Each year, administrators of multiemployer pension plans are required by federal law to share important information about the financial health of their plan. One of the tools available to meet this requirement is the Department of Labor’s Model Annual Funding Notice, outlined under ERISA Section 101(f). While the use of this model notice is optional, it provides a standardized way for Plan administrators to ensure compliance with disclosure regulations and communicate vital information to plan participants and beneficiaries.
What Is the Annual Funding Notice?
The Annual Funding Notice offers a snapshot of the pension plan’s financial condition for a specific plan year. It includes:
- The plan’s funded percentage – a measure of how well the plan’s assets cover its liabilities.
- The fair market value of the plan’s assets.
- Participant and beneficiary statistics.
- The Plan’s funding status designation (such as endangered, critical, or critical and declining).
- Basic information about benefit guarantees offered by the Pension Benefit Guaranty Corporation (PBGC).
This notice is for informational purposes only. Participants are not required to take any action upon receiving it, but it provides transparency into the Plan’s status and outlines any funding strategies or recovery actions the plan is taking.
Important Compliance Considerations
Although the model notice simplifies the process of meeting disclosure requirements, plans may choose to create their own version—so long as it includes all necessary information as outlined by ERISA Section 101(f). The current version of the model notice, accompanied by OMB Control Number 1210-0126 (expiring 09/30/2026), is subject to the Paperwork Reduction Act. The Department of Labor estimates it takes approximately 21 hours for plan administrators to complete the model.
It’s important to note that if your plan has received or is eligible for special financial assistance from the PBGC under Section 4262 of ERISA, this model does not include the required supplemental language. In such cases, plan administrators should refer to Field Assistance Bulletin 2023-01 to ensure full compliance.
Why This Matters
The model notice helps ensure that plan participants and beneficiaries are well-informed about the financial standing of their retirement benefits. Transparency around plan funding supports informed decision-making, fosters trust in plan governance, and aligns with fiduciary responsibilities.
If you need further guidance or have any questions on this topic, we are here to help. Please do not hesitate to reach out to discuss your specific situation. For more general information about the PBGC and its role in protecting pension benefits, visit www.pbgc.gov/prac/multiemployer.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
