Miscellaneous Corrections, Clarifications, and Improvements

<RULE> PENSION BENEFIT GUARANTY CORPORATION <CFR>29 CFR Parts 4000, 4006, 4007, 4010, 4041, 4041A, 4043, 4044, 4065, 4203, 4204, 4207, 4211, 4219, 4220, 4233, 4245, 4262, 4281, and 4909.</CFR> <RIN>RIN 1212-AB51</RIN> <SUBJECT>Miscellaneous Corrections, Clarifications, and Improvements</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Pension Benefit Guaranty Corporation. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Pension Benefit Guaranty Corporation (PBGC) is making miscellaneous technical corrections, clarifications, and improvements to its regulations, including its regulations on premium rates, premium due dates, and termination of single-employer plans. These changes are a result of PBGC's ongoing retrospective review of the effectiveness and clarity of its rules and of statutory changes. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> <E T="03">Effective date:</E> This rule is effective on September 15, 2025. <E T="03">Applicability dates:</E> The amendments under this final rule generally apply as of September 15, 2025. The change in 29 CFR 4007.11(d)(2), which revises the due dates for the final premium filing for certain terminating plans, is applicable to plan years beginning on or after January 1, 2026. The correction to 29 CFR 4044.52(d) regarding the rounding methodology for the expense loading charge in PBGC's benefits valuation regulation is applicable to calculations where the valuation date is on or after January 31, 2026. Many of the amendments codify policies and practices that PBGC has followed for many years, and PBGC will continue to follow those policies and practices in the interim. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Monica O'Donnell ( <E T="03">odonnell.monica@pbgc.gov</E> ), Attorney, Regulatory Affairs Division, Office of the General Counsel, Pension Benefit Guaranty Corporation, 445 12th Street SW, Washington, DC 20024-2101; 202-229-5507. If you are deaf or hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Executive Summary</HD> <HD SOURCE="HD2">A. Purpose and Authority</HD> This final rule makes miscellaneous technical corrections, clarifications, updates, and improvements to several of the Pension Benefit Guaranty Corporation's (PBGC's) regulations. These changes are based on PBGC's ongoing retrospective review of the effectiveness and clarity of its rules and on statutory changes to the Employee Retirement Income Security Act of 1974 (ERISA). PBGC's legal authority for this rulemaking comes from section 4002(b)(3) of ERISA which authorizes PBGC to issue regulations to carry out the purposes of title IV of ERISA. It also comes from section 4006 of ERISA (Premium Rates), section 4007 of ERISA (Payment of Premiums), section 4010 of ERISA (Authority to Require Certain Information), section 4041 of ERISA (Termination of Single-Employer Plans), section 4041A of ERISA (Termination of Multiemployer Plans), section 4043 of ERISA (Reportable Events), section 4044 of ERISA (Allocation of Assets), section 4065 of ERISA (Annual Report of Plan Administrator), section 4203 of ERISA (Complete Withdrawal), section 4204 of ERISA (Sale of Assets), section 4207 of ERISA (Reduction or Waiver of Complete Withdrawal Liability), section 4211 of ERISA (Methods for Computing Withdrawal Liability), section 4219 of ERISA (Notice, Collection, Etc., of Withdrawal Liability), section 4220 of ERISA (Approval of Amendments), section 4233 of ERISA (Partitions of Eligible Multiemployer Plans), section 4245 of ERISA (Insolvent Plans), section 4262 of ERISA (Special Financial Assistance by the Corporation), and section 4281 of ERISA (Benefits Under Certain Terminated Plans). <HD SOURCE="HD2">B. Major Provisions</HD> The major provisions of this rulemaking amend PBGC's regulations on: • Premium Rates, by codifying the changes of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) (Pub. L. 116-94, Division O) applicable to cooperative and small employer charity (CSEC) plans  <SU>1</SU> <FTREF/> and certain community newspaper plans;   A CSEC plan is a plan maintained by multiple employers, most of which are rural cooperatives, charities, or agricultural cooperatives or maintained by a rural telephone cooperative association. <E T="03">See</E> section 104 of the Pension Protection Act, Public Law 109-280. </FTNT> <FTNT> <SU>2</SU>  A community newspaper plan means a plan as defined in section 303(m)(5) of ERISA and section 430(m)(5) of the Internal Revenue Code. </FTNT> • Payment of Premiums, by revising the due date for the final premium for terminating plans to be the earlier of the normal premium due date or 45 days after the date the post-distribution certification is filed; • Termination of Single-Employer Plans, by setting due dates for the standard termination notice and notice of intent to terminate where the