On June 14, 2011, the Pension Benefit Guaranty Corporation (PBGC) published its final rule on the termination of an underfunded pension plan when the sponsor is in bankruptcy. The final rule is substantially the same as the proposed rule published in 2008. The Pension Protection Act of 2006 (PPA) amended the rules for a single-employer pension plan termination when the contributing sponsor is in bankruptcy.

Under the Pension Protection Act of 2006, the Employee Retirement Income Security Act of 1974 (ERISA) was amended to provide that the date a plan sponsor files a bankruptcy petition will be treated as the termination date when a defined benefit plan is terminated in bankruptcy.

On June 13, the Pension Benefit Guaranty Corporation ("PBGC") released a final rule that, in most cases, will reduce the amount of pension benefits guaranteed under the agency's single-employer insurance program when a pension plan is terminated in a bankruptcy case. The rule will also decrease the amount of pension benefits given priority in bankruptcy.

On June 13, the Pension Benefit Guaranty Corporation (“PBGC”) released a final rule that, in most cases, will reduce the amount of pension benefits guaranteed under the agency’s single-employer insurance program when a pension plan is terminated in a bankruptcy case. The rule will also decrease the amount of pension benefits given priority in bankruptcy.

On June 13, the Pension Benefit Guaranty Corporation (“PBGC”) released a final rule that, in most cases, will reduce the amount of pension benefits guaranteed under the agency’s single-employer insurance program when a pension plan is terminated in a bankruptcy case. The rule will also decrease the amount of pension benefits given priority in bankruptcy.