PBGC Seeks OMB Nod on Modifications to Info Collection

The Pension Benefit Guaranty Corporation (PBGC) is seeking the approval of the Office of Management and Budget (OMB) on two modifications of methods of collecting information. 

Reportable Events

The PBGC seeks OMB approval of modifications to two forms by which it is informed about reportable events, as well as how notices are filed: 

• Form 10. The PBGC seeks approval to modify the Form 10 for the “Failure to make required contributions” reportable event so that it provides that if payment was made to satisfy a missed contribution, the filer must submit documentation of that payment; for example, a copy of the cancelled check or wire transfer, etc. The PBGC argues that before it closes the event, documentation is needed to give prove that the missed contribution was made up and that no risk to the plan remains.
• Form 200, Notice of Failure to Make Required Contributions. The PBGC requires filers to report the due date of the required payment that triggered the notification to PBGC and to calculate the cumulative amount of unpaid balances. The PBGC seeks approval to modify the form to include a separate field showing the payment amount that triggered the notification. It argues that this will help it to better track missed contributions and identify the amount by which liens associated with missed contributions must be updated.

The instructions for electronically filing notices about reportable events say that they may be filed in two ways:

1. Using the 4043 module of PBGC's e-filing portal; or 
2. Emailing a completed form and any required attachments to [email protected].

The PBGC seeks to eliminate the email option for filings due after Sept. 30, 2021; thus, starting in Oct. 1, 2021, these filings would be submitted via PBGC’s e-filing portal.

The PBGC notes that OMB approval of information collection through Form 10 expires March 31, 2023 and its approval of information collection through Form 200 ends Feb. 28, 2022. The PBGC is asking the OMB to extend approval of these information collections for three years with these modifications. 

Comments Welcome. The PBGC will accept written comments and recommendations on these modifications for 30 days after they are published in the Federal Register. Comments should be sent to http://www.reginfo.gov/public/do/PRAMain. 

Survey Concerning Premium Rate Data

The PBGC’s regulations prescribe actuarial valuation methods and assumptions, including interest rate assumptions, to be used to determine the actuarial present value of benefits under single-employer plans in involuntary or distress terminations and the value of benefits and certain assets under multiemployer plans that undergo a mass withdrawal of contributing employers. Each month immediately before a new calendar quarter starts, the PBGC publishes the interest rates to be used under those regulations for plans terminating or undergoing mass withdrawal during the next quarter.

To determine these interest rates, the PBGC uses a quarterly survey to gather premium rate data from insurance companies that provide group annuity contracts to terminating pension plans. The survey is voluntary and is directed at approximately 20 insurance companies. The PBGC also uses the information from the survey in determining the interest rates it uses to value benefits payable to participants and beneficiaries in PBGC-trusteed plans for purposes of its financial statements.

The American Council of Life Insurers (ACLI) distributes the survey and provides the PBGC with “blind” data (that is, the PBGC is unable to match responses with the insurance companies that submitted them). 

The PBGC seeks OMB approval of the following changes to the survey.

• Addition of a question asking for specific information about the interest assumptions underlying the annuity premium rates reported in parts I and II of the survey. The PBGC says that this information will allow it to better analyze annuity price data provided in the survey. 
• Increases to the dollar ranges in the questions on respondents’ group annuity business in part III. This, says the PBGC, will allow the survey to continue to capture the variability and range of business accepted by respondents as the prices of plan termination annuity contracts increase with inflation.
• Changes to the instructions to clarify that: (1) respondents should provide pricing information only for full plan terminations (and transactions priced consistently with full plan terminations); (2) the annuity premium rates provided should include reductions for investment expenses but exclude administrative expenses; and (3) respondents should assume that plan provisions are straightforward and do not contain significant levels of anti-selection, expensive options or subsidies. 
• Addition of a confirmation that administrative expenses are excluded from pricing information and an option to comment on any exceptions. This, the PBGC says, will allow it to compare pricing information amongst survey responses when respondents are unable to completely exclude administrative expenses from pricing information.
• Consolidation and simplification of former parts III and IV into a new part III and elimination of questions asking for information PBGC no longer uses. 
• Modification of a question asking for the volume of respondents’ plan termination annuity business so that it requests annual data instead of quarterly data to reduce volatility in survey responses. 
• Addition of a question soliciting feedback on how the PBGC could improve the survey process. 
• Addition of the flexibility to conduct the survey electronically.

Comments Welcome. The PBGC will accept written comments and recommendations on these modifications for 30 days after they are published in the Federal Register. Comments should be sent to http://www.reginfo.gov/public/do/PRAMain.