1993 Tax Ct. Memo LEXIS 94 | Tax Ct. | 1993
1993 Tax Ct. Memo LEXIS 94">*94 P, a corporation, established a pension plan in 1980. In 1983, petitioner received a favorable determination letter from respondent stating that P's pension plan was a qualified plan under
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MEMORANDUM FINDINGS OF FACT AND OPINION
LARO,
The case was submitted on the basis of a stipulated administrative record that the parties agree contains all the relevant facts. Rule 217(a). After our review of the foregoing, we hold for respondent.
Petitioner is attempting to invoke our jurisdiction under
FINDINGS OF FACT
Pursuant to Rule 122(a), the parties submitted this case to the Court without trial and on the basis of the pleadings and the facts recited in a jointly stipulated administrative record filed with the Court on March 17, 1992, and supplemented on June 15, 1992. The facts and accompanying exhibits contained in the administrative record and supplement are incorporated herein by this reference.
Petitioner is a corporation that was formed and/or began operations on March 20, 1980. Its sole shareholder was, and has always been, Charles F. Faulkender (Faulkender). At the time the petition was filed, petitioner's principal place of business and corporate office was located in1993 Tax Ct. Memo LEXIS 94">*99 Rochester, Michigan. Petitioner reports the results of its operations based on a fiscal year ending on March 31.
The Plan was established and became effective on April 1, 1980. The Plan also reports the results of its operations based on a fiscal year ending on March 31. The Trust constitutes part of the Plan. The trustee is Faulkender. In the spring of 1986, Faulkender suffered a ruptured blood vessel in his brain and was ill throughout the remainder of the years at issue.
The Plan is a defined benefit plan, within the meaning of section 414(j). Under the terms of the Plan as of March 31, 1985, all employees of petitioner that are at least 25 years old are eligible to enter the Plan on the date that is coincident with or next following their completion of 1 year of service. Further, all participants are eligible to retire from employment with their full retirement benefit upon reaching the age of 65. The normal retirement benefit generally equals a percentage of compensation, based on average salary during the highest 5 years of employment, less a percentage of the Social Security benefit that the participant receives at retirement. The normal retirement benefit is subject1993 Tax Ct. Memo LEXIS 94">*100 to certain minimum and maximum monthly pension amounts.
On March 31, 1983, the Service issued the following determination letter to petitioner with respect to the Plan:
Dear Sirs: Based on the information supplied, we have made a favorable determination on your application * * *. Please keep this letter in your permanent records. Continued qualification of the plan will depend on its effect in operation under its present form. (See The status of the plan in operation will be reviewed periodically. The enclosed document describes some events that could occur after you receive this letter that would automatically nullify it without specific notice from us. The document also explains how operation of the plan may affect a favorable determination letter, and contains information about filing requirements. This letter relates only to the status of your plan under the Internal Revenue Code. It is not a determination regarding the effect of other Federal or local statutes. This determination is subject to your adoption of the proposed amendments submitted in your or your representative's letter dated Feb. 23, 1993 Tax Ct. Memo LEXIS 94">*101 1982. The proposed amendments should be adopted on or before the date prescribed by the regulations under Code This determination applies to plan year(s) beginning after Mar. 31, 1981. We have sent a copy of this letter to your representative as indicated in the power of attorney. This determination letter does not apply to any provisions of the Tax Equity and Fiscal Responsibility Act of 1982. If you have any questions, please contact * * *. Sincerely yours, /S/ District Director Enclosures: Publication 794 Lmsa 645
