IRS Issues Guidance for Notices of Benefits Limitations

August 2, 2012 ( – The Internal Revenue Service (IRS) has issued guidance for certain defined benefit (DB) plans that must place limitations on benefits.

Notice 2012-46 provides guidance in the form of questions and answers with respect to the notice requirements of section 101(j) of the Employee Retirement Income Security Act (ERISA), which requires that notice be provided to participants and beneficiaries relating to certain limitations on benefits in pension plans imposed under section 206(g) of ERISA, as added by the Pension Protection Act of 2006 (PPA).  

Section 101(j) of ERISA requires the plan administrator of a single-employer DB plan to provide a written notice to plan participants and beneficiaries, generally within 30 days after the plan becomes subject to the benefit limitations.  

The PPA established limitations on certain accruals to and payments from DB plans that are funded below 60%, for some limitations, and 80%, for others (see “IRS Provides Sample Plan Amendment for Underfunded Pension Plan Limitations”).  

Notice 2012-46 is at