5500 Preparer's Manual for 2012 Plan Years
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Several employer groups and trade associations have urged the Pension Benefit Guaranty Corporation (PBGC) to suspend enforcement of proposed regulations under ERISA §4062(e), relating to the consequences of a substantial cessation of operations at a facility in any location.
In a letter to the PBGC, sent on December 16, 2011, the ERISA Industry Committee (ERIC), American Benefits Council, the ASPPA College of Pension Actuaries, among others, expressed serious concern over the PBGC's active enforcement of the proposed regulations that are being reconsidered pursuant to an Executive Order on improving regulation and regulatory review.
The letter to PBGC Director Josh Gotbaum states that, "It is inconsistent with the President's Executive Order to announce a reconsideration of troublesome proposed regulations, while at the same time actively enforcing them as current law."
Inconsistent with the statute, letter contends
The letter argues that the proposed regulations, which were issued in August 2010, are inconsistent with the statute, published PBGC guidance, and many years of historical enforcement practices. ERISA §4062(e) was intended to apply to situations where operations at a facility are shut down, but under the proposed regulations, liability can be triggered where no operations are shut down, the letter contends.
Moreover, the letter argues that the liability created by the proposed regulations can be "vastly out of proportion with the transactions that give rise to the liability." In addition to urging the PBGC to suspend enforcement actions, the letter requests that the PBGC void all agreements entered into based on the proposed regulation.
Source: ERIC press release, December 16, 2011.
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