The Pension Benefit Guarantee Corporation (PBGC) recently announced a six-month moratorium on its enforcement of ERISA section 4062(e) cases. The moratorium, scheduled to last through the end of the year, will be used to review PBGC’s application of 4062(e) and to “work with plan sponsors to minimize effects on necessary business transactions.”
ERISA section 4062(e) is applicable to companies that halt operations at a facility, either through shut down or sale, causing 20 percent of pension plan participants to lose their jobs. The PBGC targeted its enforcement of 4062(e), generally compelling companies to increase their pension plan funding as a result. This targeted enforcement raised concerns in the business community, which seeks clarity on the interpretation and enforcement of 4062(e).Click here to be directed to the PBGC press release.