plans amended by adding the model language described in this section.

02 M & P and Regional Prototype Sponsors -- M & P and regional prototype plan sponsors using the model language must, no later than December 31, 1993, inform all adopting employers of the change to their plans; send copies of the amended plan or, if more convenient, the changed pages, to the National Office or Key District Directors in accordance with Rev. Procs. 89-9 and 89-13; and notify the National Office or key district office, as appropriate, that they are using the model language. In addition, mass submitters must certify that all identical adopters and regional prototype sponsors that utilize the mass submitter's plan will adopt the plan as amended. Sponsors should include a copy of the opinion or notification letter previously issued with "401(a)(31) Model Amendment" printed clearly on the top of the letter. Sponsors who either are identical adopters of an M & P mass submitter's plan or use a regional prototype mass submitter's plan must adopt the plan as amended by the mass submitter.

03 Volume Submitters -- Sponsors of volume submitter specimen plans using the model language must, no later than December 31, 1993, send a copy of their amended plans or, if more convenient, changed pages, to the appropriate Key District Directors. Volume submitter specimen plan sponsors may only offer the amended specimen plan prospectively, as volume submitter specimen plan sponsors do not have the power to adopt amendments on behalf of employers. However, an employer who adopted a volume submitter specimen plan prior to this amendment of the specimen plan may individually adopt the model amendment and will not need to obtain a new determination letter.

04 If a sponsor uses language different from that contained in the appendix and wants to obtain approval that the amendment will not adversely affect the plan's qualified status, then application must be made to the Service under sections 7 through 10, as applicable, of this revenue procedure.

05 Notice of any amendment must be provided by an adopting employer to interested parties in accordance with Part II of Rev. Proc. 92-6.

SEC. 7. LIMITED AMENDMENT PROCEDURE FOR M & P, M & P MASS SUBMITTER, AND REGIONAL PROTOTYPE MASS SUBMITTER PLANS

01 This section provides a limited amendment procedure under which sponsors of M & P, M & P mass submitter, and regional prototype mass submitter plans that have received a favorable opinion or notification letter can amend their plans for section 401(a)(31) of the Code using non-model language.

02 An M & P, M & P mass submitter, or regional prototype mass submitter sponsor (other than an identical adopter of an M & P mass submitter plan) must apply to the National Office of the Internal Revenue Service for approval of the non-model language. The application should include the first page of Form 4461 or Form 4461-A with "401(a)(31) Amendment" printed clearly on the top of the Form and a user fee of $400.00. Only one application and user fee is required from each sponsor, regardless of the number of plans affected.

03 All changes to the plan must be clearly described in a cover letter. A copy of the plan or, if more convenient, changed pages, must also be submitted. In addition, a copy of the opinion or notification letter(s) previously issued must be included. All applicants must certify that no changes other than those made to comply with section 401(a)(31) of the Code have been made. Plans with amendments other than amendments to comply with section 401(a)(31) will be returned to the sponsor. In addition, mass submitters must certify that all identical adopters and regional prototype sponsors that utilize the mass submitter's plan will adopt the plan as amended.

04 Upon receipt of an application, the National Office will issue an acknowledgement letter that confirms receipt of the application and informs the sponsor that the Service will notify the sponsor if any changes need to be made to the non-model language. If the Service does not notify the sponsor within 90 days of the date of the acknowledgement letter that changes to the non-model language are necessary, the sponsor may treat the non-model language as approved. In this case, the sponsor will receive no further correspondence from the Service regarding the non-model language.

05 Sponsors who either are identical adopters of an M & P mass submitter's plan or use a regional prototype mass submitter's plan must adopt the plan as amended by the mass submitter. If the mass submitter's amendment is treated as approved under paragraph .04 above, the identical adopter may also treat the amendment as approved without submitting a separate application.

06 Sponsors must inform all adopting employers of the change to their plans and must send copies of the amended plan or, if more convenient, changed pages, to the Key District Directors in accordance with Rev. Procs. 89-9 and 89-13.

07 Notice of any amendment must be provided by an adopting employer to interested parties in accordance with Part II of Rev. Proc. 92-6.

SEC. 8. LIMITED AMENDMENT PROCEDURE FOR REGIONAL PROTOTYPE PLANS

01 This section provides a limited amendment procedure under which sponsors of regional prototype plans that have received a favorable notification letter can amend their plans for section 401(a)(31) of the Code using non-model language.

02 A regional prototype sponsor must apply to the key district which issued the plan's notification letter for approval of the non- model language. The application should be addressed to the attention of the Volume Submitter Coordinator. This application should include the first page of Form 4461 or Form 4461-A with "401(a)(31) Amendment" printed clearly on the top of the Form and a user fee of $400.00.

03 All changes to the plan must be clearly described in a cover letter. A copy of the plan or, if more convenient, changed pages, must also be submitted. In addition, a copy of the notification letter previously issued must be included. All applicants must certify that no changes other than those made to comply with section 401(a)(31) of the Code have been made. Plans with amendments other than amendments to comply with section 401(a)(31) will be returned to the sponsor.

04 Upon approval of the non-model language submitted by a regional prototype sponsor, the key district office will issue a notification letter.

05 Sponsors must inform all adopting employers of the change to their plans and must send copies of the amended plan or, if more convenient, changed pages, to the Key District Directors in accordance with Rev. Proc. 89-13.

06 Notice of any amendment must be provided by an adopting employer to interested parties in accordance with Part II of Rev. Proc. 92-6.

