SECTION 9. WHAT IS

THE GENERAL SCOPE OF A DETERMINATION LETTER?

Scope of this section .01 This section delineates, generally, the scope of a determination letter issued by Employee Plans Rulings and Agreements. This section also identifies certain qualification requirements that are not considered by the Employee Plans Rulings and Agreements in its review of a plan and with respect to which determination letters do not provide reliance. This section applies to all determination letters, other than letters relating to the qualified status of group trusts; and certain letters relating solely to the requirements of § 420 (regarding the transfer of assets in a defined benefit plan to a health benefit account described in § 401(h)). For additional information pertaining to the scope of reliance on a determination letter, see section 23 of this revenue procedure.

Scope of determination letters

.02 In general, employee plans are reviewed by Employee Plans Rulings and Agreements for compliance with the form requirements (that is, those plan provisions that are required as a condition of qualification under § 401(a)). For terminating plans, the requirements are those that apply as of the date of termination. See Rev. Proc. 2016–37 for further details on the scope of Employee Plans Rulings and Agreements’ review of determination letter applications.

Design-based safe harbor .03 Generally, a plan will not be reviewed for, and a determination letter may not be relied on with respect to, whether a plan satisfies the nondiscrimination requirements of § 401(a)(4), the minimum participation requirements of § 401(a)(26), or the minimum coverage requirements of § 410(b). However, if the applicant elects, a plan will be reviewed for, and a determination letter may be relied on with respect to, whether the terms of the plan satisfy one of the design-based safe harbors in §§ 1.401(a)(4)–2(b) and 1.401(a)(4)–3(b) of the regulations (relating to nondiscrimination in amount of contributions and benefits). A defined contribution plan will also be reviewed for, and a determination letter may be relied on with respect to, whether a plan’s terms satisfy the applicable requirements of §§ 401(k) and 401(m).

Governmental plans under § 414(d)

Church plans under § 414(e)

Tax treatment of certain contributions under § 414(h)

.04 A plan will not be reviewed for, and a determination letter does not constitute a ruling or determination as to, whether the plan is a governmental plan within the meaning of § 414(d). If a determination letter applicant represents on the application that the plan is a governmental plan within the meaning of § 414(d), the determination letter issued for the plan is predicated on that representation, and qualification is conditioned on the plan constituting a governmental plan within the meaning of § 414(d).

.05 A plan will not be reviewed for, and a determination letter does not constitute a ruling or determination as to, whether the plan is a church plan within the meaning of § 414(e). If a determination letter applicant represents on the application that the plan is a church plan within the meaning of § 414(e), the determination letter issued for the plan is predicated on that representation, and qualification is conditioned on the plan constituting a church plan within the meaning of § 414(e).

.06 A plan will not be reviewed for, and a determination letter does not constitute a ruling or determination as to, whether contributions to the plan satisfy § 414(h). A determination letter does

Bulletin No. 2018–1 173 January 2, 2018

Other limits on scope of determination letter

not express an opinion on whether contributions made to a plan treated as a governmental plan defined in § 414(d) constitute employer contributions under § 414(h)(2).

.07 A favorable determination letter does not provide reliance for purposes of §§ 404, 412, 430, 431, and 432 with respect to whether an interest rate (or any other actuarial assumption) is reasonable. A favorable determination letter does not constitute a determination with respect to whether any requirements of § 414(r), relating to whether an employer is operating qualified separate lines of business, are satisfied. A favorable determination letter does not constitute a determination with respect to the federal tax consequences of a lump sum risk-transferring program as described in Notice 2015–49, 2015–30 I.R.B. 79, except as explicitly provided in that notice.

Leased employees .08 Applicants that are otherwise eligible to submit an application for a determination letter may elect that the letter include a determination as to whether leased employees are deemed employees of the employer under the meaning of § 414(n). See section 17 for procedures for requesting a leased employee determination.

Partial terminations .09 Applicants may elect that a determination letter include a determination as to whether a partial termination has occurred with respect to the plan, and if so, its impact on plan qualification. An applicant may file a determination letter application on a Form 5300 and elect a determination regarding a partial termination, whether or not the plan is otherwise eligible to be submitted for a determination letter pursuant to sections 11.01 or 12.01 of this revenue procedure. However, if the plan is not otherwise eligible to be submitted for a determination letter, as provided in sections 11.01 or 12.01 of this revenue procedure, the scope of the determination letter issued with respect to the plan will be limited solely to the request regarding whether a partial termination has occurred.

Publication 794, Favorable Determination Letter