DOL Issues FAQs on Retirement Benefits in the Wake of Louisiana Floods
The Department of Labor’s Employee Benefits Security Administration (EBSA) on Sept. 12 issued frequently asked questions
concerning aspects of administering employee benefits after the disruptions caused by the flooding in most of the southern half of Louisiana in August 2016. The matters the FAQs address include many concerning retirement plans.
EBSA’s target audience in “FAQs for Participants and Beneficiaries Following the Louisiana Storms” is employees and plan participants. Nonetheless, they are instructive for employers, administrators and plan sponsors since they provide insights into what they may encounter and issues they may need to address regarding their own employees and participants. In addition, some questions directly concern roles that an employer and plan play, what their responsibilities are and what functions they may need to perform.
Questions that more directly address retirement plans and their administrators concern:
- what a participant or beneficiary should do if their benefits payment did not come when it ordinarily does;
- when the plan must pay claims for benefits;
- whether the plan is required to provide a lump-sum distribution;
- what proof a spouse of a deceased participant needs to give the plan when filing a claim;
- whether an employer can terminate a plan if it faces economic difficulties due to the floods; and
- what a plan participant can do if his or her employment and plan participation records were destroyed by the floods.
EBSA does demonstrate some flexibility toward plans and reiterates current law and regulation regarding providing retirement benefits and administering plans. For instance, it notes that plans may take a reasonable amount of time in reviewing a claim for benefits before making a payment; plans may allow lump sum distributions, but are not required to do so by federal law; and employers are not forbidden by federal law from terminating their plans but must follow certain rules when doing so.