New 4062(e) Form Series: PBGC has created a new form series intended to clarify and simplify the process for providing PBGC the required notifications following a substantial cessation of operations and election to make additional annual contributions to satisfy resulting liability. The following four forms and instructions have been approved by OMB are now available for use: (1) Form 4062(e)-01 (to notify PBGC of a substantial cessation of operations), (2) Form 4062(e)-02 (to notify PBGC of an election to make additional annual contributions), (3) Form 4062(e)-03 (to notify PBGC of a payment of an additional contribution, termination of obligation for future contributions, or receipt of funding waiver from the IRS, and (4) Form 4062(e)-04 (to notify PBGC of a failure to pay an additional contribution). (09/18/2019)
Study on Orphan and Inactive Participants in Multiemployer Plans: The study analyzes data reported by multiemployer pension plans regarding orphan participants who formerly worked for employers that have withdrawn and other inactive participants. The study notes that plans with the most underfunding report a high concentration of orphans and other inactive participants. (8/30/2019)
Proposed Changes to Premium Filing Instructions for 2020 Plan Years: PBGC is proposing to make changes to the premium filing requirements first effective for the 2020 plan year. These changes relate only to the risk-transfer and final filing questions. Accordingly, on August 1, 2019, PBGC published a notice announcing that PBGC intends to request OMB approval of these changes and is soliciting public comment on the proposed changes. A document showing what those questions and related instructions would look like if approved is available on PBGC’s website. Please note that PBGC also expects to make routine changes, e.g., 2020 premium rates, to the filing instructions. (7/31/2019)
Solicitation of Nominations for Appointment to PBGC’s Advisory Committee: On August 1, 2019, PBGC published a solicitation for nominations for the agency’s Advisory Committee, which gives advice on investment issues and other matters related to PBGC’s mission. Under ERISA, the Advisory Committee members are appointed to serve term appointments. Therefore, PBGC is currently seeking nominations for three seats, two representing employee organizations and one representing the general public, which will be vacant in February 2020.
The Committee meets six times a year with at least one joint session with PBGC’s Board of Directors. The Committee consists of seven members: two representatives of employee organizations, two representatives of employers who maintain pension plans, and three representatives of the general public. Nominees must have experience with defined benefit plans. (7/31/2019)
Clarification to Guidance on Mergers and Transfers Between Multiemployer Plans: On September 14, 2018, PBGC published a final rule to implement its authority to facilitate mergers of multiemployer pension plans. PBGC has posted a clarification to the preamble in the second example of how a plan can demonstrate that financial assistance is necessary to mitigate the adverse effects of the merger on the merged plan’s ability to remain solvent. This example in the preamble states that, “while not a threshold, a possible demonstration may be based on stochastic modeling showing that the merged plan’s probability of insolvency within 30 years of the merger exceeds 65% without the requested financial assistance.” (See 83 FR 46642, at 46647 column 3). The percentage in this example should be 35% (not 65%). (07/15/2019)
Coverage Determinations: PBGC’s new form and instructions for requesting a determination about whether a plan is covered under title IV of ERISA has been approved by OMB and is now available for use. This form was created to streamline and simplify the coverage determination process. The instructions explain that in limited circumstances, under a one-year pilot program, employers may also use the form to request an Opinion Letter about whether a plan in the process of being created is likely to be covered by PBGC. PBGC’s Coverage webpage has been updated accordingly. (07/09/2019)
e-Filing Portal: PBGC published a final rule in May that simplifies certain reporting and disclosures of plan information by terminated and/or insolvent multiemployer plans to PBGC, participants and beneficiaries. The final rule is effective July 1, 2019. PBGC has updated its e-Filing Portal to reflect the changes and simplifications to the notices and information that terminated and/or insolvent multiemployer pension plans are required to file with PBGC. These changes include a new combined notice of insolvency and notice of insolvency benefit level as well as requirements to file actuarial valuation information and withdrawal liability information with PBGC. These new filing requirements are applicable for plan years ending after July 1, 2019. (07/01/2019)
Miscellaneous Corrections, Clarifications, and Improvements Proposed Rule: PBGC is proposing to make clarifications, corrections and improvements to four of its regulations. The proposed rule would amend:
- Reportable Events – eliminate possible duplicative reporting of active participant reductions, clarify when a liquidation occurs, and provide additional examples for certain events;
- Financial and Actuarial Information Reporting – eliminate a requirement to submit individual financial information for each controlled group member and add a new reporting waiver;
- Standard Terminations – provide more time to file a post-distribution certification; and
- Premium Rates – emphasize that a plan does not qualify for the variable rate premium exemption for the year in which it completes a standard termination if it engages in a non-de minimis spinoff in the same year.
