Pensions

Policy Accomplishments for 2011

Definition of a Fiduciary

Successfully lobbied Congress to include in the Consolidated Appropriations Act, 2012, a provision to block the Department of Labor (DOL) from moving forward with a proposed regulation on the definition of a fiduciary under ERISA.
Successfully lobbied DOL to re-propose the proposed regulation on the definition of a fiduciary under ERISA. The Chamber argued that in addition to concerns about the potential impact on ESOPs, broker-dealers, and Individual Retirement Accounts, that the proposed rule contained an insufficient economic analysis. On September 19, 2011, DOL issued a press release stating that it is going to re-propose the proposed regulation on the definition of a fiduciary. The re-proposal will give the Chamber needed time to work with DOL and other interested parties to ensure that changes to the current regulations reflect modern realities and protect plans and participants while allowing for the free flow of information and services.

PBGC Premiums

Forestalled inclusion of burdensome Pension Benefit Guaranty Corporation (PBGC) premium increases in the House-passed budget or as a revenue raiser for other bills, including the final budget for FY 2012. The president’s 2012 budget included an adjustment to premiums collected by the PBGC. The administration proposed giving the PBGC board the authority to adjust premiums over time, taking into account risks that plan sponsors pose to both retirees and the PBGC. As a result of an intense lobbying effort, the administration’s proposal – giving authority to the PBGC and basing premiums on risk – was removed from the House budget proposal. The House bill did maintain an increase in PBGC premiums; however, the score was lowered from the original $16 billion to $2.7 billion. The Chamber will continue to work to eliminate any increase in PBGC premiums as the budget is finalized.

Investment Advice

Successfully lobbied DOL to reverse its position on what constitutes generally accepted investment theories under the computer model for providing investment advice and banning the consideration of historical performance of individual plan investments. On October 25, 2011, DOL issued its final rule under a provision in the Pension Protection Act of 2006. This rule creates a prohibited transaction exemption under ERISA whereby a plan investment manager affiliated with an advice provider may receive investment management fees as long as the adviser’s compensation does not vary as a result of the advice to a participant or beneficiary (and several other requirements are met). While these issues were collateral to this specific guidance, they were important to clarify to prevent these views from impacting DOL’s views on other methods of providing advice.

Multiemployer Plan Accounting

Successfully lobbied the Financial Accounting Standards Board (FASB) to substantially revise a proposed accounting change to the financial statements of employers that participate in multiemployer pension plans. Most important, the Chamber convinced FASB to remove the requirement that employers include an estimated withdrawal liability calculation on their financial statements. While the Chamber supports additional transparency, the proposed disclosures were generally overly burdensome and would have had a negative financial impact on businesses that contribute to multiemployer plans.

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