Departments Issue Proposed Rule on Determination of Target Normal Cost and Funding Target for Single-Employer DB Plans; Comments Due October 19

Published August 19, 2026

The U.S. Department of Treasury (Treasury) and the Internal Revenue Service (IRS) issued proposed rules that would modify rules in the existing regulations relating to the minimum funding requirement applicable to single-employer defined benefit (DB) pension plans. The modifications include changes to the rules relating to the determination of a plan’s target normal cost and funding target and would implement certain statutory amendments that have not yet been reflected in the regulations. The proposed rules would affect participants in, beneficiaries of, employers maintaining, and administrators of single-employer defined benefit plans. 

The proposed rules would facilitate the adoption of amendments that increase benefits. Under the rules, such amendments adopted after the end of the plan year can be taken into account in determining the actuarial results for a plan year which, in turn, will result in an increased deductible limit for the taxable year for the plan sponsor. 

The proposed rules would also:

  • Clarify the plan related expenses that are includable in target normal cost,
  • Provide rules for plans, that are adopted after the end of a plan year,
  • Provide rules for when certain plan amendments must be taken into account in the actuarial results for a plan year,
  • Extend the deadline for making certain changes in actuarial assumptions or funding methods, and
  • Make minor changes to the rules for actuarial assumptions to eliminate references to statutory provisions that are no longer applicable and to conform them to other regulatory provisions. 

The rules are proposed to apply to plan years beginning on or after 6 months after the date of publication of the Treasury decision adopting these amendments to the rules as final rules in the Federal Register.

Comments are due October 19, 2026.