ARLINGTON, VA (January 26, 2011) – The following is a statement by Thomas J. Finnegan, president of the American Society of Pension Professionals & Actuaries (ASPPA), testifying regarding additional rules for Hybrid Retirement plans (26 CFR Part 1 §REG 132554–08) on behalf of ASPPA and the ASPPA College of Pension Actuaries (ACOPA) before a hearing at the Internal Revenue Service (IRS) on Wednesday January 26.
“We appreciate the opportunity to testify on proposed hybrid regulations. In broad terms, our concerns are that plan sponsors who in good faith followed the rules as we knew them receive fair treatment under final regulations, that final regulations provide a clear framework for plan design moving forward, and that flexibility in plan design be appropriately balanced with the participant protections that defined benefit plan participants have enjoyed since the enactment of ERISA.
ASPPA and the ASPPA College of Pension Actuaries (ACOPA) ask that IRS and Treasury consider the following recommendations for the final hybrid regulations:
1. Early retirement benefit conversion options: We recommend the final regulations provide §411(d)(6) relief for changing the method of calculating immediate annuity options.
2. Testing methodology with variable rates: We recommend the final regulations provide guidance on the application of nondiscrimination, coverage, participation, accrual and maximum benefit rules when a plan uses a variable rate.
3. Participant choice: We recommend that if participant choice of interest crediting rates is permitted, regulations provide new safeguards to participants in exchange for workable rules for plan sponsors.
In conclusion, we urge the IRS and Treasury to consider the full set of recommendations issued in our comment letter which details how these proposed rules can better serve both the needs of plan sponsors and participants.”
Read ASPPA’s full testimony before the IRS and Treasury here.
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About ACOPA: The ASPPA College of Pension Actuaries (ACOPA) was 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. actuarial organizations. All credentialed actuarial members of ASPPA are members of ACOPA.
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