March 31, 2016
On March 23, 2016, the Pension Benefit Guaranty Corporation (PBGC) issued a Notice regarding a request by the American Arbitration Association (AAA) for PBGC approval of a new fee schedule for withdrawal liability arbitrations. The PBGC is requesting comments on the new schedule by May 23, 2016.
The Employee Retirement Income Security Act (ERISA) requires withdrawal liability disputes to be arbitrated. The AAA provides arbitrators for many of these disputes under a procedure first approved by the PBGC in 1985. That procedure included a fee schedule (applicable until 2013) under which an initial filing fee of $650 was required for any dispute up to $1 million and $1,450 for a dispute up to $5 million. Effective February 1, 2013, the AAA adopted a new fee schedule under which an initial filing fee of $8,200 is required for disputes involving $1 million to $5 million (in addition to a final fee of $3,250), as well as other increases.
The AAA filed its request for approval of the 2013 fee schedule with the PBGC on November 20, 2015, citing substantially increased administrative costs and staffing involved with complex arbitrations. The request covers only fee increases; no substantive changes to the existing arbitration procedures have been made. The PBGC is required to approve AAA’s request if it determines the proposed procedures are substantially fair to all parties involved in the arbitration of a withdrawal liability dispute and that the sponsoring organization is neutral and able to carry out its role under the procedures.
Share this page