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Frequently Asked Questions About ERISA 4062(e)

Section 4062(e) is a provision of ERISA intended to help protect pensions in situations where a company ceases operations and workers lose their jobs.

A 4062(e) event occurs when:

  • There is a permanent cessation of operations at a facility; and
  • That cessation results in a workforce reduction of more than a 15% reduction in the total number of eligible employees; where
  • Eligible employees are employees eligible to participate in any employee pension plan (i.e. any defined benefit plan or defined contribution plan) maintained by members of the controlled group.

Then PBGC can take steps to protect the pension plan. There are several ways an employer can provide protection for the pension plan when a 4062(e) event occurs.
 

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