PBGC Issues Guidance on Active Participant Reduction Reportable Events

By John Iekel • September 18, 2017 • 0 Comments
The Pension Benefit Guaranty Corporation (PBGC) has issued guidance that provides an alternative method for determining whether an active participant reduction due to attrition must be reported to it. The PBGC seeks to eliminate possible duplicative reporting for plans that reported an active participant reduction due to a single-cause event, such as a reorganization or a layoff.

The guidance is contained in Technical Update 17-1, which the PBGC issued on Sept. 15.

Technical Update 17-1 says that to determine whether reporting is required for an attrition event for a plan year, a potential filer may disregard any cessations of active participant status reported to the PBGC for single-cause events during the plan year or preceding plan year. Specifically:

  • When determining whether the number of active plan participants at the end of the plan year is less than 80% of the number of active participants at the beginning of the plan year, plans may include in the year-end active participant count participants who ceased to be active participants during the plan year due to a reported single-cause event.

  • When determining whether the number of active plan participants at the end of the plan year is less than 75% of the number of active participants at the beginning of the preceding plan year, plans may include in the year-end active participant count participants who ceased to be active participants during the current or prior plan year because of a reported single-cause event.

The PBGC says that it plans to issue a new rule to amend the reportable events regulation. When it does so, Technical Update 17-1 will be superseded regarding reportable events to which the final rule applies, except to the extent that the final rule provides otherwise.

Technical Update 17-1 includes the disclaimer that it represents the PBGC’s current thinking on this topic, but does not create or confer any rights for or on any person, nor does it establish binding rules. The PBGC adds that alternative approaches that satisfy the requirements of the applicable statutes and regulations may be used; they may be discussed with the PBGC, but do not have to be.




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