On January 24, 1985, petitioner executed an amendment to the Trust agreement. 4 This amendment consisted solely of a change to one paragraph in the agreement entitled Contributions, Retirement Benefits, and Optional Modes of Payment. Following this amendment, the amended paragraph read as follows: The Corporation shall contribute into the account of each participant, a certain percentage of the participant's compensation as defined in paragraph 2.3(a) determined by the age of the participant as of the first fiscal year end he has qualified for participation, in order to provide for each participant a monthly pension, 1993 Tax Ct. Memo LEXIS 94">*102 commencing at his normal retirement date which monthly pension shall be an amount equal to one-twelfth (1/12) of 38.56% of the participant's final average compensation, reduced by 74.074% of the Social Security benefits received by a participant at retirement. The minimum monthly pension to be provided a participant under this plan will be Five Hundred ($ 500.00) Dollars per month and the maximum monthly pension to be provided a participant will be Seven Thousand Five Hundred ($ 7,500.00) Dollars per month, and the minimum contract coverage will be for One Thousand ($ 1,000.00) Dollars of insurance or Twenty ($ 20.00) Dollars per month, if any retirement annuity. For purposes of this plan, the assumed retirement benefit shall be derived from using a 6% per year compounded annually interest assumption and be based upon the contributions of the corporation for each participant as set forth above. The actuarial methods to be employed for purposes of determining the corporation's contribution for each participant, shall be the attained age level premium cost method. Payment of the corporation's contribution to the trust under the terms hereof will be made to the trustee within1993 Tax Ct. Memo LEXIS 94">*103 the time prescribed by law, including, if applicable, any extension of time for the filing of federal income tax return for such year, or within such other period as is provided in Section 404(a)(6) of the The contribution under this paragraph 5.1 shall only be made if the participant is employed by the corporation on the last day of the fiscal year of the corporation, and during such fiscal year has either completed the requisite number of hours within one of the periods specified in paragraph 2.1(d) whether or not such employment period, employment year or plan year overlaps two fiscal years, or completes not less than One Thousand (1,000) hours of service during such fiscal year.
On October 23, 1985, National Benefit1993 Tax Ct. Memo LEXIS 94">*104 Consultants, Inc. (National), an actuarial firm, prepared a written report on the actuarial valuation of the Plan covering the plan year beginning April 1, 1984. The actuarial certification included in this written report stated, in part, that the report was prepared relying on "(a) information on employees provided by [petitioner], which maintains records for the plan, and (b) information regarding plan assets as provided by [Faulkender]." Similar written reports on the Plan (including similar actuarial certifications) for each of the following 3 Plan years were also prepared by National in 1986, 1987, and 1988, respectively.
On March 31, 1988, petitioner ceased doing business and stopped making contributions to the Plan. On November 30, 1988, each participant's accrued benefit in the Plan was as follows:
Charles Faulkender | $ 212,811 |
Timothy Faulkender | 2,599 |
Albert Fitchett | 5,622 |
D. Wayne Fitzgerald | 1,134 |
David Wayne Fletcher | 660 |
Ruth McKenzie | 238 |
Terri White | 1,513 |
TOTAL | $ 224,577 |
In or about December 1988, petitioner distributed to the participants their respective accrued benefits in the Plan.
Before these distributions, on October 25, 1988, respondent's1993 Tax Ct. Memo LEXIS 94">*105 Employee Plans Group notified petitioner that it would be examining the Registration Statement of Employee Benefit Plans (Form 5500-R) that had been filed on behalf of the Plan for its year ending March 31, 1986. For purposes of this examination, respondent requested that petitioner provide documentation of amendments that were required to be made to the Plan pursuant to the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), Pub. L. 97-248, 96 Stat. 324, enacted September 3, 1982, the Deficit Reduction Act of 1984 (DEFRA), Pub. L. 98-369, 98 Stat. 494, enacted July 18, 1984, and the Retirement Equity Act of 1984 (REA), Pub. L. 98-397, 98 Stat. 1426, enacted August 23, 1984. Petitioner did not provide any such documentation. Moreover, the record does not contain even a scintilla of evidence that, with the exception of the
Following the completion of an examination, respondent mailed petitioner1993 Tax Ct. Memo LEXIS 94">*106 a letter, dated October 20, 1989, proposing to disqualify the Plan for its Plan years ending on or after March 31, 1985. This letter also stated that petitioner had 30 days in which to file an administrative appeal of respondent's proposed disqualification, and enclosed a publication explaining the procedures for making such an appeal. Petitioner did not file for an administrative appeal of respondent's proposed disqualification.
