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IRS Publishes Retirement Plan Annuity Regs

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NU Online News Service, Jan. 16, 2004, 6:06 p.m. EST – The Internal Revenue Service has published final regulations in Internal Revenue Bulletin 2004-2 that deal with some types of retirement plan annuity disclosures.[@@]

The regulations, published in T.D. 9099, deal with disclosures for workers and spouses who expect to receive benefits from defined benefit pension plans, money purchase plans and some types of defined contribution plans.

Traditionally, the standard mechanisms for making benefit payments have been qualified joint and survivor annuities and qualified preretirement survivor annuities. Benefit payments made through a QJSA are supposed to last for the remaining life of the participant, or, if there is a spouse and the spouse is the second to die, through the life of the spouse.

IRS regulations published in 1988 have required sponsors of plans governed by Section 401(a)(11) of the Internal Revenue Code to get waivers from plan participants and spouses who agree to accept retirement benefit payments in any form other than a QJSA. The new regulations tell sponsors how to help participants and spouses compare the value of QJSAs and other benefit payment options.

The regulations affect both plan sponsors and administrators of retirement plans subject to the requirements, the IRS says.

The regulations apply to some annuity distributions with starting dates after June 30 and some with starting dates after Sept. 30

The approach in the final regulations is similar to the approach in the proposed regulations, the IRS says.

The latest edition of the Internal Revenue Bulletin also gives the final version of guidance on the health savings accounts that were authorized by the Medicare Prescription Drug, Improvement and Modernization Act of 2003. The preliminary version was released in late 2003.

The bulletin is on the Web at //