Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
April 14 — The IRS and Treasury Department are withdrawing portions of the proposed nondiscrimination rules for certain retirement plan benefit formulas.
The withdrawn provisions “were intended to address certain qualified retirement plan designs that take advantage of flexibility in the existing nondiscrimination rules to provide a special benefit formula for selected employees without extending that formula to a classification of employees that is reasonable and established under objective business criteria,” the Internal Revenue Service said in Announcement 2016-16, issued April 14.
Under the IRS's nondiscrimination requirements, a retirement plan is considered qualified—that is, maintains its tax-preferred status—if the contributions or benefits provided under the plan don't discriminate in favor of highly compensated employees.
The proposed rules, which were issued on Jan. 28, feature changes to the nondiscrimination rules to provide relief for some closed plans and formulas, but include other changes that aren't limited to such plans and formulas, the IRS said (19 PBD, 1/29/16).
Following the issuance of proposed rules in January, the IRS examined the effects of the provisions it's withdrawing on the adoption and maintenance of qualified plans with varying designs and decided that further consideration of those provisions is needed, the agency said.
The other portions of the proposed rules aren't affected by the announcement, the IRS said.
The announcement is scheduled to be published in Internal Revenue Bulletin 2016-18, dated May 2.
To contact the reporter on this story: Kristen Ricaurte Knebel in Washington at email@example.com
To contact the editor responsible for this story: Jo-el J. Meyer at firstname.lastname@example.org
A copy of Announcement 2016-16 is at http://src.bna.com/d7F.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)