What's New for Practitioners Archive

Expected Retirement Age Annual Update: On November 29, 2023, PBGC published a final rule amending its valuation regulation (29 CFR 4044) by substituting a new table for selecting the “retirement rate category.” The new table is used to determine the applicable expected retirement age (“XRA”) for participants in single-employer plans with 2024 valuation dates. XRA is one of the assumptions used to determine liabilities under ERISA section 4044 (per 29 CFR 4044). A copy of the table is available on PBGC’s ERISA Section 4044 Retirement Assumptions.

2023 Form 5500: On November 17, 2023, the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA), the Internal Revenue Service (IRS), and PBGC released advance informational copies of the 2023 Form 5500 Annual Return/Report and related instructions. See EBSA’s News Release for more information, including a summary of key changes.

Mortality Tables: PBGC has updated the ERISA section 4044 mortality tables for 2024 valuations. Under the current regulation, these tables are used to determine liabilities when a single-employer plan terminates in an involuntary or distress termination (per 29 CFR 4044).  They are also used when a multiemployer plan incurs a mass withdrawal (per 29 CFR 4281).  Also, a unisex version of the healthy mortality tables is used in specified situations to determine the benefit transfer amount under the Missing Participants Program (per 29 CFR 4050).  HTML and Excel versions of these mortality tables are available on PBGC’s ERISA section 4044/4050 mortality table.

Technical Amendments Final Rule: On November 7, 2023, PBGC is issuing a final rule to amend its special financial assistance (SFA) regulation to clarify the calculation methodology for the withdrawal liability condition requiring phase-in of SFA assets. The clarifications include previously issued guidance about how make-up payments of suspended benefits are considered in the calculation methodology. The rule also makes miscellaneous updates and corrections to PBGC’s regulations. The final rule is effective December 7, 2023.

Updated SFA Information Includes Expanded Census Data Required Documentation: PBGC has updated several documents in the Special Financial Assistance information collection. These updates include changes to the application instructions requiring the submission of census data in all participant categories to enable PBGC to perform an independent death audit to identify deceased pension plan participants. In addition, PBGC has clarified the information that must be provided with the plan’s certification of the amount of the fair market value of assets, provided a toll-free number for plans to call to determine if the plan has outstanding debt, updated the model plan amendment regarding compliance to provide instructions if fewer than all trustees have executed the amendment, and clarified an example on the change of assumptions regarding CBUs. These application requirements and other updates are reflected in the General SFA Application Filing Instructions, SFA Assumptions Guidance, and Model Amendment Under 4262.6(e)(1) Regarding Compliance.

Fiduciary Video: PBGC staff gave a presentation to Small Business Administration (SBA) District Directors and Project Officers on the challenges small businesses often face when sponsoring a defined-benefit pension plan. The presentation was designed to support the SBA in helping small business owners better understand their fiduciary duties and avoid issues PBGC has identified when it assumes responsibility for pension plans. Video of the presentation is on PBGC’s Legal Resources – Fiduciary Breach Investigations.

Benefit Restrictions – Present Value of PBGC Maximum Guarantee: On October 30, 2023, PBGC posted a table showing the applicable present values for 2024 plan years. A two-column spreadsheet version of the table is also available for convenient copying. For more information see Technical Update 07-04.

Guarantee Limit: As a result of the indexing rules provided by law, the maximum guarantee limits for single-employer plans that fail in 2024 will be 5.30% higher than the limits that applied for 2023. A table showing the 2024 guarantee limits for various ages and payment forms is available. The guarantee limits for multiemployer plans are not indexed and have not changed.

2024 Premium Rates: PBGC has determined the premium rates applicable for the 2024 plan year in accordance with the indexing rules provided in section 4006 of ERISA, as amended by The Setting Every Community Up for Retirement Enhancement 2.0 Act (SECURE 2.0).  The Premium Rates webpage has been updated accordingly.

Overnight Delivery of Paper Premium Payment Checks: The address for overnight deliveries of paper premium checks is changing effective October 6, 2023. If you (or one of your clients) plans to send a paper check using an overnight delivery service in October, please be sure to review PBGC’s updated premium payment instructions webpage.

Valuation Assumptions and Methods Proposed Rule: PBGC is proposing to amend its regulation on Allocation of Assets in Single-Employer Plans to update the interest, mortality, and expense assumptions used to determine the present value of benefits for a single-employer pension plan ending in a distress or involuntary termination. The assumptions are also used for certain multiemployer withdrawal liability calculations and for other purposes. The proposed rule will be published in the Federal Register on August 18, 2023, with a 60-day public comment period. A white paper providing additional information on the methodology being proposed to determine the interest assumption is available on pbgc.gov.

