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<< Older News  |  July 31, 2021

News

All News > PBGC

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Editor's Pick Notes from Meeting of American Academy of Actuaries Multiemployer Committee with Agencies to Discuss MPRA Application Process (PDF)
American Academy of Actuaries Link to more items from this source
July 23, 2021

8 pages. Topics include: [1] Investment return assumptions; [2] Mortality assumptions; [3] New entrant assumptions; [4] Impact of COVID pandemic on actuarial assumptions; [5] Applicability of Actuarial Standards of Practice; and [6] Partition design.

Tags: Multiemployer Plans  •  PBGC  •  Retirement Plan Administration

New Withdrawal Liability Rules for Pension Bailout Recipients
McGuireWoods Link to more items from this source
[Guidance Overview]
July 14, 2021

"[To] prevent [special financial assistance (SFA)] payments from indirectly subsidizing employer withdrawals, the rule requires [multiemployer pension plans (MEPPs)] receiving SFA payments to use mass withdrawal interest assumptions in the calculations. These conservative assumptions ... will increase the overall unfunded liability of a MEPP and, in turn, increase the gross amount assessable to employers."

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans  •  PBGC

PBGC Issues Regs on Special Assistance for Troubled Multiemployer Plans
Cheiron Link to more items from this source
[Guidance Overview]
July 14, 2021

"The amount of special financial assistance [SFA] allowed by the PBGC regulations ... practically ensures that the plan will be insolvent by 2052.... Plans with an existing MPRA benefit suspension and/or partition ... that apply for the SFA will be able to restore benefit cuts, but then must drop the benefits to the PBGC guarantee level upon later insolvency. Plans that maintain their MPRA suspension may be able to pay the reduced level of benefits indefinitely."

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans  •  PBGC

Text of PBGC Guidelines SFA 21-02: Special Financial Assistance Assumptions (PDF)
Pension Benefit Guaranty Corporation [PBGC] Link to more items from this source
[Official Guidance]
July 12, 2021

8 pages. "This guidance provides guidelines for changes to certain assumptions that plans may use for purposes of determining eligibility for special financial assistance (SFA) and the amount of SFA. Plans may, but are not required to, use the guidelines if they are reasonable for the plan. Guidelines are available for contribution base units (CBUs), administrative expenses, mortality, contribution rates, new entrant profiles, and investment expenses."

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans  •  PBGC

PBGC Issues Interim Final Rule on the American Rescue Plan Act's Special Financial Assistance Program
Littler Link to more items from this source
[Guidance Overview]
July 12, 2021

"One key issue left open by the statutory text was the amount of SFA an eligible plan could receive.... [U]nder the PBGC's rule, the amount of the SFA is the value of all plan obligations minus the plan's resources. The obligations include an estimate of every amount the fund will need to pay out between the date of its application and 2051."

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans  •  PBGC

Text of PBGC Interest Rate Assumptions for Valuing Benefits in Single-Employer Plans, Third Quarter 2021
Pension Benefit Guaranty Corporation [PBGC] Link to more items from this source
[Official Guidance]
June 14, 2021

"The third quarter 2021 interest assumptions will be 2.13 percent for the first 25 years following the valuation date and 2.23 percent thereafter. In comparison with the interest assumptions in effect for the second quarter of 2021, these interest assumptions represent an increase of 5 years in the select period (the period during which the select rate (the initial rate) applies), an increase of 0.31 percent in the select rate, and an increase of 0.55 percent in the ultimate rate (the final rate)."

Tags: Funding of DB Plans  •  PBGC  •  Retirement Plan Administration

PBGC Regulatory Agenda, Fall 2020
Pension Benefit Guaranty Corporation [PBGC] Link to more items from this source
[Official Guidance]
June 11, 2021

Proposed Rules

  • Valuation Assumptions and Methods: Interest and Mortality Assumptions for Asset Allocation in Single-Employer Plans and Mass Withdrawal Liability Determination in Multiemployer Plans
  • Multiemployer Plan Guaranteed Benefits
  • Improvements to Rules on Recoupment of Benefit Overpayments
  • Penalties for Failure to Provide Certain Notices or Other Material Information

Final Rules

  • Benefit Payments and Allocation of Assets
  • Examination and Copying of PBGC Records
  • Adjustment of Civil Penalties
  • Special Financial Assistance by PBGC

Tags: Funding of DB Plans  •  PBGC  •  Retirement Plan Administration  •  Retirement Plan Design

Text of PBGC Submission to OMB and Request for Comments on Revisions to Forms for Reportable Events; Notice of Failure to Make Required Contributions
Pension Benefit Guaranty Corporation [PBGC] Link to more items from this source
[Official Guidance]
June 11, 2021

"PBGC is modifying the Form 10 for the 'Failure to make required contributions' reportable event to provide that if payment was made to satisfy a missed contribution, the filer must submit documentation of that payment ... to give evidence that the missed contribution was made up and no risk to the plan remains before PBGC closes the event.... PBGC is modifying the [Form 200] to include a separate field showing the payment amount that triggered the notification in order to better track missed contributions and identify the amount by which liens associated with missed contributions must be updated." [Instructions for submission of comments can be found on the PBGC website.]

