This is a printer friendly version.
Archived Items Posted in 2009
Practitioners Page Updated: On May 18, 2009, PBGC made two changes to the Reporting and Disclosure section of the Practitioners page on PBGC’s Web site. First, the Reportable Events and Large Unpaid Contributions Web page was restructured and improved so that detailed guidance on ERISA section 4043 reporting, including forms and instructions, Technical Updates, and Blue Book questions, can be found in one place. Second, there now is a link to information on the DOL/EBSA Annual Funding Notice under ERISA section 101(f), applicable to plan years beginning on or after January 1, 2008. (05/18/09)
No Missed-Quarterly Waiver for 2009: PBGC is not granting an automatic waiver for 2009 of the requirement to notify PBGC of missed quarterly contributions under section 4043 of ERISA and PBGC's reportable events regulation (29 CFR Part 4043). Automatic waivers have been granted by Technical Update for 2008 and prior years where the employer had 100 or fewer participants covered by its plans, or had between 100 and 500 participants covered by its plans and had missed contributions to a plan that was well-funded. PBGC's experience is that many plans that did not report missed quarterlies because of the automatic waiver later terminated with unfunded liabilities, and that if missed-quarterly reports had been made, PBGC might have been able to work with plan sponsors to avoid the underfunded terminations. PBGC will still grant case-by-case waivers where appropriate. (02/20/09)
Notice To Defined Benefit Plans Concerning Funds Invested With Bernard L. Madoff Investment Securities LLC: Concerning pension plans that may have suffered investment losses due to the failure of Bernard L. Madoff Investment Securities LLC, PBGC reminds sponsors of single-employer plans that will be unable to pay benefits when due: ERISA section 4043 requires them to notify the agency within 30 days. Trustees of multiemployer plans who believe benefits will not be paid must also carry out their Title IV responsibilities, including PBGC notification. Additional information is available in the press release. (02/09/09)
Reportable Events: Funding-Related Determinations for Threshold Test, Waivers, and Extensions; Effect of the Pension Protection Act of 2006; Guidance for 2009 Plan Years: On January 9, 2009, PBGC issued Technical Update 09-1 , which provides guidance on the applicability of changes made by the Pension Protection Act of 2006 as they relate to PBGC's Reportable Events regulation (29 CFR part 4043). Technical Update 09-1 provides basically that for Reportable Events purposes, a plan's unfunded vested benefits and the value of its assets and vested benefits are determined for a plan year beginning in 2009 in the same manner as for premiums for the preceding plan year. See Technical Update 07-2 for Reportable Events guidance for 2008 plan years. (01/09/09)
Archived Items Posted in 2008
Minimum Lump Sum Assumptions for Terminating Single-Employer Plans; Pension Protection Act of 2006: On December 31, 2008, PBGC issued Technical Update 08-4 , which provides guidance on minimum lump sum assumptions for plans that terminate in standard terminations (and in certain distress terminations) after the effective date of PPA 2006 changes to interest and mortality assumptions for minimum lump sums in ongoing plans. Among other things, Technical Update 08-4 addresses situations where a plan terminates in a plan year before the PPA 2006 interest rate basis is fully phased in and pays lump sums in a subsequent plan year. See Technical Update 07-3 for guidance on minimum lump sum assumptions for plans that terminate before the effective date of the PPA 2006 changes. (12/31/08)
Multiemployer Withdrawal Liability Final Rule: On December 30, 2008, PBGC published in the Federal Register a final rule that implements changes under the Pension Protection Act of 2006 (PPA 2006) to the withdrawal liability methods for multiemployer plans and makes other changes to the multiemployer program under PBGC's regulatory authority. For example, the rule implements the PPA 2006 "fresh start" option for determining withdrawal liability. (12/30/08)
Benefit Restrictions - Present Value of PBGC Maximum Guarantee: The Pension Protection Act of 2006 provides that, generally beginning in 2008, single-employer plans that are between 60 and 80 percent funded may not pay lump sums or other accelerated distribution forms with values in excess of: (1) 50 percent of the amount that would be paid absent the restriction or, if smaller (2) the present value of PBGC's maximum guarantee computed under PBGC guidance. Technical Update 07-04 describes the methodology used to determine the present value of PBGC’s maximum guarantee and explains that a table will be posted for each calendar year. On December 22, 2009 PBGC posted the 2009 table. (12/22/08)
