IRS Notice 2008-21 – Transition Guidance for New Funding Rules and Funding-Related Benefit Limitations under PPA ‘06

Part III – Administrative, Procedural and Miscellaneous

IRS Notice 2008-21 – Transition Guidance for New Funding Rules and Funding-Related Benefit Limitations under PPA '06

"This notice extends the effective date of certain proposed regulations and establishes a 2008 transitional rule for small defined benefit plans with end-of the-year valuations."

"Notice 2008-21 alerts taxpayers of a uniform effective date of certain proposed funding regulations under sections 430 and 436 of the Internal Revenue Code. This notice also provides a transitional rule for 2008 for small plans with end-of-the-year valuations. Notice 2008-21 will appear in Internal Revenue Bulletin 2008-7 on February 19, 2008."

The IRS and the Treasury Department announced guidance on PPA Funding Rules:

"Washington, D.C.-- The Treasury Department and the Internal Revenue Service today issued guidance that relates to new pension funding rules that were included in the Pension Protection Act of 2006.

Notice 2008-21 announces that none of the proposed funding regulations will be effective before the first plan year beginning on or after January 1, 2009, although employers may rely on these regulations during 2008. For plan years beginning before January 1, 2009, the notice provides that employers may generally rely on a reasonable interpretation of the funding rules in the statute and may rely on the proposed regulations for this purpose.

The notice also provides transitional relief to small plans for purposes of applying
the applicable benefit restrictions for underfunded pension plans for 2008."

Funding; effective date; proposed regulations under sections 430 and 436. This notice alerts taxpayers of a uniform effective date of certain proposed regulations under sections 430 and 436 of the Code. In addition, this notice provides 2008 transitional guidance under section 436 for small plans with end of the plan year valuation dates.

Related Links:

• IRS Notice 2008-21, 2008- I.R.B. - Transition Guidance for New Funding Rules and Funding-Related Benefit Limitations under PPA '06 [HTML]
• IRS Notice 2008-21, 2008-7 I.R.B. 431 - Transition Guidance for New Funding Rules and Funding-Related Benefit Limitations under PPA '06 [PDF]

• IRS Delays Effective Date of Certain Funding Regulations
• PPA Effective Dates
• IRS Updates Proposed Effective Date for Certain PPA Funding Regulations
• IRS Delays Effective Date of Regulations on Funding and Benefit Restrictions for Single-Employer Pension Plans
• IRS Delays Effective Date for New DB Funding Calculations
• IRS, Treasury Issue Single-Employer Plan Funding and Benefit Transitional Guidance (Notice 2008-21; TDNR HP-794