Compliance December 1, 2005

PBGC Releases New 2006 Rules

December 1, 2005 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) has released two final rules for 2006.
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The first is a new maximum guaranteed pension benefit for 2006, BNA reports.   The 2006 maximum monthly benefit guaranteed by PBGC that might be paid with respect to a plan participant in a single employer pension plan that terminates in 2006 is $3,971.59, beginning at age 65.   This is an increase from $3,801.41 in 2005.

The increased benefit final rule also said plan administrators of certain underfunded plans are required to provide notice to plan participants and beneficiaries of the plan’s funding status and the limits of PBGC’s guarantee.   Plan administrators may, subject to regulatory requirements, include this information in participant notices, the rule said.

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In addition,PBGC amended its regulation on allocation of assets in single-employer plans by substituting a new table that is used to determine expected retirement ages for plan participants.

The table applies to any plan being terminated either in a distress termination or involuntarily by the agency with a valuation date falling in 2006, and is used to compute the value of early retirement benefits and the total value of benefits under the plan.   The table is updated annually to reflect changes in the cost of living.

Both final rules are effective January 1, and were scheduled to be published in the Federal Register Friday. More information about the rules is  here .

 

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Compliance November 30, 2005

VA Company Owner Charged with Filing False 5500s

November 30, 2005 (PLANSPONSOR.com) - A federal grand jury has indicted the owner of VPC Group Inc. of Virginia Beach, Virginia on five counts of filing fraudulent Form 5500 plan reports.
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A news release from the US Department of Labor (DoL) said Gary Lee Beavers was charged with preparing and filing the false 5500s for the Equipment Depot Inc. Employees Salary Reduction Plan & Trust for plan years 2000 through 2003, and the Glass Baron Inc. 401(k) Profit Sharing Plan for plan year 2001.  

The indictment alleges that Beavers caused the plans to falsely report that financial statements and schedules were audited and received an opinion as to accuracy by an independent qualified public accountant, as required by the Employee Retirement Income Security Act (ERISA).

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He also allegedly used the name of a specific certified public accountant, knowing that the accountant had performed no audits and had prepared no accountant’s opinions.   The certified public accountant was unaware that his name had been used in this manner.   If convicted, Beavers faces a maximum of 25 years in prison.

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