The dust has begun to settle around the DOL’s Advisory Opinion, 2012-4, and a number of different voices have spoken about what the opinion says, and what it doesn’t say. At this point, it may be useful to to put the letter in some context.

The clarity it brings is, in fact, very helpful. What drove the request was that need for that clarity: with the growing size and sophistication of this market, important parts of the marketplace needed more certainty in order to continue to build their business models. Though we were, of course,  hopeful for a different result, the needed guidance is now in place for this (and other similar) arrangements to properly structure and safely grow the businesses.

 Some thoughts:

1. What the DOL said.  The DOL said several important things:

-It simply stated that no two, unrelated employers may co-sponsor a single ERISA retirement plan unless those employers are (a) members of a group with an "association" type of relationship and (b) that the members of that group or association control, directly or indirectly, that retirement plan.  In much of the current discussion, by the way, the "control" aspect is often overlooked.

-In determining whether there is commonalty and control in a MEP, the Department will rely on its guidance outlined in past MEWA rulings.

-From the initial opinion request, and the DOL’s response, its pretty clear that the DOL is taking the position that the decision to join a MEP (and its attendant delegation of responsibility) is a fiduciary act of the adopting employer.

2. General applicability

The Advisory Opinion is the DOL’s position with regard to all MEPs, not just the one at issue. The Opinion was thoroughly vetted within the Department at length, and other agencies were consulted.  It was issued following the DOL’s brief in the Hutcheson matter, and issued with another, similar AO on MEPs. It has, like all seminal DOL advisory opinions in the past, general applicability.

This means that whether a MEP is sponsored by a traditional association or otherwise, it will be subject to both the commonality and control rules. Each MEP’s validity as a single ERISA plan is assessed using the MEWA rulings related to the definition of employer, and this assessment may have fiduciary implications.

Thought I do not agree with the Department’s analysis, and believe that the legal basis in the initial request is a sound one, it is clearly a position with which the Department does not and will not agree. So it is to this DOL position each such arrangement of any sort will need to manage.

3. What the DOL did not say. 

The DOL properly noted, as also reflected in the original opinion request, that close attention needs to be paid in a MEP (as in any arrangement dealing with multiple employers) to the manner in which the prohibited transaction rules apply to the compensation paid to the parties in interest. This, in fact, is a key element of the design of any such arrangement. The DOL did not say that the design submitted to it violated those rules. 

The DOL did not give any type of MEP a "pass." It did make clear the rules that will apply to any arrangement seeking single ERISA plan status as a way to deliver services, and where to seek guidance for the application of those rules.

It did not "go after" TAG; the parties voluntarily sought sought firm guidance from the Department from which to base further growth in its business model.

4. The impact.  For the properly structured arrangement, the transition to comply with the DOL’s formal guidance can be be straightforward, and can actually result in less risk for both the sponsor of the arrangement and the adopting employers. The advantages of scale in administrative and investment services, as well as professional fiduciary support, can and will continue to be able to be offered to the part of the market for which there is still the most need. ERISA offers a number of different ways by which  to continue to doing this, but using the "single plan" method will require that attention be paid to the the DOL’s traditional commonality and control analysis.

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Any discussion on any tax issue addressed in this blog (including any attachments or links) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any transaction or tax-related position addressed therein. Further, nothing contained herein is intended to provide legal advice, nor to create an attorney client relationship with any party.   

  

 

 

The DOL’s Advisory Opinion process is a helpful one, as it provides a manner in which to explore and test the development of innovative programs which are necessary for the retirement system to properly adapt and change.

 One of the Advisory Opinions issued today is a case in point. A continuing challenge in the marketplace (and, generally, for policymakers) is how to effectively increase small employer sponsorship of retirement plans in a manner which protects plan participants. In one of the MEPs opined upon, the average size of participants for each employer is small, yet those plan accounts are still subject to an audit (to which they would otherwise not be subject) under ERISA’s audit rules. Plan participants are given access to a level of individual retirement advisory services that are typically only available to the very largest 401(k) plans; these small employers are not subject to the proprietary investment fund requirements typically imposed on plans of this size; there are processes in place which monitor the employers timely deposit of elective deferrals; and, of course, the cost and variety of investments are at a level which is substantially more favorable than a small plan sponsor could get on its own. Nearly half of the adopting employers were start-ups, which most vendors for single employer plans actively avoid (shall I say like the plague?).
 
