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November 8, 2002
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The problem of so-called orphan plans, defined contribution plans that have
been abandoned by their sponsors and all other fiduciaries authorized to act
on their behalf, has recently received increasing attention from retirement
plan regulators, service providers, Congress and the retirement plan
community. Although orphan plans are estimated to represent only about two
percent of all defined contribution plans and less that one percent of total
defined contribution plan assets, the problems that orphan plans create for
participants, administrators, the government and the courts are substantial.
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Plan participants may suffer economic hardship as a
result of their inability to obtain a distribution from an orphan plan;
plan service providers may be besieged with requests for distributions,
although unauthorized to act; and the government may be forced to handle
the termination of hundreds or thousands of plans that have been
abandoned. The testimony before the working group indicated that the
magnitude of the orphan plan problem is likely to grow, as more businesses
fail in a difficult economic environment and orphan plans are discovered
by service providers in connection with the GUST and EGTRRA document
restatement process.
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To most effectively deal with the problem of orphan plans, the working group
recommended measures that would permit service providers in the private
sector to terminate these plans. As the primary concern of such service
providers was potential fiduciary liability, the working group recommended
the enactment of legislation that would protect service providers from
liability in connection with their services relating to the termination of
orphan plans. Recognizing, however, that enactment of legislation was not
likely in the near term, the group recommended the establishment of a joint
EBSA-IRS program to supervise and administer the termination of orphan
plans. This program would be directed from the national offices of the DOL
and IRS, but administered in the field by the regional EBSA offices.
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The working group envisioned a joint EBSA-IRS program
that would appoint independent fiduciaries responsible for termination of
one or more orphan plans. To the extent possible, these independent
fiduciaries would retain the services of the current plan recordkeeper to
calculate and effect plan distributions.
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The working group recommended a number of regulatory and
legislative proposals intended to assist the processing of orphan plan
terminations. These recommendations included promulgation of criteria to be
used by service providers and trustees to identify and report orphan plans,
regulations that would permit an expedited termination of orphan plans by an
independent fiduciary and regulations requiring plan documents to include
language providing for plan termination in the event of abandonment. Early
identification and possible avoidance of plan abandonment was also urged
through a proposal to require notice of plan abandonment by the trustee in a
bankruptcy proceeding and legislation that would require a bankrupt plan
sponsor to terminate the bankrupt entity’s plan or plans as part of the
bankruptcy proceeding.
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A major concern of the working group was the expense of
terminating orphan accounts. Although many plans permit the payment of
expenses relating to plan termination out of plan assets, the working group
was concerned that such expenses could result in significant erosion of plan
account balances. On the other hand, the payment of orphan plan expenses by
the government could be an unwelcome addition to an already burdened federal
budget. The working group concluded that a streamlined termination process
would help reduce termination expenses. The group also urged the adoption of
measures intended to penalize plan sponsors abandoning their plans and
permitting the payment of plan termination expenses from bankruptcy
proceeds.
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To prevent undue erosion of participant account balances
in plans that permit the payment of termination expenses from plan assets,
the working group suggested the imposition of a cap on expenses based on the
lesser of a specified percentage of a plan account balance or a fixed dollar
amount. In those instances where termination expenses exceeded this cap and
in the case of plans that did not provide for the payment of expenses from
plan assets, termination expenses would be paid by the joint government
program. The working group recommended the creation of a special fund to
help pay for such expenses. Such a fund could derive its assets from the
penalties paid under various provisions of ERISA and the Internal Revenue
Code.
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The Definition of an Orphan Plan
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For purposes of this report, an orphan plan is a defined
contribution plan for which there is no plan sponsor or other plan fiduciary
willing to act with respect to the plan. The focus of this report is the
process of terminating orphan plans so that distributions may be made to
plan participants. The report does not propose solutions for the problem of
missing participants, although a recommendation is made with respect to the
handling of account balances of participants who cannot be located during
the termination process.
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A number of witnesses testified that there was a need to
define and identify orphan plans more expeditiously. To the extent that
these plans can be identified and terminated quickly, there is a greater
likelihood that a plan sponsor or other plan fiduciary can be located to
terminate the plan and, in some cases, bear some of the expenses of
termination. Early discovery also prevents deterioration of plan data that
can be expensive to re-construct months or years later. To address this
need, some testimony suggested that EBSA develop guidance that would set
forth the criteria for determining whether a plan has been abandoned.
Trustees and other plan service providers could be required or encouraged to
report plans that have met the EBSA criteria for abandonment.
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The Scope of the Orphan Plan Problem
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The testimony before the working group indicated that the
number of orphan plans is not large in an absolute sense. In remarkably
consistent testimony, the professional recordkeepers reported that generally
about 2% of total plans administered were orphan plans. From a percentage of
assets perspective, the testimony indicated that the assets involved were
considerably less than 1% of total defined contribution plan assets.
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Nevertheless, the problems that orphan plans create for
participants, administrators, the government and the courts are substantial.
The inability to obtain a distribution from a plan can pose a severe
financial hardship for a participant who has also found his or her job
eliminated and the plan abandoned. Plan service providers, who are typically
authorized to act only upon the direction of a plan fiduciary, are often
besieged by requests for distributions by distressed plan participants. In
some instances, these service providers are no longer being paid for their
services, because the plan sponsor cannot be found or is unwilling or unable
to pay. For the government and the courts, handling hundreds, and
potentially thousands, of abandoned plans on an ad hoc, plan-by-plan basis
is inefficient, expensive and time consuming.
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Several witnesses suggested that the number of orphan
plans is likely to increase in the coming months because of difficult
economic times and the GUST and EGTRRA restatement process. As more
businesses fail, the plans of those businesses may be abandoned. The GUST
and EGTRRA restatement process may permit service providers to more readily
identify plans that previously have been abandoned.
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The Causes of the Problem
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The testimony before the working group indicated that
orphan plans arise for a number of reasons. These include the death of a
sole proprietor/plan sponsor, bankruptcy, the removal of plan fiduciaries by
the DOL, mergers and acquisitions, and the disappearance or unwillingness of
plan fiduciaries to act. As noted above, plan abandonment is often
correlated with difficult economic conditions, particularly in the small
plan market.
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The History of Efforts to Deal with the Problem
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The testimony before the working group noted that, to
date, orphan plans have been handled through a EBSA national enforcement
program established in 1999. This program seeks to identify orphan plans,
find a fiduciary willing to act with respect to the plan and appoint an
independent fiduciary if a plan fiduciary cannot be found. In most, but not
all cases, court orders have been obtained to appoint the independent
fiduciary.
