Small employers will get an enforcement pass when their workforce is let go or significantly downsized, PBGC Director Joshua Gotbaum said Tuesday.
Normally, when 20% or more of a pension plan's participants are involved, it triggers a “reportable event” so the PBGC can get involved before an employer's situation deteriorates further. Now, however, employers with fewer than 100 plan participants will not be subject to enforcement, Mr. Gotbaum told attendees at the American Society of Pension Professionals & Actuaries' annual conference in National Harbor, Md.
In 2009, agency officials proposed allowing no exceptions, but Mr. Gotbaum, whose term began in 2010, said he hopes to have a revised version out in the first quarter of 2013, depending on the presidential election. “If I'm still here, there will be an exception for small business,” Mr. Gotbaum said in an interview. “We're going to focus our resources where the greatest risk to pensioners is, and it's not small business.”
The new stance was appreciated by ASPPA conference attendees. “That makes great sense because of the cost/benefit,” Judy Miller, the ASPPA's chief of actuarial issues and director of retirement, said. “Under the old rules, they didn't have to worry about it, and (the 2009 proposed change) just didn't make sense.”