Wednesday, March 26, 2008

Agenda and Testimony Requests and Outlines for Hearing on Reasonable Contracts or Arrangements Under Section 408(b)(2)--Fee Disclosure

The DOL has posted the Agenda and Testimony Requests and Outlines for the Hearing on Reasonable Contracts or Arrangements Under Section 408(b)(2)--Fee Disclosure, which was rescheduled to March 31 and April 1.



Tuesday, March 25, 2008

DOL Proposed Regulation – Model Notice of Multiemployer Plan in Critical Status

29 CFR Part 2540

RIN 1210-AB26

DOL Proposed Regulation – Model Notice of Multiemployer Plan in Critical Status

The DOL issued a model notice for multiemployer plans in critical status:

Washington – The U.S. Department of Labor today announced a proposed regulation providing a model notice for use by multiemployer defined benefit pension plans to notify plan participants and others that their plan is in critical funding status. The proposed regulation is the result of the Pension Protection Act of 2006 (PPA) signed into law by President George W. Bush on August 17, 2006.

The PPA amended the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code to require that sponsors of multiemployer defined benefit pension plans in critical status for a plan year provide notice of this status to participants, beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corp. (PBGC) and the Department of Labor. PBGC, created under ERISA to insure defined benefit pension plans, guarantees payment of basic pension benefits of affected workers and retirees.

The notice must inform participants that their plan is in critical status and of the possibility that adjustable benefits may be reduced or even eliminated. The proposed regulation contains a model notice that may be used by plans to satisfy the notice requirement.

The public may submit comments to the Labor Department at e-ORI@dol.gov or through the federal e-rulemaking portal at www.regulations.gov. Paper-based comments should be sent to the Office of Regulations and Interpretations, Employee Benefits Security Administration, Room N-5655, U.S. Department of Labor, 200 Constitution Avenue NW, Washington, DC 20210, Attention: Notice of Critical Status. The proposed regulation is to be published in the March 25 edition of the Federal Register.

Related Links:

Saturday, March 22, 2008

Employee Plans News - Spring 2008 Edition

The IRS published Employee Plans News - Spring 2008 Edition. This edition contains the following articles:

  • Recent Guidance that May Require Interim or Discretionary Amendments
  • Determination Letters Coming Your Way - Announcement 2008-23
  • Steve Miller Discusses Governmental Plans Roundtable
  • ERPA is Moving Forward
  • We're Glad You Asked!
  • New PPA Guidance on Distributions
  • Critical Priorities...With Monika Templeman
  • EP Exam's Risk Modeling Project
  • Economic Stimulus Payments: How You Can Help
  • Highlights of the Retirement News for Employers
  • Web Spins
  • Employee Plans Published Guidance
  • IRS Employee Plans Videos - Now Available Online
  • The Corner of Forms & Pubs
  • Written Plan Requirement for 403(b) Plans
  • DOL Corner
  • PBGC Insights
  • "Interesting" Pension Guidance Issued
  • Defined Benefit Plans - AFTAP Certification Needed as Early as April 1, 2008
  • Calendar of EP Benefits Conferences

Thursday, March 20, 2008

IRS Notice 2008-37 - Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

Part III --- Administrative, Miscellaneous, and Procedural

IRS Notice 2008-37 - 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 March 2008; the 24-month average segment rates; the funding transitional segment rates applicable for March 2008; and the minimum present value transitional rates for February 2008.

Related Links:

Treasury Regulation - REG-110136-07- Notice Requirements for Certain Pension Plan Amendments Significantly Reducing the Rate of Future Benefit Accrual

26 CFR Parts 1 and 54

[REG-110136-07]

RIN 1545-BG48

Treasury Regulation - REG-110136-07- Notice Requirements for Certain Pension Plan Amendments Significantly Reducing the Rate of Future Benefit Accrual

Proposed regulations under section 4980F of the Code provide guidance relating to a plan amendment that is permitted to be effective before the plan amendment’s applicable amendment date. The regulations would also reflect certain amendments made to section 4980F by the Pension Protection Act of 2006, Public Law 109-280 (120 Stat. 780). A public hearing is scheduled for July 10, 2008.

