SECTION 1. PURPOSE

.01 This revenue procedure provides

1997–33 I.R.B. 51 August 18, 1997

included the rules relating to the determination of certain benefits under §§ 411(a)(11)(B), 415(b)(2)(E) and 417(e)(3).

.02 The changes to §§ 411(a)(11)(B) and 417(e)(3), relating to the determination of the present value of certain plan distributions, were generally effective for plan years beginning after December 31, 1994. However, § 767(a)(2) of GATT provided a transition rule with respect to the determination under §§ 411(a)(11)(B) and 417(e)(3) of the present value of distributions from plans that were adopted and in effect as of December 7, 1994 (“pre-GATT plans”). In general, under this transition rule, the present value of a distribution from a pre-GATT plan that is made before the earlier of (i) the first plan year beginning after December 31, 1999, or (ii) the later of the adoption or effective date of a plan amendment applying the GATT changes to §§ 411(a)(11)(B) and 417(e)(3) to the plan is to be determined under the plan’s pre-GATT terms. Thus, for pre-GATT plans, amendments applying the GATT changes to §§ 411(a)-(11)(B) and 417(e)(3) to the plan cannot be adopted retroactively. As a result, these plans are not permitted to operate in accordance with these changes prior to the adoption of plan amendments.

.03 Under section 767(d) of GATT, the changes to § 415(b)(2)(E), relating to required adjustments to certain benefits for limitation purposes, were effective for limitation years beginning after December 31, 1994. In addition, § 767(d) of GATT required plans to be operated in accordance with the GATT changes to § 415(b)(2)(E) as of the first limitation year beginning after December 31, 1994, even though, under § 767(d)(3)(B) of GATT, plan amendments applying these changes to the plan would not be required until such date as the Secretary provides.

.04 Section 1449 of SBJPA amended § 767(d)(3)(A) of GATT, however, to permit plan sponsors to delay the implementation of the GATT changes to § 415(b)(2). Section 1449 provides that a pre-GATT plan is not required to apply the GATT changes to § 415(b)(2)(E) with respect to benefits accrued before the earlier of (i) the later of the date a plan amendment applying the changes is adopted or effective or (ii) the first day of the first limitation year beginning

guidance to sponsors of pension, profitsharing and stock bonus plans qualified under § 401(a) or 403(a) of the Internal Revenue Code (qualified plans) and taxsheltered annuity plans described in § 403(b) (§ 403(b) plans) with respect to the date by which they must adopt amendments to comply with changes in the law made by the Small Business Job Protection Act of 1996, Pub. L. 104–188 (SBJPA), the Uruguay Round Agreements Act, Pub. L. 103–465 (GATT), and the Uniformed Services Employment and Reemployment Rights Act of 1994, Pub. L. 103–353 (USERRA). This revenue procedure provides that:

1 In general, there is a single deadline for adopting SBJPA, GATT and USERRA amendments to qualified plans.

2 The deadline for adopting SBJPA, GATT and USERRA amendments is the same as the date by which certain plans that have extended reliance on Tax Reform Act of 1986 (TRA ‘86) determination letters must be amended.

3 Plan sponsors are allowed, for qualification purposes, to anticipate in plan operation certain plan amendments that they intend to adopt as a result of changes in the qualification requirements.

.02 Specifically, under this revenue procedure:

1 Qualified plans have a remedial amendment period under § 401(b) with respect to certain amendments for SBJPA, GATT or USERRA through the last day of the first plan year beginning on or after January 1, 1999. Thus, these amendments will not have to be adopted before the last day of a plan’s 1999 plan year.

2 The deadline for adopting plan amendments to reflect certain limitations under § 415(b), as amended by GATT and SBJPA, is also the last day of the first plan year beginning on or after January 1, 1999. In addition, relief is provided so that a plan amendment described in § 1449(d)(2) of SBJPA repealing an earlier plan amendment that implemented certain amendments made by GATT to § 415(b) need not be adopted before the last day of the first plan year beginning on or after January 1, 1999.

3 Plan sponsors are advised of the Service’s intention to publish procedures for obtaining determination letters that include consideration of the changes to the

qualification requirements made by SBJPA and GATT as soon as possible after necessary guidance is issued.

4 Amendments for SBJPA to § 403(b) plans, or to annuity contracts purchased under § 403(b) plans, are not required to be adopted before the first day of the first plan year beginning on or after January 1, 1998.