The IRS and the Department of Treasury is still seeking public input on future standards to determine whether a retirement plan is a governmental plan under Code Section 414(d).
According to the IRS, more guidance is needed for Section 414(d), as the statutory rules for governmental plans differ from those for nongovernmental plans. Further, changes implemented by the Pension Protection Act of 2006 further altered some its statutory provisions for plans maintained by Indian tribal governments.
According to the IRS, “given the diversity of the governmental community, the unique challenges presented (such as the existence of state law constraints), and the significant potential impact of the issue on retirement benefit design, we believe that the advance notice process will best ensure comprehensive guidance that is also practical and administrable.”
The federal agency has posted two advanced notices for proposed rulemaking (ANPRM) on this matter. Both seek to further define “governmental plan,” one applicable to sponsors, participants and beneficiaries of federal government employee benefit plans (ANPRM REG-157714-06); and the other applicable to sponsors, participants and beneficiaries of employee benefit plans of Indian tribal governments (ANPRM REG-133223-08). The IRS previously issued a call for comments, but has now added public hearings for the two ANPRMs. The public hearing on governmental plans will be July 9, 2012, at 10 a.m. The public hearing on Indian tribal governmental plans will be July 10, 2012, at 10 a.m. Both hearings will be in the auditorium of the IRS building at 1111 Constitution Ave. NW, Washington, DC.
As part of the public hearing process, the IRS has extended its deadline for comment on these matters. Interested parties may submit comments, requests to speak and outlines of topics to be discussed in a public hearing until June 18, 2012.