PBGC Adds Updated Mandatory Distributions Dollar Limit to Agenda

The Pension Benefit Guaranty Corporation’s (PBGC) regulatory agenda now includes proposed rules to reflect updates to the dollar limit for mandatory distributions under SECURE 2.0. 

The Office of Information and Regulatory Affairs of the Office of Management and Budget (OMB) has outlined the PBGC spring 2023 regulatory agenda, and the status of the rules that are part of it. OMB notes that since fall 2022, technical amendments to PBGC rules to reflect those updates to the mandatory distribution dollar limits have been added to the agenda. It also notes that the rules on actuarial assumptions for determining an employer’s withdrawal liability listed in the fall 2022 agenda now will be issued in final form. 

Proposed Rules

The following rules are in the proposed stage: 

Valuation Assumptions and Methods: Interest and Mortality Assumptions for Asset Allocation in Single-Employer Plans and Mass Withdrawal Liability Determination in Multiemployer Plans. Would update the interest, mortality and expense load assumptions used to determine the present value of benefits under the asset allocation regulation for single-employer plans and for determining mass withdrawal liability payments for multiemployer plans. 

Multiemployer Plan Guaranteed Benefits. Would clarify and codify policies on the determination of guaranteed benefits for participants in multiemployer plans. 

Improvements to Rules on Recoupment of Benefit Overpayments. Would improve the PBGC's recoupment rules.

Penalties for Failure to Provide Certain Notices or Other Material Information. Would codify the PBGC’s policy for assessing and waiving monetary penalties for failure to timely provide certain required notices or other material information.

Miscellaneous Updates, Clarifications, and Improvements. Would update, clarify, and improve PBGC regulations, primarily to address SECURE Act changes affecting premium rates, benefits payable in terminated single-employer plans, termination of single-employer plans, and allocation of assets in single-employer plans.

Final Rules 

The following rules are in the final stage: 

Benefit Payments and Allocation of Assets. Makes clarifications and codifies policies in PBGC's benefit payments and valuation regulations.

Adjustment of Civil Penalties. This final rule is required annually to amend the PBGC’s civil penalty regulations to adjust for inflation the maximum penalty provided for in Sections 4071 and 4302 of ERISA.

Actuarial Assumptions for Determining an Employer’s Withdrawal Liability. Would prescribe actuarial assumptions which may be used by a multiemployer plan actuary in determining an employer’s withdrawal liability.