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Retirement Benefits Figure in Updated IRS Priority Guidance Plan

Government Affairs

The IRS on June 17 issued a third quarter update of its 2018-2019 Priority Guidance Plan. As in such previous such plans, retirement benefits are among the many areas in which the IRS plans to take action. In the update, the IRS also reports on progress in projects it has listed in the plan.

The ‘To Do’ List

The following projects  remain on the list of priorities for the rest of the period covered by the 2018-2019 Priority Guidance Plan. 

The IRS says that work will be done on regulations under the following sections of the Internal Revenue Code:

  • 411(a)(11); the IRS had issued proposed regulations on Oct. 9, 2008.
  • 401(a)(9), updating life expectancy and distribution period tables for purposes of the required minimum distribution rules.
  • 219, 408, 408A and 4973 regarding IRAs.
  • 414(d) on the definition of governmental plan; the IRS had issued an ANPRM on Nov. 8, 2011.

The IRS still plans to issue final regulations on:

  • the application of the normal retirement age regulations under Section 401(a) to governmental plans; the IRS had issued proposed regulations on Jan. 27, 2016.
  • the minimum present value requirements for defined benefit plans under Section 417(e); the IRS had issued proposed regulations on Nov. 25, 2016.
  • ineligible plans under Section 457(f) and related guidance; the IRS had issued proposed regulations on June 22, 2016.

The IRS still plans to issue guidance on the following:

  • timing of amendments to 403(b) plans.
  • updated regulations for service credit and vesting under Section 411.
  • treatment of future interest credits and annuity conversion factor under a hybrid defined benefit plan and adjustments under a variable annuity plan for purposes of satisfying certain qualification requirements.
  • the unified plan rule for multiple employer plan under Section 413(c).
  • the aggregation rules under Section 414(m).
  • issues relating to lifetime income from retirement plans and IRAs.

Priorities Addressed

The IRS also reported on the plans listed the 2018-2019 Priority Guidance Plan on which it has taken action. Following are projects  that concern retirement plans and benefits that it has fulfilled.

 

Plan Action Taken
Guidance relating to certain Employee Plans programs, including the Qualified Pre-approved Plan Program and the Determination Letter Program Revenue Procedure (Rev. Proc.) 2018-42 issued Aug. 15, 2018; published in Internal Revenue Bulletin (IRB) 2018-36 on Sept. 4, 2018
Guidance under Section 401(a)(9) on the use of lump sum payments to replace lifetime income being received by retirees under defined benefit pension plans Notice 2019-18 issued March 6, 2019; published in IRB 2019-13 on March 25, 2019.
Final regulations regarding Qualified Nonelective Contributions (QNECs) and Qualified Matching Contributions (QMACs) Proposed regulations had been issued on Jan. 18, 2017. They were published in the Federal Register on July 20, 2018 in TD 9835.
Guidance on hardship distributions from 401(k)s to reflect modifications made by sections 41113 and 41114 of the Bipartisan Budget Act of 2018 Released in a Notice of Proposed Rulemaking on Nov. 9, 2018; published in the Federal Register on Nov. 14, 2018 as REG 107813-18

Guidance on the universal availability requirement for 403(b)s

Issued in Notice 2018-95 on Dec. 4, 2018; published in IRB 2018-52 on Dec. 24, 2018
Guidance related to church plans Issued in Notice 2018-81 on Oct. 22, 2018; published in IRB 2018-43
Revenue procedures modifying EPCRS to provide guidance regarding certain corrections and procedures Rev. Proc. 2018-52 issued Sept. 28, 2018; published in IRB 2018-42 on Oct.15, 2018
Guidance on missing participants Issued in Notice 2018-90 on Nov. 20, 2018; published in IRB 2018-49 on Dec. 3, 2018