As we are putting this April 15 behind us, next up on the calendar are the defined benefit plan annual funding notices. The Pension Protection Act of 2006 amended ERISA to require the plan administrator of any defined benefit pension plan, which is subject to Title IV of ERISA, to provide an annual funding notice to:
— the Pension Benefit Guaranty Corporation (the “PBGC”);
–each plan participant and beneficiary;
— each labor organization representing such participants and beneficiaries; and
— in the case of a multiemployer plan, each employer which has an obligation to contribute to the plan.
The notice must include, among other things, the plan’s funding percentage, a statement of the value of the plan’s assets and liabilities, a description of how the plan’s assets are invested as of specific dates, and a description of the benefits under the plan which may be guaranteed by the PBGC.
The new annual funding notice requirements apply to plan years beginning after January 2007. The funding notice for a plan year is due within 120 days after the close of that plan year. Thus, for a plan with a calendar plan year, the first funding notice is due by April 30, 2009.
As an exception to the above, in the case of a small plan, the funding notice for a plan year must be provided by the due date (including extensions), or if earlier the actual filing date, of the plan’s Form 5500 for that plan year. Generally, a “small plan” is any plan-whether a single-employer plan or a multi-employer plan-which does not have more than 100 participants on any day during the plan year preceding the year to which the funding notice in question relates. Also, in the case of a single-employer plan, a funding notice need not be provided to the PBGC, if the plan’s liabilities do not exceed it’s assets by more than $50 million.
The Department of Labor has issued Field Assistance Bulletin No. 2009-01, which provides guidance on the annual funding notice requirements and includes model notices which may be used to help meet these requirements. The Bulletin indicates that, pending further guidance, the Department will treat a plan administrator as satisfying the annual funding notice requirements if the plan administrator has complied with the guidance contained in the Bulletin, and has acted in accordance with a good faith, reasonable interpretation of those requirements as to matters not specifically addressed in the Bulletin. Importantly, properly completing the applicable model notice will satisfy any content requirements as to the funding notice.