BENEFITS DIGEST

PBGC wants more from the multiemployer plans that received special financial assistance, the federal aid that shored up troubled union plans. Segal reports the proposed annual compliance reporting would add governance and investment records and procedures for locating missing participants, with redactions permitted, and it applies only to the plans that received the assistance, which report through 2051. Comments are due December 15. The additional reporting awaits White House paperwork approval, and plans’ existing reporting requirements stay in place.

PBGC’s 2027 flat-rate premiums rise to $116 per participant for single-employer plans and $42 for multiemployer plans. The variable rate remains $52 per $1,000 of unfunded vested benefits, while its per-participant cap rises to $783. The maximum guaranteed benefit for a 65-year-old in a single-employer plan reaches $97,363.68 a year on a single-life annuity. Mercer also explains the separate present-value table used to restrict lump-sum payments from certain underfunded plans.

A multiemployer pension plan will owe PBGC $42 per participant for 2027, up from $40. Morgan Lewis points to the work behind that calculation. Properly resolving small balances and deceased-participant records may reduce the count, but losing contact with someone doesn’t erase the plan’s obligation or justify removing that person. Administrators should distinguish a benefit that has been settled from a participant who simply hasn’t been found.

Receiving special financial assistance from PBGC comes with a long reporting tail. A proposal would expand recipients’ annual submissions through 2051 to include investment policies and meeting minutes, missing-participant procedures and disclosures of criminal violations. Some material could be redacted if enough context remains. For trustees and administrators, the preparation includes keeping governance records that can support those reports. Comments are due December 15; the proposed additions aren’t final requirements yet.

Pension funding calculations need to account for the cost of running the plan as well as paying benefits. Mercer explains an IRS proposal that would include administrative expenses and PBGC premiums in the annual cost used for minimum funding, while excluding investment expenses. Bundled provider fees above $5,000 would need to be allocated, making the service breakdown relevant to the actuary’s calculation. The proposal also addresses retroactive amendments and changes awaiting IRS approval. Comments closed October 19, and the proposed rules would apply six months after finalization.

Calendar-year plan administrators have several notice deadlines approaching on December 2. Reinhart’s roundup identifies annual default-investment, automatic-enrollment and applicable safe-harbor notices, with requirements depending on the plan’s design. It also covers plan-amendment deadlines, PBGC reporting relief, preparation for the Saver’s Match and health-plan developments, including commentary on enforcement of surprise-billing arbitration awards.

Morgan Lewis notes the PBGC’s October 14 announcement that 2027 premiums for multiemployer pension plans will be a flat $42 per participant, a $2 increase from 2026 and 40% above the level of a decade ago. The firm’s practical points are keeping participant records accurate and identifying deceased participants, which help prevent inflated premium counts, while permissible small-balance cash-outs can reduce the number of participants counted.

On the single-employer side, PLANSPONSOR reports the PBGC’s 2027 guarantee limits rising 4.16%, putting the maximum guaranteed benefit for a 65-year-old retiree at $8,113.64 per month for a benefit paid over the retiree’s lifetime with no survivor payments. The flat-rate premium rises to $116 per participant, the variable rate stays at $52 per $1,000 of unfunded vested benefits under its statutory freeze, and the variable-rate cap reaches $783 per participant. The multiemployer guarantee is not indexed and does not change.

PLANSPONSOR reports PBGC’s [proposal](https://www.federalregister.gov/documents/2026/10/16/2026-21189/proposed-submission-of-information-collection-for-omb-review-comment-request-special-financial) to expand what multiemployer plans that received special financial assistance file with their annual statements of compliance, adding plan investment policies, allocation information, committee documents and relevant meeting records. Segal’s Susan Boyle discusses the practical burden for funds that already file extensively. Comments on the information-collection proposal are due December 15, and the annual statements run through 2051. It is a comment request, not a new investment rule.

PBGC’s rate table now carries 2027 premiums. The single-employer flat rate rises to $116 per participant from $111, the variable-rate premium holds at $52 per $1,000 of unfunded vested benefits, and the per-participant cap on that variable premium rises to $783 from $751. The multiemployer flat rate rises to $42 from $40. Sponsors budgeting 2027 administrative costs can take the figures straight from the table.

PBGC published updated interest assumptions for valuing benefits when allocating assets in terminating single-employer plans. The quarterly assumptions cover valuation dates from October 31, 2026, through January 30, 2027. They serve the specified PBGC valuation functions and shouldn’t be substituted for ordinary pension-funding assumptions. Administrators handling a termination should use the schedule applicable to the valuation date. The [Federal Register rule](https://www.govinfo.gov/content/pkg/FR-2026-10-14/pdf/2026-21019.pdf) supplies the operative assumptions.

Wagner attorneys Harold Ashner and Israel Goldowitz urge PBGC to tailor penalties to the seriousness of a violation and the sponsor’s efforts to comply. Their comments favor meaningful credit for prompt correction, reasonable oversight of outside providers and circumstances where an error caused no harm. They also question automatic escalation based on repeat violations. These are recommendations on a proposed rule, rather than an adopted penalty schedule or a guarantee of relief for a particular filing failure.

