single employer defined benefit plans

In certain cases of a facility sale, restructuring or cessation, recently released information by the Pension Benefit Guaranty Corporation (PBGC) leaves many unanswered questions about plan sponsor liability for single-employer defined benefit plans. Given the lack of clarity, these plan sponsors should continue to consult their lawyer in any type of transaction, restructuring or cessation that approaches a 15 percent demographic change in a plan sponsor’s controlled group over a three-year period.

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by Diane Morgenthaler, Maureen O’Brien and Kary Crassweller

Recently the Internal Revenue Service provided the first set of guidance on the new notice requirements for single employer defined benefit plans subject to funding-related restrictions under Section 436 of the Internal Revenue Code.  This guidance includes information on notice recipients, content, delivery and timing.  Because significant penalties apply to a notice failure, plan sponsors need to carefully review this new guidance.

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