It is worth noting that this particular MEP is actually based upon accountability and participant protections, and does not relieve adopting employers from their fiduciary obligations related to the plan. It specifically demands such obligations. 
 
In short, arrangements which safely increase small employer coverage; promote fiduciary compliance and accountability by such employers; control costs for employers; while providing plan participants a wide selection of reasonably priced investments is critical to promoting retirement security.   
 
Unfortunately, there will always be “bad actors” which abuse the system. Working together with regulatory agencies, we can address the “bad actor” challenge while further enhancing the structure for a sound, secure and cost effective platform for the small employer sponsored retirement plan.
 
We look forward to continuing these efforts.
 
As you can imagine, I have been asked by a number of folks of my thoughts related to the statements by the DOL in their brief for removal of the fiduciaries in the Hutcheson matter. Besides the observation that this sort of mischief could have (and does happen) regardless of the existence of a MEP,  to my mind, its all about accountability. Lets explore this:
 
An employer, when directly acting for the benefit of its employees in sponsoring an ERISA plan, can do many things. It can delegate its fiduciary authority to a plan administrator responsible for doing those things (such as filing a Form 5500) which are legally required of the plan administrator; it can delegate the responsibility to properly operate the plan to a third party fiduciary; it can hire investment advisors, investment managers and all other manner of fiduciaries for the plan. It can even agree to become a co-fiduciary to a plan, or to appoint co-fiduciaries. 
 
What it can’t do is to do these things in such a way to avoid accountability for these acts.
 
Similarly, what an employer also cannot do is merely entrust those obligations to a group or association to act indirectly on its behalf if that is accomplished by joining a group or organization formed solely for the purposes of joining the plan.
 
This last rule was established by interpretive fiat, because the unaccountable aggregating of ERISA assets which is possible when one attempts to merely entrust a group to act indirectly on its behalf can be fraught with all manner of risks for plan participants, as demonstrated by the MEWA cases.
 
Abusive MEWAS of the past three decades were designed to effectively rob participants of their promised, and paid for, health care coverage, in the cruelest sort of Ponzi schemes. They were designed to do this by attempting to collect and aggregate the premiums of several employers in a single non-regulated pool, which provided the scale necessary to pull the scheme off.  They took advantage of ERISA’s lack (prior to PPACCA) of substantive requirements for health insurance, while effectively hiding the funds from state regulation-where all of the important participant and employer protections existed for health benefit arrangements.
 
Non-regulated “scale” was fundamental to these schemes working: without the ability to pool significant assets in one place, the arrangement would fail before sufficient (and ill-gotten) gain could be had to make it worth the effort.  The DOL’s approach was then a simple and elegant one: prevent scale from happening in the first place.  By requiring “commonality and control” of organizations acting indirectly behalf of employers, illicit organizations would be disrupted in their efforts to do harm.
 
Asset aggregation and co-fiduciary administration in the retirement plan world, however (and unlike in welfare plan world), is a highly regulated activity under ERISA, and has a long history. They have been consistently recognized and well governed from the inception of ERISA, and much earlier. Multi-employer plans; 413(c); ERISA Section 210; collective trusts; 81-100 arrangements; non-registered separate accounts; master and prototype plans; operating companies under the plan assets rules; are among many examples. Even mutual funds are a classic example of asset aggregation which is critical to the retirement world. In short, “regulated scale” is fundamental to retirement security.
 
Even then, applying the “commonality and control” rule to association based retirement plans makes a great deal of sense, as it may serve to limit the ease and availability of abusive arrangements (or structures which would lend themselves to abuse) where an employer seeks to appoint a questionable organization to act indirectly on its behalf, where it may mean that the employer is seeking to inappropriately avoid  accountability for its actions.  Allowing this to happen could undermine an important element in the effective regulation of “scale”-the oversight by, and accountability of, the employer.
 
But it is one thing to merely “entrust” employer actions to a third party appointed to stand in your shoes as an employer. It is quite another to directly and responsibly act as a fiduciary on behalf of your own employees (as permitted under ERISA 3(5)), to accept co-fiduciary responsibility (as permitted under ERISA Section 405) as a plan co-sponsor with ongoing oversight responsibilities. It would be incumbent on the employer adopting any particular MEP, for example, to make sure checks and balances are in place on the handling of funds, and to have ongoing access to data. 
 
