EMPLOYEE PLANS

Rev. Rul. 2003–62, page 1034. Taxability of distributions of employee’s trust. This ruling provides that amounts distributed from a qualified retirement plan that the distributee elects to have applied to pay health insurance premiums under a cafeteria plan are includible in the distributee’s gross income. The holding also extends to situations where amounts distributed from the qualified retirement plan are applied directly to reimburse medical care expenses incurred by a participant in the qualified retirement plan.

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Rev. Rul. 2003–65, page 1035. Frozen plan; additional accruals; vesting service. This ruling states that the freezing of accruals under a plan is not a plan termination for purposes of determining whether vesting service may be disregarded if accruals resume under the plan. Accordingly, all years of service for the plan sponsor since the plan was established must be counted toward vesting. The result is the same if, instead, the frozen plan is merged into a new plan of the employer with accruals resuming under the merged plan.

Notice 2003–30, page 1044. Weighted average interest rate update. The weighted average interest rate for June 2003 and the resulting permissible range of interest rates used to calculate current liability for purposes of the full funding limitation of section 412(c)(7) of the Code are set forth.

Rev. Proc. 2003–44, page 1051. Administrative programs; correction programs. This procedure updates and expands upon the Service’s correction programs for retirement plans within the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division. Rev. Proc. 2002–47 modified and superseded.