n-09-98.pdf

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Part III – Administrative, Procedural and Miscellaneous

2009 Cumulative List of Changes in Plan Qualification Requirements

Notice 2009-98

I. PURPOSE

This notice contains the 2009 Cumulative List of Changes in Plan Qualification
Requirements (2009 Cumulative List) described in section 4 of Rev. Proc. 2007-
44, 2007-2 C.B. 54. The 2009 Cumulative List is to be used primarily by plan
sponsors of individually designed plans that are in Cycle E. An individually
designed plan is in Cycle E if it is a single employer plan where the last digit of
the employer identification number of the plan sponsor is 5 or 0, or it is a § 414(d)
governmental plan for which an election has been made by the plan sponsor to
treat Cycle E as the initial EGTRRA remedial amendment cycle for the plan.

The list of changes in section VI of this notice does not extend the deadline by
which a plan must be amended to comply with any statutory, regulatory, or
guidance changes. The general deadline for timely adoption of an interim or
discretionary amendment can be found in section 5.05 of Rev. Proc. 2007-44.

II. BACKGROUND

Rev. Proc. 2007-44 sets forth procedures for issuing opinion, advisory, and
determination letters and describes the five-year remedial amendment cycle for
individually designed plans and the six-year remedial amendment cycle for pre-
approved plans. In addition, section 5.05 of Rev. Proc. 2007-44 provides the
deadline for timely adoption of an interim amendment or discretionary
amendment.

Under section 4 of Rev. Proc. 2007-44, the Internal Revenue Service intends to
annually publish a Cumulative List to identify statutory, regulatory, and guidance
changes that must be taken into account in submissions by plan sponsors to the
Service for opinion, advisory, and determination letters whose submission period
begins on February

1st following issuance of the Cumulative List.

In Notice 2008-108, 2008-2 C.B. 1275, the Service published the 2008
Cumulative List of Changes in Plan Qualification Requirements (2008 Cumulative
List).
1

1
See Notice 2007-94, 2007-2 C.B. 1179; Notice 2007-3, 2007-1 C.B. 255; Notice 2005-101,
2005-2 C.B. 1219; and Notice 2004-84, 2004-2 C.B. 1030, for the 2007, 2006, 2005, and 2004
Cumulative Lists, respectively.

2
Under section 1107 of the Pension Protection Act of 2006 (PPA ’06), a plan
amendment made pursuant to any amendment made by PPA ’06 generally may
be retroactively effective, if, in addition to meeting the other applicable
requirements, the amendment is made on or before the last day of the first plan
year beginning on or after January 1, 2009 (January 1, 2011 in the case of a
governmental plan).

Pursuant to Notice 2008-108, as an alternative to submitting a plan in Cycle D
(February 1, 2009 – January 31, 2010), a plan sponsor of a Cycle D plan whose
first plan year beginning after January 1, 2009 ends on or after February 1, 2010,
may defer submission of its plan until Cycle E (February 1, 2010 –
January 31, 2011). In order to defer submission of such a plan until Cycle E, an
application for a determination letter must be timely filed in Cycle E. In such a
case, the plan will be treated as having been filed within the plan’s EGTRRA
remedial amendment period and will be reviewed on the basis of the 2009
Cumulative List. However, such a plan will be treated as a Cycle E plan solely
for this initial cycle, and all subsequent submissions will be made in Cycle D.

Rev. Proc. 2009-36, 2009-35 I.R.B. 304, provides, in part, that the sponsor of an
individually designed governmental plan may make a one-time election to be in
Cycle E (instead of Cycle C), as the initial EGTRRA remedial amendment cycle
for the plan.

III. APPLICATION OF 2009 CUMULATIVE LIST

This notice is being issued for purposes of the determination letter program for
plans submitted for determination letters during the Cycle E submission period.
In Rev. Proc. 2005-66, 2005-2 C.B. 509, the Service announced the opening of
the initial five-year remedial amendment cycle. In accordance with Rev. Proc.
2007-44, the Service will start accepting determination letter applications for
Cycle E plans beginning on February 1, 2010. The 12-month submission period
for Cycle E plans will end January 31, 2011.

The 2009 Cumulative List, set forth in section VI of this notice, informs plan
sponsors of issues the Service has specifically identified for review in
determining whether a plan filing in Cycle E has been properly updated.
Specifically, the 2009 Cumulative List reflects law changes under the Economic
Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), Pub. L. 107-16
(with technical corrections made by the Job Creation and Worker Assistance Act
of 2002 (JCWAA)), Pub. L. 104-147, the Pension Funding Equity Act of 2004
(PFEA), Pub. L. 108-218, the American Jobs Creation Act of 2004 (AJCA), Pub.
L. 108-357, the Katrina Emergency Tax Relief Act of 2005 (KETRA), Pub. L. 109-
73, the Gulf Opportunity Zone Act of 2005 (GOZA), Pub. L. 109-135, the Pension
Protection Act of 2006 (PPA ’06), Pub. L. 109-280, the U.S. Troop Readiness,
Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act,
2007, Pub. L. 110-28, the Heroes Earnings Assistance and Relief Tax Act of

3
2008 (HEART Act), Pub. L. 110-245, the Emergency Economic Stabilization Act
of 2008 (EESA), Pub. L. 110-343, and the Worker, Retiree, and Employer
Recovery Act of 2008 (WRERA), P.L. 110-458.

The Service will not consider in its review of any determination letter application,
for the submission period that begins February 1, 2010, any:

(1) guidance issued after October 1, 2009;

(2) statutes enacted after October 1, 2009;

(3) qualification requirements first effective in 2011 or later; or

(4) statutory provisions that are first effective in 2010, for which there is no
guidance identified in this notice.
2

The 2009 Cumulative List does not include any items described in (1) through (4)
above. However, in order to be qualified, a plan must comply with all relevant
qualification requirements, not just those on the 2009 Cumulative List.