This proposed rule is based on PBGC’s ongoing efforts to review the effectiveness and clarity of its rules and input from stakeholders. The proposed rule will be published in the Federal Register on June 27, 2019, with a 60-day public comment period. (06/26/19)
Proposed 4062(e) Form Series: PBGC is proposing to clarify and simplify the process for providing PBGC the required notifications following a substantial cessation of operations and election to make additional annual contributions to satisfy resulting liability. On May 15, 2019, PBGC is publishing a notice that PBGC intends to request OMB approval of a form series and instructions to be used when fulfilling these notification requirements. The proposed form series and instructions list the information and documents required to notify PBGC of: (1) a substantial cessation of operations (Form 4062(e)-01); (2) election to make additional annual contributions (Form 4062(e)-02); (3) payment of an additional contribution, termination of obligation for future contributions, or receipt of funding waiver from the IRS (Form 4062(e)-03); and (4) failure to pay an additional contribution (Form 4062(e)-04). PBGC is soliciting public comments on the proposed form series and instructions. (05/14/2019)
New Single-Employer Guarantee Study and Data Tables Update: PBGC released a new Single-Employer Guarantee Study. This comprehensive study examines how well the single-employer guarantee protects pensions of participants in PBGC-trusteed plans. The analysis shows that 84 percent of participants receive their full pension benefit while 16 percent see reductions. The average cutback is 24 percent for those who do receive a reduced pension. Findings of the new study are broadly comparable and support those of the 2008 study, while broadening the original study’s scope and methodology.
Additionally, PBGC updated the 2016 Data Tables that provides detailed statistics for PBGC-insured single-employer and multiemployer plans. The tables include data that quantifies the number of people and plans that PBGC protects, the people receiving or eligible to receive benefits from PBGC and the benefits paid to them, the funded status of PBGC-protected plans, and other vital statistics. (5/10/2019)
Reportable Event and Large Unpaid Contribution Forms and Instructions: OMB has approved minor revisions to the ERISA 4043 forms and instructions (i.e., Forms 10, 10-Advance and 200). The most notable change is that controlled group and financial information must now be submitted (as an attachment) with all Form 10 filings. In the past, that requirement applied to most, but not all, filings. The new forms and instructions can be found on PBGC’s Reportable Events & Large Unpaid Contributions webpage. PBGC’s e-filing portal has been updated accordingly. (05/08/19)
Coverage Determinations: On May 8, 2019, PBGC is submitting to OMB for review under the Paperwork Reduction Act draft forms and instructions to be used for coverage determinations. Included in the OMB Submission is a supporting statement addressing public comments on the proposed forms and instructions. Of note was a comment requesting that employers be allowed to request coverage determinations before creating and sponsoring pension plans. Although PBGC cannot provide coverage determinations for plans that do not exist, the supporting statement explains that, in limited situations, employers will be able to use the soon-to-be issued coverage forms to request an Opinion Letter about whether a plan in the process of being created is likely to be covered by PBGC.
