The benefits that lack protection could include benefits that are payable only upon involuntary termination of an employee or in other limited circumstances that are unrelated to retiremen and benefits that could exceed the amount of accrued benefit payable under the plan, according to the notice .
The IRS says that if the payment of the benefits is contingent upon future events that are not “reasonably and reliably predictable on an actuarial basis,” it is difficult to comply with incidental benefit requirements. The agency also said it might be especially risky if that benefit is a substantial or even the primary benefit that participants expect to receive.
According to the notice, the “benefits payable only upon an employee’s involuntary separation from service also raises questions regarding whether the availability of the benefits is based on conditions that are within the employer’s control” and whether such benefits circumvent vesting and anti-backloading protections, as well as the definitely determinable benefits requirement.
Written comments should be submitted by May 13, 2007.
Send submissions to CC:PA:LPD:PR, (Notice 2007-14), Room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, D.C. 20044.
Comments may also be hand delivered Monday through Friday between the hours of 8:30 a.m. and 4:00 p.m. to Internal Revenue Service, CC:PA:LPD:PR, (Notice 2007-14), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, N.W., Washington DC.
Comments may be submitted via the Internet at email@example.com