DOL Budget Request Includes PBGC Premium Initiative
However, the request includes an initiative to encourage companies to fully fund their pension benefits by authorizing the Pension Benefit Guaranty Corporation (PBGC) board to adjust premiums and take into account the risks that different retirement plan sponsors pose to their retirees. Under the initiative, the PBGC is estimated to save $25 billion over the next decade.
According to the proposed budget, the increase in the amount requested from FY 2012 supports increasing costs for investment management activities and the multiemployer program (see “PBGC Warns of Trouble for Multiemployer Program”), as well as improving the benefit payment and processing function.
The FY 2014 budget proposes to give the PBGC board the authority, beginning in 2015, to make future premium rate adjustments that take into account the risks that different sponsors pose to their retirees and PBGC (see “Groups Reject PBGC’s Call to Set Premiums”). The budget requires the board to undertake a one-year study and public comment period, as well as a gradual phase-in of any increases (see “Barry’s Pickings: Risky Business”). This proposal will both encourage companies to fully fund their pension benefits and ensure the agency’s continued financial soundness, the DOL suggests.
In addition, according to the proposal document, PBGC is currently benchmarking its investment management practices against those of other large pension and/or trust fund administrators. This process may lead to modifications in FY 2015 on how PBGC accounts for investment management activities to bring PBGC more in line with standard investment industry practices. To facilitate this process, the Administration is also proposing a modification to the PBGC appropriation’s language to make it easier for the Corporation to implement its board-approved investment policy.EBSA
The DOL’s FY 2014 budget provides the resources for the Employee Benefit Security Administration (EBSA) to continue to enhance pension and health benefits security for America’s workers and their families. Subsequent to full programmatic implementation of the Affordable Care Act (ACA) in FY 2014, EBSA will review and analyze the impact of unanticipated programmatic demands and request resources as necessary in FY 2015 and beyond to address these program requirements.
During FY 2014, EBSA will begin to focus its enforcement program on ACA compliance. With regard to the multiple employer welfare arrangement (MEWA) registration requirements and health care-related enforcement tools, EBSA will develop and implement compliance related programs to aid in the agency’s oversight and audit initiatives to combat health care fraud.
These efforts will include developing compliance related materials and providing training for the agency’s Benefits Advisors and Investigators upon issuance of final MEWA regulatory provisions.Detailed presentations on the MEWA regulatory provisions will also be provided to new field office Investigators and Benefits Advisors who attend the agency’s Basic Training programs.EBSA will develop materials and conduct compliance workshops across the country to educate industry professionals about the new MEWA provisions and will enhance the MEWA Registration Form to facilitate targeting entities for investigation that may not have sufficient reserves to pay legitimate health care claims.
Other highlights of the budget proposal include:
- Nearly $14 million to combat the misclassification of workers as independent contractors, which deprives workers of benefits and protections to which they are legally entitled and puts law-abiding businesses at a disadvantage against employers who violate the law;
- An additional $3.4 million for the Wage and Hour Division to support greater enforcement of the Fair Labor Standards Act and the Family and Medical Leave Act; and
- Five million dollars for the creation of a State Paid Leave Fund to assist workers who need to take time off to care for a child or other family member.