Rev. Rul. 2012-4 describes certain provisions that apply when a defined benefit plan

accepts rollover contributions under certain conditions. The following section consists of optional language to be added to the plan and adoption agreement if the plan will accept rollover contributions consistent with Rev. Rul. 20124.)

Section 4 5. Rollovers from other plans of the employer

(a) If provided by the employer in the adoption agreement, effective _____ (enter a date no earlier than January 1, 2013), the plan will accept direct rollovers made on behalf of participants of this plan to be used to increase the annuity otherwise payable under this plan. If so provided, the plan will accept direct rollover contributions (excluding amounts attributable to after-tax employee contributions and distributions from designated ROTH accounts) from the qualified defined contribution plan(s) of the employer specified in the adoption agreement. However, the plan will not accept any rollovers under this section during a period when the plan’s Adjusted Funding Target Attainment Percentage (as defined in § Treas. Reg. 1.436-1(j)(1 ) of the Income Tax Regulations)) ) is less than 60%.

(b) The amount of the benefit derived from a rollover under this section shall be payable in addition to the benefits otherwise payable under the plan, and shall be computed as follows:

(i) STEP ONE – Add interest, compounded annually, to the amount rolled over, at the rate of 120 percent of the Federal mid-term rate (as in effect under section 1274 of the Internal Revenue Code IRC 1274 for the first month of the plan year) from the date the rollover is received by the plan to the annuity start date.

(ii) STEP TWO – Convert the amount in step 1 into an actuarially equivalent annuity in

the form of payment properly elected by the participant (with spousal consent if required) in accordance with Article ___ of the plan using the §I RC 417 applicable interest and mortality rates under section ____ of the plan.

(Note to reviewer – the first blank should be filled in with the plan article number that corresponds to LRM #46, and the second blank should be filled in with the section number that corresponds to LRM #42.)

(c) A participant shall be 100% vested in his or her accrued benefit derived from any amount rolled over into the plan under this section.

(d) If a participant who rolls over an amount under this section dies before the annuity based on the rollover amount commences, a death benefit shall be payable in addition to any

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death benefits otherwise payable under the plan. S uch benefit shall be payable as follows:

(i) If the participant is married at the time of death and did not make a qualified election (as defined in section 4.3 of Article ___) to waive the qualified preretirement survivor annuity, a benefit payable to the participant’s surviving spouse in the same form and commencing on the same date as the qualified preretirement survivor annuity under section 3 of Article ___ of the plan, except that the amount of the benefit shall be determined in accordance with paragraph (b) of this section, using the form of benefit and the age of the surviving spouse at the annuity starting date.

(iii) If the participant is not married at the time of death or made a qualified election (as

defined in section 4.3 of Article ___) to waive the qualified preretirement survivor annuity in section 3 of Article ___ of the plan, a benefit payable to the participant’s designated beneficiary determined under section 45 (d)(i) of this Article as if the beneficiary were the participant’s surviving spouse. H owever, if the designated beneficiary is not the participant’s surviving spouse, the full value of the benefit must be paid to the designated beneficiary within 5 years after the death of the participant, unless the benefit is paid in the form of an annuity payable over the life of the designated beneficiary that begins within one year after the death of the participant . The amount of the benefit shall be determined in accordance with paragraph (b) of this section, using the form of benefit and the age of the beneficiary at the annuity starting date.

(Note to reviewer – the blanks in paragraph (d) should be filled in with the plan article number that corresponds to LRM #46.)

(e) The benefit attributable to any rollover contribution shall not be disregarded when determining whether the value of the participant’s benefit exceeds $ 5,000, 7,000 ($5,000 for distributions made before 1/1/2024), for purposes of applying the provisions of section ___ of the plan to determine whether the participant (and the participant’s spouse or the survivor, if applicable) must consent to the distribution of the participant’s benefit.

(Note to reviewer – the above blank should be filled in with the plan article number that corresponds to LRM #45.)

(f) A participant may not elect a retroactive annuity starting date under section ____ of the plan with respect to the benefit attributable to any rollover contribution.

(Note to reviewer – if the plan provides for retroactive annuity starting dates, the above blank should be filled in with the plan section number that corresponds to section 6 of LRM #46. If the plan does not provide for retroactive annuity starting dates, paragraph (f) above should not be included in the plan.)

Sample Adoption Agreement Language:

Acceptance of Direct Rollovers:

( ) If checked, the employer elects that the plan will accept a direct rollover made on

behalf of a participant of this plan from a qualified defined contribution plan maintained by the employer in order to obtain an additional annuity, subject to the provisions of section ____ of the plan. H owever, a rollover cannot be accepted

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during a period when the Adjusted Funding Target Attainment Percentage for the plan year is less than 60%. F or this purpose, the plan will accept a direct rollover of an eligible rollover distribution (excluding amounts attributable to after-tax employee contributions and distributions from designated Roth accounts), from:

(Note to reviewer: The blank in the preceding paragraph should be filled in with the section number of the plan corresponding to this LRM 54.)

(Note to reviewer – a list of qualified defined contribution plans sponsored by the employer from which direct rollovers will be accepted should appear here.)

(Note to reviewer: The SECURE 2.0 Act of 2022 added IRC 414(aa) to permit plan sponsors to amend a plan to account for beneft overpayments and to reduce future payments to the correct amount. The Act also added new IRC 402(c)(12), which provides for continued eligible rollover treatment for (1) a beneft overpayment that had been rolled over if recoupment is not sought, or (2) the return of the distribution to the plan through a rollover distribution if recoupment is sought. Neither IRC 402(c)(12) nor IRC 414(aa) are included on the 2026 Cumulative List, so sample plan language is not provided in this regard. However, sponsors may include provisions consistent with this statutory treatment.)