Skip to main content

You are here

2003
Manage | s y s c o m : g m

On December 11, 2003, ASPPA submitted comments to the IRS regarding the ability of a qualified retirement plan to incorporate by reference certain provisions of the Internal Revenue Code and the regulations there under. [Comment]

On November 26, 2003, ASPPA requested that the IRS issue guidance indicating that it concurs with the DOL Field Assistance Bulletin 2003-03 and asked that the IRS clarify its position that the plan's payment of administration expenses for participants who are active employees, but not for terminated vested participants, does not violate §411(a)(11). The Bulletin triggered a debate among plan sponsors and their advisors over the ability of employers to distinguish between active and terminated plan participants with respect to the payment of certain plan expenses. [Comment]

In response to alleged illegal conduct, the Securities and Exchange Commission (SEC) is considering a blanket rule requiring that all trades be received by the mutual fund company by 4:00 p.m. EST in order to get the closing price for the same day. On November 6, 2003, ASPPA representatives met with both Paul Roye of the SEC and Ann Combs of the DOL to present ASPPA's comments on the new rule. It is ASPPA's position that this rule would have a dramatic impact on the administration of retirement plans. According to Brian H. Graff, Esq., "The rule would prevent a substantial majority of 401(k) participants from being able to trade on the same day and get the closing price of that day. By treating these 401(k) plan participants as second-class investors, the rule could seriously threaten their retirement security." [Comment]

On October 31, 2003, ASPPA filed comments to IRS issued proposed 401(k) regulations. ASPPA's government affairs committee commented on ten specific issues which highlight their findings that the comprehensive proposals close the gap where no guidance previously existed and, in some instances, go a long way toward providing practical solutions to certain common operational situations, and that other proposals, however, appear to increase the likelihood of compliance failures; therefore, clarification and further guidance is required for these aspects of the regulations. [Comment]

On October 7, 2003, ASPPA submitted comments on the Disclosure of the Relative Values of Optional Forms of Benefit proposed regulations. Enabling participants to make informed decisions requires providing them with an "apples to apples" comparison between available payment forms along with other understandable and meaningful information. It is important that final regulations ensure the delivery of such data. [Comment]

On August 28, 2003, ASPPA submitted comments on the final and temporary regulations under Code Section 401(a)(9). ASPPA raised concerns about provisions that would eliminate the use of the "account balance method" for calculating Required Minimum Distributions under defined benefit plans. ASPPA's position is that RMD should be equal to the amount that would be paid if the participant elected a distribution in the form of a life annuity and that Code Section 401(a)(9) is intended to provide for certain minimum distributions prior to actual retirement and that it is not intended to require participants to receive mandatory lifetime annuity distributions or prohibit the later election of an optional payment form upon actual retirement. [Comments]

On August 6, 2003, ASPPA requested guidance from the Service, in accordance with USERRA, on the following issues: year to which the make-up employee deferrals relate; required timing of employer contributions, whether they are discretionary profit sharing, QNEC, or matching; and testing implications of a brief military leave. [Comment]

In August 2001, the Internal Revenue Service issued a 36-page white paper, “The Future of the Employee Plans Determination Letter Program: Some Possible Options” ("first White Paper"), describing options for changing its current approach to issuance of determination letters on the qualification status of retirement plans and requesting comments from the private sector. On September 20, 2002, ASPPA submitted detailed comments on the first White Paper. Based on these comments, as well as others, the IRS issued a second set of White Papers, “The Future of the Employee Plans Determination Letter Program: Evaluation of Public Comments and Additional Explanation of Staggered Remedial Amendment Period Option” (“second White Paper”). ASPPA submitted its second White Paper comments on September 2, 2003.

On July 15, 2003, ASPPA submitted a statement for the record in response to the Bush Administration's proposals to change some of the rules for single-employer defined benefit plans. According to Brian H. Graff, Esq., ASPPA Executive Director, "ASPPA welcomes the Administration's willingness to replace the 30-year Treasury bond rate with an interest rate based on a corporate bond rate. However, ASPPA strongly believes that a significant change to the funding rules, such as the yield curve proposal, should only be considered in the context of a complete review and possible additional revisions of the overall funding rules." [Comment]

On May 20, 2003, ASPPA and Small Business Council of America sent a joint letter to Chairman Thomas (R-22nd Calif.), chair of the House Committee on Ways & Means; and Chairman Grassley (R-Iowa), chair of the Senate Finance Committee; impressing upon them the importance of addressing small business retirement plans if annuities are added to the dividend exclusion proposal. [Comment]

On May 15, 2003, ASPPA submitted comments to the DOL on the Proposed Rule relating to fiduciary responsibility in relation to automatic rollovers. ASPPA stated that it is critical to ASPPA members and their plan sponsor clients that the automatic rollover rules are clear and easy to administer. ASPPA is concerned that rules that are too complex, or that impose too much potential liability on plan fiduciaries, will place an unreasonable burden on plan sponsors, particularly small business plan sponsors. [Comment]

On April 30, 2003, GAC submitted comments to the IRS requesting that restorative payments guidance be expressly extended to defined benefit plans. In Rev. Rul. 2002-45 the Service formalized the restorative payment guidelines. Because the facts in Rev. Rul. 2002-45 concern payments to DC plans, plan sponsors would benefit from assurance that the guidance in Rev. Rul. 2002-45 applies to DB plans. [Comment]

On Thursday, March 13, 2003, ASPPA's Government Affairs Committee filed comments regarding the IRS proposed regulations on Reductions of Accruals and Allocations Because of the Attainment of Any Age: Application of Nondiscrimination Cross-Testing Rules to Cash Balance Plans. The Committee stated that any legislative or regulatory policy must keep in mind the vital role defined benefit plans play in providing working Americans with a more secure retirement. Until now, a large and difficult impediment to the growth of account-based defined benefit plans has been the uncertainty over how age discrimination rules apply to them. By publishing proposed guidance, IRS and Treasury have taken an important first step towards removing this roadblock. [Comment]