Guidance on Multiemployer Pension Funding Relief
December 14, 2010
The IRS recently released fairly comprehensive guidance on the multiemployer pension funding relief provisions of last summer's Pension Relief Act
The IRS notice clarifies and confirms much of what the multiemployer community had advocated when the legislation was under consideration in Congress, although it stops short on some important points. Potentially significant problems are the continued uncertainty on the length of the benefit-increase restriction and what looks like stringent limits on what the actuary can consider in performing the solvency test, which plans must pass in order to use the relief.
The latest issue of The Segal Company's Compliance Alert discusses the following issues clarified by the IRS:
- Extended amortization period for eligible net investment losses: guidance on net investment loss and actuarial method.
- Asset valuation rules: guidance on asset smoothing.
- Solvency test: guidance on solvency period and actuarial basis.
- Benefit increase restrictions: guidance on the restrictions, their length and the effective date.
- Electing relief: guidance on the procedure, the deadline and opting out.
- Re-certification of 2010 zone status: guidance on the option and the deadline.
For further details, please view the Segal Compliance Alert.