Which unnamed retirement plan gets this tax law?

[Peter Gulia]

Here’s a brain-teaser for the super-smart BenefitsLink mavens.

 

A section of today’s Consolidated Appropriations Act, 2021 amends Internal Revenue Code of 1986 § 401(a)(36) to allow a § 401(a)-qualified plan to provide a distribution to a worker not yet separated from employment as soon as age 55.

 

But that change applies only for “a multiemployer plan . . . with respect to individuals who were participants in such plan on or before April 30, 2013, if—(i) the trust to which [the before-separation provision] applies was in existence before January 1, 1970, and (ii) before December 31, 2011, at a time when the plan provided that distributions may be made to an employee who has attained age 55 and who is not separated from employment at the time of such distribution, the plan received at least [one] written determination from the Internal Revenue Service that the trust to which [IRC § 401(a)(36)(A)-(B)] applies constituted a qualified trust under [IRC § 401].”

 

Which unnamed plan gets this tax law?

 

[BG5150]

General Motors?

[Peter Gulia]

Nice guess, but the focus is on the plan rather than an employer.

 

Here’s a clue from the soon-to-be statute’s text.  The heading for amended I.R.C. § 401(a)(36)(B) reads: “Certain employees in the building and construction industry.”

 

[C. B. Zeller]

That's a fun question! I always wonder when these strangely specific requirements end up in the law, who they were intended to benefit.

I downloaded the 2019 5500 data set from the DOL's website and filtered it down to plan type=multiemployer, plan effective date<1970, and business code starts with 232, 236, or 238. There are 537 candidates.

Edit: Silly me, I forgot that welfare plans file a 5500 too. Filtered to only include plans that attached a schedule R, it is down to 255 candidates.

Edit 2: Since 401(a)(36) only applies to pension plans, filtered out any plans where the characteristic codes did not include a 1, 2B, or 2C. Down to 248 candidates.

[XTitan]

Now you have to find the written determination that said it was okay not that it would help narrow down the search.  Looking at the Section title offers no clues as the acronym doesn't spell out anything (unlike ERISA)  - MINIMUM AGE FOR DISTRIBUTIONS DURING WORKING RETIREMENT.

[Peter Gulia]

Yesterday evening, Roll Call reports this is about the St. Louis Carpenters’ Pension Plan.

 

https://www.rollcall.com/2020/12/21/midwestern-carpenters-would-get-relief-in-year-end-tax-package/

 

[MWeddell]

Thanks for circling back to tell us the answer, Peter.

[RatherBeGolfing]

6 hours ago, Peter Gulia said:

Yesterday evening, Roll Call reports this is about the St. Louis Carpenters’ Pension Plan.

 

https://www.rollcall.com/2020/12/21/midwestern-carpenters-would-get-relief-in-year-end-tax-package/

 

And here I would have guessed Teamsters...

[Bob the Swimmer]

I was guessing a Teamsters plan also. Thanks Peter.

[JRN]

I'm dating myself here, but this reminds me of the Tax Reform Act of 1986 when Congress imposed an excise tax on DB plan termination reversions and then exempted "certain taxpayers", defined as follows:

(i) a corporation incorporated on June 13, 1917 and which has a principal place of business in Bartlesville, Oklahoma, 

(ii) a corporation incorporated on January 17, 1917 and which has a principal place of business in Coatesville, Pennslyvania, 

etc.

Like the old saying goes, "you don't really want to see how sausage is made".

[Peter Gulia]

In 1985 and 1986, I worked in lobbying on what became the 1986 Act.

 

After enactment, even skimming the enrolled bill to find the retirement plans’ provisions I’d explain in my book, I glanced over many provisions that stated narrow conditions to avoid using a name.

 

Some were mentioned in 1987’s Showdown at Gucci Gulch. https://www.penguinrandomhouse.com/books/118994/showdown-at-gucci-gulch-by-jeffrey-birnbaum/

 

And a 1988 article about the practice won a Pulitzer Prize.  Donald L. Bartlett & James B. Steele, How the Influential Win Billions in Special Tax Breaks, Philadelphia Inquirer, Apr. 10, 1988.  That article counted “at least 650 exemptions—preferences, really, for the rich and powerful—through the legislation, most written in cryptic legal and tax jargon that conceals the identity of the beneficiaries.”