Rev. Proc. 69-20

Revenue Procedure 68-45, C.B. 1968-2, 957, sets forth the general procedures of the Internal Revenue Service pertaining to the issuance of rulings, determination letters, and opinion letters relating to master and prototype pension, annuity, and profit-sharing plans (except those covering self-employed individuals) under section 401(a) of the Internal Revenue Code of 1954, and the status for exemption of related trusts or custodial accounts under section 501(a).

In master or prototype plans that involve integration with Social Security benefits, it is impossible to determine in advance whether in an individual case a particular restrictive definition of the compensation (such as basic compensation) on which contributions or benefits are based would result in discrimination in contributions or benefits in favor of officers, shareholders, employees whose principal duties consist in supervising the work of other employees, or highly compensated employees. See Revenue Ruling 69-503, page 94, this Bulletin. As to discrimination in contributions or benefits generally, see section 1.401-4(a)(1)(i) of the Income Tax Regulations.

Accordingly, opinion letters relating to master or prototype plans that involve integration with Social Security benefits will not be issued except for those plans where annual compensation, for the purposes of sections 3.01, 5.02, 6.02, 6.03, 13.01, 13.02, and 14.02 of Revenue Ruling 69-4, C.B. 1969-1, 118, is defined to be all of each employee's compensation that would be subject to tax under section 3101(a) of the Code without the dollar limitation of section 3121(a)(1) of the Code.

Revenue Procedure 68-45 is hereby amplified.