Earlier this week, I posted about an announcement by the American Society of Pension Professionals & Actuaries (ASPPA) that Treasury officials have informed Congress that they will enforce the new PPA combined plan deduction limits under Internal Revenue Code section 404(a)(7) in accordance with the language in the proposed PPA technical correction legislation (H.R. 3361 / S.1974). Q&A 9 of Notice 2007-28 will not be enforced and, in a defined benefit/defined contribution plan combination situation, if the D.C. contribution was not greater than 6%, Code section 404(a)(7) does not apply to the defined benefit plan. (hat tip to BenefitsLink.com).
Today brings an actual copy of the letter that Eric Solomon, the Assistant Secretary for Tax Policy with the U.S. Treasury Dept., sent to the Senate Finance Committee. Within that letter, the Treasury Dept. states that the “Treasury Department and the Internal Revenue Service will administer sections 801 and 803 of the Pension Protection Act of 2006 consistent with the language in sections 9(a) and (b) of S. 1974 and H.R. 3361, as introduced on August 3, 2007, in anticipation of the enactment of this legislation”. (hat tip to the American Benefits Council)
Mr. Solomon’s letter was sent in response to a 2-page letter sent to the Treasury Dept. by the ranking members of the Senate Finance Committee and the House Ways and Means Committee on September 11, 2007, asking the Treasury Dept. to address this issue.
This is another signal that the Pension Protection Technical Corrections Act of 2007 will become law before this year is over. The Joint Committee on Taxation released a 25-page Description on this bill on August 3, 2007.
[tags]Pension Protection Act, ppa, pension, retirement, Notice 2007-28, 404(a)(7), combined plan deduction limit, defined benefit, defined contribution, ERISA, pension protection technical corrections act[/tags]