IRS Revenue Procedure
2002-29

 Code Sec. 401



<<FULL TEXT>>

26 CFR 601.201: Rulings and determination letters.
(Also, Part I, sections 401; 1.401(a)(9)-1.)


REV. PROC. 2002-29

SECTION 1. PURPOSE

This revenue procedure provides that qualified retirement plans
generally must be amended by the end of the first plan year beginning on
or after January 1, 2003, to the extent necessary to comply with final and
temporary regulations under section 401(a)(9) of the Internal Revenue
Code, relating to required minimum distributions. The revenue procedure
contains model plan amendments that sponsors of master and prototype
(M&P), volume submitter and individually designed plans may adopt to
satisfy this requirement. The revenue procedure also provides that
determination letter applications filed on or after the first day of the
2003 plan year will be reviewed with respect to whether the form of the
plan satisfies the requirements of the final and temporary regulations
under section 401(a)(9).


SECTION 2. BACKGROUND

.01 Section 401(a)(9) provides rules for required minimum distributions
from plans qualified under section 401(a). The rules also apply to section
403(b) annuity contracts, section 408 IRAs, section 408A Roth IRAs, and
section 457 eligible deferred compensation plans.

.02 Proposed regulations (EE-113-82, 1987-2 C.B. 881) under section
401(a)(9) were published in the Federal Register on July 27, 1987, 52 FR
28070, and January 17, 2001, 66 FR 3928. The proposed regulations
published in 2001 (the section 401(a)(9) 2001 Proposed Regulations)
substantially simplified many of the rules in regulations that had been
proposed in 1987 (the section 401(a)(9) 1987 Proposed Regulations) and
also incorporated other guidance published after 1987, including guidance
relating to the changes to section 401(a)(9) made by the Small Business
Job Protection Act of 1996, Pub. L. 104-188 (SBJPA).

.03 The preamble to the section 401(a)(9) 2001 Proposed Regulations
stated that taxpayers could rely on the section 401(a)(9) 1987 Proposed
Regulations or the section 401(a)(9) 2001 Proposed Regulations for
determining required minimum distributions for calendar year 2001 and
subsequent calendar years prior to the effective date of the final
regulations. The preamble also contained a model amendment that sponsors
of qualified plans could adopt if they wished to apply the section
401(a)(9) 2001 Proposed Regulations in making all required minimum
distributions for 2001 and subsequent calendar years prior to the
effective date of the final regulations. After publication in the Federal
Register, the model amendment was republished in Announcement 2001-18,
2001-1 C.B. 791, with minor corrections, and appeared (as corrected in the
I.R.B.) in the preamble to the section 401(a)(9) 2001 Proposed Regulations
(REG-130477-00; REG-130481-00, 2001-1 C.B. 865).

.04 An alternative model amendment was published in Announcement
2001-82, 2001-32 I.R.B. 123. This additional model amendment was provided
in response to the concerns of qualified plan sponsors that intended to
use the section 401(a)(9) 2001 Proposed Regulations for distributions for
2001 but made required minimum distributions for 2001 under the section
401(a)(9) 1987 Proposed Regulations prior to the date in 2001 on which the
plan began operating under the section 401(a)(9) 2001 Proposed
Regulations. The alternative model amendment in Announcement 2001-82
allowed required minimum distributions made for 2001 prior to the date in
2001 on which the plan began operating under the section 401(a)(9) 2001
Proposed Regulations to be made under the section 401(a)(9) 1987 Proposed
Regulations.

.05 The alternative model amendment in Announcement 2001-82 provided
the following rules with respect to distributees who received 2001
required distributions prior to the date in 2001 on which the plan began
operating under the section 401(a)(9) 2001 Proposed Regulations. If the
total amount of 2001 required minimum distributions made to a participant
prior to the date on which the plan began operating in accordance with the
section 401(a)(9) 2001 Proposed Regulations equaled or exceeded the
required minimum distributions determined under the section 401(a)(9) 2001
Proposed Regulations, then no additional distributions were required for
that participant for 2001 on or after such date. If the total amount of
2001 required minimum distributions made to a participant prior to the
date on which the plan began operating in accordance with the section
401(a)(9) 2001 Proposed Regulations was less than the amount determined
under the section 401(a)(9) 2001 Proposed Regulations, then required
minimum distributions for 2001 on and after such date would be determined
so that the total amount of required minimum distributions for 2001 for
that participant would be the amount determined under the section
401(a)(9) 2001 Proposed Regulations.

.06 In order for a qualified plan sponsor to use either the original
model amendment in Announcement 2001-18 or the alternative model amendment
in Announcement 2001-82, the plan sponsor was required to adopt the
amendment by the deadline for amending its plan for GUST. See Rev. Proc.
2001-55, 2001-49 I.R.B. 552.

.07 Final and temporary regulations (T.D. 8987, 2002-19 I.R.B. 852)
under section 401(a)(9) were published in the Federal Register on April
17, 2002, 74 FR 18987 (the section 401(a)(9) Final and Temporary
Regulations). The section 401(a)(9) Final and Temporary Regulations
generally adopt the simplifications proposed in 2001 and provide
additional simplifications. The section 401(a)(9) Final and Temporary
regulations apply for determining required minimum distributions for
calendar years beginning on or after January 1, 2003. For determining
required minimum distributions for calendar year 2002, taxpayers may rely
on the section 401(a)(9) Final and Temporary Regulations, the section
401(a)(9) 2001 Proposed Regulations, or the section 401(a)(9) 1987
Proposed Regulations.

