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December 6, 1989
TO: PENSION MEMBERS NO. 52-89
RE: IRS EXTENDS PLAN AMENDMENT DEADLINES
__________________________________________________________
Attached is a copy of IRS Revenue Procedure 89-65, which
provides extensions of certain plan amendment deadlines and
contains other extensions and transitional rules.
Under the revenue procedure, the remedial amendment period
under section 401(b) of the Internal Revenue Code generally is
extended to the last day of the first plan year beginning after
December 31, 1990. The extension also applies to plans adopted
or amended after December 31, 1987 and collectively bargained
plans. In order to be eligible for the extended remedial
amendment period, however, the plan must be operated in
accordance with the 1986 Tax Reform Act from the date the
requirement became effective, and the required plan amendments
must apply retroactively to the date the applicable requirements
became effective. The new deadlines supersede those that were
set forth in Notice 89-8. (See Institute Memorandum to Pension
Members No. 3-89, dated January 26, 1989.)
In addition, the revenue procedure (1) extends the
application of Model Amendment 3 under Notice 88-131, to allow
plan sponsors to continue the suspension of benefit accruals for
all participants beyond the end of the 1989 plan year; (2)
extends the application of transitional rules under sections
401(a)(26) and 414(s) and the use of the special definition of
compensation under Notice 88-127; and (3) modifies the multiple
use rules under sections 401(k) and 401(m).
The IRS also announced that it will begin accepting
applications for determination letters in early 1990.
Individually designed plans for which an application is submitted
prior to July 1, 1991 that satisfy certain conditions generally
will be able to rely on their favorable determination letters
until the end of the 1994 plan year, absent statutory changes.
We will keep you informed of further developments.
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Kathy D. Ireland
Associate General Counsel
Attachment