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News Items, by Subject

Actuarial - PBGC reform


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[Guidance Overview] PBGC Proposes to Amend Valuation, Reporting, and Disclosure Regs for Terminated and Insolvent Multiemployer Plans
"The proposed regulations would reduce the number of plans that are required to prepare an annual actuarial valuation by increasing the monetary threshold from $25 million to $50 million.... The proposed regulations would add the annual actuarial valuation requirement for: [1] Insolvent plans (active and terminated) receiving financial assistance from the PBGC. [2] Plans terminated by plan amendment that are expected to become insolvent." (Thomson Reuters Practical Law)
[Official Guidance] Text of PBGC Announcement: Future Disaster Relief Will Be Keyed to IRS Announcements
"PBGC is changing its practice to simplify how it announces disaster relief by referring PBGC filers directly to IRS' disaster relief news releases.... Instead of multiple disaster relief announcements, all explaining disaster relief in the same repetitive language, [this announcement] explains how PBGC disaster relief is keyed to IRS relief, what circumstances generally lead to relief, and the nature of relief generally granted. The qualifications for disaster relief and relief granted will be simpler and easier to apply.... With this Announcement, unless a filing is on the 'Exceptions List' ..., filers can be assured that PBGC grants disaster relief when, where, and for the same relief period that IRS grants relief for taxpayers affected by a disaster.... PBGC also may grant case-by-case relief for filings and actions on the Exceptions List." [FR Doc. 2018-14125, filed June 29, 2018; published July 2, 2018] (Pension Benefit Guaranty Corporation [PBGC])
PBGC Inspector General Report SR-2018-14: Summary and Analysis of IT Audit Recommendations and PBGC FISMA Performance (PDF)
13 pages, June 20, 2018. "How does PBGC measure up in the area of IT security? This information-only report provides a summary and analysis of the [PBGC's] progress in remediating IT audit recommendations, as well as its [Federal Information Security Modernization Act (FISMA)] performance in general and its FISMA performance in comparison to other federal agencies. Bottom line: PBGC has made progress in IT security in the past five years. In FISMA performance, PBGC ranks as average among small agencies in one comparison and above average in another." (Office of Inspector General, Pension Benefit Guaranty Corporation [PBGC])
[Official Guidance] Text of PBGC Proposal for Survey of Multiemployer Pension Plan Withdrawal Liability Information
"The [PBGC] intends to request that OMB approve, under the Paperwork Reduction Act, a survey of terminated and insolvent multiemployer pension plans to obtain withdrawal liability information. PBGC needs the withdrawal liability information to estimate its multiemployer program liabilities for purposes of its financial statements. This notice informs the public of PBGC's intent and solicits public comment on the collection of information." (Pension Benefit Guaranty Corporation [PBGC])
[Official Guidance] Text of PBGC FY 2017 Projections Report (PDF)
54 pages. "This year's projections for PBGC's Multiemployer Program show a very high likelihood of insolvency during FY 2025 and near certainty of insolvency by the end of FY 2026. Compared to last year's projections, the risk of insolvency decreases slightly prior to fiscal year 2024 but increases significantly starting in fiscal year 2025. These changes are primarily the result of the largest troubled plan transitioning to a 100% fixed-income portfolio, which eliminates most of the uncertainty of the timing of its projected insolvency date and thus eliminates most of the uncertainty about when the plan will require PBGC financial assistance....

