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Regulatory roundup

October 20th, 2014 No comments

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

IRS revises Publication 4531, adds two new questions to 401k compliance checklist
The Internal Revenue Service (IRS) has updated its 401(k) compliance checklist for October 2014 and added two new questions to help employers determine if their plans meet the requirements of key IRS rules. The checklist, contained in Publication 4531, added the following two questions:

• Were top-heavy minimum contributions made?
• Was Form 5500, Annual Return/Report of Employee Benefit Plan, filed?

Each question has a yes or no answer, with a link to more information if the answer is no.

To access the updated checklist, click here.

IRS issues employee plans newsletter
The IRS has released the latest issue of Employee Plans News. The newsletter covers the following issues:

• New single distribution rule
• Canadian retirement plan participants
• Mandatory electronic filing for Form 8955-SSA and 5500-series
• Fidelity bonds and depositing plan contributions
• Form 500-EZ Pilot Penalty Relief Program
• IRS Nationwide Tax Forums online
• The Advisory Committee on Tax-Exempt & Government Entities (ACT)
• HAFTA premium guidance
• PBGC premium payments

To read the newsletter, click here.

PBGC issues technical update regarding HATFA’s impact on annual financial and actuarial information reporting
The Pension Benefit Guaranty Corporation (PBGC) has issued Technical Update 14-2 providing PBGC guidance on the effect of the Highway and Transportation Funding Act of 2014 (HATFA) on annual financial and actuarial information reporting under section 4010 of ERISA and part 4010 of PBGC’s regulations. This technical update supersedes any inconsistent guidance in PBGC’s 4010 filing instructions.

To read the entire technical update, click here.

PBGC files two notices requesting OMB approval
The PBGC has filed two notices of intention to request extension of Office of Management and Budget (OMB) approval (with modifications). PBGC is proposing to modify:

• Form 5500 Series – the 2015 Schedule MB (multiemployer defined benefit plan actuarial information) and instructions and the Schedule SB (single-employer defined benefit plan actuarial information) and instructions.
• Regulations on termination of single-employer plans and missing participants; implementing forms and instructions.

The notices inform the public of PBGC’s intent to modify these forms and solicit comments after publication in the Federal Register.

To read the entire notice regarding annual reporting via Form 5500 Series, click here.
To read the entire notice regarding termination of single-employer plans and missing participants, click here.

FASB issues proposed accounting standards update on compensation
The Financial Accounting Standards Board (FASB) has issued the exposure draft “Proposed accounting standards update: Compensation – retirement benefit (Topic 715)” covering “Practical expedient for the measurement date of an employer’s defined benefit obligation and plan assets.”

The amendments in this proposed update would provide a practical expedient for employers with fiscal year-ends that do not fall on a month-end by permitting those employers to measure defined benefit plan assets and obligations as of the month-end that is closest to the entity’s fiscal year-end and to follow that measurement date methodology consistently from year to year.

The amendments would require that an entity disclose the accounting policy election and the alternative date used for measuring defined benefit plan assets and obligations.

The proposed amendments would reduce the costs of measuring defined benefit plan assets and obligations for entities with fiscal year-ends that do not fall on a month-end without decreasing the usefulness of the information to financial statement users.

To read the entire exposure draft, click here.

EBSA requests OMB extend approval of information collection requests
The Employee Benefits Security Administration (EBSA) has filed a notice requesting public comment on their request that the Office of Management and Budget (OMB) extend approval of information collection requests (ICRs) contained in certain rules and prohibited transactions.

The Titles of the ICR rules and prohibited transactions are:

• Prohibited transaction exemption 86-128
• Consent to receive employee benefit plan disclosures electronically
• Furnishing documents to the Secretary of Labor on request under ERISA 104(a)(6)
• Patient Protection and Affordable Care Act (ACA) Section 2715 summary disclosures
• ERISA Section 408(b)(2) regulation
• ERISA Procedure 76-1 advisory opinion procedure
• ERISA Technical Release 91-1
• Disclosures by insurers to general account policyholders
• Registration for EFAST-2 credentials
• Notice of blackout period under ERISA
• ACA internal claims and appeals and external review procedures for non-grandfathered plans

To read the entire notice, click here.

BLS issues multiemployer pension plans analysis
The Bureau of Labor Statistics (BLS) has published an analysis of multiemployer pension plans in its latest issue of Beyond the Numbers. According to the analysis, about one in four workers currently covered by a traditional pension plan is in a multiemployer plan, established by a labor union and an industry or trade group to cover workers from two or more related employers.

