Administration October 2, 2011

Oklahoma Teachers Retirement Plan on Track to Reach Full Funding

October 2, 2011 (PLANSPONSOR.com) – The retirement fund for Oklahoma public schools teachers is expected to eliminate its unfunded liability in 22 years, reports Tulsa World. 
 
Reported by

James Wilbanks, the Executive Director of the state agency says the turnaround in the fund is being attributed to legislation approved this year that is meant to improve the financial shape of the Oklahoma Teachers Retirement Systems and strong investment returns.

Wilbanks said the pension funds’ unfunded liability has dropped from more than $10.4 billion to $7.6 billion. Its funded ratio is improving from 47.9% to 56.7%; that means that if all teachers and retired teachers cashed in their pensions at once, the pension plan could pay 57 cents instead of 48 cents on the dollar. The retirement plan has about 146,000 members, including 90,000 active teachers and about 49,000 retirees and beneficiaries.

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The article states, the pension fund’s strengthened position means it is expected to reach 100%-funded status in 22 years. Just a year ago the fund was projected to never reach a fully funded status.

Compliance September 30, 2011

ASPPA Recommends Self Correction for Late Deferral Deposits

September 30, 2011 (PLANSPONSOR.com) – In a letter filed with the U.S. Department of Labor’s (DoL) Employee Benefit Security Administration (EBSA) on the Voluntary Fiduciary Correction Program, the American Society of Pension Professionals & Actuaries (ASPPA) urged the DoL to modify its program as it applies to late deposits of elective deferrals under ERISA.
Reported by

Craig P. Hoffman, General Counsel and Director of Regulatory Affairs said: “ASPPA has been a strong supporter of the VFCP since its inception; however, we believe it would be greatly improved by the addition of a self-correction component that under certain circumstances would allow employers to self-correct the late deposit of elective deferrals. Plan sponsors, plan participants and DoL would all significantly benefit by permitting this approach.  

“We recommend adding a formal self-correction component for the late deposit of deferrals. This component would allow employers to correct in accordance with the current VFCP methodology without having to file an application with the Department. Instead, the employer would report that it self-corrected under VFCP and provide information on the correction as an attachment to Schedule H or I for the Form 5500, Annual Return/Report of Employee Benefit Plan.  

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“We believe this proposal would assist DoL’s goals of ensuring timely deposits and in doing so protect plan participants and plan assets. We also believe the proposal would provide the necessary documentation and certainty that late deposits have been fully corrected. By simplifying and expanding participation through a self-correction component, DoL would be able to verify the important role VFCP plays with respect to the many plan sponsors, who self-correct in accordance with, and as a direct result of VFCP, but are not counted in the ‘official’ statistics.”  

ASPPA’s comment letter is available at http://www.asppa.org/Document-Vault/pdfs/GAC/2011/09302011-Comment.aspx.

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