Annual Funding Notice Changes for 2025
- Ellen
- Mar 31
- 2 min read
Updated: Apr 3
New Rules, New Data, Act Now
Attention DB plan sponsors with PBGC coverage: The April 30 deadline for distributing the 2024 Annual Funding Notice (AFN) is approaching for calendar-year plans. This year, getting a head start on this participant communication is crucial due to the numerous changes mandated by SECURE 2.0 that must be incorporated. These changes include new reporting requirements for assets, liabilities, funded status, and participant counts.
Specifically, the new requirements dictate that information previously reported at the beginning of the plan year must now be reported as of the end of the plan year. While this change allows for more timely information for participants, it places significant pressure on plan administrators and their service providers to expedite the gathering and reporting of data. A recent article from the attorneys at Proskauer Rose LLP offers a summary of the key changes for this year. The changes include reporting related to:
Plan funded status—determined as of the end of the year, rather than the beginning
Demographic data—determined as of the end of the year, and presented in tabular format for the last three plan years
Funding and investment policy—must include the “average return on assets” for the notice year
PBGC guarantees—additional disclosures include that the PBGC plan termination liability may be greater than the liabilities presented in the AFN.
Since the Department of Labor (DOL) has not yet released an updated model notice that reflects the changes from SECURE 2.0, plan administrators will need to make interpretations of the statutory language when developing appropriate disclosures. Plan administrators should carefully consider how to reflect these changes and ensure clarity and compliance in your participant communication.
If you haven't already started revising your model notice and collecting the data needed to satisfy the new reporting requirements for the upcoming April communication, the time to start is NOW!
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