Not only then do you have “scale” in assets and professional administration (and all the benefits that can bring to a plan and participants); but “scale” in oversight, with a large number of independent fiduciaries responsible for overseeing the action of the appointed fiduciaries in the MEP. 
 
On the other side of the fiduciary fence, we also recognize that small employers often provide the greatest compliance challenges. Imposing the oversight of a professional fiduciary under a MEP (in addition to the traditional administrative function of the typical TPA) serves well to protect the plan participant in these small plans which may otherwise be unavailable to them; provides audit oversight that typically would never happen for these small sponsors; while bringing these participants a level of investment choice and related services which only scale can bring at a reasonable cost.
 
In the end, the properly designed and well run MEP advances the policy of the small employer adopting plans, while providing a measure of protection against abuses. "Commonality" may be appropriately applied to limit the availability of MEP structures which may be vulnerable to abuse, but should it be broadly used to limit those which, by design, promote accountability?
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Any discussion on any tax issue addressed in this blog (including any attachments or links) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any transaction or tax-related position addressed therein. Further, nothing contained herein is intended to provide legal advice, nor to create an attorney client relationship with any party.   

 

 Many of you know of me as being well versed in 403(b) matters; others are familiar with my work in annuities; others still consider my familiarity with MEPS or ERISA  broker dealer issues. But the heart and soul of my practice over the past nearly 30 years has really been the fiduciary rules-in particular, the application of the prohibited transaction rules. From private placements, to securities trading, to product development, to sales and marketing, and all manner of issues in between, the prohibited transaction rules have been an integral piece of my practice, woven into  much of what I have done and continue to do. It is an arcane world, full of unusual concepts-just see what happens when you try to determine under the regs just what is  the "amount involved in a transaction" -and the computation of the penalty often seems like an art to itself.  

They are also very powerful rules, with the capability of significant impact; I have seen uncertainties in their application virtually shut down insurance company general account private placements for a period of time. And given that the value of the assets in IRAs and retirement plans are equal to some 85% of the value of publicly traded securities in the U.S., they will serve as a growing shadow regulation on a large piece of the U.S. economy over time.

It is also why 408b2 is also so intriguing to me. It has the potential for some pretty serious ramifications. Though we get lost in the detail of timely meeting the new disclosure requirements, the real impact will occur once the dust settles, and when we have to deal with all manner of prohibited transactions- arising either from failure to properly disclose compensation or from what is revealed by the disclosure itself.

Interestingly enough, one of the most serious of the impacts of 408b2 promises to arise from application of Code section 4975, not from ERISA Section 406 to which 408b2 is connected.  For those not familiar with it, Code section 4975 is the Tax Code’s corollary of the prohibited transaction rules under ERISA’s Title 1. By a quirky operation of the ERISA Reorganization Plan, the DOL has the authority to issue the regs by which the prohibited transaction tax under 4975 is operated (except for computation of the tax itself), and thus 408b2 acts to interpret 4975 as well. There are, by the way, important distinctions between 4975 and 406 which will come into play (for example, 4975 does not apply to 403(b) plans, but will apply to non-ERISA IRAs).

4975 imposes a tax on the prohibited transaction. It is not a penalty (though there is a penalty in 4975 for failure to timely pay the initial tax and correct the transaction), like under ERISA Section 406. It is a tax on a transaction. Period. There is strict liability for the taxes.  Once the prohibited transaction occurs, the tax liability attaches, and there is a duty to report and pay that tax. The IRS has no ability to waive that tax-unlike the prohibited transaction penalty under ERISA, which grants the DOL the ability to waive penalties-other than through the issuance of a formal prohibited transaction exemption by the DOL.  

This is even if the transaction occurred without any intent to engage in the transaction, or even if it occurred when engaged in doing what is ultimately in the best interests of the plan and participants. 

The 408b2 regs have an important PT exemption for the responsible plan fiduciary (which also applies to the 4975 tax) under certain conditions, should there be a failure of disclosure, but this exemption does not run to the service provider who fails to make a timely disclosure. And even then the exemption only runs to the disclosure itself, not the actual prohibited transaction which may be disclosed under 408b2.

The rubber has not yet begun to hit the road…. 

 

This has become my "annual Mother’s Day" posting, which hopefully helps describe some of the importance of what we do:
 
 
 
ERISA wonks such as ourselves tend to get lost in the press of details which seem to flow non-stop from our regulators and legislators in D.C.  It is sometimes helpful to step back and see the personal impact of the things we do.
 
