Rev. Proc. 83-41

Section 1. Purpose

The purpose of this revenue procedure is to outline the procedures of the Service with respect to applications for waivers of the minimum funding standard under either section 412(d) of the Internal Revenue Code or section 303 of the Employee Retirement Income Security Act of 1974, Pub. L. 93-406, 1974-3 C.B. 1, 41. The procedure modifies and supersedes Rev. Proc. 78-14, 1978-2 C.B. 486. This revenue procedure does not apply to waivers requested for multiemployer plans within the meaning of section 414(f) of the Code.

Sec. 2. Requests for Waivers of the Minimum Funding Standard for Defined Benefit Plans.

.01 Submission.--Requests for waivers of the minimum funding standard for defined benefit plans shall be submitted to the Commissioner of Internal Revenue, Attention: OP:E:A, 1111 Constitution Avenue, N.W., Washington, D.C. 20224.

.02. Necessary Procedural Documents.--A request will not be considered unless it complies with (1) and (2) below.

(1) The request must be signed by the taxpayer maintaining the plan or an authorized representative of the taxpayer in accordance with section 7.11 of Rev. Proc. 83-36, page 763, this Bulletin. An individual is not an authorized representative of the taxpayer maintaining the plan merely on account of being the administrator or trustee of the plan.

(2) Because a request for a waiver constitutes a request for a ruling, compliance with section 6110 of the Code is also required. Section 601.201 of the Statement of Procedural Rules sets forth the requirements applicable to requests for rulings and determination letters which are subject to section 6110. Section 601.201(e) furnishes specific instructions to taxpayers.

The taxpayer must provide with the request either a statement of proposed deletions and the statutory basis for each proposed deletion, or a statement that no information other than names, addresses, and taxpayer identifying numbers need be deleted.

The request also must contain a declaration in the following form: "Under the penalties of perjury, I declare that I have examined this request, including accompanying documents, and to the best of my knowledge and belief, the facts presented in support of the request are true, correct, and complete." This declaration must be signed by the taxpayer (e.g., an authorized officer of a corporation). The signature of an individual with a power of attorney will not suffice for the declaration. See sections 7.09 and 7.10 of Rev. Proc. 83-36.

.03 Necessary Waiver Information.--The applicant must furnish appropriate evidence that the employer is unable to satisfy the minimum funding standard for a plan year without substantial business hardship and that application of the standard would be adverse to the interest of plan participants in the aggregate. What constitutes appropriate evidence will depend on the facts and circumstances of each case. A response must be furnished for each of the subsections (a) through (f) below. In certain cases some of the material described in subsections (a) through (f) may be inapplicable, unavailable, inappropriate or burdensome to furnish. In such cases, the applicant should furnish a statement indicating why the material for a particular subsection is either inapplicable, unavailable, inappropriate or burdensome.

(a) General facts concerning the employer.

A brief statement should be submitted concerning: (1) the history of the employer and its primary business. (2) The ownership of the employer and any recent or contemplated changes (such as acquisition, mergers, discontinuances of operations) which might have a bearing on the employer's organization or financial condition. (3) Whether the employer is aggregated with any other entity for purposes of section 414(b), (c) or (m) of the Code. (4) Whether the plan is also maintained by employers described in (3) above or any other employers.

(b) The financial condition of the employer.

The annual financial report of the employer for each of the two fiscal years that commenced prior to any plan year for which waiver is requested and the annual financial report for each fiscal yer that commenced with or within each plan year for which a waiver is requested should be submitted. This submission should include at least the balance sheet, profit and loss statement, and notes to the financial statement. Recent interim financial reports, if available, should also be submitted along with an interim financial report covering the corresponding period for the previous year. If the employer submits financial reports to the Securities and Exchange Commission, these reports should be submitted for the same periods as the annual financial reports. Preferably, the financial report should be a certified financial report. If a certified financial report has not been prepared, an uncertified report is acceptable. If neither certified nor uncertified reports is available, copies of the company's federal income tax returns, including all of the supporting schedules, must be submitted. (See also section 5.)

(c) Nature and extent of the business hardship.

(1) A discussion of the underlying reasons which have led to the current situation (such as declining sales, unexpected losses, labor disputes, etc.). (2) A statement concerning the prospects for recovery, including reasons why such recovery is likely. (3) A statement describing the actions taken or planned to effect recovery. (4) A statement as to when and to what extent it is anticipated that required contributions to the plan can reasonably be expected to resume.

