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Study: Multiemployer Pension Plan Crisis Has Deepened (PDF)

"As many as 121 multiemployer pension plans covering 1.3 million workers are underfunded by $48.9 billion and have informed regulators and participants that they could become insolvent within 20 years ... Cheiron's August 2017 study found 114 multiemployer pension plans were underfunded by $36.4 billion ... Some plans have since terminated because all the employers withdrew. Even after removing these plans, the number of failing multiemployer pension plans increased by 6.1 percent ... The plans in this year's study have total assets of $40.7 billion and liabilities of $89.6 billion."

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Supreme Court Withdrawal Liability Decision Is Narrow in Scope

"Under the decision, actuaries for multiemployer pension plans are clearly able to set or change the withdrawal liability assumptions after the end of a plan year. The issue as to whether, as the D.C. Circuit held, the assumptions had to be based (or were based) on information available as of the end of the plan year will likely be the subject of future arbitrations and future cases." [M&K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund, No. 23-1209 (S. Ct. May 21, 2026)]  MORE >>

Sixth Circuit Says Reasonable Assumptions Must Be Used for QJSA 'Actuarial Equivalence'

"Due in part to litigation pending in other Circuits and the lengthy dissent in the Sixth Circuit decision, the plans may seek to settle the cases or may request a re-hearing before the entire Sixth Circuit court of appeals. Even if the re-hearing request is not granted, the cases will still go back to the relevant district court for a determination of whether the actuarial assumptions are unreasonable.... Note that the decision pertains only to the QJSA determination, and does not address early retirement calculations." [Reichert v. Kellogg, No. 24-1442, consol. Watt v. FedEx, No. 24-5945 (6th Cir. Mar. 16, 2026)]  MORE >>

Plans May Need to Adjust Procedures for DOL Proposed Update to Electronic Notification Rules

"The proposed change to the 2002 safe harbor regulation would add a paragraph that states a benefit statement described in ERISA section 105(a)(2)(E) may be furnished electronically only if the plan first provides a one-time initial notice on paper.... The 2020 safe harbor regulations would also be updated ... [to] clarify that any paper benefit statement required by section 105(a)(2)(E) is to be furnished without charge. "  MORE >>

PBGC Announces 2026 Premium Rates

"Both the single-employer and multiemployer plan rates have increased. [A chart] shows the rates in effect for plan years beginning in 2024, 2025, and 2026."  MORE >>

DOL Issues New Model Annual Funding Notices

"The two model notices have significant differences from the prior model that go beyond incorporating the changes made by section 343 of the SECURE 2.0 Act. For example, the introductory language has been significantly revised. Plan administrators may want to consider whether they should adopt the new model notices right away or whether any notice that was about to be sent would be a reasonable alternative taking into account the latest guidance."  MORE >>

PBGC Premiums for 2025 Plan Year Due Earlier Than Usual

"[B]ecause of a provision in the Bipartisan Budget Act of 2015, premiums for plan years beginning in 2025 are generally due a month earlier than usual. For example, the premium filing and payment for a plan with a calendar plan year will be due September 15, 2025, instead of the normal due date of October 15, 2025. This acceleration of premium dues dates applies only for plan years that begin in 2025."  MORE >>

DOL Appoints New ERISA Advisory Council Members

"The 2025 appointees and their areas of expertise are as follows: [1] Actuarial Counseling: Christian Benjaminson is a vice president and principal consulting actuary at Cheiron Inc.... [2] Employee Organizations: Wendell Young is the President of United Food and Commercial Workers Local 1776 Keystone State as well as Vice President of the UFCW International Union.... [3] Employers: Jay Dorsch is the chair of the Employee Benefits and Executive Compensation practice of Cozen O'Connor ... [4] General Public: Elizabeth Hopkins is a senior partner at Kantor & Kantor LLP and head of the law firm's pension practice.... [5] Investment Counseling: Craig Wright is a founding partner at Strategic Financial[.]"  MORE >>

Extension of Certain Timeframes for Participants in Group Health Plans Affected by Hurricanes Helene and Milton

"In general, the items receiving extensions for participants and beneficiaries are similar to those receiving extensions that were provided with respect to COVID-19, e.g., claims filing deadlines, but begin based upon the geographic locale of the participants and beneficiaries, and the extensions all have an end date of May 1, 2025."  MORE >>

IRS Issues Final Regs on Minimum Required Distributions to Implement the SECURE Act

"The final regulations do not allow a defined benefit plan to provide a single uniform required beginning date of April 1, following the calendar year of attainment of age 70 ½. That means that a plan amendment would be required to change the required beginning date for those born on or after July 1, 1949.... [T]he rule facilitates in-service annuity distributions to participants, and does not require a plan to change distributions in pay status merely because the participant has attained an applicable age."  MORE >>

Reminder: PCORI Fee Due July 31

"Sponsors of plans subject to the PCORI fee need to determine the average number of covered lives and file IRS Form 720 by July 31, 2024, along with payment of the required fee."