The Pension Benefit Guaranty Corporation, which insures private-sector pensions, published a new set of frequently asked questions on coverage determinations, the process for getting an official answer on whether a plan falls under PBGC insurance at all. Sponsors or their actuaries, accountants, attorneys and third-party administrators can ask at any time, and the FAQs list exactly what to send in. Plans claiming an exemption need to provide more detail. A plan said to cover only a substantial owner must document ownership percentages going back 60 months, stock options and family relationships. A small professional service employer must show it has never had more than 25 active participants since 1974 and describe the owners’ professions and education. Church plans and Puerto Rico based plans get their own checklists. PBGC says incomplete submissions and slow responses are the main causes of delay, and an unfavorable answer can be appealed to its Appeals Board.

The Pension Benefit Guaranty Corporation has temporarily waived a year-end report triggered by shrinking active participation in a pension plan. The test generally looks for a drop below 80 percent of the start-of-year count, after adding back departures already reported separately as single-cause events. Morgan Lewis notes the trigger has been tripping most often in frozen plans with few remaining active participants. Technical Update 26-1, issued September 18, covers reporting deadlines on or after that date and lasts until an amended final rule takes effect. Reporting rules for layoffs, shutdowns and other single-cause reductions remain in place, along with their existing exceptions. PBGC says attrition reports rarely flag meaningful risks and cost more to prepare than the information is worth.

The federal agency that insures private-sector pensions has temporarily waived one report triggered by a decline in active plan participants. [Technical Update 26-1](https://www.pbgc.gov/prac/other-guidance/tu/temporary-reporting-waiver-attrition-events) suspends the attrition-event report, a year-end filing due when a plan's active participation falls sharply, after the PBGC concluded the reports seldom uncover anything needing scrutiny and mostly burden frozen plans with few active workers. Milliman's alert fills in the context: reportable events generally go to the agency on Form 10 within 30 days, small and well-funded plans were often exempt from this report already, and the waiver covers deadlines on or after September 18, lasting until a final rule takes effect. What does not change matters as much. Reports for single-cause reductions, a layoff, shutdown, or restructuring that cuts more than 20 percent of active participants at once, are still required, along with every other reportable event.

The Pension Benefit Guaranty Corporation, which insures private-sector pensions, wants to move the penalty policies it has used since 1995 into formal regulations, and commenters are asking it to distinguish promptly corrected mistakes from serious failures. The [July proposal](https://www.federalregister.gov/documents/2026/07/21/2026-14627/penalties-for-failure-to-provide-certain-notices-or-other-material-information) keeps the familiar framework, in Marsh's summary more or less the old policy made official, including $25 a day for the first 90 days a required notice is late and $50 a day after that, now indexed for inflation. The Wagner Law Group's comment letter, from Harold Ashner and Israel Goldowitz, who helped write the 1995 policies, asks the agency to consider whether a sponsor exercised ordinary business care in hiring and overseeing the advisers who prepare most filings, to weigh whether a violation caused any actual harm, and to answer first-time, promptly corrected, harmless mistakes with written warnings rather than daily fines. Comments closed September 21. The number of covered single-employer plans has fallen about 25 percent since 2005, and penalty exposure is one more line in the cost of keeping a defined benefit plan open.

PBGC expanded its merger FAQs for multiemployer plans that received special financial assistance, adding examples of the withdrawal liability modifications available to merged building and construction industry plans under its merger regulation. The headline modification lets a merged plan compute a withdrawing employer's share from its share of contributions rather than unfunded vested benefits, which keeps assessments closer to what the rescued plan would have produced on its own and helps show PBGC that a merger won't increase its risk of loss. The agency's worked examples show the stakes: in one scenario the default method zeroes out a $2.5 million assessment that the modification mostly preserves. The update landed the same day as the attrition-event reporting waiver we covered Monday, and the same week a Maryland decision below shows how much can turn on who bears withdrawal liability.

Harold Ashner, who as PBGC's Assistant General Counsel for Legislation and Regulations from 1988 to 2005 drafted or supervised most of the agency's regulations, has published a practitioner's overview of distress and involuntary terminations in the Journal of Pension Planning & Compliance. Among the points sponsors of underfunded plans rarely hear: consult PBGC before filing, don't sign a termination agreement before the settlement is final, remember the agency wears separate guarantor and trustee hats in any settlement, and a consensual involuntary termination can sometimes bypass the full distress process.

Pension plans have one less report to file for now. Technical Update 26-1 temporarily waives the year-end “attrition event” report for deadlines on or after September 18. The report normally applies when active participation falls below 80 percent of its start-of-year level, after adding back departures reported separately as single-cause events. PBGC concluded that these reports “rarely identify circumstances warranting additional agency reviews” and often burden frozen plans with few active participants. The waiver lasts until a final rule changing the requirement takes effect. Other event-reporting duties, including single-cause reductions, remain in place.

