International Foundation Officer, Simone L. Rockstroh, Testifies on Participant Benefit Statements Before the DOL

September 26, 2007

Contact:
Brenda Rood
(262) 373-7756
brendar@ifebp.org

Brookfield, Wis. — Simone L. Rockstroh testified recently before the Department of Labor (DOL) ERISA Advisory Council’s Working Group on Participant Benefit Statements. Rockstroh, representing the International Foundation of Employee Benefit Plans, spoke on participant benefit statements for multiemployer plans.

Her testimony focused on the issues relating to the new automatic benefit statement requirements of the Pension Protection Act (PPA) 2006 for multiemployer defined benefit plans.

“By my estimate, currently about 30% to 40% of multiemployer plans provide benefit statements, in some fashion, on an annual basis. The majority of plans, however, provide a benefit statement only upon request,” stated Rockstroh.

Her testimony stressed the fact that the information needs of the participants must be well-served but be balanced with practicality and efficiency for the plans.

Rockstroh stated that:

• At a minimum, the total accrued benefit and the total vested accrued benefit should be disclosed on the automatic benefit statements. If the benefit is not yet vested, the statement should include the amount of additional years of service necessary for vesting.
  
  
• Meeting the 45-day timeframe for issuing benefit statements is difficult for multiemployer plans if the statement is to include the accrued benefits as of the close of the fiscal year. It takes an estimated 60 days for hours and contributions from December to be reported, balancing to occur, and benefit statements issued.
  
  
• Participants and beneficiaries would benefit from simple benefit statements that are clearly understood. Multiemployer plans would benefit from flexibility in the design and production of statements.
  
  
• Individualized projections of benefits can be very costly and difficult for the plan sponsor/administrator to produce. Because of the nature of the work in multiemployer plans a projection that assumes steady work might unfairly provide a benefit projection greater than what would be realized.

Rockstroh currently serves as Secretary on the International Foundation Executive Committee, and is President of Carday Associates, Inc. in Columbia, Maryland.

Her full testimony is available online at www.ifebp.org/pdf/misc/rockstroh_doltestimony.pdf.

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The International Foundation of Employee Benefit Plans is a nonprofit educational association serving the employee benefits and compensation industry. Total membership includes more than 35,000 individuals representing over 8,300 trust funds, corporations, public employee groups and professional advisory firms in the United States and Canada.