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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
from Spencer’s Benefits Reports: In Notice 2009-86, the Internal Revenue Service extends to plan years beginning on or after Jan. 1, 2013, the time by which a governmental plan must comply with final regulations on distributions from a pension plan upon attainment of normal retirement age. Those regulations were issued on May 22, 2007. Thus, the 2007 regulations will be effective for a governmental plan (as defined in IRC Sec. 414(d)) for plan years beginning on or after Jan. 1, 2013, but in the case of nongovernmental plans, the regulations were effective as of the date of publication.
IRC Sec. 411(a)(8) provides that the term “normal retirement age” means the earlier of (A) the time a plan participant attains normal retirement age under the plan; or (B) the later of age 65 or the fifth anniversary of the time a plan participant commenced participation in the plan. A plan’s normal retirement age is relevant for a number of purposes, including for determining the date at which a participant is eligible to receive his or her normal retirement benefit and calculating the amount of the benefit received.
Reg. Sec. 1.401(a)-1(b)(1)(i) requires a pension plan to be maintained primarily to provide systematically for the payment of definitely determinable benefits after retirement. The 2007 regulations amended Reg. Sec. 1.401(a)-1(b)(1)(i) to accommodate “phased retirement” by permitting a pension plan to commence payment of retirement benefits to a participant after the participant has attained normal retirement age even if the participant has not yet had a severance from employment with the employer maintaining the plan. The 2007 regulations require a pension plan’s normal retirement age to be an age that is not earlier than the earliest age that is reasonably representative of the typical retirement age for the industry in which the covered work force is employed. In general, the regulations provide that a normal retirement age of 62 or later is deemed to satisfy this requirement, and a normal retirement age younger than 55 is presumed not to satisfy the requirement unless the IRS determines otherwise on the basis of facts and circumstances.
For governmental plans, the 2007 regulations originally were scheduled to be effective for plan years beginning on or after Jan. 1, 2009. However, in Notice 2008-98, C.B. 2008-2, 1080, the IRS amended the 2007 regulations to change the effective date for governmental plans to plan years beginning on or after Jan. 1, 2011. The agency now has stated that it intends to amend the regulations to change the effective date for governmental plans to plan years beginning on or after Jan. 1, 2013. Governmental plan sponsors may rely on Notice 2009-86 with respect to the extension until the regulations are so amended.
For further information, contact James P. Flannery via e-mail at retirementplanquestions@irs.gov.
For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.
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