[Federal Register: July 1, 1996 (Rules and Regulations)]
[Page 34102-34137]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01jy96-19]

[[pp. 34102-34137]] Reorganization, Renumbering, and Reinvention of Regulations

[[Continued from page 34101]]

[[Page 34102]]

withdrew from the plan (or prior plan) during those plan years.

Sec. 4211.34 Rolling-5 method for withdrawals after the initial plan year.

(a) General rule. Under this section, the amount of unfunded vested benefits allocable to an employer that withdraws from a merged plan after the initial plan year is the sum of the employer's proportional share, if any, of the unamortized amount of the plan's initial plan year unfunded vested benefits (determined under paragraph (b) of this section) and the employer's proportional share of the unamortized amount of the unfunded vested benefits arising after the initial plan year (determined under paragraph (c) of this section).
(b) Share of initial plan year unfunded vested benefits. An employer's proportional share, if any, of the unamortized amount of the plan's initial plan year unfunded vested benefits is the sum of the employer's share of its prior plan's liabilities, as determined under Sec. 4211.32(b)(1), and the employer's share of the adjusted initial plan year unfunded vested benefits, as determined under Sec. 4211.32(b)(2), with such sum reduced as if it were being fully amortized in level annual installments over five years beginning with the first plan year after the initial plan year.
(c) Share of unfunded vested benefits arising after the initial plan year. An employer's proportional share of the amount of the plan's unfunded vested benefits arising after the initial plan year is the employer's proportional share determined under Sec. 4211.33(c).

Sec. 4211.35 Direct attribution method for withdrawals after the initial plan year.

The allocation method under this section is the allocation method described in section 4211(c)(4) of ERISA.

Sec. 4211.36 Modifications to the determination of initial liabilities, the amortization of initial liabilities, and the allocation fraction.

(a) General rule. A plan using any of the allocation methods described in Secs. 4211.32 through 4211.34 may, by plan amendment and without PBGC approval, adopt any of the modifications described in this section.
(b) Restarting initial liabilities. A plan may be amended to allocate the initial plan year unfunded vested benefits under Sec. 4211.32(b), Sec. 4211.33(b), or Sec. 4211.34(b) without separately allocating to employers the liabilities attributable to their participation under their prior plans. An amendment under this paragraph must include an allocation fraction under paragraph (d) of this section for determining the employer's proportional share of the total unfunded benefits as of the close of the initial plan year.
(c) Amortizing initial liabilities. A plan may by amendment modify the amortization of initial liabilities in either of the following ways:
(1) If two or more plans that use the presumptive allocation method of section 4211(b) of ERISA merge, the merged plan may adjust the amortization of initial liabilities under Sec. 4211.32(b) to amortize those unfunded vested benefits over the remaining length of the prior plans' amortization schedules.
(2) A plan that has adopted the allocation method under Sec. 4211.33 or Sec. 4211.34 may adjust the amortization of initial liabilities under Sec. 4211.33(b) or Sec. 4211.34(b) to amortize those unfunded vested benefits in level annual installments over any period of at least five and not more than fifteen years.
(d) Changing the allocation fraction. A plan may by amendment replace the allocation fraction under Sec. 4211.32(b), Sec. 4211.33(b), or Sec. 4211.34(b) with any of the following contribution-based fractions--
(1) A fraction, the numerator of which is the total amount required to be contributed under the merged and prior plans by the withdrawing employer in the 60-month period ending on the last day of the initial plan year, and the denominator of which is the sum for that period of the contributions made by all employers that had not withdrawn as of the end of the initial plan year;
(2) A fraction, the numerator of which is the total amount required to be contributed by the withdrawing employer for the initial plan year and the four preceding full plan years of its prior plan, and the denominator of which is the sum of all contributions made over that period by employers that had not withdrawn as of the end of the initial plan year; or
(3) A fraction, the numerator of which is the total amount required to be contributed to the plan by the withdrawing employer since the effective date of the merger, and the denominator of which is the sum of all contributions made over that period by employers that had not withdrawn as of the end of the initial plan year.

Sec. 4211.37 Allocating unfunded vested benefits for withdrawals before the end of the initial plan year.

If an employer withdraws after the effective date of a merger and before the end of the initial plan year, the amount of unfunded vested benefits allocable to the employer shall be determined as if each plan had remained a separate plan. In making this determination, the plan sponsor shall use the allocation method of the withdrawing employer's prior plan and shall compute the employer's allocable share of the plan's unfunded vested benefits as if the day before the effective date of the merger were the end of the last plan year prior to the withdrawal.

PART 4219--NOTICE, COLLECTION, AND REDETERMINATION OF WITHDRAWAL LIABILITY

Subpart A--General

Sec. 4219.1 Purpose and scope.
4219.2 Definitions.

Subpart B--Redetermination of Withdrawal Liability Upon Mass Withdrawal

4219.11 Withdrawal liability upon mass withdrawal.
4219.12 Employers liable upon mass withdrawal.
4219.13 Amount of liability for de minimis amounts.
4219.14 Amount of liability for 20-year-limitation amounts.
4219.15 Determination of reallocation liability.
4219.16 Imposition of liability.
4219.17 Filings with PBGC.
4219.18 Withdrawal in a plan year in which substantially all employers withdraw.
4219.19 Information collection.

Subpart C--Overdue, Defaulted, and Overpaid Withdrawal Liability

4219.31 Overdue and defaulted withdrawal liability; overpayment.
4219.32 Interest on overdue, defaulted and overpaid withdrawal liability.
4219.33 Plan rules concerning overdue and defaulted withdrawal liability.

Authority: 29 U.S.C. 1302(b)(3) and 1399(c)(6).

Subpart A--General

Sec. 4219.1 Purpose and scope.

(a) Subpart A. Subpart A of this part describes the purpose and scope of the provisions in this part and defined terms used in this part.
(b) Subpart B.
(1) Purpose. When a multiemployer plan terminates by the withdrawal of every employer from the plan, or when substantially all employers withdraw from a multiemployer plan pursuant to an agreement or arrangement to withdraw from the plan, section 4219(c)(1)(D)(i) of ERISA requires that the liability of such withdrawing employers be determined (or redetermined) without regard to the 20-year limitation on annual payments established in section 4219(c)(1)(B) of ERISA. In addition, section 4219(c)(1)(D)(ii) requires that, upon the

[[Page 34103]]

occurrence of a withdrawal described above, the total unfunded vested benefits of the plan be fully allocated among such withdrawing employers in a manner that is not inconsistent with PBGC regulations. Section 4209(c) of ERISA provides that the de minimis reduction established in sections 4209 (a) and (b) of ERISA shall not apply to an employer that withdraws in a plan year in which substantially all employers withdraw from the plan, or to an employer that withdraws pursuant to an agreement to withdraw during a period of one or more plan years during which substantially all employers withdraw pursuant to an agreement or arrangement to withdraw. The purpose of subpart B of this part is to prescribe rules, pursuant to sections 4219(c)(1)(D) and 4209(c) of ERISA, for redetermining an employer's withdrawal liability and fully allocating the unfunded vested benefits of a multiemployer plan in either of two mass-withdrawal situations: the termination of a plan by the withdrawal of every employer and the withdrawal of substantially all employers pursuant to an agreement or arrangement to withdraw. Subpart B also prescribes rules for redetermining the liability of an employer without regard to section 4209 (a) or (b) when the employer withdraws in a plan year in which substantially all employers withdraw, regardless of the occurrence of a mass withdrawal. (See part 4281 regarding the valuation of unfunded vested benefits to be fully allocated under subpart B, and parts 4041A and 4281 regarding the powers and duties of the plan sponsor of a plan terminated by mass withdrawal.)
(2) Scope. Subpart B applies to multiemployer plans covered by title IV of ERISA, with respect to which there is a termination by the withdrawal of every employer (including a plan created by a partition pursuant to section 4233 of ERISA) or a withdrawal of substantially all employers in the plan pursuant to an agreement or arrangement to withdraw from the plan, and to employers that withdraw from such multiemployer plans. The obligations of a plan sponsor of a mass- withdrawal-terminated plan under subpart B shall cease to apply when the plan assets are distributed in full satisfaction of all nonforfeitable benefits under the plan. Subpart B also applies, to the extent appropriate, to multiemployer plans with respect to which there is a withdrawal of substantially all employers in a single plan year and to employers that withdraw from such plans in that plan year.
(c) Subpart C. Subpart C establishes the interest rate to be charged on overdue, defaulted and overpaid withdrawal liability under section 4219(c)(6) of ERISA, and authorizes multiemployer plans to adopt alternative rules concerning assessment of interest and related matters. Subpart C applies to multiemployer plans covered under title IV of ERISA, and to employers that have withdrawn from such plans after April 28, 1980 (May 2, 1979, for certain employers in the seagoing industry).

Sec. 4219.2 Definitions.

(a) The following terms are defined in section 4001.2 of this chapter: employer, ERISA, IRS, mass withdrawal, multiemployer plan, nonforfeitable benefit, PBGC, plan, and plan year.
(b) For purposes of this part:
Initial withdrawal liability means the amount of withdrawal liability determined in accordance with sections 4201 through 4225 of title IV without regard to the occurrence of a mass withdrawal.
Mass withdrawal liability means the sum of an employer's liability for de minimis amounts, liability for 20-year-limitation amounts, and reallocation liability.
Mass withdrawal valuation date means--
(1) In the case of a termination by mass withdrawal, the last day of the plan year in which the plan terminates; or
(2) in the case of a withdrawal of substantially all employers pursuant to an agreement or arrangement to withdraw, the last day of the plan year as of which substantially all employers have withdrawn. Reallocation liability means the amount of unfunded vested benefits allocated to an employer in the event of a mass withdrawal.
Reallocation record date means a date selected by the plan sponsor, which shall be not earlier than the date of the plan's actuarial report for the year of the mass withdrawal and not later than one year after the mass withdrawal valuation date.
Redetermination liability means the sum of an employer's liability for de minimis amounts and the employer's liability for 20-year- limitation amounts.
Unfunded vested benefits means the amount by which the present value of a plan's vested benefits exceeds the value of plan assets (including claims of the plan for unpaid initial withdrawal liability and redetermination liability), determined in accordance with section 4281 of ERISA and part 4281, subpart B.
(c) For purposes of subpart B--
Withdrawal means a complete withdrawal as defined in section 4203 of ERISA.

Subpart B--Redetermination of Withdrawal Liability Upon Mass Withdrawal

Sec. 4219.11 Withdrawal liability upon mass withdrawal.

(a) Initial withdrawal liability. The plan sponsor of a multiemployer plan that experiences a mass withdrawal shall determine initial withdrawal liability pursuant to section 4201 of ERISA of every employer that has completely or partially withdrawn from the plan and for whom the liability has not previously been determined and, in accordance with section 4202 of ERISA, notify each employer of the amount of the initial withdrawal liability and collect the amount of the initial withdrawal liability from each employer.
(b) Mass withdrawal liability. The plan sponsor of a multiemployer plan that experiences a mass withdrawal shall also--
(1) Notify withdrawing employers, in accordance with Sec. 4219.16(a), that a mass withdrawal has occurred;
(2) Within 150 days after the mass withdrawal valuation date, determine the liability of withdrawn employers for de minimis amounts and for 20-year-limitation amounts in accordance with Secs. 4219.13 and 4219.14;
(3) Within one year after the reallocation record date, determine the reallocation liability of withdrawn employers in accordance with Sec. 4219.15;
(4) Notify each withdrawing employer of the amount of mass withdrawal liability determined pursuant to this subpart and the schedule for payment of such liability, and demand payment of and collect that liability, in accordance with Sec. 4219.16; and
(5) Notify the PBGC of the occurrence of a mass withdrawal and certify, in accordance with Sec. 4219.17, that determinations of mass withdrawal liability have been completed.
(c) Extensions of time. The plan sponsor of a multiemployer plan that experiences a mass withdrawal may apply to the PBGC for an extension of the deadlines contained in paragraph (b) of this section. The PBGC shall approve such a request only if it finds that failure to grant the extension will create an unreasonable risk of loss to plan participants or the PBGC.

Sec. 4219.12 Employers liable upon mass withdrawal.

(a) Liability for de minimis amounts. An employer shall be liable for de

[[Page 34104]]

minimis amounts to the extent provided in section 4219(c)(1)(D) of ERISA if the employer's initial withdrawal liability was reduced pursuant to section 4209 (a) or (b) of ERISA.
(b) Liability for 20-year-limitation amounts. An employer shall be liable for 20-year-limitation amounts to the extent provided in section 4219(c)(1)(D) of ERISA.
(c) Liability for reallocation liability. An employer shall be liable for reallocation liability if the employer withdrew pursuant to an agreement or arrangement to withdraw from a multiemployer plan from which substantially all employers withdrew pursuant to an agreement or arrangement to withdraw, or if the employer withdrew after the beginning of the second full plan year preceding the termination date from a plan that terminated by the withdrawal of every employer, and, as of the reallocation record date--
(1) The employer has not been completely liquidated or dissolved;
(2) The employer is not the subject of a case or proceeding under title 11, United States Code, or any case or proceeding under similar provisions of state insolvency laws, except that a plan sponsor may determine that such an employer is liable for reallocation liability if the plan sponsor determines that the employer is reasonably expected to be able to pay its initial withdrawal liability and its redetermination liability in full and on time to the plan; and
(3) The plan sponsor has not determined that the employer's initial withdrawal liability or its redetermination liability is limited by section 4225 of ERISA.
(d) General exclusion. In the event that a plan experiences successive mass withdrawals, an employer that has been determined to be liable under this subpart for any component of mass withdrawal liability shall not be liable as a result of the same withdrawal for that component of mass withdrawal liability with respect to a subsequent mass withdrawal.
(e) Free-look rule. An employer that is not liable for initial withdrawal liability pursuant to a plan amendment adopting section 4210(a) of ERISA shall not be liable for de minimis amounts or for 20- year-limitation amounts, but shall be liable for reallocation liability in accordance with paragraph (c) of this section.
(f) Payment of initial withdrawal liability. An employer's payment of its total initial withdrawal liability, whether by prepayment or otherwise, for a withdrawal which is later determined to be part of a mass withdrawal shall not exclude the employer from or otherwise limit the employer's mass withdrawal liability under this subpart.
(g) Agreement presumed. Withdrawal by an employer during a period of three consecutive plan years within which substantially all employers withdraw from a plan shall be presumed to be a withdrawal pursuant to an agreement or arrangement to withdraw unless the employer proves otherwise by a preponderance of the evidence.

Sec. 4219.13 Amount of liability for de minimis amounts.

An employer that is liable for de minimis amounts shall be liable to the plan for the amount by which the employer's allocable share of unfunded vested benefits for the purpose of determining its initial withdrawal liability was reduced pursuant to section 4209 (a) or (b) of ERISA. Any liability for de minimis amounts determined under this section shall be limited by section 4225 of ERISA to the extent that section would have been limiting had the employer's initial withdrawal liability been determined without regard to the de minimis reduction.

Sec. 4219.14 Amount of liability for 20-year-limitation amounts.

An employer that is liable for 20-year-limitation amounts shall be liable to the plan for an amount equal to the present value of all initial withdrawal liability payments for which the employer was not liable pursuant to section 4219(c)(1)(B) of ERISA. The present value of such payments shall be determined as of the end of the plan year preceding the plan year in which the employer withdrew, using the assumptions that were used to determine the employer's payment schedule for initial withdrawal liability pursuant to section 4219(c)(1)(A)(ii) of ERISA. Any liability for 20-year-limitation amounts determined under this section shall be limited by section 4225 of ERISA to the extent that section would have been limiting had the employer's initial withdrawal liability been determined without regard to the 20-year limitation.

Sec. 4219.15 Determination of reallocation liability.

(a) General rule. In accordance with the rules in this section, the plan sponsor shall determine the amount of unfunded vested benefits to be reallocated and shall fully allocate those unfunded vested benefits among all employers liable for reallocation liability.
(b) Amount of unfunded vested benefits to be reallocated. For purposes of this section, the amount of a plan's unfunded vested benefits to be reallocated shall be the amount of the plan's unfunded vested benefits, determined as of the mass withdrawal valuation date, adjusted to exclude from plan assets the value of the plan's claims for unpaid initial withdrawal liability and unpaid redetermination liability that are deemed to be uncollectible under Sec. 4219.12(c)(1) or (c)(2).
(c) Amount of reallocation liability. An employer's reallocation liability shall be equal to the sum of the employer's initial allocable share of the plan's unfunded vested benefits, as determined under paragraph (c)(1) of this section, plus any unassessable amounts allocated to the employer under paragraph (c)(2), limited by section 4225 of ERISA to the extent that section would have been limiting had the employer's reallocation liability been included in the employer's initial withdrawal liability. If a plan is determined to have no unfunded vested benefits to be reallocated, the reallocation liability of each liable employer shall be zero.
(1) Initial allocable share. Except as otherwise provided in rules adopted by the plan pursuant to paragraph (d) of this section, and in accordance with paragraph (c)(3) of this section, an employer's initial allocable share shall be equal to the product of the plan's unfunded vested benefits to be reallocated, multiplied by a fraction--
(i) The numerator of which is the sum of the employer's initial withdrawal liability and the employer's redetermination liability, if any; and
(ii) The denominator of which is the sum of all initial withdrawal liabilities and all the redetermination liabilities of all employers liable for reallocation liability.
(2) Allocation of unassessable amounts. If after computing each employer's initial allocable share of unfunded vested benefits, the plan sponsor knows that any portion of an employer's initial allocable share is unassessable as withdrawal liability because of the limitations in section 4225 of ERISA, the plan sponsor shall allocate any such unassessable amounts among all other liable employers. This allocation shall be done by prorating the unassessable amounts on the basis of each such employer's initial allocable share. No employer shall be liable for unfunded vested benefits allocated under paragraph (c)(1) or this paragraph to another employer that are determined to be unassessable or uncollectible

[[Page 34105]]

subsequent to the plan sponsor's demand for payment of reallocation liability.
(3) Special rule for certain employers with no or reduced initial withdrawal liability. If an employer has no initial withdrawal liability because of the application of the free-look rule in section 4210 of ERISA, then, in computing the fraction prescribed in paragraph (c)(1), the plan sponsor shall use the employer's allocable share of unfunded vested benefits, determined under section 4211 of ERISA at the time of the employer's withdrawal and adjusted in accordance with section 4225 of ERISA, if applicable. If an employer's initial withdrawal liability was reduced pursuant to section 4209(a) or (b) of ERISA and the employer is not liable for de minimis amounts pursuant to Sec. 4219.13, then, in computing the fraction prescribed in paragraph (c)(1) of this section, the plan sponsor shall use the employer's allocable share of unfunded vested benefits, determined under section 4211 of ERISA at the time of the employer's withdrawal and adjusted in accordance with section 4225 of ERISA, if applicable.
(d) Plan rules. Plans may adopt rules for calculating an employer's initial allocable share of the plan's unfunded vested benefits in a manner other than that prescribed in paragraph (c)(1) of this section, provided that those rules allocate the plan's unfunded vested benefits to substantially the same extent the prescribed rules would. Plan rules adopted under this paragraph shall operate and be applied uniformly with respect to each employer. If such rules would increase the reallocation liability of any employer, they may be effective with respect to that employer earlier than three full plan years after their adoption only if the employer consents to the application of the rules to itself. The plan sponsor shall give a written notice to each contributing employer and each employee organization that represents employees covered by the plan of the adoption of plan rules under this paragraph.

Sec. 4219.16 Imposition of liability.

(a) Notice of mass withdrawal. Within 30 days after the mass withdrawal valuation date, the plan sponsor shall give written notice of the occurrence of a mass withdrawal to each employer that the plan sponsor reasonably expects may be a liable employer under Sec. 4219.12. The notice shall include--
(1) The mass withdrawal valuation date;
(2) A description of the consequences of a mass withdrawal under this subpart; and
(3) A statement that each employer obligated to make initial withdrawal liability payments shall continue to make those payments in accordance with its schedule. Failure of the plan sponsor to notify an employer of a mass withdrawal as required by this paragraph shall not cancel the employer's mass withdrawal liability or waive the plan's claim for such liability.
(b) Notice of redetermination liability. Within 30 days after the date as of which the plan sponsor is required under Sec. 4219.11(b)(2) to have determined the redetermination liability of employers, the plan sponsor shall issue a notice of redetermination liability in writing to each employer liable under Sec. 4219.12 for de minimis amounts or 20- year-limitation amounts, or both. The notice shall include--
(1) The amount of the employer's liability, if any, for de minimis amounts determined pursuant to Sec. 4219.13;
(2) The amount of the employer's liability, if any, for 20-year- limitation amounts determined pursuant to Sec. 4219.14;
(3) The schedule for payment of the liability determined under paragraph (f) of this section;
(4) A demand for payment of the liability in accordance with the schedule; and
(5) A statement of when the plan sponsor expects to issue notices of reallocation liability to liable employers.
(c) Notice of reallocation liability. Within 30 days after the date as of which the plan sponsor is required under Sec. 4219.11(b)(3) to have determined the reallocation liability of employers, the plan sponsor shall issue a notice of reallocation liability in writing to each employer liable for reallocation liability. The notice shall include--
(1) The amount of the employer's reallocation liability determined pursuant to Sec. 4219.15;
(2) The schedule for payment of the liability determined under paragraph (f) of this section; and
(3) A demand for payment of the liability in accordance with the schedule.
(d) Notice to employers not liable. The plan sponsor shall notify in writing any employer that receives a notice of mass withdrawal under paragraph (a) of this section and subsequently is determined not to be liable for mass withdrawal liability or any component thereof. The notice shall specify the liability from which the employer is excluded and shall be provided to the employer not later than the date by which liable employers are to be provided notices of reallocation liability pursuant to paragraph (c) of this section. If the employer is not liable for mass withdrawal liability, the notice shall also include a statement, if applicable, that the employer is obligated to continue to make initial withdrawal liability payments in accordance with its existing schedule for payment of such liability.
(e) Combined notices. A plan sponsor may combine a notice of redetermination liability with the notice of and demand for payment of initial withdrawal liability. If a mass withdrawal and a withdrawal described in Sec. 4219.18 occur concurrently, a plan sponsor may combine--
(1) A notice of mass withdrawal with a notice of withdrawal issued pursuant to Sec. 4219.18(d); and
(2) A notice of redetermination liability with a notice of liability issued pursuant to Sec. 4219.18(e).
(f) Payment schedules. The plan sponsor shall establish payment schedules for payment of an employer's mass withdrawal liability in accordance with the rules in section 4219(c) of ERISA, as modified by this paragraph. For an employer that owes initial withdrawal liability as of the mass withdrawal valuation date, the plan sponsor shall establish new payment schedules for each element of mass withdrawal liability by amending the initial withdrawal liability payment schedule in accordance with the paragraph (f)(1) of this section. For all other employers, the payment schedules shall be established in accordance with paragraph (f)(2).
(1) Employers owing initial withdrawal liability as of mass withdrawal valuation date. For an employer that owes initial withdrawal liability as of the mass withdrawal valuation date, the plan sponsor shall amend the existing schedule of payments in order to amortize the new amounts of liability being assessed, i.e., redetermination liability and reallocation liability. With respect to redetermination liability, the plan sponsor shall add that liability to the total initial withdrawal liability and determine a new payment schedule, in accordance with section 4219(c)(1) of ERISA, using the interest assumptions that were used to determine the original payment schedule. For reallocation liability, the plan sponsor shall add that liability to the present value, as of the date following the mass withdrawal valuation date, of the unpaid portion of the amended payment schedule described in the preceding sentence and determine a new payment schedule of level annual payments, calculated as if the first payment were made on the day

[[Page 34106]]

following the mass withdrawal valuation date using the interest assumptions used for determining the amount of unfunded vested benefits to be reallocated.
(2) Other employers. For an employer that had no initial withdrawal liability, or had fully paid its liability prior to the mass withdrawal valuation date, the plan sponsor shall determine the payment schedule for redetermination liability, in accordance with section 4219(c)(1) of ERISA, in the same manner and using the same interest assumptions as were used or would have been used in determining the payment schedule for the employer's initial withdrawal liability. With respect to reallocation liability, the plan sponsor shall follow the rules prescribed in paragraph (f)(1) of this section.
(g) Review of mass withdrawal liability determinations. Determinations of mass withdrawal liability made pursuant to this subpart shall be subject to plan review under section 4219(b)(2) of ERISA and to arbitration under section 4221 of ERISA within the times prescribed by those sections. Matters that relate solely to the amount of, and schedule of payments for, an employer's initial withdrawal liability are not matters relating to the employer's liability under this subpart and are not subject to review pursuant to this paragraph. (h) Cessation of withdrawal liability obligations. If the plan sponsor of a terminated plan distributes plan assets in full satisfaction of all nonforfeitable benefits under the plan, the plan sponsor's obligation to impose and collect liability, and each employer's obligation to pay liability, in accordance with this subpart ceases on the date of such distribution.
(i) Determination that a mass withdrawal has not occurred. If a plan sponsor determines, after imposing mass withdrawal liability pursuant to this subpart, that a mass withdrawal has not occurred, the plan sponsor shall refund to employers all payments of mass withdrawal liability with interest, except that a plan sponsor shall not refund payments of liability for de minimis amounts to an employer that remains liable for such amounts under Sec. 4219.18. Interest shall be credited at the interest rate prescribed in subpart C and shall accrue from the date the payment was received by the plan until the date of the refund.