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According to recent testimony of EBSA before Congress,
the portion of the EBSA enforcement budget earmarked for handling orphan
plans was $500,000 for FY 2002. This amount was allocated to pay the costs
associated with hiring independent fiduciaries to terminate orphan plans “where
the asset base of the plan was insufficient to bear these expenses without
causing substantial reductions in individual account balances.”
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To date, major financial service providers generally have
not been willing to undertake the termination of orphan plans, because of
their concerns about fiduciary liability and, in some cases, charter or
legal restrictions prohibiting service in a fiduciary role. Typically, the
independent fiduciary terminating an orphan plan at the request of the EBSA
is an individual or small firm CPA, actuary or plan consultant willing to
take the risk of serving as a plan fiduciary for the limited purpose of
terminating the plan under the supervision of the EBSA.
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A Possible DOL-IRS “White Knight” Program
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The recent congressional testimony described above noted
that EBSA is working closely with the IRS to develop a program to identify
and terminate orphan plans and, to the extent possible, take regulatory
action against plan fiduciaries that do not fulfill their obligations to the
plan. This so-called “white knight” program was described in IRS
testimony before the working group as an effort to define a class of orphan
plans for which streamlined termination procedures could be developed. Under
these procedures, a plan could be deemed to be qualified so that there would
be no adverse tax consequences for participants. These procedures could also
deem the plan to be in compliance with certain requirements of Title I of
ERISA.
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Who Should be Responsible for Terminating Orphan Plans
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The testimony before the working group suggested a number
of possible entities that could serve as the supervisory authority for the
termination of orphan plans. They included a joint EBSA-IRS program, the
PBGC, the bankruptcy trustee for a company in bankruptcy, and one or more
designated courts.
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Acting under the authority of a government program or a
court order, a number of independent fiduciaries, typically not large record
keeping institutions, have assumed the responsibility for the termination of
orphan plans. These independent fiduciaries testified that they would be
willing to direct other plan service providers, such as recordkeepers or
TPAs, in the process of plan termination and the distribution of assets.
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The independent fiduciaries further requested:
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Protection from enforcement by the DOL,
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Clear guidelines for the process by
which a plan could be terminated without causing plan disqualification,
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Relief from certain current law
obligations including document amendment, certain plan filings and
disclosures and plan audits,
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Development of a process for periodic
reports to EBSA,
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The issuance of guidance for
distributing the account balances of participants who can not be
located, and
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A mechanism to assure payment for
their services.
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How to Pay for the Termination of Orphan Plans
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The testimony before the working group indicated that the
estimated costs of terminating an orphan plan could range between a low of
$1,000 and a high of $30,000 to $50,000. The size of the plan and the
condition of the plan data appear to be major determinants of cost. One
independent fiduciary also noted that the greater the potential liability,
the greater the fees.
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The testimony noted that many plans currently include
provisions that permit the payment of plan expenses from plan assets.
According to a EBSA advisory opinion, such provisions would not permit the
payment from plan assets of settlor plan termination expenses. However, such
non-recoverable settlor expenses are generally limited to the cost of
analyzing the decision to terminate. Expenses associated with the
implementation of the termination decision may be paid from plan assets.
Implementation costs that could be paid from plan assets include the cost of
any necessary plan amendments or filings, the determination of the correct
account balances for distribution, communications with participants and
distributions of plan assets. As a practical matter, this advisory opinion
will not limit the ability of orphan plans with this plan provision to pay
the expenses of termination.
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Testimony before the working group noted a concern that
the expenses associated with termination of an orphan plan could
significantly reduce account balances. For that reason, the working group
suggested the imposition of a cap on termination expenses borne by the plan
that could be based on the lesser of a specified percentage of an account
balance, e.g., 5%, or a fixed dollar amount.
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For those plans that do not include a provision
permitting the payment of expenses from plan assets, a number of witnesses
testified that the plan sponsor should bear the expenses of termination, if
the plan sponsor could be located. In the case of a bankrupt plan sponsor,
reference was made to the pending bankruptcy legislation. That legislation
includes a provision that would require the plan sponsor who files for
bankruptcy to continue to serve as fiduciary to the plan or plans of the
bankrupt entity. Such a provision should prevent plans of bankrupt entities
from becoming orphan plans and thereby eliminate the concern for funding the
termination of such plans.
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Additional testimony before the working group suggested
the imposition of a requirement that a bankruptcy trustee provide notice of
a bankruptcy proceeding against a company that maintained one or more plans.
Such a notice could permit the filing of a claim against the bankruptcy
estate for the administrative expenses of the plan termination. Under
current law, administrative expenses of the bankruptcy estate have priority
over other creditors. To be effective, the notice would have to be provided
to a plan trustee or service provider who could relay the information to the
independent fiduciary terminating the plan, if any.
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In those cases where 1) the plan terms did not permit the
plan to bear the expenses of termination, 2) the expenses of termination
exceeded the benchmark for a substantial reduction in account balances, 3)
the plan sponsor could not be located or 4) a claim could not be timely
filed in a bankruptcy proceeding, the working group concluded that the
government (the joint EBSA-IRS program) should bear the costs of plan
termination. The group considered the possibility of establishing a special
fund for this purpose. The fund could derive its revenue from a variety of
sources, including penalties paid to the government under section 502 of
ERISA, sections 4975 and 3405(d)(10)(B) of the Internal Revenue Code and
penalties assessed against plans sponsors seeking to abandon their plans.
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How to Protect Independent Fiduciaries from Liability
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A major issue for essentially all witnesses testifying
before the working group was the concern about the potential liability of a
fiduciary willing to undertake the task of terminating an orphan plan.
Entities or individuals considering this task expressed concern about
potential exposure to an enforcement action by the DOL and lawsuits brought
by plan participants or beneficiaries. They noted that a fiduciary
terminating an orphan plan could risk litigation relating to both their
actions as a fiduciary and the actions of a co-fiduciary of the plan,
including a co-fiduciary whose actions preceded their appointment as a
fiduciary.
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In light of this concern, a number of witnesses suggested
the need for a legislative amendment to ERISA protecting from liability, to
the extent appropriate, an independent fiduciary terminating an orphan plan.
The working group noted that enactment of any such legislation in the near
future was not practical and further noted the difficulty of defining those
independent fiduciaries whose conduct should be protected from liability.
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A number of alternative measures to limit liability were
also considered. These included a waiver or release by plan participants
upon receipt of a distribution from an orphan plan, a DOL interpretation
that the actions of an independent fiduciary terminating a plan were per se
non-fiduciary, and a grant of no-enforcement protection for independent
fiduciaries terminating orphan plans.
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The recommendations of the working group include both legislative and
regulatory proposals. The regulatory proposals are described first, because
the working group believes that they could be implemented immediately.
Recognizing that enactment of the legislative proposals could be a
longer-term effort, the group urges the Department to pursue both sets of
recommendations simultaneously.
