We understand that the IRS and Treasury continue to work on developing final regulations to implement the market rate of return limitations that apply to interest credits made to cash balance accounts. This has proved to be a particularly difficult area for the government to address and one that has received significant comments from cash balance plan sponsors and practitioners.

As a result, we still do not have final rules in this area, despite the publication of proposed regulations (and partial final regulations) back in 2010. However, the IRS recently provided an update on the ultimate timing of the final market rate regulations and on how the “MAP-21” (the Moving Ahead for Progress in the 21st Century Act) pension funding relief rules may impact interest credits under some cash balance plans.

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