American Benefits Council
Benefits Byte


September 12, 2014

The Benefits Byte is the American Benefits Council’s regular e-mail and online newsletter for members only, providing timely reports on legislative, regulatory and judicial developments, along with updates on the Council’s activities in support of employer-sponsored benefit plans.

The Benefits Byte is published by the American Benefits Council, based on staff reports and edited by Jason Hammersla, Council director of communications. Contact information for Council staff related to specific topics can be found at the end of each story.

Click here to read past issues on the Benefits Byte Archive page.

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IRS Issues Guidance on Pension Plan Funding Elections Under Transportation Bill

Under Internal Revenue Service (IRS) Notice 2014-53, issued September 11, defined benefit plan sponsors have until December 31, 2014, to decide whether to take advantage of interest rate stabilization for 2013 plan years. However, the notice also establishes a number of other deadlines – some prior to December 31– that plan sponsors may need to review immediately.

On August 8, President Obama signed into law the Highway and Transportation Funding Act (H.R. 5021), including a five-year extension of defined benefit pension plan funding stabilization (or “smoothing”) measures originally passed as part of the previous transportation bill, the Moving Ahead for Progress in the 21st Century (MAP-21) Act of 2012. Details of this provision, including an interest rate corridor chart, are available in the August 1 Benefits Byte story.

While the funding provisions are effective for the 2013 plan year, plan sponsors are able to elect to have the funding stabilization extension first become effective for the 2014 plan year. This election could be made for all purposes for which funding stabilization applies, or it could be made only for purposes of benefit restrictions that apply to pension plans that do not meet certain funding levels.

Notice 2014-53 sets forth the conditions for electing to use the smoothing provisions for the 2013 plan year. Under this guidance, elections are irrevocable and must be reported no later than the later of: (1) the Form 5500 deadlines beginning in 2013; or (2) December 31, 2014. The notice also provides detailed guidance on other smoothing-related issues, including reversing prior elections to reduce credit balances and options regarding how to take the new smoothing provisions into account for purposes of the benefit restrictions (such as the restrictions on the payment of lump sums).

On August 18, the Council sent a detailed letter to Treasury and the IRS requesting guidance needed under the smoothing legislation. The Council is very pleased that Notice 2014-53 included numerous provisions identified in our letter.  The Council had also sent a letter to U.S. Treasury Department and IRS officials on August 28 urging the swift release of this critically necessary guidance. Again, Treasury and the IRS were very responsive to the need for fast guidance, issuing detailed guidance just over a month after the legislation was enacted.

The Council welcomes input from members regarding additional funding issues that may require further guidance.For more information, contact Lynn Dudley, senior vice president, retirement & compensation policy, at (202) 289-6700.

CMS to Continue Webinar Series on Reinsurance Contributions

The U.S. Department of Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS) will host the latest in a series of webinars on required Transitional Reinsurance Program (TRP) contributions under the Patient Protection and Affordable Care Act (PPACA).

Under PPACA, during the first three years that health insurance exchanges are operational (i.e., 2014 through 2016), health insurance issuers and plan administrators (on behalf of self-insured group health plans) will be assessed a per-enrollee fee to finance the three-year transitional reinsurance program. The fee is $63 per covered life for 2014.

HHS and CMS released guidance on the process for making TRP contributions in May, previewing "a streamlined process for the collection of reinsurance contributions" through This issuance was followed by an initial series of webinars to provide an overview of policy and operations for reinsurance contributions, followed by a second series to provide an overview of how a contributing entity can submit its annual enrollment count and make reinsurance contributions through

CMS has announced this latest webinar series to provide an overview of the “job aid” available to assist entities in the development of supporting documentation and detail how an entity can update reinsurance contribution filings through if an issue arises after submission. The new webinars will be held on the following days and times:

  • Wednesday, September 17, 2-3:30 p.m. ET
  • Friday, September 19, 2-3:30 p.m. ET
  • Wednesday, September 24, 2-3:30 p.m. ET

Registration will be on a first-come, first-serve basis, limited to three participants per organization. Registration will be limited to selecting only one of the event dates. You will need to log in to the official Registration for Technical Assistance Portal for more information.

Please note, this is not a Council webinar. For more information on TRP issues, contact Kathryn Wilber, senior counsel, health policy, at (202) 289-6700.

The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.

Notice: the information contained herein is general in nature. It is not, and should not be construed as, accounting, consulting, legal or tax advice or opinion provided by the American Benefits Council or any of its employees. As required by the IRS, we inform you that any information contained herein was not intended or written to be used or referred to, and cannot be used or referred to (i) for the purpose of avoiding penalties under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party any transaction or matter addressed herein (and any attachment).