The American Society of Pension Professionals & Actuaries asked the IRS today to give underfunded defined benefit plans a clean funding-status slate if they resolve to wipe out the deficit through additional contributions. Under proposed regulations to implement benefit-restriction limitations included in the Pension Protection Act of 2006, the IRS would continue benefit restrictions on an underfunded plan into the first part of the following year even if the employer made special contributions to avoid the restrictions in the current year. The restrictions include barring increased benefits for plan participants.
At todays hearing, Judy A. Miller, chief of actuarial issues and director of retirement policy at ASPPA, urged IRS officials to cut plans a little slack. What we want them to do is to include those contributions in determining the funded percentage that will be presumed to apply in the following year until the actual certification is done for that following year, Ms. Miller said in an interview.