<nobr>Mar 17, 2009</nobr>

PBGC Issues Final Rule on 4010 Reporting Requirements for Underfunded Pensions

The Pension Benefit Guaranty Corporation on March 16 published in the Federal Register a final rule implementing provisions of the Pension Protection Act that changed the standards for determining which persons are required to report under section 4010 (Authority to Require Certain Information) of ERISA and made other changes to the reporting requirements. PBGC has indicated that the first filings under the regulation are due April 15.

The final rule amends part 4010 of PBGC's regulations to implement the change to ERISA section 4010(b)(1) to provide guidance on how to determine whether reporting is required based on a plan's funding target attainment percentage. It also makes conforming changes to address the PPA changes affecting the section 4010 reporting triggers based on the imposition of certain liens or on the granting of certain minimum funding waivers.

In combination with these changes, the final rule also:

• Waives reporting in certain cases for controlled groups with aggregate underfunding of $15 million or less;


• Modifies the standards for determining which plans are exempt from reporting actuarial information;


• Modifies the reporting requirements primarily to implement the PPA 2006 changes; and


• Provides guidance on reporting requirements for sponsors of multiple employer plans.

PBGC said the final rule is nearly the same as the proposed rule, except for a few key differences. The final rule:

• Clarifies that for purposes of the gateway tests, only plans that are in existence on the last day of the information year and that are sponsored by persons who are members of the contributing sponsor's controlled group on the last day of the information year are counted;


• Clarifies that fair market value of the plan's assets, for purposes of part 4010 excludes contributions receivable (i.e., contributions received by the plan after the end of the plan year);


• Modifies the proposed rule reporting requirements for sponsors of multiple employer plans and provides for an alternative method of compliance for certain contributing sponsors of multiple employer plans;


• Modifies the plan actuarial reporting requirements to require filers to report certain information regarding liens and outstanding minimum funding waivers; and


• Modifies the proposed rule requirements for certain plans to which special funding rules apply.

The final rule is effective April 15, 2009, and is applicable to information years beginning after 2007.

PBGC Final Rule

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