35220 Federal Register / Vol. 80, No. 118 / Friday, June 19, 2015 / Rules and Regulations 

1 Division O of the Consolidated and Further 

Continuing Appropriations Act, 2015, Public Law 

113–235 (128 Stat. 2130 (2014)). 

the Secretary of the Treasury must 

determine whether to permit the 

implementation of the suspension that 

was approved under paragraph (g) of 

this section or whether to permit the 

implementation of a modification of that 

suspension. Under any such 

modification, the plan must be projected 

to avoid insolvency in accordance with 

section 432(e)(9)(D)(iv). No later than 60 

days after the results of a vote to reject 

a suspension are certified, the Secretary 

of the Treasury will notify the plan 

sponsor that the suspension or modified 

suspension is permitted to be 

implemented. 

(iv) Systemically important plan 

defined—(A) In general. For purposes of 

this paragraph (h)(5), a systemically 

important plan is a plan with respect to 

which the PBGC projects that the 

present value of financial assistance 

payments will exceed $1.0 billion if the 

suspension is not implemented. 

(B) Indexing. For calendar years 

beginning after 2015, the dollar amount 

specified in paragraph (h)(5)(iv)(A) of 

this section will be replaced with an 

amount equal to the product of the 

dollar amount and a fraction, the 

numerator of which is the contribution 

and benefit base (determined under 

section 230 of the Social Security Act) 

for the preceding calendar year and the 

denominator of which is the 

contribution and benefit base for 

calendar year 2014. If the amount 

otherwise determined under this 

paragraph (h)(5)(iv)(B) is not a multiple 

of $1.0 million, the amount will be 

rounded to the next lowest multiple of 

$1.0 million. 

(6) Final authorization to suspend—(i) 

In general. In any case in which a 

suspension is permitted to go into effect 

following a vote pursuant to section 

432(e)(9)(H)(ii) and paragraph (h)(4) of 

this section, the Secretary of the 

Treasury, in consultation with the PBGC 

and the Secretary of Labor, will issue a 

final authorization to suspend with 

respect to the suspension not later than 

seven days after the vote. 

(ii) Systemically important plans. In 

any case in which a suspension is 

permitted to go into effect following a 

determination under paragraph (h)(5) of 

this section that the plan is a 

systemically important plan, the 

Secretary of the Treasury, in 

consultation with the PBGC and the 

Secretary of Labor, will issue a final 

authorization to suspend, at a time 

sufficient to allow the implementation 

of the suspension prior to the end of the 

90-day period beginning on the date the 

results of the vote are certified. 

(iii) Plan partitions. Notwithstanding 

any other provision of this section, in 

any case in which a suspension of 

benefits with respect to a plan is made 

in combination with a partition of the 

plan, the suspension of benefits is not 

permitted to take effect prior to the 

effective date of the partition. 

(i) [Reserved]. 

(j) Effective/applicability date. This 

section applies on and after June 17, 

2015. 

(k) Expiration date. The applicability 

of this section expires on June 15, 2018. 

PART 602—OMB CONTROL NUMBERS 

UNDER THE PAPERWORK 

REDUCTION ACT 

■ Par. 3. The authority citation for part 

602 continues to read as follows: 

Authority: 26 U.S.C. 7805 

■ Par. 4. In § 602.101, paragraph (b) is 

amended by adding the following entry 

in numerical order to the table to read 

as follows: 

§ 602.101 OMB Control numbers. 

* * * * * 

(b) * * * 

CFR Part or section where 

identified and described 

Current OMB 

control no. 

* * * * * 

1.432(e)(9)–1T ...................... 1545–2260 

* * * * * 

John Dalrymple, 

Deputy Commissioner for Services and 

Enforcement. 

Approved: June 9, 2015. 

Mark J. Mazur, 

Assistant Secretary of the Treasury (Tax 

Policy). 

[FR Doc. 2015–14945 Filed 6–17–15; 11:15 am] 

BILLING CODE 4830–01–P 

PENSION BENEFIT GUARANTY 

CORPORATION 

29 CFR Part 4233 

RIN 1212–AB29 

Partitions of Eligible Multiemployer 

Plans 

AGENCY: Pension Benefit Guaranty 

Corporation. 

ACTION: Interim final rule. 

SUMMARY: This document contains an 

interim final rule prescribing the 

application process and notice 

requirements for partitions of eligible 

multiemployer plans under title IV of 

the Employee Retirement Income 

Security Act of 1974 (ERISA), as 

amended by the Multiemployer Pension 

Reform Act of 2014 (MPRA). The 

interim final rule is published pursuant 

to section 122 of MPRA in order to carry 

out the provisions of section 4233 of 

ERISA. PBGC is soliciting public 

comments on the interim final 

regulation. 

DATES: Effective June 19, 2015. 

Comments must be submitted on or 

before August 18, 2015. 

ADDRESSES: Comments, identified by 

Regulation Identifier Number (RIN) 

1212–AB29, may be submitted by any of 

the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the Web 

site instructions for submitting 

comments. 

• Email: reg.comments@pbgc.gov. 

• Fax: 202–326–4112. 

• Mail or Hand Delivery: Regulatory 

Affairs Group, Office of the General 

Counsel, Pension Benefit Guaranty 

Corporation, 1200 K Street NW., 

Washington, DC 20005–4026. All 

submissions must include the 

Regulation Identifier Number for this 

rulemaking (RIN 1212–AB29). 

Comments received, including personal 

information provided, will be posted to 

www.pbgc.gov. Copies of comments may 

also be obtained by writing to 

Disclosure Division, Office of the 

General Counsel, Pension Benefit 

Guaranty Corporation, 1200 K Street 

NW., Washington, DC 20005–4026, or 

calling 202–326–4040 during normal 

business hours. (TTY and TDD users 

may call the Federal relay service tollfree at 1–800–877–8339 and ask to be 

connected to 202–326–4040.) 

FOR FURTHER INFORMATION CONTACT: 

Joseph J. Shelton (shelton.joseph@

pbgc.gov), Assistant General Counsel, 

Office of the General Counsel, Pension 

Benefit Guaranty Corporation, 1200 K 

Street NW., Washington, DC 20005– 

4026; 202–326–4400, ext. 6559; 

Kimberly J. Duplechain 

(duplechain.kimberly@pbgc.gov), 

Deputy Assistant General Counsel, 

Office of the General Counsel, 202–326– 

4400, ext. 3028. 

SUPPLEMENTARY INFORMATION: 

Executive Summary 

Purpose of the Regulatory Action 

This interim final rule implements 

provisions of the Multiemployer 

Pension Reform Act of 2014 (MPRA) 1

that prescribe the statutory conditions 

and notice requirements that must be 

met before PBGC may partition an 


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2The guarantee amount will exceed this amount 

if the participant has more than 30 years of service. 

