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CCH® PENSION AND BENEFITS — 5/10/06

PBGC issues semiannual regulatory agenda

The PBGC has issued its semiannual regulatory agenda, which lists regulations that are currently under development or review, or which will be under development or review within the next twelve months.

In its latest issuance, the PBGC has indicated that it proposes to amend current regulations to do the following: (1) make the funding status of underfunded plans more transparent to participants; (2) strengthen multiemployer plan reporting requirements; (3) amend its benefit valuation and asset allocation regulations by improving its valuation assumptions and methods; and (4) add two new reportable events. One of the reportable events is a decline in the credit rating of a controlled group member below investment grade, and the other is the filing of Form 8-K with the SEC.

In addition, the PBGC is still exploring how to improve its benefit payment rules, with regard to terminated pension plans. Such a regulation would fill in gaps in the rules, clarify matters that have previously been handled on a case-by-case basis, and address issues relative to the determination of guarantee limits, as well as the time, form, and manner of payments.

Final rule stage

Finally, the PBGC is replacing policy statements about penalties with an updated and expanded set of premium penalty and information penalty policies codified in its regulations, and is amending its regulations to provide a rule for computing liability under ERISA §4063(b) when there is a substantial cessation of operations by an employer described in ERISA §4062(e). Further, the PBGC is considering requiring electronic filing of premium declarations.

For more information on this and related topics, consult the CCH Pension Plan Guide.

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