IRS Says Companies Cannot Get Automatic Approval for DB Plans to Change Plan Year

The Internal Revenue Service has announced that single-employer defined benefit pension plan sponsors cannot receive automatic approval to change the plan year to delay MAP 21 PBGC premium increases. The IRS states that:

"Sponsors have also suggested that a change in plan year is eligible for automatic approval because the MAP-21 effective date has passed and future increases in PBGC rates are just phase-ins. However, under Rev. Proc. 87-27, automatic approval isn’t permitted for any change in plan year that delays the effect of a statute, regardless of whether that delay is only for one year or for a number of years in the future, such as the phase-in of PBGC premium increases."

To read more, click here.