Profit-sharing plan; retiree health accounts; nonforfeitability; prospective application. This ruling holds that a sub-account within a profit-sharing plan that provides medical reimbursement expenses to each participant does not meet the provisions of section 411 of the Code on nonforfeitability because it imposes conditions on the use of the amounts held in the participants’ accounts. If certain criteria are met, the ruling will be applied prospectively.

Proposed regulations under section 401 of the Code provide guidance on the use of electronic media to provide certain notices to recipients or to transmit participant and beneficiary elections or consents with respect to employee benefit arrangements. A public hearing is scheduled for November 2, 2005.

This notice addresses certain income tax issues with respect to nonqualified deferred compensation plans maintained by federal credit unions, including whether a federal credit union can maintain an eligible nonqualified deferred compensation plan described in section 457 of the Code, and issues relating to plans in effect on publication of this notice that are intended to satisfy section 457.