Home IRS Temporary Nondiscrimination Relief Gets Another Year Extension By IRS

Temporary Nondiscrimination Relief Gets Another Year Extension By IRS

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by Robert Sheen

As Closed Defined Benefit Plans are still being worked out rules-wise, the IRS has provided an extension to an important aspect of qualified plans. In a notice released toward the close of September, the IRS has extended Temporary Nondiscrimination Relief. Notice 2016-57 explains that for another year, temporary relief may be provided for closed defined benefit plans.

Code Sec. 410 defines these qualified plans as those that do not discriminate in favor of certain higher paid employees’ (otherwise known as highly compensated employees, or HCEs) favor. Temporary relief was provided pursuant to Notice 2014-5, for plans beginning before 2016. Notice 2015-28 extended that relief by a year.

The recent Notice extends that relief for qualified plans beginning before 2018. Pending eligibility, with the terms set in the original Notice, nondiscriminatory plans can receive this extension. The addition of a year was made as the rules for Closed Defined Benefit Plans are still being defined and finalization will not be met by year’s end.

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