What's New for Employers & Practitioners

2024 Form 5500: On November 25, 2024, 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 2024 Form 5500 Annual Return/Report and related instructions. See EBSA’s News Release for more information, including a summary of key changes.

Benefit Restrictions – Present Value of PBGC Maximum Guarantee: On November 4, 2024, PBGC posted a table showing the present values applicable to benefits with annuity starting dates in 2025. A two-column spreadsheet version of the table is also available for convenient copying. For more information see Technical Update 07-04.

Special Financial Assistance Permissible Investments – Frequently Asked Questions: PBGC has posted a new SFA frequently asked question that provides guidance for multiemployer plans that receive SFA. The new SFA FAQ explains what types of derivative exposure, outside of permissible fund vehicles, are permissible in portfolios of SFA assets and provides examples. PBGC also has posted an updated FAQ on examples of permissible investment grade fixed income (IGFI) securities to clarify when fixed-to-float securities are permissible IGFI securities. The new and updated FAQs are also accessible on the SFA Program page under Resources.

Guarantee Limit: As a result of the indexing rules provided by law, the maximum guarantee limits for single-employer plans that fail in 2025 will be 4.56% higher than the limits that applied for 2024. A table showing the 2025 guarantee limits for various ages and payment forms is available. The guarantee limits for multiemployer plans are not indexed and have not changed.

2025 Premium Rates: PBGC has determined the premium rates applicable for plan years beginning in 2025 in accordance with the indexing rules provided in section 4006 of ERISA. The Premium Rates web page has been updated accordingly.

2022 Pension Insurance Data Tables Installment: PBGC’s 2022 Pension Insurance Data Tables Installment is now available. The tables summarize information on PBGC’s Single-Employer and Multiemployer Insurance Programs and the defined benefit pension system, which includes time-series data on PBGC’s finances and operations. The data on PBGC-insured defined benefit plans includes information on the number of plan participants, plan funded status, hybrid plans, frozen plans, risk transfer activity and Special Financial Assistance payments. PBGC’s data tables provide a comprehensive, longitudinal source of information on its insurance programs and employer-sponsored defined benefit plans.

First ERISA 4044 Yield Curve now Available: The July 31, 2024 ERISA 4044 Yield Curve is now available on PBGC’s ERISA 4044 Interest Assumption webpage.  This yield curve is used for 4044 calculations where the valuation date is on or after July 31, 2024 and before August 31, 2024.  PBGC will update the Interest Assumption webpage monthly to reflect future yield curves.  For more information, see PBGC’s  “Valuation Assumptions and Methods” Final Rule, issued June 6, 2024.

Solicitation of Nominations for the PBGC Participant and Plan Sponsor Advocate: On July 26, 2024, PBGC announced a solicitation for nominations for the Participant and Plan Sponsor Advocate. The Office of the Advocate works directly with participants in defined benefit plans to ensure that they receive benefits that they are entitled to from PBGC. The Office of the Advocate also assists plan sponsors in resolving disputes and other issues with PBGC. The Advocate works independently of the PBGC Departments and reports directly to the PBGC Board of Directors.

Updated Filing Instructions for 4010 and DB Missing Participants Program: Because assumption changes in its 4044 final rule are used to calculate certain amounts reported in 4010 and Missing Participants Program filings, PBGC has updated the following filing instructions to conform with the regulatory changes:

• 4010 Filing Instructions, and
• DB Missing Participants Program Filing instructions (i.e., instructions for Form MP-100, Form MP-300, and Form MP-400).

The new assumptions are used for calculations where the valuation date is on or after July 31, 2024.

Special Financial Assistance Permissible Investments – Updated Frequently Asked Questions: PBGC has posted two updated SFA frequently asked questions that provide guidance for multiemployer plans that receive SFA. The SFA FAQs explain and provide examples of securities included in large, aggregate U.S Bond index funds that meet the criteria for permissible investment grade fixed income (IGFI) securities. The updated FAQs are also accessible on the SFA Program page under Resources.

