Employee Benefits & Pensions: Current Developments (Part II) — footnotes

¹³TD 9237 (12/30/05).

¹⁴REG-146459-05 (1/26/06).

¹⁵REG-133578-05 (8/25/05).

¹⁶Boise Cascade Corp., 329 F3d 751 (9th Cir. 2003).

¹⁷See TD 9282 (8/30/06).

¹⁸Richard L. Barbee, TC Summ. Op. 2006-71.

¹⁹Rev. Proc. 2006-27, IRB 2006-22, 945.

²⁰Rev. Proc. 2006-27, Appendix A.05, clarifies that, for a typical Sec. 401(k) plan, the “missed deferral” is the participant’s compensation multiplied by the ADP of the comparable discrimination testing group (highly compensated or nonhighly compensated) for the year at issue. For a “safe harbor” plan that uses fixed contributions, the rate is a fixed 3%; for a safe-harbor plan that uses matching contributions, the percentage used is the highest percentage entitled to a 100% match (usually 3%).

²¹A broad principle of EPCRS is that the plan and the participants should be restored to the position they would have been in had the failure not occurred. Many believe that this principle, as applied, would require correction of the excluded employee before the test is rerun.

²²This information has been conveyed by IRS representatives in several previous public discussions of the EPCRS update.

²³See 71 Fed. Reg. 41,359 (7/21/06).

²⁴71 Fed. Reg. 41,616 (7/21/06).

²⁵Notice 2004-43, IRB 2004-27, 10.

²⁶Rev. Rul. 2006-36, IRB 2006-36, 353.

²⁷Rev. Rul. 2005-24, IRB 2005-16, 892.

²⁸Notice 2006-59, IRB 2006-28, 60.

²⁹Notice 2006-65, IRB 2006-31, 102.