September 27, 1993
TO: PENSION COMMITTEE NO. 33-93
RE: IRS ISSUES FINAL DISCRIMINATION AND RELATED REGULATIONS
_________________________________________________________
Attached are copies of final regulations issued by the Internal Revenue
Service concerning the nondiscrimination requirements of section 401(a)(4) of
the Internal Revenue Code, the section 401(l) permitted disparity rules, the
section 410(b) minimum coverage requirements, and the section 414(s)
definition of compensation.
The final regulations under section 401(a)(4) incorporate the changes
proposed in January as well as certain other modifications. (See Institute
Memorandum to Pension Committee No. 4-93, dated January 28, 1993.) The
changes to the final regulations under sections 401(l), 410(b) and 414(s) were
proposed in April. (See Institute Memorandum to Pension Committee No. 17-93,
dated May l2, 1993.)
The final regulations generally are effective for plan years beginning
on or after January 1, 1994. Under Notice 92-36, plan amendments generally
must be made by the end of the first plan year for which the regulations are
effective. (See Institute Memorandum to Pension Committee No. 30-92, dated
August 12, 1992.)
Also attached are proposed amendments to the final regulations under
section 414(r) of the Code, which defines the term "separate lines of
business" for purposes of the minimum coverage and participation requirements
of sections 401(a)(26) and 410(b). (See Institute Memorandum to Pension
Committee No. 38-91, dated December 9, 1991.) The proposed changes are
designed to increase flexibility and simplify compliance under the
regulations.
We will keep you informed of developments.
Kathy D. Ireland
Associate Counsel - Pension
Attachments