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Regulatory roundup

February 23rd, 2015 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

PBGC seeks comments on Multiemployer Pension Reform Act (MEPRA) of 2014
The Pension Benefit Guaranty Corporation (PBGC) filed a request for information (RIF) to inform future PBGC guidance under section 4231 and 4233 of ERISA. PBGC is seeking comments from all interested stakeholders, including multiemployer plan participants and beneficiaries, organizations serving or representing such individuals, multiemployer plan sponsors and professional advisors, contributing employers, unions and other interested parties.

To read the entire RIF, click here.

PBGC posts FAQs on MEPRA
The PBGC has published a set of frequently asked questions (FAQs) regarding the MEPRA. The FAQ consists of 10 questions and answers. The PBGC will continue to update this FAQ web page to reflect changes.

To view the FAQs, click here.

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Tools for multiemployer pension plans in critical and declining status

February 17th, 2015 No comments

The Multiemployer Pension Reform Act of 2014 (MEPRA) was part of the Consolidated and Further Continuing Appropriations Act of 2015, which was signed by President Obama in December. One of the major changes MEPRA has made is the creation of a new status for very poorly funded plans called “critical and declining status.” In this Multiemployer Review, Milliman consultants Robert Behar, Nina Lantz, and Victor Harte define this new status and outline major rules and procedures related to plan mergers, plan partitions, and benefit suspensions.

Regulatory roundup

February 17th, 2015 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

IRS schedules phone forums on retirement plan loans and second Cycle E determination letter application process

The Internal Revenue Service (IRS) has announced it will be holding two phone forums:

1. Retirement plan loans to participants (March 26, 2015)
• What type of plans can make loans to participants;
• What are the conditions a plan must follow to make loans;
• What are the required terms of a plan loan;
• How may plan loans be taxable under IRC Section 72(p);
• When do plan loans violate the prohibited transaction rules of IRC Section 4975;
• How to fix plan errors involving loans.

To register, click here.

2. Highlights of the second Cycle E determination letter application process (March 5, 2015)
• Who may submit during the second Cycle E;
• What you must include with your application;
• How we will process your application;
• What are the new reference lists;
• What changes you must make to your plan (Notice 2014-77 – 2014 cumulative list).

To register, click here.

Request for comments on MEPRA’s benefit suspension provisions
The Department of the Treasury invites public comments with regard to future guidance required to implement provisions of the Multiemployer Pension Reform Act of 2014, Division O of the Consolidated and Further Continuing Appropriations Act, 2015, Public Law No. 113-235 (MPRA). MPRA generally permits a sponsor of a multiemployer defined benefit plan that is in critical and declining status to suspend certain benefits following the provision of specified notice, consideration of public comments, approval of an application for suspension, and satisfaction of other specified conditions (including a participant vote).

The request for comments is scheduled to be published in the Feb. 18 Federal Register. Comments are due 45 days after publication.

To read the request, click here.

Multiemployer Review: Multiemployer Pension Reform Act of 2014

February 4th, 2015 No comments

This Multiemployer Review summarizes provisions of the Multiemployer Pension Reform Act (MEPRA) that were included in the Consolidated and Further Continuing Appropriations Act of 2015 (P.L.113-235). The MEPRA provisions that apply to all multiemployer plans are discussed first, followed by provisions that impact plans depending on their Pension Protection Act (PPA) zone status (green zone or endangered status, endangered status, endangered and critical status, and critical status).

Regulatory roundup

February 2nd, 2015 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

DOL issues final rule on DB plan annual funding notice requirements
The U.S. Department of Labor (DOL) has released its final rule on the annual funding notice requirement for defined benefit plans. The rule will become effective 30 days after February 2 with an applicability date of plan years beginning on or after January 1.

To read the entire rule, click here.

