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Compliance July 19, 2007
PBGC Issues Final Procedures for Multiemployer Plan Elections
July 19, 2007 (PLANSPONSOR.com) - The Pension
Benefit Guaranty Corporation (PBGC) has issued final
procedures for multiemployer plan elections under Section
1106 of the Pension Protection Act of 2006 (PPA).
Reported by Rebecca Moore
Under the procedures, a plan making an election under the Employee Retirement Income Security Act (ERISA) must demonstrate that it would have been a multiemployer plan but for the existing election. According to the PBGC document, the specific information required to demonstrate compliance with section 3(37) of ERISA includes the identity of the contributing employers to the plan, information on whether trades or businesses that are required to contribute to the plan are under common control, and copies of collective bargaining agreements for the three largest (in amount of contributions) contributing employers to the plan.
Section 3 of the procedures prescribes the requirements for giving notice of an election to the PBGC, including due dates, how to file, and contents of the notice which are necessary to satisfy the statutory requirements for an election. In addition, a checklist of information and documents for an election filing is found at the end of the procedures.
The PBGC said there may be some delay before it is able to determine that the information requirements set forth in the procedures are met, depending on the number of filings the PBGC receives and the volume of material submitted with each file. However, a plan that has properly filed an election is not prohibited from acting in accordance with the election solely because the PBGC has not yet issued a decision approving or disapproving the election on or before August 17, 2007 – the statutory deadline for making an election. If the election is disapproved, any actions taken by the plan will need to be corrected.
Under Section 1106 of the PPA, certain plans are allowed to elect to be multiemployer plans pursuant to procedures prescribed by the PBGC. A plan is eligible for the election if it is a plan revoking a previous election to remain a single-employer plan under section 3(37)(E) of ERISA, or if it is a plan with respect to which substantially all employer contributions were made by tax-exempt employers.
The PBGC requested in June that the Office of Management and Budget approve its requirement that employers submit information for three prior years when requesting multiemployer plan status (See PBGC Seeks Approval for Multiemployer Plan Information Request ). The OMB approved the procedures on July 18.
The final procedures are here .
