Treasury Regulation - REG-139236-07 - Measurement of Assets and Liabilities for Pension Funding Purposes

26 CFR Part 1

[REG-139236-07]

RIN 1545-BH07

Treasury Regulation - REG-139236-07 - Measurement of Assets and Liabilities for Pension Funding Purposes

Proposed regulations under section 430 of the Code provide guidance on the valuation of plan assets and the determination of benefit liabilities for purposes of the funding requirements that apply to single employer defined benefit plans pursuant to changes made by the Pension Protection Act of 2006. This guidance covers the determination of the plan’s funding target and normal cost, rules regarding the plan’s valuation date, the determination of the actuarial value of plan assets, rules regarding interest rates applied for minimum funding purposes, and special rules for at-risk plans.

The Treasury and the IRS issued additional proposed regulations on Pension Protection Act funding rules:

IR-2007-212, Dec. 28, 2007

WASHINGTON — The Treasury Department and the Internal Revenue Service today issued proposed regulations that provide employers sponsoring single-employer defined benefit plans with guidance regarding the measurement of pension assets and liabilities under the new funding rules enacted as part of the Pension Protection Act of 2006.

These proposed regulations, together with proposed regulations related to mortality issued in May, proposed regulations relating to funding balances and funding-based benefit limitations issued in August, the yield curve guidance issued in October, and guidance on lump sum determinations issued in November will assist plan sponsors in determining the contribution requirements that apply to their defined benefit plans for the first year that the new funding rules apply.

Although the new funding rules are generally effective for plan years beginning on or after Jan. 1, 2008, these regulations are proposed to be effective for plan years beginning on or after Jan. 1, 2009. However, plan sponsors can rely on these proposed regulations for purposes of satisfying the requirements of section 430 for plan years beginning in 2008.

The Treasury Department and the Internal Revenue Service intend to issue guidance in the near future indicating that the proposed effective date for these regulations should also apply for the proposed regulations relating to employer-specific mortality tables issued in May and the proposed regulations related to funding balances and funding based-benefit limitations under sections 430(f) and 436 issued in August. Although final regulations will not apply to plan years beginning before January 1, 2009, plan sponsors may also rely on those proposed regulations for purposes of satisfying the statutory requirements for plan years beginning in 2008.

On Dec. 19, 2007, the Senate passed an amended version of the Pension Protection Technical Corrections Act of 2007. These proposed regulations, like the earlier proposed regulations, do not reflect any proposed technical corrections. Nor do they include any reflection of the proposed modification to the rules for determining asset values. After technical corrections are enacted, the regulations will be modified to take into account the enacted provisions.

Related Links:

• Treasury Regulation - REG-139236-07, 2008-9 I.R.B. 491 (March 3, 2008) - Measurement of Assets and Liabilities for Pension Funding Purposes [PDF]
• Treasury Regulation - REG-139236-07, 2008-9 I.R.B. 491 (March 3, 2008) - Measurement of Assets and Liabilities for Pension Funding Purposes [HTML]

• Proposed pension funding regs criticized at IRS hearing
• IRS to Postpone Effective Date of PPA Funding Regulations Until 2009 But Will Permit Interim Reliance
• Preparing for 2008 -- IRS proposes "final" funding rules
• IRS Proposed Rules for Measuring Defined Benefit Plan Assets and Liabilities
• Pomeroy Letter to Treasury
• PPA...Ready or Not
• Funding Yield Curve Segment Rates
• IRS proposes rules on measurement of plan assets and liabilities under PPA
• IRS Issues Proposed Regulations on Valuing Assets and Liabilities Under New Funding Rules
• Three Out of Four: The New Proposed Regs on Funding Requirements for DB Plans
• IRS Rings in the New Year with New Cash Balance Regs and DB Lump Sum Regs

Treasury Regulation - REG–104946–07 - Hybrid Retirement Plans

26 CFR Part 1

[REG–104946–07]

RIN 1545–BG36

Treasury Regulation - [REG–104946–07] - Hybrid Retirement Plans

Proposed regulations provide guidance under sections 411(a)(13) and 411(b)(5) of the Code, which were added by the Pension Protection Act of 2006. Section 411(a)(13) provides rules relating to vesting and payment of benefits that must be satisfied in order for hybrid defined benefit plans to be tax-qualified. Section 411(b)(5) provides age discrimination rules for tax-qualified defined benefit plans, including hybrid defined benefit plans.