"New results for PBGC's Single-Employer Program are generally consistent with findings of the prior year's report but the financial status of the program is likely to improve faster and reach a higher net surplus position compared to the projections from last year. Recent increases in asset returns and decreases in expected future claims increase the likelihood that the program will reach net surplus a few years earlier than previously projected." (Pension Benefit Guaranty Corporation [PBGC])

PBGC Projections: Multiemployer Program Insolvent in FY 2025
"The [PBGC's] Multiemployer Insurance Program continues to face insolvency by the end of fiscal year 2025, according to findings in the FY 2017 Projections Report.... The likelihood that the Multiemployer Program will run out of money before the end of FY 2025 has grown to over 90 percent, and there remains a significant chance the program will run out of money during FY 2024. The likelihood the program will remain solvent after FY 2026 is now less than 1 percent.... PBGC's Single-Employer Program, which covers about 28 million participants, continues to improve and is likely to emerge from deficit sooner than previously anticipated." (Pension Benefit Guaranty Corporation [PBGC])
PBGC Director Says Failed Multiemployer Plan Members May Receive Only Fraction of PBGC Minimum
"When asked if the PBGC would be able provide the minimum guaranteed benefit to failed plan members without congressional action, [PBGC Director Thomas Reeder] said 'no,' adding that the PBGC would have to cut it to about one-eighth the minimum benefit, or less.... Reeder said that without help from Congress, propping up the PBGC could cost taxpayers $16 billion over 10 years, and that would only keep the organization going for another 20 years." (Chief Investment Officer [CIO])
[Opinion] The Politics of Pensions in America
"To give the committee a chance to work out of the political glare, it will not report until after the midterm elections. Furthermore, any proposal supported by a majority both of Republicans and Democrats will get an automatic up or down vote in the Senate. Nonetheless, getting any compromise will be very difficult because in every case, the proposals made by one constituency are political poison to another.... [T]he collapse of these pension funds could end up doing as much or more damage than Hurricane Harvey." (Former PBGC Director Joshua Gotbaum, via The Brookings Institution)
Democrat Senators Question Trump's Nomination for PBGC Director in Midst of Multiemployer Plan Crisis
"The president has nominated Gordon Hartogensis -- who, the senators say, seems to have little to no prior experience relevant to the pension system and the work of the PBGC -- to replace Reeder. Meanwhile Reeder, who is in the middle of his five-year term, has been advocating for changes to help the PBGC's programs, especially the program for multiemployer defined benefit (DB) plans." (planadviser)
Joint Select Committee on Multiemployer Pensions Meets Again in Educational Session on the PBGC (PDF)
"[PBGC Director Thomas Reeder] noted that if Congress does nothing and the PBGC's multiemployer insurance system becomes insolvent, it would be able to provide only about one-eighth or 12.5% of the already low benefit that it guarantees to pay.... Co-Chair Brown announced that the Select Committee would hold two more hearing in June and two more in July and hopes that serious negotiating on a legislative solution would begin this coming July." (United Actuarial Services, Inc.)
[Official Guidance] Text of PBGC Request for Comments on Proposed Revisions to Form 715, Power of Attorney, for Participants Receiving Payment from PBGC
"PBGC is proposing to revise one form in this collection, the Power of Attorney Form (Form 715). The proposed revision would include: ... [1] granting a durable power of attorney (DPOA) in addition to a nondurable power of attorney (NDPOA), and allowing a principal to name up to three agents to act on her behalf with PBGC ... [2] heightened requirements for granting authority and for executing the document ... and [3] A 'Notice to the Principal,' to alert the principal about what powers she is granting to a designated agent, and an 'Agent's Acknowledgement' to inform the agent about her duties and liabilities with respect to handling the principal's affairs. PBGC believes these revisions provide greater flexibility and greater protections against fraud for customers using the Form 715." (Pension Benefit Guaranty Corporation [PBGC])
Multiemployer Plan Committee to Examine Financial State of PBGC
"Joint Select Committee on the Solvency of Multiemployer Pension Plans Co-Chairmen Orrin Hatch (R-Utah) and Sherrod Brown (D-Ohio) ... announced they will convene a hearing on Thursday, May 17, 2018, to examine the state of the [PBGC].... The [sole] witness ... will be Thomas Reeder, Executive Director of the PBGC." (Joint Select Committee on Solvency of Multiemployer Pension Plans)
[Official Guidance] Text of PBGC Regulatory Agenda, Spring 2018
Proposed Rules include: [1] Valuation Assumptions and Methods: Interest and Mortality Assumptions for Asset Allocation in Single-Employer Plans and Mass Withdrawal Liability Determination in Multi-Employer Plans; [2] Owner-Participant Benefits; [3] Benefit Payments; [4] Methods for Computing Withdrawal Liability; [5] Terminated and Insolvent Multiemployer Plans and Duties of Plan Sponsors; and [6] PBGC-Approved Arbitration Procedures -- Multiemployer Plans.
