July 7, 2015
The Pension Benefit Guaranty Corporation (PBGC) has issued proposed rules that would limit the use of the “less than $15 million aggregate underfunding” reporting exemption under Section 4010 of the Employee Retirement Income Security Act (ERISA). ERISA §4010 requires an employer to file an annual report with PBGC covering financial and actuarial information if the employer or any member of its controlled group sponsors a plan that was less than 80 percent funded. PBGC rules currently provide an exemption from this reporting if the aggregate underfunding in the plans of the controlled group was less than $15 million. The PBGC is now proposing to limit this exemption to plans with fewer than 500 participants on a controlled group basis. In its explanation of the proposed rules, PBGC states that the change is needed because it is not currently receiving sufficient information to be able to timely intervene to protect troubled plans, participants and the pension insurance system.
In addition, the proposed rules eliminate §4010 reporting for two triggering events if the events have already been reported as “reportable events” under ERISA §4043 by the time the §4010 report is due:
Finally, the proposed rules incorporate changes made by the Moving Ahead for Progress in the 21st Century Act (MAP-21), the Highway Transportation and Funding Act of 2014 (HATFA) and the PBGC’s earlier guidance on use of stabilized interest rates for PBGC reporting purposes: Technical Update 12-2: Effect of MAP-21 on 4010 Reporting and Technical Update 14-2: Effect of HATFA on 4010 Reporting.
Comments on the proposed rules are due on or before September 25, 2015.
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