Comment letter to IRS on combined plan limits under Notice 2007-28

Mr. James E. Holland, Jr. Manager, Employee Plans, Tax Exempt and Government Entities Division Internal Revenue Service SE:T:EP:RA:T 1111 Constitution Avenue NW Washington, DC 20224 Re: Combined plan limits under Notice 2007-28 Dear Mr. Holland: 1The American Academy of Actuaries Pension Committee respectfully requests your consideration of its comments regarding IRS Notice 2007-28 (the Notice). The Notice provides much needed guidance regarding changes to the combined plan deduction limit under IRC section 404(a)(7), as modified by the Pension Protection Act of 2006 (PPA). However, portions of the guidance appear to be inconsistent with the language and intent of the statute. Relevant Language from Statute and Agency Guidance IRC section 404(a)(7) limits the total deduction when a sponsor contributes to both defined benefit and defined contribution plans (emphasis added): “If amounts are deductible under the foregoing paragraphs of this subsection (other than paragraph (5)) in connection with 1 or more defined contribution plans and 1 or more defined benefit plans or in connection with trusts or plans described in 2 or more of such paragraphs, the total amount deductible in a taxable year under such plans shall not exceed the greater of— ” IRC section 404(a)(7)(C) provides that paragraph (a)(7) does not apply in certain cases. PPA added a new exception to the existing list: 1 ...