Final Rules: [1] Mergers and Transfers Between Multiemployer Plans; and [2] Adjustment of Civil Penalties. (Pension Benefit Guaranty Corporation [PBGC])
PBGC Releases Strategic Plan for 2018-2022
"The PBGC has identified five priorities to effectively manage its insurance programs.... They include: [1] Encouraging continuation and maintenance of voluntary private pension plans for the benefit of their participants; [2] Enhancing production quality and reducing the inventory of unissued benefit determination letters; [3] Completing implementation of enterprise risk management; [4] Addressing workforce challenges to prevent an impact on the PBGC's ability to carry out its mission; and [5] Continuing to improve the internal control environment." (Wolters Kluwer Law & Business)
PBGC Issues Guidance on Reviews of Multiemployer Plans' Proposed Alternative Terms and Conditions to Satisfy Withdrawal Liability
"The Pension Benefit Guaranty Corporation (PBGC) has issued guidance for multiemployer plans that request review of proposed alternative terms and conditions for satisfying employer withdrawal liability under [ERISA]. The guidance sheds light on information the PBGC finds helpful and the factors it considers in its reviews." (Thomson Reuters Practical Law)
The Pension Benefit Guaranty Corporation: A Primer (PDF)
24 pages. "In FY2017, PBGC insured nearly 24,000 DB pension plans covering about 40 million people. It paid or owed benefits to 1.5 million people. PBGC is the trustee of 4,845 single-employer plans. PBGC provided financial assistance to 72 multiemployer pensions. PBGC pays a maximum benefit to plan participants. Most workers in single-employer plans taken over by PBGC and multiemploy er plans that receive financial assistance from PBGC receive the full pension benefit that they earned." [Report 95-118, Mar. 20, 2018] (Congressional Research Service [CRS])
Notes from Meeting of Actuaries 'Intersector Group' with PBGC, October 11, 2017 (PDF)
6 pages. Topics include: [1] Terminated plans; [2] Section 4010 filings under the new rule; [3] Reportable events; [4] Multiemployer plan issues; [5] Plan terminations where an annuity provider cannot be found; [6] Insolvent multiemployer plans with active contributing employers; [7] Treasury Department interpretation of requirement to lift benefit suspensions after a merger between a distressed multiemployer fund and a larger healthy fund; [8] Missing participants; [9] New Code Section 430 mortality regulations. (American Academy of Actuaries, Conference of Consulting Actuaries, Society of Actuaries, and ASPPA College of Pension Actuaries [ACOPA])
2017 State-By-State Pension Benefit Payments
"This listing breaks down the benefits we paid to our participants in 2017. It shows the total amount of benefits paid and the number of people receiving payments in each state. The benefits are from single-employer plans that PBGC trusteed over the years. The total benefit amount paid in 2017 was $5.6 billion to about 868,000 retirees." (Pension Benefit Guaranty Corporation [PBGC])
[Official Guidance] Text of PBGC Proposed Regs: Owner-Participant Changes to Guaranteed Benefits and Asset Allocation
30 pages. "This proposed rule would amend PBGC's benefit payment regulation by replacing the guarantee limitations applicable to substantial owners with a new limitation applicable to majority owners. Additionally, this proposed rule would amend PBGC's asset allocation regulation by prioritizing funding of all other benefits in priority category 4 ahead of those benefits that would be guaranteed but for the new, owner-participant limitation. The proposed rule also clarifies that plan administrators may continue to use the simplified calculation in the existing rule to estimate benefits funded by plan assets. Finally, it provides new examples to aid in implementation." (Pension Benefit Guaranty Corporation [PBGC])
Outlook 2018: PBGC Looking to Congress for Rescue
"The PBGC's program for insuring single-employer pension plans saw its deficit cut nearly in half during the 2017 fiscal year. At the same time, the agency's insurance program for unionized workers' pensions is in a tailspin and the agency is looking for help from Congress in 2018. The agency reported a $65.1 billion program deficit in its latest annual report and projects that the program will likely be insolvent by late 2025 or earlier." (Bloomberg BNA)
PBGC to Expand Missing Participants Program Beyond Single-Employer DB Plans
"PBGC will work with sponsors of terminated 401(k) and other defined contribution plans, including profit-sharing, money purchase, target benefit, employee stock ownership and stock bonus 403(b) plans, to help distribute plan benefits to missing participants. Plans not covered include governmental plans, church plans and plans that cannot pay benefits to PBGC in cash. The agency will charge sponsors $35 per account to transfer plan benefits into the program and fees will not exceed PBGC's costs." (Pensions & Investments)
