PBGC ‘To-Do’ List: Work on Benefits, Penalties and More

The Pension Benefit Guaranty Corporation (PBGC) in its spring regulatory agenda enumerates a variety of proposals and actions close to implementation that will address benefits payments, assistance, valuation assessments, penalties and more. 

Proposals

The following proposed rules are on the PBGC’s radar screen. 

Valuation Assumptions and Methods. The PBGC proposes a rule on valuation assumptions and methods concerning interest and mortality assumptions for asset allocation in single-employer plans, and concerning mass withdrawal liability determination in multiemployer plans. For single-employer plans, the rule would update the interest, mortality and expense load assumptions used to determine the present value of benefits under the asset allocation regulation; for multi-employer plans, it would update those assumption for determining mass withdrawal liability payments. 

Multiemployer Plan Guaranteed Benefits. The PBGC proposes a rule that would clarify and codify policies on the determination of multiemployer plan guaranteed benefits. 

Recoupment of Overpayments. The PBGC proposes a rule that would improve its rules for recoupment of benefit overpayments. 

Failure to Provide Certain Notices. The PBGC proposes a rule that would codify a statement of policy for assessing and waiving monetary penalties for failure to provide certain required notices or other material information in a timely fashion. 

Updates to PBGC Regulations. The PBGC proposes a rule that would update its regulations in accordance with the SECURE Act concerning premium rates, termination of single-employer plans and benefits payable by those plans, and allocation of assets in single-employer plans. 

Final Rules

The following proposals are in the final rule stage. 

Benefits Payments and Allocation of Assets. The PBGC issued a notice of proposed rulemaking on Sept. 30, 2019 concerning a final rule that clarifies and codifies policies in the PBGC’s benefit payments and valuation regulations. It anticipates action in August. 

Examination and Copying of PBGC Records. The PBGC issued a notice of proposed rulemaking on Oct. 13, 2020 concerning a final rule that would modernize the rules for requesting and disclosing PBGC material under the Freedom of Information Act. 

Civil Penalties. The PBGC will meet its obligation under ERISA to annually amend its civil penalty regulations to adjust the maximum penalty for inflation. 

Special Assistance by the PBGC. The PBGC expects to issue an interim final rule in July that will implement provisions of the American Rescue Plan Act that will set forth requirements for special assistance applications. It considers this rule economically significant.