The likelihood the program will remain solvent after FY 2026 is now less than 1%.
Tag: Pension Benefit Guaranty Corporation
Reeder recently told the Joint Select Committee on Solvency of Multiemployer Pension Plans that insolvency of the PBGC multiemployer program could result in participants in failed multiemployer plans receiving a very small fraction—an eighth or less, on average—of the current benefit guarantee level.
Plan sponsors now have the opportunity to contact the agency for a pre-filing consultation to discuss the filing process and ensure the filing of a distress termination is appropriate given the sponsor’s specific circumstances.
Regarding guidance to assist multiemployer pension plans that request PBGC review of alternative plan rules for satisfying employer withdrawal liability, the agency said for example, some proposals include incentives for employers to remain in the plan by providing discounted withdrawal liability that is conditioned on continued employer participation for a specified period of years.
The proposed rule would amend PBGC’s benefit payment regulation by replacing the guarantee limitations applicable to substantial owners with a new limitation applicable to majority owners.
The agency is required to adjust these amounts annually for inflation, but the agency says its goal is to encourage compliance, not to penalize plans that inadvertently forget to file information.
The idea is to put participants with lesser unfunded vested benefits (UVBs) in one plan, and those with greater UVBs in another.
Beginning in January, terminating DC plans will have the option of transferring missing participants’ benefits to PBGC instead of establishing an individual retirement account (IRA) at a financial institution.
A final rule provides a new table for determining expected retirement ages for participants in pension plans undergoing distress or involuntary termination with valuation dates falling in 2018.
According to a Sears announcement, following the making of a $407 million contribution, it will be nearly relieved of the obligation to make further contributions to the pension plans for approximately two years.
“By providing an alternative dispute resolution option for employers who sponsor ongoing and terminated plans, we expect to save time and money for both the government and our stakeholders,” says PBGC Director Tom Reeder.
John Lowell, Atlanta-based partner and actuary for October Three, shares solutions for health care organizations to possibly decrease their PBGC premium payments.
A technical update provides an alternative method for determining whether reporting an attrition event to the PBGC is required.
The agency is proposing that termination forms may be filed electronically and that plan sponsors be offered a pre-filing consultation.
The relief applies to PBGC premiums, single-employer plan terminations, reportable event notices, annual employer reporting, requests for reconsideration or appeals and multiemployer plan deadlines.