WASHINGTON, December 13, 2022 – The ERISA Industry Committee (ERIC) today submitted comments recommending revisions to the Pension Benefit Guaranty Corporation’s (PBGC) proposed rule, “Actuarial Assumptions for Determining an Employer’s Withdrawal Liability,” published on October 14, 2022 in the Federal Register.
The PBGC’s proposed regulation sets standards for the actuarial assumptions multiemployer pension plans may use in assessing liability when a contributing employer withdraws from the plan. The proposal permits a range of assumptions to be used in assessing withdrawal liability, but states that the interest rate assumption would not be subject to a “reasonableness” standard.
“Thousands of employers, large and small, contribute to multiemployer plans on behalf of millions of workers. Regulators should ensure that plans charge employers leaving the system withdrawal liability based on reasonable actuarial assumptions that reflect the plan’s circumstances,” said James Gelfand, President of ERIC.
In its letter to the PBGC, ERIC proposed adding a requirement that actuarial assumptions used in assessing withdrawal liability be reasonable, consistent with other legal requirements. ERIC also noted that the most conservative withdrawal assumptions are not appropriate for every circumstance but would be always permissible under the rule. Finally, ERIC highlighted that the proposed rule did not analyze important costs to employers.
“ERIC looks forward to working with the PBGC and others to continue to improve the multiemployer system,” added Gelfand.