PBGC Offers Mediation Program
In 2017, the Pension Benefit Guaranty Corporation (PBGC) introduced a pilot mediation program for pension plans in order to reduce costs of settlement negotiations and other proceedings. Recently, the PBGC has expanded the program and made it permanent.
The PBGC offers the mediation program to plan sponsors in three program areas: Early Warning Program cases, termination liability cases, and fiduciary breach cases. The Early Warning Program involves a corporate transaction that may affect a plan sponsor’s ability to continue its pension plan; the magnitude of the effect of the transaction may be in dispute. Termination liability cases involve a dispute regarding the liability that results from the termination of a plan. Fiduciary breach cases involve the determination of the liability fiduciaries of a terminated plan face for violating their duties of loyalty and prudence to participants.
The PBGC stated goals of the program are to resolve disputes early and economically. Participation in the program is voluntary. The Federal Mediation and Conciliation Service, a federal agency independent of the PBGC, will serve as mediators. The PBGC shares the cost of mediation with the plan sponsors.