Updates – Defined Benefit Plans

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protected content PBGC Releases Guidance on HATFA & PBGC Premiums

Today, the Pension Benefit Guaranty Corporation (“PBGC”) released Technical Update 14-1: Effect of the Highway and Transportation Funding Act of 2014 HAFTA on PBGC Premiums. … More

PBGC Announces Plans to Collect Information on Cash Outs and Annuitizations of Benefits

The Pension Benefit Guaranty Corporation (“PBGC”) recently announced that it is planning to start collecting information on actions taken to cash out or annuitize benefits for certain former employees. … More

protected content Senators Cardin and Portman Introduce Frozen Plans/Nondiscrimination Testing Relief Legislation

Senate Finance Committee Members Ben Cardin (D-MD) and Rob Portman (R-OH) once again have teamed up on retirement security issues by introducing legislation to provide relief from ongoing nondiscrimination testing for frozen defined benefit plans, subject to certain conditions. … More

protected content Some Benefits Proposals Could Emerge in Lame Duck

When Congress returned home to campaign for the November 4 elections, lawmakers left for themselves a substantial list of must-do issues for their lame duck (post-election) session. That session—which is of the current 113th Congress—is scheduled to start November 12. … More

protected content Treasury Issues Final Hybrid Plan Rules and Proposed Regulations on Transition Issues

The U.S. Department of Treasury earlier today released final regulations regarding hybrid retirement plans, and proposed regulations concerning transitional amendments to satisfy the market rate of return rules for hybrid retirement plans.… More

ERIC Offers Support for Chairman Tiberi’s Bill to Provide Relief from Nondiscrimination Testing for Frozen DB Plans

In a statement submitted today to the House Ways and Means Subcommittee on Select Revenue Measures, the ERISA Industry Committee (ERIC) urged the subcommittee to protect and encourage the continuation of retirement plans by minimizing costs to maintain retirement plans, provide relief for frozen defined benefit plans, recognize the deferral nature of retirement savings, and critically evaluate proposals to change the system.… More

protected content Senate Passes Harkin Bill S. 2511 Amending Section 4062(e)

Yesterday, the full Senate approved by unanimous consent S. 2511, Senator Tom Harkin’s (D-IA) bill that would amend section 4062(e) of ERISA regarding the definition of “substantial cessation of operations.” … More

ERIC Applauds Senate for Approving Legislation Clarifying “Substantial Cessation of Operations” under ERISA Section 4062(e) and PBGC Enforcement Activity

Kathryn Ricard, ERIC Senior Vice President for Retirement Policy, today made the following statement in reaction to the Senate approving S. 2511, legislation to amend the Employee Retirement Income Security Act to clarify the definition of “substantial cessation of operations” for purposes of section 4062(e). … More

protected content Ways and Means Subcommittee on Select Revenue Measures Holds Hearing on Defined Benefit Plans

Today, the Ways and Means Subcommittee on Select Revenue Measures held a hearing on Private Employer Defined Benefit Pension Plans. The focus on the hearing was the challenges facing employers, employees and retirees who rely on defined benefit pension plans to help provide retirement security. The hearing focused on single employer and multiemployer issues.… More

protected content IRS Issues Additional Guidance on Pension Funding Stabilization

The Internal Revenue Service (IRS) recently issued Notice 2014-53, which addresses pension funding stabilization under the Highway and Transportation Funding Act (HATFA). … More

protected content Senate Finance Committee Holds Hearing on Retirement Savings Policy

Today, the Senate Finance Committee held a hearing on “Retirement Savings 2.0: Updating Savings Policy for the Modern Economy.” Chairman Ron Wyden (D-OR) opened the hearing by stating that it appears tax incentives for retirement savings are not skewed towards those Americans who need them the most. … More

ERIC Urges Senate Finance Committee to Be Wary of Unintended Consequences in Considering Tax Changes to Employer Retirement System

In a statement submitted today to the Senate Finance Committee on its hearing on retirement savings reform, the ERISA Industry Committee (ERIC) urged the committee to be wary of unintended outcomes in considering changes to the tax rules for retirement savings. … More

protected content Senate Finance Committee and Ways and Means Subcommittee Schedule Hearings on Pension Reform Issues

