On November 21, 2012, the IRS issued Notice 2012-70, which extends the deadline to amend a defined benefit plan to satisfy the requirements of Internal Revenue Code (IRC) Section 436 to the latest of:

IRC Section 436 was added by the Pension Protection Act of 2006 and sets out a series of limitations on the accrual and payment of benefits under an underfunded plan. In Notice 2011-96, which Notice 2012-70 modifies, the IRS had provided that interim amendments to satisfy the requirements of IRC Section 436 were generally required to be adopted by the last day of the first plan year beginning on or after January 1, 2012.

IRC Section 411(d)(6) generally provides that a plan may not be amended to decrease a participant's accrued benefit. Under the notice, if the adoption of the amendment (by the deadline) causes a plan to eliminate or reduce an IRC Section 411(d)(6) protected benefit and the elimination or reduction is made solely to satisfy IRC Section 436, the elimination or reduction does not cause the plan to fail to meet the anti-cutback requirements of IRC Section 411(d)(6).

For more information on plan amendments that must be adopted by the end of the 2012 plan year, see Article, Required 2012 Qualified Retirement Plan Amendments and Cycle B Determination Letter Filing Deadline.

For a sample IRC Section 436 amendment with integrated notes and important explanations and drafting tips, see Standard Clauses, Plan Language, Benefit Limitations under IRC Section 436 for Defined Benefit Plans.