rp-02-29.pdf

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Part III

Administrative, Procedural, and Miscellaneous

26 CFR 601.201: Rulings and determination letters
(Also, Part I, §§ 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 § 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 § 401(a)(9).

SECTION 2. BACKGROUND

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

.02 Proposed regulations under § 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 § 401(a)(9) 2001 Proposed Regulations)
substantially simplified many of the rules in regulations that had been proposed in 1987
(the § 401(a)(9) 1987 Proposed Regulations) and also incorporated other guidance
published after 1987, including guidance relating to the changes to § 401(a)(9) made by
the Small Business Job Protection Act of 1996, Pub. L. 104-188 (SBJPA).

.03 The preamble to the § 401(a)(9) 2001 Proposed Regulations stated that
taxpayers could rely on the § 401(a)(9) 1987 Proposed Regulations or the § 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 § 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 §

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401(a)(9) 2001 Proposed Regulations (REG-130477-00; REG-130481-00, 2001-11 I.R.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 § 401(a)(9) 2001 Proposed
Regulations for distributions for 2001 but made required minimum distributions for 2001
under the § 401(a)(9) 1987 Proposed Regulations prior to the date in 2001 on which the
plan began operating under the § 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 §
401(a)(9) 2001 Proposed Regulations to be made under the § 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 § 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
§ 401(a)(9) 2001 Proposed Regulations equaled or exceeded the required minimum
distributions determined under the § 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 § 401(a)(9) 2001
Proposed Regulations was less than the amount determined under the § 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 § 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 under § 401(a)(9) were published in the
Federal Register on April 17, 2002, 74 FR 18987 (the § 401(a)(9) Final and Temporary
Regulations). The § 401(a)(9) Final and Temporary Regulations generally adopt the
simplifications proposed in 2001 and provide additional simplifications. The § 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 § 401(a)(9)
Final and Temporary Regulations, the § 401(a)(9) 2001 Proposed Regulations, or the §
401(a)(9) 1987 Proposed Regulations.

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.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 §
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 §
401(a). Notice 2001-42, 2001-30 I.R.B. 70, provides a remedial amendment period under
§ 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 §§ 401(a),
403(a), 409 and 4975(e)(7) of the Code and the exempt status of related trusts or
custodial accounts under § 501(a).

.11 Section 1.401(a)(9)-1, Q&A-3, describes the provisions that a plan must
contain in order to satisfy § 401(a)(9). The plan must generally set forth the statutory
rules of § 401(a)(9), including the incidental death benefit requirement in § 401(a)(9)(G),
and must provide that distributions must be made in accordance with the § 401(a)(9)
Final and Temporary Regulations. The plan must provide that its provisions reflecting §
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 § 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 § 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 § 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

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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 § 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 § 401(a)(9) 1987 Proposed
Regulations or the § 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 § 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 § 401(a)(9) Final and Temporary Regulations. Nevertheless, volume
submitter practitioners must amend their specimen plans for the § 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 § 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 § 401(a)(9) Final and Temporary
Regulations if a plan amendment to comply with the § 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 §
401(a)(9) Final and Temporary Regulations. Determination letter applications for

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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 § 401(a)(9) Final and Temporary Regulations if a plan
amendment to comply with the § 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 § 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 § 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 § 401(a)(9) Final and
Temporary Regulations and, as a result of the amendment, there is a disqualifying
provision under § 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 § 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 § 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 § 401(a)(9) Final and Temporary Regulations.
Adoption of one of the model amendments will not amend a plan for the changes to §
401(a)(9) made by § 1404 of SBJPA or to provide that 2001 or 2002 required minimum
distributions will be determined in accordance with the § 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 §
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 pre-approved plan to be treated as an individually designed
plan. For this purpose, changes to either of the model amendments to incorporate the

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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 § 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 § 401(a)(9)
and the § 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 § 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 § 401(a)(9)(C) that was made by §
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 § 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 § 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 § 401(a)(9) 2001
Proposed Regulations. A plan sponsor that has operated its plan in accordance with the §
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

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provisions in order have reliance that the form of the plan has been properly amended to
comply with the § 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.

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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 70½, 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.

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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.

(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

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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 § 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:

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_____ 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

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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.

1.5. 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:

(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

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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

15
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

16
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.

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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 § 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.)

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.

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