PBGC Proposes Improvements to Rules on Recoupment of Benefit Overpayments; Comments Due September 4

Published July 06, 2026

The Pension Benefit Guaranty Corporation (PBGC) issued a proposal to improve its rules on recoupment of benefit overpayments under PBGC’s insurance program for single-employer terminated plans trusteed by PBGC. The proposed improvements include changing the recoupment methodology to a flat rate of 5 percent of a participant’s monthly benefit and eliminating recoupment from a participant’s surviving beneficiary.

The major provisions of the proposed rule would amend PBGC’s recoupment rules as follows:

Simplify the recoupment methodology to eliminate the actuarial reduction (capped, generally, at 10 percent of a participant’s monthly benefit), and instead recoup at a flat rate of 5 percent of a participant’s monthly benefit,
Waive overpayment amounts of $250 or less,
Eliminate recoupment of a participant’s overpayment from a participant’s surviving spouse or other designated beneficiary, and
Eliminate recoupment on a revised benefit determination, except under specified circumstances such as where there is a post-benefit determination qualified domestic relations order (QDRO).

Major provisions of the recoupment rules that are not changing are as follows:

No interest is ever charged by PBGC on net overpayments,
Recoupment ends one month early if the amount remaining to be recouped in the final month is less than the amount of the monthly reduction,
Recoupment constitutes full repayment of the net overpayment.

The proposed rule would also codify PBGC’s policy of administrative correction to correct payment errors and clarify when PBGC uses recovery methods instead of recoupment.

Comments are due September 4, 2026.