Transition Relief Urged For Single-Employer Plans, IRS Told

The U.S. Department of the Treasury should offer transition relief for single-employer pension plans impacted by funding changes made by recent coronavirus relief legislation, the American Benefits Council said in a letter to the agency released Tuesday.

Pension plans should not be subject to penalties if they make payments or take actions during a transition period that takes into account changes to plan funding made by the American Rescue Plan Act , the council said in the letter, dated March 24. The transition relief should apply to payments and plan actions impacted by the legislation, as long as they occur by the last day of plans' 2020 plan years, the letter said.

The legislation extended amortization periods for plan years commencing after 2021 from seven to 15 years and also made changes to interest rates under Internal Revenue Code Section 430(h)(2)(C)(iv) .

--Editing by Neil Cohen.

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