3See FY 2013 PBGC Projections Report at http:// 

www.pbgc.gov/documents/Projections-report2013.pdf. 

eligible multiemployer plan under 

section 4233 of ERISA. 

PBGC’s legal authority for this action 

comes from section 4002(b)(3) of ERISA, 

which authorizes PBGC to issue 

regulations to carry out the purposes of 

title IV of ERISA, and section 4233 of 

ERISA, as amended by MPRA, which 

requires that the partition process be 

conducted in accordance with 

regulations prescribed by PBGC. 

Major Provisions of the Regulatory 

Action 

This rule adds a new part 4233 to 

PBGC’s regulations. Part 4233 prescribes 

the application process to ensure the 

timely processing of applications for 

partition and related notice 

requirements. 

Background 

PBGC and the Multiemployer Insurance 

Program 

This interim final rule provides 

necessary guidance to plan sponsors on 

the application and notice requirements 

under section 4233 of ERISA for 

partitions of eligible multiemployer 

plans. To understand the effect of a 

partition of a multiemployer plan under 

MPRA, however, it is first helpful to 

understand the structure and operation 

of PBGC’s multiemployer insurance 

program. 

PBGC is a Federal corporation created 

under title IV of ERISA to guarantee the 

payment of pension benefits earned by 

more than 41 million American workers 

and retirees in nearly 24,000 privatesector defined benefit pension plans. 

The purpose of PBGC and the title IV 

insurance program is (1) to encourage 

the continuation and maintenance of 

voluntary private pension plans for the 

benefit of their participants; (2) to 

provide for the timely and 

uninterrupted payment of pension 

benefits under insured plans; and (3) to 

maintain premiums at the lowest level 

consistent with PBGC’s obligations. 

PBGC administers two insurance 

programs—one for single-employer 

defined benefit pension plans and a 

second for multiemployer defined 

benefit pension plans. This interim final 

rule applies only to the multiemployer 

program. The multiemployer program 

protects the benefits of approximately 

10 million workers and retirees in 

approximately 1,400 plans. A 

multiemployer plan is a collectively 

bargained pension arrangement 

involving two or more unrelated 

employers, usually in a common 

industry, such as construction or 

trucking. Multiemployer plans pay an 

annual premium to PBGC. Under 

MPRA, the annual premium for 2015 

increased from $13 to $26 per 

participant. For plan years beginning 

after 2015, the annual premium will 

increase based on increases in the 

national average wage index. 

In general, a multiemployer plan may 

be terminated in one of two ways: (1) By 

plan amendment that ‘‘freezes’’ the 

accrual and vesting of benefits after a 

specified date, or that converts the plan 

into a defined contribution plan; or (2) 

every employer withdraws from the 

plan or ceases to have an obligation to 

contribute to the plan. In contrast to the 

single-employer program, however, plan 

termination is not an insurable event. In 

other words, plan termination does not 

trigger the payment of PBGC-insured, 

guaranteed benefits to participants and 

beneficiaries. The insurable event under 

the multiemployer program is plan 

insolvency, which generally occurs 

when a plan is unable to pay benefits at 

the level promised for the plan year. 

The PBGC guarantee for 

multiemployer plans is lower than the 

guarantee for single-employer plans, 

and is based on a participant’s credited 

service and accrual rate, as defined in 

section 4022A. The maximum monthly 

benefit payable by PBGC under the 

multiemployer program is equal to a 

participant’s years of service multiplied 

by the sum of— 

• 100 percent of the first $11 of the 

accrual rate, and 

• 75 percent of the next $33 of the 

accrual rate. 

Under this formula, benefits in excess 

of $3,960 per year are only partially 

guaranteed, and the maximum 

guarantee amount payable per year is 

capped at $12,870 (applicable to a 

participant with 30 years of service and 

with an annual benefit in excess of 

$15,840).2

Another important difference between 

the single-employer program and the 

multiemployer program is the manner 

in which PBGC pays guaranteed 

benefits. Under the multiemployer 

program, PBGC does not pay guaranteed 

benefit amounts directly to participants 

and beneficiaries. Rather, when a 

multiemployer plan becomes insolvent, 

PBGC provides financial assistance in 

the form of loans to the insolvent plan 

sufficient to pay guaranteed benefit 

amounts to participants and 

beneficiaries. Despite this difference, 

the receipt of guaranteed benefit 

amounts from an insolvent 

multiemployer plan receiving financial 

assistance from PBGC is considered the 

receipt of benefits guaranteed by PBGC 

under title IV of ERISA. 

MPRA Changes to Partition Rules 

Although many multiemployer plans 

are healthy, a significant minority of 

financially troubled plans are projected 

to become insolvent over the next two 

decades.3 PBGC’s multiemployer 

insurance program is also projected to 

become insolvent within that timeframe. 

During 2013 and 2014, congressional 

committees held several hearings on the 

problems facing these plans and PBGC. 

Those challenges include, among other 

things, investment market declines, 

employer withdrawals, and 

demographic changes. 

In December 2014, Congress enacted, 

and the President signed, the 

Consolidated and Further Continuing 

Appropriations Act, 2015, Public Law 

113–235 (128 Stat. 2130 (2014)), of 

which MPRA is a part. MPRA contains 

a number of statutory reforms intended 

to help financially troubled 

multiemployer plans, and to improve 

the financial condition of PBGC’s 

multiemployer insurance program. In 

addition to increased premiums, 

sections 121 and 122 of MPRA provide 

PBGC with new statutory authority to 

assist financially troubled 

multiemployer plans under certain 

conditions, if doing so would reduce 

potential future costs to PBGC and if 

PBGC can certify that its ability to meet 

existing financial assistance to other 

plans will not be impaired. 

In addition, section 201 of MPRA 

amended the funding rules under 

section 305 of ERISA to add a new 

‘‘critical and declining’’ status for 

financially troubled multiemployer 

plans. Under section 305(b)(6) of ERISA, 

a plan is in critical and declining status 

if it satisfies the criteria for critical 

status under section 305(b)(2), and is 

projected to become insolvent within 

the meaning of section 4245 of ERISA 

during the current plan year or any of 

the 14 succeeding plan years (19 

succeeding plan years if the plan has a 

ratio of inactive participants to active 

participants that exceeds two to one, or 

if the funded percentage of the plan is 

less than 80 percent). Section 305(e)(9) 

of ERISA, as added by MPRA, prescribes 

new benefit suspension rules for 

multiemployer defined benefit plans in 

critical and declining status. The 

Department of the Treasury (Treasury) 

has interpretative jurisdiction over the 

subject matter in section 305 of ERISA 


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4See Rev. Proc. 2015–34, and the temporary and 

proposed regulations under section 305(e)(9) of 

ERISA (section 432(e)(9) of the Internal Revenue 

Code). 

