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Title: |
Adoption Agreement |
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Date: |
2002 |
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Preview shows 40KB of 116KB total |
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$64 |
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#860403 |
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Internal Revenue Service Department of the Treasury
Plan Description: Prototype Non-standardized Profit Sharing Plan With CODA
FFN: 50307440002-001 Case: 200000174 EIN: 42-0127290 Washington, DC 20224
Letter Serial No: K305394a
| PRINCIPAL LIFE INSURANCE CO | Contact Person: Ms. Arrington 50-00197 |
| 710 9TH STREET | Telephone Number: (202) 283-8811 |
| DES MOINES, IA 50309 | In Reference to: T:EP:RA:T2 Date: 08-07-2001 |
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under section 401 of the Internal Revenue Code for use by employers for the benefit of their employees. This opinion relates only to the acceptability of the form of the plan under the Internal Revenue Code. It is not an opinion of the effect of other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan. You are also required to send a copy of the approved form of the plan, any approved amendments and related documents to Employee Plans Determination in Cincinnati at the address specified in section 9.11 of Rev. Proc. 2000-20, 2000-6 I.R.B. 553.
This letter considers the changes in qualifications requirements made by the Uruguay Round Agreements Act (GATT), Pub. L. 103-465, the Small Business Job Protection Act of 1996, Pub. L. 104-188, the Uniformed Services Employment and Reemployment Rights Act of 1994, Pub. L. 103-353, the Taxpayer Relief Act of 1997, Pub. L. 105-34, the Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. 105-206 and the Community Renewal Tax Relief Act of 2000, Pub. L. 106-554. These laws are referred to collectively as GUST.
Our opinion on the acceptability of the form of the plan is not a ruling or determination as to whether an employers plan qualifies under Code section 401(a). However, an employer that adopts this plan may rely on this letter with respect to the qualification of its plan under Code section 401(a), as provided for in Announcement 2001-77, 2001-30 I.R.B. and outlined below. The terms of the plan must be followed in operation.
Except as provided below, our opinion does not apply with respect to the requirements of: (a) Code sections 401(a)(4), 401(a)(26), 401(1), 410(b) and 414(s). Our opinion does not apply for purposes of Code section 401(a)(10)(B) and section 401(a)(16) if an employer ever maintained another qualified plan for one or more employees who are covered by this plan. For this purpose, the employer will not be considered to have maintained another plan merely because the employer has maintained another defined contribution plan(s), provided such other plan(s) has been terminated prior to the effective date of this plan and no annual additions have been credited to the account of any participant under such other plan(s) as of any date within the limitation year of this plan. Likewise, if this plan is first effective on or after the effective date of the repeal of Code section 415(e), the employer will not be considered to have maintained another plan merely because the employer has maintained a defined benefit plan(s), provided the defined benefits plan(s) has been terminated prior to the effective date of this plan. Our opinion also does not apply for purposes of Code section 401(a)(16) if, after December 31, 1985, the employer maintains a welfare benefit fund defined in Code section 419(e), which provides postretirement medical benefits allocated to separate accounts for key employees as defined in Code section 419A(d)(3).
Our opinion applies with respect to the requirements of Code section 410(b) if 100 percent of all nonexcludable employees benefit under the plan. Employers that elect a safe harbor allocation formula and a safe harbor compensation definition can also rely on an opinion letter with respect to the nondiscriminatory amounts requirement under section 401(a)(4) and the requirements of sections 401 (k) and 401 (m) (except where the plan is a safe harbor plan under section 401(k)(12) that provides for the safe harbor contribution to be made under another plan).
An employee that elects to continue to apply the pre-GUST family aggregation rules in years beginning after December 31, 1996, or the combined plan limit of section 415(e) in years beginning after December 31, 1999, will not be able to rely on the opinion letter without a determination letter. The employer may request a determination letter by filing an application with Employee Plans Determination on Form 5307, Application for Determination for Adopters of Master of Prototype or Volume Submitter Plans.
If you, the master or prototype sponsor, have any questions concerning the IRS processing of this case, please call the above telephone number. This number is only for use of the sponsor. Individual participants and/or adopting employers with questions concerning the plan should contact the master or prototype sponsor. The plans adoption agreement must include the sponsors address and telephone number for inquiries by adopting employers.
