Harold Ashner | The Wagner Law GroupThe Wagner Law Group2026-06-18T16:04:25Zhttps://www.wagnerlawgroup.com/feed/atom/WordPress/wp-content/uploads/sites/1101401/2021/06/cropped-wagner-fav-icon-2-32x32.pngby The Wagner Law Group<![CDATA[Chambers USA Recognizes The Wagner Law Group and Attorneys Harold Ashner, Eric Keller, Andrew Oringer, Roberta Casper Watson and Stephen Wilkes]]>https://www.wagnerlawgroup.com/?p=685062026-06-08T14:24:59Z2026-06-05T14:18:17ZChambers USA Recognizes The Wagner Law Group and Attorneys Harold Ashner, Eric Keller, Andrew Oringer, Roberta Casper Watson and Stephen Wilkes - EIN Presswire, June 5, 2026 (PDF)]]>by The Wagner Law Group<![CDATA[The Wagner Law Group’s Washington, D.C. Office Benefits Bulletin Newsletter]]>https://www.wagnerlawgroup.com/?p=675192026-02-05T13:14:52Z2025-11-11T15:24:25Z
how PBGC reportable events may be triggered in various non-intuitive circumstances
when engaging an independent fiduciary is required or may be warranted; and
recent appellate court decisions involving the calculation of multiemployer pension plan withdrawal liability.
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Watch Out for PBGC Reportable Events!
By Harold Ashner
A PBGC reportable event is an event that may be indicative of a need to terminate a PBGC-covered single-employer pension plan. Some reportable events are plan events (e.g., an inability to pay benefits when due), and others are corporate events (e.g., a change in the plan’s controlled group or a loan default involving a controlled group member). PBGC uses reportable event filings as a key trigger for its “Early Warning Program,” under which PBGC may threaten to seek involuntary termination of a plan or seek security or other protection as the “price” for its forbearance.
Failure to comply with the reportable events rules can lead to exposure to PBGC penalties, up to a maximum of $2,739 per day for each day of delinquency. Fortunately, PBGC is not required to (and does not often) assess penalties, and has “guideline” penalties—$25 per day for the first 90 days and $50 per day thereafter, with special relief rules for smaller plans—that are far below the maximum level. But it’s still of course best to avoid having a reporting delinquency.
Avoiding reporting delinquencies can be challenging, as reporting is required sporadically rather than on a predictable, periodic basis; the events that may trigger reporting can relate only to some foreign or otherwise distant member of the plan’s controlled group; and the rules contain requirements that do not always track what one might intuitively expect.
For example, consider the rules relating to a change in the plan’s controlled group (29 C.F.R. § 4043.29). Post-event reporting is required (generally within 30 days) “when there is a transaction that results, or will result, in one or more persons’ . . . ceasing to be a member of the plan’s controlled group (other than by merger involving members of the same controlled group)” (emphasis added). And the term “transaction” for this purpose “includes, but is not limited to, a legally binding agreement,” with “legally binding” determined “without regard to any conditions in the agreement” (emphasis added). Thus, reporting may be required even if the change is months or years away, and even if it never occurs, perhaps because of the failure to meet the “conditions” that are to be disregarded for reporting purposes.
Another example involves the rules relating to “loan default” reportable events (29 C.F.R. § 4043.34), which can occur “with respect to a loan with an outstanding balance of $10 million or more to a member of the plan’s controlled group.” The rules treat any default under the loan agreement as reportable, with no exception for minor or technical defaults. And they also capture, as reportable loan defaults, situations in which there is no default because the lender “waives or agrees to an amendment of any covenant in the loan agreement the effect of which is to cure or avoid a breach that would trigger a default” (emphasis added).
For a more detailed discussion of the reporting rules and some related “traps for the unwary,” with a focus on post-event reporting (as advance reporting applies only to a relatively small group of privately-held controlled groups with significantly underfunded plans), see “Surprise—You Just Missed a PBGC Reportable Events Deadline!”
