The Infrastructure Investment and Jobs Act (IIJA) signed by President Biden on November 15 extends interest rate stabilization provisions enacted by the American Rescue Plan Act (ARPA) and provides automatic extension of certain tax and retirement deadlines following declared disasters.
When ARPA was enacted in March, it provided interest rate stabilization and extended amortization for defined benefit pension plans. The new law will delay the phaseout of the ARPA interest rate stabilization provisions. Under the IIJA, the 5% corridor around the 25-year interest rate averages will remain in effect through 2030 (rather than 2025 as under ARPA) and gradually widen by 5 percentage points each year until it reaches 30% according to the following schedule:
| Applicable corridor | ARPA | IIJA |
|---|---|---|
| 95% – 105% | 2020 (or 2021 or 2022, as elected) – 2025 | 2020 (or 2021 or 2022, as elected) –2030 |
| 90% – 110% | 2026 | 2031 |
| 85% – 115% | 2027 | 2032 |
| 80% – 120% | 2028 | 2033 |
| 75% – 125% | 2029 | 2034 |
| 70% – 130% | 2030 and later | 2035 and later |
The new law also establishes automatic extensions of certain tax and retirement deadlines when federal financial assistance is provided for a disaster declared by the president under the Robert T. Stafford Disaster Relief and Emergency Act.
The new automatic extensions only apply to certain deadlines, including:
The automatic extensions do not apply to every benefit-related deadline. They do not automatically extend deadlines for filing Form 5500, making required minimum distributions, distributing excess deferrals or repaying retirement plan loans, or many other provisions that are described in section 8 of Revenue Procedure 2018-58, which lists time-sensitive employee benefit deadlines that may be postponed as a result of a disaster.
For deadlines that are postponed under the IIJA, the extended time frame generally will begin on the earliest incident date related to the disaster and end on the later of 60 days after the initial incident date or 60 days after the disaster declaration was issued. This provision overrides regulations finalized by the Treasury Department and IRS earlier this year, under which deadline extension provisions in the Setting Every Community Up for Retirement Enhancement Act apply only when the Treasury and IRS first exercise discretionary authority to extend deadlines following a disaster.