The Treasury and the IRS issued proposed regulations for cash balance and other hybrid pension plans:

IR-2007-211, Dec. 28, 2007

WASHINGTON — The Treasury Department and Internal Revenue Service (IRS) issued proposed regulations relating to cash balance plans and other hybrid pension plans. The proposed regulations would interpret rules that were added to the tax law by the Pension Protection Act of 2006 (PPA), including an age discrimination safe harbor for hybrid pension plans, conversion protection for employees, and a 3-year minimum vesting requirement. The proposed regulations would also apply for purposes of the parallel rules that were added by PPA to the Employee Retirement Income Security Act of 1974 (ERISA).The regulations are generally proposed to be effective for plan years beginning on and after Jan. 1, 2009. For periods before the effective date of these regulations, a plan must comply with the new PPA statutory provisions. During these periods, a plan is permitted to rely on the regulations for purposes of satisfying the new PPA statutory provisions.

Related Links:

• REG 104946–07 - 72 Fed. Reg 73680 (December 28, 2007) [PDF]
• Treasury Regulation - [REG–104946–07], 2008-11 I.R.B. 596 (March 17, 2008) - Hybrid Retirement Plans [HTML]
• 2008-11 I.R.B. 596 (March 17, 2008)
• Treasury Regulation REG-104946-07 – Hybrid Retirement Plans; Correction

• Highlights of Proposed Rules for Hybrid Plans
• IRS Publishes Proposed Regulations for Hybrid Plans
• IRS Proposes Cash Balance Regulations
• IRS Proposes Regulations on PPA Requirements for Hybrid Plans
• IRS Proposes Rule view]s for Cash Balance and Other Hybrid Pension Plans
• Proposed cash balance/hybrid plan regs issued by IRS
• New IRS Proposed Regulations on Cash Balance and Other Hybrid Plans
• IRS Issues Proposed Regulations on Hybrid Plans
• IRS Proposes Hybrid Plan And Pension Asset Rules
• IRS Rings in the New Year with New Cash Balance Regs and DB Lump Sum Regs
• GRIST Alert: IRS proposes regulations on new PPA rules for cash balance and other hybrid plans
• Proposed Regulations on Cash Balance Defined Benefit Plans Released (NPRM REG-104946-07)

IRS Revenue Ruling 2008-5 - Losses from wash sales of stock or securities

Part I

Section 1091.—Loss from Wash Sales of Stock or Securities

26 CFR 1.1091-1: Losses from wash sales of stock or securities.

IRS Revenue Ruling 2008-5 - Losses from wash sales of stock or securities

If an individual sells stock or securities for a loss and causes his or her individual
retirement account or Roth IRA to purchase substantially identical stock or securities
within 30 days before or after the sale, is the loss on the sale of the stock or securities
disallowed?

Related Links:

• IRS Revenue Ruling 2008-05, I.R.B. - Losses from wash sales of stock or securities [PDF]
• IRS Revenue Ruling 2008-05, I.R.B. - Losses from wash sales of stock or securities [HTML]

• IRS applies wash sale rules to IRAs, and maybe to other directed accounts
• Ruling may impact tax treatment of transactions inside 401(k)s, IRAs
• Legal Alert: IRS Rules on Wash Sales Involving IRAs

IRS Notice 2007-101 - Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

Part III --- Administrative, Miscellaneous, and Procedural

IRS Notice 2007-101 - Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

Weighted average interest rate update; corporate bond indices; 30-year Treasury securities; segment rates. This notice contains updates for the corporate bond weighted average interest rate for plan years beginning in December 2007; the 24-month average segment rates; the funding transitional segment rates applicable for December 2007; and the minimum present value transitional rates for November 2007.