Tags: PBGC  •  Reporting to Government Agencies

Text of PBGC Submission to OMB and Request for Comments on Changes to Survey of Nonparticipating Single Premium Group Annuity Rates
Pension Benefit Guaranty Corporation [PBGC] Link to more items from this source
[Official Guidance]
June 11, 2021

"[PBGC's published] interest rates are intended to reflect current conditions in the annuity markets. To determine these interest rates, PBGC gathers premium rate data from insurance companies that are providing group annuity contracts to terminating pension plans through a quarterly survey. The American Council of Life Insurers (ACLI) distributes the survey and provides PBGC with 'blind' data ... PBGC is proposing several changes to the survey distributed by ACLI." [Instructions for submission of comments can be found on the PBGC website.]

Tags: Funding of DB Plans  •  PBGC

OIG Report: PBGC Needs to Strengthen Acquisition Planning for Actuarial Support Services (PDF)
Office of Inspector General, Pension Benefit Guaranty Corporation [PBGC] Link to more items from this source
June 7, 2021

27 pages. "PBGC's acquisition planning for actuarial support services did not meet its needs timely and effectively. Delays in acquisition planning led PBGC to extend the previous contracts and award follow-on contracts on a sole-source basis. Furthermore, PBGC awarded a contract to assist PBGC with planning for these contracts that had duplicative requirements of an existing contract." [Report No. EVAL-2021-09, Jun. 4, 2021]

Tags: PBGC

Annuity Purchase Update: May 2021 Interest Rates
October Three Consulting Link to more items from this source
May 27, 2021

"PBGC premiums have increased in 2021. This raises plan maintenance costs and can make Pension Risk Transfer solutions even more appealing. An annuity purchase for even a subset of plan participants would allow for plan sponsors to lock in the recent gains from increased funding status and interest rates."

Tags: Funding of DB Plans  •  PBGC

PBGC Discontinues Monthly Interest Rate Summary
Pension Benefit Guaranty Corporation [PBGC] Link to more items from this source
May 20, 2021

"Given that current and historical information about the four interest rates that currently appear on the Monthly Interest Rate Summary are available on other rate-specific webpages on PBGC.gov, PBGC is ceasing publication of the Monthly Interest Rate Summary. The May summary ... is the final summary."

Tags: Funding of DB Plans  •  PBGC

Multiemployer Pension Plans Await ARPA 2.0
NEPC Link to more items from this source
[Opinion]
May 13, 2021

"While the ARPA, in its present form, is certainly well-intentioned and a promising start, ... it requires further clarification and/or modification if it is to succeed in its goal of helping troubled pension plans achieve solvency."

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans  •  PBGC

2019 Pension Insurance Data Tables: First Installment (PDF)
Pension Benefit Guaranty Corporation [PBGC] Link to more items from this source
May 3, 2021

39 pages. "The first installment of the 2019 Data Tables for PBGC's Single-Employer and Multiemployer Programs and the private defined benefit pension system is now available. This installment includes various breakdowns of PBGC claims, guaranteed benefit payments, and summaries of PBGC operations."

Tags: PBGC  •  Retirement Plan Design

What ARPA Means for Green Zone Pension Plans
International Foundation of Employee Benefit Plans [IFEBP] Link to more items from this source
[Guidance Overview]
Apr. 29, 2021

"[1] PBGC Multiemployer Insurance Program premiums will increase to $52 per participant after December 31, 2030 (up from $31 in 2021).... [2] PBGC Multiemployer Insurance Program will be solvent for longer. CBO estimated that ARPA would push PBGC insolvency from 2027 to the mid-2040s.... [3] Plans will have the chance to comment on agency regulations."

Tags: ARPA  •  Multiemployer Plans  •  PBGC

Online Premium Filing With My PAA
Pension Benefit Guaranty Corporation [PBGC] Link to more items from this source
[Official Guidance]
Apr. 26, 2021

"The new and improved version of My PAA is now available and ready to accept electronic premium filings for plan years beginning in 2021. Resources and training materials, including a summary of the key enhancements, are available ... PBGC encourages all premium filers to review these resources."

