Skip to main content
A Better Partnership

Publications

Apr 2020
22
April 22, 2020

No COVID-19 Deadline Extension for Annual Funding Notice

An annual funding notice (AFN) is required for all defined benefit plans (not defined contribution plans, like 401(k) or 403(b) plans) subject to the Employee Retirement Income Security Act of 1974 (ERISA). The AFN must be provided no later than 120 days after the end of each plan year. For pension plans with a calendar plan year, the 2020 deadline is April 29, 2020 (due to the leap year). Although the CARES Act allows the Department of Labor (DOL) to delay the AFN distribution deadline, the DOL has failed to do so. As a result, the April 29, 2020, distribution deadline still applies. 

With so many issues demanding attention amid the COVID‑19 pandemic, plan sponsors and plan administrators could easily miss this deadline. We are hopeful that the DOL will issue an extension; however, in the meantime, plan sponsors and plan administrators need to make arrangements for distributing the AFN by the April 29, 2020, deadline. 

(NOTE: The civil penalty for failure to timely provide the AFN is $110 per day payable to each participant or beneficiary who did not receive the AFN. This penalty is not imposed by the DOL, however. Instead, this penalty is assessed by the court, in its discretion. So, any participant or beneficiary entitled to receive a penalty payment may file a civil action in court for such relief. If the court awards the penalty, the penalty amount must be paid to each affected plan participant and beneficiary for the failure period.)

Visit Warner’s COVID Resource Center for the latest legal insight into COVID‑19 developments. 

Warner is here to help! If you need assistance with implementing the CARES Act provisions, please contact Lisa Zimmer, Kent Sparks or a member of Warner’s Employee Benefits and Executive Compensation Practice Group.

NOTICE. Although we would like to hear from you, we cannot represent you until we know that doing so will not create a conflict of interest. Also, we cannot treat unsolicited information as confidential. Accordingly, please do not send us any information about any matter that may involve you until you receive a written statement from us that we represent you.

By clicking the ‘ACCEPT’ button, you agree that we may review any information you transmit to us. You recognize that our review of your information, even if you submitted it in a good faith effort to retain us, and even if you consider it confidential, does not preclude us from representing another client directly adverse to you, even in a matter where that information could and will be used against you.

Please click the ‘ACCEPT’ button if you understand and accept the foregoing statement and wish to proceed.

ACCEPTCANCEL

Text

+ -

Reset