Proposed Regulations under Section 411(d)(6)

[Guest Tom Maloney]

It is my understanding the Treasury held a public hearing on June 27, 2000, to receive comments on the Proposed Regulations. Has Treasury given any indication as to when the regulations might be finalized?

Second question, I am confused about the relief provided for elective transfers between defined contribution plans. Specifically, an example of the qualification requirements that must be met to obtain the relief is compliance by the transferee plan with the 401(a)(11) and 417 survivor annuity requirements if the transferor plan was subject to those requirements. Does this mean that the transferee plan has to satisfy 401(a)(11)/417 only if it offers an annuity form of benefit following the transfer, or does this mean the transferee plan has to offer an annuity form of benefit if the transferor plan offered an annuity (to protect the rights of spouses)?

Thank you.

[Guest Brian4]

The Treasury cancelled the hearing due to a lack of interest for presenting testimony.

I assume the possible transferor plan is a money purchase pension plan, as these are usually the defined contribution plans subject to the survivor annuity requirements. The proposed regulation says, that for the elective transfer exception to the anti-cutback rule: "To the extent the benefits being are transferred from a money purchase pension plan, the transferee plan must be a money purchase pension plan." So, spouses would continue to receive the survivor protection after the transfer.

An alternative way of moving funds between plans is by rollovers. The funds in the money purchase plan could distributed, say following the employees termination, or the plan termination. Then, the distributed funds could be rolled over to a profit sharing plan, which usually does not provide a survivor annuity.