The IRS has released Notice 2020-82 providing that it will treat a contribution to a single-employer defined benefit pension plan with a Jan. 1, 2021, extended due date under the CARES Act as timely if made no later than Jan. 4.
The CARES Act allows plan sponsors of single-employer defined benefit pension plans to postpone any required minimum contributions due in 2020 until Jan. 1, 2021. Notice 2020-82 extends this deadline to Jan. 4, the next business day, because Jan. 1 is a bank holiday and financial institutions will be unable to transfer funds on that date. The notice also provides other guidance regarding the extended due date including, but not limited to, that the amount of the minimum required contribution satisfied by the contribution, and the amount that may be added to the plan’s prefunding balance as a result of an excess contribution, is determined by computing the applicable interest adjustment using the actual contribution date.
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