New DOL Guidance for Pension Plan Sponsors – What Employers Need to Know

On April 3, 2025, the U.S. Department of Labor (DOL) issued important new guidance for employers that sponsor defined benefit (pension) plans. This guidance provides new model notices and addresses several outstanding questions on annual funding notice (AFN) changes under the SECURE 2.0 Act of 2022 ("SECURE 2.0").

Whether you’ve already prepared your AFN or are just getting started, this guidance will shape how plan sponsors meet their compliance obligations in 2025 and beyond.

Key Highlights from the DOL Guidance

• New Model Notices – You can use and rely on new model notices (one for single-employer and one for multi-employer plans) provided in the guidance. You can no longer rely on the prior model notice provided in the 2015 regulations.
• Model Language for PBGC Guarantee Levels – Under SECURE 2.0, you now must tell participants that the PBGC may pay more than the guaranteed amount upon plan termination. In this guidance, the DOL provides model language for that disclosure.
• Relief for Reporting the Most Recent Plan Year-End Funding Level – Under SECURE 2.0, you must now use end-of-year figures, instead of first-of-the-year figures. To make this change easier on employers, the DOL says you can use reasonable estimates to determine year-end liabilities for the most recent plan year. For the two prior plan years, you must use end-of-year figures and those figures should match what is reported on the plan’s Form 5500 for the applicable year.
• Relief for Reporting Most Recent Plan Year-End Demographics – Under SECURE 2.0, you must now use end-of-year figures, instead of first-of-the-year figures. The DOL says, until it issues further guidance, you can use estimates for the most recent plan year as long as you disclose the use of estimates in the AFN.
• Two Methods for Determining "Average Return on Assets" – Under SECURE 2.0, you must now report the plan’s "average return on assets." The DOL says you can use any method that complies with SECURE 2.0, and offers two specific methods that will work: one that is similar to the method used to determine the "actual rate of return" on Line 10 of Schedule SB to Form 5500, and another that is similar to the method used to calculate the "estimated investment return – current (market) value" on Line 6h of Schedule MB to Form 5500.
•  No At-Risk Disclosures – The DOL clarifies that you do not have to disclose at-risk liabilities or take the at-risk rule into account in determining plan liabilities. This rule, which applied to plans that did not meet minimum funding requirements, was eliminated by SECURE 2.0.

Important Deadline

For large calendar-year plans, the AFN for the plan year ending December 31, 2024, must be furnished by April 30, 2025.

What If You’ve Already Sent Your AFN?

If you've already prepared and/or distributed your AFN for the 2024 plan year using a good-faith interpretation of SECURE 2.0, you're covered — no need to revise it. That said, we recommend reviewing the new guidance and consider adopting the updated model notice in 2026 and beyond.

Questions?

Our Employee Benefits & Executive Compensation team is here to help. Please reach out to any member of the group or your regular Smith Anderson contact with questions or to discuss how this new guidance may affect your plan.

Special thanks to contributing author Kathy Lockhart, Smith Anderson senior paralegal.