Almost a year to the day after providing relief for the 2011 plan year, the PBGC released PBGC Technical Update 11-1. This notice provides guidance for the 2012 plan year on how to comply with the proposed amendments to the reportable events regulations.
Summary of Important Guidance
Similar to the prior pronouncements, the new Technical Update:
– Extends the waiver of the requirement to report a missed quarterly contribution for small pension plans under ERISA §4043.25. This waiver is valid as long as the plan (1) has fewer than 25 participants or (2) has between 25 and 100 participants and files a simplified notice with the PBGC. In both cases, the reason for the missed quarterly contribution cannot be due to financial inability.
– Affirms that the assets and liabilities used to calculate the 2011 PBGC variable rate premium should be used to determine reporting requirements for events occurring during the 2012 plan year. This includes determining whether the plan is eligible for reporting waivers, reporting extensions, or is subject to advance reporting requirements.
Technical Update 11-1 also mentions two other small PBGC-related items:
- It acknowledges that the reaction to the proposed 2009 reportable event regulations has been largely negative. So, the PBGC will issue new proposed regulations that “will more effectively target troubled plans and sponsors while reducing burden for those that are financially sound.”
- If the PBGC issues a final rule before the end of 2012, then the guidance in Technical Update 11-1 will be superseded by the final rules.
After three years of temporary reportable event relief, it seems likely that the new proposed regulations will incorporate some of this relief on a permanent basis. We’ll just have to wait and see whether the rules are formalized in 2012 or whether we get another extension as an early Christmas present next year.