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PBGC Expands Info on Special Financial Assistance Interim Final Rule

The Pension Benefit Guaranty Corporation (PBGC) has expanded the information it makes available concerning the effects of its Special Financial Assistance (SFA) Interim Final Rule by adding a Q&A webpage. 

The PBGC issued the interim final rule on July 9. The rule implements a Special Financial Assistance Program for financially troubled multiemployer pension plans.  

The rule: 

  • sets forth what information a plan is required to file to demonstrate eligibility for SFA and the formula to determine the amount of SFA that the PBGC will pay to an eligible plan; 
  • outlines a processing system, which will accommodate the filing and review of many applications in a limited amount of time; and 
  • specifies permissible investments for SFA funds and establishes certain restrictions and conditions on plans that receive SFA. 

The Q&A

The clarifications and additional information the PBGC is providing are as follows. 

Q. Will the PBGC change the special financial assistance interim final rule in response to comments it receives?

A. The PBGC is reviewing the comments submitted on the interim final rule and  has not yet determined whether, or to what extent, to make changes to the regulation.

Q. When will PBGC decide whether it will make changes to the interim final rule?

A. The PBGC is reviewing comments on the interim final rule and will move to publish a final rule when that review has concluded.  The final rule will reflect any changes to the interim final rule—or, in the absence of any changes—it will adopt the interim final rule “as is.”  

Q. While the PBGC is reviewing comments and considering changes to the interim final rule, will the PBGC still accept applications under that rule for priority groups that are eligible to file an application during that period?

A. Yes.

Q. Suppose a plan filed an application for special financial assistance under the interim final rule before the final rule was published in the Federal Register. What happens if the final rule changes how the amount of special financial assistance is determined?

A. If the PBGC issues a final rule that makes any changes affecting the amount of special financial assistance for a plan, any such changes will not reduce the amount of special financial assistance payable to any plan that successfully submitted its initial application for that assistance before the final rule was published in the Federal Register.  

The PBGC also expects that if changes are made in the final rule and they would result in a greater amount of special financial assistance for plans that have already applied for, or received, that assistance before the final rule was published, those plans will be able to receive the greater amount.

If a plan submits its initial application after the PBGC publishes the final rule, the provisions of the final rule—not the interim final rule—will be used to determine the amount of special financial assistance.