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CCH® PENSION — 12/28/11

IRS issues 2011 cumulative list of changes in plan qualification requirements

The IRS has issued its 2011 Cumulative List of Changes in Plan Qualification Requirements. The 2011 Cumulative List is to be used by plan sponsors and practitioners submitting determination, opinion, or advisory letter applications for plans during the period beginning February 1, 2012 and ending January 31, 2013. These plans will primarily be (1) single-employer individually designed defined contribution plans, including employee stock ownership plans (ESOPs), single-employer individually designed defined benefit plans, and multiple-employer individually designed plans that are in Cycle B. Generally, an individually designed plan is in Cycle B if the last digit of the employer identification number of the plan sponsor is 2 or 7.

The 2011 Cumulative List informs plan sponsors of issues the IRS has specifically identified for review in determining whether a plan filing in Cycle B has been properly updated. The 2011 Cumulative List reflects law changes made by the Pension Protection Act of 2006 (PPA; P.L. 109-280), the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act (P.L. 110-28), the Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008 (P.L. 110-245), the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA; P.L. 110-458), the Small Business Jobs Act of 2010 (P.L. 111-240), and the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (P.L. 111-192).

Generally, the IRS will not consider in its review of any determination letter application for the submission period that begins February 1, 2012, any:

(1) guidance issued after October 1, 2011;
(2) statutes enacted after October 1, 2011;
(3) qualification requirements first effective in 2013 or later; or
(4) statutory provisions that are first effective in 2012, for which there is no guidance identified in the 2011 Cumulative List.

However, in order to be qualified, a plan must comply with all relevant qualification requirements, not just those on the 2011 Cumulative List. Terminating plans must include all law changes in effect at the time of termination.

2011 changes highlighted

The 2011 Cumulative List contains plan qualification requirements listed in the 2007, 2008, 2009, and 2010 Cumulative Lists, as well as additional 2011 plan qualification requirements. Some of the newly added qualification requirements for 2011 include:

• Rev. Rul. 2011-1, revising the rules for group trusts;
• Notice 2011-19 on employer securities readily tradable on established securities markets;
• Notice 2011-85, postponing the effective dates for certain hybrid plan interest crediting rules and extending the deadline for adopting an interim or discretionary amendment under Code Sec. 411(a)(13); and
• Code Sec. 431(b)(8), added by P.L. 111-192 and Notice 2010-83, providing guidance with respect to the funding rules under that provision.

Source: IRS Notice 2011-97.

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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