This document contains proposed regulations that would provide guidance relating to the application of section 4980F of the Internal Revenue Code to a plan amendment that is permitted to reduce benefits accrued before the plan amendment's applicable amendment date. These regulations would also reflect certain amendments made to section 4980F by the Pension Protection Act of 2006, Public Law 109-280 (120 Stat. 780). These proposed regulations would affect sponsors, administrators, participants, and beneficiaries of pension plans. This document also provides a notice of a public hearing on these proposed regulations.

Related Links:

Tuesday, March 18, 2008

Treasury Regulation REG–151135–07 - Multiemployer Plan Funding Guidance

26 CFR Part 1

[REG–151135–07]

RIN 1545–BH39

Treasury Regulation REG–151135–07 - Multiemployer Plan Funding Guidance

Proposed regulations under section 432 of the Code provide additional rules for certain multiemployer defined benefit plans that are in effect on July 16, 2006. The regulations affect sponsors and administrators of, and participants in, multiemployer plans that are in either endangered or critical status. The regulations are necessary to implement the new rules set forth in section 432 that are effective for plan years beginning after 2007.

This document contains proposed regulations under section 432 of the Internal Revenue Code (Code). These proposed regulations provide additional rules for certain multiemployer defined benefit plans that are in effect on July 16, 2006. These proposed regulations affect sponsors and administrators of, and participants in multiemployer plans that are in either endangered or critical status. These regulations are necessary to implement the new rules set forth in section 432 that are effective for plan years beginning after 2007. The proposed regulations reflect changes made by the Pension Protection Act of 2006.

Related Links:

Monday, March 17, 2008

Proposed Collection; Comment Request for Form 1099–R

The Internal Revenue Service (IRS) and the Treasury Department requested comments on IRS Form 1099-R:

SUMMARY: The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104–13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Form 1099–R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

DATES: Written comments should be received on or before May 16, 2008 to be assured of consideration.

Request for Comments: Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval. All comments will become a matter of public record. Comments are invited on:

  1. Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility
  2. the accuracy of the agency's estimate of the burden of the collection of information;
  3. ways to enhance the quality, utility, and clarity of the information to be collected;
  4. ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and
  5. estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.

Friday, March 14, 2008

IRS Announcement 2008-23 – Issuance of Opinion and Advisory Letters and Opening of the EGTRRA Determination Letter Program for Pre-Approved Defined Contribution Plans

Part IV. – Items of General Interest

IRS Announcement 2008-23 – Issuance of Opinion and Advisory Letters and Opening of the EGTRRA Determination Letter Program for Pre-Approved Defined Contribution Plans

Pre-approved defined contribution master and prototype and volume submitter plans; issuance of EGTRRA opinion and advisory letters. This announcement states that the Service will soon issue opinion and advisory letters for pre-approved, i.e., master and prototype and volume submitter defined contribution plans that were timely filed with the Service to comply with the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), and other changes in plan qualification requirements listed in Notice 2004-84, 2004-2 C.B. 1030.

Announcement 2008-23 states that the Service will soon issue opinion and advisory letters for pre-approved master and prototype and volume submitter defined contribution plans that were timely filed with the Service to comply with the Economic Growth and Tax Relief Reconciliation Act of 2001, Pub. L. 107-16, and other changes in plan qualification requirements listed in Notice 2004-84, 2004-2 C.B. 1030.

Announcement 2008-23 will be in Internal Revenue Bulletin 2008-14, dated: April 7, 2008

Related Links:

Tuesday, March 11, 2008

DOL Notice - Hearing on Reasonable Contracts or Arrangements Under Section 408(b)(2)--Fee Disclosure

The DOL announced the rescheduling of the Hearing on Reasonable Contracts or Arrangements Under Section 408(b)(2)--Fee Disclosure to March 31 and April 1.

Washington — The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) has re-scheduled its public hearing to March 31, and April 1 (if necessary), to hear testimony about its regulatory proposal on the disclosure of service provider compensation and conflicts of interest information to employers. The hearing will take place at the Labor Department in Room S-4215 A-C, 200 Constitution Avenue, NW in Washington, DC.

Persons wishing to testify at the hearing should submit an outline of topics to be discussed by March 20, 2008 online to e-ORI@dol.gov. Persons who submitted a request to testify on the earlier date are not required to make another submission, unless they will be unable to testify on March 31. Information on the hearing agenda will be posted on the EBSA's Web site at www.dol.gov/ebsa.