5Section 4041A(d) of ERISA provides that the 

plan sponsor of a plan which terminates under 

section 4041A(a)(2) (termination by mass 

withdrawal) shall reduce benefits and suspend 

benefit payments in accordance with section 4281 

of ERISA. 

6Section 305(e)(9)(B) defines the term 

‘‘suspension of benefits’’ as the temporary or 

permanent reduction of any current or future 

payment obligation of the plan to any participant 

or beneficiary under the plan, whether or not in pay 

status at the time of the suspension of benefits. 

7The Participant and Plan Sponsor Advocate 

position was created in 2012 by the Moving Ahead 

for Progress in the 21st Century Act (MAP–21). See 

section 4004 of ERISA for the rules governing this 

position. 

and is contemporaneously issuing 

regulatory guidance in this area.4

As noted above, the purpose of this 

rule is to implement application and 

notice requirements under section 122 

of MPRA, which prescribes the statutory 

conditions and notice requirements that 

must be met before PBGC may partition 

an eligible multiemployer plan. PBGC 

expects to publish a proposed rule on 

facilitated mergers involving critical and 

declining status plans under section 121 

of MPRA in a separate rulemaking. 

Multiemployer Plan Partitions—Prior 

Law 

Before MPRA, PBGC could partition a 

multiemployer plan likely to become 

insolvent upon application by a plan 

sponsor or on its own accord. In either 

case, partition was only available in 

certain limited circumstances involving 

employer bankruptcies, and the 

liabilities transferred were restricted to 

the nonforfeitable benefits directly 

attributable to service with bankrupt 

employers, along with an equitable 

share of assets. The new plan created by 

the partition order was a successor plan 

under section 4022A of ERISA, and a 

terminated multiemployer plan to 

which section 4041A(d) applies.5 In 

addition, if the new plan did not have 

sufficient assets to pay the transferred 

benefits as of the date of the partition 

order, which generally was the case, it 

would be insolvent within the meaning 

of section 4245(b)(1) of ERISA. In such 

a case, PBGC provided financial 

assistance to the new plan so that it 

could make benefit payments to 

participants whose benefits had been 

transferred to the new plan, but reduced 

to the PBGC guarantee level. In contrast, 

participants in the ongoing plan 

continued to receive unreduced plan 

benefits. Due in part to the eligibility 

limitations for partition, PBGC had 

partitioned only a few plans prior to the 

enactment of MPRA. 

Multiemployer Plan Partitions—MPRA 

Section 122 of MPRA replaced the 

rules for partition with a new 

framework of rules. One of the most 

obvious changes is that PBGC may 

approve a partition without requiring an 

employer bankruptcy and, therefore, the 

benefits subject to transfer in a partition 

are no longer limited to those 

attributable to service with a bankrupt 

employer. The statute imposes a number 

of new eligibility requirements, 

however, such as a requirement that the 

plan be in critical and declining status 

as defined in section 305 of ERISA, and 

new statutory conditions and 

obligations that apply both before and 

after a partition, including a new, 

ongoing benefit payment obligation that 

applies to the eligible multiemployer 

plan that requested the partition. 

Another important change under 

MPRA is the relationship between the 

partition rules under section 4233 and 

the suspension of benefits rules under 

section 305(e)(9) of ERISA.6 Section 

305(e)(9) permits critical and declining 

status plans to apply to Treasury for 

approval to suspend certain benefits 

following the provision of specified 

notice, consideration of comments, 

Treasury review and approval, and 

satisfaction of other specified conditions 

(including a participant vote). One 

example of the interplay between an 

application for partition and an 

application for suspension of benefits is 

that before Treasury can approve an 

application for suspension, the plan 

actuary must certify that, taking into 

account a proposed suspension of 

benefits and, if applicable, a proposed 

partition under section 4233, the plan is 

projected to avoid insolvency within the 

meaning of section 4245, assuming the 

suspension of benefits continues until 

the suspension expires by its own terms 

or, if no such expiration date is set, 

indefinitely. 

Another example of the interplay 

between an application for partition and 

an application for suspension of benefits 

is that before PBGC may order a 

partition, it must first determine, in 

consultation with the Participant and 

Plan Sponsor Advocate,7 that the plan 

sponsor has taken (or is taking 

concurrently with an application for 

partition) all reasonable measures to 

avoid insolvency, including maximum 

benefit suspensions under section 

305(e)(9), if applicable. In addition, 

section 305(e)(9)(D)(iv) provides that 

any suspension of benefits, in the 

aggregate (and, if applicable, in 

combination with a partition), must be 

reasonably estimated to achieve, but not 

materially exceed, the level that is 

necessary to avoid insolvency. Finally, 

section 305(e)(9)(D)(v) requires that in 

any case in which an application for 

suspension of benefits to Treasury is 

made in combination with an 

application for partition to PBGC, the 

suspension of benefits may not take 

effect prior to the effective date of the 

partition. 

Given the interplay between MPRA’s 

partition and suspension of benefits 

provisions, PBGC staff has consulted 

with staff of Treasury and the 

Department of Labor in developing this 

interim final rule. PBGC will continue 

to work closely with these agencies as 

part of the interagency consultative 

process required under section 305(e)(9) 

of ERISA. 

The following is a summary of the 

new statutory framework for partitions 

under MPRA. 

Partition Application and Notice 

Requirements 

Section 4233(a)(1) of ERISA states 

that, upon application by the plan 

sponsor of an eligible multiemployer 

plan, PBGC may order a partition of the 

plan in accordance with that section. As 

under prior law, PBGC’s decision to 

order a partition is discretionary. Unlike 

prior law, however, the statute requires 

PBGC to make a determination not later 

than 270 days after the date such 

application was filed (or, if later, the 

date such application was completed), 

in accordance with regulations 

promulgated by PBGC. 

In addition, section 4233(a)(2) states 

that not later than 30 days after 

submitting an application for partition, 

the plan sponsor shall notify the 

participants and beneficiaries of such 

application, in the form and manner 

prescribed by regulations issued by 

PBGC. 

Eligibility Criteria for Partition 

Section 4233(b) of ERISA contains 

five statutory conditions that must be 

satisfied before PBGC may order a 

partition. They are discussed below: 

Critical and declining status. In 

accordance with section 4233(b)(1), the 

plan must be in critical and declining 

status as defined in section 305(b)(6) of 

ERISA. As noted above, a plan is in 

critical and declining status if the plan 

satisfies the criteria for critical status 

under section 305(b)(2), and is projected 

to become insolvent within the meaning 

of section 4245 during the current plan 

year or any of the 14 succeeding plan 

years (or 19 succeeding plan years if the 

plan has a ratio of inactive participants 

to active participants that exceeds two 

to one or if the funded percentage of the 

plan is less than 80 percent). Section 


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8The term ‘‘maximum benefit suspensions’’ in 

section 4233(b)(2) of ERISA should not to be 

confused with the term ‘‘maximum suspendable 

benefits’’ under section 305(e)(9)(D)(ii)(ll). 

