IRS issues Revenue Ruling on conversion of defined benefit plans to insurance contract plans
Article Abstract:
An IRS Revenue Ruling on conversion of defined benefit plans into insurance contract plans details the funding requirements that must be met for the new plan under IRC section 412. Under section 412, insurance contract plans must be funded by level annual premium contracts. Converting defined benefit plans cannot meet this requirement literally so additional funding and guarantee requirements must be met. Employers with overfunded defined benefit plans wishing to convert and terminate the plan should note that the Revenue Ruling requires continued benefit accruals after conversion.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1995
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IRS issues announcement on contributions of property other than cash to a qualified plan after Keystone
Article Abstract:
The IRS has provided guidance and relief for taxpayers that wish to comply with the restriction on contributions of unencumbered property to fund qualified defined benefit plans enacted by the US Supreme Court's decision in Commissioner v. Keystone Consolidated Industries. Such contributions, at least if made to meet funding requirements, are considered prohibited sales or exchanges. Taxpayers correcting such transactions and informing the IRS by Aug 21, 1995, will only be subject to 5% first-tier excise tax and not the 100% second-tier excise tax.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1995
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Treasury releases study on allocation of excess pension assets in the case of bridge banks
Article Abstract:
The Department of the Treasury has completed a study on the technique for allocating excess pension assets for bridge banks that receive a closed, uninsured banks's assets and liabilities. Specific allocation of excess assets among the resulting plans is usually required if a spin-off transaction from an overfunded defined benefit plan creates a new defined benefit plan. The primary issue in the asset allocation is the conflict between bank insurance policy and federal pension policy.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1992
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