>Federal government agencies publish semiannual regulatory agendas, which serve as a “to do” list of sorts, revealing the regulations that the agencies expect to review or develop in the near term.
>The Treasury Department’s agenda (including items for the Internal Revenue Service) includes:
- Highly Compensated Employees – proposed regulations are expected regarding the definition of highly compensated employee.
- Deemed IRAs in Qualified Retirement Plans – temporary and proposed regulations are on the agenda to provide rules under which certain qualified plan accounts will be treated as Roth or traditional IRAs, as applicable (see IRS Distinguishes ‘Deemed IRA’ From Qualified Plan ).
- Changes to Protected Retirement Benefits and Elimination of Forms of Distribution in Defined Contribution Plans resulting from EGTRRA – both stem from EGTRRA changes to the anti-cutback rules of Code Section 411(d)(6). The former addresses proposed rules to be issued allowing for elimination of certain early retirement benefits and optional forms of benefit where the benefits are of de minimis value compared to the administrative burden and complexity involved. The second deals with finalizing proposed regulations that allow defined contribution plans to eliminate certain optional forms of benefit (see ROLLOVER DIRECTION – Revenue Ruling OKs Direct Rollover as Default .
- Reductions of Accruals and Allocations Because of Increased Age – proposed regulations involving the minimum vesting requirements under Code Section 411 are in their final stages. The regs require that accruals and allocations under qualified retirement plans cannot be reduced because of attainment of any particular age, are in the final rule stage.
>Of interest to plan sponsors on the Department of Labor’s (DOL) list are:
- Statutory Exemption for Loans to Plan Participants – this year the Employee Benefits Security Administration (EBSA) plans to review the participant loan rules and determine if changes are required.
- DefaultRollover Safe Harbor. Under EGTRRA, EBSA was directed to come up with regulations by mid 2004 providing for safe harbors under which designating an institution and investments for automatic direct rollovers required under Code Section 401(a)(31)(B) will automatically satisfy ERISA’s fiduciary responsibility requirements (see IRS Rolls Out Expanded Safe Harbor Guidelines ).