Practice Management
The Pension Benefit Guaranty Corporation (PBGC) has issued a final rule that makes technical corrections, clarifications and improvements to a variety of its regulations. The changes are part of the agency’s ongoing retrospective review of the effectiveness and clarity of its rules; they also result in part from input the PBGC has received.
More specifically, the PBGC is updating the following regulations.
Reportable Events and Certain Other Notification Requirements. These changes do the following:
- eliminate possible duplicative reporting of active participant reductions;
- clarify when a liquidation occurs; and
- provide additional examples for active participant reduction, liquidation and change in controlled group events.
Financial and Actuarial Information Reporting. These changes do the following:
- eliminate a requirement to submit individual financial information for each controlled group member;
- clarify reporting waivers; and
- provide guidance on assumptions for valuing benefit liabilities for cash balance plans.
Standard Terminations of Single-Employer Plans. These changes provide more time to file a post-distribution certification by providing more time to complete a PBGC Form 501 in the standard termination process.
Premium Rates. These changes do the following:
- expressly state that a plan does not qualify for the variable-rate premium for the year in which it completes a standard termination if it engages in a spinoff in the same year;
- clarify the participant count date special rule for transactions (for example, mergers and spinoffs); and
- modify the circumstances under which the premium is prorated for a short plan year resulting from a plan’s termination.
Effective Date
The final rule takes effect March 5, 2020, 30 days after its publication in the Federal Register. There are some exceptions, however:
- Certain provisions have different applicability dates (e.g., the changes first impact 4010 filings due on or after April 15, 2020).
- Revised forms, instructions, and e-filing portal (reflecting the changes) are under review by the Office of Management and Budget (OMB). However, the PBGC expects that they still will be available for use by the effective date.
The final rule is available here.
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