Archive

Posts Tagged ‘PBGC’

Regulatory roundup

July 28th, 2015 No comments

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

IRS announces changes to determination letter program for qualified retirement plans
The Internal Revenue Service (IRS) has issued Announcement 2015-19, describing important changes to the determination letter program for qualified retirement plans.

The changes outlined will eliminate the staggered 5-year determination letter remedial amendment cycles for individually designed plans and will limit the scope of the determination letter program for individually designed plans to initial plan qualification and qualification upon plan termination. The announcement also provides a transition rule with respect to the remedial amendment period for certain plans currently on the 5-year cycle.

The IRS is requesting comments on specific issues relating to the implementation of these changes to the determination letter program.

To read the entire announcement, click here.

PBGC issues proposed rule to amend annual financial-actuarial information reporting
The Pension Benefit Guaranty Corporation (PBGC) is proposing to amend its regulation on annual financial and actuarial information reporting to codify provisions of the Moving Ahead for Progress in the 21st Century Act (MAP-21) and the Highway Transportation and Funding Act of 2014 (HATFA-14) and related guidance that affect reporting under ERISA section 4010.

PBGC is proposing to limit the reporting waiver under the current regulation tied to aggregate plan underfunding of $15 million or less to smaller plans and to add reporting waivers for plans that must file solely on the basis of either a statutory lien resulting from missed contributions over $1 million or outstanding minimum funding waivers exceeding the same amount (provided the missed contributions or funding waivers were previously reported to PBGC). The proposed rule also makes some technical changes.

To read the entire proposed rule, click here.

IRS updates guidance and FAQs for pre-approved retirement plan
The IRS has updated its guidance and frequently asked questions (FAQs) for employers adopting pre-approved retirement plans. The guidance and FAQs were updated after the Service issued:

• Rev. Proc. 2015–36, which sets forth the procedures for issuing opinion and advisory letters regarding the acceptability under §§ 401, 403(a), and 4975(e)(7) of the Internal Revenue Code (Code) of the form of pre-approved plans (that is, master and prototype and volume submitter plans)

• Announcement 2015-16, on the issuance of opinion and advisory letters for pre-approved defined contribution plans for the second six-year cycle, deadline for employer adoption, and opening of determination letter program for pre-approved plan adopters.

To read the FAQs, click here.

The guidance is available at the following links:

Types of pre-approved retirement plans

Deadline extended for pre-approved defined benefit plans

Preapproved plan submission procedures

DOL web page houses comment letters related to conflicts of interest rule
The Department of Labor (DOL) has a web page containing submitted comment letters on the fiduciary definition, conflicts of interest rule, which was re-proposed on April 14, 2015. The comment period closed on July 21, 2015.

To read the comment, click here.

Categories: Benefit News Tags: , , ,

Regulatory roundup

June 23rd, 2015 No comments

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

IRS releases temporary and proposed regulations on suspension of MPRA benefits
The Internal Revenue Service (IRS) has released temporary regulations on suspension of benefits under the Multiemployer Pension Reform Act (MPRA). These temporary regulations affect multiemployer pension plans that are projected to have insufficient funds, at some point in the future, to pay the full benefits to which individuals will be entitled under the plans (referred to as plans in “critical and declining status”).

To read the temporary regulations, click here.
To read the proposed regulations, click here.

IRS releases procedures for multiemployer pension plans in critical and declining status
The IRS has released Revenue Procedure 2015-34, which describes procedures for a multiemployer defined benefit plan in critical and declining status to apply for approval of a proposed suspension of benefits under § 432(e)(9).

The revenue procedure provides that the U.S. Department of the Treasury will accept applications beginning June 19, 2015. The revenue procedure is being issued in conjunction with temporary and proposed regulations providing guidance on benefit suspensions. Section 432(e)(9) was amended by Section 201 of the Multiemployer Pension Reform Act of 2014, Division O of the Consolidated and Further Continuing Appropriations Act, 2015, Public Law 113-235 (128 Stat. 2130 [2014]).

To read Revenue Procedure 2015-34, click here.

PBGC releases interim final rule on partitions of eligible multiemployer plans
The Pension Benefit Guaranty Corporation (PBGC) has issued an interim final rule prescribing the application process and notice requirements for partitions of eligible multiemployer plans under Title IV of ERISA, as amended by the Multiemployer Pension Reform Act of 2014 (MPRA).

The interim final rule is published pursuant to Section 122 of MPRA in order to carry out the provisions of Section 4233 of ERISA. PBGC is soliciting public comments on the interim final regulation.

To learn more about the interim final rule, click here.

FASB issues technical corrections and improvements
The Financial Accounting Standards Board (FASB) released Accounting Standards Update (ASU) No. 2015-10, Technical Corrections and Improvements. The amendments contained in this ASU include items raised to the Board through the codification’s feedback mechanism.

