This IRS has released a Notice extending certain effective dates and deadlines for cash balance and other hybrid pension plans to comply with new requirements enacted by the Pension protection Act of 2006 (PPA). In 2010, IRS issued final and proposed regulations addressing the requirement under PPA that interest credits under cash balance and other hybrid plans cannot exceed a market rate of interest. IRS Notice 2011-85 extends the deadline for complying with certain aspects of these requirements.
For a discussion of some of the benefits of a cash balance design based on the 2010 IRS regulations, see HRS Insight 11/25. The Notice also extends the deadline for cash balance and other hybrid plan sponsors to adopt amendments to comply with the market rate of return and other requirements enacted under the PPA from the last day of the 2011 plan year until at least the last day of the 2012 year.