On January 31, 1990, respondent mailed petitioner a final revocation letter with respect to the Plan. The final revocation letter stated that the Plan did not meet the requirements of
On April 30, 1990, petitioner filed a petition with the Court to declare the status of the Plan and the Trust for the years at issue. Petitioner1993 Tax Ct. Memo LEXIS 94">*107 later amended its petition on July 3, 1990 (hereinafter, the petition and the amended petition will collectively be referred to as the petition).
OPINION
The first issue we must decide is whether the Court has the authority to make a declaratory judgment with respect to the qualification of the Plan under
In 1974, Congress enacted ERISA to deal with a number of problems in the retirement area, one of which was the unavailability of a judicial forum to review such a situation. (a) Creation of Remedy. -- In a case of actual controversy involving -- (1) a determination by the Secretary with respect to the initial qualification or continuing qualification of a retirement plan under subchapter D of chapter 1, * * * * * * upon the filing of an appropriate pleading, the Tax Court may make a declaration with respect to such initial qualification or continuing qualification. Any such declaration shall have the force and effect of a decision1993 Tax Ct. Memo LEXIS 94">*109 of the Tax Court and shall be reviewable as such. For purposes of this section, a determination with respect to a continuing qualification includes any revocation of or other change in a qualification. (b) Limitations. -- (1) Petitioner. -- A pleading may be filed under this section only by a petitioner who is the employer, the plan administrator, an employee who has qualified under regulations prescribed by the Secretary as an interested party for purposes of pursuing administrative remedies within the Internal Revenue Service, or the Pension Benefit Guaranty Corporation. (2) Notice. -- For purposes of this section, the filing of a pleading by any petitioner may be held by the Tax Court to be premature, unless the petitioner establishes to the satisfaction of the court that he has complied with the requirements prescribed by regulations of the Secretary with respect to notice to other interested parties of the filing of the request for a determination referred to in subsection (a). (3) Exhaustion of Administrative Remedies. -- The Tax Court shall not issue a declaratory judgment or decree under this section in any proceeding unless it determines that the petitioner has exhausted1993 Tax Ct. Memo LEXIS 94">*110 administrative remedies available to him within the Internal Revenue Service. A petitioner shall not be deemed to have exhausted his administrative remedies with respect to a failure by the Secretary to make a determination with respect to initial qualification or continuing qualification of a retirement plan before the expiration of 270 days after the request for such determination was made. (4) Plan Put Into Effect. -- No proceeding may be maintained under this section unless the plan (and, in the case of a controversy involving the continuing qualification of the plan because of an amendment to the plan, the amendment) with respect to which a decision of the Tax Court is sought has been put into effect before the filing of the pleading. A plan or amendment shall not be treated as not being in effect merely because under the plan the funds contributed to the plan may be refunded if the plan (or the plan as so amended) is found to be not qualified. (5) Time for Bringing Action. -- If the Secretary sends by certified or registered mail notice of his determination with respect to the qualification of the plan to the persons referred to in paragraph (1) (or, in the case of employees1993 Tax Ct. Memo LEXIS 94">*111 referred to in paragraph (1), to any individual designated under regulations prescribed by the Secretary as a representative of such employee), no proceeding may be initiated under this section by any person unless the pleading is filed before the ninety-first day after the day after such notice is mailed to such person (or to his designated representative, in the case of an employee). (c) Retirement Plan. -- For purposes of this section, the term "retirement plan" means -- (1) a pension, profit-sharing, or stock bonus plan described in (2) an annuity plan described in section 403(a).
