Washington-based legal publisher BNA said the Pension Benefit Guaranty Corporation (PBGC) reported the move in its semiannual regulatory agenda which sets out the agency’s most recent rule-making activities and those expected in coming months.
The BNA report quoted IRS officials as saying the agency’s proposed cash balance rules should be released soon.
Although treated as defined benefit plans for regulatory purposes and insured by PBGC like traditional defined benefit plans, cash balance plans have a number of defined contribution plan characteristics, the PBGC said in its notice asking for comments on the variable indices question.
When a traditional defined benefit plan terminates, PBGC values it at the date of plan termination in accord with its valuation rules on fixed factors. For cash balance plans, PBGC values the annuity at retirement age or at expected retirement age, the BNA report said.
In the absence of fixed factors or a plan method for fixing them, PBGC must determine which of several possible methods to use to fix the factors.
PBGC officials have previously announced that the agency would seek comments on how to value cash balance plans upon plan termination as part of the possible issuance of regulations providing guidance in this uncharted area.
In the completed action stage of its regulatory report, the PBGC amended its administrative review regulation to expedite the appeals process by allowing a single member of the PBGC’s appeals board to decide routine appeals.
In the final rule stage is a PBGC rule addressing assessment of and relief from penalties, the agenda said. The PBGC has issued a number of policy statements about penalties over the last few years. PBGC intends to replace those policy statements with an updated and expanded set of penalty policies.
In the proposed rule stage is a rule clarifying and simplifying PBGC’s filing rules to provide greater flexibility in methods of filing, the agenda said. Other pending proposed rules include the payment of benefits in PBGC-trusteed plans and allocation of assets in single-employer plans.
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