Ambitious Goals for Retirement Plans in IRS 2016-17 Priority Guidance Plan
The IRS recently issued its 2016-17 Priority Guidance Plan, and it contains an array of goals for projects relevant to retirement plans. The plan outlines objectives the IRS intends to pursue during the period July 1, 2016-June 30, 2017.
The IRS’ plans include the following projects relevant to retirement plans:
Defined Benefit Plans
- Final regulations on closed DB plans and related matters. Proposed regulations were published on Jan. 29, 2016.
- Guidanace on the treatment of future interest credits under a hybrid DB plan for purposes of satisfying various qualification requirements.
- Regulations under Code Section 401(a)(9) on the use of lump sum payments to replace lifetime income being received by retirees under DB benefit plans.
- Guidance on issues relating to pension equity plans.
The IRS plans to issue final regulations on the application of the normal retirement age regulations under Section 401(a) to governmental plans.IRAs
- Regulations on exceptions to additional tax under Code Section 72(t) on early distributions from retirement plans and IRAs.
- Regulations under Code Sections 219, 408, 408A and 4973 regarding IRAs.
- Additional guidance on issues relating to lifetime income from retirement plans and IRAs.
- Additional guidance on the determination letter program, including changes to the pre-approved plan program.
- A revenue procedure modifying Rev. Proc. 2013-12 concerning the Employee Plans Compliance Resolution System (EPCRS) to reflect changes in the determination letter program.
The IRS plans to issue guidance concerning:
- the timing of the use or allocation of forfeitures in defined contribution plans;
- qualifying longevity annuity contracts (QLACs);
- substantiation of hardship distributions;
- Qualified Nonelective Contributions (QNECs) and Qualified Matching Contributions (QMACs);
- the 403(b) remedial amendment period; and
- deductions under Code Section 404 for employer contributions to qualified plans.
The IRS also plans to issue regulations on additional issues relating to funding and related rules for single-employer plans under Internal Revenue Code Sections 430 and 436, as well as a revenue procedure modifying EPCRS to provide guidance with regard to certain corrections.