By Hazel Bradford, Crain News Service
WASHINGTON (Feb. 4, 2015) — Single-employer defined benefit plan sponsors covered by the Employee Retirement Income Security Act (ERISA) have new guidelines for annual funding notices in a final rule published Feb. 2 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 (PPA).
“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:
c The plan's funding ratio;
c The assets and liabilities that determine the funding ratio;
c 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
c Events projected to have a material effect on funding.
Model notices for plans covered by the ERISA are included in the Feb. 2 edition of the Federal Register.
This report appeard in Pensions & Investments, a Chicago-based sister publication of Tire Business.