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IRS and Treasury Request Comments on Possible Approaches to Governmental Plan Guidance

The IRS and Department of Treasury are soliciting comments on possible standards for determining if a retirement plan is a governmental plan under section 414(d) of the Internal Revenue Code. This issue is important to Federal, State, Local and Indian tribal governments, as well as their employees, because the statutory rules that apply to governmental plans are different from those that apply to nongovernmental plans. In addition, the Pension Protection Act of 2006 (PPA ’06) contained statutory changes related to plans maintained by Indian tribal governments.

The solicitation for comment is contained in two advance notices of proposed rulemaking released on November 7, 2011. The advance notices will appear in the Federal Register on November 8, 2011. Included in these advance notices are drafts of possible approaches to guidance in this area. Comments are invited on these possible approaches, other possible approaches, and other issues that should be taken into account. Please see the advance notices for deadlines and procedures for submitting comments. In addition to the general request for comment, the IRS intends to conduct outreach including listening meetings with interested taxpayers in different geographic locations.   

The IRS and Department of Treasury have initiated this process because the lack of comprehensive section 414(d) guidance has made it difficult for government employers and their employees to have the certainty that they need in this area. In addition, PPA '06 contained statutory changes related to plans maintained by Indian tribal governments. 

Overall, employers and their employees are raising questions on this issue with increasing frequency. For this reason, the IRS and the Department of Treasury believe comprehensive regulatory guidance should be developed. Given the diversity of the governmental community, the unique challenges presented (such as the existence of state law constraints), and the significant potential impact of the issue on retirement benefit design, we believe that the advance notice process will best ensure comprehensive guidance that is also practical and administrable.  

After this process, the IRS and Department of Treasury anticipate using this input from the community to develop proposed regulations for comment.

  • More details on the guidance under consideration

  • Text of the Advance Notices of Proposed Rulemaking

    • ANPRM REG-157714-06, filed with the Federal Register on November 7, 2011 (governmental plans, generally).
    • ANPRM REG-133223-08, filed with the Federal Register on November 7, 2011 (Indian tribal government plans).

  • Public Hearings Scheduled for July 9 and 10, 2012


Page Last Reviewed or Updated: 11-Jun-2013