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The IRS has issued proposed regulations on the treatment of forfeitures under defined benefit and defined contribution plans.  The proposed guidance, which would amend Treasury Regulation 1.401-7, synthesizes (and updates the existing regulation to reflect) guidance previously found in Revenue Rulings, an IRS newsletter, and certain changes to the Internal Revenue Code (the “Code”), made during the last 35 years or so.  The proposed regulation would also generally clarify and extend what had been previously understood to be the deadline for “zeroing out” forfeiture accounts under defined contribution plans. Continue Reading IRS Issues Proposed Forfeiture Regulations

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Among the many changes to laws governing retirement plans in SECURE 2.0—the long-awaited follow-up to the 2019 SECURE Act that passed as part of the 2023 Consolidated Appropriations Act—is a provision that may benefit sponsors of over-funded pension plans.  Under Section 420 of the Internal Revenue Code (“Code”), as amended by SECURE 2.0, and subject to certain conditions, pension plans that are at least 110% funded may transfer a portion of their assets to cover costs for their retiree medical or life insurance plan.Continue Reading SECURE 2.0 Facilitates Funding Retiree Medical and Life Insurance Accounts