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2025 Maximum Out-of-Pocket Limits, HSA Parameters, and Excepted Benefit HRA Limits

"[A chart] compares this year's limits and parameters to the 2025 limits. For the first time, the maximum out-of-pocket limits for non-grandfathered health plans will decrease."

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IRS Issues Updated Rules on Minimum Present Value of Benefits

"The updated regulations make it easier for a plan to change the lookback month or stability period as needed.... If a plan has employee contributions, an amendment will likely be needed to satisfy the requirement that no mortality be taken into account for the employee-derived portion of the accrued benefit.... If a plan has a Social Security level income option that does not already satisfy the minimum present value requirements, then the plan will need to be amended so that either the entire option satisfies the present value requirements or the plan provisions satisfy the implicit bifurcation rule."

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Gag Clause Prohibition Compliance Attestation Required by Year End

"The method of attesting compliance with the gag clause prohibition is somewhat similar to the RxDC reporting under section 204 of the CAA. However, the information required for this attestation is much less involved. Plans who have not already done so should determine if each of their service provider agreements comply with this requirement."

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Departments' Proposed Mental Health Parity Regs Would Significantly Impact Most Plans' Compliance Report

"Despite providing significantly more details, many unanswered questions remain.... If left up to the reporting plan sponsor to answer these questions, those using specialized vendors for MH/SUD services will have more challenges to ensure consistency in consolidating the required reports between M/S and MH/SUD vendors and care management firms.... The requirement for a named fiduciary to review the analysis and certify that it complies with the content requirements is a significant development that puts trustees and other fiduciaries at risk for a failure to make sure the comparative analysis complies with the new requirements."

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2024 Maximum Out-of-Pocket Limits, HSA Parameters, and Excepted Benefit HRA Limits

"[HHS has] published the Maximum Annual Limitation on Cost Sharing for 2024 limits for 2024. In addition, the IRS published (in Rev. Proc. 2023-23) the 2024 inflation adjusted amounts for Health Savings Accounts (HSAs) and the maximum amount that may be made newly available for an Excepted Benefit Health Reimbursement Arrangement (EBHRA). The chart below compares this year's limits and parameters to the 2024 limits."

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Guidance on the End of the COVID-19 Public Health Emergency and National Emergency

"Although plans would no longer be required to cover [certain COVID-related] services, plan sponsors should consider to what degree maintaining coverage is cost-effective. Additional communication may be needed for plans that have a large benefit differential between in-network and out-of-network, as [there has been] an unusually high proportion of out-of-network providers being used for the COVID-19 testing."

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SECURE 2.0 Increases Age for Required Minimum Distributions

"SECURE Act 2.0 requires no change for an individual who attained age 72 prior to 2023. However, there is a logical issue for individuals who were born in 1959 and will attain age 74 in 2033."

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SECURE 2.0 Overpayment Provisions Now Effective

"The effective date of the changes is December 29, 2022....[N]ew section 206(h) [of] ERISA ... provides relief for fiduciaries who might otherwise feel compelled to pursue recoupment of overpayments. The law also provides important protections for participants and beneficiaries from plans seeking to recoup overpayments particularly after benefit payments have been made for many years.... New Code section 414(aa) provides ... explicit permission for the plan sponsor to amend the plan to increase past, or decrease future, benefit payments to affected participants and beneficiaries in order to adjust for prior inadvertent benefit overpayments."  MORE >>

PBGC Issues Proposed Regulation on Interest Rate for Withdrawal Liability

"The proposed regulation would appear to resolve some of the issues that have arisen in recent years with respect to the interest rate used to determine withdrawal liability. However, the wording of the regulation raises a number of questions. If the interest rate can be within a specified range, who decides what rate will be used? Can the interest rate be decided after a plan year is over?"

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