To read the entire analysis, click here.

Multiemployer Alert: IRS issues final hybrid plan regulations with variable annuity pension plan implications

October 15th, 2014 No comments

On September 19, 2014, the Internal Revenue Service (IRS) published final regulations providing guidance on hybrid pension plans that includes some items of interest to multiemployer pension plan trustees. Although mainly focused on cash balance and pension equity plans, the guidance includes provisions related to variable annuity pension plans (VAPPs), which have been drawing attention among trustees who believe there is enormous value in the defined benefit system. Some of the more onerous provisions needed to satisfy hybrid plan rules are now explicitly removed for VAPPs, and trustees adopting VAPPs have been given more flexibility in plan design. This Multiemployer Alert offers some perspective on the final regulations.

Regulatory roundup

October 13th, 2014 No comments

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

Comments request related to collection requirements to defer net experience loss in a multiemployer plan
The Internal Revenue Service (IRS) is soliciting public comments on Notice 2005-40 concerning information collection requirements related to election to defer net experience loss in a multiemployer plan. The notice describes the election that must be filed by an eligible multiemployer plan’s enrolled actuary to the IRS in order to defer a net experience loss. The notice also describes the notification that must be given to plan participants and beneficiaries, to labor organizations, to contributing employers and to the Pension Benefit Guaranty Corporation within 30 days of making an election with the Service and the certification that must be filed if a restricted amendment is adopted.

For more information, click here.

PBGC offers tips to expedite premium payment postings to plan accounts
The Pension Benefit Guaranty Corporation has published information to “help ensure that premium payments are quickly and accurately posted to plan accounts, we have the following requests.”

For more information, click here.

GASB issues technical plan
The Governmental Accounting Standards Board (GASB) approved the technical plan for the final third of 2014 during its August 2014 meeting. The GASB added two projects to its current technical agenda – one related to asset retirement obligations and the other to blending requirements for certain business-type activities.

For more information, click here.

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Regulatory roundup

October 7th, 2014 No comments

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

DOL proposed rule on electronic filing of notices for apprenticeship and training plan notices and “top hat” plan statements
The U.S. Department of Labor (DOL) has issued a proposed rule containing regulations that would revise filing procedures for apprenticeship and training plan notices and “top hat” plan statements with the Secretary of Labor to require electronic submission of these notices and statements.

The proposal would revise § 2520.104-22(c) and § 2520.104-23(c) to require Internet-based electronic filing of apprenticeship and training plan notices and top hat plan statements with the Secretary through the Employee Benefits Security Administration (EBSA) website. Once they are filed, these notices and statements would be posted on this DOL web page and be available to the public.

To read the entire proposed rule, click here.
For the DOL’s instructions on apprenticeship and training plan filing, click here.
For the DOL’s instructions on top hat filing, click here.

DOL’s Office of Inspector General issues report on limited-scope audits
The DOL’s Office of the Inspector General (OIG) has released a report, “Limited-Scope Audits Provide Inadequate Protections to Retirement Plan Participants.” The report, sent to the Assistant Secretary for EBSA, highlights changes EBSA needs to make to improve protections to plan participants for ERISA plans electing limited-scope audits for assets held and certified by trustee and custodians.

According to OIG, most plans are required by federal law to arrange for annual independent audits to ensure the integrity of retirement plan assets. However, certain plans are not required to receive a full-scope audit because of an exemption in the law, putting more than $1 trillion in complex trust arrangements and hard-to-value (HTV) assets at risk because limited-scope audits do not provide adequate assurance of assets’ existence or value.

To read the entire report, click here.

Summary of finances of selected state and local government employee retirement systems
The U.S. Census Bureau has published its quarterly survey of public pension plans. For the 100 largest public-employee pension systems in the country, cash and security holdings totaled $3,365.4 billion in the second quarter of 2014. Cash and security holdings had a quarter-to-quarter increase of 4.6%, from $3,218.2 billion last quarter, and a year-to-year increase of 14.3%, from $2,945.6 billion in the second quarter of 2013. Earnings on investments totaled $129.4 billion in the second quarter of 2014.

For more information, click here.

DOL issues private pension plan bulletin abstract of 2012 Form 5500
The DOL has issued two reports in regards to 2012 Form 5500.

Private pension plan bulletin: Abstract of 2012 Form 5500 annual reports
Private pension plan bulletin: Historical tables and graphs

IRS issues retirement newsletter for employers
This edition of Retirement News for Employers from the Internal Revenue Service (IRS) contains articles on: Starting a plan, operating a plan and correcting mistakes, and terminating plans.

