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ASPPA’s College of Pension Actuaries Issues Letter to PBGC

Melinda | October 13, 2010 | 0 Comments

The ASPPA College of Pension Actuaries (ACOPA) responds to a request for comment on the proposed rule relating to treatment of substantial cessation of operations under ERISA Section 4062(e) issued by the Pension Benefit Guaranty Corporation (PBGC) on August 10, 2010 [RIN 1212-AB20].

Here’s a summary of ACOPA’s recommendations :

Small Plan Exception: Events affecting no more than 20 employees pose little or no risk to PBGC, and should be exempt from the reporting requirements.
Well-funded Plan Exception: Well funded plans pose little or no risk to PBGC, and should be exempt from the reporting requirements.
“Cessation” Issues: The 7-day and 30-day time frames should operate as safe harbors. Furthermore, moving operations to a new location, seasonal changes in employment and other cessation and resumptions of employment in the ordinary course of business should be exempt under the final rule.
Active Participant Definition: The definition of “active participant” should include employees who are in the plan’s eligibility group and who will be eligible to accrue benefits once they have completed the plan’s entry date requirements.
“Operation” and “Facility” Issues: The final regulation should provide clarification on how the 20% reduction is measured for businesses performing multiple operations at multiple locations.
Sale of business: The sale of all or part of a business in which employment and operations continue seamlessly with the new employer should not be a section 4062(e) event.

Read ACOPA’s full comment letter issued to the PBGC here.

About ACOPA: The ASPPA College of Pension Actuaries (ACOPA) formed in September 2008 when ASPPA and the College of Pension Actuaries (COPA) combined to create a semi-autonomous operating unit within ASPPA. ACOPA is the primary source of professional organizational support for pension actuaries and manages the actuarial responsibilities of ASPPA, which is one of the recognized U.S. organizations of actuaries. All credentialed actuarial members of ASPPA are members of ACOPA.

About ASPPA:The American Society of Pension Professionals & Actuaries (ASPPA) is a national organization of more than 7,000 retirement plan and benefits professionals that serves as the educator, voice, and advocate for the employer-based retirement system. ASPPA members are administrators, actuaries, advisors, attorneys, accountants and other financial services professionals who provide consulting and administrative services for qualified retirement plans.