The Erisa Outline Book-Current Develpments by Chapter

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TRI Pension Services

The ERISA Outline Book

Current Developments By Chapter

In this section we reference significant current developments, organized by chapter, that affect sections of that chapter in the 2009 Edition of the ERISA Outline Book. For other new developments, visit the What's New page. Please note that the information below still relates to the 2009 Edition and will continue to do so until the end of February. Beginning in March 2010, when the 2010 Edition of The ERISA Outline Book becomes available and the items below will have been incorporated into the book, the information below will refer only to new developments that affect the content of the 2010 Edition.

In parentheses next to each item in the list below, we note the date we posted the item as well. Subscribers to eRISA Update, one of our quarterly newsletter, contains summaries of the new developments cited. For ordering information, Click here and follow the instructions to print out an order form.

Chapter 1A

Compensation definition. Ruling discusses tax treatment and qualification issues surrounding the deferral (either on an elective or nonelective basis) of the dollar equivalent of paid unused leave [Citation: Rev. Rul. 2009-31, Rev. Rul. 2009-32, 2009-39 I.R.B. (September 25, 2009)

Practice before the IRS definition. Proposed regulations would update standards for enrolled actuaries to reflect changes in the law and industry practice [Citation: 20 C.F.R. Part 201, Prop. Reg. §§901.0, 901.1, 901.10-901.12, 901.20, 901.31, 901.32, 901.47 and 901.72, 74 F.R. 48030 (September 21, 2009)]

Chapter 1B

Remedial amendment period definition.Modifications to remedial amendment cycle applicable to governmental plans [Citation: Rev. Proc. 2009-36, 2009-35 I.R.B. (August 31, 2009)

Section 403(b) plan definition, Part H (added June 5, 2009). The IRS has published a draft revenue procedure that would launch a prototype program for section 403(b) plans. See Announcement 2009-34.

Section 403(b) plan definition, Part H.6. Retroactive remedial amendment period for section 403(b) plans [Citation: Announcement 2009-98]

Chapter 2

No entries

Chapter 3A

Section II, Part D.2.e.3) (added March 21, 2009). Final regulations on eligible automatic contribution arrangements (EACAs); permissible withdrawals under IRC §414(w) [Citation: Treas. Reg. §§1.414(w)-1, 1.402(c)-2, Q&A-4(h), 54.4979-1(c), 74 F.R. 8200 (February 24, 2009)]. Includes a clarification that an EACA is permitted to cover fewer than all eligible employees (e.g., employees who become eligible for the plan after a specified date), but if, for plan years beginning on or after January 1, 2010, all eligible employees are not covered by the EACA, the 6-month correction rule under IRC §4979 is not available. The final regulations also reconfirm that an EACA cannot be implemented mid-year.

Section II, Part D.2.e. IRS provides guidance to facilitate automatic enrollment in SIMPLE-IRA plans; publishes sample plan language [Citation: Notice 2009-66, Notice 2009-67, 2009-39 I.R.B. (September 25, 2009)

Section II, Part E.4.e.2) (added March 24, 2009). The note at the end of this paragraph refers to sample plan language published by the IRS on July 1, 2008, to provide for transfers to avoid a S corporation's ESOP from having a nonallocation year under IRC §409(p). The IRS has modified that sample language. The new language is published in the Spring Edition of the IRS' Employee Plans News .

Chapter 3B

Section VIII, Part B.7.b. (added March 21, 2009). Notice 2009-22 provides interim rules regarding asset valuation methods that are permitted to be used by single employer defined benefit pension plans for minimum funding purposes pursuant to changes made by the Worker, Retiree, and Employer Recovery Act of 2008, Public Law 110-458 (WRERA). This notice also provides automatic approval for a change in asset valuation method for plan years beginning during 2009 to adopt any permissible asset valuation method.

Section VIII, Part B. Final regulations on calculation of funding target, target normal cost, interest rates, valuation of assets, use of funding balances, and at-risk plans [Citation: Treas. §§1.430(d)-1, 1.430(f)-1, 1.430(g)-1, 1.430(h)(2)-1, and 1.430(i)-1, 74 F.R. 53004 (October 15, 2009)]

Section VIII, Part K Final regulations provide guidance on restrictions under IRC §436 [Citation: Treas. Reg. §1.436-1, 74 F.R. 53004 (October 15, 2009)

Section IX, Part B.2. Extended anti-cutback relief will be provided to statutory hybrid plans that need to be amended to comply with future guidance on market rate of interest [Citation: Announcement 2009-82, 2009-48 I.R.B. (November 30, 2009)

