Treasury Regulation - REG–136701–07 - Diversification Requirements for Certain Defined Contribution Plans

26 CFR Part

[REG–136701–07]

RIN1545–BH04

Treasury Regulation - REG–136701–07 - Diversification Requirements for Certain Defined Contribution Plans

Proposed regulations under section 401 of the Code provide guidance relating to diversification requirements for certain defined contribution plans and to publicly traded employer securities.

The Treasury Department and the IRS released proposed regulations under IRC Section 401(a)(35), "relating to diversification requirements for certain defined contribution plans and to publicly traded employer securities. These regulations will affect administrators of, employers maintaining, participants in, and beneficiaries of defined contribution plans that are invested in employer securities."

Background:

• IRC Section 401(a)(35) was added by the Pension Protection Act of 2006 (PPA) (Public Law 109–280—Aug. 17, 2006)
• Transition guidance was provided in IRS Notice 2006-107, 2006-51 I.R.B. 1114 - Diversification Requirements for Qualified Defined Contribution Plans Holding Publicly Traded Employer Securities
• The transition guidance was extended in IRS Notice 2008-7 - Extension of Transitional Relief for Diversification Requirements for Certain Defined Contribution Plans
• The proposed regulations are effective for plan years beginning on or after January 1, 2009. For 2008, plans may rely on IRS Notice 2006-107 or the proposed regulations.

Outline

• Explanation of Provisions
  · Overview
  · Basic Diversification Rights
  · Plans Subject to Section 401(a)(35)
  · Prohibition on Restriction or Conditions
• Proposed Effective Date
• Special Analyses
• Comments and Requests for Public Hearing
• Drafting Information
• List of Subjects in 26 CFR Part 1
• Proposed Amendments to the Regulations

Related Links:

• Treasury Regulation - REG–136701–07 - Diversification Requirements for Certain Defined Contribution Plans [PDF]
• Treasury Regulation - REG–136701–07, 2008-11 I.R.B. 616 (Marchy 17, 2008) - Diversification Requirements for Certain Defined Contribution Plans [PDF]
• 2008-11 I.R.B. 616 (March 17, 2008)

• Analysis of IRC Section 401(a)(35) Proposed Regulations – Definition of Publicly Traded and the Impact on Other ESOP Provisions

• Treasury Proposes New ESOP Regulations And Invites Public Comment
• IRS proposes diversification rules for defined contribution plans using employer securities
• IRS Publishes Company Stock Diversification Guidance
• IRS Issues Proposed Regulations Regarding Diversification Requirements for Defined Contribution Plans Using Employer Securities (NPRM REG-136701-07)