PBGC Proposes Amendments to Benefit Payment Rules
FOR IMMEDIATE RELEASE
December 22, 2000
The Pension Benefit Guaranty Corporation (PBGC) today announced several proposed regulatory changes concerning how it pays benefits to participants in terminated defined benefit pension plans it takes over.
"This proposal is part of our continuing efforts to clarify and simplify our rules and provide meaningful choices to our customers," said PBGC Executive Director David M. Strauss.
Under the proposal, PBGC would:
- permit participants, with the consent of their spouses, to choose among several alternative annuity benefit forms and to designate non-spouse beneficiaries;
- introduce the concept of the Earliest PBGC Retirement Date, to distinguish for PBGC purposes between separations from service and retirements;
- provide rules on who should receive benefits owed to a participant at the time of the participant's death;
- recognize entitlement to benefits where plan conditions relating to age, length of service, disability, or death are met on or before (rather than just before) the plan's termination date; and
- simplify the application of the maximum guaranteed benefit rules when an individual is entitled to a benefit both as a participant and as a survivor of another participant.
Comments on the proposal, which will appear in the December 26, 2000, Federal Register, must be received by February 26, 2001, and may be sent by Internet e-mail to email@example.com.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by about 43 million American workers and retirees participating in nearly 40,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and investment returns.
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PBGC No. 01-14