• Plan Sponsors Have Opportunity for Relief from Pension Funding and Benefit Restrictions
  • July 19, 2010
  • Law Firm: Fried Frank Harris Shriver Jacobson LLP - New York Office
  • The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 20101 (the “Act”) provides sponsors of defined benefit plans with an opportunity for temporary funding relief. The Act allows plan sponsors to elect additional time to amortize any funding shortfalls under such plans. As discussed below, the ability of plan sponsors to take full advantage of the funding relief will likely be limited if they pay compensation to any employee in excess of $1,000,000, pay extraordinary dividends or an extraordinary stock buy back occurs. In addition, the Act provides relief through 2010 from certain benefit restrictions under The Pension Protection Act of 20062 (the “PPA”) that apply to defined benefit plans with an adjusted funding target attainment percentage (“AFTAP”)3 below 60%.