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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
In separate releases, the Department of Labor’s Employee Benefits Security Administration (EBSA) and the Pension Benefit Guaranty Corporation (PBGC), have announced guidance on the duties of plan administrators and other fiduciaries of employee benefit plans that may be adversely affected by the alleged abuses involving Bernard L. Madoff Investment Securities LLC.
DOL guidance
In a statement posted to its website, EBSA provides guidance to fiduciaries, investment managers and other investment service providers to plans who believe they may have exposure to losses on investments with entities related to the Madoff firm. The guidance also provides steps that can be taken to assess and protect the interests of plans, participants and beneficiaries under ERISA.
EBSA states that “where plan fiduciaries determine that plan assets were invested with Madoff entities and material losses are likely, appropriate steps should be taken to assess and protect the interests of the plan and its participants and beneficiaries.”
Such steps may include (1) requesting disclosures from investment managers, fund managers, and other investment intermediaries regarding the plan’s potential exposure to Madoff-related losses, (2) seeking advice regarding the likelihood of losses due to investments that may be at risk; (3) making appropriate disclosures to other plan fiduciaries and plan participants and beneficiaries; and (4) considering whether the plan has claims that are reasonably likely to lead to recovery of Madoff-related losses that should be asserted against responsible fiduciaries or other intermediaries who placed plan assets with Madoff entities, as well as claims against the Madoff bankruptcy estate. Fiduciaries must ensure that claims are filed in accordance with applicable filing deadlines such as those applicable to bankruptcy claims and for coverage by the Securities Investor Protection Corporation (SIPC).
The web site of the court-appointed trustee for the liquidation of Bernard L. Madoff Investment Securities LLC is www.madofftrustee.com. This web site contains the liquidation notice, claim forms and related claims information, and deadlines for the filing of claims with the trustee.
PBGC guidance
In a separate news release, the PBGC provides notice to single-employer and multiemployer defined benefit plans insured by the PBGC that may have experienced significant investment losses resulting from a customer relationship with Bernard L. Madoff Investment Securities LLC, either directly or through an investment advisor.
If the losses of a single-employer plan are sufficient to render the plan unable to pay benefits when due, the plan administrator or sponsor is required by ERISA §4043 to notify the PBGC of this event within 30 days of knowing or having reason to know that this reportable event has occurred. The plan administrator must notify PBGC of a reportable event by filing PBGC Form 10. The PBGC advises that questions be directed to Roger Reiersen of PBGC’s Department of Insurance Supervision and Compliance. He may be contacted at (202) 326-4000, extension 3704, or reiersen.roger@pbgc.gov.
Multiemployer plans that are covered by Title IV of ERISA do not have an obligation to notify PBGC when a reportable event under ERISA §4043 occurs. However, if the trustees believe that benefits cannot be paid when due, or all, or substantially all, employers cease contributing to the plan, the trustees have legal responsibilities, which may include reducing benefits, assessing withdrawal liability, and notifying the PBGC. If plan representatives have questions or concerns, they may call the Multiemployer Division at 202-326-4000, ext. 3012, or send an e-mail to Multiemployerprogram@pbgc.gov.
Plan administrators and sponsors of affected single-employer and multiemployer plans should also consult a qualified advisor concerning recovery of funds invested directly or indirectly with Madoff Securities, the PBGC advises.
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