Interest rates: underpayment and overpayments. The rates for interest determined under section 6621 of the code for the calendar quarter beginning January 1, 2015, will be 3 percent for overpayments (2 percent in the case of a corporation), 3 percent for the underpayments, and 5 percent for large corporation underpayments. The rate of interest paid on the portion of a corporation overpayment exceeding $10,000 will be 0.5 percent.

2014 Base Period T-Bill Rate. The table of interest factors that Rev. Rul. 2014–27 provided for compounding the “base period T-bill rate” under section 995(f) of the Internal Revenue Code is replaced by the table in this revenue ruling. Rev. Rul. 2014–27 modified.

2015 covered compensation tables; permitted disparity. The covered compensation tables under section 401 of the Code for the year 2015 are provided for use in determining contributions to defined benefit plans and permitted disparity.

This announcement extends to June 30, 2015, the deadline for submitting on-cycle applications for opinion and advisory letters for pre-approved defined benefit plans for the plans’ second six-year remedial amendment cycle. This announcement also provides a two day extension (from Saturday, January 31, 2015, to Monday, February 2, 2015) for Cycle D on-cycle submissions (primarily individually designed plans including multiemployer plans).

This notice contains the 2014 Cumulative List of Changes in Plan Qualification Requirements (2014 Cumulative List) described in section 4 of Rev. Proc. 2007–44, 2007–2 C.B. 54. The 2014 Cumulative List is to be used by plan sponsors and practitioners submitting determination letter applications for plans during the period beginning February 1, 2015 and ending January 31, 2016.

This revenue ruling provides tables of covered compensation under § 401(l)(5)(E) of the Internal Revenue Code (the “Code”) and the Income Tax Regulations thereunder, for the 2015 plan year.

Section 401(l)(5)(E)(i) of the Code defines covered compensation with respect to an employee as the average of the contribution and benefit bases in effect under section 230 of the Social Security Act (the “Act”) for each year in the 35-year period ending with the year in which the employee attains social security retirement age.

Section 401(l)(5)(E)(ii) of the Code states that the determination for any year preceding the year in which the employee attains social security retirement age shall be made by assuming that there is no increase in covered compensation after the determination year and before the employee attains social security retirement age.

Section 1.401(l)–1(c)(34) of the Income Tax Regulations (the “Regulations”) defines the taxable wage base as the contribution and benefit base under section 230 of the Act.

Section 1.401(l)–1(c)(7)(i) of the Regulations defines covered compensation for an employee as the average (without indexing) of the taxable wage bases in effect for each calendar year during the 35-year period ending with the last day of the calendar year in which the employee attains (or will attain) social security retirement age. A 35-year period is used for all individuals regardless of the year of birth of the individual. In determining an employee’s covered compensation for a plan year, the taxable wage base for all calendar years beginning after the first day of the plan year is assumed to be the same as the taxable wage base in effect as of the beginning of the plan year. An employee’s covered compensation for a plan year beginning after the 35-year period applicable under § 1.401(l)–1(c)(7)(i) of the Regulations is the employee’s covered compensation for a plan year during which the 35-year period ends. An employee’s covered compensation for a plan year beginning before the 35-year period applicable under § 1.401(l)–1(c)(7)(i) of the Regulations is the taxable wage base in effect as of the beginning of the plan year.

Section 1.401(l)–1(c)(7)(ii) of the Regulations provides that, for purposes of determining the amount of an employee’s covered compensation under § 1.401(l)–1(c)(7)(i) of the Regulations, a plan may use tables, provided by the Commissioner, that are developed by rounding the actual amounts of covered compensation for different years of birth.

For purposes of determining covered compensation for the 2015 year, the taxable wage base is $118,500.

The following tables provide covered compensation for 2015.

The principal author of this revenue ruling is Michael Spaid of the Employee Plans, Tax Exempt and Government Entities Division. For further information regarding this revenue ruling, please contact the Employee Plans taxpayer assistance telephone service at 1-877-829-5500, between the hours of 8:30 a.m. and 4:30 p.m. Eastern time, Monday through Friday (a toll-free number). Mr. Spaid may be reached via e-mail at RetirementPlanQuestions@irs.gov.

2014 Base Period T-Bill Rate. The table of interest factors that Rev. Rul. 2014–27 provided for compounding the “base period T-bill rate” under section 995(f) of the Internal Revenue Code is replaced by the table in this revenue ruling. Rev. Rul. 2014–27 modified.

