[Federal Register: May 7, 2004 (Volume 69, Number 89)]
[Notices]               
[Page 25791-25796]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07my04-121]                         


[[Page 25791]]

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Part V





Pension Benefit Guaranty Corporation





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Participant Notice Voluntary Correction Program



29 CFR Parts 4011 and 4071



Assessment of and Relief From Penalties--Participant Notices; Notice 
and Proposed Rule


[[Page 25792]]


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PENSION BENEFIT GUARANTY CORPORATION

RIN 1212-AB00

 
Participant Notice Voluntary Correction Program

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Notice.

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SUMMARY: The Pension Benefit Guaranty Corporation (``PBGC'') is 
announcing a Participant Notice Voluntary Correction Program (``VCP''). 
This program, which generally covers Participant Notices for the 2002 
or 2003 plan year that were not issued as required, is designed to 
encourage plan administrators to correct recent compliance failures 
without penalty and to facilitate plan administrators' future 
compliance. The PBGC will not pursue any failure to provide a pre-2002 
Participant Notice unless there is a 2002 or 2003 Participant Notice 
failure that is covered by the VCP but that does not meet the 
requirements for penalty relief under the VCP. Elsewhere in today's 
Federal Register, the PBGC is proposing a new Participant Notice 
penalty policy.

DATES: To meet the requirements for penalty relief under the 
Participant Notice Voluntary Correction Program with respect to a 
Participant Notice failure for the 2002 or 2003 plan year, the plan 
administrator must: (1) Issue a VCP corrective notice by the 2004 
Participant Notice due date (for calendar year plans, generally October 
4, 2004, November 15, 2004, or December 15, 2004); and (2) notify the 
PBGC within 30 days after the 2004 Participant Notice due date.

FOR FURTHER INFORMATION CONTACT: Harold J. Ashner, Assistant General 
Counsel, or Catherine B. Klion, Attorney, Office of the General 
Counsel, Pension Benefit Guaranty Corporation, 1200 K Street, NW., 
Washington, DC 20005-4026; 202-326-4024 (TTY/TDD users may call the 
Federal relay service toll-free at 1-800-877-8339 and ask to be 
connected to 202-326-4024.)

SUPPLEMENTARY INFORMATION:

Overview of Participant Notice Requirements

    Section 4011 of the Employee Retirement Income Security Act of 1974 
(``ERISA'') requires certain underfunded plans to issue a notice to 
participants of the plan's funding status and the limits on the PBGC's 
guarantee (``Participant Notice''). The Participant Notice helps to 
ensure that participants better understand the financial status of 
their plans and the consequences that plan underfunding may have on 
their promised benefits. The PBGC's implementing regulations are at 29 
CFR part 4011.
    In general, a plan administrator must issue a Participant Notice 
for a plan year if a variable rate premium (which is tied to plan 
underfunding) is payable for that plan year, unless the plan meets the 
``DRC Exception Test'' for that plan year or for the prior plan year. 
However, the Job Creation and Worker Assistance Act of 2002 (JCWAA) 
made a temporary change to the premium interest rate that did not apply 
for purposes of determining whether a Participant Notice was required. 
Therefore, a plan administrator may be required to provide a 
Participant Notice for the 2002 or 2003 plan year even if a variable 
rate premium is not payable for that plan year.
    The Pension Funding Equity Act of 2004 (PFEA), which was signed 
into law by the President on April 10, 2004, changes the rules for 
determining the required interest rate for premium payment years 
beginning in 2004 or 2005. Under PFEA, plan administrators may use the 
premium interest rate for purposes of determining whether a Participant 
Notice is required. Thus, a plan administrator may be required to issue 
a Participant Notice for the 2004 or 2005 plan year only if a variable 
rate premium is payable for that plan year.
    A Participant Notice for a plan year is due in that plan year--`` 
two months after the due date (with extensions) for the plan's Form 
5500 for the prior plan year. (The due date for a plan's Participant 
Notice for a plan year is keyed to the due date for the plan's Summary 
Annual Report for the prior plan year so that the two documents may be 
issued together.) For calendar year plans, common due dates for the 
2004 Participant Notice are therefore October 4, 2004, November 15, 
2004, and December 15, 2004. There are a variety of rules governing who 
is entitled to receive the Participant Notice and the form, content, 
and manner of issuance of the Participant Notice.
    Plan administrators are required to certify on the annual PBGC 
premium filing (Form 1 or Form 1-EZ) that, for the prior plan year: (1) 
A Participant Notice was not required to be issued; (2) a Participant 
Notice was issued as required; or (3) an explanation is attached (e.g., 
because a required Participant Notice was issued late).
    See appendix A for a detailed explanation of the requirements 
governing Participant Notices.

