Cycle E Cumulative List
Rev. 12/18/09; E-mail Alert 2009-20

The 2009 List of Cumulative Changes for Cycle E plans has been issued as IRS Notice 2009-98.
Cycle E is for individually designed plans whose EIN ends with a 5 or a 0.  Cycle E starts February 1, 2010 and ends January 31, 2011.

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.

Cycle E: New Requirements

401(a)
Notice 2008-98 provides that the Service and Treasury intend to amend the normal retirement age regulations to change the effective date for governmental plans to plan years beginning on or after January 1, 2011.

401(a)(9)
Final regulations under §401(a)(9) were published on September 8, 2009, which permit a governmental plan to comply with the required minimum distribution rules of §401(a)(9) by using a reasonable and good faith interpretation of the statute.

401(a)(35)
WRERA §109(a) amended the definition of one-participant retirement plan under §401(a)(35)(E)(iv).

401(k) & 401(m)
Section 107(a) of the HEART Act extends and makes permanent the applicability of the qualified reservist distribution to individuals ordered or called to active duty after December 31, 2007.

Final regulations under §401(k) and 401(m) with respect to qualified automatic contribution arrangements were published on February 24, 2009.

Rev. Rul. 2009-30 provides information with respect to automatic contribution increases under automatic contribution arrangements.

Notice 2009-65 provides sample amendments that plan sponsors can use to add automatic contribution features to their plans.

402(c)(11)
WRERA §108(f) requires that plans provide for nonspouse beneficiary rollovers under §402(c)(11), effective for plan years beginning after December 31, 2009.

402(f)
Notice 2009-68 provides two safe harbor explanations that may be provided to recipients of eligible rollover distributions from an employer to satisfy §402(f).

WRERA §108(f)(2) amended §402(f)(2)(A) with respect to the definition of eligible rollover distribution.

402(g)(2)
WRERA §109(b)(3) amended §402(g)(2)(A)(ii) to eliminate the distribution of gap period earnings with excess deferrals.

411(a)(13)
WRERA §107(b)(2) amended §411(a)(13)(A).

411(b)(5)
WRERA §107(b)(1) amended §411(b)(5).

414(w)
WRERA §109(b)(4), (5), and (6) amended §414(w)(3), (5), and (6) respectively.

Final regulations under §414(w) with respect to eligible automatic contribution arrangements were published on February 24, 2009 (74 Fed. Reg. 8200).

415
WRERA §103(a) changed the deadline to adopt PFEA amendments from the end of the 2008 plan year to the end of the 2009 plan year.

WRERA §103(b)(2)(B)(i) amended § 415(b)(2)(E)(v).

417
WRERA §103(b)(2)(A) amended § 417(e)(3)(D)(i).

432
WRERA §204 provides a temporary delay of designation of multiemployer plans in endangered or critical status.

Worker, Retiree, And Employer Recovery Act (WRERA) of 2008
Section 201 of WRERA provides, in part, a suspension of the minimum distribution requirement for 2009 applicable to defined contribution plans. A plan amendment made pursuant to WRERA section 201 generally may be retroactively effective, if, in addition to meeting the other applicable requirements, the amendment is made on or before the last day of the first plan year beginning on or after January 1, 2011 (January 1, 2012 in the case of a governmental plan). Plans submitted in Cycle E can be amended, at the option of plan sponsors to include WRERA section 201. However, the Service will not consider WRERA section 201 in issuing determination letters for Cycle E plans, and such letters cannot be relied on with respect to the requirements of WRERA section 201.  A plan restatement submitted in Cycle E must include the applicable WRERA provisions identified in section VI of this notice.

Notice 2009-31 as modified by Notice 2009-42 provides election and notice procedures for multiemployer plans under WRERA §204 and §205.

Rev. Proc. 2009-43 provides procedures with respect to the revocation of elections by multiemployer plans to freeze funded status under WRERA §204.

WRERA §205 provides a temporary extension of the funding improvement or rehabilitation periods for multiemployer plans in endangered or critical status for 2008 or 2009.

Emergency Economic Stabilization Act of 2008, Pub. L. 110-343, provides temporary tax relief for areas damaged by 2008 Midwestern severe storms, tornados, and flooding by applying §1400Q and KETRA to any Midwestern disaster area.

Miscellaneous

Rev. Rul. 2009-31 provides guidance with respect to annual paid time off contributions.

Rev. Rul. 2009-32, 2009-39 I.R.B. 398, provides guidance with respect to paid time off contributions at termination of employment.

401(a)(9)(H)
Section 201(a) of WRERA added §401(a)(9)(H) which provides a suspension of the minimum distribution requirement for 2009 applicable to defined contribution plans

Notice 2009-82, 2009-41 I.R.B. 491, provides guidance relating to the suspension of the minimum distribution requirement for 2009 applicable to defined contribution plans.