Single-employer defined benefit plan sponsors covered by ERISA will have new guidelines for annual funding notices when the Department of Labor's Employee Benefits Security Administration publishes a final rule Feb. 2.
The new guidelines also include some new requirements for multiemployer plans.
The updated guidelines implement pension transparency provisions of the Pension Protection Act. “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,” Assistant Secretary Phyllis Borzi said in a statement. Before PPA, only multiemployer plans were required to provide annual funding notices.
The notices must show the plan's funding ratio, the assets and liabilities that determine the funding ratio, 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 events projected to have a material effect on funding.
Model notices for plans covered by the Employee Retirement Income Security Act will be included in the Feb. 2 edition of the Federal Register.