ERIC has submitted a letter to the Pension Benefit Guaranty Corporation (PBGC) in response to questions posed by the PBGC at the recent hearing on the reportable events proposed regulations. A special thanks to Michael Francese of Covington & Burling, who testified on behalf of ERIC and provided valuable input on the follow-up letter.
This letter supplements our prior comment letter and testimony on this issue. In particular, our recent letter discussed in further detail that:
- Companies will need to restructure their credit agreements as a result of the proposed regulations;
- Many financially sound companies secure their receivables to reduce financing costs;
- Complying with the proposed regulations would be costly for companies;
- 98% of the largest U.S. defined benefit plans will not qualify for the safe harbor for plans that are 120% funded on a premium basis; and
- The PBGC should not create a new approach whereby it uses a limited number of factors in the company safe harbor.