On June 27, 2019, the Pension Benefit Guaranty Corporation (PBGC) published proposed regulations that cover a variety of corrections, clarifications and improvements. These are now open to public comment, with comments accepted up to Aug. 26, 2019. The ACOPA Government Affairs Committee will be reviewing the proposed regulations for possible areas of comment.
While the regulations are proposed at this point, I wanted to highlight one area in the regulations the PBGC is trying to improve. Under section 4041 of ERISA, the plan administrator of a plan terminating in a standard termination must certify to the PBGC that the plan’s assets have been distributed to pay all benefits under the plan. This certification must be made within 30 days after the final distribution of assets is completed.
This post-distribution certification, using PBGC Form 501, is often challenging for practitioners to collect all necessary information and timely file the Form 501. As a result, the PBGC is proposing to create an alternative filing option for plan administrators who need more time. The proposed alternative would allow a plan administrator to submit the completed Form 501 within 60 days after the last distribution date for any affected party if the plan administrator certifies to the PBGC that all assets have been distributed in accordance with section 4044 of ERISA and the underlying regulations within 30 days after the last distribution date for any affected party. This first (30 day) certification can be done in an email or as otherwise described in the Form 501 instructions.
This is just one example of the improvements and clarifications PBGC is proposing in the just-released regulations, but I think it is another good example of the efforts PBGC is making to be helpful to practitioners and retirement plan administration in general. Take a look at the full regulation in the Federal Register for other corrections and improvements being proposed by the PBGC. Happy reading!
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