The Service will not consider the proposed regulations identified in the footnotes
of section VI of this notice in issuing determination letters, and such letters
cannot be relied on with respect to the proposed regulations.

Terminating plans must include all law changes in effect at the time of
termination. See section 8 of Rev. Proc. 2007-44 regarding plan termination.

IV. SPECIAL RULES FOR THE HEROES EARNINGS ASSISTANCE AND
RELIEF TAX ACT OF 2008

Under sections 104(d)(2) and 105(c) of the Heroes Earnings Assistance and
Relief Tax Act of 2008 (HEART Act), Pub. L. 110-245, a plan amendment made
pursuant to sections 104(a) or 105(b)(1) of the HEART Act generally may be
retroactively effective, if, in addition to meeting the other applicable requirements,
the amendment is made on or before the last day of the first plan year beginning
on or after January 1, 2010 (January 1, 2012 in the case of a governmental plan).

Plans submitted in Cycle E must meet the amendment deadline for the HEART
Act, if applicable. However, the Service will not consider the HEART Act in
issuing determination letters because no guidance has been issued with respect
to the HEART Act, and such letters cannot be relied on with respect to the
HEART Act. The HEART Act provisions are listed in section VII of this notice.

2
The Service will also not consider the requirements of § 436 in its review of any Cycle E
determination letter application. The Service will consider the requirements of §§ 401(a)(35),
411(a)(13), and 411(b)(5) in its review of a Cycle E determination letter application only if the plan
has been amended to meet those requirements.

4

Section 107(a) of the HEART Act extends the applicability of the qualified
reservist distribution to individuals ordered or called to duty after
December 31, 2007. The Service is treating an amendment made pursuant to
section 107 of the HEART Act as if it was included in the amendments described
in section 1107 of PPA ’06. See section VI of this notice, # 11, with respect to
§ 401(k)(2)(B)(i)(V) qualified reservist distributions.

V. SPECIAL RULES FOR THE WORKER, RETIREE, AND EMPLOYER
RECOVERY ACT OF 2008

Section 201 of WRERA added section 401(a)(9)(H) to the Code. This provision
provides, in part, a suspension of the minimum distribution requirement for 2009
applicable to defined contribution plans.

Under section 201(c)(2) of WRERA, a plan amendment made pursuant to
WRERA section 201 generally may be retroactively effective, if, in addition to
meeting the other applicable requirements, the amendment is made on or before
the last day of the first plan year beginning on or after January 1, 2011
(January 1, 2012 in the case of a governmental plan).

Plans submitted in Cycle E can be amended, at the option of plan sponsors to
include WRERA section 201. However, the Service will not consider WRERA
section 201 in issuing determination letters for Cycle E plans, and such letters
cannot be relied on with respect to the requirements of WRERA section 201.

A plan restatement submitted in Cycle E must include the applicable WRERA
provisions identified in section VI of this notice.

VI. 2009 CUMULATIVE LIST OF CHANGES IN PLAN QUALIFICATION
REQUIREMENTS

The following list consists of statutory provisions and associated guidance which
reflect changes to plan qualification requirements. Miscellaneous guidance is
also provided. The Service has identified below plan qualification requirements
which were not on the 2008 or earlier Cumulative Lists as “(New)”. Thus, the
2009 Cumulative List contains those plan qualification requirements listed in the
2004, 2005, 2006, 2007, and 2008 Cumulative Lists as well as additional 2009
plan qualification requirements.

1. 72(p)
: Section 1.72(p)-1 of the Income Tax Regulations relating to plan
loans was published on December 3, 2002 (67 Fed. Reg. 71821).
(2004 C. L.).

2. 401(a)
:

5
š Final Regulations under § 401(a) of the Code regarding permissible
normal retirement ages were published on May 22, 2007 (72 Fed.
Reg. 28604). (2006 C. L.).
š Notice 2007-69, 2007-2 C.B. 468, provides temporary relief,
for certain pension plans under which the definition of normal
retirement age may be required to be changed to comply with
the regulations, but only until the first day of the first plan year
that begins after June 30, 2008. (2007 C. L.).
š Notice 2008-98, 2008-2 C.B. 1080, provides that the Service
and Treasury intend to amend the normal retirement age
regulations to change the effective date for governmental
plans to plan years beginning on or after January 1, 2011.
3

(New).

š Rev. Rul. 2008-40, 2008-2 C.B. 166, provides that the transfer of
amounts from a trust under a plan qualified under § 401(a) to a
nonqualified foreign trust is treated as a distribution from the
transferor plan and that transfer of assets and liabilities from a
qualified plan to a plan that satisfies § 1165 of the Puerto Rico
Code is also treated as a distribution from the transferor plan.
(2008 C. L.).

š Rev. Rul. 2008-45, 2008-2 C.B. 403, provides that the exclusive
benefit rule of § 401(a) is violated if the sponsorship of a qualified
retirement plan is transferred from an employer to an unrelated
taxpayer and the transfer is not in connection with a transfer of
business assets or operations from the employer to the unrelated
taxpayer. (2008 C. L.).

3. 401(a)(4):
š Amendments to § 1.401(a)(4)-8 of the Regulations relating to new
comparability plans were published on June 29, 2001 (66 Fed. Reg.
34535). (2004 C. L.).
š Rev. Rul. 2001-30, 2001-2 C.B. 46. (2004 C. L.).
š Amendments to § 1.401(a)(4)-9 of the Regulations relating to new
comparability plans were published on June 29, 2001 (66 Fed. Reg.
34535). (2005 C. L.).
š Rev. Rul. 2004-21, 2004-1 C.B. 544. (2005 C. L.).

4. 401(a)(5): Section 401(a)(5)(G) of the Code was amended by PPA ’06
§ 861(a)(1) with respect to governmental plans. (2008 C. L.).