Before Congress recesses for the mid-term elections, there are a number of retirement-related activities scheduled over the next week. Both the Senate Finance Committee and the House Ways and Means Subcommittee on Select Revenue Measures plan to hold hearings on retirement issues next week. In addition, we understand that the full Senate is scheduled to vote on Senator Harkin’s Manager’s Amendment that would reform ERISA section 4062(e) (S. 2511). … More

protected content Treasury and IRS Release 2014-2015 Priority Guidance Plan

The Treasury Department and Internal Revenue Service released their joint 2014-2015 priority guidance plan which contains 65 items under the Retirement Benefits and Executive Compensation, Health Care and Other Benefits sections. … More

protected content Certain Puerto Rico Retirement Plans May Invest in 81-100 Group Trusts, IRS Says

The Internal Revenue Service announced in Revenue Ruling 2014-24 that trusts of certain retirement plans qualified under the Puerto Rico Code are eligible to participate in 81-100 group trusts, and that assets held by certain separate accounts maintained by insurance companies may be invested in 81-100 group trusts. … More

The Washington Post Prints ERIC’s Letter-to-the-Editor Defending Pension Smoothing

ERIC submitted and the Washington Post printed a rebuttal letter-to-the-editor on this issue in the Taking Exception section of the editorial page. ERIC’s letter appeared in the Sunday edition of the paper, dated August 24.… More

protected content FASB Adds Project on DB Plan Measurement Dates, but Not Cash Balance Project

The Financial Accounting Standards Board on August 13 added a project to its agenda to permit an employer with a fiscal year-end that does not fall on the end of a month to measure its defined benefit (DB) plan assets and liabilities as of the month end that is closest to the employer’s fiscal year-end.… More

protected content IRS Provides Pension Discount Rates to Incorporate Changes from Highway Funding Bill

The Internal Revenue Service on August 12 released Notice 2014-48 providing the 2013 and 2014 stabilized pension funding segment rates under the Highway and Transportation Funding Act of 2014 (HTFA), which was enacted into law on August 8. … More

protected content JCT Tax Expenditure Report Demonstrates Risk to Benefits

On August 5, the Joint Committee on Taxation (JCT) released its tax expenditure report for 2014 through 2018. The tax expenditure report discusses and assesses forgone federal tax revenue values for the tax rules that exempt taxpayers from (or allow them to defer into the future) otherwise taxable income. … More

protected content Pension Smoothing Extension Signed Into Law

President Obama on August 8 signed into law an extension of the pension smoothing provisions enacted under MAP-21, as part of the Highway and Transportation Funding Act of 2014 (H.R. 5021). The new law includes a five-year delay in the phaseout of the MAP-21 interest stabilization provision … More

protected content Representative Tiberi Introduces Frozen Plans/Nondiscrimination Testing Relief Legislation

On July 31, 2014, Representative Pat Tiberi (R-OH), introduced H.R. 5381, which would provide relief from ongoing nondiscrimination testing for frozen defined benefit plans, subject to certain conditions. … More

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House and Senate Pass Highway Funding Bill with Pension Smoothing Provision, but No PBGC Premium Increases

This evening, the Senate passed H.R. 5021, the “Highway and Transportation Funding Act of 2014” by a vote of 81 to 13. As we reported recently, the House recently re-passed H.R. 5021. The bill is on its way to the President for signature. … More

protected content SEC Adopts Money Market Fund Reform Rules Requiring Floating NAV

After a long-running battle for the past several years, the Securities and Exchange Commission on July 23 adopted changes to the rules that govern money market mutual funds to address “risks of investor runs.” … More

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Senate Committee Advances Legislation to Revise 4062(e) Definition, while PBGC Announces Moratorium

The Pension Benefit Guaranty Corporation (“PBGC”) on July 8 announced that it is imposing a moratorium from July 8 – December 31, 2014 on the enforcement of ERISA section 4062(e) cases. … More

protected content House Approves the Highway and Transportation Funding Act with No PBGC Premium Increases

On July 15, House of Representatives approved H.R. 5021, the Highway and Transportation Funding Act, which extends the funding of highway and other federal transportation projects through May 31, 2014. … More

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