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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.
The IRS has issued two advanced notices of proposed rulemaking on the definition of "governmental plan" under Code Sec. 414(d). The guidance contains anticipated proposed regulations and requests for comments. One draft proposed set of regulations would provide general guidance on the determination of governmental plan status. The other draft set of proposed rules would provide guidance on the determination of whether a plan of an Indian tribal government is a governmental plan within the meaning of Code Sec. 414(d). The IRS invites comments on the proposed rules, other possible approaches, and other issues that should be taken into account. Written and electronic comments are due by February 6, 2012.
These issuances are needed because the lack of comprehensive Code Sec. 414(d) guidance has made it difficult for government employers and their employees to have the certainty they require in this area, according to the IRS. In addition, the Pension Protection Act of 2006 (PPA; P.L. 109-280) contained statutory changes related to plan maintained by Indian tribal governments.
General guidance
The draft proposed regulations providing general guidance would define key terms under Code Sec. 414(d), such as "United States," "State," "political subdivision of a State," and "agency or instrumentality of a State or political subdivision of a State."
In addition, the proposed regulations would provide guidance on whether a governmental entity has established and maintained a governmental plan for purposes of Code Sec. 414(d) and guidance on the rules that would apply when a plan sponsor changes its status from a governmental entity to a private entity or vice-versa.
It is expected that the proposed regulations providing general guidance would not be effective earlier than plan years beginning after the publication of final regulations.
Indian tribal governments
Under the draft proposed regulations relating to Indian tribal governments, the determination of whether a plan of an Indian tribal government (ITG) is a governmental or nongovernmental plan would depend in part on: (1) a determination of which activities are commercial activities and (2) a determination of whether employees of the ITG covered by the plan are employees who perform substantial services in commercial activities of the ITG and are thus commercial employees. The proposed regulations would provide that certain specific activities are deemed to be governmental or commercial for purposes of Code Sec. 414(d). Commercial activities would be operations involving a hotel, casino, service station, convenience store, or marina. These activities are examples that were identified as commercial activities in Notice 2006-89 and Notice 2007-67.
The proposed rules relating to Indian tribal governments would apply to plan years beginning six months after the publication of final regulations.
Source: 76 FR 69172 and 76 FR 69188, November 8, 2011.
For more information, visit http://www.wolterskluwerlb.com/rbcs.
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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