PBGC Issues Reportable Event Opinion Involving Pension Risk Transfers

The Pension Benefit Guaranty Corporation (PBGC) has issued Opinion Letter 26-001, responding to questions concerning whether a company's defined benefit plan had experienced a reportable event under ERISA Section 4043(c)(3) and section 4043.23(a) of correlating PBGC regulations. The inquiring company intends to purchase annuity buyouts for 69 percent of the plan's participants, with no change in the current employment status of the affected individuals. The opinion notes that a pension risk transfer by itself is not indicative of financial issues with a plan or present a risk to a plan sponsor's ability to continue to maintain a plan. Additionally, absent an accompanying workforce reduction or attrition event, the buyout does not implicate the risks that the reportable event framework was designed to identify.

PBGC notes that this represents the corporation’s first opinion letter since 2002.