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Regulatory roundup

December 8th, 2014 No comments

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

House approves tax extenders bill with multiemployer pension plan provisions
On December 3, the House of Representative voted 404-17 to approve the “Achieving a Better Life Experience Act” (ABLE Act, H.R.647) which would allow for the creation of savings accounts to enable certain disabled beneficiaries to help pay for qualified expenses, effective for tax years beginning in 2015. Following the vote, the House combined the bill with the tax extenders legislation (H.R.5771) before sending it to the Senate.

Of interest to some employers are two provisions included in the ABLE Act:

• The IRS would be authorized to certify “professional employer organizations” (PEOs). Such PEOs would pay an annual fee of $1,000, satisfy certain requirements (including posting a bond to ensure they satisfy employment tax withholding and payment obligations and submitting audited financial statements), and assume sole responsibility for the customer’s employment taxes. The provision generally would be effective for wages paid by a certified PEO for services performed by an employee after 2015, and the IRS would be required to establish the PEO certification program by July 1, 2015. (The Joint Committee on Taxation estimates this provision would increase revenues by $8 million over 10 years.)

• Certain civil penalties under the tax code would be adjusted for inflation, beginning in 2015, including for failures to file a tax return or to pay tax; failures to file certain information returns, registration statements, and other statements; and failures to file correct information returns and payee statements. (The Joint Committee on Taxation estimates this provision will increase revenues by $115 million over 10 years.)

IRS extends submission deadlines
The IRS released Announcement 2014-41. This announcement extends to June 30, 2015, the deadline for submitting on-cycle applications for opinion and advisory letters for pre-approved defined benefit plans for the plans’ second six-year remedial amendment cycle. This announcement also provides a two day extension (from Saturday, January 31, 2015, to Monday, February 2, 2015) for Cycle D on-cycle submissions (primarily individually designed plans including multiemployer plans).

For more information, click here.

DOL report to Congress finds EBSA has not provided guidance and oversight of use of limited-scope audits
The Department of Labor’s Office of Inspector General (OIG) has issued its Semiannual Report to Congress on the DOL’s activities, accomplishments, and concerns for the six-month period ending September 30, 2014. During this reporting period, the Office of Inspector General (OIG) issued 19 audit and other reports that identified needed improvements in Department of Labor (DOL) programs and operations.

Of interest to employee benefit practitioners was that an audit of the Employee Benefits Security Administration’s (EBSA’s) oversight of the use of limited-scope audits for employee benefit plans found that EBSA has not provided the guidance and oversight needed to adequately protect more than $1 trillion of plan assets invested in complex trust arrangements and hard-to-value assets held and certified by custodians.

To read the entire report, click here.

Read more…

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Regulatory roundup

December 1st, 2014 No comments

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

PBGC issues final rule on treatment of rollovers from DC to DB plans
The Pension Benefit Guaranty Corporation (PBGC) is publishing a final rule that makes it easier for participants in 401(k) plans with rollover options to get lifetime income by moving their funds into traditional pensions. The agency hopes to encourage people to get lifetime income by removing potential barriers to moving their benefits from defined contribution (DC) plans to defined benefit (DB) plans. The final rule removes the fear that the amounts rolled over would suffer under guarantee limits should PBGC step in and pay benefits. When PBGC first proposed the rule in April it was well-received from various organizations in the pension and retirement community.

Under the final rule, benefits earned from a rollover generally would not be affected by PBGC’s maximum guarantee limits. For a plan terminating in 2015, the agency’s maximum guaranteed benefit for a 65-year-old retiree will be just over $60,000 a year.

Also, rollover amounts generally would remain untouched by PBGC’s five-year phase-in limits. Normally, benefit increases from changes to a plan in the five years before it ends are partially guaranteed. Under the new proposal, these restrictions generally would not apply.

To read the entire final rule, click here.

IRS issues notice amending two safe harbor explanations for eligible rollover distributions
The Internal Revenue Service (IRS) has released Notice 2014-74, which amends the two safe harbor explanations in Notice 2009-68, 2009-2 C.B. 423, that can be used to satisfy the requirement under § 402(f) of the Internal Revenue Code (Code) that certain information be provided to recipients of eligible rollover distributions.

Amendments to the safe harbor explanations reflected in this notice relate to the allocation of pretax and after-tax amounts, distributions in the form of in-plan Roth rollovers, and certain other clarifications to the two safe harbor explanations. The amendments to the safe harbor explanations (and attached model notices) may be used for plans that apply the guidance in section III of Notice 2014-54, 2014-41 I.R.B. 670, with respect to the allocation of pretax and after-tax amounts.