Related Links:

• IRS Notice 2007-101, 2007-52 I.R.B. (December 26, 2007) - Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates [HTML]


• IRS Notice 2007-101, 2007-52 I.R.B. (December 26, 2007) - Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates [PDF]

IRS Notice 2007-100 - Transition Relief and Guidance on Corrections of Certain Failures of a Nonqualified

Part III – Administrative, Procedural, and Miscellaneous

IRS Notice 2007-100 - Deferred Compensation Plan to Comply with § 409A(a) in Operation
This notice provides transition relief and guidance on the correction of certain failures of a nonqualified deferred compensation plan to comply with section 409A(a) of the Code in operation (an operational failure), including: (1) methods for correcting certain operational failures during a service provider’s taxable year in which the failure occurs to avoid income inclusion under section 409A(a); (2) transition relief limiting the amount includible in income under section 409A(a) for certain operational failures occurring in a service provider’s taxable year beginning before January 1, 2010, that involve only limited amounts; (3) an outline of, and request for comments on, a potential corrections program that would permit service recipients and service providers to limit the amounts required to be included in income under section 409A(a) due to certain operational failures.

Related Links:

• IRS Notice 2007-100, 2007-52 I.R.B. (December 26, 2007) -
  Transition Relief and Guidance on Corrections of Certain Failures of a Nonqualified
  Deferred Compensation Plan to Comply with § 409A(a) in Operation [HTML]


• IRS Notice 2007-100, 2007-52 I.R.B. (December 26, 2007) -
  Transition Relief and Guidance on Corrections of Certain Failures of a Nonqualified
  Deferred Compensation Plan to Comply with § 409A(a) in Operation [PDF]

• Transition Relief and Guidance on Corrections of Certain Errors in Nonqualified Deferred Compensation Plans to Comply With Section 409A in Operation

IRS Notice 2007-99 - Modification of Q&A-23 of Notice 2007-7

Part III – Administrative, Procedural, and Miscellaneous

IRS Notice 2007-99 - Modification of Q&A-23 of Notice 2007-7

Distributions from governmental plans and health and accident insurance; section 845 of PPA '06. As a result of section 845 of the Pension Protection Act of 2006 and section 9(i)(1)(B) and (C) of S. 1974 and H.R. 3361, the pending Pension Protection Technical Corrections Acts of 2007, Q&A-23 of Notice 2007-7, 2007-5 I.R.B. 395, pertaining to distributions from certain health and accident plans is altered. Notice 2007-7 modified.

Related Links:

• IRS Notice 2007-99, 2007-52 I.R.B. (December 26, 2007) - Modification of Q&A-23 of Notice 2007-7 [HTML]
• IRS Notice 2007-99, 2007-52 I.R.B. (December 26, 2007) - Modification of Q&A-23 of Notice 2007-7 [PDF]

Treasury Regulation - TD 9370 - User Fees Relating to Enrollment To Perform Actuarial Services

26 CFR Part 300

[TD 9370]

RIN 1545–BG88

Treasury Regulation - TD 9370 - User Fees Relating to Enrollment To Perform Actuarial Services

This final regulation contains relates to user fees for the initial and renewed enrollment to become an enrolled actuary.
Related Links:

• TD 9370 – Fed. Reg 72606 (December 21, 2007) - User Fees Relating to Enrollment To Perform Actuarial Services [PDF]

IRS Notice 2008-7 - Extension of Transitional Relief for Diversification Requirements for Certain Defined Contribution Plans

Part III - Administrative, Procedural and Miscellaneous

Extension of Transitional Relief for Diversification Requirements for Certain Defined Contribution Plans

IRS Notice 2008-7 - Extension of Transitional Relief for Diversification Requirements for Certain Defined Contribution Plans

The IRS announced the following:

"Notice 2008-07 provides relief for certain defined contribution plans holding publicly traded employer securities under Notice 2006-107, 2006-51 I.R.B. 1114. The transitional relief provided for the period prior to January 1, 2008, in paragraph 4 of Part III.D of Notice 2006-107 will continue to apply after 2007 until new regulations go into effect.

