PBGC Proposes Modifications to Form 5500 Schedule R and SB Reporting

The Pension Benefit Guarantee Corporation (PBGC) has submitted to the Office of Management and Budget an information collection request and extension related to Form 5500 series annual reporting requirements. Specifically, the request proposes modifications to Schedule R, Retirement Plan Information, and Schedule SB, Single-Employer Defined Benefit Plan Actuarial Information.

Proposed changes to the Schedule R include

  • Modifying the asset categories (and correlating instructions) in line 19a used to report the breakdown of plan assets to include Public Equity, Private Equity, Investment-Grade Debt and Interest Rate Hedging Assets, High-Yield Debt, Real Assets, Cash or Cash Equivalents, and Other;
  • Modifying the instructions for line 19a so that the asset allocation is as of the end of the plan year rather than the beginning of the plan year; and
  • Modifying the current check box under line 19b to indicate the average duration of the plan’s combined Investment-Grade Debt and Interest Rate Hedging Assets portfolio, rather than the average duration of the plan’s combined Investment-Grade and High Yield Debt portfolio. PBGG is also proposing to change the average duration ranges to choose from 3-year periods to multiple 5-year periods, with the last choice being a period of 15 or more years.

Proposed changes to Schedule SB include

  • Proposed changes to lines 6a and 6c of the instructions, and 6c of the form regarding Target Normal Cost to clarify the amount to be reported in line 6a is the present value of expected accruals and by detailing that line 6c requires the sum of lines 6a and 6b, “reduced (but not below zero) by any mandatory employee contributions expected to be made during the plan year”
  • Proposed changes to instructions for Schedule SB, line 26b attachment (Schedule of Projection of Expected Benefit Payments) to provide that for a plan that has 1,000 or more participants as of the valuation date—in situations where a plan assumes some or all benefits are paid in a lump sum but uses the annuity substitution rule to determine the funding target—the attachment may show projected benefits payable in the annuity form instead of in the form assumed for valuation purposes

Comments can be submitted to PBGC within 30 days of publication in the Federal Register.