Uncover the Compliance Risks for Employers with Defined Benefit Plans: What Lawyers Need to Know About the Mandatory Restrictions on Benefits Under PPA
A 90-minute TeleConference/Live Audio Webcast
Tuesday, October 23, 2007
1:00 pm - 2:30 pm ET / 12:00 pm - 1:30 pm CT / 11:00 am -12:30 pm MT / 10:00 am - 11:30 am PT
Moderator:
Judy Mazo, The Segal Company, Washington, DC
Panelists:
William Bortz, Associate Benefits Tax Counsel, Office of Tax Policy, U.S. Department of the Treasury, Washington, DC
Harlan Weller, Pension Policy Actuary, U.S. Department of the Treasury, Washington, DC
Susan Katz Hoffman, Littler Mendelson, Philadelphia, PA
Kent A. Mason, Davis & Harman, Washington, DC
To help propel pension plans toward full funding, PPA restricts the benefits that single employer plans can promise and pay when they are less than 100% funded. For example, as soon as the actuary certifies that a plan is less than 80% funded - or, in many cases, fails to certify otherwise - the plan has to cut back on lump sum and similar payments, and benefit accruals must stop when the funding drops below 60%. Plans have to be amended to provide for implementation of the restrictions when triggered; notices have to be given, as well as new or alternative benefit elections; fiduciary implications are rampant; given how much turns on the timeliness of the actuary''s certification, contracts may need to be reviewed; the ripple effects run through corporate transactions, collective bargaining and plan administrative systems. The panel will discuss the proposed Treasury regulations that explain what goes into testing a plan’s funding against the key 100%, 80% and 60% cutoff points, how and when the plan must apply the restrictions, what notices are required and which may be highly advisable, what happens to benefits when the restrictions come off, the consequences if the funded percentage calculation is incorrect and what an employer can do to avoid the restrictions or undo them as quickly as possible. Also on the theme of benefit restrictions, the panel will discuss highlights of the final section 415 regulation, adopted earlier this year.
