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CCH® PENSION AND BENEFITS — 03/23/09

PBGC issues final regs on information reporting for underfunded controlled groups, reflecting PPA

The Pension Benefit Guaranty Corporation (PBGC) has issued final regulations governing annual financial and actuarial information reporting that implement provisions of the Pension Protection Act of 2006 (PPA; P.L. 109-280). The PPA changed the standards for reporting for underfunded controlled groups under ERISA §4010 (Authority to Require Certain Information). The final regulations are generally effective on April 15, 2009 and apply to information years beginning after 2007.

The final regulations provide guidance on how to determine whether reporting is required based on a plan’s funding target attainment percentage. The regulations also make conforming changes to address the PPA changes affecting ERISA §4010 reporting triggers based on the imposition of certain liens or on the granting of certain minimum funding waivers.

In addition, the regulations waive reporting in certain cases for controlled groups with aggregate underfunding of $15 million or less; modify the standards for determining which plans are exempt from reporting actuarial information; and provide guidance on reporting requirements for sponsors of multiple-employer plans.

Key changes from proposed rules

The regulatory preamble notes that the final rules are “nearly the same” as the proposed rules issued in February 2008. However, there are some key differences.

The final regulations clarify that the gateway tests apply only to plans maintained as of the end of the “information year” and hence exclude plans no longer maintained by the controlled group as of the end of the information year. The final rules also clarify that fair market value of the plan’s assets, for ERISA §4010 purposes, excludes contributions receivable (i.e., contributions received by the plan after the end of the plan year). The final regulations modify the reporting requirements contained in the proposed regulations for sponsors of multiple-employer plans and provide for an alternative method of compliance for certain contributing sponsors of such plans. In addition, the actuarial reporting requirements are modified to require filers to report certain information regarding liens and outstanding minimum funding waivers.

Update to PBGC e-4010 filing application expected

In a separate news release, the PBGC said that it expects to update the e-4010 filing application and related materials (e.g., filing instructions) within a few days. Until the application is updated, filers should not attempt to enter data for a post-PPA filing; such data will be lost when the application is updated. However, first-time filers may log on to the application to set up an account and become familiar with the application, through http://www.pbgc.gov/practitioners/reporting-and-disclosure/content/page14529.html. The first filings under the new rules are due April 15, 2009.

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