[11677]
February 28, 2000
TO: PENSION COMMITTEE No. 18-00
RE: IRS SEEKS COMMENTS ON ""NEW COMPARABILITY"" PLANS
______________________________________________________________________________
The Internal Revenue Service has announced in Notice 2000-14 that the Service and the Treasury
Department are reviewing issues posed by “new comparability” plans and invite public comments on
such issues. The Notice, which describes new comparability plans (and similar plans such as “super-
integrated” plans) as defined contribution plans that generally restrict higher rates of employer
contributions to highly compensated employees, states that the review will focus on the
nondiscrimination requirements applicable to these plans.
Specifically, the Service and Treasury are concerned that cross-testing (under Code section
401(a)(4)) of new comparability plans permits disparities in nonelective employer contribution rates
between highly compensated and nonhighly compensated employees. The agencies, therefore, are
considering possible modifications to the existing rules governing these plans. It is anticipated that any
such modifications would be applied on a prospective basis only.
The Notice requests that comments be submitted by May 15, 2000. A copy of Notice 2000-14 is
attached.
Thomas T. Kim
Assistant Counsel
Attachment