On Monday, the Pension Benefit Guaranty Corporation (PBGC) issued a proposed rule that would, among other things, conform the agency’s reportable events regulation under the Employee Retirement Income Security Act (ERISA) and other PBGC regulations to the changes made by the Pension Protection Act of 2006 (PPA 2006). According to the PBGC’s overview of the proposed rule published in the Federal Register, the new regulations would do the following:

• amend the PBGC’s reportable events regulation to make the advance reporting threshold test consistent with the PPA 2006 funding rules and PBGC’s new variable rate premium rules;
• eliminate most automatic waivers and filing extensions currently available under the reportable events regulation;

• create two new reportable events based on provisions in PPA 2006 dealing with funding-based benefit limits and with asset transfers to retiree health benefits accounts;
• reduce reporting of active participant reductions;
• clarify the provisions dealing with missed contributions and inability to pay benefits when due;
• clarify the benefit liability transfer event;
• remove from the regulation the lists of information items to be submitted (which are listed in the filing instructions);
• require filers to use PBGC forms to file reportable events notices;
• eliminate the special ‘‘partial electronic filing’’ provision; and
• amend six other PBGC regulations to revise statutory cross-references and otherwise accommodate the statutory and regulatory changes in the premium rules.

The impetus for eliminating most automatic waivers and extensions of reportable events, according to the PBGC, is to provide the agency with early warning signs that a pension plan is in danger of termination, and allow it to mitigate distress situations. Ordinarily, plan administrators and contributing sponsors must notify the PBGC of certain reportable events within 30 days of the event’s occurrence. Other reportable events meeting a “threshold test” must be reported in advance. Currently, section 4043.4 of the reportable events regulation provides that the PBGC may grant waivers and extensions on a case by case basis. Examples of such waivers include those provided for small plans, well-funded plans, and for events affecting de minimis segments of controlled groups or foreign entities. The PBGC asserts that because reportable events usually signal financial distress and possible plan termination, eliminating the waivers and reporting extensions will enable the PBGC to take steps to encourage plan continuation.

To this end, the proposed rule includes a set of tables setting forth the various automatic waivers and extensions. The PBGC seeks public input on each such waiver and extension as to whether the agency has “struck the correct balance” between ensuring that relevant information is received in a timely manner, and the increased reporting burden on the regulated community.

Comments must be submitted by January 22, 2009, and contain the Regulation Identifier Number (RIN) 1212–AB06. Written comments may be sent by mail or hand delivery to: Legislative and Regulatory Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005–4026. Alternatively, comments may be made electronically through the Federal eRulemaking Portal: http://www.regulations.gov, via e-mail: reg.comments@pbgc.gov, or facsimile: 202–326–4224.

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