Employee Benefit Plans

Investors want the Financial Accounting Standards Board to revisit pension accounting rules and make changes that go beyond the International
Accounting Standards Board’s new standards, Chairman Leslie Seidman said. “That is a pressing matter we’re going to have to take seriously in terms
of adding to the agenda,” she said. The FASB changed pension accounting rules in 2006, but has deferred a second phase of revisions. Read more»

The Financial Accounting Standards Board released an Accounting Standards Update that requires employers that contribute to multiple-employer pension plans to disclose more information than in the past. Previously, employers had to release the total amount contributed to such plans, but now they must disclose specific information about their contributions to significant pension plans, and whether those plans are subject to funding improvement plans, among other things. Read more»

Changing accounting standards could worsen weak pensions, says the National Association of Pension Funds. International Financial Reporting Standards are eliminating so-called smoothing techniques that reduce volatility by adopting a long-term view of financial positions. Some critics say the changes are being made based on the financial cycle and not for accounting purposes. Read more»

The Financial Accounting Standards Board approved revised standards requiring companies to provide more data about pension plan obligations for unionized workers. New data required under the standard includes the contributions made to each plan and whether the employer contributes more than 5% of the total contribution. Read more»

The Internal Revenue Service and Treasury Department have released final and proposed regulations governing hybrid retirement plans, which were introduced by the Pension Protection Act of 2006. The regulations define key concepts and provide special vesting rules and safe harbors. Read more»

The AICPA and auditor firms are concerned that companies may be misrepresenting the public significance of audit reports conducted under the Statement on Auditing Standards No. 70. Using terms like “SAS 70 certified” or “SAS 70 compliant” to attract potential customers is concerning because each SAS 70 report is voluntarily commissioned and has no specific criteria, says Chuck Landes, AICPA’s vice president of professional standards and services. Read more»

Given the complexity of employee benefit plan administration, it comes as no surprise that errors occur. Unfortunately, if left unresolved, these errors can lead to sanctions — and even to a plan losing its tax-favored status. If compliance errors are discovered, consultation with outside professionals will likely be necessary to ensure that appropriate steps are taken to correct the errors Read more»

Employee benefit plan sponsors often outsource some portion of their plan’s processing to outside service providers. These third party administrators (TPAs) include bank trust departments, insurance companies, data processing service bureaus or benefits administrators. Some of the more commonly outsourced activities include payroll and participant activity recordkeeping. Read more»

Recent amendments to Department of Labor (DOL) and IRS regulations have made ERISA-covered 403(b) plans subject to the same reporting and audit requirements as 401(k)s. Read more»

Beginning January 2010, plans that are required to file a Form 5500 must file it using the ERISA Filing Acceptance System, or EFAST. In addition, the IRS has made substantive changes to Schedule C, which may require additional information from plan sponsors. Read more»