The PBGC's plan to increase reporting demands on defined benefit plans would place unnecessary burdens on them while providing little new information, pension fund advocates said Tuesday.
“It will only serve to enhance the trend to plan terminations,” said Deborah Forbes, executive director of the Committee on Investment of Employee Benefit Assets, which represents more than 100 of the largest U.S. corporate pension funds with more than $1.5 trillion in retirement plan assets.
Ms. Forbes was one of several witnesses at the Pension Benefit Guaranty Corp.'s first public hearing.
The proposed “reportable events” rule, which PBGC officials hope to finalize by the end of the year, would exempt companies from the reporting demands under certain criteria, including financial soundness measures or small business status.
While pension fund groups consider the proposal an improvement over an earlier approach that offered few exemptions, speakers Tuesday raised concerns at the hearing over methods for determining financial soundness, and what they consider a high bar for safe-harbor exemptions that would require funding levels of 120% on an ongoing basis, or 100% funded on a termination basis.
PBGC Director Joshua Gotbaum described the hearing as a way to get more input on getting useful financial information before pension plans become the agency's problem, but without placing too many demands on companies offering pension funds.
“We do have to do our jobs, but we also have to keep our customers,” Mr. Gotbaum said at the hearing. While he asked for alternative ways to assess the financial soundness of companies, he added that “telling us it won't work isn't going to cut it.”