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Australian Treasury Issues Draft Amendment to Impose Director Liability for Superannuation Obligations

Under new legislation that has been introduced into Parliament, directors would be personally liable for their company?ÇÖs unpaid superannuation guarantee amounts. When a company fails to meet its superannuation funding obligations, the Commissioner of Taxation would be authorized to step in and assess personal liability against the directors for the unpaid amounts. This is in addition to liability that directors could face for pay-as-you-go tax withholding liability. In addition, the Commissioner of Taxation would no longer be required to give 21 days notice before starting proceedings against directors. The proposed legislation can be found here.

Ontario (Canada) Issues Draft Regulations Under the Pension Benefits Act

The Ministry of Finance issued changes to Regulation 909 that would (1) enable the proclamation of the ?Ç£retired member?Ç¥ provisions in the PBA; (2) implement immediate vesting for plan members and increase the threshold for the small pension payout rule; (3) further clarify the surplus payment rules; and (4) reflect changes to the Income Tax Act (Canada) regarding Individual Pension Plans. Draft Regulations are here. Discussion paper can be found here.

Court Finds Personal Jurisdiction Over a Foreign Parent Regarding Controlled Group Liability for U.S. Subsidiary?ÇÖs Pension Plan

The Pension Benefit Guaranty Corporation (PBGC) brought suit against Asahi Tec Corporation, a Japanese company, asserting controlled group liability against Asahi for the underfunding of the terminated pension plan maintained by its bankrupt U.S. subsidiary, Metaldyne. Asahi filed a motion to dismiss, asserting that the U.S. Federal District Court for the District of Columbia lacked personal jurisdiction over Asahi. Asahi argued that because it did not commit any acts with respect to the pension plan (with either funding or the termination), and because its sole contact with the United States was its ownership of a U.S. subsidiary, there was no basis for personal jurisdiction.?á The court disagreed, noting the PBGC?ÇÖs claims against Asahi were not based on the pension plan?ÇÖs termination or underfunding, but were predicated solely on Asahi?ÇÖs status as a member of the controlled group through its acquisition of Metaldyne. The court denied the motion to dismiss on… Continue Reading

Canada?ÇÖs Office of the Superintendent of Financial Institutions (OSFI) Publishes FAQs on Letters of Credit

Beginning in April, 2011, sponsors of Canadian pension plans were allowed to use letters of credit in lieu of making solvency payments to a pension plan fund for up to 15 percent of a plan?ÇÖs assets. In response to the ?Ç£letters of credit?Ç¥ changes, the OSFI updated FAQs addressing changes to pension funding rules to include new FAQs on letters of credit. The new FAQs can be accessed here.

Australia?ÇÖs Superannuation Funds Receive Consumer Protections under Proposed Regulations

Australia?ÇÖs Governor-General issued proposed regulations that would make limited recourse borrowing arrangements financial products under the Corporations Act 2001 when entered into by regulated superannuation funds. The proposed regulations also amend current regulations to provide that limited recourse borrowing arrangements are not a credit facility under the Corporations Act 2001 when acquired by superannuation funds, and an Australian Financial Services Licence covering derivatives or securities is taken to also cover limited recourse borrowing arrangements. The superannuation funds would receive consumer protections when purchasing installment warrants. The proposed regulations are located here, and an explanatory memo is located here.

FACTA Requires U.S. Employees to Report Value of Non-U.S. Equity Compensation, Deferred Compensation and Pension Benefits on their U.S. Tax Returns

Temporary regulations issued under Section 6038D of the Internal Revenue Code (which was added by the Foreign Account Tax Compliance Act (FACTA)), require certain U.S. taxpayers to file a statement on IRS Form 8938 with their personal income tax returns reporting interests in ?Ç£specific foreign financial assets?Ç¥ if the aggregate value of those assets exceeds certain thresholds. The thresholds vary depending on the individual?ÇÖs filing status and whether the individual lives in or outside of the United States. Reportable assets include financial accounts maintained by non-U.S. financial institutions and non-U.S. financial assets held outside of the U.S., including stock or securities issued by a non-U.S. corporation, non-U.S. partnership interests, indebtedness issued by a non-U.S. person, and options to acquire any of the preceding items. Accordingly, stock purchase rights, stock options, restricted stock units, stock appreciation rights and performance shares issued by non-U.S. entities to U.S. taxpayers, are subject to the… Continue Reading

United Kingdom: Auto-Enrollment Deadlines Delayed for Medium and Small Employers

Employers in the UK with 250 or more employees will begin auto-enrolling employees in workplace pensions starting in October of this year. However, the dates have been delayed for medium and smaller employers: employers with 50 to 249 employees will begin in April 2014; employers with 30 to 49 employees will begin in August 2015; and employers with less than 30 employees will begin in January 2016. The full schedule can be found here.

Canada: New Draft Instruction Guide on Amendments to Reduce Defined Benefit Pension Plan Benefits

The Office of the Superintendent of Financial Institutions (OSFI) has issued a new draft Instruction Guide regarding amendments that reduce benefits under defined benefit pension plans. The draft Instruction Guide may be used while in draft form and replaces the previous Instruction Guide issued in April 2006. The new draft Instruction Guide can be found here.

Canada: New CASPA Investment Practices and Funding Policy Guidelines

The Canadian Association of Pension Supervisory Authorities (CASPA) issued new guidelines regarding pension plan prudent investment practices and pension plan funding policies. CASPA is an association of pension regulators that develops harmonized regulatory policies and guidelines to improve pension plan administration. Although the guidelines are not ?Ç£law,?Ç¥ pension plan administrators may use such guidelines in their efforts to implement best practices and fulfill their fiduciary duties. The new guidelines can be found here: Guideline No. 6 and Guideline No. 7.

The Netherlands: Amendments to 30 Percent Ruling

Effective January 1, 2012, amendments went into effect that change requirements pertaining to Dutch 30 percent tax rulings. The Dutch 30 percent tax ruling permits foreign employees who are hired by a Dutch employer and who meet certain conditions to receive 30 percent of their remuneration tax free. In late 2011, the Dutch Parliament approved several amendments to the 30 percent ruling which went into effect on January 1, 2012. The amendments include, among other things, replacing the specific skills test with a fixed annual salary standard; implementing a 150 kilometer rule that generally prohibits employees residing less than 150 kilometers from the Dutch border from qualifying for a 30 percent ruling; and a reduction in the period of coverage for the 30 percent ruling for employees who previously lived in the Netherlands.

September 2021