PBGC extends reportable events guidance for post-2012 plan years

The Pension Benefit Guaranty Corporation (PBGC) has issued a technical update for plan years beginning after 2012 that extends interim guidance on compliance with the reportable events requirements of ERISA §4043 and related regulations provided in Technical Update 11-1. Guidance is provided regarding (1) funding-related determinations for purposes of waivers, extensions, and the advance reporting threshold test and (2) missed quarterly contributions.

On November 23, 2009, the PBGC issued proposed regulations that would conform its reportable events rules to reflect the Pension Protection Act of 2006 (P.L. 109-280). The PBGC noted that public comments on the proposed regulations were generally negative. Taking into account the comments and Executive Order 13563, which mandates federal agencies to both improve regulations and the process used to review them, the PBGC plans to issue new proposed regulations “that will more effectively target troubled plans and sponsors while reducing [the] burden for those that are financially sound.” To provide interim guidance for plan years beginning after 2012, this latest technical update extends the guidance provided in Technical Update 11-1, subject to applicable provisions of amendments that the PBGC makes to the reportable events regulations.

Funding-related determinations

Regarding funding-related determinations for purposes of waivers, extensions, and the advance reporting threshold test, the PBGC provides that generally, for purposes of the reportable events regulation, a plan’s unfunded vested benefits (UVBs) and the value of its assets and vested benefits are determined for a plan year beginning after 2012 in the same manner as for variable-rate premiums (VRPs) for the preceding plan year.

Missed quarterly contributions

Regarding missed quarterly contributions, the PBGC provides that, generally, for purposes of the reportable events regulations, if a required quarterly contribution for a plan year beginning after 2012 is not timely made to a plan, and the failure to make the contribution is not motivated by financial inability, the reporting requirement under PBGC Reg. §4043.25 is waived if the plan has fewer than 25 participants for the prior plan year. If the plan has at least 25 but fewer than 100 participants for the prior plan year, the reporting requirement under PBGC Reg. §4043.25 will be considered satisfied if a simplified notice is filed with the PBGC by the time the first missed-quarterly reportable event report not timely made for the current year would otherwise be due.

Source: PBGC Technical Update 13-1.

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For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer’s Benefits Reports.

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