9Because the benefit payment obligation under 

section 4233(e)(1) is based, in part, on the monthly 

Continued 

305(b)(3)(A)(i) requires an annual 

certification from the plan actuary on 

whether a plan is or will be in critical 

and declining status for such plan year. 

Treasury has interpretative jurisdiction 

over the subject matter in section 305 of 

ERISA. 

PBGC determination on reasonable 

measures. Under section 4233(b)(2) of 

ERISA, PBGC must determine, after 

consultation with the Participant and 

Plan Sponsor Advocate, that the plan 

sponsor has taken (or is taking 

concurrently with an application for 

partition) all reasonable measures to 

avoid insolvency, including maximum 

benefit suspensions under section 

305(e)(9) of ERISA, if applicable. 

The term ‘‘maximum benefit 

suspensions’’ is not defined in section 

305(e)(9) of ERISA.8 However, based on 

the structure and operation of section 

305(e)(9)—specifically, the statutorily 

defined limitations and protections 

contained in section 305(e)(9)(D), which 

limits the maximum amount of a 

suspension so that the post-suspension 

benefit is no less than 110 percent of the 

PBGC guarantee under section 4022A, 

exempts certain categories of 

individuals based on their age, and 

exempts benefits based on disability— 

PBGC interprets the term ‘‘maximum 

benefit suspensions’’ in section 

4233(b)(2) of ERISA to mean the 

maximum benefit suspensions 

permissible under section 305(e)(9). For 

example, the maximum benefit 

suspension permissible for an 

individual with a plan benefit based on 

disability would be zero, because 

benefits based on disability may not be 

suspended under section 

305(e)(9)(D)(iii). 

The requirement under section 

4233(b)(2) that a plan sponsor has taken 

(or is currently taking) all reasonable 

measures to avoid insolvency is similar 

to the demonstration that a plan sponsor 

must make under section 305(e)(9)(C)(ii) 

relating to an application for suspension 

of benefits. Under that provision, the 

plan sponsor must maintain a written 

record demonstrating that the plan is 

projected to become insolvent unless 

benefits are suspended, although all 

reasonable measures have been taken 

(and continue to be taken during the 

period of the benefit suspension). 

Although it is possible for a plan to 

file only an application for partition 

(and not an application for suspension 

of benefits under section 305(e)(9) of 

ERISA), the only instance in which that 

may occur would be if all participants 

and beneficiaries are older than 80, and/ 

or receive benefits based on disability, 

or have accrued benefits not greater than 

110 percent of the monthly benefit 

guaranteed by PBGC under section 

4022A. Therefore, PBGC expects that 

most applicants for partition will also 

apply to Treasury for a suspension of 

benefits. 

While the statute does not require a 

plan sponsor to file concurrent 

applications for partition and 

suspension of benefits, PBGC strongly 

encourages plan sponsors to do so 

because of the interplay between these 

provisions. For example, under section 

305(e)(9) of ERISA, it is necessary for 

Treasury to review whether a proposed 

suspension of benefits and partition 

combined will allow the plan to avoid 

insolvency, and both PBGC and 

Treasury must make overlapping 

findings for each application. 

Furthermore, participant 

communications may be simplified if 

participants and beneficiaries receive a 

notice of partition concurrently with 

that of suspension. Finally, applications 

for partition and suspension that are not 

closely coordinated may also make it 

difficult for the agencies to comply with 

the statutory timeframes. 

Long-term loss and plan solvency. In 

accordance with section 4233(b)(3) of 

ERISA, PBGC must reasonably expect 

that— 

• Partition will reduce PBGC’s 

expected long-term loss with respect to 

the plan; and 

• Partition is necessary for the plan to 

remain solvent. 

Certification to Congress. In 

accordance with section 4233(b)(4) of 

ERISA, PBGC must certify to Congress 

that its ability to meet existing financial 

assistance obligations to other plans 

(including any liabilities associated 

with multiemployer plans that are 

insolvent or that are projected to 

become insolvent within 10 years) will 

not be impaired by the partition. 

Source of funding. In accordance with 

section 4233(b)(5) of ERISA, the cost to 

PBGC arising from the partition must be 

paid exclusively from the PBGC fund for 

basic benefits guaranteed for 

multiemployer plans. 

PBGC Partition Order 

Upon PBGC’s approval of an 

application for partition, section 4233(c) 

of ERISA provides that PBGC’s partition 

order shall provide for a transfer to the 

plan created by the partition order (the 

successor plan) the minimum amount of 

the original plan’s liabilities necessary 

for the original plan to remain solvent. 

Sections 4233(d)(1) and (2) of ERISA 

describe the nature of the successor 

plan, and assign responsibility for its 

management. Specifically, section 

4233(d)(1) provides that the plan 

created by the partition order is a 

successor plan to which section 4022A 

applies. Section 4233(d)(2) provides that 

the plan sponsor of the original plan 

and the administrator of such plan shall 

be the plan sponsor and administrator, 

respectively, of the successor plan. 

Partition Withdrawal Liability Rule 

As noted above, unlike the partition 

rule under prior law, MPRA imposes a 

number of ongoing statutory obligations 

on the solvent, original plan and its 

contributing employers. For example, 

section 4233(d)(3) of ERISA prescribes a 

new withdrawal liability rule that 

applies for 10 years following the date 

of the partition order. Under the new 

withdrawal liability rule, if an employer 

withdraws from the original plan within 

10 years following the date of the 

partition, withdrawal liability is 

computed under section 4201 with 

respect to the original plan and the 

successor plan. If, however, the 

withdrawal occurs more than 10 years 

after the date of the partition order, 

withdrawal liability is computed under 

section 4201 only with respect to the 

original plan (and not with respect to 

the successor plan). In either case, 

withdrawal liability is payable to the 

original plan (and not the successor 

plan). 

Continuing Payment Obligation 

Section 4233(e)(1) imposes an 

ongoing benefit payment obligation on 

the original plan with respect to each 

participant or beneficiary of the original 

plan whose guarantee amount was 

transferred to the successor plan 

pursuant to a partition order. With 

respect to these individuals, the original 

plan must pay a monthly benefit for 

each month in which such benefit is in 

pay status following the effective date of 

the partition in an amount equal to the 

excess of— 

• The monthly benefit that would be 

paid to such participant or beneficiary 

for such month under the terms of the 

plan (taking into account benefit 

suspensions under section 305(e)(9) and 

any plan amendments following the 

effective date of such partition) if the 

partition had not occurred, over 

• The monthly benefit for such 

participant or beneficiary that is 

guaranteed under section 4022A.9


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benefit that is guaranteed under section 4022A, the 

amount of this benefit payment obligation is subject 

to change under section 4022A(f)(2)(C). 