SEC. 9. LIMITED AMENDMENT PROCEDURE FOR VOLUME SUBMITTER SPECIMEN PLANS

01 This section provides a limited amendment procedure under which sponsors of volume submitter specimen plans that have received a favorable advisory letter can amend their plans for section 401(a)(31) of the Code using non-model language.

02 A sponsor of a volume submitter specimen plan must apply to the key district office (or offices) that issued the original advisory letter(s) for approval of the non-model language. The application(s) should be addressed to the attention of the Volume Submitter Coordinator(s) identified in the advisory letter(s), and must include a cover letter that has "401(a)(31) Amendment" printed clearly on the top and a user fee of $400.00.

03 All changes to the plan must be clearly described in the cover letter. A copy of the plan or, if more convenient, changed pages, must also be submitted. In addition, a copy of the advisory letter previously issued must be included. All applicants must certify that no changes other than those made to comply with section 401(a)(31) of the Code have been made. Plans with amendments other than amendments to comply with section 401(a)(31) will be returned to the sponsor.

04 Upon approval of the non-model language submitted by a volume submitter specimen plan sponsor, the key district office will issue an advisory letter.

05 Volume submitter specimen plan sponsors may only offer the amended specimen plan prospectively, as volume submitter specimen plan sponsors do not have the power to adopt amendments on behalf of employers. However, an employer who adopted a volume submitter specimens plan prior to this amendment of the specimen plan may individually adopt non-model language in accordance with section 10 of this revenue procedure.

SEC. 1O. LIMITED AMENDMENT PROCEDURE FOR ADOPTERS OF INDIVIDUALLY DESIGNED PLANS INCLUDING PREVIOUSLY APPROVED VOLUME SUBMITTER SPECIMEN PLANS

01 This section provides a limited amendment procedure under which an adopting employer of an individually designed plan, including a previously approved volume submitter specimen plan, that has received a favorable determination letter can amend its plan for section 401(a)(31) of the Code using non-model language.

02 An employer maintaining an individually designed plan must apply to the key district office in the region containing the employer's principal place of business for approval of the non-model language. The employer should include the first page of Form 6406 with "401(a)(31) Amendment" printed clearly on the top of the application, Form 8717, and a user fee of $125.00.

02.1 An employer who has previously adopted a volume submitter's specimen plan and that wishes to utilize the version of the specimen plan that includes the non-model amendment provided in section 9 must apply to the key district office that issued the original advisory letter for approval of the non-model language. The application should include the first page of Form 5307 with "401(a)(31) Amendment" printed clearly on the top of the application, Form 8717, and a user fee of $125.00.

03 All changes to the plan must be clearly described in a cover letter. A copy of the plan or, if more convenient, changed pages, must also be submitted. In addition, a copy of the determination letter previously issued must be included. All applicants must certify that no changes other than those made to comply with section 401(a)(31) of the Code have been made. Plans with amendments other than amendments to comply with section 401(a)(31) will be returned to the employer.

04 Upon approval of the non-model language submitted by an adopting employer, the key district office will issue a determination letter.

05 Notice of any amendment must be provided by an adopting employer to interested parties in accordance with Part II of Rev. Proc. 92-6.

SEC. 11. EXTENDED RELIANCE

Plans that are amended in accordance with sections 6 through 10 of this revenue procedure will not lose their otherwise applicable extended reliance period under Rev. Procs. 89-9, 89-13, or any other procedure. Also, employers entitled to rely on an opinion, notification, or determination letter will not lose reliance on such letters merely because of these amendments.

SEC. 12. EFFECT ON OTHER DOCUMENTS

Rev. Procs. 89-9, 89-13, 91-66, 92-60, and 90-17 are modified.

SEC. 13. DRAFTING INFORMATION

The principal author of this revenue procedure is Elizabeth Van Osten of the Employee Plans Technical and Actuarial Division. For further information regarding this revenue procedure, contact the Employee Plans Technical and Actuarial Division's telephone assistance service between 1:30 and 4:00 p.m., Eastern Time, Monday through Thursday on (202) 622-6074/6075 or Ms. Van Osten at (202) 622-6214. (These telephone numbers are not toll-free numbers.)

APPENDIX

MODEL LANGUAGE

(Note to Sponsor: The following model language may be used to amend plans to provide for the requirement of section 401(a)(31) of the Code that plans permit the direct rollover of eligible rollover distributions. This model language should be added to the plan. The wording and/or numbering in the heading of each article and/or section may be changed to conform to the system currently used in the plan.)

"Article I

Section 1. This Article applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the plan to the contrary that would otherwise limit a distributee's election under this Article, a distributee may elect, at the time and in the manner prescribed by the plan administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.

Section 2. Definitions.

Section 2.1. Eligible rollover distribution: An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under section 401(a)(9) of the Code; and the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities).

Section 2.2. Eligible retirement plan: An eligible retirement plan is an individual retirement account described in section 408(a) of the Code, an individual retirement annuity described in section 408(b) of the Code, an annuity plan described in section 403(a) of the Code, or a qualified trust described in section 401(a) of the Code, that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity.

Section 2.3. Distributee: A distributee includes an employee or former employee. In addition, the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in section 414(p) of the Code, are distributees with regard to the interest of the spouse or former spouse. Section 2.4. Direct rollover: A direct rollover is a payment by the plan to the eligible retirement plan specified by the distributee."