Rule Change Could Decrease Funds To Bankrupt Plans

Law360, New York (July 3, 2008, 12:00 AM EDT) -- The Pension Benefit Guaranty Corp. has proposed a rule that would peg the termination date of a single-employer plan whose sponsor declares bankruptcy to the bankruptcy date for some purposes. This would likely reduce the funds paid out to plan participants.

The proposed rule, published Tuesday in the Federal Register, would implement Section 404 of the Pension Protection Act of 2006, which in several respects alters the Employee Retirement Income Security Act of 1975.

The public comment period on the proposed rule continues until Sept. 2....
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