IRS Revenue Ruling 2008-45 – Qualified Pension, Profit-sharing, and Stock Bonus Plans

Part I – Rulings and Decisions Under the Internal Revenue Code of 1986

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

26 CFR 1.401-1: Qualified pension, profit-sharing, and stock bonus plans. (Also, § 414.)

IRS Revenue Ruling 2008-45 – Qualified Pension, Profit-sharing, and Stock Bonus Plans

Exclusive benefit rule; transfer of plan sponsorship; controlled groups. This ruling provides that the exclusive benefit rule of section 401(a) of the Code is violated if the sponsorship of a qualified retirement plan is transferred from an employer to an unrelated taxpayer and the transfer is not in connection with a transfer of business assets or operations from the employer to the unrelated taxpayer.

Revenue Ruling 2008-45 considers whether the exclusive benefit rule of § 401(a) of the Internal Revenue Code ("Code") is violated if the sponsorship of a qualified retirement plan is transferred from an employer to an unrelated taxpayer and the transfer of the sponsorship of the plan is not in connection with a transfer of business assets, operations, or employees from the employer to the unrelated taxpayer.

ISSUE
Is the exclusive benefit rule of § 401(a) of the Internal Revenue Code ("Code") violated if the sponsorship of a qualified retirement plan is transferred from an employer to an unrelated taxpayer and the transfer of the sponsorship of the plan is not in connection with a transfer of business assets, operations, or employees from the employer to the unrelated taxpayer?

HOLDING
The exclusive benefit rule of § 401(a) is violated if the sponsorship of a qualified retirement plan is transferred from an employer to an unrelated taxpayer and the transfer of the sponsorship of the plan is not in connection with a transfer of business assets, operations, or employees from the employer to the unrelated taxpayer.

This ruling does not address any federal income tax consequences other than those specifically addressed herein.

Related Links:

• IRS Revenue Ruling 2008-45, 2008-34 I.R.B. – Qualified Pension, Profit-sharing, and Stock Bonus Plans [PDF]
• IRS Revenue Ruling 2008-45, 2008-34 I.R.B. – Qualified Pension, Profit-sharing, and Stock Bonus Plans [HTML]
• 2008-34 I.R.B. (August 25, 2008)
• IRC Section 401(a) – Qualified pension, profit-sharing, and stock bonus plans - Requirements for qualification