More retirement-related regulatory news for plan sponsors, including links to detailed information.
PBGC releases FY 2014 projections report
The projected insolvency date for the insurance program for multiemployer pension plans, which cover more than 10 million Americans, has been delayed by three years, according to the fiscal year (FY) 2014 projections report released by the Pension Benefit Guaranty Corporation (PBGC). The risk of program insolvency has decreased over the near term, which is due primarily to the new premium revenues anticipated under the Multiemployer Pension Reform Act of 2014 (MPRA). It is more likely than not that the program’s assets will be depleted in 2025, compared with 2022 in last year’s report, and the risk of insolvency grows rapidly thereafter.
Projections for the PBGC’s insurance program for single-employer plans, which cover about 31 million people, show that the program’s financial condition continues to be likely to improve and conclude that it is highly unlikely to run out of funds in the next 10 years. The PBGC modeled 5,000 simulations for the 2014 projections report, and none showed that the program would be unable to pay the benefits it owes in 2025.
To read the PBGC’s entire projections report, click here.
JCT provides background on proposed fiduciary rule
The Joint Committee on Taxation (JCT) has released a report explaining information regarding the fiduciary rule proposed by the U.S. Department of Labor (DOL). The document provides a description of present law relating to prohibited transactions, investment advice, and fiduciary status with respect to retirement plans and individual accounts.
To read the entire report (JCX-131-15), click here.
GAO report on pension advance transactions
The U.S. Government Accountability Office (GAO) has released a report entitled “Pension advance transactions – questionable business practices and the federal response” (GAO-15-846T). The report is based on testimony provided by Stephen Lord, managing director of forensic audits and investigative services at the GAO, before the U.S. Senate Special Committee on Aging. The testimony examines companies attempting to take advantage of retirees using pension advances. The report describes the number and characteristics of pension advance companies and marketing practices; evaluates how pension advance terms compare with those of other products; and evaluates the extent to which there is federal oversight.
To read the entire report, click here.
GAO report on private sector coverage
The GAO released the report “Federal action could help state efforts to expand private sector coverage” (GAO-15-556). The report examines how a growing number of states have proposed efforts to expand coverage in private sector workplace retirement savings programs. The GAO report includes:
• Recent estimates of coverage, including access and participation, as well as characteristics of workers who lack coverage
• Strategies used by states and other countries to expand coverage
• Challenges states could face given existing federal law and regulations. The GAO primarily used Survey of Income and Program Participation (SIPP) data from 2012 (the most recent available)
To read the entire report, click here.
IRS releases TEGE priorities for FY 2016
The Tax Exempt and Government Entities Division (TEGE) of the Internal Revenue Service (IRS) has released its FY 2016 priorities. These priorities include that the Employee Plans Office will continue to:
• Develop, maintain, and refine a comprehensive collection of enforcement mechanisms that identify and focus efforts on addressing retirement plan noncompliance
• Leverage existing programs and learn best practices to enhance voluntary compliance
• Address and eliminate fraudulent and abusive schemes that undermine the retirement system.
The office will also focus on its specialty programs in the areas of multiemployer plans, along with tax code Sections 403(b) and 457(b) plans. The Employee Plans Compliance Unit expects to have several new compliance check projects in 2016.
For more information, click here.
IRS publishes Employee Plans News
The IRS has released the latest issue of Employee Plans News. This issue provides links to recent agency information about developments and upcoming deadlines, including:
• Form 5500 automatic extension to file for 2016 and later plan years
• Procedures for requesting waiver of electronic filing of Form 8955-SSA and 5500EZ
• An IRS overview of 403(b) correction procedures
• Regulations on minimum required contributions for single-employer defined benefit plans under Section 430
• Regulations for multiemployer plan participant votes on suspension of benefits
To read the entire issue, click here.