SECTION 9. TERMINATING PLANS

A plan (including a master or prototype, regional prototype, or volume submitter plan) that is terminated after the effective date of changes in the qualification requirements made by SBJPA or GATT but before the date that plan amendments would otherwise be required must be amended in connection with the plan termination to comply with the changes as of their effective date with respect to the plan. For this purpose, any amendment that is adopted after the date of plan termination in order to receive a favorable determination letter will be considered as adopted in connection with the plan termination. In addition, annuity contracts distributed from such terminated plans also must meet all the applicable requirements of SBJPA and GATT. In the case of changes in the qualification requirements to which § 1465 of SBJPA applies, the operational compliance requirement of § 1465 must also be satisfied. (See Notice 87–57, 1987–2 C.B. 368, and Announcement 88–8, 1988–4 I.R.B. 32,

1997–33 I.R.B. 55 August 18, 1997

to be made before the time described in § 1465 of SBJPA, provided the retroactive amendment and operational compliance requirements of § 1465 are satisfied. For this purpose, the time described in § 1465 with respect to a § 403(b) plan that is a governmental plan will be treated as not expiring before the last day of the first plan year beginning on or after the 1999 legislative date, that is, the 90th day after the opening of the first legislative session beginning on or after January 1, 1999, of the governing body with authority to amend the plan, if that body does not meet continuously.

.02 For example, § 1450(c)(1) of SBJPA amended § 403(b)(1)(E) to provide that each contract purchased under a § 403(b) plan salary reduction agreement must provide that elective deferrals made under the contract may not exceed the annual limit on elective deferrals under § 402(g)(1). Prior to this amendment, the § 403(b) plan, not each contract, was required to provide this limitation. Section 1450(c)(2) provides that this amendment applies to years beginning after December 31, 1995, except a contract will not be required to meet any change in any requirement by reason of the amendment before the 90th day after enactment of SBJPA (that is, November 18, 1996). Because § 1465 applies to any annuity contract purchased under a § 403(b) plan, such a contract is not required to be amended to comply with § 1450(c)(1) before the first day of the first plan year beginning on or after January 1, 1998 (or, in the case of a contract purchased under a § 403(b) plan that is a governmental plan, the later of (i) the first day of the first plan year beginning on or after January 1, 2000, or (ii) the last day of the first plan year beginning on or after the 1999 legislative date), provided the retroactive amendment and operational compliance requirements of § 1465 are satisfied with respect to the contract.