plan administrator has not provided a proposed termination date, and by adding additional criteria majority owners must meet to waive their benefits if they are owners through constructive ownership; and • Termination of Multiemployer Plans, by eliminating a requirement for terminated and insolvent multiemployer plans to file withdrawal liability information. <HD SOURCE="HD1">II. Background</HD> PBGC administers two insurance programs for private-sector defined benefit pension plans under title IV of ERISA: a single-employer plan termination insurance program and a multiemployer plan insolvency insurance program. In addition, PBGC administers a special financial assistance program for certain financially distressed multiemployer plans. The amendments in this rulemaking apply primarily to the single-employer plan termination insurance program. <HD SOURCE="HD1">III. Proposed Rule</HD> On January 21, 2025, PBGC published a proposed rule  <SU>3</SU> <FTREF/> to make miscellaneous technical corrections, clarifications, updates, and improvements to several of PBGC's regulations. PBGC provided a 60-day comment period. In response, PBGC received one comment letter, but the comment does not appear to be related to any of the provisions in the proposed rule. Except for amendments to eliminate certain multiemployer plan withdrawal liability reporting requirements and to revise the expense loading charge provided in § 4044.52(d) of the benefits valuation regulation to correct the rounding methodology, the final rule is substantially the same as the proposed rule. The final rule also includes some technical and editorial changes. <FTNT> <SU>3</SU>  90 FR 6894 (Jan. 21, 2025). </FTNT> The provisions of this final rule are discussed with respect to each of the regulations as identified below. <HD SOURCE="HD1">IV. Premium Rates—29 CFR Part 4006</HD> Sponsors of plans covered under PBGC's single-employer program are subject to rules requiring the calculation and payment of annual premiums to PBGC under section 4006 of ERISA and PBGC's regulation on Premium Rates (29 CFR part 4006), “premium rates regulation.” The SECURE Act modified the calculation of premiums under section 4006 of ERISA for a CSEC plan and the funding requirements for a community newspaper plan under section 303(m) of ERISA and section 430(m) of the Internal Revenue Code (the Code). The SECURE Act also modified section 401 of the Code to allow an employer to adopt a new pension plan and elect to treat the plan as if it had been adopted during the prior taxable year. PBGC is amending its premium rates regulation to account for these SECURE Act modifications. <HD SOURCE="HD2">A. CSEC Plans—Variable Rate Premiums</HD> The SECURE Act modified flat and variable rate premiums and changed the way the variable rate premium is calculated for CSEC plans first effective for 2019. <SU>4</SU> <FTREF/> Under section 4006(a)(3)(A) of ERISA, as amended by the SECURE Act, CSEC plans calculate the variable rate premiums that they owe to PBGC based on alternative minimum funding standards. CSEC plans now apply an alternate definition of unfunded vested benefits (UVBs). This definition refers to the funding liability of the CSEC plan as determined under section 306(j)(5)(C) of ERISA and section 433(j)(5)(C) of the Code. PBGC issued guidance  <SU>5</SU> <FTREF/> on these changes and incorporated the special premium rules for CSEC plans into the premium filing instructions starting with the 2021 filing instructions. <FTNT> <SU>4</SU>  The SECURE Act's reduced premium rates applicable to CSEC plans are reflected in § 4006.3(a) and (b) of PBGC's premium rates regulation. </FTNT> <FTNT> <SU>5</SU>  PBGC Technical Update 20-1 (2020). </FTNT> Although the rules have been in place for several years, PBGC is now amending its premium rates regulation to conform the regulation with changes made by the SECURE Act regarding how CSEC plans determine UVBs for the purpose of calculating variable rate premiums. First, new § 4006.5(h) provides the rules to calculate a CSEC plan's “premium funding target” using the alternate definition of UVBs as provided in section 306(j)(5)(C) of ERISA and section 433(j)(5)(C) of the Code. In addition, PBGC is making conforming amendments to §§ 4006.2, 4006.4(b)(1) and 4006.4(f)(2) to further conform to changes under the SECURE Act for CSEC plans. <HD SOURCE="HD2">B. Community Newspaper Plans</HD> The SECURE Act amended section 430 of the Code and section 303 of ERISA, providing that community newspaper plans may elect to use alternative minimum funding standards. <SU>6</SU> <FTREF/> Section 4006 of ERISA was not similarly amended, however, so community newspaper plans are not permitted to use these alternative standards to calculate the premiums that ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 75k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━