n-04-62.pdf

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Part III. Administrative, Procedural, and Miscellaneous

Notice 2004-62

I. PURPOSE

The Internal Revenue Service, the Department of Labor's Employee Benefits
Security Administration ("EBSA") and the Pension Benefit Guaranty Corporation
("PBGC") are providing relief in connection with certain employee benefit plans because
of damage in Florida caused by Tropical Storm Bonnie, Hurricane Charley and
Hurricane Frances ("Florida Storms"). The relief provided by this notice is in addition to
the relief already provided by the Service to victims of the Florida Storms.

II. BACKGROUND

Section 412(a) of the Code and § 302(a) of the Employee Retirement Income
Security Act of 1974, Pub. L. No. 93-406 ("ERISA") provide that, in order for a plan to
meet the minimum funding standards of the Code and ERISA, the plan must not have
an accumulated funding deficiency as of the end of each plan year. Section 412(c)(10)
of the Code and § 302(c)(10) of ERISA provide that, for purposes of satisfying the
minimum funding requirements of the Code and ERISA, any contributions for a plan
year made by an employer by the end of the 8½-month period following the end of such
plan year are deemed to have been made on the last day of the year.

Section 412(d) of the Code and § 303 of ERISA provide for waivers of the
minimum funding requirements in the event of temporary substantial business hardship.
In order for a plan other than a multiemployer plan to receive such a waiver, § 412(d)(4)
of the Code and § 303(d)(1) of ERISA provide that an application for such a waiver must
be submitted no later than the 15
th
day of the 3rd month beginning after the close of the
plan year for which the waiver is sought. Thus, for example, in order for a plan to
receive a waiver of the minimum funding requirements for the plan year ending on June
30, 2004, the sponsor of the plan must have submitted an application by September 15,
2004.

Section 412(m)(1) of the Code and § 302(e)(1) of ERISA require that, with
respect to certain plans with a funded current liability percentage of less than 100
percent, a higher rate of interest be charged on any unpaid required quarterly
installments. Section 412(m)(5) of the Code and § 302(e)(5) of ERISA increase the
required quarterly installments to the amount needed to prevent a liquidity shortfall (as
defined in those sections). For a plan with a calendar-year plan year, the due dates for
the required installments for the 2004 calendar year are April 15, 2004, July 15, 2004,
October 15, 2004, and January 15, 2005.

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Section 412(n)(1) of the Code and § 302(f)(1) of ERISA provide that, with respect
to certain plans with a funded current liability percentage of less than 100 percent, if the
required installments or any other payment required under those sections are not made
to the plan before the due date for such installment or other payment, and if the
aggregate unpaid balance of such installments or other payments exceeds $1,000,000,
then there shall be a lien in favor of the plan. The lien may be perfected by the PBGC.

Section 7508A(b) of the Code provides that, in the case of a pension or other
employee benefit plan, or any sponsor, administrator, participant, beneficiary, or other
person with respect to such plan, affected by a Presidentially declared disaster or a
terroristic or military action, the Secretary of the Treasury may prescribe a period of up
to 1 year which may be disregarded in determining the date by which any action is
required or permitted to be completed. No plan shall be treated as failing to be
operated in accordance with its terms solely because the plan disregards any period by
reason of such relief. Parallel provisions are in Titles I and IV of ERISA.

Under the PBGC's premium regulations, contributions may be taken into account
for determining a plan's unfunded vested benefits for a premium payment year or a
plan's entitlement to the full funding limit exemption from the variable-rate premium for a
premium payment year if the contributions (1) are for a plan year before the premium
payment year and (2) are made on or before the earlier of (a) the due date for payment
of the variable-rate premium or (b) the date the variable-rate premium is paid (29 CFR
§§ 4006.4(b)(2)(iv) and 4006.5(a)(5)).

III. RELIEF

For any plan that is affected by the Florida Storms (an "Affected Plan"), if the
date described in § 412(c)(10) or 412(m) of the Code and § 302(c)(10) or 302(e) of
ERISA for making contributions falls within the period beginning on August 11, 2004,
and ending on October 14, 2004, then the date such contributions must be made is
postponed to October 15, 2004. If the date described in § 412(d)(4) of the Code and
§ 303(d)(1) of ERISA for applying for a waiver for an Affected Plan falls within the period
beginning on August 11, 2004, and ending on October 14, 2004, then the date such
waiver must be applied for is postponed to October 15, 2004.

For purposes of the notice, a plan is an Affected Plan only if any of the following
were located at the time of the Florida Storms in any of the Florida counties declared by
the President to be eligible for individual assistance under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288: the
principal place of business of the employer that maintains the plan (in the case of a
single-employer plan, determined disregarding the rules of § 414(b) and (c) of the
Code); the principal place of business of employers that employ more than 50 percent
of the active participants covered by the plan (in the case of a plan covering employees
of more than one employer, determined disregarding the rules of § 414(b) and (c)); the
office of the plan or the plan administrator; the office of the primary recordkeeper
serving the plan; or the office of the enrolled actuary or other advisor that had been

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retained by the plan or the employer at the time of the storms to determine the funding
requirements for which the due date falls between the period beginning on August 11,
2004, and ending on October 14, 2004. For purposes of the preceding sentence, the
term "office" includes only the worksite of those individuals, and the location of any
records, necessary to determine the plan's funding requirements for the relevant period.

The following rule applies under Title IV of ERISA for purposes of determining a
plan's unfunded vested benefits for a premium payment year or entitlement to the full
funding limit exemption from the variable-rate premium for a premium payment year.
For any plan for which this notice extends a date described in § 412(c)(10) of the Code
and § 302(c)(10) of ERISA, contributions for any plan year before the premium payment
year may be taken into account if they are made on or before the earlier of (1) the
extended § 412(c)(10)/§ 302(c)(10) date under this notice or (2) the date of the plan's
variable-rate premium filing (or, if applicable, amended variable-rate premium filing) for
the premium payment year.

DRAFTING INFORMATION

The principal authors of this notice are James E. Holland, Jr. and Roger Kuehnle
of the Employee Plans, Tax Exempt and Government Entities Division. For further
information regarding this notice, please contact the Employee Plans’ taxpayer
assistance telephone service at 1-877-829-5500, between the hours of 8:30 a.m. and
6:30 p.m. Eastern Time, Monday through Friday (a toll-free number). Mr. Holland may
be reached at (202) 283-9699 (not a toll-free number).

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