In what has become an annual rite of winter, the PBGC recently released PBGC Technical Update 13-1 extending relief from the proposed amendments to the reportable events regulations for certain small pension plans. However, unlike previous years’ relief, the new technical update provides guidance for all plan years after 2012 (or until new proposed or final rules are released) and not just a one-year extension.
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 PBGC variable rate premium should be used to determine reporting requirements for events occurring during the following plan year. This includes determining whether the plan is eligible for reporting waivers, reporting extensions, or is subject to advance reporting requirements.
Of course, the relief in Technical Update 13-1 will be superseded once the PBGC issues final rules.
After four years of temporary reportable event relief, it seems likely that the new proposed regulations will eventually incorporate some of this relief on a permanent basis. At the very least, Technical Update 13-1 provides the stability of knowing that reportable event relief will continue until new rules are released and that we won’t have to wait for the PBGC to reaffirm the relief annually.