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 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 Related Links:
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.
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)?
Thursday, March 6, 2008
IRS Notice 2008-30 - Miscellaneous Pension Protection Act Changes
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