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Paragraphs (b)(3), (c)(2), and (c)(3) of section 1.401(b)-1,
Income Tax Regs., were promulgated as temporary regulations on
August 1, 1997, and adopted without substantive change as final
regulations on February 4, 2000. See T.D. 8871, 2000-1 C.B. 641;
T.D. 8727, 1997-2 C.B. 47.
Under section 1.401(b)-1(b)(3), Income Tax Regs., the
Commissioner has discretion to designate certain plan provisions
as disqualifying provisions. As implied by Rev. Proc. 99-23,
sec. 3.06, 1999-1 C.B. at 923, and Rev. Proc. 2000-27, sec. 4.02,
2000-1 C.B. at 1273, the Commissioner designated plan provisions
providing for the determination of the present value of a
participant’s accrued benefit as disqualifying provisions because
they were integral to a qualification requirement that had been
changed. Consequently, the Commissioner subjected these plan
provisions to the remedial amendment period set forth in those
revenue procedures. Because the lump-sum payment option is such
a plan provision, it was subject to the remedial amendment
period. Therefore, petitioner cannot avoid the conclusion that
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 addition to subjecting plan provisions providing for the
determination of the present value of a participant’s accrued
benefit to the remedial amendment period, the Commissioner also
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