A few years back, a good friend of mine who ran the retirement plan operations of a large insurance company asked me to speak about ERISA to a meeting of his administrative processing staff. At the time, they were still struggling with some of the more difficult administrative processes related to the QJSA and QPSA rules. Here’s what I told them:
 
My father died at Ford’s Rouge Plant in 1970, after 20 years with the company. Back then, the normal form of benefit under a defined benefit plan was a single life annuity, covering the life of only the employee.  There was no such thing yet as a qualified joint and survivor annuity or a qualified pre-retirement survivor’s annuity.  This meant that my father’s pension died with him. My mother was the typical stay-at-home mother of the period who was depending on that pension benefit for the future, but was left with nothing. With my father’s wages topping at $13,000 annually and five kids at home, there was also little chance to accumulate savings.
 
The Retirement Equity Act of 1984 (a copy of which I still keep in my office) was designed to change all of that. By implementing the requirement of a spousal survivor annuity, a whole class of non-working spouses received protection which was desperately needed.  So in that speech to my friend’s administrative staff, I asked them to take a broader view-if just for a moment- of the important task they were being asked to implement. It was valuable social policy with real, human effect which they were responsible for pulling off, and they should take a measure of pride in the work they were doing.
 
Things have evolved much over the years, and some of those same rules which provided such valuable protection have become the matter of great policy discussions centering on whether they are appropriately designed, and whether they can be modified in a way to accommodate new benefits like guaranteed lifetime income from defined contribution plans. But the point is that Congress sometimes gets it right, and there is very valuable social benefit often hidden in the day to day  "grunge" of administering what often seems to be silly rules.
 
 
In years past, I had reported that Mom is doing well. But with a series of strokes, and advancing dementia, she is now in Memory Care, and "doing well" takes on a whole different set of meanings. She is still healthy,  does know all of us, and remembers well many important things from a very precious past. We come more fully to the understanding that blessings truly  come in many different forms.
 
 

 

The DOL, in its final 408(b)-2 regulation, issued relief for 403(b) plans, under which information related to  certain contracts would not be subject to the the new fee disclosure rules. Though this was very helpful, it did not specifically address the 404a-5 participant disclosure regulations for the same type of contracts. This raised a degree of uncertainty with regard to whether or not that relief would be extended to the participant disclosures–causing a good  friend to comment in his inimitable NY manner, "what are the participant regs anyway, chopped liver?!?"

The DOL has saved those regs from chopped liver status, today making it clear in Question 2 to FAB 2012-2 that the 408b-2 relief for 403(b) plans also is extended to the 404a-5 requirements for said plans, on the same terms and conditions.

 

 

NOTE: I STRONGLY CAUTION READERS THAT THE FOLLOWING IS MERELY A SUGGESTED APPROACH WHICH COULD BE SENSIBLY USED BY THE IRS IF IT WERE TO CHOOSE TO RECOGNIZE THE DSTRIBUTION OF INDIVIDUAL CUSTODIAL ACCOUNTS FROM 403(b)(7) PLANS, AND TO LEAD TO FURTHER DISCUSSION. IT IS NOT REFLECTIVE OF THE IRS’S (NOR, AS FAR AS I KNOW, THE DOL’S) CURRENT POSITION, OR EVEN ONE IT IS CONSIDERING. THE FOLLOWING IS NOT INTENDED TO PROVDE LEGAL OR TAX ADVICE, AND SHOULD NOT BE USED AS A BASIS TO JUSTFY A DISTRIBUTION OF A 403(b)(7) CUSTODIAL ACCOUNT.

 

I, like many others, struggle with the notion of advocating for the ability to terminate a 403(b) retirement plan.  However, any retirement plan needs to be able to be sanely unwound -often for a number of critical, exigent reasons unrelated to the plan itself.  We now find ourselves in a growing number of difficult circumstances where the right solution is to terminate a 403(b) plan, but find ourselves unable to do so.

The IRS’s ongoing position is that an individual 403(b)(7) custodial account cannot be distributed from a 403(b) plan upon its termination, while a “fully paid” annuity contract is permitted to be distributed- as it will not deem the custodial account to be an annuity for these purposes.  This has the practical effect of preventing termination of any 403(b) plan which is funded with individual custodial accounts. As time wears on, and this position begins to get long in the tooth, its “unworkableness” becomes more and more apparent as it causes difficulties beyond the actual plan itself. 