Sec. 4219.17 Filings with PBGC.

(a) Filing requirements. The plan sponsor shall file with PBGC a notice that a mass withdrawal has occurred and separate certifications that determinations of redetermination liability and reallocation liability have been made and notices provided to employers in accordance with this subpart.
(b) Who shall file. The plan sponsor or a duly authorized representative acting on behalf of the plan sponsor shall sign and file the notice and the certifications.
(c) When to file. A notice of mass withdrawal for a plan from which substantially all employers withdraw pursuant to an agreement or arrangement to withdraw shall be filed with the PBGC no later than 30 days after the mass withdrawal valuation date. A notice of mass withdrawal termination shall be filed within the time prescribed for the filing of that notice in part 4041A, subparts A and B, of this chapter. Certifications of liability determinations shall be filed with the PBGC no later than 30 days after the date on which the plan sponsor is required to have provided employers with notices pursuant to Sec. 4219.16.
(d) Where to file. The notice and certifications may be sent by mail or submitted by hand during normal working hours to Reports Processing, Insurance Operations Department, Pension Benefit Guaranty Corporation, 1200 K Street NW., Washington, DC 20005-4026.
(e) Filing date. For purposes of paragraph (c)--
(1) The notice is considered filed on the date of the postmark stamped on the cover in which the notice is mailed if--
(i) The postmark was made by the United States Postal Service; and (ii) The notice was mailed postage prepaid, properly packaged and addressed to the PBGC.
(2) If both conditions described in paragraph (e)(1) are not met, the notice is considered filed on the date it is received by the PBGC, except that notices received after regular business hours are considered filed on the next regular business day.
(f) Contents of notice of mass withdrawal. If a plan terminates by the withdrawal of every employer, a notice of termination filed in accordance with part 4041A, subparts A and B, of this chapter shall satisfy the requirements for a notice of mass withdrawal under this subpart. If substantially all employers withdraw from a plan pursuant to an agreement or arrangement to withdraw, the notice of mass withdrawal shall contain the following information:
(1) The name of the plan.
(2) The name, address and telephone number of the plan sponsor and of the duly authorized representative, if any, of the plan sponsor.
(3) The nine-digit Employer Identification Number (EIN) assigned by the IRS to the plan sponsor and the three-digit Plan Identification Number (PIN) assigned by the plan sponsor to the plan, and, if different, the EIN or PIN last filed with the PBGC. If no EIN or PIN has been assigned, the notice shall so indicate.
(4) The mass withdrawal valuation date.
(5) A description of the facts on which the plan sponsor has based its determination that a mass withdrawal has occurred, including the number of contributing employers withdrawn and the number remaining in the plan, and a description of the effect of the mass withdrawal on the plan's contribution base.
(g) Contents of certifications. Each certification shall contain the following information:
(1) The name of the plan.
(2) The name, address and telephone number of the plan sponsor and of the duly authorized representative, if any, of the plan sponsor.
(3) The nine-digit Employer Identification Number (EIN) assigned by the IRS to the plan sponsor and the three-digit Plan Identification Number (PIN) last assigned by the plan sponsor to the plan, and, if different, the EIN or PIN filed with the PBGC. If no EIN or PIN has been assigned, the notice shall so indicate.
(4) Identification of the liability determination to which the certification relates.
(5) A certification, signed by the plan sponsor or a duly authorized representative, that the determinations have been made and the notices given in accordance with this subpart.
(6) For reallocation liability certifications--
(i) A certification, signed by the plan's actuary, that the determination of unfunded vested benefits has been done in accordance with part 4281, subpart B; and
(ii) A copy of plan rules, if any, adopted pursuant to Sec. 4219.15(d).
(h) Additional information. In addition to the information described in paragraph (g) of this section, the PBGC may require the plan sponsor to submit any other information the PBGC determines it needs in order to monitor compliance with this subpart.

Sec. 4219.18 Withdrawal in a plan year in which substantially all employers withdraw.

(a) General rule. An employer that withdraws in a plan year in which substantially all employers withdraw

[[Page 34107]]

from the plan shall be liable to the plan for de minimis amounts if the employer's initial withdrawal liability was reduced pursuant to section 4209(a) or (b) of ERISA.
(b) Amount of liability. An employer's liability for de minimis amounts under this section shall be determined pursuant to Sec. 4219.13.
(c) Plan sponsor's obligations. The plan sponsor of a plan that experiences a withdrawal described in paragraph (a) shall--
(1) Determine and collect initial withdrawal liability of every employer that has completely or partially withdrawn, in accordance with sections 4201 and 4202 of ERISA;
(2) Notify each employer that is or may be liable under this section, in accordance with paragraph (d) of this section;
(3) Within 90 days after the end of the plan year in which the withdrawal occurred, determine, in accordance with paragraph (b) of this section, the liability of each withdrawing employer that is liable under this section;
(4) Notify each liable employer, in accordance with paragraph (e) of this section, of the amount of its liability under this section, demand payment of and collect that liability; and
(5) Certify to the PBGC that determinations of liability have been completed, in accordance with paragraph (g) of this section.
(d) Notice of withdrawal. Within 30 days after the end of a plan year in which a plan experiences a withdrawal described in paragraph (a), the plan sponsor shall notify in writing each employer that is or may be liable under this section. The notice shall specify the plan year in which substantially all employers have withdrawn, describe the consequences of such withdrawal under this section, and state that an employer obligated to make initial withdrawal liability payments shall continue to make those payments in accordance with its schedule.
(e) Notice of liability. Within 30 days after the determination of liability, the plan sponsor shall issue a notice of liability in writing to each liable employer. The notice shall include--
(1) The amount of the employer's liability for de minimis amounts;
(2) A schedule for payment of the liability, determined under Sec. 4219.16(f); and
(3) A demand for payment of the liability in accordance with the schedule.
(f) Review of liability determinations. Determinations of liability made pursuant to this section shall be subject to plan review under section 4219(b)(2) of ERISA and to arbitration under section 4221 of ERISA, subject to the limitations contained in Sec. 4219.16(g).
(g) Notice to the PBGC. No later than 30 days after the notices of liability under this section are required to be provided to liable employers, the plan sponsor shall file with the PBGC a notice. The notice shall include the items described in Sec. 4219.17 (g)(1) through (g)(3), as well as the information listed below. In addition, the PBGC may require the plan sponsor to submit any further information that the PBGC determines it needs in order to monitor compliance with this section.
(1) The plan year in which the withdrawal occurred.
(2) A description of the effect of the withdrawal, including the number of contributing employers that withdrew in the plan year in which substantially all employers withdrew, the number of employers remaining in the plan, and a description of the effect of the withdrawal on the plan's contribution base.
(3) A certification, signed by the plan sponsor or duly authorized representative, that determinations have been made and notices given in accordance with this section.

Sec. 4219.19 Information collection.

The information collection requirements contained in Secs. 4219.16, 4219.17, and 4219.18 have been approved by the Office of Management and Budget under control number 1212-0034.

Subpart C--Overdue, Defaulted, and Overpaid Withdrawal Liability

Sec. 4219.31 Overdue and defaulted withdrawal liability; overpayment.

(a) Overdue withdrawal liability payment. Except as otherwise provided in rules adopted by the plan in accordance with Sec. 4219.33, a withdrawal liability payment is overdue if it is not paid on the date set forth in the schedule of payments established by the plan sponsor.
(b) Default.
(1) Except as provided in paragraph (c)(1), ``default'' means--
(i) The failure of an employer to pay any overdue withdrawal liability payment within 60 days after the employer receives written notification from the plan sponsor that the payment is overdue; and
(ii) Any other event described in rules adopted by the plan which indicates a substantial likelihood that an employer will be unable to pay its withdrawal liability.
(2) In the event of a default, a plan sponsor may require immediate payment of all or a portion of the outstanding amount of an employer's withdrawal liability, plus interest. In the event that the plan sponsor accelerates only a portion of the outstanding amount of an employer's withdrawal liability, the plan sponsor shall establish a new schedule of payments for the remaining amount of the employer's withdrawal liability.
(c) Plan review or arbitration of liability determination. The following rules shall apply with respect to the obligation to make withdrawal liability payments during the period for plan review and arbitration and with respect to the failure to make such payments:
(1) A default as a result of failure to make any payments shall not occur until the 61st day after the last of--
(i) Expiration of the period described in section 4219(b)(2)(A) of ERISA;
(ii) If the employer requests review under section 4219(b)(2)(A) of ERISA of the plan's withdrawal liability determination or the schedule of payments established by the plan, expiration of the period described in section 4221(a)(1) of ERISA for initiation of arbitration; or
(iii) If arbitration is timely initiated either by the plan, the employer or both, issuance of the arbitrator's decision.
(2) Any amounts due before the expiration of the period described in paragraph (c)(1) shall be paid in accordance with the schedule established by the plan sponsor. If a payment is not made when due under the schedule, the payment is overdue and interest shall accrue in accordance with the rules and at the same rate set forth in Sec. 4219.32.
(d) Overpayments. If the plan sponsor or an arbitrator determines that payments made in accordance with the schedule of payments established by the plan sponsor have resulted in an overpayment of withdrawal liability, the plan sponsor shall refund the overpayment, with interest, in a lump sum. The plan sponsor shall credit interest on the overpayment from the date of the overpayment to the date on which the overpayment is refunded to the employer at the same rate as the rate for overdue withdrawal liability payments, as established under Sec. 4219.32 or by the plan pursuant to Sec. 4219.33.

Sec. 4219.32 Interest on overdue, defaulted and overpaid withdrawal liability.

(a) Interest assessed. The plan sponsor of a multiemployer plan--
(1) Shall assess interest on overdue withdrawal liability payments from the due date, as defined in paragraph (d) of

[[Page 34108]]

this section, until the date paid, as defined in paragraph (e); and (2) In the event of a default, may assess interest on any accelerated portion of the outstanding withdrawal liability from the due date, as defined in paragraph (d) of this section, until the date paid, as defined in paragraph (e).
(b) Interest rate. Except as otherwise provided in rules adopted by the plan pursuant to Sec. 4219.33, interest under this section shall be charged or credited for each calendar quarter at an annual rate equal to the average quoted prime rate on short-term commercial loans for the fifteenth day (or next business day if the fifteenth day is not a business day) of the month preceding the beginning of each calendar quarter, as reported by the Board of Governors of the Federal Reserve System in Statistical Release H.15 (``Selected Interest Rates'').
(c) Calculation of interest. The interest rate under paragraph (b) of this section is the nominal rate for any calendar quarter or portion thereof. The amount of interest due the plan for overdue or defaulted withdrawal liability, or due the employer for overpayment, is equal to the overdue, defaulted, or overpaid amount multiplied by:
(1) For each full calendar quarter in the period from the due date (or date of overpayment) to the date paid (or date of refund), one- fourth of the annual rate in effect for that quarter;
(2) For each full calendar month in a partial quarter in that period, one-twelfth of the annual rate in effect for that quarter; and
(3) For each day in a partial month in that period, one-three- hundred-sixtieth of the annual rate in effect for that month.
(d) Due date. Except as otherwise provided in rules adopted by the plan, the due date from which interest accrues shall be, for an overdue withdrawal liability payment and for an amount of withdrawal liability in default, the date of the missed payment that gave rise to the delinquency or the default.
(e) Date paid. Any payment of withdrawal liability shall be deemed to have been paid on the date on which it is received.

Sec. 4219.33 Plan rules concerning overdue and defaulted withdrawal liability.

Plans may adopt rules relating to overdue and defaulted withdrawal liability, provided that those rules are consistent with ERISA. These rules may include, but are not limited to, rules for determining the rate of interest to be charged on overdue, defaulted and overpaid withdrawal liability (provided that the rate reflects prevailing market rates for comparable obligations); rules providing reasonable grace periods during which late payments may be made without interest; additional definitions of default which indicate a substantial likelihood that an employer will be unable to pay its withdrawal liability; and rules pertaining to acceleration of the outstanding balance on default. Plan rules adopted under this section shall be reasonable. Plan rules shall operate and be applied uniformly with respect to each employer, except that the rules may take into account the creditworthiness of an employer. Rules which take into account the creditworthiness of an employer shall state with particularity the categories of creditworthiness the plan will use, the specific differences in treatment accorded employers in different categories, and the standards and procedures for assigning an employer to a category.

PART 4220--PROCEDURES FOR PBGC APPROVAL OF PLAN AMENDMENTS

Sec.
4220.1 Purpose and scope.
4220.2 Definitions.
4220.3 Requests for PBGC approval.
4220.4 PBGC action on requests.

Authority: 29 U.S.C. 1302(b)(3), 1400.

Sec. 4220.1 Purpose and scope.

(a) General. This part establishes procedures under which a plan sponsor shall request the PBGC to approve a plan amendment under section 4220 of ERISA. This part applies to all multiemployer plans covered by title IV of ERISA that adopt amendments pursuant to the authorization of sections 4201-4219 of ERISA (except for amendments adopted pursuant to section 4211(c)(5)). (The covered amendments are set forth in paragraph (b) of this section.) The subsequent modification of a plan amendment adopted by authorization of those sections is also covered by this part. This part does not, however, cover a plan amendment that merely repeals a previously adopted amendment, returning the plan to the statutorily prescribed rule.
(b) Covered amendments. Amendments made pursuant to the following sections of ERISA are covered by this part:
(1) Section 4203 (b)(1)(B)(ii).
(2) Section 4203(c)(4).
(3) Section 4205(c)(1).
(4) Section 4205(d).
(5) Section 4209(b).
(6) Section 4210(b)(2).
(7) Section 4211(c)(1).
(8) Section 4211(c)(4)(D).
(9) Section 4211(d)(1).
(10) Section 4211(d)(2).
(11) Section 4219(c)(1)(C)(ii)(I).
(12) Section 4219(c)(1)(C)(iii). (c) Exception. Submission of a request for approval under this part is not required for a plan amendment for which the PBGC has published a notice in the Federal Register granting class approval.

Sec. 4220.2 Definitions.

The following terms are defined in Sec. 4001.2 of this chapter: employer, ERISA, IRS, multiemployer plan, PBGC, plan, and plan sponsor.

Sec. 4220.3 Requests for PBGC approval.

(a) Filing of request. A request for approval of an amendment filed with the PBGC in accordance with this section shall constitute notice to the PBGC for purposes of the 90-day period specified in section 4220 of ERISA. A request is deemed filed on the date on which a request containing all information required by paragraph (d) of this section is received by the PBGC.
(b) Who may request. The plan sponsor, or a duly authorized representative acting on behalf of a plan sponsor, shall sign and submit the request.
(c) Where to file. The request shall be delivered by hand or by mail to Reports Processing, Insurance Operations Department, Pension Benefit Guaranty Corporation, 1200 K Street NW., Washington, DC 20005- 4026.
(d) Information. Each request filed shall contain the following information:
(1) The name of the plan for which the amendment is being submitted, and the name, address and the telephone number of the plan sponsor or its duly authorized representative.
(2) The nine-digit Employer Identification Number (EIN) assigned by the IRS to the plan sponsor and the three-digit Plan Identification Number (PIN) assigned by the plan sponsor to the plan, and, if different, the EIN or PIN last filed with PBGC. If no EIN or PIN has been assigned, that fact must be indicated.
(3) A copy of the amendment as adopted, including its proposed effective date.
(4) A copy of the most recent actuarial valuation of the plan.
(5) A statement containing a certification that notice of the adoption of the amendment has been given to all employers who have an obligation to contribute under the plan and to all employee organizations representing employees covered by the plan.

[[Page 34109]]

(6) Any other information that the plan sponsor believes to be pertinent to its request.
(e) Supplemental information. The PBGC may require a plan sponsor to submit any other information that the PBGC determines to be necessary to review a request under this part. The PBGC may suspend the running of the 90-day period pursuant to Sec. 4220.4(c), pending the submission of the supplemental information.

(Approved by the Office of Management and Budget under control number 1212-0031)

Sec. 4220.4 PBGC action on requests.

(a) General. Upon receipt of a complete request, the PBGC shall notify the plan sponsor in writing of the date of commencement of the 90-day period specified in section 4220 of ERISA. Except as provided in paragraph (c) of this section, the PBGC shall approve or disapprove a plan amendment submitted to it under this part within 90 days after receipt of a complete request for approval. If the PBGC fails to act within the 90-day period, or within that period notifies the plan sponsor that it will not disapprove the amendment, the amendment may be made effective without the approval of the PBGC.
(b) Decision on request. The PBGC's decision on a request for approval shall be in writing. If the PBGC disapproves the plan amendment, the decision shall state the reasons for the disapproval. An approval by the PBGC constitutes its finding only with respect to the issue of risk as set forth in section 4220(c) of ERISA, and not with respect to whether the amendment is otherwise properly adopted in accordance with the terms of ERISA and the plan in question.
(c) Suspension of the 90-day period. The PBGC may suspend the running of the 90-day period referred to in paragraph (a) of this section if it determines that additional information is required under Sec. 4220.3(e). When it does so, PBGC's request for additional information will advise the plan sponsor that the running of 90-day period has been suspended. The 90-day period will resume running on the date on which the additional information is received by the PBGC, and the PBGC will notify the plan sponsor of that date upon receipt of the information.

PART 4221--ARBITRATION OF DISPUTES IN MULTIEMPLOYER PLANS

Sec.
4221.1 Purpose and scope.
4221.2 Definitions.
4221.3 Initiation of arbitration.
4221.4 Appointment of the arbitrator.
4221.5 Powers and duties of the arbitrator.
4221.6 Hearing.
4221.7 Reopening of proceedings.
4221.8 Award.
4221.9 Reconsideration of award.
4221.10 Costs.
4221.11 Waiver of rules.
4221.12 Calculation of periods of time.
4221.13 Filing or service of documents.
4221.14 PBGC-approved arbitration procedures.

Authority: 29 U.S.C. 1302(b)(3), 1401.

Sec. 4221.1 Purpose and scope.

(a) Purpose. The purpose of this part is to establish procedures for the arbitration, pursuant to section 4221 of ERISA, of withdrawal liability disputes arising under sections 4201 through 4219 and 4225 of ERISA.
(b) Scope. This part applies to arbitration proceedings initiated pursuant to section 4221 of ERISA and this part on or after September 26, 1985. On and after the effective date, any plan rules governing arbitration procedures (other than a plan rule adopting a PBGC-approved arbitration procedure in accordance with Sec. 4221.14) are effective only to the extent that they are consistent with this part and adopted by the arbitrator in a particular proceeding.

Sec. 4221.2 Definitions.

The following terms are defined in Sec. 4001.2 of this chapter: ERISA, IRS, multiemployer plan, PBGC, plan, and plan sponsor.
In addition, for purposes of this part:
Arbitrator means an individual or panel of individuals selected according to this part to decide a dispute concerning withdrawal liability.
Employer means an individual, partnership, corporation or other entity against which a plan sponsor has made a demand for payment of withdrawal liability pursuant to section 4219(b)(1) of ERISA.
Party or parties means the employer and the plan sponsor involved in a withdrawal liability dispute.
Withdrawal liability dispute means a dispute described in Sec. 4221.1(a) of this chapter.

Sec. 4221.3 Initiation of arbitration.

(a) Time limits--in general. Arbitration of a withdrawal liability dispute may be initiated within the time limits described in section 4221(a)(1) of ERISA.
(b) Waiver or extension of time limits. Arbitration shall be initiated in accordance with this section, notwithstanding any inconsistent provision of any agreement entered into by the parties before the date on which the employer received notice of the plan's assessment of withdrawal liability. The parties may, however, agree at any time to waive or extend the time limits for initiating arbitration.
(c) Establishment of timeliness of initiation. A party that unilaterally initiates arbitration is responsible for establishing that the notice of initiation of arbitration was timely received by the other party. If arbitration is initiated by agreement of the parties, the date on which the agreement to arbitrate was executed establishes whether the arbitration was timely initiated.
(d) Contents of agreement or notice. If the employer initiates arbitration, it shall include in the notice of initiation a statement that it disputes the plan sponsor's determination of its withdrawal liability and is initiating arbitration. A copy of the demand for withdrawal liability and any request for reconsideration, and the response thereto, shall be attached to the notice. If a party other than an employer initiates arbitration, it shall include in the notice a statement that it is initiating arbitration and a brief description of the questions on which arbitration is sought. If arbitration is initiated by agreement, the agreement shall include a brief description of the questions submitted to arbitration. In no case is compliance with formal rules of pleading required.
(e) Effect of deficient agreement or notice. If a party fails to object promptly in writing to deficiencies in an initiation agreement or a notice of initiation of arbitration, it waives its right to object.

Sec. 4221.4 Appointment of the arbitrator.

(a) Appointment of and acceptance by arbitrator. The parties shall select the arbitrator within 45 days after the arbitration is initiated, or within such other period as is mutually agreed after the initiation of arbitration, and shall mail to the designated arbitrator a notice of his or her appointment. The notice of appointment shall include a copy of the notice or agreement initiating arbitration, a statement that the arbitration is to be conducted in accordance with this part, and a request for a written acceptance by the arbitrator. The arbitrator's appointment becomes effective upon his or her written acceptance, stating his or her availability to serve and making any disclosures required by paragraph (b) of this section. If the arbitrator does not accept in writing within 15 days after the notice of appointment is mailed or delivered to him or her, he or she is deemed to have declined to act, and the parties shall select a new arbitrator in accordance with paragraph (d) of this section.

[[Page 34110]]

(b) Disclosure by arbitrator and disqualification. Upon accepting the appointment, the arbitrator shall disclose to the parties any circumstances likely to affect his or her impartiality, including any bias or any financial or personal interest in the result of the arbitration and any past or present relationship with the parties or their counsel. If any party determines that the arbitrator should be disqualified because of the information disclosed, that party shall notify all other parties and the arbitrator no later than 10 days after the arbitrator makes the disclosure required by this paragraph (but in no event later than the commencement of the hearing under Sec. 4221.6). The arbitrator shall then withdraw, and the parties shall select another arbitrator in accordance with paragraph (d) of this section.
(c) Challenge and withdrawal. After the arbitrator has been selected, a party may request that he or she withdraw from the proceedings at any point before a final award is rendered on the ground that he or she is unable to render an award impartially. The request for withdrawal shall be served on all other parties and the arbitrator by hand or by certified or registered mail and shall include a statement of the circumstances that, in the requesting party's view, affect the arbitrator's impartiality and a statement that the requesting party has brought these circumstances to the attention of the arbitrator and the other parties at the earliest practicable point in the proceedings. If the arbitrator determines that the circumstances adduced are likely to affect his or her impartiality and have been presented in a timely fashion, he or she shall withdraw from the proceedings and notify the parties of the reasons for his or her withdrawal. The parties shall then select a new arbitrator in accordance with paragraph (d) of this section.
(d) Filling vacancies. If the designated arbitrator declines his or her appointment or, after accepting his or her appointment, is disqualified, resigns, dies, withdraws, or is unable to perform his or her duties at any time before a final award is rendered, the parties shall select another arbitrator to fill the vacancy. The selection shall be made, in accordance with the procedure used in the initial selection, within 20 days after the parties receive notice of the vacancy. The matter shall then be reheard by the newly chosen arbitrator, who may, in his or her discretion, rely on all or any portion of the record already established.
(e) Failure to select arbitrator. If the parties fail to select an arbitrator within the time prescribed by this section, either party or both may seek the designation and appointment of an arbitrator in a United States district court pursuant to the provisions of title 9 of the United States Code.

Sec. 4221.5 Powers and duties of the arbitrator.

(a) Arbitration hearing. Except as otherwise provided in this part, the arbitrator shall conduct the arbitration hearing under Sec. 4221.6 in the same manner, and shall possess the same powers, as an arbitrator conducting a proceeding under title 9 of the United States Code.
(1) Application of the law. In reaching his or her decision, the arbitrator shall follow applicable law, as embodied in statutes, regulations, court decisions, interpretations of the agencies charged with the enforcement of ERISA, and other pertinent authorities.
(2) Prehearing discovery. The arbitrator may allow any party to conduct prehearing discovery by interrogatories, depositions, requests for the production of documents, or other means, upon a showing that the discovery sought is likely to lead to the production of relevant evidence and will not be disproportionately burdensome to the other parties. The arbitrator may impose appropriate sanctions if he or she determines that a party has failed to respond to discovery in good faith or has conducted discovery proceedings in bad faith or for the purpose of harassment. The arbitrator may, at the request of any party or on his or her own motion, require parties to give advance notice of expert or other witnesses that they intend to introduce.
(3) Admissibility of evidence. The arbitrator determines the relevance and materiality of the evidence offered during the course of the hearing and is the judge of the admissibility of evidence offered. Conformity to legal rules of evidence is not necessary. To the extent reasonably practicable, all evidence shall be taken in the presence of the arbitrator and the parties. The arbitrator may, however, consider affidavits, transcripts of depositions, and similar documents.
(4) Production of documents or other evidence. The arbitrator may subpoena witnesses or documents upon his or her own initiative or upon request by any party after determining that the evidence is likely to be relevant to the dispute.
(b) Prehearing conference. If it appears that a prehearing conference will expedite the proceedings, the arbitrator may, at any time before the commencement of the arbitration hearing under Sec. 4221.6, direct the parties to appear at a conference to consider settlement of the case, clarification of issues and stipulation of facts not in dispute, admission of documents to avoid unnecessary proof, limitations on the number of expert or other witnesses, and any other matters that could expedite the disposition of the proceedings.
(c) Proceeding without hearing. The arbitrator may render an award without a hearing if the parties agree and file with the arbitrator such evidence as the arbitrator deems necessary to enable him or her to render an award under Sec. 4221.8.

