As described in our prior blog post, the US Internal Revenue Service (IRS) recently extended many impending amendment deadlines for legislative changes made by the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), Bipartisan American Miners Act of 2019 (MINERS Act), and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). However, for reasons that were not entirely clear, the IRS did not extend the amendment deadline for certain CARES Act changes at the time. Now, in Notice 2022-45, the IRS is extending the amendment deadline for the remaining CARES Act changes.
ML BeneBits
EXAMINING A RANGE OF EMPLOYEE BENEFITS
AND EXECUTIVE COMPENSATION ISSUES
AND EXECUTIVE COMPENSATION ISSUES
Although variable annuity pension plan (VAPP) designs have been permissible for decades, they have not yet seen widespread adoption—particularly in the Taft-Hartley multiemployer plan space.
The American Rescue Plan Act (ARPA) provided relief from certain annual notice and funding requirements to multiemployer plans reeling from COVID-19–related investment and experience losses. IRS Notice 2021-57, issued on October 8, 2021, gives plan sponsors a roadmap for electing relief.
The US Senate on March 6 passed the Butch Lewis Emergency Pension Plan Relief Act of 2021 (EPPRA) as part of the American Rescue Plan of 2021 (H.R. 1319), the Biden administration’s $1.9 trillion COVID-19 stimulus package. The bill was passed under the reconciliation process, requiring a simple majority vote. Because the Senate made some last-minute changes to EPPRA (which was initially proposed in the House of Representatives), the bill now moves back to the House, where it will be revoted on March 9. The Biden administration hopes to have the package signed into law before March 14.
The ongoing effort to provide relief for troubled multiemployer pension plans took many twists and turns in 2020, and the year ended once again without an agreed-upon solution. Looking forward to 2021, the incoming Biden administration and the new 117th Congress will continue to grapple with how best to avoid the looming insolvency of both the Pension Benefit Guaranty Corporation’s (PBGC) multiemployer pension insurance program and a growing number of plans in critical and declining status.
As we noted in a post last year at this time, pension plans that are not fully funded for PBGC purposes have two parts to their PBGC premium. One part is a flat rate premium of $83 per participant in 2020 ($86 for 2021, as just announced by the PBGC). The other is a variable rate premium that looks to the value of the plan’s “unfunded vested benefits,” which is the excess, if any, of the plan’s Premium Funding Target over the fair market value of plan assets.