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CCH® PENSION — 05/07/10

PBGC semiannual regulatory agenda addresses cash balance plans, missing participant program

The Pension Benefit Guaranty Corporation (PBGC) has released its semiannual regulatory agenda for Spring 2010, which outlines regulations that have been selected for amendment during the next year, as well as long-term actions and regulations that have been recently finalized.

Proposed rule stage

Among the items in the PBGC's proposed rule stage are:

• Proposed amendments to its regulations prescribing rules on valuing benefits in terminating cash balance and other hybrid plans.
• A proposed rule to implement section 410 of the Pension Protection Act of 2006 (PPA; P.L. 109-280), which allows certain terminating plans not covered by the existing Missing Participants program to participate in that program.
• A proposed rule that would revise the PBGC's regulation on debt collection to conform to the Debt Collection Improvement Act of 1996, the Federal Claims Collection Standards and other legal requirements applicable to the collection of non-tax debts owed to PBGC.
• A proposed rule to amend PBGC's regulation on Benefits Payable in Terminated Single-Employer Plans (29 CFR part 4022). That regulation sets forth rules on the PBGC's guarantee of pension plan benefits, including rules on the phase-in of the guarantee.
• A proposed amendment to the PBGC's regulation on Liability for Termination of Single-Employer Plans to provide guidance as to what constitutes an ERISA §4062(e) event, on the reporting of such an event to the PBGC, and on the determination and satisfaction of liability arising from such an event.

Final rule stage

There are two items in the PBGC's final rule stage:

• One is a final rule that would amend the PBGC's current regulation on Reportable Events and Certain Other Notification Requirements (part 4043) to conform to changes under the PPA and the PBGC's regulations on Premium Rates (part 4006) and make other changes.
• A second final rule would implement section 404 of the PPA, which amended Title IV of ERISA to provide that when an underfunded, PBGC-covered, single-employer pension plan terminates while its contributing sponsor is in bankruptcy, sections 4022 and 4044(a)(3) of ERISA are to be applied by treating the date the sponsor's bankruptcy petition was filed as the termination date of the plan.

Long-term actions

The items slated for Long-Term Actions include the following:

• Assessment of and relief from information penalties.
• A proposed rule to amend PBGC's regulation on Payment of Premiums (29 CFR part 4007).
• A proposed amendment to the PBGC's benefit valuation and asset allocation regulations.

Source: The PBGC Agenda for Spring 2010 is available at www.RegInfo.gov.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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