The Washington Report
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March 8, 2023
Note to Subscribers
While we do our best to provide timely updates, it is possible that the information shared in the newsletter may change after our publication deadline.
Retirement
PBGC Releases 2020 Pension Insurance Data Tables
On February 28, 2023, the Pension Benefit Guaranty Corporation (PBGC) announced that the 2020 Pension Insurance Data Tables are now available. The tables summarize information on PBGC’s Single-Employer and Multiemployer Insurance Programs and the defined benefit pension system, which includes time-series data on PBGC’s finances and operations. The data in the PBGC-insured defined benefit plans includes information on the number of plan participants, plan funded status, hybrid plans, frozen plans, and risk transfer activity.
The 2020 Pension Insurance Data Tables are available here.
Final Rules Released on Changes to 2023 Form 5500, Form 5500-SF Employee Benefit Plan Reports
On February 23, 2023, the Department of Labor (DOL), Internal Revenue Service (IRS), and the PBGC released final rules announcing changes to the 2023 Form 5500 Annual Return/Report of Employee Benefit Plan and Form 5500-SF Short Form. The announcement marks the third and final phase of implementation of a September 2021 regulatory proposal, which included changes related to provisions in the Setting Every Community Up for Retirement Enforcement (SECURE) Act which affected annual reporting requirements under ERISA and the Internal Revenue Code.
The first two phases of implementation included publication of Federal Register notices in December 2021 for Phase I and May 2022 for Phase II, respectively, to adopt changes for the 2021 and 2022 Form 5500 Returns/Reports. The latest Phase III announcement features a Notice of Final Forms Revisions from the DOL, IRS, and PBGC for the 2023 plan year forms and instructions and a Notice of Final Rulemaking by the DOL that makes corresponding changes to annual reporting regulations under Title I of ERISA.
The 2023 plan year reports (which generally will be filed beginning in July 2024 for calendar year plans), include the following changes:
- A consolidated Form 5500 reporting option for certain groups of defined contribution retirement plans, improved reporting by pooled employer plans and other multiple employer plans.
- A change in the participant-counting methodology for determining eligibility for simplified reporting alternatives available to “small plans,” which are generally plans with fewer than 100 participants.
- A breakout of reporting on administrative expenses paid by the plan on the plan’s financial statements.
- Further improvements in financial and funding reporting by PBGC-covered defined benefit plans.
- The addition of selected Internal Revenue Code compliance questions to improve tax oversight and compliance of tax-qualified retirement plans.
- Technical and conforming changes as part of the annual rollover of forms and instructions.
- Additionally, technical adjustments were made to the Federal Register notices to address certain provisions in SECURE Act 2.0 of 2022 on Code Section 403(b) multiple employer plans, including pooled employer plans, minimum required distributions, and audit requirements for plans in defined contribution group reporting arrangements.
The news release is available here.
A Fact Sheet is available here.
The Notice of Final Rulemaking is available here.
The Notice of Final Form Revisions is available here.
Aon Publications
SECURE 2.0: Major Provisions Impacting Defined Contribution Plans (March 2023)
Read Aon’s latest Client Alert to learn more about the key provisions of SECURE 2.0 that impact defined contribution (DC) plans and for insights on how these provisions may impact plan sponsors as they consider updating their plans and strategies.
On December 29, 2022, President Biden signed the SECURE 2.0 Act of 2022 (SECURE 2.0) into law as part of the Consolidated Appropriations Act, 2023. SECURE 2.0 contains numerous provisions impacting qualified retirement plans, building on the foundation laid by the Setting Every Community Up for Retirement Enhancement Act (SECURE Act) of 2019. The significant provisions of SECURE 2.0 relevant to DC retirement plans, including 401(k), 403(b), and 457(b) plans, are generally set forth in this Client Alert. Money purchase pension plans, 401(a) plans without a 401(k) feature, non-electing church plans, and defined benefit (DB) plans are not covered by this Client Alert. (DB plans are covered in a separate Client Alert, which may be accessed here.)
For purposes of this DC Client Alert, Aon has categorized the relevant SECURE 2.0 provisions into the following sections: items for plan sponsors to act upon, items to make plan sponsorship easier, items as follow-up for government agencies, and items that are effective after 2025 (unless covered in one of the prior topics). For a full understanding of some provisions, additional guidance may be needed from the Internal Revenue Service, Department of Labor, or other regulatory agencies.
The Aon Client Alert, SECURE 2.0: Major Provisions Impacting Defined Contribution Plans (March 2023), is available here.
We’re Not Kidding!—Employer Plans Must Attest to “No Gag Clauses” by December 31
As President Biden might say: “Not a joke.” By December 31, employers have to tell the government that employer contracts with health care providers don’t contain “gag clauses.”
Under the Consolidated Appropriations Act, 2021 (CAA 2021), group health plans and insurers are prohibited from having “gag clauses” in their contracts with health care providers and other third parties. To ensure compliance with this provision, group health plans must submit an annual attestation of compliance to the Centers for Medicare & Medicaid Services beginning December 31, 2023. The Department of Labor, Health and Human Services, and Treasury announced the process group health plans and insurers must use to submit this annual attestation in Affordable Care Act and CAA 2021 Frequently Asked Questions Part 57.
This Aon bulletin discusses:
- What are gag clauses and what is prohibited?
- What is the attestation of compliance?
- When is attestation due?
- Who must submit the attestation?
- Delegating the attestation
- How to submit the attestation and reference material
- Next steps for employers
The Aon bulletin is available here.