If you write to the IRS regarding this plan, please provide your telephone number and the most convenient time for us to call in case we need more information. Whether you call or write, please refer to the Letter Serial Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you modify or discontinue sponsorship of this plan.
| Sincerely yours, Paul T. Shultz Director Employee Plans Rulings & Agreements |
| A. | ADOPTION AGREEMENT | 1 |
| B. | EMPLOYER | 1 |
| C. | PLAN NAME | 1 |
| D. | EFFECTIVE DATE | 1 |
| E. | YEARLY DATE | 2 |
| F. | FISCAL YEAR | 2 |
| G. | NAMED FIDUCIARY | 2 |
| H. | PLAN ADMINISTRATOR | 2 |
| I. | PREDECESSOR EMPLOYER AND PRIOR EMPLOYER | 3 |
| J. | ELIGIBLE EMPLOYEE | 4 |
| K. | HIGHLY COMPENSATED EMPLOYEE AND TESTING METHODS | 6 |
| L. | ENTRY REQUIREMENTS | 7 |
| M. | ENTRY DATE | 9 |
| N. | PAY | 9 |
| O. | ELECTIVE DEFERRAL CONTRIBUTIONS | 11 |
| P. | MATCHING CONTRIBUTIONS | 15 |
| Q. | OTHER EMPLOYER CONTRIBUTIONS AND FORFEITURES | 18 |
| R. | NET PROFITS AND CONTRIBUTION REQUIREMENTS> | 23 |
| S. | CONTRIBUTION MODIFICATIONS | 24 |
| T. | VOLUNTARY CONTRIBUTIONS AND ROLLOVER CONTRIBUTIONS | 26 |
| U. | INVESTMENTS | 27 |
| V. | VESTING PERCENTAGE | 29 |
| W. | VESTING SERVICE | 30 |
| X. | EQUIVALENCIEST | 32 |
| Y. | WITHDRAWAL BENEFITS | 32 |
| Z. | RETIREMENT AND THE START OF BENEFITS | 33 |
| AA. | FORMS OF DISTRIBUTION FOR RETIREMENT BENEFITS | 36 |
| BB. | ADOPTING EMPLOYERS | 37 |
(Use black ink to complete the Adoption Agreement.)
This ADOPTION AGREEMENT together with the PRINCIPAL FINANCIAL GROUP PROTOTYPE BASIC SAVINGS PLAN constitutes (Select (1), (2), or (3).)
[ ] a new plan.
[X] a restatement of an existing plan (and trust). Such existing plan was qualifiable under 401 (a) of the Internal Revenue Code. The provisions of this restatement are effective on January 1. 2002. This is the RESTATEMENT DATE. (Select if not currently on this Plan No. 001, Basic Plan No. 02 with the approval date shown on the cover page.)
[ ] Amendment No. _________________ to the Plan. It replaces all prior amendments to the Plan and the first Adoption Agreement. The provisions of this amendment are
effective on _______________________________________. (Select if currently on this Plan No. 001, Basic Plan No. 02 with the approval date shown on the cover page.)
The terms we, us, and our, as they are used in this Plan, refer to the EMPLOYER.
We, New Horizons Worldwide. Inc. are the Employer. (Fill in exact legal name.)
The PLAN NAME is The New Horizons Worldwide 401fk1 Retirement Savings Plan.
The Plans original effective date is January 1. 1995. This is the EFFECTIVE DATE.
Page 1
The YEARLY DATE is the first day of each Plan Year. (Fill in the Effective Date. If this is not a new plan and the Yearly Date has changed more than once, fill in any Yearly Date that is not later than the Restatement Date or amendment effective date.)
The Yearly Date is January 1, 1995 and (Select one.)
[X] the same day of each following year.
[ ] each following _________________. (The first Plan Year is short.)
each following __________________ through
____________________ and
each following ________________________. (A later Plan Year is short. Complete (a) using the same month andday as in Yearly Date above, (b) using the same month and day as in (a) and the calendar year in which the short Plan Year begins, and (c) using the first day of the new Plan Year.)
If the first date in Item E is after the Effective Date, Yearly Dates before the first date in Item E above shall be determined under the provisions of the (Prior) Plan before that date.
The FISCAL YEAR is our taxable year and ends on December 31. (Month and day.)
We are the NAMED FIDUCIARY, unless otherwise specified in (1) below.
[ ] ____________________________________ is the Named Fiduciary: (Principal Life Insurance Company cannot be named.)