Updated Analysis of Single-Employer Partial Pension Risk Transfers: PBGC has posted an update to a 2020 report that analyzed partial risk transfer data reported by single-employer pension plans to PBGC on premium filings. The update includes data reported to PBGC in the 2015 through 2022 plan years, and summarizes the information by year, plan size, industry, plan frozen status, and premium funded ratios.

Valuation Assumptions and Methods Final Rule: On June 6, 2024, PBGC is issuing a final rule amending its regulation on Allocation of Assets in Single Employer Plans to modernize the interest, mortality, and expense assumptions used to determine the present value of benefits for a single employer pension plan ending in a distress or involuntary termination. Those assumptions are also used for certain multiemployer withdrawal liability calculations, 4010 reporting, and for other purposes. There are no notable changes from the proposed rule issued August 18, 2023.

Key assumption changes include moving to a generational approach for mortality and a yield curve approach for interest. A white paper providing additional information on the methodology that will be used to determine the interest assumption is available on pbgc.gov. The revised assumptions apply to calculations where the valuation date is on or after July 31, 2024.

Reporting and Disclosure RFI – Comment Period Extended: The comment period for the request for information (RFI) soliciting public input as the federal government reviews the effectiveness of existing reporting and disclosure requirements for retirement plans, as required by Section 319 of SECURE 2.0, was originally scheduled to close on April 22, 2024. The comment period has been extended 30 days to May 22, 2024. For more information, see the notice published in the Federal Register today.

2021 Pension Insurance Data Tables Installment: PBGC’s 2021 Pension Insurance Data Tables Installment is now available. The tables summarize information on PBGC’s Single-Employer and Multiemployer Insurance Programs and the defined benefit pension system, which includes time-series data on PBGC’s finances and operations. The data on PBGC-insured defined benefit plans includes information on the number of plan participants, plan funded status, hybrid plans, frozen plans, and risk transfer activity. Additional information was added this year regarding Special Financial Assistance payments. PBGC’s data tables provide a comprehensive, longitudinal source of information on its insurance programs and employer-sponsored defined benefit plans.

PBGC’s e-Filing Portal: Earlier today, PBGC launched its new and improved e-Filing Portal. Key changes include a new, more secure, login process and a streamlined look and feel across all applications (e.g., 4010 and reportable event filings, certain multiemployer plan filings, SFA applications). For additional information, including information about who to contact with questions, please see: e-Filing Portal Login.gov FAQs and PBGC’s e-Filing Portal User Guide.

Reporting and Disclosure RFI: On January 23, 2024, the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA), the Department of the Treasury, the Internal Revenue Service (IRS), and PBGC jointly published a request for information (RFI) soliciting public input as the federal government reviews the effectiveness of existing reporting and disclosure requirements for retirement plans, as required by Section 319 of SECURE 2.0.

As noted in the RFI, a summary of PBGC’s reporting and disclosure requirements is posted on pbgc.gov. EBSA’s January 19, 2024 News Release provides additional information.

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 for failure 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.

2024 Premium Filing Instructions: The Comprehensive Premium Filing Instructions for 2024 plan years have been approved by OMB and are now available on PBGC's website. My PAA has been updated accordingly and is now ready to accept 2024 filings. In addition to updating My PAA for 2024, the home page has been updated to have a more modern look and feel.

Expected Retirement Age Annual Update: On November 29, 2023, PBGC published a final rule amending its valuation regulation (29 CFR 4044) by substituting a new table for selecting the “retirement rate category.” The new table is used to determine the applicable expected retirement age (“XRA”) for participants in single-employer plans with 2024 valuation dates. XRA is one of the assumptions used to determine liabilities under ERISA section 4044 (per 29 CFR 4044). A copy of the table is available on PBGC’s ERISA Section 4044 Retirement Assumptions.

2023 Form 5500: On November 17, 2023, 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 2023 Form 5500 Annual Return/Report and related instructions. See EBSA’s News Release for more information, including a summary of key changes.

