PBGC Amends Appeals Procedures

July 3, 2008 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) announced it is publishing a final rule amending its regulation on Rules for Administrative Review of Agency Decisions to clarify that the agency's Appeals Board may refer certain categories of appeals to other PBGC departments for a written response.

The final regulation (29 CFR part 4003) formalizes the Appeals Board’s practice of referring certain routine appeals, such as those that allege a mistake of fact or that request a more detailed benefit explanation, to other PBGC departments or Appeals Board staff for a written response.

Appeals that will be subject to referral include those that:

  • request an explanation of a covered initial benefit determination;
  • dispute specific data used in a covered initial determination, such as date of hire, date of retirement, date of termination of employment, length of service, compensation, marital status, and the form of benefit elected; or
  • request an explanation of the limits on benefits payable by PBGC under part 4022, subpart B, such as the maximum guaranteeable benefit and phase-in.

The agency said the practice began after it concluded that other PBGC departments, such as the Benefits Administration and Payment Department (BAPD), could handle these types of appeals efficiently given their familiarity with the relevant facts underlying the initial benefit determinations. The PBGC also concluded that it would be appropriate for Appeals Board staff (rather than the Appeals Board) to respond to untimely and premature appeals, as well as appeals alleging that benefit reductions required by law will work a financial hardship.

The PBGC's final rule on administrative reviews also says that since Section 4022A of the Employee Retirement Income Security Act (ERISA) sets forth PBGC's guarantee for multiemployer pension plan benefits, the agency is removing determinations under section 4022A from the scope of part 4003.

Certain sections of part 4003 are also amended to replace language with the plain language used in the "Your Right to Appeal" brochure that currently accompanies all benefit determinations and is available on PBGC's Web site. The filing address for appeals and requests for filing extensions is also corrected.

Finally, PBGC said it is replacing all references to the term "Executive Director" in part 4003 with the term "Director" to reflect language in the Pension Protection Act of 2006 which states that the PBGC shall be administered by a Director.

The agency said the changes are effective August 4, 2008.

The final rule is here .