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Regulatory Recommendations
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Formalize the ongoing efforts of EBSA and the IRS to
establish and maintain a joint program (“the Program”) to supervise and
administer the termination of orphan plans.
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The working group concluded that the efforts already
underway by EBSA and the IRS to develop a joint program would be the most
the most effective and immediate means of addressing the problem of orphan
plans. Because the tax qualified status of orphan plans must be maintained
to protect both participants receiving distributions and fiduciaries
responsible for administering plans in the termination process, IRS
involvement in the Program is essential.
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Provide for the overall administration and supervision of
the Program in the EBSA and IRS national offices, with each EBSA regional
office empowered to supervise the termination of the orphan plans in its
area.
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By decentralizing the day-to-day operation of the
Program, each EBSA regional office can more effectively supervise the
independent fiduciaries terminating plans within their area. It is
important, however, that uniform standards for terminating the plans be
developed and implemented by the IRS and EBSA national offices. The national
offices also can direct the termination of those plans requiring enforcement
proceedings and requests for special exemptions from the procedures
established for the Program.
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Provide that the Program will permit the retention of
independent fiduciaries to terminate orphan plans and distribute benefits to
participants. Such independent fiduciaries could be retained through a
competitive bidding process or some other means.
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Through a competitive bidding process, the Program may
obtain the services of independent fiduciaries willing to oversee the
termination of orphan plans. This process should help ensure that the costs
for terminating orphan plans are reasonable.
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Require through regulations that plan documents include
language directing the Program to take measures necessary to terminate the
plan in the event the plan is abandoned. In the alternative, the regulations
could permit the plan terms to appoint an independent fiduciary by name,
with a default to the Program, in the event the named independent fiduciary
is unwilling or unable to act.
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Assuming a determination that, as a legal matter, the
termination of orphan plans may be directed without a court order, the
process of terminating orphan plans should be facilitated. The incorporation
of language in a plan document providing for the termination of the plan by
either the Program or a designated independent fiduciary in the event of
plan abandonment would permit the Program to function without the need for a
court order. Such a process would be more efficient for both the Program and
the independent fiduciary terminating the plan.
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Promulgate regulations setting forth the criteria for
determining that a plan has been abandoned and is eligible for the Program.
Require or encourage plan service providers and trustees to report plans as
abandoned pursuant to the criteria established.
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The early identification of orphan plans may reduce the
number of plans actually abandoned, make the termination process simpler for
those abandoned and assist in funding the expenses necessary to terminate
abandoned plans. Early identification will make it more likely to locate a
fiduciary for the plan, increase the likelihood that a timely claim for
administrative expenses can be filed against the bankruptcy estate and
prevent the plan data from becoming further out-of-date.
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Guidelines of the Program could establish criteria for
determining plan abandonment, such as returned mail for a specified period
of time, inability to contact a plan fiduciary, calls from participants
stating that a plan has been abandoned or notice from a bankruptcy trustee
that a plan sponsor has filed for bankruptcy. Plan trustees and service
providers could be required or encouraged to report to the Program plans
that meet the established criteria within a specified time frame. In
addition, EBSA should consider adopting a policy of inquiring on its own
initiative whether a plan that has failed to file a timely 5500 has been
abandoned.
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Empower the independent fiduciaries selected by the
Program to take all necessary steps to efficiently terminate an orphan plan,
including, to the extent possible, retention of the current plan
recordkeeper or TPA. This recordkeeper or TPA could assist in determining
account balances and in making distributions. In effect the termination
would be a multi-tiered effort, with the Program serving as the overall
supervisor, the independent fiduciary appointed by and reporting to the
Program and the current recordkeeper or TPA directed by the independent
fiduciary.
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In most cases, the current recordkeeper or TPA for the
plan can most efficiently and cost-effectively terminate the plan and
distribute the assets to participants. Transferring the plan data to the
independent fiduciary appointed by the Program would only increase the time
and expense of plan termination. Because, however, many current
recordkeepers and TPAs cannot or will not assume a fiduciary role, the
independent fiduciary could direct the current recordkeeper or TPA with
respect to the termination process and distributions. The independent
fiduciary could also negotiate the payments required for the services of the
current recordkeeper or TPA, consistent with the funding made available to
the independent TPA.
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Provide for the promulgation of Program
guidelines/regulations that provide for:
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expedited plan amendments or a waiver
of the requirement to amend plan documents to comply with all
requirements of current law, including both IRS amendment requirements
and DOL disclosure requirements, such as summaries of material
modifications;
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assurance of the qualified status of
the plan upon termination without the need for a Form 5310 filing (to
protect the tax treatment of participants), if the guidelines have been
met;
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relief from any requirement to file
missing Forms 5500;
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procedures for filing a final Form
5500 on behalf of the plan;
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relief from the plan audit requirement
for those plans for which there is no knowledge of significant errors in
account balances;
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establishment of a cap on expenses of
plan termination that can be borne by participant accounts. This cap
should be based on the lesser of a specified percentage of an account
balance or a fixed dollar amount;
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guidance on the allocation of the plan
forfeiture account and any other unallocated account, including relief
from the limitations of Code section 415, to the extent necessary;
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guidance on the extent to which plan
data must be fully and completely updated (retroactive recordkeeping)
before distributions can be made;
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procedures for distributing the
account balances of missing participants, such as the establishment of
an IRA without fiduciary liability for selection of the IRA provider and
IRA investments and/or a procedure requiring 100% IRS withholding of
small distribution amounts. (Such withheld amounts could be transmitted
to the IRS and applied as a credit against the participant’s future
tax liability);
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a requirement for the independent
fiduciary to file with the Program quarterly reports and a final report
for the plan; and
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similar to the protection provided
through EBSA’s Voluntary Fiduciary Compliance program, an independent
fiduciary complying with the guidelines of the Program would not be
subject to a DOL enforcement action with respect to activities
undertaken in connection with the termination of the plan.
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Permit the payment of administrative expenses relating to
the termination of orphan plans out of plan assets, to the extent permitted
by plan terms, but only to the extent such payment does not cause an
excessive reduction in plan account balances. To the extent expenses are not
paid out of plan assets, encourage measures designed to recoup such expenses
from the plan sponsor or the bankruptcy estate, if any. Remaining expenses
of termination would be borne by the Program.
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For those plans the terms of which permit the payment of
administrative expenses from plan assets, the costs of termination can be
allocated among the account balances of the remaining participants. If prior
distributions have been made shortly before plan abandonment, the
independent fiduciary should seek to recoup from those participants a
portion of the termination expenses. The Program should assist the
independent fiduciary in these efforts.
