PBGC Proposal Links Timing of Guaranteed Benefits to Plan Shutdowns

The Pension Benefit Guaranty Corporation ("PBGC") released a proposed rule this morning that would amend PBGC's regulation on benefits payable in terminated single-employer plans by adding rules for phasing in PBGC-guaranteed pension benefits. The proposed amendments would implement Section 403 of the Pension Protection Act of 2006, which makes the phase-in period for guaranteed benefits contingent on the occurrence of an “unpredictable contingent event,” such as a plant shutdown. Under the proposed rule, PBGC-guaranteed benefits could begin no earlier than the date of a plant shutdown or other unpredictable contingent event. The public comment deadline for the proposed rule is May 10.