Defined pension plan participants may tune out and miss important information if they get excessively long pension funding notices.
Officials at the American Society of Pension Professionals & Actuaries (ASPPA), Arlington, Va., have given that warning in a comment on a draft of a pension plan funding notice model.
The Pension Protection Act of 2006 (PPA) created the need for an annual funding notice model, by requiring single-employer plans to give participants yearly updates on plan finances.
Plan sponsors and administrators have been meeting the notice requirement using U.S. Department of Labor Field Assistance Bulletin (FAB) 2009-01, a batch of guidance issued in February 2009.
The Employee Benefits Security Administration (EBSA), an arm of the Labor Department, released a draft model notice regulation based on FAB 2009-01 in November 2010. The draft would require administrators of defined benefit plans that are subject to Title IV of the Employee Retirement Income Security Act of 1974 to send an annual funding notice to the Pension Benefit Guaranty Corp., each plan participant and beneficiary, and each labor organization representing the participants or beneficiaries. EBSA officials estimate the regulations would affect about 29,500 pension plans with about 44 million participants and beneficiaries.