Rev. Rul. 2014–27, 2014–47 I.R.B. 832 provided the “base period T-bill rate” under section 995(f) of the Internal Revenue Code for the period ending September 30, 2014, and provided a table of base period T-bill rate factors to reflect daily compounding of the rate for any number of days in a DISC shareholder’s taxable year. Due to a transcription error, Rev. Rul. 2014–27 overstated the factors (though Rev. Rul. 2014–27 correctly stated the base period T-bill rate itself) and cited section 6222 (rather than section 6622) as the statute that requires daily compounding of interest. This ruling provides a corrected table of factors and changes the statutory reference to section 6622.

Rev. Rul. 2014–27 is modified.

The principal author of this revenue ruling is Anand Desai of the Office of Associate Chief Counsel (International). For further information regarding the revenue ruling, contact Mr. Desai at (202) 317-6939 (not a toll-free number).

Section 6621 of the Internal Revenue Code establishes the interest rates on overpayments and underpayments of tax. Under section 6621(a)(1), the overpayment rate is the sum of the federal short-term rate plus 3 percentage points (2 percentage points in the case of a corporation), except the rate for the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the sum of the federal short-term rate plus 0.5 of a percentage point. Under section 6621(a)(2), the underpayment rate is the sum of the federal short-term rate plus 3 percentage points.

Section 6621(c) provides that for purposes of interest payable under section 6601 on any large corporate underpayment, the underpayment rate under section 6621(a)(2) is determined by substituting “5 percentage points” for “3 percentage points.” See section 6621(c) and section 301.6621–3 of the Regulations on Procedure and Administration for the definition of a large corporate underpayment and for the rules for determining the applicable date. Section 6621(c) and section 301.6621–3 are generally effective for periods after December 31, 1990.

Section 6621(b)(1) provides that the Secretary will determine the federal short-term rate for the first month in each calendar quarter. Section 6621(b)(2)(A) provides that the federal short-term rate determined under section 6621(b)(1) for any month applies during the first calendar quarter beginning after that month. Section 6621(b)(2)(B) provides that in determining the addition to tax under section 6654 for failure to pay estimated tax for any taxable year, the federal short-term rate that applies during the third month following the taxable year also applies during the first 15 days of the 4th month following the taxable year. Section 6621(b)(3) provides that the federal short-term rate for any month is the federal short-term rate determined during that month by the Secretary in accordance with section 1274(d), rounded to the nearest full percent (or, if a multiple of 1/2 of 1 percent, the rate is increased to the next highest full percent).

Notice 88–59, 1988–1 C.B. 546, announced that in determining the quarterly interest rates to be used for overpayments and underpayments of tax under section 6621, the Internal Revenue Service will use the federal short-term rate based on daily compounding because that rate is most consistent with section 6621 which, pursuant to section 6622, is subject to daily compounding.

The federal short-term rate determined in accordance with section 1274(d) during October 2014 is the rate published in Revenue Ruling 2014–28, 2014–45 IRB 756 to take effect beginning November 1, 2014. The federal short-term rate, rounded to the nearest full percent, based on daily compounding determined during the month of October 2014 is 0 percent. Accordingly, an overpayment rate of 3 percent (2 percent in the case of a corporation) and an underpayment rate of 3 percent are established for the calendar quarter beginning January 1, 2015. The overpayment rate for the portion of a corporate overpayment exceeding $10,000 for the calendar quarter beginning January 1, 2015 is 0.5 percent. The underpayment rate for large corporate underpayments for the calendar quarter beginning January 1, 2015, is 5 percent. These rates apply to amounts bearing interest during that calendar quarter.

The 3 percent rate also applies to estimated tax underpayments for the first calendar quarter in 2015.

Interest factors for daily compound interest for annual rates of 0.5 percent are published in Appendix A of this Revenue Ruling. Interest factors for daily compound interest for annual rates of 2 percent, 3 percent and 5 percent are published in Tables 9, 11, and 15 of Rev. Proc. 95–17, 1995–1 C.B. 563, 565, and 569.

Annual interest rates to be compounded daily pursuant to section 6622 that apply for prior periods are set forth in the tables accompanying this revenue ruling.

The principal author of this revenue ruling is Deborah Colbert-James of the Office of Associate Chief Counsel (Procedure & Administration). For further information regarding this revenue ruling, contact Ms. Colbert-James at (202) 317-3400 (not a toll-free call).

