WASHINGTON - Employer groups are reacting favorably to proposed Treasury Department regulations that require pension plan sponsors to inform participants at least 45 days before making any changes that will result in future cuts in benefits, and to explain the magnitude of the cuts to workers. Under the proposal, employers, for the first time, will have to provide these notices even if they eliminate or reduce early retirement subsidies.
The proposal, which offers guidance on changes in tax and pension laws last year, triples the previous 15-day notice employers were required to give about cutbacks in future benefits.
"They've carefully balanced the need to get additional information to participants with the reality that pension plan sponsors face, and it preserves the flexibility for employers to design notices that will work best for their workers," said James M. Delaplane Jr., vice president of retirement policy at the American Benefits Council.
The public will be free to comment on the proposed regulation, which was published in the Federal Register last week, for 90 days.