December 1, 2006 – The IRS has just issued Notice 2006-107 giving temporary relief from the Pension Protection Act of 2006 (PPA) diversification notice requirements. PPA requires that certain plans with publicly-traded employer securities provide right-to-diversify notices to participants. These notices must be given to participants 30 days before the date they may exercise this right. Notice 2006-107 gives a welcome extension to the deadline for providing this notice, describes diversification rules, and includes a sample model notice.
The PPA provision guaranteeing this right to diversify takes effect in 2007, meaning January 1, 2007, for calendar plans. This meant the diversification notice for calendar-year plans would generally have to be given by December 2, 2006. Notice 2006-107, however, provides that plans with plan years starting on or after January 1, 2007, (but before February 1, 2007) now have until January 1, 2007, to give this notice to participants.
IRS Notice 2006-107 may be accessed as follows.