In the instant case, the petition includes sufficient information from which we may easily determine that four of the five jurisdictional limitations under
We now turn to and consider the fifth jurisdictional limitation --
Petitioner does not allege in its petition that it exhausted administrative remedies within the Service before filing the petition. In fact, petitioner alleges that all such remedies have not been exhausted. Thus, at first blush, it appears that the petition must be dismissed because the jurisdictional limitation under
A trust that forms part of a pension or other retirement type plan is a qualified trust entitled to preferential tax treatment under the Internal Revenue Code if the trust meets the requirements of
The Service generally will issue a determination letter stating whether an existing retirement1993 Tax Ct. Memo LEXIS 94">*118 plan, or an amendment to such a plan, qualifies for this preferential tax treatment. See, e.g.,
1993 Tax Ct. Memo LEXIS 94">*119 This assurance is not absolute, however, because Congress has given respondent broad authority to revoke a determination letter retroactively. Sec. 7805(b); see also Except in rare or unusual circumstances, the revocation or modification of a ruling will not be applied retroactively with respect to the taxpayer to whom the ruling was originally issued or to a taxpayer whose tax liability was directly involved in such ruling if (i) there has been no misstatement or omission of material facts, (ii) the facts subsequently developed are not materially different from the facts on which the ruling was based, (iii) there has been no change in the applicable law, (iv) the ruling was originally issued with respect to a prospective or proposed transaction, and (v) the taxpayer directly involved in the ruling acted in good faith in reliance upon the ruling and the retroactive revocation would be to1993 Tax Ct. Memo LEXIS 94">*120 his detriment.
In the instant case, respondent issued petitioner a favorable determination letter in 1983, stating that the Plan qualified under
TEFRA substantially and extensively changed the requirements that must be met for an employee benefit plan, such as the Plan, to constitute a qualified plan under
Two years after TEFRA, or, in other words, 1 year after petitioner received its favorable1993 Tax Ct. Memo LEXIS 94">*121 determination letter from respondent, Congress enacted DEFRA and REA. Like TEFRA, these two acts substantially and dramatically amended the requirements for an employee benefit plan to be considered a qualified plan under
1993 Tax Ct. Memo LEXIS 94">*122 With respect to the changes that are included in TEFRA, DEFRA, and REA (hereinafter these three Acts are collectively referred to as the Acts), the various effective dates by which a qualified plan is generally required to implement these changes are set forth in the respective Act. 101993 Tax Ct. Memo LEXIS 94">*123 In addition,
1993 Tax Ct. Memo LEXIS 94">*124 In petitioner's case, based on respondent's guidelines, the compliance dates for each affected plan year and the applicable law are as follows:
Plan Year | Adoption Date | Compliance Date | Applicable Law |
3/31/85 | N/A | 6/30/86 | TEFRA |
3/31/86 | N/A | 6/30/86 | DEFRA/REA |
3/31/87 | N/A | 3/31/87 | DEFRA/REA |
3/31/88 | N/A | 3/31/88 | DEFRA/REA |
3/31/89 | N/A | 3/31/89 | DEFRA/REA |
The record does not contain even a scintilla of evidence that, with the exception of the
1993 Tax Ct. Memo LEXIS 94">*125 The requirements that a plan must meet for qualification under
In making its contention that the Plan's compliance with
We find it important to note that the Acts fundamentally changed the qualification requirements for retirement plans under
1993 Tax Ct. Memo LEXIS 94">*129 We must also note that petitioner's position would undercut the necessity of having a written plan in order to qualify under
Accordingly, we conclude that the enactment of the Acts necessitated the amendment of petitioner's written Plan within the specified time periods. In so concluding, we note that the only two cases cited by petitioner to support its contention that substance takes precedence over form in the retirement plan area,
Having concluded that the Plan did not comply with the requirements of
Faulkender became ill in the spring of 1986. This was almost 4 years after the enactment of TEFRA and almost 2 years after1993 Tax Ct. Memo LEXIS 94">*133 the enactment of DEFRA and REA. In the interim, the Service provided much guidance on the need to comply with the Acts, and the consequences of noncompliance. Respondent's favorable determination letter also contained a specific reference to the need to comply with TEFRA. In addition, IRS Pub. 794, Rev. Aug. 1982, which was referenced in respondent's determination letter as an enclosed document, states that "A favorable determination letter may no longer apply if there is a change in a statute, a regulation, or a revenue ruling applicable to the qualification of the plan. * * * If the letter no longer applies to the plan, the plan must be amended to comply with the new requirements in order to maintain its qualified status." Thus, petitioner was on notice of the need to comply with the Acts long before the illness of Faulkender, the Plan's trustee. In addition, even after this illness, National continued to provide actuarial reports based on information provided by petitioner and Faulkender. Thus, based on the record, it appears that petitioner had the resources and ability to timely amend the Plan to make it consistent with the Acts.
