IRS Anticipates Busy Benefit Plan Agenda Under Trump

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By David B. Brandolph

The Internal Revenue Service is expected to propose or finalize many retirement-related projects during the second half of 2017, according to the Treasury Department’s regulatory agenda.

Two provisions slated to be in final rule form later this year concern mortality tables for pension plans and revisions to nonqualified deferred compensation plans under tax code Section 409A.

The mortality tables are used to determine present value for lump sum payments and annuity transfers under Section 430 and reflect plan life expectancy experience and projections. The IRS is expected to issue new tables that will kick in on Jan. 1, 2018.

A proposed rule on excise taxes for high-cost employer sponsored health coverage under Section 4980 for taxable years after 2019 is also on the agency’s agenda.

Other Proposals

Other proposals the IRS anticipates issuing by the end of the year include:

  •  additional rules on determining funding and benefit restrictions for single-employer pensions;
  •  reporting and notice requirements related to individuals separating from service with a deferred vested benefit under Section 6057;
  •  determination of governmental plan status under Section 414(d);
  •  requirements for retirement plans of Indian tribal governments;
  •  guidance on eligible combined plans under Section 414(x);
  •  deduction limits for collectively bargaining welfare funds;
  •  requirements for employee stock ownership plans;
  •  updates to existing final vesting regulations for retirement plans under Section 411(a); and
  •  withholding on retirement plan distributions under Section 3405(a) and (b).

Final Rules Expected

The IRS also plans to issue final regulations on pension accrual rules, on the prohibition of accelerations of annuity payments to pension participants who currently receive such payments, and on providing notice to participants of the failure to defer receipt of qualified retirement plan distributions.

Other expected final regulations include modifications to the definition of qualified nonelective contribution and qualified matching contribution and the computing of unrelated business taxable income of voluntary employees’ beneficiary associations.

In addition, the agency expects to finalize reporting and notice requirements for deferred vested benefits under Section 6057.

The IRS says it intends to issue final rules relating to deferred compensation plans of state and local governments and tax-exempt entities, as well as the application of normal retirement age regulations to governmental plans.

In other final rules expected this year, the agency would modify minimum present value requirement for pension distributions and issue nondiscrimination relief for closed pension and 401(k)-type plans.

To contact the reporter on this story: David B. Brandolph in Washington at

To contact the editor responsible for this story: Jo-el J. Meyer at

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