ERISA Section 4010 Filing Waiver: On December 19, 2008, PBGC issued Technical Update 08-3, which waives the filing under ERISA section 4010 for information years beginning on or after January 1, 2008 if: (1) the sole reason reporting would otherwise be required is because one or more plans sponsored by members of the filer's controlled group have a funding target attainment percentage of less than 80 percent; and (2) the aggregate underfunding for plans sponsored by members of the filer's controlled group is less than $15 million. This waiver is identical to a waiver in PBGC's proposed rule that would amend PBGC's regulation on Annual Financial and Actuarial Information Reporting (29 CFR part 4010). PBGC expects to issue a final rule in early 2009. PBGC issued Technical Update 08-3 pending issuance of the final rule so that potential filers can make informed decisions about elections to waive carryover balances, which, for many plans, are due by year-end. (12/19/08)
Expected Retirement Age Update: On December 1, 2008, PBGC published a final rule amending its valuation regulation by substituting a new table for selecting a retirement rate category. The new table applies to any plan being terminated either in a distress termination or involuntarily by the PBGC with valuation date falling in 2009. (12/01/08)
2009 Maximum Guarantee: On December 1, 2008, PBGC published a final rule amending its benefits payment regulation by updating the maximum guaranteeable monthly benefit table for 2009. The maximum guaranteeable monthly benefit for 2009 is $4,500.00 (as compared with $4,312.50 for 2008). (12/01/08)
Flat-Rate Premium Increase for Plan Year 2009: On December 1, 2008, PBGC published a notice stating that the per-participant flat-rate premium for single-employer plans for plan year 2009 is $34.00 (up from $33.00 for Plan Year 2008) and $9.00 (unchanged from Plan Year 2008) for multiemployer plans. By law, the premium rates are adjusted for inflation each year based on changes in the national average wage index. (12/01/08)
Disclosure of Termination Information Final Rule: On November 18, 2008, PBGC published a final rule to implement section 506 of the Pension Protection Act of 2006, which amends sections 4041 and 4042 of ERISA. These amendments require that plan administrators, plan sponsors, and PBGC disclose certain information in connection with distress terminations or PBGC-initiated terminations to affected parties upon request. (11/18/08)
Flat-Rate Premium Increase for Plan Year 2009: The per-participant flat-rate premium for single-employer plans for plan year 2009 is $34.00 (up from $33.00 for Plan Year 2008) and $9.00 (unchanged from Plan Year 2008) for multiemployer plans. By law, the premium rates are adjusted for inflation each year based on changes in the national average wage index. (10/21/08)
2008 Premium Filings: For plan years beginning in 2008, both Comprehensive and Estimated Flat-rate Filings can now be electronically filed via our premium e-filing application called My Plan Administration Account (My PAA). For details about the information that must be submitted in the 2008 Comprehensive Filing, refer to the Comprehensive Filing instructions that are on our Web site. For information about how to e-file, review the My PAA Page (e.g., FAQs, E-Filing Tips and User Demos). Note that the earliest Comprehensive Filing due date for 2008 calendar year plans is October 15, 2008. (7/25/08)
Administrative Review of Agency Decisions Final Rule: On July 3, 2008, PBGC published a final rule that amends its regulation on Rules for Adminstrative Review of Agency Decisions (29 CFR part 4003) to clarify that the agency's Appeals Board may refer certain categories of appeals to other PBGC departments for a written response and to make other minor changes in the rules. (07/03/08)
Proposed Rule on Treating Bankruptcy Filing Date as Plan Termination Date: On July 1, 2008, PBGC published in the Federal Register a proposed rule that would implement a Pension Protection Act of 2006 change to the benefits PBGC pays. Under PPA 2006, when an underfunded pension plan terminates during the bankruptcy of the plan sponsor, the date that the sponsor's bankruptcy petition was filed is treated as the plan's termination date for purposes of determining (1) the amount of benefits PBGC guarantees, and (2) the amount of benefits in priority category 3 in the asset allocation. The statutory change applies if the bankruptcy petition was filed on or after September 16, 2006. Comments on the proposed rule are due September 2, 2008. (07/01/08)
PBGC Publishes Final Rule Amending Its Bylaws: On May 23, 2008, PBGC published in the Federal Register a final rule that amends PBGC's bylaws. The bylaws define the roles of the new statutory Director, the Board, and the Board Representatives. (05/23/08)
