The Internal Revenue Service (IRS) has extended the period for multiemployer plan sponsors to elect funding relief under the Worker, Retiree, and Employer Recovery Act of 2008. Under IRS Notice 2009-31, elections were due by April 30, 2009, or 30 days after the annual certification of the plan’s status is due, whichever is later. In Notice 2009-42, the IRS extended the deadline to June 30, 2009. The funding relief permits a multiemployer defined benefit plan to temporarily freeze its “green zone,” “yellow zone” or “red zone” status from the prior plan year, and/or extend its funding improvement plan or rehabilitation plan by an additional three years. For more information on the funding relief, see McDermott’s On the Subject “Multiemployer Plan Funding Relief Guidance Issued: Immediate Action Needed” available at http://www.mwe.com/info/news/ots0409m.htm.
The IRS extension is certainly welcome, given that the relief was initially announced in late March and not published in the Internal Revenue Bulletin until late April. The extension will give plan fiduciaries, who typically meet on a quarterly basis, additional time to consider their options. Unfortunately, the notice does not address whether plan sponsors can revisit any elections made prior to the April 30, 2009, deadline under IRS Notice 2009-31. In determining the best course of action for each plan, consultation with legal counsel, actuaries and accountants is extremely important.