This Technical Update temporarily waives the requirement to report an attrition event under § 4043.23(a)(2) of the Pension Benefit Guaranty Corporation's (“PBGC”) regulation on Reportable Events and Certain Other Notification Requirements (29 CFR part 4043) (the “reportable events regulation”) if the deadline for reporting the attrition event is on or after the date of this Technical Update. The waiver is granted pursuant to § 4043.4(a) of the reportable events regulation.
Background
Section 4043 of the Employee Retirement Income Security Act of 1974 (“ERISA”) requires that PBGC be notified of certain “reportable events.” PBGC’s reportable events regulation implements section 4043. Under § 4043.23, an active participant reduction reportable event occurs if either a single-cause event or an attrition event occurs.
Under § 4043.23(a)(2), an attrition event occurs at the end of a plan year if the sum of the number of active participants covered by the plan at the end of such plan year, plus the number of individuals who ceased to be active participants during the same plan year and are reported to PBGC as single-cause events, is less than 80 percent of the number of active participants at the beginning of such plan year.
Based on PBGC’s review of recent reportable event filings, PBGC has found that attrition events rarely identify circumstances warranting additional agency reviews and generally do not help in identifying plans or contributing sponsors that present an increased risk to the pension insurance program. PBGC also understands that attrition events frequently occur in frozen plans with relatively few active participants. PBGC thus believes that the administrative burden of attrition-event reporting likely outweighs the value of the information provided by those reports.
Temporarily waiving this reporting requirement would reduce compliance burden while, in PBGC’s view, preserving PBGC’s ability to receive timely notice of workforce reductions through the single-cause event reporting requirement. Under § 4043.4(a) of the reportable events regulation, PBGC may grant waivers where it is convinced that doing so is appropriate under the circumstances, but a waiver may be subject to conditions. Pending further guidance or regulatory action, pursuant to § 4043.4(a), PBGC is providing the temporary waiver described below.
Waiver
The requirement to report an attrition event under § 4043.23(a)(2) is waived if the deadline for reporting the attrition event is on or after the date of this Technical Update.
The waiver applies only to the requirement to report an attrition event under § 4043.23(a)(2). It does not waive any reporting requirement applicable to a single-cause event under § 4043.23(a)(1) or any other reportable event under part 4043.
This waiver applies regardless of whether the plan otherwise satisfies any other waiver or extension provision under part 4043 that would be applicable to the attrition event.
Scope and Duration
This Technical Update establishes a temporary waiver of the requirement to report attrition events under § 4043.23(a)(2), pending further guidance or regulatory action concerning that reporting requirement.
The waiver will remain in effect until the effective date of a final regulation amending § 4043.23 with respect to attrition events.
Other Requirements Unaffected
This Technical Update does not affect any other requirement under ERISA or PBGC's regulations. In particular, this Technical Update does not repeal any existing waiver of reporting under part 4043 and it does not waive the reporting of:
- a single-cause event required to be reported under § 4043.23(a)(1);
- any other reportable event under part 4043;
- any event required to be reported under another provision of ERISA or PBGC's regulations;
- or any information specifically requested by PBGC.
Effect of Waiver
An attrition event for which the deadline for reporting occurs during the period in which this waiver is in effect is not required to be reported to PBGC under § 4043.23(a)(2).
Disclaimer
This Technical Update represents PBGC's current views on this topic. It does not create or confer any rights for or on any person or operate to bind the public. If an alternative approach satisfies the requirements of the applicable statutes and regulations, a regulated entity may use that approach. Anyone who wishes to discuss an alternative approach (which is not required) may contact PBGC.
Contact Information
For questions about this Technical Update, contact Kristina Archeval of the Corporate Finance and Restructuring Department at (202) 229-4189 or Susan Lee of the Policy, Research and Analysis Department at (202) 229-4289. You may also send an email to post-event.report@pbgc.gov.