As many as 90% of pension plans and pension plan sponsors may soon have fewer “reportable events” to track and report to the Pension Benefit Guaranty Corporation (the “PBGC”), if certain proposed changes to the PBGC regulations are finalized this summer. These proposed changes were published by the PBGC on April 3, 2013.
The PBGC is a wholly owned United States government corporation and an agency of the United States that administers the private-sector defined benefit pension plan termination insurance program under Title IV of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). In fulfilling these obligations, the PBGC monitors the status of such pension plans to pick up on early alerts of adverse changes in the plan or the plan sponsor that would enable it to mitigate such changes. As part of this monitoring, ERISA requires plan sponsors to inform the PBGC when certain “reportable events” occur. The PBGC’s current regulations explaining these reportable event requirements include a variety of waivers and extensions that allow plan sponsors to delay or avoid reporting of certain events, if a plan’s funding is maintained at a specified level (referred to as funding-based waivers). The PBGC is now in the process of revising these regulations in an effort to shift the focus from a plan’s funding to a plan sponsor’s financial health when determining whether or not these reports must be submitted. The revisions would also expand existing waivers for small plans, modify the current foreign entity and de minimis waivers, and eliminate certain other waivers now available to plans and their sponsors.
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