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To comply with ERISA, the final rule allows these plans to use the most recently performed valuation for
the next two plan years. As a result, the plan could technically move in and out of three-year or annual
valuation cycles as the value of a plan's non-forfeitable benefits changes.

All other plans must continue to perform valuations annually, except:
plans that received financial assistance from the PBGC under ERISA Section 4261
plans that are closed out in accordance with PBGC guidance

These two exceptions remain from the existing regulations.

Mark Johnson, Ph.D., J.D.

Consulting services in:

Fiduciary liability
401(k) and ESOPs
Pension benefits
Cash balance conversions
Group life & health plans
Health plan reimbursement
Long term disability benefits
Retiree medical plans
Severance benefits
Survivor benefits
Third party administrators
VEBA plans

PBGC Changes Multi-Employer Plan Regulations to Ease
Burdens on Plans and Sponsors
By Mark Johnson, Ph.D., J.D.

Acting now to help multi-employer plans function proficiently in
the future, the Pension Benefit Guaranty Corporation (PBGC)
recently announced amendments to existing regulations placed on
multi-employer plans. These changes aim to reduce administrative
costs and preserve assets by: making plans and their sponsors more
effective and efficient; reducing regulatory burdens; and facilitating
plan merger transactions.

The agency published its final rule on May 28, 2014 in the Federal
Register. These revisions, which become effective on June 27,
2014, also impact the regulatory actions on annual valuations,
insolvency notices and updates. The final rule has not changed from
the proposed rule the agency set forth on January 28, 2014.

Valuations for Mass Withdrawals May Not Be Needed Annually

When a multi-employer plan terminated under the existing
regulations, a mandatory annual valuation of the plans assets and
benefits had to be performed to determine whether the plan had to
exclude benefits that were not eligible for the PBGC's guarantee.

Now, under the amended rule, valuations for plans terminated by
mass withdrawal may occur every three years if:
that plan is not insolvent
the value of non-forfeitable plan benefits is $25 million or less
ERISA Benefits Consulting, Inc. 817-909-0778
Filing Requirements for Mergers are Shortened

Plans preparing to merge are required to jointly file a notice with PBGC before the transaction. The final
rule now shortens the time required to notify the agency from 120 days to 45 days in cases where a
compliance determination isn't requested.

Existing reporting requirements will remain in effect when:
a compliance determination is requested
transactions involve a transfer of plan assets or benefit liabilities, due to the fact that transfers take
more time to analyze

The shortened reporting requirement still gives the PBGC sufficient time to review merger notices but
alleviates much of the agencys need to grant waivers.

Final Rule Ends Requirement for Annual Insolvency Notices and Updates

Current PBGC regulations stipulated that if a multi-employer plan was to become insolvent, it had to
provide a series of notices to PBGC, plan participants and beneficiaries on an annual basis. The final rule
now ends this requirement, since the agency has found that once a multi-employer plan becomes
insolvent, it typically stays that way. Therefore, annual updates havent been useful to PBGC or the plan
participants and beneficiaries.

In addition, the final rule eliminates the requirement for a plan sponsor of a terminated multi-employer
plan to provide annual updates to the notice of insolvency.

Systematic & Practical

PBGC currently insures more than 1,400 multi-employer plans covering more than 10 million people in
industries such as construction, mining, supermarkets, transportation, manufacturing, and hotels and

In a news release issued by the agency, the U.S. Chamber of Commerce, a trade group that represents
American businesses, applauds these revisions because they address concerns that many reporting
requirements are too costly and lack merit.

The Chamber said the rule, acknowledges this reality and eliminates requirements where the
administrative burdens and costs outweigh the usefulness of the information provided."

ABOUT THE AUTHOR. Mark Johnson, Ph.D., J.D., is a highly experienced ERISA expert. As a
former ERISA Plan Managing Director and plan fiduciary for a Fortune 500 company, Dr. Johnson has
practical knowledge of plan documents as well as an in-depth understanding of ERISA obligations. He
works as an expert consultant and witness on 401(k), ESOP and pension fiduciary liability; retiree
medical benefit coverage; third party administrator disputes; individual benefit claims; pension benefits in
bankruptcy; long term disability benefits; and cash conversion balances. He can be reached at 817-909-
0778 or

ERISA Benefits Consulting, Inc. by Mark Johnson provides benefit consulting and advisory services and
does not engage in the practice of law. June, 2014