The Pension Benefit Guaranty Corp. wants to treat the date when a pension plan sponsor files for bankruptcy as the plan termination date for some purposes.
The PBGC has published that proposal and others in a proposed rule that appears today in the Federal Register.
Other sections deal with what benefits are guaranteed by the PBGC and the priority list for distributing the assets of a terminated plan.
The proposed regulations would implement Section 404 of the Pension Protection Act of 2006, which deals with terminations of underfunded, PBGC-covered, single-employer pension plans with sponsors that have sought bankruptcy court protection.
The PPA changes the data for determining what benefits the PBGC will guarantee to the sponsor bankruptcy date, rather than the plan termination date. That change, in most cases, will “reduce the amount of guaranteed benefits,” officials warn in a preamble to the proposed regulations.