Compliance and Enforcement Background

    The Participant Notice requirement went into effect in the 1995 
plan year for large plans (generally plans with more than 100 
participants) and in the 1996 plan year for small plans (generally 
plans with 100 or fewer participants). In the first few years after the 
requirement went into effect, plan administrators of only a relatively 
small number of defined benefit plans had to provide a Participant 
Notice, reflecting the fact that plans were better funded at that time. 
The PBGC conducted compliance surveys and found that both large plan 
and small plan compliance was high for those plan years. In the last 
several years, however, because of low interest rates and poor 
investment returns, more plans have become underfunded and, therefore, 
many plan administrators have been required to issue a Participant 
Notice for the first time.
    Recent PBGC audits have found higher rates of noncompliance with 
the Participant Notice requirement than in prior years. Much of the 
noncompliance appears to have resulted from a lack of awareness or 
understanding of the applicable requirements rather than from an 
attempt to avoid disclosure. Nonetheless, plan participants deserve to 
know if their plans are underfunded. As a result, the PBGC is expanding 
its Participant Notice enforcement program with a view toward more 
actively auditing compliance and assessing penalties for noncompliance.

Overview of Voluntary Correction Program

    As a transition to this expanded enforcement program, the PBGC is 
launching a Participant Notice Voluntary Correction Program (``VCP'') 
designed to encourage plan administrators to correct past compliance 
failures and to facilitate their future compliance with Participant 
Notice requirements. The VCP generally covers Participant Notice 
failures for the 2002 and 2003 plan years. Under this program, the PBGC 
will not assess penalties for failure to provide a 2002 or 2003 
Participant Notice as required if the failure is corrected in 
accordance with the guidelines in this notice. (The VCP focuses on the 
2002 and 2003 plan years in part because the PBGC is concerned that 
some plan administrators may have misunderstood the effect of JCWAA on 
their Participant Notice obligations for those plan years.)
    The PBGC will not pursue failures to provide a pre-2002 Participant 
Notice unless there is a 2002 or 2003

[[Page 25793]]

Participant Notice failure that is covered by the VCP but that does not 
meet the requirements for penalty relief under the VCP. Focusing the 
PBGC's enforcement resources primarily on 2002 and later Participant 
Notice failures will concentrate those resources effectively and limit 
disclosures to plan years that are most relevant to participants.
    The PBGC anticipates that many plan administrators will want to 
participate in the VCP as a precaution, even in the absence of a known 
Participant Notice failure. Participation in the VCP will not affect 
the likelihood that a plan will be selected for audit of compliance 
with the requirement to issue a post-VCP Participant Notice (see 
``Participant Notices Covered by VCP''), with the PBGC premium 
requirement, or with any other PBGC requirement.

Participant Notices Covered by VCP

    The VCP covers any Participant Notice for a plan's 2002 or 2003 
plan year: (1) That is due before May 7, 2004; and (2) that is not, as 
of May 7, 2004, the subject of a PBGC audit proceeding.
    For purposes of determining whether the VCP covers a plan's 
Participant Notice, the date the Participant Notice is due is 
determined without regard to any deadline extension resulting from a 
disaster relief notice. For example, if a calendar year plan's 2003 
Participant Notice was originally due on December 15, 2003, but as a 
result of a disaster relief notice the due date was extended to May 14, 
2004, the VCP would cover the plan's 2003 Participant Notice because 
the extension to May 14, 2004, would be disregarded.

