December 11, 1990
TO: PENSION MEMBERS NO. 40-90
RE: EXTENSION OF TAX REFORM ACT COMPLIANCE DEADLINES
__________________________________________________________
Attached is a copy of IRS Notice 90-73 which the Internal
Revenue Service recently released extending the remedial
amendment period for qualified employee benefit plans and 403(b)
arrangements to comply with the Tax Reform Act of 1986. (See
Institute Memoranda to Pension Members Nos. 8-89 and 13-90, dated
February 10, 1989 and March 28, 1990 respectively.)
Also attached is a notice of proposed rulemaking by which the
Service delays the effective dates provided in the previously
proposed regulations regarding the nondiscrimination requirements
for qualified retirement plans under section 401(a)(4) of the
Code and the average benefit percentage test under section 410(b)
of the Code. (See Institute Memoranda to Pension Members Nos.
25-90 and 35-90, dated May 17, 1990 and September 19, 1990
respectively.)
Notice 90-73 specifies that qualified retirement plans must
be amended by the end of the first plan year beginning after
December 31, 1991. Also, the deadline for submission of
applications for sponsors of master and prototype plans that seek
continued reliance on a prior opinion letter is extended to
January 31, 1991. Finally, the Notice indefinitely extends the
403(b) arrangement discrimination safe-harbors set forth in IRS
Notice 89-23 which were scheduled to expire at the end of 1990.
Employers may rely on a reasonable, good faith interpretation of
section 403(b)(12) and/or the transitional safe harbors contained
in Notice 89-23 until further guidance is issued concerning these
nondiscrimination rules.
With regard to the effective dates under the proposed
nondiscrimination regulations under section 401(a)(4), the IRS
delayed the effective date of these regulations to plan years
beginning on or after January 1, 1992. Other transitional rules
are provided regarding compliance with proposed regulations under
section 410(b).
We will keep you informed of further developments.
W. Richard Mason
Assistant General Counsel
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