Sec. 4221.6 Hearing.

(a) Time and place of hearing established. Unless the parties agree to proceed without a hearing as provided in Sec. 4221.5(c), the parties and the arbitrator shall, no later than 15 days after the written acceptance by the arbitrator is mailed to the parties, establish a date and place for the hearing. If agreement is not reached within the 15- day period, the arbitrator shall, within 10 additional days, choose a location and set a hearing date. The date set for the hearing may be no later than 50 days after the mailing date of the arbitrator's written acceptance.
(b) Notice. After the time and place for the hearing have been established, the arbitrator shall serve a written notice of the hearing on the parties by hand or by certified or registered mail.
(c) Appearances. The parties may appear in person or by counsel or other representatives. Any party that, after being duly notified and without good cause shown, fails to appear in person or by representative at a hearing or conference, or fails to file documents in a timely manner, is deemed to have waived all rights with respect thereto and is subject to whatever orders or determinations the arbitrator may make.
(d) Record and transcript of hearing. Upon the request of either party, the arbitrator shall arrange for a record of the arbitration hearing to be made by stenographic means or by tape recording. The cost of making the record and the costs of transcription and copying are costs of the arbitration proceedings payable as provided in Sec. 4221.10(b) except that, if only one party requests that a transcript of the record be made, that party shall pay the cost of the transcript.
(e) Order of hearing. The arbitrator shall conduct the hearing in accordance with the following rules:
(1) Opening. The arbitrator shall open the hearing and place in the record the

[[Page 34111]]

notice of initiation of arbitration or the initiation agreement. The arbitrator may ask for statements clarifying the issues involved.
(2) Presentation of claim and response. The arbitrator shall establish the procedure for presentation of claim and response in such a manner as to afford full and equal opportunity to all parties for the presentation of their cases.
(3) Witnesses. All witnesses shall testify under oath or affirmation and are subject to cross-examination by opposing parties. If testimony of an expert witness is offered by a party without prior notice to the other party, the arbitrator shall grant the other party a reasonable time to prepare for cross-examination and to produce expert witnesses on its own behalf. The arbitrator may on his or her own initiative call expert witnesses on any issue raised in the arbitration. The cost of any expert called by the arbitrator is a cost of the proceedings payable as provided in Sec. 4221.10(b).
(f) Continuance of hearing. The arbitrator may, for good cause shown, grant a continuance for a reasonable period. When granting a continuance, the arbitrator shall set a date for resumption of the hearing.
(g) Filing of briefs. Each party may file a written statement of facts and argument supporting the party's position. The parties' briefs are due no later than 30 days after the close of the hearing. Within 15 days thereafter, each party may file a reply brief concerning matters contained in the opposing brief. The arbitrator may establish a briefing schedule and may reduce or extend these time limits. Each party shall deliver copies of all of its briefs to the arbitrator and to all opposing parties.

Sec. 4221.7 Reopening of proceedings.

(a) Grounds for reopening. At any time before a final award is rendered, the proceedings may be reopened, on the motion of the arbitrator or at the request of any party, for the purpose of taking further evidence or rehearing or rearguing any matter, if the arbitrator determines that--
(1) The reopening is likely to result in new information that will have a material effect on the outcome of the arbitration;
(2) Good cause exists for the failure of the party that requested reopening to present such information at the hearing; and
(3) The delay caused by the reopening will not be unfairly injurious to any party.
(b) Comments on and notice of reopening. The arbitrator shall allow all affected parties the opportunity to comment on any motion or request to reopen the proceedings. If he or she determines that the proceedings should be reopened, he or she shall give all parties written notice of the reasons for reopening and of the schedule of the reopened proceedings.

Sec. 4221.8 Award.

(a) Form. The arbitrator shall render a written award that--
(1) States the basis for the award, including such findings of fact and conclusions of law (which need not be explicitly designated as such) as are necessary to resolve the dispute;
(2) Adjusts (or provides a method for adjusting) the amount or schedule of payments to be made after the award to reflect overpayments or underpayments made before the award was rendered or requires the plan sponsor to refund overpayments in accordance with Sec. 4219.31(d); and
(3) Provides for an allocation of costs in accordance with Sec. 4221.10.
(b) Time of award. Except as provided in paragraphs (c), (d), and (e) of this section, the arbitrator shall render the award no later than 30 days after the proceedings close. The award is rendered when filed or served on the parties as provided in Sec. 4221.13. The award is final when the period for seeking modification or reconsideration in accordance with Sec. 4221.9(a) has expired or the arbitrator has rendered a revised award in accordance with Sec. 4221.9(c).
(c) Reopened proceedings. If the proceedings are reopened in accordance with Sec. 4221.7 after the close of the hearing, the arbitrator shall render the award no later than 30 days after the date on which the reopened proceedings are closed.
(d) Absence of hearing. If the parties have chosen to proceed without a hearing, the arbitrator shall render the award no later than 30 days after the date on which final statements and proofs are filed with him or her.
(e) Agreement for extension of time. Notwithstanding paragraphs (b), (c), and (d), the parties may agree to an extension of time for the arbitrator's award in light of the particular facts and circumstances of their dispute.
(f) Close of proceedings. For purposes of paragraphs (b) and (c) of this section, the proceedings are closed on the date on which the last brief or reply brief is due or, if no briefs are to be filed, on the date on which the hearing or rehearing closes.
(g) Publication of award. After a final award has been rendered, the plan sponsor shall make copies available upon request to the PBGC and to all companies that contribute to the plan. The plan sponsor may impose reasonable charges for copying and postage.

Sec. 4221.9 Reconsideration of award.

(a) Motion for reconsideration and objections. A party may seek modification or reconsideration of the arbitrator's award by filing a written motion with the arbitrator and all opposing parties within 20 days after the award is rendered. Opposing parties may file objections to modification or reconsideration within 10 days after the motion is filed. The filing of a written motion for modification or reconsideration suspends the 30-day period under section 4221(b)(2) of ERISA for requesting court review of the award. The 30-day statutory period again begins to run when the arbitrator denies the motion pursuant to paragraph (c) of this section or renders a revised award.
(b) Grounds for modification or reconsideration. The arbitrator may grant a motion for modification or reconsideration of the award only if--
(1) There is a numerical error or a mistake in the description of any person, thing, or property referred to in the award; or
(2) The arbitrator has rendered an award upon a matter not submitted to the arbitrator and the matter affects the merits of the decision; or
(3) The award is imperfect in a matter of form not affecting the merits of the dispute.
(c) Decision of arbitrator. The arbitrator shall grant or deny the motion for modification or reconsideration, and may render an opinion to support his or her decision within 20 days after the motion is filed with the arbitrator, or within 30 days after the motion is filed if an objection is also filed.

Sec. 4221.10 Costs.

The costs of arbitration under this part shall be borne by the parties as follows:
(a) Witnesses. Each party to the dispute shall bear the costs of its own witnesses.
(b) Other costs of arbitration. Except as provided in Sec. 4221.6(d) with respect to a transcript of the hearing, the parties shall bear the other costs of the arbitration proceedings equally unless the arbitrator determines otherwise. The parties may, however, agree to a different allocation of costs if their agreement is entered into after the employer has received notice of the plan's assessment of withdrawal liability.

[[Page 34112]]

(c) Attorneys' fees. The arbitrator may require a party that initiates or contests an arbitration in bad faith or engages in dilatory, harassing, or other improper conduct during the course of the arbitration to pay reasonable attorneys' fees of other parties.

Sec. 4221.11 Waiver of rules.

Any party that fails to object in writing in a timely manner to any deviation from any provision of this part is deemed to have waived the right to interpose that objection thereafter.

Sec. 4221.12 Calculation of periods of time.

For purposes of calculating any period of time under this part, the period begins to run on the day following the day that a communication is received or an act is completed. If the last day of the period is a Federal, State, or local holiday or a non-business day for one of the parties or the arbitrator, the period runs until the end of the first business day that follows. Holidays or non-business days occurring during the running of the period of time are included in calculating the period.

Sec. 4221.13 Filing or service of documents.

(a) By mail. A document that is to be filed or served under this part is considered filed or served on--
(1) The date of the receipt provided to the sender by the United States Postal Service, if the document was sent by certified or registered mail, postage prepaid, properly packaged, and properly addressed; or
(2) The date of the United States Postal Service postmark stamped on the cover in which the document is mailed, if paragraph (a)(1) is not applicable, a legible postmark was made, and the document was sent postage prepaid, properly packaged, and properly addressed.
(b) By means other than mail. A document required to be delivered under this part that is not mailed in accordance with paragraph (a) of this section is considered filed or served on the date on which it is received.

Sec. 4221.14 PBGC-approved arbitration procedures.

(a) Use of PBGC-approved arbitration procedures. In lieu of the procedures prescribed by this part, an arbitration may be conducted in accordance with an alternative arbitration procedure approved by the PBGC in accordance with paragraph (c) of this section. A plan may by plan amendment require the use of a PBGC-approved procedure for all arbitrations of withdrawal liability disputes, or the parties may agree to the use of a PBGC-approved procedure in a particular case.
(b) Scope of alternative procedures. If an arbitration is conducted in accordance with a PBGC-approved arbitration procedure, the alternative procedure shall govern all aspects of the arbitration, with the following exceptions:
(1) The time limits for the initiation of arbitration may not differ from those provided for by Sec. 4221.3.
(2) The arbitrator shall be selected after the initiation of the arbitration.
(3) The arbitrator shall give the parties opportunity for prehearing discovery substantially equivalent to that provided by Sec. 4221.5(a)(2).
(4) The award shall be made available to the public to at least the extent provided by Sec. 4221.8(g).
(5) The costs of arbitration shall be allocated in accordance with Sec. 4221.10.
(c) Procedure for approval of alternative procedures. The PBGC may approve arbitration procedures on its own initiative by publishing an appropriate notice in the Federal Register. The sponsor of an arbitration procedure may request PBGC approval of its procedures by submitting an application to the PBGC. The application shall be submitted to Reports Processing, Insurance Operations Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005-4026, and shall include:
(1) A copy of the procedures for which approval is sought;
(2) A description of the history, structure and membership of the organization that sponsors the procedures; and
(3) A discussion of the reasons why, in the sponsoring organization's opinion, the procedures satisfy the criteria for approval set forth in this section.
(d) Criteria for approval of alternative procedures. The PBGC shall approve an application if it determines that the proposed procedures will be substantially fair to all parties involved in the arbitration of a withdrawal liability dispute and that the sponsoring organization is neutral and able to carry out its role under the procedures. The PBGC may request comments on the application by publishing an appropriate notice in the Federal Register. Notice of the PBGC's decision on the application shall be published in the Federal Register. Unless the notice of approval specifies otherwise, approval will remain effective until revoked by the PBGC through a Federal Register notice.

PART 4231--MERGERS AND TRANSFERS BETWEEN MULTIEMPLOYER PLANS

Sec.
4231.1 Purpose and scope.
4231.2 Definitions.
4231.3 Requirements for mergers and transfers.
4231.4 Preservation of accrued benefits.
4231.5 Valuation requirement.
4231.6 Plan solvency tests.
4231.7 De minimis mergers and transfers.
4231.8 Notice of merger or transfer.
4231.9 Request for compliance determination.
4231.10 Actuarial calculations and assumptions.

Authority: 29 U.S.C. 1302(b)(3), 1411.

Sec. 4231.1 Purpose and scope.

(a) Purpose. The purpose of this part is to prescribe notice requirements under section 4231 of ERISA for mergers and transfers of assets or liabilities among multiemployer pension plans. This part also interprets the other requirements of section 4231 and prescribes special rules for de minimis mergers and transfers.
(b) Scope. This part applies to mergers and transfers among multiemployer plans where all of the plans immediately before and immediately after the transaction are multiemployer plans covered by title IV of ERISA.

Sec. 4231.2 Definitions.

The following terms are defined in Sec. 4001.2 of this chapter: ERISA, fair market value, IRS, multiemployer plan, PBGC, plan, and plan year.
In addition, for purposes of this part:
Actuarial valuation means a valuation of assets and liabilities performed by an enrolled actuary using the actuarial assumptions used for purposes of determining the charges and credits to the funding standard account under section 302 of ERISA and section 412 of the Code.
Certified change of collective bargaining representative means a change of collective bargaining representative certified under the Labor-Management Relations Act of 1947, as amended, or the Railway Labor Act, as amended.
Fair market value of assets has the same meaning as the term has for minimum funding purposes under section 302 of ERISA and section 412 of the Code.
Merger means the combining of two or more plans into a single plan. For example, a consolidation of two plans into a new plan is a merger. Significant transfer means the transfer of assets that equal or exceed 15% of the assets of the transferor plan before the transfer or the transfer of unfunded

[[Page 34113]]

accrued benefits that equal or exceed 15% of the assets of the transferee plan (including a plan that did not exist prior to the transfer) before the transfer.
Transfer and transfer of assets or liabilities mean a diminution of assets or liabilities with respect to one plan and the acquisition of these assets or the assumption of these liabilities by another plan or plans (including a plan that did not exist prior to the transfer). However, the shifting of assets or liabilities pursuant to a written reciprocity agreement between two multiemployer plans in which one plan assumes liabilities of another plan is not a transfer of assets or liabilities. In addition, the shifting of assets between several funding media used for a single plan (such as between trusts, between annuity contracts, or between trusts and annuity contracts) is not a transfer of assets or liabilities.

Sec. 4231.3 Requirements for mergers and transfers.

(a) General requirements. A plan sponsor may not cause a multiemployer plan to merge with one or more multiemployer plans or transfer assets or liabilities to or from another multiemployer plan unless the merger or transfer satisfies all of the following requirements:
(1) No participant's or beneficiary's accrued benefit may be lower immediately after the effective date of the merger or transfer than the benefit immediately before the merger or transfer.
(2) Actuarial valuations of the plans involved in the merger or transfer shall have been performed in accordance with Sec. 4231.5.
(3) For each plan involved in the transaction, an enrolled actuary shall-
(i) Determine that the plan meets the applicable plan solvency requirement set forth in Sec. 4231.6; or
(ii) Otherwise demonstrate that benefits under the plan are not reasonably expected to be subject to suspension under section 4245 of ERISA.
(4) The plan sponsor shall notify the PBGC of the merger or transfer in accordance with Sec. 4231.8.
(b) Compliance determination. If a plan sponsor requests a determination that a merger or transfer that may otherwise be prohibited by section 406(a) or (b)(2) of ERISA satisfies the requirements of section 4231 of ERISA, the plan sponsor shall submit the information described in Sec. 4231.9 in addition to the information required by Sec. 4231.8. PBGC may request additional information if necessary to determine whether a merger or transfer complies with the requirements of section 4231 and this part. Plan sponsors are not required to request a compliance determination. Under section 4231(c) of ERISA, if the PBGC determines that the merger or transfer complies with section 4231 of ERISA and this part, the merger or transfer will not constitute a violation of the prohibited transaction provisions of section 406(a) and (b)(2) of ERISA.
(c) Certified change in bargaining representative. Transfers of assets and liabilities pursuant to a certified change in bargaining representative are governed by section 4235 of ERISA. Plan sponsors involved in such transfers are not required to comply with this part. However, under section 4235(f)(1) of ERISA, the plan sponsors of the plans involved in the transfer may agree to a transfer that complies with sections 4231 and 4234 of ERISA. Plan sponsors that elect to comply with sections 4231 and 4234 must comply with the rules in this part.

(Approved by the Office of Management and Budget under control number 1212-0022)

Sec. 4231.4 Preservation of accrued benefits.

Section 4231(b)(2) of ERISA and Sec. 4231.3(a)(1) require that no participant's or beneficiary's accrued benefit may be lower immediately after the effective date of the merger or transfer than the benefit immediately before the merger or transfer. A plan that assumes an obligation to pay benefits for a group of participants satisfies this requirement only if the plan contains a provision preserving all accrued benefits. The determination of what is an accrued benefit shall be made in accordance with section 411 of the Code and the regulations thereunder.

Sec. 4231.5 Valuation requirement.

(a) Mergers and non-significant transfers. A merger or a transfer that is not significant (``non-significant transfer'') satisfies section 4231(b)(4) of ERISA and Sec. 4231.3(a)(2) (requiring an actuarial valuation) if an actuarial valuation has been performed for each plan involved in the merger or transfer, based on the assets and liabilities of the plan as of a date not more than three years before the date on which the notice of the merger or transfer is filed.
(b) Significant transfers. A significant transfer satisfies section 4231(b)(4) of ERISA and Sec. 4231.3(a)(2) if an actuarial valuation has been performed for each plan involved in the transfer, based on the assets and liabilities of the plan as of a date not earlier than the first day of the last plan year ending before the proposed effective date of the transfer. The valuation shall separately identify assets, contributions and liabilities being transferred, and shall be based on the actuarial assumptions and methods that are expected to be used for the first plan year beginning after the transfer.

Sec. 4231.6 Plan solvency tests.

(a) Significant transfers. A significant transfer satisfies the plan solvency requirement of section 4231(b)(3) of ERISA and Sec. 4231.3(a)(3)(i) if all of the following requirements are met by each plan involved in the transfer:
(1) Expected contributions shall equal or exceed the estimated amount necessary to satisfy the minimum funding requirement of section 412(a) of the Code (including reorganization funding, if applicable) for the five plan years beginning on or after the proposed effective date of the transfer.
(2) The fair market value of plan assets immediately after the transfer shall equal or exceed the total amount of expected benefit payments during the first five plan years beginning on or after the proposed effective date of the transfer.
(3) Expected contributions for the first plan year beginning on or after the proposed effective date of the transfer shall equal or exceed expected benefit payments for that plan year.
(4) Contributions for the amortization period shall equal or exceed unfunded accrued benefits plus expected normal costs.
(i) Notwithstanding paragraph (c)(4) of this section, ``unfunded accrued benefits'' means the excess of the present value of accrued benefits over the fair market value of the assets, determined on the basis of the actuarial valuation required under Sec. 4231.5(b).
(ii) ``Amortization period'' means either 25 plan years or the amortization period for the resulting base when the combined charge base and the combined credit base are offset under section 412(b)(4) of the Code. The actuary may select either period.
(b) Mergers and non-significant transfers. A merger or non- significant transfer satisfies the plan solvency requirement of section 4231(b)(3) of ERISA and Sec. 4231.3(a)(3)(i) if, for the merged plan or for each plan that continues after the transfer--
(1) The fair market value of plan assets immediately after the merger or transfer equals or exceeds five times the benefit payments in the last plan year ending before the proposed effective date of the merger or transfer; or
(2) In each of the first five plan years beginning after the proposed effective date of the merger or transfer, expected plan assets plus expected contributions and investment earnings equal or

[[Page 34114]]

exceed expected expenses and benefit payments for the plan year. (c) Rules for determinations. In determining whether a transaction satisfies the plan solvency requirements set forth in this section, the following rules apply:
(1) Expected contributions after a merger or transfer shall be determined by assuming that contributions will equal contributions received in or accrued for the last full plan year ending before the date on which the notice of merger or transfer is filed with the PBGC. Contributions shall be adjusted, however, to reflect any change in the rate of employer contributions that has been negotiated (whether or not in effect), or a trend of changing contribution base units over the preceding five plan years or other period of time that can be demonstrated to be more appropriate.
(2) Expected normal costs shall be determined under the funding method and assumptions used by the plan actuary for purposes of determining the minimum funding requirement under section 412 of the Code (which requires that such assumptions be reasonable in the aggregate). If the plan is using an aggregate funding method, normal costs shall be determined under the entry age normal method.
(3) Expected benefit payments shall be determined by assuming that current benefits remain in effect and that all scheduled increases in benefits occur.
(4) The fair market value of plan assets immediately after the merger or transfer shall be based on the most recent data available to the plan sponsor immediately before the date on which the notice is filed.
(5) Expected investment earnings shall be determined using the same interest assumption used for determining the minimum funding requirement under section 412 of the Code.
(6) Expected expenses shall be determined using expenses in the last plan year ending before the notice is filed, adjusted to reflect any anticipated changes.
(7) Expected plan assets for a plan year shall be determined by adjusting the most current data on fair market value of plan assets to reflect expected contributions, investment earnings, benefit payments and expenses for each plan year between the date of the most current data and the beginning of the plan year for which expected assets are being determined.

Sec. 4231.7 De minimis mergers and transfers.

(a) Special plan solvency rule. In order to determine whether a de minimis merger or transfer satisfies the plan solvency requirement in Sec. 4231.6(b), the plan assets, expected contributions and expected benefits may be determined without regard to any de minimis mergers or transfers that have occurred since the last valuation performed to establish charges and credits to the minimum funding standard account under section 412(b) of the Code.
(b) De minimis merger defined. A merger is de minimis if the present value of accrued benefits (whether or not vested) of one plan is less than 3 percent of the fair market value of the other plan's assets.
(c) De minimis transfer defined. A transfer of assets or liabilities is de minimis if--
(1) The fair market value of the assets transferred, if any, is less than 3 percent of the fair market value of all the assets of the transferor plan; and
(2) The present value of the accrued benefits transferred (whether or not vested) is less than 3 percent of the fair market value of all the assets of the transferee plan.
(d) Value of assets and benefits. For purposes of paragraphs (b) and (c) of this section, the value of plan assets and accrued benefits may be determined as of any date prior to the proposed effective date of the merger or transfer, but not earlier than the date of the most recent valuation performed for purposes of section 412(b) of the Code.
(e) Aggregation required. In determining whether a merger or transfer is de minimis, the assets and accrued benefits transferred in previous de minimis mergers and transfers within the same plan year shall be aggregated as described in paragraphs (e)(1) and (e)(2) of this section. For the purposes of those paragraphs, the value of plan assets may be determined as of the date during the plan year on which the total value of the plan's assets is the highest.
(1) A merger is not de minimis if the total present value of accrued benefits merged into a plan, when aggregated with all prior de minimis mergers of and transfers to that plan effective within the same plan year, equals or exceeds 3 percent of the value of the plan's assets.
(2) A transfer is not de minimis if, when aggregated with all previous mergers and transfers effective within the same plan year--
(i) The value of all assets transferred from the plan equals or exceeds 3 percent of the value of the plan's assets; or
(ii) The present value of all accrued benefits transferred to the plan equals or exceeds 3 percent of the plan's assets.

Sec. 4231.8 Notice of merger or transfer.

(a) When to file. Except as provided in paragraph (f) of this section, a notice of a proposed merger or transfer shall be filed not less than 120 days before the effective date of the transaction. For purposes of this part, the effective date of a merger or transfer is the earlier of--
(1) The date on which one plan assumes liability for benefits accrued under another plan involved in the transaction; or
(2) The date on which one plan transfers assets to another plan involved in the transaction.
(b) Who shall file. The plan sponsors of all plans involved in a merger or transfer, or the duly authorized representative(s) acting on behalf of the plan sponsors, shall jointly file the notice required by this section.
(c) Where to file. The notice shall be delivered by mail or submitted by hand to Reports Processing, Insurance Operations Department, Pension Benefit Guaranty Corporation, 1200 K Street NW., Washington, DC 20005-4026.
(d) Filing date. For purposes of paragraph (a) of this section, the notice is not considered filed until all of the information required by paragraph (e) of this section has been submitted. Except as provided in the next sentence, the notice is considered filed on the date it is received by the PBGC, unless it is received after regular business hours, in which event it is considered filed on the next regular business day. The notice is considered filed on the date of the postmark stamped on the cover in which the notice is mailed if--
(1) The postmark was made by the United States Postal Service; and
(2) The notice was mailed postage prepaid, properly packaged and addressed to the PBGC.
(e) Information required. Each notice shall contain the following information:
(1) For each plan involved in the merger or transfer--
(i) The name of the plan;
(ii) The name, address and telephone number of the plan sponsor and of the plan sponsor's duly authorized representative, if any; and
(iii) The nine-digit employer Identification Number (EIN) assigned by the IRS to the plan sponsor and the three-digit Plan Identification Number (PIN) assigned by the plan sponsor to the plan, and, if different, the EIN or PIN last filed with the PBGC. If no EIN or PIN has been assigned, the notice shall so indicate.

