IRS’s Employee Plans News Discusses Procedural Guidelines for Pension Equity Plan Determination Letters

In the latest edition of Employee Plans News, the Internal Revenue Service (IRS) discusses its new procedural guidelines for pension equity plan determination letters. The newsletter links to the IRS’s PEP Determinations Worksheet and Explanation of PEP Plan Issues, which are intended for use by IRS employees in processing determination letter applications. The IRS indicates that “These documents explain the issues unique to PEP plans that we will take into account when reviewing plan documents, such as how the provision of hypothetical interest impacts the plan’s compliance with the accrual rules of Internal Revenue Code Section 411(b)(1).” The IRS also includes links to its PEP Memorandum. The IRS indicates that the memorandum “highlights the plan document’s compliance with IRC Section 411(b)(1)(G), which generally provides that a participant’s accrued benefit under a qualified defined benefit plan cannot be reduced on account of any increase in the participant’s age or service”.

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