Requirements for VCP Penalty Relief

    For any Participant Notice that is covered by the VCP, the PBGC 
will not assess a penalty if the plan administrator, in accordance with 
the guidelines in this notice: (1) Issues a VCP corrective notice; and 
(2) notifies the PBGC that it is participating in the VCP. (If the only 
failure was a late issuance corrected before May 7, 2004, see ``Special 
rule for late 2002/2003 notices already corrected.'')

VCP Corrective Notice

    The PBGC believes that many of the plans that will participate in 
the VCP to correct a Participant Notice failure for 2002 or 2003 will 
also be required to issue a Participant Notice for 2004. Accordingly, 
the PBGC has structured the VCP corrective notice requirements to 
enable such plans to issue a single notice that meets the requirements 
for a VCP corrective notice and for the 2004 Participant Notice. This 
approach will minimize the confusion for participants that could result 
from the issuance of multiple notices at or about the same time.
    The VCP corrective notice must meet all of the requirements that 
apply to the 2004 Participant Notice (or, if the plan is not required 
to issue a 2004 Participant Notice, all of the requirements that would 
apply if it were required), except as otherwise provided in the 
guidelines in this notice.
    Normally the 2004 Participant Notice would have to include the 
``funded current liability percentage'' for the 2003 plan year or for 
the 2004 plan year. Under the VCP, whether the plan administrator is 
correcting only a 2002 failure, only a 2003 failure, or both a 2002 and 
a 2003 failure, the VCP corrective notice: (1) Must include the funded 
current liability percentage for the 2002 plan year and for the 2003 
plan year, and (2) may include as well the funded current liability 
percentage for the 2004 plan year. In all other respects, the VCP 
corrective notice must contain the information required in a 2004 
Participant Notice (e.g., current information on funding waivers, 
missed contributions, and limitations on the PBGC's guarantee).
    Although the plan administrator is not required to inform 
participants that it had a Participant Notice failure for the 2002 or 
2003 plan year (or for both), or that it is participating in a 
``voluntary correction program,'' a plan administrator may choose to 
include that information in the VCP corrective notice.
    Appendix B contains a model VCP corrective notice that plan 
administrators may use to meet VCP requirements. The PBGC will treat a 

VCP corrective notice that is issued in accordance with the guidelines 
in this notice as meeting the requirements for the 2004 Participant 
Notice.
    Plan administrators should take special note that because the VCP 
corrective notice is tied to the requirements for the 2004 Participant 
Notice rather than to the requirements for the 2002 or 2003 Participant 
Notice that was not issued as required, the VCP corrective notice is 
required to be issued only to those persons entitled to receive the 
plan's 2004 Participant Notice (or that would be entitled to receive 
the plan's 2004 Participant Notice if it were required). Thus, there is 
no need to issue the VCP corrective notice to those persons who were 
entitled to receive the 2002 or 2003 Participant Notice that was not 
issued as required but who are not entitled to receive the 2004 
Participant Notice (e.g., a participant whose entire benefit has been 
annuitized or paid out in a lump sum).

Notice to PBGC

    The plan administrator must notify the PBGC that it is 
participating in the VCP no later than the 30th day after the due date 
for issuing the VCP corrective notice. The notification must include a 
copy of the VCP corrective notice and the name and telephone number of 
a person for the PBGC to contact with any questions. Plan 
administrators may notify the PBGC electronically through the PBGC's 
Web site at mailto:participant.pro@pbgc.gov, by fax at 202-336-4197, 
or by mail, commercial delivery service, or hand at Contracts and 
Control Review Department, Pension Benefit Guaranty Corporation, 1200 K 
Street, NW., Suite 580, Washington, DC 20005-4026. The PBGC will 
promptly issue a written acknowledgment of the notification. Plan 
administrators should keep the acknowledgment as proof of meeting the 
VCP requirement of notifying the PBGC.