.08 Section 401(b) and the regulations thereunder provide a remedial
amendment period during which an amendment to a disqualifying provision
may be made retroactively effective, under certain circumstances, to
comply with the requirements of section 401(a). Section 1.401(b)-1(b)
provides that a disqualifying provision includes an amendment to an
existing plan that causes the plan to fail to satisfy the requirements of
section 401(a). Notice 2001-42, 2001-30 I.R.B. 70, provides a remedial
amendment period under section 401(b) ending not prior to the last day of
the first plan year beginning on or after January 1, 2005, in which any
needed retroactive amendment with regard to the Economic Growth and Tax
Relief Reconciliation Act of 2001, Pub. L. 107-16, (EGTRRA), may be
adopted. The availability of this remedial amendment period is conditioned
on the adoption of a good faith EGTRRA plan amendment no later than the
later of: (i) the end of the plan year in which the EGTRRA change in the
qualification requirement is required to be, or is optionally, put into
effect under the plan; or (ii) the end of the GUST remedial amendment
period for the plan.

.09 Rev. Proc. 2000-20, 2000-1 C.B. 553, as modified by Rev. Proc.
2000-27, 2000-1 C.B. 1272, Notice 2001-42, 2001-30 I.R.B. 70, and Rev.
Proc. 2001-55, contains the Service's procedures for issuing opinion
letters regarding the acceptability of the form of M&P plans.

.10 Rev. Proc. 2002-6, 2002-1 I.R.B. 203, contains the Service's
procedures for issuing determination letters on the qualified status of
employee plans under sections 401(a), 403(a), 409 and 4975(e)(7) of the
Code and the exempt status of related trusts or custodial accounts under
section 501(a).

.11 Section 1.401(a)(9)-1, Q&A-3, describes the provisions that a plan
must contain in order to satisfy section 401(a)(9). The plan must
generally set forth the statutory rules of section 401(a)(9), including
the incidental death benefit requirement in section 401(a)(9)(G), and must
provide that distributions must be made in accordance with the section
401(a)(9) Final and Temporary Regulations. The plan must provide that its
provisions reflecting section 401(a)(9) override any inconsistent
distribution options in the plan and must include such other provisions as
the Commissioner may prescribe in guidance published in the Internal
Revenue Bulletin.


SECTION 3. REQUIRED PLAN AMENDMENTS

.01 In general, qualified plans must be amended by the last day of the
first plan year beginning on or after January 1, 2003, to the extent
necessary to comply with the requirements of the section 401(a)(9) Final
and Temporary Regulations. Whether and the extent to which a particular
plan must be amended depends on the plan's current terms. Any plan
amendments for the section 401(a)(9) Final and Temporary Regulations must
apply in determining required minimum distributions under the plan for
calendar years beginning on or after January 1, 2003. If a plan sponsor
begins operating its plan under the section 401(a)(9) Final and Temporary
Regulations on a date in 2002, then the amendments must also apply in
determining required minimum distributions under the plan for 2002 that
are made on or after such date, although the amendments are not required
to be adopted before the last day of the first plan year beginning on or
after January 1, 2003.

.02 If a plan sponsor begins operating its plan under the section
401(a)(9) Final and Temporary Regulations on a date in 2002 and prior to
such date the plan sponsor has made required minimum distributions for
2002 under the section 401(a)(9) 1987 Proposed Regulations or the section
401(a)(9) 2001 Proposed Regulations, then the plan must also be amended to
provide the transitional rule for 2002 required minimum distributions that
is set forth in section 1.2 of the model amendments in the Appendix to
this revenue procedure.

.03 Every M&P plan must allow the M&P plan sponsor to amend the plan on
behalf of all adopting employers so that changes in the Code, regulations,
revenue rulings, other statements published by the Internal Revenue
Service, or corrections of prior approved plans may be applied to all
employers who have adopted the plan. Therefore, by December 31, 2003,
every sponsor of an M&P plan must amend its plan to the extent necessary
to comply with the requirements of the section 401(a)(9) Final and
Temporary Regulations and must furnish copies of the amendments to all
employers who have adopted the plan. A favorable opinion letter may not be
relied upon after December 31, 2003, unless the M&P plan sponsor satisfies
this requirement.

.04 Practitioners that sponsor volume submitter plans generally are not
authorized to amend the plan on behalf of adopting employers. In this
case, employers that have adopted the plan must individually amend their
plans by the last day of the first plan year beginning on or after January
1, 2003, to the extent necessary to comply with the requirements of the
section 401(a)(9) Final and Temporary Regulations. Nevertheless, volume
submitter practitioners must amend their specimen plans for the section
401(a)(9) Final and Temporary Regulations by December 31, 2003, so that
the amendments will apply to future adopters of the plan. A favorable
advisory letter may not be relied upon after December 31, 2003, unless the
volume submitter practitioner satisfies this requirement.

