[Federal Register Volume 75, Number 248 (Tuesday, December 28, 2010)]
[Rules and Regulations]
[Pages 81456-81457]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-32539]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9505]
RIN 1545-BG36
Hybrid Retirement Plans; Correction
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Correcting amendment.
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SUMMARY: This document contains correctioning amendments to correct
errors resulting from the publication of to final regulations (TD 9505)
that were published in the Federal Register on Tuesday, October 19,
2010 (75 FR 64123) providing guidance relating to certain provisions of
the Internal Revenue Code that apply to hybrid defined benefit pension
plans.
DATES: This correcting amendment is effective on December 28, 2010, and
is applicable on October 19, 2010.
FOR FURTHER INFORMATION CONTACT: Neil S. Sandhu, Lauson C. Green, or
Linda S. F. Marshall at (202) 622-6090 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations (TD 9505) that are the subject of this
document are under section 411 of the Internal Revenue Code.
Need for Correction
As published, the final regulations (TD 9505) contain errors that
may prove to be misleading and are in need of clarification.
List of Subject in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Correction of Publication
0
Accordingly, 26 CFR part 1 is corrected by making the following
correcting amendments:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 2. Section 1.411(b)(5)-1 is amended by:
0
1. Revising the paragraph (b)(1)(ii)(A).
0
2. Revising the first sentence of paragraph (b)(1)(iv) Example 4.(iii).
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3. Revising the first sentence of paragraph (c)(5) Example 2.(iv).
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4. Revising the third sentence of paragraph (c)(5) Example 3.(i).
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5. Revising the paragraph (d)(1)(iii).
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6. Revising the first sentence of paragraph (f)(2)(iii).
The revisions read as follows:
Sec. 1.411(b)(5)-1 Reduction in rate of benefit accrual under a
defined benefit plan.
* * * * *
(b) * * *
(1) * * *
(ii) * * * (A) In general. Except as provided in paragraphs
(b)(1)(ii)(B), (C), and (D) of this section, the safe harbor provided
by section 411(b)(5)(A) and paragraph (b)(1)(i) of this section is
available with respect to an individual only if the individual's
accumulated benefit under the plan is expressed in terms of only one
safe-harbor formula measure and no similarly situated, younger
individual who is or could be a participant has an accumulated benefit
that is expressed in terms of any measure other than that same safe-
harbor formula measure. Thus, for example, if a plan provides that the
accumulated benefit of participants who
[[Page 81457]]
are age 55 or over is expressed under the terms of the plan as a life
annuity payable at normal retirement age (or current age, if later) as
described in paragraph (b)(1)(i)(A) of this section and the plan
provides that the accumulated benefit of participants who are younger
than age 55 is expressed as the current balance of a hypothetical
account as described in paragraph (b)(1)(i)(B) of this section, then
the safe harbor described in section 411(b)(5)(A) and paragraph
(b)(1)(i) of this section does not apply to individuals who are or
could be participants who are age 55 or over.
(iv) * * *
Example 4. * * *
(iii) * * * If, instead of the facts in paragraph (i) of this
Example 4, the plan had been amended to provide only participants
who have not yet attained age 55 by January 1, 2012, with a benefit
that is the greater of the benefit under the average annual
compensation formula and a benefit that is based on the balance of a
hypothetical account, then the safe harbor would not be satisfied
with respect to individuals who have attained age 55 by January 1,
2012. * * *
* * * * *
(c) * * *
(5) * * *
Example 2. * * *
(iv) * * * The plan provides that, as of a participant's annuity
starting date, the plan will determine whether the benefit
attributable to the opening hypothetical account balance payable in
the particular optional form of benefit selected is equal to or
greater than the benefit accrued under the plan through the date of
conversion and payable in the same generalized optional form of
benefit with the same annuity starting date. * * *
Example 3. * * * (i) * * * Under the terms of Plan E, the
benefit attributable to A's opening hypothetical account balance is
increased so that A's straight life annuity commencing on January 1,
2015, is $1,000 per month. * * *
* * * * *
(d) * * *
(1) * * *
(iii) Market rate of return for single rates. Except as otherwise
provided in this paragraph (d)(1), an interest crediting rate is not in
excess of a market rate of return only if the plan terms provide that
the interest credit for each plan year is determined using one of the
following specified interest crediting rates:
* * * * *
(f) * * *
(2) * * *
(iii) * * * For the periods after the statutory effective date set
forth in paragraph (f)(1) of this section and before the regulatory
effective date set forth in paragraph (f)(2)(i) of this section, the
safe harbor and other relief of section 411(b)(5) apply and the market
rate of return and other requirements of section 411(b)(5) must be
satisfied. * * *
Guy R. Traynor
Acting Chief, Publications and Regulations Branch, Legal Processing
Division, Associate Chief Counsel, Procedure and Administration.
[FR Doc. 2010-32539 Filed 12-27-10; 8:45 am]
BILLING CODE 4830-01-P