The public hearing on the IRS’s proposed regulations on the determination of governmental plan status, originally scheduled for June 5, 2012, has been rescheduled to July 9, 2012. Outlines of topics to be discussed must be submitted by June 18, 2012. Details.
IRS Proposes “Governmental Plan” Definition
For years, governmental entities have struggled with the criteria for identification of a “governmental plan” for purposes of the tax-qualification rules of the Internal Revenue Code (“IRC”). On November 8, 2011, the IRS issued an advance notice of proposed rulemaking (ANPRM) defining “governmental plan” under Section 414(d) of the IRC. The ANPRM sets forth an extensive discussion of the IRS’s view on the characteristics of a governmental plan. It can be anticipated that through the initial comment period — ending on February 6, 2012 — and as proposed regulations work their way into final regulations, input from governmental sponsors and advisors may significantly impact the criteria for determining governmental plan status.
Link to full text of Duane Morris Alert:
Link to full text of ANPRM:
http://www.gpo.gov/fdsys/pkg/FR-2011-11-08/pdf/2011-28853.pdf
IRS Announces Pension Plan Limitations for 2012
On October 20, 2011, the Internal Revenue Service published news release IR-2011-103, which details the cost-of-living adjustments for dollar limitations for pension plans and other retirement-related benefits for the 2012 tax year.
Of particular note for plan sponsors is the fact that the elective deferral limit has been increased from $16,500 to $17,000 and the annual limitation for contributions to defined contribution plans increased from $49,000 to $50,000. In addition, the annual compensation limit increased from $245,000 to $250,000. This is the first increase in those areas since the current limits went into effect for 2009.
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