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Technical Update 09-2: ERISA section 4010 reporting; Alternative form-of-payment assumption for determining benefit liabilities.


March 25, 2009

Background

On March 16, 2009 (at 74 FR 11022), PBGC published in the Federal Register a final rule that amends PBGC's regulation on Annual Financial and Actuarial Information Reporting (29 CFR Part 4010) to implement amendments made to ERISA section 4010 by the Pension Protection Act of 2006 and to make other changes. The final rule is effective April 15, 2009.

Section 4010.8(d)(2) of the final regulation provides guidance on the assumptions to be used to determine benefit liabilities for section 4010 reporting purposes. Under § 4010.8(d)(2)(i), filers must determine benefit liabilities using the form-of-payment assumption used to determine the minimum required contribution for the plan year ending within the filer's information year.

Alternative Form-of-payment Assumption

In response to inquiries, for information years starting on or after January 1, 2008, filers may determine benefit liabilities using the form-of-payment assumption described in § 4044.51 of PBGC's regulation on Allocation of Assets in Single-Employer Plans (29 CFR part 4044). Thus, if a benefit is not in pay status and no valid election with respect to the form of benefit has been made, the filer may use the form of benefit that, under the terms of the plan, is payable in the absence of a valid election (generally an annuity form of payment). Filers who use the alternative form-of-payment assumption under § 4044.51 must report that fact to PBGC using the comment feature of the e-4010 filing application.

PBGC may clarify the final regulation, as appropriate.

PBGC Contact Points

For questions about this Technical Update 09-2, please contact Grace Kraemer of the Legislative and Regulatory Department at (202) 326-4223, ext. 3865, or kraemer.grace@pbgc.gov or Amy Viener of the Policy, Research and Analysis Department at (202) 326-4080, ext. 3919, or viener.amy@pbgc.gov.