[[Page 34115]]

(2) The kind of transaction being reported (merger, significant transfer or non-significant transfer).
(3) The proposed effective date of the merger or transfer.
(4) A copy of the plan provision stating that no participant's or beneficiary's accrued benefit will be lower immediately after the merger or transfer than the benefit immediately before the transaction.
(5) One of the following statements, certified by an enrolled actuary:
(i) A statement that the merger or transfer is de minimis as defined in Sec. 4231.7. A notice of a de minimis merger or transfer is not required to include the information described in paragraph (e)(6) or (e)(7) of this section.
(ii) A statement that the merger or transfer satisfies the applicable plan solvency test set forth in Sec. 4231.6, indicating which is the applicable test.
(iii) A statement of the basis on which the actuary has determined that benefits under the plan are not reasonably expected to be subject to suspension under section 4245 of ERISA, including the supporting data or calculations, assumptions and methods.
(6) For mergers or transfers (other than de minimis mergers or transfers), a copy of the most recent actuarial valuation report that satisfies the requirements of Sec. 4231.5.
(7) For a significant transfer, the following information used in making the plan solvency determination under Sec. 4231.6(a): (i) The present value of the accrued benefits and fair market value of plan assets under the valuation required by Sec. 4231.5(b), allocable to each plan after the transfer.
(ii) The fair market value of assets in each plan after the transfer (determined in accordance with Sec. 4231.6(c)(4)).
(iii) The expected benefit payments for each plan in the first plan year beginning on or after the proposed effective date of the transfer (determined in accordance with Sec. 4231.6(c)(3)).
(iv) The contribution rates in effect for each plan for the first plan year beginning on or after the proposed effective date of the transfer.
(v) The expected contributions for each plan in the first plan year beginning on or after the proposed effective date of the transfer (determined in accordance with Sec. 4231.6(c)(1)).
(f) Waiver of notice. PBGC may waive the notice requirements of this section and section 4231(b)(1) of ERISA if the plan sponsor demonstrates to the satisfaction of the PBGC that failure to complete the merger or transfer in less than 120 days after filing the notice will cause harm to participants or beneficiaries of the plans involved in the transaction.

(Approved by the Office of Management and Budget under control number 1212-0022)

Sec. 4231.9 Request for compliance determination.

(a) General. A request for a determination that a merger or transfer complies with the requirements of section 4231 of ERISA may be filed by the plan sponsor or sponsors of one or more plans involved in a merger or transfer. The request shall contain the information described in paragraph (b) or (c) of this section, as applicable.
(1) The place of filing. The request shall be delivered to the address set forth in Sec. 4231.8(c).
(2) Single request permitted for all de minimis transactions. Because the plan solvency test for de minimis mergers and transfers is based on the most recent valuation (without adjustment for intervening de minimis transactions), a plan sponsor may submit a single request for a compliance determination covering all de minimis mergers or transfers that occur between one plan valuation and the next. However, the plan sponsor must still notify PBGC of each de minimis merger or transfer separately, in accordance with Sec. 4231.8. The single request for a compliance determination may be filed concurrently with any one of the notices of a de minimis merger or transfer.
(b) Contents of request: merger or transfer that is not de minimis. A request for a compliance determination concerning a merger or transfer that is not de minimus shall contain--
(1) A copy of the merger or transfer agreement;
(2) A summary of the required calculations, including a complete description of assumptions and methods, on which the enrolled actuary based the certification that the merger or transfer satisfied a plan solvency test described in Sec. 4231.6; and
(3) For a significant transfer, copies of all actuarial valuations performed within the 5 years preceding the proposed effective date of the transfer.
(c) Contents of request: De minimus merger or transfer. A request for a compliance determination concerning a de minimis merger or transfer shall contain one of the following statements, certified by an enrolled actuary:
(1) A statement that the merger or transfer satisfies one of the plan solvency tests set forth in Sec. 4231.6(b), indicating which test is satisfied.
(2) A statement of the basis on which the actuary has determined that benefits under the plan are not reasonably expected to be subject to suspension under section 4245 of ERISA, including supporting data or calculations, assumptions and methods.

(Approved by the Office of Management and Budget under control number 1212-0022)

Sec. 4231.10 Actuarial calculations and assumptions.

(a) Most recent valuation. All calculations required by this part shall be based on the most recent actuarial valuation as of the date of filing the notice, updated to show any material changes.
(b) Assumptions. All calculations required by this part shall be based on methods and assumptions that are reasonable in the aggregate, based on generally accepted actuarial principles.
(c) Updated calculations. If the actual date of the merger or transfer is more than one year after the date the notice is filed with the PBGC, PBGC may require the plans involved to provide updated calculations and representations based on the actual effective date of the transaction.

(Approved by the Office of Management and Budget under control number 1212-0022)

PART 4245--NOTICE OF INSOLVENCY

Sec.
4245.1 Purpose and scope.
4245.2 Definitions.
4245.3 Notice of insolvency.
4245.4 Contents of notice of insolvency.
4245.5 Notice of insolvency benefit level.
4245.6 Contents of notice of insolvency benefit level.
4245.7 PBGC address.

Authority: 29 U.S.C. 1302(b)(3), 1426(e).

Sec. 4245.1 Purpose and scope.

(a) Purpose. The purpose of this part is to prescribe notice requirements pertaining to insolvent multiemployer plans that are in reorganization.
(b) Scope. This part applies to multiemployer plans in reorganization covered by title IV of ERISA, other than plans that have terminated by mass withdrawal under section 4041A(a)(2) of ERISA.

Sec. 4245.2 Definitions.

The following terms are defined in Sec. 4001.2 of this chapter: employer, ERISA, IRS, multiemployer plan, nonforfeitable benefit, PBGC, person, plan, and plan year.
In addition, for purposes of this part:
Actuarial valuation means a report submitted to the plan in connection with a valuation of plan assets and liabilities, which, in the case of a plan covered by subparts C and D of part 4281, shall be performed in accordance with subpart B of part 4281.

[[Page 34116]]

Available resources means, for a plan year, available resources as described in section 4245(b)(3) of ERISA.
Benefits subject to reduction means those benefits accrued under plan amendments (or plans) adopted after March 26, 1980, or under collective bargaining agreements entered into after March 26, 1980, that are not eligible for the PBGC's guarantee under section 4022A(b) of ERISA.
Financial assistance means financial assistance from the PBGC under section 4261 of ERISA.
Insolvency benefit level means the greater of the resource benefit level or the benefit level guaranteed by the PBGC for each participant and beneficiary in pay status.
Insolvency year means insolvency year as described in section 4245(b)(4) of ERISA.
Insolvent means that a plan is unable to pay benefits when due during the plan year. A plan terminated by mass withdrawal is not insolvent unless it has been amended to eliminate all benefits that are subject to reduction under section 4281(c) of ERISA, or, in the absence of an amendment, no benefits under the plan are subject to reduction under section 4281(c) of ERISA.
Reasonably expected to enter pay status means, with respect to plan participants and beneficiaries, persons (other than those in pay status) who, according to plan records, are disabled, have applied for benefits, or have reached or will reach during the applicable period the normal retirement age under the plan, and any others whom it is reasonable for the plan sponsor to expect to enter pay status during the applicable period.
Reorganization means reorganization under section 4241(a) of ERISA.
Resource benefit level means resource benefit level as described in section 4245(b)(2) of ERISA.

Sec. 4245.3 Notice of insolvency.

(a) Requirement of notice. A plan sponsor of a multiemployer plan in reorganization that determines under section 4245 (b)(1), (d)(1) or (d)(2) of ERISA that the plan's available resources are or may be insufficient to pay benefits when due for a plan year shall so notify the PBGC and the interested parties, as defined in paragraph (d) of this section. A single notice may cover more than one plan year. The notices shall be delivered in the manner and within the time prescribed in this section and shall contain the information described in Sec. 4245.4.
(b) When delivered. A plan sponsor shall mail or otherwise deliver the notices of insolvency no later than 30 days after it determines that the plan is or may become insolvent, as described in paragraph (a) of this section. However, the notice to participants and beneficiaries in pay status may be delivered concurrently with the first benefit payment made more than 30 days after the determination of insolvency. (c) Methods of delivery. The notice of insolvency shall be
delivered by mail or by hand to the PBGC and the interested parties described in paragraph (d) of this section, other than participants and beneficiaries who are not in pay status when the notice is required to be delivered. The notice to participants and beneficiaries who are not in pay status shall be provided in any manner reasonably calculated to reach those participants and beneficiaries. Reasonable methods of notification include, but are not limited to, posting the notice at participants' worksites or publishing the notice in a union newsletter or in a newspaper of general circulation in the area or areas where participants reside. Notice to a participant shall be deemed notice to that participant's beneficiary or beneficiaries.
(d) Interested parties. For purposes of this part, the term ``interested parties'' means--
(1) Employers required to contribute to the plan;
(2) Employee organizations that, for collective bargaining purposes, represent plan participants employed by such employers; and
(3) Plan participants and beneficiaries.

Sec. 4245.4 Contents of notice of insolvency.

(a) Notice to the PBGC. A notice of insolvency required to be filed with the PBGC pursuant to Sec. 4245.3 shall contain the information set forth below:
(1) The name of the plan.
(2) The name, address and telephone number of the plan sponsor and of the plan sponsor's duly authorized representative, if any.
(3) The nine-digit Employer Identification Number (EIN) assigned by the IRS to the plan sponsor and the three-digit Plan Identification Number (PIN) assigned by the plan sponsor to the plan, and, if different, the EIN or PIN last filed with the PBGC. If no EIN or PIN has been assigned, the notice shall so indicate.
(4) The IRS key district that has jurisdiction over determination letters with respect to the plan.
(5) The case number assigned to the plan by the PBGC. If the plan has no case number, the notice shall state whether the plan has previously filed a notice of insolvency with the PBGC and, if so, the date on which the notice was filed.
(6) The plan year or years for which the plan sponsor has determined that the plan is or may become insolvent.
(7) A copy of the plan document, including the last restatement of the plan and all subsequent amendments in effect, or to become effective, during the insolvency year or years. However, if a copy of the plan document was submitted to the PBGC with a previous notice of insolvency or notice of insolvency benefit level, only subsequent plan amendments need be submitted, and the notice shall state when the copy of the plan document was filed.
(8) A copy of the most recent actuarial valuation for the plan and a copy of the most recent Schedule B (Form 5500) filed for the plan, if the Schedule B contains more recent information than the actuarial valuation. If the actuarial valuation or Schedule B was previously submitted to the PBGC, it may be omitted, and the notice shall state the date on which the document was filed and that the information is still accurate and complete.
(9) The estimated amount of annual benefit payments under the plan (determined without regard to the insolvency) for each insolvency year.
(10) The estimated amount of the plan's available resources for each insolvency year.
(11) A certification, signed by the plan sponsor (or a duly authorized representative), that notices of insolvency have been given to all interested parties in accordance with the requirements of this part.
(b) Notices to interested parties. A notice of insolvency required under Sec. 4245.3 to be given to an interested party, as defined in Sec. 4245.3(d), shall contain the information set forth below:
(1) The name of the plan.
(2) The plan year or years for which the plan sponsor has determined that the plan is or may become insolvent.
(3) The estimated amount of annual benefit payment under the plan (determined without regard to the insolvency) for each insolvency year.
(4) The estimated amount of the plan's available resources for each insolvency year.
(5) A statement that, during the insolvency year, benefits above the amount that can be paid from available resources or the level guaranteed by the PBGC, whichever is greater, will be suspended, with a brief explanation of which benefits are guaranteed by the PBGC. The following statement may be

[[Page 34117]]

included as an explanation of PBGC-guaranteed benefits:
Should the plan become insolvent, each participant's benefit guaranteed by the Pension Benefit Guaranty Corporation (PBGC) is determined as follows. Each participant's nonforfeitable monthly benefit payable under the plan at retirement is computed. This benefit is then divided by the participant's years of credited service under the plan. Of the resulting figure (the accrual rate), the first $5 is guaranteed at 100%. Any additional amount (up to $15) is either 75% or 65% guaranteed, depending on the past funding practices of the plan. Any remaining amount that exceeds $20 is not guaranteed. The PBGC guarantees the payment of a monthly benefit equal to this adjusted accrual rate times years of credited service. The PBGC does not guarantee benefits or benefit increases that have been in effect for fewer than 60 months before the plan becomes insolvent or is amended to reduce accrued benefits.
(6) The name, address, and telephone number of the plan administrator or other person designated by the plan sponsor to answer inquiries concerning benefits during the plan's insolvency.

Sec. 4245.5 Notice of insolvency benefit level.

(a) Requirement of notice. Except as provided in paragraph (b) of this section, for each insolvency year the plan sponsor shall notify the PBGC and the interested parties, as defined in Sec. 4245.3(d), of the level of benefits expected to be paid during the year (the ``insolvency benefit level''). These notices shall be delivered in the manner and within the time prescribed in this section and shall contain the information described in Sec. 4245.6.
(b) Waiver of notice to certain interested parties. The notice of insolvency benefit level required under this section need not be given to interested parties, other than participants and beneficiaries who are in pay status or are reasonably expected to enter pay status during the insolvency year, for an insolvency year immediately following the plan year in which a notice of insolvency was required to be delivered pursuant to Sec. 4245.3, provided that the notice of insolvency was in fact delivered.
(c) When delivered. The plan sponsor shall mail or otherwise deliver the required notices of insolvency benefit level no later than 60 days before the beginning of the insolvency year, except that if the determination of insolvency is made fewer than 120 days before the beginning of the insolvency year, the notices shall be delivered within 60 days after the date of the plan sponsor's determination.
(d) Methods of delivery. The notice of insolvency benefit level shall be delivered by mail or by hand to the PBGC and to the interested parties described in Sec. 4245.3(d), other than participants and beneficiaries who are neither in pay status nor reasonably expected to enter pay status during the insolvency year for which the notice is given. The notice to participants and beneficiaries not in pay status, nor reasonably expected to enter pay status during the insolvency year, shall be provided in any manner reasonably calculated to reach those participants and beneficiaries. Reasonable methods of notification include, but are not limited to, posting the notice at participants' worksites or publishing the notice in a union newsletter or in a newspaper of general circulation in the area or areas where participants reside. Notice to a participant shall be deemed notice to that participant's beneficiary or beneficiaries.

Sec. 4245.6 Contents of notice of insolvency benefit level.

(a) Notice to the PBGC. A notice of insolvency benefit level required to be filed with the PBGC pursuant to Sec. 4245.5(a) shall contain the information set forth below, except as provided in the next sentence. The information required in paragraphs (a)(7) to (a)(10) need be submitted only if it is different from the information submitted to the PBGC with the notice of insolvency filed for that insolvency year (see Sec. 4245.4 (a)(7) to (a)(10)) or the notice of insolvency benefit level filed for a prior year. When any information is omitted under this exception, the notice shall so state and indicate when the notice of insolvency or prior notice of insolvency benefit level was filed.
(1) The name of the plan.
(2) The name, address and telephone number of the plan sponsor and of the plan sponsor's authorized representative, if any.
(3) The nine-digit Employer Identification Number (EIN) assigned by the IRS to the plan sponsor and the three-digit Plan Identification Number (PIN) assigned by the plan sponsor to the plan, and, if different, the EIN or PIN last filed with the PBGC. If no EIN or PIN has been assigned, the notice shall so indicate.
(4) The IRS key district that has jurisdiction over determination letters with respect to the plan.
(5) The case number assigned to the plan by the PBGC.
(6) The plan year for which the notice is filed.
(7) A copy of the plan document, including any amendments, in effect during the insolvency year.
(8) A copy of the most recent actuarial valuation for the plan and a copy of the most recent Schedule B (Form 5500) filed for the plan, if the Schedule B contains more recent information than the actuarial valuation.
(9) The estimated amount of annual benefit payments under the plan (determined without regard to the insolvency) for the insolvency year.
(10) The estimated amount of the plan's available resources for the insolvency year.
(11) The estimated amount of the annual benefit payments guaranteed by the PBGC for the insolvency year.
(12) The amount of financial assistance, if any, requested from the PBGC.
(13) A certification, signed by the plan sponsor (or a duly authorized representative), that notices of insolvency benefit level have been given to all interested parties in accordance with the requirements of this part.
When financial assistance is requested, the PBGC may require the plan sponsor to submit additional information necessary to process the request.
(b) Notices to interested parties other than participants in or entering pay status. A notice of insolvency benefit level required by Sec. 4245.5(a) to be delivered to interested parties, as defined in Sec. 4245.3(d), other than a notice to a participant or beneficiary who is in pay status or is reasonably expected to enter pay status during the insolvency year, shall include the information set forth below:
(1) The name of the plan.
(2) The plan year for which the notice is issued.
(3) The estimated amount of annual benefit payments under the plan (determined without regard to the insolvency) for the insolvency year.
(4) The estimated amount of the plan's available resources for the insolvency year.
(5) The amount of financial assistance, if any, requested from the PBGC.
(c) Notices to participants and beneficiaries in or entering pay status. A notice of insolvency benefit level required by Sec. 4245.5(a) to be delivered to participants and beneficiaries who are in pay status or are reasonably expected to enter pay status during the insolvency year for which the notice is given, shall include the following information:
(1) The name of the plan.
(2) The plan year for which the notice is issued.

[[Page 34118]]

(3) A statement of the monthly benefit expected to be paid to the participant or beneficiary during the insolvency year.
(4) A statement that in subsequent plan years, depending on the plan's available resources, this benefit level may be increased or decreased but will not fall below the level guaranteed by the PBGC, and that the participant or beneficiary will be notified in advance of the new benefit level if it is less than his full nonforfeitable benefit under the plan.
(5) The name, address, and telephone number of the plan administrator or other person designated by the plan sponsor to answer inquiries concerning benefits during the plan's insolvency.

Sec. 4245.7 PBGC address.

All notices required to be filed with the PBGC under this part shall be addressed to Reports Processing, Insurance Operations Department, Pension Benefit Guaranty Corporation, 1200 K Street NW., Washington, DC 20005-4026.

(Approved by the Office of Management and Budget under control number 1212-0033)

PART 4261--FINANCIAL ASSISTANCE TO MULTIEMPLOYER PLANS

Sec. 4261.1 Cross-reference.

See Sec. 4281.47 for procedures for applying to the PBGC for financial assistance under section 4261 of ERISA.

PART 4281--DUTIES OF PLAN SPONSOR FOLLOWING MASS WITHDRAWAL

Subpart A--General

Sec.
4281.1 Purpose and scope.
4281.2 Definitions.
4281.3 Submission of documents.
4281.4 Collection of information.

Subpart B--Valuation of Plan Benefits and Plan Assets

4281.11 Valuation dates.
4281.12 Benefits to be valued.
4281.13 Benefit valuation methods--in general.
4281.14 Mortality assumptions--in general.
4281.15 Mortality assumptions--lump sums under trusteed plans.
4281.16 Benefit valuation methods--plans closing out.
4281.17 Asset valuation methods--in general.
4281.18 Outstanding claims for withdrawal liability.

Subpart C--Benefit Reductions

4281.31 Plan amendment.
4281.32 Notices of benefit reductions.
4281.33 Restoration of benefits.

Subpart D--Benefit Suspensions

4281.41 Benefit suspensions.
4281.42 Retroactive payments.
4281.43 Notices of insolvency and annual updates.
4281.44 Contents of notices of insolvency and annual updates.
4281.45 Notices of insolvency benefit level.
4281.46 Contents of notices of insolvency benefit level.
4281.47 Application for financial assistance.

Authority: 29 U.S.C. 1302(b)(3), 1341a, 1399(c)(1)(D), and 1441.

Subpart A--General Provisions

Sec. 4281.1 Purpose and scope.

(a) General.
(1) Purpose. When a multiemployer plan terminates by mass withdrawal under section 4041A(a)(2) of ERISA, the plan's assets and benefits must be valued annually under section 4281(b) of ERISA, and plan benefits may have to be reduced or suspended to the extent provided in section 4281 (c) or (d). This part implements the provisions of section 4281 and provides rules for applying for financial assistance from the PBGC under section 4261 of ERISA. The plan valuation rules in this part also apply to the determination of reallocation liability under section 4219(c)(1)(D) of ERISA and subpart B of part 4219 of this chapter for multiemployer plans that undergo mass withdrawal (with or without termination).
(2) Scope. This part applies to multiemployer plans covered by Title IV of ERISA that have terminated by mass withdrawal under section 4041A(a)(2) of ERISA (including plans created by partition pursuant to section 4233 of ERISA). Subpart B of this part also applies to covered multiemployer plans that have undergone mass withdrawal without terminating.
(b) Subpart B. Subpart B establishes rules for determining the value of multiemployer plan benefits and assets, including outstanding claims for withdrawal liability, for plans required to perform annual valuations under section 4281(b) of ERISA or allocate unfunded vested benefits under section 4219(c)(1)(D) of ERISA.
(c) Subpart C. Subpart C sets forth procedures under which the plan sponsor of a terminated plan shall amend the plan to reduce benefits subject to reduction in accordance with section 4281(c) of ERISA and Sec. 4041A.24(b) of this chapter. Subpart C applies to a plan for which the annual valuation required by Sec. 4041A.24(a) indicates that the value of nonforfeitable benefits under the plan exceeds the value of the plan's assets (including claims for withdrawal liability) if, at the end of the plan year for which that valuation was done, the plan provided any benefits subject to reduction. Benefit reductions required to be made under subpart C shall not apply to accrued benefits under plans or plan amendments adopted on or before March 26, 1980, or under collective bargaining agreements entered into on or before March 26, 1980.
(d) Subpart D. Subpart D sets forth the procedures under which the plan sponsor of an insolvent plan must suspend benefit payments and issue insolvency notices in accordance with section 4281(d) of ERISA and Sec. 4041A.25 (c) and (d) of this chapter. Subpart D applies to a plan that has been amended under section 4281(c) of ERISA and subpart C of this part to eliminate all benefits subject to reduction and to a plan that provided no benefits subject to reduction as of the date on which the plan terminated.

Sec. 4281.2 Definitions.

The following terms are defined in section 4001.2 of this chapter: annuity, employer, ERISA, fair market value, IRS, insurer, irrevocable commitment, mass withdrawal, multiemployer plan, nonforfeitable benefit, normal retirement age, PBGC, person, plan, plan administrator, and plan year.
In addition, for purposes of this part:
Available resources means, for a plan year, available resources as described in section 4245(b)(3) of ERISA.
Benefits subject to reduction means those benefits accrued under plan amendments (or plans) adopted after March 26, 1980, or under collective bargaining agreements entered into after March 26, 1980, that are not eligible for the PBGC's guarantee under section 4022A(b) of ERISA.
Financial assistance means financial assistance from the PBGC under section 4261 of ERISA.
Insolvency benefit level means the greater of the resource benefit level or the benefit level guaranteed by the PBGC for each participant and beneficiary in pay status.
Insolvency year means insolvency year as described in section 4245(b)(4) of ERISA.
Insolvent means that a plan is unable to pay benefits when due during the plan year. A plan terminated by mass withdrawal is not insolvent unless it has been amended to eliminate all benefits that are subject to reduction under section 4281(c), or, in the absence of an amendment, no benefits under the plan are subject to reduction under section 4281(c) of ERISA.
Pro rata means that the required benefit reduction or payment shall be allocated among affected participants in the same proportion that each such

[[Page 34119]]

participant's nonforfeitable benefits under the plan bear to all nonforfeitable benefits of those participants under the plan.
Reasonably expected to enter pay status means, with respect to plan participants and beneficiaries, persons (other than those in pay status) who, according to plan records, are disabled, have applied for benefits, or have reached or will reach during the applicable period the normal retirement age under the plan, and any others whom it is reasonable for the plan sponsor to expect to enter pay status during the applicable period.
Resource benefit level means resource benefit level as described in section 4245(b)(2) of ERISA.
Valuation date means the last day of the plan year in which the plan terminates and the last day of each plan year thereafter.

Sec. 4281.3 Submission of documents.

(a) Filing date. Any notice, document or information required to be filed with the PBGC under this part shall be considered filed on the date of the United States postmark stamped on the cover in which the document or information is mailed, provided that the postmark was made by the United States Postal Service and the document was mailed postage prepaid, properly packaged and addressed to the PBGC. If these conditions are not met, the document shall be considered filed on the date on which it was received by the PBGC.
(b) Address. All notices, documents and information required to be filed with the PBGC under this part shall be addressed to Reports Processing, Insurance Operations Department, Pension Benefit Guaranty Corporation, 1200 K Street NW., Washington, DC 20005-4026.

Sec. 4281.4 Collection of information.

The collection of information requirements contained in this part have been approved by the Office of Management and Budget under control number 1212-0032.

Subpart B--Valuation of Plan Benefits and Plan Assets

Sec. 4281.11 Valuation dates.

(a) Annual valuations of mass-withdrawal-terminated plans. The valuation dates for the annual valuation required under section 4281(b) of ERISA shall be the last day of the plan year in which the plan terminates and the last day of each plan year thereafter.
(b) Valuations related to mass withdrawal reallocation liability. The valuation date for determining the value of unfunded vested benefits (for purposes of allocation) under section 4219(c)(1)(D) of ERISA shall be--
(1) If the plan terminates by mass withdrawal, the last day of the plan year in which the plan terminates; or
(2) If substantially all the employers withdraw from the plan pursuant to an agreement or arrangement to withdraw from the plan, the last day of the plan year as of which substantially all employers have withdrawn from the plan pursuant to the agreement or arrangement.

Sec. 4281.12 Benefits to be valued.