Mortality Tables: PBGC has updated the ERISA section 4044 mortality tables for 2024 valuations. Under the current regulation, these tables are used to determine liabilities when a single-employer plan terminates in an involuntary or distress termination (per 29 CFR 4044).  They are also used when a multiemployer plan incurs a mass withdrawal (per 29 CFR 4281).  Also, a unisex version of the healthy mortality tables is used in specified situations to determine the benefit transfer amount under the Missing Participants Program (per 29 CFR 4050).  HTML and Excel versions of these mortality tables are available on PBGC’s ERISA section 4044/4050 mortality table.

Technical Amendments Final Rule: On November 7, 2023, PBGC is issuing a final rule to amend its special financial assistance (SFA) regulation to clarify the calculation methodology for the withdrawal liability condition requiring phase-in of SFA assets. The clarifications include previously issued guidance about how make-up payments of suspended benefits are considered in the calculation methodology. The rule also makes miscellaneous updates and corrections to PBGC’s regulations. The final rule is effective December 7, 2023.

Updated SFA Information Includes Expanded Census Data Required Documentation: PBGC has updated several documents in the Special Financial Assistance information collection. These updates include changes to the application instructions requiring the submission of census data in all participant categories to enable PBGC to perform an independent death audit to identify deceased pension plan participants. In addition, PBGC has clarified the information that must be provided with the plan’s certification of the amount of the fair market value of assets, provided a toll-free number for plans to call to determine if the plan has outstanding debt, updated the model plan amendment regarding compliance to provide instructions if fewer than all trustees have executed the amendment, and clarified an example on the change of assumptions regarding CBUs. These application requirements and other updates are reflected in the General SFA Application Filing Instructions, SFA Assumptions Guidance, and Model Amendment Under 4262.6(e)(1) Regarding Compliance.

Fiduciary Video: PBGC staff gave a presentation to Small Business Administration (SBA) District Directors and Project Officers on the challenges small businesses often face when sponsoring a defined-benefit pension plan. The presentation was designed to support the SBA in helping small business owners better understand their fiduciary duties and avoid issues PBGC has identified when it assumes responsibility for pension plans. Video of the presentation is on PBGC’s Legal Resources – Fiduciary Breach Investigations.

Benefit Restrictions – Present Value of PBGC Maximum Guarantee: On October 30, 2023, PBGC posted a table showing the applicable present values for 2024 plan years. A two-column spreadsheet version of the table is also available for convenient copying. For more information see Technical Update 07-04.

Guarantee Limit: As a result of the indexing rules provided by law, the maximum guarantee limits for single-employer plans that fail in 2024 will be 5.30% higher than the limits that applied for 2023. A table showing the 2024 guarantee limits for various ages and payment forms is available. The guarantee limits for multiemployer plans are not indexed and have not changed.

2024 Premium Rates: PBGC has determined the premium rates applicable for the 2024 plan year in accordance with the indexing rules provided in section 4006 of ERISA, as amended by The Setting Every Community Up for Retirement Enhancement 2.0 Act (SECURE 2.0).  The Premium Rates webpage has been updated accordingly.

Overnight Delivery of Paper Premium Payment Checks: The address for overnight deliveries of paper premium checks is changing effective October 6, 2023. If you (or one of your clients) plans to send a paper check using an overnight delivery service in October, please be sure to review PBGC’s updated premium payment instructions webpage.

Valuation Assumptions and Methods Proposed Rule: PBGC is proposing to amend its regulation on Allocation of Assets in Single-Employer Plans to update the interest, mortality, and expense assumptions used to determine the present value of benefits for a single-employer pension plan ending in a distress or involuntary termination. The assumptions are also used for certain multiemployer withdrawal liability calculations and for other purposes. The proposed rule will be published in the Federal Register on August 18, 2023, with a 60-day public comment period. A white paper providing additional information on the methodology being proposed to determine the interest assumption is available on pbgc.gov.

ERISA 4010 Reporting Waiver: In recognition of the atypical market conditions of late 2022 and early 2023 and the way those conditions impact assets and liabilities for purposes of determining whether a 4010 filing is required, PBGC is providing a one-time waiver of the reporting requirement for filers meeting specified criteria. See PBGC Technical Update 23-1 for details.