ERISA 4010 Reporting Waiver: In recognition of the atypical market conditions of late 2022 and early 2023 and the way those conditions impact assets and liabilities for purposes of determining whether a 4010 filing is required, PBGC is providing a one-time waiver of the reporting requirement for filers meeting specified criteria. See PBGC Technical Update 23-1 for details.

Updated SFA Information Includes Census Data Required Documentation: PBGC has updated several documents in the Special Financial Assistance information collection. These updates include changes to the application instructions requiring the submission of census data to enable PBGC to perform an independent death audit to identify deceased pension plan participants and the submission of an assumptions summary. In addition, PBGC has provided a process for plans to request expedited processing of revised applications and a process for plans to submit revised lock-in applications in limited circumstances. These application requirements and other updates, including a new Template 10, are reflected in the General SFA Application Filing Instructions, SFA Application Amendment Cover Letter, and Lock-in Application.

Special Financial Assistance – New Questions & Answers: PBGC has posted two sets of new SFA questions and answers that provide guidance and examples for multiemployer plans that receive SFA.

• The Permissible Investments SFA questions and answers explain and provide examples of permissible investment grade fixed income (IGFI) securities and return-seeking assets (RSA).
• The Withdrawal Liability Condition and Make-up Payments of Previously Suspended Benefits SFA questions and answers focus on the withdrawal liability condition requiring phase-in of SFA assets. They clarify the calculation methodology for plans that paid make-up payments of previously suspended benefits.

The questions and answers are also accessible on the SFA Program page under Resources.

Benefit Payments Final Rule: On July 11, 2023, PBGC is issuing a final rule to increase transparency of PBGC benefits administration for terminated single-employer pension plans that PBGC trustees. The final rule makes clarifications and codifies policies involving benefit payments and valuation of plan assets.

Special Financial Assistance Non-Priority Group Application Process: PBGC has posted guidance for eligible multiemployer plans seeking to apply for SFA during the non-priority group application period, which begins March 11, 2023. Due to the extensive review process required for SFA applications, PBGC is limited in the number of applications it can review at any time. To facilitate an expeditious and thorough review process, the SFA regulation includes a metering system that permits the temporary closure of the e-Filing portal until PBGC has capacity to process more applications. Due to PBGC’s current and anticipated inventory of SFA applications, the e-Filing portal will be closed temporarily beginning at 12:00 AM ET on Saturday, March 11, 2023, to SFA applications. Beginning at 9:00 AM ET on Monday, March 13, 2023, PBGC will begin to accept requests to be placed on a waiting list for plans seeking to apply for SFA. See the guidance on the non-priority group application process for more information, including the application process for emergency filings and lock-in applications.

2020 Pension Insurance Data Tables: PBGC’s 2020 Pension Insurance Data Tables are now available. The tables summarize information on PBGC’s Single-Employer and Multiemployer Insurance Programs and the defined benefit pension system, which includes time-series data on PBGC’s finances and operations. The data on PBGC-insured defined benefit plans includes information on the number of plan participants, plan funded status, hybrid plans, frozen plans, and risk transfer activity. PBGC’s data tables provide a comprehensive, longitudinal source of information on its insurance programs and employer-sponsored defined benefit plans.

Special Financial Assistance Application Period to Open for Plans in Priority Group 6: On February 11, 2023, PBGC will begin accepting applications for Special Financial Assistance for eligible plans in Priority Group 6. Priority Group 6 includes those plans for which PBGC projects a present value of financial assistance payments under section 4261 of ERISA that would exceed $1 billion in the absence of SFA.

Updated SFA Information Includes Changes to Death Audit Required Documentation: Recently, PBGC updated a number of documents in the Special Financial Assistance information collection. These updates included changes to the instructions regarding the documentation of a death audit to identify deceased pension plan participants. In particular, these death audit updates and other updates were reflected in the General SFA Application Filing Instructions and the SFA Assumptions Guidance.

Special Financial Assistance – Withdrawal Liability Condition Exception: On January 26, 2023, in response to public comments, PBGC published a final rule amending its special financial assistance (SFA) regulation to add an exception process for certain withdrawal liability conditions that apply to a plan that receives SFA. An exception would be available under narrow circumstances where application of the conditions would result in an increase in employer withdrawals. A plan may submit an exception request either before the plan’s initial application for SFA is filed or before a revised application is filed. The final rule is effective January 26, 2023.