October 23, 2019

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October 21, 2019

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Once Again, IRS Extends Nondiscrimination Relief for Frozen Defined Benefit Plans

The Internal Revenue Service (IRS) has once again extended the temporary nondiscrimination relief for frozen defined benefit plans, now through 2020. Frozen pension plans are pension plans that have been closed to new participants but continue to provide ongoing benefit accruals for certain participants. This extended relief is intended to enable frozen pension plans to satisfy certain nondiscrimination testing requirements. In most cases, the relief allows the frozen defined benefit plan to be aggregated with a defined contribution plan to satisfy the nondiscrimination testing requirements. The relief assists the aggregated plan in passing nondiscrimination requirements that apply to accrued benefits and to certain rights and features relating to those benefits.

The original nondiscrimination testing relief for frozen pension plans was provided in a 2013 IRS notice. This relief has now been extended on three prior occasions. Many are advocating for legislation that would permanently fix this issue by shielding frozen defined benefit pension plans from unintended nondiscrimination rule violations. The Setting Every Community Up for Retirement Enhancement Act, which includes nondiscrimination reform provisions, passed the US House of Representatives on May 21, but it is still pending in the US Senate.

© 2019 McDermott Will & Emery


About this Author


Alan D. Nesburg is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  He focuses his practice on a wide range of employee benefit matters, including qualified pension and profit-sharing plans, deferred compensation, and group benefits programs.  His clients include both public and private businesses.

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Charnae Supplee Mcdermott Will Emery DC Employee Benefits & Executive Compensation

Charnae Supplee* focuses her practice on employee benefits and executive compensation matters. She has experience working on matters related to 401(k) and pension plans, cafeteria and welfare plans, nonqualified deferred compensation arrangements, and employee stock ownership plans. Charnae assists clients in drafting employee benefit plan documents and amendments. She advises clients on employee benefits design, implementation and transition matters, and immigration issues during corporate mergers and acquisitions.

Charnae has experience working on employment discrimination claims involving federal agencies at the Equal Employment Opportunity Commission (EEOC). She has worked on wage and hour disputes and has worked on appeals to the Transportation Security Administration’s Office of Professional Responsibility Appellate Board and the US Merit Systems Protection Board. While in law school, Charnae worked as a student attorney in The George Washington Law School’s Public Justice Advocacy Clinic.

*Not admitted to practice in the District of Columbia; admitted only in New York. Supervised by principals of the Firm who are members of the District of Columbia Bar.