[author] [author_image timthumb='on']https://www.wagnerlawgroup.com/wp-content/uploads/sites/1101401/2023/04/HJA.jpg[/author_image] [author_info]Harold J. Ashner advises and represents clients on a wide variety of employee benefits matters, with an emphasis on PBGC issues. He served as Assistant General Counsel for Legislation and Regulations at PBGC, where he drafted or supervised virtually all regulations and policies issued by PBGC from 1988 until he left the agency in 2005.[/author_info] [/author]
Spotlight on the Role of the Independent Fiduciary
By Camille Castro and Stephen Wilkes
There are a variety of situations under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) warranting the appointment of an independent fiduciary. While commonly associated with prohibited transaction exemptions, the use of an independent fiduciary provides multiple benefits, including a significant risk-shifting opportunity from the plan fiduciary to the independent fiduciary. (For an in-depth discussion, see “A Current Look At Independent Fiduciaries Under ERISA”, by Stephen Wilkes, Fall 2025, Journal of Pension Planning & Compliance”.
Independent fiduciaries play a crucial role in satisfying the conditions of certain statutory, class, and individual prohibited transaction exemptions. Many class and individual exemptions require the services of independent fiduciaries as a condition of compliance, and several statutory exemptions under ERISA specifically require that the plan’s decisionmaker be independent, such as ERISA Section 408(b)(8) with respect to common or collective trust funds. Additionally, other statutory exemptions expressly require the appointment of an independent fiduciary, including transactions executed through an electronic communication network.
While “independent fiduciary” is not defined in ERISA, the prohibited transaction exemption procedures, which were most recently updated by the Department of Labor (“DOL”) in 2024, provide a definition and set out the requirements for a “qualified independent fiduciary.” Under the regulations, the independent fiduciary must have appropriate training and experience to act on behalf of the plan regarding the exemption transaction. As such, the independent fiduciary must possess a deep knowledge of its duties and responsibilities under ERISA, as well as the relevant experience and knowledge regarding the transaction. The independent fiduciary must also be free of relationships that could improperly affect its judgment. When determining whether a fiduciary is independent, the DOL considers all relevant facts and circumstances, including revenues received from the transaction (including fees) relative to the fiduciary’s revenues from all sources, making it clear that the fiduciary must not have a financial relationship with the transaction or parties that would impair its independence.
In addition to its value in the context of prohibited transaction exemption matters, the use of an independent fiduciary can also mitigate potential conflict of interest situations. Examples of such situations where the services of an independent fiduciary may be required include certain employee stock ownership plan (“ESOP”) transactions, the selection and management of pharmacy benefit manager (“PBM”) programs, class action litigation settlements, annuity purchases, and alternative investments, such as determinations as to whether a plan should invest in alternative assets that may produce a higher return (where the alternative might be to increase contributions).
The Wagner Law Group’s Independent Fiduciary Services practice has extensive independent fiduciary and ERISA experience, ranging from supporting individual and class prohibited transaction exemption applications, to serving as an independent fiduciary for health plans to address complex PBM matters. The decision to retain a competent independent fiduciary focused solely on acting in the interest of plan participants and beneficiaries can help reduce risk, mitigate or prevent conflicts of interest, and add a level of independent review and protection for plan participants and beneficiaries.
[author] [author_image timthumb='on']/wp-content/uploads/sites/1101401/2025/07/castro_camille-1.jpg[/author_image] [author_info]With over a decade of experience in pension and employee benefits law, Camille brings a wealth of experience in matters related to ERISA and pension plans. Her career at PBGC has provided Camille with a unique understanding of federal pension insurance programs and the intricacies of government regulations that impact plan sponsors, fiduciaries, and participants.[/author_info] [/author]
[author] [author_image timthumb='on']https://www.wagnerlawgroup.com/wp-content/uploads/sites/1101401/2023/04/StephenWilkes.jpg[/author_image] [author_info]Stephen Wilkes heads the firm's Investment Management Law practice. He also is a Practice Group leader for the firm's ERISA Fiduciary Compliance and Independent Fiduciary practices. Steve advises a national client base of mutual funds, CIFs, private funds, registered investment advisers, insurance companies, broker dealers, wealth management firms, banks, trust companies, third-party platform providers, Taft Hartley Funds and plan sponsors on ERISA, tax, and related securities law issues. [/author_info] [/author]
Multiemployer Plans and Employers Continue to Test the Limits of ERISA’s Withdrawal Liability Provisions
By Israel Goldowitz
We have often written on withdrawal liability issues under ERISA involving collectively bargained multiemployer pension plans. Multiemployer plan participants can incur benefit reductions, and ongoing employers can incur increased funding costs when other employers withdraw and do not pay their withdrawal liability. The price tag for withdrawal liability, however, can be unexpectedly high. Given the stakes, it is not surprising that-45 years after Congress enacted withdrawal liability-plans and withdrawn employers continue to test the limits of ERISA’s withdrawal liability provisions.
