Each year the IRS issues the Cumulative List of Changes in Plan Qualification Requirements (“the “Cumulative List”). The Cumulative List is a listing of the statutory, regulatory and other guidance that may require an amendment to individually designed tax qualified retirement plans by year end. See Notice 2011-97 for the 2012 Cumulative List. The following is a brief overview of the plan provisions that may require an amendment by the end of the 2012 plan year.
Defined Contribution Plans that hold publicly traded employer securities that are "readily tradable on an established securities market" must satisfy certain diversification requirements. Notice 2011-19 revised the definition of “readily tradable on an established securities market”. A plan that defines the phrase “readily tradable on an established securities market" may require an amendment.
Defined Benefit Plans generally will need to be amended to provide for certain funding-based limits on accelerated benefit payments and benefit accruals if a plan does not satisfy certain funding requirements. IRS Notice 2011-96 provides a sample amendment.
Benefits Insight: If your plan has already been amended for the funding based limitations, we recommend reviewing your plan amendment against the sample amendment to determine if further revisions are required or may be beneficial.
You may also refer to our September 2012 newsletter for an article describing the notice requirements for funding-based benefit limitations.
Governmental Plans must be amended to incorporate provisions of The Heroes Earnings Assistance Relief Act of 2008 (HEART Act) (generally effective as of January 1, 2007) relating to qualified military duty, and The Worker, Retiree, and Employer Recovery Act of 2008 (WRERA), which eliminated the requirement to make required minimum distributions for the 2009 calendar year. IRS Notice 2009-82 provides a sample amendment.
Puerto Rico Plans that cover residents of Puerto Rico must be amended to comply with changes required under Puerto Rico law.
Favorable Determination Letter Applications may be filed by employers with a two (2) or seven (7) as the last digit of their Employer Identification Number on or before January 31, 2012 for their individually designed tax qualified plans.
In addition, please refer to the Upcoming Filing and Notice Deadlines for Qualified Retirement and Health and Welfare Plans calendar in this newsletter for additional deadlines that may affect your plans.