Tag Archives: FASB

Regulatory roundup

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

IRS memorandum on matching contributions related to NQDC plans
The Internal Revenue Service (IRS) released a memorandum from the Office of Chief Counsel concluding that the salary an employee has elected to defer under a nonqualified deferred compensation (NQDC) plan is subject to a “substantial risk of forfeiture” if the employer provides a 25% matching contribution.

To read the entire memo, click here.

FASB issues proposed taxonomy implementation guide on retirement benefits
The Financial Accounting Standards Board (FASB) published the document “Proposed taxonomy implementation guide” (Version 1.0) related to the proposed 2017 U.S. GAAP Financial Reporting Taxonomy. The purpose of the proposed guide is to demonstrate the modeling of disclosures related to retirement benefits.

To download a copy of the entire guide, click here.

Regulatory roundup

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

PBGC issues interim final rule on adjustment of civil penalties
The Pension Benefit Guaranty Corporation (PBGC) is amending its regulations to adjust the penalties provided for in sections 4071 and 4302 of ERISA. This interim final rule adjusts the maximum civil penalties that PBGC may assess. The new maximum amounts are $2,063 for section 4071 penalties and $275 for section 4302 penalties.

The amendments are effective August 1, 2016. The increases in the civil monetary penalties under sections 4071 and 4302 provided for in this rule apply on and after August 1, 2016.

To read the entire rule, click here.

FAF releases updated print editions of FASB and GASB accounting standards codifications
The Financial Accounting Foundation (FAF) has released updated print editions of the FASB Accounting Standards Codification, from the Financial Accounting Standards Board (FASB), and the Codification of Governmental Accounting and Financial Reporting Standards, from the Governmental Accounting Standards Board (GASB).

The FASB codification is the single, authoritative source of GAAP for public and private companies and not-for-profit organizations. For more information, click here.

The GASB codification is the single, authoritative source of GAAP for state and local governments. For more information, click here.

Regulatory roundup

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

Proposed rule on nondiscrimination relief for closed DB plans
The Internal Revenue Service (IRS) has released a proposed rule on nondiscrimination relief for closed defined benefit (DB) plans and additional changes to retirement plan nondiscrimination requirements. The rule would modify the nondiscrimination requirements applicable to certain retirement plans that provide additional benefits to a grandfathered group of employees following certain changes in the coverage of a defined benefit plan or a defined benefit plan formula.

The proposed rule also makes certain other changes to the nondiscrimination rules that are not limited to these plans. The regulation would affect participants in, beneficiaries of, employers maintaining, and administrators of tax-qualified retirement plans.

To read the entire proposed rule, click here.

Proposed improvements to financial reporting of pension and other postretirement benefit plans
The Financial Accounting Standards Board (FASB) has issued two proposed Accounting Standards updates intended to improve financial reporting by employers related to defined benefit pension and other postretirement benefit plans. The proposed updates are entitled:

• Compensation—retirement benefits—defined benefit plans—general (subtopic 715-20): Changes to the disclosure requirements for defined benefit plans
• Proposed Accounting Standards update—compensation—retirement benefits (topic 715): Improving the presentation of net periodic pension cost and net periodic postretirement benefit cost

To download the proposed updates, click here.

Proposed rule on applicability of normal retirement age regulations to governmental pension plans
The IRS released a proposed rule under section 401(a) providing guidance on the applicability of the 2007 normal retirement age (NRA) regulations to governmental plans.
The proposed rule are intended to assist in determining whether the normal retirement age under a governmental plan satisfies the requirements of section 401(a) by amending the 2007 NRA regulations to provide additional rules for governmental plans.

To read the entire proposed rule, click here.

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Regulatory roundup

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

Revisions to the employee plans determination letter program
The U.S. Department of the Treasury and the Internal Revenue Service (IRS) has issued guidance regarding the elimination of the five-year remedial amendment cycle system for individually designed plans under the employee plans determination letter program, effective January 1, 2017. Notice 2016-03 provides guidance on (1) controlled groups and affiliated service groups that have previously made a Cycle A election and are permitted to submit determination letter applications during the Cycle A submission period beginning February 1, 2016, and ending January 31, 2017; (2) expiration dates on determination letters issued prior to January 4, 2016, that are no longer operative; and (3) the period during which certain employers may, on or after January 1, 2016, establish or adopt a defined contribution preapproved plan and, if permissible, apply for a determination letter, which has been extended from April 30, 2016, to April 30, 2017.

