Recent Guidance That May Require Interim or Discretionary Amendments
Interim amendments are required to keep a written plan document up to date between a plan’s submission periods during the applicable remedial amendment cycles. The purpose of this list is to provide plan sponsors with an aid as they prepare interim plan amendments. However, it is important to note that this does not relieve plan sponsors of the responsibility of looking at the 2007 Cumulative List, as well as at guidance published after October 1, 2007, and making a determination as to whether and when an interim amendment should be made in order to maintain a plan’s qualified status.
The finalized list below contains certain new guidance identified on the 2007 Cumulative List and guidance issued between October 1, 2007 and September 30, 2008. Look for the release of the 2008 Cumulative List in November 2008.
The general deadline for timely adoption of an interim or discretionary amendment can be found in section 5.05 of Rev. Proc. 2007-44. For a disqualifying provision or a provision that is integral to a disqualifying provision, an interim amendment must be adopted by the later of (1) the due date (including extensions) for filing the income tax return for the employer’s taxable year that includes the date on which the remedial amendment period begins1 or (2) the last day of the plan year that includes the date on which the remedial amendment period begins. A discretionary amendment must be adopted by the end of the plan year in which the plan amendment is effective. Section 5.06 of Rev. Proc. 2007-44 provides special amendment deadlines for tax-exempt employers and government entities. Pursuant to section 12.03 of Rev. Proc. 2007-44, the filing of a determination letter may accelerate the deadline for the incorporation of interim amendments into a restated plan document from the date described in Rev. Proc. 2007-44, section 5.05, to an earlier date.
You must look at the terms of the plan to determine whether an amendment is required or optional.
Under section 1107 of PPA ’06, a plan sponsor is permitted to delay adopting a plan amendment pursuant to statutory provisions under PPA ’06 or pursuant to any regulation issued under PPA ’06 until the last day of the first plan year beginning on or after January 1, 2009 (January 1, 2011 in the case of governmental plans). This amendment deadline applies to both interim and discretionary amendments that are made pursuant to PPA ’06 or any regulation issued under PPA ’06. See, Rev. Proc. 2007-44, section 5.07(2). This list does not include PPA ’06 provisions or guidance related to PPA ‘06.
Notice 2007-69, 2007-35 I.R.B. 468 , provides temporary relief, until the first day of the first plan year that begins after June 30, 2008, for certain pension plans under which the definition of normal retirement age may be required to be changed to comply with final regulations on distributions from a pension plan upon attainment of normal retirement age.2
Announcement 2007-59, 2007-25 I.R.B. 1448, provides that a plan will not fail to satisfy the requirements of a §401(k) safe harbor plan because of a mid-year change to implement a designated Roth contribution program.
Rev. Rul. 2008-7, 2008-7 I.R.B. 419 , addresses (1) the application of the backloading provisions of §411(b)(1)(A), (B), and(C) to defined benefit cash balance plans and (2) the use of a “greater of” formula in the instance of a conversion of a defined benefit pension plan to a cash balance plan, including limited §7805(b) relief.
Section 6613 of the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007, amends §420(c)(3)(A) regarding minimum cost requirements for transfers of excess pension assets to retiree health accounts.
Section V of Notice 2008-30, 2008-12 I.R.B. 637, provides that an interim plan amendment to provide for the inclusion of gap-period earnings in the distribution of excess deferrals will not be required to be adopted until the last day of the first plan year beginning on or after January 1, 2009.
1 The remedial amendment period begins on the date on which the change becomes effective with respect to the plan or, in the case of a provision that is integral to a qualification requirement that has been changed, the first day on which the plan is operated in accordance with the provision as amended.
2 Notice 2007-69 is not applicable to governmental plans under §414(d). See