In Notice 2003-6 , the IRS said it plans to issue regulations on the application of nondiscrimination requirements to certain governmental pension plans, and to provide in the regulations that those plans are deemed to satisfy applicable sections of the tax code until the first day of the first plan year beginning on or after they are issued.
The IRS said it anticipated that these regulations would provide that such governmental plans will be deemed to satisfy § 401(a)(4), 401(a)(26), 401(k)(3), and 401(m) of the Code until the first day of the first plan year beginning on or after the date final regulations are issued.
According to the Notice, the regulations will provide further guidance on the application requirements for governmental plans within the meaning of Section 414(d), which defines the term governmental plan. The Taxpayer Relief Act of 1997 (TRA 97) generally provides that nondiscrimination rules do not apply to state and local government plans.
Notice 2001-46, which was released in July 2001, said that other governmental plans would be deemed to satisfy tax code sections with nondiscrimination requirements (including 401(a)(4), 401(a)(26), 401(k)(3), and 401(m)). It also said they were exempt from related regulations until the first day of the first plan year beginning on or after Jan. 1, 2003.
In the new notice, the IRS also requested comments on how nondiscrimination requirements should be applied to governmental plans addressed in the final notice, to be submitted by Feb. 28, 2003.
The IRS also issued Revenue Procedure 2003-10 , with additional guidance for government plans on compliance with required minimum distribution rules (see also IRS Gives DB, Government Plans an RMD Christmas “Present” ).
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