PBGC announces OMB approval of standard and distress terminations and missing participants forms and instructions
The Office of Management and Budget (OMB) has approved revisions to the standard and distress termination forms and instructions. The new forms and instructions can be found on the plan terminations page of the Pension Benefit Guaranty Corporation (PBGC) website. Under the revisions, a plan administrator of a plan terminating in a standard termination (or a distress termination that closes out in the private sector) must submit with the post-distribution certification the most recent plan document and proof of benefit distributions for lump sums paid and annuities purchased.

Plan administrators must provide this information with any post-distribution certification filed on or after March 1, 2015. Filers may contact standard@pbgc.gov or distress@pbgc.gov for more information.

IRS updates its rollover-eligible retirement plans and IRA combinations chart for 2015
The Internal Revenue Service (IRS) has published a one-page summary listing the eight plans and IRAs that can make rollover-eligible distributions as well as the corresponding eight plans and IRAs into which those distributions can or cannot be rolled over.

For more information, click here.

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Regulatory roundup

January 26th, 2015 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

PBGC announces Section 4062(e)—new law is enacted
On December 16, President Obama signed into law H.R. 83, which made major changes to the provision of ERISA that created liability in certain situations where there was a reduction in active participants in a plan as a result of a cessation of operations (Section 4062[e]).

With the new law in effect the Pension Benefit Guaranty Corporation (PBGC) will not continue the six-month moratorium on the enforcement of Section 4062(e) that expired December 31.

The new law generally applies both to future cessations of operations and to those that have already occurred, except where a settlement agreement was entered into before June 1, 2014. The PBGC has outlined some of the major changes in the law and provided a point of contact for questions here. Further guidance will be issued in the future.

PBGC seeks OMB approval of modifications to Forms 10, 10-A, and 200
The PBGC has issued Forms 10 and 10-Advance (10-A) and related instructions under subparts B and C. The PBGC has also issued Form 200 and related instructions under subpart D. The approval of the Office of Management and Budget (OMB) for both of these collections of information expires March 31, 2015. The PBGC intends to request that OMB extend its approval for three years with modifications.

IRS issues relief for certain participants in Section 414(d) governmental plans
The Internal Revenue Service (IRS) has issued Notice 2015-07. The notice announces that the IRS and U.S. Treasury Department anticipate issuing proposed regulations that would permit a state or local retirement system that is a governmental plan (within the meaning of section 414[d]) to cover public charter school employees if certain requirements are satisfied. The notice also announces that broader transition relief will be addressed in the proposed regulations. The notice includes a request for public comments.

To read Notice 2015-07, click here.

IRS posts 2014 reference list of changes in qualification requirements for retirement plans
The IRS has published a 2014 reference list, which contains items that first appeared on the 2014 cumulative list of changes in plan qualification requirements.

• Determination letter applications: For an individually designed plan submitted on Form 5300, complete the five reference lists for the five years of your remedial amendment cycle (RAC). These are the years covered by the cumulative list applicable to your submission. For an employer adopting a volume submitter plan and submitting on Form 5307, complete the six reference lists for the six years in your RAC.
• Interim amendments: Complete each year’s reference list to check whether your plan document is up-to-date. If you missed any relevant amendments, your plan may have a qualification failure and you must correct the error.

To download the reference list, click here.

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Regulatory roundup

January 19th, 2015 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

PBGC submits draft forms and instructions for premium filings to OMB
On January 12, the Pension Benefit Guaranty Corporation (PBGC) submitted draft forms and instructions for 2015 premium filings under the Paperwork Reduction Act to the Office of Management and Budget (OMB) for review. Included in the OMB submission is a supporting statement addressing, among other things, public comments received on new questions related to certain lump-sum windows and annuity purchases.

Comments are due to OMB by February 11, 2015. For more information, click here.

PBGC posts increase in 2015 flat-rate premium for multiemployer plans
The Multiemployer Pension Reform Act of 2014 increased the 2015 flat-rate premium for multiemployer plans from $13 to $26 per participant. The PBGC has updated its website to reflect this increase.

For more information, click here.