Two recent examples are Perfection Bakeries v. Retail Wholesale and Department Store Pension Fund in the Eleventh Circuit and SuperValu v. United Food and Commercial Workers Pension Fund in the Seventh Circuit. Perfection dealt with the order of calculations when there has been a partial withdrawal. SuperValu dealt with calculation of the annual payment when operations were previously sold under a safe harbor provision.
An employer withdraws from a multiemployer plan when it permanently ceases covered operations or permanently ceases to have an obligation to contribute to the plan. Typically, this would occur if the employer does not renew its obligation after its collective bargaining agreement expires, it shuts down, or it sells its assets. For instance, a company may go nonunion or substitute a 401(k) plan for the multiemployer plan, a small business owner may retire and close the business, or a large or mid-sized business may be acquired by a strategic or financial buyer. Employers can also have liability for a partial withdrawal, for a sustained reduction in covered hours (70 percent for three years), or for taking an operation nonunion (at its original location or elsewhere).
Withdrawal liability represents the employer’s share of the plan’s underfunding. That share is defined as the value of vested benefits minus the value of plan assets the (unfunded vested benefits or UVB) times a fraction that represents the employer’s historical share of required contributions to the plan. The plan may use a single snapshot of UVB and the employer’s five-year contribution ratio as of the end of the plan year before withdrawal, or it may use a method that compares two or more snapshots and five-year fractions and reduces year-to-year volatility.
The resulting amount is payable in annual installments equal to the product of the employer’s highest contribution rate and its high-three average annual covered hours within the previous 10 years. But payments are limited to 20 years’ worth unless the plan terminates by a mass withdrawal.
For example, if the present value of vested benefits is $2 billion, the value of assets is $1.5 billion, and the employer has been a five-percent contributor, the UVB would be $500 million, and the employer’s share would be $25 million. If its installment payments are only $1 million per year, they would not pay off the $25 million in 20 years, and the assessment would be limited to $20 million in total payments. Their present value would be considerably less.
The calculations are highly sensitive to interest rates. If the plan values benefits using the same rate as it uses to calculate minimum funding contributions, say 7%, the present value would be less than if the plan values benefits using a 6% rate. (Present value and interest rate are inversely related.) Depending on the age of the plan’s participants, a change from 7% to 6% could increase the value of vested benefits by ten percent or more. If assets are $1.5 billion, employers could have a share of $700 million ($2.2 billion minus $1.5 billion), instead of $500 million, to give an example.
The majority of plans use a blend of PBGC rates—derived from insurance company annuity prices and the funding rate, which can result in an effective interest rate less than 6%, at least in a “normal” interest rate environment, and therefore a more dramatic increase in UVB. Three courts of appeal have held that a plan must use its funding rate, however, as the actuary must use his “best estimate” for each purpose, and he can’t have two different ”best” estimates. Some experts disagree, as the withdrawn employer will not share in future gains or losses, so taking “closeout” rates into account is appropriate.
More recently, in M&K Employee Solutions v Trustee of the IAM National Pension Fund, the Supreme Court agreed to resolve a split in circuits over when the interest rate must be selected, by the end of the plan year before withdrawal or by a reasonable time in the year of withdrawal. ERISA provides that the valuation must be “as of” the end of the year, which means a permissible after-the-fact valuation in actuarial practice and according to the D.C Circuit, but which may lead to abuse according to the Second Circuit.
Employers and funds have litigated other issues recently. For instance,
If the employer incurs a partial withdrawal followed by a complete withdrawal, how is the first assessment credited against the second to prevent overcharging? In Perfection, the Eleventh Circuit held that a portion of the partial withdrawal liability assessment is deducted from the employer’s share of UVB in the second assessment rather than at a later step, which resulted in a $6 million rather than a $4 million assessment.
If an employer sells some but not all operations and avoids liability under an exception that provides for the buyer to assume the seller’s share of UVB for the last five years’ contributions, how does that affect the installment payment amount if the employer later withdraws? In SuperValu. the Seventh Circuit held that the employer’s annual payment should be based on hours worked at a sold operation in the sixth through tenth years before withdrawal, though they did not count toward its share of UVB. The court did not say how much this issue was worth, but the assessment was for $23 million.
