Headlines about "Actuarial - misc"
Gathered from the web by the editors at BenefitsLink.com.
Supreme Court Will Review Decision Concerning Whether Employer Followed Proper Procedures When Changing Pension Benefits Calculation Rules
Excerpt: "The court has granted certiorari to Sally L. Conkright et al. Petitioners vs. Paul J. Frommert et al., a class-action brought on behalf of participants in a pension plan sponsored by Xerox Corp., Norwalk, Conn. The plaintiffs sued the administrators of the Xerox Corporation Retirement Income Guarantee Plan and the plan itself, alleging the plan had violated the participants' rights under the Employee Retirement Income Security Act by adding a mechanism that involved use of 'phantom account' factor and the hypothetical growth of an employee's previous lump-sum retirement benefits distribution to calculate current benefits." (The National Underwriter Company; free registration or paid subscription required)
[Guidance Overview] Untapped Opportunities for Actuaries in the Health Industry
Excerpt: "In 2006 and 2007, two separate surveys, as well as interviews with actuaries in senior level positions in the health industry, pointed out a significant risk to our profession: actuaries with health actuarial technical skills, and especially those with comprehensive health care knowledge, are in short supply." (Society of Actuaries)
Court of Appeals Hearing is Friday on Treatment of Indiana Pension Fund as Bondholder in Chrysler Deal
Excerpt: "A U.S. Court of Appeals agreed on Tuesday [June 2] to hear a challenge to Chrysler LLC's sale of most of its assets to a group led by Italian automaker Fiat . . . . A three-judge panel for the U.S. Court of Appeals for the Second Circuit will hear arguments in the appeal on Friday at 2 p.m. EDT (1800 GMT) in New York, according to a court order on Tuesday." (New York Times)
[Opinion] A Sickening Outcome for GM's 377,000 Retirees
Excerpt: "A trust fund set up a few years ago to protect [retiree healthcare] benefits [for 377,000 retirees] -- while allowing General Motors to clean up its balance sheet --is seriously underfunded. Now, the United Automobile Workers union is about to discover that it's no better at managing escalating health care costs than GM. . . . As part of the deal, the union agreed to forgive $20 billion that GM owes to the retiree health care trust." (Joann Muller in Forbes)
UAW OKs Healthcare Benefits Reduction for GM Retirees; DB Plan to Continue
Excerpt: "[I]nstead of GM contributing about $20 billion in cash and other contributions, the new VEBA will receive a note, payable in cash, with a principal amount of $2.5 billion. The note will make cash payments of $1.38 billion, including accrued interest, in 2013, 2015 and 2017. The VEBA also will receive preferred stock in the restructured company with a face value of $6.5 billion. The stock will pay an annual cash dividend of $585 million for as long as the VEBA holds the stock. Finally, the VEBA will receive 17.5% of the common stock issued by the restructured GM . . . ." (Business Insurance)
CMS Announces 2010 Indexed Medicare Rx Amounts
Excerpt: "Recently announced 2010 limits for Medicare Part D prescription drug benefits reflect annual adjustments that affect employers' calculations when applying for the retiree drug subsidy (RDS). Upcoming changes to the RDS application process will require actuaries to register again with additional identifying information and revise how lists of covered retirees are submitted and processed. The latest update to the RDS User's Guide includes a chapter on the appeals process." (Mercer LLC)
PBGC Deficit Sparks Fears of Bailout
Excerpt: "The financial position of the Pension Benefit Guaranty Corp. again is rapidly deteriorating, triggering fears that a taxpayer-funded bailout may be needed to shore up the government's pension plan insurer. The PBGC disclosed last week that its deficit hit a record $33.5 billion at the end of its 2009 fiscal first half on March 31, compared with $11.2 billion at the close of fiscal 2008." (Pensions & Investments)
PBGC May Need Aid as Deficit Soars
Excerpt: "The federal agency that guarantees corporate pensions was $33.5 billion in the red at the end of March, triple its deficit six months earlier, the agency's head told a Senate committee yesterday. The recession threatens to add to the strain on the Pension Benefit Guaranty Corp. by pushing more companies into bankruptcy and leaving the struggling agency responsible for their pensions. . . . If the PBGC's condition continues to deteriorate, the government could come under pressure to shore it up with taxpayer funds, the GAO said in testimony to the Senate's Special Committee on Aging." (The Washington Post; free registration required)
Milwaukee County Settles Pension Case for $45 Million