This notice contains the 2014 Cumulative List of Changes in Plan Qualification Requirements (2014 Cumulative List) described in section 4 of Rev. Proc. 2007–44, 2007–2 C.B. 54. The 2014 Cumulative List is to be used by plan sponsors and practitioners submitting determination letter applications for plans during the period beginning February 1, 2015 and ending January 31, 2016.

Plans using this Cumulative List will primarily be single employer individually designed defined contribution plans and single employer individually designed defined benefit plans that are in Cycle E. Generally an individually designed plan is in Cycle E if the last digit of the employer identification number of the plan sponsor is 5 or 0, or if the plan is a § 414(d) governmental plan (including governmental multiemployer or governmental multiple employer plans) for which an election has been made by the plan sponsor to treat Cycle E as the second remedial amendment cycle for the plan.

The list of changes in section IV of this notice does not extend the deadline by which a plan must be amended to comply with any statutory, regulatory, or guidance changes. The general deadline for timely adoption of an interim or discretionary amendment can be found in section 5.05 of Rev. Proc. 2007–44.

Rev. Proc. 2007–44 sets forth procedures for issuing opinion, advisory, and determination letters and describes the five-year remedial amendment cycle for individually designed plans and the six-year remedial amendment cycle for pre-approved plans. In addition, section 5.05 of Rev. Proc. 2007–44 provides the deadline for timely adoption of an interim amendment or discretionary amendment.

Under section 4 of Rev. Proc. 2007–44, the Internal Revenue Service (the Service) announced its intention to annually publish a Cumulative List to identify statutory, regulatory, and guidance changes that must be taken into account in submissions by plan sponsors to the Service requesting opinion, advisory, and determination letters whose submission period begins on February 1st following issuance of the Cumulative List.

In Notice 2013–84, 2013–52 I.R.B. 822, the Service published the 2013 Cumulative List of Changes in Plan Qualification Requirements (2013 Cumulative List).^[1]

This notice relates to the determination letter program for individually designed plans eligible for Cycle E. In accordance with Rev. Proc. 2007–44, the Service will start accepting determination letter applications for Cycle E individually designed plans beginning on February 1, 2015. The 12-month submission period for Cycle E plans will end on January 31, 2016.

The 2014 Cumulative List, set forth in section IV of this notice, informs plan sponsors of issues the Service has specifically identified for review in determining whether a plan filing in Cycle E has been properly updated. Specifically, the 2014 Cumulative List reflects law changes under the Pension Protection Act of 2006 (PPA ’06), Pub. L. 109–280; the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act), Pub. L. 110–245; the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA), Pub. L. 110–458; the Small Business Jobs Act of 2010 (SBJA), Pub. L. 111–240; the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (PRA 2010), Pub. L. No. 111–192; the Moving Ahead for Progress in the 21^st Century Act (MAP–21), Pub. L. 112–141; the American Taxpayer Relief Act of 2012 (ATRA), Pub. L. 112–240; the Highway and Transportation Funding Act of 2014 (HATFA), Pub. L. No. 113–159; and the Cooperative and Small Employer Charity Pension Flexibility Act (CSEC Act), Pub. L. 113–97.

Except as provided below, the Service will not consider in its review of any determination letter application for the submission period that begins February 1, 2015, any:

(1) guidance issued after October 1, 2014;

(2) statutes enacted after October 1, 2014;

(3) qualification requirements first effective in 2016 or later; or

(4) statutory provisions that are first effective in 2015, for which there is no guidance identified in this notice.

However, in order to be qualified, a plan must comply with all relevant qualification requirements, not just those on the 2014 Cumulative List.

The Service’s review of a determination letter application filed in the Cycle E submission period will not consider the 2014 final hybrid plan regulations (other than the delay in the effective date of certain provisions in the 2010 final hybrid plan regulations set forth in § 1.411(b)(5)–1(f)(2)(i)(B)) unless (1) the plan has been amended to satisfy the 2014 final regulations and (2) the determination letter application indicates that a determination is requested that the plan complies with those final regulations.

The 2014 Cumulative List includes one item of guidance issued after October 1, 2014, namely Notice 2014–66, 2014–46 I.R.B. 820, which provides a special nondiscrimination rule for a qualified defined contribution plan that provides lifetime income by offering, as investment options, a series of target date funds (TDFs) that include deferred annuities among their assets, even if some of the TDFs within the series are available only to older participants.