For more information, click here.

IRS updates 2016 revenue procedures for employee plans and exempt organizations
The IRS has published its latest Internal Revenue Bulletin. The bulletin includes various revenue procedures for issuing letters, rulings, determination letters, and technical advice on specific issues related to employee benefits.

To read Internal Revenue Bulletin 2016-1, click here.

IRS announces beginning of processing electronic Form 1094 and 1095, B and C
The IRS announced that the processing of electronic Forms 1094 B/C and Forms 1095 B/C will begin on January 21, 2016. The IRS posted a November 2015 revision of Publication 5165, Guide for Electronically Filing ACA Information Returns for Software Developers and Transmitters (processing year 2016). This version represents the most current technical information and should replace previous “Early Look” versions.

For more information, click here.

PBGC ready to accept 2016 premium filings
The Pension Benefit Guaranty Corporation (PBGC) announced that My PAA is now ready to accept electronic premium filings for plan years beginning in 2016.

For additional information, see the following pages: Premium payment instructions and addresses, What’s new in My PAA, Online demos, and Online premium filing with My PAA.

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Regulatory roundup

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

DOL posts 2015 Form 5500 and Form 5500-SF for information purposes only
The U.S. Department of Labor (DOL) has made available advance copies of the 2015 Form 5500, Annual Return/Report of Employee Benefit Plan, on its website, along with instructions that highlight new electronic filing requirements and various form modifications.

The electronic filing requirements for filing the Form 5500 and Form 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan, to the Internal Revenue Service (IRS) apply to employee benefit plans that are required to file at least 250 returns in a calendar year. They go into effect in 2016 for reporting on plan years that begin in or after 2015. Plans were already required to file electronically to the DOL.

For more information, click here.

OMB approval of revised collections of information for e-filing requirements
The Pension Benefit Guaranty Corporation (PBGC) has issued a notice stating that the Office of Management and Budget (OMB) has approved revisions to five collections of information under the PBGC’s regulations.

On September 17, 2015, the PBGC published a final rule amending its regulations on filing, issuance, computation of time, record retention, termination of multiemployer plans, and duties of plan sponsors following mass withdrawals that require mandatory e-filing of certain multiemployer plan notices starting in 2016. New amendments affect three collections of information:

• Duties of plan sponsor following mass withdrawal
• Notice of insolvency
• Termination of multiemployer plans

For more information, click here.

On September 11, 2015, the PBGC published a final rule amending its regulation on reportable events and certain other notification requirements to modify the system of waivers from reporting, implement provisions of the Pension Protection Act of 2006, and make other changes. The PBGC made changes to two collections of information:

• Reportable events
• Notice of failure to make required contributions

OMB approved the revised collections of information through November 30, 2018.

For more information, click here.

FASB issues proposed accounting standards update on fair value measurement
The Financial Accounting Standards Board (FASB) has issued a proposed Accounting Standards Update (ASU) intended to improve the effectiveness of disclosure requirements on fair value measurements. Stakeholders are asked to review and provide comment on the proposed ASU by February 29, 2016.

The proposed ASU is part of the FASB’s broader disclosure framework project to improve the effectiveness of disclosures in the notes to financial statements by clearly communicating the information that is most important to users of a reporting organization’s financial statements.

The proposed ASU would improve existing disclosure requirements related to fair value measurement and clarify disclosure requirements, as well as identify ways to improve the FASB’s decision process.

Fair value measurement is one of four areas where the FASB will evaluate and improve existing disclosure requirements. Other areas the FASB will address include an employer’s disclosure of defined benefit plans, income taxes, and inventory.

For more information, click here.

PBGC issues Table I-16 used to value benefits in plans with 2016 valuation dates
The Pension Benefit Guaranty Corporation (PBGC) has issued a final rule amending its regulation on allocation of assets in single-employer plans by substituting a new table for determining expected retirement ages for participants in pension plans undergoing distress or involuntary termination, with valuation dates falling in 2016. This table is needed in order to compute the value of early retirement benefits and, thus, the total value of benefits under a plan.

The final rule amends Appendix D to replace Table I-15 with Table I-16 in order to provide an updated correlation, appropriate for calendar year 2016, between the amount of a participant’s benefit and the probability that the participant will elect early retirement. Table I-16 will be used to value benefits in plans with valuation dates during calendar year 2016. The final rule is effective on January 1, 2016.

To read the entire final rule, click here.

Regulatory roundup

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.