Legislative and Regulatory Update Presented by: Joleah White, Manager EP R&A Planning Analysis & Reporting October 2, 2012

2 Current Employee Plans Organization Robert Choi, Director, Employee Plans (EP) Andrew Zuckerman, Director, EP R&A –Determinations –Determinations Quality Assurance –Voluntary Compliance –Technical –Technical Guidance and Quality Assurance Monika Templeman, Director, EP Exam –Five Examination Areas –Exam Programs and Review

3 Discussion Topics EP Determinations Update EP Voluntary Compliance Update FY 2012 Guidance Overview EP Examination Update

4 EP Determinations Update Changes to the EP Determination Letter Program described in Announcement Elimination of Demonstrations Regarding Coverage and Nondiscrimination Requirements Form 5307 Applications Limited to Adopters of VS Plans Who Modify Pre-Approved Terms Form 5300 Applications for M&P and VS Plans Changes are reflected in Revenue Procedure

5 EP Determinations Update 2 nd Remedial Amendment Cycle for Pre- approved DC Plans began on 2/1/2011 (Revenue Procedure ) Release of Revenue Procedure for 403(b) Pre-Approved Plans? Other Possible Pre-approved Programs What about the Governmental Plan Submissions for the 2 nd Cycle C beginning on 2/1/2013?

6 EP Voluntary Compliance Update New VCP Submission Kit for DB pre- approved plans not timely amended by April 30, 2012 New video/audio clip on Tips for Completing Your VCP Submission on Appendix F Applications Improving coordination with Determinations program

7 FY 2012 Guidance Overview February Lifetime Income Quartet Revenue Ruling : Clarifies rules for DC plans that offer lifetime income options Revenue Ruling : Clarifies rules that apply to rollovers from DC plan into DB plan Proposed regulations under IRC § 401(a)(9): Guidance for plans offering longevity annuity options Proposed regulations under IRC § 417: Partial lump sum payment from a DB plan

8 FY 2012 Guidance Overview Governmental Plans Released two items of proposed guidance consisting of: –An announcement of proposed rulemaking (ANPRM) –A draft notice of proposed rulemaking containing proposed regulations One item provides guidelines for determining whether a retirement plan is a governmental plan under section 414(d) The other item provides guidelines for determining whether a plan of an Indian Tribal Government (ITG) is a governmental plan Town hall and consultation meetings on the ANPRMs were held Received over 2,000 comments

9 FY 2012 Guidance Overview REG : Proposed regulations related to filing the Form 8955-SSA, “Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits” REG : Proposed regulations that would provide guidance under the anti-cutback rules of IRC § 411(d)(6) in relation to plans sponsored by employers in bankruptcy Notice : The IRS and Treasury announce their intent to issue guidance on the applicability of Treas. Reg. § 1.401(a)-1(b) (the 2007 Normal Retirement Age regulations) to IRC section 414(d) governmental plans

10 FY 2012 Guidance Overview The Moving Ahead for Progress in the 21st Century Act (MAP-21) –Notice : Determination of the 25-year segment rates that are applied to adjust the otherwise applicable 24-month average segment rates –Notice : Provides guidance on the special rules relating to pension funding stabilization for single-employer defined benefit pension plans Notice – –Provides a sample plan amendment that satisfies IRC § 436 regarding limitations on the accrual and payment of benefits under certain underfunded single employer DB plans – –Extends both the deadline to amend a plan to satisfy IRC § 436 and the period during which such an amendment is eligible for relief from the anti-cutback requirements of IRC § 411(d)(6)

11 EP Examination Update 401(k) Electronic Compliance Check Questionnaire Project Published an interim report highlighting trends and other information in February 2012 –86% of plans use a pre-approved plan document –23% of plan sponsors requested a determination letter from the IRS –68% of plans provide matching contributions The IRS continues to use the questionnaire data –to enhance compliance strategies –to improve the Employee Plans Compliance Resolution System, and –to improve guidance and outreach products, such as the web- based 401(k) Fix-It Guide

12 EP Examination Update International – –Continued expanding the focus of the Employee Plan Team Audit (EPTA) program to large employee plan cases with multinational issues – –Worked with Puerto Rico and the Virgin Islands on dual jurisdiction audits and voluntary compliance efforts Emerging Issues and Abusive Transactions: –Continued work on tools and resources to address hard-to-value assets in retirement plans –Developed and refined resources that aid in the identification of abusive and promotional schemes –Coordinated with CI on promoter investigation issues

13 EP Examination Update Employee Plans Compliance Unit (EPCU) Final reports on many completed projects will be posted on the IRS website – –Leased Employees – –Domestic Trust – –Foreign Distributions – –SEP – –Adverse Accountants Opinions – –412(i) – –Qualifying Employer Securities New projects and planned projects – –Project verifying single employer DB plan compliance with PPA 2006 benefit restrictions – –The annual recertification of non-bank trustees and custodians – –An ineligible employer project related to 403(b) plans – –Final returns filed with reported assets – –Nonqualified 401(k) plans

14 Additional Resources Visit our Web site on a regular basis: your questions to: Call (877) with your questions Subscribe and read our Newsletters: –Retirement News for Employers –Employee Plans News Your feedback and comments are appreciated