Updated SFA Information Includes Census Data Required Documentation: PBGC has updated several documents in the Special Financial Assistance information collection. These updates include changes to the application instructions requiring the submission of census data to enable PBGC to perform an independent death audit to identify deceased pension plan participants and the submission of an assumptions summary. In addition, PBGC has provided a process for plans to request expedited processing of revised applications and a process for plans to submit revised lock-in applications in limited circumstances. These application requirements and other updates, including a new Template 10, are reflected in the General SFA Application Filing Instructions, SFA Application Amendment Cover Letter, and Lock-in Application.

Special Financial Assistance – New Questions & Answers: PBGC has posted two sets of new SFA questions and answers that provide guidance and examples for multiemployer plans that receive SFA.

• The Permissible Investments SFA questions and answers explain and provide examples of permissible investment grade fixed income (IGFI) securities and return-seeking assets (RSA).
• The Withdrawal Liability Condition and Make-up Payments of Previously Suspended Benefits SFA questions and answers focus on the withdrawal liability condition requiring phase-in of SFA assets. They clarify the calculation methodology for plans that paid make-up payments of previously suspended benefits.

The questions and answers are also accessible on the SFA Program page under Resources.

Benefit Payments Final Rule: On July 11, 2023, PBGC is issuing a final rule to increase transparency of PBGC benefits administration for terminated single-employer pension plans that PBGC trustees. The final rule makes clarifications and codifies policies involving benefit payments and valuation of plan assets.

Special Financial Assistance Non-Priority Group Application Process: PBGC has posted guidance for eligible multiemployer plans seeking to apply for SFA during the non-priority group application period, which begins March 11, 2023. Due to the extensive review process required for SFA applications, PBGC is limited in the number of applications it can review at any time. To facilitate an expeditious and thorough review process, the SFA regulation includes a metering system that permits the temporary closure of the e-Filing portal until PBGC has capacity to process more applications. Due to PBGC’s current and anticipated inventory of SFA applications, the e-Filing portal will be closed temporarily beginning at 12:00 AM ET on Saturday, March 11, 2023, to SFA applications. Beginning at 9:00 AM ET on Monday, March 13, 2023, PBGC will begin to accept requests to be placed on a waiting list for plans seeking to apply for SFA. See the guidance on the non-priority group application process for more information, including the application process for emergency filings and lock-in applications.

2020 Pension Insurance Data Tables: PBGC’s 2020 Pension Insurance Data Tables are now available. The tables summarize information on PBGC’s Single-Employer and Multiemployer Insurance Programs and the defined benefit pension system, which includes time-series data on PBGC’s finances and operations. The data on PBGC-insured defined benefit plans includes information on the number of plan participants, plan funded status, hybrid plans, frozen plans, and risk transfer activity. PBGC’s data tables provide a comprehensive, longitudinal source of information on its insurance programs and employer-sponsored defined benefit plans.

Special Financial Assistance Application Period to Open for Plans in Priority Group 6: On February 11, 2023, PBGC will begin accepting applications for Special Financial Assistance for eligible plans in Priority Group 6. Priority Group 6 includes those plans for which PBGC projects a present value of financial assistance payments under section 4261 of ERISA that would exceed $1 billion in the absence of SFA.

Updated SFA Information Includes Changes to Death Audit Required Documentation: Recently, PBGC updated a number of documents in the Special Financial Assistance information collection. These updates included changes to the instructions regarding the documentation of a death audit to identify deceased pension plan participants. In particular, these death audit updates and other updates were reflected in the General SFA Application Filing Instructions and the SFA Assumptions Guidance.

Special Financial Assistance – Withdrawal Liability Condition Exception: On January 26, 2023, in response to public comments, PBGC published a final rule amending its special financial assistance (SFA) regulation to add an exception process for certain withdrawal liability conditions that apply to a plan that receives SFA. An exception would be available under narrow circumstances where application of the conditions would result in an increase in employer withdrawals. A plan may submit an exception request either before the plan’s initial application for SFA is filed or before a revised application is filed. The final rule is effective January 26, 2023.

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 for failure to provide certain required information (e.g., reportable event filings, 4010 filings, certain multiemployer plan notices). Accordingly, PBGC published a final rule on January 12, 2023, 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.