The Multiemployer Pension Plan Crisis: History, Legislation, and What's Next? (PDF)
52 pages. Topics include: [1] Is MPRA working? [2] What happens if nothing happens? [3] Potential solutions: (a) PBGC takeover of critical and declining status plans; (b) PBGC funding; (c) Partitioning of orphans; (d) Plan mergers; (e) Benefit modifications; (f) Variable defined benefit plans; (e) Composite plans; and (f) Loan program proposals. (U.S. Chamber of Commerce)
Splitting Pension Plans Can Reduce PBGC Variable Rate Premiums
"[This article considers] a strategy for reducing PBGC variable-rate premiums -- the split-up of a plan ... into [one] plan that covers participants subject to the variable-rate premium headcount cap ... and a [second] plan that covers all other participants. Such a strategy may reduce PBGC variable-rate premiums ... [1] it can be used to maximize the effect of the headcount cap ... [2] it may allow the sponsor to make contributions that reduce variable-rate premiums where the headcount cap would otherwise prevent that result." (October Three Consulting)
[Official Guidance] Text of PBGC Statement of Regulatory and Deregulatory Priorities, Along with Fall 2017 Regulatory Agenda
"A major focus of PBGC's current efforts is to finalize rules to simplify and revise the existing missing participants program to help connect more participants with their lost retirement savings. As authorized by the Pension Protection Act of 2006 (PPA), the revised program will cover terminating defined contribution plans, defined benefit plans of small professional-service employers that are not covered by title IV of ERISA, and multiemployer plans, in addition to terminating single-employer defined benefit plans." [Also online: Fall 2017 Proposed and Final Rules List; and Fall 2017 Long-Term Actions] (Pension Benefit Guaranty Corporation [PBGC])
PBGC and Open Government -- Call for Ideas
"PBGC is interested in your ideas on how we make information available. Please consider the following: What PBGC data or content should be more readily available? Which PBGC online service or data would you like to be easier to use? Which PBGC service would you like to use on your mobile device? You can submit your feedback to Opengov@pbgc.gov." (Pension Benefit Guaranty Corporation [PBGC])
Senate HELP Subcommittee Examines the Mounting Multiemployer Pension Problem
"Members of the Subcommittee heard from the Honorable Tom Reeder, the Director of the [PBGC].... Reeder laid out the high stakes of finding a solution to preserve the pension plans promised to millions of workers and retirees.... PBGC's FY 2016 Projections Report shows that the [single-employer] program will be out of a deficit by 2022.... [T]he Multiemployer Program stands in stark contrast as financial conditions continue to worsen." (Committee on Education and the Workforce, U.S. House of Representatives)
[Guidance Overview] Mediation of PBGC Disputes: A New and Welcome Option (PDF)
"This article provides a brief history of the background leading to the pilot mediation program, a description of the two categories of disputes that are eligible for the program, and a summary of the basic rules that apply to the program." (Keightley & Ashner LLP, via Bloomberg Law Pension & Benefits Daily)
House HELP Subcommittee to Hold Hearing on PBGC
"On Wednesday, November 29 at 10:00 a.m., the Subcommittee on Health, Employment, Labor and Pensions [HELP] will hold a hearing on 'Financial Challenges Facing the Pension Benefit Guaranty Corporation: Implications for Pension Plans, Workers, and Retirees.' ... The subcommittee hearing will examine how pension plans, workers, and retirees may be affected by financial challenges faced by the [PBGC]." (Committee on Education and the Workforce, U.S. House of Representatives)
Multiemployer Plan Pension Rescue Bill Proposed
"The bill creates a new agency within the Department of the Treasury called the Pension Rehabilitation Administration (PRA) to make loans to plans and to receive loan payments. The PRA would receive funding from government bonds.... A plan would receive the loan and be required to either purchase an annuity contract for benefits in pay status, or establish a bond portfolio that would match the anticipated payment stream for benefits in pay status. The plan would make interest payments on the loan until maturity." (Cheiron)
Multiemployer Solvency Crisis: Adjustments to the PBGC's Benefit Guarantee to Reduce Pressure on the Guarantee Fund (PDF)
