Here is the link to the latest edition of the Council's Benefits Passport, summarizing the topics of discussion at the summer meeting of the Organization for Economic Cooperation and Development (OECD) Working Party on Private Pensions (WPPP). The American Benefits Institute (Institute), the education and research affiliate of the American Benefits Council (Council), serves as a private sector advisor to the U.S. government delegation to the OECD. Richard Hinz, senior advisor to the Council (and former Chairman of the WPPP when he served in the U.S. Department of Labor (DOL)), attended the meeting on our behalf.
Topics covered at the meeting include:
Incorporating Corporate Income Tax and The Effects of New Savings
Long Term Cost of Tax and Financial Incentives for Funded Private Pensions
Lending Activities in Private Pensions
Designing Funded Pension Arrangements Given the Level of Financial Literacy and Behavioral Biases
Literature Review of the Impact of tax Incentives and Other Policies on Retirement Savings
Policy Measures to Contain Costs of Running Funded Private Pension Plans
Defined Benefit Pension Arrangements, Solvency and Interest Rates
The U.S. Department of Labor (DOL) is seeking an 18-month delay in the applicability dates of three prohibited transaction exemptions (PTEs) associated with the final "fiduciary" rule, according to an August 9 filing with the U.S. District Court for the District of Minnesota. The Council had requested a delay in the applicability date to give the agency time to address plan sponsor concerns.
In an August 7 letter to the U.S. Department of Labor (DOL) Employee Benefits Security Administration (EBSA), the Council continued to push for revisions to the final "fiduciary" rule to provide more certainty and clarity.
In an August 1 letter to the U.S. Treasury Department and Internal Revenue Service (IRS), the Council formally requested urgent guidance and adequate transition time for the applicability of new mortality tables with respect to defined benefit plans.
Responding to a formal request for information (RFI), on August 1 the Council provided to the U.S. Treasury Department a comprehensive set of recommendations for eliminating, modifying or streamlining regulations to reduce burdens on employee benefit plan sponsors.
A bipartisan team of lawmakers in the U.S. House of Representatives have introduced the Rightsizing Pension Premiums Act (H.R. 3596), a measure that makes a number of reforms to the Pension Benefit Guaranty Corporation's (PBGC) insurance premium system as recommended by the Council.
This measure includes (1) reduction of premiums for small employers and "CSEC" plans (generally multiple employer plans maintained by charities or cooperatives) to pre-2006 levels, (2) reduction of premiums for other plans based on the funded status of the PBGC's single employer plan program, and (3) taking PBGC premium increases and decreases off-budget.
What is next? Although the repeal and replace process for several months has been reminiscent of the famous line from Monty Python and the Holy Grail – "I'm not dead yet!" – it appears that the repeal-and-replace effort really has come to a halt. There are numerous paths forward with respect to "repair" of the ACA and all pose a high degree of importance for employer sponsors of health coverage, as well as other stakeholders.
The American Benefits Council offered detailed recommendations with respect to tax reform in a July 17 letter to the Senate Finance Committee, urging lawmakers to strengthen the tax incentives for employer-sponsored health insurance and retirement plans. The letter also included numerous suggestions for reducing employer burdens and improving outcomes for participants and beneficiaries.
On July 13, Senate Republican leaders released the latest version of the Better Care Reconciliation Act (BCRA), a measure to repeal and replace large sections of the Affordable Care Act (ACA). The latest version of the legislation includes a number of changes designed to shore up support within the caucus, though none of these significantly affect employer-sponsored plans.