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2017 JCEB Report Provides Nonbinding PBGC Statements
Practical Law Legal Update w-010-0811 (Approx. 5 pages)
2017 JCEB Report Provides Nonbinding PBGC Statements
by Practical Law Employee Benefits & Executive Compensation
| Published on 31 Aug 2017 • USA (National/Federal) |
The Joint Committee on Employee Benefits (JCEB) of the American Bar Association (ABA) issued a report containing nonbinding statements from the Pension Benefit Guaranty Corporation (PBGC) on a range of topics affecting defined benefit plans, including regulatory reform, the PBGC's early warning program and multiemployer plan insurance program, reportable events, plan terminations, and PBGC premiums.
The Joint Committee on Employee Benefits (JCEB) of the American Bar Association (ABA) issued a report containing nonbinding statements from the Pension Benefit Guaranty Corporation (PBGC) that were made at the May 10, 2017 meeting between JCEB representatives and PBGC staff.
As was the case with previous PBGC-JCEB meetings, the statements made by PBGC staff at the May 2017 meeting reflect the unofficial, individual views of the PBGC staff as of the time of the discussion, which do not necessarily represent the official position of PBGC, and the PBGC staff do not approve or endorse the contents of the JCEB report.
However, unlike previous meetings between JCEB representatives and PBGC staff, the 2017 meeting did not follow a question and answer format. Instead, there was an informal discussion of seven broad topics that were agreed upon in advance, including:
- The impact of Executive Orders 13771 and 13777 on the PBGC. The Orders seek to reform the federal regulatory process and minimize the burden of new regulations. The PBGC views the forthcoming final missing participants rule as a deregulatory action under the Executive Orders because it is expected to expand choices for both employers and participants. The PBGC hopes that the final rule will be published, effective, and available to plans terminating as of and after January 1, 2018. The PBGC also views its proposed rule to facilitate mergers of multiemployer plans as deregulatory (for more information on the proposed rule, see Legal Update, PBGC Issues Proposed Regulations on Mergers and Transfers Between Multiemployer Plans).
- The PBGC's early warning program (for information on the early warning program, see Practice Note, Defined Benefit Plans: Distress and Involuntary Terminations).
- The PBGC's multiemployer pension plan insurance program (for information on multiemployer pension plans, see Practice Note, Multiemployer Pension Plans).
- Reportable events for defined benefit (pension) plans under Section 4043 of the Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C. § 1343) (for information on reportable events, see Practice Note, Reportable Events for Pension Plans Under ERISA Occurring On or After January 1, 2016).
- The PBGC's practices governing the selection of pension plans for standard termination audit (for information on standard terminations, see Practice Note, Qualified Retirement Plans in Mergers and Acquisitions: Plan Termination: Defined Benefit Plans).
- The PBGC's redesigned website.
- PBGC premiums and pension plan de-risking (for information on pension plan de-risking, see Practice Notes, Defined Benefit Plans: Lump-Sum Windows, Freezing Defined Benefit Plans, and Qualified Retirement Plans in Mergers and Acquisitions: Legal Options Available to the Parties).
Practical Implications
Pension plan sponsors should review the JCEB report but remember that the PBGC's statements are nonbinding. Sponsors should also be mindful of the changes to the format of the PBGC-JCEB meeting.