New final rules for reportable events have been announced by the Pension Benefit Guaranty Corporation, and they focus on the highest-risk plans and sponsors—a minority of those covered by the rules.
Most sponsors, according to the PBGC, will have more flexibility to decide whether waiver requirements apply—something that comments on the proposed rules asked for.
The final rule is scheduled for publication in the Federal Register on Friday. It finalizes the agency's 2013 proposed rule on reportable events and will apply to events occurring after January 1, 2016.
Reportable events, which are rare, have a financial impact on companies and the plans they sponsor.
Federal law requires that plan sponsors and administrators report such events to PBGC so the agency can fulfill its mission to maintain pension plans for the benefit of participants. Reports can indicate whether the sponsor is able to keep the plan going.
The final rule creates a new structure for waivers. The old rule was more concerned with funding levels than with potential risks that plans might not be able to continue.
The new structure focuses instead on situations where risk is higher, while reducing filing requirements for the majority of plans and sponsors where risk to the pension insurance system is lower.
As a result, PBGC anticipates about 94 percent of plans and sponsors will be exempt from many reporting requirements
“This regulation helps us get the information we need and will reduce the burden for employers whose pension plans are not at risk,” said Alice Maroni, acting director of PBGC, in a statement. She added, “We give companies flexibility to use information they have readily at hand to see if they are eligible for a waiver and need not report to us.”
Historically, just 4 percent of plans annually experienced an event and were required to report it, according to the agency. Under the final rule, PBGC said that it expects to receive filings from a reduced number of plans when compared to the old regulation. PBGC also has the authority to grant waivers on a case-by-case basis.
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