I have never fully understood the legal concerns that the IRS has with treating the custodial account as a deemed annuity and thus a distributable asset from the plan, but will fully admit that this arises from my perspectives on these contracts bred by my particular experience with them.

Could it be that the IRS is uncomfortable with the notion of treating the custodial account as an annuity means treating the custodian contract of a plan as being, itself, a plan asset?  If so, this concern is eminently understandable. It seems counterintuitive, at best, that a part of the fundamental structure of a plan be considered a plan asset.  It makes much better sense that the underlying securities (or the cash generated from their sales) held by the custodian is the asset that can be distributed; and that its not really possible to distribute a portion of the structure of the plan. An individual custodial account cannot possibly be a financial instrument that can be recognized as an “in-kind” plan asset: its part of the plan itself.

Like many things 403(b), however, these sorts of issues are novel and of first impression when applied to such plans, requiring that we return to some very basic concepts.

I would hope that the following analysis would be useful.

Lets start with the distribution of an annuity contract from a 401(a) plan.  The tax regulations have long recognized that an annuity contract is a financial instrument (as opposed to cash) which can be distributed from a 401(a) plan (see 1.401(a)-20, Q&A 2); that it can have an account balance or a cash value (see 1.401(a)31, Q&A 17 which requires a qualified plan distributed annuity to allow a direct rollover of funds from the annuity contract to another plan or IRA); and the IRS has issued a number PLRs to that effect (see, for example PLR 200951039, which describes a variable annuity contract issued from a plan).

So it becomes a relatively straightforward proposition to permit the distribution of an individual annuity contract from a terminating 403(b) plan (putting aside for now the issue of what is a “fully paid” annuity contract). Even though it can be seen as constituting a part of the actual structure of a plan, its distribution is accorded no different legal or tax effect than is granted to annuity contracts distributed from a 401(a) plan.  And just as a qualified plan distributed annuity continues to be subject to 401(a) (as administered by the insurance company, see for example 1.401(a)-20 Q&A 17), the distributed annuity 403(b) contract continues to be subject to the terms of 403(b) (see Rev. Rul. 2011-7). 

But what of individually owned 403(b) custodial accounts which, like the annuity contracts they are deemed to be by the Code, seem to be an integral part of the plan’s structure?  Could it also be comfortably considered a financial instrument capable of being distributed by a 403(b) plan on termination in the same manner as an annuity?  

I invite consideration of the following: 

-The individually owned custodial account is a financial instrument, a legally binding contract which is signed by the participant (not the plan) and the custodian, like the individual annuity contract. It has specific terms and conditions on the exercise of the rights by the participant/owner over the underlying securities it holds. For example, the custodial accounts limit the distribution of its assets to those distributions permitted under 403(b)-11, and needed No-Act approval from the SEC to do so-as had the annuity contract. The legal right and title to those contracts under state law run to the participant (though also being subject to ERISA standards for ERISA plans), as does the rights under an individual annuity contract. It would be hard to argue that these are not ”bundle of rights” which constitutes property rights under traditional state property law analysis, as with an annuity contract. 

-The individual custodial account is fundamentally different than the traditional 401(a) custodial account, here with rights to the underlying assets themselves not only running directly to the participant, but the rights of participants can vary greatly within the same plan. 

-Given the state law property rights granted to the individual owner of the custodial accounts, and that the DOL uses ordinary notions of property law to determine whether or not something is a plan asset (see, for example AO 94-31-though the DOL has yet to take a position on this in the 403(b) custodial account context), and that annuity contracts are generally considered plan assets, it becomes hard to argue that the individually owned custodial account is not also a plan asset. And just because it is a plan asset which holds other plan assets (like annuity contracts with separate accounts), this does not disqualify its own plan asset "status."  I suspect that, if the custodial account were abused by a participant or vendor in some sort of way, the DOL would be the first to acknowledge that it is a plan asset.

-The custodial account can, and has historically has been able to, legally exist and operate independently from the existence of a plan and a plan sponsor, with the custodian acting in the same manner as an insurer under a 403(b)  annuity contract which is not related to a plan. 

