The IRS released an advance version of Notice 2015-28 that extends, for one year—for plan years beginning before 2017—the temporary nondiscrimination relief previously provided by Notice 2014-5 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).
As released in December 2013, Notice 2014-5 [PDF 35 KB] permits certain employers that sponsor an aggregation of plans that includes (1) one or more defined benefit plans and (2) one or more defined contribution plans—a DB/DC plan that includes a closed defined benefit plan, to demonstrate that the aggregated plans comply with the nondiscrimination requirements of Reg. section 401(a)(4) on the basis of equivalent benefits, even if the aggregated plans do not satisfy the current conditions for testing on that basis.
Notice 2015-28 [PDF 13 KB] extends the temporary nondiscrimination relief provided in Notice 2014-5 for an additional year by applying that relief to plan years beginning before 2017 if the conditions of Notice 2014-5 are satisfied.
During the period of the extension, the remaining provisions of the nondiscrimination regulations under section 401(a)(4)—including the rules relating to the timing of plan amendments under Reg. section 1.401(a)(4)-5—continue to apply.
The extension provided by Notice 2015-28 is in anticipation of the finalization of proposed regulations under section 401(a)(4).
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