Related Links:

Employee Plans News - Special Edition, March 11, 2008

The IRS published Employee Plans News - Special Edition, March 11, 2008:

IRS Employee Plans is hosting a roundtable discussion with the governmental plans community as an initial step in an effort to raise awareness in the government plan sector of the need to comply with the tax qualification requirements. This Special Edition provides the details about this roundtable discussion.

Thursday, March 6, 2008

IRS Form 5500 Extension after Severe Weather Hit Kentucky

The DOL announced an extension of the annual reports deadline after severe weather hit Kentucky:

Atlanta — The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) today announced an extension of the deadline for filing Form 5500 and Form 5500 EZ annual report/returns due to damages from severe storms, tornadoes, straight-line winds and flooding in Kentucky.

"These filing extensions provide some relief to organizations whose operations were adversely impacted by the recent severe storms and tornadoes," said Secretary of Labor Elaine L. Chao.

President Bush has declared nine counties a disaster area due to the damage caused by severe weather. The extension applies to plan administrators, employers and other entities located in areas directly affected, as identified by the Federal Emergency Management Agency (FEMA). The designated disaster area includes the counties of Allen, Christian, Fayette, Hardin, Hart, Meade, Mercer, Monroe and Muhlenberg. The extension also applies to firms located outside the affected areas that are unable to obtain the necessary information from service providers, banks or insurance companies whose operations were directly affected by the fires.

Under this relief, Form 5500 series filings required to be filed between February 5 and April 7, 2008, are granted an extension until April 7, 2008. Plan filers entitled to an extension of relief should check Part I, Box D on the Form 5500 or Part I on Form 5500-EZ, and attach a statement to the form in accordance with the instructions.

IRS Notice 2008-30 - Miscellaneous Pension Protection Act Changes

Part III. --- Administrative, Procedural and Miscellaneous

IRS Notice 2008-30 - Miscellaneous Pension Protection Act Changes

Distributions; various issues; Pension Protection Act of 2006 (PPA ’06). This notice provides guidance in the form of questions and answers with respect to certain provisions
contained in PPA ’06 that are effective in 2008 and are primarily related to distributions described in sections 302, 824, and 1004 of PPA ’06.

IRS Notice 2008-30 is being issued in question and answer format, addresses various issues related to distributions where the provisions first become effective in 2008 pursuant to the Pension Protection Act of 2006. Notice 2008-30 also addresses the issue of gap-period earnings and the plan amendment process.

I. PURPOSE AND BACKGROUND

II. SECTION 824 OF PPA ’06

Q-1. Can distributions from a qualified plan described in § 401(a) be rolled over to a Roth IRA?
Q-2. Can distributions from other types of retirement plans be rolled over to a Roth IRA?
Q-3. Does the additional tax under § 72(t) apply to a qualified rollover contribution from an eligible retirement plan other than a Roth IRA?
Q-4. Under § 401(a)(31)(A), must a plan permit a distributee of an eligible rollover distribution to elect a direct rollover to a Roth IRA?
Q-5. Is the plan administrator responsible for assuring the distributee is eligible to make a rollover to a Roth IRA?
Q-6. What are the withholding requirements for an eligible rollover distribution that is rolled over to a Roth IRA?
Q-7. Can beneficiaries make qualified rollover contributions to Roth IRAs?

III. SECTION 1004 OF PPA ’06


Q-8. What level of spouse survivor annuity must be provided under a QOSA?
Q-9. If, both before and after the effective date of § 1004 of PPA ’06, a plan that is subject to § 401(a)(11) offers, in addition to the QJSA, an optional joint and spouse survivor annuity that is at least actuarially equivalent to the plan’s single life annuity form of benefit payable at the same time as the optional joint and spouse survivor annuity and that provides a spouse survivor annuity percentage equal to the spouse survivor annuity percentage required to be provided under a QOSA, must the plan be amended or the plan’s administration be changed in order to implement § 1004 of PPA ’06?
Q-10. If a plan that is subject to § 401(a)(11) provides a QJSA that is more valuable than the plan’s single life annuity form of benefit, must the plan’s QOSA be at least actuarially equivalent to the QJSA or need the plan’s QOSA only be at least actuarially equivalent to the plan’s single life annuity form of benefit payable at the same time as the QOSA?
Q-11. If a participant elects to receive a distribution in the form of a QOSA, must the participant’s spouse consent to the participant’s election?
Q-12. How does a plan that is subject to § 401(a)(11) satisfy the requirement in § 417(a)(3)(i), as amended by §1004 of PPA ’06, that the plan provide to a participant a written explanation of the terms and conditions of the QOSA available to the participant?
Q-13. Must a plan that is subject to § 401(a)(11) offer to participants, as an alternative to a qualified preretirement survivor annuity described in § 417(c), a preretirement survivor annuity that is based on a QOSA?
Q-14. How does § 1107 of PPA ’06, which provides certain rules regarding amendments made pursuant to PPA ’06, apply to plan amendments adopted pursuant to § 1004 of PPA?
Q-15. What is the effective date of the changes made to § 417 by § 1004 of PPA ’06?