Notice 2008-7 will be published in Internal Revenue Bulletin 2008-3, dated January 22, 2008."

Extension of Transitional Relief

• "It is expected that these regulations, when finalized, will not be effective before plan years beginning on or after January 1, 2009."
  
• "Except as otherwise provided in the proposed or final regulations, plans must continue to apply Notice 2006-107 until the regulations go into effect."
  
• "For this purpose, the transitional relief provided for the period prior to January 1, 2008, in paragraph 4 of Part III.D of Notice 2006-107 will continue to apply after 2007 until the regulations go into effect."

Related Links:

• IRS Notice 2008-7, 2008-03 I.R.B. - Extension of Transitional Relief for Diversification Requirements for Certain Defined Contribution Plans [HTML]
• IRS Notice 2007-94, 2008-03 I.R.B. - Extension of Transitional Relief for Diversification Requirements for Certain Defined Contribution Plans [PDF]
• IRS Notice 2006-107, 2006-51 I.R.B. 1114 - Diversification Requirements for Qualified Defined Contribution Plans Holding Publicly Traded Employer Securities

• IRS extends transition relief from diversification requirements for grandfathered investments past 2007
  

IRS Notice 2007-94 - 2007 Cumulative List of Changes in Plan Qualification Requirements

Part III – Administrative, Procedural and Miscellaneous

IRS Notice 2007-94 - 2007 Cumulative List of Changes in Plan Qualification Requirements

Retirement plans; qualification, list of changes. This notice sets forth a list of changes referred to in Rev. Proc. 2007-44, 2007-28 I.R.B. 54, pertaining to the statutory, regulatory, and guidance changes needed for certain requests to the Service for opinion, advisory, and determination letters for the 12-month period beginning February 1, 2008.

Related Links:

• IRS Notice 2007-94, 2007-51 I.R.B. - 2007 Cumulative List of Changes in Plan Qualification Requirements (December 17, 2007) [HTML]
• IRS Notice 2007-94, 2007-51 I.R.B. - 2007 Cumulative List of Changes in Plan Qualification Requirements (December 17, 2007) [PDF]
  

IRS Revenue Procedure 2007-71 – Rulings and determination letters

Part III --Administrative, Procedural, and Miscellaneous

26 CFR 601.201: Rulings and determination letters.

(Also, Part I, § 403; § 1.403(b)-3.)

IRS Revenue Procedure 2007-71 – Rulings and determination letters

Tax-sheltered annuities; written program; public schools; model amendments. This procedure sets forth model amendments that may be adopted in order to satisfy certain requirements for a definite written program for certain tax-sheltered annuities under section 403(b) of the Code. This revenue procedure also provides additional relief for certain section 403(b) tax-sheltered annuity contracts.

Related Links:

• Rev. Proc. 2007-71, 2007-51 I.R.B. - Rulings and determination letters (December 17, 2007) [HTML]
• Rev. Proc. 2007-71, 2007-51 I.R.B. - Rulings and determination letters (December 17, 2007) [PDF]
  

DOL Proposed Regulation – Civil Penalties Under ERISA Section 502(c)(4)

29 CFR Part 2560

RIN 1210-AB24

DOL Proposed Regulation – Civil Penalties Under ERISA Section 502(c)(4)

The DOL announced a proposed regulation for "assessing civil penalties against plan administrators who fail to disclose certain documents to participants, beneficiaries and others as required by the Employee Retirement Income Security Act, as amended by the Pension Protection Act (PPA)":

"The PPA established new disclosure provisions relating to: funding-based limits on benefit accruals and certain forms of benefit distributions; plan actuarial and financial reports; withdrawal liability of contributing employers; and participants' rights and obligations under automatic contribution arrangements. The PPA gives the department authority to assess civil monetary penalties of up to $1,000 per day against plan administrators for violations of the new disclosure requirements. The proposed regulation sets forth the administrative procedures for assessing and contesting such penalties and does not address substantive provisions of the new
disclosure requirements."

Related Links:

• News Release
• DOL Proposed Regulation – Civil Penalties Under ERISA Section 502(c)(4) (December 19, 2007) [HTML]
• DOL Proposed Regulation – Civil Penalties Under ERISA Section 502(c)(4) (December 19, 2007) [PDF]

• Proposed regs issued on civil penalties for noncompliance with ERISA disclosure rules
• DOL proposes protocol to assess penalties on failed disclosures
• Plans to Be Fined on Disclosure Issues

DOL Proposed Regulation - Reasonable Contract or Arrangement Under Section 408(b)(2)--Fee Disclosure

29 CFR Part 2550

RIN 1210-AB08

DOL Proposed Regulation - Reasonable Contract or Arrangement Under Section 408(b)(2)--Fee Disclosure

According to a news release, the U.S. Labor Department is proposing regulations to increase the disclosure of fees and conflict of interests affecting 401(k) and other employee benefit plans:

"Washington – The U.S. Department of Labor today announced a proposed rule that will enhance disclosure to fiduciaries of 401(k) and other employee benefit plans to assist them in determining the reasonableness of compensation paid to plan service providers and conflicts of interest that may affect a service provider's performance under a service contract or arrangement.

"One of the department's top priorities is improved disclosure in order to ensure that participants and fiduciaries have the information they need to make informed decisions," said U.S. Secretary of Labor Elaine L. Chao. "We are working quickly to implement regulations that foster fair, competitive and transparent prices for services as well as combat excessive or hidden plan fees."

The proposed regulation would enhance disclosure to plan fiduciaries by requiring that contracts between certain service providers and plans provide for specific and detailed information. The proposal requires that all services furnished to a plan and all compensation, direct and indirect, to be received by the service provider be disclosed in writing. The proposal also requires the disclosure of possible conflicts of interest of the service provider that may affect the performance of plan services.

In addition, the department is proposing a class exemption to provide relief to plan fiduciaries who enter into deficient contracts with service providers that, unbeknownst to the plan fiduciary, failed to comply with their disclosure obligations.

401(k) savings and other employee benefit plans are critical to the retirement and health security of American workers and their families," said Bradford P. Campbell, assistant secretary for the Labor Department's Employee Benefits Security Administration. "This initiative enhances disclosure of fees and conflicts of interest that can affect workers' interests and is an important part of our continued efforts to enhance workers' benefit security.""

The fact sheet describes the following disclosure requirements:

"Disclosure of Services and Compensation - The terms of the contract must require that the service provider disclose information regarding all services to be performed and all compensation that will be received either directly from the plan or indirectly from parties other than the plan or plan sponsor. The proposal includes a definition of "compensation or fees" and rules for bundled service providers and for estimating the amount of prospective compensation.

Disclosure of Conflicts of Interest - Service providers also must disclose information about relationships or interests that may raise conflicts of interest for the service provider in performing plan services. Specifically, service providers must describe:

• any participation or interest of the service provider in transactions to be entered into by the plan pursuant to the contract;
  
• any material relationships with other parties that may create conflicts of interest;
  
• any compensation the service provider may receive that it can affect without prior approval by an independent fiduciary; and
  
• any policies or procedures in place to address potential conflicts of interest.

Ongoing Disclosure Obligations - The proposal includes ongoing disclosure obligations relating to:

• Material Changes: During the term of the contract, a service provider must disclose material changes to information previously furnished within 30 days of such changes.
  
• Reporting and Disclosure Requirements: Service providers must disclose compensation or other information related to the contract or arrangement that is requested by the responsible plan fiduciary or plan administrator in order to comply with ERISA's reporting and disclosure requirements.
  
• Actual Performance: The proposal also includes an explicit requirement that service providers actually make the required disclosures."

Related Links:

• News Release
• Fact Sheet
• DOL Proposed Regulation - Reasonable Contract or Arrangement Under Section 408(b)(2)--Fee Disclosure (December 13, 2007) [HTML]
• DOL Proposed Regulation - Reasonable Contract or Arrangement Under Section 408(b)(2)--Fee Disclosure (December 13, 2007) [PDF]
• DOL Notice - Proposed Class Exemption for Plan Fiduciaries When Plan Service Arrangements Fail To Comply With ERISA Section 408(b)(2) (December 13, 2007) [HTML]
• DOL Notice - Proposed Class Exemption for Plan Fiduciaries When Plan Service Arrangements Fail To Comply With ERISA Section 408(b)(2) (December 13, 2007) [PDF]
• DOL Final Regulation - Annual Reporting and Disclosure
• DOL Proposed Regulation - Hearing on Reasonable Contracts or Arrangements Under Section 408(b)(2)--Fee Disclosure
• DOL Notice - Hearing on Reasonable Contracts or Arrangements Under Section 408(b)(2)--Fee Disclosure

• The DOL’s Proposed 408(b)(2) Regulation: Impact on Broker-Dealers and Registered Representatives
• DOL proposes full disclosure plan
• ASPPA Suggests Clarification of DOL Proposed Plan Fee Regulations
• DOL Proposes Fee Disclosure Rules
• Employee Benefits Advisory: Department of Labor Issues Guidance on 401(k) Plan Fees
• The DOL’s Proposed 408(b)(2) Regulation: Impact of the Mandated Disclosures on Registered Investment Advisers (RIAs)
• The pain of disclosure: DOL officials say investment-only funds must reveal fees
• DOL Takes Action on Disclosure of Compensation
• Department of Labor Advances Fee Disclosure Initiatives for ERISA Plan Service Providers
• Recent DOL Actions Increase Obligations of Service Providers
• More Information on Fee Disclosure Proposed Regulations
• Do proposed rules for 401(k) fees do enough to ensure disclosure?
• DOL proposed regs require service providers to furnish detailed fee disclosures to plan fiduciaries
• Disclosure may cut revenue-sharing payments
• DOL Issues Proposed Regulations on Fee and Conflict of Interest Disclosures by Service Providers
• Proposed Labor Regulations Would Require Greater Disclosures of Fees, Compensation and Conflicts of Interest for Employee Benefit Plan Service Providers
• Department of Labor Finalizes Form 5500 Fee Disclosure Rules and Proposes Guidance for Contracts Between Plans and Service Providers Under ERISA 408(b)(2)
• New Disclosures of Adviser Compensation Required on Form 5500
• DOL Issues Long-Awaited Proposed Fee Disclosure Regulations
• Investment Company Institute Comments
• Summary: DOL Proposed 408(b)(2) Regulations on Fee Disclosure
• Reasonable Compensation Proposed Regs Floated by DOL
• Proposed Plan Regs Require Glimpse Inside The Bundles
• Legal Alert: DOL Proposes New ERISA Disclosure Requirements for Plan Service Providers
• EBSA Puts Out Provider Fee Disclosure Proposal
• Final Revised Form 5500 -- New Fee Reporting Rules
• Transparency Urged for 401(k) Fees: Labor Dept. Regulation Would Put Plans' Costs in Writing
• 401(k) Disclosure Regs Floated

IRS Revenue Ruling 2007-71 - Permitted disparity in employer-provided contributions or benefits

Part I

Section 401. -- Qualified Pension, Profit-Sharing, and Stock Bonus Plans

26 CFR 1.401(l)-1: Permitted disparity in employer-provided contributions or benefits

IRS Revenue Ruling 2007-71 - Permitted disparity in employer-provided contributions or benefits

2008 covered compensation tables; permitted disparity. The covered compensation tables under section 401 of the Code for the year 2008 are provided for use in determining contributions to defined benefit plans and permitted disparity.

Related Links:

• IRS Revenue Ruling 2007-71, 2007-50 I.R.B. - Permitted disparity in employer-provided contributions or benefits (December 10, 2007) [PDF]
• IRS Revenue Ruling 2007-71, 2007-50 I.R.B. - Permitted disparity in employer-provided contributions or benefits (December 10, 2007) [HTML]