PLANADVISER - November/December 2021 - 10

compliance news //
PBGC Insurance Programs
Report Positive Positions
The Pension Benefit Guaranty Corporation
(PBGC) has released its Fiscal
Year 2021 Annual Report, which shows
that its multiemployer plan insurance
program has a positive net position of
$481 million-a sharp contrast to the
program's deficit of $63.7 billion at the
end of fiscal 2020.
The agency's multiemployer plan
program will now likely remain
solvent for more than 30 years, due
to the enactment of the American
Rescue Plan Act (ARPA) of 2021. ARPA
created a special financial assistance
pants and beneficiaries in the " legacy "
part of the Huntington Ingalls Industries
Inc. Newport News Operations
Pension Plan for Employees Covered by
United Steelworkers Local 8888 Collective
Bargaining Agreement.
The
complaint stated that the
defendants calculated an annuity
conversion factor, and thus the
present value of the non-single life
annuities (SLAs), for the legacy part
of their pension plan using a so-called
1971 Group Annuity Mortality Table.
Beyond projecting that both men and
women will live shorter lives in retirement
compared with predictions
... the legislation would
establish an online,
searchable " Retirement
Lost and Found " database
at the DOL ...
(SFA) program, which the PBGC estimates
will provide funding to more
than 250 severely underfunded
pension plans covering more than 3
million Americans.
The PBGC's single-employer plan
insurance program also saw year-overyear
improvement. It had assets of
$150.7 billion and liabilities of $119.8
billion as of September 30. The positive
net position of $30.9 billion reflects
an improvement of $15.4 billion from
the program's $15.5 billion net position
in
fiscal
2020.
During
fiscal
2021, according to the agency, it paid
more than $6.4 billion in benefits to
nearly 970,000 retirees in terminated
single-employer plans. The PBGC also
assumed responsibility for the benefit
payments of nearly 34,000 workers and
retirees in 47 single-employer plans
trusteed this fiscal year.
Outdated Mortality Table Suit
Huntington
Ingalls
Industries
has
agreed to settle a lawsuit claiming
it used outdated mortality tables to
calculate monthly benefits for particifrom
newly prepared tables, the 1971
table assumes 90% of the company's
employees are male and 90% of contingent
annuitants are female-all while
using a 6% interest rate.
The lawsuit was among a number of
similar suits filed against large companies
over the past three years.
Summary of Hardship
Withdrawal Rules
In an Issue Snapshot, the IRS has
summarized changes made to hardship
withdrawal rules by the Bipartisan
Budget Act of 2018 and subsequent
IRS regulations. The rules:
* Delete the six-month prohibition
on contributions to a retirement plan
following a hardship withdrawal-
mandatory for plan sponsors to adopt;
* Extend the allowance of hardship
withdrawals to include contributions
to a profit-sharing or stock bonus
plan, qualified nonelective contributions
(QNECs) and qualified matching
contributions (QMACs);
* Now allow earnings on the contributions;
*
Eliminate the requirement to take
a loan before requesting a hardship-
this is optional for plan sponsors,
which may still require the participant
to take a loan first;
* Add the following to the safe harbor
list of expenses for which distributions
may be made on account of an immediate
and heavy financial need those
incurred by the " primary beneficiary
under the plan " for qualifying medical,
educational or funeral expenses; a
deduction under IRC Section 165 for
damage that would qualify as a casualty,
to a principal residence not in a
federally declared disaster area; and a
new type of expense relating to costs
resulting from certain disasters (a plan
need not allow hardship distributions
for all safe harbor expenses);
* Clarify that plans could require a
minimum amount for hardship distributions,
provided the minimum is
nondiscriminatory;
* Change requirements for proving
a heavy financial need in these ways:
as of 2020, an employee may make a
representation that he has insufficient
cash or other liquid assets reasonably
available to satisfy a financial need
even if the employee does have cash or
other liquid assets on hand, provided
that those assets are earmarked to pay
an obligation in the near future such
as rent; and
* Now permit employee representations
to be made over the phone,
provided that the call is recorded-the
plan administrator may rely on the
employee's representation unless the
plan administrator has actual knowledge
to the contrary.
Walgreens Settles Suit Over TDFs
Plaintiffs in a lawsuit alleging that
fiduciaries of the Walgreen ProfitSharing
Retirement Plan breached
their fiduciary duties by selecting
and retaining historically poorly
performing Northern Trust targetdate
funds (TDFs) for the plan
have filed a motion for preliminary
approval of a settlement agreement.
Besides listing the settlement provisions,
a memorandum of law states
that the TDFs have already been
removed from the plan. -PA
10 | planadviser.com November-December 2021
http://www.planadviser.com
PLANADVISER - November/December 2021

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