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Relationship between Revenue Ruling 2001-62 and Cash Balance Pension Plans

Revenue Ruling 2001-62, 2001-53 I.R.B. 632 describes a new mortality table applicable under section 417(e)(3) of the Internal Revenue Code for determining the present value of plan benefits on or after December 31, 2002.  The revenue ruling allows the new table to be incorporated by reference (by referring to the mortality table in Rev. Rul. 2001-62).  The revenue ruling also provides section 411(d)(6) relief for an amendment substituting the new table for the prior table (if any resulting reduction is not applicable to benefits paid before the later of the effective date or the adoption date of the amendment).  Please refer to section 767(d)(2) of the Retirement Protection Act of 1994 for additional information.


Question:

What is the effect of section 411(d)(6) of the Code, section 4980F of the Code, and section 204(h) of ERISA where there is an adoption of the table described in Revenue Ruling 2001-62 under a cash balance pension plan?

Answer:

It is the Service's position that an amendment to a cash balance pension plan adopting the new table as described in Rev. Rul. 2001-62 would not violate section 411(d)(6) and that advance notice to participants is not required under a good faith interpretation of section 204(h) of ERISA and section 4980F of the Code.

Page Last Reviewed or Updated: 25-Sep-2014