To access the entire newsletter, click here.

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Regulatory roundup

September 29th, 2014 No comments

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

PBGC issues technical update on the effect of HATFA on PBGC premiums
The Pension Benefit Guaranty Corporation (PBGC) issued Technical Update 14-1 providing guidance on the effect of the Highway and Transportation Funding Act of 2014 (HATFA) on PBGC premiums.

The guidance supersedes any inconsistent guidance in PBGC’s 2014 premium instructions. It does not affect the guidance in PBGC Technical Update 12-1 (Effect of MAP-21 on PBGC Premiums), which continues to apply for plan years to which HATFA applies.

For more information, click here.

PBGC requests OMB approval of modification to its regulation on payment of premiums
The PBGC has issued a notice of intention to request approval from the Office of Management and Budget (OMB) to modify the collection of information under its regulation on payment of premiums. The notice informs the public of PBGC’s intent and solicits public comment on the collection of information.

To read the entire notice, click here.

IRS final rules on employee retirement benefit plan returns required on magnetic media
The Internal Revenue Service (IRS) released final regulations related to the requirements for filing certain employee retirement benefit plan statements, returns, and reports on magnetic media. The term magnetic media includes electronic filing, as well as other magnetic media specifically permitted under applicable regulations, revenue procedures, publications, forms, instructions, or other guidance on the IRS.gov website.

The regulations apply to employee retirement benefit plan statements and notifications required to be filed under section 6057 for plan years that begin on or after January 1, 2014, but only for filings with a filing deadline (not taking into account extensions) on or after July 31, 2015.

For more information, click here.

IRS issues new edition of Employee Plans newsletter
The IRS has issued an updated edition of its newsletter Employee Plans News. This edition contains:

• Form 5498 reporting errors: IRA trustees, issuers, and custodians should carefully complete IRA transactions.
• Updated: Finding missing plan participants: Steps plan sponsors may take to locate missing participants.
• DOL corner: Updates from the U.S. Department of Labor (DOL) on brokerage windows and missing participants.
• IRS and DOL guide for retirement plan reporting and disclosure issues: Chart summarizes plan sponsors’ responsibilities on Form 5500 annual reports, participant notices, and other items.

To read the entire newsletter, click here.

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Regulatory roundup

September 22nd, 2014 No comments

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

IRS issues final and proposed regulations for hybrid retirement plans
The Internal Revenue Service (IRS) has issued final regulations providing guidance for defined benefit plans that use a lump-sum-based benefit formula, including cash balance and pension equity plans, as well as other hybrid retirement plans that have a similar effect.

To read more about the final regulations concerning hybrid plans, click here.

The IRS has also proposed regulations on market rate of return. For more information, click here.

IRS issues proposed regulations to Roth distribution accounts
The IRS has issued proposed amendments to the regulations that address the tax treatment of distributions from designated Roth accounts under tax-favored retirement plans. The proposed regulations would limit the applicability of the rule regarding allocation of after-tax amounts when disbursements are made to multiple destinations so the allocation rule applies only to distributions made before the earlier of January 1, 2015, or a date chosen by the taxpayer that is on or after the date the regulation was published in the Federal Register (September 19, 2014).

To read more about the proposed regulations to Roth distribution accounts, click here.

IRS issues guidance on allocation of after-tax amounts to rollovers
The IRS has issued Notice 2014-54, providing rules for allocating pretax and after-tax amounts among distributions that are made to multiple destinations from a qualified plan described in Section 401(a). These rules also apply to disbursements from a 403(b) or 457(b) plan maintained by governmental employers.

To read Notice 2014-54, click here.

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Regulatory roundup

September 15th, 2014 No comments

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

IRS issues pension funding stabilization guidance under HATFA
The Internal Revenue Service (IRS) has released Notice 2014-53 providing guidance on the changes to the funding stabilization rules for single-employer pension plans under the Internal Revenue Code (Code) and ERISA that were made by section 2003 of the Highway and Transportation Funding Act of 2014 (HATFA).

To read the entire notice, click here.

House Ways and Means announces hearing on private single-employer and multiemployer pension plans
The U.S. House Committee on Ways and Means will be holding a hearing on defined benefit pension plans offered by private sector employers, including both multiemployer plans and single-employer plans. The hearing will take place on Wednesday, September 17, at the 1100 Longworth House Office Building, beginning at 10:15 a.m.