Petitioner also contends that a disqualification1993 Tax Ct. Memo LEXIS 94">*134 of the Plan should be avoided because petitioner delegated its responsibility to administer the Plan to National, a third-party actuarial firm, and fully relied on that firm to conform the Plan to the provisions of the Internal Revenue Code. We reject this contention for the same reasons as above, and because petitioner cannot delegate away its ultimate responsibility for keeping the Plan qualified under
To reflect the foregoing,
1993 Tax Ct. Memo LEXIS 94">*135
Footnotes
1. Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the years in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure.↩
2. Neither petitioner nor respondent has presented any separate arguments with respect to the exemption of the Trust under
sec. 501(a) . Such exemption does not always follow the qualification of a plan undersec. 401(a) . See secs. 502 and 503. However, the parties do not dispute that the exemption of the Trust undersec. 501(a) would automatically flow from the qualification of the Plan undersec. 401(a) , and the Trust would not qualify undersec. 501(a) if the Plan does not qualify undersec. 401(a)↩ .3. In its brief, petitioner requested that the Court rule that petitioner is entitled to a deduction for the contributions that it made to the Plan in the years at issue. Nothing in the petition indicates that respondent has issued a notice of deficiency to petitioner with respect to this matter. Thus, we decline to resolve this matter because we do not have jurisdiction to do so. Sec. 6213(a); Rule 13(a).↩
4. This amendment was the
second amendment to the Trust agreement. Based on the administrative record in this case, only two amendments were made to this agreement. Thefirst amendment↩ was made on Feb. 18, 1982.5. Although the petition failed to comply with the form and content of Rule 211(c)(2)(B), we also conclude that the taxpayer made a conscientious effort to comply with our Rules, and intended that the document it filed be a petition asking the Court to make a declaratory judgment with respect to the Plan. Accordingly, we believe that this is the type of case for which we should exercise our discretion to excuse this noncompliance in order to effect jurisdiction.
, 63 T.C. 285">287 (1974);Castaldo v. Commissioner , 63 T.C. 285">63 T.C. 285 , 57 T.C. 542">546↩ (1972).Carstenson v. Commissioner , 57 T.C. 542">57 T.C. 5426.
SEC. 401 . QUALIFIED PENSION, PROFIT-SHARING, AND STOCK BONUS PLANS.(a) Requirements for Qualification. -- A trust created or organized in the United States and forming part of a stock bonus, pension, or profit-sharing plan of an employer for the exclusive benefit of his employees or their beneficiaries shall constitute a qualified trust under this section --
(1) if contributions are made to the trust by such employer, or employees, or both, or by another employer who is entitled to deduct his contributions under section 404(a)(3)(B) (relating to deduction for contributions to profit-sharing and stock bonus plans), for the purpose of distributing to such employees or their beneficiaries the corpus and income of the fund accumulated by the trust in accordance with such plan;
(2) if under the trust instrument it is impossible, at any time prior to the satisfaction of all liabilities with respect to employees and their beneficiaries under the trust, for any part of the corpus or income to be (within the taxable year or thereafter) used for, or diverted to, purposes other than for the exclusive benefit of his employees or their beneficiaries * * *;
(3) if the plan of which such trust is a part satisfies the requirements of section 410 (relating to minimum participation standards); and
(4) if the contributions or benefits provided under the plan do not discriminate in favor of employees who are --
(A) officers,
(B) shareholders, or
(C) highly compensated.↩
7. In general, three favorable tax consequences flow from a qualified trust. First, in connection with the taxation of the plan, income earned by a plan that meets the requirements of