Excerpt: "The Milwaukee County Board approved a $45 million settlement of the county's pension lawsuit against Mercer Tuesday, following a nearly two-hour closed-door session. The vote in favor of settling the case in mid-trial was 18-0. There was no public discussion of the settlement, but supervisors broke into applause after the vote. The Pension Board approved the settlement on an 8-0 vote shortly after supervisors acted. Members of the board exchanged hugs with some of the lawyers who handled the case following that vote. The county expects to receive about $32 million after paying its attorneys and litigation costs, officials said. The funds, by previous resolution, will go to the county's pension fund." (Milwaukee Journal Sentinel)
Deficit at PBGC Tripled in the Last Six Months to a Record High
Excerpt: "The agency, the Pension Benefit Guaranty Corporation, faced a shortfall of just $11 billion as of October. The combined effect of lower interest rates, losses on its investment portfolio and rising numbers of companies filing for bankruptcy produced the jump in its projected deficit, officials said Wednesday. Because the agency has $56 billion in assets -- most of which is invested in Treasury bonds -- it is not facing any prospect of default in the short term, officials said." (The New York Times; free registration required)
Former PBGC Director Invokes Fifth Amendment Rights at Senate Hearing
Excerpt: "Charles E.F. Millard, the former head of the nation's private pension plan insurer, refused to answer questions by the Senate Special Committee on Aging during a Wednesday legislative hearing on Capitol Hill regarding the Pension Benefit Guaranty Corporation (PBGC). . . . Millard, whom Congress announced it is now investigating for possible improper interactions with financial services firms at a time when the agency was considering an allocation change . . . was scheduled to be the first witness. After the first question by Kohl, Millard said he had been advised by his attorneys, who were present with him, to decline to answer any questions by the committee." (PLANSPONSOR.com; free registration required)
Acting PBGC Head Recommends Dumping Money Management Contracts
Excerpt: "Vince Snowbarger, acting director of the Pension Benefit Guaranty Corporation, has recommended three controversial contracts with Wall Street firms be dropped, according to a letter released Wednesday. U.S. Secretary of Labor Hilda L. Solis revealed the Snowbarger recommendation to the agency's board in a letter sent to and released by U.S. Senator Herb Kohl (D-Wisconsin), chairman of the Senate Special Committee on Aging, which conducted a hearing into the private-sector pension insurer on Wednesday . . . ." (PLANSPONSOR.com; free registration required)
Testimony on Pension Benefit Guaranty Corporation: Financial Challenges Highlight Need for Improved Governance and Management (PDF)
May 20, 2009, Testimony by Barbara D. Bovbjerg, director, education, workforce, and income security, before the Senate Special Committee on Aging. 1 page. Excerpt: "Specifically, this testimony addresses two issues: (1) PBGC's financial vulnerabilities, and (2) the governance, oversight, and management challenges PBGC faces." (Pension Benefit Guaranty Corporation)
Shortfall Triples at U.S. Pension Benefit Guaranty Corporation
Excerpt: "The federal agency that backstops corporate pension plans reported that its deficit tripled in the last six months, to $33.5 billion. Despite the shortfall, the agency said it has enough assets to pay benefits for many years, even if the holder of one of the largest retirement programs, General Motors Corp., were to file for bankruptcy. The news came as the Pension Benefit Guaranty Corp.'s former director invoked the Fifth Amendment in response to lawmakers' questions about possible mismanagement under the Bush administration. The PBGC's inspector general last week issued a report saying that the former director had violated prohibitions on contacting bidders that were seeking investment contracts." (The Wall Street Journal)
Congress Considers Tough Rules to Oversee PBGC
Excerpt: "The rapidly deteriorating financial health of the federal agency that guarantees 44 million Americans' pensions is raising alarms in Congress, where key lawmakers are demanding tougher rules to insure vigilant oversight of its multibillion-dollar investment portfolio. The recession is forcing into bankruptcy an increasing number of companies with underfunded pension plans, leaving the Pension Benefit Guaranty Corp. with billions of dollars more to pay out in pension checks to retirees in the future. Its long-term deficit tripled in the past six months to a startling $33.5 billion." (AP via The New York Times; free registration required)
Hearing: No Guarantees: As Pension Plans Crumble, Can PBGC Deliver?