.05 Until further notice, sponsors of pre-approved plans are not
required to request opinion or advisory letters that consider whether
their plans satisfy the requirements of the section 401(a)(9) Final and
Temporary Regulations. However, opinion and advisory letter applications
filed on or after January 1, 2003, will be reviewed with respect to
whether the form of the plan satisfies these requirements. Opinion and
advisory letter applications filed before January 1, 2003, will be
reviewed with respect to whether the form of the plan satisfies the
requirements of the section 401(a)(9) Final and Temporary Regulations if a
plan amendment to comply with the section 401(a)(9) Final and Temporary
Regulations is submitted in conjunction with and at the same time as the
request for the opinion or advisory letter.

.06 Determination letter applications for individually designed plans
filed on or after the first day of the first plan year beginning on or
after January 1, 2003, will be reviewed with respect to whether the form
of the plan satisfies the requirements of the section 401(a)(9) Final and
Temporary Regulations. Determination letter applications for individually
designed plans filed before the first day of the first plan year beginning
on or after January 1, 2003, will be reviewed with respect to whether the
form of the plan satisfies the requirements of the section 401(a)(9) Final
and Temporary Regulations if a plan amendment to comply with the section
401(a)(9) Final and Temporary Regulations is submitted in conjunction with
and at the same time as the request for the determination letter. In both
cases, determination letters issued for such applications may be relied on
with respect to the requirements of the section 401(a)(9) Final and
Temporary Regulations. Determination letters issued for pre-approved plans
may be relied on with respect to the requirements of the section 401(a)(9)
Final and Temporary Regulations if those requirements were considered in
issuing the opinion or advisory letter.

.07 If a plan is timely amended to comply with the section 401(a)(9)
Final and Temporary Regulations and, as a result of the amendment, there
is a disqualifying provision under section 401(b), the remedial amendment
period with respect to the disqualifying provision will end at the end of
the EGTRRA remedial amendment period. Therefore, an application for a
determination letter regarding the effect of the plan amendment need not
be filed earlier than the last day of the EGTRRA remedial amendment
period. The timely adoption of the appropriate model amendment in the
Appendix will provide reliance, without the need to request a letter, that
the plan has been amended to comply with the section 401(a)(9) Final and
Temporary Regulations and will not result in a disqualifying provision.

.08 The Appendix provides two model plan amendments to facilitate the
amendment of qualified plans to comply with the requirements of the
section 401(a)(9) Final and Temporary Regulations. The model amendments
may be adopted by M&P plans sponsors and volume submitter practitioners
and also by sponsors of individually designed plans. The model amendments
are "snap-on" amendments designed to work with a plan's existing minimum
distribution provisions by superseding those that are inconsistent with
the provisions of the model amendment and retaining those (such as the
plan's definition of required beginning date) that are not inconsistent.
Plans that are amended to adopt the model amendments must retain their
existing required minimum distribution provisions in order to have
reliance that the form of the plan has been properly amended to comply
with the section 401(a)(9) Final and Temporary Regulations. Adoption of
one of the model amendments will not amend a plan for the changes to
section 401(a)(9) made by section 1404 of SBJPA or to provide that 2001 or
2002 required minimum distributions will be determined in accordance with
the section 401(a)(9) 2001 Proposed Regulations.

The first model amendment is for defined contribution plans. The second
model amendment is for defined benefit plans. A plan sponsor or a sponsor
of a pre-approved plan that timely adopts the appropriate model amendment
verbatim (or with only minor changes) will have reliance that the form of
its plan satisfies the requirements of the section 401(a)(9) Final and
Temporary Regulations, and the adoption of the model amendment will not
adversely affect the plan sponsor's reliance on a favorable determination,
opinion or advisory letter, or cause a preapproved plan to be treated as
an individually designed plan. For this purpose, changes to either of the
model amendments to incorporate the adoption agreement elective provisions
into the body of the amendment or to remove the elective provisions in
favor of the default rules in the body of the amendment are minor changes.


SECTION 4. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 2000-20 and Rev. Proc. 2002-6 are modified.


SECTION 5. EFFECTIVE DATE

This revenue procedure is effective June 17, 2002.


DRAFTING INFORMATION

The principal authors of this revenue procedure are James Flannery and
Steven Linder of Employee Plans, Tax Exempt and Government Entities
Division. For further information regarding this revenue procedure, please
contact the Employee Plans' taxpayer assistance telephone service at
1-877-829-5500 between the hours of 8:00 a.m. and 6:30 p.m. Eastern time,
Monday through Friday (a toll-free number). Mr. Flannery and Mr. Linder
may be reached at 1-202-283-9888 (not a toll-free call).


