April 3, 2020
Ms. Carol Weiser Mr. Preston Rutledge
Benefits Tax Counsel Assistant Secretary of Labor
U.S. Department of the Treasury Employee Benefits Security Administration
1500 Pennsylvania Ave, NW U.S. Department of Labor
Washington, DC 200 Constitution Avenue
Washington, DC 20210
Ms. Victoria Judson Mr. Gordon Hartogensis
Associate Chief Counsel Director
Internal Revenue Service Pension Benefit Guarantee Corporation
1111 Constitution Avenue, NW 1200 K St, NW
Washington, DC 20224 Washington, DC 2000
Dear Ms. Weiser, Mr. Rutledge, Ms. Judson, and Mr. Hartogensis:
Because of the COVID -19 pandemic, The U.S. Chamber of Commerce’s (the Chamber ) member s are facing
both economic and staffing challenges. Human resources and benefit s departments are scrambli ng to respond to
the current crisis , and many members do not have any employees physically present in their offices to perform
administrative functions, such as preparing and mailing required employee benefit notices . Because of the current
financial and staffing constraints, we request, among other items, that 1) the Agencies delay employee benefit
plan reporting and disclosure to the full extent allowed by law; 2) provide for good faith compliance; and 3) allow
employers additional time to comply wi th specific notice requirements.
As always, the Chamber and our members appreciate your attention to these matters, especially at a time when
the Agencies are under similar staffing constraints as our members.
The Department of the Treasury and Internal Revenue Service
Reporting and Disclosure Delay
Under Code Section 7508A, the Secretary of the Treasury has the authority to delay time sensitive deadlines due
to a federally declared disaster under the Robert T. Stafford Disaster Relief and Emergency Assis tance Act on a
state by state basis. 1 With respect to pensions or other employee benefit plans, the Secretary of the Treasury may specify a period of up to one year w hich may be disregarded in determining the date by which any action is
required or permitted to be completed under the Internal Revenue Code (Code) . In the past, the Secretary of the
Treasury extended relief to the taxpayer in the disaster area and to taxpayers whose r ecords necessary to meet a
deadline are in the covered disaster area.
In the past, disaster relief was based on a set incident period. However due to the unique nature of the COVID -
19 pandemic , the current declared disasters have a start date of January 20, 2019 and are “continuing”.
Furthermore, each day new states are a dded to the list of federally declared disaster areas for COVID -19 . The
Chamber appreciates that the Secretary of th e Treasury may not be able to provide official guidance until there is
an end date. However, the Chamber urges the Secretary of the Treasury to 1) assure the employee benefit plan
community that once an end date is established, relief will apply for any actions on and after January 2 0, 2020;
and 2) implement a delay to the full extent of his authority with respect to employee benefit plans, namely up to
one year from any due date. This delay is especially important because the COVID -19 pandemic not only has
severely impacted plan spon sors’ businesses but the ir v endors ’ businesses as well , which means that plan
sponsors may not be able to obtain the needed information for some forms. Plan sponsors and their vendors
will be further hampered by the increased participant requests for loan s, loan modifications, hardship
withdrawals and other distributions .
Finally, because the P ension Benefit Guarantee Corporation (PBGC) follows the IRS disaster relief, information
to the employee benefit community that relief is expected and expected to the full extent possible will ease both
administrative and financial burdens for many employers with respect to PBGC payments and filings at a time
when cash flow is at a premium. 2
A defined benefit plan, money purchase plan or target benefit plan must distribute benefits in the form of a
Qualified Joint and Survivor Annuity (QJSA) to a married participant unless the participants elects a different
form and obtains spousal consent. Code §§ 410(a)(11); 417(a), (b). The spouse’s consent must acknowledge the
effect of the election and be witnessed by a plan representative or a notary public. Code § 417(a)(2)(A)(i).
Genera lly, a defined contribution plan will not require spousal consent for a distribution (including a loan or
hardship withdrawal ) if certain requirements are met. Code § 401(a)(11)(B)(iii); Treas. Reg. § 1.401(a) -20, Q&A 3.
Given the current situation of many employees working remotely and many regions with stay at home orders , a
plan representative likely cannot witness such consent and the participant may not be able to have it notarized.
We request that the IRS should provide that a plan wi ll not be disqualified for making a distribution other than a
QJSA with a spousal consent that is not notarized or witnessed by a plan representative if the plan administrator
makes a good -faith diligent effort under the circumstances to comply with those requirements and obtains such
documentation as soon as reasonably possible. To the extent a defined contribution plan would require consent
for a distribution, the same rue should apply.
Safe Harbor Plans
Safe harbor plans are not subject to the Actual Def erral and Actual Contribution Percentage (ADP/ACP) testing
or the top heavy rules. Code §§ 401(k)(12);(13);(m)(10); (11); and 416(g)(4)(H) . Nothing in the Code provides
how a plan may be amended mid -year to reduce or suspend a safe harbor contribution, when the amendment is
effective or any required notice. The only statutory notice requirement is the initial notices to all eligible employees that must be provide d within a r easonable time before any year and be sufficiently accurate and
comprehensive to “apprise the employee of such rights and obligations.” Code § 401(k)(12)(d).