May 20, 2009. Excerpt from May 14, 2009, press release. 'On Wednesday, May 20, U.S. Senate Special Committee on Aging Chairman Herb Kohl (D-WI) will hold a hearing to consider whether the federal government's Pension Benefit Guaranty Corporation (PBGC) has the capability to fulfill its mission to insure the pensions of nearly 44 million Americans, at a time when several of the country's largest automobile companies are teetering on the edge of bankruptcy." (U.S. Senate Special Committee on Aging)
Senate Committee Hearing Examines PBGC
Excerpt: "As the current economic downturn weighs on the nation's pension plans, a Senate Committee plans to examine what it means to the nation's private pension plan insurer. Today the U.S. Senate Special Committee on Aging Chairman will hold a hearing - provocatively titled 'No Guarantees: As Pension Plans Crumble, can PBGC Deliver?' - to 'consider whether the federal government's Pension Benefit Guaranty Corporation (PBGC) has the capability to fulfill its mission to insure the pensions of nearly 44 million Americans, at a time when several of the country's largest automobile companies are teetering on the edge of bankruptcy,' according to a press release." (PLANSPONSOR.com; free registration required)
PBGC's Deficit Triples to $33.5 Billion
Excerpt: "The federal agency that guarantees corporate pensions was $33.5 billion in the red at the end of March, triple its deficit six months earlier, the agency's head has told a Senate committee. The recession threatens to add to the strain on the Pension Benefit Guaranty Corp. by pushing more companies into bankruptcy and leaving the struggling agency responsible for their pensions." (The Washington Post; free registration required)
[Guidance Overview] PBGC Termination Premium Not an Unsecured, Dischargeable Bankruptcy Claim
Excerpt: "An employer that terminated a defined benefit plan while undergoing a Chapter 11 bankruptcy reorganization could not avoid paying a termination premium to the PBGC by calling the termination premium an unsecured, pre-petition claim that was dischargeable under the Bankruptcy Code, the U.S. Court of Appeals in New York City (CA-2) has ruled in PBGC v. Oneida." (Wolters Kluwer)
Certain Implementation Issues Related to Other Postemployment Benefits
Excerpt: "Primary Objective: The objective of this project is to consider whether to modify certain requirements related to the measurement of actuarial liabilities for other postemployment benefits (OPEB) by agent employers." (Governmental Accounting Standards Board)
2008 Disclosures of Funding, Discount Rates, Asset Allocations and Contributions
Excerpt: "During the latter months of 2008, Watson Wyatt projected year-end pension funding status for accounting purposes at various times, capturing different interest rate and market environments. Now Watson Wyatt has analyzed actual funded status for the 100 largest pension sponsors among publicly traded companies with year-end 2008 fiscal dates, as disclosed in their Securities and Exchange Commission (SEC) 10-K filings. During 2008, actual funding ratios in this group declined by an average of 28 percentage points." (Watson Wyatt Worldwide)
[Guidance Overview] Court Dismisses Claims against JPMorgan Cash Balance Plan
Excerpt: "JPMorgan Chase & Co. did not violate the Employee Retirement Income Security Act (ERISA) with its 1989 conversion to a cash balance pension plan and subsequent plan amendments, a court ruled. The U.S. District Court for the Southern District of New York also ruled that JPMorgan's predecessor banks, including Chemical Banking Corporation, did not violate ERISA. Former participant Frank Bilello alleged that the plan's failure to specify a projection method for the accrual of benefits resulted in an accrual that was not 'definitely determinable' in violation of ERISA." (planadvisor)
[Guidance Overview] Second Circuit Rules Bankrupt Companies Must Pay Substantial Pension Termination Fees (PDF)
Excerpt: "In a recent reversal of a Bankruptcy Court decision, the U.S. Court of Appeals for the Second Circuit upheld a law which could further burden financially distressed companies attempting to reorganize and exit bankruptcy. The Second Circuit ruled that 'termination premiums' owed to the Pension Benefit Guarantee Corp. ('PBGC') are not pre-petition claims which may be discharged under the Bankruptcy Code." (Winston & Strawn LLP)
[Guidance Overview] Second Circuit Reverses Bankruptcy Court's Decision on PBGC Termination Premiums
Excerpt: "In Pension Benefit Guaranty Corporation v. Oneida, Ltd. dated April 8, 2009, the U.S. Court of Appeals for the Second Circuit reversed a ruling by the U.S. Bankruptcy Court for the Southern District of New York characterizing certain 'termination premiums' owed to the Pension Benefit Guaranty Corporation (PBGC) pursuant to the Deficit Reduction Act of 2005 as contingent, pre-petition claims and thus dischargeable in bankruptcy." (McDermott Will & Emery)
