PBGC Proposes Rule Applying Modified Phase-In Rules for Owner-Participants
The Pension Benefit Guaranty Corporation (PBGC) has proposed a rule that would conform its regulations to changes in the phase-in rules for owner-participants under the Pension Protection Act of 2006 (PPA).
The PPA changed special provisions in Sections 4022 and 4044 of ERISA that make the PBGC’s guarantee of plan benefits and allocation of plan assets under terminated single-employer plans applicable to owner-participants, who have certain ownership interests in their plan sponsors.
The PBGC has been operating in accordance with the amended provisions since they became effective. Through this proposed rule, PBGC intends to increase transparency into its operations and provide guidance for plan administrators on the impact of the statutory changes. The proposed rule clarifies that plan administrators may continue to use the simplified calculation in the existing rule to estimate benefits funded by plan assets. It also provides new examples to aid plan administrators in implementation.
Additional information for practitioners is available on the PBGC’s Employers & Practitioners page.