On November 21, 2012, the IRS issued Notice 2012-79 extending both the deadline to amend a plan to satisfy Internal Revenue Code (Code) section 436 and the period during which such an amendment is eligible for relief from the anti-cutback requirements of Code section 411(d)(6). Code section 436, as added by the Pension Protection Act of 2006, sets limits on benefit payments and pension accruals for defined benefit plans that are "underfunded." As discussed in the December 2011 Employee Benefits Update, the IRS previously issued Notice 2011-96 extending both the deadline to amend a plan to satisfy Code section 436 and the period during which such an amendment is eligible for relief from the anti-cutback requirements of Code section 411(d)(6).

The new Notice 2012-79 provides an additional extension on the amendment deadline. Pursuant to this Notice, the deadline for adopting an interim amendment with respect to Code section 436 has been extended to the latest of: (1) the last day of the first plan year that begins on or after January 1, 2013, (2) the last day of the plan year for which Code section 436 is first effective for the plan, or (3) the due date (including extensions) of the employer’s tax return for the tax year that contains the first day of the plan year for which Code section 436 is first effective for the plan. However, in the case of an application for a determination letter for an individually designed plan that is filed on or after February 1, 2013, the restated plan that is submitted with the application must incorporate an interim amendment with respect to Code section 436. Individually-designed and pre-approved single employer defined benefit plans may adopt the sample amendment provided in Notice 2011-96. The notice also provides that a plan amendment adopted with respect to Code section 436 that eliminates or reduces a Code section 411(d)(6) protected benefit does not cause the plan to fail to meet the anti-cutback requirements of Code section 411(d)(6) if the amendment is adopted by the deadline described above and the elimination or reduction is made only to the extent necessary to enable the plan to meet the requirements of Code section 436.

Furthermore, like the previous guidance extending the amendment deadline, the new extension also provides that a plan amendment adopted with respect to Code section 436 that eliminates or reduces a Code section 411(d)(6) protected benefit does not cause a plan to fail to meet the anti-cutback requirements of Code section 411(d)(6) if the amendment is adopted by the extended deadline and the elimination or reduction is made only to the extent necessary to enable the plan to meet the requirements of Code section 436.