Defined benefit plan executives will be allowed to change the asset valuation methods they use in 2009 without seeking IRS approval, according to guidance issued by the agency.
The guidance, IRS Notice 2009-22, allows plans to change their method to take advantage of the Worker, Retiree and Employer Recovery Act of 2008 enacted in December clarifying that plans could smooth asset values looking back up to 24 months preceding the beginning of the plan year.
Under existing IRS rules, pension plans needed IRS approval to change the asset valuation method they used for their plans each year.
This guidance essentially says that the agency is giving plans another bite at the apple in 2009, said Ken Steiner, resource actuary at Watson Wyatt Worldwide. This could reduce their minimum contribution requirement for the 2009 plan year.
Added Frank Todisco, senior pension fellow for the American Academy of Actuaries: The welcome piece was allowing plans to change their methods in 2009 without applying for approval.