Tag Archives: PBGC

Supreme Court Rules in Favor of Church-Affiliated Hospitals in Church Plan Litigation

In a major victory for church-affiliated hospitals, the US Supreme Court overturned three appellate court rulings and decided unanimously that church-affiliated hospitals can maintain their pension plans as “church plans” exempt from the Employee Retirement Income Security Act of 1974, as amended (ERISA), regardless of whether a church actually established the plan. Impacted health systems, … Continue Reading

Accelerating Deductions for Compensation and Benefits if Corporate Tax Rates Are Reduced

President-elect Trump proposes to reduce the maximum corporate income tax rate from 35 percent to 15 percent. While the effective date of any rate reduction is uncertain, it likely will not occur before 2018. Deductions claimed when tax rates are 35 percent are worth 20 percent more to the taxpayer than if the same deduction … Continue Reading

Proposed Changes to Form 5500 Reporting Requirements May Have Significant Impact on Retirement Plan Sponsors

On July 11, 2016, the Department of Labor (DOL), Internal Revenue Service (IRS) and Pension Benefit Guaranty Corporation (PBGC) announced a proposal to implement sweeping changes to the forms and regulations that govern annual employee benefit plan reporting on Form 5500. The proposed changes, which were published in the Federal Register on July 21, 2016, … Continue Reading

Increase in PBGC Premiums Effective for 2017 and Later Years

President Barack Obama signed into law the Bipartisan Budget Act of 2015 (the Budget Act), which raised Pension Benefit Guaranty Corporation (PBGC) premium rates beginning in 2017. Background Single-employer defined benefit pension plans must pay annual premiums to the Pension Benefit Guaranty Corporation (PBGC), the U.S. government agency that insures these plans. All single-employer defined … Continue Reading

Reportable Event Changes for Pension Plans Effective January 1, 2016

Effective January 1, 2016, the Pension Benefit Guaranty Corporation (PBGC) altered the reportable event rules for defined benefit pension plans. Although new PBGC regulations make electronic filing of all reportable event notices mandatory, the regulations also substantially reduce the reporting requirements for pension plan administrators, sponsors and contributing employers. Read the full article.… Continue Reading

PBGC Coverage May No Longer Apply to Puerto Rico-Only Qualified Retirement Plans

Employers that sponsor defined benefit qualified retirement plans benefiting only Puerto Rico employees should be aware that Pension Benefit Guaranty Corporation (PBGC) coverage may no longer apply.  Last year, the PBGC withdrew old prior opinion letters (Opinion Letters 77-172 and 85-19) regarding PBGC coverage in Puerto Rico and Guam.  Those opinion letters articulated the PBGC’s … Continue Reading

PBGC Intends to Monitor Lump-sum and Annuity Cashouts Under Defined Benefit Plans

The Pension Benefit Guaranty Corporation (PBGC) stated in a filing published in the Federal Register on September 23, 2014, that it intends to require that plan sponsors report to the PBGC “certain undertakings” to cashout or annuitize benefits for specified groups of employees under defined benefit pension plans.  PBGC intends to make this reporting part of the … Continue Reading

PBGC Releases Revised Proposed Regulations Addressing Reportable Event Requirements under ERISA

by Paul J. Compernolle, Ashley McCarthy and Maureen O’Brien Section 4043 of the Employee Retirement Income Security Act of 1974 (ERISA) requires pension plan sponsors to report a variety of corporate and plan events to the Pension Benefit Guaranty Corporation (PBGC).  In November 2009, the PBGC proposed regulations that would have eliminated most of the … Continue Reading

PBGC Announces Formal Policy Reducing Impact of ERISA Section 4062(e) on Creditworthy Plan Sponsors

by Michael T. Graham, Stephen Pavlick and Patrick D. Ryan The Pension Benefit Guaranty Corporation (PBGC) has announced a new pilot program that should substantially modify its enforcement strategy regarding pension liability for facility closures under ERISA Section 4062(e).  Under this new program, PBGC will no longer assess liability against creditworthy companies or small plans, … Continue Reading

IRS Eliminates Use of Letter Forwarding Service to Find Missing Participants and Beneficiaries

by Jeffrey M. Holdvogt and Susan Peters Schaefer The Internal Revenue Service (IRS) recently discontinued its letter forwarding service for missing participants or beneficiaries entitled to a benefit under an employee retirement plan.  Until now, retirement plan sponsors have frequently used the IRS letter forwarding service as a way to locate missing participants or beneficiaries to … Continue Reading

Federal District Court Finds Jurisdiction Exists Over Foreign Parent in Pension Plan Liability Suit

by Michael T. Graham, Maureen O’Brien and Ashley McCarthy.    A recent federal district court decision defeats a long-standing assumption that a foreign corporate parent would not be subject to personal jurisdiction for a suit seeking payment of pension liabilities merely by acquiring a U.S. subsidiary. To read the full article, click here. … Continue Reading

Understanding Which Deadlines Are Extended by the Recent IRS Guidance for Hybrid Plans

by Joseph S. Adams, Anne S. Becker and Stephen Pavlick In October 2011, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) issued Notice 2011-85 (Notice), announcing their intent to extend certain requirements applicable to hybrid pension plans such as cash balance plans.  Given the highly technical nature of cash balance plans … Continue Reading

New PBGC Guidance Provides Premium Penalty Relief for Certain Late Payments and for Faulty Alternative Premium Funding Target Elections

by Joseph S. Adams, Maureen O’Brien and Patrick D. Ryan On September 14, 2011, the Pension Benefit Guaranty Corporation (PBGC) issued a notice (Notice) that provides relief to pension plans from penalties associated with certain late payment of premiums and situations involving the failure to properly elect the alternative premium funding target (APFT) to calculate … Continue Reading
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