7/2/97: The IRS has issued Announcement 97-70, stating
that tax-qualified retirement plans that failed to follow their provisions requiring
distributions by April 1, 1997 (for participants who attained age 70-1/2 in 1996) are permitted
to pay "make-up" distributions by the end of 1997, and will not be disqualified despite the
failure to follow the terms of the plan. The announcement also restates an earlier
announcement, in which the IRS stated that employers are permitted to allow such employees to
elect to defer receipt of payments until termination of employment, despite plan provisions
requiring such distributions. Such an election can be made as late as December 31, 1997. A
plan will need to be amended to allow such elections, but the amendment is not required to be
in place before the elections are permitted. Further guidance will be issued regarding the
deadline for the needed retroactive amendment.
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