For more information, click here.

GASB issues two exposure drafts related to Other Postemployment Benefit (OPEB)

September 5th, 2014 No comments

The Governmental Accounting Standards Board (GASB) issued two exposure drafts regarding Other Postemployment Benefit (OPEB) financial reporting by state and local governments. These proposed standards will significantly alter the methods used to account for OPEBs, similar to the new GASB 67/68 pension standards.

Like the pension standards, the unfunded liability will become a balance sheet item rather than a note disclosure. These proposed changes in OPEB reporting are sweeping in scope, and they will serve to increase the balance sheet liability and may significantly increase the volatility of annual OPEB expense. This PERiScope alert provides  some perspective.

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Regulatory roundup

September 2nd, 2014 No comments

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

Treasury and IRS release priority guidance plan 2014-2015
The U.S. Department of the Treasury and Internal Revenue Service (IRS) recently released their annual Priority Guidance Plan for the July 2014 to July 2015 fiscal year. The plan lists 317 project priorities based on the suggestions of taxpayers, tax practitioners, and industry groups and is revised and republished throughout the fiscal year to reflect additional projects and guidance.

The list focuses resources on guidance items that are most important to taxpayers and tax administration. Published guidance plays an important role in increasing voluntary compliance by helping to clarify ambiguous areas of the tax law.

To download the entire 2014-2015 Priority Guidance Plan, click here.

Census Bureau: Survey of public pensions: State-administered DB data
The U.S. Census Bureau has published its 2013 Annual Survey of Public Pensions: State-Administered Defined Benefit Data. The survey provides a comprehensive look at the financial activity of the nation’s state-administered defined benefit (DB) pension systems, including cash and investment holdings, receipts, payments, pension obligations, and membership information. Statistics are shown at the national level and for individual states. The total cash and investment holdings of the nation’s state-administered defined benefit pensions systems totaled $2.7 trillion in 2013. By comparison, total cash and investment holdings totaled $2.5 trillion in 2012, yielding a 7.8% increase from 2012 to 2013.

For more information, click here.

IRS issues draft Form 8955-SSA for 2014
The IRS has released a draft copy of Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits.

To download a copy of the form, click here.

Regulatory roundup

August 25th, 2014 No comments

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

DOL issues notice for to review use of brokerage windows in participant-directed individual account retirement plans
The Employee Benefits Security Administration of the U.S. Department of Labor (DOL) has published a notice as part of its review of the use of brokerage windows (including self-directed brokerage accounts or similar arrangements) in participant-directed individual account retirement plans covered by ERISA.

The Request for Information contained in the notice will assist the DOL in determining whether, and to what extent, regulatory standards or other guidance concerning the use of brokerage windows by plans are necessary to protect participants’ retirement savings. It also will assist the DOL in preparing any analyses that it may need to perform pursuant to Executive Order 12866, the Paperwork Reduction Act, and the Regulatory Flexibility Act.

To read the entire Request for Information, click here.

IRS updated Forms 8717 and 8717-A for determination letters
The Internal Revenue Service (IRS) issued a new version of Form 8717, User Fee for Employee Plan Determination Letter Request, reflecting increases in some fees for 2014. It also updated Form 8717-A, User Fee for Employee Plan Opinion or Advisory Letter Request.

The updated user fee schedule on the form is effective for all determination letter applications postmarked after January 31. The revised form must be used after July 1, the IRS said on the form’s instructions.

To download Form 8717, click here.
To download Form 8717-A, click here.

IRS issues revenue ruling stating some Puerto Rican retirement plans qualify as group trusts

The IRS issued Revenue Ruling 2014-24 stating that certain retirement plans qualified only under Puerto Rico’s tax code may be included on the list of group trust retiree benefit plans eligible to participate in 81-100 group trusts.

Revenue Ruling 2014-24 will be published in the Internal Revenue Bulletin on September 8, 2014.

To read a copy of Revenue Ruling 2014-24, click here.

Bureau of Labor Statistics issues annual health and retirement plan provisions survey
The U.S. Bureau of Labor Statistics has issued the National Compensation Survey: Health and Retirement Plan Provisions in Private Industry in the United States, 2013. The National Compensation Survey (NCS) provides comprehensive measures of compensation cost trends, the incidence of benefits, and detailed benefit provisions. This bulletin presents estimates of the detailed provisions of employer-provided health and retirement plans in private industry in 2013.

To read the entire survey, click here.

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