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ERIC also offered the ongoing experience of ERIC members who sponsor cash balance and other hybrid pensions plans as an example of the adverse consequences that misguided regulations can have. “The Pension Protection Act of 2006 reflected a clear policy in favor of establishing and maintaining hybrid plans that provide meaningful and secure retirement benefits. However, almost five years have passed, and Treasury and the IRS still have not issued definitive guidance on fundamental issues; and proposed regulations have introduced new stumbling blocks that are inconsistent with Congress’s intent,” said ERIC President Mark Ugoretz. ERIC provided the suggestion as part of comments it submitted to the Department of Treasury in response to a Request for Information (RFI) as part of President Obama’s January 18 Executive Order on ways the Department could reduce the burden associated with its regulations. ERIC’s letter adds that “[t]he current regulatory climate, particularly with regard to hybrid plans, offers very little incentive to maintain a defined benefit plan in any form, and actually imposes significant disincentives.” In addition, ERIC said that overly burdensome regulations under the Patient Protection and Affordable Care Act (ACA) and other laws affecting employee benefit plans can have similar adverse consequences and that it is critical to “choose the least burdensome path,” as outlined in the Executive Order. ERIC recommends creating one or more stakeholder advisory groups such as the Information Reporting Program Advisory Committee (IRPAC) to review regulations affecting employee benefit plans, and to discuss issues and proposed solutions with Treasury and IRS officials.
ERIC also offered the ongoing experience of ERIC members who sponsor cash balance and other hybrid pensions plans as an example of the adverse consequences that misguided regulations can have.
“The Pension Protection Act of 2006 reflected a clear policy in favor of establishing and maintaining hybrid plans that provide meaningful and secure retirement benefits. However, almost five years have passed, and Treasury and the IRS still have not issued definitive guidance on fundamental issues; and proposed regulations have introduced new stumbling blocks that are inconsistent with Congress’s intent,” said ERIC President Mark Ugoretz.
ERIC provided the suggestion as part of comments it submitted to the Department of Treasury in response to a Request for Information (RFI) as part of President Obama’s January 18 Executive Order on ways the Department could reduce the burden associated with its regulations.
ERIC’s letter adds that “[t]he current regulatory climate, particularly with regard to hybrid plans, offers very little incentive to maintain a defined benefit plan in any form, and actually imposes significant disincentives.”
In addition, ERIC said that overly burdensome regulations under the Patient Protection and Affordable Care Act (ACA) and other laws affecting employee benefit plans can have similar adverse consequences and that it is critical to “choose the least burdensome path,” as outlined in the Executive Order.
ERIC recommends creating one or more stakeholder advisory groups such as the Information Reporting Program Advisory Committee (IRPAC) to review regulations affecting employee benefit plans, and to discuss issues and proposed solutions with Treasury and IRS officials.
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