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Multiemployer Plans Should Hold Off on Filing Form 5500

Posted on May 14, 2021

Multiemployer plans should wait to file their ERISA Form 5500 until they have seen upcoming guidance on the pension relief provisions provided in the American Rescue Plan Act of 2021, a Treasury official said.

The guidance addressing the special financial assistance provided to multiemployer plans is Treasury’s top priority in the benefits area, and the goal is to release it in conjunction with the required 120-day guidance due from the Pension Benefit Guaranty Corp. on July 9, according to Harlan Weller of the Treasury Office of Benefits Tax Counsel.

“We are certainly hopeful that we will be able to get guidance to people in time, so they won’t be late on their [Forms 5500],” Weller said May 12 at the American Bar Association Section of Taxation virtual meeting.

The American Rescue Plan Act (P.L. 117-2) established a PBGC fund to provide special assistance to some multiemployer plans. The funding doesn't require repayment. The Congressional Budget Office estimates that the cost of the special assistance will be $86 billion over the next decade and that between 185 and 336 multiemployer plans will receive special assistance under the provision.

The next priority for Treasury will be to address the questions regarding the single-employer relief provisions, Weller said.

The legislation provides two separate funding-relief provisions for single-employer pension plans. One extends the amortization for single-employer plans, and the other extends the pension funding stabilization percentages for single-employers plans.

Weller said the coming guidance will also address some questions arising out of the Coronavirus Aid, Relief, and Economic Security Act. It will include issues such as the coordination of an elected use of a lookback-adjusted funding target attainment percentage under section 436 for those who now want to change it because of the new interest rates.

“There’s a number of fairly intricate questions in this guidance, partially because unlike the earlier issues where we had retroactivity, this retroactivity actually runs more than a year,” Weller said. “We’re talking about 2019 changes for a law enacted in March of 2021. So we really have more complex retroactivity issues to deal with.”

Also, William Evans of the Treasury Office of Benefits Tax Counsel noted that there would be guidance coming on remote notarization relief for participant elections. The current temporary relief, for the physical presence requirement for participant elections, was established in Notice 2021-03 and was an extension of the original temporary relief granted in Notice 2020-42.

“There have been a couple of notices providing relief from that physical presence requirement — the most recent expansion ends June 30 of this year. I would note that we are . . . aware of that expiration date coming up and we’re working hard to have some additional guidance out in time for that,” Evans said.

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