Charles P. Stepnowski - Page 17

                                       - 17 -                                         
          participant’s spouse must consent in writing before the plan may            
          distribute the present value of the participant’s QJSA.  Under              
          section 417(e)(3), as amended by the Uruguay Round Agreements               
          Act, Pub. L. 103-465, sec. 767(a)(2), 108 Stat. 5038, the present           
          value of a participant’s QJSA shall not be less than the present            
          value calculated by using the applicable mortality table and the            
          applicable interest rate.  See also sec. 1.417(e)-1(d)(1), Income           
          Tax Regs.  Under section 417(e)(3)(A)(ii)(II), the term                     
          “applicable interest rate” means the annual interest rate on                
          30-year Treasury securities for the month before the date of                
          distribution or such other time as the Secretary may by                     
          regulations prescribe.  See also sec. 1.417(e)-1(d)(3), Income              
          Tax Regs.  Prior to its amendment by the Uruguay Round Agreements           
          Act, section 417(e)(3) required retirement plans to calculate the           
          present value of a participant’s QJSA using an interest rate                
          assumption based on the rate that would be used (as of the date             
          of distribution) by the PBGC for purposes of determining the                
          present value of a lump-sum distribution on plan termination                
          (PBGC interest rate).  Section 417(e)(3), as amended, is                    
          effective for plan years beginning after December 31, 1994.                 
          Uruguay Round Agreements Act, Pub. L. 103-465, sec. 767(d)(1),              
          108 Stat. 5040.                                                             
               The amendment to section 417(e)(3) offered a financial                 
          benefit to sponsors of defined benefit plans by allowing them to            






Page:  Previous  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  Next

Last modified: May 25, 2011