Section X, Part D Regulations clarify notice requirements for retroactive amendments, treat certain notice requirements in other tax code and ERISA sections as satisfying 204(h) notice [Citation: Treas. Reg. §§1.411(d)-3 and 54.4980F-1, Q&As-1, -7 -8, -9, -10, -11 and -18, 74 F.R. 61270 (November 24, 2009)]

Chapter 4

No entries

Chapter 5

No entries

Chapter 6

Section IV, Part C.6. (added March 21, 2009). Final regulations on eligible automatic contribution arrangements (EACAs); permissible withdrawals under IRC §414(w) [Citation: Treas. Reg. §§1.414(w)-1, 1.402(c)-2, Q&A-4(h), 54.4979-1(c), 74 F.R. 8200 (February 24, 2009)]. Permits the election period for permissible withdrawals to be less than 90 days, but the election period may not be less than 30 days.

Section IV, Part D.2.IRS updates the model 204(f) notice to reflect law changes enacted since 2001 [Citation: Notice 2009-68, 2009-39 I.R.B. (September 25, 2009)

Section V, Part B.3.d. (added March 21, 2009).

Kennedy v. Dupont

Section VII.IRS provides guidance on waiver of 2009 RMDs for defined contribution plans and IRAs [Citation: Notice 2009-82, 2009-41 I.R.B. (October 9, 2009)

Chapter 7

Section II, Part B.3. Deemed distributions (or alternative special tax treatment) for certain individuals who relinquish U.S. citizenship or permanent U.S. residence for tax purposes [Citation: Notice 2009-85, 2009-45 I.R.B. (October 15, 2009)

Section IV, Part C. Additional guidance on PPA amendment to allow non-Roth funds in eligible retirement plans to be rolled over to Roth IRAs [Citation: Notice 2009-75, 2009-39 I.R.B. (September 25, 2009)

Chapter 8

No entries

Chapter 9

No entries

Chapter 10

No entries

Chapter 11

Section VI, Part C.1.m. (added March 21, 2009). The proposed regulations cited in this paragraph were finalized on February 24, 2009.

Section VII, Part C.1.b. (added March 21, 2009). The proposed regulations cited in footnote 10 were finalized on February 24, 2009.

Section VIII, Part C.2.c. (added March 21, 2009). Regulations issued on February 24, 2009, finalize the proposed regulations cited in this paragraph, reflecting the repeal by the PPA 2006 of the "gap period" earnings rule for ADP/ACP corrective distributions.

Section VIII, Part D.1. (added March 21, 2009). Regulations issued on February 24, 2009, finalize the proposed regulations cited in this paragraph, reflecting the timing of income rule for ADP/ACP corrective distributions made with respect to post-2007 plan years.

Section XIV (added March 21, 2009). Final regulations on qualified automatic contribution arrangements (QACAs) finalize the proposed regulations cited in this section with respect to QACAs. [Citation: Treas. Reg. §1.401(k)-3(a), (e), (h), (j) and (k), 74 F.R. 8200 (February 24, 2009)] The regulations prescribe rules for determining how the minimum default percentage rules for a QACA are applied to a rehired employee, or to any employee who previously was enrolled by default but who, for at least one full plan year, has not had any default contributions made on his/her behalf. The final regulations also clarify how to satisfy the notice requirements when it is not practical to give the QACA safe harbor notice before an employee's date of eligibility (e.g., plan with immediate entry provision).

Section XIV, Part B.4.e. (added June 5, 2009). Proposed regulations permit a company to suspend or reduce the safe harbor nonelective contribution before the end of the year if the company incurs a substantial business hardship. See Prop. Treas. Reg. §§1.401(k)-3(g) and 1.401(m)-3(h). The rules are similar to those for suspending or reducing the safe harbor matching contributions except that a substantial business hardship is required only for suspending or reducing the safe harbor nonelective contribution. Only amendments made after May 18, 2009, may provide for the suspension or reduction of the safe harbor nonelective contribution. WIth this option added to the regulations, the statement made in Part I.2.c.3) of Section XIV no longer is true.

