Statement of Regulatory and Deregulatory Priorities

The Pension Benefit Guaranty Corporation (PBGC) protects the pensions of more than 40 million people in nearly 24,000 private-sector defined benefit plans. PBGC receives no tax revenues. Operations are financed by insurance premiums, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the trusteed plans.

To carry out these functions, PBGC issues regulations on such matters as termination, payment of premiums, reporting and disclosure, and assessment and collection of employer liability. The Corporation is committed to issuing simple, understandable, flexible, and timely regulations to help affected parties.

PBGC continues to follow a regulatory approach that seeks to encourage the maintenance of existing defined benefit plans or the establishment of new plans. Thus, in developing new regulations and reviewing existing regulations, the focus, to the extent possible, is to reduce burdens on plans, employers, and participants, and to ease and simplify employer compliance. PBGC particularly strives to meet the needs of small businesses that sponsor defined benefit plans.

PBGC develops its regulations in accordance with the principles set forth in Executive Order 13563 "Improving Regulation and Regulatory Review" (Jan. 18, 2011), and PBGC's Plan for Regulatory Review (Regulatory Review Plan).[1] This Statement of Regulatory and Deregulatory Priorities reflects PBGC's ongoing implementation of its Regulatory Review Plan.

PBGC Insurance Programs

PBGC administers two insurance programs for privately maintained defined benefit plans under title IV of the Employee Retirement Income Security Act of 1974 (ERISA):

  • Single-Employer Program. Under the single-employer program, when a plan terminates with insufficient assets to cover all plan benefits (distress and involuntary terminations), PBGC pays plan benefits that are guaranteed under title IV. PBGC also pays nonguaranteed plan benefits to the extent funded by plan assets or recoveries from employers.

  • Multiemployer Program. The smaller multiemployer program covers collectively bargained plans involving more than one unrelated employer. PBGC provides financial assistance (in the form of a loan) to the plan if the plan is unable to pay benefits at the guaranteed level. The guarantee is structured differently from, and generally significantly smaller than, the single-employer guarantee.

    At the end of FY 2015, PBGC had a deficit of $24 billion in its single-employer insurance program and $52 billion in its multiemployer insurance program. While the financial position of the single-employer program is likely (but not certain) to improve, the multiemployer program is likely to run out of funds by 2025. Substantial increases in premium revenue will be needed to avoid cuts in multiemployer insurance program guarantees.

    Regulatory Objectives and Priorities

    PBGC's regulatory objectives and priorities are developed in the context of the Corporation's statutory purposes:

  • To encourage voluntary private pension plans;

  • To provide for the timely and uninterrupted payment of pension benefits; and

  • To keep premiums at the lowest possible levels.

    Pension plans and the statutory framework in which they are maintained and terminated are complex. Despite this complexity, PBGC is committed to issuing simple, understandable, flexible, and timely regulations and other guidance that do not impose undue burdens that could impede maintenance or establishment of defined benefit plans.

    Through its regulations and other guidance, PBGC strives to minimize burdens on plans, plan sponsors, and plan participants; simplify filing; provide relief for small businesses and plans; and assist plans in complying with applicable requirements. To enhance policy-making through collaboration, PBGC also plans to continue to expand opportunities for public participation in rulemaking (see Open Government and Public Participation below).

    PBGC's current regulatory objectives and priorities are to simplify its regulations and reduce burden, to enhance retirement security, and to implement statutory changes, particularly the Multiemployer Pension Reform Act of 2014 (MPRA) and the Pension Protection Act of 2006 (PPA 2006).

    Enhancing Retirement Security

    Missing participants. A major focus of PBGC's current regulatory efforts is to finalize rules to improve and expand the existing missing participants program to help connect more participants with their lost retirement savings. As authorized by PPA 2006, the expanded program will cover terminating defined contribution plans, non-covered defined benefit plans, and multiemployer plans, in addition to single-employer defined benefit plans. PBGC will continue to work with Internal Revenue Service and Department of Labor to coordinate government requirements for dealing with missing participant issues. PBGC published a proposal in September 2016. PBGC expects to publish a final regulation in FY 2017.

    Rethinking Existing Regulations

    Pursuant to section 6 of Executive Order 13563 "Improving Regulation and Regulatory Review" (Jan. 18, 2011), the following Regulatory Identifier Numbers (RINs) have been identified as associated with retrospective review and analysis consistent with the Corporation's final retrospective review plan. The regulatory actions associated with these RINs are described below.



