What's a DB Plan Administrator/Advisor to Do


Disclaimer: The comments below represent my own opinion and do not necessarily represent those of my employer or any organization to which I may belong.

    Administrators of defined benefit plans and other professionals dealing with them have had a real problem on their hands this year. 2008 is now half over and a significant amount of clear, final guidance on how the Pension Protection Act applies to plans has not been issued. We have a new law. Many provisions are effective for the 2008 plan year (some act provisions were effective even earlier). We really can’t blame the IRS for this because Congress passed the biggest overhaul of pension law since ERISA and then dumped the whole regulatory mess in the lap of the Service.

    We have some proposed regulations. The effective date of the [yet to be issued] final regulations have been put off until 2009. What are we to do in the meantime? A “reasonable interpretation” will be acceptable. This seems to have replaced “good faith reliance”. At times, “reasonable’, like beauty, is in the eye of the beholder. We can also rely on the proposed regulations. In the preambles, we have been asked for comments on certain issues that the Service is considering. Can we rely on this request for comments? Are administrators, actuaries, and lawyers going to be left holding the bag when final regulations are issued? What worries me is that what many think is a reasonable interpretation of the language of the law may turn out to be not reasonable when the final rules are in.

    My question to this forum is, what have you been doing in 2008 when dealing with your defined benefit plans, especially in two areas: where no proposed regulations have been issued and where musings in preambles and in open forums by government representatives are disagreed with by practitioners?