In Notice 2012-70, the Internal Revenue Service (the “IRS”) extended the deadline for amending a qualified defined benefit plan to reflect the requirements of section 436 of the Internal Revenue Code (the “Code”). Section 436 contains restrictions on benefit accruals and payouts for underfunded plans. The previous deadline for the section 436 amendment was set forth in Notice 2011-96. That Notice also providing a sample plan amendment.
Under Notice 2012-70, the new deadline for the section 436 amendment is the latest of:
(1) the last day of the first plan year that begins after 2012,
(2) the last day of the plan year for which section 436 is first effective for the plan, or
(3) the due date (including extensions) of the employer’s tax return for the tax year
that contains the first day of the plan year for which section 436 is first
effective for the plan.
Note, however, if an application for a determination letter for an individually designed plan is filed on or after February 1, 2013 , the restated plan submitted with the application must include provisions that comply with section 436. The filing would thus require an earlier amendment for section 436. Plans submitted before February 1, 2013 need not include provisions reflecting section 436 .
Also, a plan amendment which is adopted with respect to section 436, and which eliminates or reduces a section 411(d)(6) protected benefit, does not cause a plan to fail to meet the anti-cutback requirements of section 411(d)(6) if: (a) the amendment is adopted by the deadline described above and (b) the elimination or reduction is made only to the extent necessary to enable the plan to meet the requirements of section 436.