Pension & Benefits News IRS regulatory agenda includes guidance on distributions, reporting and disclosure rules, and IRAs
Friday, December 28, 2018

IRS regulatory agenda includes guidance on distributions, reporting and disclosure rules, and IRAs 

By Pension and Benefits Editorial Staff

The IRS has released its regulatory agenda for Fall 2018, which includes pension and benefit regulations that are currently under development or review. 

Prerule stage. The IRS anticipates issuing regulations under Code Sec. 414(m) to define the term “affiliated service group,” including guidance on determining whether two or more separate service entities constitute an affiliated service group under Code Sec. 414(m) and whether two unrelated organizations are in a management-type affiliated service group under Code Sec. 414(m)(5). 

Proposed rule stage. Among the items in the IRS’s proposed rule stage are: 

  • Guidance relating to the determination of whether a plan is a governmental plan. 
  • Additional guidance regarding the determination of plan assets and benefit liabilities for purposes of the funding requirements that apply to single-employer defined benefit plans, the use of certain funding balances maintained for those plans, and the benefit restrictions for certain underfunded defined benefit pension plans 
  • Guidance relating to individual retirement arrangements (IRAs), including spousal IRAs, SEPs, and IRA technical changes. 
  • Guidance on the requirement for plan administrators or employers to furnish an individual statement to participants who separate from service with a deferred vested benefit. 
  • Rules relating to employee stock ownership plans (ESOPs). 
  • Application of the Code Sec. 72(t)10% additional tax to that portion of a distribution received by a taxpayer before attaining age 59 from a qualified retirement plan that is includible in the taxpayer’s gross income. 
  • Regulations that would prohibit accelerations of annuity payments to those plan participants in defined benefit plans who currently receive annuity payments and would allow for a modification of a stream of annuity payments from a retirement plan in connection with the plan ceasing to be subject to a restriction on prohibited payments under Code Sec. 436(d) or plan termination. 
  • Update to existing final minimum vesting standard regulations that generally apply to tax-qualified retirement plans under Code Sec. 411(a). 
  • Withholding on certain retirement plan distributions under Code Secs. 3405(a) and (b). 
  • Update of existing final regulations on the definition of a church plan under Code Sec. 414(e). 
  • Guidance on the application of the nondiscrimination requirements, the backloading limitations, certain plan termination rules, the benefit limitations, and the top heavy rules to cash balance plans, pension equity plans, and variable annuity plans. 
  • Update of user fees related to enrolled agents and enrolled retirement plan agents. 
  • Modification of the rules relating to hardship distributions from 401(k) plans. 
  • Proposed regulations that would provide limited relief to a defined contribution multiple employer plan (MEP) in the event of a failure by one employer maintaining the plan to satisfy an applicable qualification requirement or to provide information needed to ensure compliance with a qualification requirement. 

Final rule stage.The items in the IRS’s final rule stage include the following: 

  • Application of Code Sec. 409A to nonqualified deferred compensation plans regarding the measurement of income inclusion and calculation of applicable taxes. 
  • Guidance for nonqualified deferred compensation plans of State and local governments and tax-exempt entities relating to the definitions of a bona fide severance pay plan and substantial risk of forfeiture. 
  • Guidance on satisfying the reporting requirements of Code Sec. 6057 for plan years beginning after December 31, 2008. 
  • Modification to the rules regarding the minimum present value requirements applicable to certain qualified defined benefit retirement plans in order to reflect statutory and other changes to the applicable requirements. 
  • Revision of certain provisions in the regulations under Code Sec. 409A to clarify the application of Code Sec. 409A to nonqualified deferred compensation plans. 
  • Guidance relating to IRAs under Code Secs. 408 and 408A. 
  • Application of normal retirement age regulations to governmental plans. 
  • Amendment to modify the nondiscrimination requirements applicable to certain defined benefit plans and defined contribution plans that provide additional benefits to a grandfathered group of employees. The Treasury Department is considering whether it can achieve relevant statutory objectives at a lower cost. 
  • Modification of the definitions of QNEC and QMAC contributions under IRS Reg. Secs. 1.401(k)-6 and 1.401(m)-5 to provide that forfeitures may be used to fund the contributions. 

SOURCE: The Unified Agenda for Fall 2018.

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