On August 9, 2010, the Pension Benefit Guarantee Corporation (PBGC) issued proposed rules to clarify when an employer who maintains a single-employer defined benefit plan has a cessation of operations triggering the application of ERISA section 4062(e). Under ERISA section 4062(e), if an employer ceases operations at a facility in any location and, as a result of such cessation of operations, more than 20 percent of the total number of employees who are participants in the employer's defined benefit plan separate from service, then the employer is subject to liability requirements with regard to the plan.

The proposed rules intend to help employers identify when an event triggering ERISA section 4062(e) occurs by providing definitions and examples of what constitutes an operation, a facility, and a cessation. The proposed rules also provide guidance in calculating the liability and discuss notice requirements, including employer notice to the PBGC of an event triggering ERISA section 4062(e) within 60 days following the later of the cessation date or the date that the number of active participant separations exceeds 20 percent of the active participant base.