FROM THE OFFICE OF PUBLIC AFFAIRS
To view or print the PDF content on this page, download the free Adobe® Acrobat® Reader®.
April 18, 2005
JS-2388
Treasury and IRS Provide Guidance
on Pension Plan Amendments
The IRS issued a revenue procedure today that addresses the application of a recent Supreme Court decision relating to pension benefits, Central Laborers' Pension Fund v. Heinz, 541 U.S. 739 (June 7, 2004). This case held that ERISA generally prohibits an amendment that imposes additional conditions on the right to receive early retirement benefits for benefits accrued before the amendment. However, there may be a number of retirement plans that have adopted such an amendment and the retroactive application of the Supreme Court's opinion would put these plans' tax-qualified status in jeopardy as a result of violating the parallel tax-qualification requirement. Recognizing this, the Supreme Court recommended that the IRS use its authority under Internal Revenue Code section 7805(b)(8) to provide relief to plans in order for them to avoid disqualification. The revenue procedure issued today generally provides relief from the risk of disqualification for a suspension of benefits amendment that is not permissible under the Supreme Court decision, assuming that the plan takes corrective action for early and normal retirement benefits retroactive to the June 7, 2004 date of the case.
The text of the revenue procedure is attached. In addition, a detailed example that illustrates compliance with the revenue procedure has been posted on the IRS website at http://www.irs.gov/retirement/article/0,,id=137638,00.html
REPORTS