SECTION 4. REMEDIAL

AMENDMENT PERIOD FOR CHANGES IN PLAN QUALIFICATION REQUIREMENTS MADE BY TRA ’97

.01 Section 1541 of TRA ’97 contains provisions relating to plan amendments that are adopted as a result of TRA ’97. If § 1541 applies to a plan amendment, § 1541(a) provides that the plan will be treated as operated in accordance with its terms and will not fail to satisfy the re

quirements of § 411(d)(6) by reason of the amendment. Section 1541 applies to a plan amendment that is made pursuant to a legislative change in the pension and employee benefit provisions of TRA ’97, provided the following conditions are satisfied. First, the plan amendment must be adopted before the first day of the first plan year beginning on or after January 1, 1999 (2001, in the case of a governmental plan, as defined in § 414(d)). Second, the plan must be operated in accordance with the terms of the plan amendment beginning on the date the legislative change takes effect, or, if the amendment is not required by the legislative change, the effective date of the amendment specified by the plan. Third, the plan amendment must be made retroactively effective.

.02 Pursuant to the Commissioner’s authority under § 1.401(b)–1, a plan provision is hereby designated as a disqualifying provision under § 1.401(b)–1(b) to which the remedial amendment period described in section 6 of Rev. Proc. 97–41 applies if the provision causes a plan to fail to satisfy the qualification requirements of the Code because of changes made to those requirements by TRA ’97 or if the provision is integral to a qualification requirement changed by TRA ’97. The operational compliance and retroactive amendment conditions described in § 1541(b)(2) of TRA ’97 must be satisfied throughout such remedial amendment period with respect to any amendment of a disqualifying provision described in the preceding sentence.

.03 For example, § 1071 of TRA ’97 increased the amount of the accrued benefit subject to involuntary distribution under § 411(a)(11) from $3,500 to $5,000, effective for plan years beginning after August 5, 1997. A plan provision that reflects the $3,500 limit under § 411(a)(11), as in effect prior to TRA ’97, is integral to a qualification requirement changed by TRA ’97. Thus, for example, a plan that contains the $3,500 limit may, for plan qualification purposes, be operated during the remedial amendment period in anticipation of a retroactive amendment reflecting the increase in the limit under § 1071 of TRA ’97, provided the amendment is adopted on or before the last day of the remedial amendment period and is made retroactively effective as of the beginning of the remedial amendment period. In

this case, the plan provision containing the $3,500 limit is integrally related to a qualification requirement changed by TRA ’97 but the plan provision would not disqualify the plan as a result of the statutory change. Therefore, the remedial amendment period begins on the date on or after the first day of the first plan year beginning after August 5, 1997, on which the plan was first operated in anticipation of the amendment increasing the limit to $5,000. In the case of a nongovernmental plan, the remedial amendment period ends on the last day of the first plan year beginning on or after January 1, 1999.