June 6, 2016
On June 2, 2016, the Pension Benefit Guaranty Corporation (PBGC) issued proposed regulations on the merger provisions of Section 4231 of the Employee Retirement Income Security Act (ERISA), as amended by the Multiemployer Pension Reform Act of 2014 (MPRA) to allow the PBGC to facilitate mergers. The facilitated merger provisions authorize the PBGC to provide technical assistance -- and, for mergers in which at least one participating plan is in critical and declining status -- financial assistance to plans that wish to merge. The proposed regulations also amend the existing regulations under §4231 to provide revised definitions, solvency tests, and procedures for all applications for mergers and transfers, including facilitated mergers.
Plans are permitted to apply for mergers or transfers under the proposed regulations, but may have to modify their submissions once the final regulations are issued. The PBGC urges any plans considering a facilitated merger that would require PBGC financial assistance to discuss the proposed merger with PBGC before making a formal submission. Comments on the proposed regulations are due to the PBGC on or before August 5, 2016.
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