PBGC Form 200 questions: On April 15, 2008, the Treasury Department and the Internal Revenue Service published proposed regulations providing guidance on the determination and payment of minimum required contributions under the new funding rules enacted as part of the Pension Protection Act of 2006. The new regulations are proposed to be effective for plan years beginning on or after January 1, 2009, but plan sponsors may rely upon them for plan years beginning in 2008. For a calendar year plan required to make quarterly installments, the first installment for the 2008 plan year was due April 15, 2008. Whenever there is a failure to make a required payment and the total of unpaid balances including interest exceeds $1 million, the plan sponsor must file PBGC Form 200 (Notice of Failure to Make Required Contributions) within 10 days of the due date for the required payment. Sponsors with questions about PBGC Form 200 filing requirements should contact Scot McCulloch of PBGC's Department of Insurance Supervision and Compliance, at (202) 326-4070 x 3033 or mcculloch.scot@pbgc.gov. (04/16/08)
Waiver for Small Employer Reporting of Missed Quarterly Contributions: On March 24, 2008, PBGC issued Technical Update 08-2, which waives reporting under PBGC's reportable events regulation of missed quarterly contributions for plan years beginning in 2008 for certain small employers. (3/24/08)
VRP Final Rule Published; 2008 Premium Filings. On March 21, 2008, PBGC published a final rule to amend PBGC's regulations on Premium Rates and Payment of Premiums. The amendments implement provisions of the Pension Protection Act of 2006 that change the variable-rate premium for plan years beginning on or after January 1, 2008, and make other changes to the regulations. The related premium instructions for 2008 final e-filings (now called Comprehensive Filings) have been updated to incorporate this final rule and have been posted to our Web site. Conforming changes will be made to My Plan Administration Account (My PAA) in sufficient time for the first Comprehensive Filings. The earliest Comprehensive Filing due date for calendar year plans in 2008 is October 15, 2008. Please note that for 2008, only Estimated Flat-rate Premium Filings are allowed to be e-filed at this time via My PAA. (3/21/08) .
4010 filing deadline extension: On February 21, 2008, PBGC issued Technical Update 08-1, which grants an automatic one-day extension of the 4010 filing deadline where the 105-day reporting period includes February 29, 2008. See section 4010 of ERISA and 29 CFR part 4010. For example, for a calendar year filer, this Technical Update extends the filing deadline from Monday, April 14, 2008 to Tuesday, April 15, 2008. (2/21/08)
Proposed rule on Annual Financial and Actuarial Information Reporting (ERISA section 4010): On February 20, 2008, PBGC published in the Federal Register a proposed rule that would implement changes to PBGC's regulation on annual financial and actuarial information reporting (part 4010) as required under the Pension Protection Act of 2006. The proposed rule, which would provide guidance on how to determine whether a 4010 filing is required under the PPA 2006 changes, would waive reporting in certain cases for controlled groups with aggregate underfunding of $15 million or less. It also would specify that the new rules are applicable to information years beginning after 2007; modify the standards for determining which plans are exempt from reporting actuarial information; revise the actuarial information requirements to conform with other PPA changes; and provide other clarifications. The first reports under the new rules would generally be due April 15, 2009. Comments on the proposed rule are due April 21, 2008. (2/20/08)
VRP Interest Rates under PPA: On January 15, 2008, PBGC posted the variable-rate premium interest rates for plan years beginning in January 2008 on its Web site. This is the first set of rates under the new interest rate methodology established by the Pension Protection Act of 2006 for determining the present value of vested benefits for purposes of the variable-rate premiums. (01/15/08)
PBGC Discontinuing Routine Federal Register Notices of Interest Rates: On January 15, 2008, PBGC published a notice informing the public that the routine Federal Register notices of PBGC interest rates and assumptions to be used under parts 4006, 4007, 4062, 4219, and 4281 of PBGC regulations have been discontinued. These include the variable rate premium interest rates . These rates and assumptions are published elsewhere (or can be derived from rates published elsewhere) and are also available in the Interest Rates section of the Practitioners page on PBGC's Web site, www.pbgc.gov. (01/15/08)
Archived Items Posted in 2007
Premium Final Rule: On December 17, 2007, PBGC published a final rule amending PBGC's premium regulations to implement certain provisions of the Deficit Reduction Act of 2005 and the Pension Protection Act of 2006 that are effective beginning in 2006 or 2007. The provisions that are implemented by this rule change the flat premium rate, cap the variable-rate premium for plans of certain small employers, and create a new "termination premium" that is payable in connection with certain distress and involuntary plan terminations. (12/17/07)