Special Rule for Late 2002/2003 Notices Already Corrected

    If a plan administrator's only failure with respect to a 2002 or 
2003 Participant Notice was late issuance and the failure has been 
corrected before May 7, 2004, the PBGC will treat the plan 
administrator as having participated in the VCP and will assess no 
penalty for that 2002 or 2003 failure (and will not pursue any pre-2002 
Participant Notice failure) without requiring that the plan 
administrator issue a VCP corrective notice or notify the PBGC of the 
plan's participation in the VCP.

Effect of VCP on Certification Requirements

    Ordinarily, a plan administrator that filed an erroneous 
certification on the annual PBGC premium filing as to whether a 
Participant Notice was required for the prior plan year and, if so, 
whether it was issued as required would have to file an amended 
certification. However, if the plan administrator notifies the PBGC of 
the plan's participation in the VCP, the PBGC will treat the 
notification as effectively amending any erroneous certification filed 
on or before May 7, 2004, with respect to a 2002 or 2003 Participant 
Notice. The PBGC will take no enforcement action based on the erroneous 
prior certification if the plan administrator of a plan that meets the 
requirements for penalty relief under the VCP amends (or effectively 
amends) the erroneous prior certification.

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    Plan administrators of all plans that meet the requirements for VCP 
penalty relief will be required to check a box on the 2005 PBGC premium 
filing notifying the PBGC of the plan's participation in the VCP. This 
requirement is in addition to the Notice to PBGC requirement described 
above that must be met to qualify for VCP penalty relief, except under 
``Special rule for late 2002/2003 notices already corrected.''

Compliance Assistance

    The PBGC has developed written guidance on the requirements of the 
VCP, including a Fact Sheet and Frequently Asked Questions. All 
information related to the VCP and to Participant Notice requirements 
generally is available on the PBGC's Web site at mailto:participant.pro@pbgc.gov.
 In addition, plan administrators seeking guidance on 

Participant Notice compliance questions, including questions about the 
VCP, may submit questions electronically through that Web site or call 
the toll-free telephone number at the PBGC's Practitioner Customer 
Service Center (1-800-736-2444).
    Plan administrators may also contact the PBGC to request 
appropriate modifications to the VCP requirements on a case-by-case 
basis. For example, in the case of a 2002 or 2003 ``partial'' failure 
such as a failure to provide the notice to some of the participants or 
a failure to include in the notice some required information, the PBGC 
will work with the plan administrator to determine what type of 
correction, if any, would be needed to address the partial failure in 
order to qualify for penalty relief under the VCP.

Future Participant Notice Penalties

    Elsewhere in today's Federal Register, the PBGC is proposing a new 
Participant Notice penalty policy. The PBGC intends to publish its 
final Participant Notice penalty policy as soon as practicable after 
considering public comments.

Compliance With Rulemaking Guidelines

    The PBGC has determined, in consultation with the Office of 
Management and Budget, that this Notice is a ``significant regulatory 
action'' under Executive Order. The Office of Management and Budget has 
therefore reviewed this notice under Executive Order 12866.
    The collection of information requirements under the VCP have been 
approved by the Office of Management and Budget under control numbers 
1212-0009 (expires December 31, 2006) and 1212-0050 (expires November 
30, 2004). An agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it displays 
a currently valid OMB control number.
    Because this action deals only with a general statement of PBGC 
enforcement policy, it is not subject to the notice and comment 
rulemaking requirements or delayed effective date requirements under 
section 553 of the Administrative Procedure Act. Because no general 
notice of proposed rulemaking is required, the Regulatory Flexibility 
Act does not apply. See 5 U.S.C. 601(2), 603, 604.