APPENDIX -- MODEL AMENDMENTS

The following are model plan amendments that sponsors of pre-approved
plans and sponsors of individually designed plans may adopt to comply with
the section 401(a)(9) Final and Temporary Regulations. Except as provided
below, a plan that is amended to adopt one of the model amendments will
satisfy, in form, the requirements of section 401(a)(9) and the section
401(a)(9) Final and Temporary Regulations in determining required minimum
distributions for calendar years beginning on or after January 1, 2003 (as
well as required minimum distributions for calendar year 2002 made on or
after the date the plan sponsor begins to operate its plan in accordance
with the section 401(a)(9) Final and Temporary Regulations). Adoption of
the model amendments will not amend a plan to reflect the change to the
definition of required beginning date in section 401(a)(9)(C) that was
made by section 1404 of SBJPA or to provide the actuarial adjustment that
may be required in a defined benefit plan that is so amended. A plan
sponsor that wishes to amend its plan to reflect the provisions of section
1404 of SBJPA must do so through a separate amendment. Consequently, the
model amendments may not be relied upon with respect to whether a plan's
definition of required beginning date is correct or whether a defined
benefit plan makes the correct actuarial adjustment required by section
401(a)(9)(C)(iii). Adoption of the model amendments also will not amend a
plan to provide that 2001 or 2002 required minimum distributions will be
determined in accordance with the section 401(a)(9) 2001 Proposed
Regulations. A plan sponsor that has operated its plan in accordance with
the section 401(a)(9) 2001 Proposed Regulations must adopt the model
amendment in Announcement 2001-18 or the alternative model amendment in
Announcement 2001-82 within the plan's GUST remedial amendment period.
Plans that are amended to adopt the model amendments must retain their
existing required minimum distribution provisions in order to have
reliance that the form of the plan has been properly amended to comply
with the section 401(a)(9) Final and Temporary Regulations.


MODEL PLAN AMENDMENT 1 -- DEFINED CONTRIBUTION PLANS

Article ____. MINIMUM DISTRIBUTION REQUIREMENTS.

SECTION 1. GENERAL RULES

1.1. Effective Date. Unless an earlier effective date is specified in
the adoption agreement, the provisions of this article will apply for
purposes of determining required minimum distributions for calendar years
beginning with the 2003 calendar year.

1.2. Coordination with Minimum Distribution Requirements Previously in
Effect. If the adoption agreement specifies an effective date of this
article that is earlier than calendar years beginning with the 2003
calendar year, required minimum distributions for 2002 under this article
will be determined as follows. If the total amount of 2002 required
minimum distributions under the plan made to the distributee prior to the
effective date of this article equals or exceeds the required minimum
distributions determined under this article, then no additional
distributions will be required to be made for 2002 on or after such date
to the distributee. If the total amount of 2002 required minimum
distributions under the plan made to the distributee prior to the
effective date of this article is less than the amount determined under
this article, then required minimum distributions for 2002 on and after
such date will be determined so that the total amount of required minimum
distributions for 2002 made to the distributee will be the amount
determined under this article.

1.3. Precedence. The requirements of this article will take precedence
over any inconsistent provisions of the plan.

1.4. Requirements of Treasury Regulations Incorporated. All
distributions required under this article will be determined and made in
accordance with the Treasury regulations under section 401(a)(9) of the
Internal Revenue Code.

1.5. TEFRA Section 242(b)(2) Elections. Notwithstanding the other
provisions of this article, distributions may be made under a designation
made before January 1, 1984, in accordance with section 242(b)(2) of the
Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the
plan that relate to section 242(b)(2) of TEFRA.


SECTION 2. TIME AND MANNER OF DISTRIBUTION.

2.1. Required Beginning Date. The participant's entire interest will be
distributed, or begin to be distributed, to the participant no later than
the participant's required beginning date.

2.2. Death of Participant Before Distributions Begin. If the
participant dies before distributions begin, the participant's entire
interest will be distributed, or begin to be distributed, no later than as
follows:

(a) If the participant's surviving spouse is the participant's sole
designated beneficiary, then, except as provided in the adoption
agreement, distributions to the surviving spouse will begin by December 31
of the calendar year immediately following the calendar year in which the
participant died, or by December 31 of the calendar year in which the
participant would have attained age 70 1/2, if later.

(b) If the participant's surviving spouse is not the participant's sole
designated beneficiary, then, except as provided in the adoption
agreement, distributions to the designated beneficiary will begin by
December 31 of the calendar year immediately following the calendar year
in which the participant died.

(c) If there is no designated beneficiary as of September 30 of the
year following the year of the participant's death, the participant's
entire interest will be distributed by December 31 of the calendar year
containing the fifth anniversary of the participant's death.

(d) If the participant's surviving spouse is the participant's sole
designated beneficiary and the surviving spouse dies after the participant
but before distributions to the surviving spouse begin, this section 2.2,
other than section 2.2(a), will apply as if the surviving spouse were the
participant.

For purposes of this section 2.2 and section 4, unless section 2.2(d)
applies, distributions are considered to begin on the participant's
required beginning date. If section 2.2(d) applies, distributions are
considered to begin on the date distributions are required to begin to the
surviving spouse under section 2.2(a). If distributions under an annuity
purchased from an insurance company irrevocably commence to the
participant before the participant's required beginning date (or to the
participant's surviving spouse before the date distributions are required
to begin to the surviving spouse under section 2.2(a)), the date
distributions are considered to begin is the date distributions actually
commence.

2.3. Forms of Distribution. Unless the participant's interest is
distributed in the form of an annuity purchased from an insurance company
or in a single sum on or before the required beginning date, as of the
first distribution calendar year distributions will be made in accordance
with sections 3 and 4 of this article. If the participant's interest is
distributed in the form of an annuity purchased from an insurance company,
distributions thereunder will be made in accordance with the requirements
of section 401(a)(9) of the Code and the Treasury regulations.


SECTION 3. REQUIRED MINIMUM DISTRIBUTIONS DURING PARTICIPANT'S LIFETIME.

