IRS Issues Final, Proposed Rules on Hybrid Defined Pension Plans

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IRS issues proposed and final rules amending certain provisions on hybrid defined benefit pension plans, such as cash balance plans, under tax code Sections 411(a)(13) and 411(b)(5). The proposed (REG-132554-08) and final rules (T.D. 9505) apply to hybrid plans, as modified by the Pension Protection Act of 2006 and amended by the Worker, Retiree, and Employer Recovery Act of 2008. IRS says a key purpose of Sections 411(a)(13) and 411(b)(5) is to address defined benefit plan formulas where younger participants receive a larger annual benefit at normal retirement age when compared with similarly situated older participants.