The amendments would reduce the number of actuarial valuations required for certain small terminated but not insolvent plans, shorten the advance notice filing requirements for mergers in situations that do not involve a compliance determination, and remove certain insolvency notice and update requirements. The agency says the rule is needed to reduce burden on multiemployer plans and sponsors and to facilitate potentially beneficial plan merger transactions.
When a multiemployer plan terminates, the plan must perform an annual valuation of the its assets and benefits. The proposed rule would allow valuations for plans that were terminated by mass withdrawal, but are not insolvent and where the value of nonforfeitable benefits is $25 million or less, to be performed every three years instead of annually as required under the current regulations.
Under the current regulations, a merger or a transfer of assets and liabilities between multiemployer plans must satisfy certain requirements, including a requirement that plan sponsors of all plans involved in a merger or transfer must jointly file a notice with PBGC 120 days before the transaction. This proposed rule would shorten the notice period to 45 days where no compliance determination is requested.
Terminated multiemployer plans that determine that they will be insolvent for a plan year must provide a series of notices and updates to notices to PBGC and participants and beneficiaries, including a notice of insolvency. The proposed rule would eliminate the requirement to provide annual updates to the notice of insolvency.
Comments are due 60 days after publication of the proposed rule in the Federal Register, which is scheduled for January 29.