SECTION 2. BACKGROUND AND

GENERAL INFORMATION

.01 Section 401(a) of the Internal Revenue Code provides that a trust created or organized in the United States and forming a part of a qualified stock bonus, pension, or profit-sharing plan of an employer constitutes a qualified trust

only if the various requirements set out in § 401(a) are met.

.02 Section 1.401–1(b)(1)(i) of the Income Tax Regulations provides the definition of a pension plan for purposes of § 401(a). This section provides, in part, that a pension plan is a plan established and maintained by an employer primarily to provide for the payment of definitely determinable benefits to employees over a period of years, usually for life, after retirement. This section also provides that a pension plan may provide for the payment of a pension due to disability, and may also provide for incidental death benefits.

.03 Rev. Rul. 56–693, 1956–2 C.B. 282, as modified by Rev. Rul. 60–323, 1960–2 C.B. 148, provides that, pursuant to the definition of a pension plan in § 1.401–1(b) of the regulations, a pension plan fails to meet the requirements of § 401(a) if it permits an employee to withdraw any part of the employee’s accrued benefit (other than a benefit attributable to voluntary employee contributions) prior to certain distributable events; i.e., retirement, death, disability, severance of employment, or termination of the plan.

.04 Rev. Rul. 94–76 provides that, to satisfy § 401(a), benefits attributable to assets and liabilities transferred, within the meaning of § 414(l), from a money purchase pension plan to a profit-sharing or stock bonus plan must remain subject to the restrictions on distributions from pension plans set forth in Rev. Rul. 56–693 based upon § 1.401–1(b) of the regulations.

.05 Rev. Rul. 94–76 provides that, in order to remain qualified under § 401(a), profit-sharing or stock bonus plans that accept transfers of assets and liabilities from money purchase pension plans and permit distributions prior to retirement, death, disability, severance of employment, or termination of the plan, must be amended to provide that on or after a transfer of assets and liabilities from a money purchase pension plan to the profit-sharing or stock bonus plan, the account balances (including the posttransfer earnings thereon) attributable to the transferred assets and liabilities will be distributed only on or after the occurrence of one of these events on or after which distributions are permitted from a pension plan.

.06 Rev. Rul. 94–76 provides that certain profit-sharing plans or stock bonus plans are permitted to be amended

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not issue new opinion, notification, advisory, or determination letters for plans that are amended solely to add the model language described in this section.

.02 The model language is available only to sponsors of M&P, regional prototype, volume submitter specimen, and individually designed plans (including volume submitter plans) that 1) are eligible for the relief from failure to be qualified under § 401(a) provided in Rev. Rul. 94–76 and 2) as of the date of the adoption of the model amendment have reliance on a favorable opinion, notification, or determination letter that takes into account the requirements of the Tax Reform Act of 1986, Pub. L. No. 99–514 (‘‘TRA ’86’’) under Rev. Proc. 89–9, 1989–1 C.B. 780, as modified; Rev. Proc. 89–13, 1989–1 C.B. 801, as modified; Rev. Proc. 90–20, 1990–1 C.B. 495; Rev. Proc. 91–41, 1991–2 C.B. 697; Rev. Proc. 91–66, 1991–2 C.B. 870; Rev. Proc. 93–39, 1993–2 C.B. 513; or Rev. Proc. 96–6, 1996–1 I.R.B. 151. Condition 2) in the preceding sentence does not apply to plans 1) that (a) have received a favorable determination, opinion, or notification letter that considered TEFRA, DEFRA, and REA, and (b) have been submitted within the plan’s § 401(b) remedial amendment period for a determination, opinion, or notification letter that considers TRA ’86 (TRA ’86 remedial amendment period) but have not yet received the letter or 2) for which the TRA ’86 remedial amendment period has not yet expired, such as adopters of master and prototype plans, regional prototype plans, and volume submitter plans, described in section 3 of Rev. Proc. 95–12, 1995–1 C.B. 508; governmental plans described in Announcement 95–48, 1995–23 I.R.B. 13; and plans maintained by tax-exempt organizations, including non-electing church plans, described in Announcement 95– 48.

.03 M&P, Regional Prototype and Volume Submitter Plans—M&P, regional prototype and volume submitter plan sponsors that use the model language must file Form 8837, Notice of Adoption of Revenue Procedure Model Amendments.