The government pension insurance agency issued rules Wednesday requiring employers with underfunded retirement programs to notify their 4 million plan participants of the size of the shortfall.
The pension reform law that went into effect last December requires companies with pension plans that are less than 90 percent funded to provide an annual, easy-to-read explanation of their plans’ funding levels.
The rules announced Wednesday spell out how the new requirements will be carried out and include a model notice that had been tested for readability by a focus group of workers and retirees.
The law also requires that the notification explain the limits of the guarantees by the Pension Benefit Guaranty Corp., which guarantees benefits of more than 41 million workers and retirees in 58,000 private-sector, definedbenefit plans.
The rules require about 1,500 companies with large plans to notify participants this year. Most will distribute the information between September and mid-December.