Section 204(a) of WRERA provides that a multiemployer plan sponsor may elect to temporarily freeze the plan’s funding status (critical, endangered, or neither) so that it is the same as the plan’s status for the plan year immediately prior to the election year. Specifically, section 204(a)(1) of WRERA provides that a multiemployer plan sponsor may elect that the plan’s funding status for the first plan year beginning on or after October 1, 2008 and not later than September 30, 2009 be the same as the plan’s status for the prior year.
In addition, WRERA provides that the sponsor of a multiemployer plan that was in endangered or critical status for the prior year, and for which an election is made under section 204, is not required to update its funding improvement plan, rehabilitation plan, or schedules as otherwise required until the plan year following the election year. However, if the plan has, without regard to the election, been certified by the plan actuary to be in critical status for the election year, then the plan is treated as being in critical status for that year for purposes of applying the excise tax exception under section 4971(g)(1)(A) of the Code.
An election under section 204 must be made at the time and in the manner that the Secretary of the Treasury or the Secretary’s delegate may prescribe and, once made, may be revoked only with the consent of the Secretary. If the election is made before the date the annual certification of the plan’s funded status is submitted to the Secretary, then the election must be included with the certification that is submitted to the Secretary. If the election is made after the date the certification is submitted, then the election must be submitted to the Secretary not later than 30 days after the date of the election.
Further, the plan’s election could change the required notice that must be provided to the participants and beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corporation, and the Secretary of Labor not later than 30 days after the date of the certification or election, whichever is later.
Employers may also elect to increase their funding improvement period by three years under the relief.
IRS Notice 2009-31 is here .