You might recall that The Pension Protection Act of 2006 (PPA) requires that administrators of all defined benefit plans (including multiemployer benefit plans) to provide an annual funding notice to the Pension Benefit Guaranty Corporation (PBGC), plan participants and beneficiaries, labor organization representing participants or beneficiaries. In the case of a multiemployer plan, the plan also has to send a notice to each employer that has an obligation to contribute to the plan. This funding notice must include the plan’s funding target attainment percentage, a statement of the value of the plan’s assets and liabilities and a description of how the plan’s assets are invested as of specific dates, a description of the benefits under the plan that are eligible to be guaranteed by the PBGC, and other information relevant to the plan’s funded status.
The Employee Benefits Security Administration (EBSA) published a proposed rule (available here) that implements the annual funding notice requirement for all defined benefit plans. The proposed regulation outlines the scope of an administrator’s obligations in providing this notice and details the content requirements of the notice itself. The proposed rule’s appendix contains two model notices, one for single employer plans and one for multiemployer plans. The notices can be accessed through the EBSA Annual Funding Fact Sheet.
The purpose of the notices, according to the proposed rule is to “increase the transparency of information about the funding status of plans, affording all parties interested in the financial viability of these plans with a greater opportunity to monitor their funding status and take action where necessary.” The model notice in the proposed rule, the rule asserts, “is expected to mitigate burden and contribute to the efficiency of compliance.“
The deadline for written comments on the proposed rule is January 18, 2011.