We are the PLAN ADMINISTRATOR, unless otherwise specified in (1) below.
[ ] ________________________________________ is the Plan Administrator: (Principal Life Insurance Company cannot be named.)
If (1) is selected, complete the address, phone number, and tax filing number of the Plan Administrator.
Address ___________________________________________________________
___________________________________________________________________
___________________________________________________________________
Phone No. _____________________ Tax Filing No. ____________________
Page 2
PREDECESSOR EMPLOYER AND PRIOR EMPLOYER.
A PREDECESSOR EMPLOYER is a firm of which we were once a part (e.g., due to a spinoff or a change of corporate status) or a firm absorbed by us because of a merger or acquisition (stock or asset, including a division or an operation of such company). No selections are needed for a Predecessor Employer which maintained this Plan since the Employer is defined as including such Predecessor Employer, and service with the Employer would therefore include service with such Predecessor Employer.
[X] (Select if you wish to count service or pay with a Predecessor Employer which did not maintain this Plan.) A Predecessor Employer which did not maintain this Plan is deemed to be the Employer for purposes of determining: (Select at least one.)
[X] Entry Service
NOTE: The Entry Date for an employee of such Predecessor Employer shall be the earliest Entry Date on or after he has both met the entry requirements and is an Eligible Employee.
[X] Vesting Service
[X] Hours of Service required to be eligible for an Employer Contribution
[X] Pay
[X] (Select if service must be continuous.) Service with or pay from such Predecessor Employer shall be counted only if service continued without interruption.
[ ] (Select if Self-employed Individuals service and pay is to be counted.) Service with or pay from such Predecessor Employer shall include service or pay while a sole proprietor or partner.
[ ] (Select if not counted for all such Predecessor Employers.) Service with or pay from such Predecessor Employer shall be counted only as to a Predecessor Employer which (Select (i), (ii), or both.)
[ ] maintained a qualified pension or profit sharing plan (or)
[ ] is named below: (Exact legal name(s).)
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
Page 3
A PRIOR EMPLOYER is an Employees last employer immediately prior to us which is not a Predecessor Employer or a Controlled Group member, but for which service credit is granted under the Plan. Service with such Prior Employer shall be counted pEly if service continued without interruption.
[ ] (Select if you wish to count service with a Prior Employer.) The following are Prior Employers for which service credit is granted under the Plan:. (Exact legal name(s).)
________________________________________________________
________________________________________________________
________________________________________________________
Service with such Prior Employer shall be counted for purposes of determining: (If (a) above is selected, select (i), (ii), or both.)
[ ] El Entry Service
NOTE: The Entry Date for an employee of such Prior Employer shall be the earliest Entry Date on or after he has both met the entry requirements and is an Eligible Employee.
[ ] Vesting Service
An ELIGIBLE EMPLOYEE is (Select (7) or (2).)
[ ] El an Employee of ours or of an Adopting Employer (See Item AB.).
[X] an Employee of ours or of an Adopting Employer (See Item AB.), provided the Employee meets the requirements) selected below. (Select requirements) in (a)-(e) that apply. Selections may affect testing done to determine if the minimum coverage requirement of Code Section 410(b) is met, unless otherwise indicated.)
[ ] El Employed in the following employment classification: (Select at least one.)
[ ] Paid on a salaried basis
[ ] Paid on a commission basis
[ ] Paid on an hourly basis
[ ] Represented for collective bargaining purposes by (Select A or B.)
[ ] any bargaining unit
[ ] specific bargaining unit named below:
________________________________________________
________________________________________________
________________________________________________
Page 4
[ ] Not represented for collective bargaining purposes by (Select A or B.)
[ ] any collective bargaining agreement between us and employee representatives, if retirement benefits were the subject of good faith bargaining and if two percent or less of the Employees who are covered pursuant to that agreement are professionals as defined in section 1.410(b)-9 of the regulations. For this purpose, the term employee representatives does not include any organization more than half of whose members are Employees who are owners, officers, or executives of ours. (This exclusion does not affect coverage testing.)
[ ] a specific bargaining unit named below:
_______________________________________________
_______________________________________________
_______________________________________________
(This exclusion does not affect coverage testing if requirements in (a)(v)A above are met.)
