Small pension plans will see some relief from the PBGC in the coming months, including extended reporting deadlines and possible easing of reporting rules, Director Joshua Gotbaum said Tuesday.
Speaking on a panel of federal regulators during the ASPPA annual conference in Oxon Hill, Md., Mr. Gotbaum said his agency is also rethinking its approach to workforce downsizings that allow the PBGC to impose additional funding requirements on a plan. These are known as 4062(e) situations for the ERISA section giving PBGC authority to require more funding when 20% or more of the workforce is affected by a plant layoff or shutdown.
“PBGC exists to serve defined benefit plans. We’re trying to keep our customers, and we would like to ease the burdens for small plans,” Mr. Gotbaum told members of the American Society of Pension Professionals & Actuaries.
Mr. Gotbaum said the PBGC will extend through 2012 a rule implemented this year that granted small plans relief for reporting missed contributions. Small plans generally are considered to be those with 500 participants or less, although the definition can vary.
The agency is also looking at ways to ease reportable event requirements for small plans. Having reporting rules apply to small plans “was a mistake and we are going to correct it,” Mr. Gotbaum said.
The PBGC also is considering easing provisions for 4062(e) situations requiring additional funding in the event of layoffs if plan sponsors do not pose a risk to the PBGC.
“We’re going to rethink it so we impose responsibilities on our clients only when it is necessary. In cases where the plan sponsors do not pose a risk, we are not going to require it at all,” Mr. Gotbaum said.
“Our goal in life has to be client service. We in the government have actually made it harder to offer defined benefit plans. I think it is incumbent on us to rethink how we do that.”
In a separate announcement, the PBGC on Tuesday announced that flat-rate premiums, which are adjusted each year for inflation, will not increase for plan year 2012. The single-employer flat-rate premium will remain at $35 per participant per year, and the multiemployer flat-rate premium will stay at $9 per participant per year.