    Issued in Washington, DC, this 3rd day of May, 2004.
Bradley D. Belt,
Executive Director, Pension Benefit Guaranty Corporation.

Appendix A

Summary of Participant Notice Requirements

Statutory and Regulatory Framework

    Section 4011 of ERISA and 29 CFR part 4011 require certain 
underfunded plans to issue an annual notice to participants (a 
``Participant Notice'') that discloses the plan's funding status and 
the limits of the PBGC's guarantee.

When Requirement Applies

    In general, a plan administrator is required to provide a 
Participant Notice for a plan year if a variable rate premium (which 
is tied to plan underfunding) is payable for that plan year, unless 
the plan meets a funding-related test tied to the ``deficit 
reduction contribution'' rules--the ``Deficit Reduction Contribution 
(``DRC'') Exception Test''--for that plan year or for the prior plan 
year. See Sec.  4011.3. However, as discussed below under Effect of 
JCWAA on Requirements, a plan administrator may be required to 
provide a Participant Notice for the 2002 or 2003 plan year even if 
a variable rate premium is not payable for that plan year.
    In general, the DRC Exception Test requires a plan to be at 
least 90 percent funded, although a plan that is at least 80 percent 
funded meets the test if it was at least 90 percent funded for two 
consecutive plan years out of the last three. There are special 
rules under the DRC Exception Test that allow small plans to avoid 
doing additional calculations by using numbers they already reported 
on the Schedule B to their Form 5500. See Sec.  4011.4. Most new and 
newly-covered plans are exempt from the Participant Notice 
requirement. See Sec.  4011.5.

Due Dates

    A participant notice for a plan year is due in that plan year. 
The due date for issuing a Participant Notice for a plan year is two 
months after the plan's due date, with extensions, if any, for 
filing the Form 5500 for the prior plan year. (The due date for a 
plan's Participant Notice for a plan year is keyed to the due date 
for the plan's Summary Annual Report for the prior plan year so that 
the two documents may be issued together.) The plan administrator 
may change the date of issuance from one plan year to the next, 
provided that the effect of any change is not to avoid disclosing a 
minimum funding waiver or a missed contribution. See Sec.  4011.8. 
The following table shows the common due dates for calendar year 
plans for the 2004 Participant Notice:

------------------------------------------------------------------------
                                             2004 Participant notice due
          2003 Form 5500 due date                       date
------------------------------------------------------------------------
Monday, August 2, 2004....................  Monday, October 4, 2004.
Wednesday, September 15, 2004.............  Monday, November 15, 2004.
Friday, October 15, 2004..................  Wednesday, December 15,
                                             2004.
------------------------------------------------------------------------

Persons Entitled To Receive Notice

    A plan administrator must provide a Participant Notice to 
participants, beneficiaries of deceased participants, alternate 
payees, and unions. To determine who is a person entitled to receive 
a Participant Notice, the plan administrator may select any date 
during the period beginning with the last day of the prior plan year 
and ending with the date on which the Participant Notice is due, 
provided that a change in the date from one plan year to another 
does not exclude a substantial number of participants and 
beneficiaries. See Sec.  4011.7.

Manner of Issuance

    The plan administrator must issue a Participant Notice using 
measures reasonably calculated to ensure actual receipt by the 
persons entitled to receive it. A Participant Notice may be issued 
together with another document, such as the Summary Annual Report 
(which is due at the same time as the Participant Notice), as long 
as it is in a separate document. See Sec.  4011.9, as amended by the 
PBGC's final rule published October 28, 2003 (68 FR 61344, 61353).