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The working group recommends that, when plan participants
are bearing the costs of plan termination, such costs should be allocated on
the basis of account balances. In addition, the termination costs borne by
participants should be capped to prevent any substantial reduction of
account balances. The level of the cap should be determined by the Program;
however, the members of the working group recommend that the Program adopt a
cap that is fixed at the lesser of a specified percentage of an account
balance or a fixed dollar amount.
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When administrative expenses associated with plan
termination cannot be paid from plan assets, the working group recommends
that all reasonable efforts be made by the appointed independent fiduciary,
with the assistance of the Program, to recoup expenses from the abandoning
plan sponsor or the bankruptcy estate of the plan sponsor. Such measures
should include the possibility of Program legal action against the sponsor
and the filing of a claim with the bankruptcy trustee for administrative
expenses. Expenses of termination that cannot be recovered from any of these
sources should be borne by the Program.
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Legislative Recommendations
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Seek legislation that would protect plan service
providers and independent fiduciaries that terminate orphan plans from
fiduciary liability in connection with their services relating to the
termination of the plan.
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Although the working group concluded that a legislative
amendment to ERISA was the most effective manner to assure protection of
independent fiduciaries and other plan service providers addressing the
problem of orphan plans, the group recognized that enactment of such
legislation was not likely in the near-term. The working group also noted
the need to carefully draft such legislation to insure that its scope of
protection was neither overly broad nor inadequately narrow.
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To the extent necessary, introduce legislation providing
for the creation of a fund to be established for the purpose of covering
Program expenses. The fund could be financed, in part, by penalties assessed
under various sections of the Code and ERISA, including, but not limited to,
section 502(l) of ERISA (fiduciary breaches), section 502(c)(2) of ERISA
(5500 report penalties), section 4975 of the Code (prohibited transaction
excise taxes), section 3405(d)(10)(B) of the Code (section 402(f) notices),
and section 502(c)(7) of ERISA (blackout notices).
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In an effort to reduce the budgetary concerns arising
from the creation of the proposed Program, the working group recommends the
allocation of the income from the various penalty provisions cited above for
the Program fund. Currently, these penalties are contributed to the general
revenues of the government.
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Provide for the imposition of monetary penalties upon
plan sponsors and other plan fiduciaries that abandon their fiduciary
responsibilities with respect to a plan. These penalties should be
substantial enough to deter pan sponsors from abandoning their plans. In the
case of a bankrupt plan sponsor, the working group recommends an amendment
to proposed bankruptcy legislation that would provide a priority for such a
penalty to be paid from the bankruptcy estate. Any such penalties could be
contributed to the Program fund established to cover expenses of the
Program.
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Support the enactment of the provision in proposed
bankruptcy legislation that would require a bankrupt plan sponsor to fulfill
his fiduciary responsibilities by terminating the company’s retirement
plan or plans.
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A provision in proposed bankruptcy legislation, S. 420,
requires a bankrupt plan sponsor to terminate any plan of the bankrupt
company. As noted by the late Senator Wellstone, the sponsor of this
provision of the bill, the provision merely enforces the plan fiduciary’s
current obligations to the plan or plans. It imposes no new obligations on
the plan sponsor. Moreover, such a provision could effectively reduce the
number of orphan plans. The bankruptcy trustee could require the sponsor to
terminate the plan and thereby avoid the abandonment that might otherwise
occur.
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Propose inclusion in bankruptcy legislation of a
provision that would require trustees in bankruptcy to give notice to plan
trustees and other service providers that a company has filed for
bankruptcy. In the alternative to legislation requiring notice of the
bankruptcy filing to the plan trustee and service providers, propose
regulatory guidance that would require such a notice to trustees and service
providers.
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Once provided, such a notice could serve as one of the
criteria for the regulations described in A.5. above that would be applied
by a trustee or other service provider in determining that a plan has been
or might become abandoned. Such a notice could also facilitate the filing of
a claim of process against the bankruptcy estate. The timely filing of this
claim may permit expenses of termination to be recovered from the bankruptcy
estate as priority administrative expenses.
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Testimony of Virginia C. Smith on July 18, 2002
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Ms. Smith testified that the Department of Labor (DOL)
definition of Orphan Plans is those plans abandoned by the plan sponsor and
all other discretionary fiduciaries. The critical issue with orphan plans is
the ability of participants and beneficiaries to obtain distributions of
their benefits. Orphan plans also raise problems with compliance,
amendments, and payments of fees to service providers.
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A number of factors lead to the creation of orphan plans.
These include DOL enforcement actions (though often removal of a fiduciary
is accompanied by appointment of a replacement fiduciary); bankruptcy of the
plan sponsor; the death or incarceration of the fiduciary; the flight to
avoid extradition of the fiduciary; or an unwillingness by a fiduciary to
act.
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DOL began to notice the problem in 1997 and 1998 as it
received an increasing number of complaints from participants and
beneficiaries. EBSA first responded on a case-by-case basis. They followed
this with a project in the Philadelphia region to examine the issue and
became convinced it is a serious problem and needs national attention.
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On October 1, 1999, DOL began a national enforcement
project on orphan plans with the objectives of locating orphan plans and
trying to locate a fiduciary that they would require to perform the
obligatory fiduciary duties. If no fiduciary could be located, EBSA assumed
an active role in the appointment of an independent fiduciary.
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Between October 1, 1999 and June 30, 2002, DOL brought
464 civil cases involving orphan plans. DOL currently has 274 pending orphan
plan cases. More than $111 million has been protected or returned to plans.
More than $51 million has been paid to participants and 43 independent
fiduciaries have been appointed in 37 cases.
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DOL is interested in developing guidelines for a White
Knight approach. White Knights are independent fiduciaries who agree to
distribute the assets of and terminate orphan plans. This approach would
include some type of fiduciary protection for these independent fiduciaries.
DOL also supports proposed bankruptcy legislation that would require a
bankruptcy trustee to exercise fiduciary control over the company’s
benefit plans.
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Ms. Smith also testified that DOL is interested in ERISA
Advisory Council assistance in:
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Gathering data on the extent of the
orphan plan problem, especially from financial service providers
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Determining whether plan assets are
being maintained on an individual participant basis with readily
ascertainable market balances so that distributions can be made
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Asking whether financial service
providers would be willing to file a final Form 5500 on behalf of an
orphan plan in order to provide information on the termination of the
plan to plan participants
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Ascertaining whether financial service
firms would be willing to obtain certifications from participants and
beneficiaries prior to making distributions regarding the accuracy of
account balances.
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Testimony of Gary Yerke on July 18, 2002
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Mr. Yerke testified that Fidelity Investment’s
definition of an orphan plan is a defined contribution plan without a plan
sponsor or active fiduciaries. Orphan plans originate when fiduciaries
abandon plans, a plan sponsor dissolves, sells assets, goes bankrupt, or a
sole proprietor dies. Often Fidelity becomes aware of the issue when its
contacts at the plan become unresponsive.