3
Notice 2009-86, 2009-46 I.R.B. 629, provides that the Service and Treasury intend to amend the
normal retirement age regulations to change the effective date for governmental plans to plan
years beginning on or after January 1, 2013.

6
5. 401(a)(9):
š Sections 1.401(a)(9)-1 through –9 of the Regulations were published
on April 17, 2002 and June 15, 2004 (67 Fed. Reg. 18988 and 69
Fed. Reg. 33288). (2004 C. L.).
š Final regulations under § 401(a)(9) were published on
September 8, 2009 (74 Fed. Reg. 45993), which permit a
governmental plan to comply with the required minimum distribution
rules of § 401(a)(9) by using a reasonable and good faith
interpretation of the statute. (New).

6. 401(a)(17)
: Section 401(a)(17) of the Code was amended by § 611(c) of
EGTRRA to increase the compensation limit to $200,000. (2004 C. L.).
š Notice 2001-56, 2001-2 C.B. 277. (2004 C. L.).

7. 401(a)(26)
: Section 401(a)(26)(G) of the Code was amended by PPA ’06
§ 861(a)(1) with respect to governmental plans. (2008 C. L.).

8. 401(a)(31)
:
š Section 401(a)(31) was amended by § 643(b) of EGTRRA to allow
employees’ after-tax contributions to be rolled over under certain
circumstances. (2004 C. L.).
š Section 401(a)(31)(B) was amended by § 657(a) of EGTRRA (as
amended by § 411(t) of JCWAA) to provide for the automatic rollover
of certain mandatory distributions. The effective date is
March 28, 2005. (2004 C. L.).
š Notice 2005-5, 2005-1 C.B. 337. (2004 C. L.).
š Sections 641, 642 and 643 of EGTRRA (as amended by § 411(q) of
JCWAA) amended the definition of eligible retirement plan in § 402
of the Code to include a § 403(b) annuity contract and eligible
governmental § 457(b) plan. (2004 C. L.).
š Section 636(b) of EGTRRA modified the definition of eligible rollover
distribution to exclude hardship distributions. (2004 C. L.).

9. 401(a)(35)
: PPA ’06 § 901(a)(1) added § 401(a)(35) requiring that defined
contribution plans provide employees with the freedom to divest publicly
traded securities.
4
(2008 C. L.).

š Notice 2006-107, 2006-2 C.B. 1114. (2008 C. L.).
š Notice 2008-7, 2008-1 C.B. 276, extends certain transitional
guidance and transitional relief provided to certain defined
contribution plans holding publicly traded employer securities under
Notice 2006-107. (2008 C. L.).

4
Proposed regulations under § 401(a)(35) were published on January 3, 2008 (73 Fed. Reg. 421)
and may be relied upon until final regulations are issued. The Service will consider the
requirements of § 401(a)(35) in its review of a Cycle E determination letter application only if the
plan has been amended to meet those requirements.

7
š WRERA § 109(a) amended the definition of one-participant
retirement plan under § 401(a)(35)(E)(iv). (New).

10. 401(a)(36): PPA ’06 § 905(b) added § 401(a)(36) regarding distributions
to a participant who has attained age 62 and who has not separated from
employment at the time of the distribution. (2008 C. L.).

11. 401(k) & 401(m)
:
š Section 401(k)(2) and § 401(k)(10) of the Code were amended by
§ 646(a)(1) of EGTRRA to permit distributions of elective deferrals
from a § 401(k) plan upon severance from employment.
(2004 C. L.).
š Notice 2002-4, 2002-1 C.B. 298. (2004 C. L.).
š Section 636(a) of EGTRRA directed the Secretary of the Treasury to
revise the regulations relating to safe harbor hardship distributions of
elective deferrals from § 401(k) plans so that the time the employee
is prohibited from making elective and employee contributions is
reduced from one year to six months after a hardship distribution.
(2004 C. L.).
š Notice 2001-56. (2004 C. L.).
š Notice 2002-4. (2004 C. L.).
š Section 401(k)(11) of the Code was amended by § 611(f) of
EGTRRA to increase the maximum amount of qualified salary
reduction contributions that can be made to SIMPLE 401(k) plans.
(2004 C. L.).
š Section 402(g) of the Code was amended by § 611(d) of EGTRRA to
increase the applicable dollar amount. (2004 C. L.).
š Section 401(m)(9) of the Code was amended by § 666 of EGTRRA to
eliminate the multiple use test. (2004 C. L.).
š Final Regulations under § 401(k) and § 401(m) of the Code were
published on December 29, 2004 (69 Fed. Reg. 78144).
5

(2004 C. L.).
š Announcement 2007-59, 2007-1 C.B. 1448, provides that a plan will
not fail to satisfy the requirements of a § 401(k) safe harbor plan
because of a mid-year change to implement a designated Roth
contribution program. (2007 C. L.).
š PPA ’06 § 826 modified the rules relating to distributions from a
§ 401(k) plan on account of a participant’s hardship to permit the plan
to treat a participant’s beneficiary under the plan the same as the
participant’s spouse or dependent. (2008 C. L.).
š Notice 2007-7, 2007-1 C.B. 395, provides guidance regarding
PPA ’06 § 826. (2008 C. L.).

5
Proposed amendments to the regulations under § 401(k) and § 401(m) were published on
May 18, 2009 (74 Fed. Reg. 23134) and may be relied upon until final regulations are issued.

