Notice to participants when filing an application for determination le

[Guest slt]

Carol, or anyone else who has filed a determination letter for a governmental plan, do you have the plan send out notice to participants re the letter filing? The regulations concerning the provision of notice (1.7476-1(B)(7) and ©(5)) are not written clearly. My reading of ©(5) is that it was written specifically to draw governmental plans into the requirement to provide notice. However, ©(5) provides that notice must be given for a determination seeking qualification for a year to which section 410©(2) applies. 410©(2) was amended in 1997 to carve out governmental plans from meeting certain "pre-ERISA" requirements. Does this mean that post-1997, notice need not be given for governmental plans? Thanks!! -Shaun

[Carol V. Calhoun]

I always have a governmental plan issue a Notice to Interested Parties in connection with the filing of a determination letter request. It seems to me that a plan is "described in" section 410©(2) if it is described in any one of the paragraphs of section 410©(1). Governmental plans receive the benefit of section 410©(2) and therefore are described in that section inasmuch as they are exempted from the rest of section 410© by section 410©(2). The language of the second clause of section 410©(2) was intended to exempt governmental plans from rules governing nondiscrimination in plan coverage, but did not cause them not to be described at all in section 410©(2).

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Employee benefits legal resource site

[Guest slt]

Just in case anyone is looking at this message, I want to state that it appears that my initial argument was correct. The IRS has stated in the final notice to interested parties regulation that was issued in July of 2002 that notice to interested parties does NOT have to be given out for governmental plans (state and local).

This is excerpted from the preamble:

One commentator requested clarification that the notice to

interested parties requirement under section 7476 no longer applies to governmental plans after TRA '97. Section 1.7476-1(B)(7) of the regulations limits the applicability of the notice to interested parties requirement to retirement plans that are subject to section 410 of the Code. Because a governmental plan established and maintained by a State or local government or political subdivision thereof (or agency or instrumentality thereof) is not subject to section 410 of the Code, it is also not subject to the notice to interested parties requirement.

-Shaun