One Q&A addresses the low-default-risk safe harbor, which was added by the PBGC's 2015 final reportable events regulations (final regulations) (for more information on the final regulations, see Legal Update, PBGC Issues Final Reportable Events Regulations That Provide Additional Reporting Waivers and Practice Note, Reportable Events for Pension Plans Under ERISA Occurring On or After January 1, 2016).

The low-default-risk safe harbor provides a waiver from reporting for five reportable events:

For more information on the low-default-risk safe harbor, see Practice Note, Reportable Events for Pension Plans Under ERISA Occurring On or After January 1, 2016: Company Low-Default-Risk Safe Harbor.

A company meets the low-default risk safe harbor if it satisfies at least four out of seven possible criteria. One of these criteria (the no missed contributions criterion) requires that during the two year period ending on the qualifying date, there have been no failures to make a required contribution to the plan (unless reporting was waived for that event).

One Q&A focused on the no missed contributions event criterion. The PBGC clarified that when determining whether the low-default-risk waiver applies, even though a missed contribution event only has to be reported by the administrator and sponsor of the plan to which the missed contribution was owed, a company must take into account a missed contribution to a plan that it does not sponsor if the company is a member of the plan's controlled group.

The PBGC answered two questions on the definition of plan participant for purposes of:

The PBGC representatives stated that the PBGC's intention was that the active participant reduction reportable event would use the same definition of participant that is used for premium payment purposes. However, the PBGC representatives stated that for both the active participant event and Section 4010 reporting, the filer's definition of participant will be accepted if it is reasonable and used consistently among all plans. For example, a plan sponsor's consistent use of a participant definition used for purposes of the Form 5500 participant count would be considered reasonable.

One Q&A deals with an active participant reduction that is due to a single-cause event (for more information on this reportable event, see Practice Note, Reportable Events for Pension Plans Under ERISA Occurring On or After January 1, 2016: Active Participant Reduction).

An employee reduction resulting from a single-cause event is disregarded to the extent it:

(29 C.F.R. § 4043.23(c).)

JCEB representatives asked if the plan may disregard a reduction under 29 CFR Section 4043.23(c) regardless of when the ERISA Section 4063(a) report is due, as long as the ERISA Section 4063(a) report is timely made. The PBGC representatives explained that the PBGC intends 29 C.F.R. Section 4043.23(c) to apply only after the ERISA Section 4063(a) report was filed.

However, due to the changes to ERISA Section 4062(e), PBGC staff believe that the issue is "largely moot" because it expects few ERISA Section 4062(e) reports to be filed, which means there will be only few occasions to apply 29 C.F.R. Section 4043.23(c).

JCEB representatives provided an example where a pension plan's active participants drop from 1,000 to 790 in 2016 because of a mass layoff. 20 of those layoffs relate to (and are included in the) three year lookback for a cessation of operations that will occur two years later (in 2018). The 2018 cessation is timely reported within 60 days after the cessation. JCEB asked if the plan could disregard the 20 active participants in determining whether a "single-cause" active participant reduction event occurred. The PBGC representatives responded that since the ERISA Section 4063 report is made in 2018 and the active participant reduction event would have been required to be reported on Form 10 in 2016, there is nothing to disregard in this example.

A reportable event occurs when a transaction results or will result in at least one person ceasing to be a member of the plan's controlled group, other than by a merger involving members of the same controlled group (29 C.F.R. § 4043.29(a)) (see Practice Note, Reportable Events for Pension Plans Under ERISA Occurring On or After January 1, 2016: Contributing Sponsor or Controlled Group Changes).

One Q&A focuses on this reportable event and provides an example in which Company X, which sponsors a defined benefit plan (Plan A), engages in an asset sale with Company Y that results in Company Y becoming the sponsor of Plan A. Neither Company X or Company Y is a member of a controlled group. Companies X and Y sign an agreement stating that Company Y will assume sponsorship of the plan on closing at a later date. Company X is eligible for the low-default-risk safe harbor at all times, and Company Y is never eligible for the low-default-risk safe harbor. JCEB representatives asked who is the "post-event" contributing sponsor for purposes of determining whether the low-default-risk safe harbor is available for this event.

The PBGC representatives answered that the post-event contributing sponsor for determining if the low-default-risk safe harbor applies is Company X because:

However, the PBGC representatives noted that the identity of the post-event contributing sponsor may depend on facts and circumstances. For example, if Company X and Company Y completed the transaction described in the example in a sign-and-close structure where the parties execute an agreement and consummate the transaction simultaneously, Company Y would be the post-event contributing sponsor, and the low-default-risk safe harbor would not apply to this event.

For more information on the low-default-risk safe harbor, see Practice Note, Reportable Events for Pension Plans Under ERISA Occurring On or After January 1, 2016: Company Low-Default-Risk Safe Harbor.

One Q&A deals with the possibility of obtaining a waiver from the financial and actuarial reporting required under ERISA Section 4010 (29 U.S.C. § 1310). Specifically, the question discusses how 29 C.F.R. Section 4043.4(d) provides a waiver from filing a reportable event notice (Form 10 or Form 10-A) or Form 200 applies if the notice date is on or after the date on which:

(29 U.S.C. § 1342; 29 C.F.R. § 4043.4(d); see Practice Note, Reportable Events for Pension Plans Under ERISA Occurring On or After January 1, 2016: Form 10.)

The PBGC representatives explained that there is not a similar rule that the PBGC would apply to the annual financial and actuarial information reporting requirement under ERISA Section 4010. There is no automatic waiver from the required reporting under ERISA Section 4010. However, if a plan sponsor believes that a reporting waiver would be appropriate, the plan sponsor may file a waiver request with the PBGC based on the facts and circumstances. For more information on the requirements of ERISA Section 4010, see Legal Update, PBGC Issues Final Regulations on Pension Plan Reporting Under ERISA Section 4010 and Practice Note, Guide to ERISA Provisions in Credit and Financing Agreements: Reporting Obligations (ERISA Sections 4010, 4043).

One Q&A focused on the common reporting delinquencies that the PBGC encounters. In the PBGC's written response, the PBGC stated that the most common reportable events and Form 200 reporting delinquencies include:

(For more information on Form 200, see Practice Note, Reportable Events for Pension Plans Under ERISA Occurring On or After January 1, 2016: Form 200.)

The PBGC's response notes that for all of these errors, the PBGC:

Regarding reporting errors under ERISA Section 4010 (29 U.S.C. § 1310), PBGC representatives stated that the most common reporting delinquency is failure to comply with PBGC Regulation 4010.6(a)(2). This provision applies to a filer who is not required to file for the year immediately following the year a full ERISA Section 4010 filing was required. The filer in that situation must submit information to the PBGC demonstrating why the filing is not required. The PBGC representatives noted that filers fail to comply with this requirement only 10 to 12 times per year, and the PBGC notifies the delinquent filers by email.

The PBGC representatives also noted that the PBGC generally will not deny a waiver request solely for failure to comply with PBGC Regulation 4010.11(d), which requires that a waiver be requested at least 15 days in advance of the reporting deadline. However, filers should make every effort to comply with that requirement.