May 17, 2017
On May 10, 2017, the Pension Benefit Guaranty Corporation (PBGC) announced that its December 2016 revision to the webpage description of its Early Warning Program (EWP) was not intended to indicate an expansion of the program. Historically, the EWP was triggered only by a “transaction or event.” The December 2016 revision suggested that the program also would be triggered by a change in a sponsor’s credit quality.
As part of a redesign of the webpage in question, the PBGC has clarified its “transaction or event” standard and eliminated credit quality as a triggering event. The redesigned webpage includes a revised description of the EWP and answers to frequently asked questions (FAQs). The answers to FAQs do note, however, that once the EWP has been triggered by a transaction or event, the PBGC will look at changes in the sponsor’s (or a member of the sponsor’s controlled group’s) credit quality in evaluating the risk to the PBGC if the plan should terminate.