Internal Revenue Bulletin:  2010-48 

November 29, 2010 

EMPLOYEE PLANS


Table of Contents

T.D. 9505 T.D. 9505

Final regulations under sections 411(a)(13) and 411(b)(5) of the Code, which were added by section 701(b) of the Pension Protection Act of 2006 (PPA ‘06), provide guidance concerning hybrid defined benefit pension plans, including cash balance plans. The regulations under section 411(a)(13) generally describe the plans that are treated as statutory hybrid plans and provide special benefit calculation and vesting rules with respect to those plans. The regulations under section 411(b)(5) provide rules for statutory hybrid plans to comply with age discrimination requirements, including rules governing design of and conversion to a statutory hybrid plan, and rules governing operation of those plans, including providing interest credits that do not exceed a market rate of return.

REG-132554-08 REG-132554-08

Proposed regulations under sections 411(a)(13) and 411(b)(5) of the Code, as well as section 411(b)(1), provide additional guidance concerning hybrid defined benefit pension plans, including cash balance plans. In particular, these proposed regulations provide guidance as to the scope of relief under section 411(a)(13)(A), contain a special rule regarding the application of the 1331/3 percent rule under section 411(b)(1)(B) to statutory hybrid plans that credit interest using a variable rate, provide an alternative method of satisfying the conversion protection requirements under section 411(b)(5)(B)(ii), and provide additional guidance with respect to the market rate of return rules under section 411(b)(5)(B)(i). A public hearing is scheduled for January 26, 2011.


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