The CARES (Coronavirus Aid, Relief, and Economic Security) Act that was signed into law on March 27, 2020 included aid and relief to not only to businesses and individuals, but to retirement plans. Most of the focus has been given to provisions for defined contribution plans in the CARES Act, but the legislation also included provisions aimed at corporate defined benefit plans:
- Extending the date for annual required 2020 contributions to January 1, 2021 for single employer plans. Interest will accrue past the original due date.
- Plans can use the adjusted funding target attainment percentage (AFTAP) for the plan year before January 1, 2020 to determine if the AFTAP is below 80%, a critical level for determining requirements for benefit restrictions.
- The CARES Act omitted relief for single union and multi-employer pension plans, although the separate legislation to cover these plans suffering duress (the establishment of the Pension Rehabilitation Administration (PRA)) is still in in process.
In addition, the IRS extended filing deadlines for certain plan filings to July 15, 2020, such as the filing of Forms 5500 and 8955-SSA. This extension resulted in an extension of PBGC filing dates and triggered the PBGC disaster relief policy, which states no late payment penalty charges and no late payment interest charges will be assessed for the disaster relief period.
Map-21, and its successor funding relief extensions are expiring in 2021. Given the current level of interest rates, funding deficits will increase substantially without additional extensions. Interest rates are below the Map-21 levels (2012), so there has been some discussion that Congress will extend funding relief.
There also has been speculation about other legislative proposals to combat the fallout from the economic shutdown, including direct funding relief to pension plans and freezing PBGC premiums.