Companies with more than 100 employees in underfunded pension plans will be required to advise workers of their plans' financial status starting this summer, the government announced Monday.
The Pension Benefit Guaranty Corp. said the regulation requires most companies with pension plans less than 90% funded to provide the annual notices. About 4 million workers and retirees will eventually be affected.
"Workers must know if their pensions are underfunded so they can make informed choices about their retirement and their future," said Martin Slate, executive director of the government pension-insurance agency.
About 1,500 larger companies will have to advise their workers beginning this summer.
Another 4,000 companies with fewer than 100 pension plan participants will have to provide notices beginning next year.
In addition to the underfunding details, the notices must warn employees that the PBGC guarantees may not cover all of their promised benefits. The maximum monthly payment this year is $2,573.86 for workers if their plans are terminated.
The regulation is one of several reforms enacted in December. The law also accelerates funding for underfunded plans, increases premiums for the most risky plans and gives the PBGC stronger enforcement rules. The PBGC guarantees basic benefits earned by nearly 41 million U.S. workers and retirees in 60,000 private-sector defined-benefit plans.