IRS Extends Plan Contribution Deadlines

January 28, 2002 ( - The Internal Revenue Service (IRS) is giving plan sponsors impacted by the September 11 attacks more time to make required contributions.

According to the IRS, notice 2002-7 expands and supplements tax relief already granted under Internal Revenue Code Section 7508A in Notice 2001-61 for taxpayers affected by the attack.  President Bush signed into law the Victims of Terrorism Tax Relief Act of 2001 on January 23.

In Notice 2002-7, the IRS says that for plans required to make contributions between September 11 and September 23, 2001, those contributions would not be required until September 24, 2001.  Cut-offs for applications for a waiver that would have fallen between March 15, 2001, and February 28, 2002, have been extended to March 1, 2002.  The dates established for said contributions are described in Section 412(c)(10) or Section 412(m) and Section 302(c)(10) or 302(e) of the Employee Retirement Income Security Act.

Minimum Standards

Those sections say that, in order for a plan to meet the minimum funding standards of the Code and ERISA, the plan must not have an accumulated funding deficiency as of the end of each plan year. Furthermore, that any contributions for a plan year made by an employer by the end of the 8 1/2-month period following the end of such plan year are deemed to have been made on the last day of the year. 

However, there is a provision for waivers of the minimum funding requirements in the event of temporary substantial business hardship.  The current notice expands on those conditions in view of the September 11 attacks.

Direct Impact

In addition, the notice said that for plans directly affected by the attack, contributions that would have been required between September 11, 2001, and February 11, 2002, can now be made as late as February 12, 2002.  The notice says plans directly affected by the attack are those where:

  • the principal place of business of any employer that maintained the plan; 
  • the office of the plan or the plan administrator;
  • the office of the primary recordkeeper serving the plan; 
  • the office of an attorney, enrolled actuary, certified public accountant, or other advisor retained by the plan or the employer at the time of the attack to determine the funding requirements described above for the period described in such section; 

are in the New York counties of Bronx, Kings, New York, Queens, and Richmond:

Or if the enrolled actuary for the plan was killed, injured or is missing as a result of the attack.

The notice also said a plan’s unfunded vested benefits for a premium payment year or entitlement to the full funding limit exemption from the variable-rate premium for a premium payment year would be determined under Title IV of ERISA.

Notice 2002-7 will be in Internal Revenue Bulletin 2002-6 dated February 11 and is also online at .