"Using the Multiemployer Pension Simulation Model (MEPSIM), we project that about 130 multiemployer pension plans covering 2.1 million participants will become insolvent over the next 20 years, and that the [PBGC's] multiemployer guarantee fund -- the backstop against such insolvencies -- will itself be exhausted by 2027.... The adjustments to the guarantee that we examine within this paper have a significant downward impact on the present value of projected PBGC assistance payments, but the impact is not sufficient to prevent the exhaustion of the guarantee fund. Given the large number of plans heading towards insolvency, it is unlikely that a single policy action is available to stabilize the guarantee fund. Rather, several simultaneous actions will be required, among which a reduction of the guarantee can be considered." (The Pension Analytics Group)
PBGC Fiscal Year 2017 Annual Report: Multiemployer Program Deficit Widens; Single-Employer Program Continues to Improve
"[T]he deficit in [PBGC's] insurance program for multiemployer plans rose to $65.1 billion at the end of FY 2017, up from $58.8 billion a year earlier. The increase was driven primarily by the ongoing financial decline of several large multiemployer plans that are expected to run out of money in the next decade. PBGC's Single-Employer Insurance Program continued to improve as the deficit dropped to $10.9 billion at the end of FY 2017, compared to $20.6 billion at the end of FY 2016. The primary drivers of the continued improvement include premium and investment income and increases in the interest factors used to measure the value of future liabilities." (Pension Benefit Guaranty Corporation [PBGC])
[Opinion] Senators Introduce Bills to Save Financially Troubled Multiemployer Plans and Protect Retirees
"These bills set up a new office in the Treasury Department called the Pension Rehabilitation Administration (PRA), which would receive proceeds from the issuance of Treasury bonds. This money would then be lent to financially-troubled plans as long as they meet certain criteria. The Pension Rights Center is particularly pleased that the loans would be used to fully pay the benefits of retirees and that the bill would require plans, which have already been approved to cut benefits under MPRA, to apply for these new loans and if approved, use that money to restore previously suspended benefits." (Pension Rights Center)
[Opinion] Any Action to Address PBGC Deficit Must Protect Improving Single-Employer Pension Plan System
"Traditional defined benefit pensions are in a delicate balance, with the retirement savings of millions of people at stake. Increasing pressure on the single-employer program would only compel healthy plans to exit the system, leaving a dwindling premium base and creating a death spiral for the PBGC[.]" (American Benefits Council)
Sen. Sherrod Brown to Unveil Multiemployer Loan Program Legislation
"The bill ... would create a new office within the Treasury Department called the Pension Rehabilitation Administration. The funds would come from the sale of Treasury-issued bonds to financial institutions. The pension funds could borrow for 30 years at low interest rates.... The bill would also fund a program at the [PBGC] to finance any remaining needs of pension plans borrowing from the new program." (Pensions & Investments)
[Official Guidance] PBGC Guarantee Limit for Single-Employer Plans Increases for 2018
"[PBGC has announced] the guarantee limits for single-employer plans that fail in 2018.... The increase is not retroactive; payments to retirees whose plans failed before 2018 will not change.... [If] a plan fails in 2018 during a plan sponsor's bankruptcy that began in an earlier year, the limits in effect for that earlier year apply. The guarantee for multiemployer plans has not changed." (Pension Benefit Guaranty Corporation [PBGC])
[Guidance Overview] Text of PBGC Release 17-7: Pilot Mediation Project Launched to Resolve Certain Termination Liability Collection and Early Warning Program Cases
"PBGC chose Termination Liability Collections cases and Early Warning Program matters for the pilot project as potentially reaping the greatest benefit from mediation.... After one year, PBGC will evaluate the Mediation Pilot's success on multiple metrics, including: Percent of eligible cases opting for mediation, Resolution rate and time to resolution, and Cost savings." (Pension Benefit Guaranty Corporation [PBGC])
Assessing Multiemployer Plans' Capacity for Self-Stabilization (PDF)
12 pages. "Three main options are available to prevent the exhaustion of the [PBGC's] guarantee fund : [1] empower plans to take stronger actions to avoid or delay insolvency; [2] reduce the level of the PBGC's benefit guarantee, and/or [3] increase the revenue flowing into the fund, either through premium increases or by securing additional revenue sources. [This paper focuses on Option One.]" (The Pension Analytics Group)
