IRS Issues Guidance Regarding ARPA Multiemployer Plan Relief Rules

The American Rescue Plan Act (ARPA) provided relief from certain annual notice and funding requirements to multiemployer plans reeling from COVID-19-related investment and experience losses. IRS Notice 2021-57, issued on October 8, 2021, gives plan sponsors a roadmap for electing relief.

Highlights of the notice include:

• Freeze elections: A multiemployer plan's actuary will annually certify its funding status, on a scale ranging from "neither endangered or critical" to "critical and declining." Under ARPA Section 9701, a plan sponsor may elect to carry over the plan's zone status from the previous plan year and operate the plan pursuant to the more favorable requirements of the prior year's status. This "freeze" election is available for the first two plan years beginning on or after March 1, 2020. If the plan sponsor freezes at endangered or critical status, then no new or updated rehabilitation or improvement plans are required until the plan year following