PBGC Issues Final Rule With Simplified Methods For Withdrawal Liability Calculations

The Pension Benefit Guaranty Corporation ("PBGC") issued a final rule on January 7, 2021 that impacts the calculation of withdrawal liability by multiemployer pension plans in endangered or critical status. The final rule applies to withdrawals from multiemployer plans that occur in plan years beginning on or after February 8, 2021.

The final rule contains amendments to implement the requirements under the Pension Protection Act of 2006 ("PPA") and the Multiemployer Pension Reform Act of 2014's ("MPRA") requirements that benefit reductions, benefit suspensions, surcharges, and contribution increases under a funding improvement or rehabilitation plan must be disregarded when determining a withdrawing employer's total withdrawal liability and withdrawal liability payment amount (the "disregard rules"). The final rule also provides optional simplified withdrawal liability calculation methods for applying the disregard rules in determining withdrawal liability and the