[Opinion] ASPPA College of Pension Actuaries Letter Re: End of Year Valuation and Benefit Restriction Guidance Needed (PDF)
9 pages. Excerpt: "Final regulations should clarify that, in the event that the partial lump sum option required by IRC ?436(d) is not normally offered as an immediate distribution option under the plan, the plan will not fail to satisfy IRC ?411(a) or IRC ?417(e) simply because any partial annuity benefit required by IRC ?436(d) does not take into account IRC ?417(e) rates and the minimum present value requirement when determining the amount of any optional form payable in satisfaction of the restricted portion of the benefit." (American Society of Pension Professionals & Actuaries)
[Guidance Overview] IRS's Asset Valuation Guidance
Excerpt: "The IRS recently released Notice 2009-22, to provide pension plan sponsors assistance on applying new asset valuation rules introduced in the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA). Here we give background on the issues and discuss application of the new guidance." (JPMorgan Chase & Co.)
[Guidance Overview] Second Circuit Finds Termination Premiums Not Dischargeable 'Claims' in Bankruptcy (PDF)
Excerpt: "On April 8, 2009, the United States Court of Appeals for the Second Circuit found that 'termination premiums' due under Section 4006(a)(7) of the Employee Retirement Income Security Act ('ERISA') are not 'claims' under the Bankruptcy Code and are therefore not dischargeable in bankruptcy. This decision has a substantial impact on any company considering a Chapter 11 bankruptcy proceeding as a means to eliminate pension obligations." (Pillsbury Winthrop Shaw Pittman LLP)
GM Bankruptcy Would Expose $13.5 Billion Pension Liability
Excerpt: "A General Motors bankruptcy could become a nightmare for the federal government's Pension Benefit Guaranty Corp. As much as $13.5 billion in unfunded pension liabilities could be dumped onto the U.S. agency that takes over troubled pension plans." (Workforce Management; free registration required)
The Actuarial Balance of the Pay-as-You-Go Pension System: 'American' Model versus 'Swedish' Model
Excerpt: "The aim of this paper is to show the advisability of making it compulsory to draw up an actuarial balance in pay-as-you-go pension systems so as to improve their transparency and solvency. This is in line with the trend seen in some developed countries of trying to introduce actuarial analysis methodology into the field of public pay-as-you-go pension system management. The paper also aims to shed some light on the two main methods used by government Social Security departments to draw up the actuarial balance, focusing especially on their methodology and actuarial issues." (Social Science Research Network)
Mark-to-Market Valuation at a Crossroads? (PDF)
Pages 3 of 8 pages. Excerpt: "The move toward mark-to-market valuation for pension plans has seemed inexorable in recent years and has progressed across the entire pensionlandscape -- whether the terrain has been accounting or funding, private or public, national or international. Now, for the first time, we're seeing significant resistance. Will this moment be just a slowing down of a continued advance? A pause? A partial reversal?" (American Academy of Actuaries)
Actuaries Can Determine E-Prescribing's Potential for Savings and Improved Outcomes
Excerpt: "In the article, An Electronic Prescription for Health Care Efficiency, [Susan] Pantely asserts that e-prescribing makes a doctor's prescribing practice more efficient by helping the doctor make an 'appropriate determination of the best drug for the patient' in a real-time fashion. To determine e-prescribing's potential, an actuary can review doctors' drug prescribing patterns and their generic proportions; that is, lower order rates for generic drugs shows greater potential for savings, she wrote." (Wolters Kluwer)
Pension Plan Choices May Shrink: Underfunding Could Affect Many
Excerpt: "The stock market's decline has already ravaged your 401(k) plan. Now it could hurt your pension, too. Under a law that took effect last year, underfunded pension plans may be forced to limit lump-sum payments and suspend cost-of-living increases for retirees. In addition, some plans could be frozen, preventing current employees from earning credit for additional years on the job." (The Boston Globe)
[Guidance Overview] Small Plans with End-of-Year Valuation Dates: PBGC Premium Deadline Looms (PDF)
1 page. Excerpt: "As part of its final rule implementing the PPA changes to the PBGC variable?]rate premium (?gVRP?h), PBGC made significant changes to its premium due date structure, with the new rules varying depending on whether the plan is small, mid?]size, or large (based on the required flat?]rate participant count for the plan year preceding the premium payment year)." (Keightley & Ashner LLP)
Get Used to a 'Working Retirement'
Excerpt: " The recession is making clear what we've suspected for a long time. The concept of not working and embracing leisure for the last third of life isn't practical for most people." (Business Week)
