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Labor Department Finalizes Rule to Improve Security of Small Pension Plan Assets.

The Department of Labor's Pension and Welfare Benefits Administration has published a final rule to improve the security of more than $300 billion in assets held in private-sector pension plans maintained by small businesses. Historically, pension plans with fewer than 100 participants had been exempt from the requirement to have an independent qualified public accountant conduct an annual audit of the plan's financial statements. On Dec. 1, 1999, the department published a notice of proposed rulemaking containing additional criteria for small pension plans to be exempt from the annual independent audit requirement under the Employee Retirement Income Security Act.

Largely unchanged from the proposal, the final regulation is designed to safeguard small pension plan assets by adding new conditions to the audit waiver requirement which focus on persons who hold plan assets, enhanced disclosure to participants and beneficiaries, and improved bonding requirements.

The new conditions in the final rule will apply to the first plan year starting after Apr. 17,2001. This date was chosen to give the employee benefit plan community more time to comply with the new requirements. Accordingly, this change applies to the 2001 year filings for fiscal year filers whose plan years begin after Apr. 17, 2001, and the 2002 filings for calendar year filers.
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Publication:CPA Letter
Article Type:Brief Article
Geographic Code:1USA
Date:Apr 1, 2001
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