Regulatory roundup

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

Final overtime rule issued

The Department of Labor (DOL) announced a final rule to make 1.3 million American workers eligible for overtime pay under the Fair Labor Standards Act (FLSA). The rule updates the earnings thresholds necessary to exempt executive, administrative, or professional employees from the FLSA’s minimum wage and overtime pay requirements, and allows employers to count a portion of certain bonuses (and commissions) toward meeting the salary level. The new thresholds account for growth in employee earnings since the currently enforced thresholds were set in 2004.

To learn more about the final rule, click here.

Proposed rule on lump-sum assumptions released

The Pension Benefit Guaranty Corporation (PBGC) has released a proposed rule on lump-sum assumptions. The proposed rule would modify the assumptions the PBGC uses to determine de minimis lump-sum benefits in PBGC-trusteed terminated single-employer defined benefit pension plans, and would discontinue monthly publication of the PBGC’s lump-sum interest rate assumption.

Specifically, under this proposed rule, the PBGC would adopt the interest and mortality assumptions from section 417(e)(3) of the Internal Revenue Code (Code) for this purpose. It would also discontinue the PBGC’s monthly calculation and publication of the interest rates used for this purpose. Because some private-sector plans use the PBGC’s lump-sum interest rates, the proposal would provide a final interest rate set for private-sector plans to use for valuation dates on or after the effective date of the final rule.

To learn more about the proposed rule, click here.

Proposed rule on benefit payments and allocation of assets

The PBGC released a proposed rule on benefit payments and allocation of assets. The proposed rule would make changes to the PBGC’s regulations on benefits payable in terminated single-employer plans and allocation of assets in single-employer plans. The changes would make clarifications and codify policies involving payment of lump sums, changes to benefit form, partial benefit distributions, and valuation of plan assets.

To learn more about the proposed rule, click here.

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