Compliance April 30, 2009

Multiemployer Plans Get 60 More Days on WRERA Decisions

April 30, 2009 (PLANSPONSOR.com) - The Internal Revenue Service (IRS) has given multiemployer plans another 60 days to make election regarding defined benefit plan funding relief as provided for by the Worker, Retiree, and Employer Recovery Act of 2008, (WRERA).
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The IRS had originally set Thursday as the deadline for making the funding notice decisions called for under section 204 of WRERA but changed it to June 30, 2009, in Notice 2009-42.

Also, the IRS said it will automatically approve a request to revoke an election made under the WRERA if:

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  • as of the otherwise applicable deadline for making an election under section 204 or 205, a plan sponsor has been unable to reach agreement as to whether to make the election, so that the decision must be resolved through an arbitration process;
  • the plan sponsor makes an election by the otherwise applicable deadline that is contingent on the resolution of the arbitration; and
  • the resolution is to not make an election.

Section 204(a) of WRERA provides that a multiemployer plan sponsor may elect to temporarily freeze the plan’s funding status (critical, endangered, or neither) so that it is the same as the plan’s status for the plan year immediately prior to the election year (see IRS Issues Guidance on Funding Relief ).

Specifically, section 204(a)(1) of WRERA provides that a multiemployer plan sponsor may elect that the plan’s funding status for the first plan year beginning on or after October 1, 2008, and not later than September 30, 2009, be the same as the plan’s status for the prior year.

The latest IRS release is available  here .

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