PDF《10/11/11》

10/11/11 Part III - Administrative, Procedural and Miscellaneous Postponement of Effective/Applicability Date of § 1.

411(b)(5)-1(d)(1)(iii), (d)(1)(vi), and (d)(6)(i) of the Income Tax Regulations Relating to Interest Crediting Rates in Hybrid Pension Plans;

Extension of Plan Amendment Deadline for §§ 411(a)(13) (other than § 411(a)(13)(A)) and 411(b)(5);

Special Timing Rule for Providing Section 204(h) Notice of Certain Amendments Changing the Interest Crediting Rate in Hybrid Pension Plans Notice 2011-85 I. Purpose This notice announces that the Treasury Department and the Internal Revenue Service intend to amend the final regulations under § 411(b)(5) of the Internal Revenue Code (Code), which sets forth special rules for statutory hybrid plans (as defined in § 1.411(a)(13)-1(d) of the Income Tax Regulations), to postpone the effective/applicability date of those provisions of § 1.411(b)(5)-1(d) that apply to plan years beginning on or after January 1, 2012. Section 1.411(b)(5)-1(d) sets forth rules under § 411(b)(5)(B)(i) relating to interest crediting rates under a cash balance or other statutory hybrid plan. This notice also extends the deadline for adopting an interim or discretionary plan amendment under § 411(a)(13) (other than § 411(a)(13)(A)) and § 411(b)(5). In addition, this notice provides that the previously announced limited relief from the requirements of § 411(d)(6) for certain amendments made to comply with § 411(b)(5) is expected to apply to amendments made before the postponed effective date. The Service'

s review of an application for a determination letter submitted to the Service between February 1, 2011, and January 31, 2012, will not consider the final regulations under § 411(a)(13) (other than with respect to § 411(a)(13)(A)) and § 411(b)(5) unless the plan has been amended to satisfy those regulations. Finally, in Announcement 2009-82, 2009-48 I.R.B. 720, the Treasury Department and the Service announced their intent to provide a special timing rule for providing section 204(h) notice (as defined in § 54.4980F-1, A-4(a) of the Excise Tax Regulations) for certain amendments to change the interest crediting rate under a statutory hybrid plan. The special timing rule only applies to amendments that were adopted after November 10, 2009, and on or before the last day of the first plan year that begins on or after January 1, 2009. This notice formally provides the special timing rule described in Announcement 2009-82. II. Background A. Sections 411(b)(5)(B)(i) and 411(d)(6) Section 411(b)(5)(B)(i) provides that a statutory hybrid plan is treated as failing to satisfy the requirements of § 411(b)(1)(H), relating to continued accrual beyond normal

2 retirement age, if the terms of the plan provide any interest credit (or an equivalent amount) for any plan year at a rate that is in excess of a market rate of return. Section 411(b)(5)(B)(i), which was added by section 701(b)(1) of the Pension Protection Act of

2006 (PPA '

06), Pub. L. 109-280, is generally effective for plan years beginning after December 31, 2007. Section 411(d)(6) provides generally that a plan does not satisfy § 401(a) if an amendment to the plan decreases a participant'

s accrued benefit. For this purpose, a plan amendment that has the effect of eliminating or reducing an early retirement benefit or a retirement-type subsidy or eliminating an optional form of benefit with respect to benefits attributable to service before the amendment is treated as reducing accrued benefits. Section 1.411(d)-4, A-2(b)(2)(i), of the Income Tax Regulations provides that a plan may be amended to eliminate or reduce a section 411(d)(6) protected benefit, within the meaning of § 1.411(d)-4, A-1, if the following three requirements are met: the amendment constitutes timely compliance with a change in law affecting plan qualification;