SECOND CHANCE FOR PLANS THAT MISSED REQUIRED APRIL 1, 1997 DISTRIBUTION DATE FOR PARTICIPANTS ATTAINING 70-1/2 IN 1996 _______________________________________________________________ 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. The full text of the proposed regulation appears on BenefitsLink at http://www.benefitslink.com/IRS/ann97-70.html