Form of Notice

    A Participant Notice must contain the plan's ``Notice Funding 
Percentage''--the plan's ``funded current liability percentage'' as 
defined in section 302(d)(9)(C) of ERISA--for the current plan year 
or the prior plan year, along with the date as of which that 
percentage is determined. The Participant Notice also must contain 
information on minimum funding waivers and missed contributions, a 
summary of plan benefits guaranteed by the PBGC with an explanation 
of the limitations on the guarantee, and other information specified 
in the regulation. See Sec.  4011.10(b) and (c). Additional 
information must be in a separate document. See Sec.  4011.10(d).
    A Participant Notice must be readable and written in a manner 
calculated to be understood by the average plan participant and not 
to mislead recipients. See Sec.  4011.10(a). Plan administrators of 
plans with specified numbers or percentages of participants literate 
only in the same non-English language must provide either an 
English-language Participant Notice with a

[[Page 25795]]

prominent legend in the common non-English language offering 
assistance in that language or a Participant Notice in the common 
non-English language. See Sec.  4011.10(e).
    The Participant Notice regulation contains a Model Participant 
Notice as an example of a Participant Notice that meets the 
requirements of Sec.  4011.10. Each year the PBGC issues a Technical 
Update that provides specific information relating to that year's 
Participant Notice and updates the Model Notice.

Effect of JCWAA on Requirements

    Section 405 of the Job Creation and Worker Assistance Act of 
2002 (``JCWAA'') increased the required interest rate for 
calculating vested benefits for the PBGC variable rate premium under 
section 4006(a)(3)(E)(iii) of ERISA from 85 percent to 100 percent 
of the yield on 30-year Treasury securities. The statutory change 
applies only to plan years beginning in 2002 or 2003. However, JCWAA 
does not allow use of 100 percent of the Treasury yield to determine 
whether a PBGC variable rate premium is payable for purposes of 
determining whether a Participant Notice is required. Thus, plan 
administrators must continue to use 85 percent of the Treasury yield 
for this purpose.
    Section 405 of JCWAA also increased, for plan years beginning in 
2002 or 2003, the maximum interest rate (from 105 percent to 120 
percent of the four-year weighted average of the yield on 30-year 
Treasury securities) that may be used to calculate current liability 
for purposes of the DRC funding requirement. The change in the 
maximum interest rate used to calculate current liability for DRC 
funding purposes can affect, for the 2002, 2003, and certain future 
plan years: (1) Whether a plan administrator is required to issue a 
Participant Notice; and (2) the plan funding information required to 
be disclosed in a Participant Notice.
    The effect of JWCAA on Participant Notice requirements is fully 
discussed in PBGC Technical Updates 02-2 and 03-17, both available 
on the PBGC's Web site, mailto:participant.pro@pbgc.gov.


Certification

    The plan administrator is required to certify on the annual PBGC 
premium filing (Form 1 or Form 1-EZ) that, for the prior plan year: 
(1) A Participant Notice was not required to be issued; (2) a 
Participant Notice was issued as required; or (3) an explanation is 
attached (e.g., because a required Participant Notice was issued 
late).

Penalties

    If a Participant Notice is not issued as required, the PBGC may 
assess penalties under section 4071 of ERISA and 29 CFR part 4071. 
For more information on Participant Notice penalties, see the PBGC's 
proposal on such penalties published elsewhere in today's Federal 
Register.

Appendix B

Model VCP Corrective Notice

    The following is an example of a corrective notice that 
satisfies the requirements of the Participant Notice Voluntary 
Correction Program when the required information is filled in 
(subject to Sec.  4011.10(d)-(e), as applicable). It also satisfies 
the requirements of Sec.  4011.10 for the 2004 Participant Notice.

Notice to Participants of [Plan Name]

    The law requires that you receive information on the funding 
level of your defined benefit pension plan and the benefits 
guaranteed by the Pension Benefit Guaranty Corporation (PBGC), a 
federal insurance agency. [YOU MAY INCLUDE A STATEMENT TO THE EFFECT 
THAT THE PLAN HAD A PARTICIPANT NOTICE FAILURE FOR THE 2002 PLAN 
YEAR OR FOR THE 2003 PLAN YEAR (OR FOR BOTH). YOU MAY ALSO INCLUDE A 
STATEMENT TO THE EFFECT THAT THE PLAN IS PARTICIPATING THE PBGC'S 
PARTICIPANT NOTICE VOLUNTARY CORRECTION PROGRAM.]