Notice 2014-74 will be published in Internal Revenue Bulletin 2014-50 on December 8, 2014. To read the entire notice, click here.

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Regulatory roundup

November 24th, 2014 No comments

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

PBGC annual report shows improvement in single-employer program and deterioration in multiemployer program
The Pension Benefit Guaranty Corporation (PBGC) has released its Annual Report, which showed that PBGC’s deficit increased to about $62 billion in fiscal year 2014, which was largely due to the declining condition of a few multiemployer plans. The financial condition of the single-employer program improved with a deficit of about $19.3 billion, down from $27.4 billion in the previous year.

The increase in PBGC’s deficit in the report is consistent with the estimates included in the FY 2013 Projections Report that was released in June. The projections report found that the insolvencies of a minority of multiemployer plans have become both more likely and more imminent.

To read the entire report, click here.

IRS updates rollover chart
The Internal Revenue Service (IRS) has updated its “Rollover Chart” for 2014. It’s a one-page summary in the form of a table, listing the eight kinds of plans and IRAs that can make rollover-eligible distributions, and the corresponding eight kinds of plans and IRAs into which those distributions can (or cannot) be rolled over. The chart was updated November 17, 2014, to reflect revised rollover rules.

To view the chart, click here.

Joint Committee on Taxation publishes analysis of the Tax Reform Act of 2014
The U.S. Joint Committee on Taxation (JCT) has released a Discussion Draft prepared by the Chairman of the House Committee on Ways and Means. This document provides a technical explanation, estimated revenue effects, distributional analysis, and macroeconomic analysis of the Tax Reform Act of 2014. The draft proposes to reform the Internal Revenue Code. Provisions related to pension and retirement begin on page 101, and include:

• Changes to rules for individual retirement arrangements
• Repeal of exception to 10% penalty for first-time home purchases and elimination of first-time home purchase as a qualified distribution from a Roth IRA
• Termination of new simplified employee pensions
• Termination for new SIMPLE 401(k) plans
• Modification of required distribution rules for pension plans
• Reduction in age for allowable in-service distributions
• Modification of rules governing hardship distributions
• Extended rollover period for the rollover of plan loan offset amounts in certain cases
• Coordination of contribution limitations for 403(b) plans and governmental 457(b) plans
• Application of 10% early distribution tax to governmental 457 plans; and inflation adjustments for employer-sponsored retirement plan dollar limitations on benefits and contributions

To read the entire draft, click here.

Regulatory roundup

November 3rd, 2014 No comments

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

IRS posts submission procedures for individually designed plans five-year remedial amendment cycle
The Internal Revenue Service (IRS) has published a web page outlining submission procedures for plan sponsors with individually designed plans and employer identification numbers (EINs) ending in 4 or 9.

For more information, click here.

GAO publishes report on pension valuation
The U.S. Government Accountability Office (GAO) has released a report entitled “Pension plan valuation: Views on using multiple measures to offer a more complete financial picture.” In this report the GAO discusses how defined benefit plans use interest rates to “discount,” or determine the current value, of estimated future benefits.

Experts in the United States have disagreed on both the approach that should be taken by plans to determine a discount rate and the appropriate rate to be used. Different discount rates can create large differences in the valuation of a plan’s obligations, which in turn can lead various stakeholders to draw different conclusions about a plan’s health, the value of a plan’s benefits, and the contributions required to fund them.

As requested, GAO examined different approaches used to determine the discount rate. This report addresses:

• The significance of differences in approaches used to determine discount rates among public and private plans
• Purposes for measuring the value of a plan’s future benefits and key considerations for determining discount rate policy
• Approaches selected countries have taken to choose discount rates

To read the entire report, click here.

PBGC announces maximum guarantee benefit for 2015
The Pension Benefit Guaranty Corporation (PBGC) has announced that the annual maximum guaranteed benefit for a 65-year-old retiree in a single-employer pension plan will increase to $60,136 for 2015, up from $59,318 in 2014. A table showing amounts for other ages is here.

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Regulatory roundup

October 27th, 2014 No comments

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

IRS announces pension plan limits for 2015
The Internal Revenue Service (IRS) has announced cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2015. Many of the pension plan limitations will change for 2015 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. However, other limitations will remain unchanged because the increase in the index did not meet the statutory thresholds that trigger their adjustment.

