2009-12-18
On November 23, 2009, the Pension Benefit Guaranty Corporation (PBGC) published a request for public comment on purchases of irrevocable commitments to provide plan benefits before initiating a standard termination under ERISA Section 4041.

An irrevocable commitment is generally an obligation by an insurer to pay benefits to a specific participant or beneficiary that cannot be canceled without the consent of the participant or beneficiary. An irrevocable commitment is used to purchase participants' benefits upon a plan termination. However, plan sponsors have occasionally purchased annuities that are irrevocable commitments prior to a standard plan termination in order to "lock in" purchase rates.

The Hewitt bulletin linked to at right discusses the PBGC's concerns with such purchases in advance of a plan termination and the request for comments.

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