In Notice 2012-46, the Internal Revenue Service (the “IRS”) has provided guidance, in the form of Q & As, on the notice requirements of section 101(j) of ERISA. Under these requirements, notice must be provided to participants and beneficiaries in a single-employer defined benefit pension plan (a “Plan”) regarding certain limitations on benefits imposed under section 206(g) of ERISA.
By way of background, section 101(j) of ERISA requires the plan administrator of a Plan to provide a written notice to participants and beneficiaries generally within 30 days after the plan becomes subject to the benefit limitations of section 206(g)(1) or (3) of ERISA (relating to unpredictable contingent event benefits and prohibited payments). In addition, if a Plan becomes subject to the benefit limitations of section 206(g)(4) of ERISA (relating to the cessation of benefit accruals), the section 101(j) notice must be provided within 30 days after the earlier of the valuation date for the plan year for which the Plan’s adjusted funding target attainment percentage (the “AFTAP”) is less than 60% or the date such percentage is presumed to be less than 60% under the rules of section 206(g)(7) of ERISA.
The Q &As in Notice 2012-46 cover a number of issues pertaining to the section 101(j) notice, including:
–the timing requirements for providing the notice;
–how the requirements for the notice interact with the notice requirements of section 204(h) of ERISA;
–the persons to whom to the notice must be provided;
–the information to be included in the notice; and
–how the notice may be provided.