Benefit Restrictions - Present Value of PBGC Maximum Guarantee: The Pension Protection Act of 2006 provides that, generally beginning in 2008, single-employer plans that are between 60 and 80 percent funded may not pay lump sums or other accelerated distribution forms with values in excess of: (1) 50 percent of the amount that would be paid absent the restriction or, if smaller (2) the present value of PBGC's maximum guarantee computed under PBGC guidance. On December 17, 2007, PBGC posted a table showing the present value of PBGC's maximum guarantee for 2008 and issued Technical Update 07-04 providing information on how the table was developed and how it should be used. (12/17/07)
Transitional Guidance on 4010 and 4043 Reporting Requirements: On November 28, 2007, PBGC issued Technical Update 07-2, providing guidance on the applicability of changes made by the Pension Protection Act of 2006 (PPA 2006) as they relate to PBGC's regulations on Annual Financial and Actuarial Information Reporting (29 CFR part 4010) and Reportable Events and Certain Other Notification Requirements (29 CFR part 4043). For example, the Technical Update states that PBGC interprets the PPA 2006 amendments to ERISA section 4010 as applying to information years beginning after 2007, which means that the $50 million gateway test is still used to determine whether a 4010 filing is required for information years beginning in 2007. In addition, the Technical Update provides guidance on how to determine vested benefits and UVBs for purposes of reporting waiver requirements and the advance notice filing threshold test under part 4043 for event years beginning in 2008. The PBGC revised this Technical Update on December 7, 2007 (corrected December 15, 2007). (12/15/07)
Disclosure of Termination Information Proposed Rule: On December 5, 2007, PBGC published a proposed rule to implement section 506 of the Pension Protection Act of 2006, which amends sections 4041 and 4042 of ERISA. These amendments require that a plan administrator disclose information it has submitted to PBGC in connection with a distress termination filing, and that a plan administrator or plan sponsor disclose information it has submitted to PBGC in connection with PBGC-initiated termination. The new provisions also require PBGC to disclose the administrative record in a PBGC-initiated termination. The disclosures must be made to an affected party upon request. Comments on the proposed rule are due February 4, 2008. (12/05/07)
Minimum Lump Sum Assumptions for Terminating Single-Employer Plans; Pension Protection Act 2006: On December 3, 2007, PBGC issued Technical Update 07-3 , which provides guidance on lump sum calculation issues for single-employer plans that terminate in standard terminations (and in certain distress terminations) pursuant to ERISA section 4041. In particular, the Technical Update provides that if a plan terminates before the effective date of Pension Protection Act of 2006 changes to the interest rate and mortality table used in determining minimum lump sum values, the pre-PPA assumptions apply for determining lump sum payments made on or after that effective date. (12/03/07)
Expected Retirement Age Update: On November 30, 2007, PBGC published a final rule amending its valuation regulation by substituting a new table for selecting a retirement rate category. The new table applies to any plan being terminated either in a distress termination or involuntarily by the PBGC with valuation date falling in 2008. (11/30/07)
2008 Maximum Guarantee: On November 30, 2007, PBGC published a final rule amending its benefits payment regulation by updating the maximum guaranteeable monthly benefit table for 2008. The maximum guaranteeable monthly benefit for 2008 is $4,312.50 (as compared with $4,125 for 2007). (11/30/07)
Notice of Revisions to 2008 Form 5500: On November 16, 2007, the Department of Labor, the Department of Treasury, and PBGC published a Notice of Adoption of Revisions to Annual Return/Reports in the Federal Register, at 72 FR 64731. The Notice contains revisions required by the Pension Protection Act of 2006 to the Form 5500 Annual Return/Report forms that are filed for employee benefit plans under the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code. Some of the forms revisions will apply on a transitional basis for the 2008 reporting year. All of the forms revisions, including a new Form 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan, will be fully implemented for the 2009 reporting year as part of the switch under the ERISA Filing Acceptance System (EFAST) to a wholly electronic filing system (EFAST2). (11/16/07)
Rules for Administrative Review of Agency Decisions Proposed Rule: On October 18, PBGC published a proposed rule that would amend its regulation on Rules for Administrative Review of Agency Decisions (29 CFR part 4003) to clarify that the agency’s Appeals Board may refer certain categories of appeals to other PBGC departments for a written response and to make other changes. Public comments on the proposed rule are due December 17, 2007. (10/18/07)