(a) Form of benefit. The plan sponsor shall determine the form of each benefit to be valued, without regard to the form of benefit valued in any prior year, in accordance with the following rules:
(1) If a benefit is in pay status as of the valuation date, the plan sponsor shall value the form of benefit being paid.
(2) If a benefit is not in pay status as of the valuation date but a valid election with respect to the form of benefit has been made on or before the valuation date, the plan sponsor shall value the form of benefit so elected.
(3) If a benefit is not in pay status as of the valuation date and no valid election with respect to the form of benefit has been made on or before the valuation date, the plan sponsor shall value the form of benefit that, under the terms of the plan or applicable law, is payable in the absence of a valid election.
(b) Timing of benefit. The plan sponsor shall value benefits whose starting date is subject to election--
(1) By assuming that the starting date of each benefit is the earliest date, not preceding the valuation date, that could be elected; or
(2) By using any other assumption that the plan sponsor demonstrates to the satisfaction of the PBGC is more reasonable under the circumstances.

Sec. 4281.13 Benefit valuation methods--in general.

(a) General rule. Except as otherwise provided in paragraph (b) of this section (regarding the valuation of benefits payable as lump sums under trusteed plans) and Sec. 4281.16 (regarding plans that are closing out), the plan sponsor shall value benefits as of the valuation date by--
(1) Using the interest assumptions described in Table I of appendix B to part 4044 of this chapter;
(2) Using the mortality assumptions described in Sec. 4281.14;
(3) Using interpolation methods, where necessary, at least as accurate as linear interpolation;
(4) Applying valuation formulas that accord with generally accepted actuarial principles and practices; and
(5) Adjusting the values to reflect the loading for expenses in accordance with appendix C to part 4044 of this chapter (substituting the term ``benefits'' for the term ``benefit liabilities (as defined in 29 U.S.C. Sec. 1301(a)(16))'').
(b) Benefits payable as lump sums under trusteed plans. If the PBGC is trustee of a multiemployer plan, for determining whether the value of a benefit is $3,500 or less under Sec. 4022.7(b)(1) and for calculating the amount of a lump sum benefit, the PBGC shall value benefits to be paid as lump sums in the same manner as benefits to be paid as annuities except that the interest assumptions prescribed by Table II of appendix B to part 4044 of this chapter and the mortality assumptions prescribed by Sec. 4281.15 shall apply, and there shall be no adjustment to reflect the loading for expenses.

Sec. 4281.14 Mortality assumptions--in general.

(a) General rule. Except as otherwise provided in Sec. 4281.15 (regarding the valuation of benefits payable as lump sums under trusteed plans), and subject to paragraph (b) of this section (regarding certain death benefits), the plan administrator shall use the mortality factors prescribed in paragraphs (c), (d), and (e) of this section to value benefits under Sec. 4281.13.
(b) Certain death benefits. If an annuity for one person is in pay status on the valuation date, and if the payment of a death benefit after the valuation date to another person, who need not be identifiable on the valuation date, depends in whole or in part on the death of the pay status annuitant, then the plan administrator shall value the death benefit using--
(1) the mortality rates that are applicable to the annuity in pay status under this section to represent the mortality of the pay status annuitant; and
(2) the mortality rates applicable to annuities not in pay status and to deferred benefits other than annuities, under paragraph (c) of this section, to represent the mortality of the death beneficiary. (c) Mortality rates for healthy lives. The mortality rates
applicable to annuities in pay status on the valuation date that are not being received as disability benefits, to annuities not in

[[Page 34120]]

pay status on the valuation date, and to deferred benefits other than annuities, are,--
(1) For male participants, the rates in Table 1 of appendix A to part 4044 of this chapter, and
(2) For female participants, the rates in Table 1 of appendix A to part 4044 of this chapter, set back 6 years.
(d) Mortality rates for disabled lives (other than Social Security disability). The mortality rates applicable to annuities in pay status on the valuation date that are being received as disability benefits and for which neither eligibility for, nor receipt of, Social Security disability benefits is a prerequisite, are,--
(1) For male participants, the rates in Table 1 of appendix A to part 4044 of this chapter, set forward 3 years, and
(2) For female participants, the rates in Table 1 of appendix A to part 4044 of this chapter, set back 3 years.
(e) Mortality rates for disabled lives (Social Security disability). The mortality rates applicable to annuities in pay status on the valuation date that are being received as disability benefits and for which either eligibility for, or receipt of, Social Security disability benefits is a prerequisite, are the rates in Tables 2-M and 2-F of appendix A to part 4044 of this chapter.

Sec. 4281.15 Mortality assumptions--lump sums under trusteed plans.

(a) General rule. If the PBGC is trustee of a multiemployer plan, for determining whether the value of a benefit is $3,500 or less under Sec. 4022.7(b)(1) and for calculating the amount of a lump sum benefit, the PBGC will use the mortality rates in Table 3 of appendix A to part 4044 of this chapter.

Sec. 4281.16 Benefit valuation methods--plans closing out.

(a) Applicability. For purposes of the annual valuation required by section 4281(b) of ERISA, the plan sponsor shall value the plan's benefits in accordance with paragraph (b) of this section if,--
(1) Plans closed out before valuation. Before the time when the valuation is performed, the plan has satisfied in full all liabilities for payment of nonforfeitable benefits, in a manner consistent with the terms of the plan and applicable law, by the purchase of one or more nonparticipating irrevocable commitments from one or more insurers, with respect to all benefits payable as annuities, and by the payment of single-sum cash distributions, with respect to benefits not payable as annuities; or
(2) Plans to be closed out after valuation. As of the time when the valuation is performed, the plan sponsor reasonably expects that the plan will close out before the next annual valuation date and the plan sponsor has a currently exercisable bid or bids to provide the irrevocable commitment(s) described in paragraph (a)(1) of this section and the total cost of the irrevocable commitment(s) under the bid, plus the total amount of the single-sum cash distributions described in paragraph (a)(1), does not exceed the value of the plan's assets, exclusive of outstanding claims for withdrawal liability, as determined under this subpart.
(b) Valuation rule. The present value of nonforfeitable benefits under this section is the total amount of single-sum cash distributions made or to be made plus the cost of the irrevocable commitment(s) purchased or to be purchased in order to satisfy in full all liabilities of the plan for nonforfeitable benefits.

Sec. 4281.17 Asset valuation methods--in general.

(a) General rule. The plan sponsor shall value plan assets as of the valuation date, using the valuation methods prescribed by this section and Sec. 4281.18 (regarding outstanding claims for withdrawal liability), and deducting administrative liabilities in accordance with paragraph (c) of this section.
(b) Assets other than withdrawal liability claims. The plan sponsor shall value any plan asset (other than an outstanding claim for withdrawal liability) by such method or methods as the plan sponsor reasonably believes most accurately determine fair market value.
(c) Adjustment for administrative liabilities. In determining the total value of plan assets, the plan sponsor shall subtract all plan liabilities, other than liabilities to pay benefits. For this purpose, any obligation to repay financial assistance received from the PBGC under section 4261 of ERISA is a plan liability other than a liability to pay benefits. The obligation to repay financial assistance shall be valued by determining the value of the scheduled payments in the same manner as prescribed in Sec. 4281.18(a) for valuing claims for withdrawal liability.

Sec. 4281.18 Outstanding claims for withdrawal liability.

(a) Value of claim. The plan sponsor shall value an outstanding claim for withdrawal liability owed by an employer described in paragraph (b) of this section in accordance with paragraphs (a)(1) and (a)(2) of this section:
(1) If the schedule of withdrawal liability payments provides for one or more series of equal payments, the plan sponsor shall value each series of payments as an annuity certain in accordance with the provisions of Sec. 4281.13.
(2) If the schedule of withdrawal liability payments provides for one or more payments that are not part of a series of equal payments as described in paragraph (a)(1) of this section, the plan sponsor shall value each such unequal payment as a lump-sum payment in accordance with the provisions of Sec. 4281.13.
(b) Employers neither liquidated nor in insolvency proceedings. The plan sponsor shall value an outstanding claim for withdrawal liability under paragraph (a) of this section if, as of the valuation date--
(1) The employer has not been completely liquidated or dissolved; and
(2) The employer is not the subject of any case or proceeding under title 11, United States Code, or any case or proceeding under similar provisions of state insolvency laws; except that the claim for withdrawal liability of an employer that is the subject of a proceeding described in this paragraph (b)(2) shall be valued under paragraph (a) of this section if the plan sponsor determines that the employer is reasonably expected to be able to pay its withdrawal liability in full and on time.
(c) Claims against other employers. The plan sponsor shall value at zero any outstanding claim for withdrawal liability owed by an employer that does not meet the conditions set forth in paragraph (b) of this section.

Subpart C--Benefit Reductions

Sec. 4281.31 Plan amendment.

The plan sponsor of a plan described in Sec. 4281.31 shall amend the plan to eliminate those benefits subject to reduction in excess of the value of benefits that can be provided by plan assets. Such reductions shall be effected by a pro rata reduction of all benefits subject to reduction or by elimination or pro rata reduction of any category of benefit. Benefit reductions required by this section shall apply only prospectively. An amendment required under this section shall take effect no later than six months after the end of the plan year for which it is determined that the value of nonforfeitable benefits exceeds the value of the plan's assets.

Sec. 4281.32 Notices of benefit reductions.

(a) Requirement of notices. A plan sponsor of a multiemployer plan under which a plan amendment reducing

[[Page 34121]]

benefits is adopted pursuant to section 4281(c) of ERISA shall so notify the PBGC and plan participants and beneficiaries whose benefits are reduced by the amendment. The notices shall be delivered in the manner and within the time prescribed, and shall contain the information described, in this section. The notice required in this section shall be filed in lieu of the notice described in section 4244A(b)(2) of ERISA.
(b) When delivered. The plan sponsor shall mail or otherwise deliver the notices of benefit reduction no later than the earlier of--
(1) 45 days after the amendment reducing benefits is adopted; or
(2) The date of the first reduced benefit payment.
(c) Method of delivery. The notices of benefit reductions shall be delivered by mail or by hand to the PBGC and to plan participants and beneficiaries who are in pay status when the notice is required to be delivered or who are reasonably expected to enter pay status before the end of the plan year after the plan year in which the amendment is adopted. The notice to other participants and beneficiaries whose benefit is reduced by the amendment shall be provided in any manner reasonably calculated to reach those participants and beneficiaries. Reasonable methods of notification include, but are not limited to, posting the notice at participants' worksites or publishing the notice in a union newsletter or newspaper of general circulation in the area or areas where participants reside. Notice to a participant shall be deemed notice to the participant's beneficiary or beneficiaries.
(d) Contents of notice to the PBGC. A notice of benefit reduction required to be filed with the PBGC pursuant to paragraph (a) of this section shall contain the following information:
(1) The name of the plan.
(2) The name, address, and telephone number of the plan sponsor and of the plan sponsor's duly authorized representative, if any.
(3) The nine-digit Employer Identification Number (EIN) assigned by the IRS to the plan sponsor and the three-digit Plan Number (PN) assigned by the plan sponsor to the plan, and, if different, the EIN or PN last filed with the PBGC. If no EIN or PN has been assigned, the notice shall so state.
(4) The case number assigned by the PBGC to the filing of the plan's notice of termination pursuant to part 4041A, subpart B, of this chapter.
(5) A statement that a plan amendment reducing benefits has been adopted, listing the date of adoption and the effective date of the amendment.
(6) A certification, signed by the plan sponsor or its duly authorized representative, that notice of the benefit reductions has been given to all participants and beneficiaries whose benefits are reduced by the plan amendment, in accordance with the requirements of this section.
(e) Contents of notice to participants and beneficiaries. A notice of benefit reductions required under paragraph (a) of this section to be given to plan participants and beneficiaries whose benefits are reduced by the amendment shall contain the following information:
(1) The name of the plan.
(2) A statement that a plan amendment reducing benefits has been adopted, listing the date of adoption and the effective date of the amendment.
(3) A summary of the amendment, including a description of the effect of the amendment on the benefits to which it applies.
(4) The name, address, and telephone number of the plan administrator or other person designated by the plan sponsor to answer inquiries concerning benefits.

Sec. 4281.33 Restoration of benefits.

(a) General. The plan sponsor of a plan that has been amended to reduce benefits under this subpart shall amend the plan to restore those benefits before adopting any amendment increasing benefits under the plan. A plan is not required to make retroactive benefit payments with respect to any benefit that was reduced and subsequently restored in accordance with this section.
(b) Notice to the PBGC. The plan sponsor shall notify the PBGC in writing of any restoration under this section. The notice shall include the information specified in Sec. 4281.32 (d)(1) through (d)(4); a statement that a plan amendment restoring benefits has been adopted, the date of adoption, and the effective date of the amendment; and a certification, signed by the plan sponsor or its duly authorized representative, that the amendment has been adopted in accordance with this section.

Subpart D--Benefit Suspensions

Sec. 4281.41 Benefit suspensions.

If the plan sponsor determines that the plan is or is expected to be insolvent for a plan year, the plan sponsor shall suspend benefits to the extent necessary to reduce the benefits to the greater of the resource benefit level or the level of guaranteed benefits.

Sec. 4281.42 Retroactive payments.

(a) Erroneous resource benefit level. If, by the end of a year in which benefits were suspended under Sec. 4281.41, the plan sponsor determines in writing that the plan's available resources in that year could have supported benefit payments above the resource benefit level determined for that year, the plan sponsor may distribute the excess resources to each affected participant and beneficiary who received benefit payments that year on a pro rata basis. The amount distributed to each participant under this paragraph may not exceed the amount that, when added to benefit payments already made, brings the total benefit for the plan year up to the total benefit provided under the plan.
(b) Benefits paid below resource benefit level. If, by the end of a plan year in which benefits were suspended under Sec. 4281.41, any benefit has not been paid at the resource benefit level, amounts up to the resource benefit level that were unpaid shall be distributed to each affected participant and beneficiary on a pro rata basis to the extent possible, taking into account the plan's total available resources in that year.

Sec. 4281.43 Notices of insolvency and annual updates.

(a) Requirement of notices of insolvency. A plan sponsor that determines that the plan is, or is expected to be, insolvent for a plan year shall issue notices of insolvency to the PBGC and to plan participants and beneficiaries. Once notices of insolvency have been issued to the PBGC and to plan participants and beneficiaries, no notice of insolvency needs to be issued for subsequent insolvency years. Notices shall be delivered in the manner and within the time prescribed in this section and shall contain the information described in Sec. 4281.44.
(b) Requirement of annual updates. A plan sponsor that has issued notices of insolvency to the PBGC and to plan participants and beneficiaries shall thereafter issue annual updates to the PBGC and participants and beneficiaries for each plan year beginning after the plan year for which the notice of insolvency was issued. However, the plan sponsor need not issue an annual update to plan participants and beneficiaries who are issued notices of insolvency benefit level in accordance with Sec. 4281.45 for the same insolvency year. A plan sponsor that, after issuing annual updates for a plan year, determines under Sec. 4041A.25(b) that the plan is or may be insolvent for that plan

[[Page 34122]]

year need not issue revised annual updates. Annual updates shall be delivered in the manner and within the time prescribed in this section and shall contain the information described in Sec. 4281.44.
(c) Notices of insolvency--when delivered. Except as provided in the next sentence, the plan sponsor shall mail or otherwise deliver the notices of insolvency no later than 30 days after the plan sponsor determines that the plan is or may be insolvent. However, the notice to plan participants and beneficiaries in pay status may be delivered concurrently with the first benefit payment made after the determination of insolvency.
(d) Annual updates--when delivered. Except as provided in the next sentence, the plan sponsor shall mail or otherwise deliver annual updates no later than 60 days before the beginning of the plan year for which the annual update is issued. A plan sponsor that determines under Sec. 4041A.25(b) that the plan is or may be insolvent for a plan year and that has not at that time issued annual updates for that year, shall mail or otherwise deliver the annual updates by the later of 60 days before the beginning of the plan year or 30 days after the date of the plan sponsor's determination under Sec. 4041A.25(b).
(e) Notices of insolvency--method of delivery. The notices of insolvency shall be delivered by mail or by hand to the PBGC and to plan participants and beneficiaries in pay status when the notice is required to be delivered. Notice to participants and beneficiaries not in pay status shall be provided in any manner reasonably calculated to reach those participants and beneficiaries. Reasonable methods of notification include, but are not limited to, posting the notice at participants' worksites or publishing the notice in a union newsletter or newspaper of general circulation in the area or areas where participants reside. Notice to a participant shall be deemed notice to that participant's beneficiary or beneficiaries.
(f) Annual updates--method of delivery. Each annual update shall be delivered by mail or by hand to the PBGC. Each annual update to plan participants and beneficiaries shall be provided in any manner reasonably calculated to reach participants and beneficiaries. Reasonable methods of notification include, but are not limited to, posting the notice at participants' worksites and publishing the notice in a union newsletter of general circulation in the area or areas where participants reside. Notice to a participant shall be deemed notice to that participant's beneficiary or beneficiaries.

Sec. 4281.44 Contents of notices of insolvency and annual updates.

(a) Notice of insolvency to the PBGC. A notice of insolvency required under Sec. 4281.43(a) to be filed with the PBGC shall contain the following information:
(1) The name of the plan.
(2) The name, address, and telephone number of the plan sponsor and of the plan sponsor's duly authorized representative, if any.
(3) The nine-digit Employer Identification Number (EIN) assigned by the IRS to the plan sponsor and the three-digit Plan Number (PN) assigned by the plan sponsor to the plan, and, if different, the EIN or PN last filed with the PBGC. If no EIN or PN has been assigned, the notice shall so state.
(4) The IRS Key District that has jurisdiction over determination letters with respect to the plan.
(5) The case number assigned by the PBGC to the filing of the plan's notice of termination pursuant to part 4041A, subparts A and B, of this chapter.
(6) The plan year for which the plan sponsor has determined that the plan is or may be insolvent.
(7) A copy of the plan document currently in effect, i.e., a copy of the last restatement of the plan and all subsequent amendments. However, if a copy of the plan document was submitted to the PBGC with a previous filing, only subsequent plan amendments need be submitted, and the notice shall state when the copy of the plan document was filed.
(8) A copy of the most recent actuarial valuation for the plan (i.e., the most recent report submitted to the plan in connection with a valuation of plan assets and liabilities, which shall be performed in accordance with subpart B of this part). If the actuarial valuation was previously submitted to the PBGC, it may be omitted, and the notice shall state the date on which the document was filed and that the information is still accurate and complete.
(9) The estimated amount of annual benefit payments under the plan (determined without regard to the insolvency) for the insolvency year.
(10) The estimated amount of the plan's available resources for the insolvency year.
(11) The estimated amount of the annual benefits guaranteed by the PBGC for the insolvency year.
(12) A statement indicating whether the notice of insolvency is the result of an insolvency determination under Sec. 4041A.25 (a) or (b).
(13) A certification, signed by the plan sponsor or its duly authorized representative, that notices of insolvency have been given to all plan participants and beneficiaries in accordance with this part.
(b) Notice of insolvency to participants and beneficiaries. A notice of insolvency required under Sec. 4281.43(a) to be issued to plan participants and beneficiaries shall contain the following information:
(1) The name of the plan.
(2) A statement of the plan year for which the plan sponsor has determined that the plan is or may be insolvent.
(3) A statement that benefits above the amount that can be paid from available resources or the level guaranteed by the PBGC, whichever is greater, will be suspended during the insolvency year, with a brief explanation of which benefits are guaranteed by the PBGC.
(4) The name, address, and telephone number of the plan administrator or other person designated by the plan sponsor to answer inquiries concerning benefits.
(c) Annual update to the PBGC. Each annual update required by Sec. 4281.43(b) to be filed with the PBGC shall contain the following information:
(1) The case number assigned by the PBGC to the filing of the plan's notice of termination pursuant to part 4041A, subparts A and B, of this chapter.
(2) A copy of the annual update to plan participants and beneficiaries, as described in paragraph (d) of this section, for the plan year.
(3) A statement indicating whether the annual update is the result of an insolvency determination under Sec. 4041A.25(a) or (b).
(4) A certification, signed by the plan sponsor or a duly authorized representative, that the annual update has been given to all plan participants and beneficiaries in accordance with this part.
(d) Annual updates to participants and beneficiaries. Each annual update required by Sec. 4281.43(b) to be issued to plan participants and beneficiaries shall contain the following information:
(1) The name of the plan.
(2) The date the notice of insolvency was issued and the insolvency year identified in the notice.
(3) The plan year to which the annual update pertains and the plan sponsor's determination whether the plan may be insolvent in that year.
(4) If the plan may be insolvent for the plan year, a statement that benefits above the amount that can be paid from available resources or the level guaranteed by the PBGC, whichever is greater, will be suspended during the insolvency year, with a brief

[[Page 34123]]

explanation of which benefits are guaranteed by the PBGC. (5) If the plan will not be insolvent for the plan year, a statement that full nonforfeitable benefits under the plan will be paid.
(6) The name, address, and telephone number of the plan administrator or other person designated by the plan sponsor to answer inquiries concerning benefits.

Sec. 4281.45 Notices of insolvency benefit level.

(a) Requirement of notices. For each insolvency year, the plan sponsor shall issue a notice of insolvency benefit level to the PBGC and to plan participants and beneficiaries in pay status or reasonably expected to enter pay status during the insolvency year. The notices shall be delivered in the manner and within the time prescribed in this section and shall contain the information described in Sec. 4281.46.
(b) When delivered. The plan sponsor shall mail or otherwise deliver the notices of insolvency benefit level no later than 60 days before the beginning of the insolvency year. A plan sponsor that determines under Sec. 4041A.25(b) that the plan is or may be insolvent for a plan year shall mail or otherwise deliver the notices of insolvency benefit level by the later of 60 days before the beginning of the insolvency year or 60 days after the date of the plan sponsor's determination under Sec. 4041A.25(b).
(c) Method of delivery. The notices of insolvency benefit level shall be delivered by mail or by hand to the PBGC and to plan participants and beneficiaries in pay status or reasonably expected to enter pay status during the insolvency year.

Sec. 4281.46 Contents of notices of insolvency benefit level.

(a) Notice to the PBGC. A notice of insolvency benefit level required by Sec. 4281.45(a) to be filed with the PBGC shall contain the information specified in Sec. 4281.44(a)(1) through (a)(5) and (a)(7) through (a)(11) and: (1) The insolvency year for which the notice is being filed.
(2) The amount of financial assistance, if any, requested from the PBGC. (When financial assistance is requested, the plan sponsor shall submit an application in accordance with Sec. 4281.47.)
(3) A statement indicating whether the notice of insolvency benefit level is the result of an insolvency determination under Sec. 4041A.25(a) or (b).
(4) A certification, signed by the plan sponsor or its duly authorized representative, that a notice of insolvency benefit level has been sent to all plan participants and beneficiaries in pay status or reasonably expected to enter pay status during the insolvency year, in accordance with this part.
(b) Notice to participants in or entering pay status. A notice of insolvency benefit level required by Sec. 4281.45(a) to be delivered to plan participants and beneficiaries in pay status or reasonably expected to enter pay status during the insolvency year for which the notice is given, shall contain the following information:
(1) The name of the plan.
(2) The insolvency year for which the notice is being sent.
(3) The monthly benefit that the participant or beneficiary may expect to receive during the insolvency year.
(4) A statement that in subsequent plan years, depending on the plan's available resources, this benefit level may be increased or decreased but not below the level guaranteed by the PBGC, and that the participant or beneficiary will be notified in advance of the new benefit level if it is less than the participant's full nonforfeitable benefit under the plan.
(5) The amount of the participant's or beneficiary's monthly nonforfeitable benefit under the plan.
(6) The amount of the participant's or beneficiary's monthly benefit that is guaranteed by the PBGC.
(7) The name, address, and telephone number of the plan administrator or other person designated by the plan sponsor to answer inquiries concerning benefits.

Sec. 4281.47 Application for financial assistance.

(a) General. If the plan sponsor determines that the plan's resource benefit level for an insolvency year is below the level of benefits guaranteed by PBGC or that the plan will be unable to pay guaranteed benefits when due for any month during the year, the plan sponsor shall apply to the PBGC for financial assistance pursuant to section 4261 of ERISA. The application shall be filed within the time prescribed in paragraph (b) of this section. When the resource benefit level is below the guarantee level, the application shall contain the information set forth in paragraph (c) of this section. When the plan is unable to pay guaranteed benefits for any month, the application shall contain the information set forth in paragraph (d) of this section.
(b) When to apply. When the plan sponsor determines a resource benefit level that is less than guaranteed benefits, it shall apply for financial assistance at the same time that it submits its notice of insolvency benefit level pursuant to Sec. 4281.45. When the plan sponsor determines an inability to pay guaranteed benefits for any month, it shall apply for financial assistance within 15 days after making that determination.
(c) Contents of application--resource benefit level below level of guaranteed benefits. A plan sponsor applying for financial assistance because the plan's resource benefit level is below the level of guaranteed benefits shall file an application that includes the information specified in Sec. 4281.44 (a)(1) through (a)(5) and:
(1) The insolvency year for which the application is being filed.
(2) A participant data schedule showing each participant and beneficiary in pay status or reasonably expected to enter pay status during the year for which financial assistance is requested, listing for each--
(i) Name;
(ii) Sex;
(iii) Date of birth;
(iv) Credited service;
(v) Vested accrued monthly benefit;
(vi) Monthly benefit guaranteed by PBGC;
(vii) Benefit commencement date; and
(viii) Type of benefit.
(d) Contents of application--unable to pay guaranteed benefits for any month. A plan sponsor applying for financial assistance because the plan is unable to pay guaranteed benefits for any month shall file an application that includes the data described in Sec. 4281.44 (a)(1) through (a)(5), the month for which financial assistance is requested, and the plan's available resources and guaranteed benefits payable in that month. The participant data schedule described in paragraph (c)(2) of this section shall be submitted upon the request of the PBGC.
(e) Additional information. The PBGC may request any additional information that it needs to calculate or verify the amount of financial assistance necessary as part of the conditions of granting financial assistance pursuant to section 4261 of ERISA.

