News Flash: PPA will trigger hundreds of guidance items, mostly from Treasury

[Malik Shabazz]

In fairness to CCH, it's just a bad title for a news article about the ASPPA conference.

PPA will trigger hundreds of guidance items, mostly from Treasury

The Pension Protection Act of 2006 (PPA; P.L. 109280) requires government agencies to issue guidance or perform some task in 407 instances, according to a word search of the PPA conducted by W. Thomas Reeder, benefits tax counsel with the Treasury Department. The agencies involved will be very busy in the next year; he told the 40th annual conference of the American Society of Pension Professionals and Actuaries (ASPPA), in Washington, D.C., on October 24, 2006. With more than 300 references made to the Secretary of the Treasury, Mr. Reeder's department faces the most work, followed by 44 references to the Secretary of Labor, 21 references to the Pension Benefit Guaranty Corporation, and various references to other agencies.

Guidance to be issued in phases

According to Mr. Reeder, guidance will be issued in three phases. In the first phase, the Treasury Department hopes to publish guidance by the end of November 2006 on issues such as mortality tables, a unified definition of governmental plan, the annual 401(k) safe harbor notices, and the issues surrounding Subchapter S ESOPs under Code Sec. 409(p). In addition, Mr. Reeder expects the Treasury Department to give the Internal Revenue Service guidance for opening the determination letter process for many cash balance plans that have requested letters in the past six years.

Distribution rules will be another major issue addressed fairly soon, particularly the problem surrounding lump-sum distributions calculated using interest rates that are higher than those retroactively set by the PPA. Other items in the second phase of guidance will include final Roth 401(k) regulations, final 403(b) regulations, final 415 regulations, guidance concerning phased retirement, and a list of items that must be changed in plan documents. The third phase will be items later in 2007 and beyond. ...

http://hr.cch.com/news/pension/110706a.asp

This is something I hadn't really noticed when reading the new law:

The issuance of guidance is not as easy as it used to be, Joseph H. Grant, the new director of Employee Plans at the IRS, told the ASPPA conference. The PPA provisions often require a partnership involving the Treasury Department, IRS, DOL, and the PBGC.