The Internal Revenue Service has announced the annual cost-of-living adjustments applicable to dollar limitations for pension plans and other items for Tax Year 2008. For many of the pension plan limitations, the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. For some, however, the limitation remains unchanged: for instance, for […]

The Treasury Department and the Internal Revenue Service (the “IRS”) issued final regulations under Section 403(b) of the Internal Revenue Code (the “final regulations”) on July 26, 2007. Section 403(b) of the Internal Revenue Code (the “Code”) governs retirement plans for employees of certain tax-exempt organizations and public educational organizations that are funded either by […]

The Internal Revenue Service (the “IRS”) has issued final regulations under Section 403(b) of the Internal Revenue Code (the “Code”). Section 403(b) governs retirement plans for employees of certain taxexempt organizations and public educational organizations that are funded either by annuity contracts issued by insurance companies or by custodial accounts invested in mutual funds. Section […]

Final regulations under Internal Revenue Code (“Code”) section 415 were issued by the Internal Revenue Service (“IRS”) on April 5, 2007. These regulations generally reflect the proposed regulations that were issued on May 25, 2005 (see our June 2005 issue) but also include changes from the proposed regulations. Significant changes are discussed below. The final […]

The current system for applying for opinion, advisory or determination letters for qualified plans under Section 401(b) of the Internal Revenue Code (“Code”), employing cyclical remedial amendment periods, was established in Revenue Procedure 2005–66 (“2005–66”). Recently, the Internal Revenue Service (“IRS”) issued Revenue Procedure 2007–44 (“2007–44”), updating the procedures set forth in 2005–66. 2007–44 makes […]

There are many circumstances in which plan sponsors and administrators of employee benefit plans may want or be required to contact plan participants for whom they have no valid mailing address. Without attempting an exhaustive catalog of reasons, some of the more common ones are: Notifying participants who have terminated employment with small account balances […]

Introduction Roth 401(k) plan provisions under Internal Revenue Code (the “Code”) section 402A, enacted as part of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), first became effective on January 1, 2006. Participants in a 401(k) plan that has adopted the Roth provisions may elect to contribute after-tax dollars into the plan […]

The Pension Protection Act of 2006 (the “PPA”) made a number of sweeping changes to the retirement plan landscape which have garnered much attention and analysis. These include two provisions which are of specific interest to public safety employees covered by governmental retirement plans, and the entities sponsoring those plans. The PPA provides for a […]

On March 14, 2007, the Internal Revenue Service (“IRS”) released Notice 2007–28 (“Notice”) providing guidance concerning the changes made by the Pension Protection Act of 2006 (“PPA”) to the deduction limits under Section 404 of the Internal Revenue Code (“Code”). Some changes to the deduction limits made by the PPA are effective for tax years […]

Background In general, under the Employee Retirement Income Security Act (“ERISA”) and corresponding provisions of the Internal Revenue Code (the “Code”), a participant’s benefits under a qualified retirement plan cannot be assigned or alienated. (ERISA § 206(d)(1); Code § 401(a)(13).) However, under an exception that is now familiar to most plan sponsors and plan participants, […]

The Internal Revenue Service (the “Service”) released Notice 2007–7 (the “Notice”) on January 10, 2007, providing guidance on several provisions of the Pension Protection Act of 2006 (the “PPA”) affecting distributions from qualified plans. The Notice addresses the following: Interest rate assumptions for lump sum distributions from defined benefit plans Hardship distributions for medical, tuition, […]

On November 30, 2006, the Internal Revenue Service (the “IRS”) issued Notice 2006–107 in response to the divestiture requirements of the Pension Protection Act of 2006 (“PPA”). Section 401(a)(35) of the Internal Revenue Code and the parallel provision in Section 204(j) of ERISA were added by Section 901 of the PPA, to provide divestiture rights […]

Pension Protection Act Changes The Pension Protection Act (“PPA”), passed this August, institutes requirements for a number of new notices and disclosures from plan sponsors and administrators. Some of these changes will merely call for the delivery of already existing information, while others will require additional information to be compiled and distributed. Some of the […]

The recently enacted Pension Protection Act of 2006 (“PPA”) provides important new provisions clarifying the legality of cash balance plans and certain other types of “hybrid” retirement plans. In addition, the U.S. Court of Appeals for the Seventh Circuit issued a recent decision holding that IBM’s cash balance plan — and the cash balance formula […]

The Internal Revenue Service has announced the annual cost-of-living adjustments applicable to dollar limitations for pension plans and other items for Tax Year 2007. The increase in the cost-of-living index met the statutory thresholds that trigger adjustment for most pension plan limitations. Some of the cost-ofliving adjustments are based on increased limits enacted by the […]