WASHINGTON – The U.S. Department of Labor's Employee Benefits Security Administration has announced a final rule implementing the annual funding notice requirements under section 101(f) of the Employee Retirement Income Security Act of 1974 , as amended by the Pension Protection Act of 2006.
"The final rule implements the pension transparency provisions of the Pension Protection Act," said EBSA Assistant Secretary Phyllis C. Borzi. "Workers need to know how well their pension plans are funded in order to properly plan for retirement, or to take corrective action if their plans are dangerously underfunded." The rule requires the plan administrator of a defined benefit pension plan that is subject to the Pension Benefit Guaranty Corporation's insurance program to furnish a funding notice annually to participants, beneficiaries, labor organizations representing such participants or beneficiaries, employers obligated to make contributions to a multiemployer plan, and the Pension Benefit Guaranty Corporation.
Among other things, the notice must show the plan's funding percentage, the assets and liabilities that determine the funding percentage, the fair market value of the plan's assets on the last day of the plan year, the plan's funding and investment policies and allocation of assets, and known events that are projected to have a material effect on the plan's funding.
An estimated 27,000 plans covering approximately 44 million participants and beneficiaries are subject to these disclosure requirements.
The final rule contains model notices and will be published in the Feb. 2, 2015 edition of the Federal Register. For a copy of the final rule, visit www.dol.gov/ebsa.
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