With respect to matters addressed by proposed regulations identified in the footnotes of section IV of this notice, the Service’s review of the plan will be based on a reasonable interpretation of the statute, existing final regulations, or other published guidance. For this purpose, compliance with proposed regulations will be treated as meeting that standard. However, a determination letter cannot be relied on with respect to whether the plan complies with the proposed regulations.

Terminating plans must include all law changes in effect at the time of termination. See section 8 of Rev. Proc. 2007–44 regarding plan termination.

The following list consists of statutory provisions and associated guidance which reflect changes to plan qualification requirements. The Service has identified below the plan qualification requirements that differ from those that were on the 2013 or earlier Cumulative Lists as “(New).”

Items from the 2009 Cumulative List have been deleted from the 2014 Cumulative List. Thus, the 2014 Cumulative List contains the plan qualification requirements in the 2010, 2011, 2012 and 2013 Cumulative Lists, as well as additional 2014 plan qualification requirements. The deletions have been made to enhance the utility of the cumulative list, by removing items that would have been previously reviewed in the case of a plan that was submitted during the initial Cycle E submission period (February 1, 2010 – January 31, 2011). However, if a plan has not been previously reviewed for items on earlier cumulative lists, the items from the earlier cumulative lists must be taken into account. These items can be found in the 2009 Cumulative List, Notice 2009–98.^[2]

1. 401(a):

2. 401(a)(4):

3. 401(a)(9):

4. 401(a)(22):

5. 401(a)(28)(C):

6. 401(a)(35):

7. 401(a)(37):

8. 401(k) & 401(m):

9. 402(a):

10. 402(c)(2):

11. 402A:

12. 409:

13. 411(a):

14. 411(a)(13):

15. 411(b)(1):

16. 411(b)(5):

17. 411(d)(6):

18. 414(u):

19. 414(x):

20. 415:

21. 417:

22. 420:

23. 431(b)(8):

24. 436:^[6]

The following guidance contains sample or model amendments: Notice 2009–82 (suspension of the minimum distribution requirement for 2009); Rev. Rul. 2011–1 (group trusts); and Notice 2011–96 (limitations on the accrual and payment of benefits under underfunded single employer defined benefit plans).

The principal author of this notice is Patrick Gutierrez of the Employee Plans, Tax Exempt and Government Entities Division. For further information regarding this notice, please contact the Employee Plans taxpayer assistance answering service at 1-877-829-5500 (a toll free number) or e-mail Mr. Gutierrez at RetirementPlanQuestions@irs.gov.

This announcement extends to June 30, 2015, the deadline for submitting on-cycle applications for opinion and advisory letters for pre-approved defined benefit plans for the plans’ second six-year remedial amendment cycle. This announcement also provides a two day extension (from Saturday, January 31, 2015, to Monday, February 2, 2015) for Cycle D on-cycle submissions (primarily individually designed plans including multiemployer plans).

The extension to June 30, 2015, applies to pre-approved defined benefit mass submitter lead and specimen plans, word-for-word identical plans, master and prototype minor modifier placeholder applications, and defined benefit non-mass submitter lead and specimen plans. Under Rev. Proc. 2007–44, 2007–2 C.B. 54, and Rev. Proc. 2011–49, 2011–44 I.R.B. 608, as modified by Announcement 2014–4, 2014–7 I.R.B. 523, the submission period for these applications is scheduled to expire on February 2, 2015. This extension applies to all on-cycle pre-approved defined benefit plan submissions.

In general, plans submitted in accordance with this extension will continue to be reviewed for qualification items based on the 2012 Cumulative List (Notice 2012–76, 2012–52 I.R.B. 775).

The IRS expects to modify Rev. Proc. 2011–49 to expand the preapproved program to include defined benefit plans containing cash balance features and defined contribution plans containing employee stock ownership plan (ESOP) features. In addition, the IRS is developing tools, which will be available before June 30, 2015, to assist plan sponsors in drafting these plans.

The extension from January 31, 2015, to February 2, 2015, applies to Cycle D filers reviewed for qualification items based on the 2013 Cumulative List (Notice 2013–84, 2013–52 I.R.B. 822).

Rev. Proc. 2007–44, Rev. Proc. 2011–49, and Announcement 2014–4 are modified.

The principal author of this announcement is Donald J. Kieffer of the Employee Plans, Tax Exempt and Government Entities Division. For further information regarding this announcement, please call the Employee Plans taxpayer assistance answering service at (877) 829-5500 (a toll-free telephone number) or e-mail Mr. Kieffer at retirementplanquestions@irs.gov.