September 19, 2019

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The IRS Doesn’t Disappoint…Again

As imagined by plan sponsors of closed defined benefit pension plans, the IRS issued Notice 201-49, the fifth extension for an additional year of the temporary nondiscrimination relief for “closed” defined benefit pension plans originally announced by the IRS during 2014.  The extended relief applies to plan years beginning before 2021 for those “closed” plans that satisfy certain conditions in Notice 2014-5.  The relief for “closed” defined benefit plans refers to those defined benefit plans amended prior to December 13, 2013, to limit ongoing accruals to some or all employed participants in the plan as of a particular date, thus no longer admitting new participants into the plan.

Each extension has been in anticipation of finalization of the proposed regulations issued in January 2016.  The IRS received many comments on the proposed regulations and expects the final regulations to include several significant changes in response to the comments.  By extending the relief another year, the IRS acknowledges the plans will need sufficient time to make plan design decisions based on the final regulations, yet to be published, before the end of the most recent extension which is December 31, 2019

Notice 2019-49 does not indicate when to expect the final regulations but states an expectation the final regulations will allow reliance on the proposed regulations for plan years beginning before 2021.  Congress is considering legislation that would include both permanent and partial types of targeted relief from nondiscrimination testing for qualifying closed DB plans.  Both a Bill passed by the House earlier in the year and a new recently proposed stand-alone Senate Bill are now pending before the Senate.  

Jackson Lewis P.C. © 2019

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About this Author

Allan S. Friedland, Jackson Lewis, COBRA Compliance Lawyer, qualified defined benefit attorney
Principal

Allan Friedland is a Principal in the Hartford, Connecticut, office of Jackson Lewis P.C. He has over 25 years of employee benefit and tax experience, both in private practice and with a major insurance company.

Mr. Friedland advises private and public employers on a wide range of retirement and health and welfare plan tax compliance issues and related ERISA fiduciary and employment law matters. He has extensive experience with health and welfare plans, including COBRA compliance, implementation, administration and...

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Kathryn Wheeler Knowledge Management Lawyer Jackson
Attorney

Kathryn W. Wheeler is the Knowledge Management (“KM”) Attorney for Jackson Lewis P.C.’s Employee Benefits Practice Group, and is based in the Overland Park, Kansas, office of Jackson Lewis P.C. She has more than 24 years in the employee benefits industry, 14 of those years as a benefits manager for private industry. 

Ms. Wheeler has experience with employee benefits from the perspective of clients and of legal counsel, giving her the ability to understand the issues confronting clients from both sides of the table. Her zeal for protecting the company’s interests in employee benefit-related areas led her to receive her law license to better negotiate the statutes and regulations imposed on employers. 

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