The Pension Protection Act Blog

One of my favorite actuaries called me today about the meaning of this paragraph in the new Proposed Regulations on the Measurement of Assets and Liabilities for Pension Funding Purposes, released by the IRS on December 28, 2007. The paragraph is:

I. Overview. These proposed regulations are the third in a series of proposed regulations under new section 430. (footnote reference). These proposed regulations would provide guidance on the determination of assets and liabilities for purposes of applying the new funding rules of section 430. The Treasury Department and the IRS intend to issue additional proposed regulations relating to other portions of the rules under section 430 (including sections 430(a), (c), and (j)) in the first part of 2008. It is expected that those regulations will be effective for plan years beginning on or after January 1, 2009.

Footnote: Proposed regulation sections 1.430(h)(3)-1 and 1.430(h)(3)-2, relating to the mortality tables used to determine liabilities under section 430(h)(3), were issued May 29, 2007 (REG-143601-06, 72 FR 29456), and proposed regulation section 1.430(f)-1, relating to prefunding and funding standard carryover balances under section 430(f), was issued August 31, 2007 (REG-113891-07, 72 FR 50544).

Note: Announcement 2007-71 corrected the proposed regulation issued May 29, 2007. The proposed regulations issued on August 31, 2007, were corrected by this Correction.

So what does third in a series mean? The IRS handily provided the footnote naming the first two pieces of guidance about Code section 430. This is the third piece of guidance with more guidance on the way. My hope is that once the additional guidance is issued by the IRS in early 2008, I will be able to put together a cohesive explanation of Code section 430 and its impact on defined benefit plans. Of course, any cohesive Code section 430 explanation will require a little help from my friends.

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