<nobr>Jan 4, 2008</nobr>

IRS Releases Proposed Guidance on Measurement of Assets and Benefit Liabilities for Single Employer Plans

The Treasury Department and Internal Revenue Service (IRS) December 28 released proposed regulations governing the measurement of plan assets and liabilities in single-employer pension plans. Even though the new funding rules generally are effective for plan years beginning on or after January 1, 2008, the proposed regulations generally would be applicable to plan years beginning on or after January 1, 2009.

The proposed rule would implement changes made by the Pension Protection Act of 2006 (PPA), which made extensive changes to the minimum funding requirements. Added by PPA, Internal Revenue Code section 430 specifies the minimum funding requirements that apply to single employer defined benefit pension plans pursuant to section 412, which provides minimum funding requirements that generally apply for pension plans. The proposed regulations address the determination of funding target and target normal cost, valuation date and value of plan assets, interest rates, and plans in at-risk status.

The proposed regulations are the third in a series of proposed regulations under new section 430. Treasury and IRS intend to issue additional proposed regulations relating to other portions of the rules under section 430 (including sections 430(a), (c), and (j)) in the first part of 2008. It is expected that those regulations will be effective for plan years beginning on or after January 1, 2009.

Written or electronic comments and requests for a public hearing on the proposed regulations must be received by March 31, 2008.

Websites:

Proposed Regulation on Measurement of Assets and Liabilities for Pension Funding Purposes

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