The Treasury Department and the Internal Revenue Service issued guidance on new pension-funding rules included in the Pension Protection Act of 2006.

Notice 2008-21 announces that none of the proposed funding regulations will be effective before the first plan year beginning on or after Jan. 1, 2009. Employers may rely on the regulations during 2008, however. The notice announces a later effective date than originally proposed for certain proposed regulations under Sections 430 and 436 of the Tax Code, as added by the Pension Protection Act.

For plan years beginning before Jan. 1, 2009, employers may generally rely on a reasonable interpretation of the funding rules in the statute and on the proposed regulations. The notice also provides transitional relief to small plans with end-of-year valuation dates for purposes of applying the applicable benefit restrictions for underfunded pension plans for 2008.

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