The Washington Report
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July 13, 2022
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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 Issues Final Rule on SFA Program for Multiemployer Pension Plans
On July 6, 2022, the Pension Benefit Guaranty Corporation (PBGC) announced a final rule implementing changes to the Special Financial Assistance (SFA) Program for financially troubled multiemployer pension plans. The changes are responsive to public comments received on PBGC’s interim final rule and will “better protect the pensions earned by workers and retirees covered by multiemployer plans eligible for assistance.” The PBGC launched the SFA Program under an interim final rule published in July 2021. The PBGC received over 100 public comments on many provisions of the interim rule including the methodology plans must use to calculate the amount of SFA, permissible investments of SFA funds, the conditions imposed on plans that receive SFA, and several other aspects of the interim rule. The final rule becomes effective August 8, 2022.
The final rule makes various changes that address the public comments received, including:
Allowing plans to invest up to 33 percent of their SFA funds in return-seeking investments (e.g., publicly traded common stock and equity funds that invest primarily in public shares); with the remaining 67 percent restricted to high-quality fixed income investments.
Modifying the SFA calculation method to use separate interest rates for plans’ SFA and non-SFA assets; and aligning the interest rates used to calculate SFA with reasonable expectations of investment returns on plans’ SFA assets.
Providing a different methodology for the calculation of SFA for plans that implemented benefit suspensions under the Multiemployer Pension Reform Act of 2014.
Requiring a phase-in recognition of SFA funds for purposes of computing employer withdrawal liability (the PBGC included a 30-day public comment period solely related to this change).
Additionally, the PBGC adopted changes that address stakeholder comments on the application process, including changes that facilitate plans’ SFA calculations and the preparation of SFA application materials.
The American Rescue Plan Act (ARPA), enacted in March 2021, contains provisions to provide up to an estimated $91 billion in assistance to eligible plans that are severely underfunded. Additionally, it assists plans by providing funds to reinstate previously suspended benefits. The ARPA also addresses the solvency of PBGC’s Multiemployer Insurance Program, which was projected to become insolvent in 2026.
The news release is available here.
A Fact Sheet is available here.
The final rule is available here.
Other HR/Employment
DOL Launches Android Timesheet App for Employees and Employers to Record Hours, Overtime, Breaks; Compute Wages
On June 30, 2022, the Department of Labor (DOL) announced the launch of an app for use on Android devices that helps track work hours, break time, overtime hours and calculates wages due. (The DOL previously launched the iOS version of the division’s Timesheet App.) The Timesheet App allows employees to ensure all their hours of work are recorded, including those hours when they telework, travel, perform pre- or post-shift work, or log in while on call. Employees can maintain a record of their work hours on the app to ensure their pay records are correct or to use if a pay dispute arises. For employers, the app can help ensure that current timekeeping information is accessible in one location on a mobile device.
Additional information is available in the DOL news release, available here.
Aon Publications
CMS Forecasts Upcoming Guidance on ACA Transparency Machine Readable Files
The Affordable Care Act (ACA) Transparency in Coverage provisions require that most group health plans and insurers post Machine Readable Files (MRFs) by July 1, 2022. The Centers for Medicare & Medicaid Services (CMS) recently posted a frequently asked question (FAQ) that could mean a relaxation of certain requirements for a subset of employers and that the Departments of Labor, Health and Human Services, and the Treasury would be issuing formal guidance “soon.”
This Aon bulletin addresses:
Overview of the ACA transparency MRF requirements;
Who is responsible for implementation;
The CMS FAQ that provides insight into future official guidance, including what is missing; and
Next steps for employers.
The Aon bulletin is available here.