SECTION 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 contain certain provisions in order for a waiver to be granted. If the applicant does not want 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 § 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 § 401(a) of the Code.

.02 Waiver Ruling Only/Without Submission of Plan Amendment.—Under this procedure, requests for waivers must be submitted to:

Employee Plans Internal Revenue Service Commissioner, TE/GE Attention: SE:T:EP:RA P.O. Box 27063 McPherson Station Washington, D.C. 20038

The applicant must satisfy the requirements of section 2 of this revenue procedure except those applicable only to defined benefit plans, e.g. section 2.03(5)(h).

(m) A copy of the most recently completed Annual Return/Report of Em- ployee Benefit Plan (Form 5500 series, as applicable) and in the case of a defined benefit plan, a copy of the corresponding Actuarial Information schedule (Schedule B of Form 5500).

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

(o) A copy of each ruling letter that waived the minimum funding standard during the last 15 plan years, a statement of the amount waived for each plan year, and a statement of the outstanding balance of the amortization base for each waived funding deficiency. The outstanding balance of the amortization base for each waiver is to be calculated as of the first day of the plan year for which a waiver is being requested.

(6) 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:

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

(b) The number of employees covered.

(c) The classes of employees covered.

(d) The approximate annual contribution required.

(e) 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.

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

(7) Other information.

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

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

(c) Also state which Area Office maintains files concerning the plan.

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

(a) current assets;

(b) inventory included in current assets;

(c) fixed assets;

(d) other assets;

(e) total assets;

(f) current liabilities;

(g) long–term liabilities;

(h) other liabilities;

(i) total liabilities;

(j) working capital;

(k) equity;

(l) sales;

(m) cost of sales;

(n) gross profit;

(o) other income and expense;

(p) net profit before taxes;

(q) income taxes;

(r) net profit after taxes; and

(s) for plans for which waivers are requested, pension costs expensed in determining (p).

.04 Additional Copy of Information Required.—The applicant must furnish two copies of the necessary waiver information described in section 2.03, if the sum of the outstanding balances of any amortization bases established under § 412(b)(2)(C) of the Code for waivers granted to the plan for any prior plan years (calculated as of

2004-7 I.R.B. 493 February 17, 2004

and Government Entities Division to the Determinations Manager for consideration while the technical advice request is completed.

(c) The Office of the Commissioner, Tax Exempt and Government Entities Division will consider both issues. If a waiver is to be granted and if the Office of the Commissioner, Tax Exempt and Government Entities Division believes that qualification of the plan is not adversely affected by the plan amendment, a technical advice memorandum will be issued to the Determinations Manager. The Determinations Manager 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. This request must be in writing. An initial written notice of intent to make this 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 Determinations Manager does not ask for reconsideration of the technical advice memorandum within 10 working days, the Actuarial Group will issue the waiver ruling. This ruling will not contain the caveat described in section 3.02.