Your Plan's Funding

    As of [APPLICABLE DATE], your plan had [INSERT PLAN'S FUNDED 
CURRENT LIABILITY PERCENTAGE (AS DEFINED IN SECTION 302(d)(9)(C) of 
ERISA) FOR THE 2002 PLAN YEAR] percent of the money needed to pay 
benefits promised to employees and retirees.
    As of [APPLICABLE DATE], your plan had [INSERT PLAN'S FUNDED 
CURRENT LIABILITY PERCENTAGE (AS DEFINED IN SECTION 302(d)(9)(C) of 
ERISA) FOR THE 2003 PLAN YEAR] percent of the money needed to pay 
benefits promised to employees and retirees.
    [YOU MAY ALSO INCLUDE THE FOLLOWING STATEMENT:
    As of [APPLICABLE DATE], your plan had [INSERT PLAN'S FUNDED 
CURRENT LIABILITY PERCENTAGE (AS DEFINED IN SECTION 302(d)(9)(C) of 
ERISA) FOR THE 2004 PLAN YEAR] percent of the money needed to pay 
benefits promised to employees and retirees.]
    [SEE Sec.  4011.10(c)(2) FOR SPECIAL RULES SMALL PLANS MAY USE 
TO DETERMINE THE PLAN'S FUNDED CURRENT LIABILITY PERCENTAGE.]
    To pay pension benefits, your employer is required to contribute 
money to the pension plan over a period of years. A plan's funding 
percentage does not take into consideration the financial strength 
of the employer. Your employer, by law, must pay for all pension 
benefits, but your benefits may be at risk if your employer faces a 
severe financial crisis or is in bankruptcy.
    [INCLUDE THE FOLLOWING PARAGRAPH ONLY IF, FOR ANY OF THE 
PREVIOUS FIVE PLAN YEARS, THE PLAN HAS BEEN GRANTED AND HAS NOT 
FULLY REPAID A FUNDING WAIVER.]
    Your plan received a funding waiver for [LIST ANY OF THE FIVE 
PREVIOUS PLAN YEARS FOR WHICH A FUNDING WAIVER WAS GRANTED AND HAS 
NOT BEEN FULLY REPAID]. If a company is experiencing temporary 
financial hardship, the Internal Revenue Service may grant a funding 
waiver that permits the company to delay contributions that fund the 
pension plan.
    [INCLUDE THE FOLLOWING WITH RESPECT TO ANY UNPAID OR LATE 
PAYMENT THAT MUST BE DISCLOSED UNDER SECTION 4011.10(b)(6):]
    Your plan was required to receive a payment from the employer on 
[LIST APPLICABLE DUE DATE(S)]. That payment [has not been made] [was 
made on [LIST APPLICABLE PAYMENT DATE(S)]].

PBGC Guarantees

    When a pension plan terminates without enough money to pay all 
benefits, the PBGC steps in to pay pension benefits. The PBGC pays 
most people all pension benefits, but some people may lose certain 
benefits that are not guaranteed.
    The PBGC pays pension benefits up to certain maximum limits.
     The maximum guaranteed benefit is $3,698.86 per month 
or $44,386.32 per year for a 65-year-old person in a plan that 
terminates in 2004. [IF YOU ISSUE THIS NOTICE AFTER THE MAXIMUM 
GUARANTEED BENEFIT INFORMATION FOR PLANS THAT TERMINATE IN 2005 IS 
ANNOUNCED, YOU MAY ADD OR SUBSTITUTE THAT INFORMATION IN ORDER TO 
PROVIDE PARTICIPANTS WITH MORE CURRENT INFORMATION. THE PBGC EXPECTS 
TO MAKE THAT INFORMATION AVAILABLE ON ITS WEB SITE AT http://WWW.PBGC.GOV 

