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New Cumulative List
December 29, 2006
The IRS issued the 2006 Cumulative List as Notice 2007-3. The list, which includes PPA items, is for plans that are to be submitted from February 1, 2007, through January 31, 2008.

IRS Determination Letter Submissions for 2007
The IRS’s Cumulative List details the plan qualification requirements that must be adopted by plans submitting for a Determination Letter during the upcoming year in its review cycle. Under Rev. Proc. 2005-66, qualified plans that may be submitted for IRS review between February 1, 2007 and January 31, 2008 include pre-approved defined benefit plans (i.e. prototype and volume submitter plans) and "B" cycle individually designed plans (i.e. whose employer’s EIN ends in 2 or 7; and non-governmental multiple employer plans). The plans submitted during this period must meet the requirements of the Cumulative List for 2007, which was published in Notice 2007-3.

The 2007 list incorporates the requirements of the first and second cumulative lists (Notice 2004-84 and Notice 2005-101) that applied to plans submitted in 2005 and 2006, respectively. The latest list adds the new items applicable to submissions in 2007, including PPA provisions that will apply to 2007 restatements. Generally, regulatory changes adopted after Dec. 14, 2006 are not included on the list with the exception of certain specified items.

The new items for 2007 that must be incorporated into plan documents, as applicable, include the following (listed by Internal Revenue Code Section):
    1. 401(a): Final Regulations regarding permissible normal retirement ages.
    2. 402A: Notice 2006-44, 2006-20 I.R.B. 889 provides a sample amendment for Roth § 401(k) plans.
    3. 402A: Final Distribution Regulations under §402A .
    4. 409: Final Regulations concerning requirements under §409(p) for ESOPs holding stock of S corporations.
    5. 410(b): Final Regulations permitting certain employees of tax-exempt organizations to be excluded when determining whether a §401(k) plan meets the §410(b) minimum coverage requirements.
    6. 411(a): Amendments to §1.411(d)-3 of the Final Regulations that coordinate the anti-cutback rules of §411(d)(6) and the nonforfeitability requirements of §411(a).
    7. 411(d)(6): Amendments to §1.411(d)-3 of the Final Regulations that coordinate the anti-cutback rules of §411(d)(6) and the nonforfeitability requirements of §411(a).
    8. 411(d)(6): Amendments to §1.411(d)-3 of the Final Regulations with respect to a utilization test when discontinuing a form of distribution.
    9. 415: Final Regulations under §415 with respect to pre-PPA ’06 law related to annual additions made to defined benefit plans.
  10. 417: Final Regulations under §417(a)(3) regarding the disclosure of the relative value of optional forms of benefit.
  11. Hurricane Relief: Gulf Opportunity Zone Act of 2005, P.L. 109-135, added §1400M and §1400Q to the Code to provide certain tax benefits to those areas affected by Hurricanes Katrina, Wilma, and Rita.
  12. §1.401(a)-21 of the Final Regulations for the use of electronic medium to provide applicable notices or to make participant elections.

SPECIAL RULES FOR THE PENSION PROTECTION ACT OF 2006

Section 1107 of PPA ’06 permits a plan amendment made pursuant to any law changes in this Act to become retroactively effective, if the amendment is adopted not later than the last day of the first plan year beginning on or after January 1, 2009 (January 1, 2011 in the case of a governmental plan).

Master and prototype plan sponsors and VS practitioners are required to include applicable PPA ’06 provisions listed below in plan documents submitted with their Opinion and Advisory Letter applications for pre-approved defined benefit plans. The Service will consider PPA ’06 in issuing Opinion and Advisory Letters, and such letters may be relied on with respect to PPA ’06, but only for the PPA ’06 provisions listed in Cumulative List items 27, 28, 31, 32, and 33 below (in blue) which are effective in 2006 and 2007.

Individually designed plans and multiple employer plans may be amended to include the applicable PPA ’06 provisions listed below. Individually designed plans and multiple employer plans will have to identify which PPA ’06 provisions have been included in the document and the plan provision that reflects these provisions when submitting their determination letter application. However, the Service will not consider PPA ’06 when issuing Determination Letters for individually designed plans and multiple employer plans, and such letters will not provide reliance with respect to PPA ’06 provisions.

Terminating plans must include all applicable PPA ’06 provisions that are in effect as of the date of plan termination.

The PPA provisions becoming effective for 2006 and 2007 include the following (as numbered in the Cumulative List):

  24. 401(a)(35): The requirement that defined contribution plans provide employees with the right to divest publicly traded securities.
  25. 401(k): The modification of the rules relating to hardship distributions from a §401(k) plan that will permit the plan to treat a participant’s beneficiary under the plan the same as the participant’s spouse or dependent.
  26. 401(k)(2)(B)(i)(V): The provision that permits reservists called to active duty after September 11, 2001 and before 2008 to take in-service distributions from a §401(k) plan.
  27. 402(c)(2)(A): The provision that permits nontaxable distributions from a qualified plan to be directly rolled over tax-free to either another qualified plan or a §403(b) plan if the separate accounting requirements are met.
  28. 402(c)(11): The provision that allows nonspousal beneficiaries to roll over distributions from a qualified plan to an individual retirement plan.
  29. 411: Changes to the rules applicable to cash balance plans and other hybrid defined benefit plans.
  30. 411(a): The accelerated vesting of employer nonelective contributions in defined contribution plans.
31. 415(b)(2)(E)(ii): The updated interest rate assumptions for applying benefit limitations to lump sum distributions.
32. 415(b)(11): The updated interest rate assumptions for applying benefit limitations to lump sum distributions.
33. 402(f); 411(a)(11); 417: The change that permits the distribution options notice for defined benefit plan participants to be provided as much as 180 days in advance of the annuity starting date, including a description of the consequences of failing to defer receipt of a distribution.

Notice 2007-3 (for plans submitted 2-1-07 to 1-31-08)

Prior Cumulative Lists:
2005 Cumulative List, Notice 2005-101 (for plans submitted 2-1-06 to 1-31-07)
2004 Cumulative List, Notice 2004-84 (for plans submitted 2-1-05 to 1-31-06)

 
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