10Section 305(e)(9)(E)(vi) defines the term 

‘‘benefit improvement’’ as a resumption of 

suspended benefits, an increase in benefits, an 

increase at the rate at which benefits accrue, or an 

increase in the rate at which benefits become 

nonforfeitable under the plan. As noted above, 

Treasury has interpretative jurisdiction over the 

subject matter in section 305 of ERISA. 

11The RFI and comments are accessible at http:// 

www.pbgc.gov/prac/pg/other/guidance/

multiemployer-notices.html. 

12Treasury issued an RFI seeking comments on 

certain matters related to the suspension of benefit 

rules under section 432(e)(9) of the Internal 

Revenue Code (section 305(e)(9) of ERISA). The 

Treasury RFI and comments are accessible at http:// 

www.regulations.gov/#!docketDetail;D=IRS-2015- 

0004. 

As a result of this continuing payment 

obligation, PBGC expects that 

participants and beneficiaries whose 

guarantee amounts are transferred to a 

successor plan, and who have a plan 

benefit that exceeds the PBGC guarantee 

(e.g., 110 percent of the PBGC guarantee 

amount, benefit based on disability, 

etc.), will continue to participate in, and 

retain a right to receive a benefit 

payment from, the original plan after the 

effective date of a partition order. 

Benefit Improvement Premium 

Payments to PBGC 

Section 4233(e)(2) of ERISA provides 

that in any case in which a plan 

provides a benefit improvement, as 

defined in section 305(e)(9)(E)(vi), that 

takes effect after the effective date of the 

partition, the original plan shall pay to 

PBGC for each year during the 10-year 

period following the partition effective 

date, an annual amount equal to the 

lesser of— 

• The total value of the increase in 

benefit payments for such [plan] year 

that is attributable to the benefit 

improvement, or 

• The total benefit payments from the 

successor plan for such [plan] year. 

This payment must be made at the 

time of, and in addition to, any other 

premium imposed by PBGC under title 

IV of ERISA.10

Special Premium Rule 

Section 4233(e)(3) of ERISA imposes 

a special premium rule on the original 

plan, which requires it to pay the 

premiums for participants whose 

guarantee amounts were transferred to 

the successor plan for each year during 

the 10-year period following the 

partition effective date. 

Notice of Partition Order 

In addition to the initial notice 

requirement under section 4233(a)(2) of 

ERISA, which applies to the plan 

sponsor, section 4233(f) imposes a 

notice requirement on PBGC. It states 

that not later than 14 days after the 

issuance of a partition order, PBGC must 

provide notice of the order to the 

Committee on Education and the 

Workforce of the House of 

Representatives; the Committee on 

Ways and Means of the House of 

Representatives; the Committee on 

Finance of the Senate; the Committee on 

Health, Education, Labor, and Pensions 

of the Senate; and any affected 

participants or beneficiaries. 

PBGC Request for Information 

On February 18, 2015, PBGC 

published in the Federal Register a 

request for information (RFI) to solicit 

information from interested parties on 

issues PBGC should consider in 

implementing sections 4231 and 4233 of 

ERISA, and received 20 comments in 

response to the RFI.11 PBGC has 

reviewed these comments and this 

interim final rule reflects a number of 

the suggestions contained in those 

comments.12

In general, commenters supported the 

implementation of section 4233 of 

ERISA and urged PBGC to issue 

guidance in a timely manner. Most 

commenters emphasized a need for 

clear guidance from PBGC on the types 

of information, documents, data, and 

actuarial projections needed to complete 

an application for partition. A number 

of commenters suggested that whenever 

possible and consistent with statutory 

requirements, the application should be 

based on information that plans are 

already required to prepare, or 

information that plans could easily 

develop. Consistent with these 

comments, PBGC believes that the 

interim final rule strikes an appropriate 

balance between providing clear and 

detailed guidance on the required 

content of an application for partition 

and not being unduly burdensome. 

A number of commenters requested 

guidance on PBGC’s evaluation criteria 

and standards for approval. PBGC 

considered these comments, but 

concluded that given the nature of the 

analysis and determinations required 

under section 4233(b) of ERISA with 

respect to both the plan applicant and 

PBGC, it is not able to provide guidance 

in those areas at this time. As a result, 

PBGC will review each application for 

partition on a case-by-case basis in 

accordance with the statutory criteria in 

section 4233(b). Such experience may 

enable PBGC to develop appropriate 

guidance in those areas in the future. 

There were also differing views on a 

number of other issues, including the 

required showing of solvency under 

ERISA section 4233, and whether there 

is a need for additional post-partition 

oversight by PBGC. As discussed below, 

PBGC interprets the term ‘‘remain 

solvent’’ to have the same meaning as 

‘‘avoid insolvency’’ in section 

305(e)(9)(D)(iv) of ERISA and the 

regulations thereunder. PBGC agrees 

with those commenters who suggested a 

need for post-partition oversight. In 

PBGC’s view, additional oversight is 

necessary to ensure compliance with the 

partition order, statutory post-partition 

obligations of the original plan, and 

proper stewardship of PBGC financial 

assistance provided to the successor 

plan. A more detailed discussion of the 

regulatory changes and the RFI 

comments follows. 

Regulatory Changes 

Overview 

To implement MPRA’s changes to 

section 4233 of ERISA, PBGC is adding 

a new part 4233, Partitions of Eligible 

Multiemployer Plans, to its regulations. 

Part 4233 provides guidance to 

multiemployer plan sponsors on the 

process for submitting an application for 

partition, the information required to be 

included in an application, notice 

requirements under section 4233(a)(2), 

including the form and manner of the 

notice, the notification process for PBGC 

decisions on applications for partition, 

the content of a partition order, and the 

scope of PBGC’s continuing jurisdiction 

under a partition order. 

Section-by-Section Discussion 

Section 4233.1 of the regulation 

describes the purpose and scope of part 

4233, which is to prescribe application 

and notice requirements for partition 

under section 4233 of ERISA. The 

procedures set forth in the regulation 

represent the exclusive means by which 

PBGC will review an application for 

partition under section 4233 of ERISA. 

Section 4233.2 of the regulation 

defines key terms used in the regulation. 

The statute uses the terms ‘‘eligible 

multiemployer plan,’’ the ‘‘eligible 

multiemployer plan prior to the 

partition,’’ and the ‘‘plan that was 

partitioned,’’ to refer to the 

multiemployer plan that is the subject of 

the partition application under section 

4233(a) of ERISA. To avoid confusion, 

the regulation uses the term ‘‘original 

plan’’ to refer to the eligible 

multiemployer plan under section 

4233(b) of ERISA, and ‘‘successor plan’’ 

to refer to the plan created by the 


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13PBGC is not defining the Participant and Plan 

Sponsor Advocate’s consultative role in 

determining if the plan sponsor has taken all 

reasonable measures, but will let that role evolve on 

a case-by-case basis. 

partition order under section 4233(d)(1) 

of ERISA. 

