SECTION 2. BACKGROUND

.04 The end of the remedial amendment period described in Rev. Proc. 97–41 is also the deadline for adopting plan amendments applying the changes under § 415(b)(2)(E). It is, likewise, the deadline for adopting a plan amendment repealing a pre-August 20, 1996, GATT plan amendment, thereby permitting the earlier plan amendment to be disregarded in applying § 767(d)(3)(A) of GATT, as modified by § 1449(a) of SBJPA.

.05 Notice 98–52, 1998–46 I.R.B. 16, provided guidance on the nondiscrimination safe harbor methods in § 401(k)(12) and § 401(m)(11). This notice designates as disqualifying provisions under § 401(b) plan provisions that are integral to a qualification requirement changed by a provision of SBJPA that becomes effective on the first day of the first plan year beginning after December 31, 1998, provided two conditions are satisfied. First, the plan provisions must generally be amended by no later than the last day of the first plan year beginning after December 31, 1998. Second, the plan provisions, as amended, must be effective as of the first day of the first plan year beginning after December 31, 1998. Notice 98–52 also provides that a plan amendment that satisfies these conditions will not be treated as violating § 411(d)(6) merely because the plan amendment imposes the withdrawal restrictions required by § 401(k)(12)(E)(i), provided that those withdrawal restrictions do not apply with respect to contributions allocated as of a date before the first day of the first plan year beginning after December 31, 1998.

.06 Notice 99–5, 1999–3 I.R.B. 10, provided guidance relating to the exception to the definition of eligible rollover distribution for certain hardship distributions which was added to §§ 402(c)(4) and 403(b)(8)(B) by § 6005(c)(2)(A) and (B) of RRA 98. This definition is relevant in the application of the direct rollover requirements of § 401(a)(31). This notice designates as disqualifying provisions under § 401(b) plan provisions that are integral to the requirements of § 401(a)(31), but only to the extent such provisions are amended to reflect the change made by § 6005(c)(2) of RRA 98, provided two conditions are satisfied. First, the plan provisions must generally be amended to reflect the change made by § 6005(c)(2)

.01 In recent years, the following public laws have made changes affecting the requirements for qualification of pension, profit-sharing, and stock bonus plans under § 401(a) or § 403(a):

1 the Uruguay Round Agreements Act, Pub. L. 103–464 (“GATT”);

2 the Uniformed Services Employment and Reemployment Rights Act of 1994, Pub. L. 103–353 (“USERRA”);

3 SBJPA; 4 the Taxpayer Relief Act of 1997, Pub. L. 105–34 (“TRA 97”); and

5 RRA 98.

.02 Rev. Proc. 97–41, 1997–33 I.R.B. 51, provided a remedial amendment period under § 401(b) with respect to certain amendments for GATT, SBJPA, and USERRA. The remedial amendment period that was provided under Rev. Proc. 97–41 generally permits plan amendments to be made retroactively effective if they are adopted before the end of the remedial amendment period and they relate to GATT, SBJPA, and USERRA qualification changes that are effective before the first day of the first plan year beginning on or after January 1, 1999. Rev. Proc. 98–14, 1998–4 I.R.B. 22, provided that the remedial amendment period described in Rev. Proc. 97–41 will also apply to plan amendments that relate to TRA 97. For plans other than governmental plans, the remedial amendment period under Rev. Proc. 97–41 and Rev. Proc. 98–14 ends on the last day of the first plan year beginning on or after January 1, 1999. For governmental plans, as defined in § 414(d), the remedial amendment period ends on the later of (i) the last day of the last plan year beginning before January 1, 2001, or (ii) 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 after December 31, 1998, of the governing body with authority to amend the plan, if that body does not meet continuously). Those amendments that are required to be made to retain qualified status as a result of changes in the qualification requirements must be made retroactively effective as of the date on which the qualification change became effective with respect to the plan, and, in general, operational compliance prior to actual amendment is required. Those amendments that are not required but that amend plan provisions that are integrally related to qualification changes may be made retroactively effective as of the first day on which the plan was operated in accordance with the amended plan provision.

.03 The remedial amendment period described in Rev. Proc. 97–41 also applies with respect to all disqualifying provisions of new plans adopted or effective after December 7, 1994, and with respect to all plan amendments adopted after December 7, 1994, which would cause an existing plan to fail to be qualified.

April 19, 1999 6 1999–16 I.R.B.

ginning on or after January 1, 2001. The remedial amendment period was not extended for other amendments covered by the TRA 86 remedial amendment period, such as amendments required to satisfy the Omnibus Budget Reconciliation Act of 1993 (“OBRA 93”), the Unemployment Compensation Act of 1992 (“UCA”), or the changes to the law under TRA 86 other than changes to the nondiscrimination rules. Sponsors of nonelecting church plans were required by Notice 96–64, 1996–2 C.B. 229, to adopt amendments satisfying those changes in law by the last day of the first plan year beginning on or after January 1, 1999.

.12 For governmental plans, Notice 96–64, citing Announcement 95–48, 1995–23 I.R.B. 13, provided that the TRA 86 remedial amendment period for plan amendments relating to regulations under §§ 401(a)(4), 401(a)(26), 401(k), 401(m), 410(b), and 414(s) was extended to the last day of the first plan year beginning on or after the later of January 1, 1999, or 90 days after the opening of the first legislative session beginning on or after January 1, 1999 (“1999 legislative date”). This extension of the TRA 86 remedial amendment period for governmental plans applied to all amendments relating to TRA 86, UCA, and OBRA 93, not just the nondiscrimination requirements.