PBGC Sets Regulatory and Deregulatory Priorities
The Pension Benefit Guaranty Corporation (PBGC) has issued a statement on its regulatory — and deregulatory — priorities. The PBGC says that it intends these actions to promote clarity and reduce burden with the goal that net cost impact on the public is zero or less overall.
Most of the PBGC’s regulatory and deregulatory actions are the result of its ongoing retrospective review program to identify and ameliorate inconsistencies, inaccuracies and requirements made irrelevant over time.
The PBGC cites the following as its most important actions.
Missing Participants. A major focus of the PBGC’s current efforts is to finalize rules to simplify and revise the existing missing participants program to help connect more participants with their lost retirement savings. The PBGC published a proposed rule on Sept. 20, 2016, received 14 comments, and intends to publish a final rule early in fiscal year 2018.
Mergers and Transfers Between Multiemployer Plans. The Multiemployer Pension Reform Act of 2014 (MPRA) established new options (plan partitions and mergers) for trustees of multiemployer plans that will potentially run out of money to apply to PBGC for technical or financial assistance. The PBGC published a proposed rule on June 6, 2016, received 10 comments, and intends to publish a final rule early in FY 2018.
Rethinking Existing Regulations
PBGC undertook a review of its multiemployer plan regulations and has identified rules in which it can reduce burden and clarify guidance. For example, PBGC plans to propose a “housekeeping” rulemaking project to make miscellaneous technical corrections, clarifications and improvements to its regulations, such as:
- the reportable events regulation (particularly addressing duplicative active participant reduction event reporting;
- the regulation on annual financial and actuarial information reporting;
- regulations on PBGC benefit payments and valuations, to make clarifications and codify policies concerning them; and
- the rules for administrative review of agency decisions.
The PBGC plans to propose the following concerning multi-employer plans:
- reductions in actuarial valuation requirements for certain small terminated multi-employer pension plans, notice requirements on plan sponsors of plans terminated by mass withdrawal, and reporting and disclosure requirements on sponsors of insolvent plans; and
- simplification regarding how multi-employer plans calculate withdrawal liability where changes in contributions or benefits are, by statute, to be disregarded in that calculation.
The PBGC says that it “seeks to reduce burdens on plans, employers, and participants, and to ease and simplify employer compliance wherever possible.” It adds that it “particularly strives to meet the needs of small businesses that sponsor defined benefit plans” and protect the retirement income of plan participants.