    Effect on Small Business

    Payment of Premiums; Late Payment Penalty Relief


    Expected to reduce burden on small business

    Valuation Assumptions and Methods; Interest and Mortality


    To Be Determined

    Benefit Payments


    To Be Determined

    Administrative Review


    To Be Determined

    Miscellaneous Corrections, Clarifications, and Improvements


    To Be Determined

    Penalty relief for late payment of premiums. PBGC is lowering the rates of penalty charged for late payment of premiums by all plans, and providing a waiver of most of the penalty for plans with a history of premium compliance. In recent years, Congress has significantly increased PBGC premium rates. Since late payment charges are a percentage of unpaid premium, the penalties have gone up in proportion to the increases. PBGC is sensitive to the fact that a penalty assessed today may be several times what would have been assessed years ago for the same acts or omissions involving a plan with the same number of participants and the same unfunded vested benefits. Penalties under the new rule generally would be reduced by half and could be reduced by 80 percent for sponsors with good payment histories.

    Valuation assumptions and methods; interest and mortality. PBGC plans to conduct a routine, periodic review of PBGC's regulations and policies to ensure that the actuarial and economic content remains current. PBGC plans to publish a proposed rule in FY 2017 that would amend its benefit valuation and asset allocation regulations by improving its valuation assumptions and methods. Chief among the modifications PBGC is considering are modifications to mortality rates and the format of its interest factors.

    Benefit payments. PBGC plans to publish a proposed rule in FY 2017 to make clarifications and codify policies in PBGC's benefit payments and valuation regulations involving payment of lump sums, entitlement to a benefit, changes to benefit form, partial benefit distributions, and valuation of plan assets.

    Administrative review. PBGC is proposing to update and improve its rules for administrative review of agency decisions.

    Miscellaneous corrections, clarifications, and improvements. PBGC is proposing to make miscellaneous corrections, clarifications, and improvements to its regulations. PBGC intends to initiate future projects of this type to deal with minor issues that don't call for full-scale rulemaking projects.

    Statutory implementation

    MPRA. MPRA established new options for trustees of multiemployer plans that will potentially run out of money to apply to PBGC for financial assistance. PBGC published a proposed rule on June 6, 2016, that would prescribe rules for facilitated mergers of multiemployer plans and conform the existing regulation to changes in the law. PBGC received 10 comments on the proposal and expects to publish a final rule early in FY 2017. This is the second PBGC rulemaking project based on MPRA requirements. The first, prescribing the application process and notice requirements for partitions of eligible multiemployer plans under MPRA, was finalized on December 23, 2015.

    Cash balance plans. PPA 2006 changed the rules for determining benefits in cash balance plans and other statutory hybrid plans. In October 2011, PBGC published a proposed rule implementing the changes both in PBGC-trusteed plans and in plans that close out in the private sector.[2] Now that the Treasury Department has issued final regulations on statutory hybrid plans, PBGC is developing a final rule, which it expects to publish in FY 2017.

    Owner-participant benefits. PPA 2006 changed the guarantee of owner-participant benefits in PBGC-trusteed plans. PBGC is developing a proposed rule implementing these changes, which it expects to publish in FY 2017.

    Small Businesses

    PBGC takes into account the special needs and concerns of small businesses in making policy. A large percentage of the plans insured by PBGC are small or maintained by small employers. PBGC has issued or is considering proposed rules that will focus on small businesses:

    Missing participants. The missing participants rule discussed above would benefit small businesses by simplifying and streamlining current requirements, better coordinating with requirements of other agencies, and providing more options for sponsors of terminating non-covered plans.

    Penalty relief for late payment of premiums. The late payment penalty relief rule discussed above benefits small businesses by reducing penalties for late premium payments by at least half.

    Open Government and Increased Public Participation

    PBGC is doing more to encourage public participation in the regulatory process. For example, PBGC's current efforts to reduce regulatory burden are in substantial part a response to public comments. The regulatory projects discussed above highlight PBGC's customer-focused efforts to reduce regulatory burden.

    PBGC's Regulatory Review Plan sets forth ways to expand opportunities for public participation in the regulatory process. For example, in June 2013, PBGC held its first-ever regulatory hearing on the reportable events proposed rule, so that the agency would have a better understanding of the needs and concerns of plan administrators and plan sponsors. Discussion at that hearing informed PBGC's final rule. PBGC's 2013 Request for Information[3] on Missing Participants in Individual Account Plans and 2015 Request for Information[4] on Partitions and Facilitated Mergers Under MPRA are examples of PBGC's efforts to solicit public participation in the regulatory process.

    PBGC plans to provide additional means for public involvement, including social media and continuing opportunity for public comment on PBGC's Web site.

    PBGC also invites comments on the Regulatory Review Plan on an on-going basis as we engage in the review process. Comments should be sent to

    PBGC will continue to look for ways to further improve its regulations.

    [1] Progress reports on the plan can be found at

    [2] 76 FR 67105 (Oct. 31, 2011),