The 2007 Cumulative List, Notice 2007-94

This list is basically for Cycle C plans.  Cycle C plans are individually designed plans whose EIN ends in 8 or 3 and whose filing timeframe is February 1, 2008 to January 31, 2009.

This is the first cumulative list after the updated Rev Proc 2007-44 (that updated Rev Proc 2005-66).

Once again the IRS has listed as “new”, items that appear for the first time.  As is our tradition since the cumulative lists began in 2004, we will present only the new items in our web article and a link to the entire cumulative list.

The prior cumulative lists:

Note:
Guidance from the prior cumulative lists must also be included in submissions made in Cycle C. Guidance or legislation issued after October 1, 2007 will not be included. Also excluded are amendments due in 2009 and amendments due in 2008 that are not listed in the cumulative list.
Terminating plans must include all law changes in effect at the time of termination.

Special Rules for the Pension Protection Act of 2006 (PPA)

A plan amendment may be retroactively effective under Section 1107 of PPA, provided it is made by the last day of the 2009 plan year (2011 for governmental plans).

Cycle C plans may include certain PPA provisions as listed in Section 6, provided the PPA choices are identified with the Cycle C submission. Nonetheless, the IRS will not consider PPA provisions when issuing Cycle C Determination Letters (DLs) and thus may not rely on the DLs for PPA provisions.

Terminating plans must include the applicable PPA’06 provisions that are in effect at the time of the termination.

Three new requirements for Cycle C (Other than PPA provisions below)

• Announcement 2007-59. Safe Harbor plan may add a designated Roth mid-year without failing to be a safe harbor plan.
• Rev. ruling 2007-43. Defined Contribution, partial plan termination guidance.
• 420(c)(3)(A). 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 VI PPA Provisions

• 401(a)(36): PPA‘ 06 §905(b) added  §401(a)(35) regarding distributions to a participant who has attained age 62 and who has not separated from employment at the time of the distribution.
• Announcement 2007-59. Safe Harbor plan may add a hardship on behalf of a beneficiary, in accordance with PPA §826, mid-year without failing to be a safe harbor plan.
• 401(k)(8)(A)(i); PPA’06 §902(e)(3) eliminates the gap period income rule for excess contributions.
• 401(k)(13; PPA’06  §902 added §401(k)(13) with respect to automatic contribution arrangements. (QACA safe harbor NEC)
• 401(m)(6); PPA’06 §902 added §401(m)(12) with respect to automatic contribution arrangements. (QACA safe harbor matching)
• 408A(e); PPA’06 added §408A(e) which permits rollovers to Roth IRAs from qualified plans, §403(b) plans and §457(b) plans.
• 414(d); PPA’06 §906(a)(1) added language to the definition of governmental plan in §414(d) with respect to Indian Tribal governments.
      Notice 2006-89 and 2007-67 provide transition relief for plans subject to PPA §906.
• 414(f)(6); PPA’06 §1106(b) added 414(f)(6) with respect to a multiemployer status election. Section 6611(a)(2) and (b)(2) of the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 amends §414(f)(6).
• 414(w); PPA’06 §902(d)(1) added §414(w) with respect to automatic contribution arrangements.
• 415(n); PPA’06 §821 retroactively clarified the rules under §415(n) relating to the purchase of permissive credit under defined benefit governmental plans.
• 417(e)(3); PPA’06 §302(b) amended the applicable interest rate and mortality table to be used for determining the present value of lump sum distributions.
• 417(g); PPA’06 §1004(a)(2) added §417(g), the qualified optional survivor annuity benefit.
• 420(e)(2); PPA’06 §114(d)(1) modified the definition of the term “excess pension assets.”  Section 6612(b) of the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 amends  §420(e)(2)(B).
• 432(c); PPA’06 §212(a) added §432(c) which requires that a funding improvement plan be adopted for multiemployer plans in endangered status.
• 432(e); PPA’06 §212(a) added §432(e) which requires that a rehabilitation plan be adopted for multiemployer plans in critical status.

436; PPA’06 §113(a)(1)(B) added §436 with respect to funding-based limits on benefits and benefit accruals under defined benefit single employer plans.

Bill Grossman, QPA