8
š Announcement 2007-59, 2007-1 C.B. 1448, provides that a plan
will not fail to satisfy the requirements of a § 401(k) safe harbor
plan because of a mid-year change to implement the PPA ’06
§ 826 hardship withdrawals. (2008 C. L.).
š PPA ’06 § 827 added § 401(k)(2)(B)(i)(V) which permits reservists
called to active duty after September 11, 2001 and before 2008 to
take in-service distributions from a § 401(k) plan. (2008 C. L.).
š Section 107(a) of the HEART Act extends the applicability of the
qualified reservist distribution to individuals ordered or called to
active duty after December 31, 2007. (New).
š PPA ’06 § 861(a)(2) amended § 401(k)(3)(G) with respect to
governmental plans. (2008 C. L.).
š PPA ’06 § 902(e)(3) eliminates the gap period income rule for excess
contributions in § 401(k)(8)(A)(i). (2008 C. L.).
š PPA ’06 § 902 added § 401(k)(13) with respect to qualified automatic
contribution arrangements. (2008 C. L.).
š Final regulations under § 401(k) with respect to qualified automatic
contribution arrangements were published on February 24, 2009 (74
Fed. Reg. 8200). (New).
š Rev. Rul. 2009-30, 2009-39 I.R.B. 391, provides information with
respect to automatic contribution increases under automatic
contribution arrangements. (New).
š Notice 2009-65, 2009-39 I.R.B. 413, provides sample amendments
that plan sponsors can use to add automatic contribution features to
their plans. (New).
š PPA ’06 § 902(e)(3) eliminates the gap period income rule for excess
aggregate contributions in § 401(m)(6)(A). (2008 C. L.).
š PPA ’06 § 902 added § 401(m)(12) with respect to qualified
automatic contribution arrangements. (2008 C. L.).
š Final regulations under § 401(m) with respect to qualified automatic
contribution arrangements were published on February 24, 2009 (74
Fed. Reg. 8200). (New).

12. 402(c)(2)(A)
: PPA ’06 § 822(a) amended § 402(c)(2)(A) to permit
nontaxable distributions from a qualified plan to be directly rolled over tax-
free to either another qualified plan or a § 403(b) plan if the separate
accounting requirements are met. (2008 C. L.).

13. 402(c)(11)
: PPA ’06 § 829(a)(1) added § 402(c)(11) to allow nonspouse
beneficiaries to directly roll over distributions from a qualified plan to an
individual retirement plan. (2008 C. L.).
š Notice 2007-7, 2007-1 C.B. 395, provides guidance regarding
§ 402(c)(11). (2008 C. L.).
š WRERA § 108(f) requires that plans provide for nonspouse
beneficiary rollovers under § 402(c)(11), effective for plan years
beginning after December 31, 2009. (New).

9

14. 402(f): PPA ’06 § 1102(a) provides that notice required to be provided
under § 402(f) may be provided as much as 180 days before the annuity
starting date.
6
(2008 C. L.).
š Notice 2007-7, 2007-1 C.B. 395, provides guidance regarding
PPA ’06 § 1102. (2008 C. L.).
š Notice 2009-68, 2009-39 I.R.B. 423, provides two safe harbor
explanations that may be provided to recipients of eligible rollover
distributions from an employer to satisfy § 402(f). (New).
š WRERA § 108(f)(2) amended § 402(f)(2)(A) with respect to the
definition of eligible rollover distribution. (New).

15. 402(g)(2)
: WRERA § 109(b)(3) amended § 402(g)(2)(A)(ii) to eliminate
the distribution of gap period earnings with excess deferrals. (New).

16. 402A
: Section 402A of the Code was added by § 617 of EGTRRA to offer
optional treatment of elective deferrals as designated Roth contributions to
defined contribution plans, effective for taxable years beginning after
December 31, 2005. (2004 C. L.).
š Final Regulations under § 401(k) and § 401(m) of the Code relating
to designated Roth contributions were published on
January 3, 2006 (71 Fed. Reg. 6). (2005 C. L.).
š Notice 2006-44, 2006-1 C.B. 889, provides a sample
amendment for Roth § 401(k) plans. (2006 C. L.).
š Final Regulations under § 402A of the Code were published on
April 30, 2007 (72 Fed. Reg. 21103). (2006 C. L.).

17. 404
:
š Section 404(k)(2)(A) of the Code was amended by § 662(a) of
EGTRRA (as amended by § 411(w) of JCWAA) to allow ESOP
dividends to be reinvested without the loss of dividend deductions.
(2005 C. L.).
š Notice 2002-2, 2002-1 C.B. 285, provides guidance with
respect to the changes made to § 404(k) of the Code and on
the effective date of § 409(p) of the Code. (2005 C. L.).

18. 408(q):
Section 408(q) of the Code was added by § 602 of EGTRRA (as
amended by § 411(i) of JCWAA) to allow for deemed individual retirement
accounts (IRAs) in an eligible retirement plan. (2004 C. L.).
š Section 1.408(q)-1 of the Regulations was published on
July 22, 2004 (69 Fed. Reg. 43735). (2004 C. L.).

6
Proposed regulations under § 402(f) were published on October 9, 2008 (73 Fed. Reg. 59575)
and may be relied upon until final regulations are issued.

10
19. 408A(e): PPA ‘06 § 824 added § 408A(e) which permits rollovers to Roth
IRAs from accounts that are not designated Roth accounts that are part of
qualified plans, § 403(b) plans, and § 457 plans. (2008 C. L.).
š Notice 2008-30, 2008-1 C.B. 638, provides guidance regarding
PPA ’06 § 824. (2008 C. L.).

