What's New for Practitioners Archive

Administrative Review Final Rule: PBGC is amending its rules for administrative review of agency decisions. The Administrative Review Final Rule makes all agency coverage determinations subject to appeal and clarifies the procedures for requesting administrative review. The final rule will be published in the Federal Register on Monday, February 24, 2020, and is effective March 25, 2020.

Miscellaneous Corrections, Clarifications, and Improvements Final Rule: As part of PBGC’s ongoing efforts to review the effectiveness and clarity of its rules, on February 4, 2020, PBGC will publish a final rule making clarifications, corrections, and improvements to some of its regulations. Key changes include:

• Reportable Events – eliminating possible duplicative reporting of active participant reductions, clarifying when a liquidation occurs, and providing additional examples for certain events;
• Financial and Actuarial Information Reporting (“4010 filings”) – eliminating a requirement to submit individual financial information for each controlled group member;
• Standard Terminations – providing more time to file a post-distribution certification; and
• Premium Rates – clarifying the date on which participants are counted for premium calculations and emphasizing that a plan doesn’t qualify for the variable rate premium exemption for the year in which it completes a standard termination if it engages in a non-de minimis spinoff in the same year.

The rule takes effect 30 days after it is published (i.e., on March 5, 2020), but certain provisions have different applicability dates (e.g., the changes first impact 4010 filings due on or after April 15, 2020). Revised forms, instructions, and e-filing portal (reflecting the changes) are under review by OMB, which PBGC expects to be available for use by the effective date.

CSEC Premium Filing Guidance: On January 23, 2020, PBGC issued Technical Update 20-1 providing guidance for cooperative and small-employer charity (CSEC) plans on how to submit premium filings for 2019 and 2020, and if applicable, how to request refunds for 2019 overpayments. This guidance is needed to reflect the retroactive changes to the way premiums are determined for these plans provided in the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act).

2017 Pension Insurance Data Tables: The second installment of the 2017 Data Tables for PBGC's Single-Employer and Multiemployer Programs and the private defined benefit pension system is now available. This installment includes statistics, claims activity, financial position, premium revenue, guarantee payments, and administrative expenses. Also included is an update to the ME Administrative Expense Supplement for 2017.

Annual Update of Maximum Civil Monetary Penalty: Federal law requires that PBGC amend its civil penalty regulations annually to incorporate an inflation adjustment on the maximum penalty that may be assessed when plans fail to provide certain required information (e.g., reportable event filings, 4010 filings, certain multiemployer plan notices). Accordingly, PBGC published a final rule amending two regulations (29 CFR parts 4071 and 4302). Although the maximum penalty is increasing, it is uncommon for PBGC to assess this amount. The agency's goal is to encourage compliance. In most cases, when PBGC assesses an information penalty, it is for an amount significantly less than the maximum permitted.

2020 Premium Filing Instructions: The Comprehensive Premium Filing Instructions for 2020 plan years have been approved by OMB and are now available on PBGC's website. My PAA will be ready to accept 2020 filings very soon. These instructions do not reflect changes to the way premiums are determined for certain plans sponsored by cooperative and small employer charities (“CSEC plans”) as provided in Public Law 116-94, enacted December 20, 2019. Premium-related guidance for those plans will be issued separately.

Approval of Alternative Arbitration Procedures for Multiemployer Plans: PBGC published a notice in the Federal Register approving, effective January 1, 2020, a request from the American Arbitration Association (AAA) for approval of an alternative arbitration procedure (AAA Rules). The AAA Rules address, among other things, arbitration initiation fees, apportionment of fees, and the arbitrator selection process.

Expected Retirement Age Annual Update: On December 9, 2019, 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 2020 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 web page.

Mortality Tables: PBGC has updated the ERISA section 4044 mortality table for 2020 valuations. This table is used to determine liabilities when a single-employer plan terminates in an involuntary or distress termination (per 29 CFR 4044). It is also used when a multiemployer plan incurs a mass withdrawal (per 29 CFR 4281). HTML and Excel versions of the 2020 mortality tables are available on PBGC’s ERISA section 4044/4050 mortality table webpage. A unisex version of the table is also available on that webpage. The unisex version is used in specified situations to determine the benefit transfer amount under the Missing Participants Program (per 29 CFR 4050).