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Regulatory roundup

January 12th, 2015 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

PBGC requests OMB approval for reporting of pension plan de-risking measures
The Pension Benefit Guaranty Corporation (PBGC) is modifying the collection of information under its regulation on payment of premiums and is requesting that the Office of Management and Budget (OMB) approve the revised collection of information under the Paperwork Reduction Act for three years.

PBGC is revising the 2015 filing procedures and instructions for payment of premiums to require after-the-fact reporting of certain risk transfers through lump-sum windows and annuity purchases. Risk transfers can substantially reduce the premiums that plans otherwise would pay to PBGC. Because PBGC premiums and the investment income earned on them are a major source of income for PBGC, information about risk transfers is critical to its ability to assess its future financial condition. There is currently no available comprehensive, detailed, and reliable source for information on risk transfers.

PBGC is also changing certain premium declaration certification procedures, offering the option for a plan to provide a telephone number specifically for inclusion in the PBGC Search Plan List on its website, updating the premium rates (including reflecting the Consolidated and Further Continuing Appropriations Act, 2015, Pub. L. 113-235), and making conforming, clarifying, and editorial changes.

To read the entire notice, click here.

PBGC issues changes to ERISA Section 4062(e)
This announcement provides information about two important changes regarding ERISA Section 4062(e). First, on December 16, 2014, the president signed into law H.R. 83, which made major changes to section 4062(e). Second, the PBGC is ending the moratorium on enforcement of 4062(e) cases that it announced in July 2014.

For more information on the changes to ERISA Section 4062(e), click here.

IRS updates 2015 revenue procedures for employee plans and exempt organizations
The Internal Revenue Service (IRS) published its January 2, 2015, Internal Revenue Bulletin, which includes the various revenue procedures, revised for 2015, for issuing letters, rulings, determination letters, and technical advice on specific issues related to employee benefits. The documents are:

• Rev. Proc. 2015-1
• Rev. Proc. 2015-2
• Rev. Proc. 2015-3
• Rev. Proc. 2015-4
• Rev. Proc. 2015-5
• Rev. Proc. 2015-6
• Rev. Proc. 2015-7
• Rev. Proc. 2015-8

For an electronic version of Internal Revenue Bulletin 2015-1, which contains these revenue procedures and user fee schedules, click here.

IRS provides guidance on automatic approval of change in funding method for takeover plans
The IRS has released Announcement 2015-03, providing guidance on the automatic approval of a change in funding method for single-employer defined benefit plans under certain circumstances in which the change in method results from a change in a plan’s enrolled actuary.

To read Announcement 2015-03 in its entirety, click here.

PBGC publishes First Annual Report of the Participant and Plan Sponsor Advocate
The PBGC has released the first annual report of the participant and plan sponsor advocate.

To read the entire report, click here.

DOL issues fact sheet on EBSA’s enforcement efforts
Through its enforcement of ERISA, the Employee Benefits Security Administration (EBSA) of the U.S. Department of Labor (DOL) is responsible for ensuring the integrity of the private employee benefit plan system in the United States. EBSA’s oversight authority extends to nearly 684,000 retirement plans, approximately 2.4 million health plans, and a similar number of other welfare benefit plans, such as those providing life or disability insurance. These plans cover about 141 million workers and their dependents and include assets of over $7.6 trillion (as of October 29, 2014). In FY 2014, EBSA recovered $599.7 million for direct payment to plans, participants, and beneficiaries.

For more information, click here.

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Regulatory roundup

December 29th, 2014 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

IRS issues guidance on rollovers of after-tax contributions in retirement plans
Prior to the issuance of Notice 2014-54, the Internal Revenue Service (IRS) treated disbursements from a retirement plan that were rolled over to multiple destinations as separate distributions to each destination, with each distribution treated as containing a pro rata portion of the pretax and after-tax amounts. Notice 2014-54, which was issued September 18, 2014, provides that all disbursements from a retirement plan scheduled to be made at the same time are treated as a single distribution even if they are sent to multiple destinations.

