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PBGC Seeks Input on Two-Pool Alternative Withdrawal Liability Arrangements

The Pension Benefit Guaranty Corporation (PBGC) has issued a request for information (RFI) seeking public feedback on proposed “two-pool” alternative withdrawal liability arrangements. When an employer partially or completely withdraws from a multiemployer pension plan, the employer may be required to pay withdrawal liability, payments that help cover the employer’s share of unfunded benefit obligations that are left in the plan when the employer is gone.

The PBGC has been studying recently proposed arrangements regarding how plans assess withdrawal liability. Plans must choose among options set forth in the law and regulations for a means to assess withdrawal liability or ask the PBGC for permission to use an alternate method. The PBGC says that a number of plans have asked to use a two pool alternative method.

Under this alternative method, there would be two separate withdrawal liability pools relating to the liabilities of different groups of employers, an “old” pool and a “new” pool. Plans have suggested various terms and conditions for allowing employers to move from the “old” pool to the “new” pool, including:

1. payment of frozen withdrawal liability; and
2. relief from other potential liability.

These alternatives might attract new employers or retain employers who would otherwise leave the plan. But, depending on their structure, they might also increase the risk of loss to plan participants and beneficiaries or to the multiemployer insurance program.
The PBGC wants input from the public and all interested stakeholders, including multiemployer plan participants and beneficiaries, plan sponsors and employers on these types of actions.

Comments will be accepted through Feb. 20, 2017 and may be submitted by any of the following methods:



  • By mail or hand deliveryto : Regulatory Affairs Group, Office of the General Counsel, Pension Benefit Guaranty Corporation, 1200 K Street, NW, Washington, DC 20005-4026.