The Service may request additional information, including items listed in section 412(d)(2) of the Code.

(d) Facts concerning the pension plan.

For each pension plan for which a waiver is requested, the following information should be supplied.

(1) The name of the plan, the plan's identification number, and file folder number (if any).

(2) The date the plan was adopted.

(3) The effective date of the plan.

(4) The classes of employees covered. If the only participants are owners of the employer or relatives of owners, so state.

(5) The number of employees covered.

(6) A copy of the current plan document and the most recent summary plan description.

(7) brief description of any plan amendments during the last five years which affect plan costs, including the approximate effect of each amendment on such costs.

(8) The most recent actuarial report plus any available actuarial reports for the preceding two plan years. Also, if not shown in that report, the present value of accrued benefits, present value of vested benefits, and fair market value of assets (excluding contributions not yet paid).

(9) How the plan is funded (i.e., trust fund, individual insurance policies, etc.).

(10) A list of the contributions actually paid in each month, from the twenty-fourth month prior to the beginning of the plan year for which the waiver is requested through the date of the request and the plan year to which the contributions were applied, with the employee contributions and the employer contributions listed separately.

(11) The plan year for which the waiver is requested (e.g., 1/1/83-12/31/83).

(12) The approximate contribution required to meet the minimum funding standard and the approximate amount requested to be waived. For defined benefit plans, this amount should be as determined by the plan's enrolled actuary.

(13) A copy of the most recently completed Annual Return/Report of Employee Benefit Plan (Form 5500, Form 5500C, Form 5500K or Form 5500R, as applicable) and in the case of a defined benefit plan, a copy of the corresponding Actuarial Information schedule (Schedule B of Form 5500).

(14) Whether the plan is subject to Title IV of ERISA.

(15) List each of the prior 15 plan years for which a waiver was granted and describe the special conditions under which each waiver was granted, if any. A copy of each waiver ruling letter may be submitted to satisfy this requirement.

(e) Other pension, profit-sharing, or stock bonus plans.

If the employer maintains more than one plan, an outline of the essential facts for each such plan should be submitted. This should include:

(1) A brief description of the plan, including the name of the plan and its plan year.

(2) The number of employees covered.

(3) The classes of employees covered.

(4) The approximate annual contribution required.

(5) The amount of contributions that have been made, or are intended to be made, for any plan year of such other plan commencing in, or ending in, the plan year for which the waiver is requested.

(6) A statement as to whether a waiver request is contemplated for the plan.

(f) Other information.

(1) Describe the nature of any matters pertaining to the plan which are currently pending or about to be submitted to the Service, Department of Labor or the Pension Benefit Guaranty Corporation.

(2) Furnish details of any existing litigation or court procedure which involves the plan.

(3) Also state which Service District Office maintains files concerning the plan.

Sec. 3. Request for Waivers for Defined Contribution Pension Plans.

.01 Background Information.--Section 3 of Rev. Rul. 78-223, 1978-1 C.B. 125, requires that a defined contribution pension plan must contain certain provisions in order for a waiver to be granted. Where the taxpayer does not desire to draft individually designed provisions to satisfy the requirements of section 3 of Rev. Rul. 78-223, the Service will provide sample plan amendment language that complies with such requirements. See subsection .02. However, a provision that satisfies section 3 of Rev. Rul. 78-223 does not necessarily satisfy the requirements of section 401(a) of the Code. In order to provide maximum flexibility in obtaining a waiver for a defined contribution pension plan, three alternative procedures are provided in subsections .02, .03, and .04, in which a single request may cover either a waiver ruling only or a waiver ruling and a determination letter as to the status under section 401(a) of the Code.

.02 Waiver Ruling Only/Without Submission of Plan Amendment.--Under this procedure, requests for waivers shall be submitted to the Commissioner of Internal Revenue, Attention: OP:E:A, 1111 Constitution Ave., Washington, DC 20224. The applicant must satisfy the requirements of section 2 of this revenue procedure except those applicable only to defined benefit plans. Any waiver ruling granted under this procedure will be accompanied by a plan amendment supplied by the Service which will, if adopted, satisfy section 3 of Rev. Rul. 78-223. The waiver will be conditioned upon the plan being amended by adoption of that amendment, within a reasonable period of time, and will contain a caveat stating that the ruling is not a ruling as to the effect the plan provision may have on the qualified status of the plan. Upon receipt of that amendment, the taxpayer may (within 60 days of date of the letter) request reconsideration of this waiver condition if the amendment is inappropriate. Reconsideration may be requested by submitting a letter from the taxpayer (or authorized representative) to the above address.