[Opinion] American Benefits Council Letter to PBGC: Recommendations for Regulatory and Deregulatory Actions
"Of all of PBGC's programs, the [Early Warning Program] has perhaps the greatest potential to disrupt the normal operation of the American businesses to which it is applied. Yet the Program operates without any statutory or authorizing regulatory guidance.... [The Council is] very concerned about the recent use of the financial soundness of the plan sponsor as a factor in PBGC's exercise of its enforcement and interpretive authority.... PBGC can and should publish its reports on its financial condition based on the same assumptions that Congress has imposed on private plans." (American Benefits Council)
[Opinion] ERIC Comments to PBGC on Regulatory Planning
"We encourage the PBGC to carefully weigh the financial impact and other costs of new and existing regulations against the benefits (if any) associated with them.... [U]nhelpful changes to existing programs, such as the Early Warning Program, only feed into growing skepticism that it is still prudent for employers to continue to sponsor defined benefit plans." (The ERISA Industry Committee [ERIC])
[Guidance Overview] 2017 Q&As: PBGC Meeting with ABA Joint Committee on Employee Benefits, May 10, 2017 (PDF)
13 pages. Topics include: [1] Regulatory review/reform developments: PBGC impact; [2] PBGC early warning program; [3] Multiemployer program update (including PBGC audits of plans terminating by mass withdrawal, and two-pool withdrawal liability method request for information); [4] PBGC informal assistance regarding merger and partitions; [5] Reportable events: recent PBGC experience; [6] Standard terminations: recent PBGC experience; [7] PBGC website project: Q&A presenting informal views; [8] PBGC premiums in the context of de-risking, and de-risking trends. (Joint Committee on Employee Benefits [JCEB], American Bar Association)
Pension Insurance System for Union Plans Still Faces Train Wreck
"The latest report, for fiscal year 2016, echoes previous warnings the [PBGC] has issued about its multiemployer program, which covers about 10 million workers. More than 100 plans insured by the agency have told their members that their plans will be insolvent within 20 years, the report says. The PBGC's own insolvency could leave the benefits of some 1.2 million participants in those plans without any safety net." (Bloomberg BNA)
Notes from Meeting of Actuaries 'Intersector Group' with PBGC, May 3, 2017 (PDF)
9 pages. Topics include: ... [1] How does the new administration affect the current priorities? ... [2] What is PBGC's plan with respect to mortality assumptions now that the IRS proposed regulations have been released? ... [3] Is PBGC moving forward with review of all other assumptions (e.g., ERISA Section 4044), and what can be expected on that front? ... [4] Are there any changes in the types of issues PBGC is seeing on audits of plan terminations or premium filings? ... PBGC provided a litany of errors it commonly discovers ... [5] Does PBGC expect to finalize the multiemployer plan merger regulation, and are any changes likely from the proposed regulation? (American Academy of Actuaries, Conference of Consulting Actuaries, Society of Actuaries, and ASPPA College of Pension Actuaries [ACOPA])
Text of PBGC FY 2016 Projections Report (PDF)
60 pages. "This year's projections for PBGC's multiemployer program show less uncertainty regarding the year it will use up all of its assets; most projections show insolvency occurring during the three fiscal years 2024-2026. The risk of insolvency accumulates year by year, leaving the multiemployer program fund more likely than not to use up all of its assets by the end of fiscal year (FY) 2025.... New results for PBGC's single-employer program are consistent with findings of the prior year's report -- the financial status of the program is likely to improve and reach a surplus net position within the next decade. Low claim levels in FY 2016, combined with recent increases in interest rates, cause the program to potentially reach net surplus several years earlier than previously projected." (Pension Benefit Guaranty Corporation [PBGC])
[Official Guidance] Text of PBGC Request for Information: Regulatory Planning and Review of Existing Regulations