PART 4901--EXAMINATION AND COPYING OF PENSION BENEFIT GUARANTY CORPORATION RECORDS

Subpart A--General

Sec.
4901.1 Purpose and scope.
4901.2 Definitions.
4901.3 Disclosure facilities.
4901.4 Information maintained in public reference room.
4901.5 Disclosure of other information.

[[Page 34124]]

Subpart B--Procedure for Formal Requests

4901.11 Submittal of requests for access to records.
4901.12 Description of information requested.
4901.13 Receipt by agency of request.
4901.14 Action on request.
4901.15 Appeals from denial of requests.
4901.16 Extensions of time.
4901.17 Exhaustion of administrative remedies.

Subpart C--Restrictions on Disclosure

4901.21 Restrictions in general.
4901.22 Partial disclosure.
4901.23 Records of concern to more than one agency.
4901.24 Special rules for trade secrets and confidential commercial
or financial information submitted to the PBGC.

Subpart D--Fees

4901.31 Charges for services.
4901.32 Fee schedule.
4901.33 Payment of fees.
4901.34 Waiver or reduction of charges.

Authority: 5 U.S.C. 552; 29 U.S.C. 1302(b)(3); E.O. 12600, 52 FR 23781.

Subpart A--General

Sec. 4901.1 Purpose and scope.

This part contains the general rules of the PBGC implementing the Freedom of Information Act. This part sets forth generally the categories of records accessible to the public, the types of records subject to prohibitions or restrictions on disclosure, and the procedure whereby members of the public may obtain access to and inspect and copy information from records in the custody of the PBGC.

Sec. 4901.2 Definitions.

In addition to terminology in part 4001 of this chapter, as used in this part--
Agency, person, party, rule, rulemaking, order, and adjudication have the meanings attributed to these terms by the definitions in 5 U.S.C. 551, except where the context demonstrates that a different meaning is intended, and except that for purposes of the Freedom of Information Act the term agency as defined in 5 U.S.C. 551 includes any executive department, military department, Government corporation, Government controlled corporation, or other establishment in the executive branch of the Government (including the Executive Office of the President) or any independent regulatory agency.
Disclosure officer means the designated official in the Communications and Public Affairs Department, PBGC.
FOIA means the Freedom of Information Act, as amended (5 U.S.C. 552). Working day means any weekday excepting Federal holidays.

Sec. 4901.3 Disclosure facilities.

(a) Public reference room. The PBGC will maintain a public reference room in its offices located at 1200 K Street NW., Washington, DC 20005-4026, wherein persons may inspect and copy all records made available for such purposes under this part.
(b) No withdrawal of records. No person may remove any record made available for inspection or copying under this part from the place where it is made available except with the written consent of the General Counsel of the PBGC.

Sec. 4901.4 Information maintained in public reference room.

The PBGC shall make available in its public reference room for inspection and copying without formal request--
(a) Information published in the Federal Register. Copies of Federal Register documents published by the PBGC, and copies of Federal Register indexes;
(b) Information in PBGC publications. Copies of informational material, such as press releases, pamphlets, and other material ordinarily made available to the public without cost as part of a public information program;
(c) Rulemaking proceedings. All papers and documents made a part of the official record in administrative proceedings conducted by the PBGC in connection with the issuance, amendment, or revocation of rules and regulations or determinations having general applicability or legal effect with respect to members of the public or a class thereof (with a register being kept to identify the persons who inspect the records and the times at which they do so);
(d) Except to the extent that deletion of identifying details is required to prevent a clearly unwarranted invasion of personal privacy (in which case the justification for the deletion shall be fully explained in writing)--
(1) Adjudication proceedings. Final opinions, orders, and (except to the extent that an exemption provided by FOIA must be asserted in the public interest to prevent a clearly unwarranted invasion of personal privacy or violation of law or to ensure the proper discharge of the functions of the PBGC) other papers and documents made a part of the official record in adjudication proceedings conducted by the PBGC,
(2) Policy statements and interpretations. Statements of policy and interpretations affecting a member of the public which have been adopted by the PBGC and which have not been published in the Federal Register, and
(3) Staff manuals and instructions. Administrative staff manuals and instructions to staff issued by the PBGC that affect any member of the public, and
(e) Indexes to certain records. Current indexes (updated at least quarterly) identifying materials described in paragraph (a)(2) of FOIA and paragraph (d) of this section.

Sec. 4901.5 Disclosure of other information.

(a) In general. Upon the request of any person submitted in accordance with subpart B of this part, the disclosure officer shall make any document (or portion thereof) from the records of the PBGC in the custody of any official of the PBGC available for inspection and copying unless exempt from disclosure under the provisions of subsection (b) of FOIA and subpart C of this part. The subpart B procedures must be used for records that are not made available in the PBGC's public reference room under Sec. 4901.4 and may be used for records that are available in the public reference room. Records that could be produced only by manipulation of existing information (such as computer analyses of existing data), thus creating information not previously in being, are not records of the PBGC and are not required to be furnished under FOIA.
(b) Discretionary disclosure. Notwithstanding the applicability of an exemption under subsection (b) of FOIA and subpart C of this part (other than an exemption under paragraph (b)(1) or (b)(3) of FOIA and Sec. 4901.21 (a)(2) and (a)(3)), the disclosure officer may (subject to 18 U.S.C. 1905 and Sec. 4901.21(a)(1)) make any document (or portion thereof) from the records of the PBGC available for inspection and copying if the disclosure officer determines that disclosure furthers the public interest and does not impede the discharge of any of the functions of the PBGC.

Subpart B--Procedure for Formal Requests

Sec. 4901.11 Submittal of requests for access to records.

A request to inspect or copy any record subject to this subpart shall be submitted in writing to the Disclosure Officer, Communications and Public Affairs Department, Pension Benefit Guaranty Corporation, 1200 K Street NW., Washington, DC 20005-4026. To expedite processing, the words ``FOIA request'' should appear clearly on the request and its envelope.

[[Page 34125]]

Sec. 4901.12 Description of information requested.

(a) In general. Each request should reasonably describe the record or records sought in sufficient detail to permit identification and location with a reasonable amount of effort. So far as practicable, the request should specify the subject matter of the record, the place where and date or approximate date when made, the person or office that made it, and any other pertinent identifying details.
(b) Deficient descriptions. If the description is insufficient to enable a professional employee familiar with the subject area of the request to locate the record with a reasonable amount of effort, the disclosure officer will notify the requester and, to the extent possible, indicate the additional information required. Every reasonable effort shall be made to assist a requester in the identification and location of the record or records sought. Records will not be withheld merely because it is difficult to find them.
(c) Requests for categories of records. Requests calling for all records falling within a reasonably specific category will be regarded as reasonably described within the meaning of this section and paragraph (a)(3) of FOIA if the PBGC is reasonably able to determine which records come within the request and to search for and collect them without unduly interfering with PBGC operations. If PBGC operations would be unduly disrupted, the disclosure officer shall promptly notify the requester and provide an opportunity to confer in an attempt to reduce the request to manageable proportions.

Sec. 4901.13 Receipt by agency of request.

The disclosure officer shall note the date and time of receipt on each request for access to records. A request shall be deemed received and the period within which action on the request shall be taken, as set forth in Sec. 4901.14 of this part, shall begin on the next business day following such date, except that a request shall be deemed received only if and when the PBGC receives--
(a) A sufficient description under Sec. 4901.12;
(b) Payment or assurance of payment if required under Sec. 4901.33(b); and
(c) The requester's consent to pay substantial search, review, and/ or duplication charges under subpart D of this part if the PBGC determines that such charges may be substantial and so notifies the requester. Consent may be in the form of a statement that costs under subpart D will be acceptable either in any amount or up to a specified amount. To avoid possible delay, a requester may include such a statement in a request.

Sec. 4901.14 Action on request.

(a) Time for action. Promptly and in any event within 10 working days after receipt of a disclosure request (subject to extension under Sec. 4901.16), the disclosure officer shall take action with respect to each requested item (or portion of an item) under either paragraph (b), (c), or (d) of this section.
(b) Request granted. If the disclosure officer determines that the request should be granted, the requester shall be so advised and the records shall be promptly made available to the requester.
(c) Request denied. If the disclosure officer determines that the request should be denied, the requester shall be so advised in writing with a brief statement of the reasons for the denial, including a reference to the specific exemption(s) authorizing the denial and an explanation of how each such exemption applies to the matter withheld. The denial shall also include the name and title or position of the person(s) responsible for the denial and outline the appeal procedure available.
(d) Records not promptly located. As to records that are not located in time to make an informed determination, the disclosure officer may deny the request and so advise the requester in writing with an explanation of the circumstances. The denial shall also include the name and title or position of the person(s) responsible for the denial, outline the appeal procedure available, and advise the requester that the search or examination will be continued and that the denial may be withdrawn, modified, or confirmed when processing of the request is completed.

Sec. 4901.15 Appeals from denial of requests.

(a) Submittal of appeals. If a disclosure request is denied in whole or in part by the disclosure officer, the requester may file a written appeal within 30 days from the date of the denial or, if later (in the case of a partial denial), 30 days from the date the requester receives the disclosed material. The appeal shall state the grounds for appeal and any supporting statements or arguments, and shall be addressed to the General Counsel, Pension Benefit Guaranty Corporation, 1200 K Street NW., Washington, DC 20005-4026. To expedite processing, the words ``FOIA appeal'' should appear clearly on the appeal and its envelope.
(b) Receipt and consideration of appeal. The General Counsel shall note the date and time of receipt on each appeal and notify the requester thereof. Promptly and in any event within 20 working days after receipt of an appeal (subject to extension under Sec. 4901.16), the General Counsel shall issue a decision on the appeal.
(1) The General Counsel may determine de novo whether the denial of disclosure was in accordance with FOIA and this part.
(2) If the denial appealed from was under Sec. 4901.14(d), the General Counsel shall consider any supplementary determination by the disclosure officer in deciding the appeal.
(3) Unless otherwise ordered by the court, the General Counsel may act on an appeal notwithstanding the pendency of an action for judicial relief in the same matter and, if no appeal has been filed, may treat such an action as the filing of an appeal.
(c) Decision on appeal. As to each item (or portion of an item) whose nondisclosure is appealed, the General Counsel shall either--
(1) Grant the appeal and so advise the requester in writing, in which case the records with respect to which the appeal is granted shall be promptly made available to the requester; or
(2) Deny the appeal and so advise the requester in writing with a brief statement of the reasons for the denial, including a reference to the specific exemption(s) authorizing the denial, an explanation of how each such exemption applies to the matter withheld, and notice of the provisions for judicial review in paragraph (a)(4) of FOIA. The General Counsel's decision shall be the final action of the PBGC with respect to the request.
(d) Records of appeals. Copies of both grants and denials of appeals shall be collected in one file available in the PBGC's public reference room under Sec. 4901.4(d)(1) and indexed under Sec. 4901.4(e).

Sec. 4901.16 Extensions of time.

In unusual circumstances (as described in subparagraph (a)(6)(B) of FOIA), the time to respond to a disclosure request under Sec. 4901.14(a) or an appeal under Sec. 4901.15(b) may be extended as reasonably necessary to process the request or appeal. The disclosure officer (with the prior approval of the General Counsel) or the General Counsel, as appropriate, shall notify the requester in writing within the original time period of the reasons for the extension and the date when a response is expected to be sent. The maximum extension for responding to a disclosure request shall be 10 working days, and the maximum extension for responding to an appeal shall be 10

[[Page 34126]]

working days minus the amount of any extension on the request to which the appeal relates.

Sec. 4901.17 Exhaustion of administrative remedies.

If the disclosure officer fails to make a determination to grant or deny access to requested records, or the General Counsel does not make a decision on appeal from a denial of access to PBGC records, within the time prescribed (including any extension) for making such determination or decision, the requester's administrative remedies shall be deemed exhausted and the requester may apply for judicial relief under FOIA. However, since a court may allow the PBGC additional time to act as provided in FOIA, processing of the request or appeal shall continue and the requester shall be so advised.

Subpart C--Restrictions on Disclosure

Sec. 4901.21 Restrictions in general.

(a) Records not disclosable. Records shall not be disclosed to the extent prohibited by--
(1) 18 U.S.C. 1905, dealing in general with commercial and financial information;
(2) Paragraph (b)(1) of FOIA, dealing in general with matters of national defense and foreign policy; or
(3) Paragraph (b)(3) of FOIA, dealing in general with matters specifically exempted from disclosure by statute, including information or documentary material submitted to the PBGC pursuant to sections 4010 and 4043 of ERISA.
(b) Records disclosure of which may be refused. Records need not (but may, as provided in Sec. 4901.5(b)) be disclosed to the extent provided by--
(1) Paragraph (b)(2) of FOIA, dealing in general with internal agency personnel rules and practices;
(2) Paragraph (b)(4) of FOIA, dealing in general with trade secrets and commercial and financial information;
(3) Paragraph (b)(5) of FOIA, dealing in general with inter-agency and intra-agency memoranda and letters;
(4) Paragraph (b)(6) of FOIA, dealing in general with personnel, medical, and similar files;
(5) Paragraph (b)(7) of FOIA, dealing in general with records or information compiled for law enforcement purposes;
(6) Paragraph (b)(8) of FOIA, dealing in general with reports on financial institutions; or
(7) Paragraph (b)(9) of FOIA, dealing in general with information about wells.

Sec. 4901.22 Partial disclosure.

If an otherwise disclosable record contains some material that is protected from disclosure, the record shall not for that reason be withheld from disclosure if deletion of the protected material is feasible. This principle shall be applied in particular to identifying details the disclosure of which would constitute an unwarranted invasion of personal privacy.

Sec. 4901.23 Record of concern to more than one agency.

If the release of a record in the custody of the PBGC would be of concern not only to the PBGC but also to another Federal agency, the record will be made available by the PBGC only if its interest in the record is the primary interest and only after coordination with the other interested agency. If the interest of the PBGC in the record is not primary, the request will be transferred promptly to the agency having the primary interest, and the requester will be so notified.

Sec. 4901.24 Special rules for trade secrets and confidential commercial or financial information submitted to the PBGC.

(a) Application. To the extent permitted by law, this section applies to a request for disclosure of a record that contains information that has been designated by the submitter in good faith in accordance with paragraph (b) of this section or a record that the PBGC has reason to believe contains such information, unless--
(1) Access to the information is denied;
(2) The information has been published or officially made available to the public;
(3) Disclosure of the information is required by law other than FOIA; or
(4) The designation under paragraph (b) of this section appears obviously frivolous, except that in such a case the PBGC will notify the submitter in writing of a determination to disclose the information within a reasonable time before the disclosure date (which shall be specified in the notice).
(b) Designation by submitter. To designate information as being subject to this section, the submitter shall, at the time of submission or by a reasonable time thereafter, assert that information being submitted is confidential business information and designate, with appropriate markings, the portion(s) of the submission to which the assertion applies. Any designation under this paragraph shall expire 10 years after the date of submission unless a longer designation period is requested and reasonable justification is provided therefor.
(c) Notification to submitter of disclosure request. When disclosure of information subject to this section may be made, the disclosure officer or (where disclosure may be made in response to an appeal) the General Counsel shall promptly notify the submitter, describing (or providing a copy of) the information that may be disclosed, and afford the submitter a reasonable period of time to object in writing to the requested disclosure. (The notification to the submitter may be oral or written; if oral, it will be confirmed in writing.) When a submitter is notified under this paragraph, the requester shall be notified that the submitter is being afforded an opportunity to object to disclosure.
(d) Objection of submitter. A submitter's statement objecting to disclosure should specify all grounds relied upon for opposing disclosure of any portion(s) of the information under subsection (b) of FOIA and, with respect to the exemption in paragraph (b)(4) of FOIA, demonstrate why the information is a trade secret or is commercial or financial information that is privileged or confidential. Facts asserted should be certified or otherwise supported. (Information provided pursuant to this paragraph may itself be subject to disclosure under FOIA.) Any timely objection of a submitter under this paragraph shall be carefully considered in determining whether to grant a disclosure request or appeal.
(e) Notification to submitter of decision to disclose. If the disclosure officer or (where disclosure is in response to an appeal) the General Counsel decides to disclose information subject to this section despite the submitter's objections, the disclosure officer (or General Counsel) shall give the submitter written notice, explaining briefly why the information is to be disclosed despite those objections, describing the information to be disclosed, and specifying the date when the information will be disclosed to the requester. The notification shall, to the extent permitted by law, be provided a reasonable number of days before the disclosure date so specified, and a copy shall be provided to the requester.
(f) Notification to submitter of action to compel disclosure. The disclosure officer or the General Counsel shall promptly notify the submitter if a requester brings suit seeking to compel disclosure.

Subpart D--Fees

Sec. 4901.31 Charges for services.

(a) Generally. Pursuant to the provisions of FOIA, as amended, charges will be assessed to cover the direct costs of searching for, reviewing,

[[Page 34127]]

and/or duplicating records requested under FOIA from the PBGC, except where the charges are limited or waived under paragraph (b) or (d) of this section, according to the fee schedule in Sec. 4901.32 of this part. No charge will be assessed if the costs of routine collection and processing of the fee would be equal to or greater than the fee itself.
(1) ``Direct costs'' means those expenditures which the PBGC actually incurs in searching for and duplicating (and in the case of commercial requesters, reviewing) documents to respond to a request under FOIA and this part. Direct costs include, for example, the salary of the employee performing work (i.e., the basic rate of pay plus benefits) or an established average pay for a homogeneous class of personnel (e.g., all administrative/clerical or all professional/ executive), and the cost of operating duplicating machinery. Not included in direct costs are overhead expenses such as costs of space, and heating or lighting the facility in which the records are stored.
(2) ``Search'' means all time spent looking for material that is responsive to a request under FOIA and this part, including page-by- page or line-by-line identification of materials within a document, if required, and may be done manually or by computer using existing programming. ``Search'' should be distinguished from ``review'' which is defined in paragraph (a)(3) of this section.
(3) ``Review'' means the process of examining documents located in response to a request under FOIA and this part to determine whether any portion of any document located is permitted or required to be withheld. It also includes processing any documents for disclosure, e.g., doing all that is necessary to excise them and otherwise prepare them for release. Review does not include time spent resolving general legal or policy issues regarding the application of exemptions.
(4) ``Duplication'' means the process of making a copy of a document necessary to respond to a request under FOIA and this part, in a form that is reasonably usable by the requester. Copies can take the form of paper copy, microform, audio-visual materials, or machine readable documentation (e.g., magnetic tape or disk), among others.
(b) Categories of requesters. Requesters who seek access to records under FOIA and this part are divided into four categories: commercial use requesters, educational and noncommercial scientific institutions, representatives of the news media, and all other requesters. The PBGC will determine the category of a requester and charge fees according to the following rules.
(1) Commercial use requesters. When records are requested for commercial use, the PBGC will assess charges, as provided in this subpart, for the full direct costs of searching for, reviewing for release, and duplicating the records sought. Fees for search and review may be charged even if the record searched for is not found or if, after it is found, it is determined that the request to inspect it may be denied under the provisions of subsection (b) of FOIA and this part.
(i) ``Commercial use'' request means a request from or on behalf of one who seeks information for a use or purpose that furthers the commercial, trade, or profit interests of the requester or the person on whose behalf the request is made.
(ii) In determining whether a request properly belongs in this category, the PBGC will look to the use to which a requester will put the documents requested. Moreover, where the PBGC has reasonable cause to doubt the use to which a requester will put the records sought, or where that use is not clear from the request itself, the PBGC will require the requester to provide clarification before assigning the request to this category.
(2) Educational and noncommercial scientific institution requesters. When records are requested by an educational or noncommercial scientific institution, the PBGC will assess charges, as provided in this subpart, for the full direct cost of duplication only, excluding charges for the first 100 pages.
(i) ``Educational institution'' means a preschool, a public or private elementary or secondary school, an institution of graduate higher education, an institution of undergraduate higher education, an institution of professional education, and an institution of vocational education, which operates a program or programs of scholarly research.
(ii) ``Noncommercial scientific institution'' means an institution that is not operated on a ``commercial'' basis as that term is defined in paragraph (b)(1)(i) of this section, and which is operated solely for the purpose of conducting scientific research the results of which are not intended to promote any particular product or industry.
(iii) To be eligible for inclusion in this category, requesters must show that the request is being made as authorized by and under the auspices of a qualifying institution and that the records are not sought for a commercial use, but are sought in furtherance of scholarly (if the request is from an educational institution) or scientific (if the request is from a noncommercial scientific institution) research.
(3) Requesters who are representatives of the news media. When records are requested by representatives of the news media, the PBGC will assess charges, as provided in this subpart, for the full direct cost of duplication only, excluding charges for the first 100 pages.
(i) ``Representative of the news media'' means any person actively gathering news for an entity that is organized and operated to publish or broadcast news to the public. The term ``news'' means information that is about current events or that would be of current interest to the public. Examples of news media entities include television or radio stations broadcasting to the public at large, and publishers of periodicals (but only in those instances when they can qualify as disseminators of ``news'') who make their products available for purchase or subscription by the general public. These examples are not intended to be all-inclusive. ``Freelance'' journalists may be regarded as working for a news organization if they can demonstrate a solid basis for expecting publication through that organization, even though not actually employed by it.
(ii) To be eligible for inclusion in this category, the request must not be made for a commercial use. A request for records supporting the news dissemination function of the requester who is a representative of the news media shall not be considered to be a request that is for a commercial use.
(4) All other requesters. When records are requested by requesters who do not fit into any of the categories in paragraphs (b)(1) through (b)(3) of this section, the PBGC will assess charges, as provided in this subpart, for the full direct cost of searching for and duplicating the records sought, with the exceptions that there will be no charge for the first 100 pages of duplication and the first two hours of manual search time (or its cost equivalent in computer search time). Notwithstanding the preceding sentence, there will be no charge for search time in the event of requests under the Privacy Act of 1974 from subjects of records filed in the PBGC's systems of records for the disclosure of records about themselves. Search fees, where applicable, may be charged even if the record searched for is not found.
(c) Aggregation of requests. If the PBGC reasonably believes that a

[[Page 34128]]

requester or group of requesters is attempting to break a request down into a series of requests for the purpose of evading the assessment of fees, the PBGC will aggregate any such requests and charge accordingly. In no case will the PBGC aggregate multiple requests on unrelated subjects from one requester.
(d) Waiver or reduction of charges. Circumstances under which searching, review, and duplication facilities or services may be made available to the requester without charge or at a reduced charge are set forth in Sec. 4901.34 of this part.

Sec. 4901.32 Fee schedule.

(a) Charges for searching and review of records. Charges applicable under this subpart to the search for and review of records will be made according to the following fee schedule:
(1) Search and review time. (i) Ordinary search and review by custodial or clerical personnel, $1.75 for each one-quarter hour or fraction thereof of employee worktime required to locate or obtain the records to be searched and to make the necessary review; and (ii) search or review requiring services of professional or supervisory personnel to locate or review requested records, $4.00 for each one- quarter hour or fraction thereof of professional or supervisory personnel worktime.
(2) Additional search costs. If the search for a requested record requires transportation of the searcher to the location of the records or transportation of the records to the searcher, at a cost in excess of $5.00, actual transportation costs will be added to the search time cost.
(3) Search in computerized records. Charges for information that is available in whole or in part in computerized form will include the cost of operating the central processing unit (CPU) for that portion of operating time that is directly attributable to searching for records responsive to the request, personnel salaries apportionable to the search, and tape or printout production or an established agency-wide average rate for CPU operating costs and operator/programmer salaries involved in FOIA searches. Charges will be computed at the rates prescribed in paragraphs (a) and (b) of this section.
(b) Charges for duplication of records. Charges applicable under this subpart for obtaining requested copies of records made available for inspection will be made according to the following fee schedule and subject to the following conditions.
(1) Standard copying fee. $0.15 for each page of record copies furnished. This standard fee is also applicable to the furnishing of copies of available computer printouts as stated in paragraph (a)(3) of this section.
(2) Voluminous material. If the volume of page copy desired by the requester is such that the reproduction charge at the standard page rate would be in excess of $50, the person desiring reproduction may request a special rate quotation from the PBGC.
(3) Limit of service. Not more than 10 copies of any document will be furnished.
(4) Manual copying by requester. No charge will be made for manual copying by the requesting party of any document made available for inspection under the provisions of this part. The PBGC shall provide facilities for such copying without charge at reasonable times during normal working hours.
(5) Indexes. Pursuant to paragraph (a)(2) of FOIA copies of indexes or supplements thereto which are maintained as therein provided but which have not been published will be provided on request at a cost not to exceed the direct cost of duplication.
(c) Other charges. The scheduled fees, set forth in paragraphs (a) and (b) of this section, for furnishing records made available for inspection and duplication represent the direct costs of furnishing the copies at the place of duplication. Upon request, single copies of the records will be mailed, postage prepaid, free of charge. Actual costs of transmitting records by special methods such as registered, certified, or special delivery mail or messenger, and of special handling or packaging, if required, will be charged in addition to the scheduled fees.

