PBGC Proposes Changes to Form 5500 Reporting by DB Plans

The agency is proposing two modifications for multiemployer plans and one modification for single-employer plans.

The Pension Benefit Guaranty Corporation (PBGC) intends to request that the Office of Management and Budget (OMB) extend for three years its approval of information collection on the annual Form 5500 filing required by defined benefit (DB) plan sponsors.

The collection of information has been approved by the OMB through August 31, 2020.

In its Notice of Intent, the PBGC is proposing two modifications to the 2017 Form 5500 Schedule MB (Multiemployer Defined Benefit Plan Actuarial Information) instructions and one modification to the schedule SB (Single Employer Defined Benefit Plan Actuarial Information) instructions.

With regard to the Schedule MB instructions, the agency is proposing to change the instructions to require new attachments in two situations:

  • If any of the contributions reported in Line 3 (Contributions Made to Plan) include amounts owed for withdrawal liability, PBGC is proposing to require plan administrators to report for each reported contribution (on an attachment to Line 3), the aggregate amount of withdrawal liability payments included in such contribution. The agency says separating withdrawal payments from contributions will assist in projections of future ongoing contributions and also will provide information regarding withdrawing employers.
  • For multiemployer plans for which Code C (Critical Status) or Code D (Critical and Declining Status) is entered on Line 4b),  the current Schedule MB instructions require that plans report the year a troubled multiemployer plan is projected to become insolvent or emerge from troubled status on Line 4f. The PBGC is proposing that basic supporting documentation be included as an attachment to Line 4f. Such plans would be required to report in the attachment year-by-year cash flow projections for the period ending with whichever is applicable, the year the plan is projected to emerge from Critical or Critical and Declining Status or the year the plan is projected to become insolvent; and a summary of the assumptions underlying these projections. The agency says it is proposing the addition of this information to enable it to better project the impact on participants and PBGC’s insurance system.

With regard to the Schedule SB instructions, PBGC is proposing to change the instructions related to an attachment that is currently required of plans for which the Internal Revenue Service (IRS) has granted permission to use a substitute mortality table. The current instructions for Schedule SB, item 23, describe the information that is to be included in the attachment. Those instructions reflect the current IRS regulation on the use of substitute mortality tables, but the PBGC’s proposed changes to the Schedule SB are based on amendments to the IRS mortality table regulations that are proposed to become effective 1/1/2018.  If the regulations are not effective on 1/1/2018, then the proposed changes to the Schedule SB will be deleted from the final Form 5500 instructions. The agency says the addition of information will allow it to reconstruct the substitute table for which the plan has sought IRS approval, which will enable it to better predict future funding requirements and the impact on participants and the insurance system.

The Notice of Intent includes a request for public comments.