"With an eye toward the Fall iteration of the semi-annual regulatory agenda, PBGC is requesting information, suggestions, and comment from the public -- including from plan sponsors, participants, practitioners, organizations representing retirees and plan participants, and other parties participating in or affected by PBGC's programs -- on regulatory and deregulatory actions PBGC should take. To facilitate this request for information, PBGC developed [13] questions ... the answers to which will help determine whether there are gaps in regulatory guidance where the public believes rulemaking would be beneficial, and help PBGC evaluate the continued effectiveness and usefulness of existing regulations." (Pension Benefit Guaranty Corporation [PBGC])
2015 PBGC Data Insurance Tables (PDF)
61 pages. "PBGC is now releasing data in groups, as they become available. This second release includes data in the Premium and Covered Plan Information Tables." (Pension Benefit Guaranty Corporation [PBGC])
PBGC Reverses Expansion of Early Warning Factors
"Plan sponsors and others had criticized the new additions to the list as too vague. There were also concerns that these factors could result in more forcefully sought financial concessions from plan sponsors that could ill afford them. The PBGC initially claimed that it had always used similar criteria in its screening process." (Willis Towers Watson)
2016 State-By-State Information on PBGC Payments to Retirees
"[This] state-by-state map shows how much PBGC pays in benefits to our participants, listing the dollars and number of people paid in each state. Some of the interesting information you can glean from the 2016 data is that Ohio ranks as the state with the most benefits paid, $557,021,996 to 78,929 retirees; next, in Pennsylvania, 79,687 retirees were paid $464,996,076 in benefits; while 57,874 retirees in Florida received $414,878,111 in benefits." (Pension Benefit Guaranty Corporation [PBGC])
[Guidance Overview] PBGC Walks Back Early Warning Program Expansion (PDF)
"[On] May 10, 2017, PBGC updated the guidance on its website regarding the Early Warning Program. PBGC removed credit deterioration and a downward trend in a company's financial metrics as risk identification factors ... However, PBGC made clear that, in analyzing a transaction under the Early Warning Program, PBGC generally considers a company's credit quality in its analysis.... PBGC clarified that the December guidance was not meant to expand the Early Warning Program and that PBGC has not 'changed the monitoring criteria or the processes involved' in the program." (Groom Law Group)
[Guidance Overview] PBGC Q&As on Rules for Risk Mitigation and Early Warning Program
9 Questions & Answers, updated May 2017. "Did PBGC's December 2016 updated content signify an expansion of the Early Warning Program to include credit deterioration? No. PBGC has not expanded the program or changed the monitoring criteria or the processes involved.... The monitoring criteria reference a participant count of 5,000 or more or an underfunding threshold of $50 million or more. Does PBGC apply these thresholds on a plan-by-plan basis or on an aggregate controlled group basis? PBGC applies the participant count and underfunding monitoring criteria on an aggregate controlled group basis.... Does PBGC use information provided in filings made under section 4010 of ERISA to open an Early Warning Program review? No." (Pension Benefit Guaranty Corporation [PBGC])
2015 PBGC Data Insurance Tables (PDF)
27 pages. "PBGC is now releasing data in groups, as they become available. The first release includes data in the Summary Tables, Claims Tables and Multiemployer Graphical Supplement [showing zone status changes over time, and distribution of administrative expenses]." (Pension Benefit Guaranty Corporation [PBGC])
Retiree-Employee Ratios Are Dooming the Multiemployer Pension
"Even as Congress has taken steps to solve the multiemployer pension problem, the plans continue to face a death spiral. In fiscal year 2016, 10 multiemployer plans went insolvent and requested financial assistance from the PBGC. The federal agency is now giving financial assistance to a record-high 71 multiemployer plans." (Bloomberg BNA)
[Opinion] American Benefits Council Letter to PBGC Urging Review of Early Warning Program
"Suggested changes to the program ... [1] Suspend the program for six months while it is evaluated and reformed.... [2] Reform the criteria for the program.... [3] Obtain board of directors approval for large plan involuntary terminations based on long-run loss determinations.... [4] Provide safe harbors from the Early Warning Program.... [5] Reform the 'sanctions' under the program.... [6] Preclude PBGC from intervening in company businesses without statutory authorization.... [7] Cease publicizing Early Warning Program agreements." (American Benefits Council)
[Opinion] Joint Trade Association Letter to House Speaker Paul Ryan, Opposing Increases in PBGC Premiums