Chapter 12

Section V, Part C. IRS provides guidance to facilitate automatic enrollment in SIMPLE-IRA plans; publishes sample plan language [Citation: Notice 2009-66, Notice 2009-67, 2009-39 I.R.B. (September 25, 2009)]

Chapter 13A

Section III, Part A.2. DOL posts FAQs at website regarding EFAST2 (mandatory electronic filing system) [Citation: http://www.dol.gov/ebsa/faqs/faq-EFAST2.html]

Section III, Part A.2.a.4). DOL provides reporting relief with respect to certain individually-owned contracts or custodial accounts held by section 403(b) plans [Citation: Field Assistance Bulletin (FAB) 2009-02, available at www.dol.gov/ebsa]

Section III, Part A.3.e. DOL issues additional FAQs on revised Schedule C to Form 5500 [Citation: FAQs About The 2009 Form 5500 Schedule C, available at the DOL website (www.dol.gov/ebsa/faqs/main.html)]

Section III, Part C.4. (added March 21, 2009). The proposed regulations under ERISA §4010, which update the regulations to reflect the changes made by the PPA 2006, were finalized on March 16, 2009. [Citation: Prop. PBGC Reg. §§4010.1-4010.9, 4010.11-4010.13, 74 F.R. 11022 (March 16, 2009)] The key changes to the proposed regulations are: (1) clarification that for purposes of the gateway tests, only plans that are in existence on the last day of the information year and that are sponsored by persons who are members of the contributing sponsor’s controlled group on the last day of the information year are counted, (2) clarification that fair market value of the plan’s assets, for purposes of ERISA §4010 excludes contributions receivable (i.e., contributions received by the plan after the end of the plan year). (3) modification of the reporting requirements for sponsors of multiple employer plans which provides for an alternative method of compliance for certain contributing sponsors of multiple employer plans, and (4) modification of the plan actuarial reporting requirements to require filers to report certain information regarding liens and outstanding minimum funding waivers.
Section III, Part C.5.e.2)b) (added June 5, 2009). PBGC Technical Update 09-3 provides a waiver from ERISA §4043 reporting, or a simplified reporting option for the 2009 plan year with respect to certain small plans that have missed quarterly contribution not motivated by financial inability.

Section III, Part C.5. Extension of guidance in Technical Updates 09-1 and 09-3 to reportable events for the 2010 plan year [Citation: PBGC Technical Update 09-4 (November 23, 2009), available at www.pbgc.gov]

Section III, Part C.6. Regulations determine guaranteed benefits with respect to USERRA-covered participants who are in military service as of the termination date by including military service benefits that would be restored through the termination date if reemployment occurs after termination [Citation: PBGC Reg. §4022.11, 74 F.R. 59093 (November 17, 2009)]

Section IV, Part F.2.b. (added March 21, 2009).The DOL has provided interim guidance on the annual funding notices under ERISA §101(f) [Citation: Field Assistance Bulletin 2009-01 (February 10, 2009)]. The guidance includes model notices.

Proposed regulations would update reportable event rules to reflect PPA 2006 funding rules and eliminate most automatic waivers and filing extensions [Citation: Prop. PBGC Reg. §§4043.1-4043.6, 4043.23, 4043.25-4043.27, 4043.29-4043.37, 4043.61-4043.70, 4043.81, 74 F.R. 61248 (November 23, 2009)]

Chapter 13B

Section II, Part B.1.d. Underlying assets of target date or lifecycle mutual fund not plan assets of plans that invested in the mutual fund [Citation: DOL Advisory Opinion 2009-04A (December 4, 2009)]

Section II, Part E.1. Prospectus delivery obligation under ERISA §404(c) regulations may be satisfied with a mutual fund's Summary Prospectus [Citation: Field Assistance Bulletin 2009-03, available at www.dol.gov/ebsa]

Chapter 14

Section II, Part B.2. (added March 21, 2009). Effective July 1, 2010, Regulation Z, which implements the Truth In Lending law, is no longer applicable to participant loans from employer-sponsored plans (qualified plans, section 403(b) plan, governmental 457(b) plans, provided the loan is solely from vested benefits. [Citation: Regulation Z, 12 C.F.R. Part 226, §226.3(g), 74 F.R. 5244 (January 29, 2009)]

Section II, Part E.14.and E.15. DOL withdraws final regulations prescribing requirements for statutory exemption under ERISA §408(b)(14) and IRC §4975(d)(17) with respect to investment advice rendered by a fiduciary adviser and incorporating class exemption that would have expanded scope of relief [Citation: Withdrawal of DOL Reg. §§2550.408g-1 and 2550.408g-2, 74 F.R. 60156 (November 20, 2009)]

Chapter 15

Section X. 2009 List of Changes issued for Cycle E plans [Citation: Notice 2009-98, 2009-52 I.R.B. (December 11, 2009)]

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Opdateret d. 19/1/10