20. 409
: Section 409(p) of the Code was added by § 656 of EGTRRA relating
to restrictions on the allocation of employer securities in an ESOP
maintained by an S corporation. (2005 C. L.).
š Section 1.409(p)-1T of the Regulations was published on
July 21, 2003 (68 Fed. Reg. 42970). (2005 C. L.).
š Section 1.409(p)-1T of the Regulations was published on
December 17, 2004 (69 Fed. Reg. 75455). (2005 C. L.).
š Rev. Proc. 2003-23, 2003-1 C.B. 599, as modified and superseded
by Rev. Proc. 2004-14, 2004-1 C.B. 489, allows a direct rollover
from an ESOP maintained by an S corporation to an individual
retirement plan (IRA). (2005 C. L.).
š Rev. Rul. 2003-6, 2003-1 C.B. 286, provides guidance with respect
to whether an ESOP maintained by an S corporation is eligible for
the delayed effective date of § 409(p) under § 656(d)(2) of EGTRRA.
(2005 C. L.).
š Rev. Rul. 2004-4, 2004-1 C.B. 414, provides guidance relating to
synthetic equity owned by a disqualified person in a nonallocation
year of an ESOP maintained by an S corporation. (2005 C. L.).
š Final Regulations were published on December 20, 2006 (71 Fed.
Reg. 76134) that provide guidance concerning requirements under
§ 409(p) for ESOPs holding stock of S corporations. (2006 C. L.).

21. 410(b)
: Final Regulations were published on July 21, 2006 (71 Fed. Reg.
41357) permitting some employees of tax-exempt organizations to be
excluded when determining whether a § 401(k) plan meets the § 410(b)
minimum coverage requirements. (2006 C. L.).

22. 411(a)
:
š Section 411(a) of the Code was amended by § 633 of EGTRRA (as
amended by § 411(o) of JCWAA) to provide for faster vesting of
matching contributions. (2004 C. L.).
š Rev. Rul. 2003-65, 2003-1 C.B. 1035. (2005 C. L.).
š Amendments to § 1.411(d)-3 of the Final Regulations were published
on August 9, 2006 (71 Fed. Reg. 45379) with respect to the
interaction between the anti-cutback rules of § 411(d)(6) and the
nonforfeitability requirements of § 411(a). (2006 C. L.).
š Section 411(a) of the Code was amended by § 904 of PPA ’06 to
provide for faster vesting of employer nonelective contributions.
(2008 C. L.).

11
š Notice 2007-7, 2007-1 C.B. 395, provides guidance regarding
§ 411(a), as amended by § 904 of PPA ’06. (2008 C. L.).

23. 411(a)(11): Section 411(a)(11)(D) of the Code was added by § 648(a) of
EGTRRA (as amended by § 411(r) of JCWAA) to allow amounts
attributable to rollover contributions to be disregarded in determining the
value of an account balance for involuntary distributions. (2004 C. L.).
š PPA ’06 § 1102(a) provides that notice required to be provided under
§ 411(a)(11) may be provided as much as 180 days before the
annuity starting date. Section 1102(b) of PPA ’06 requires that the
notice under § 411(a)(11) also include a description of the
consequences of failing to defer receipt of a distribution.
7

(2008 C. L.).
š Notice 2007-7, 2007-1 C.B. 395, provides guidance regarding
PPA ’06 § 1102. (2008 C. L.).

24. 411(a)(13
): PPA ’06 § 701(b)(2) added § 411(a)(13) with respect to
special vesting rules for applicable defined benefit plans, such as cash
balance plans.
8
(2008 C. L.).
š Notice 2007-6, 2007-1 C.B. 272, provides guidance regarding cash
balance plans and other hybrid defined benefit plans. (2008 C. L.).
š WRERA § 107(b)(2) amended § 411(a)(13)(A). (New).

25. 411(b)(1):
š Rev. Rul. 2008-7, 2008-7 I.R.B. 419, addresses (1) the application
of the backloading provisions of § 411(b)(1)(A), (B), and (C) to
defined benefit cash balance plans and (2) the use of a “greater of”
formula in the instance of a conversion of a defined benefit pension
plan to a cash balance plan, including limited § 7805(b) relief.
(2008 C. L.).

26. 411(b)(5)
: PPA ’06 § 701(b)(1) added § 411(b)(5) with respect to
applicable defined benefit plans, such as cash balance plans, and special
rules relating to age.
9
(2008 C. L.).

7
Proposed regulations under § 411(a)(11) were published on October 9, 2008 (73 Fed. Reg.
59575). Until final regulations are issued, a plan will be treated as complying with § 411(a)(11) if
(1) the plan complies with either the proposed regulations or Q&A-32 and Q&A-33 in Notice 2007-
7; or (2) if the plan administrator makes a reasonable attempt to comply with § 411(a)(11).
8
Proposed regulations under § 411(a)(13) were published on December 28, 2007 (72 Fed. Reg.
73680) and may be relied upon until final regulations are issued. The Service will consider the
requirements of § 411(a)(13) in its review of a Cycle E determination letter application only if the
plan has been amended to meet those requirements.
9
Proposed regulations under § 411(b)(5) were published on December 28, 2007 (72 Fed. Reg.
73680) and may be relied upon until final regulations are issued. Announcement 2009-82, 2009-
48 I.R.B. November 30, 2009, announces relief for sponsors of statutory hybrid plans that must
amend the interest crediting rate in those plans. Plan sponsors may rely on Ann. 2009-82
pending publication of the anticipated additional guidance described in the announcement. The

12
š Notice 2007-6, 2007-1 C.B. 272, provides guidance regarding cash
balance plans and other hybrid defined benefit plans. (2008 C. L.).
š WRERA § 107(b)(1) amended § 411(b)(5). (New).

27. 411(d)(3)
:
š Rev. Rul. 2007-43, 2007-2 C.B. 45, provides guidance regarding
the partial termination of a defined contribution plan. (2007 C. L.).