"Congress has increased premiums four times over the past decade, going from $30/person in 2006 to a scheduled $80/person in 2019. The decision to increase these premiums has not been driven from sound pension policy, but rather a need for additional revenue to pay for other, unrelated government programs." (American Benefits Council and seven other employer and professional organizations)
PBGC Adds Credit Deterioration, Cash Flow Decline to Early Warning Factors It Monitors
"The federal pension insurance agency has for more than 20 years monitored corporate transactions and events through its Early Warning Program (EWP). In December 2016, the PBGC updated the program's overview on its website and added 'credit deterioration' and a 'downward trend in cash flow or other financial factors' to its watch list.... The new additions may lead to a PBGC inquiry, even if none of the other corporate transaction warning signs listed is present." (Compensation.BLR.com)
[Opinion] U.S. Chamber of Commerce Comment Letter to PBGC on Alternative Methods for Computing Withdrawal Liability
"The Chamber believes that widespread implementation of the two-pool alternative withdrawal liability arrangements could be helpful in stabilizing the multiemployer pension system.... [It] would be helpful to highlight areas where requests have been deficient or highlighting information that is necessary for approval.... Moving away from a prescriptive list [of information required from plan sponsors] would minimize the burden of employers and plans having to provide information that is not necessary for the PBGC's determination." (U.S. Chamber of Commerce)
State-by-State PBGC Pension Plan Payments
"PBGC paid more than $5.6 billion (that's 'billion' with a 'b') to 840,000 retirees in 2015 ... This clickable map lists the total amount and number of people paid in each state, broken down by congressional district." (Pension Benefit Guaranty Corporation [PBGC] Blog: Retirement Matters)
[Opinion] Letter to Congressman Renacci Supporting Proposed Legislation to Move PBGC Premiums Off-Budget
"We believe that PBGC premiums should be increased only as needed to ensure retirement benefits are adequately protected.... This is not only an issue of protecting American's retirement benefits; it is also an issue of good governance. PBGC premiums are only used by the PBGC for their intended purpose. The premiums cannot be used to pay for other programs, although the increases have been used to 'pay' for other unrelated programs over the years. This double-counting of funds is simply an accounting gimmick and does nothing to address the deficits we face." (The ERISA Industry Committee (ERIC), ASPPA College of Pension Actuaries, and five other industry and employer organizations)
[Opinion] Letter to Congressman Renacci Supporting Proposed Legislation to Move PBGC Premiums Off-Budget
"We believe that PBGC premiums should be increased only as needed to ensure retirement benefits are adequately protected.... This is not only an issue of protecting American's retirement benefits; it is also an issue of good governance. PBGC premiums are only used by the PBGC for their intended purpose. The premiums cannot be used to pay for other programs, although the increases have been used to 'pay' for other unrelated programs over the years. This double-counting of funds is simply an accounting gimmick and does nothing to address the deficits we face." (The ERISA Industry Committee (ERIC), American Benefits Council, ASPPA College of Pension Actuaries, and four other industry and employer organizations Committee on Investment of Employee Benefit Assets Inc. National Association of Manufacturers The Society for Human Resource Management U.S. Chamber of Commerce WorldatWork)
[Opinion] Senate Takes Up Fight to Move PBGC Premiums Off-Budget
"[The Pension and Budget Integrity Act of 2017] would ensure that [PBGC] premiums are no longer counted in general fund revenue, eliminating the incentive for legislators to raise premium costs to pay for unrelated initiatives and programs. That change would help to stabilize single-employer pension plans and provides more certainty for America's companies and their employees." (The ERISA Industry Committee [ERIC])
PBGC Premiums in Their Historical Context -- Ouch!
"The impact of recent premium increases is clear in the PBGC's latest annual report ... Commenting on it in a year-end review, Michael Moran of Goldman Sachs noted that while PBGC flat rate premium income jumped by 12% in 2016, variable-rate premium (VRP) income leapt up by 81%. Startling as that observation is, it perhaps does not do justice to just how big the increases are." (Russell Investments)
 
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