PBGC proposes reduced reporting for most pension plan sponsors
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Proposed Pension Benefit Guaranty Corp. rules would reduce reporting requirements for more than 90% of plan sponsors, the agency said Wednesday.
Among other things, the PBGC would waive reporting of certain events, such as a reduction in the number of active participants, a change in the control group and payment of extraordinary dividends, if an employer meets certain financial soundness tests, including having positive net income and no loan defaults, or if its pension plan is fully funded.
“One way we encourage companies to keep their pensions is by cutting unnecessary red tape. That is what we're doing here. Not only is it better for business and plans, it will let us focus our efforts where they're really needed,” PBGC Director Joshua Gotbaum said in a statement.
“By limiting reporting requirements to circumstances where plans are at risk and reporting is actually useful, PBGC will be able to focus its resources,” the agency said.
The comment period on the proposed rules ends June 3. The rules, if adopted, would go into effect no sooner than Jan. 1, 2014.
The PBGC proposal comes amid a drastic reduction in the number of plans the agency insures as employers, for a variety of reasons, have moved away from defined benefit plans in favor of defined contribution plans.
As of Jan. 23, the PBGC insured 22,697 single-employer plans, an all-time low that is about half of what it was as recently as 1997, when the PBGC insured just less than 44,000 plans.