The term ‘‘successor plan benefit’’ is 

the portion of the accrued nonforfeitable 

monthly benefit which would be 

guaranteed under section 4022A as of 

the effective date of the partition, 

calculated under the terms of the 

original plan without reflecting any 

changes related to a benefit suspension 

under section 305(e)(9) of ERISA. 

Because the payment of a successor plan 

benefit from a plan receiving financial 

assistance is the payment of a 

guaranteed benefit under title IV of 

ERISA, the definition of successor plan 

benefit makes clear that the payment of 

such benefits is subject to the 

limitations and conditions contained in 

sections 4022A(a)–(f) of ERISA. 

The term ‘‘residual benefit’’ is the 

monthly benefit payable from the 

original plan to a participant or 

beneficiary whose benefit was 

transferred to a successor plan pursuant 

to a partition order. The residual benefit 

is the difference between the monthly 

benefit defined in section 4233(e)(1)(A) 

of ERISA (i.e., the monthly benefit that 

would be paid under the terms of the 

plan after taking into account benefit 

suspensions and any plan amendments 

following the effective date of the 

partition) and the successor plan 

benefit. The residual benefit is not 

subject to a separate guarantee under 

section 4022A of ERISA. 

The term ‘‘remain solvent’’ has the 

same meaning as ‘‘avoid insolvency’’ in 

section 305(e)(9)(D)(iv) of ERISA, and is 

determined in the same manner and 

using the same methodology as is 

required under section 305(e)(9) and the 

Treasury regulations thereunder. This is 

based on the requirement under MPRA 

that Treasury make a finding that a plan 

is reasonably estimated to avoid 

insolvency taking into account both 

suspension and partition in the case of 

a plan that requires both to avoid 

insolvency. 

Application Requirements 

Section 4233.3 of the regulation 

provides general information on the 

application filing requirements, 

including the method of filing, who may 

file, and where to file an application for 

partition under section 4233 of ERISA. 

Section 4233.4 of the regulation 

summarizes the information needed for 

PBGC to make a determination on 

whether an application is complete. It 

states that an application will not be 

considered complete unless the 

application includes the information 

specified in § 4233.5 (plan information), 

§ 4233.6 (partition information), 

§ 4233.7 (actuarial and financial 

information); § 4233.8 (participant 

census data), and § 4233.9 (financial 

assistance information). It also states 

that PBGC may require additional 

information it deems necessary to 

review an application, including 

information needed to calculate or 

verify the amount of financial assistance 

that would be necessary for a partition. 

Finally, section 4233.4 of the regulation 

also imposes an affirmative obligation 

on the plan sponsor to promptly notify 

PBGC in writing if the plan sponsor 

discovers that any material fact or 

representation contained in or relating 

to an application for partition, or in any 

supporting document, is no longer 

accurate, or has been omitted. 

Section 4233.5 of the regulation 

identifies the various categories of planrelated information required for an 

application to be complete, such as 

formal plan documents, trust 

agreements, summary plan descriptions, 

summaries of material modifications, 

rehabilitation plans, Forms 5500, a 

current listing of employers who have 

an obligation to contribute to the plan, 

and the approximate number of 

participants for whom each employer is 

currently making contributions. PBGC 

expects that most, if not all, of the 

information required under this 

subsection should be readily available 

and accessible by plan sponsors, an 

issue also identified by several 

commenters. 

Section 4233.6 of the regulation 

identifies information needed to 

evaluate the partition as proposed by 

the plan sponsor, such as the proposed 

structure, effective date, and a detailed 

description of any larger integrated 

transaction of which the proposed 

partition is a part (including, but not 

limited to, an application for suspension 

of benefits under section 305(e)(9)(G), or 

a merger under section 4231 of ERISA). 

If applicable, it also requires the plan 

sponsor to submit a copy of its 

application for suspension of benefits 

under section 305(e)(9)(G) of ERISA 

(including all attachments and exhibits). 

In addition, consistent with section 

4233(b)(2) of ERISA, the regulation 

requires the plan sponsor to provide a 

detailed description of all measures the 

plan sponsor has taken (or is taking) to 

avoid insolvency, as well as those 

measures the plan sponsor considered 

taking but did not take, including the 

factor(s) the plan sponsor considered in 

making these determinations.13

Finally, without limiting PBGC’s 

ability to determine the final structure 

and amounts involved in a partition, 

§ 4233.6 requires the plan sponsor to 

provide a detailed description of the 

estimated minimum amount of 

guaranteed benefit amounts the plan 

sponsor proposes to transfer in a 

partition, including: 

• The estimated number of 

participants and beneficiaries (and, if 

applicable, alternate payees) whose 

benefits (or any portion thereof) would 

be transferred, including the number of 

retirees receiving payments (if any), 

terminated vested participants (if any), 

and active participants (if any). 

• All supporting data, calculations, 

assumptions, and methods used to 

determine the estimated minimum 

amount of benefit liabilities. 

• If applicable, a description of any 

classifications or specific group(s) of 

participants and beneficiaries whose 

benefits the plan sponsor proposes to 

transfer, and the plan sponsor’s 

rationale or basis for selecting those 

classifications or groups. 

Section 4233.7 of the regulation 

identifies actuarial and financial 

information requirements. The first two 

information requirements relate to plan 

actuarial reports and an actuarial 

certification, which should ordinarily be 

within the possession of the plan 

sponsor or plan actuary. Sections 

4233.7(a)(3)–(8) of the regulation require 

the submission of certain actuarial and 

financial information specific to the 

proposed partition, which are necessary 

for PBGC to evaluate whether a partition 

is necessary for the plan to remain 

solvent. 

Section 4233.8 of the regulation 

identifies the types of participant census 

data to include with an application for 

partition. 

Section 4233.9 of the regulation 

requires the submission of certain 

information relevant to an application 

for financial assistance. 

Initial Review Process 

Section 4233.10 of the regulation 

prescribes an initial review process for 

the purpose of determining whether an 

application is complete under section 

4233(a)(1) of ERISA. An application will 

not be deemed complete until PBGC has 

made an initial determination under the 

regulation. One of the RFI commenters 

noted that it would be helpful if 

guidance called for the trustees to be 

notified at the time an application is 

complete. Consistent with that 

comment, § 4233.10(c) provides that 

upon making a determination that an 

application is complete, PBGC will 

issue a written notice to the plan 


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14As noted above, section 4233(b) sets forth five 

statutory conditions that must be satisfied before 

PBGC may order a partition. PBGC will review each 

application for partition on a case-by-case basis in 

accordance with the statutory criteria in section 

4233(b). PBGC’s determination under section 

4233(b)(2) will be made in consultation with the 

Participant and Plan Sponsor Advocate. 

sponsor. Similarly, if PBGC determines 

that an application is incomplete, it will 

issue a written notice to the plan 

sponsor describing the information 

missing from the application. 