Reportable Events Experience. PBGC staff reported that it received fewer reportable event notices in Fiscal Year 2023 (ending Sept. 30, 2023) than in any prior year, with a year-over-year decrease both in terms of numbers of filings and percentage of plans filing, and with the decrease across all event types. On the other hand, staff noted that the number of late filings – about one third of all filings – has remained consistent. Common issues with filings include late filings, non-filing, and failing to include the proper attachments.
Standard Termination Audit Experience. PBGC staff addressed common errors detected in standard termination audits, including errors in calculating lump sums; determining compensation; incorrectly rolling over missing participants’ benefits to an IRA instead of using the PBGC Missing Participants Program; premature distributions; pro rata payment of benefits based on plan assets; and failure to obtain spousal consent for distributions. PBGC noted that audits generally take 18 months on average, though the length of the audit depends on the size and complexity of the plan, as well as the capacity of PBGC’s audit team. PBGC continues to audit every plan with over 1,050 participants and has seen an increase in the number of large plans doing standard terminations. For plans with no more than 1,050 participants, PBGC audits a sample, as well as any plan for which PBGC is aware of a potential problem.
Missing Participants Experience. PBGC staff indicated that PBGC continues to receive Missing Participants Program filings at a steady pace. Approximately three quarters of the filings are made in connection with a standard termination, with the remaining quarter from defined contribution plans. Staff noted that some defined contribution plans have a Roth benefit feature, and PBGC expects an increase in these Roth features. PBGC continues to see filing errors, and has updated the Missing Participants Program forms, spreadsheets, and instructions. Common filing errors include not splitting out pre-tax benefits from Roth funds, and withholding taxes from the benefit transferred to PBGC. PBGC offers pre-filing consultations to reduce errors.
Special Financial Assistance. PBGC staff reported that PBGC has approved SFA payments to 72 plans in the amount of approximately $53.9 billion, and that there are currently 20 applications under review with requests totaling $14.3 billion. Staff further reported that there are currently 87 plans on the waiting list to apply for SFA. The waiting list is updated every Friday and can be viewed at www.pbgc.gov/arp-sfa. PBGC is taking more time to get to the plans on the waiting list in part because of changes to the procedures requiring more expansive death audits. PBGC has more advanced search tools than the general public, such as the Social Security Death Master File, which is why plans were missing a number of deceased participants in the plans’ own death audits. PBGC staff suggested, however, that plans on the waiting list complete a death audit before submitting an SFA application.
Premiums. PBGC staff reminded practitioners of the early premium due date in 2025 of September 15, which was put in place in 2015. The budget has called for repeal of this provision, but Congress has not yet acted. Employers should consider how the early premium due date in 2025 will impact, or make difficult, decisions regarding funding. PBGC is concerned that smaller plans without knowledgeable vendors may miss the deadline, and there is sensitivity at the agency to ignoring the earlier deadline by not assessing penalties and interest if the plan pays by the usual October 15th deadline.
Reportable Events Experience. PBGC staff reported that reportable events filings during fiscal year 2022 (ending September 30, 2022) were down about 30% from the preceding fiscal year, noting that the decline was likely due to improved funding and reduced minimum funding requirements under recent legislation.Staff also noted that, despite the overall decrease in reports, reported active participant reductions increased, likely due to attrition, plan freezes, and the effects of the pandemic. In addition, staff noted that the PBGC website has a simplified guide to reportable events for small plans (pbgc.gov/prac/reporting-and-disclosure/small-plan-reportable-reference), and recommended that practitioners regularly remind their clients of the list of reportable events.
Early Warning Program. Staff advised that there had been little recent activity in this area. Staff pointed to corporations’ focus on servicing debt during the pandemic, the benign effect of rising interest rates on pension liabilities, funding relief under ARPA and other recent legislation, and a decline in LBO activity. Staff noted that there had been no change in the program, just a few years of unusual experience.
Standard Termination Audit Experience. PBGC staff addressed common errors detected in standard termination audits, including the rollover of small benefits (valued at $5,000 or less) to IRAs for non-responsive participants rather than, as required, payment to PBGC’s Missing Participants program; premature distributions (after the notice of intent to terminate is issued and before the end of the 60-day period after the filing of the Form 500 with PBGC, or with no standard termination notice or filing); pro rata distributions when plan assets are not sufficient to provide all benefit liabilities; and the absence of spousal consent to alternative forms of distributions.Staff also noted that lump sum windows generally are not typical plan practice, and that a lump sum window shortly before termination would generally be considered “in anticipation of termination” (see 29 CFR § 4044.4(b)), and thus could result in a violation of the Title IV asset allocation rules if all benefit liabilities are not ultimately satisfied.
