IRS Issues New Guidance on Annual Funding Notice Requirements
The Moving Ahead for Progress in the 21st Century Act (MAP-21) that was passed last year provided plan sponsors of defined benefit pension plans the opportunity to reduce pension funding costs in 2012 by using a 25 year average discount rate. The provisions of MAP-21 apply solely to private sector plan sponsors of defined benefit plans, and do not apply to governmental plan sponsors as defined in 414(d).
MAP-21 also provided that plan sponsors who apply the new 25 year average discount rates must disclose the effect of such to plan participants. The IRS has just released Field Assistance Bulletin 2013-01
which provides guidance and model supplement language to the Annual Funding Notice to participants. Annual Funding Notices along with the new supplemental MAP-21 information must be provided to participants no later than 120 days following the end of each plan year. For calendar year plans, the 2012 Annual Funding Notices will be due April 30, 2013.
This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.