For additional information, click here.

IRS issues guidance on target date funds for qualified defined contribution plans
The IRS has issued Notice 2014-66, providing a special rule that enables qualified defined contribution plans to provide lifetime income by offering, as investment options, a series of target date funds (TDFs) that include deferred annuities among their assets, even if some of the TDFs within the series are available only to older participants.

This special rule provides that, if certain conditions are satisfied, a series of TDFs in a defined contribution plan is treated as a single right or feature for purposes of the nondiscrimination requirements of § 401(a)(4) of the Internal Revenue Code. This permits the TDFs to satisfy those nondiscrimination requirements as they apply to rights or features even if one or more of the TDFs considered on its own would not satisfy those requirements.

Notice 2014-66 will be published in Internal Revenue Bulletin 2014-46 on November 10, 2014.

In an accompanying letter, the U.S. Department of Labor (DOL) has confirmed that target date funds serving as default investment alternatives may include annuities among their fixed income investments. The letter also describes how ERISA fiduciary standards can be satisfied when a plan sponsor appoints an investment manager who selects the annuity contracts and annuity provider to pay the lifetime income.

To read Notice 2014-66, click here.
To read the DOL’s letter, click here.

IRS posts summary of new single distribution rule for 401(a) qualified, 403(b), and 457(b) governmental retirement plans
Beginning January 1, 2015, when participants choose to direct their retirement plan distribution to go to multiple destinations, the amounts will be treated as a single distribution for allocating pretax and after-tax basis (Notice 2014-54 and proposed rules issued September 19, 2014).

For additional information, click here.

PBGC posts 2015 premium rates
The Pension Benefit Guaranty Corporation (PBGC) posted the 2015 premium rates. The per-participant flat premium rate for plan years beginning in 2015 is $57 for single-employer plans (up from a 2014 rate of $49) and $13 for multiemployer plans (up from a 2014 rate of $12).

For plan years beginning in 2015, the variable-rate premium (VRP) for single-employer plans is $24 per $1,000 of unfunded vested benefits (UVBs), up from a 2014 rate of $14. This $10 increase was provided in the Bipartisan Budget Act of 2013. The VRP rate is also subject to indexing, but because of statutory rounding rules, indexing had no effect on the 2015 VRP rate.

For 2015, the VRP is capped at $418 times the number of participants (up from a 2014 cap of $412). Plans sponsored by small employers (generally fewer than 25 employees) may be subject to an even lower cap. Multiemployer plans do not pay a VRP.

The Bipartisan Budget Act of 2013 calls for the VRP rate to increase another $5 starting with 2016 (on top of indexing).

To view the PBGC premiums rates, click here.

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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 401(k) 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 and Government Entities (ACT)
• Highway and Transportation Funding Act of 2014 (HATFA) premium guidance
• Pension Benefit Guaranty Corporation (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 PBGC has issued Technical Update 14-2 providing guidance on the effect of 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.

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 with 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 (PBGC) within 30 days of making an election with the IRS 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.”

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

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

August 4th, 2014 No comments

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

IRS private letter ruling on lump sum window for those in pay status will not violate MDR
The Internal Revenue Service (IRS) recently released a private letter ruling (PLR 201431034) stating that a lump sum window for participants in pay status will not violate minimum distribution requirements (MDR).

According to the PLR:

Under the amendment, the Covered Individuals would have a specified limited window period of no more than 180 days during which they could elect to receive in lieu of their current annuity what Company A represents is the actuarial present value of their remaining benefits under the aforementioned Plans, in the form of a single lump sum payment. The window period may consist of multiple phases, such as an opt-in phase during which Covered Individuals would have the opportunity to proceed through the remainder of the window program and an election phase during which Covered Individuals could elect to receive, in lieu of their current annuity, the actuarial present value of their remaining annuity payments in the form of an immediate lump sum, and the extent the law requires, a qualified joint and survivor annuity (including a single annuity for retirees who are not married), or a qualified optional survivor annuity.

To read the entire private letter ruling, click here.

Social Security trustees retain projected year of trust fund reserve depletion
The Social Security Board of Trustees recently released its annual report on the long-term financial status of the Social Security Trust Funds. The combined asset reserves of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2033, unchanged from last year, with 77% of benefits still payable at that time. The DI Trust Fund will become depleted in 2016, also unchanged from last year’s estimate, with 81% of benefits still payable.

To read the entire report, click here.

