TEFRA amended 401(a)(9, however certain elections made prior to 1984 were grandfathered. Is there any reason, (please try to remember or think about this... I know it was over 15 years ago) why someone would NOT make the election available under TEFRA at that time? See, eg, January 1984 Journal of Taxation page 50.

Ahh . . . the sweet TEFRA 242(B) election. Friend of well advised taxpayers everywhere.

No, can't think of any reason why a participant wouldn't make such an election. They are revocable so you weren't locked in for life. (After TRA '86 many folks had second thoughts because of the 15% excess distribution tax but, again, you could always revoke and stagger your distributions around this now repealed excise tax.)

The real problem with these TEFRA elections is that the IRS issued a Notice in late Nov. 1983 just prior to the 12/31/83 deadline. Many folks made elections before this notice was issued and their elections failed to meet all of the IRS's detailed requirements. Now many people are discovering their elections which they thought were good, are not quite on all fours with the IRS's view of TEFRA 242(B). Indeed the IRS has issued a number of restrictive PLRs on this subject. Personally, I think the IRS is a bit vulnerable here given the wording of the statute but I wouldn't want to be the test case!

Bottom line: There was no reason not to make the election in 1983 but you better double check the election to see if it complies with the IRS requirements.