10/28/2002
Internal Revenue Service Department of Treasury
Washington, D.C. 20224
Plan Description: Prototype Standardized Profit Sharing Plan with CODA
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
Section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion related only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the affect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to Employee Plan Determinations in
Cincinnati at the address specified in Section 9.11 of Rev. Proc. 2000-20,
2000-6 I.R.B. 553.
This letter considers the changes in qualifications requirements made by the
Uruguay Round Agreements Act (GATT), Pub. L. 103-465, the Small Business Job
Protection Act of 1996, Pub. L. 144-188, the Uniformed Services Employment and
Reemployment Rights Act of 1994, Pub. L. 103-353, the Taxpayer Relief Act of
1997, Pub. L. 105-34, the Internal Revenue Service Restructuring and Reform Act
of 1998, Pub. L. 105-206 and the Community Renewal Tax Relief Act of 2000, Pub.
L. 106-554. These laws are referred to collectively as GUST.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code Section
401(a). However, an employer that adopts this plan may rely on this letter with
respect to the qualifications of its plan under Code Section 401(a), except as
provided below, provided the eligibility requirements and contribution or
benefit provisions are not more favorable for highly compensated employees than
for other employees. The terms of the plan must be followed in operation. Except
as stated below, Employee Plans Determinations will not issue a determination
letter with respect to this plan.
Our opinion does not apply for purposes of Code Section 401(a)(10)(b) and
Section 401(a)(16) if an employer ever maintained another qualified plan for one
or more employees who are covered by this plan, other than a specified paired
plan within the meaning of Section 4.11 of Rev. Proc. 2000-20, 2000-6 I.R.B.
553. For this purpose the employer will not be considered to have maintained
another plan merely because the employer has maintained another defined
contribution plan(s), provided such other plan(s) has been terminated prior to
the effective date of this plan and no annual additions have been credited to
the account of any participant under such other plan(s) as of any date within
the limitation year of this plan. Likewise if this plan is first effective on or
after the effective date of the repeal of Code Section 415(e), the employer will
not be considered to have maintained another plan merely because the employer
has maintained a defined benefit plan(s) provided the defined benefit plan(s)
has been terminated prior to the effective date of this plan. Our opinion also
does not apply for purposes of Code Section 401(a)(16) after December 31, 1985,
the employer maintains a welfare benefit fund defined in Code Section 419(a),
which provides postretirement medical benefits allocated to separate accounts
for key employees as defined in Code Section 419A(d)(3).
An employer that adopts this plan may not rely on this opinion letter with
respect for (1) Whether any amendment or series of amendments to the plan
satisfies the nondiscrimination requirements of Section 1.401(a)(4)-5(a) of the
regulations except with respect to the plan amendments granting past service
that meet the safe harbor described in Section 1.401(a)(4)- 5(a)(5) and are not
part of a pattern of amendments that significantly discriminates in favor of
highly compensated employees; or (2) whether the plan satisfies the effective
availability requirement of Section 1.401(a)(4)-4(c) of the regulations with
respect to any benefit, right or feature.
An employer that adopts this plan as an amendment to a plan other than a
standardized plan may not rely on this opinion letter with respect to whether a
benefit, right or other feature that is prospectively eliminated satisfies the
current availability requirements of Section 1.401(a)(4) of the regulations.
An employer that elects to continue to apply the pre-GUST family aggregation
rules in years beginning after December 31, 1996, or the combined plan limit of
Section 415(e) in years beginning after December 31, 1999, will not be able to
rely on the opinion letter without a determination letter.
The employer may request a determination (1) as to whether the plan, considered
with all related qualified plans and, if appropriate welfare benefit funds,
satisfies the requirements of Code Section 401(a)(16) as to limitations on
benefits and contributions on Code Section 415 and the requirements of Code
Section 401(a)(10)(B) as to the top-heavy plan requirements in Code Section 416;
(2) regarding the nondiscriminatory effect of grants of past services; (3) with
respect to whether a prospectively eliminated benefit, right or feature
satisfies the current availability requirements; and (4) with respect to the
continued application of the pre-GUST family aggregation rules in years
beginning after December 31, 1996, or the combined plan limit of Section 415(e)
in years beginning after December 31, 1999. The employer may request a
determination letter by filing an application with Employee Plans Determinations
on Form 5307, Application for Determination for Adopters of Master or Prototype
or Volume Submitter Plans.
Because you submitted this plan for approval after December 31, 2000, the
remedial amendment extension period of Section 19 of Rev. Proc. 2000-20 2000-6
I.R.B. 533 is not applicable.
If you, the master or prototype sponsor, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsor.
Individual participants and/or adopting employers with questions concerning the
plan should contact the master or prototype sponsor. The plan's adoption
agreement must include the sponsor's addresses and telephone number for
inquiries by adopting employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the letter serial number
and file folder number shown in the heading of this letter.
You should keep this letter a permanent record. Please notify us if you modify
or discontinue sponsorship of this plan.
Sincerely yours,
/s/Paul T. Schultz
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Paul T. Schultz
Director
Employee Plans Rulings and Agreements