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PBGC Stops Enforcement of 4062(e) Cases Until 2015

The PBGC is stopping its enforcement efforts in open cases involving ERISA Section 4062 (e), and will not take on any new ones until after Dec. 31, 2014. In a July 8 press release, the agency said it is doing so to ensure that its efforts are targeted at cases in which pensions genuinely are at risk. The agency also said that it plans to work with the business community, labor and other stakeholders during this period.

The PBGC began to target its 4062(e) enforcement in 2012, focusing on cases in which plans were most at risk of failing. More than 90% of plan sponsors were exempt from this enforcement. In 2013, the PBGC found that only 63 companies met the standard for enforcement, and only took action in 20% of those cases. 

The PBGC did not succeed in dispelling all uncertainty about its enforcement despite the changes it put in place. Some businesses still said they were unclear about how the PBGC goes about it, and the PBGC’s efforts also elicited some objections. Consequently, PBGC staff will be working during the moratorium to find ways to minimize the effects of its enforcement efforts on necessary business activities. 

But just because the PBGC has put a hold on enforcement doesn’t mean that it will not accept reports about such cases. The PBGC says that companies should continue to report new 4062(e) events, but that the agency will take no action on those events during the moratorium.