Compliance April 2, 2015

PBGC Proposes Electronic Filing for Multiemployer Plan Notices

The PBGC says electronic filing of certain notices required by multiemployer plans would result in greater efficiencies for the government.
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The Pension Benefit Guaranty Corporation (PBGC) is proposing to amend its regulations to require electronic filing of certain multiemployer notices.

The proposed rule would require the following notices to be filed electronically: notices of termination under part 4041A, notices of insolvency and of insolvency benefit level under parts 4245 and 4281, and applications for financial assistance under part 4281.

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The agency says it would grant case-by-case exemptions to the electronic filing requirement in appropriate circumstances for filers that demonstrate good cause for exemption.

The proposed rule is part of PBGC’s ongoing implementation of the Government Paperwork Elimination Act and is consistent with the Office of Management and Budget (OMB)’s directive to remove regulatory impediments to electronic transactions. The proposal builds in flexibility to allow the agency to update the electronic filing process as technology advances.

PBGC says it believes requiring electronic filing for these notices would result in benefits for both the public and the government. Electronic filing would simplify the filing process for the public by building in all required and optional fields and including readily accessible guidance in the application. This is expected to reduce the need to contact PBGC for assistance.

The agency estimates that the amendments in the proposed rule would result in a total savings in administrative burdens for the public of 25% (about 22 hours and $99,000 annually). It is asking for comments about the proposal.

Text of the proposal is here. 

Products April 2, 2015

Legg Mason Rolls Out Credit CIF

The Hands Benefit & Trust long-duration credit collective investment fund (CIF) from Legg Mason is benchmarked to the Barclays Long Credit index.
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Legg Mason’s credit collective investment fund (CIF), sub-advised by Western Asset, is designed to allow eligible retirement plans the efficiency and flexibility to better align assets with their liabilities. 

Under normal circumstances, the fund generally invests in a diverse portfolio of primarily investment-grade credit bonds, but may also make other opportunistic investments, including limited investments in high-yield, emerging markets and mortgage-backed securities. Western Asset’s investment process combines a traditional fundamental value orientation with credit research-driven ideas in an effort to exceed benchmark indices. Western Asset aims to add incremental value by exploiting inefficiencies in the corporate bond market.

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With more than 25 years managing long-credit assets, Western Asset believes active management is a critical element to keep pace with the liabilities of an Employee Retirement Income Security Act (ERISA) plan, according to Ryan Brist, head of U.S. investment-grade credit at Legg Mason and the fund’s manager.

According to Doug Hulsey, head of U.S. corporate relationships/liability-driven investment (LDI) solutions at Western Asset, the new vehicle is an efficient and cost-effective investment solution for clients and prospects focused on managing to their liabilities. “It should be particularly attractive for smaller pension plans and outsourced chief investment officers (OCIO) providers,” Hulsey says.

Hands Benefit &Trust (HB&T) is the trustee, responsible for establishing, maintaining and operating the fund. It is also responsible for retention and oversight of the sub-adviser and other service providers for the CIFs.

“The conversion of the Long-Duration Credit strategy from a separately managed account to a CIF reflects the broader industry trend of increased demand for the CIF structure,” says Stephen Hand, president at HB&T. “The ability to bring the defined benefit (DB) space cost-efficient access to Western Asset’s experienced team and strong track record was attractive from HB&T’s perspective.”

Brist’s co-manager on the fund is Blanton Keh, who will be supported by Western Asset’s global credit team.  

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