-This financial instrument is recognized as a security by the SEC. The SEC’s own position recognizes the interests embodied in the 403(b) custodial account as a security owned by the participant, which further lends weight to the argument that it is an asset which can be distributed.  In Release 33-6188, it stated these interests are securities, though “as a matter of administrative practice…the staff does not require such interests to be registered."  This is not a reference to the underlying securities held by the custodial account, as those interests are specifically required to be registered. 

Admittedly, this presents a one sided view, but it is one which is both legitimate and could form the basis of permitting the distribution of the individual custodial account upon plan termination. Supporting this from a logistical view of things is that there are already a significant number of such custodial accounts described above in the marketplace which exist outside a plan. These came to be by virtue of 90-24 transfers occurring before 9/24/2007. Note that I do not address-nor advocate-the application of this approach to distributions from ongoing plans. There are a number of other complications which arise from that circumstance. Note, too, that I suggest that this analysis is only possible under 403(b) (and not under 401(a)) because of the specific language of 403(b)(7).

I would hope that this approach, recognizing the individual custodial account as the financial instrument it is, would make some sense to our regulators in deciding upon its termination distribution. 

 

 

 I have written often of the large impact of the small, the concept of  "minimum necessary change" to accomplish what needs to be done, and have noted a number of regulatory instances where this has been-and not-accomplished.

This whole idea of small rules meaning much also has relevance in the Multiple Employer Plan world, in some very key ways. Some meaningful MEP minutiae:
 
Employer responsibility. One of the ongoing concerns related to MEPs which has garnered much discussion is the level of responsibility which remains with the adopting employer, an issue noted by Ass’t Sec’y Borzi in her recent testimony before the Senate Aging Committee. Interestingly enough, the IRS Form 5330 also speaks to this point. This form, which s used to report and file prohibited transaction penalties related to the late deposit of elective deferrals into a 401(k) plan, is required to be filed and signed by the offending participating employer in the MEP, not the Lead Sponsor (though it must be reported on the 5500 by the Lead Sponsor). The 4975 penalty tax is on that participating employer which is mishandling the deferrals. 
 
An employee.  One of the more lively discussions had always been whether the lead plan sponsor of the MEP needs to have an employee covered by the plan.  Though some have legitimately taken the position that it should be possible under current law to not have an employee, a small rule seems to get in the way. A note on page 3 of the Form 5300 (used to file for an IRS determination letter for the plan) Instructions states "if an employer has no employees, the taxpayer cannot submit as the sponsor of the plan." This seems to require the Lead Sponsor of a MEP requesting the letter to have an employee as a condition of filing for the letter.
 
One bad apple.  One of the risks in adopting a MEP is that, under IRS rules, a single bad plan can disqualify the entire MEP. What minutiae is critical here, though, is Section 10.12 of EPCRS (the IRS’s correction programs): a MEP which has a violating plan sponsor is fixed by fixing only the broken portion of the MEP (of course), but the Plan Administrator may elect to have the compliance fee or sanction based only upon the offending plan, not based on the entire arrangement; while 14.03 permits similar treatment for "tainted" assets transferred into the plan from an offending plan (if the offense does not continue). As a practical matter, this means the risk of an economic catastrophe from a single employer disqualifying an entire MEP can be cost effectively managed.
 
On a personal note, an important milestone. The Toth Ft. Wayne Sourdough Starter had its 10th anniversary this past week, being cultivated from the wild yeast in our kitchen and first used by our daughter and I on April 11, 2002.  Looking, eventually, for it to be passed onto the grandkids for their eventual baking pleasure as well.  Life is good….
 
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Any discussion on any tax issue addressed in this blog (including any attachments or links) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any transaction or tax-related position addressed therein. Further, nothing contained herein is intended to provide legal advice, nor to create an attorney client relationship with any party.   
 
 
 
 
 
 
 
 
 
 
 

For those of you who do not subscribe to BNA, BNA published as an "Insight" an article I wrote on QLAC and Rev Rul 2012-3 (yes, my author agreement permits me to post it here, with attribution).  Look for Paul Hamburger’s upcoming related article, delving into a number of technical and policy issues they raise, as well as discussing the releases on transferring to a DB plan. Link here: First Steps to Modernizing DC Annuitization: QLACs and Revenue Ruling 2012-3.

I will be speaking on a panel addressing this topic with Mark Iwry, Jeff Turner and Wally Lloyd at the ABA Section of Taxation’s Employee Benefits Committee general session on May 12 in DC.