Comments are due to OMB by June 7, 2019. Information on how to comment is included in the related Federal Register notice. (05/08/2019)
Pre-filing Consultation Service: PBGC now offers a pre-filing consultation for ERISA 4010 filers, especially first-time filers, looking for guidance on filing requirements. PBGC staff will provide an overview of the process, share helpful tips on how to use the e-filing software, and provide insights on how to avoid common filing errors. To schedule a pre-filing consultation, send an email to ERISA.firstname.lastname@example.org or call (202)-326-4000 ext. 3075. You can also visit PBGC’s website for more information: ERISA 4010 Reporting. (03/29/2019)
Simplified Methods for Computing Withdrawal Liability: On February 6, 2019, PBGC published a proposed rule that would implement statutory changes under the Multiemployer Pension Reform Act of 2014 affecting the determination of a withdrawing employer’s liability under a multiemployer plan and annual withdrawal liability payment amount. The proposed rule would provide simplified methods for determining withdrawal liability and annual payment amounts that a plan sponsor would be able to adopt to satisfy the statutory requirements that certain amounts associated with funding improvement/rehabilitation plans and benefit suspensions be disregarded. PBGC is soliciting comments on the proposed rule. (02/06/2019)
Update to Staff Guidance Questions and Answers: PBGC has updated its Staff Responses to Practitioner Questions webpage to include additional information about guaranteed benefits, reportable events and standard terminations. PBGC will update this webpage periodically as additional questions arise. The updated Q&As can also be accessed on the Other Guidance webpage under the “Employers and Practitioner” menu on PBGC.gov. (01/29/2019)
Pilot Mediation Program Made Permanent and Expanded: PBGC’s Pilot Mediation Program is now permanent and PBGC has added fiduciary breach cases to the categories of disputes covered by the program. This gives plan administrators the opportunity to resolve these cases with a neutral, professional, independent mediator in a timely and cost-effective manner.
Fiduciary breach cases involve situations where plan fiduciaries, such as sponsors, administrators and certain advisors, take actions that violate their duties of loyalty and prudence to participants. In 2017, PBGC started the Mediation Program as a pilot project with certain termination liability collection and Early Warning Program cases. (01/24/2019)
My PAA Demos are now available directly from every page header within My PAA;
- All “team members” will be notified be email when new PBGC premium-related correspondence is sent (copies of such correspondence can be viewed via the Plan Correspondence Quick Link);
- Filing Coordinators can now add or remove “team members” for multiple plans at once; and
- With the exception of “uploaded” filings, filers now have the ability to attach a document when submitting premium filings online using My PAA in the event they would like to include additional explanations for any premium filing data. (01/02/2019)
Annual Update of Maximum Civil Monetary Penalty: Federal law requires that PBGC amend its civil penalty regulations annually to incorporate an inflation adjustment on the maximum penalty that may be assessed when plans fail to provide certain required information (e.g., reportable event filings, 4010 filings, certain multiemployer plan notices). Accordingly, PBGC published a final rule amending two regulations (29 CFR parts 4071 and 4302).
Although the maximum penalty is increasing, it is uncommon for PBGC to assess this amount. The agency's goal is to encourage compliance. In most cases, when PBGC assesses an information penalty, it is for an amount significantly less than the maximum permitted. (12/28/2018)
2019 Premium Filing Instructions: The Comprehensive Premium Filing Instructions for 2019 Plan Years (including the illustrative form) have been approved by OMB and are now available on PBGC's website. Besides updating the instructions to reflect the 2019 premium rates, minor changes have been made to reflect PBGC’s streamlined disaster relief policy. In addition, the instructions now provide information, previously available only in the My PAA user’s manual, about the options plan administrators may use to certify premium filings (i.e., manually instead of electronically). My PAA will be ready to accept 2019 filings in the very near future. (12/13/2018)
Expected Retirement Age Annual Update: On December 12, 2018, 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 a valuation date falling in 2019. A copy of the table is available on PBGC’s ERISA Section 4044 Retirement Assumptions web page. (12/12/2018)
2019 Mortality Tables: On December 3, 2018, PBGC posted the mortality table to be used for determining the present value of annuities in involuntary terminations and distress terminations of single-employer plans with 2019 valuation dates (per 29 CFR 4044). A unisex version of that table, used in specified situations to determine the benefit transfer amount under the Missing Participants Program (per 29 CFR 4050) was also posted. HTML and Excel versions of the 2019 mortality tables are available on PBGC’s ERISA section 4044/4050 mortality table webpage. (12/03/2018)
