On January 14, 2015, the DOL's Employee Benefits Security Administration (EBSA) issued Field Assistance Bulletin 2015-01 (FAB 2015-01), which provides guidance to plan administrators of single-employer defined benefit plans to comply with the annual funding notice requirements of the Employee Retirement Income Security Act of 1974 (ERISA) as amended by the Highway and Transportation Funding Act of 2014 (HATFA).

ERISA Section 101(f) requires plan administrators of defined benefit plans to provide annual funding notices to participants and beneficiaries within 120 days after the end of each plan year. ERISA Section 101(f)(2)(D)(i) was added by the Moving Ahead for Progress in the 21st Century Act (MAP-21) and requires plan administrators of single-employer defined benefit plans to disclose additional information in the annual funding notice for plan years beginning after December 31, 2011 and before January 1, 2015, if the plan has an "applicable plan year" that meets certain requirements of MAP-21 explained in Field Assistance Bulletin 2013-01 (FAB 2013-01) (see Legal Update, DOL Issues Model MAP-21 Supplement to the Annual Funding Notice for Pension Plans). This additional disclosure information relates to the effect of the funding stabilization rules on plan liabilities and the plan sponsor's minimum required contributions. FAB 2013-01 also provided a supplement to the model annual funding notice that was described in Appendix A to FAB 2013-01.

HATFA extended the period that this additional disclosure information must be provided for "applicable plan years" beginning before January 1, 2020 and changed the disclosures that are required to be provided effective for plan years beginning after December 31, 2012 (unless the plan sponsor elects out of the new rules for a plan year beginning in 2013) (see Legal Update, President Obama Signs the Highway and Transportation Funding Act of 2014 with Pension Funding Provisions). The IRS also issued Notice 2014-53 providing guidance on the funding stabilization rules under HATFA.

As a result of the questions and feedback from practitioners on the extension provided under HATFA to plan years ending before January 1, 2020, the DOL issued FAB 2015-01 which:

FAB 2015-01 provides the following guidance on the retroactive application of HATFA for the 2013 plan year. A plan administrator that has:

Pending further guidance, FAB 2015-01 provides that EBSA would treat a plan administrator as satisfying the annual funding notice requirements if the plan administrator:

FAB 2015-01 provides an Appendix A that contains a supplement to the single-employer defined benefit plan model annual funding notice which replaces the MAP-21 supplement described in Appendix A of FAB 2013-01. For a 2013 applicable plan year, this supplement replaces the MAP-21 supplement in FAB 2013-01 only if the funding notice reflects the use of HATFA segment rates. Pending further guidance, the use of an appropriately completed model supplement, together with the model annual funding notice, satisfies the content requirements of ERISA Section 101(f)(2)(B) and (D).

EBSA will also treat a funding notice for a plan year beginning after December 31, 2012, that was issued before the issuance of FAB 2015-01 as satisfying the HATFA amendments to ERISA Section 101(f)(2)(D), if it reflects a good faith, reasonable interpretation of the amendments to that section.

FAB 2015-01 also provides that the model supplement is no longer required to state the value of plan assets or to include an accompanying explanation for any funding notice due after January 14, 2015.

Plan administrators of applicable single-employer defined benefit pension plans should be aware of how this guidance affects compliance with their annual funding notice requirements. Plan administrators should consult with their actuaries to determine how best to comply for the 2013 plan year (if these disclosures have not yet been provided). Plan administrators should also begin to determine how to handle the disclosures for the 2014 plan year.