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November 30, 2006
hp-181
Treasury and the IRS Issue Notice Regarding Participants’
Diversification Rights for Employer Securities Held in Retirement
Plans
The Treasury Department and IRS issued a notice today providing guidance relating to the rights of plan participants and beneficiaries to choose to diversify their accounts that are held in publicly traded employer securities.
Pursuant to a change made by the Pension Protection Act of 2006, the notice describes the new rights and provides transitional guidance pending the issuance of regulations.
The notice also includes information provided by the Department of Labor addressing the date by which participants and beneficiaries must be notified of their new rights announcing that the notice is not required to be provided before January 1, 2007. The notice includes a model notice that can be used for the purpose of satisfying the notification requirement.
"We believe this guidance will go a long way toward helping plan sponsors satisfy their new obligations and are grateful for the hard work and cooperation from other agencies, especially the Employee Benefit Security Administration of the Department of Labor, in getting this guidance out so quickly after enactment of the statute," stated Tom Reeder, Benefits Tax Counsel at the Department of the Treasury.
REPORTS