U.S. Births Break Baby Boom Record
Excerpt: "The 4,317,119 births, reported by federal researchers Wednesday, topped a record first set in 1957 at the height of the baby boom. . . . On average, a U.S. woman has 2.1 babies in her lifetime. That's the 'magic number' required for a population to replace itself. Countries with much lower rates -- such as Japan and Italy -- face future labor shortages and eroding tax bases as they fail to reproduce enough to take care of their aging elders." (AP via ChicagoTribune.com)
Cash-Strapped Washington State's King County Faces $67 Million Retiree Medical Bill
Excerpt: "Currently the county is obligated to pay 100 percent of the lifetime medical expenses for participants . . . . King County Budget Director Bob Cowan said the ultimate expense for the county could be $67 million. . . . [T]he retirement program is the only one that included long-term care, meaning employees' nursing home costs must also be paid for, which could some times run up to $15,000 a month per person." (SeattlePI.com)
[Opinion] Pension Busts and Market Booms Ahead as World Rides the Demographic Wave:
Excerpt: "The idea that aging will have a profoundly negative impact on the global economy has been around for decades but has been dismissed or taken a back seat to other more 'important' problems. Unfortunately, all the years spent avoiding the aging & pension problem has served to magnify the issue." (RGE Monitor)
[Guidance Overview] Fat Firefighters, Rescue Workers Alarm Researchers
Excerpt: "These conditions also carry a high price tag for government health, disability and pension plans . . . ." ([Wilmington, NC] Star-News)
Rosy Projections of Pensions' Investment Earnings?
Excerpt: "Ed Mendel of Capitol Weekly writes that public pension funds' rosy forecasts pose problems . . . ." (Leo Kolivakis)
PBGC Pays Retirees After Madoff Loss
Excerpt: "The U.S. agency that insures corporate pensions took responsibility for about $2 million in pensions owed to former employees of East River Management Corp, a building service provider that lost all its assets in the Bernard Madoff scandal, the agency said on Tuesday. The Pension Benefit Guaranty Corporation (PBGC) said it stepped in after New York-based East River Management's retirement plan was unable to pay benefits owed to retired workers. The PBGC started paying benefits to East River Management retirees on an emergency basis after learning of the retirement plan's problems in December." (Reuters)
No PBGC Reporting Waiver for 2009 Missed Quarterly Pension Contributions
Excerpt: "Before 2009, the PBGC automatically waived reporting of missed quarterly contributions for employers with no more than 100 participants in all controlled group pension plans, or with 100-500 participants if the missed quarterly was to a well-funded plan. On Feb. 20, the PBGC announced it would grant no such waiver for 2009." (Mercer LLC)
[Opinion] Two Health Actuaries Offer Their Prescription for Health Care Reform (PDF)
8 pages. Excerpt: "In this issue, two more health actuaries have stepped forward with their own proposals. While not strictly pointcounterpoint, Tony Batory and Hobson Carroll each offer an informed analysis of the issue that reflects their professional expertise as working health actuaries. They also display the independent thinking that actuaries are capable of bringing to this (and any other) debate. Health care reform is certainly not the only issue that is subject to differing opinions within the profession (pension reform comes to mind). While they may come to different conclusions, however, all actuaries at least start from the same premise: An issue is best resolved by factual analysis that's unencumbered by emotion or political fashion." (Contingencies)
Pendency of Request for Approval of Special Withdrawal Liability Rules; Service Employees International Union Local 1 Pension Trust Fund
Excerpt: "The Pension Benefit Guaranty Corporation ('PBGC') has received a request from the Service Employees International Union Local 1 Pension Trust Fund for approval of a plan amendment providing for special withdrawal liability rules. Under section 4203(f) of the Employee Retirement Income Security Act of 1974 and the PBGC's regulation on Extension of Special Withdrawal Liability Rules, a multiemployer pension plan may, with PBGC approval, be amended to provide for special withdrawal liability rules similar to those that apply to the construction and entertainment industries. Such approval is granted only if the PBGC determines that the plan amendment will be used in an industry with characteristics that would make use of the special rules appropriate and that the plan amendment would not pose a significant risk to the PBGC. This notice advises interested persons of the pendency of this request and invites public comment." (FIND, Inc. via COMTEX via Technology Marketing Corp.)