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Fidelity dealt with about 100 orphan plans, involving
over $40 million in assets and about 2,500 participants. The typical orphan
plan has less than 25 participants and less than $1 million in assets. Also,
the vast majority of plans that become orphan plans are operating under
prototype plan documents.
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Fidelity has experienced an increasing number of orphan
plans and predicts that the problem will continue to grow because of: more
business failures, the adoption of 401(k)s by smaller employers
(approximately 20% of small businesses fail during their first two or three
years), and the required GUST/EGTRRA amendments may identify more orphan
plans because no one will have authority to amend those plans.
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Fidelity believes that there are several issues that need
resolution. A plan fiduciary must be available to make decisions about plan
documents and to administer the plan. It is especially important to Fidelity
that someone fills this roll because Fidelity must have direction in order
to perform plan-related tasks. Service providers are reluctant to take on
many tasks associated with plan administration because of conflicts of
interest. Furthermore, service providers may lack necessary information,
expertise, etc. in these areas.
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Mr. Yerke stated that Fidelity is never willing to make
distribution to participants and beneficiaries without the proper
authorization of a plan fiduciary. Fidelity is not authorized by plan
documents to take such action and often does not have the information
required to make those distributions. Fidelity does contact the DOL about
those situations.
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There needs to be an established procedure for
terminating orphan plans and distributing assets. Authorized company
signatories may get their own plan assets prior to abandonment, and then
they leave the other participants without access to funds.
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Qualification issues create problems for participants.
During a 1995 audit, the Houston office of the IRS expressed concern about
the tax-qualified status of orphan plans and rollovers from those plans.
Disqualification would impose an additional hardship on innocent plan
participants. As it is, an independent fiduciary may refuse to process
distribution requests until plan amendments are finalized and an IRS
qualification letter is received. This delays the distribution of funds that
participants and beneficiaries may need.
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The potential liability of fiduciaries for abandoning
plans raises fairness issues. Typically well-meaning fiduciaries may have
lost their jobs at a defunct company and then are in a difficult position
because they have no access to information, counsel, etc.
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Finally, the role of a bankruptcy trustee depends in part
on the acquiescence of the bankruptcy trustee. When a bankruptcy trustee
does not act voluntarily on behalf of the plan, the DOL’s position seems
to differ by region. Sometimes the DOL becomes involved quickly and seeks to
get an independent fiduciary appointed, in other cases the regional DOL
office is less active.
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To address these issues Mr. Yerke outlined a number of
items that should be included in comprehensive guidance issued jointly by
the DOL and IRS. He suggested administrative relief for service providers;
additional guidance using plan assets to pay plan expenses; increasing
uniformity of DOL definitions and actions; clarifying the role of the
bankruptcy trustee; the qualification of plans without plan sponsors and
streamlining tax law compliance.
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Mr. Yerke also suggested that legislation might provide
relief for former fiduciaries, service providers, and bankruptcy trustees.
As an alternative, he suggested that the PBGC might become responsible for
the termination of orphan plans.
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Testimony of Sanford Koeppel on July 18, 2002
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Mr. Koeppel testified that the most frequent cause of
orphan plans is bankruptcy or other termination of the business sponsoring
the plan. Trustees in bankruptcy are uncomfortable assuming the role of
administrator or successor to the plan administrator, mainly because of
liability issues. Other reasons for orphan plans include death of the
principal owner of a small business, merger or acquisition of a business,
dissolution, liquidation or abandonment of the business by the business
owner, or the incarceration of the business owner.
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The problems caused by orphan plans are time-consuming
and costly. Orphan plans contain, on average, between $100,000 and $500,000.
Typically the plans have less than $1 million in assets. The plans include
an average of 10 to 20 participants. Average account size is under $10,000.
The number of orphan plans is expected to increase in the future.
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The major problem presented by orphan plans is finding a
way to distribute orphan plan assets to participants. There is usually no
plan fiduciary to authorize the distribution; therefore the insurance
company is in the awkward position of having to honor a distribution
request. Clarifying the role of the bankruptcy trustee would go a long way
to resolving many of these problems.
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Orphan plans are time consuming and expensive to
administer. Terminating an orphan plan can add ten percent to the expenses
related to plan administration. These costs include hiring a search firm to
locate missing fiduciaries, significant staff time on participant requests,
dealing with uncashed checks and returned mail, etc. These situations are
lose/lose situations because the higher expenses impact participant’s
accounts and participants are frustrated about maintaining a relationship
with the service provider because of the situation.
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ACLI has convened a task force to address the problem.
They will share with the committee their recommendations. However, any
solution should be coordinated with the IRS, and any solution should focus
on providing a party with requisite authorization and relief from fiduciary
liability.
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It is important for the IRS and the DOL to coordinate a
response, which addresses all the issues and concerns. It is preferable for
a solution to be arrived at without legislation. However, if legislation
were necessary, that would be appropriate.
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Testimony of Joyce Kahn on July 18, 2002
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Ms. Kahn began her testimony by indicating the IRS
considers any plan without an employer to be an orphan plan. The IRS
position is that the Code presupposes an employer for a plan to exist,
therefore any plan without an employer would not be a qualified plan. These
plans result from the death of a company owner, to abandonment, etc. The
commonalties in these plans are that participants have difficulty getting
distributions, distributions may not be eligible for favorable tax
treatment, distributions may not be calculated correctly, and that custodial
expenses are eating away at assets.
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The IRS has established the Employee Plans Compliance
Resolution System (EPCRS), which has three components:
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A self-correction component, allowing
corrections within a certain amount of time without contacting the IRS,
-
A voluntary compliance program (VCR),
which allows corrections with IRS approval, and
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An audit program.
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There have been submissions from orphan plans in the VCR.
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When approached with a problem plan, the IRS determines
if relief is appropriate. In certain cases, because of expense, the IRS is
working to define a class of plans where disqualification would not be
pursued, because of expense. Relief is granted under Title II but exposure
may continue under Title I.
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Ms. Kahn indicated that the white knight approach would
be a good solution. At the same time the IRS does not want to
unintentionally encourage employers, under some sort of special guidelines,
to abandon plans.
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Testimony of Thomas Kim on July 18, 2002
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Mr. Kim defined orphan or abandoned defined contribution
plans as plans for which there's no longer an employer or plan fiduciary to
maintain, administer, or make distributions under the plan. He said that a
plan may become orphaned because the person who served as the sole plan
fiduciary has died or because the corporate plan sponsor may have been
dissolved as a business entity whether in or outside bankruptcy proceedings.
