Rev. Proc. 74-39

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 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 because the Employee Retirement Income Security Act of 1974 (Public Law 93-406), approved September 2, 1974, (hereinafter referred to as "the Act") adds new requirements relating to employees' plans and trusts under sections 401 and 501(a) of the Internal Revenue Code of 1954.

Sec. 2. Background and General Information.

.01 The general procedures of the Service relating to the issuance of rulings, determination letters, and opinion letters are set forth in Rev. Proc. 72-3, 1972-1 C.B. 698. Rev. Proc. 72-6, 1972-1 C.B. 710, provides the detailed procedures relating to the issuance of determination letters as to the qualification of employees' plans under sections 401 and 405 of the Code and to the exempt status of related trusts or custodial accounts, if any, under section 501(a). For revision of these procedures see Rev. Proc. 74-38.

.02 Rev. Proc. 72-8, 1972-1 C.B. 716, contains procedures relating to master and prototype plans that do not include self-employed individuals. For revision of these procedures see Rev. Proc. 74-40.

Sec. 3. Procedures.

.01 Until further notice, any opinion letter issued on a master or prototype plan will remain in effect.

.02 The effect of a prior opinion letter will not be altered if:

(1) The master or prototype plan is amended solely to provide for the limitation on earned income (the first $100,000) described in section 401(a)(17) of the Code, as added by the Act, which may be taken into account in a nondiscriminatory manner.

(2) A master or prototype plan which satisfies the requirements of section 401(a)(17) is amended solely to provide for contributions of up to the new maximum deductible limit (lesser of $7,500 or 15% of earned income) or minimum deductible limit (lesser of $750 or 100% of earned income) in a nondiscriminatory manner.

Plans so amended are not to be resubmitted for further consideration, and no new opinion letters will be issued.

.03 Until further notice, the National Office will not consider any request of a sponsoring organization filed with the National Office after September 2, 1974, as to:

(1) The initial acceptability of the form of a master or prototype plan and any related or custodial account, or

(2) The acceptability of an amendment of a master or prototype plan, except where the amendment is necessary to maintain the plan's approved form under the law in effect prior to amendment by the Act.

.04 Where, on or before January 1, 1974, an employer has adopted and put into effect a master or prototype plan, the qualification of the employer's plan under section 401 of the Code will not be affected by the new law until the beginning of the first plan year commencing after December 31, 1975, provided the conditions of section 3.02 of Rev. Proc. 72-7 are satisfied.

.05 Where, after January 1, 1974, an employer has adopted and put into effect a master or prototype plan (whether or not such plan was adopted before September 2, 1974), the qualification of the employer's plan under section 401 of the Code will not be affected until the beginning of the first plan year commencing after September 2, 1974, provided the conditions of section 3.02 of Rev. Proc. 72-7 are satisfied.

Sec. 4. Effect on Other Documents.

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

Sec. 5. Effective Date.

This Revenue Procedure is effective September 2, 1974.

¹ Also released as Technical Information Release 1309, dated September 11, 1974.