December 16, 2014
- New Edition of Pomeroy Perspectives: Lessons Learned During the Lame-Duck Session
- Incoming Finance Committee Chairman Reiterates Support for Retirement Savings
- DOL Releases Advance Copies of Form 5500, 5500-SF
- CMS Updates "Culturally and Linguistically Appropriate" County List for PPACA Disclosures
New Edition of Pomeroy Perspectives: Lessons Learned During the Lame-Duck Session
The second edition of Pomeroy Perspectives, a new series of interviews and essays written by former U.S. Representative Earl Pomeroy (D-ND) – a member of the Council’s Policy Board of Directors and senior counsel at Alston & Bird LLP – is now available on the Council website.
In the latest edition, Lessons from the Lame-Duck Session, Pomeroy shares his insight on the recent enactment of multiemployer pension reform as part of the year-end continuing resolution/omnibus legislation to fund government operations (see the December 10 Benefits Byte). Pomeroy represented the National Coordinating Committee for Multiemployer Plans (NCCMP) in its successful effort to secure legislative approval this week of its “Solutions Not Bailouts” multiemployer pension plan proposal.
In this edition, Pomeroy observes that legislative achievements can be particularly challenging in the lame-duck session, especially in the current politically charged environment, but the unique urgency of the multiemployer pension plan crisis ultimately provided the necessary momentum for success.
For more information on this series or suggestions for future subjects, contact Jason Hammersla, senior director, communications, at (202) 289-6700.
Incoming Finance Committee Chairman Reiterates Support for Retirement Savings
In a December 15 speech before the Financial Services Roundtable, Senator Orrin Hatch (R-UT) expressed strong support for the current retirement savings limits while outlining his legislative agenda for retirement policy. When the new session of Congress begins in January 2015, Hatch will assume the chairmanship of the Senate Finance Committee, which has jurisdiction over tax policy and shares jurisdiction of employee benefits policy.
Hatch began his remarks with a brief discussion of comprehensive tax reform, saying that “tax reform is no longer optional.” In addition to the principles of economic growth, fairness and simplicity, as originally enunciated by President Ronald Reagan, Hatch cited permanence, certainty and competitiveness as his goals for a reformed tax code. As we reported in the December 12 Benefits Byte, Hatch released a report, Comprehensive Tax Reform for 2015 and Beyond, outlining several issues likely to come up in the effort to reform the tax code.
With respect to retirement savings, Hatch underscored the value of the private employer-based retirement savings system, calling 401(k) plans and Individual Retirement Accounts (IRAs) “the greatest wealth creator for the middle class in history.”
To emphasize this point, Hatch voiced strong opposition to proposals that would reduce permitted contributions to 401(k) plans and IRAs. Such proposals, he said, “would be both short-sighted and foolish. … the key to successful retirement savings is participation by employees in a plan at work, and the key to convincing employers to sponsor a plan at work is a healthy contribution limit.”
In addition to his defense of the current contribution limits, Hatch’s retirement policy legislative agenda will include:
- Permitting unrelated small employers to pool assets in “Open MEP” multiple employer plans. (This was one of the specific policy recommendations included in the Council’s A 2020 Vision strategic plan.)
- Encouraging the use of annuities in 401(k) plans, as set forth in his Secure Annuities for Employee (SAFE) Retirement Act (S. 1270) [official summary], which also includes provisions facilitating greater use of electronic communication and automatic enrollment. (The Council expressed support for S. 1270 in a July 2013 letter to Hatch.The SAFE Retirement Act will need to be reintroduced in the 114th Congress.)
- Development of a “Starter 401(k)” plan designed for small or start-up businesses.
As we reported in the December 1 Benefits Byte, outgoing Finance Committee Chairman Ron Wyden (D-OR) has expressed concerns that the current tax incentives are skewed to benefit those who don’t need them and has been critical of large IRA balances in the wake of a recent GAO report.
Hatch responded to Wyden’s concerns in a September 30 letter, emphasizing testimony from the Government Accountability Office that “it is not possible for a taxpayer to accumulate such a large IRA account balance solely by making the maximum annual contribution permitted by the tax code and earning average investment returns. … Rather, IRA account balances that great must be the result of other factors, such as extraordinary investment success on the part of the taxpayer.” Hatch also noted the bipartisan repeal of an excise tax on “excess” retirement accumulations, saying that it inappropriately penalized favorable investment returns and could deter individuals from saving.
During a September 16 hearing on retirement policy, Hatch refuted assertions that retirement savings tax incentives are “upside down” and stressed the importance of a bipartisan approach to retirement policy.
As we continue to engage policymakers on tax reform and the potential ramifications of dramatic changes in the retirement plan tax incentives, we welcome your participation and input. For more information, contact Diann Howland, vice president, legislative affairs, at (202) 289-6700.
DOL Releases Advance Copies of Form 5500, 5500-SF
On December 15, the U.S. Department of Labor's Employee Benefits Security Administration (EBSA), the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC) released advance informational copies of the 2014 Form 5500 and Form 5500-SF annual return/report and related instructions. The advance copies are for informational purposes only and cannot be used for actual filing.
Form 5500 is the annual report that benefit plans file with the federal government and the primary source of information for both the federal government and the private sector on retirement plan assets. Modifications to Form 5500 and Form 5500-SF, and their schedules and instructions for plan year 2014 are described under “Changes to Note” in the 2014 instructions.
As part of its Fall 2014 Regulatory Agenda, EBSA announced that it is preparing proposed regulations to modernize the Form 5500 Annual Return/Report of Employee Benefit Plan to “[make] the investment and other information on the Form 5500 more data mineable” and revisions to Form 5500 Annual Return/Report of Multiple Employer Plans, as required by the Cooperative and Small Employer Charity Pension Flexibility Act (CSEC Act), which created the exemption from the Pension Protection Act of 2006 funding rules.
For more information, contact Jan Jacobson, senior counsel, retirement policy, at (202) 289-6700.
CMS Updates "Culturally and Linguistically Appropriate" County List for PPACA Disclosures
The U.S. Department of Health and Human Services’ Center for Consumer Information & Insurance Oversight (CCIIO) of the Centers for Medicaid and Medicare Services (CMS) has updated its Culturally and Linguistically Appropriate Services (CLAS) county data for purposes of complying with certain disclosure requirements under the Public Health Service Act (PHSA) as amended by the Patient Protection and Affordable Care Act (PPACA).
The CLAS establishes the counties in which group health plans and health insurance issuers offering non-grandfathered health coverage are required to provide notices related to internal claims and appeals and external review processes “in a culturally and linguistically appropriate manner” as required under Section 2719 of the Public Health Services Act (PHSA, as added by PPACA). The regulations implementing PHSA Section 2719 require plans and issuers to make certain accommodations for notices sent to an address in a county meeting a threshold percentage of people who are literate only in the same non-English language. This threshold percentage is set at 10 percent or more of the population residing in the claimant’s county, as determined based on American Community Survey (ACS) data published by the United States Census Bureau.
PHSA Section 2715 similarly requires that the Summary of Benefits and Coverage (SBC) be provided “in a culturally and linguistically appropriate manner.” A plan or health insurance issuer may meet this requirement by following the Section 2719 rules for providing claims and appeals procedures in this manner.
A June 2011 HHS technical guidance document provides instructions for calculating these county-level estimates, but affirms that plans and issuers are not obligated to perform calculations on their own and can rely on the chart as a safe harbor. For more information, contact Kathryn Wilber, senior counsel, health policy, at (202) 289-6700.