[Federal Register Volume 75, Number 248 (Tuesday, December 28, 2010)]
[Rules and Regulations]
[Pages 81456-81457]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-32539]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9505]
RIN 1545-BG36


Hybrid Retirement Plans; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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SUMMARY: This document contains correctioning amendments to correct 
errors resulting from the publication of to final regulations (TD 9505) 
that were published in the Federal Register on Tuesday, October 19, 
2010 (75 FR 64123) providing guidance relating to certain provisions of 
the Internal Revenue Code that apply to hybrid defined benefit pension 
plans.

DATES: This correcting amendment is effective on December 28, 2010, and 
is applicable on October 19, 2010.

FOR FURTHER INFORMATION CONTACT: Neil S. Sandhu, Lauson C. Green, or 
Linda S. F. Marshall at (202) 622-6090 (not a toll-free number).

SUPPLEMENTARY INFORMATION: 

Background

    The final regulations (TD 9505) that are the subject of this 
document are under section 411 of the Internal Revenue Code.

Need for Correction

    As published, the final regulations (TD 9505) contain errors that 
may prove to be misleading and are in need of clarification.

List of Subject in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Correction of Publication

0
Accordingly, 26 CFR part 1 is corrected by making the following 
correcting amendments:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *

0
Par. 2. Section 1.411(b)(5)-1 is amended by:
0
1. Revising the paragraph (b)(1)(ii)(A).
0
2. Revising the first sentence of paragraph (b)(1)(iv) Example 4.(iii).
0
3. Revising the first sentence of paragraph (c)(5) Example 2.(iv).
0
4. Revising the third sentence of paragraph (c)(5) Example 3.(i).
0
5. Revising the paragraph (d)(1)(iii).
0
6. Revising the first sentence of paragraph (f)(2)(iii).
    The revisions read as follows:


Sec.  1.411(b)(5)-1  Reduction in rate of benefit accrual under a 
defined benefit plan.

* * * * *
    (b) * * *
    (1) * * *
    (ii) * * * (A) In general. Except as provided in paragraphs 
(b)(1)(ii)(B), (C), and (D) of this section, the safe harbor provided 
by section 411(b)(5)(A) and paragraph (b)(1)(i) of this section is 
available with respect to an individual only if the individual's 
accumulated benefit under the plan is expressed in terms of only one 
safe-harbor formula measure and no similarly situated, younger 
individual who is or could be a participant has an accumulated benefit 
that is expressed in terms of any measure other than that same safe-
harbor formula measure. Thus, for example, if a plan provides that the 
accumulated benefit of participants who

[[Page 81457]]

are age 55 or over is expressed under the terms of the plan as a life 
annuity payable at normal retirement age (or current age, if later) as 
described in paragraph (b)(1)(i)(A) of this section and the plan 
provides that the accumulated benefit of participants who are younger 
than age 55 is expressed as the current balance of a hypothetical 
account as described in paragraph (b)(1)(i)(B) of this section, then 
the safe harbor described in section 411(b)(5)(A) and paragraph 
(b)(1)(i) of this section does not apply to individuals who are or 
could be participants who are age 55 or over.
    (iv) * * *
    Example 4. * * *
    (iii) * * * If, instead of the facts in paragraph (i) of this 
Example 4, the plan had been amended to provide only participants 
who have not yet attained age 55 by January 1, 2012, with a benefit 
that is the greater of the benefit under the average annual 
compensation formula and a benefit that is based on the balance of a 
hypothetical account, then the safe harbor would not be satisfied 
with respect to individuals who have attained age 55 by January 1, 
2012. * * *
* * * * *
    (c) * * *
    (5) * * *
    Example 2. * * *
    (iv) * * * The plan provides that, as of a participant's annuity 
starting date, the plan will determine whether the benefit 
attributable to the opening hypothetical account balance payable in 
the particular optional form of benefit selected is equal to or 
greater than the benefit accrued under the plan through the date of 
conversion and payable in the same generalized optional form of 
benefit with the same annuity starting date. * * *
    Example 3. * * * (i) * * * Under the terms of Plan E, the 
benefit attributable to A's opening hypothetical account balance is 
increased so that A's straight life annuity commencing on January 1, 
2015, is $1,000 per month. * * *
* * * * *
    (d) * * *
    (1) * * *
    (iii) Market rate of return for single rates. Except as otherwise 
provided in this paragraph (d)(1), an interest crediting rate is not in 
excess of a market rate of return only if the plan terms provide that 
the interest credit for each plan year is determined using one of the 
following specified interest crediting rates:
* * * * *
    (f) * * *
    (2) * * *
    (iii) * * * For the periods after the statutory effective date set 
forth in paragraph (f)(1) of this section and before the regulatory 
effective date set forth in paragraph (f)(2)(i) of this section, the 
safe harbor and other relief of section 411(b)(5) apply and the market 
rate of return and other requirements of section 411(b)(5) must be 
satisfied. * * *

Guy R. Traynor
Acting Chief, Publications and Regulations Branch, Legal Processing 
Division, Associate Chief Counsel, Procedure and Administration.
[FR Doc. 2010-32539 Filed 12-27-10; 8:45 am]
BILLING CODE 4830-01-P