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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
The Employee Benefits Security Administration (EBSA) has released final regulations implementing the annual funding notice requirements for multiemployer defined benefit plans added by the Pension Funding Equity Act of 2004 (PFEA, P.L. 108-218). The regulations also contain a model annual funding notice that may be used by plan administrators to discharge their notice obligations. The final regulations are effective February 10, 2006, and apply to plan years beginning after December 31, 2004.
"These rules will ensure that workers and employers receive important information about the funding status of their multiemployer plans and encourage sound funding so that sufficient assets are available to pay future benefits," said Ann L. Combs, Assistant Secretary of EBSA. "The rules will result in greater transparency for individuals, employers and the government," Combs said.
ERISA §101(f), as added by the PFEA, requires the administrator of a multiemployer defined benefit plan to provide participants, beneficiaries, relevant labor organizations, contributing employers, and the PBGC, with an annual funding notice. The final regulations set out the content requirements of the required notice, the time and manner of furnishing the notice, and the persons entitled to the notice. Under the final regulations, the administrator of a plan receiving financial assistance from the PBGC is not required to furnish the annual funding notice.
The final regulations require that the identification and financial information included in the notice should be consistent with the information included in the plan's Form 5500 filed for the plan year to which the notice relates. The notice must include basic financial information about the multiemployer plan, such as a statement as to whether or not the plan is 100% funded. In addition, the notice must provide a comparison of the plan's assets to benefit payments, a description of the law governing insolvent multiemployer plans, and a disclosure of the benefits guaranteed by the PBGC.
Under the final rules, notices are required to be furnished within nine months after the close of the plan year, unless the IRS has granted an extension of time to file the annual report, in which case the notice must be furnished within two months after the close of the extension period.
Annual funding notices must be furnished to: (1) each participant covered under the plan on the last day of the plan year to which the notice relates; (2) each beneficiary receiving benefits under the plan on the last day of the plan year to which the notice relates; (3) each labor organization representing participants under the plan on the last day of the plan year to which the notice relates; (4) each employer that, as of the last day of the plan year to which the notice relates, is a party to the collective bargaining agreement(s) pursuant to which the plan is maintained or who otherwise may be subject to withdrawal liability; and (5) the PBGC.
The regulations provide a model notice designed to reduce compliance burdens on plans and their administrators. Use of the model notice is not mandatory.
For more information on this and related topics, consult the CCH Pension Plan Guide.
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