Proposed Form for Requesting Plan Coverage Determination: PBGC is proposing to streamline the process of obtaining a PBGC coverage determination. On December 4, 2018, PBGC published a notice that PBGC intends to request OMB approval of a form and instructions to be used when submitting a coverage determination request. The proposed form and instructions list the information and documents required for PBGC to make a coverage determination. PBGC is soliciting public comments on the proposed form and instructions. (12/03/2018)
2018 Form 5500: On November 13, 2018, The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA), the Internal Revenue Service (IRS), and PBGC released advance informational copies of the 2018 Form 5500 Annual Return/Report and related instructions. See EBSA’s News Release for more information, including a summary of key changes. (11/15/2018)
Benefit Restrictions - Present Value of PBGC Maximum Guarantee: On October 29, 2018, PBGC posted a table showing the applicable present values for 2019 plan years. The table is also available in a printer-friendly format. For more information see Technical Update 07-04. (10/31/2018)
Reportable Events Reference Sheet for Small Plans: PBGC has created a reference tool to help practitioners when advising small plans (those with 100 or fewer participants) about possible reportable events. The tool, in the form of a quick checklist, can be found on PBGC’s Reportable Events and Large Unpaid Contributions page. (10/26/2018)
Guarantee Limit: On October 22, 2018, PBGC announced that, as a result of the indexing rules provided in ERISA, the guarantee limits for single-employer plans that fail in 2019 will be 3.46% higher than the limits that applied for 2018. A table showing the single-employer plan guarantee limits for various ages and payment forms is available on PBGC's website. The guarantee limits for multiemployer plans are not indexed and therefore have not changed. (10/22/2018)
2019 Premium Rates: PBGC updated the Premium Rates web page to show premium rates for 2019 after reflecting increases and indexing required by section 4006 of ERISA, as amended by The Bipartisan Budget Act of 2015. (10/12/2018)
Enhanced ERISA Section 4062(e) Web Page: PBGC has expanded and modified the information on pbgc.gov related to liability that may arise when an employer ceases operations at a facility under ERISA section 4062(e), as amended by Public Law 113-235. The revised web page provides basic information about 4062(e), answers to frequently asked questions, and information on reporting to PBGC. (10/11/2018)
Final Rule on Mergers and Transfers Between Multiemployer Plans: On September 14, PBGC will publish a final rule to implement its authority to facilitate mergers of multiemployer pension plans. Mergers of multiemployer plans can help to protect the benefits earned by workers and retirees and extend the solvency of troubled plans. This rulemaking also updates the general rules on plan mergers and transfers. Read the press release: PBGC Finalizes Guidance on Mergers and Transfers Between Multiemployer Plans. (9/13/2018)
Modifications to 2018 Premium Filing Instructions: On September 4, 2018, PBGC modified the Comprehensive Premium Filing Instructions for 2018 Plan Years to provide information about a recent change to the premium payment instructions and, in response to questions PBGC has received, to clarify the applicability of a variable-rate premium exemption for plans closing out during the year. See pages 2 and 35 respectively. (9/4/2018).
Solicitation of Nominations for Appointment to PBGC’s Advisory Committee: On August 8, PBGC will publish a solicitation for nominations for the agency’s Advisory Committee, which gives advice on investment issues and other matters related to PBGC’s mission. The Committee meets six times a year with at least one joint session with PBGC’s Board of Directors. The Committee consists of seven members: two representatives of employee organizations, two representatives of employers who maintain pension plans, and three representatives of the general public. PBGC seeks nominations for all seats. Nominees must have experience with defined benefit plans. (8/7/2018)
Premium Payment & Correspondence Mailing Addresses: Effective immediately, the PBGC has changed their mailing addresses for paper checks and correspondence from Bank of America to U.S. Bank. If a paper check or correspondence is mailed to Bank of America, it will be forwarded to U.S. Bank until 10/30/2018. Complete premium payment instructions can be found here, Premium Filing Payment & Instructions. (7/30/2018)
New Staff Guidance Q&A web page: PBGC has developed a new web page that compiles PBGC staff responses to questions received from practitioners about Title IV requirements that may be of interest to other practitioners. The questions cover issues such as bankruptcy claims, liens arising from large missed contributions, guaranteed benefits, and reportable events. Also included is a response to a question received several times in recent months about whether a two-step transaction, sometimes called a “reverse spinoff,” is an acceptable strategy for avoiding certain premium payments.
