n-18-69.pdf

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Extension of Temporary Nondiscrimination Relief for Closed Defined Benefit
Plans through 2019
Notice 2018-69
I. PURPOSE
This notice extends the temporary nondiscrimination relief for closed defined benefit
plans that is provided in Notice 2014-5, 2014-2 I.R.B. 276, by making that relief
available for plan years beginning before 2020 if the conditions of Notice 2014-5 are
satisfied.
II. BACKGROUND
Notice 2014-5 provides temporary nondiscrimination relief for certain “closed” defined
benefit pension plans (i.e., defined benefit plans that provide ongoing accruals but that
have been amended to limit those accruals to some or all of the employees who
participated in the plan on a specified date). Specifically, for plan years beginning
before 2016, Section III.B of Notice 2014-5 permits a DB/DC plan that includes a closed
defined benefit plan (that was closed before December 13, 2013) and that satisfies
certain conditions set forth in the notice to demonstrate satisfaction of the
nondiscrimination in amount requirement of § 1.401(a)(4)-1(b)(2) on the basis of
equivalent benefits even if the DB/DC plan does not meet any of the existing eligibility
conditions for testing on that basis under § 1.401(a)(4)-9(b)(2)(v).
Notice 2015-28, 2015-14 I.R.B. 848, Notice 2016-57, 2016-40 I.R.B. 432, and Notice
2017-45, 2017-38 I.R.B. 232, extend the temporary nondiscrimination relief provided in
Notice 2014-5 by applying that relief to plan years beginning before 2019 if the
conditions of Notice 2014-5 are satisfied. Notice 2015-28 further provides that, during
the period for which the extension applies, the remaining provisions of the
nondiscrimination regulations under § 401(a)(4) continue to apply.
Proposed regulations relating to nondiscrimination requirements for closed plans were
published in the Federal Register on January 29, 2016 (81 FR 4976). The proposed
regulations set forth relief for closed plans under §§ 1.401(a)(4)-4, 1.401(a)(4)-8, and
1.401(a)(4)-9 (subject to satisfaction of certain conditions set forth in the regulations),
and contain other proposed nondiscrimination rules. The regulations are proposed to
apply generally to plan years beginning on or after the date of publication of the final
regulations. The proposed regulations provide that taxpayers are permitted to apply
certain provisions of the proposed regulations (including all of the provisions that apply
specifically to closed plans) for certain plan years beginning before the proposed
applicability date.

2

Many comments have been submitted on the proposed regulations, including oral
comments at a public hearing held on May 19, 2016. The Internal Revenue Service
(IRS) and the Treasury Department expect that the final regulations will include a
number of significant changes in response to those comments. However, it is
anticipated that the final regulations will not be published in time for plan sponsors to
make plan design decisions based on the final regulations before expiration of the relief
provided under Notice 2014-5 (as last extended by Notice 2017-45). Accordingly, the
IRS and the Treasury Department have determined that it is appropriate to extend the
rel ief provided under Notice 2014-5 for an additional year.
III. EXTENSION OF RELIEF FOR CLOSED PLANS
The temporary nondiscrimination relief for closed plans that is provided in Notice 2014-5
is hereby extended to plan years beginning before 2020 if the conditions of Notice 2014-
5 are satisfied. This extension is provided in anticipation of the issuance of final
amendments to the § 401(a)(4) regulations. In addition, it is expected that the final
regulations will provide that the reliance granted in the preamble to the proposed
regulations may be applied for plan years beginning before 2020.
IV. EFFECT ON OTHER DOCUMENTS
Notice 2014-5, Notice 2015-28, Notice 2016-57, and Notice 2017-45 are modified.
DRAFTING INFORMATION
The principal author of this notice is Diane S. Bloom of the Office of the Associate Chief
Counsel (Tax Exempt and Government Entities). However, other personnel from the
IRS participated in development of this guidance. For further information regarding this
notice, please contact Ms. Bloom or Linda Marshall at (202) 317-6700 (not a toll-free
number).