In other situations, the owner may have simply abandoned the business and
the retirement plan.
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Fund companies may discover that a plan has been orphaned
under a variety of circumstances. For example, a plan participant or
beneficiary may contact the service provider seeking a distribution from the
plan and representing the plan sponsor is no longer available or has simply
died. Other ways a defined contribution service provider may learn that a
plan has been abandoned are that the service provider may receive a
bankruptcy filing notice; a financial advisor or broker serving as an
intermediary between the plan and the service provider may inform a service
provider that the plan sponsor is no longer operating; or, statements or
other plan related mailings that are sent to plan fiduciaries are returned
as undeliverable by the post office. Moreover, as prototype plans are being
amended for GUST, it is likely that additional orphan plans will be
discovered.
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While ICI members observe that there do not appear to be
a large number of orphan plans at their respective firms, many report that
they're dealing with such plans and that the issues raised by them cause
significant legal and practical difficulties. Generally most plans are known
to be relatively small, having less than 25 participants. Often they're
plans maintained by sole proprietorships with few participants holding less
than half a million dollars in total assets. At the same time ICI members
have occasionally found that a large client plans with hundreds or thousands
of participants and millions of dollars in assets has become an orphan.
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ICI members do not act in a fiduciary capacity with
respect to retirement plans. To the extent that they serve as trustees, they
function as directed trustees. In other words, in the absence of affirmative
direction from a plan fiduciary, they're not authorized to make plan
distributions or make other discretionary decisions. Thus, fund companies
generally are unable to make distributions to orphan plan participants.
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Also, a mutual fund company may often lack the necessary
plan and participant information to even ascertain whether a participant is
eligible for distribution. In many cases, the plan sponsor may have been the
only party with plan-related documents, including the plan document itself.
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Finally, many orphan plans have qualification defects
because no plan sponsor has been available to maintain the plan. Plans, for
instance, that may not have been updated for new tax law changes, indeed, a
plan that's been orphaned for an extended period is probably unlikely to
satisfy the numerous requirements of Code Section 401(a) or may be
delinquent in submitting regulatory filings, such as the Form 5500.
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Mr. Kim suggested that the Department of Labor and the
IRS jointly develop a program offering two approaches. First, service
providers could voluntarily make distributions to orphan plan participants
to the extent that they have sufficient information concerning the plan
participant's benefits and other relevant information. And importantly, by
following the program's specified guidelines, the service provider's actions
would not be viewed as discretionary in nature and, therefore, would not
give rise to fiduciary status under Title I of ERISA. And, of course, a
program would also have to clarify when a plan is considered orphaned.
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Alternatively, a plan service provider could submit the
available information relating to an orphan plan to a government-established
clearinghouse. The government entity could then bundle such plans and seek
appointment of an independent fiduciary to authorize distributions. The
bundling of these plans could provide greater efficiencies and economies of
scale.
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To the extent that any program builds upon the
department's current efforts, ICI recommends that the department develop
uniform publicly available guidelines that will facilitate the referral of
orphan plans by service providers to the department. It should do so without
imposing burdensome requirements on such providers and also expedite the
delivery of distributions to participants.
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Additionally, the program should address the plan's
potential qualification deficiencies under the Internal Revenue Code because
participants under such plans are not responsible for the dissolution or
absence of the employer. Distributions should be made as if the plan were
qualified, notwithstanding the existence of qualification defects. This
should include allowing distributees to preserve the assets in a retirement
solution by allowing them to roll over assets into another retirement
savings vehicle subject, of course, to otherwise applicable rules.
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In sum, Mr. Kim testified that ICI believes that the
program should emphasize the efficient delivery of distributions to orphan
plan participants, given that many plan participants may not have
alternative sources of retirement incomes. To the extent that service
providers are permitted to deliver distributions under such a program,
program rules should reduce potential liability for such activities, refrain
from imposing requirements that fall outside the scope of the duties of
service providers and account for the diverse factual situations encountered
by service provider. This would include the varying degrees to which they
would have plan and participant information. The program should minimize the
administrative costs of the program, particularly because participant
accounts may be the only available source of funds.
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Finally, the plan may become orphaned due to a plan
sponsor's liquidation and bankruptcy proceedings. While in bankruptcy, the
party in the best position to authorize distributions from defined
contribution plan is the bankruptcy trustee. The bankruptcy code, however,
doesn't currently clearly assign this responsibility to the trustee, and
although the duties of the bankruptcy trustee as a representative of the
bankruptcy estate include the resolution of pension issues. Many bankruptcy
trustees are reticent or reluctant to assume such duties. A legislative
clarification of the bankruptcy trustee's responsibility with regard to
pension plans would be helpful. The proposal, for instance, could clarify
that a trustee steps into the shoes of the plan sponsor in bankruptcy to
authorize distributions to participants and otherwise wipe out the plan.
Passage of the legislative provision that's currently pending before
Congress would certainly be a step in the right direction.
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Testimony of James A. Boyd on July 18, 2002
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Mr. Boyd testified that while the problem with orphan
plans is almost minuscule in numbers, it is gigantic in impact. He indicated
that while he had administered approximately 1,500 plans, only nine had
become orphan plans. In each case, the situation was the result of the
company filing for bankruptcy dissolution. It was not the result of a
reorganization. In addition, the bankruptcy trustee either forgot to do
something with the plan or did not know what needed to be done.
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He testified that participant balances in these plans,
however small, sometimes meant survival to people who are scared, angry, and
confused. As an example he related his experience with a 70-employee plan
that became orphaned in early 1990’s. He indicated that he was able to
provide the participants with their money only after a difficult and
time-consuming process supported by a very sympathetic and non-bureaucratic
agent at the Department of Labor. His company was also required to write-off
any outstanding fees owed.
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Mr. Boyd recommended that an amendment be made to ERISA
that would grant the trustee of a plan that has been orphaned the authority
to terminate the plan; make distribution of assets to participants; or
rollover plan balances into an IRA in the name of a participant. The change
should also allow the trustee to initiate the action, sign the necessary
documentation, and allow reasonable expenses to be charged against
participant balances on a pro rata basis if there is no provision already
existing in the document.
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Also, as the trustee for many small plans is an officer
of the company as well as the plan administrator, he suggested the same
right to terminate should also be extended to the participants as a group,
not to exceed ten percent of the participants. This approach should be
established with an understanding that if such authority is granted to the
participants of a plan, care must be taken not to impose burdensome
requirements beyond the basics.
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Mr. Boyd suggested that if after 180 days there have been
no contributions, no contact with the employer, no activity in the plan,
then the plan trustee should give a certification that it has become an
orphan plan. If the company were in bankruptcy, this certification would be
coupled with the bankruptcy filing that this is a dissolution and not a
reorganization. This certification would also serve notice that the trustee
intends to terminate the plan and distribute the balances unless some other
fiduciary steps in with an alternative solution.
