Tag Archives: Regs and guidance

Regulatory roundup

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

Social Security announces 1.6% COLA increase for 2020

The Social Security Administration announced a 1.6% cost-of-living adjustment (COLA) for benefits payable starting in 2020. For 2020, the Social Security taxable wage base will increase to $137,700, up from $132,900 in 2019. The Social Security Old-Age, Survivors, and Disability Insurance (OASDI) tax rate will remain at 6.2% on wages up to the $137,700 wage base.

For more information, click here.

PBGC releases 2018 Actuarial Report

The Pension Benefit Guaranty Corporation (PBGC) published the 2018 Actuarial Report containing a summary of the results of the September 30, 2018, actuarial valuation. The agency calculated and validated the present value of future benefits for both the single-employer and multiemployer programs and of non-recoverable future financial assistance under the multiemployer program.

To read the entire report, click here.

PBGC announces the 2020 premium rates

The PBGC has determined the premium rates for single-employer and multiemployer plans applicable for 2020 plan years in accordance with the indexing rules provided in section 4006 of ERISA.

To see the updated premium rates, click here.

PBGC posts 2017 pension insurance data tables

The PBGC published the first installment of the 2017 data tables, which include statistics for PBGC’s single-employer and multiemployer programs and for the private defined benefit pension system. This installment provides detailed information about PBGC’s single-employer program, including claims activity, financial position, premium revenue, benefit payments, and administrative expenses.

To see the pension insurance data, click here.

Proposed rule on contribution limits applicable to ABLE accounts issued

The Internal Revenue Service (IRS) issued a proposed rule related to section 529A of the Internal Revenue Code, which allows a state (or its agency or instrumentality) to establish and maintain a tax-advantaged savings program under which contributions may be made to an ABLE account for the purpose of paying for the qualified disability expenses of the designated beneficiary of the account.

Section 529A was amended by the Tax Cuts and Jobs Act, signed into law on December 22, 2017. The 2017 Act allows certain designated beneficiaries to contribute a limited amount of compensation income to their own ABLE accounts.

To read the entire proposed rule, click here.

Regulatory roundup

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

Revenue Procedure providing remedial amendment periods for correcting form defects in 403(b) plans released

The Internal Revenue Service (IRS) released Revenue Procedure 2019-39, which sets forth a system of recurring remedial amendment periods for correcting form defects in a § 403(b) plan first occurring after March 31, 2020—the ending date for the initial remedial amendment period under Rev. Proc. 2013-22, 2013-18 I.R.B. 985.

To learn more, click here.

PBGC issues proposed rule on administrative review of decisions

The Pension Benefit Guaranty Corporation (PBGC) is amending its regulation on rules for administrative review of agency decisions. The PBGC’s proposed rule would clarify and make changes to the review process for certain agency determinations and the procedures for requesting administrative review.

To learn more, click here.

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.

Regulatory roundup

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

Modifications to 2020 Form 5500 Series proposed

The Pension Benefit Guaranty Corporation (PBGC) requested that the Office of Management and Budget (OMB) extend approval (with modifications) of its collection of information for annual reporting. PBGC is proposing modifications to the 2020 Schedule R (Retirement Plan Information) and its related instructions. The proposed modifications to Schedule R affect multiemployer defined benefit (DB) plans covered by Title IV of ERISA. PBGC is also proposing minor modifications to the Form 5500 Series to improve the accuracy of reported information.

For more information, click here.

IRS extends temporary nondiscrimination relief for closed DB plans through 2020

The Internal Revenue Service (IRS) issued Notice 2019-49, which extends the temporary nondiscrimination relief for closed DB plans that is provided in Notice 2014-5, 2014-2 I.R.B. 276, by making that relief available for plan years beginning before 2021 if the conditions of Notice 2014-5 are satisfied.

The IRS and the Department of the Treasury expect that the final regulations making amendments to the § 401(a)(4) regulations will include a number of significant changes in response to comments received.

However, it is anticipated that the final regulations will not be published in time for plan sponsors to make plan design decisions based on the final regulations before expiration of the relief provided under Notice 2014-5 (as last extended by Notice 2018-69). Accordingly, the IRS and the Treasury have determined that it is appropriate to extend the relief provided under Notice 2014-5 for an additional year.

For more information, click here.

Key considerations from PBGC multiemployer report

The Pension Benefit Guaranty Corporation (PBGC) recently released its projections report for fiscal year 2018. The report provides a review of the financial condition of the agency’s Multiemployer Insurance Program. Milliman’s latest Multiemployer Alert provide some key takeaways from the PBGC report.

Retirement plan considerations related to expanded determination letter program

Earlier this year, the Internal Revenue Service (IRS) released Revenue Procedure (Rev Proc) 2019-20 announcing an expansion of the determination letter program for certain retirement plans. The determination letter program, previously restricted in 2017 (Rev Proc 2016-37), will be expanded on September 1, 2019. This action opens the program up to statutory hybrid plans to apply during a 12-month window, and also allows certain merged plans indefinitely. Milliman’s Carrie Vaughn offers more perspective in this Multiemployer Review article.