A press release from Rep. Rob Andrews (D-N.J.) and Sen. Tom Harkin (D-Iowa) says the GAO wants to call a halt until the Department of Labor can evaluate the situation, according to BNA.
The news release outlines the following GAO recommendations for the perceived problems with cash balance plans:
- amend the Employee Retirement Income Security Act (ERISA) to require plans to provide participants with timely, plain-language information about plan changes;
- establish requirements to prevent plans from creating a wearaway period at conversion on prior accrued benefits;
- create a moratorium on determination letters approving cash balance plans until the IRS can develop a regulatory framework with cash balance plan requirements;
- change current disclosure requirements for summary plan descriptions to include clear statements regarding the hypothetical nature of cash balance plans and the potential of the conversion to reduce future benefit accruals;
- require that participants be notified of plan changes that can reduce future benefit accruals at least 90 days in advance.
Harkin told BNA if the pension reform bill (H.R. 1102) goes to the Senate floor before Congress adjourns, he will offer an amendment to protect workers from the wearaway of benefits in cash balance plans.
– Nevin Adams firstname.lastname@example.org