Significant Guidance Documents: PBGC has added a link for Significant Guidance Documents under Laws, Regulations & Informal Guidance. This new page meets the requirements set under the Office of Management and Budget's "Final Bulletin for Good Guidance Practices," which requires that each agency maintain a list of current significant guidance documents on its Web site, with links to each document. Most of PBGC's significant guidance documents are already on the Web site under separate headings. The documents will remain under those headings but are now also accessible from one page reached by the new link. Significant guidance documents that are issued in the future will be added to the new page not later than 30 days after they are issued. (8/07/07)
Variable Rate Premium Proposed Rule: On May 31, 2007, PBGC published a proposed rule to amend PBGC's regulations on Premium Rates and Payment of Premiums. The amendments would implement provisions of the Pension Protection Act of 2006 that change the variable-rate premium for plan years beginning on or after January 1, 2008, and make other changes to the regulations. Public comments on the proposed rule are due by July 30. (5/31/07)
Premium Proposed Rule: On February 20, 2007, PBGC published a proposed rule to amend PBGC's premium regulations to implement certain provisions of the Deficit Reduction Act of 2005 and the Pension Protection Act of 2006 that are effective beginning in 2006 or 2007. The provisions that would be implemented by this rule change the flat premium rate, cap the variable-rate premium for plans of certain small employers, and create a new "termination premium" that is payable in connection with certain distress and involuntary plan terminations. Public comments on the proposed rule are due by April 23. (2/22/07)
Technical Update 07-1: On February 13, 2007, PBGC issued Technical Update 07-1, Effect of Treasury Mortality Tables on PBGC Requirements, which provides guidance on how the establishment by the Secretary of the Treasury of new mortality tables for determining current liability affects premium calculations and other PBGC requirements (in particular, reporting requirements under ERISA sections 4010 and 4043). The PBGC modified this technical update on February 15, 2007, to make minor changes and to state under section III.C. that for advance reporting of a reportable event with an effective date in a plan year beginning in 2007, the fair market value of assets is used to determine whether a company is subject to advance reporting. (02/15/07)
2007 Premium Filings:
- Electronic Filing Required — All premium filings for plan years beginning on or after 1/1/2007 must be submitted electronically to PBGC. As of July 1, 2006, large plans (those with 500 or more participants in the prior year) have been required to e-file for plan years beginning on or after 1/1/2006.
- My PAA — PBGC's e-filing application, My Plan Administration Account (My PAA), has been updated to allow the preparation/submission of all types of 2007 Filings. Click here to access information about My PAA, including how to get started, answers to frequently asked questions, and online “demos.”
- Flat-rate Premium Increase — The flat-rate premium for plan year 2007 is $31.00 per participant (up from $30.00 for 2006) for single-employer plans and $8.00 (no change from 2006) per participant for multi-employer plans.
- Assumptions/Methodology for Calculating VRP — As a result of the new IRS current liability mortality table, the assumptions and methods underlying the variable-rate premium calculation have changed. The Required Interest Rate increases from 85% to 100% of the corporate bond rate and the market value of assets should be used instead of actuarial value.
- Maximum VRP — Beginning with plan year 2007, the variable-rate premium is capped for certain plans maintained by small employers. The cap applies to a plan if the aggregate number of employees of the contributing sponsor of the plan and all members of their controlled group is 25 or fewer. For these plans, the variable-rate premium is capped at a per-participant rate of $5 multiplied by the number of plan participants. For example, if the participant count is 20, the cap on the variable-rate premium is $2,000 [($5 x 20) x 20]. (02/12/07)
Mortality Assumptions: New mortality assumptions for PBGC’s missing participants regulation will be effective for plans terminating on or after February 27, 2007. On December 14, 2006, the PBGC published in the Federal Register a direct final rule updating the missing participant mortality assumptions under part 4050 of the PBGC's regulations to conform to amendments made to part 4044 (Allocation of Assets in Single-employer Plans), which were published in the Federal Register on December 2, 2005. The rule also contained a minor conforming amendment to the mortality assumptions in part 4281(Duties of Plan Sponsor Following Mass Withdrawal). The direct final rule provided that it would become effective on February 27, 2007, unless the PBGC were to receive significant adverse comment by January 16, 2007. No comments were received. (01/25/07)