3.1. Amount of Required Minimum Distribution For Each Distribution
Calendar Year. During the participant's lifetime, the minimum amount that
will be distributed for each distribution calendar year is the lesser of:

(a) the quotient obtained by dividing the participant's account balance
by the distribution period in the Uniform Lifetime Table set forth in
section 1.401(a)(9)-9 of the Treasury regulations, using the participant's
age as of the participant's birthday in the distribution calendar year; or

(b) if the participant's sole designated beneficiary for the
distribution calendar year is the participant's spouse, the quotient
obtained by dividing the participant's account balance by the number in
the Joint and Last Survivor Table set forth in section 1.401(a)(9)-9 of
the Treasury regulations, using the participant's and spouse's attained
ages as of the participant's and spouse's birthdays in the distribution
calendar year.


3.2. Lifetime Required Minimum Distributions Continue Through Year of
Participant's Death. Required minimum distributions will be determined
under this section 3 beginning with the first distribution calendar year
and up to and including the distribution calendar year that includes the
participant's date of death.


SECTION 4. REQUIRED MINIMUM DISTRIBUTIONS AFTER PARTICIPANT'S DEATH.

4.1. Death On or After Date Distributions Begin.

(a) Participant Survived by Designated Beneficiary. If the participant
dies on or after the date distributions begin and there is a designated
beneficiary, the minimum amount that will be distributed for each
distribution calendar year after the year of the participant's death is
the quotient obtained by dividing the participant's account balance by the
longer of the remaining life expectancy of the participant or the
remaining life expectancy of the participant's designated beneficiary,
determined as follows:

(1) The participant's remaining life expectancy is calculated using the
age of the participant in the year of death, reduced by one for each
subsequent year.

(2) If the participant's surviving spouse is the participant's sole
designated beneficiary, the remaining life expectancy of the surviving
spouse is calculated for each distribution calendar year after the year of
the participant's death using the surviving spouse's age as of the
spouse's birthday in that year. For distribution calendar years after the
year of the surviving spouse's death, the remaining life expectancy of the
surviving spouse is calculated using the age of the surviving spouse as of
the spouse's birthday in the calendar year of the spouse's death, reduced
by one for each subsequent calendar year.

<<END RULING>>


(3) If the participant's surviving spouse is not the participant's sole
designated beneficiary, the designated beneficiary's remaining life
expectancy is calculated using the age of the beneficiary in the year
following the year of the participant's death, reduced by one for each
subsequent year.


(b) No Designated Beneficiary. If the participant dies on or after the
date distributions begin and there is no designated beneficiary as of
September 30 of the year after the year of the participant's death, the
minimum amount that will be distributed for each distribution calendar
year after the year of the participant's death is the quotient obtained by
dividing the participant's account balance by the participant's remaining
life expectancy calculated using the age of the participant in the year of
death, reduced by one for each subsequent year.


4.2. Death Before Date Distributions Begin.

(a) Participant Survived by Designated Beneficiary. Except as provided
in the adoption agreement, if the participant dies before the date
distributions begin and there is a designated beneficiary, the minimum
amount that will be distributed for each distribution calendar year after
the year of the participant's death is the quotient obtained by dividing
the participant's account balance by the remaining life expectancy of the
participant's designated beneficiary, determined as provided in section
4.1.

(b) No Designated Beneficiary. If the participant dies before the date
distributions begin and there is no designated beneficiary as of September
30 of the year following the year of the participant's death, distribution
of the participant's entire interest will be completed by December 31 of
the calendar year containing the fifth anniversary of the participant's
death.

(c) Death of Surviving Spouse Before Distributions to Surviving Spouse
Are Required to Begin. If the participant dies before the date
distributions begin, the participant's surviving spouse is the
participant's sole designated beneficiary, and the surviving spouse dies
before distributions are required to begin to the surviving spouse under
section 2.2(a), this section 4.2 will apply as if the surviving spouse
were the participant.


SECTION 5. DEFINITIONS.

5.1. Designated beneficiary. The individual who is designated as the
beneficiary under section ____ of the plan and is the designated
beneficiary under section 401(a)(9) of the Internal Revenue Code and
section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.

5.2. Distribution calendar year. A calendar year for which a minimum
distribution is required. For distributions beginning before the
participant's death, the first distribution calendar year is the calendar
year immediately preceding the calendar year which contains the
participant's required beginning date. For distributions beginning after
the participant's death, the first distribution calendar year is the
calendar year in which distributions are required to begin under section
2.2. The required minimum distribution for the participant's first
distribution calendar year will be made on or before the participant's
required beginning date. The required minimum distribution for other
distribution calendar years, including the required minimum distribution
for the distribution calendar year in which the participant's required
beginning date occurs, will be made on or before December 31 of that
distribution calendar year.

5.3. Life expectancy. Life expectancy as computed by use of the Single
Life Table in section 1.401(a)(9)-9 of the Treasury regulations.

5.4. Participant's account balance. The account balance as of the last
valuation date in the calendar year immediately preceding the distribution
calendar year (valuation calendar year) increased by the amount of any
contributions made and allocated or forfeitures allocated to the account
balance as of dates in the valuation calendar year after the valuation
date and decreased by distributions made in the valuation calendar year
after the valuation date. The account balance for the valuation calendar
year includes any amounts rolled over or transferred to the plan either in
the valuation calendar year or in the distribution calendar year if
distributed or transferred in the valuation calendar year.

