On February 10, 2009, the Department of Labor (“DOL”) released Field Assistance Bulletin 2009-01 (“FAB 2009-01”), which provides guidance on the required annual funding disclosure obligations of defined benefit plans. The Pension Protection Act of 2006 (the “PPA”) amended the Employee Retirement Income Security Act of 1974 to require that administrators of all defined benefit plans provide this annual funding notice to participants and beneficiaries, labor organizations representing participants and beneficiaries, and the PBGC. The DOL has not previously provided guidance to assist plan administrators of single employer defined benefit plans in complying with this new requirement.
FAB 2009-01 includes a model annual funding notice applicable to single employer plans. Although use of the appropriately completed model notice will be deemed to satisfy the content requirements of the statute, use of the model notice is not mandatory.
Substantive guidance in FAB 2009-01 on the statute’s requirements includes statements from the DOL that:
- The notice must disclose the plan’s funding percentage at the beginning of the plan year, as well as at the beginning of the two prior plan years, among other things.
- Filing the annual funding notice with the PBGC is not required unless liabilities exceed plan assets by more than $50 million.
- A plan administrator will be considered to be compliant with the statute’s requirements if the administrator acts in accordance with a good-faith, reasonable interpretation of matters not addressed in FAB 2009-01.
The annual funding notice requirements, as amended by the PPA, apply to plan years beginning on or after January 1, 2008. As plans must furnish the notices no later than 120 days after the close of each plan year, calendar year plans must generally provide their first annual funding notice by April 30, 2009.