sec. 401(a) is not subject to taxation while the plan's assets are held in a tax-exempt trust.Secs. 401(a) ,501(a) . Second, from the employer's point of view, subject to certain limitations, the employer receives an immediate tax deduction for contributions to a qualified plan. Sec. 404(a). Third, with respect to the employees, employees are not taxed on any employer contributions that are made on their behalf until the benefits are actually distributed (or otherwise made available) to them from the Plan. Sec. 402(a). By comparison, if a plan does not meet the requirements ofsec. 401(a)↩ , the earnings of the plan are subject to tax, employer deductions for contributions may be deferred or eliminated, and employees are taxed on the value of employer contributions under the rules of sec. 83. See, e.g., sec. 402(b).8. For the years at issue,
Rev. Proc. 80-30 set forth the general procedures under which the Service would issue a determination letter with respect to the qualification of an employee benefit plan. By comparison, the recent practice of the Service has been to publish an annual revenue procedure that announces the Service's current procedures for issuing a determination letter with respect to an employee plan. See, e.g.,Rev. Proc. 93-6, 1 I.R.B. 135">1993-1 I.R.B. 135 , supersedingRev. Proc. 92-6, 1 I.R.B. 105">1992-1 I.R.B. 105↩ , for requesting determination letters after Jan. 3, 1993.9. Retirement Equity Act of 1984 (REA), Pub. L. 98-397, 98 Stat. 1426, in particular, was enacted primarily to:
REA pmbl., 98 Stat. 1426.improve the delivery of retirement benefits and provide for greater equity under private pension plans for workers and their spouses and dependents by taking into account changes in work patterns, the status of marriage as an economic partnership, and the substantial contribution to that partnership of spouses who work both in and outside the home, * * *.↩
10. The effective date provisions for sections of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), Pub. L. 97-248, tit. II, subtit. C, 96 Stat. 505, generally are contained in the respective section. Likewise, the effective date provisions for sections of the Deficit Reduction Act of 1984 (DEFRA), Pub. L. 98-369, tit. V, 98 Stat. 854, generally are contained in the respective section. Sec. 302 of REA, 98 Stat. 1451, generally contains the effective date provisions for REA.↩
11.
Sec. 401(b) provides:(b) Certain Retroactive Changes in Plan. -- A stock bonus, pension, profit-sharing, or annuity plan shall be considered as satisfying the requirements of subsection (a) for the period beginning with the date on which it was put into effect, or for the period beginning with the earlier of the date on which there was adopted or put into effect any amendment which caused the plan to fail to satisfy such requirements, and ending with the time prescribed by law for filing the return of the employer for his taxable year in which such plan or amendment was adopted (including extensions thereof) or such later time as the Secretary may designate, if all provisions of the plan which are necessary to satisfy such requirements are in effect by the end of such period and have been made effective for all purposes of the whole of such period.↩
12. In order to satisfy TEFRA, employers were required to amend their plans by the end of the appropriate remedial amendment period determined pursuant to
sec. 401(b) andsec. 1.401(b)-1, Income Tax Regs. See, e.g.,Notice 85-5 ,1 C.B. 427">1985-1 C.B. 427 . This deadline for compliance was extended when the Service announced that the remedial amendment period undersec. 1.401(b)-1, Income Tax Regs. , would be applied as if an employer requested and received the automatic extension for filing tax returns under sec. 6081, regardless of whether such an extension for time had actually been filed.Id. The Service also announced that this deemed extension rule would be applied to changes in the top heavy requirements included in DEFRA. . With respect to TRA (other than the top heavy provisions mentioned above) and REA, employers were required to adopt those amendments no later than the last day of the first plan year beginning on or after January 1, 1985. See, e.g.,Id. at 427 . Later, however, the Service announced a procedure under which an employer could receive an extension, until Nov. 1, 1985, of the time for compliance with TRA and REA, as well as TEFRA. News Release IR-85-89 (Aug. 30, 1985). In this announcement, the Service also stated that tax sanctions apply to plans that do not meet the compliance dates for TEFRA, TRA, and REA.id. at 427Id. Subsequently, this Nov. 1, 1985, date was extended to June 30, 1986, with the Service stressing that a plan would not qualify undersec. 