October 21, 2014
- Submission Form for Transitional Reinsurance Program Annual Enrollment Count Coming Soon
- PBGC Provides 4010 Filing Guidance Under HATFA Pension Funding Provisions
- Council Urges Society of Actuaries to Proceed Cautiously with Mortality Table Reports
Submission Form for Transitional Reinsurance Program Annual Enrollment Count Coming Soon
TheU.S. Department of Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS) announced on October 20 that the form for submitting the Transitional Reinsurance Program (TRP) annual enrollment count will be available on October 24 via www.pay.gov. The deadline for the 2014 benefit year’s annual enrollment count submission is November 15, 2014.
Section 1341 of the Patient Protection and Affordable Care Act (PPACA) established a transitional reinsurance program (2014 through 2016) intended to stabilize premiums in the individual insurance market. Health insurance issuers and certain self-insured group health plans will be assessed a per-enrollee contribution to fund this transitional reinsurance program. The contribution is $63 per covered life for 2014.
Using www.pay.gov, filers will be able to complete all of the informational requirements: registration, submission of the Annual Enrollment Count and remittance of contributions.
The announcement notes that the reinsurance contribution payments are not due on November 15, 2014, and that contributing entities have the option to pay (1) the entire 2014 benefit year contribution in one payment no later than January 15, 2015, reflecting $63 per covered life; or (2) in two separate payments for the 2014 benefit year, with the first remittance due by January 15, 2015, reflecting $52.50 per covered life, and the second remittance due by November 15, 2015, reflecting $10.50 per covered life.
For additional information on the reinsurance contributions submission process, log on to the Registration for Technical Assistance Portal (REGTAP) and visit the Reinsurance-Contributions Library. For more information on the TRP generally, contact Kathryn Wilber, senior counsel, health policy, at (202) 289-6700.
PBGC Provides 4010 Filing Guidance Under HATFA Pension Funding Provisions
The Pension Benefit Guaranty Corporation (PBGC) issued Technical Update 2014-2 on October 17, providing guidance on the effect of the Highway and Transportation Funding Act of 2014 (HATFA) on annual financial and actuarial information reporting under Section 4010 of ERISA and Part 4010 of PBGC's regulations.
Section 4010 of ERISA requires certain underfunded plans to report identifying, financial and actuarial information to the PBGC. For information years ending on or after December 31, 2004, such information must be submitted electronically.
As we have previously reported, HATFA included a five-year extension of defined benefit pension plan funding stabilization (or “smoothing”) rules 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.
Plan sponsors may elect to wait until funding attributable to the 2014 plan year is due to use HATFA rates, in which case the MAP-21 rates will apply for the 2013 plan year. Under IRS Notice 2014-53, plans may decide whether to use MAP-21 or HATFA rates for 2013 funding determinations as late as December 31, 2014 (or, if later, the due date for the 2013 Form 5500 Annual Return/Report).
In a September 5 letter to PBGC, the Council noted that Technical Update 2012-2 provided very helpful guidance regarding the application of the MAP-21 funding stabilization provision to ERISA Section 4010 and urged the agency to confirm that these same rules would continue to apply to the pension funding provisions under HATFA.
Technical Update 2014-2 confirms that the rules and concepts set forth in Technical Update 2012-2 continue to apply. The update also provides relief for plans that have already completed the 4010 filing and for filings submitted prior to the availability of an actuarial valuation report.
Council Urges Society of Actuaries to Proceed Cautiously with Mortality Table Reports
In an October 17 letter to the Society of Actuaries (SOA), a professional organization serving 24,000 actuarial members, the Council urged the body not to rush the release of its final mortality table reports without a full review of comments received from the public. These documents would have a substantial impact on defined benefit pension plans.
In February, the SOA Retirement Plans Experience Committee (RPEC) released an exposure draft of the Mortality Improvement Scale MP-2014 and an exposure draft of the RP-2014 mortality tables. These documents, based on a comprehensive study of uninsured retirement plan mortality experience begun by the RPEC in late 2009, establish a new basis for mortality assumptions for retirement programs in the United States. For pension-related purposes, the mortality projection scale presented in this report, denoted MP-2014, replaces both Scale AA, which was released in 1995, and the interim Scale BB, which was released in 2012.
For accounting purposes, auditors may rely on the assumptions published by the SOA. For purposes of funding, benefit restrictions, PBGC premiums and other related purposes, SOA’s assumptions are usually taken into account by the government in formulating updated mortality assumptions, though those updates may not take effect until at least 2016.
The Council’s October 17 letter, which follows a May 30 lettergenerally expressing support for a cooperative and collaborative review of important mortality table standards, notes several serious concerns about the SOA’s process, most notably the likelihood that strong objections are not being taken into account in the effort to finalize the documents by October 31. “Several comments voiced strong concerns that the SOA had excluded from consideration the vast majority of data available and that the projection scale is subject to significant judgment and should not be a prescriptive, ‘one-size-fits-all’ approach,” the letter read.
The Council is urging the SOA and RPEC not to release the final reports without a full review of the comments submitted regarding the exposure drafts. “The SOA’s announcement conveyed to the pension community that comments received are not likely to be taken into account before the results are finalized. This is disappointing and does not inspire confidence that the table ultimately issued will have been arrived upon in as fair and accurate a manner as it deserves.”
For more information, contact Lynn Dudley, senior vice president, global retirement and compensation policy, at (202) 289-6700.