Innovate Insights. Brought to you by Innovative Pension

Provided by your plan administration partner:

Regulations Announcement - April 23, 2008

1.800.98PENSION

Two Important Issues for Review

Essential: RETIREMENT AGE: NEW IRS RULES

Applicable only to pension plans (defined benefit plans and money purchase plans)
Every Plan defines Normal Retirement Age in its written document.
Comply with these new regulations no later than January 1, 2009.

plan amendments necessary to comply, adopted by December 31, 2009; effective as of January 1, 2009. Non calendar years may need to comply earlier

The IRS has identified the following rules for an acceptable definition of a plan's retirement age (Normal Retirement Age):

Age 62 or higher - Automatically acceptable. This is deemed a safe harbor
Age 55 to Age 62 - Acceptable if it is reasonably representative of the typical retirement age for the industry in which the covered workforce is employed. This determination is based on relevant facts and circumstances.

Elaboration:

See a full discussion of the rules

Actions:

Plan Normal Retirement Age is 62 or higher: No action required.
Plan Normal Retirement age is below age 62

Make a determination as to whether your plan's definition of retirement age is typical for your business' industry or practice.
Provide relevant facts to your file to support your plan's definition of Normal Retirement Age. (Copy Innovative Pension)
Contact Innovative Pension for Assistance

OR

Plan Normal Retirement age is below age 62

Amend your plan's retirement age to an age acceptable under these new regulations.
Adopt amendment by June 30, 2009
Call Innovative Pension to prepare the amendment

Important:

Changing Normal Retirement Age will change the amount of the plan's contribution

Essential: NEW CERTIFICATIONS NECESSARY FOR DEFINED BENEFIT PLANS

IRS has issued new rules requiring additional actuarial certifications to verify a plan's funding status
Intended to apply new benefit restrictions to certain underfunded plans.
Defined benefit plans will be subject to restrictions on future benefits and the payment of lump sum distributions to terminated participants unless an AFTAP Certification establishes that the plan is sufficiently funded.
Notice must be provided to all plan participants which describe these potential benefit restrictions.

Elaboration:

See a full discussion of the rules

Actions:

Distribute the notice Participant DB Funding Notice to all Plan Participants and Beneficiaries by April 30th.
Email Us or fax 858-748-0615 a copy of the notice back to us with your signature and the date of distribution on it.

Reach Customer Service at 858-748-6500 with questions
Plan Design 858-218-3440
Contact Us

In this Announcement:

Introduction

Essential: New IRS Rules
Action: New IRS Rules

Essential: New Certifications for DB plans
Action: New Certifications for DB plans

Quick Links...

Innovative Pension Home

Newsletter Archives

Innovative Pension
14251 Danielson Street
Poway, CA 92064

For Assistance,
Call Customer Service: 1.800.98PENSION

or email helpdesk

Provided by your plan administration partner:

Regulations Announcement - April 23, 2008	1.800.98PENSION
Two Important Issues for Review Essential: RETIREMENT AGE: NEW IRS RULES Applicable only to pension plans (defined benefit plans and money purchase plans) Every Plan defines Normal Retirement Age in its written document. Comply with these new regulations no later than January 1, 2009. plan amendments necessary to comply, adopted by December 31, 2009; effective as of January 1, 2009. Non calendar years may need to comply earlier The IRS has identified the following rules for an acceptable definition of a plan's retirement age (Normal Retirement Age): Age 62 or higher - Automatically acceptable. This is deemed a safe harbor Age 55 to Age 62 - Acceptable if it is reasonably representative of the typical retirement age for the industry in which the covered workforce is employed. This determination is based on relevant facts and circumstances. Elaboration: See a full discussion of the rules Actions: Plan Normal Retirement Age is 62 or higher: No action required. Plan Normal Retirement age is below age 62 Make a determination as to whether your plan's definition of retirement age is typical for your business' industry or practice. Provide relevant facts to your file to support your plan's definition of Normal Retirement Age. (Copy Innovative Pension) Contact Innovative Pension for Assistance OR Plan Normal Retirement age is below age 62 Amend your plan's retirement age to an age acceptable under these new regulations. Adopt amendment by June 30, 2009 Call Innovative Pension to prepare the amendment Important: Changing Normal Retirement Age will change the amount of the plan's contribution Essential: NEW CERTIFICATIONS NECESSARY FOR DEFINED BENEFIT PLANS IRS has issued new rules requiring additional actuarial certifications to verify a plan's funding status Intended to apply new benefit restrictions to certain underfunded plans. Defined benefit plans will be subject to restrictions on future benefits and the payment of lump sum distributions to terminated participants unless an AFTAP Certification establishes that the plan is sufficiently funded. Notice must be provided to all plan participants which describe these potential benefit restrictions. Elaboration: See a full discussion of the rules Actions: Distribute the notice Participant DB Funding Notice to all Plan Participants and Beneficiaries by April 30th. Email Us or fax 858-748-0615 a copy of the notice back to us with your signature and the date of distribution on it. Reach Customer Service at 858-748-6500 with questions Plan Design 858-218-3440 Contact Us	In this Announcement: Introduction Essential: New IRS Rules Action: New IRS Rules Essential: New Certifications for DB plans Action: New Certifications for DB plans Quick Links... Innovative Pension Home Newsletter Archives Contact Us Innovative Pension 14251 Danielson Street Poway, CA 92064 For Assistance, Call Customer Service: 1.800.98PENSION or email helpdesk