AICPA comments on FAB 2006-03.

• Author: Nevius, Alistair M.
• Position: AICPA ACTIVITIES

The AICPA has submitted comments to the Department of Labor (DOL) regarding Field Assistance Bulletin (FAB) 2006-03.

The Pension Protection Act of 2006 (PPA '06) Section 508(a) revised ERISA's periodic pension benefit statement requirements. Under prior law, ERISA Sections 105(a) and 502(c)(1) required a qualified retirement plan administrator to furnish a benefit statement to any participant or beneficiary who requests such statement in writing. The benefit statement must indicate, on the basis of the latest available information, the participant's or beneficiary's total accrued benefit and the participant's or beneficiary's vested accrued benefit, or indicate the earliest date on which the accrued benefit will become vested. A participant or beneficiary is not to receive more than one benefit statement during any 12-month period. If the required statement is not timely provided, the participant or the beneficiary may bring a civil action to recover from the administrator $100 a day or other relief that a court deems appropriate.

Section 508(a) changes the benefit statement requirements to make them dependent--in part--on the plan type and the individual to whom the statement is provided. Section 508(a) requires that the benefit statement (1) be based on the latest available information; (2) include the total benefits accrued or the vested accrued benefit, or indicate the earliest date on which the accrued benefit will become vested; and (3) include an explanation of any permitted disparity or floor-offset arrangement that may be applied in determining accrued benefits under the plan.

With respect to vested benefits, the Secretary of Labor is required to provide that the requirements are met if, at least annually, the plan updates the information on vested benefits in the benefit statement or provides in a separate statement the information necessary to enable participants and beneficiaries to determine their vested benefits.

On December 20, 2006, the DOL issued FAB 2006-03 to provide guidance concerning "good faith compliance" with these new rules pending the issuance of regulations. In FAB 2006-03, the DOL states that furnishing pension benefit statement information not later than 45 days following the end of the period (calendar quarter or calendar year) will constitute good-faith compliance with the requirement to furnish a pension benefit statement in accordance with...