Downturn May Limit Lump-Sum Pension Payments
Excerpt: "The ongoing chaos in the financial markets has created a new set of issues for HR executives at companies with defined-benefit plans. Many employers are discovering that they may be restricted in their ability to provide lump-sum payments to retiring employees. [Published January 19, 2009.]" (Workforce Management; free registration required)
[Guidance Overview] Downsizing Employers with Ongoing Pension Plans May Face an Immediate and Significant PBGC Liability
Excerpt: "The Pension Benefit Guaranty Corporation -- relying on an obscure ERISA provision that had been largely ignored for decades -- is aggressively pursuing liability against downsizing employers with ongoing pension plans. On the books since 1974, ERISA Section 4062(e) empowers PBGC to make an immediate demand that an employer provide an escrow payment or post a bond in the case of certain cessations of its operations that result in the separation from employment of more than 20 percent of its employees who are participants in its defined benefit pension plan. Until mid-2006, when PBGC issued a final rule that established a potentially workable liability formula under this provision, there was little effort on PBGC's part to pursue this liability." (Keightley & Ashner LLP)
Cost Impact to Payers and Employers of TIA and Stroke: An Actuarial Analysis (PDF)
24 pages. (Milliman)
PBGC Braces for Recession
Excerpt: "'Every time the economy bounces around, everybody acts like everything is going to collapse and that they should worry about the PBGC, and then things come back,' says Dallas Salisbury, president of the Employee Benefit Research Institute in Washington. Others who pore over the PBGC annual reports predict a bailout is inevitable. 'Barring some absolutely phenomenal gains in the market or what PBGC's new or future investment strategy comes up with, the PBGC will need taxpayer money at some point in time,' said David John, a pensions expert at the conservative Heritage Foundation. For now, the PBGC, which is awaiting a new boss, will remain on the Government Accountability Office's 'high risk' watch list for the seventh consecutive year because of worries that the economic crisis could mean more pension plan terminations and swell the PBGC's deficit." (AP via Google)
PBGC Now Accepting 2009 Premium Filings
Excerpt: "Pension plan sponsors may now file their 2009 estimated flat rate and comprehensive (variable- and final flat-rate) PBGC premiums using the agency's My Plan Administration Account (My PAA) e-filing application. Calendar plans generally must make estimated flat rate premium filings by March 2 (if 500 or more participants in 2008) and comprehensive filings by Oct. 15. But plans reporting fewer than 100 participants in 2008 have until April 30, 2010, to make 2009 premium filings." (Mercer LLC)
[Official Guidance] Text of IRS Notice 2009-16: Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates (PDF)
4 pages. Excerpt: "This notice contains updates for interest rates for funding requirements under sections 412(b)(5)(B) and 430(h)(2) of the Code applicable for February 2009, and updates for interest rates for minimum present value determinations under 417(e)(3) of the Code for January 2009." (Internal Revenue Service)
[Guidance Overview] New PBGC Regulation Offering Multiemployer Plans Additional Options for Withdrawal Liability (PDF)
4 pages. Excerpt: "The PBGC has published a final regulation that implements changes made by the Pension Protection Act of 2006 (PPA) in withdrawal liability calculations. The new regulation also offers additional options to plans and changes the method of allocating liability following a mass withdrawal." (Cheiron, Inc.)
