Speaking to attendees at the 2013 American Society of Pension Professionals & Actuaries (ASPPA) Annual Conference in National Harbor, Maryland, Borzi said she cannot give a sure date when those regulations—which she called the “conflict-of-interest” rule—will be issued, but “we are very close to finishing.” She added that the rule is the DOL Employee Benefit Security Administration’s highest priority.
When the regulations are issued, Borzi said, it will include three parts:
- The preamble and text of the regulations;
- A “robust” economic analysis, in which the administration discusses what harm is done by conflicted advice, and including a cost/benefit analysis; and
- A list of exemptions.
Borzi also mentioned the administration’s advanced notice of proposed rulemaking about lifetime income projections on participant statements. It is now in the stage of analyzing comments. Many commenters urged the administration not to require projections on statements, but Borzi said, “I don’t think that moves the needle, saying you can do it if you want.”
Michael Rae, deputy chief of Negotiations and Restructuring at the Pension Benefit Guaranty Corporation (PBGC) told attendees his agency is working to ease burdens on pension plan sponsors, especially of small plans, to encourage continuity of the defined contribution retirement plan system. He mentioned regulations proposed in July on Premium Rates and Payment of Premiums that would simplify due dates, coordinate the due date for terminating plans with the termination process, make conforming and clarifying changes to the variable-rate premium rules, and provide for relief from penalties. According to Rae, the agency is in the process of reviewing comments (see “Groups Recommend Changes to PBGC’s Premium Proposal”) and hopes to issue final regulations before time to pay 2014 premiums.
Rae also noted that the PBGC recently appointed a Participant and Plan Sponsor Advocate (see “PBGC Names Plan Sponsor and Participant Advocate”). However, there are no specific regulations yet about when and how to engage the advocate.
Mark Iwry, senior adviser to the Secretary of the Treasury and deputy assistant secretary of the U.S. Treasury, said his agency is hoping to issue hybrid plan regulations that have been in the works for so long. “Due to the degree of technical issues with cash balance plans, it has taken longer than we thought,” he stated, noting that when the regulations are issued, they will be final regulations.
Iwry told conference attendees the Internal Revenue Service (IRS) encourages stronger plan designs to increase retirement plan participation. He added that the agency encourages the use of automatic plan features not only in its regulations, but in speaking engagements.
The IRS has been working with the DOL to figure out how to expand lifetime income options in defined contribution plans. He invited attendees to offer remarks about how to design such options.