28. 411(d)(6)
:
š Central Laborers’ Pension Fund v. Heinz, 124 S.Ct. 2230 (2004).
(2005 C. L.).
š Rev. Proc. 2005-23, 2005-1 C.B. 991, as modified by Rev.
Proc. 2005-76, 2005-2 C.B. 1139. (2005 C. L.).
š Amendments to § 1.411(d)-3 of the Final Regulations were
published on August 9, 2006 (71 Fed. Reg. 45379) with
respect to the interaction between the anti-cutback rules of
§ 411(d)(6) and the nonforfeitability requirements of
§ 411(a). (2006 C. L.).
š Section 645(b)(3) of EGTRRA directed the Secretary of the
Treasury to issue regulations under § 411(d)(6)(B). (2005 C. L.).
š Section 1.411(d)-3 of the Regulations was published on
August 12, 2005 (70 Fed. Reg. 47109). (2005 C. L.).
š Amendments to § 1.411(d)-3 of the Final Regulations were
published on August 9, 2006 (71 Fed. Reg. 45379) with
respect to a utilization test. (2006 C. L.).
š Section 411(d)(6)(D) and § 411(d)(6)(E) of the Code were added by
§ 645 of EGTRRA to permit the elimination of certain optional forms
of benefit under certain conditions. (2005 C. L.).
š Section 1.411(d)-4, Q&A-2(e) of the Regulations was
published on January 25, 2005 (70 Fed. Reg. 3475) to
implement § 411(d)(6)(E). (2005 C. L.).

29. 412:
š Rev. Rul. 2004-20, 2004-1 C.B. 546, provides guidance with respect
to whether a qualified pension plan can be a § 412(i) plan if the plan
holds life insurance contracts and annuity contracts for benefits at
normal retirement age in excess of a participant’s benefits at normal
retirement age under the plan. (2005 C. L.).
š Notice 2004-59, 2004-2 C.B. 447, provides guidance with respect to
restrictions placed on plan amendments following an employer’s
election of an alternative deficit reduction contribution. (2005 C. L.).

Service will consider the requirements of § 411(b)(5) in its review of a Cycle E determination letter
application only if the plan has been amended to meet those requirements.

13
30. 414(d): PPA ’06 § 906(a)(1) added language to the definition of
governmental plan in § 414(d) with respect to Indian tribal governments.
(2008 C. L.).
š Notice 2006-89, 2006-2 C.B. 772, provides transition relief for plans
subject to PPA ‘06 § 906. (2008 C. L.).
š Notice 2007-67, 2007-2 C.B. 467, extends the transition relief
provided in Notice 2006-89. (2008 C. L.).

31. 414(f)(6)
: PPA ’06 § 1106(b) added § 414(f)(6) with respect to a
multiemployer status election. Section 6611(a)(2) and (b)(2) of the U.S.
Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq
Accountability Appropriations Act, 2007 amends § 414(f)(6). (2008 C. L.).

32. 414(v)
: Section 414(v) of the Code was added by § 631 of EGTRRA (as
amended by § 411(o) of JCWAA) to allow for catch-up contributions for
individuals age 50 or older. (2004 C. L.).
š Regulations under § 414(v) were published on July 8, 2003 (68 Fed.
Reg. 40510). (2004 C. L.).
š Notice 2002-4. (2004 C. L.).

33. 414(w): PPA ’06 § 902(d)(1) added § 414(w) with respect to eligible
automatic contribution arrangements.

(2008 C. L.).
š WRERA § 109(b)(4), (5), and (6) amended § 414(w)(3), (5), and (6)
respectively. (New).
š Final regulations under § 414(w) with respect to eligible automatic
contribution arrangements were published on February 24, 2009
(74 Fed. Reg. 8200). (New).
š Rev. Rul. 2009-30, 2009-39 I.R.B. 391, provides information with
respect to automatic contribution increases under automatic
contribution arrangements. (New).
š Notice 2009-65, 2009-39 I.R.B. 413, provides sample amendments
that plan sponsors can use to add automatic contribution features
to their plans. (New).

34. 415
:

š Section 415(c) of the Code was amended by §§ 611(b) and 632 of
EGTRRA (as amended by § 411(p) of JCWAA) to increase the
maximum annual additions permitted to the lesser of $40,000 or
100% of compensation. (2004 C. L.).
š Rev. Rul. 2001-51, 2001-2 C.B. 427. (2004 C. L.).
š Rev. Rul. 2002-27, 2002-1 C.B. 925, provided that
“compensation” within the meaning of § 415(c) could in certain
situations include “deemed § 125 compensation”. (2004 C. L.).

14
š Section 415(b) of the Code was amended by § 611 of EGTRRA to
increase the dollar limit and change the age when the limit is reduced
or increased. (2005 C. L.).
š Rev. Rul. 2001-51, 2001-2 C.B. 427. (2004 C. L.).
š Section 415(b)(2)(E)(ii) of the Code was amended by § 101(b)(4) of
PFEA to fix the percentage at 5.5%. (2005 C. L.).
š Notice 2004-78, 2004-2 C.B. 879, provides the actuarial
assumptions that must be used for distributions with annuity
starting dates occurring during the plan years beginning in
2004 and 2005. (2005 C. L.).
š WRERA § 103(a) changed the deadline to adopt PFEA
amendments from the end of the 2008 plan year to the end of
the 2009 plan year. (New).
š Section 415(b)(2)(E)(ii) of the Code was amended by § 303 of
PPA ‘06 regarding the interest rate assumption for applying benefit
limitations to lump sum distributions. (2008 C. L.).
š PPA ’06 § 832(a) amended § 415(b)(3) to eliminate the active
participant restriction from the “average compensation for high 3
years” definition. (2008 C. L.).
š PPA ‘06 § 906(b)(1)(A) & (B) modified §§ 415(b)(2)(H) and
415(b)(10), respectively, regarding Indian tribal governments. (2008
C. L.).
š PPA ’06 § 867(a) amended § 415(b)(11) to remove the 100% of
compensation limitation for a church plan participant if the participant
has never been a highly compensated employee of the church.
(2008 C. L.).
š Final Regulations under § 415 were published on April 5, 2007 (72
Fed. Reg. 16878). (2006 C. L.).
š WRERA § 103(b)(2)(B)(i) amended § 415(b)(2)(E)(v). (New).

