Defined benefit plan sponsors may make standing elections instead of quarterly calculations and filings to apply credit balances toward quarterly contribution installments, under final rules published Wednesday by the IRS.
The rules, published in the Federal Register, finalize ones proposed in April 2008.
Plans with a funding shortfall in the prior year are subject to the quarterly reporting requirements. Without the new rules, which are effective for plan years beginning on or after Jan. 1, 2016, sponsors had to elect a specific dollar amount each quarter, or risk interest charges.
“It's something that employers and actuaries have been asking for, for quite a while. It alleviates the worry of people missing the deadline,” said Heidi Rackley, consulting actuary and partner in Mercer's Washington group, in an interview.
The final rules are available on the Federal Register.