By Pension and Benefits Editorial Staff
The Pension Benefit Guaranty Corporation (PBGC) has announced that its Pilot Mediation Project is now permanent and that the PBGC has added fiduciary breach cases to the categories of disputes covered by the program. This gives plan administrators the opportunity to resolve these cases with a neutral, professional, independent mediator in a timely and cost-effective manner.
When the PBGC announced the creation of the new pilot program in October 2017, it offered mediation in certain termination liability collection and early warning program cases. The PBGC stated that the mediation project was part of the Agency's ongoing efforts to make it easier for sponsors to maintain their pension plans. The PBGC offered mediation to ongoing plan sponsors as part of its Early Warning and Risk Mitigation Program and to former plan sponsors as part of the resolution of their pension liabilities following termination of underfunded pension plans. Mediation was offered to eligible respondents and proceeded only on a voluntary basis. According to the PBGC, cases were generally not eligible where the plan sponsor had a minimal ability to pay, there was a pending court proceeding, or there was limited time to act and the plan sponsor had declined to sign a standstill or tolling agreement.
As to the added fiduciary breach cases, the PBGC states that they involve situations where plan fiduciaries, such as sponsors, administrators and certain advisors, take actions that violate their duties of loyalty and prudence to participants.
SOURCE: PBGC What's New for Practitioners.
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