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CCH® PENSION AND BENEFITS — 1/31/08

IRS releases its semiannual regulatory agenda including pension, benefit projects

The IRS has released its Fall 2007 semiannual regulatory agenda, which includes pension and benefit regulations that are currently under development or review.

Proposed rules

The IRS will be drafting regulations covering some of the following areas:

• the definition of “highly compensated employee”;
• clarification of the general rules for deductibility of employer contributions to qualified retirement plans and other deferred compensation arrangements;
• the performance of actuarial service under ERISA;
• additional guidance on satisfying the Code Sec. 401(a)(4) nondiscrimination requirement with respect to benefits or contributions;
• the measurement of income inclusion and calculation of applicable taxes under Code Sec. 409A relating to deferred compensation;
• determination of the annual benefit under a defined benefit plan for the purpose of applying the limitations of Code Sec. 415 in cases where there has been more than one annuity starting date;
• guidance regarding the use of certain funding balances maintained for defined benefit pension plans and regarding benefit restrictions for certain underfunded defined benefit pension plans;
• guidance on how a qualified cash or deferred arrangement can become a qualified automatic contribution arrangement and avoid the ADP test of Code Sec. 401(k)(3)(A)(ii);
• guidance on the implementation of the new diversification requirements for certain defined contribution plans; and
• the determination of benefit liabilities and assets for purposes of the funding requirements that apply to single employer defined benefit pension plans.

Final rules

Among the rules that the IRS expects to finalize are the following:

• enhancement of the existing HIPAA portability regulations and clarification of the interaction between the HIPAA portability requirements and the FMLA; and
• guidance for group health plans that provide benefits for hospital stays in connection with childbirth relating to requirements for minimum lengths of stay.

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