SECTION 13. GROUP

TRUSTS

.04 In the case of plans subject to Title IV of ERISA, a favorable determination letter issued in connection with a plan’s termination is conditioned on approval that the termination is a valid termination under Title IV of ERISA. Notification by PBGC that a plan may not be terminated will be treated as a material change of fact.

.05 A plan that terminates after the effective date of a change in law, but prior to the date that amendments are otherwise required, must be amended to comply with the applicable provisions of law from the date on which such provisions become effective with respect to the plan. Because such a terminated plan would no longer be in existence by the required amendment date and therefore could not be amended on that date, such plan must be amended in connection with the plan termination to comply with those provisions of law that become effective with respect to the plan on or before the date of plan termination. (Such amendments include any amendments made after the date of plan termination that were required in order to obtain a favorable determination letter.) In addition, annuity contracts distributed from such terminated plans also must meet all the applicable provisions of any change in law. See also section 8 of Rev. Proc. 2007–44.

An application will be deemed to be filed in connection with plan termination if it is filed no later than the later of (i) one year from the effective date of the termination, or (ii) one year from the date on which the action terminating the plan is adopted. However, in no event can the application be filed later than twelve months from the date of distribution of substantially all plan assets in connection with the termination of the plan.

.06 A terminating plan generally does not have to be restated. However, see section 7.05 and .05 of this section above.

Scope .01 This section provides special procedures for requesting a determination letter on the qualified status of a group trust under Rev. Rul. 81–100, as clarified and modified by Rev. Rul. 2004–67, Rev. Rul. 2011–1, 2011–2 I.R.B. 251, Notice 2012–6, 2012–3 I.R.B. 293, and Rev. Rul. 2014–24, 2014–37 I.R.B. 529.

Required information .02 A request for a determination letter on the status of a group trust is made by submitting a Form 5316, Application for Group or Pooled Trust Ruling, demonstrating how the group trust satisfies the criteria listed in Rev. Rul. 2011–1, together with the trust instrument and related documents. Rev. Rul. 2004–67 extends the ability to participate in group trusts to eligible governmental plans under § 457(b) and clarifies the ability of certain individual retirement accounts under § 408 to participate. Rev. Rul. 2011–1 extends the ability to participate in group trusts to custodial accounts under § 403(b)(7), retirement income accounts under § 403(b)(9), and governmental retiree benefit plans under § 401(a)(24). There are two model amendments in Rev. Rul. 2011–1. Amendment 1 is for a group trust that received a determination letter from the Service prior to January 10, 2011, that the group trust satisfies Rev. Rul. 81–100, but that does not satisfy the separate account requirement of paragraph (6) of the holding of Rev. Rul. 2011–1. Amendment 2 is for a group trust that received a determination letter from the Service prior to January 10, 2011, that the group trust satisfies Rev. Rul. 81–100, as modified by Rev. Rul. 2004–67, and that intends to permit custodial accounts under § 403(b)(7), retirement

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income accounts under § 403(b)(9), or § 401(a)(24) governmental retirement plans to participate in the group trust. Rev. Rul. 2014–24 extends the ability to participate in a group trust to certain retirement plans qualified only under the Código de Rentas Internas para un Nuevo Puerto Rico de la Ley Núm. 1 de 31 de enero de 2011 (“Puerto Rico Code”), and clarifies that assets held by certain separate accounts maintained by insurance companies may be invested in 81-100 group trusts.

Forms .03 Required Forms

(1) Form 8717, User Fee for Employee Plan Determination Letter Request (or the payment confirmation from www.pay.gov as described in section 6.09) .

(2) Form 2848, Power of Attorney and Declaration of Representative, or other written authorization allowing the VS practitioner to act as a representative of the employer with respect to the request for a determination letter. If applicable, submit Form 8821, Tax Information Authorization.

(3) Form 5316, Application for Group or Pooled Trust Ruling, including a copy of the Procedural Requirements Checklist.

SECTION 14. AFFILIATED SERVICE GROUPS; LEASED EMPLOYEES

Scope .01 This section provides procedures for determination letter requests on affiliated service group status under § 414(m), and whether an employee is a leased employee and is deemed to be an employee of the recipient employer for qualification purposes under § 414(n).

Employer must request the determination under § 414(m) or § 414(n)

.02 Generally, a determination letter will indicate whether the employer is a member of an affiliated service group under § 414(m) or whether an employee is a leased employee and is deemed to be an employee of the recipient employer under § 414(n) only if the employer requests such determination, and submits with the determination letter application the information specified in section 14.06 or section 14.07 below.

