The Washington Report
July 17, 2019
PBGC Updates Coverage Determination Form and Instructions
On July 10, 2019, the Pension Benefit Guaranty Corporation (PBGC) announced that the new form and instructions for requesting a determination about whether a plan is covered under Title IV of ERISA has been approved by the Office of Management and Budget and is now available for use. According to the PBGC, the form was created to “streamline and simplify the coverage determination process.” The instructions explain that in limited circumstances, under a one-year pilot program, employers may also use the form to request an Opinion Letter about whether a plan in the process of being created is likely to be covered by the PBGC. The PBGC’s Coverage webpage has been updated to include the new material.
The PBGC announcement is available here
The Request for Coverage Determination form is available here
The instructions for the form are available here
The PBGC’s Coverage webpage is available here
PBGC Publishes Proposed Rules on Clarifications and Corrections Impacting Premium Reduction Strategies, Reportable Events, Section 4010 Filings, and Standard Termination Filings
On June 27, 2019, the PBGC published proposed changes to regulations related to premium payments, reportable events, ERISA Section 4010 filings, and standard termination filings. In general, the PBGC proposes to make changes to these rules in order to simplify filings or clarify requirements.
For PBGC premiums, the proposed changes reflect questions the PBGC received on the applicability of premium rules in various situations. The PBGC has also reviewed the intent of the original requirements. The proposed changes would potentially impact the premiums in the following situations:
- A de minimis merger on the first day of the plan year;
- A spinoff and transfer to an existing plan on the first day of the plan year; and
- A spinoff and termination of the remaining plan with a distribution of assets in the same plan year.
While many proposed changes pertaining to reportable events, Section 4010 filings, and standard terminations are simply clarifications to existing rules, several will be welcomed changes to requirements including:
- The elimination of the two-year 75% test for an active participant reduction;
- A clarification of the employment relationship within the controlled group for an active participant reduction, generally eliminating the reporting requirement for an active participant reduction for a spinoff within the controlled group;
- The elimination of reporting of three pieces of financial information for each member of a controlled group when consolidated financial information is reported in a Section 4010 filing;
- A waiver of Section 4010 reporting for a late election to reduce a funding balance;
- A clarification of the assumptions to use for the benefit liability calculation for cash balance plans for Section 4010 reporting purposes; and
- An additional 30 days to provide the Form 501 upon completion of a standard plan termination.
For additional details, please refer to the proposed rules.
Comments on the proposed rules are due by August 26, 2019.
The proposed rules are available here
EEOC Provides Materials and FAQs on EEO-1 Pay Data Collection; Launches New Website
The Equal Employment Opportunity Commission (EEOC) recently published guidance in the form of Frequently Asked Questions (FAQs) on EEO-1 pay data collection requirements. The EEO-1 report requires employers with at least 100 employees and federal contractors (with at least 50 employees and a contract of $50,000 or more with the federal government) to file the EEO-1 form, which identifies the number of employees by job category, race, sex, and ethnicity.
In addition to the updated source materials, the EEOC also launched its long-awaited Component 2 EEO-1 Online Filing System website. The website became available for all filers on July 15, 2019, and system and login information was sent to employers on the same day.
The new website is available here
The FAQs on the “Collection of 2017 and 2018 Component 2 Compensation Data” are available here.
Additional information, including materials available to help support Component 2 EEO-1 Compensation Data filing, is available here.
President Trump Signs Executive Order on Improving Health Care Price and Quality Transparency
President Trump signed an Executive Order on June 24, 2019, instructing various departments of the federal government to issue regulations over the next few months mandating transparency in the prices of health care treatments and services, and in data on the quality of care provided by hospitals and doctors. Additionally, the Executive Order requires agencies to issue guidance that would provide more flexibility with respect to certain health savings account and flexible savings account requirements.
The Executive Order addresses five areas of federal health care policy.
The Aon bulletin on the Executive Order can be found here
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