January 26, 2023

The Pension Benefit Guaranty Corporation (PBGC) published a final rule amending its regulations implementing the “special financial assistance” (SFA) program created by the American Rescue Plan Act. SWACCA’s public policy team helped to shape the PBGC's July 2022 Final Rule.

Today’s final rule adds an exception process for the conditions the July 2022 regulations imposed on withdrawal liability for multiemployer plans that receive SFA through a new section 4262.16(g)(3). This new section details a process for a plan sponsor to request from PBGC an exception from the withdrawal liability conditions in section 4262.16(g)(1) of the SFA regulations regarding the interest assumptions used in determining unfunded vested benefits (UVBs) for withdrawal liability and section 4262.16(g)(2), concerning plan recognition of SFA monies in calculating withdrawal liability. 

Under this new section 4262.16(g)(3), a plan may request an exception from these withdrawal liability conditions by demonstrating that the exception lessens the risk of loss to plan participants and beneficiaries and does not increase expected employer withdrawals. The plan sponsor must also demonstrate that the exception does not increase the amount of the plan’s SFA or unreasonably increase the PBGC’s risk of loss.

Today’s final rule is effective as of today, January 26, 2023. 

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