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Site News: Chart comparing elective plans updated |
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Site News: 457 Answer Book, Fifth Edition, Published |
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 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. Click here for a text version of the proposed regulations,
or here for a PDF version.
It is
essential for each governmental plan to have the regulations reviewed by
those who are responsible for the plan’s compliance with section 415 to
determine whether the regulations pose issues for the
plan and what action should be taken to deal with any such issues.
The regulations apply,
subject to certain transition rules, to limitation years beginning on or after
July 1, 2007.
(Read more about this)
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| 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.
From the perspective of plan administration, this case illustrates the importance of reviewing purported QDROs carefully, to make sure that their terms will be clear under any possible future circumstances. Otherwise, the plan runs the risk of ending up in the middle of a court battle to interpret an ambiguous domestic relations order after the death of the participant, at which time the issue cannot be resolved simply by amending the existing QDRO.
(Read more about this)
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Let's kill all the lawyers? |
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Why did Shakespeare say, "Let's kill all the lawyers"?
And what is the relevance for employee benefits law?
(Read more about this)
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Site News: Employee Benefits Headlines Reorganized |
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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 about this)
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