Sec. 4901.33 Payment of fees.

(a) Medium of payment. Payment of the applicable fees as provided in this subsection shall be made in cash, by U.S. postal money order, or by check payable to the PBGC. Postage stamps will not be accepted in lieu of cash, checks, or money orders as payment for fees specified in the schedule. Cash should not be sent by mail.
(b) Advance payment or assurance of payment. Payment or assurance of payment before work is begun or continued on a request may be required under the following rules.
(1) Where the PBGC estimates or determines that charges allowable under the rules in this subpart are likely to exceed $250, the PBGC may require advance payment of the entire fee or assurance of payment, as follows:
(i) Where the requester has a history of prompt payment of fees under this part, the PBGC will notify the requester of the likely cost and obtain satisfactory assurance of full payment; or
(ii) Where the requester has no history of payment for requests made pursuant to FOIA and this part, the PBGC may require the requester to make an advance payment of an amount up to the full estimated charges.
(2) Where the requester has previously failed to pay a fee charged in a timely fashion (i.e., within 30 days of the date of the billing), the PBGC may require the requester to pay the full amount owed plus any applicable interest as provided in paragraph (c) of this section (or demonstrate that he has, in fact, paid the fee) and to make an advance payment of the full amount of the estimated fee.
(c) Late payment interest charges. The PBGC may assess late payment interest charges on any amounts unpaid by the 31st day after the date a bill is mailed to a requester. Interest will be assessed at the rate prescribed in 31 U.S.C. 3717 and will accrue from the date the bill is mailed.

Sec. 4901.34 Waiver or reduction of charges.

(a) The disclosure officer may waive or reduce fees otherwise applicable under this subpart when disclosure of the information is in the public interest because it is likely to contribute significantly to public understanding of the operations or activities of the government and is not primarily in the commercial interest of the requester. A fee waiver request shall set forth full and complete information upon which the request for waiver is based.
(b) The disclosure officer may reduce or waive fees applicable under this subpart when the requester has demonstrated his inability to pay such fees.

PART 4902--DISCLOSURE AND AMENDMENT OF RECORDS PERTAINING TO INDIVIDUALS UNDER THE PRIVACY ACT

Sec. 4902.1 Purpose and scope.
4902.2 Definitions.
4902.3 Procedures for determining existence of and requesting access to records.
4902.4 Disclosure of record to an individual.
4902.5 Procedures for requesting amendment of a record.
4902.6 Action on request for amendment of a record.
4902.7 Appeal of a denial of a request for amendment of a record.
4902.8 Fees.
4902.9 Specific exemptions.

Authority: 5 U.S.C. 552a.

[[Page 34129]]

Sec. 4902.1 Purpose and scope.

This part establishes procedures whereby an individual can determine whether the PBGC maintains any system of records that contains a record pertaining to the individual, procedures to effect access to an individual's record upon his or her request, and procedures for making requests to amend records, for making the initial determinations on such requests, and for appealing denials of such requests. This part also prescribes the fees for making copies of an individual's record. Finally, this part sets forth those systems of records that are exempted from certain disclosure and other provisions of the Privacy Act (5 U.S.C. 552a).

Sec. 4902.2 Definitions.

In addition to terminology in part 4001 of this chapter, as used in this part:
Disclosure officer means the designated official in the Communications and Public Affairs Department, PBGC.
Record means any item, collection, or grouping of information about an individual that is maintained by an agency, including, but not limited to, his or her education, financial transactions, medical history, and criminal or employment history and that contains his or her name, or the identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or a photograph.
System of records means a group of any records under the control of any agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual.
Working day means any weekday excepting Federal holidays.

Sec. 4902.3 Procedures for determining existence of and requesting access to records.

(a) Any individual may submit a written request, either by mail to the Disclosure Officer, Communications and Public Affairs Department, Pension Benefit Guaranty Corporation, 1200 K Street NW., Washington, DC 20005-4026, or in person between the hours of 9 a.m. and 4 p.m. on any working day in Suite 240 at the above address, for the purpose of--
(1) Learning whether a system of records maintained by the PBGC contains any record pertaining to the requester, or
(2) Obtaining access to such a record.
(b) Each request submitted pursuant to paragraph (a) of this section shall include the name of the system of records to which the request pertains and the requester's full name, home address and date of birth, and shall clearly state on the envelope and on the request ``Privacy Act Request.'' If this information is insufficient to enable the PBGC to identify the record in question, the disclosure officer shall request such further identifying data as the disclosure officer deems necessary to locate the record.
(c) Unless the request is only for notification of the existence of a record and such notification is required under the Freedom of Information Act (5 U.S.C. 552), the requester shall be required to provide verification of his or her identity to the PBGC as set forth in paragraph (c) (1) or (2) of this section, as appropriate.
(1) If the request is made by mail, the requester shall submit a notarized statement establishing his or her identity.
(2) If the request is made in person, the requester shall show identification satisfactory to the disclosure officer, such as a driver's license, employee identification, annuitant identification or Medicare card.
(d) The disclosure officer shall respond to the request in writing within 10 working days after receipt of the request or of such additional information as may be required under paragraph (b) of this section. If a request for access to a record is granted, the response shall state when the record will be made available.

Sec. 4902.4 Disclosure of record to an individual.

(a) When the disclosure officer grants a request for access to records under Sec. 4902.3, such records shall be made available when the requester is advised of the determination or as promptly thereafter as possible. At the requester's option, the record will be made available for the requester's inspection and copying at the Communications and Public Affairs Department, Pension Benefit Guaranty Corporation, 1200 K Street NW., Washington, DC 20005-4026, between the hours of 9 a.m. and 4 p.m. on any working day, or a copy of the record will be mailed to the requester.
(b) If the requester desires to be accompanied by another individual during the inspection and/or copying of the record, the requester shall, either when the record is made available or at any earlier time, submit to the disclosure officer a signed statement identifying such other individual and authorizing such other individual to be present during the inspection and/or copying of the record.

Sec. 4902.5 Procedures for requesting amendment of a record.

(a) Any individual about whom the PBGC maintains a record contained in a system of records may request that the record be amended. Such a request shall be submitted in the same manner described in Sec. 4902.3(a).
(b) Each request submitted under paragraph (a) of this section shall include the information described in Sec. 4902.3(b) and a statement specifying the changes to be made in the record and the justification therefor. The disclosure officer may request further identifying data as described in Sec. 4902.3(b).
(c) An individual who desires assistance in the preparation of a request for amendment of a record shall submit such request for assistance in writing to the Deputy General Counsel, Pension Benefit Guaranty Corporation, 1200 K Street NW., Washington, DC 20005-4026. The Deputy General Counsel shall respond to such request as promptly as possible.

Sec. 4902.6 Action on request for amendment of a record.

(a) Within 20 working days after receipt by the PBGC of a request for amendment of a record under Sec. 4902.5, unless for good cause shown the Executive Director of the PBGC extends such 20-day period, the disclosure officer shall notify the requester in writing whether and to what extent the request shall be granted. To the extent that the request is granted, the disclosure officer shall cause the requested amendment to be made promptly.
(b) When a request for amendment of a record is denied in whole or in part, the denial shall include a statement of the reasons therefor, the procedures for appealing such denial, and a notice that the requester has a right to assistance in preparing an appeal of the denial.
(c) An individual who desires assistance in preparing an appeal of a denial under this section shall submit a request in writing to the Deputy General Counsel, Pension Benefit Guaranty Corporation, 1200 K Street NW., Washington, DC 20005-4026. The Deputy General Counsel shall respond to the request as promptly as possible, but in no event more than 30 days after receipt.

Sec. 4902.7 Appeal of a denial of a request for amendment of a record.

(a) An appeal from a denial of a request for amendment of a record under Sec. 4902.6 shall be submitted, within 45 days of receipt of the denial, to the General Counsel, Pension Benefit

[[Page 34130]]

Guaranty Corporation, 1200 K Street NW., Washington, DC 20005-4026, unless the record subject to such request is one maintained by the Office of the General Counsel, in which event the appeal shall be submitted to the Deputy Executive Director at the same address. The appeal shall state in detail the basis on which it is made and both the envelope and the appeal shall clearly state ``Privacy Act Request''.
(b) Within 30 working days after the receipt of the appeal, unless for good cause shown the Executive Director of the PBGC extends such 30-day period, the General Counsel or, where appropriate, the Deputy Executive Director, shall issue a decision in writing granting or denying the appeal in whole or in part. To the extent that the appeal is granted, the General Counsel or, where appropriate, the Deputy Executive Director, shall cause the requested amendment to be made promptly. To the extent that the appeal is denied, the decision shall include the reasons for the denial and a notice of the requester's right to submit a brief statement setting forth reasons for disputing the denial of appeal, to seek judicial review of the denial pursuant to 5 U.S.C. 552a(g)(1)(A), and to obtain further information concerning the provisions for judicial review under that section.
(c) An individual whose appeal has been denied in whole or in part may submit a brief summary statement setting forth reasons for disputing such denial. Such statement shall be submitted within 30 days of receipt of the denial of the appeal to the Disclosure Officer. Any such statement shall be made available by the PBGC to anyone to whom the record is subsequently furnished and may also be accompanied, at the discretion of the PBGC, by a brief statement summarizing the PBGC's reasons for refusing to amend the record. The PBGC shall also provide copies of the individual's statement of dispute to all prior recipients of the record with respect to whom an accounting of the disclosure of the record was maintained pursuant to 5 U.S.C. 552a(c)(1).
(d) To request further information concerning the provisions for judicial review, an individual shall submit such request in writing to the Deputy General Counsel, who shall respond to such request as promptly as possible.

Sec. 4902.8 Fees.

When an individual requests a copy of his or her record under Sec. 4902.4, charges for the copying shall be made according to the following fee schedule:
(a) Standard copying fee. There shall be a charge of $0.15 per page of record copies furnished. Where the copying fee is less than $1.50, it shall not be assessed.
(b) Voluminous material. If the volume of page copy desired by the requester is such that the reproduction charge at the standard page rate would be in excess of $50, the individual desiring reproduction may request a special rate quotation from the PBGC.
(c) Manual copying by requester. No charge will be made for manual copying by the requester of any document made available for inspection under Sec. 4902.4. The PBGC shall provide facilities for such copying without charge between the hours of 9 a.m. and 4 p.m. on any working day.

Sec. 4902.9 Specific exemptions.

(a) Under the authority granted by 5 U.S.C. 552a(k)(5), the PBGC hereby exempts the system of records entitled ``Personnel Security Investigation Records--PBGC'' from the provisions of 5 U.S.C. Secs. 552a (c)(3), (d), (e)(1), (e)(4) (G), (H), and (I), and (f), to the extent that the disclosure of such material would reveal the identity of a source who furnished information to PBGC under an express promise of confidentiality or, before September 27, 1975, under an implied promise of confidentiality.
(b) The reasons for asserting this exemption are to insure the gaining of information essential to determining suitability and fitness for PBGC employment, access to information, and security clearances, to insure that full and candid disclosures are obtained in making such determinations, to prevent subjects of such determinations from thwarting the completion of such determinations, and to avoid revealing the identities of persons who furnish information to the PBGC in confidence.

PART 4903--DEBT COLLECTION

Subpart A--General

Sec. 4903.1 Purpose and scope.
4903.2 General.
4903.3 Definitions.

Subpart B--Administrative Offset

4903.21 Application of Federal Claims Collection Standards.
4903.22 Administrative offset procedures.
4903.23 PBGC requests for offset by other agencies.
4903.24 Requests for offset from other agencies.

Subpart C--Tax Refund Offset

4903.31 Eligibility of debt for tax refund offset.
4903.32 Tax refund offset procedures.
4903.33 Referral of debt for tax refund offset.

Subpart D--Salary Offset [Reserved]

Authority: 29 U.S.C. 1302(b); 31 U.S.C. 3701, 3711(f), 3720A; 4 CFR part 102; 26 CFR 301.6402--6.

Subpart A--General

Sec. 4903.1 Purpose and scope.

(a) Subpart A. Subpart A of this part contains definitions and general provisions applicable to debt collection generally.
(b) Subpart B. Subpart B of this part prescribes procedures for debt collection by administrative offset, as authorized by the Federal Claims Collection Act (31 U.S.C. 3716), and consistent with applicable provisions of the Federal Claims Collection Standards. These procedures apply when the PBGC determines that collection by administrative offset of a claim that is liquidated or certain in amount is feasible and not otherwise prohibited or when another agency seeks administrative offset against a payment to be made by the PBGC.
(c) Subpart C. Subpart C of this part prescribes procedures for debt collection by tax refund offset, as authorized by section 3720A of subchapter II, chapter 37 of title 31 of the United States Code (31 U.S.C. 3720A) and in accordance with applicable IRS regulations (26 CFR 301-6402.6), including a related procedure for disclosure to a consumer reporting agency. These procedures apply to determinations that a debt of at least $25 is past-due and legally enforceable, to referrals by the PBGC of past-due, legally enforceable debts to the IRS for offset, and to any subsequent corrections of information contained in such referrals.

Sec. 4903.2 General.

(a) Certain PBGC efforts to obtain payment of debts arising out of activities under ERISA are authorized by and subject to requirements prescribed under other federal statutes. When, and to the extent, such requirements apply to collection of a debt by the PBGC, PBGC activities will be consistent with such requirements, as well as with any other applicable requirements (see, e.g., parts 4003, 4007, and 4062 of this chapter).
(b)(1) The Executive Director of the PBGC has delegated to the Director of the Financial Operations Department primary responsibility for PBGC debt collection activities. This delegation includes responsibility for procedures implementing requirements prescribed under federal statutes other than ERISA,

[[Page 34131]]

and for coordinating the activities of other PBGC departments with functional responsibilities for different types of claims.
(2) PBGC departments are responsible for ascertaining indebtedness and other aspects of agency collection activities within their areas of functional responsibility.

Sec. 4903.3 Definitions.

The following terms are defined in Sec. 4001.2 of this chapter: IRS, PBGC, and person. In addition, for purposes of this part:
Administrative offset has the meaning set forth in 31 U.S.C. 3701(a)(1).
Agency means an executive or legislative agency (within the meaning of 31 U.S.C. 3701(a)(4)).
Claim and debt, as defined in the Federal Claims Collection Standards (4 CFR 101.2(a)), are used synonymously and interchangeably to refer to an amount of money or property which has been determined by an appropriate agency official to be owed to the United States from any person, organization, or entity, except another Federal agency.
Consumer reporting agency has the meaning set forth in 31 U.S.C. 3701(a)(3).
Federal Claims Collection Act means the Federal Claims Collection Act of 1966, as amended (31 U.S.C. 3701 et seq.).
Federal Claims Collection Standards means 4 CFR parts 101 through 105, which are regulations issued jointly by the Comptroller General of the United States and the Attorney General of the United States that implement the Federal Claims Collection Act.
Repayment agreement means a written agreement by a debtor to repay a debt to the PBGC.
Tax refund offset means the reduction by the IRS of a tax overpayment payable to a taxpayer by the amount of past-due, legally enforceable debt owed by that taxpayer to a federal agency that has entered into an agreement with the IRS with regard to its participation in the tax refund offset program, pursuant to IRS regulations (26 CFR 301.6402-6).

Subpart B--Administrative Offset

Sec. 4903.21 Application of Federal Claims Collection Standards.

The PBGC will determine the feasibility of collection by administrative offset, whether to accept a repayment agreement in lieu of offset, and how to apply amounts collected by administrative offset on multiple debts as provided in the Federal Claims Collection Standards (4 CFR 102.3).
(a) Feasibility. The PBGC will determine whether collection by administrative offset is feasible on a case-by-case basis in the exercise of sound discretion. In making such determinations, the PBGC will consider:
(1) Whether administrative offset can be accomplished, both practically and legally;
(2) Whether administrative offset is best suited to further and protect all governmental interests;
(3) In appropriate circumstances, the debtor's financial condition; and
(4) Whether offset would tend to interfere substantially with or defeat the purposes of the program authorizing the payments against which offset is contemplated.
(b) Repayment agreements. The PBGC will exercise its discretion in determining whether to accept a repayment agreement in lieu of offset, balancing the Government's interest in collecting the debt against fairness to the debtor. If the debt is delinquent (within the meaning of 4 CFR 101.2(b)) and the debtor has not disputed its existence or amount, the PBGC will accept a repayment agreement in lieu of offset only if the debtor is able to establish that offset would result in undue financial hardship or would be against equity and good conscience.
(c) Multiple debts. When the PBGC collects multiple debts by administrative offset, it will apply the recovered amounts to those debts in accordance with the best interests of the United States, as determined by the facts and circumstances of the particular case, paying special attention to applicable statutes of limitations.

Sec. 4903.22 Administrative offset procedures.

(a) General. Except as otherwise required by law or as provided in paragraph (e) of this section, the PBGC will not effect administrative offset against a payment to be made to a debtor prior to the completion of the procedures specified in paragraphs (b) and (c) of this section. However, the PBGC will not duplicate any notice or other procedural protection it previously provided in connection with the same debt under some other statutory or regulatory authority, such as part 4003 of this chapter.
(b) Notice. The PBGC will provide written notice informing the debtor of the following:
(1) The nature and amount of the debt, and the PBGC's intention to collect by offset;
(2) That the debtor may inspect and copy PBGC records pertaining to the debt in accordance with part 4901 or part 4902 of this chapter, as applicable (access under the Freedom of Information Act (5 U.S.C. 552) or the Privacy Act (5 U.S.C. 552a), respectively);
(3) How and from whom the debtor may obtain administrative review of a determination of indebtedness;
(4) The facts and circumstances that the PBGC will consider in determining whether to accept a repayment agreement in lieu of offset; and
(5) If the PBGC has not previously demanded payment of the debt, the date by which payment must be made to avoid further collection action.
(c) Administrative review. (1) A debtor may obtain review within the PBGC of a determination of indebtedness by submitting a written request for review, designated as such, to the PBGC official specified in the notice of indebtedness. Unless another regulation in this chapter specifies a different period of time, such a request must be submitted within 30 days after the date of a PBGC notice under paragraph (b) of this section.
(2) A request for review must:
(i) State the ground(s) on which the debtor disputes the debt; and
(ii) Reference all pertinent information already in the possession of the PBGC and include any additional information believed to be relevant.
(3) The PBGC will review a determination of indebtedness, when requested to do so in a timely manner. The PBGC will issue a written decision, based on the written record, and will notify the debtor of its decision.
(i) The review will be conducted by an official of at least the same level of authority as the person who made the determination of indebtedness.
(ii) The notice of the PBGC's decision on review will include a brief statement of the reason(s) why the determination of indebtedness has or has not been changed.
(4) Upon receipt of a request for administrative review, the PBGC may, in its discretion, temporarily suspend transactions in any of the debtor's accounts maintained by the PBGC. If the PBGC resolves the dispute in the debtor's favor, it will lift the suspension immediately.
(d) Repayment agreement in lieu of offset. (1) The PBGC will not consider entering a repayment agreement in lieu of offset unless a debtor submits a copy of the debtor's most recent audited (or if not available, unaudited) financial statement (with balance sheets, income statements, and statements of changes in financial position), to the extent such documents have been prepared, and other information regarding the debtor's financial condition (e.g., the types of information on assets, liabilities,

[[Page 34132]]

earnings, and other factors specified in paragraphs (b)(3) through (b)(7) of Sec. 4062.6 of this chapter).
(2) The PBGC may require appropriate security as a condition of accepting a repayment agreement in lieu of offset.
(e) Exception. (1) The PBGC may effect administrative offset against a payment to be made to the debtor prior to completing the procedures specified in paragraphs (b) and (c) of this section if:
(i) Failure to take the offset would substantially prejudice the government's ability to collect the debt; and
(ii) The time before the payment is to be made does not reasonably permit the completion of those procedures.
(2) The PBGC has determined that a case in which it applies the special rule in Sec. 4068.3(c) of this chapter meets the criteria in paragraph (e)(1) of this section.
(3) If the PBGC effects administrative offset against a payment to be made to a debtor prior to completing the procedures specified in paragraphs (b) and (c) of this section, the PBGC--
(i) Will promptly complete those procedures; and
(ii) Will promptly refund any amounts recovered by offset but later found not to be owed to the Government.

Sec. 4903.23 PBGC requests for offset by other agencies.

(a) General. The PBGC may request that funds payable to its debtor by another agency be administratively offset to collect a debt owed to the PBGC by the debtor. A PBGC request for administrative offset against amounts due and payable from the Civil Service Retirement and Disability Fund will be made in accordance with 5 CFR part 831, subpart R (Agency Requests to OPM for Recovery of a Debt from the Civil Service Retirement and Disability Fund).
(b) Certification. In requesting administrative offset, the Director of the Financial Operations Department (or a department official designated by the Director) will certify in writing to the agency holding funds of the debtor--
(1) That the debtor owes the debt (including the amount) and that the PBGC has fully complied with the provisions of 4 CFR 102.3; and
(2) In a request for administrative offset against amounts due and payable from the Civil Service Retirement and Disability Fund, that the PBGC has complied with applicable statutes and the regulations and procedures of the Office of Personnel Management.

Sec. 4903.24 Requests for offset from other agencies.

(a) General. As provided in the Federal Claims Collections Standards (4 CFR 102.3(d)), the PBGC generally will comply with requests from other agencies to initiate administrative offset to collect debts owed to the United States unless the requesting agency has not complied with the applicable provisions of the Federal Claims Collection Standards or the offset would be otherwise contrary to law.
(b) Submission of requests. (1) Any agency may request that funds payable to its debtor by the PBGC be administratively offset to collect a debt owed to such agency by the debtor by submitting the certification described in paragraph (c) of this section.
(2) All such requests should be directed to the Director, Financial Operations Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005-4026.
(c) Certification required. The PBGC will not initiate administrative offset in response to a request from another agency until it receives written certification from the requesting agency, signed by an appropriate agency official, that the debtor owes the debt (including the amount) and that the requesting agency has fully complied with the provisions of 4 CFR 102.3 (with a citation to the agency's own administrative offset regulations).

Subpart C--Tax Refund Offset

Sec. 4903.31 Eligibility of debt for tax refund offset.

The PBGC will determine whether a debt is eligible for tax refund offset in accordance with IRS regulations (26 CFR 301.6402-6 (c) and
(d)). The PBGC may refer a past-due, legally enforceable debt to the IRS for offset if:
(a) The debt is a judgment debt, or the PBGC's right of action accrued not more than 10 years earlier (unless the debt is specifically exempt from this requirement);
(b) The PBGC cannot currently collect the debt by salary offset (pursuant to 5 U.S.C. 5514(a)(1));
(c) The debt is ineligible for administrative offset (by reason of 31 U.S.C. 3716(c)(2)), or the PBGC cannot currently collect the debt by administrative offset (under 31 U.S.C. 3716 and subpart B of this part) against amounts payable by the debtor to the PBGC;
(d) The PBGC has notified, or attempted to notify, the debtor of its intent to refer the debt, given the debtor an opportunity to present evidence that all or part of the debt is not past-due or not legally enforceable, considered any evidence presented by the debtor in accordance with Sec. 4903.32, and determined that the debt is past-due and legally enforceable;
(e) If the debt is a consumer debt and exceeds $100, the PBGC has disclosed the debt to a consumer reporting agency (as authorized by 31 U.S.C. 3711(f) and provided in Sec. 4903.32), unless a consumer reporting agency would be prohibited from reporting information concerning the debt (by reason of 15 U.S.C. 1681c); and
(f) The debt is at least $25.

Sec. 4903.32 Tax refund offset procedures.

(a) General. Before referring a debt for tax refund offset, the PBGC will complete the procedures specified in paragraph (b) and, if applicable, paragraph (c) of this section. The PBGC may satisfy these requirements in conjunction with any other procedures that apply to the same debt, such as those prescribed in Sec. 4903.22 or part 4003 of this chapter.
(b) Notice, opportunity to present evidence, and determination of indebtedness.
(1) The PBGC will notify, or make a reasonable attempt to notify, a person owing a debt (a ``debtor'') that a debt is past-due and if not repaid within 60 days, the PBGC will refer the debt to the IRS for offset against any overpayment of tax. For this purpose, compliance with IRS procedures (26 CFR 301.6402-6(d)(1)) constitutes a reasonable attempt to notify a debtor.
(2) A debtor will have at least 60 days to present evidence, for consideration by the PBGC, that all or part of a debt is not past-due or not legally enforceable.
(3) If evidence that all or part of a debt is not past-due or not legally enforceable is considered by an agent or person other than a PBGC employee acting on behalf of the PBGC, a debtor will have at least 30 days from the date of the determination on the debt to request review by the Director of the Financial Operations Department (or a department official designated by the Director).
(4) The PBGC will notify a debtor of its determination as to whether all or part of a debt is past-due and legally enforceable.
(c) Consumer reporting agency disclosure.
(1)(i) If a consumer debt exceeds $100, the Director of the Financial Operations Department (or a department official designated by the Director), after verifying the validity and overdue status of the debt and that section 605 of the Consumer Credit Protection Act (15 U.S.C. 1681c) does not prohibit a

[[Page 34133]]

consumer reporting agency from reporting information concerning the debt because it is obsolete, will send the individual who owes the debt a written notice--
(A) That the debt is past-due;
(B) That the PBGC intends to disclose to a consumer reporting agency that the individual is responsible for the debt and the specific information to be disclosed; and
(C) How the individual may obtain an explanation of the debt, dispute the information in PBGC's records, and obtain administrative review of the debt.
(ii) If the PBGC does not have a current address for an individual, the Director of the Financial Operations Department (or a department official designated by the Director) will take reasonable action to locate the individual.
(2) The Director of the Financial Operations Department (or a department official designated by the Director) will disclose the debt if, within 60 days (or, at his or her discretion, more than 60 days) after sending the notice described in paragraph (c)(1) of this section, the individual has not repaid the debt, or agreed to repay the debt under a written agreement, or requested administrative review of the debt.