PBGC creates online resource guide on choosing between lump sum or annuity
The Pension Benefit Guaranty Corporation (PBGC) recently created an online resource that provides information to assist with “Making a choice: Lump sum or annuity?”

The new resource page allows the public to get some insight on key questions that should be answered when making this important decision and offers other hypothetical scenarios.

To read the entire guide, click here.

401(k) plans: Improvements can be made to better protect participants in managed accounts
The U.S. Government Accountability Office (GAO) has issued the report “401(k) plans: Improvements can be made to better protect participants in managed accounts.” The report reviews eight managed account providers that represented an estimated 95% of the industry involved in defined contribution plans in 2013, showing that the providers varied in how they structured managed accounts, including the services they offered and their reported fiduciary roles.

To read the entire report, click here.

IRS posts three FAQs regarding EGTRRA determination letter program for preapproved plans
The IRS has posted three new frequently asked questions (FAQs) regarding the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) determination letter program for preapproved plans.

Question #4: “If I file a determination letter application for my pre-approved defined benefit plan by April 30, 2012, and the Service determines that additional remedial amendments are needed, will I have time to adopt the amendments?”
Question #6: “I am an adopter of a volume submitter plan and I wish to make certain changes to the pre-approved document. When I file a determination letter application, must I incorporate these changes in the pre-approved plan document or may I make the changes as separate amendments to the plan?”
Question #8: “I am filing Form 5310 to terminate my EGTRRA-approved M&P or volume submitter plan. Must I include copies of interim amendments with my application?”

Regulatory roundup

July 15th, 2014 No comments

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

MAP-21 pension extension moves in highway trust fund bills from congressional panels
The U.S. House Ways and Means Committee has approved by voice vote a bill (H.R.5021) that would provide highway funding through May 2015 in part by using about $6.4 billion from an extension of the Moving Ahead for Progress in the 21st Century (MAP-21) Act pension funding stabilization provision. The House is expected to vote on the “Highway and Transportation Funding Act” next week.

Regarding the pension smoothing provisions, the House bill, as described by the Joint Committee on Taxation, revises the specified percentage ranges (that is, the range from the applicable minimum percentage to the applicable maximum percentage of average segment rates) for determining whether a segment rate must be adjusted upward or downward. Under the proposal, the specified percentage range for a plan year is determined by reference to the calendar year in which the plan year begins as follows:

• 90% to 110% for 2012 through 2017
• 85% to 115% for 2018
• 80% to 120% for 2019
• 75% to 125% for 2020
• 70% to 130% for 2021 or later

In addition, for purposes of the additional information that must be provided in a funding notice for an applicable plan year, an applicable plan year includes any plan year that begins after December 31, 2011, and before January 1, 2020, and that otherwise meets the definition of applicable plan year.

To read the Congressional Budget Office’s report on the bill, click here.

PBGC issues moratorium on 4062(e) enforcement
The Pension Benefit Guaranty Corporation (PBGC) has announced a moratorium, until the end of 2014, on the enforcement of 4062(e) cases. The moratorium will enable PBGC to ensure that its efforts are targeted to cases where pensions are genuinely at risk. The six-month period will also allow the PBGC to work with the business community, labor, and other stakeholders.

During the moratorium, from July 8 to December 31, 2014, PBGC will cease enforcement efforts on open and new cases. Companies should continue to report new 4062(e) events, but PBGC will take no action on those events during the moratorium.

For more information, click here.

GAO report: Private pensions: Targeted revisions could improve usefulness of Form 5500 information
In a two-phase online U.S. Government Accountability Office (GAO) survey, stakeholders identified problems with the usefulness, reliability, and comparability of data from the Form 5500 (see table in report). Despite longstanding concerns with the Form 5500—the annual report that employee benefit plans file with the federal government—agency officials have made only minimal changes over the last three years.

Key challenges identified with Form 5500:

• Weaknesses in the format
Plan asset categories break out plan assets differently from the investment industry, and provide little insight into plan investments, their structures, or the levels of associated risk. In particular, the majority of respondents indicated that the “other” plan asset category in the form is too broad because it can include many disparate types of investments. Respondents also indicated challenges in identifying the underlying holdings of plan assets invested in indirect investments.

• Challenges in finding key information
The form lacks detailed information on plan investments because there is no structured, data-searchable format for attachments to the form and the filing requirements on plan investments are limited for small plans, which have less than 100 participants.

• Inconsistent data
Naming conventions and identification numbers may be inconsistent, making it difficult to collect and accurately match records.

To read the entire GAO report, click here.