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1.417(e)-1(d), Income Tax Regs. Thus, it follows that plan
sponsors had until February 28, 2002, to adopt plan amendments
falling under the safe harbors provided by section
1.417(e)-1(d)(10)(ii) through (v), Income Tax Regs. Accordingly,
Hercules had until February 28, 2002, to adopt amendments to the
lump-sum payment option in accordance with the safe harbor
provided by section 1.417(e)-1(d)(10)(iv), Income Tax Regs.
In an effort to avoid this conclusion, petitioner contends
that, because “the continuing use of the PBGC interest rate
cannot be a ‘disqualifying provision’” within the meaning of the
Treasury regulations promulgated under section 401(b), “the
series of Revenue Procedures relating to the remedial amendment
period with respect to the extensive GUST I or GUST II amendments
did not extend the period during which Hercules could amend the
plan to provide that the 30-year Treasury bond rate would be
used”. As discussed below, petitioner’s contention is
unpersuasive.
Section 1.401(b)-1, Income Tax Regs., explains the operation
of section 401(b) and provides, in pertinent part, as follows:
(a) General rule. Under section 401(b) a * * *
pension * * * plan which does not satisfy the
requirements of section 401(a) on any day solely as a
result of a disqualifying provision * * * shall be
considered to have satisfied such requirements on such
date if, on or before the last day of the remedial
amendment period * * * with respect to such
disqualifying provision, all provisions of the plan
which are necessary to satisfy all requirements of
* * * [section] 401(a) * * * are in effect and have
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