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October 27, 2011
Don’t Forget to Remember: Upcoming Compliance Deadlines for Multiemployer Retirement Plans
This Compliance Alert reminds trustees of qualified plans about some upcoming compliance deadlines that, because they are not new, could be easy to miss. The deadlines relate to required amendments, the Summary Report required by Section 104(d) of the Employee Retirement Income Security Act (ERISA) and Internal Revenue Service (IRS) Form 8955-SSA.
Amendments
Plans might need to adopt amendments that provide the following:
- Minimum Required Distributions (MRDs) Defined contribution (DC) plans might need to adopt amendments that describe how minimum required distributions (MRDs) were treated under the plan for 2009. The Worker, Retiree, and Employer Recovery Act of 2008 (WRERA) provided that no minimum distributions from defined contribution plans were required to be paid for 2009. Depending upon the language currently in a plan about MRDs and how it was decided to treat the minimum distributions that, without WRERA, would have been required for 2009, a plan amendment to reflect the treatment of the 2009 MRD might be needed. Many plans may already have been amended to document the treatment of the 2009 MRD. Calendar-year multiemployer DC plans that have not yet been amended have until December 31, 2011 to do so.
- Discretionary Plan Changes Under IRS rules, amendments to defined benefit (DB) or DC plans that are discretionary (i.e., not legally required) generally must be adopted by the last day of the plan year in which they become effective unless a different amendment deadline applies or is specified.1 Calendar-year multiemployer plans that have made discretionary amendments with 2011 effective dates should make sure those amendments are formally adopted (signed and dated) by
December 31, 2011.
It also is important to note that plans with pending determination letter requests should send to the IRS any discretionary amendments adopted since the time the determination letter application was submitted to the IRS. If this is not done, amendments that were adopted after the submission and before the determination letter is issued might not be protected by the next determination letter requested.2
Under IRS Notice 2011-85, the deadline by which a calendar-year cash balance or other hybrid plan must be amended for most PPA hybrid plan rules (including, for example, the Internal Revenue Code (IRC) §411(a)(13) vesting rules and the IRC §411(b)(5) interest crediting and conversion rules) has been further delayed from the last day of the 2011 plan year until the last day of the plan year that precedes the plan year in which the proposed hybrid plan regulations (originally issued in 2010), when finalized, are effective for the plan.1
ERISA §104(d) Summary Report
Under ERISA §104(d),4 multiemployer DB plans must provide participating unions and contributing employers with a report that summarizes certain plan information, much of which is drawn from the Form 5500.5 Trustees have 30 days from the due date (plus extensions) of their 2010 Form 5500 to prepare and distribute these reports. For calendar-year plans to which filing extensions applied, it appears that the reports will have to be distributed by
November 16, 2011.6
IRS Form 8955-SSA
For calendar-year DB and DC plans, the filing deadline for both the 2009 and 2010 Form 8955-SSA is January 17, 2012,7 and this deadline cannot be further extended by filing an IRS Form 5558.8
The January 17, 2012 filing deadline for the 2009 and 2010 Form 8955-SSA for calendar-year DB and DC plans is also the deadline for providing the required individual statements to the DB and DC plan deferred vested participants listed on Form 8955-SSA for each year. (See “Retirement Plan FAQs Regarding Form 8955-SSA, FAQ 14.”)
• • •
Although this Compliance Alert highlights key upcoming deadlines, it is important to keep in mind that there are myriad compliance requirements for multiemployer retirement plans. Those are summarized in The Segal Company’s annual Reporting & Disclosure Calendar for Multiemployer Plans.
As with all issues involving the interpretation or application of laws and regulations, plan sponsors should rely on their attorneys for authoritative advice. Segal can be retained to work with trustees and their fund counsel on amendments and required participation communications.
- 1
- IRS Rev. Proc. 2007-44, §5.05, is available on the IRS website. If a discretionary amendment is not adopted by the last day of the plan year in which it becomes effective, the plan is not considered to be operating in accordance with its terms and will likely require correction under the IRS corrections program. The corrections program is described in Rev. Proc. 2008-50, which is available on the IRS website. (Return to the Compliance Alert.)
- 2
- IRS Rev. Proc. 2011-6 §7.04 no longer requires plans to submit these post-submission/pre-determination letter amendments. However, at this time the IRS is indicating in informal comments that it does not intend to review post-submission/pre-determination letter amendments if submitted in the next determination letter Cycle. Therefore, it appears that post-submission/pre-determination letter amendments should continue to be submitted in the current Cycle in order to obtain the protection of a determination letter. (Return to the Compliance Alert.)
- 3
- IRS Notice 2011-85 is available on the IRS website. The original amendment deadline, the last day of the 2009 plan year, was previously extended twice, most recently by IRS Notice 2010-77, which is also available on the IRS website. (Return to the Compliance Alert.)
- 4
- The content of the Summary Report required by ERISA §104(d) (29 USC 1024(d)) is set out in the statutory language available at http://www.law.cornell.edu/uscode/29/1024.html No further guidance is available. For more information about the Summary Report, see The Segal Company’s July 13, 2009 Compliance Alert, “Multiemployer Pension Plans Urged to Extend the Due Date of their Form 5500.” (Return to the Compliance Alert.)
- 5
- There is no formal guidance on this issue. Informal guidance from the Department of Labor (DOL) with regard to prior reports indicates that this report is expected to be distributed only by DB plans even though the requirement itself is not limited to DB plans. (Return to the Compliance Alert.)
- 6
- Trustees have 30 days from the due date (plus extensions) of their 2010 Form 5500 to prepare and distribute these reports. For calendar-year plans that took extensions, the Form 5500 was due by October 15, 2011. However, the general rule for the Form 5500 is that if its due date falls on a Saturday, Sunday or Federal holiday, the Form 5500 may be filed on the next day that is not a Saturday, Sunday or Federal holiday (in this case, October 17, 2011). There is no guidance from the DOL on whether that rule similarly extends the due date for the report. Therefore, trustees should rely on legal counsel to determine the distribution deadline. (Return to the Compliance Alert.)
- 7
- The Form 8955-SSA guidance is available on the IRS website. It was discussed in see Segal’s July 11, 2011 Compliance Alert, “IRS Issues Long-Awaited Guidance on Reporting Deferred Vested Retirement Benefits; Postpones 2009 and 2010 Plan Year Filing Deadlines.” (Return to the Compliance Alert.)
- 8
- The instructions to the revised Form 5558 state that a Form 5558 may not be used to extend the filing deadline for Form 8955-SSA for the 2009 and 2010 plan years if the 2010 plan year ends before April 1, 2011. Generally, filing a Form 5558 on or before the original filing due date of a Form 8955-SSA will result in an automatic 2½ month extension of the filing deadline. (Return to the Compliance Alert.)
Compliance Alert, The Segal Company's periodic electronic newsletter summarizing important developments affecting benefit plan compliance, is for informational purposes only and should not be construed as legal advice. It is not intended to provide authoritative guidance. On all issues involving the interpretation or application of laws and regulations, plan sponsors should rely on their attorneys for legal advice.
