Deals and People June 17, 2015

Bogdahn Group Expands DC Investment Consulting Team

Paul Murray has experience working with hospital and higher education 401(k)s and 403(b)s.
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The Bogdahn Group announced the addition of Paul Murray to its defined contribution team.

Murray will assist the firm in its continued expansion of the defined contribution practice, which provides advice to more than $6 billion dollars in assets.

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He brings 25 years of retirement plan experience to his new role as retirement consultant, including his time as a plan consultant for hospitals and higher education organizations in the defined contribution space for 401(k) plans and 403(b) plans.

The Bogdahn Group, an institutional investment consulting firm headquartered in Orlando, Florida, with more than $61 billion in assets under advisement (AUA), has a defined contribution team that works with plan sponsors and retirement committees to deliver comprehensive retirement solutions to all institutional plan types, with a specific expertise in public plans, including 457(b), 401(a) and 403(b) plans. More information about the firm is at on their website.

Compliance June 17, 2015

PBGC Issues Rule About Multiemployer Plan Partitions

Bankruptcies need not be imminent to ask PBGC to approve a partition.
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The Pension Benefit Guaranty Corporation has issued an interim final regulation to implement the partition provisions of the Multiemployer Pension Reform Act of 2014.

This legislation enables PBGC to expand its efforts to help prevent the insolvency of financially troubled multiemployer pension plans. Under the rule, troubled plans may apply to PBGC for financial assistance to fund a portion of their benefit liabilities in order to remain solvent.

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The agency explains that before the Act’s passage, its partition authority was limited to situations involving bankruptcy by some of a plan’s contributing employers. Partitions required benefits to be reduced to PBGC guarantee levels. Under the new rule, plans that are projected to run out of money within 20 years may be able to ask PBGC to approve a partition.

Using the new authority, PBGC can relieve plans of some of their financial obligations so they can preserve benefits for participants at levels above the PBGC-guaranteed amounts and continue to pay retirement benefits over the long term.

Before PBGC can provide help to a plan, the law requires that the plan must have taken all reasonable measures to remain solvent. Those measures include making certain benefit reductions to ward off larger benefit reductions in the future. Specifically, the plan’s trustees must have received Treasury Department approval to reduce participants’ benefits to 110% of the PBGC-guarantee level (except for participants who are aged or disabled). For example, if a participant’s PBGC-guaranteed benefit would be $1,000 per month, the reduced benefit could not be below $1,100 per month.

PBGC’s ability to approve partitions will be limited by its financial resources. The agency must certify that providing help to a particular plan doesn’t hurt its ability to provide assistance to participants in other troubled plans. 

The rule will be effective upon publication in the Federal Register June 19. The public will have 60 days to provide comments to PBGC. Frequently asked questions about the interim final rule are here. Text of the rule is here.

The agency asked for input about expanded rules for partitions and mergers of multiemployer plans in February.

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