SECTION 7. EMPLOYER

RELIANCE ON OPINION LETTER

.01 Standardized Plans - Except as provided in section 7.01(1) through (3), an employer adopting a Standardized Plan may rely on that plan’s Opinion Letter as to the qualification in form of the plan under the Code provisions provided in section 4.06 if the plan has a currently valid Opinion Letter, the employer’s plan is identical to the Standardized Plan, the coverage and contributions or benefits under the employer’s plan are not more favorable for highly compensated employees (as defined in § 414(q)) than for other employees, and the employer has not amended the plan other than to choose options provided under the plan or to make amendments as described in section 8.03. See also section 8.06, which provides that an employer that amends a Standardized Plan other than as provided in section 8.03 will be treated as maintaining an individually designed plan.

(1) An employer may not rely on an Opinion Letter for a Standardized Plan with respect to the requirements of §§ 415 and 416 without obtaining a determination letter if the employer maintains at any time, or has maintained at any time, another plan, including a Standardized Plan, that was qualified or determined to be qualified and that covers or covered some of the same participants. An employer that adopts a Standardized Plan that is a defined contribution plan will not be considered to have maintained another plan merely because the employer has maintained another defined contribution plan, provided such other plan has been terminated prior to the effective date of the Standardized Plan and no annual additions have been credited to the account of any participant under such other plan as of any date within a limitation year of the Standardized Plan. For this purpose, a plan that has been properly replaced by the adoption of a Standardized Plan is not considered another plan. To be considered a replacement plan and thus for the employer to be able to rely on the Standardized Plan with respect to the requirements of §§ 415 and 416 without obtaining a determination letter, the plan that has been replaced and the Standardized Plan must be of the same type (for example, both defined benefit plans).

(2) An employer that has adopted a Standardized Plan that is a defined benefit plan may rely on an Opinion Letter with respect to the requirements of § 401(a)(26) only if the plan satisfies the requirements of § 401(a)(26) with respect to its prior benefit structure (within the meaning of § 1.401(a)(26)–3) or is deemed to satisfy § 401(a)(26) pursuant to regulations thereunder.

(3) An employer that adopts a Standardized Plan may not rely on an Opinion Letter with respect to: (a) whether the timing of any amendment to the plan (or series of amendments) satisfies the nondiscrimination requirements of § 1.401(a)(4)–5(a), except with respect to plan amendments granting past service that meet the safe harbor described in § 1.401(a)(4)–5(a)(3) and are not part of a pattern of amendments that significantly discriminates in favor of highly compensated employees; or (b) whether the plan satisfies the effective availability requirement of § 1.401(a)(4)–4(c) with respect to any benefit, right, or feature. An employer that adopts a Standardized Plan as an amendment to a plan other than a Standardized Plan may not rely on an Opinion Letter with respect to whether a benefit, right, or feature that is prospectively eliminated satisfies the current availability requirements of § 1.401(a)(4)–4.

.02 Nonstandardized Plans - An employer adopting a Nonstandardized Plan may rely on that plan’s Opinion Letter as to the qualification in form of the plan under the Code provisions provided in section 4.06 if the plan has a currently valid Opinion Letter, the employer’s plan is identical to the Nonstandardized Plan, and the employer has not amended the plan other than to choose options provided under the plan or to make amendments as described in section 8.03.

(1) Except as otherwise provided in this section 7.02, Adopting Employers of Nonstandardized Plans may not rely on an Opinion Letter with respect to the requirements of:

(a) § 401(a)(4), 401(a)(26), 401(l), 410(b), or 414(s); or

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(b) if the employer maintains or has ever maintained another plan covering some of the same participants, § 415 or 416 (for this purpose, whether an employer maintains or has ever maintained another plan will be determined using principles consistent with section 7.01(1)).

(2) Adopting Employers of Nonstandardized Plans may rely on the Opinion Letter with respect to the requirements of §§ 410(b) and 401(a)(26) (other than the § 401(a)(26) requirements that apply to a prior benefit structure) if all nonexcludable employees benefit under the plan.

(3) Nonstandardized Plans may allow an Adopting Employer to select an allocation formula for employer nonelective contributions that satisfies one of the design-based safe harbors in § 1.401(a)(4)–2(b)(2) or a benefit formula that satisfies one of the design-based safe harbors under § 1.401(a)(4)–3(b)(3), (4), or (5), and the ability to select a safe harbor compensation definition for such formula that satisfies § 1.414(s)–1(c). If the plan of the Adopting Employer allocates contributions or provides benefits using one of the design-based safe harbors in § 1.401(a)(4)– 2(b)(2) or § 1.401(a)(4)–3(b)(3), (4), or (5), and the plan defines compensation using a definition that satisfies § 1.414(s)–1(c), then the Adopting Employer may rely on an Opinion Letter with respect to the nondiscriminatory amounts requirement under § 401(a)(4). Adopting Employers of Nonstandardized Plans that are § 401(k) and/or § 401(m) plans may rely on an Opinion Letter with respect to whether the form of the plan satisfies the actual deferral percentage test of § 401(k)(3) or the actual contribution percentage test of § 401(m)(2) if the employer elects to use a safe harbor definition of compensation in the test. Adopting Employers of Nonstandardized Plans described in § 401(k)(11) and/or § 401(m)(12) may rely on an Opinion Letter with respect to whether the form of the plan satisfies these requirements, unless the plan provides for the safe harbor contribution to be made under another plan.

(4) Except as provided in section 5.18(2), Adopting Employers of plans that contain a Cash Balance Formula with a structure of Principal Credits that increase with age, service, or any other measure during a participant’s employment may not rely on an Opinion Letter with respect to the requirements of § 411(b)(1).

.03 Other Limitations and Conditions on Reliance - The following conditions and limitations apply with respect to all Pre-approved Plans:

(1) An Adopting Employer may rely on an Opinion Letter for a plan that amends or restates a plan of the employer only if the plan that is being amended or restated was qualified.

(2) An Adopting Employer will not have reliance if the employer’s adoption of the plan precedes the issuance of an Opinion Letter for the plan.

(3) An Adopting Employer will not have reliance on the Opinion Letter if the adoption agreement or other elective provisions in the plan are not completed correctly when adopted by the employer.

(4) An Adopting Employer may rely on an Opinion Letter only if the requirements of this section 7 are met and the employer’s plan is identical (as described in section 8.03) to a Pre-approved Plan with a currently valid Opinion Letter. Thus, the employer must not have added any terms to the Pre-approved Plan and must not have modified or deleted any terms of the plan other than by choosing options permitted under the plan or by amending the document as permitted under section 8.03.

(5) An Adopting Employer of any pension plan in which the normal retirement age selected by the employer is less than age 62 will not have reliance on the Opinion Letter that such age is

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