5.5 Required beginning date. The date specified in section ____ of the
plan.


ADOPTION AGREEMENT

(Check and complete section 1 below if any required minimum distributions
for the 2002 distribution calendar year were made in accordance with the
section 401(a)(9) Final and Temporary Regulations.)

Section 1. Effective Date of Plan Amendment for Section 401(a)(9) Final
and Temporary Treasury Regulations.

____. Article ____, Minimum Distribution Requirements, applies for
purposes of determining required minimum distributions for distribution
calendar years beginning with the 2003 calendar year, as well as required
minimum distributions for the 2002 distribution calendar year that are
made on or after ____.

(Check and complete any of the remaining sections if you wish to modify
the rules in sections 2.2 and 4.2 of Article ____ of the plan.)


Section 2. Election to Apply 5-Year Rule to Distributions to Designated
Beneficiaries.

____ If the participant dies before distributions begin and there is a
designated beneficiary, distribution to the designated beneficiary is not
required to begin by the date specified in section 2.2 of Article ____ of
the plan, but the participant's entire interest will be distributed to the
designated beneficiary by December 31 of the calendar year containing the
fifth anniversary of the participant's death. If the participant's
surviving spouse is the participant's sole designated beneficiary and the
surviving spouse dies after the participant but before distributions to
either the participant or the surviving spouse begin, this election will
apply as if the surviving spouse were the participant.

This election will apply to:

____ All distributions.

____ The following distributions:

____.


Section 3. Election to Allow Participants or Beneficiaries to Elect 5-Year
Rule.

____ Participants or beneficiaries may elect on an individual basis
whether the 5-year rule or the life expectancy rule in sections 2.2 and
4.2 of Article ____ of the plan applies to distributions after the death
of a participant who has a designated beneficiary. The election must be
made no later than the earlier of September 30 of the calendar year in
which distribution would be required to begin under section 2.2 of Article
____ of the plan, or by September 30 of the calendar year which contains
the fifth anniversary of the participant's (or, if applicable, surviving
spouse's) death. If neither the participant nor beneficiary makes an
election under this paragraph, distributions will be made in accordance
with sections 2.2 and 4.2 of Article of the plan and, if applicable, the
elections in section 2 above.


Section 4. Election to Allow Designated Beneficiary Receiving
Distributions Under 5-Year Rule to Elect Life Expectancy Distributions.

____ A designated beneficiary who is receiving payments under the 5-year
rule may make a new election to receive payments under the life expectancy
rule until December 31, 2003, provided that all amounts that would have
been required to be distributed under the life expectancy rule for all
distribution calendar years before 2004 are distributed by the earlier of
December 31, 2003, or the end of the 5-year period.


MODEL PLAN AMENDMENT 2 -- DEFINED BENEFIT PLANS

Article ____. MINIMUM DISTRIBUTION REQUIREMENTS.

Section 1. General Rules

1.1. Effective Date. Unless an earlier effective date is specified in
the adoption agreement, the provisions of this article will apply for
purposes of determining required minimum distributions for calendar years
beginning with the 2003 calendar year.

1.2. Coordination with Minimum Distribution Requirements Previously in
Effect. If the adoption agreement specifies an effective date of this
article that is earlier than calendar years beginning with the 2003
calendar year, required minimum distributions for 2002 under this article
will be determined as follows. If the total amount of 2002 required
minimum distributions under the plan made to the distributee prior to the
effective date of this article equals or exceeds the required minimum
distributions determined under this article, then no additional
distributions will be required to be made for 2002 on or after such date
to the distributee. If the total amount of 2002 required minimum
distributions under the plan made to the distributee prior to the
effective date of this article is less than the amount determined under
this article, then required minimum distributions for 2002 on and after
such date will be determined so that the total amount of required minimum
distributions for 2002 made to the distributee will be the amount
determined under this article.

1.3. Precedence. The requirements of this article will take precedence
over any inconsistent provisions of the plan.

1.4. Requirements of Treasury Regulations Incorporated. All
distributions required under this article will be determined and made in
accordance with the Treasury regulations under section 401(a)(9) of the
Internal Revenue Code.

1.5. TEFRA Section 242(b)(2) Elections. Notwithstanding the other
provisions of this article, other than section 1.4, distributions may be
made under a designation made before January 1, 1984, in accordance with
section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA)
and the provisions of the plan that relate to section 242(b)(2) of TEFRA.


Section 2. Time and Manner of Distribution.

2.1. Required Beginning Date. The participant's entire interest will be
distributed, or begin to be distributed, to the participant no later than
the participant's required beginning date.

2.2. Death of Participant Before Distributions Begin. If the
participant dies before distributions begin, the participant's entire
interest will be distributed, or begin to be distributed, no later than as
follows:

(a) If the participant's surviving spouse is the participant's sole
designated beneficiary, then, except as provided in the adoption
agreement, distributions to the surviving spouse will begin by December 31
of the calendar year immediately following the calendar year in which the
participant died, or by December 31 of the calendar year in which the
participant would have attained age 70 1/2, if later.

(b) If the participant's surviving spouse is not the participant's sole
designated beneficiary, then, except as provided in the adoption
agreement, distributions to the designated beneficiary will begin by
December 31 of the calendar year immediately following the calendar year
in which the participant died.

