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July 13, 2021

IRS provides guidance for multiemployer defined benefit plan sponsors that received PBGC financial assistance

The IRS has provided guidance (Notice 2021-38) under IRC Section 432(k) for sponsors of multiemployer defined benefit pension plans required to reinstate certain previously suspended benefits as a condition of receiving special financial assistance from the Pension Benefit Guaranty Corporation (PBGC). The notice also addresses (1) whether make-up payments for previously suspended benefits may be rolled over to another eligible retirement plan under IRC Section 402(c), and (2) how to apply the IRC Section 432(k)(2)(D)(i) rule, which does not take special financial assistance the plan receives into account in determining contributions required under IRC Section 431.