DOL News
The Department of Labor’s Employee Benefits Security Administration (DOL/EBSA) announced new guidance as featured below. You can subscribe to DOL/EBSA’s homepage for updates.
New annual funding notice requirements
On March 8, 2013, DOL/EBSA issued Field Assistance Bulletin 2013-01 concerning new disclosure requirements mandated by the Moving Ahead for Progress in the 21st Century Act.
MAP-21 amended ERISA Section 101(f) to require plan administrators of single-employer defined benefit plans to provide participants and others additional information regarding the impact of MAP-21's interest rate stabilization rules on the plan's funding status. An estimated 12,000
The FAB addresses a need for interim guidance pending adoption of regulations or other guidance under ERISA Section 101(f) as amended by MAP-21. The FAB sets forth technical questions and answers, and provides a model supplement that plan administrators may use to discharge their MAP-21 disclosure obligations.
Cleared swap transactions
On February 7, 2013, DOL/EBSA issued Advisory Opinion 2013-01A concerning the application of the fiduciary and prohibited transaction provisions of ERISA to certain “cleared swap” transactions conducted pursuant to provisions of the Dodd-Frank Act.
Amendments to Abandoned Plan Program
On December 12, 2012, DOL/EBSA published in the Federal Register a proposed rule and related class exemption that will make it easier for Chapter 7 bankruptcy trustees to distribute assets from bankrupt companies’ retirement plans. The proposal would allow such trustees to use EBSA’s existing Abandoned Plan Program to terminate, wind up and distribute benefits from such plans.
The existing Abandoned Plan Program provides streamlined termination and distribution procedures for abandoned individual account plans, including 401(k) plans. Under the Program, benefits may be distributed in a manner that can substantially reduce fees charged to participants’ accounts for, among other things, annual reporting, legal compliance and other administrative services, including termination costs. By making this streamlined process available to Chapter 7 bankruptcy trustees, the time and resources required to “wind up” a bankrupt company’s retirement plan can be significantly reduced.
Under amendments in 2005 to federal bankruptcy law, if a company in liquidation administered an individual account plan, the company’s Chapter 7 bankruptcy trustee must perform those functions. The Abandoned Plan Program, established in 2006, provides specific guidance on when a plan may be considered abandoned, who may make that determination, and exactly how to terminate the affairs of the plan and make benefit distributions. The program also limits potential fiduciary liability of financial institutions that step in to terminate and wind up plans that have been abandoned by their sponsors.
Comments on the proposed rule are available on DOL/EBSA’s website.
2012 Form 5500 Annual Report
On December 4, 2012, DOL/EBSA, the Internal Revenue Service and the Pension Benefit Guaranty Corporation released advance informational copies of the 2012 Form 5500 annual return/report and related instructions. These copies are for informational purposes only and cannot be used to file.
Pension and welfare benefit plans that are required to file electronically an annual return/report regarding their financial conditions, investments and operations each year generally satisfy that requirement by filing the Form 5500 or Form 5500-SF and any required attachments.
Modifications to the Form 5500 and Form 5500-SF for plan year 2012 are described under “Changes to Note” in the 2012 instructions, including:
- Optional Paid Preparer Information
- Optional Trust Information in Schedule H and Schedule I
- Schedule SB instructions updated to advise that additional detail is requested for the prior year’s excess contributions to be added to the prefunding balance
- Multiemployer actuarial information reporting clarified for changes in adjustable benefits and for amortization charges under the funding standard account statement for this plan year
The official electronic versions for filing are now available on the EFAST2 website.
Compliance guidance for those impacted by Hurricane Sandy
On November 20, 2012, DOL/EBSA provided guidance about compliance with employee benefit plan rules for those adversely impacted by Hurricane Sandy.
The guidance applies to employee benefit plans, plan sponsors, as well as service providers to such employers, located on October 26, 2012, in one of the counties or Tribal Nations that have been identified as covered disaster areas because of the devastation caused by Hurricane Sandy. Covered disaster areas are identified as federally declared disaster areas in the IRS News Releases for Victims of Hurricane Sandy.
The relief provided in this guidance is in addition to the Form 5500 Annual Return/Report filing relief already provided by the IRS. The relief provided in this guidance includes verification procedures for plan loans and distributions, participant contributions and loan repayments, blackout notices and ERISA group health plans.
Outreach and education
For notice of upcoming events as they are scheduled, subscribe on DOL/EBSA’s homepage. DOL/EBSA also conducts seminars for small businesses sponsoring health benefits plans. Information on these events is also available on DOL/EBSA’s homepage.