(c) If there is no designated beneficiary as of September 30 of the
year following the year of the participant's death, the participant's
entire interest will be distributed by December 31 of the calendar year
containing the fifth anniversary of the participant's death.

(d) If the participant's surviving spouse is the participant's sole
designated beneficiary and the surviving spouse dies after the participant
but before distributions to the surviving spouse begin, this section 2.2,
other than section 2.2(a), will apply as if the surviving spouse were the
participant.

For purposes of this section 2.2 and section 5, distributions are
considered to begin on the participant's required beginning date (or, if
section 2.2(d) applies, the date distributions are required to begin to
the surviving spouse under section 2.2(a)). If annuity payments
irrevocably commence to the participant before the participant's required
beginning date (or to the participant's surviving spouse before the date
distributions are required to begin to the surviving spouse under section
2.2(a)), the date distributions are considered to begin is the date
distributions actually commence.

2.3. Form of Distribution. Unless the participant's interest is
distributed in the form of an annuity purchased from an insurance company
or in a single sum on or before the required beginning date, as of the
first distribution calendar year distributions will be made in accordance
with sections 3, 4 and 5 of this article. If the participant's interest is
distributed in the form of an annuity purchased from an insurance company,
distributions thereunder will be made in accordance with the requirements
of section 401(a)(9) of the Code and the Treasury regulations. Any part of
the participant's interest which is in the form of an individual account
described in section 414(k) of the Code will be distributed in a manner
satisfying the requirements of section 401(a)(9) of the Code and the
Treasury regulations that apply to individual accounts.


Section 3. Determination of Amount to be Distributed Each Year.

3.1. General Annuity Requirements. If the participant's interest is
paid in the form of annuity distributions under the plan, payments under
the annuity will satisfy the following requirements:

(a) the annuity distributions will be paid in periodic payments made at
intervals not longer than one year;

(b) the distribution period will be over a life (or lives) or over a
period certain not longer than the period described in section 4 or 5;

(c) once payments have begun over a period certain, the period certain
will not be changed even if the period certain is shorter than the maximum
permitted;

(d) payments will either be nonincreasing or increase only as follows:

(1) by an annual percentage increase that does not exceed the annual
percentage increase in a cost-of-living index that is based on prices of
all items and issued by the Bureau of Labor Statistics;

(2) to the extent of the reduction in the amount of the participant's
payments to provide for a survivor benefit upon death, but only if the
beneficiary whose life was being used to determine the distribution period
described in section 4 dies or is no longer the participant's beneficiary
pursuant to a qualified domestic relations order within the meaning of
section 414(p);

(3) to provide cash refunds of employee contributions upon the
participant's death; or

(4) to pay increased benefits that result from a plan amendment.


3.2. Amount Required to be Distributed by Required Beginning Date. The
amount that must be distributed on or before the participant's required
beginning date (or, if the participant dies before distributions begin,
the date distributions are required to begin under section 2.2(a) or (b))
is the payment that is required for one payment interval. The second
payment need not be made until the end of the next payment interval even
if that payment interval ends in the next calendar year. Payment intervals
are the periods for which payments are received, e.g., bi-monthly,
monthly, semi-annually, or annually. All of the participant's benefit
accruals as of the last day of the first distribution calendar year will
be included in the calculation of the amount of the annuity payments for
payment intervals ending on or after the participant's required beginning
date.

3.3. Additional Accruals After First Distribution Calendar Year. Any
additional benefits accruing to the participant in a calendar year after
the first distribution calendar year will be distributed beginning with
the first payment interval ending in the calendar year immediately
following the calendar year in which such amount accrues.


Section 4. Requirements For Annuity Distributions That Commence During
Participant's Lifetime.

4.1. Joint Life Annuities Where the Beneficiary Is Not the
Participant's Spouse. If the participant's interest is being distributed
in the form of a joint and survivor annuity for the joint lives of the
participant and a nonspouse beneficiary, annuity payments to be made on or
after the participant's required beginning date to the designated
beneficiary after the participant's death must not at any time exceed the
applicable percentage of the annuity payment for such period that would
have been payable to the participant using the table set forth in Q&A-2 of
section 1.401(a)(9)-6T of the Treasury regulations. If the form of
distribution combines a joint and survivor annuity for the joint lives of
the participant and a nonspouse beneficiary and a period certain annuity,
the requirement in the preceding sentence will apply to annuity payments
to be made to the designated beneficiary after the expiration of the
period certain.

4.2. Period Certain Annuities. Unless the participant's spouse is the
sole designated beneficiary and the form of distribution is a period
certain and no life annuity, the period certain for an annuity
distribution commencing during the participant's lifetime may not exceed
the applicable distribution period for the participant under the Uniform
Lifetime Table set forth in section 1.401(a)(9)-9 of the Treasury
regulations for the calendar year that contains the annuity starting date.
If the annuity starting date precedes the year in which the participant
reaches age 70, the applicable distribution period for the participant is
the distribution period for age 70 under the Uniform Lifetime Table set
forth in section 1.401(a)(9)-9 of the Treasury regulations plus the excess
of 70 over the age of the participant as of the participant's birthday in
the year that contains the annuity starting date. If the participant's
spouse is the participant's sole designated beneficiary and the form of
distribution is a period certain and no life annuity, the period certain
may not exceed the longer of the participant's applicable distribution
period, as determined under this section 4.2, or the joint life and last
survivor expectancy of the participant and the participant's spouse as
determined under the Joint and Last Survivor Table set forth in section
1.401(a)(9)-9 of the Treasury regulations, using the participant's and
spouse's attained ages as of the participant's and spouse's birthdays in
the calendar year that contains the annuity starting date.


