Compliance News | May 2, 2019

PBGC Streamlines Duties of Sponsors of Terminated and/or Insolvent Multiemployer Plans

In the May 2, 2019 Federal Register, the Pension Benefit Guaranty Corporation (PBGC) published a final regulation intended to simplify certain reporting and disclosure obligations of terminated and/or insolvent multiemployer plans.

The Changes

The final regulation:

  • Amends certain reporting, disclosure and valuation requirements;
  • Adds a requirement for certain plans to submit an actuarial valuation and information on withdrawal liability to PBGC;
  • Removes requirements related to certain insolvency notices and updates; and
  • Repeals the multiemployer plan reorganization rules.

In response to public comments, PBGC made modifications to clarify its forms and instructions associated with the final regulation, but the final regulation reflects, in large part, PBGC’s proposed regulation issued on July 16, 2018.

Effective Date

The final regulation is generally applicable as of July 1, 2019. Changes to the annual actuarial valuation requirement apply to valuations prepared for plan years ending after July 1, 2019. The withdrawal liability reporting requirement applies to plan years ending after July 1, 2019.

Implications for Sponsors of Terminated and/or Insolvent Plans

Although the final regulation applies only to terminated and/or insolvent plans, PBGC’s efforts to make certain reporting and disclosure requirements more efficient should reduce plan administrative costs, a development that will be helpful to sponsors of plans facing financial distress.

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