By regulation (Treas. Reg. § 1.401(k)(12)(g) ), the IRS provides that a safe harbor match or nonelective
contribution may only be amended during the plan year if:
- The employer either
- Is operating at an economic loss (defined in Code Section 412(c)(2)(A)) for the plan year; or
- Included a statement in the initial safe harbor notice that the plan may be amended during the plan year to reduce or suspend the matching or nonelective contributions but only 30 days after a supplement notice of suspension is provide;
- All employees are provided a supplement notice of amendment or suspension ;
- The reduction or suspension is effective no earlier than the later of the date the plan amendment is adopted or 30 days after the supplemental notice is provided;
- Eligible employees a re given a reasonable opportunity after receiving the notice and before the reduction or suspension to change their election;
- The plan is amended to provide that the ADP/ACP test will be satisfied for the entire plan year using the current year testing; and
- The plan satisfied the safe harbor provisions through the date of the plan amendment.
Because of the current economic situation, employers may need to suspend or reduce the safe harbor match or
nonelective contribution to maintain the cash flow needed to meet payroll and other operati ng needs. T he
Chamber requests that through the end of the 2020 plan year, any reduction or suspension is effective on the
date of the plan amendment if an employer provide s the supplemental, regulatory notice no later than 90 days
after the date of the amendment.
The Chamber also requests that the Treasury and IRS consider a top heavy safe harbor for 2020 plan year to
avoid plans from terminating as a way to comply with the top heavy rules if a match or nonelective safe har bor
contribution is suspended or amended mid -year .
Extend the Cash Balance Determination Letter Deadline
In Revenue Procedure 2019 -20, the IRS expanded the determination letter program for statutory hybrid plans
from September 1, 2019 to August 31, 2020. Given the COVID -19 pandemic , the Chamber req uests that this
program be extended to August 31, 2021 .
Department of Labor and Pension Benefit Guarantee Corporation
Reporting and Disclosure Delay
ERISA Section 518 mirrors Code Section 7508A to provide that with respect to a pension or other employee
benefit plan affected by a Presidentially declared natural disaster, the Secretary may prescribe a period of up to
one year which may be disregarded in determining the date any action is required or permitted to be completed
under the Employee Retirement Income Security Act ( ERISA ). The Coronavirus Aid, Relief, and Economic
Security Act ( CARES A ct) amended ERISA Section 518 to add “a public health emerg ency declared by the
Secretary of Health and Human Services” as an additional reason for a delay.
Similar to the Treasury request, The Chamber urges the Secretary of Labor to 1) assure the employee be nefit
plan community that once an end date is established for Presidentially declared COVID -19 disaster s, relief will
apply for any actions on and after January 20, 2020; 2) implement a delay to the full extent of his authority with
respect to employee benefit p lans, namely up to one year from the due date; and 3) waive any penalties if the
required actions or notices are completed by the extended deadline. Not only should this apply to the Form
5500, but also to any other required notice such as the annual fundi ng notice under ERISA Section 101(f) (29
U.S.C. § 1021(f) )) and penalties under ERISA Section 502(c) (29 U.S.C. § 1132(c) ). Immediate DOL action on
the annual funding notices is critical because these notices are due on April 29, 2020 for calendar year plans, and
many employers currently do not have the staff available to meet this deadline.
Notice of Required Payment Failure
If an employer fails to make a quarterly or other required contribution to a defined benefit plan, the employer
must provide each participant, beneficiary and alternate payee a notices stating that the employer did not make
the required contributions. ERISA § 101(j) ; (29 U.S.C. § 1021(d) . The notice must be given before the 60 th day
following the due date of the quarter ly or other contri bution.
The CARES Act allows a plan sponsor to delay any required quarterly minimum contributions due during
calendar year 2020 until January 1, 2021, subject to interest from the original due date at the “effective rate of
interest for the plan for the pl an year which includes such payment date.” Although the CARES Act allows a
plan sponsor to delay quarterly payments, it is unclear whether the notice requirement under ERISA Section
101(j) (29 U.S.C. Section 1021(d) ) applies.
The Chamber recognizes the importance of these notices ; however , given that many employers that will need to
take advantage of the CARES Act r elief will not have the staffing bandwidth to draft and send these notices, the
Chamber requests that the Secretary of Labor allow employers that use this funding relief to provide a one -time
notice to participants and b eneficiaries 60 days after the contribution is due under the CARES Act.
Failure to make a required contribution is a PBGC reportable event. ERISA § 4043(c)(5) ; 29 U.C.C. § 134 3(c)(5) ;
and 29 C.F.R. § 4043.25 . An employer must file the Form 10 with the PBGC within 30 days of the reportable
event ; however, an employer may instead file the Form 200 within 10 days of the due date for a missed
contribution . The Chamber requests that if an employer makes any 2020 quarterly contribution by the date
specified in the CARES Act, any missed contributions in 2020 will not be considered a reportable event and
neither the Form 10 nor Form 200 will be required.
Good Faith Compliance
As noted a bove, human resource and benefit staff and service provide rs are under tremendous strain because of
the COVID - 19 pandemic . A lthough employers and plan sponsors are working as diligently as possible to ensure
their employee benefit plans remain in complianc e, we urge the D epartment of L abor to issue guidance that it
will not take action with respect to employee benefit compliance issues during this period similar to what it has
issued during other natural disasters, including
- Verification Procedures for Plan Loans and Distributions ;
- Participant Co ntributions and Loan Repayments ;
- Blackout Notices ;
- ERISA Claims Compliance; and
- Form 5500 Filings
The Chamber sincerely app reciates the Agencies ’ attention to these and other employee benefit issues at this
critical time. If you have any questions, please feel free to reach out to me directly.
Executive Director, Retirement Policy
Cc: Jeanne Klinefelter Wilson