PBGC seeking comments regarding data collection
The pension agency says it needs information from administrators to locate participants and assist beneficiaries.
The Pension Benefit Guaranty Corporation is seeking comment regarding the information that it collects from plan administrators of terminated pension plans.
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Title IV of the Employee Retirement Income Security Act allows the PGBC to hold retirement benefits from terminated pension plans until missing participants or their beneficiaries can be located. However, PGBC needs information from administrators in order to locate those participants, determine the form and amount of benefits they should receive, and direct beneficiaries to institutions holding any other assets they may be entitled to.
“The process of closing out a terminated retirement plan involves the disposition of plan assets to satisfy the benefits of plan participants and beneficiaries. One difficulty faced by plan administrators in closing out terminated plans is how to provide for the benefits of missing persons,” the agency wrote in its request for comments. “PBGC, as administrator of the Missing Participants Program, relies on information provided and certified to by the plan administrator or plan sponsor as applicable.”
The program was limited to single-employer pension plans covered by ERISA’s Title IV. Then, the Pension Protection Act of 2006, and a 2017 rule from PBGC, extended the program to defined contribution plans, and pensions not covered by Title IV. Plans covered by Title IV must participate in the program, while others may do so on a voluntary basis.
PGBC wants to expand the information it collects in order to correctly withhold taxes on benefits paid:
- A breakdown of qualified and nonqualified amounts transferred to PGBC from Roth accounts
- For nonqualified Roth amounts, the date of the first Roth contribution
- The portion of a participant’s benefits that should be treated as foreign-source income, and how the determination was made for pension plans
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PGBC is requesting that the Office of Management and Budget approve its request for three years. The agency estimates it will receive 226 filings annually under the program, and require 646 hours and $115,650 to process it.
PBGC’s request was published in the Federal Register on Tuesday. Interested parties have until Jan. 7, 2021 to submit comments.
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