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FOR IMMEDIATE RELEASE

CONTACT:
Jim Jaffe
703.516.9300 x141
jjaffe@asppa.org

ASPPA President Rosen Cautions Internal Revenue Service on Proposed Section 415 Retirement Plan Regulations

Steve Rosen, the president of the American Society of Pension Professionals & Actuaries (ASPPA) today warned that changes under consideration by the Internal Revenue Service (IRS) would be harmful to those who choose to continue working beyond age 65 and are small business owners.

Rosen testified at an IRS hearing soliciting views on the way defined benefit and defined contribution retirement plans are regulated under Section 415 of the Internal Revenue Code (Code). He warned that an IRS proposal to link existing compensation limits under Code Section 401 to the Code Section 415 requirements would directly conflict with existing authority and could substantially reduce permissible benefits for those who either chose to work beyond age 65 or defer payment of accrued benefits beyond this deadline.

Rosen was also critical of a proposed change in Code Section 415 regarding limits on compensation that takes into account a participant’s highest three years of compensation. While decades of existing law have used a “high three” standard without regard to plan participation, the proposed change would limit the average to only active participation in the relevant plan. The proposed change could be disadvantageous to those whose peak incomes were recorded prior to their participation in a plan.

The ASPPA President also suggested that the agency show added flexibility in determining the effectiveness of the regulations, given that the proposed regulations changes existing guidance that has been in place for almost three decades. A full text of his testimony is available on the ASPPA Web site at www.asppa.org/government/gov_comment.htm.

ASPPA is a national organization of over 5,500 retirement plan professionals, who provide consulting and administrative services for qualified retirement plans covering millions of American workers. ASPPA members include consultants, administrators, actuaries, accountants, and attorneys. ASPPA’s membership is dedicated to preserving and enhancing the private retirement plan system in the United States.