Responding to the Department of the Treasury’s “Preliminary Plan for Retroactive Analysis of Existing Rules,” the American Society of Pension Professionals & Actuaries (ASPPA) recommended that these two issues be given top priority in light of the current economic climate and the importance of promoting retirement security through expanded availability and use of lifetime income distribution options.
The group highlighted a number of recommendations for existing regulations to support innovation and reduce administrative burdens for the retirement plan system:
- Safe Harbor 401(k) Plans – ASPPA recommends that mid-year changes to a safe harbor 401(k) plan be permitted (and updated notices provided), to the extent that the changes would not be expected to significantly impact a participant’s deferral decision.
- Electronic Communications – ASPPA recommends that the Department work with the U.S. Department of Labor to create a unified approach for electronic disclosures for retirement plans.
- Plan Sponsor Elections Under Pension Protection Act of 2006 – ASPPA and the ASPPA College of Pension Actuaries (ACOPA) recommend that all elections that affect the funding for a plan year be formalized in an attachment to the Schedule SB for the year and that elections regarding credit balances be permitted in all instances to specify a determinable formula in lieu of stating a specific dollar amount. ASPPA and ACOPA also recommend that the ability to make standing elections be expanded, so employers are not required to make the same election each and every plan year and that standing elections be permitted to be written in a manner so as to remain in force as long as the employer continues the business relationship with the individual or company named on the election, even in the event of a change in the individual actuary who prepares the Schedule SB for that plan.
- Participant Communications – ASPPA recommends that the Department simplify the required employee communication items by combining and integrating required notices where possible, coordinating timing requirements so that participants do not receive multiple notices on various topics throughout the year, and coordinating with the U.S. Department of Labor to eliminate duplicative disclosures.
- Interim Amendments – ASPPA recommends that the interim amendments only be required once every three years.