Because PBGC’s determination on 

whether an application is complete 

marks the beginning of the 270-day 

statutory review period under section 

4233(a)(1) of ERISA and the 30-day 

notice period under section 4233(a)(2), 

§ 4233.10(c) provides that the date of 

PBGC’s written notice to a plan sponsor 

that an application is complete will 

mark the beginning of PBGC’s 270-day 

review period under section 4233(a)(1) 

of ERISA, and the plan sponsor’s 30-day 

notice period under section 4233(a)(2) 

of ERISA. 

Section 4233.10(d) of the regulation 

provides that for a plan sponsor that is 

coordinating applications for partition 

and suspension of benefits, an initial 

determination that a partition 

application is complete will be 

conditioned on filing an application for 

benefit suspensions with Treasury 

within 30 days after receipt of written 

notice of the determination. Because a 

multiemployer plan must suspend 

benefits to the maximum extent possible 

to be eligible for a partition, the effect 

of a suspension on the plan is integral 

to PBGC’s evaluation of the partition. 

Moreover, this rule will ensure that 

participants and other interested parties 

receive notice of the plan’s proposed 

suspension, which must be given 

concurrently with an application for 

suspension, in advance of or at the same 

time as they receive notice of an 

application for partition, assisting in 

their understanding of the integrated 

transaction. Section 4233.13 facilitates 

the provision of a combined notice of 

application for benefit suspensions and 

partition. A copy of the completed 

application for benefit suspensions must 

be provided to PBGC under § 4233.6. 

Finally, recognizing the importance of 

early PBGC engagement on partitions, 

§ 4233.10(e) states that the initial review 

process is not intended to preclude a 

plan sponsor from contacting PBGC on 

an informal basis to discuss a potential 

partition application. Allowing for such 

discussions in advance of an application 

for partition is consistent with a number 

of the RFI comments. For example, in 

discussing the difficulties faced by 

severely distressed plans that will 

require both a partition and maximum 

benefit suspensions to remain solvent, 

one commenter noted that in light of the 

time and costs involved in the benefit 

suspension process, it is not in the 

interests of anyone involved for trustees 

to apply for a suspension without 

preliminary feedback from PBGC on the 

feasibility of partition. 

Similarly, another commenter noted 

that guidance should encourage plans to 

contact PBGC before making any 

substantive decisions on how to 

approach a potential partition 

application. Given the many 

complexities and uncertainties involved 

in a partition, including the fact that 

PBGC’s authority to order a partition 

will depend, in part, on whether the 

proposed partition would impair 

PBGC’s ability to meet existing financial 

assistance obligations to other plans, 

PBGC agrees with these comments and 

encourages plans to contact PBGC and 

engage in informal discussions on these 

and other issues before making a formal 

application. 

Notice Requirements 

Section 4233.11 describes the timing 

requirements applicable to furnishing 

the notice to interested parties under 

section 4233(b) of ERISA, and the 

information that must be included in 

the notice. Section 4233.11(a) of the 

regulation requires the plan sponsor to 

send the notice to interested parties not 

later than 30 days after receipt of a 

determination under § 4233.10(c), and 

provides a cross-reference to filing rules 

in PBGC’s regulation on Filing, 

Issuance, Computation of Time, and 

Record Retention (29 CFR part 4000). 

Section 4233.11(b) of the regulation 

prescribes content requirements for the 

notice of application for partition. The 

information required to be included in 

the notice is necessary to ensure that it 

provides adequate notice to interested 

parties on the meaning of a partition; 

the condition of the plan; and the effect 

of a partition on the plan, participants 

and beneficiaries, the plan sponsor, and 

contributing employers. In addition, the 

notice must include contact information 

for the plan sponsor, PBGC, and the 

Participant and Plan Sponsor Advocate. 

PBGC is providing model notices that 

may be used by a plan sponsor. The 

model notices, which can be found in 

Appendix A of the regulation, may be 

used or adapted by plan sponsors to 

meet the notice requirements under 

section 4233(a)(2) of ERISA. Use of the 

model notices is not required, but will 

be deemed to satisfy the requirements of 

section 4233(a)(2) of ERISA and this 

part. PBGC specifically requests 

comments on the form and content of 

the model notices, including what, if 

any, additional information should be 

included in the model notices. 

Determination Process 

Section 4233.12 of the regulation 

describes the timing and manner in 

which PBGC will notify a plan sponsor 

of PBGC’s decision on an application for 

partition. As noted above in the 

discussion of the initial review process, 

PBGC will approve or deny an 

application in accordance with the 

standards set forth in section 4233(b) of 

ERISA within 270 days after issuing 

notice to the plan sponsor of the 

completed application under 

§ 4233.10(c).14 If PBGC denies the 

application, PBGC’s written decision 

will state the reason(s) for the denial. If 

PBGC approves the application, PBGC 

will issue a partition order in 

accordance with § 4233.14 and section 

4233(c) of ERISA. The decision to 

approve or deny an application for 

partition under section 4233 of ERISA is 

within PBGC’s discretion, and is a final 

agency action not subject to PBGC’s 

rules for reconsideration or 

administrative appeal. 

Section 4233.12(c) describes an 

optional conditional determination 

process for plan sponsors who file 

applications for partition and a 

suspension of benefits. This provision is 

in response to those commenters who 

urged PBGC to create a conditional, or 

accelerated, approval process. With 

respect to this issue, one commenter 

noted that a multiemployer plan that 

needs a partition and suspension to 

become solvent should not have to go 

through a suspension of benefits vote by 

participants only to have its application 

for partition denied by PBGC, and 

consequently have to inform its 

participants that although they voted for 

the suspension of benefits, the plan 

cannot proceed with the suspension 

because PBGC denied the application 

for partition. 

Similarly, noting that the suspension 

process is likely to be long and costly, 

another commenter stated that because 

an approved suspension cannot be 

implemented before the effective date of 

the related partition, and because the 

magnitude of any needed partition 

typically increases with time, guidance 

(and any related internal procedures) 

should permit PBGC to issue a partition 

order prior to, but conditioned upon 

approval and implementation of, the 

suspension. 