Regarding employee benefits, the ASU contains:

• Amendments to Subtopic 715-30, Compensation—Retirement Benefits—Defined Benefit Plans—Pension (p. 25)
• Amendments to Subtopic 715-80, Compensation—Retirement Benefits—Multiemployer Plans Disclosure (p.26)
• Amendments to Subtopic 718-40, Compensation—Stock Compensation—Employee Stock Ownership Plans (p. 27-33)

To read the entire ASU, click here.

IASB proposed narrow-scope amendments to pension accounting standards
The International Accounting Standards Board (IASB) proposed narrow-scope amendments to pension accounting standards. The proposed changes are included in an exposure draft entitled “Remeasurement on a plan amendment, curtailment or settlement/availability of a refund from a defined benefit plan.”

When a defined benefit plan is amended, curtailed, or settled during a reporting period, the entity needs to update the assumptions about its obligation and fair value of its plan assets to calculate costs related to these changes. The proposed amendments to IAS 19 Employee Benefits specify that the entity is required to use the updated information to determine current service cost and net interest for the period followed by these changes.

To read the entire exposure draft, click here.

Regulatory roundup

June 8th, 2015 No comments

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

PBGC releases data tables
The Pension Benefit Guaranty Corporation (PBGC) has released its annual update on pension data. The data tables cover information recently reported by pension plans and the PBGC, comparing them with values for prior years.

The data tables provide researchers, journalists, and others interested in the federal pension insurance program easily accessible, detailed statistics for the single-employer and multiemployer plans that PBGC insures. The tables include the numbers of people and plans that the PBGC protects, the number of people receiving or eligible to receive benefits from the PBGC as well as the benefits paid to them, claims against the PBGC, the funded status of PBGC-protected plans, and other statistics.

To read the latest PBGC data tables, click here.

BLS: Automatic enrollment, employer match rates, and employee compensation in 401(k) plans
The latest Monthly Labor Review article on the U.S. Bureau of Labor Statistics (BLS) website uses restricted-access employer-level micro data from the National Compensation Survey to examine the relationship between automatic enrollment and employee compensation in 401(k) plans.

To read the entire article, click here.

GAO report: Most households approaching retirement have low savings
The U.S. Government Accountability Office (GAO) recently released the report “Most households approaching retirement have low savings” (GAO-15-419). According to this report, many retirees and workers approaching retirement have limited financial resources. About half of households age 55 and older have no retirement savings, such as in a 401(k) plan or IRA. Additionally, many older households without retirement savings have few other resources, such as a defined benefit (DB) plan or nonretirement savings, to draw on in retirement.

To read the entire report, click here.

SEC memo addresses pay ratio disclosure
The Division of Economic and Risk Analysis of the Securities and Exchange Commission (SEC) released a memorandum to assist the SEC in developing final rules regarding pay ratio disclosure. The division analyzed the potential effects on the pay ratio calculation of the exclusion of different percentages of employees. The memorandum states that excluding some employees from the determination of median employee compensation, which some commenters suggested, can affect the calculation of that median and thus change the ratio of the annual total compensation of the principal executive officer (PEO) to the median of the annual total compensation of employees (“pay ratio”).

To read the entire memo, click here.

Categories: Benefit News Tags: , , , ,

Regulatory roundup

May 26th, 2015 No comments

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

Supreme Court allows suits challenging fiduciary actions beyond ERISA’s 6-year claim filing period
The U.S. Supreme Court unanimously ruled that 401(k) plan participants may file a suit challenging actions of a retirement plan’s fiduciary that took place before the six-year statute of limitations period allowed by ERISA for filing a claim (Tibble v. Edison Int’l, U.S., No. 13-550, 5/18/15). In so ruling, the Court rejected three appellate courts’ views on the timing for filing lawsuits challenging plan fees.

According to the decision, courts cannot dismiss these types of challenges without considering whether plan fiduciaries have fulfilled their duties to monitor those investments during the relevant six-year window.

To read the court’s opinion paper, click here.

PBGC clarifies requirements of proposed rule on multiemployer plans
The Pension Benefit Guaranty Corporation (PBGC) has received inquiries on whether its proposed rule on mandatory e-filing for certain multiemployer notices would affect notices to participants. The proposed rule only affects notices to PBGC. As stated in the preamble, the proposed rule would require the following notices to be filed electronically with PBGC: notices of termination under part 4041A, notices of insolvency and of insolvency benefit level under parts 4245 and 4281, and applications for financial assistance under part 4281 (see page 18172, middle column). Further, the proposed rule does not involve the Multiemployer Pension Reform Act of 2014 (MPRA). Comments on the proposed rule are due June 2, 2015.

PBGC launches pilot program for smaller asset managers
The PBGC issued a press release announcing a “Smaller Asset Managers Pilot Program” to reduce barriers to competition faced by such firms while maintaining rigorous investment risk and control standards.

To read the entire press release, click here.

Regulatory roundup

May 11th, 2015 No comments

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

PBGC updates premium payment addresses
The Pension Benefit Guaranty Corporation (PBGC) has updated addresses for pension plan premium payments made by electronic funds transfer outside of the agency’s electronic filing and payment system.

For more information, click here.

