The Pension Benefit Guaranty Corporation (PBGC) today announced a final rule amending the special financial assistance (SFA) regulation to add an exception process for certain withdrawal liability conditions that apply to a plan that receives SFA. The amendment is responsive to public comments received on the SFA final rule published on July 8, 2022.
Under the Employee Retirement Income Security Act of 1974, an employer that withdraws from an underfunded multiemployer plan may owe withdrawal liability to the plan. The amount owed represents the withdrawn employer’s share of the amount of the plan’s unfunded vested benefits. PBGC’s final rule implementing the SFA program included conditions on the interest rate and methodology SFA plans must use to calculate withdrawal liability.
Under this new rule, an exception would be available under narrow circumstances where application of the withdrawal liability conditions in the final rule would result in an increase in employer withdrawals. A plan may submit an exception request either before the plan’s initial SFA application is filed or before a revised application is filed.
The final rule is available for public inspection today at FederalRegister.gov and is scheduled for publication in the Federal Register on January 26, 2023. The final rule is effective January 26, 2023.
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