IRS Issues Model Section 436 Amendment and Extends Deadline for Adoption

The Internal Revenue Service (IRS) has extended by one year the deadline to amend defined benefit plans to comply with Section 436 of the Internal Revenue Code, which limits the accrual and payment of benefits when single-employer defined benefit plans are underfunded. The deadline for adoption, previously the last day of the plan year that begins on or after January 1, 2011 (for calendar year plans, December 31, 2011), has been extended to the last day of the plan year that begins on or after January 1, 2012 (for calendar year plans, December 31, 2012). In this notice, the IRS also has issued a model plan amendment that defined benefit plan sponsors may adopt to comply with the requirements of Section 436 of the Internal Revenue Code. This guidance is available here.