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Treasury Department and IRS Publish Final Hybrid Plan Regulations and Announce Extension of Required Amendment Date for Certain Hybrid Plan Provisions

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The Treasury Department and the IRS recently issued final regulations (the “2015 Final Regulations”) relating to hybrid retirement plans, including cash balance pension plans.

The 2015 Final Regulations provide anti-cutback relief to allow hybrid plans to be amended to change the interest crediting rate to an interest crediting rate that is a market rate of return as described in the hybrid plan final regulations issued in 2014 (the “2014 Final Regulations”).

The 2015 Final Regulations allow plan sponsors additional time to amend hybrid plans to comply with the 2015 Final Regulations as well as certain provisions of the 2014 Final Regulations.  Plan sponsors have until the first day of the first plan year that begins on or after January 1, 2017 to amend hybrid plans to implement the 2015 Final Regulations and certain provisions of the 2014 Final Regulations.

Plan sponsors should note, however, that not all provisions of the 2014 Final Regulations have been extended.  Accordingly, plan sponsors should review their hybrid plans to determine whether any amendments need to be made prior to January 1, 2016.

A link to the 2015 final regulations is here.