The guidance also includes this relief:

• Ability for plan sponsors to disregard periods between March 30, 2020 and July 15, 2020 for calculating any interest or penalty for failure to file the Form 5330 or pay the related excise tax
• Extends due dates for corrections under the IRS’s Employee Plans Compliance Resolution System (EPCRS), 403(b) plan amendments and preapproved plan deadlines
• Expanded definition of “affected taxpayers” that could benefit from the extensions

Delayed zone certification and zone notice

The actuary for a multiemployer plan must certify the funding status of the plan (zone certification) by the 90^th day of the plan year. In certain circumstances, the plan sponsor is required to provide notice of the funded status (zone notice) to participants, beneficiaries and certain government agencies.

The new IRS guidance extends until July 15, 2020 the date of any actions due on or after March 30, 2020.

Delayed timing for adopting and updating an FIP or an RP

For the first plan year that a multiemployer plan is in “endangered” status, the plan sponsor must adopt an FIP no later than 240 days following the due date for the zone certification and, within 30 days after adoption, provide the bargaining parties one or more schedules designed to meet the benchmarks in the FIP. The FIP and schedules must be updated annually and be attached to the Form 5500. There are similar requirements with respect to a rehabilitation plan for “critical” status plans.

The new IRS guidance extends until July 15, 2020 the date of any actions due on or after March 30, 2020.

Delayed contribution deadlines and certifications for CSEC plans

CSEC plans have special funding rules that include certification of funding status and the adoption of a funding restoration plan. The new IRS guidance extends until July 15, 2020 the deadline for the performance of those actions, as well as the due date for required contributions, that would fall on or after March 30, 2020.

Delayed application date for funding waivers and substitute mortality tables for single-employer plans

Applications for funding waivers for single-employer pension plans on account of business hardship are due no later than the fifteenth day of the third month beginning after the close of the plan year for which the waiver is sought. For calendar-year plans, the deadline is March 15. The new IRS guidance extends until July 15, 2020 the date of any actions due on or after March 30, 2020.

Additionally, sponsors of single-employer plans can request IRS approval to use substitute tables that reflect the plan’s population. The application must be submitted to the IRS at least seven months before the first day of the first plan year for which the substitute mortality tables will apply. For calendar-year plans, the deadline is the prior June 1. The new IRS guidance extends until July 15, 2020 the date of any actions due on or after March 30, 2020.

Relief for 5500 penalties and interest

Form 5330 is used to report and pay a variety of excise taxes related to employee benefit plans. The new IRS guidance permits the period on or after March 30, 2020 to be disregarded when calculating any interest or penalty for failure to file the Form 5330 or to pay the excise taxes postponed by the Notice.

For plan sponsors that take advantage of this relief, interest and penalties will begin to accrue again on July 16, 2020.

Extended due dates for EPCRS Corrections, 403(b) plan amendments and preapproved plan deadlines

Under the Voluntary Compliance Program (VCP) portion of EPCRS, after the plan sponsor and the IRS reach agreement, the IRS issues a “compliance statement” specifying the corrective actions required. The plan sponsor must implement the corrective actions within 150 days of the compliance letter. The new IRS guidance extends until July 15, 2020 the date of any actions due on or after March 30, 2020.

Section 403(b) plans have a remedial amendment period to adopt a pre-approved plan or amend an individually designed plan that ended March 31, 2020. The new IRS guidance extends that date to June 30, 2020 for all purposes.

Deadlines for defined benefit plans under the IRS pre-approved plan program are postponed until July 31, 2020.

Expanded definition of “affected taxpayers”

For purposes of the relief discussed above, the IRS specifies a list of affected taxpayers. These include the plan, including 403(b) plans and governmental 457(b) plans, the plan sponsor, the plan administrator, participants, beneficiaries, disqualified people or other people.

Applicability to ERISA requirements

Notice 2020-35 indicates that to the extent there is similar language in ERISA, the new guidance extends the ERISA requirements. This new guidance builds on earlier guidance from both the IRS and the DOL (IRS Notice 2020-23, which was announced on April 9, 2020, and DOL/EBSA Disaster Relief Notice 2020-01, which we summarized in a May 1, 2020 web post.)