More retirement-related regulatory news for plan sponsors, including links to detailed information.
Senate strikes bipartisan deal on unemployment benefits; pensions affected
Senators Jack Reed (R-RI) and Dean Heller (R-Nev) have penned a bipartisan proposal that would extend federal unemployment benefits for five months and allow for retroactive payments to December 28, 2013. The program expired on December 28, 2013.
The deal, which was crafted from both Republican and Democratic proposals, would pay for the $10 billion cost by including the pension offset provisions from the 2012 highway bill (MAP-21), which were set to be phased-out this year. The proposal also would:
• Allow single-employer defined benefit pension plans to prepay their flat rate premiums to the Pension Benefit Guaranty Corporation (PBGC).
• Extend customs user fees through 2024.
• End federal unemployment insurance (UI) payments to any individual whose adjusted gross income in the preceding year was $1 million or more.
• Strengthen reemployment and eligibility assessment (REA) and ReEmployment Services (RES) programs. In an effort to help get job seekers back into the workforce, individuals receiving emergency unemployment compensation will be eligible for enhanced, personalized assessments and referrals to reemployment services when they begin their 27th week of UI (Tier I) and 55th week of UI (Tier III).
DOL issues proposed rule that would require service providers to furnish disclosure guide to pension plans
The Employee Benefit Security Administration of the U.S. Department of Labor (DOL) has issued a proposed rule that would require certain retirement plan service providers to disclose information about the service providers’ compensation and potential conflicts of interest. The proposed rule would amend the DOL’s final rule on fee disclosures to require covered service providers to furnish a guide along with the initial disclosures to help fiduciaries if the disclosures contain multiple or lengthy documents.
PBGC issues final rule on premium rates, payment of premiums
The PBGC has issued a final rule making its premium rules more effective and less burdensome. Based on its regulatory review under Executive Order 13563, PBGC proposed to simplify due dates, coordinate due dates for terminating plans with the termination process, make conforming and clarifying changes to the variable-rate premium rules, give small plans time to value benefits, provide relief from penalties, and make other changes.
On January 3, 2014, PBGC published a final rule moving the flat-rate premium due date for large single employer and multiemployer plans (500 or more participants) to the variable-rate premium due date for single-employer plans, starting with the 2014 plan year. This final rule finalizes the rest of the proposal.
PBGC has now completed the process of simplifying the due-date rules by making small plans’ premiums due at the same time as large and mid-size plans’ premiums. However, because of a transition rule that gives small plans more time to adjust to the new provisions, the due dates will not be completely uniform until 2015.
To read the entire final rule, click here.