More retirement-related regulatory news for plan sponsors, including links to detailed information.
PBGC publishes 2015 Annual Report
According to the Pension Benefit Guaranty Corporation (PBGC) 2015 Annual Report, the agency paid $5.7 billion to more than 800,000 people in failed pension plans, similar to the amount of payments PBGC made in FY 2014.
The PBGC’s multiemployer insurance program reported a deficit of $52.3 billion, compared with $42.4 billion in fiscal year 2014. The larger deficit is due to changes in interest factors that increased multiemployer program liabilities. PBGC’s interest factors are used to measure the value of future benefit payments. The deficit increase was also driven by the identification of 17 additional multiemployer plans that are newly terminated or are projected to run out of money within the next 10 years.
To learn more about the annual report, click here.
Savings arrangements established by states for non-governmental employees
The Employee Benefits Security Administration has issued a proposed rule under the Employee Retirement Income Security Act of 1974 (ERISA) setting forth a safe harbor describing circumstances in which a payroll deduction savings program, including one with automatic enrollment, would not give rise to an employee pension benefit plan under ERISA. A program would be established and maintained by a state government, and state law would require certain private-sector employers to make the program available to their employees.
Several states are considering or have adopted measures to increase access to payroll deduction savings for individuals employed or residing in their jurisdictions. By making clear that state payroll deduction savings programs with automatic enrollment that conform to the safe harbor in the proposal do not establish ERISA plans, the objective of the safe harbor is to reduce the risk of such state programs being preempted if they were ever challenged. If adopted, this rule would affect individuals and employers subject to such laws.
To read the entire proposed rule, click here.
Interpretive bulletin – State savings programs
The Employee Benefits Security Administration has issued an interpretive outlining the views of the Department of Labor concerning the application of ERISA to certain state laws designed to expand the retirement savings options available to private sector workers through ERISA-covered retirement plans. Concern over adverse social and economic consequences of inadequate retirement savings levels has prompted several states to adopt or consider legislation to address this problem.
To read the entire interpretive bulletin, click here.
IRS schedules hearing regarding multiemployer plan administration
The IRS has issued a notice of public hearing on proposed regulations relating to the administration of a multiemployer plan participant vote on an approved suspension of benefits under the Multiemployer Pension Reform Act of 2014 (MPRA). The proposed regulations were issued on September 2, 2015.
The public hearing is being held on Friday, December 18, 2015, at 10 a.m. The IRS must receive outlines of the topics to be discussed at the public hearing by Monday, November 30, 2015.
To read the entire IRS Notice, click here.