IRS POSTPONES EFFECTIVE DATES OF NONDISCRIMINATION RULES.

Announcement 92-29

The Service today announces the following extensions applicable to the nondiscrimination requirements for qualified plans:

o EXTENSION OF EFFECTIVE DATE. The effective date for the nondiscrimination regulations under sections 401(a)(4), 401(a)(17), 401(1), 410(b), 414(r), and 414(s) of the Code will be extended to the first day of plan years beginning on or after January 1, 1993. For plans maintained by any organization exempt from tax under subtitle A of the Code, the effective date for these regulations will be extended to the first day of plan years beginning on or after January 1, 1995.

o EXTENSION OF REASONABLE GOOD FAITH INTERPRETATION PERIOD. For years beginning before January 1, 1993, or, in the case of plans maintained by any organization exempt from tax under subtitle A, January 1, 1995, taxpayers may rely on a reasonable good faith interpretation of sections 401(a)(4), 401(a)(17), 401(1), 410(b), 414(r), and 414(s).

o EXTENSION OF EFFECTIVE DATE FOR GOVERNMENTAL PLANS. The special effective date for governmental plans, within the meaning of section 414(d), provided in the relevant nondiscrimination regulations will be extended to the first day of plan years beginning on or after January 1, 1995.

o EXTENSION OF 401(B) REMEDIAL AMENDMENT PERIOD. The section 401(b) remedial amendment period in which qualified plans must be amended to comply with the Tax Reform Act of 1986 and related regulations is extended through the last day of the 1993 plan year.

o EXTENSION OF ALTERNATIVE II D AND OTHER RELIEF PROVISIONS. The relief provisions provided in Notice 91-38, 1991-49 I.R.B. 62, December 9, 1991, including the extension of reliance on Alternative II D, are extended through the last day of the 1993 plan year.

These extensions are effective immediately and will be formally implemented through appropriate modifications to existing regulations, notices, and other documents of general applicability.

The purpose of this extension is to provide additional time for employers and practitioners to review the regulations and their plans, consider their compliance alternatives, and make any necessary amendments. In addition, since the publication of the final nondiscrimination regulations, the Service and the Treasury have received comments on potential areas for improvement or clarification. Thus, this extension is also intended to provide additional time to consider these suggestions and work with affected taxpayers and practitioners. As part of their ongoing effort to reduce taxpayer burden, the Service and Treasury specifically solicit additional comments or suggestions for facilitating compliance with these regulations, including safe harbors, alternative testing approaches, or ways of simplifying the data requirements.