When an employer leaves an underfunded multiemployer pension plan, it owes an exit payment, and an employer that made an earlier partial exit gets a credit for what it already owes. The fight here was over when to subtract that credit. Consumers Concrete left Central States in stages, 2017 and 2019, and the sequencing decides almost everything. Apply the credit early in the statute's four-step calculation, as the fund read it, and the company owes about $607,000 a year for twenty years ($9.3 million in present value). Apply it to the finished number, after the twenty-year payment cap, and the bill could reach zero. Judge Lee, joined by Judges Easterbrook and Ripple, held the credit comes off the finished number, expressly parting with the Eleventh Circuit (whose three judges each called it a hard case) and the Ninth. The PBGC filed an amicus brief supporting that reading, its position since 1985, and no Seventh Circuit judge asked to rehear the case. Employers and funds now face conflicting appellate answers to the same arithmetic, with the agency on the employer's side of the split.

The first firm analysis of the suit 22 multiemployer plans filed against the PBGC last week adds the numbers that show what the waitlist costs. The plans represent more than 25,000 participants and estimate they are owed roughly $450 million. Eight are already insolvent and have cut benefits, in some cases by more than half, and three more expect insolvency within a year. Many of the affected retirees are past 75, and because special financial assistance restores benefits only to participants alive when the money arrives, delay does damage no later payment can repair. Jackson Lewis also notes what tilts the eligibility fight. The Supreme Court denied review of the Second Circuit's Bakery Drivers decision in May, yet the complaint alleges the agency still bars terminated plans outside that circuit while letting terminated plans inside it move ahead in the queue.

The boards of 22 multiemployer plans, from foundry workers to food terminal employees, say the PBGC has kept them from applying for the special financial assistance Congress funded in the American Rescue Plan. Congress told the agency to process every application within 120 days; the funds say they have sat on a waitlist for more than a year without being allowed to file at all. The complaint also attacks the PBGC's position that terminated plans are ineligible, which the Second Circuit struck down in the Bakery Drivers case, now the subject of the agency's pending Supreme Court petition. The plans asked for a preliminary injunction and an expedited hearing the day they filed, and the docket has not slowed for the calendar. The court entered a scheduling order on Labor Day.

The Pension Benefit Guaranty Corporation has relaunched its opinion letter program, giving employers, plan sponsors, unions, and practitioners a channel to ask the agency's Office of the General Counsel how Title IV of ERISA applies to specific situations. Requests may be submitted anonymously through counsel, opinions bind only the requester, and the program excludes matters in litigation, coverage determinations, and issues pending in rulemaking. The agency's first opinion letter since 2002 issued in June, finding that annuity buyouts of frozen plan participants do not trigger section 4043 reporting.

The agency raised rates that pension plans and multiemployer plans use for valuation and funding purposes.

Milliman explains why the PBGC’s new Coverage Assessment Program matters especially for professional service firms, whose defined benefit plans often sit under unique coverage rules.

PBGC filed a comment letter supporting FASB's proposal to discount qualifying market return cash balance obligations at the plan's assumed interest crediting rate. An accounting change rather than a compliance obligation, but one that would move reported pension obligations for hybrid plans.

The PBGC settled a Title VII promotion-discrimination claim brought by one of its own employees.

In an unpublished memorandum, the Ninth Circuit affirmed an arbitration award holding that a multiemployer plan actuary's use of PBGC-published interest rate assumptions to calculate withdrawal liability violated ERISA's requirement that assumptions represent the actuary's best estimate of anticipated experience. The plan's 7 percent minimum funding rate applied instead. See The Second Thing above.

A pilot becomes policy: employers considering a defined benefit plan can now ask PBGC for a coverage determination before establishing the plan, removing a source of uncertainty for church-affiliated, professional-service, and Puerto Rico plan sponsors.

On July 20, 2026, the PBGC proposed a framework modernizing how it calculates and enforces penalties for late required notices and filings, with daily penalty schedules ranging from $25 to $1,000 by violation severity and reductions or waivers for reasonable cause and self-correction. Plan sponsors should revisit compliance procedures for reportable events and section 4010 filings, as PBGC has ended its informal nonenforcement posture in these areas.

On June 15, 2026, the Pension Benefit Guaranty Corporation (“PBGC”) issued an opinion addressing whether an annuity buyout that reduces active headcount by 20% or more would trigger a reportable event.

This proposed rule would provide the Pension Benefit Guaranty Corporation's policies for calculating, imposing, and waiving monetary penalties to pension plans for failure to provide certain required notices or other material information timely to PBGC and plan participants.

Background Under ERISA section 4043, defined benefit plan administrators must notify PBGC when certain “reportable events” occur. One of those events is a reduction in the active participant headcount.

(PBGC) is requesting that the Office of Management and Budget (OMB) approve, under the Paperwork Reduction Act, a new collection of information. The purpose