October 2009 Bulletin, “IRS Regulations on Pension Funding and Benefit Restrictions”

Abstract

The Internal Revenue Service and the Treasury Department recently published final funding regulations for single-employer pension plans, which will generally first take effect for the 2010 plan year. Employers can also rely on these regulations for 2008 and 2009, if they choose. The regulations contain a large amount of technical details.

This Bulletin gives a high-level summary of key provisions that might be of interest to private sector employers. It notes highlights of the following:

  • The rules for determining minimum required contributions and
  • The rules for how benefit restrictions are administered.

Although the regulations do not generally cover most issues related to cash balance and other hybrid plans and do not cover provisions that were added by the 2008 Worker, Retiree, and Employer Recovery Act, or quarterly contributions, they answer some of the outstanding questions, and will need to be reflected in planning for 2010.

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