Pension Protection Act Blog

New information today from the IRS, PBGC and the Government Printing Office.

Today, the IRS released Revenue Procedure 2007-37, setting forth the procedure that a sponsor of a defined benefit plan, other than a multiemployer plan, can request and obtain approval for the use of plan-specific mortality tables. This revenue procedure contains specific information, including the deadline to make the request, the address to mail the request to and the fee for applying. A copy is available on the IRS’ website at http://www.irs.gov/pub/irs-drop/rp-07-37.pdf. The topic of this Revenue Procedure looks familiar because the IRS issued proposed regulations on this topic on May 29th.

On May 29th, the IRS released Proposed Regulations on Mortality Tables for Determining Present Value. These proposed regulations provide mortality tables to be used in determining present value or making any computation for purposes of applying certain pension funding requirements. A copy is available at http://benefitslink.com/taxregs/07-2631.pdf.

Today, the IRS also released Announcement 2007-59, providing Guidance for Employer Concerned About Certain Mid-Year Changes to a Safe Harbor 401(k) Plan. This announcement is only one page in length, and provides that a plan will not fail to satisfy the requirements to be a § 401(k) safe harbor plan merely because of mid-year changes to implement a qualified Roth contribution program (as defined in § 402A) or the hardship withdrawals described in part III of Notice 2007-7. The IRS also requests comments on this issue by September 17, 2007. A copy of Announcement 2007-59 is available on the IRS’ website at http://www.irs.gov/pub/irs-drop/a-07-59.pdf.

Today, the IRS also issued Proposed Regulations on Employer Comparable Contributions to Health Savings Accounts under Section 4980G. These proposed regulations provide guidance on employer comparable contributions to HSAs under Code section 4980G where an employee has not established an HSA by December 31st. It also addresses where an employer accelerates contributions for the calendar year for employees who have incurred qualified medical expenses. A copy of these proposed regulations is available at http://benefitslink.com/taxregs/4980g_prop_regs.pdf.

Today, the PBGC issued a Proposed Rule on Variable Rate Premiums for Single-Employer Plans. This proposed rule would amend PBGC’s regulations on Premium Rates and Payment of Premiums to implement the amendment to ERISA section 4006 made by the Pension Protection Act. A copy of the Proposed Rule is available at http://benefitslink.com/pbgcregs/E7-10412.pdf.

Today, the Government Printing Office published a 65-page transcript of the Congressional Hearing on Are Hidden 401(k) Fees Undermining Retirement Security, which took place March 6th. The report is an interesting indication of what may become Congressionally mandated regulations for 401(k) fees. The hearing begins with the Committee Chairman’s comment that “We have to ask whether or not all of these fees are necessary, and we have to examine whether they are undermining the workers retirement security.” Another interesting statement is: “If you go through this information packet for these fees, I am sure that either your head will be on your chest, your eyes will be glazed over, and you simply will not be able to decipher the information that you need as the saver.” A copy is available at http://frwebgate.access.gpo.gov/cgi-bin/useftp.cgi?IPaddress=162.140.64.120&filename=33655.pdf&directory=/disk3/wais/data/110_house_hearings.

Hat tip to BenefitsLink.com.

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