Notice 2009-86 by ProQuest


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									Part III. Administrative, Procedural, and Miscellaneous
Further Extension of                            pension plan to commence payment of re-          tion of a stated number of years of service
Effective Date of Normal                        tirement benefits to a participant after the     typically will not satisfy the vesting or
Retirement Age Regulations                      participant has attained normal retirement       accrual rules of § 411. The notice asked
                                                age even if the participant has not yet had      for comments from sponsors of plans
for Governmental Plans                          a severance from employment with the             that are not subject to the requirements
                                                employer maintaining the plan.                   of § 411, such as governmental plans, on
Notice 2009–86                                      The NRA regulations require a pension        whether such a plan may define normal
                                                plan’s normal retirement age to be an age        retirement age based on years of service.
I. Purpose
                                                that is not earlier than the earliest age that   Specifically, comments were requested on
   The Service and Treasury intend to           is reasonably representative of the typical      whether and how a pension plan with a
extend the time by which a governmental         retirement age for the industry in which         normal retirement age conditioned on the
plan must comply with final regulations         the covered workforce is employed. The           completion of a stated number of years
on distributions from a pension plan upon       NRA regulations provide that a normal re-        of service satisfies the requirement in
attainment of normal retirement age (“the       tirement age of 62 or later (or age 50 or        § 1.401(a)–1(b)(1)(i) that a pension plan
NRA regulations”) beyond the date pre-          later, in the case of a plan in which sub-       be maintained primarily to provide for
viously announced in Notice 2008–98,            stantially all of the participants are qual-     the payment of definitely determinable
2008–2 C.B. 1080. These regulations             ified public safety employees (within the        benefits after retirement or attainment of
were published in the Federal Register          meaning of § 72(t)(10)(B))) is deemed to         normal retirement age and how such a
as T.D. 9325, 2007–1 C.B. 1386 (72 FR           satisfy this requirement, and a normal re-       plan satisfies the pre-ERISA vesting rules.
28604) on May 22, 2007. Taking into             tirement age lower than 55 is presumed not       A number of comments were received
account this extension, the NRA regula-         to satisfy the requirement unless the Com-       in response to Notice 2007–69, includ-
tions will be effective for a governmental      missioner determines otherwise on the ba-        ing comments relating to the effect of the
plan (as defined in § 414(d) of the Internal    sis of facts and circumstances. Whether a        NRA regulations on governmental plans.
Revenue Code) for plan years beginning          normal retirement age that is at least 55 but        In Notice 2008–98, the Service and
on or after January 1, 2013. This notice        below 62 satisfies the requirement is based      Treasury announced their intention to
does not change the effective date of the       on facts and circumstances.                      amend the NRA regulations to change the
NRA regulations for a plan that is not a            The NRA regulations were generally           effective date for governmental plans to
governmental plan or modify the relief          effective May 22, 2007, with a later ef-         plan years beginning on or after January
previously provided in Notice 2007–69,          fective date for governmental plans and          1, 2011.
2007–2 C.B. 468.                                certain collectively bargained plans. For
                                                governmental plans, the NRA regulations          III. Further Extension of Effective Date
II. Background                                  were originally effective for plan years be-     of NRA Regulations for Governmental
                                                ginning on or after January 1, 2009.             Plans
    Section 411(a)(8) provides that the term        Notice 2007–69 provided temporary
“normal retirement age” means the ear-          relief for certain plans that may have had          The Service and Treasury intend to
lier of (A) the time a plan participant at-     to change their definition of normal retire-     amend the NRA regulations to change
tains normal retirement age under the plan      ment age to satisfy the NRA regulations.         the effective date for governmental plans
or (B) the later of age 65 or the fifth an-     The relief was available to certain plans        to plan years beginning on or after
niversary of the time a plan participant        that might otherwise have been required   
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