At the end of March 2020, the CARES Act was signed into law. One impact of this legislation for defined benefit plan sponsors is that any contributions that were required during 2020, either quarterly contributions or those to satisfy minimum requirements, can be delayed until January 1, 2021. However, sponsors with materially underfunded plans are facing the prospect of rising Pension Benefit Guaranty Corporation (PBGC) premiums, and many are considering lump sum offerings or other risk transfer activities in order to reduce the size of the pension plan on the corporate balance sheet, an activity which may further strain the funded status of the plan.
