Total Articles: 5
Jackson Lewis P.C. • May 23, 2016
Sponsors of preapproved defined contribution retirement plans were generally required to sign new plan documents on or before April 30, 2016 that incorporated changes required by the Pension Protection Act of 2006 (PPA). Defined contribution plans include profit sharing plans, 401(k) plans, and money purchase pension plans. Preapproved plans are plan documents that have been approved by the Internal Revenue Service (IRS) and are sold to plan sponsors through law firms, banks, brokers and other financial institutions.
Ogletree Deakins • February 19, 2016
Employers withdrawing from an underfunded multiemployer defined benefit pension plan may soon face not only an assessment of withdrawal liability, but also an additional payment called an “exit premium.” The Obama administration’s fiscal year 2017 budget, released on February 9, 2016, proposes that the Pension Benefit Guaranty Corporation (PBGC) impose an exit premium on employers that withdraw from unfunded multiemployer plans. This exit premium, along with a proposed variable-rate premium for underfunded multiemployer plans, is part of the administration’s effort to increase revenue to the PBGC by $15 billion over the next decade. A variable-rate premium already exists for single-employer plans (for 2016, the rate is $30 per $1,000 of underfunded vested benefits up to $24 per participant) but not for multiemployer plans. In 2015, the PBGC predicted that the multiemployer plan insurance program it operates would likely be insolvent by 2025. No details regarding the amount or calculation of the proposed exit premium or variable-rate premium are apparent from the budget release.
Franczek Radelet P.C • January 28, 2016
The U.S. Department of Labor (DOL) recently announced that it is expanding an audit program directed at large defined benefit pension plans. The program, which originated in the DOL’s Philadelphia region and is expanding, is looking at pension plans that the DOL suspects have failed to attempt to locate terminated vested participants who have reached their required beginning dates (which is generally April 1 following the date a participant reaches age 70 ½), and are entitled to receive required distributions.
Jackson Lewis P.C. • July 28, 2015
On July 9, 2015, the IRS released Notice 2015-49 (the “Notice”) informing taxpayers that the Service and the Treasury intend to amend the required minimum distribution regulations to eliminate the recent defined benefit (“DB”) plan risk management strategy of offering lump sum payments to replace annuity payments to retirees currently receiving joint and survivor, single life, or other life annuity benefit payments.
Schulte Roth & Zabel LLP • February 26, 2009
On Feb. 10, 2009, the U.S. Department of Labor (DOL) issued Field Assistance Bulletin (FAB) 2009-01, providing guidance for plan administrators to comply with the annual funding notice requirement for defined benefit pension plans under the Pension Protection Action of 2006 (PPA). The annual funding notice must be distributed in lieu of the Summary Annual Report (SAR) for defined benefit plans but requires more information than the SAR.