SECTION 3. USE OF THE MODEL

AMENDMENTS

.01 Any eligible employer may amend a § 457(b) plan to utilize one or more of the optional changes made to § 457(e) of the Internal Revenue Code by section 1447 of the SBJPA and section 1017 of TRA ’97 and described in Section 2.02 of this revenue procedure by adopting one or more of Model Amendments 1, 2 or 3 contained in the appendix to this revenue procedure.

.02 An eligible employer that is a state or local government employer must amend its § 457(b) plan to comply with the mandatory trust requirement of § 457(g) described in Section 2.03. An eligible government employer may adopt Model Amendment 4 in the appendix to this revenue procedure in order to modify the plan to reflect the funding arrangement established under the plan in conformity with § 457(g). In addition, in order to rely on Model Amendment 4, the eligible government employer must adopt a trust, one or more custodial accounts, or one or more annuity contracts that hold all assets and income described in Model Amendment 4. The trust, custodial account or accounts, or annuity contract or contracts must be valid instruments under state law, must otherwise comply with the requirements provided in Notice 98–8, and may contain no language inconsistent with Model Amendment 4. See Section 4

.04 In response to these significant revisions made to § 457 by the SBJPA and

1998–32 I.R.B. 7 August 10, 1998

below for more information regarding a government entity’s right to rely upon a prior private letter ruling concerning its § 457(b) plan if it adopts Model Amendment 4 on a word-for-word basis.