Benefits Payable in Terminated Single-Employer Plans; Limitations on Guaranteed Benefits

Image via WikipediSUMMARY: This is a proposed rule to
amend PBGC’s regulation on Benefits
Payable in Terminated Single-Employer Plans. That regulation sets forth rules on PBGC’s guarantee of pension plan benefits, including rules on the phasein of the guarantee. The amendments implement section 403 of the Pension Protection Act of 2006, which provides that the phase-in period for the guarantee of  benefits that are contingent upon the occurrence of an ‘‘unpredictable contingent event,’’ such as a plant shutdown, starts no earlier than the date of the shutdown or other unpredictable contingent event.

DATES: Comments must be received on or before May 10, 2011.

ADDRESSES: Comments should be identified by Regulation Information Number (RIN 1212–AB18), and may be submitted by any of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov.
• Follow the Web site instructions for submitting comments.
• E-mail: reg.comments@pbgc.gov.
• Fax: 202–326–4224.
• Mail or Hand Delivery: Legislative and Regulatory Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005–4026.

PBGC will make all comments available on its Web site, http://www.pbgc.gov.

Copies of comments also may be obtained by writing PBGC’s Communications and Public Affairs
Department (CPAD) at Suite 240 at the above address or by visiting or calling CPAD during normal business hours (202–326–4040).

FOR FURTHER INFORMATION CONTACT: John
H. Hanley, Director; Gail A. Sevin, Manager; or Bernard Klein, Attorney;
Legislative & Regulatory Department,
Pension Benefit Guaranty Corporation,
1200 K Street, NW., Washington, DC
20005, 202–326–4224. (TTY/TDD users may call the Federal relay service tollfree at 1–800–877–8339 and ask to be connected to 202–326–4224.)
Complete Federal Register Notice with Full Details

Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Valuing and Paying Benefits

SUMMARY: Pension Benefit Guaranty Corporation's regulation Benefits Payable in Terminated Single-Employer Plans prescribes interest assumptions for valuing and paying certain benefits under terminating single-employer plans. This final rule amends the benefit payments regulation to adopt interest assumptions for plans with valuation dates in August 2010. Interest assumptions are also published on PBGC's Web site (http://www.pbgc.gov).

DATES: Effective August 1, 2010.

Additional Information

Related articles by Zemanta

• Pension Problems Are Just Beginning (fool.com)
• Robert Powell: Cash-balance pension plans growing fast (marketwatch.com)
• How to Find Hidden Retirement Money (money.usnews.com)

This notice announces the national average value of donated foods or, where applicable, cash in lieu of donated foods, to be provided in school year

Pension Benefit Guaranty Corporation's regulation on Benefits Payable in Terminated Single-Employer Plans prescribes interest assumptions for valuing and paying certain benefits under terminating single[pi]employer plans. This final rule amends the benefit payments regulation to adopt interest assumptions for plans with valuation dates in August 2009. Interest assumptions are also published on PBGC's Web site (http://www.pbgc.gov). Final Rule

Pension Protection Act of 2006: Computing Withdrawal Liability; Reallocation Liability Upon Mass Withdrawal

This final rule amends PBGC's regulation on Allocating Unfunded Vested Benefits to Withdrawing Employers (29 CFR part 4211) to implement provisions of the Pension Protection Act of 2006 that provide for changes in the allocation of unfunded vested benefits to withdrawing employers from a multiemployer pension plan, and that require adjustments in determining an employer's withdrawal liability when a multiemployer plan is in critical status. Pursuant to PBGC's authority under section 4211(c)(5) of ERISA to prescribe standard approaches for alternative withdrawal liability methods, the final rule also amends this regulation to provide additional modifications to the statutory methods for determining an employer's allocable share of unfunded vested benefits. In addition, pursuant to PBGC's authority under section 4219(c)(1)(D) of ERISA, this final rule amends PBGC's regulation on Notice, Collection, and Redetermination of Withdrawal Liability (29 CFR part 4219) to improve the process of fully allocating a plan's total unfunded vested benefits among all liable employers in a mass withdrawal. Finally, this final rule amends PBGC's regulation on Terminology (29 CFR part 4001) to reflect the definition of a ``multiemployer plan'' added by the Pension Protection Act of 2006. DATES: Effective January 29, 2009.

PBGC Lost $1.2 Billion in Investments

By Nancy Trejos, Washington Post Staff Writer, October 23, 2008; Page D03 The government agency that insures private-sector pension plans for millions of Americans lost $1.2 billion in the past 11 months to Aug. 31, including a $3.1 billion loss in stock investments. The Pension Benefit Guaranty Corp. incurred the loss even before the stock market's historic tumble last month, according to preliminary unaudited figures released by the House Education and Labor Committee.