Forms .03 Form 5300 is submitted for a request on affiliated service group status or leased employee status. Form 5307 cannot be used for this purpose.

Employer is responsible for determining status under § 414(m) and § 414(n)

.04 An employer is responsible for determining at any particular time whether it is a member of an affiliated service group and, if so, whether its plan(s) continues to meet the requirements of § 401(a) taking into account § 414(m). An employer or plan administrator is also responsible for taking action relative to the employer’s qualified plan if that employer becomes, or ceases to be, a member of an affiliated service group. An employer that is the recipient of services of leased employees within the meaning of § 414(n) is also responsible for determining at any particular time whether a leased employee is deemed to be an employee of the recipient for qualified plan purposes.

Pre-approved plans .05 An employer that has adopted a pre-approved plan and wants a determination with respect to § 414(m) or § 414(n) must submit the information required by section 14.06 or section 14.07 of this revenue procedure and any other materials necessary to make a determination along with Form 5300. When an employer requests a determination regarding affiliated service group status or leased employees, the plan will be reviewed on the basis of the Cumulative List that was used to review the underlying pre-approved plan.

Required information for § 414(m) determination

.06 A determination letter will be issued with respect to § 414(m) only if the employer requests such a determination and the application includes:

(1) A description of the nature of the business of the employer, specifically whether it is a service organization or an organization whose principal business is the performance of management functions for another organization, including the reasons therefor;

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Required information for § 414(n) determination

(2) The identification of other members (or possible members) of the affiliated service group;

(3) A description of the business of each member (or possible member) of the affiliated service group, describing the type of organization (corporation, partnership, etc.) and indicating whether the member is a service organization or an organization whose principal business is the performance of management functions for the other group member(s);

(4) The ownership interests between the employer and the members (or possible members) of the affiliated service group (including ownership interests as described in § 414(m)(2)(B)(ii) or § 414(m)(6)(B));

(5) A description of services performed for the employer by the members (or possible members) of the affiliated service group, or vice versa (including the percentage of each member’s (or possible member’s) gross receipts and service receipts provided by such services, if available, and data as to whether such services are a significant portion of the member’s business) and whether, as of December 13, 1980, it was not unusual for the services to be performed by employees of organizations in that service field in the United States;

(6) A description of how the employer and the members (or possible members) of the affiliated service group associate in performing services for other parties;

(7) In the case of a management organization under § 414(m)(5):

(a) A description of the management functions, if any, performed by the employer for the member(s) (or possible member(s)) of the affiliated service group, or received by the employer from any other members (or possible members) of the group (including data explaining whether the management functions are performed on a regular and continuous basis) and whether or not it is unusual for such management functions to be performed by employees of organizations in the employer’s business field in the United States;

(b) If management functions are performed by the employer for the member (or possible members) of the affiliated service group, a description of what part of the employer’s business constitutes the performance of management functions for the member (or possible member) of the group (including the percentage of gross receipts derived from management activities as compared to the gross receipts from other activities); and

(8) A copy of any ruling issued by the Service on whether the employer is an affiliated service group; a copy of any prior determination letter that considered the effect of § 414(m); and, if known, a copy of any such ruling or determination letter issued to any other member (or possible member) of the same affiliated service group, accompanied by a statement as to whether the facts upon which the ruling or determination letter was based have changed.

.07 A determination letter will be issued with respect to § 414(n) only if the employer requests such a determination and the application includes:

(1) A description of the nature of the business of the recipient organization;

(2) A copy of the relevant leasing agreement(s);

(3) A description of the function of all leased employees within the trade or business of the recipient organization (including data as to whether all leased employees are performing services on a substantially full-time basis);

(4) A description of facts and circumstances relevant to a determination of whether such leased employees’ services are performed under primary direction or control by the recipient organization (including whether the leased employees are required to comply with instructions of the recipient about when, where, and how to perform the services, whether the services must be performed by particular persons, whether the leased employees are subject to the supervision

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of the recipient, and whether the leased employees must perform services in the order or sequence set by the recipient); and

(5) If the recipient organization is relying on any qualified plan(s) maintained by the employee leasing organization for purposes of qualification of the recipient organization’s plan, a description of such plan(s) (including a description of the contributions or benefits provided for all leased employees which are attributable to services performed for the recipient organization, plan eligibility, and vesting.)