Rev. Proc. 77-15

Section 1. Purpose.

This Revenue Procedure sets forth the procedures of the Internal Revenue Service pertaining to the adoption of Form 5612, Model Profit-Sharing Plan, Form 5613, Restated Model Profit-Sharing Plan, Form 5614, Model Money Purchase Pension Plan and Form 5615, Restated Model Money Purchase Pension Plan (hereinafter referred to as model plans). Two of these model plans, Form 5612 and Form 5614, are designed for initial qualification under section 401 of the Internal Revenue Code of 1954, as amended by the Employee Retirement Income Security Act of 1974 (ERISA), (Pub. L. 93-406, 88 Stat. 829), 1974-3 C.B. 148. The other two plans, Form 5613 and Form 5615, are designed for use as plans which amend existing qualified plans to comply with the requirements of section 401 of the Code as amended by ERISA. This Revenue Procedure also contains the procedures for the adoption of a valid written trust or custodial account.

Sec. 2. Background and General Information

.01 Rev. Proc. 75-47, 1975-2 C.B. 581, contains procedures relating to the issuance of determination letters concerning the qualification of certain individually designed pension, annuity, profit-sharing, stock bonus, and bond purchase plans described in sections 401, 403(a), and 405 of the Code, as amended by ERISA.

.02 Sections 1.7476-1 and 1.7476-2 of the Income Tax Regulations set forth the requirements with respect to notifying interested parties of requests for determination letters under Rev. Proc. 75-47.

.03. This Revenue Procedure sets forth the procedures for the adoption of model plans which will be deemed by the Service to satisfy the requirements of section 401 of the Code even though an advance determination letter is not issued.

Sec. 3. Determination Letters

.01 Key District Directors will not issue advance determination letters on model plans except as provided in section 4.02 below. Model plans do not include plans described in section 3.03 below.

.02 A model plan shall be deemed to be a qualified plan within the meaning of section 401 of the Code provided that:

(1) Form 5612, Form 5613, Form 5614 or Form 5615, whichever is appropriate, is completed in its entirety and the plan is adopted in its entirety and without modification;

(2) A written trust agreement or a written custodial account described in section 401(f) of the Code (and the regulations thereunder) is executed, and the instrument adopted forms part of the model plan and does not in any way conflict with the provisions of such plan;

(3) under the trust or custodial agreement it is impossible for the diversion prohibited by section 401(a)(2) of the Code to occur;

(4) notice is given to interested parties pursuant to section 4.01 below; and

(5) the employer does not receive notice from the Service, that its plan will not be deemed a qualified plan, within 120 days after the adoption of the plan.

.03 A model plan that is modified will no longer be considered by the Service to be a model plan but rather an individually designed plan to which Rev. Proc. 75-47 is applicable. Such a plan should be submitted to the appropriate District Director for a determination letter if so desired. The application for such a determination letter should show changes made to the model plan.

Sec. 4. Instructions to Taxpayers

.01 Sections 1.7476-1 and 1.7476-2 of the Income Tax Regulations and section 601.201(o)(3) of the Statement of Procedural Rules shall apply with respect to interested parties who must receive notice, the time within which such notice must be given, the information to be provided in such notice, and the information which must be made available to interested parties. Any reference in section 601.201(o)(3) of the Statement of Procedural Rules to a date or a day on which an application is made or received should be read as a reference to the date 30 days after a model plan is adopted.

.02 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 model plan, the Service will evaluate the comments. If the Service determines that the matters mentioned cannot affect the qualification of the plan, the employer and the interested parties who commented will be so notified. If the Service determines that the matters may affect the qualification of the plan, the Service will notify the employer that it should request a determination letter under the procedures of Rev. Proc. 75-47 if such employer wishes the plan to be deemed by the Service to satisfy the requirements of section 401 of the Code. 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 model plan in accordance with this Revenue Procedure.

.03 Adoption of a model plan is to be accomplished by executing Form 5612, Form 5613, Form 5614, or Form 5615, as applicable, in accordance with the instructions on such form. However, a complete and accurate facsimile of a model plan may be adopted as long as all the requirements of this Revenue Procedure are satisfied.

.04 A copy of the model plan adopted by the employer should not be submitted to a District Director's office except as provided in section 4.02. However, employers who adopt model plans are not relieved from filing other forms required, or from giving notice to interested parties in accordance with sections 1.7476-1 and 1.7476-2 of the regulations and section 601.201(o)(3) of the Statement of Procedural Rules.

.05 Model plans are designed for use by individual corporate employers and therefore may not be used to cover self-employed individuals or owner-employees as defined in section 401(c) of the Code.

.06 A model plan may not be used in conjunction with other qualified plans or one or more plans meeting the requirements of section 301(d) of the Tax Reduction Act of 1975, Pub. L. 94-12, 1975-1 C.B. 545. It is not designed for use as:

(1) a plan covering employees in a seasonal industry where the customary period of employment is less than 1000 hours during a calendar year;

(2) a plan covering employees in the maritime industry;

(3) a plan covering shareholder-employees as defined in section 1379 of the Code;

(4) a plan where the employer also has one or more employees on whose behalf contributions are made to a tax sheltered (section 403(b) of the Code) annuity contract if such employee, or employees in the aggregate, own at least 50% of the capital or voting stock of the employer;

(5) a plan for members of a controlled group of corporations, partnerships, or proprietorships or trades or businesses under common control, or

(6) a multiemployer or multiple employer plan.

.07 In addition to the restrictions mentioned in .06 above, the Restated Model Profit-Sharing Plan and the Restated Model Money Purchase Plan are not designed for use as:

(1) a plan which has had amounts allocated to suspense accounts for contributions in excess of the limitations under section 415 of the Code;

(2) a plan which amends or restates a plan with respect to which there occurred a merger or consolidation, or transfer of assets or liabilities as contemplated under section 414(l) of the Code on or after the effective date of the plan;

(3) a plan which amends or restates a class year plan;

(4) a plan which amends or restates a plan under which the percentage of vesting of any participant in any part of employer contributions (including forfeitures and income, gains, and losses attributable to such contributions and forfeitures) allocated to his account was different from such participant's percentage of vesting in any other part of such contributions; or

(5) a plan which amends or restates a plan under which there has been, on or after the effective date of the restated plan, an allocation of any amount to the account of any person in excess of the amount allocable to the account of such person under the terms of the restated plan, if a distribution to such person (or his beneficiary) has occurred after such allocation was made.

Sec. 5. Effective Date

This Revenue Procedure is effective May 10, 1977.