The changes under these regulations apply to distributions with annuity starting dates
in plan years beginning on or after Jan.
Finally, the notice states that the IRS intends to extend the effective date of the regulations regarding NRA for governmental plans to annuity starting dates that occur in plan years beginning on or after the later of Jan.
The new distribution form would have a new annuity starting date, and the election would be subject to the spousal consent requirements.
These changes are proposed to become effective when finalized and would apply to distributions with annuity starting dates
in plan years beginning after that date.
In the alternative, an employer is permitted to eliminate a protected benefit if (a) the amendment does not apply to participants with annuity starting dates less than four years after the date the amendment is adopted and (b) certain "core options" are retained.
These requirements are generally effective for QJSA explanations with annuity starting dates after February 1, 2006.
As noted below, under earlier law, for distributes with annuity starting dates after December 31, 1986, annuity payments received after the investment is recovered are fully includable in gross income.
Special transition rules are provided for payors and distributes who continued using the simplified safe harbor contained in Notice 88-118 with respect to annuities with annuity starting dates after November 18, 1996.
2004-58 (32) limits the information that must be furnished to participants whose annuity starting dates fall between Oct.
Cost-of-living adjustments must be based on a recognized index and may not exceed the cumulative index increase since the annuity starting date. Governmental plans, however, are allowed to adjust annuity payments to track pay increases for the pensioner's former position (a common feature in plans for judges and some other public officeholders).
Pre-1998 starting dates: For annuity starting dates
Under the new method, the portion of each annuity payment that represents a return of basis equals the employee's total basis as of the annuity starting date
, divided by the number of anticipated payments, which is now determined under a table based upon the employee's age as of the annuity starting date