[ ] Not a nonresident alien, within the meaning of Code Section 7701(b)(1)(B), who receives no earned income, within the meaning of Code Section 911(d)(2), from us which constitutes income from sources within the United States, within the meaning of Code Section 861(a)(3), or who receives such earned income but it is all exempt from income tax in the United States under the terms of an income tax convention. (This exclusion does not affect coverage testing.)
[ ] Not a Leased Employee.
[ ] Not an Employee who became an Employee as the result of a Code Section 410(b)(6)(C) transaction. These Employees will be excluded during the period beginning on the date of the transaction and ending on the last day of the first Plan Year beginning after the date of the transaction. A Code Section 410(b)(6)(C) transaction is an asset or stock acquisition, merger, or similar transaction involving a change in the employer of the employees of a trade or business. (This exclusion does not affect coverage testing.)
[ ] Not an Employee considered by us to be an independent contractor, or the employee of an independent contractor, who is later determined by the Internal Revenue Service to be an Employee.
If more than one employment classification is selected in (a) above, the Employee must meet (Select (i) or (l).)
[ ] all of the employment classifications selected.
[ ] any one of the employment classifications selected.
Page 5
[ ] Not covered under any other qualified (Select (i), (ii), or both.)
[ ] profit sharing plan (or)
[ ] pension plan
to which we contribute.
[ ] Employed at the following location(s) or division(s) or in the following position(s) or classification(s): (List those to be included.)
_______________________________________________
_______________________________________________
[X] Not employed at the following location(s) or division(s) or in the following position(s) or classification(s): (List those to be excluded. Cannot impose a service-based exclusion such as part-time employees.)
union, temporary, discretionary, per diem
HIGHLY COMPENSATED EMPLOYEE AND TESTING METHODS.
HIGHLY COMPENSATED EMPLOYEE. The definition of Highly Compensated Employee in Plan Section 1.02 is modified below. (Select any that apply.)
[ ] TOP-PAID GROUP ELECTION. (Select if you wish to limit the number of Highly Compensated Employees based on compensation to the fop-paid group.) In determining who is a Highly Compensated Employee, we make a top-paid group election. The effect of this election is that an Employee (who is not a 5-percent owner at any time during the determination year or the look-back year) with compensation in excess of $80,000 (as adjusted) for the look-back year is a Highly Compensated Employee only if the Employee was in the top-paid group for the look-back year.
[ ] CALENDAR YEAR DATA ELECTION. (Select if you wish to change the look-back year for compensation determination. This election has no effect if the Plan Year begins on January 1.) In determining who is a Highly Compensated Employee (other than as a 5-percent owner), we make a calendar year data election. The effect of this election is that the look-back year is the calendar year beginning with or within the look-back year.
NOTE: These elections must apply consistently to the determination years of all plans of yours except as provided in the definition of Highly Compensated Employee in Plan Section 1.02.
TESTING METHODS. This Plan shall use the prior year testing method for purposes of the ADP and ACP Tests, unless otherwise specified in (a) below.
Page 6
[ ] (Must be selected if 401 (k) Safe Harbor Plan.) This Plan shall use the current year testing method for purposes of the ADP and ACP Tests.
NOTE:The Plan cannot change from the current year testing method to the prior year testing method for a Plan Year unless (i) the Plan has been using the current year testing method for the preceding five Plan Years or, if less, the number of Plan Years the Plan has been in existence or (ii) the Plan otherwise meets one of the conditions specified in Internal Revenue Service Notice 98-1 (or superseding guidance) for changing from the current year testing method.
If this is not a successor plan and the Plan is using the prior year testing method, for the first Plan Year this Plan permits any Member to make Elective Deferral Contributions, the prior years Nonhighly Compensated Employees ADP, as defined in Plan Section 3.07, shall be three percent, unless otherwise specified in (i) below.
[ ] (Cannot be used with (a) above.) The Plan Years ADP, as defined in Plan Section 3.07, shall be used for the Nonhighly Compensated Employees ADP.
If this is not a successor plan and the Plan is using the prior year testing method, for the first Plan Year this Plan permits any Member to make Voluntary Contributions, provides for Matching Contributions, or both, the prior years Nonhighly Compensated Employees ACP, as defined in Plan Section 3.07, shall be three percent, unless otherwise specified in (i) below.
[ ] (Cannot be used with (a) above.) The Plan Years ACP, as defined in Plan Section 3.07, shall be used for the Nonhighly Compensated Employees ACP.
ENTRY REQUIREMENTS.
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