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The IRS has just released Notice 2004-78 that provides guidance concerning interest rates to be used under the Pension Funding Equity Act of 2004 (the "PFA") by defined benefit plans, that discusses how the transition rules applicable to distribution during 2004 are to apply, and that also discusses how and when remedial amendments should be made to affected plans. A copy of the notice is attached. Generally, under the PFA, for 2004 and 2005 plan years, an interest rate of 5.5% is to be used instead of the applicable interest rate in determining lump sum present value limitations under Code 415(b). The PFA also allows amendments for this purpose to be made on or before the last day of the first plan year beginning on or after January 1, 2006.

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