Final IRS Regulations Clarify Maximum Limits for Governmental Qualified Plans
(Posted on April 5, 2007 by )


On April 5, 2007, the IRS proposed new regulations under section 415 of the Internal Revenue Code (IRC), as amended. Section 415 limits the benefits that may be paid by defined benefit plans and contributions that may be made to defined contribution plans. While some of the provisions may be a restatement of the current rules or a codification of guidance issued over the years since the current regulations were adopted, other provisions may represent new interpretations that need to be studied carefully. Read more

Post-death qualified domestic relations order invalidated
(Posted on January 9, 2006 by )


The recent case of Sanzo v. NYSA-ILA Pension Trust Fund illustrates the perils of a badly drafted qualified domestic relations order (“QDRO”). Although directly applicable only to QDROs of ERISA-covered plans, the principles underlying it would also apply to governmental and church plans that allow for the recognition of domestic relations orders. Read more

Future Cost-of-Living Increases Included in 415(b) Calculation
(Posted on January 4, 2005 by )


Private Letter Ruling 200452039 discussed the situation of a plan that provided a 3% cost-of-living adjustment to the benefits of each retired participant each year, beginning on the January 1 following the third anniversary of the participant’s retirement date. The private letter ruling held, in effect, that a participant whose annual benefit beginning in 2005 was equal to the dollar limit for 2005 ($170,000 per year), but whose benefit was subject to a cost of living increase starting in January 2009, would be in violation of the limit. Read more

New Mandatory Rollover Rules Will Apply to Government, Church Plans
(Posted on December 29, 2004 by )


Section 657 of the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”) amended Internal Revenue Code (“Code”) section 401(a)(31) to provide that a distribution from an “eligible plan” of more than $1,000 had to be directly rolled over to an individual retirement account unless a participant affirmatively elected another form of distribution (e.g., to receive the amount in cash). The term “eligible plan” was defined as follows:

a plan which provides that any nonforfeitable accrued benefit for which the present value (as determined under section 411(a)(11)) does not exceed $5,000 shall be immediately distributed to the participant.

The effective date of the provision was tied to the issuance of regulations by the Department of Labor. Thus, the question arose as to whether a plan that was not subject to either Department of Labor regulations or section 411 (a governmental plan or a nonelecting church plan) would be subject to the EGTRRA change. Read more

Form 1945, Statement Concerning Your Employment in a Job Not Covered by Social Security, Released
(Posted on December 20, 2004 by )


If a state or local government hires new employees not covered by social security after January 1, 2005, it must do the following: Read more

IRS Code & Subject Directory Available Online
(Posted on December 9, 2004 by )


The IRS has announced that the Directory of Practitioners on its site “is unavailable pending redesign considerations.” However, you can still get a copy of the latest monthly directory in PDF format by clicking here. Read more IRS links.

Working Families Tax Relief Act Affects Domestic Partner Benefits
(Posted on October 29, 2004 by )


After publication of this article, the Supreme Court issued United States v. Windsor. That decision overturned the Defense of Marriage Act, which had previously prevented federal recognition of same-sex marriage. Thus, this article is now obsolete as to same-sex spouses, although it continues to apply to domestic partners who are not legally married.

One issue that has been completely ignored in the press surrounding the Working Families Tax Relief Act of 2004, Public Law No. 108-311 (“Act”), is the apparently unintentional effect it will have on employers that sponsor employee benefit plans covering domestic partners or same-sex spouses of employees, and on employees whose domestic partners or same-sex spouses are covered by such plans. Because the relevant provisions of the Act will become effective starting in 2005, employers that sponsor such plans will have to act quickly to deal with the changes made by the Act. Read more

Speech outline, “Federal Law Update, 2003-2004,” now available
(Posted on October 18, 2004 by )


The outline of the speech, originally presented on October 12, 2004, at the 18th Annual Convention of the National Council on Teacher Retirement, is available by clicking here. Read more

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