PBGC intends to update this web page periodically as additional questions arise. The new web page can be accessed by clicking the link above or via the Other Guidance page on the “Employers and Practitioner” menu of PBGC.gov. (7/25/2018)
My PAA Updates: Additional functionality has been added to the “Submit a Request” Quick Link button, located near the top of the Plan Page. Practitioners have the ability to submit a Penalty RFR, Premium Refund and now any other type of actionable request or correspondence directly to the PBGC. When a request has been successfully submitted, an automatic Service Request ID will be generated and all filing team members will receive a confirmation message. In addition, the “Check Status of Request” Quick Link button has been created to track certain plan specific requests. This page includes all requests that filing team members created via the “Submit a Request” Quick Link (mentioned above) in addition to other relevant plan items which may have been created internally by the PBGC. Lastly, practitioners can only submit on-screen My PAA filings for plan years beginning 2008 and forward; See Prior Year Instructions and Forms for reference. (7/23/2018)
2016 Pension Insurance Data Book: On July 18th, PBGC posted the second installment of the 2016 Data Tables, which includes statistics for PBGC's single-employer and multiemployer programs and for the private defined benefit pension system. This installment provides information about plan funding levels, demographics, and premiums, and multiemployer plan zone status, including, for the first time, information specific to critical and declining plans. (7/23/2018)
Terminated and Insolvent Multiemployer Plans Proposed Rule: On July 16, PBGC will publish a proposed rule that would make more efficient certain reporting and disclosure of plan information by terminated and/or insolvent multiemployer plans to PBGC and participants and beneficiaries. Certain terminated plans and insolvent plans must provide notices of insolvency and notices of insolvency benefit level. The proposed rule would remove outdated information included in the notices and would eliminate the requirement to provide most annual updates to the notice of insolvency benefit level. Under current regulations, multiemployer plans terminated by mass withdrawal must perform an annual actuarial valuation of the plan’s assets and liabilities. Under the proposed rule, smaller plans terminated by mass withdrawal would be able to perform actuarial valuations less frequently. The proposed rule also would add new requirements for plan sponsors of certain terminated plans and insolvent plans to file their actuarial valuations and withdrawal liability information with PBGC. (7/13/2018)
Disaster Relief: On July 2, 2018, PBGC will issue a Federal Register Notice announcing changes to the way it provides disaster relief. The revised policy streamlines PBGC’s practice of announcing relief by keying it to IRS’ disaster relief news releases via a one-time Disaster Relief Announcement and makes other minor changes. PBGC’s Disaster Relief announcement explains which filings are covered, what the relief entails, how/when to notify PBGC that your plan qualifies for the relief, etc. The Federal Register notice is available for public inspection now. (6/29/2018)
PBGC Projections Report FY 2017: On May 31, 2018, PBGC released its FY 2017 Projections Report, an annual actuarial evaluation forecasting the future financial condition of PBGC’s two separate programs (Single Employer and Multiemployer). The new projections are broadly consistent with last year’s projections and indicate that, absent changes in law or additional resources, PBGC’s Multiemployer Program is highly likely to become insolvent by the end of FY 2025, and that, while there remain significant risks, PBGC’s Single Employer Program is likely to emerge from deficit sooner than previously anticipated. PBGC’s news release provides additional information about the projections. (5/31/2018)
My PAA Updates: We have improved premium e-filing via My PAA to provide customer usability enhancements, which include improvements to the e-signature process if credits have changed since initial sign-off, displaying on-screen validations for single-filings in the upload filing process, and revised on-screen variable-rate premium validations for certain small plans. In addition, security enhancements were made, for example, to increase password complexity. For more information, see What’s New in My PAA and review the associated My PAA demos, which have been updated to reflect these changes. (4/27/2018)
Standard and distress terminations forms and instructions: OMB has approved minor revisions to the standard and distress termination forms and instructions. Key changes include a new option for submitting these filings by email and the ability to request a pre-filing consultation to determine if a distress filing application is warranted (see PBGC’s distress termination webpage for more information). In addition, because the rules related to missing participants differ depending on whether the date of plan termination is before January 1, 2018, the post-distribution certifications (i.e., Forms 501 and 602, for standard and distress terminations respectively), have been modified slightly so that they can be used for both pre-2018 and post-2017 terminations.