2019 Form 5500:  On November 18, 2019, 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 2019 Form 5500 Annual Return/Report and related instructions. See EBSA’s News Release for more information, including a summary of key changes.

Benefit Restrictions - Present Value of PBGC Maximum Guarantee: On November 7, 2019, PBGC posted a table showing the applicable present values for 2020 plan years. A two-column spreadsheet version of the table is also available for convenient copying. For more information see Technical Update 07-04.

Reportable Events and Large Unpaid Contributions Forms and Instructions: On November 4, 2019 PBGC is publishing a notice in the Federal Register that it intends to request OMB approval of two changes to ERISA 4043 reportable events forms and instructions (Forms 10 and 200) and that it intends to require, starting in October 2021, that such filings be submitted via PBGC’s e-filing portal (i.e., emailing scanned copies of Forms 10, 10-Advance, and 200 and applicable attachments will no longer be an acceptable way to submit the required information). PBGC’s e-filing portal, available for reportable events filings since 2016, offers a secure application for submitting required information. PBGC is soliciting public comments on the proposed changes.

2020 Premiums: PBGC is submitting to OMB Comprehensive Premium Filing Instructions for 2020 along with corresponding My PAA screenshots for review under the Paperwork Reduction Act. The instructions include a summary of the key changes from the 2019 Comprehensive Premium Filing Instructions. A Federal Register notice to be published on 10/30/2019 provides additional information.

Guarantee Limit: As a result of the indexing rules provided by law, the guarantee limits for single-employer plans that fail in 2020 will be 3.65% higher than the limits that applied for 2019. A table showing the 2020 guarantee limits for various ages and payment forms is available on PBGC's website. The guarantee limits for multiemployer plans are not indexed and therefore have not changed.

ERISA 4010 Financial Reporting Waiver: To reduce the burden of reporting under PBGC’s 4010 regulation, PBGC is waiving the § 4010.9(b)(2) requirement to report certain financial information separately for each non-exempt member of the filer’s controlled group. See PBGC Technical Update 19-1 for details and conditions.

2020 Premium Rates: PBGC has determined the premium rates applicable for 2020 plan years in accordance with the indexing rules provided in section 4006 of ERISA. The Premium Rates web page has been updated accordingly.

2017 Pension Insurance Data Tables: On October 07, PBGC posted the first installment of the 2017 Data Tables, which include statistics for PBGC's single-employer and multiemployer programs and for the private defined benefit pension system. This installment provides detailed information about PBGC’s single-employer program, including claims activity, financial position, premium revenue, benefit payments, and administrative expenses.

Administrative Review Proposed Rule: PBGC is proposing to amend its rules for administrative review of agency decisions. The Administrative Review Proposed Rule would make all agency coverage determinations subject to appeal and clarify the procedures for requesting administrative review. The proposed rule will be published in the Federal Register on Friday, October 4, 2019, with a 60-day public comment period.

PBGC Benefit Payments Proposed Rules: PBGC is issuing two proposed rules related to its ERISA section 4022 Benefits Payment Regulation. The first proposal would modernize the assumptions it uses to determine de minimis lump sum benefits in PBGC-trusteed terminated single-employer plans. That proposal would also provide a fixed set of “immediate and deferred” interest rates for use by the relatively few private-sector plans that use the current PBGC lump sum interest rates to determine lump sums. The second proposal would further increase transparency of PBGC benefits administration by codifying policies involving benefit payments and valuation of plan assets. Both proposed rules will be published in the Federal Register on September 30, with a 60-day public comment period.

New 4062(e) Form Series: PBGC has created a new form series intended to clarify and simplify the process for providing PBGC the required notifications following a substantial cessation of operations and election to make additional annual contributions to satisfy resulting liability. The following four forms and instructions have been approved by OMB are now available for use: (1) Form 4062(e)-01 (to notify PBGC of a substantial cessation of operations), (2) Form 4062(e)-02 (to notify PBGC of an election to make additional annual contributions), (3) Form 4062(e)-03 (to notify PBGC of a payment of an additional contribution, termination of obligation for future contributions, or receipt of funding waiver from the IRS, and (4) Form 4062(e)-04 (to notify PBGC of a failure to pay an additional contribution).