The Pension Benefit Guaranty Corp. published a final rule for partitions of multiemployer plans on Wednesday.
The Multiemployer Pension Reform Act of 2014 allows the Pension Benefit Guaranty Corp. to partition some plans to save parts of them, and to avoid having to fund the plans. A plan in danger of becoming insolvent may apply to transfer a portion of its liability into a new successor plan that would be funded by PBGC payments, under several conditions. PBGC officials estimated that they could process up to $60 million worth of partitions, with as many as six plans per year seeking it, but they have not received any applications yet.
The rule makes minor changes to an interim rule published June 19. Those changes cover information requirements, the timing of PBGC's initial review of an application for partition and how the application process will be coordinated with requests for benefit suspension. MPRA requires the PBGC to make a determination on an application within 270 days. Plan sponsors must notify participants within 30 days of submitting a partition application.
The final rule is posted on the Federal Register.