IN EARLY NOVEMBER 2004.]
     The maximum benefit may be reduced for an individual 
who is younger than age 65. For example, it is $1,664.49 per month 
or $19,973.88 per year for an individual who starts receiving 
benefits at age 55. [IN LIEU OF AGE 55, YOU MAY ADD OR SUBSTITUTE 
ANY AGE(S) RELEVANT UNDER THE PLAN. FOR EXAMPLE, YOU MAY ADD OR 
SUBSTITUTE THE MAXIMUM BENEFIT FOR AGES 62 OR 60. THE MAXIMUM 
BENEFIT IS $2,922.10 PER MONTH OR $35,065.20 PER YEAR AT AGE 62; IT 
IS $2,404.26 PER MONTH OR $28,851.12 PER YEAR AT AGE 60. IF THE PLAN 
PROVIDES FOR NORMAL RETIREMENT BEFORE AGE 65, YOU MUST INCLUDE THE 
NORMAL RETIREMENT AGE.] [IF YOU ISSUE THIS NOTICE AFTER THE MAXIMUM 
GUARANTEED BENEFIT INFORMATION FOR PLANS THAT TERMINATE IN 2005 IS 
ANNOUNCED, YOU MAY ADD OR SUBSTITUTE THAT INFORMATION IN ORDER TO 
PROVIDE PARTICIPANTS WITH MORE CURRENT INFORMATION. THE PBGC EXPECTS 
TO MAKE THAT INFORMATION AVAILABLE ON ITS WEB SITE AT http://WWW.PBGC.GOV

IN EARLY NOVEMBER 2004.] [IF THE PLAN DOES NOT PROVIDE FOR 
COMMENCEMENT OF BENEFITS BEFORE AGE 65, YOU MAY OMIT THIS 
PARAGRAPH.]
     The maximum benefit will also be reduced when a benefit 
is provided for a survivor.
    The PBGC does not guarantee certain types of benefits. [INCLUDE 
THE FOLLOWING GUARANTEE LIMITS THAT APPLY TO THE BENEFITS AVAILABLE 
UNDER YOUR PLAN.]
     The PBGC does not guarantee benefits for which you do 
not have a vested right when a plan terminates, usually because you 
have not worked enough years for the company.

[[Page 25796]]

     The PBGC does not guarantee benefits for which you have 
not met all age, service, or other requirements at the time the plan 
terminates.
     Benefit increases and new benefits that have been in 
place for less than a year are not guaranteed. Those that have been 
in place for less than 5 years are only partly guaranteed.
     Early retirement payments that are greater than 
payments at normal retirement age may not be guaranteed. For 
example, a supplemental benefit that stops when you become eligible 
for Social Security may not be guaranteed.
     Benefits other than pension benefits, such as health 
insurance, life insurance, death benefits, vacation pay, or 
severance pay, are not guaranteed.
     The PBGC generally does not pay lump sums exceeding 
$5,000.

Where To Get More Information

    Your plan, [EIN-PN], is sponsored by [CONTRIBUTING SPONSOR(S)]. 
If you would like more information about the funding of your plan, 
contact [INSERT NAME, TITLE, BUSINESS ADDRESS AND PHONE NUMBER OF 
INDIVIDUAL OR ENTITY].
    For more information about the PBGC and the benefits it 
guarantees, you may request a free copy of Your Guaranteed Pension 
by writing to Consumer Information Center, Dept. YGP, Pueblo, 
Colorado 81009. [THE FOLLOWING SENTENCE MAY BE INCLUDED:] ``Your 
Guaranteed Pension'' is also available on the PBGC's Web site at 
http://www.pbgc.gov.

    Issued: [INSERT AT LEAST MONTH AND YEAR]

[FR Doc. 04-10406 Filed 5-6-04; 8:45 am]

BILLING CODE 7708-01-P