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He also recommended the creation of an office within DOL
to assist in the termination of the plans. This office would assist trustees
or participants with the plan termination protect the rights of the
participants and carry out the original intent of the plan.
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Testimony of David L. Heald on July 18, 2002
|
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Mr. Heald testified that the current process provides
little relief and is not cost effective for orphan plan resolution. This
comes at a time when there is growing concern about and a growing number of
inquiries regarding orphan plans. There will be a growth in these plans due
the current adverse economic situation. Most orphans are small plans
containing small assets.
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Most orphan plans are caused when plan sponsors going out
of business. Typically, parties involved with the plan do not understand
what the appropriate procedures are for orphan plan termination. There is no
one authority or party assigned to act on behalf of a plan when it is
orphaned. There is no empowered fiduciary or decision-maker. Custodians may
exist but custodians cannot make fiduciary decisions. Custodians will only
react to direction for a fiduciary. Often those attempting to terminate an
orphan plan must get court authorization. This wastes time and reduces
assets.
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A fiduciary is needed to make decisions, arrange for
termination, pay out balances and search for lost participants. The
fiduciary assumes liability exposure but who will pay expenses? There will
be higher expenses due to higher risk exposure. If the risk is eliminated
the expenses could be reduced. It is estimated to cost between $10,000 and
$30,000 to wind down an orphan plan.
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Standard procedures should be an established. A fiduciary
should be appointed automatically without court involvement as the result of
coordination and agreement between the DOL and the IRS. The IRS should
require a provision in plan that triggers a DOL appointed fiduciary if the
plan is orphaned. If orphaned plan or a service provider with an orphan plan
contacts DOL, a fiduciary should be automatically appointed. DOL should take
a supervisory role in this process.
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This approach does not require legislation. No new
agencies are required to be formed. No other agencies need be involved.
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Testimony of Regina Pizzonia on July 18, 2002
|
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The T.Rowe Price definition of an orphan plan is a plan
with which there has not been contact or transactions for two years. Most of
its orphan plans were sole proprietorships not subject to ERISA. T.Rowe
Price has experienced 15-18 orphan plans in the midsize and larger plan
market. Some have been the result of a plan sponsor bankruptcy. In some the
employer could not be found. The average assets of a T.Rowe Price were about
$50,000 but two were $1,000,000. DOL is involved with two of these plans.
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Although there are not many orphan plans, dealing with
such plans is time consuming and costly. Costs are especially high relative
to assets involved. Also, participants must wait months for benefits.
Further, there is no one to approve loans, Qualified Domestic Relations
Orders (QDROs) or other participant transactions. This in itself could cause
qualification issues.
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T. Rowe Price believes that DOL should not to get
involved in each orphan plan. DOL involvement is too time-consuming.
Further, lawsuits brought by DOL to appoint fiduciaries are only a partial
solution.
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T. Rowe Price recommends that DOL follow the existing
structure of the PBGC program. That is a small group of employees within
EBSA should be identified to handle these plans as a routine matter. Such a
centralized solution would 1) create consistency 2) be efficient 3) be cost
effective.
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An alternative would be to have DOL create a similar
structure as the PBGC and/or to contract with PBGC to locate participants to
pay out benefits. DOL also could contract with various third party
administrators (TPAs) to wind down the plans.
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DOL and IRS need to work together with service providers
on this problem. The IRS should provide some type of summary termination
procedures. A clearinghouse created as part of the DOL or private agency
would also be useful. No legislation is warranted due to the small number of
plans and the small amounts involved.
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Testimony of David M. Lipkin on September 18, 2002
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Mr. Lipkin believes that the number of orphan plans is
likely to increase in the future because they constitute some percentage of
all plans and poor economic periods may increase the numbers of orphan
plans.
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The major problems Metro Benefits has experienced in
working with orphan plans are:
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Getting accurate financial data
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Locating plan participants
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The need to spend plan assets on fees
-
Distrust of plan participants who
already may feel mistreated by their employer
-
The lack of insurance protection for
trustees.
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Metro Benefits recommends that DOL:
-
Provide assistance in locating
participants
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Continue its new program of paying
trustee fees for termination services
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Increase and formalize the reporting
relationship from trustee of an orphan plan to the DOL
-
Build inter-agency cooperation with
the IRS particularly regarding qualification issues and the need to file
past due 5500 forms
-
Increase penalties for plan sponsors
who abandon their retirement plans.
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Testimony of James Lang on September 18, 2002
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Principal Life Insurance Company currently has about
1,000 orphan plans, or about two percent of the plans the company services.
The plans tend to have between 10 and 20 participants and approximately
$100,000 in assets. As an insurance company, subject to state law and
obligated to remain in compliance with its representations to the state,
Principal cannot provide trustee services to these plans.
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Principal has identified the following risks and problems
associated with orphan plans. First, because fiduciary responsibility is
based upon function, anyone who acts as a fiduciary with respect to an
orphan plan assumes potential liability. This includes service providers who
would act on their own to terminate an orphan plan.
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Second, documents and records of some orphan plans are in
often incomplete and out of date. This includes issues with late or unmade
contributions, delinquent Form 5500s, and the absence of any company
official to assume plan duties.
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Third, like any other plan, orphan plans require ongoing
fiduciary decision making for issues such as plan distributions, domestic
relations orders, and governmental reporting.
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To address the orphan plan problem Principal made the
following suggestions:
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DOL should provide procedures for
winding down orphan plans.
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Those who engage in the termination of
orphan plans should be protected from liability. This would include
protection for financial institutions and for those preparing government
filings.
-
DOL should provide standards for
determining when a plan is orphaned.
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Principal is not in favor of requiring that participants
certify that their account balances are accurate because of delays, lack of
participant knowledge, and potential for abuse.
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On a related topic Principal suggests that DOL should
provide standards for dealing with missing participants. The company
recommends that for amounts less than $1,000 the amount be transferred to
the IRS as withholding, and that amounts over $1,000 be automatically rolled
over into an IRA. Appropriate guidance would need to be issued regarding
these automatic rollovers.
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Testimony of M. Larry Lefoldt on September 18, 2002
|
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Mr. Lefoldt testified that his firm has terminated 45 or
46 orphan plans. It started working with the DOL on orphan plan terminations
in May 1999. Since 1999 the firm’s work with orphan plans has increased
substantially. Currently the firm is trustee for 40 orphan plans. This
includes orphaned medical reimbursement plans. The plan assets in plans it
has trusteed have ranged from $5,000 to $8,000,000.
