PBGC Proposed Rule on Reportable Events
Under ERISA, pension plans and plan sponsors are required to report to the Pension Benefit Guaranty Corporation (PBGC) a range of corporate and plan events. In 2009, the PBGC proposed to increase reporting requirements by eliminating many reporting waivers. The PBGC received a significant number of objections to the proposed rule, saying that the elimination of these waivers would require reports where the actual risk to plans and the PBGC is minimal. The PBGC ultimately agreed with this position. The PBGC’s new proposed rule exempts plans and sponsors from reporting events that would not likely put the plans at risk, and targets reporting requirements to the minority of companies and plans that are at substantial risk of default. The PBGC also indicated at an April 2013 enrolled actuaries meeting that they are continuing to fine-tune guidance under 4062(e) of ERISA, which requires reporting and potential liability for companies that cease operations at a facility that results in a 20% reduction in active plan participants. Companies that are financially sound will not be required to provide financial assurance, and the PBGC will focus 4062(e) measures on companies that are at higher risk of default. The PBGC’s reasonable position on reporting events and 4062(e) will no doubt be a relief to many plan sponsors.