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However, the plaintiffs pointed to Internal Revenue Service Notice 2007-69 (see “IRS Lends Helping Hand on Plan Retirement Age Changes”), in which they argued the Notice’s “purpose” section identifies potential violations of the vesting and accrued benefit requirements for defined benefit plans under [IRC] § 411 that may arise from a definition of normal retirement age based on a minimum period of service. The 4th Circuit said the notice concerns the implications of new Treasury regulations that are prospective in nature only. The first paragraph of the Notice is clear: “[t]his notice provides temporary relief for certain pension plans whose definition of normal retirement age may be required to be changed to comply with the regulations regarding a plan’s normal retirement age that were recently issued under section 401(a) of the [IRC].” The obvious thrust of this language is that the violations identified in the Notice are related to the newly promulgated regulations as they apply once those regulations are in effect, the court said. It referred only to how a plan was to be analyzed going forward, not retroactively to plan years already passed and for which remedial efforts were not possible, such as in the Bank of America case. The opinion in McCorkle v. Bank of America Corporation is at http://www.ca4.uscourts.gov/Opinions/Published/111668.P.pdf.
However, the plaintiffs pointed to Internal Revenue Service Notice 2007-69 (see “IRS Lends Helping Hand on Plan Retirement Age Changes”), in which they argued the Notice’s “purpose” section identifies potential violations of the vesting and accrued benefit requirements for defined benefit plans under [IRC] § 411 that may arise from a definition of normal retirement age based on a minimum period of service.
The 4th Circuit said the notice concerns the implications of new Treasury regulations that are prospective in nature only. The first paragraph of the Notice is clear: “[t]his notice provides temporary relief for certain pension plans whose definition of normal retirement age may be required to be changed to comply with the regulations regarding a plan’s normal retirement age that were recently issued under section 401(a) of the [IRC].” The obvious thrust of this language is that the violations identified in the Notice are related to the newly promulgated regulations as they apply once those regulations are in effect, the court said.
It referred only to how a plan was to be analyzed going forward, not retroactively to plan years already passed and for which remedial efforts were not possible, such as in the Bank of America case.
The opinion in McCorkle v. Bank of America Corporation is at http://www.ca4.uscourts.gov/Opinions/Published/111668.P.pdf.
Rebecca Mooreeditors@plansponsor.com