Products July 21, 2014

PBGC Offers Guidance Page on Multiemployer Pension Plans

July 21, 2014 (PLANSPONSOR.com) – A recent posting on the Pension Benefit Guaranty Corporation's (PBGC) Retirement Matters blog discusses multiemployer pension plans and points plan sponsors to basic information about such plans.
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The blog post directs defined benefit plan sponsors to the PBGC’s “Introduction to Multiemployer Plans” web page. This page defines a multiemployer pension plan as “a collectively bargained plan maintained by more than one employer, usually within the same or related industries, and a labor union.” The PBGC notes that these plans can also be referred to as Taft-Hartley plans.

The introduction page covers topics such as background on the PBGC’s Multiemployer Program, rules governing multiemployer pension plan coverage, plan benefit structures and employer contributions.

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The blog post on multiemployer pension plans notes how the PBGC “doesn’t take responsibility for multiemployer [pension] plans but instead sends financial assistance to plans that have run out of money to pay promised benefits.” The PBGC notes that during fiscal year 2013, it paid $89 million in financial assistance to 44 multiemployer pension plans covering the benefits of nearly 50,000 retirees, with an additional 21,000 people in these plans set to receive benefits when they retire.

The PBGC has been paying close attention to multiemployer pension plans as of late, issuing new educational resources as well as new regulations impacting multiemployer pension plans (see “PBGC Foresees Increased Risks to Multiemployer Plans” and “PBGC Finalizes Multiemployer Plan Reporting Regs”).

Compliance July 21, 2014

New Law Outlines Training for CalPERS Board Members

July 21, 2014 (PLANSPONSOR.com) – A new state law calls for members of the California Public Employees' Retirement System (CalPERS) board of administration to receive investment-related training.
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Assembly Bill No. 1163, or AB 1163, was signed into law late last week by California Governor Jerry Brown. The language of the new law says that the board is required to adopt an education policy for its members and further requires that “all board members receive a minimum of 24 hours of board member education within the first two years of assuming office and for every subsequent two-year period in which the person serves on the board.”

In addition, the law requires the board to maintain a record of a board member’s compliance with the policy and to post the policy and an annual report on board member compliance on the CalPERS website (http://www.calpers.ca.gov/).

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The language of AB 1163 also lists the topics that board members need to be trained on, which include, but are not limited to, the following:

  • Fiduciary responsibilities;
  • Ethics;
  • Pension fund investments and investment program management;
  • Actuarial matters;
  • Pension funding;
  • Benefits administration;
  • Disability evaluation;
  • Fair hearings;
  • Pension fund governance; and
  • New board member orientation.

More information about AB 1163 can be found here.

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