35. 416
:
š Section 416 of the Code was amended by § 613 of EGTRRA (as
amended by § 411(k) of JCWAA) to make several changes to the
top-heavy rules. (2004 C. L.).
š Section 416(g)(4)(H) of the Code was added by § 613(d) of EGTRRA
to provide certain safe harbor § 401(k) plans and § 401(m) plans an
exemption from the top-heavy rules. (2004 C. L.).
š Rev. Rul. 2004-13, 2004-1 C.B. 485. (2004 C. L.).
š Section 416(c)(1)(C) of the Code was amended by § 613(e) of
EGTRRA (as amended by § 411(k)(1) of JCWAA) to provide when a
frozen defined benefit plan is exempt from the minimum benefit
requirements. (2005 C. L.).
š PPA ’06 § 902(c)(1) amended § 416(g)(4)(H)(i) by inserting
§ 401(k)(13) of the Code . (2008 C. L.).

15
š PPA ’06 § 902(c)(2) amended § 416(g)(4)(H)(ii) by inserting
§ 401(m)(12) of the Code. (2008 C. L.).

36. 417:
š Section 1.417(e)-1 of the Regulations was published on
July 16, 2003 (68 Fed. Reg. 41906) relating to retroactive annuity
starting dates. (2005 C. L.).
š Final Regulations under § 417(a)(3) were published on
March 24, 2006 (71 Fed. Reg. 14798) regarding the disclosure of the
relative value of optional forms of benefit. (2006 C. L.).
š PPA ’06 § 1102(a) provides that notice required to be provided under
§ 417 may be provided as much as 180 days before the annuity
starting date.
10
(2008 C. L.).
š Notice 2007-7, 2007-1 C.B. 395, provides guidance regarding
PPA ’06 § 1102. (2008 C. L.).
š PPA ’06 § 302(b) amended the applicable interest rate and mortality
table to be used for determining the present value of lump sum
distributions in § 417(e)(3). (2008 C. L.).
š Rev. Rul. 2007-67, 2007-2 C.B. 1047, addresses the mortality
tables required by § 417(e)(3). (2008 C. L.).
š Notice 2008-30, 2008-1 C.B. 638, provides guidance regarding
PPA ’06 § 302. (2008 C. L.).
š WRERA § 103(b)(2)(A) amended § 417(e)(3)(D)(i). (New).
š PPA ’06 § 1004(a) added the qualified optional survivor annuity
benefit to § 417. (2008 C. L.).
š Notice 2008-30, 2008-1 C.B. 638, provides guidance regarding
PPA ’06 § 1004. (2008 C. L.).

37. 420
:

š Section 6613 of the U.S. Troop Readiness, Veterans' Care, Katrina
Recovery, and Iraq Accountability Appropriations Act, 2007, amends
§ 420(c)(3)(A) regarding minimum cost requirements for transfers of
excess pension assets to retiree health accounts. (2007 C. L.).
š PPA ’06 § 114(d)(1) modified the definition of the term “excess
pension assets” in § 420(e)(2). Section 6612(b) of the U.S. Troop
Readiness, Veterans' Care, Katrina Recovery, and Iraq
Accountability Appropriations Act, 2007, amends § 420(e)(2)(B).
(2007 C. L.).

38. 432
: PPA ’06 § 212(a) added § 432 which requires that a funding
improvement plan or a rehabilitation plan be adopted for multiemployer

10
Proposed regulations under § 417 were published on October 9, 2008 (73 Fed. Reg. 59575)
and may be relied upon until final regulations are issued.

16
plans in endangered or critical status and provides for certain benefit
reductions.
11
(2008 C. L.).
š WRERA § 204 provides a temporary delay of designation of
multiemployer plans in endangered or critical status. (New).
š Notice 2009-31, 2009-16 I.R.B. 856, as modified by Notice
2009-42, 2009-20 I.R.B. 1011, provides election and notice
procedures for multiemployer plans under WRERA § 204.
(New).
š Rev. Proc. 2009-43, 2009-40 I.R.B. 460, provides procedures
with respect to the revocation of elections by multiemployer
plans to freeze funded status under WRERA § 204. (New).
š WRERA § 205 provides a temporary extension of the funding
improvement or rehabilitation periods for multiemployer plans in
endangered or critical status for 2008 or 2009. (New).
š Notice 2009-31, 2009-16 I.R.B. 856, as modified by Notice
2009-42, 2009-20 I.R.B. 1011, provides election and notice
procedures for multiemployer plans under WRERA § 205.
(New).

39. 4975
:
š Section 4975 of the Code was amended by § 612 of EGTRRA to
allow plan loans for Subchapter S shareholder-employees.
(2004 C. L.).
š Section 4975(f) of the Code was amended by § 240 of AJCA to allow
an S corporation distribution on allocated shares to pay off an exempt
loan as long as equal amounts are allocated to participant accounts.
(2005 C. L.).

40. Hurricane Relief
:
š Katrina Emergency Tax Relief Act of 2005, Pub. L. 109-73.
(2005 C. L.).
š Notice 2005-92, 2005-2 C.B. 1165. (2005 C. L.).
š Announcement 2005-70, 2005-2 C.B. 682. (2005 C. L.).
š Gulf Opportunity Zone Act of 2005, Pub. L. 109-135, added § 1400M
and § 1400Q to the Code to provide certain tax benefits to those
areas affected by Hurricanes Katrina, Wilma, and Rita. (2006 C. L.).
š Notice 2008-87, 2008-42 I.R.B. 930, provides relief in connection with
certain employee benefit plans because of damage caused by
Hurricane Ike. (New).
š Emergency Economic Stabilization Act of 2008, Pub. L. 110-343,
provides temporary tax relief for areas damaged by 2008 Midwestern
severe storms, tornados, and flooding by applying § 1400Q and
KETRA to any Midwestern disaster area. (New).