Tags: PBGC  •  Retirement Plan Administration

D.C. Circuit: PBGC Has Discretion to Deny Pre-NOIT Lumpsum Distributions
Roberts Disability Law Link to more items from this source
Apr. 26, 2021

"Appellant argued Section 1341(c)'s prohibition on [post-notice of intent to terminate (post-NOIT)] lumpsum distributions reflects Congress' unambiguous intent to preclude PBGC from denying pre-NOIT lumpsum distributions. The court explained that silence may signal permission rather than proscription, leaving the question open to agency discretion." [Fisher v. PBGC, No. 20-7063 (D.C. Cir. Apr. 20, 2021)]

Tags: PBGC  •  Retirement Plan Administration

Text of PBGC Notice of Submission for OMB Approval: Survey of Nonparticipating Single Premium Group Annuity Rates
Pension Benefit Guaranty Corporation [PBGC] Link to more items from this source
[Official Guidance]
Mar. 31, 2021

"PBGC's regulations prescribe actuarial valuation methods and assumptions (including interest rate assumptions) to be used to determine the actuarial present value of benefits under single-employer plans in involuntary or distress terminations and the value of benefits and certain assets under multiemployer plans that undergo a mass withdrawal of contributing employers.... The interest rates are intended to reflect current conditions in the annuity markets. To determine these interest rates, PBGC gathers premium rate data from insurance companies that are providing annuity contracts to terminating pension plans through a quarterly survey.... PBGC is proposing several changes to the survey[.]"

Tags: Funding of DB Plans  •  PBGC

Text of PBGC Final Regs: Rescission of Final Rule on PBGC Guidance Documents
Pension Benefit Guaranty Corporation [PBGC] Link to more items from this source
[Official Guidance]
Mar. 31, 2021

"On August 26, 2020, the [PBGC] published a final rule on guidance implementing an Executive order entitled 'Promoting the Rule of Law Through Improved Agency Guidance Documents,' and providing policy and requirements for issuing, modifying, withdrawing, and using guidance; making guidance available to the public; a notice and comment process for significant guidance; and taking and responding to petitions about guidance.... [T]his final rule rescinds PBGC's rule on guidance."

Tags: PBGC

Upcoming Changes for PBGC Premium Filings Created with Private-Sector Software
Pension Benefit Guaranty Corporation [PBGC] Link to more items from this source
[Official Guidance]
Mar. 26, 2021

"On Monday, April 26, 2021, PBGC will launch a new version of the My Plan Administration Account (My PAA) premium filing application. The most notable changes relate to premium filings created with private-sector software, especially with respect to the 'upload' process."

Tags: PBGC  •  Retirement Plan Administration

Money — But No Lasting Fixes — for Multiemployer Pension Plans
Pensions & Investments Link to more items from this source
[Opinion]
Mar. 24, 2021

"[T]he package sidesteps action on needed structural reforms that, to date, have been impossible to enact through a bipartisan approach. In essence, the money contained in the latest stimulus bill is a fix -- some call it a bailout -- for troubled plans, and provides only a temporary reprieve for the Pension Benefit Guaranty Corp."

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans  •  PBGC  •  Retirement Plan Policy

How the COVID Relief Bill Saves Union Pensions
Northwest Labor Press Link to more items from this source
[Opinion]
Mar. 24, 2021

"The rescue is aimed at the roughly one in 10 multiemployer pension plans that are running out of money to pay benefits.... [CBO] estimates the rescue would cost about $86 billion. About 185 union pension plans are likely to receive assistance, but the number could be as high as 336."

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans  •  PBGC

ARPA Hands 30 Years of Relief to Underfunded Multiemployer Plans
Snell & Wilmer Link to more items from this source
[Guidance Overview]
Mar. 19, 2021

"[T]he Act permits the PBGC to limit applications during the first two years of the program to certain multiemployer plans with larger and/or more imminent needs ... Applications for financial assistance should be available in the next few months, as the Act requires the PBGC to issue guidance within 120 days of enactment[.]"

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans  •  PBGC

Pension Contributions: Consider Something More Than the Bare Minimum
Cheryl Gabriel, CPC, via LinkedIn Link to more items from this source
Mar. 17, 2021

"Recent COVID relief legislation changes the funding rules for single employer private pension plans ... In general, taking advantage of this permissible lower contribution will ... [mean] a longer period of paying PBGC premiums and administrative expenses, not to mention the continued internal administration of the plan."

Tags: ARPA  •  Funding of DB Plans  •  PBGC  •  Retirement Plan Administration

Text of PBGC Interest Rate Assumptions for Valuing Benefits in Single-Employer Plans, Second Quarter 2021
Pension Benefit Guaranty Corporation [PBGC] Link to more items from this source
[Official Guidance]
Mar. 12, 2021

"The second quarter 2021 interest assumptions will be 1.82 percent for the first 20 years following the valuation date and 1.68 percent thereafter. In comparison with the interest assumptions in effect for the first quarter of 2021, these interest assumptions represent no change in the select period, an increase of 0.13 percent in the select rate, and an increase of 0.02 percent in the ultimate rate."

Tags: Funding of DB Plans  •  PBGC  •  Retirement Plan Administration


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