.03 Waiver Ruling Only/With Submission of Plan Amendment.--Under this procedure, requests for waivers shall be submitted to the Commissioner of Internal Revenue, Attention: OP:E:A, 1111 Constitution Ave., Washington, DC 20224. The applicant must satisfy the requirements of section 2 of this Revenue Procedure, except those applicable only to defined benefit plans, and must include the plan provisions necessary to satisfy section 3 of Rev. Rul. 78-223. All waivers issued pursuant to this subsection will contain a caveat indicating that the ruling is not a ruling as to the effect any plan provision, submitted pursuant to the previous sentence, may have on the qualified status of the plan.

.04 Waiver Ruling and Determination Letter Request.--(1) Under this procedure both the request for a waiver ruling and the request for a determination letter on the effect of any amendment necessary to satisfy section 3 of Rev. Rul. 78-223 shall be submitted to the District Director to whom such request for a determination letter would normally be made. Such combined request satisfy all the procedural requirements described in section 3.03 of this Revenue Procedure.

(2) The District Director described in paragraph (1) shall (a) forward the waiver request and the supporting documents to the Actuarial Division, OP:E:A, and (b) ask the National Office for technical advice on the qualification issue with respect to the plan provisions necessary to satisfy section 3 of Rev. Rul. 78-223.

(3) The National Office will consider both issues. If a waiver is to be granted and if the National Office believes that qualification of the plan is not adversely affected by the plan amendment, the technical advice memorandum shall be issued to the District Director. The District Director must decide within 10 working days from the date of the technical advice memorandum either to furnish the applicant with the technical advice memorandum and with a favorable advance determination letter, or to ask for reconsideration of the technical advice memorandum. Such a request must be in writing. An initial written notice of an intent to make such a request may be submitted within 10 working days of the date of the technical advice memorandum and followed by a written request within 30 working days from the date of such written notice. If the District Director does not ask for reconsideration of the technical advice memorandum within 10 working days, the Actuarial Division shall issue the waiver ruling. This ruling will not contain a caveat described in section 3.02.

Sec. 4. Time When Appropriate to Request A Waiver.

A waiver request should be submitted no later than the later of (1) the close of the plan year following the plan year for which the waiver is requested, or (2) December 31, 1983. Upon a showing of good cause why the waiver was not timely submitted, the Actuarial Division may extend this deadline. A request for extension must be in writing.

In seeking a waiver with respect to a plan year which has not yet commenced, the applicant may have difficulty in furnishing sufficient current evidence in support of the request. For this reason it is generally advisable that such advance request be submitted no earlier than 180 days prior to the beginning of the plan year for which the waiver is requested.

Sec. 5. General.

.01 Employers who have difficulty in furnishing the information specified in this revenue procedure may call or write the Actuarial Division, OP:E:A, for guidance. In some instances, preliminary conferences will be afforded in addition to conferences available under Rev. Proc. 83-36. In any event the material described in section 2.03 shall be furnished.

.02 Although it is not required, a digest of certain information from the financial statements described in section 2.03 will facilitate the processing of a waiver request. For example, a digest could show for the applicable years,

     (1) current assets

Rev. Proc. 83-36 is modified to the extent that this revenue procedure provides special procedures for issuing rulings with respect to requests for waiver of the minimum funding standard.

Rev. Proc. 80-26, 1980-1 C.B. 671, is modified to the extent that this revenue procedure provides special procedures for furnishing technical advice to District Directors when both a request for a waiver of the minimum funding standard and a request for a determination letter have been submitted for a defined contribution plan.

Rev. Proc. 80-30, 1980-1 C.B. 685, is modified to the extent that this revenue procedure provides special procedures to follow in issuing a determination letter for a defined contribution plan if a waiver of the minimum funding standard has been requested.

Rev. Proc. 78-14, 1978-2 C.B. 486, is modified and superseded.