Sec. 4903.33 Referral of debt for tax refund offset.

The Director of the Financial Operations Department (or a department official designated by the Director) will refer debts to the IRS for refund offset, and will correct referrals, in accordance with IRS regulations (26 CFR 301.6402-6(e) and (f)).

Subpart D--Salary Offset [Reserved]

PART 4904--ETHICAL CONDUCT OF EMPLOYEES

Sec. 4904.1 Outside employment and other activity.
Authority: 29 U.S.C. 1302(b); E.O. 11222, 30 FR 6469; 5 CFR 735.104.

Sec. 4904.1 Outside employment and other activity.

(a)-(c) [Reserved].
(d) An employee who is engaged in or is planning to engage in outside employment, business, professional or other such activities for pay shall obtain clearance:
(1) When such activities raise a question of conflict with this subpart or any applicable laws, orders, regulations or standards, or
(2) When applicable laws, orders or regulations require clearance of such activities.
(e) A request for clearance shall be in writing and shall include a statement of the nature of and the amount of time to be devoted to the activity. The heads of offices shall receive and review requests for clearance submitted by members of their staff. The Executive Director or his designee shall receive and review requests for clearance submitted by the heads of offices and special Government employees. The employee reviewing the request for clearance may require the employee making the request to furnish such other information as may be appropriate in considering the request and shall consult with the Corporation's Ethics Counselor where appropriate. The request may be granted only if such activity would be consistent with applicable laws, orders and regulations. If the request for clearance is not granted, the employee making the request shall not commence or continue in the activity unless the Executive Director or his designee, upon written request of the employee, determines that such activity would be consistent with applicable laws, orders and regulations.

PART 4905--APPEARANCES IN CERTAIN PROCEEDINGS

Sec.
4905.1 Purpose and scope.
4905.2 Definitions.
4905.3 General.
4905.4 Appearances by PBGC employees.
4905.5 Requests for authenticated copies of PBGC records.
4905.6 Penalty.

Authority: 29 U.S.C. 1302(b); E.O. 11222, 30 FR 6469; 5 CFR 735.104.

Sec. 4905.1 Purpose and scope.

(a) Purpose. This part sets forth the rules and procedures to be followed when a PBGC employee or former employee is requested or served with compulsory process to appear as a witness or produce documents in a proceeding in which the PBGC is not a party, if such appearance arises out of, or is related to, his or her employment with the PBGC. It provides a centralized decisionmaking mechanism for responding to such requests and compulsory process.
(b) Scope. (1) This part applies when, in a judicial, administrative, legislative, or other proceeding, a PBGC employee or former employee is requested or served with compulsory process to provide testimony concerning information acquired in the course of performing official duties or because of official status and/or to produce material acquired in the course of performing official duties or contained in PBGC files.
(2) This part does not apply to:
(i) Proceedings in which the PBGC is a party;
(ii) Congressional requests or subpoenas for testimony or documents; or
(iii) Appearances by PBGC employees in proceedings that do not arise out of, or relate to, their employment with PBGC (e.g., outside activities that are engaged in consistent with applicable standards of ethical conduct).

Sec. 4905.2 Definitions.

For purposes of this part:
Appearance means testimony or production of documents or other material, including an affidavit, deposition, interrogatory, declaration, or other required written submission. Compulsory Process means any subpoena, order, or other demand of a court or other authority (e.g., an administrative agency or a state or local legislative body) for the appearance of a PBGC employee or former employee.
Employee means any officer or employee of the PBGC, including a special government employee.
Proceeding means any proceeding before any federal, state, or local court; federal, state, or local agency; state or local legislature; or other authority responsible for administering regulatory requirements or adjudicating disputes or controversies, including arbitration, mediation, and other similar proceedings.
Special government employee means an employee of the PBGC who is retained, designated, appointed or employed to perform, with or without compensation, for not to exceed one hundred and thirty days during any three hundred and sixty-five consecutive days, temporary duties either on a full-time or intermittent basis (18 U.S.C. 202).

Sec. 4905.3 General.

No PBGC employee or former employee may appear in any proceeding to which this part applies to testify and/or produce documents or other material unless authorized under this part.

Sec. 4905.4 Appearances by PBGC employees.

(a) Whenever a PBGC employee or former employee is requested or served with compulsory process to appear in a proceeding to which this part applies, he or she will promptly notify the General Counsel.
(b) The General Counsel or his or her designee will authorize an appearance by a PBGC employee or former employee if, and to the extent, he or she determines that such appearance is in the interest of the PBGC.

[[Page 34134]]

(1) In determining whether an appearance is in the interest of the PBGC, the General Counsel or his or her designee will consider relevant factors, including:
(i) What, if any, objective of the PBGC (and, where relevant, any federal agency, if the United States is a party) would be promoted by the appearance;
(ii) Whether the appearance would unnecessarily interfere with the employee's official duties;
(iii) Whether the appearance would result in the appearance of improperly favoring one litigant over another; and
(iv) Whether the appearance is appropriate under applicable substantive and procedural rules.
(2) If the General Counsel or his or her designee concludes that compulsory process is essentially a request for PBGC record information, it will be treated as a request under the Freedom of Information Act, as amended, in accordance with part 4901 of this chapter, except to the extent that the Privacy Act of 1974, as amended, and part 4902 of this chapter govern disclosure of a record maintained on an individual.
(c) If, in response to compulsory process in a proceeding to which this part applies, the General Counsel or his or her designee has not authorized an appearance by the return date, the employee or former employee shall appear at the stated time and place (unless advised by the General Counsel or his or her designee that process either was not validly issued or served or has been withdrawn), accompanied by a PBGC attorney, produce a copy of this part of the regulations, and respectfully decline to provide any testimony or produce any documents or other material. When the demand is under consideration, the employee shall respectfully request that the court or other authority stay the demand pending the employee's receipt of instructions from the General Counsel.

Sec. 4905.5 Requests for authenticated copies of PBGC records.

The PBGC will grant requests for authenticated copies of PBGC records, for purposes of admissibility under 28 U.S.C. 1733 and Rule 44 of the Federal Rules of Civil Procedure, for records that are to be disclosed pursuant to this part or part 4901 of this chapter. Appropriate fees will be charged for providing authenticated copies of PBGC records, in accordance with part 4901, subpart D, of this chapter.

Sec. 4905.6 Penalty.

A PBGC employee who testifies or produces documents or other material in violation of a provision of this part of the regulations shall be subject to disciplinary action.

PART 4907--ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF HANDICAP IN PROGRAMS OR ACTIVITIES CONDUCTED BY THE PENSION BENEFIT GUARANTY CORPORATION

Sec.
4907.101 Purpose.
4907.102 Application.
4907.103 Definitions.
4907.104-4907.109 [Reserved]
4907.110 Self-evaluation.
4907.111 Notice.
4907.112-4907.129 [Reserved]
4907.130 General prohibitions against discrimination.
4907.131-4907.139 [Reserved]
4907.140 Employment.
4907.141-4907.148 [Reserved]
4907.149 Program accessibility: Discrimination prohibited.
4907.150 Program accessibility: Existing facilities.
4907.151 Program accessibility: New construction and alterations.
4907.152-4907.159 [Reserved]
4907.160 Communications.
4907.161-4907.169 [Reserved]
4907.170 Compliance procedures.
4907.171-4907.999 [Reserved]

Authority: 29 U.S.C. 794, 1302(b)(3).

Sec. 4907.101 Purpose.

This part effectuates section 119 of the Rehabilitation, Comprehensive Services, and Developmental Disabilities Amendments of 1978, which amended section 504 of the Rehabilitation Act of 1973 to prohibit discrimination on the basis of handicap in programs or activities conducted by Executive agencies or the United States Postal Service.

Sec. 4907.102 Application.

This part applies to all programs or activities conducted by the agency.

Sec. 4907.103 Definitions.

For purposes of this part, the term--
Assistant Attorney General means the Assistant Attorney General, Civil Rights Division, United States Department of Justice.
Auxiliary aids means services or devices that enable persons with impaired sensory, manual, or speaking skills to have an equal opportunity to participate in, and enjoy the benefits of, programs or activities conducted by the agency. For example, auxiliary aids useful for persons with impaired vision include readers, brailled materials, audio recordings, telecommunications devices and other similar services and devices. Auxiliary aids useful for persons with impaired hearing include telephone handset amplifiers, telephones compatible with hearing aids, telecommunication devices for deaf persons (TDD's), interpreters, notetakers, written materials, and other similar services and devices.
Complete complaint means a written statement that contains the complainant's name and address and describes the agency's alleged discriminatory action in sufficient detail to inform the agency of the nature and date of the alleged violation of section 504. It shall be signed by the complainant or by someone authorized to do so on his or her behalf. Complaints filed on behalf of classes or third parties shall describe or identify (by name, if possible) the alleged victims of discrimination.
Facility means all or any portion of buildings, structures, equipment, roads, walks, parking lots, rolling stock or other conveyances, or other real or personal property.
Handicapped person means any person who has a physical or mental impairment that substantially limits one or more major life activities, has a record of such an impairment, or is regarded as having such an impairment.
As used in this definition, the phrase:
(1) Physical or mental impairment includes--
(i) Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: Neurological; musculoskeletal; special sense organs; respiratory, including speech organs; cardiovascular; reproductive; digestive; genitourinary; hemic and lymphatic; skin; and endocrine; or
(ii) Any mental or psychological disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities. The term ``physical or mental impairment'' includes, but is not limited to, such diseases and conditions as orthopedic, visual, speech, and hearing impairments, cerebral palsy, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, diabetes, mental retardation, emotional illness, and drug addiction and alcoholism.
(2) Major life activities includes functions such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working.
(3) Has a record of such an impairment means has a history of, or has been misclassified as having, a mental or physical impairment that substantially limits one or more major life activities.

[[Page 34135]]

(4) Is regarded as having an impairment means--
(i) Has a physical or mental impairment that does not substantially limit major life activities but is treated by the agency as constituting such a limitation;
(ii) Has a physical or mental impairment that substantially limits major life activities only as a result of the attitudes of others toward such impairment; or
(iii) Has none of the impairments defined in subparagraph (1) of this definition but is treated by the agency as having such an impairment.
Historic preservation programs means programs conducted by the agency that have preservation of historic properties as a primary purpose.
Historic properties means those properties that are listed or eligible for listing in the National Register of Historic Places or properties designated as historic under a statute of the appropriate State or local government body.
Qualified handicapped person means--
(1) With respect to preschool, elementary, or secondary education services provided by the agency, a handicapped person who is a member of a class of persons otherwise entitled by statute, regulation, or agency policy to receive education services from the agency.
(2) With respect to any other agency program or activity under which a person is required to perform services or to achieve a level of accomplishment, a handicapped person who meets the essential eligibility requirements and who can achieve the purpose of the program or activity without modifications in the program or activity that the agency can demonstrate would result in a fundamental alteration in its nature;
(3) With respect to any other program or activity, a handicapped person who meets the essential eligibility requirements for participation in, or receipt of benefits from, that program or activity; and
(4) Qualified handicapped person is defined for purposes of employment in 29 CFR 1613.702(f), which is made applicable to this part by Sec. 4907.140.
Section 504 means section 504 of the Rehabilitation Act of 1973 (Pub. L. 93-112, 87 Stat. 394 (29 U.S.C. 794)), as amended by the Rehabilitation Act Amendments of 1974 (Pub. L. 93-516, 88 Stat. 1617), and the Rehabilitation, Comprehensive Services, and Developmental Disabilities Amendments of 1978 (Pub. L. 95-602, 92 Stat. 2955). As used in this part, section 504 applies only to programs or activities conducted by Executive agencies and not to federally assisted programs.
Substantial impairment means a significant loss of the integrity of finished materials, design quality, or special character resulting from a permanent alteration.

Secs. 4907.104-4907.109 [Reserved]

Sec. 4907.110 Self-evaluation.

(a) The agency shall, by August 24, 1987, evaluate its current policies and practices, and the effects thereof, that do not or may not meet the requirements of this part, and, to the extent modification of any such policies and practices is required, the agency shall proceed to make the necessary modifications.
(b) The agency shall provide an opportunity to interested persons, including handicapped persons or organizations representing handicapped persons, to participate in the self-evaluation process by submitting comments (both oral and written).
(c) The agency shall, until three years following the completion of the self-evaluation, maintain on file and make available for public inspection:
(1) a description of areas examined and any problems identified, and
(2) a description of any modifications made.

Sec. 4907.111 Notice.

The agency shall make available to employees, applicants, participants, beneficiaries, and other interested persons such information regarding the provisions of this part and its applicability to the programs or activities conducted by the agency, and make such information available to them in such manner as the head of the agency finds necessary to apprise such persons of the protections against discrimination assured them by section 504 and this regulation.

Secs. 4907.112-4907.129 [Reserved]

Sec. 4907.130 General prohibitions against discrimination.

(a) No qualified handicapped person shall, on the basis of handicap, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any program or activity conducted by the agency.
(b)(1) The agency, in providing any aid, benefit, or service, may not, directly or through contractual, licensing, or other arrangements, on the basis of handicap--
(i) Deny a qualified handicapped person the opportunity to participate in or benefit from the aid, benefit, or service; (ii) Afford a qualified handicapped person an opportunity to participate in or benefit from the aid, benefit, or service that is not equal to that afforded others;
(iii) Provide a qualified handicapped person with an aid, benefit, or service that is not as effective in affording equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement as that provided to others;
(iv) Provide different or separate aid, benefits, or services to handicapped persons or to any class of handicapped persons than is provided to others unless such action is necessary to provide qualified handicapped persons with aid, benefits, or services that are as effective as those provided to others;
(v) Deny a qualified handicapped person the opportunity to participate as a member of planning or advisory boards; or
(vi) Otherwise limit a qualified handicapped person in the enjoyment of any right, privilege, advantage, or opportunity enjoyed by others receiving the aid, benefit, or service.
(2) The agency may not deny a qualified handicapped person the opportunity to participate in programs or activities that are not separate or different, despite the existence of permissibly separate or different programs or activities.
(3) The agency may not, directly or through contractual or other arrangements, utilize criteria or methods of administration the purpose or effect of which would--
(i) Subject qualified handicapped persons to discrimination on the basis of handicap; or
(ii) Defeat or substantially impair accomplishment of the objectives of a program or activity with respect to handicapped persons.
(4) The agency may not, in determining the site or location of a facility, make selections the purpose or effect of which would--
(i) Exclude handicapped persons from, deny them the benefits of, or otherwise subject them to discrimination under any program or activity conducted by the agency; or
(ii) Defeat or substantially impair the accomplishment of the objectives of a program or activity with respect to handicapped persons.
(5) The agency, in the selection of procurement contractors, may not use criteria that subject qualified handicapped persons to discrimination on the basis of handicap.

[[Page 34136]]

(6) The agency may not administer a licensing or certification program in a manner that subjects qualified handicapped persons to discrimination on the basis of handicap, nor may the agency establish requirements for the programs or activities of licensees or certified entities that subject qualified handicapped persons to discrimination on the basis of handicap. However, the programs or activities of entities that are licensed or certified by the agency are not, themselves, covered by this part.
(c) The exclusion of nonhandicapped persons from the benefits of a program limited by Federal statute or Executive Order to handicapped persons or the exclusion of a specific class of handicapped persons from a program limited by Federal statute or Executive Order to a different class of handicapped persons is not prohibited by this part.
(d) The agency shall administer programs and activities in the most integrated setting appropriate to the needs of qualified handicapped persons.

Secs. 4907.131-4907.139 [Reserved]

Sec. 4907.140 Employment.

No qualified handicapped person shall, on the basis of handicap, be subjected to discrimination in employment under any program or activity conducted by the agency. The definitions, requirements, and procedures of section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 791), as established by the Equal Employment Opportunity Commission in 29 CFR part 1613, shall apply to employment in federally-conducted programs or activities.

Secs. 4907.141-4907.148 [Reserved]

Sec. 4907.149 Program accessibility: Discrimination prohibited.

Except as otherwise provided in Sec. 4907.150, no qualified handicapped person shall, because the agency's facilities are inaccessible to or unusable by handicapped persons, be denied the benefits of, be excluded from participation in, or otherwise be subjected to discrimination under any program or activity conducted by the agency.

Sec. 4907.150 Program accessibility: Existing facilities.

(a) General. The agency shall operate each program or activity so that the program or activity, when viewed in its entirety, is readily accessible to and usable by handicapped persons. This paragraph does not--
(1) Necessarily require the agency to make each of its existing facilities accessible to and usable by handicapped persons;
(2) In the case of historic preservation programs, require the agency to take any action that would result in a substantial impairment of significant historic features of an historic property; or
(3) Require the agency to take any action that it can demonstrate would result in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens. In those circumstances where agency personnel believe that the proposed action would fundamentally alter the program or activity or would result in undue financial and administrative burdens, the agency has the burden of proving that compliance with Sec. 4907.150(a) would result in such alteration or burdens. The decision that compliance would result in such alteration or burdens must be made by the agency head or his or her designee after considering all agency resources available for use in the funding and operation of the conducted program or activity, and must be accompanied by a written statement of the reasons for reaching that conclusion. If an action would result in such an alteration or such burdens, the agency shall take any other action that would not result in such an alteration or such burdens but would nevertheless ensure that handicapped persons receive the benefits and services of the program or activity.
(b) Methods--
(1) General. The agency may comply with the requirements of this section through such means as redesign of equipment, reassignment of services to accessible buildings, assignment of aides to beneficiaries, home visits, delivery of services at alternate accessible sites, alteration of existing facilities and construction of new facilities, use of accessible rolling stock, or any other methods that result in making its programs or activities readily accessible to and usable by handicapped persons. The agency is not required to make structural changes in existing facilities where other methods are effective in achieving compliance with this section. The agency, in making alterations to existing buildings, shall meet accessibility requirements to the extent compelled by the Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151-4157), and any regulations implementing it. In choosing among available methods for meeting the requirements of this section, the agency shall give priority to those methods that offer programs and activities to qualified handicapped persons in the most integrated setting appropriate.
(2) Historic preservation programs. In meeting the requirements of Sec. 4907.150(a) in historic preservation programs, the agency shall give priority to methods that provide physical access to handicapped persons. In cases where a physical alteration to an historic property is not required because of Sec. 4907.150 (a)(2) or (a)(3), alternative methods of achieving program accessibility include--
(i) Using audio-visual materials and devices to depict those portions of an historic property that cannot otherwise be made accessible;
(ii) Assigning persons to guide handicapped persons into or through portions of historic properties that cannot otherwise be made accessible; or
(iii) Adopting other innovative methods.
(c) Time period for compliance. The agency shall comply with the obligations established under this section by October 21, 1986, except that where structural changes in facilities are undertaken, such changes shall be made by August 22, 1989, but in any event as expeditiously as possible.
(d) Transition plan. In the event that structural changes to facilities will be undertaken to achieve program accessibility, the agency shall develop, by February 23, 1987 a transition plan setting forth the steps necessary to complete such changes. The agency shall provide an opportunity to interested persons, including handicapped persons or organizations representing handicapped persons, to participate in the development of the transition plan by submitting comments (both oral and written). A copy of the transition plan shall be made available for public inspection. The plan shall, at a minimum--
(1) Identify physical obstacles in the agency's facilities that limit the accessibility of its programs or activities to handicapped persons;
(2) Describe in detail the methods that will be used to make the facilities accessible;
(3) Specify the schedule for taking the steps necessary to achieve compliance with this section and, if the time period of the transition plan is longer than one year, identify steps that will be taken during each year of the transition period; and
(4) Indicate the official responsible for implementation of the plan.

Sec. 4907.151 Program accessibility: New construction and alterations.

Each building or part of a building that is constructed or altered by, on behalf of, or for the use of the agency shall be designed, constructed, or

[[Page 34137]]

altered so as to be readily accessible to and usable by handicapped persons. The definitions, requirements, and standards of the Architectural Barriers Act (42 U.S.C. 4151-4157), as established in 41 CFR 101-19.600 to 101-19.607, apply to buildings covered by this section.

Secs. 4907.152-4907.159 [Reserved]

Sec. 4907.160 Communications.

(a) The agency shall take appropriate steps to ensure effective communication with applicants, participants, personnel of other Federal entities, and members of the public.
(1) The agency shall furnish appropriate auxiliary aids where necessary to afford a handicapped person an equal opportunity to participate in, and enjoy the benefits of, a program or activity conducted by the agency.
(i) In determining what type of auxiliary aid is necessary, the agency shall give primary consideration to the requests of the handicapped person.
(ii) The agency need not provide individually prescribed devices, readers for personal use or study, or other devices of a personal nature.
(2) Where the agency communicates with applicants and beneficiaries by telephone, telecommunication devices for deaf person (TDD's) or equally effective telecommunication systems shall be used.
(b) The agency shall ensure that interested persons, including persons with impaired vision or hearing, can obtain information as to the existence and location of accessible services, activities, and facilities.
(c) The agency shall provide signage at a primary entrance to each of its inaccessible facilities, directing users to a location at which they can obtain information about accessible facilities. The international symbol for accessibility shall be used at each primary entrance of an accessible facility.
(d) This section does not require the agency to take any action that it can demonstrate would result in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens. In those circumstances where agency personnel believe that the proposed action would fundamentally alter the program or activity or would result in undue financial and administrative burdens, the agency has the burden of proving that compliance with Sec. 4907.160 would result in such alteration or burdens. The decision that compliance would result in such alteration or burdens must be made by the agency head or his or her designee after considering all agency resources available for use in the funding and operation of the conducted program or activity, and must be accompanied by a written statement of the reasons for reaching that conclusion. If an action required to comply with this section would result in such an alteration or such burdens, the agency shall take any other action that would not result in such an alteration or such burdens but would nevertheless ensure that, to the maximum extent possible, handicapped persons receive the benefits and services of the program or activity.

Secs. 4907.161-4907.169 [Reserved]

Sec. 4907.170 Compliance procedures.

(a) Except as provided in paragraph (b) of this section, this section applies to all allegations of discrimination on the basis of handicap in programs or activities conducted by the agency.
(b) The agency shall process complaints alleging violations of section 504 with respect to employment according to the procedures established by the Equal Employment Opportunity Commission in 29 CFR part 1613 pursuant to section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 791).
(c) The Equal Opportunity Manager shall be responsible for coordinating implementation of this section. Complaints may be sent to Equal Opportunity Manager, Human Resources Department, Pension Benefit Guaranty Corporation, 1200 K Street NW., Washington, DC 20005-4026.
(d) The agency shall accept and investigate all complete complaints for which it has jurisdiction. All complete complaints must be filed within 180 days of the alleged act of discrimination. The agency may extend this time period for good cause.
(e) If the agency receives a complaint over which it does not have jurisdiction, it shall promptly notify the complainant and shall make reasonable efforts to refer the complaint to the appropriate government entity.
(f) The agency shall notify the Architectural and Transportation Barriers Compliance Board upon receipt of any complaint alleging that a building or facility that is subject to the Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151-4157), or section 502 of the Rehabilitation Act of 1973, as amended (29 U.S.C. 792), is not readily accessible to and usable by handicapped persons.
(g) Within 180 days of the receipt of a complete complaint for which it has jurisdiction, the agency shall notify the complainant of the results of the investigation in a letter containing--
(1) Findings of fact and conclusions of law;
(2) A description of a remedy for each violation found; and
(3) A notice of the right to appeal.
(h) Appeals of the findings of fact and conclusions of law or remedies must be filed by the complainant within 90 days of receipt from the agency of the letter required by Sec. 4907.170(g). The agency may extend this time for good cause.
(i) Timely appeals shall be accepted and processed by the head of the agency.
(j) The head of the agency shall notify the complainant of the results of the appeal within 60 days of the receipt of the request. If the head of the agency determines that additional information is needed from the complainant, he or she shall have 60 days from the date of receipt of the additional information to make his or her determination on the appeal.
(k) The time limits cited in paragraphs (g) and (j) of this section may be extended with the permission of the Assistant Attorney General.
(l) The agency may delegate its authority for conducting complaint investigations to other Federal agencies, except that the authority for making the final determination may not be delegated to another agency.

Secs. 4907.171-4907.999 [Reserved]

[FR Doc. 96-16398 Filed 6-28-96; 8:45 am] BILLING CODE 7708-01-P