The new forms and instructions can be found on PBGC’s Forms for Practitioners and Employers webpage. Practitioners with questions about these forms may contact email@example.com or firstname.lastname@example.org. (04/17/18)
2016 Pension Insurance Data Book: Today, PBGC released the first installment tables for the 2016 Data Book, updating information in the Claims and Summary Tables. (04/04/2018)
Multiemployer Plan Alternative Terms and Conditions to Satisfy Withdrawal Liability: PBGC is issuing guidance on alternative terms and conditions that multiemployer plans can use to satisfy withdrawal liability claims. The guidance describes the types of information PBGC finds helpful in evaluating plan proposals, and the factors PBGC considers in its evaluation. PBGC is issuing guidance now because it is observing an uptick in plans considering alternative rules and PBGC wants to be transparent and provide stakeholders with useful information to assist them in this process. Read the press release: PBGC Issues Guidance to Assist Multiemployer Pension Plans Seeking Alternative Rules for Employer Withdrawal Liability. (04/03/2018)
Owner-participant Proposed Rule: On March 7, 2018, PBGC published a proposed rule to conform our regulations to changes in the phase-in rules for owner-participants under the Pension Protection Act of 2006 (PPA 2006). Sections 4022 and 4044 of ERISA cover PBGC’s guarantee of plan benefits and allocation of plan assets, respectively, under terminated single-employer plans. Special provisions within these sections apply to owner-participants, who have certain ownership interests in their plan sponsors. PPA 2006 made changes to these provisions. PBGC has been operating in accordance with the amended provisions since they became effective.
With this rulemaking, PBGC intends to increase transparency into its operations and provide guidance for plan administrators on the impact of the statutory changes. The proposed rule clarifies that plan administrators may continue to use the simplified calculation in the existing rule to estimate benefits funded by plan assets. It also provides new examples to aid plan administrators in implementation. (3/7/2018)
Annual Update of Maximum Civil Monetary Penalty: Federal law requires that PBGC amend its civil penalty regulations annually to incorporate an inflation adjustment on the maximum penalty that may be assessed when plans fail to provide certain required information (e.g., reportable event filings, 4010 filings, certain multiemployer plan notices). Accordingly, on January 12, 2018, PBGC will publish a final rule amending two regulations (29 CFR parts 4071 and 4302).
Although the maximum penalty is increasing, it's worth noting that it is uncommon for PBGC to assess information penalties. The agency's goal is to encourage compliance, not to penalize plans that inadvertently forget to file information. In most cases, when PBGC does assess an information penalty, it is for an amount significantly less than the maximum permitted. (1/11/2018)
2018 Premium Filings: My PAA is now ready to accept electronic premium filings for plan years beginning in 2018. In addition, if you have the plan in your My PAA account (which we highly recommend), you can submit an online Request for Reconsideration (of penalty) or a Request for a Premium Refund (by the PA/PA Rep). For additional information, see the following pages: Premium Payment Instructions & Addresses, What's New in My PAA & Reminders, Online Demos, and the Online Premium Filing with My PAA page (for FAQs, My PAA User's Manual, etc.). (1/10/2018)
2018 Premium Filing Instructions: The Comprehensive Premium Filing Instructions for 2018 Plan Years (including the illustrative form) have been approved by OMB and are now available on PBGC's website. Of particular note is a new section alerting practitioners to the most common premium filing mistakes. We expanded the section about short plan years to provide additional information for plans expecting to distribute assets during the 2018 plan year pursuant to a standard termination. In addition, we’ve expanded the examples in the section about how to determine premiums in a year when a plan is involved with a Spinoff, Merger or Consolidation. My PAA will be ready to accept 2018 filings in the very near future. (1/8/2018)