Pension De-Risking. PBGC staff addressed annuity “buy-ins” and “buyouts,” noting that a buyout shortly before termination would be considered to be “in anticipation of termination,” as previously described. Staff also noted that small plans often purchase annuities for select participants, and then run short of assets to satisfy other benefit liabilities.
Missing Participants Experience. PBGC staff noted that, although the Missing Participants program had been expanded in 2018 to include terminating multiemployer plans, defined contribution plans, and non-PBGC covered defined benefit plans, 80% of cases involve PBGC-covered defined benefit plans (with the remainder being mainly defined contribution plans, including Roth and other non-taxable accounts). Staff also said that PBGC continues to find missing information for Roth accounts (g., the split between contributions and investment income, or the contribution dates) and inconsistencies between the total contribution amount and the information regarding the split between contributions and investment income.
Special Financial Assistance. PBGC staff reported that 78 initial or supplemental applications for SFA had been approved since the advent of the program (covering 574,000 participants and accounting for $47.4 billion in SFA), and that 38 applications, including three supplemental applications, were under review (covering 865,000 participants and, if approved, accounting for $21.4 billion in SFA). Staff also noted that it had returned about half of all applications for resubmission for reasons such as:
overly aggressive assumptions, including those that anticipated IRS interest rate issuances; those that captured the fourth preceding month where the IRS issuance is made mid-month, see ERISA Section 4262(e)(3); those that included excessive contribution base unit (“CBU”) declines and high inflation (g., 5% per year for 30 years); and those that are inconsistent with other assumptions (such as by treating rehires as new hires with past service grants, thus double counting those liabilities);
double counted participants (which affects PBGC premium and expense projections), due to an error in commonly used software;
mathematical errors, such as reversal of signs (+/-);
failure to pro rate first-year interest, see 29 CFR § 4262.12(a)(2);
Boston, MA, August 17, 2023 – The Wagner Law Group, widely recognized as the country’s top ERISA and employee benefits law firm, is delighted to announce that 11 of its attorneys will be recognized as Best Lawyers® in the 2024 edition of The Best Lawyers in America©, in practice areas including, Employee Benefits (ERISA) Law, Litigation - Labor and Employment, and Labor Law – Management. These exceptional attorneys include Marcia Wagner, the firm’s founder and Managing Director, Thomas E. Clark Jr., Partner and the firm’s Chief Operating Officer, Andrew Oringer, Partner and the firm’s General Counsel, and Partners Harold Ashner, David Gabor, Russell Gaudreau, Jr., Israel Goldowitz, Mark Poerio, Linda Rosenzweig and Roberta Casper Watson. “We are extraordinarily proud that such a large percentage of our firm’s attorneys continues to be listed among The Best Lawyers in America©,” says Ms. Wagner.
The Best Lawyers in America© is widely regarded as a respected reference guide to legal excellence. Recognition by Best Lawyers® is based solely on confidential peer review. The rigorous methodology utilized for recognition is designed to capture the consensus of leading lawyers about the professional abilities of colleagues within the same country and legal practice area. Best Lawyers® employs a sophisticated and transparent survey process that is tailored to elicit meaningful and substantive evaluations of the quality of legal services provided by attorneys. The Best Lawyers in America© recognizes the top 5% of private practicing lawyers in the United States and is commonly used by consumers in need of legal services to identify the most qualified attorneys based on legal expertise, ethical standards, and professionalism. The 2024 edition of The Best Lawyers in America© will be distributed in more than 30 leading publications around the country, including The New York Times, The Washington Post and The Wall Street Journal.
The Wagner Law Group has also been nationally ranked, as well as locally ranked in Boston and Washington, D.C., as a Tier 1 Best Law Firm in the area of Employee Benefits (ERISA) Law in the U.S. News & World Report – Best Lawyers® most recently published "Best Law Firms" list. Firms that receive this ranking are recognized for professional excellence with consistently high ratings from clients and peers. Achieving a tiered ranking signifies a unique combination of quality law practice and breadth of legal expertise.
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