11
Proposed regulations under § 432 were published on March 18, 2008 (73 Fed. Reg. 14417)
and may be relied upon until final regulations are issued.

17

41. Miscellaneous:
š Rev. Rul. 2002-42, 2002-1 C.B. 76, provides guidance with respect to
a situation where a money purchase pension plan is merged or
converted into a profit sharing plan. (2004 C. L.).
š Rev. Proc. 2002-21, 2002-1 C.B. 911, provides guidance with respect
to defined contribution retirement plans maintained by professional
employer organizations. (2004 C. L.).
š Rev. Proc. 2003-86, 2003-2 C.B. 1211, amplifies Rev. Proc. 2002-21
relating to relief provided for certain defined contribution plans
maintained by professional employer organizations. (2004 C. L.).
š Rev. Rul. 2004-10, 2004-1 C.B. 484, provides guidance with respect
to charging administrative expenses to former and current
employees. (2004 C. L.).
š Rev. Rul. 2004-12, 2004-1 C.B. 478, provides guidance with respect
to the distribution restrictions applicable to rollover contributions.
(2004 C. L.).
š Rev. Rul. 2001-62, 2001-2 C.B. 632, provides guidance with respect
to the mortality table under § 415(b)(2)(E)(v) of the Code and the
applicable mortality table under § 417(e)(3)(A)(ii)(I) of the Code.
(2005 C. L.).
š Rev. Rul. 2003-11, 2003-1 C.B. 285, provides guidance with respect
to satisfying the nondiscrimination rules under § 401(a)(4) of the
Code and the minimum coverage requirements under § 410(b) of the
Code when applying the increased compensation limit to former
employees. (2005 C. L.).
š Rev. Rul. 2005-55, 2005-2 C.B. 284, provides guidance with respect
to medical reimbursement accounts under a profit sharing plan.
(2005 C. L.).
š Section 1.401(a)-21 of the Final Regulations was published on
October 20, 2006 (71 Fed. Reg. 61877) setting forth standards for
the use of an electronic medium to provide applicable notices to
recipients or to make participant elections. (2006 C. L.).
š Notice 2008-21, 2008-1 C.B. 431, provides transitional guidance for
2008 under § 436 for small plans with end-of-year valuation dates.
(2008 C. L.).
š Notice 2008-73, 2008-2 C.B. 717, expands transition relief of Notice
2008-21. (2008 C. L.).
š Rev. Rul. 2009-31, 2009-39 I.R.B. 395, provides guidance with
respect to annual paid time off contributions. (New).

š Rev. Rul. 2009-32, 2009-39 I.R.B. 398, provides guidance with
respect to paid time off contributions at termination of employment.
(New).

18
The following guidance contains sample or model amendments: Notice 2001-57,
2001-1 C.B. 279 (miscellaneous EGTRRA amendments); Rev. Rul. 2001-62,
2001-2 C.B. 632 (applicable mortality table); Rev. Proc. 2002-29, 2002-2 C.B.
1176 (required minimum distribution amendments); Rev. Proc. 2003-13, 2003-1
C.B. 317 (required language for deemed IRAs); Notice 2005-5 (automatic
rollover); Notice 2006-44, 2006-1 C.B. 889 (Roth § 401(k) plans); and Notice
2009-65, 2009-39 I.R.B. 413 (automatic contribution features).

VII. HEROES EARNINGS ASSISTANCE AND RELIEF TAX ACT OF 2008
PROVISIONS
As provided in section IV of this notice, a plan amendment made pursuant to
section 104(a) or 105(b)(1) of the HEART Act generally may be retroactively
effective, if, in addition to meeting the other applicable requirements, the
amendment is made on or before the last day of the first plan year beginning on
or after January 1, 2010 (January 1, 2012 in the case of a governmental plan).
While plans submitting in Cycle E must meet the amendment deadline for the
HEART Act, if applicable, the Service will not consider the HEART Act in issuing
determination letters because no guidance has been issued with respect to the
HEART Act. The HEART Act provisions are listed below.
1. 401(a)(37)
: Section 104(a) of the HEART Act added Code § 401(a)(37)
with respect to benefits payable on the death of a plan participant while
performing qualified military service. (2008 C. L.).

2. 414(u)(9)
: Section 104(b) of the HEART Act amended § 414(u) of the
Code by adding a paragraph regarding how a plan may provide benefit
accruals for a person who dies or becomes disabled while performing
qualified military service. (2008 C. L.).

3. 414(u)(12)
: Section 105(b)(1) of the HEART Act added § 414(u)(12) with
respect to the treatment of differential wage payments during the period a
person, while on active duty, is performing service in the uniformed
services. (2008 C. L.).

VIII. WORKER, RETIREE, AND EMPLOYER RECOVERY ACT OF 2009
PROVISION
As provided in section V of this notice, a plan amendment made pursuant to
WRERA section 201 generally may be retroactively effective, if, in addition to
meeting the other applicable requirements, the amendment is made on or before
the last day of the first plan year beginning on or after January 1, 2011
(January 1, 2012 in the case of a governmental plan). The WRERA provision is
listed below.

19
1. 401(a)(9)(H)
: Section 201(a) of WRERA added § 401(a)(9)(H) which
provides a suspension of the minimum distribution requirement for 2009
applicable to defined contribution plans. (New).
š Notice 2009-82, 2009-41 I.R.B. 491, provides guidance relating to
the suspension of the minimum distribution requirement for 2009
applicable to defined contribution plans. (New).

DRAFTING INFORMATION

The principal author of this notice is Angelique Carrington of the Employee Plans,
Tax Exempt and Government Entities Division. For further information regarding
this notice, please contact the Employee Plans taxpayer assistance answering
service at 1-877-829-5500 (a toll free number) or e-mail Ms. Carrington at
RetirementPlanQuestions@irs.gov
.