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Mr. Lefoldt observed that orphan plans raise a number of
issues, especially compliance issues. As an example, he indicated that his
firm has been getting exemptions from the need to file retroactive Form
5500s and, instead, files one catch up Form 5500. He observed that there is
a need to weigh costs and benefits in compliance considerations with orphan
plans.
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He also pointed out that orphan plan data in incomplete and inaccurate and
that it is often difficult to locate some participants. There are also
issues with the payment of fees to the plan’s TPA. This can be compounded
by the time lag between a bankruptcy filing and appointment of an
independent fiduciary, which can create additional financial costs for
orphan plans. In fact, some TPAs have failed file claims with the bankruptcy
court for their fees.
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Pooled income plans pose particular risks because there
is no one to make ongoing decisions regarding investments and reporting.
This lack of a fiduciary can sometimes create significant delays in
evaluating the investments.
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Mr. Lefoldt had a number of suggestions for dealing with
orphan plans. He suggested that specific procedures be formulated for
dealing with the compliance issues, such as Form 5500 filings. Orphan plans
should not be required to file 5310s and updating amendments with the IRS.
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Mr. Lefoldt felt that most communications should continue
to be between the trustee and the regional DOL office responsible for the
orphan plan. He felt that centralized administration of some orphan plan
matters might decrease the specific plan knowledge on the part of the DOL
contact. He has had good results in working with the regional offices.
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He recommended that a procedure be established for the
trustee to follow in dealing with the account balances of lost participants.
He specifically suggested forwarding them to the IRS as tax payments.
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He indicated that determination of orphan plan status
should be made as quickly as possible. The more time that passes, the more
problems occur with respect to plan data, bankruptcy issues, and locating
participants. TPAs should be asked or required to report potential orphan
plans to the DOL as early as possible, perhaps even at the point that
potential trouble is observed. Similarly, company fiduciaries of the plan
should be required to notify the DOL of any bankruptcy filing.
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Finally, he recommended that fiduciaries working on the
termination of orphan plans should be granted liability protection,
particularly in the case of pooled income plans.
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|
|
Testimony of Nicholas L. Saakvitne on September 25,
2002
|
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Mr. Saakvitne recommended the following solutions for
consideration by the ERISA Advisory Council. First, the DOL should be given
the authority to appoint fiduciaries for orphan plans. He suggested that
language could be included in the plan document that would give DOL this
authority.
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Second, the requirement of an independent audit of the
plan should be waived for orphan plans. Auditing an orphan plan is
expensive. Such an audit can cost between $10,000 and $25,000. At the same
time, DOL should establish a procedure to be followed by fiduciaries in
establishing the benefit levels of orphan plan participants.
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Third, all discrimination testing for orphan plans should
be waived. He pointed out that it often impossible to obtain the data
necessary to perform these tests appropriately.
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Fourth, a de minimis balance standard should be set for
orphan plans. If an account balance were lower than the standard the
fiduciary would be authorized to forfeit that amount upon plan termination.
The expense of communicating with participants with very small balances
often exceeds the value of those balances.
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Fifth, there should be 100 percent federal income tax
withholding of the benefits of lost participants with small balances. This
is the most efficient and fair method of dealing with this issue.
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Sixth, personal responsibility by the plan
administrator/fiduciary appointed by the DOL for the Form 5500 filings
should be waived. It is unfair to hold those appointed to deal with orphan
plans responsible for missing or incomplete 5500s that were to be filed
prior to the date of their appointment.
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2002 Index for the Working Group on Orphan Plans
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Advisory Council on Employee Benefit and Pension Plans
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Actual Transcripts/Executive Summaries for the Council's
full meetings and working group sessions are available - at a cost - through
the Department of Labor's contracted court reporting service, which is Neal
R. Gross and Co., Inc. 1323 Rhode Island Avenue, NW, Washington, DC
20005-3701 at 202.234.4433 or www.nealgross.com.
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July 18, 2002: Working Group on Orphan Plans
|
-
Agenda
-
Official Transcript
-
Questions Posed to Witnesses by Chairs
-
“EBSA Developing ‘White Knight’
Guidelines to Assist Fiduciaries; Asks for Information” by Michael
Wyand, July 19, 2002 BNA Pensions & Benefits Reporter.
-
Written Statement of Virginia Smith,
Director of Enforcement, Employee Benefits Security Administration, on
Orphan Plan Project.
-
Statement on Behalf of the Investment
Company Institute by Thomas Kim, Associate Counsel.
-
Written Testimony of Sanford E.
Koeppel, Vice President, Legislative and Regulatory Affairs, Prudential
Financial, Inc.
-
Outline of Comments made by Gary L.
Yerke, Associate General Counsel, Fidelity Investments.
-
Written Testimony of Reginia Pizzonia,
Vice President and Associate Counsel, T.Rowe Price Associates.
-
Written Testimony of David L. Heald,
Principal, Consulting Fiduciaries, Inc.
-
Packet of Pension and Welfare Benefits
Administration news releases about orphan plan cases being litigated by
the agency.
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|
September 18, 2002: Working Group on Orphan Plans
|
-
Agenda
-
Official Transcript
-
Outline of testimony provided by David
M. Lipkin, F.S.A., Metro Benefits Inc.
-
Outline of testimony provided by M.
Larry Lefoldt, CPA
-
Section on Orphan Plans from Testimony
presented by Assistant Secretary of the Pension and Welfare Benefits
Administration Ann Combs before the House Committee on Education and the
Workforce, Subcommittee on Employer-Employee Relations on September 10,
2002.
-
Written testimony of Jim Lang,
Compliance Officer, Principal Life Insurance Company.
-
A recent news release issued by EBSA
regarding the naming of Larry Lefoldt as the independent fiduciary of
Sun Country Airline’s Pension Plan.
-
“Protection for Orphan Plan Service
Providers Requires Legislative Solution, Speaker Says,” article in the
September 19, 2002 issue of BNA’s Pension & Benefits Reporter.
-
Copy of letter received from Nicholas
L. Saakvitne, an ERISA attorney, who opined on the topic.
-
Summary of issues for the working
group to consider as it begins its deliberations, prepared by the chair
Catherine Heron.
-
American Council of Life Insurers (ACLI)
Recommendations to the Working Group on Orphan Plan regarding the
Department of Labor’s “White Knight” Fiduciary Program.
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October 15, 2002: Working Group on Orphan Plans
|
|
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|
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Catherine Heron, Chair
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David Wray, Vice Chair
-
James S. Ray, Chair of the ERISA
Advisory Council and Ex-Officio Member of All Working Groups
-
Ronnie S. Thierman, Vice Chair of
the Council and Ex-Officio Member of All Working Groups
-
Michele Weldon
-
John Szczur
-
Norman Stein
-
Dana Muir
-
Robert Patrician
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