IV. SECTION 302 OF PPA ’06


Q-16. If, after § 302 of PPA ’06 is effective, a plan is amended, during the period established in § 1107(b)(2)(A) of PPA ’06, to provide that the amount payable under an optional form of benefit that is subject to the minimum present value requirement of § 417(e)(3) is calculated as the more favorable to participants of (i) the amount calculated by using the pre-PPA ’06 applicable mortality table and pre-PPA ’06 applicable interest rate, or (ii) the amount calculated by using the post-PPA ’06 applicable mortality table and post-PPA ’06 applicable interest rate, will the plan fail to satisfy the requirement that the QJSA for a married participant be at least as valuable as any other form of benefit payable under the plan at the same time?
Q-17. If a plan is amended as described in Q&A-16 of this notice, but provides that benefits cease to be calculated by using the pre-PPA ’06 applicable mortality table and pre-PPA ’06 applicable interest rate after a specified period, does relief under § 1107 of PPA ’06, as described in Rev. Rul. 2007-67, apply to the amendment?
Q-18. Does the relief under § 1107 of PPA ’06, as described in Rev. Rul. 2007-67 and this notice, apply to a plan amendment that replaces a plan reference to the pre-PPA ’06 applicable mortality table and/or pre-PPA ’06 applicable interest rate with a reference to the post-PPA ’06 applicable mortality table and/or post-PPA ’06 applicable interest rate, without regard to whether § 302 of PPA ’06 requires such amendment?

V. GAP-PERIOD EARNINGS


Q-19. Is a plan restatement submitted to the Service in Cycle B (February 1, 2007, through January 31, 2008) or Cycle C (February 1, 2008, through January 31, 2009) required to provide for the inclusion of gap-period earnings in the distribution of excess deferrals?
Q-20. Is an interim plan amendment to provide for the inclusion of gap-period earnings in the distribution of excess deferrals required to be adopted by the time described in section 5.05 of Rev. Proc. 2007-44?
Q-21. Are plans required to include gap-period earnings in the distribution of excess deferrals in accordance with the final regulations under § 402(g)?

Related Links:

IRS Notice 2008-29 - Alternative Disability Mortality Tables – Continued Reliance on Revenue Ruling 96-7

Part III. --- Administrative, Procedural and Miscellaneous

IRS Notice 2008-29 - Alternative Disability Mortality Tables – Continued Reliance on Revenue Ruling 96-7

Alternative mortality tables; disabled individuals; defined benefit plans. This notice provides which mortality tables are permitted to be used to determine present values with respect to individuals who are entitled to benefits under a qualified defined benefit pension plan on account of disability.

IRS Notice 2008-29 provides that pending further guidance, employers who maintain qualified defined benefit pension plans may continue to use the mortality tables in Rev. Rul. 96-7, 1996-1 C.B. 59, to determine present values with respect to individuals who are entitled to benefits as a result of a disability.

Related Links:

IRS Revenue Ruling 2008-13 – Excessive Compensation

Part I

Section 162(m)—Excessive Compensation

26 CFR 1.162-27(e)

IRS Revenue Ruling 2008-13 – Excessive Compensation

Performance-based compensation. This ruling holds that compensation paid to an executive is not qualified performance-based compensation for purposes of section 162(m) of the Code, even if the compensation is paid upon the attainment of the performance goal, if the plan agreement or contract provides for payment of compensation to an executive upon the attainment of a performance goal or for (1) termination without "cause" or for "good reason" or (2) voluntary retirement

Related Links: