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Member, Beacon International Group, Ltd.
Single-employer defined benefit plan sponsors covered by ERISA have new guidelines for annual funding notices in a final rule published Monday by the U.S. Department of Labor's Employee Benefits Security Administration.
The new rule, which applies to plan years beginning January 2015 and takes effect March 4, includes new requirements for multiemployer plans dictated by the Multiemployer Pension Reform Act of 2014 to inform participants.
The updated guidelines implement pension transparency provisions of the Pension Protection Act.
“Workers need to know how well their pension plans are funded in order to properly plan for retirement, or to take corrective action if their plans are dangerously underfunded,” Assistant Secretary Phyllis Borzi said in a statement.
Before PPA, only multiemployer plans were required to provide annual funding notices.
The notices must show the plan's funding ratio, the assets and liabilities that determine the funding ratio, the fair market value of the plan's assets on the last day of the plan year, the plan's funding and investment policies and allocation of assets, and events projected to have a material effect on funding.
Model notices for plans covered by the Employee Retirement Income Security Act are included in the Feb. 2 edition of the Federal Register.
Hazel Bradford writes for Pensions & Investments, a sister publication of Business Insurance.
Multiemployer pension provisions in the Pension Protection Act of 2006 set to expire Dec. 31 would gain another year in a tax extension passed by the House Wednesday.