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Covington’s Francese Urges Caution in Pension Benefit Guaranty Corporation Testimony

June 20, 2013

WASHINGTON, DC, June 20, 2013Mike Francese, a partner in Covington’s employee benefits practice, testified on Tuesday before the Pension Benefit Guaranty Corporation (PBGC). Speaking on behalf of the ERISA Industry Committee (ERIC), Mr. Francese raised concerns regarding PBGC’s proposal to modify rules governing reportable events.

“PBGC has proposed essentially to eliminate its long-standing reliance on the funded status of a plan in determining whether a reportable event can be waived and replace it with a new test that focuses on the financial condition of the employer sponsoring the plan,” Mr. Francese said. “If enacted, the proposal would result in a considerable number of increased filings for defined benefit plan sponsors and create considerable uncertainty in how they conduct their businesses. ERIC strongly supports the current regulatory framework and believes that the PBGC has the tools it needs to protect the system without unduly burdening those employers who choose to continue to sponsor defined benefit plans.”

ERIC, a nonprofit based in Washington, D.C., promotes the advancement of employee retirement, health, and other welfare benefits of America’s largest employers. PBGC is a federal agency created by the Employee Retirement Income Security Act of 1974 (ERISA) to protect pension benefits in private-sector defined benefit plans.

Mr. Francese focuses on counseling clients in matters arising under their employee benefit plans and executive compensation arrangements with respect to ERISA, the Internal Revenue Code, and related federal and state laws. He also represents clients before agencies and courts on both the federal and state level, and consults with them in connection with mergers, acquisitions, and other corporate transactions.

Mr. Francese’s testimony can be found here.

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