Terminated Single-Employer Pension Plans

The Pension Benefit Guaranty Corporation's regulations on Benefits Payable in Terminated Single-Employer Plans and Allocation of Assets in Single-Employer Plans prescribe interest assumptions for valuing and paying benefits under terminating single-employer plans. This final rule amends the regulations to adopt interest assumptions for plans with valuation dates in November 2008. Interest assumptions are also published on the PBGC's Web site (http://www.pbgc.gov).

PBGC: Need for Improved Oversight Persists

Although PBGC’s board has strengthened the corporation’s governing bylaws, the three-member board of directors is still limited in its ability to provide policy direction and oversight to PBGC. In implementing our earlier recommendation, the board revised the corporation’s bylaws to more clearly define the roles and responsibilities of PBGC’s board members, representatives, director, and senior management. PBGC also contracted with a consulting firm to provide a background report to assist the board in its review of alternative corporate governance structures, including restructuring the board of directors as GAO suggested in 2007. However, because of its small size, the board has not been able to develop procedures and mechanisms to monitor PBGC’s operations, such as standing committees, which are mechanisms used by other government corporations. PBGC may also be exposed to challenges as the board, its representatives, and the director will likely change with the upcoming presidential transition in January 2009. While PBGC management has experienced a partial leadership change in recent years and provides operational and financial information to those newly appointed, PBGC Inspector General and GAO reports have recently identified additional financial and operational challenges facing the corporation. This additional information could help the new board members better understand the vulnerabilities and challenges facing the corporation. PBGC is subject to routine congressional oversight, but certain other government corporations have other types of reporting requirements in place—such as congressional notifications and reporting protocols for their advisory committees—to ensure effective communication exist between the corporations and Congress. Congressional oversight of PBGC in recent years has ranged from formal committee hearings to investigations and studies conducted by its congressional support agencies. For example, since 2002, PBGC officials have testified 19 times before several different committees on issues such as the status of its financial condition. Further, GAO, the Congressional Budget Office, and the Congressional Research Service have issued a variety of reports and testimonies on PBGC financial and operational matters. However, PBGC does not have reporting requirements applied to other government corporations for providing additional information to Congress. GAO recommends that PBGC provide Office of Inspector General and GAO reports on the corporation’s management and financial challenges to the newly appointed board members, board representatives, and director. In response, PBGC agreed to provide such reports to new appointees.

Benefits Payable in Terminated Single-Employer Plans

The Pension Benefit Guaranty Corporation's regulations on Benefits Payable in Terminated Single-Employer Plans and Allocation of Assets in Single-Employer Plans prescribe interest assumptions for valuing and paying benefits under terminating single-employer plans. This final rule amends the regulations to adopt interest assumptions for plans with valuation dates in October 2008. Interest assumptions are also published on the PBGC's Web site (http://www.pbgc.gov).

PBGC ASSETS - Implementation of New Investment Policy Will Need Stronger Board Oversight

The Pension Benefit Guaranty Corporation (PBGC) insures the retirement future of over 44 million people. As a federal guarantor of private defined benefit plans, PBGC finances its operations through insurance premiums, investment income, and funds from terminated pension plans. PBGC is governed by a board of directors comprised of the Secretaries of Commerce, Labor, and Treasury, who are responsible for providing policy direction and oversight but often rely on board representatives. In 2004, PBGC began reviewing its investment policy biennially and recently decided to broaden the range of asset classes in which it invests. GAO reviewed PBGC’s procedures for developing and implementing its investment policies, and examined PBGC’s most recent investment policy. To address these issues, GAO reviewed and analyzed PBGC policies and data, assessed the analysis informing the recent policy change, and interviewed agency officials and other experts. GAO recommends (1) improvements to the way that PBGC’s board monitors progress in achieving investment policy goals, and (2) additional analyses on the new investment policy.

Guaranteed Benefits; Allocation of Plan Assets; Pension Protection Act of 2006

AGENCY: Pension Benefit Guaranty Corporation. ACTION: Proposed rule SUMMARY: This is a proposed rule to implement section 404 of the Pension Protection Act of 2006. Section 404 amended Title IV of ERISA to provide that when an underfunded, PBGC-covered, single-employer pension plan terminates while its contributing sponsor is in bankruptcy, sections 4022 and 4044(a)(3) of ERISA are to be applied by treating the date the sponsor's bankruptcy petition was filed as the termination date of the plan. Section 4022 determines which benefits are guaranteed by PBGC, and section 4044(a)(3) determines which benefits are entitled to priority in ``priority category 3'' in the statutory hierarchy for allocating the assets of a terminated plan. Thus, under the 2006 amendments, when a plan terminates while the sponsor is in bankruptcy, the amount of benefits guaranteed by PBGC and the amount of benefits in priority category 3 are fixed at the date of the bankruptcy filing rather than at the plan termination date. This will, in most cases, reduce the amount of guaranteed benefits and the amount of benefits in priority category 3. DATES: Comments must be submitted on or before September 2, 2008.