401(a) if the plan did not comply with TEFRA, TRA, and REA.Notice 86-3 ,1 C.B. 388">1986-1 C.B. 388 ;Announcement 86-60 ,19 I.R.B. 17">1986-19 I.R.B. 17 (May 12, 1986). After June 30, 1986, employers could no longer amend individual plans to comply with the provisions of TEFRA. However, employers could still receive retroactive qualified status for their plans by adopting a master or prototype plan.Notice 86-3 ,1 C.B. 388">1986-1 C.B. 388 . This opportunity to receive such retroactive status by adopting a master or prototype plan did not expire until Jan. 14, 1988.Notice 87-80 ,2 C.B. 388">1987-2 C.B. 388↩ .13. The record in the instant case does not include the written Plan. Thus, we cannot determine whether the
second amendment , in and of itself, was enough to conform the written Plan with the Acts. We doubt, however, that it was. In particular, we find it very unlikely that petitioner drafted the Plan in 1980 with such precision and certainty as to anticipate all the voluminous changes that are included in the Acts, enacted some 2 to 4 years after petitioner established the Plan. In any event, the record contains only the slightest bit of information to support petitioner's burden of proving that respondent erred in determining that the Plan does not meet the requirements ofsec. 401(a)↩ .14. In general, the increased congressional activity in the retirement plan area began with the Employee Retirement Income Security Act of 1974 (ERISA), Pub. L. 93-406, 88 Stat. 829. As Congress noted in its findings and declaration of policy under ERISA:
ERISA sec. 2, 88 Stat. 829, 832-833.(a) The Congress finds that the growth in size, scope, and numbers of employee benefit plans in recent years has been rapid and substantial; that the operational scope and economic impact of such plans is increasingly interstate; that the continued well-being and security of millions of employees and their dependents are directly affected by these plans; that they are affected with a national public interest; that they have become an important factor affecting the stability of employment and the successful development of industrial relations; * * * that owing to the lack of employee information and adequate safeguards concerning their operation, it is desirable in the interests of employees and their beneficiaries, and to provide for the general welfare and the free flow of commerce, that disclosure be made and safeguards be provided with respect to the establishment, operation, and administration of such plans; * * *
(b) It is hereby declared to be the policy of this Act to protect interstate commerce and the interests of participants in employee benefit plans and their beneficiaries, by requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto, by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the Federal courts.↩
15. ERISA sec. 402(a)(1), 88 Stat. 875, provides: "every employee benefit plan shall be established and maintained pursuant to a written instrument. Such instrument shall provide for one or more named fiduciaries who jointly or severally shall have authority to control and manage the operation and administration of the plan." Although this provision is contained in the labor title (Tit. I) of ERISA, the provision generally applies to any employee benefit plan. ERISA sec. 4(a), 88 Stat. 875.↩
16.
Sec. 1.401-1(a)(2)(i), Income Tax Regs. , provides that a qualified pension plan undersec. 401(a) is "adefinite written plan↩ and arrangement which is communicated to the employees and which is established and maintained by an employer * * * to provide for the livelihood of the employees or their beneficiaries after the retirement of such employees through the payment of benefits determined without regard to profits". [Emphasis added.]17. We recognize that this Court, on occasion, has given retroactive effect to curative amendments that were not made within the statutory timeframe. See
, and its progeny. In those instances, however, the employer exercised due diligence by amending its plan retroactively to eliminate all objectional provisions prior to petitioning the Court. The record in the instant case, by comparison, suggests that the written Plan has never been amended to comply with the Acts. Thus, the rationale ofAero Rental v. Commissioner , 64 T.C. 331 (1975)Aero Rental↩ and its progeny are inapplicable to the instant case.