FASB releases accounting standards update on fair value measurement
The Financial Accounting Standards Board (FASB) has issued Accounting Standards Update 2015-07 on fair value measurement (Topic 820) disclosures for investments in certain entities that calculate net asset value per share (or its equivalent).

To read the entire FASB update, click here.

IRS: New issue of employee plans newsletter
The latest edition of the Internal Revenue Service (IRS) newsletter, Employee Plans News, provides information on changes to the employee plans (EP) determination letter application processing, new revenue procedure updates related to the Employee Plans Compliance Resolution System (EPCRS), and more.

To read the entire newsletter, click here.

Categories: Benefit News Tags: , , ,

Regulatory roundup

April 6th, 2015 No comments

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

IRS releases guidance on safe harbor correction methods
The Internal Revenue Service (IRS) has issued Revenue Procedure 2015-28, which contains modifications to Revenue Procedure 2013-12, 2013-4 I.R.B. 313. The modifications reflected in this revenue procedure include new safe harbor Employee Plans Compliance Resolution System (EPCRS) correction methods relating to automatic contribution features, including automatic enrollment and automatic escalation of elective deferrals, in plans described in § 401(k) and § 403(b). The special safe harbor correction methods include plans with automatic contribution features that have failures that are of limited duration involving elective deferrals.

To read the entire guidance, click here.

PBGC issues proposed rule on electronic filing of multiemployer plans
The Pension Benefit Guaranty Corporation (PBGC) is proposing to amend its regulations to require electronic filing of certain multiemployer notices. These changes would make the provision of information to the PBGC more efficient and effective. The proposed rule would require the following notices to be filed electronically with PBGC:

• Notices of termination under part 4041A
• Notices of insolvency and of insolvency benefit level under part 4245
• Notices of insolvency and of insolvency benefit level under part 4281 (following mass withdrawal)
• Applications for financial assistance under part 4281 (following mass withdrawal)

To read the entire proposed rule, click here.

IRS reminds plan sponsors to keep track of loans and hardship distributions
Even if plan sponsors use a third-party administrator (TPA) to handle participant transactions, they are ultimately responsible for the proper administration of their retirement plans. The IRS has published recordkeeping requirements regarding loans and hardship distributions.

For more information, click here.

IRS issues guidance on plan distributions to foreign persons
The IRS has published information for plan sponsors making distributions to foreign individuals. To read the entire guidance, click here.

Categories: Benefit News Tags: , ,

PBGC requires plan sponsors to report risk transfer activities

March 26th, 2015 No comments

Single-employer and multiemployer defined benefit plan sponsors that undertake “de-risking” activities must now disclose information about annuity purchases or lump-sum window offerings when they pay their premiums to the Pension Benefit Guaranty Corporation (PBGC), beginning with the filings for the 2015 plan year. For sponsors of plans with calendar-year plans, the first filing with the de-risking disclosures is due October 15, 2015. The PBGC’s rationale for this new requirement is that there currently is available no comprehensive, detailed, and reliable source for information on risk transfer activities, which can result in substantially reduced premium payments to the agency. This Client Action Bulletin provides more perspective.

Regulatory roundup

March 9th, 2015 No comments

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

Changes to the employee plans determination letter process begin in 2015
The Internal Revenue Service (IRS) has posted changes to the employee plans (EP) determination letter process for 2015. The changes, effective February 1, 2015, will begin with Cycle E2 applications and are expected to improve the program’s efficiency and consistency.

For more information, click here.

PBGC seeks to extend actuarial reporting collection with modifications (Form 5500 series)
The Pension Benefit Guaranty Corporation (PBGC) is requesting that the Office of Management and Budget extend approval of a collection of information with modifications on annual financial and actuarial reporting under the Form 5500 series, specifically the 2015 Schedule MB (multiemployer defined benefit plan and certain money purchase plan actuarial information) and instructions and the Schedule SB (single-employer defined benefit plan actuarial information) instructions.

Analysis of the information helps the agency anticipate potential demands on the system and allows the PBGC to direct its resources to situations that would create the largest risk to the system.

To read the entire notice, click here.

GASB issues final statement on fair value measurement and application
The Governmental Accounting Standards Board (GASB) has issued final guidance on accounting and financial reporting issues related to fair value measurements, which primarily applies to investments made by state and local governments.

GASB Statement No. 72, Fair Value Measurement and Application, defines fair value and describes how fair value should be measured, what assets and liabilities should be measured at fair value, and what information about fair value should be disclosed in the notes to the financial statements.

To read the entire guidance, click here.

IRS issues plan feature comparison chart for tax-exempt and governmental entities
The IRS’s Employee Plans publication has issued a comparison of plan types available to employees of tax-exempt and governmental entities. The publication includes a plan feature comparison chart with highlights of eight types of retirement plans—noting the latest tax laws specific to each plan.

To download the entire publication, click here.

Categories: Benefit News Tags: , , ,

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 (RFI) to inform future PBGC guidance under section 4231 and 4233 of ERISA. The 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 RFI, 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.

Categories: Benefit News Tags: ,

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.

Categories: Benefit News Tags: , , ,