PBGC Seeks to Amend Rules for Administrative Review of its Decisions

The Pension Benefit Guaranty Corporation (PBGC) has issued a proposed rule that would amend its rules for administrative review of agency decisions. The proposed rule would make all agency coverage determinations subject to appeal and clarify the procedures for requesting administrative review.

The PBGC’s Rules for Administrative Review of Agency Decisions provide procedures so that those aggrieved by its determinations have an opportunity to present their positions to the PBGC before it makes a final decision. To balance the need to provide fair and effective administrative review and the need to minimize the time and cost entailed in obtaining PBGC review of its decisions, the PBGC developed an administrative review system with reconsideration and appeal processes.

This proposed rule would amend the PBGC’s rules for administrative review of its decisions to clarify, simplify and make other editorial changes to their language, and codify PBGC practices.

Major Provisions

The major provisions of the proposed rule would subject to appeal:

• all coverage determinations; and
• all determinations concerning the allocation of a trusteed plan’s assets upon plan termination, except for determinations concerning the distribution of residual assets, which would remain subject to reconsideration.

They also would clarify:

• where to send requests for extensions on appeals and extensions for reconsideration; and
• that persons seeking administrative review may request information in the PBGC’s possession by using the PBGC’s procedures for requests under the Freedom of Information Act and the Privacy Act.

Immediate Effective Date

Under an exception in Section 4003.22(b) of its Rules for Administrative Review of Agency Decisions, the PBGC may order that an initial determination is effective on the date it is issued. When it does so, any person aggrieved by the initial determination has exhausted all available administrative remedies and may seek judicial review of PBGC’s determination in an appropriate court.

The PBGC proposes to clarify this exception by providing that it does not apply to:

• initial determinations related to a participant’s or beneficiary’s benefit entitlement and the amount of benefit payable under a covered plan;
• whether a domestic relations order is or is not qualified; and
• whether benefits are payable under ERISA Section 4050 of ERISA and part 4050.

The PBGC proposes to further clarify Section 4003.22(b) by providing that when it issues an order making an initial determination effective on the date of issuance, a person aggrieved by the initial determination has no right to request review under subparts C and D, consistent with PBGC’s long-standing practice, and has exhausted all administrative remedies.

Information Gathering

To make the information-gathering process more efficient and transparent for those seeking administrative review, the PBGC proposes to reorganize Section 4003.3 and to clarify that persons may request information using the PBGC’s procedures for FOIA and Privacy Act requests.

Extension of Time

Regarding extensions of time, the PBGC proposes:

• Deleting Part 4003.4(b) of the Rules for Administrative Review of Agency Decisions concerning requests for extensions of time related to disaster relief and reorganizing the section to contain a single paragraph concerning a request for an extension of time when a document must be filed within a certain period.
• Including language that provides that requests for extension of time for submitting appeals should be sent to the Appeals Board, while requests for extension of the submission of requests for reconsideration should be sent to the department that issued the initial determination.

Comments Invited

The proposed rule will be published in the Federal Register on Friday, Oct. 4, 2019, with a 60-day public comment period. Comments may be submitted by any of the following methods:

• Through the federal rulemaking portal: http://www.regulations.gov.
• Via email to: [email protected]. Refer to RIN-1212-AB35 in the subject line.
• By mail or hand delivery to: Regulatory Affairs Division, Office of the General Counsel, Pension Benefit Guaranty Corporation, 1200 K Street NW, Washington, DC 20005-4026.

All submissions must include the agency’s name (Pension Benefit Guaranty Corporation, or PBGC) and the RIN for this rulemaking (RIN 1212–AB35).