Labor & Employment Law Daily Wrap Up, FEDERAL REGULATIONS—PBGC proposes corrections, clarifications, and improvements to certain regulations, (Jan 17, 2025)

By Brandi O. Brown, J.D.

Among the changes are those affecting termination of single-employer plans.

PBGC administers two insurance programs for private-sector defined benefit pension plans under title IV of ERISA: (1) a single-employer plan termination insurance program and (2) a multiemployer plan insolvency insurance program. The amendments proposed in this rulemaking, scheduled to be published in the Federal Register on January 21, 2025, apply primarily to the single-employer plan termination insurance program.

The major provisions of the proposed rulemaking would amend PBGC’s regulations in three main ways. Regarding premium rates, it would codify the changes of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) (Pub. L. 116-94, Division O) applicable to cooperative and small employer charity (CSEC) plans and certain community newspaper plans. Regarding payment of premiums, it would revise the due date for the final premium for terminating plans to be the earlier of the normal premium due date or 45 days after the date the post-distribution certification is filed. And, regarding termination of single-employer plans, it would set due dates for the standard termination notice and notice of intent to terminate where the plan administrator has not provided a proposed termination date and add additional criteria majority owners must meet to waive their benefits if they are owners through constructive ownership.

Comments must be submitted within 60 days after the proposed rule is published in the Federal Register.

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