As a result of this notice, taxpayers with pretax and after-tax amounts in their plans, for example, can transfer through direct rollovers the pretax portion of the distribution (including earnings on after-tax amounts) to a traditional IRA and the after-tax portion of the distribution to a Roth IRA. (Previous interpretations allowed accomplishing this result through 60-day rollovers but not direct rollovers.) The guidance provided in Notice 2014-54 applies only to distributions from qualified plans described in section 401(a) of the Code (such as profit-sharing and 401[k] plans), section 403(b) plans, and section 457(b) governmental plans. The guidance in Notice 2014-54 is generally effective January 1, 2015; however, transitional rules included in the guidance permit taxpayers to utilize the new rules provided in the guidance prior to the effective date.

The guidance in Notice 2014-54 does not apply to distributions from IRAs.

For more information, click here and here.

IRS proposes changes to annual employee benefit plan report
The IRS has issued a notice and request for comment on continuing information collections: Annual Return/Report of Employee Benefit Plan, with proposed changes. Currently, employee benefit plans are required to annually file Form 5500 or Form 5500-SF, and schedules. The IRS uses the report to determine if the plan is operating properly or whether the plan should be audited.

The IRS proposes revising a currently approved collection by creating Form 5500-SUP (DRAFT), a paper-only form, to be used by retirement plan sponsors and administrators to satisfy the reporting requirements of Section 6058. Form 5500–SUP would only be used if certain IRS compliance questions are not answered electronically on the Form 5500 or Form 5500–SF. Comments are due on or before February 23, 2015.

To read the entire notice, click here.

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Regulatory roundup

December 22nd, 2014 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

CBO releases new long-term projections for Social Security
The Congressional Budget Office (CBO) has published a new report entitled “CBO’s 2014 long-term projections for Social Security – additional information.” The CBO projects that under current law, the Disability Insurance (DI) trust fund will be exhausted in fiscal year 2017, and the Old-Age and Survivors Insurance (OASI) trust fund will be exhausted in 2032. If a trust fund’s balance fell to zero and current revenues were insufficient to cover the benefits specified in law, the Social Security Administration would no longer have legal authority to pay full benefits when they were due.

To read the entire report, click here.

IRS releases changes to employee plans determination letter processing
The Internal Revenue Service (IRS) released Announcement 2015-01, describing changes to the processing of employee plans determination letters that will take effect in 2015. These changes are being adopted as a result of a process improvement strategy designed to promote case processing efficiency.

The changes to the determination letter procedures described in this announcement will be reflected in Rev. Proc. 2015-6, which will be published in IRB 2015-1 and will be effective on February 1, 2015. Rev. Proc. 2015-6 will set forth the IRS’s procedures for issuing determination letters on the qualified status of employee plans.

To read the entire announcement, click here.

DOL issues information letter on myRAs facilitated by employers
The U.S. Department of Labor (DOL) has released an information letter stating that employers facilitating retirement savings accounts known as “myRAs” will not be establishing an ERISA-covered “employee pension benefit plan.” The DOL’s letter responds to a Treasury Department inquiry that asked whether the accounts would be covered by ERISA Title I.

The Treasury recently released a final rule on the savings bonds that are only available through the program announced by the president in January. Until the program is expanded, in order for an employee to make contributions to a myRA account, the employer must agree to forward the employee’s payroll deduction contributions. Employers would not make contributions to the myRAs and they would have no investment or other funding obligations, or have any custody or control over account assets.

To read the entire information letter, click here.

DOL releases advance copies of 2014 Form 5500 and 5500-SF
The DOL’s Employee Benefits Security Administration has updated its website with advance informational copies of the 2014 Form 5500 and 5500-SF and final copy of the 2014 Form M-1 of Form 5500.

To download Form 5500 and 5500-SF, click here.
To download Form M-1, click here.

For more information, click here.