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PENSION BENEFIT GUARANTY CORPORATION (PBGC)
Statement of Regulatory and Deregulatory Priorities
The Pension Benefit Guaranty Corporation (PBGC) protects the pensions 
of over 44 million working men and women in about 30,500 private 
defined benefit plans. PBGC receives no funds from general tax 
revenues. Operations are financed by insurance premiums, investment 
income, assets from pension plans trusteed by PBGC, and recoveries from 
the companies formerly responsible for the trusteed plans.
To carry out these functions, PBGC issues regulations interpreting such 
matters as the termination process, establishment of procedures for the 
payment of premiums, reporting and disclosure, and assessment and 
collection of employer liability. The Corporation is committed to 
issuing simple, understandable, and timely regulations to help affected 
parties do business.
PBGC's intent is to issue regulations that implement the law in ways 
that do not impede the maintenance of existing defined benefit plans or 
the establishment of new plans. Thus, the focus is to avoid placing 
burdens on plans, employers, and participants, wherever possible. PBGC 
also seeks to ease and simplify employer compliance whenever possible.
PBGC Insurance Programs
PBGC administers two insurance programs for private defined benefit 
plans under title IV of the Employee Retirement Income Security Act of 
1974 (ERISA): a single-employer plan termination insurance program and 
a multiemployer plan insolvency insurance program.
<bullet> Single-Employer Program. Under the single-employer program, 
            PBGC pays guaranteed and certain other pension benefits to 
            participants and beneficiaries if their plan terminates 
            with insufficient assets (distress and involuntary 
            terminations). The single-employer program had a $13.1 
            billion deficit at the end of fiscal year 2007.
<bullet> Multiemployer Program. The smaller multiemployer program 
            covers about 1500 collectively bargained plans involving 
            more than one unrelated employer. PBGC provides financial 
            assistance (in the form of a loan) to the plan if the plan 
            is unable to pay benefits at the guaranteed level. 
            Guaranteed benefits are less than single-employer 
            guaranteed benefits. The multiemployer program, which is 
            separately funded from the single-employer program, had a 
            $955 million deficit at the end of fiscal year 2007.
Recent Legislation
Early in 2005, the Administration proposed reforms to improve funding 
of plans and restore the financial health of the insurance program, 
which had a $233.billion deficit at the end of fiscal year 2004. 
Legislation signed into law in 2006 -- the Deficit Reduction Act of 
2005 (DRA 2005) and the Pension Protection Act of 2006 (PPA 2006) -- 
contain various provisions intended to improve plan funding, enhance 
pension-related reporting and disclosure, and strengthen the insurance 
programs.
Regulatory Objectives and Priorities
PBGC's current regulatory objectives and priorities are to continue 
implementation of the PPA 2006 changes by issuing simple, 
understandable, and timely regulations that do not impose undue burdens 
that could impede maintenance or establishment of defined benefit 
plans. (PBGC has completed its implementation of DRA 2005.) These 
regulatory objectives and priorities are developed in the context of 
the Corporation's statutory purposes:
<bullet> To encourage voluntary private pension plans;
<bullet> To provide for the timely and uninterrupted payment of pension 
            benefits; and
<bullet> To keep premiums at the lowest possible levels.
PBGC also attempts to minimize administrative burdens on plans and 
participants, improve transparency, simplify filing, and provide relief 
for small businesses. As mentioned below, the first set of rulemakings 
concerns premiums, disclosure of termination information, annual 
financial and actuarial reporting, treatment of bankruptcy filing date 
as termination date for certain purposes, multiemployer plan withdrawal 
liability, and missing participants.
The Corporation seeks to improve transparency of information to plan 
participants, investors, and PBGC, in order to better inform them and 
to encourage more responsible funding of pension plans. PPA 2006 
contains provisions for disclosure of certain information to 
participants regarding the termination of their underfunded plan. PBGC 
published a proposed regulation on this disclosure of termination 
information in December 2007 and expects to publish a final regulation 
in October 2008.
PPA 2006 also makes changes to the plan actuarial and employer 
financial information required under section 4010 of ERISA to be 
reported to PBGC by employers with large amounts of pension 
underfunding. PBGC published a proposed regulation implementing those 
changes in February 2008 and expects to publish a final regulation in 
October 2008.
PBGC also seeks to simplify filing with PBGC by increasing use of 
electronic filing. Electronic filing of premium information has been 
mandatory for all plans for plan years beginning on or after January 1, 
2007. Filers have a choice of using private-sector software that meets 
PBGC's published standards or using PBGC's software. Electronic premium 
filing simplifies filers' paperwork, improves accuracy of PBGC's 
premium records and database, and enables more prompt payment of 
premium refunds.
In December 2007 and March 2008, PBGC published final rules 
implementing most of the premium changes under PPA 2006. The 
Corporation has incorporated the changes to the flat-rate and variable-
rate premiums into software so that it will be easy to comply with the 
premium changes under the new law.
Plan actuarial and employer financial information required under 
section 4010 of ERISA to be reported to PBGC by employers with large 
amounts of pension underfunding is required to be filed electronically. 
Electronic filing reduces the filing burden, improves accuracy, and 
better enables PBGC to monitor and manage risks posed by these plans. 
PBGC is incorporating the PPA 2006 changes to this reporting into 
software so that it will be easy to comply with the reporting changes 
under the new law.
In July 2008, PBGC published a proposed rule that would implement a PPA 
2006 provision that treats the bankruptcy filing date as the plan 
termination date for purposes of determining the amount of benefits 
PBGC guarantees and the amount of assets allocated to participants who 
retired or have been retirement-eligible for three years. The provision 
applies to plans that terminate in a distress or involuntary 
termination while the sponsor is a bankruptcy proceeding that was 
initiated on or after September 16,

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2006. PBGC expects to publish a final rule in 2009.
PPA 2006 provides for changes in the allocation of unfunded vested 
benefits to withdrawing employers from a multiemployer pension plan and 
requires adjustments in determining an employer's withdrawal liability 
when a multiemployer plan is in critical status. In March 2008, PBGC 
published a proposed rule to implement these provisions. The proposed 
rule also would provide new modifications to the statutory methods for 
determining an employer's allocable share of unfunded vested benefits 
and improve the process of fully allocating a plan's total unfunded 
vested benefits among liable employers in a plan terminated by mass 
withdrawal. PBGC expects to issue a final rule in October 2008.
PBGC gives consideration to the special needs and concerns of small 
businesses in making policy. A large percentage of the plans insured by 
PBGC are small or maintained by small employers. The first proposed 
rule PBGC published under PPA 2006 implemented the cap on the variable-
rate premium for plans of small employers. In 2009, the Corporation 
expects to issue a proposed regulation implementing the expanded 
missing participants program under PPA 2006, which will also benefit 
small businesses.
PBGC will continue to look for ways to further improve its regulations.
BILLING CODE 7709-01-S