PBGC Seeks Comment on ERISA Rule Change

February 24, 2005 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) is seeking comments on a proposed rule change to section 4062(e) of the Employee Retirement Income Security Act (ERISA).

>The section currently requires employers to provide the agency with a bond or escrow if, after the cessation of operations at a facility, more than one in five workers who participate in an ERISA plan are separated from employment, according to a press release from the PBGC. The bond is canceled – or the escrow returned – if the plan is still ongoing five years after operations are ceased.

>The proposed rule change specifies a different method of calculating the amount of bond or escrow that is based on the percentage reduction in the number of employees under the plan as a result of the operations ceasing to continue, according to the news release. The agency usually follows this method on a case-by-case basis.

>The proposed rule alteration will be published in the Federal Register on Friday.