[Guidance Overview] PBGC's Final Plan Termination Disclosure Rules (PDF)
2 pages. Excerpt: "On November 18, 2008, the Pension Benefit Guaranty Corporation (PBGC) issued final rules on the new plan termination disclosure requirements for single-employer defined benefit pension plans in the case of distress terminations or terminations initiated by PBGC ('involuntary terminations'). These new disclosure requirements apply to plan terminations initiated on or after August 17, 2006, but only to requests for information made on or after December 18, 2008." (Prudential Retirement)
Report on Hard to Value Assets and Target Date Funds
Excerpt: "The 2008 ERISA Advisory Council formed a working group on Hard To Value Assets and Target Date Funds (hereinafter referred to as the 'Working Group') to study issues involving two topics concerning: first, plan assets invested in Hard To Value Assets, or alternative investments, and second, plan assets which allow participants to invest in Target Date Funds." (U.S. Employee Benefits Security Administration)
PBGC's 'My PAA' Now Ready to Accept 2009 Premium Filings
Excerpt: "My Plan Administration Account (My PAA), the PBGC's premium e-filing application, is now ready to accept premium filings for plan years beginning in 2009, the PBGC has stated on its website. Information about how to e-file via My PAA (e.g., FAQs and Demos) is on the Online premium filing (My PAA) page of the PBGC'S website." (Wolters Kluwer)
Court Hears Arguments on PBGC Plan Termination Fees
Excerpt: "U.S. federal judges on Thursday heard arguments whether companies that emerge from bankruptcy must pay termination fees to the Pension Benefit Guaranty Corporation (PBGC). According to Reuters, the issue in the case is whether a rule passed in 2005 requiring employers who terminate their plans in bankruptcy to pay the PBGC $1,250 per participant per year for three years . . . constitutes a claim that can be discharged in bankruptcy." (PLANSPONSOR.com; free registration required)
Planning a Standard Termination?A Checklist for Practitioners
Excerpt: "Many things have to be done right if a standard termination of a PBGC-covered plan is to be successfully completed. Determining in advance what must be done, who will do it, and when it will be done is critical. If you are involved in planning a standard termination, the following checklist should help you ensure a smooth process." (Keightley & Ashner LLP)
[Guidance Overview] PBGC's Guidance on Minimum Lump-Sum Assumptions for Terminating Single-Employer Plans
Excerpt: "The PBGC has issued a Technical Update which expands guidance provided in prior Technical Update 07-3 on lump-sum valuation issues for single-employer plans that terminate in a standard termination. The Technical Update applies to plans that terminate on or after the effective date of certain amendments to the law as enacted by the Pension Protection Act of 2006 (PPA; P.L. 109-280) and provides guidance on how to apply the PPA changes in the interest rate and mortality table used in calculating minimum lump-sum amounts." (Wolters Kluwer)
The Problem with Pension Investment Return Assumptions
Excerpt: "That 8 percent annual return on investment you and your pension fund manager were banking on is now looking almost as optimistic as Madoff's magic 12 percent, as deleveraging and deflation bite. With extremely low or negative interest rates and everyone from consumers to banks trying to shed debt and assets at the same time, what seemed like reasonable projections for a mixed portfolio of stocks, bonds and other assets are now substantially too high." (Reuters)
The PPA and Market Turmoil ? Selecting and Changing Funding Methods
Excerpt: "How does you[r] actuary value your plan's liabilities? How does your actuary value your plan's assets? In the new world of PPA and its amendments by WRERA, there are many choices to be made. In this article, we explore those choices, as well as some as yet unresolved questions on the topic." (JPMorgan Chase & Co.)
PBGC Announces January-March 2009 Interest Rates for Valuing Benefits
Excerpt: "The PBGC has announced the interest rates for valuing benefits of terminating single-employer plans and for valuing benefits and assets under ERISA ?4044 for January 2009 through March 2009. The interest rate to be used in valuing benefits of single-employer or multiemployer plans for valuation dates during January, February, and March 2009 will be 6.02%, which represents a decrease from the December 2008 rate of 7.92%." (Wolters Kluwer)
PBGC Will Represent Government in Madoff Liquidation Proceedings If a Pension Has Failed As Result of Madoff-Related Losses
Excerpt: "The nation's private-sector pension insurer told a bankruptcy judge that it would represent the government in liquidation proceedings against Bernard Madoff's investment company if a pension failed as a result of Madoff-related losses. A Reuters news report said the Pension Benefit Guaranty Corporation (PBGC) filed papers in the U.S. Bankruptcy Court for the Southern District of New York to secure its position as a creditor so it could act to recover any available assets for a failed plan." (PLANSPONSOR.com; free registration required)
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