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DOL Guidance on Annual Funding Notice Requirement Changes for Defined Benefit Plans

  • Writer: Boutwell Fay
    Boutwell Fay
  • Apr 10
  • 2 min read

Updated: Apr 10


Section 343 of the SECURE 2.0 Act of 2022 amended Section 101(f) of ERISA which relates to the annual funding notice (“AFN”) requirements for defined benefit pension plans for plan years beginning after December 31, 2023.


On April 3, 2025, the DOL issued Field Assistance Bulletin No. 2025-02 (the “FAB”) to clarify the amended law. The FAB includes updated model AFNs for use by single employer and multiemployer plans. Plan Administrators may no longer rely on the prior model notices contained in the ERISA regulations. AFNs under the new law will be due April 30, 2025, for calendar year plans.


Plan administrators are required to furnish the AFNs to participants, beneficiaries, the Pension Benefit Guaranty Corporation, and other parties under ERISA. The amended law requires the plan’s funding levels to be disclosed on the AFNs as the percentage of plan liabilities funded – the ratio between the fair market value of assets and the value of liabilities, rather than as the funding target attainment percentage (FTAP) under prior law.


Under the amended law, AFNs must include specified demographic information that show a breakdown of the number of retired, terminated vested and active participants for the notice year and two preceding plan years. The FAB clarifies that small plans must use accurate numbers for the notice year, and large plans may rely on reasonable estimates if accurate numbers are not available at the time the AFN is due. All plans must use actual numbers for the two preceding plan years.


Please contact our attorneys if you have questions about how the new requirements impact the operation of your defined benefit plan.


 

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