Section 5. Requirements For Minimum Distributions Where Participant Dies
Before Date Distributions Begin.

5.1. Participant Survived by Designated Beneficiary. Except as provided
in the adoption agreement, if the participant dies before the date
distribution of his or her interest begins and there is a designated
beneficiary, the participant's entire interest will be distributed,
beginning no later than the time described in section 2.2(a) or (b), over
the life of the designated beneficiary or over a period certain not
exceeding:

(a) unless the annuity starting date is before the first distribution
calendar year, the life expectancy of the designated beneficiary
determined using the beneficiary's age as of the beneficiary's birthday in
the calendar year immediately following the calendar year of the
participant's death; or

(b) if the annuity starting date is before the first distribution
calendar year, the life expectancy of the designated beneficiary
determined using the beneficiary's age as of the beneficiary's birthday in
the calendar year that contains the annuity starting date.


5.2. No Designated Beneficiary. If the participant dies before the date
distributions begin and there is no designated beneficiary as of September
30 of the year following the year of the participant's death, distribution
of the participant's entire interest will be completed by December 31 of
the calendar year containing the fifth anniversary of the participant's
death.

5.3. Death of Surviving Spouse Before Distributions to Surviving Spouse
Begin. If the participant dies before the date distribution of his or her
interest begins, the participant's surviving spouse is the participant's
sole designated beneficiary, and the surviving spouse dies before
distributions to the surviving spouse begin, this section 5 will apply as
if the surviving spouse were the participant, except that the time by
which distributions must begin will be determined without regard to
section 2.2(a).


Section 6. Definitions.

6.1. Designated beneficiary. The individual who is designated as the
beneficiary under section ____ of the plan and is the designated
beneficiary under section 401(a)(9) of the Internal Revenue Code and
section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.

6.2. Distribution calendar year. A calendar year for which a minimum
distribution is required. For distributions beginning before the
participant's death, the first distribution calendar year is the calendar
year immediately preceding the calendar year which contains the
participant's required beginning date. For distributions beginning after
the participant's death, the first distribution calendar year is the
calendar year in which distributions are required to begin pursuant to
section 2.2.

6.3 Life expectancy. Life expectancy as computed by use of the Single
Life Table in section 1.401(a)(9)-9 of the Treasury regulations.

6.4. Required beginning date. The date specified in section ____ of the
plan.


ADOPTION AGREEMENT

(Check and complete section 1 below if any required minimum distributions
for the 2002 distribution calendar year were made in accordance with the
section 401(a)(9) Final and Temporary Regulations.)

Section 1. Effective Date of Plan Amendment for Section 401(a)(9) Final
and Temporary Treasury Regulations.

____ Article ____, Minimum Distribution Requirements, applies for purposes
of determining required minimum distributions for distribution calendar
years beginning with the 2003 calendar year, as well as required minimum
distributions for the 2002 distribution calendar year that are made on or
after.

(Check and complete any of the remaining sections if you wish to modify
the rules in sections 2.2 and 5 of Article of the plan.)


Section 2. Election to Apply 5-Year Rule to Distributions to Designated
Beneficiaries.

____ If the participant dies before distributions begin and there is a
designated beneficiary, distribution to the designated beneficiary is not
required to begin by the date specified in section 2.2 of Article ____ of
the plan, but the participant's entire interest will be distributed to the
designated beneficiary by December 31 of the calendar year containing the
fifth anniversary of the participant's death. If the participant's
surviving spouse is the participant's sole designated beneficiary and the
surviving spouse dies after the participant but before distributions to
either the participant or the surviving spouse begin, this election will
apply as if the surviving spouse were the participant.

This election will apply to:

____ All distributions.

____ The following distributions:

____.


Section 3. Election to Allow Participants or Beneficiaries to Elect 5-Year
Rule.

____ Participants or beneficiaries may elect on an individual basis
whether the 5-year rule or the life expectancy rule in sections 2.2 and 5
of Article ____ of the plan applies to distributions after the death of a
participant who has a designated beneficiary. The election must be made no
later than the earlier of September 30 of the calendar year in which
distribution would be required to begin under section 2.2 of Article of
the plan, or by September 30 of the calendar year which contains the fifth
anniversary of the participant's (or, if applicable, surviving spouse's)
death. If neither the participant nor beneficiary makes an election under
this paragraph, distributions will be made in accordance with sections 2.2
and 5 of Article ____ of the plan and, if applicable, the elections in
section 2 above.


Section 4. Election to Allow Designated Beneficiary Receiving
Distributions Under 5-Year Rule to Elect Life Expectancy Distributions.

____ A designated beneficiary who is receiving payments under the 5-year
rule may make a new election to receive payments under the life expectancy
rule until December 31, 2003, provided that all amounts that would have
been required to be distributed under the life expectancy rule for all
distribution calendar years before 2004 are distributed by the earlier of
December 31, 2003, or the end of the 5-year period.

<<END RULING>>


 

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