Consistent with these and other 

comments, § 4233.12(c) provides that, at 

the request of a plan sponsor, PBGC 

may, in its discretion, issue a 


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15Section 4233(e)(1) requires the original plan to 

pay a monthly benefit for each month in which 

such benefit is in pay status following the effective 

date of the partition in an amount equal to the 

excess of the monthly benefit that would be paid 

to such participant or beneficiary for such month 

under the terms of the plan (taking into account 

benefit suspensions under section 305(e)(9) and any 

plan amendments following the effective date of 

such partition) if the partition had not occurred, 

over the monthly benefit of such participant or 

beneficiary which is guaranteed under section 

4022A. 

preliminary approval of an application 

conditioned on Treasury’s final 

authorization to suspend benefits under 

section 305(e)(9) of ERISA. The 

regulation requires that the conditional 

approval include a written statement of 

preliminary findings, conclusions, and 

conditions. A partition will only 

become effective, however, upon 

satisfaction of the required conditions, 

and the issuance of an order of partition 

under section 4233(c) of ERISA. 

Coordinated Application Process for 

Partition and Benefit Suspension 

Section 4233.13 of the regulation 

provides special rules for plan sponsors 

who file applications for partition under 

section 4233 of ERISA with PBGC, and 

benefit suspensions under section 

305(e)(9) of ERISA with Treasury. 

Section 4233.13(a) describes the 

interagency coordination process 

applicable to such plans. 

In response to RFI comments urging 

PBGC and Treasury to allow for a 

combined notice of application for 

benefit suspension and partition, 

§ 4233.13(b) provides that a plan 

sponsor may combine the model notice 

provided at Appendix A with the model 

notice contained in Rev. Proc. 2015–34 

to satisfy the notice requirements of this 

part. 

Partition Order 

Section 4233.14 of the regulation 

describes the content of a PBGC 

partition order. It provides that the 

partition order will describe the 

liabilities to be transferred to the 

successor plan, and the manner in 

which financial assistance will be 

provided to the successor plan by PBGC. 

Section 4233.14(a) states that the 

partition order shall set forth PBGC’s 

findings and conclusions on the 

application for partition, the effective 

date of partition, the obligations and 

responsibilities of the plan sponsor of 

the original plan and the successor plan, 

and such other information as PBGC 

may deem appropriate. 

Section 4233.14(b) provides that the 

partition order will set forth the terms 

and conditions of the partition, and will 

incorporate by reference the applicable 

requirements under sections 4233(d) 

and 4233(e) of ERISA. Finally, 

§ 4233.14(b) requires that the plan 

sponsor of the original plan and the 

successor plan amend the original plan 

and successor plan, respectively, to 

reflect the benefits payable to 

participants and beneficiaries resulting 

from the partition order. While the 

regulation does not require a plan 

sponsor to submit a draft amendment to 

the original plan or a draft successor 

plan document with an application for 

partition, PBGC will require the 

submission of these and other related 

documents pursuant to § 4233.4(b) 

before it will issue a partition order. 

Nature and Operation of Successor Plan 

Section 4233.15 of the regulation 

describes the nature and operation of 

the successor plan created by the 

partition order. Section 4233(d)(1) of 

ERISA states that the plan created by the 

partition order is a successor plan to 

which section 4022A of ERISA applies. 

The statutory cross-reference to section 

4022A of ERISA makes clear that the 

portion of a participant’s or 

beneficiary’s benefit transferred to a 

successor plan is subject to and limited 

by section 4022A of ERISA. The 

aggregate amount of benefits subject to 

transfer is further limited by section 

4233(c) of ERISA, which states that 

PBGC’s partition order shall provide for 

a transfer of the ‘‘minimum amount of 

the [original] plan’s liabilities necessary 

for the [original] plan to remain 

solvent.’’ The statutory reference to 

successor plan status under section 

4233(d)(1) is relevant under title IV for 

purposes of coverage determinations 

under section 4021 of ERISA, and for 

determining the period of time for 

which a benefit or a benefit increase has 

been in effect under section 4022A(b)(1) 

of ERISA. 

Consistent with the statute, 

§ 4233.15(a) of the regulation provides 

that the plan created by the partition 

order is a successor plan to which 

section 4022A applies. Although the 

statute does not reference section 4245 

of ERISA or the solvency of the 

successor plan, § 4233.15(a) also states 

that the successor plan is an insolvent 

plan under section 4245 of ERISA. A 

successor plan is insolvent as of the 

effective date of a partition order 

because the order will provide for a 

transfer of guaranteed benefit amounts 

(the minimum amount of the original 

plan’s liabilities necessary for it to 

remain solvent) but no corresponding 

transfer of assets. Therefore, as of the 

effective date of the partition order, the 

successor plan will be insolvent within 

the meaning of section 4245 of ERISA 

because it will not have sufficient 

available resources to pay benefits 

under the plan when due for the plan 

year. The guaranteed benefit amounts 

transferred to the successor plan will be 

paid with PBGC financial assistance in 

an amount sufficient to enable the plan 

to pay such benefits under section 4261 

of ERISA. 

Section 4233.15(b) states that the 

successor plan is also treated as a 

terminated multiemployer plan to 

which section 4041A(d) of ERISA 

applies because there will be no 

contributing employers with an 

obligation to contribute to the successor 

plan as of the effective date of the 

partition order. The treatment of the 

successor plan as a terminated plan 

under section 4041A(a)(2), however, is 

not taken into account for purposes of 

determining withdrawal liability of any 

contributing employer to the original 

plan. Under section 4233(d)(3) of 

ERISA, in the event an employer 

withdraws from the original plan within 

10 years following the effective date of 

the partition order, withdrawal liability 

shall be computed under section 4201 

with respect to both the original plan 

and the plan created by the partition 

order. 

Consistent with section 4233(d)(2) of 

ERISA, § 4233.15(c) provides that the 

plan sponsor of an eligible 

multiemployer plan prior to the 

partition and the administrator of such 

plan shall be the plan sponsor and the 

administrator, respectively, of the 

successor plan. PBGC retains the right to 

remove and replace the plan sponsor of 

the successor plan pursuant to section 

4042(b)(2) of ERISA. 

Coordination of Benefits Under Original 

Plan and Successor Plan 

Section 4233.16 of the regulation 

describes the relationship and 

interaction between the residual benefit 

and the successor plan benefit, and the 

treatment of such benefits under section 

4022A of ERISA. Section 4233.16(a) 

provides that subject to the limitations 

contained in section 4022A of ERISA, 

the only benefits payable under a 

successor plan are successor plan 

benefits as defined in § 4233.2. While 

the only benefits payable under a 

successor plan are successor plan 

benefits, which are subject to the 

limitations and conditions contained in 

section 4022A, participants and 

beneficiaries whose guaranteed benefit 

amounts are transferred to a successor 

plan will also generally retain a right to 

receive a residual benefit under the 

original plan pursuant to section 

4233(e)(1) of ERISA.15 Section 4233.2 of 

the regulation defines the term ‘‘residual 


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16Participant A’s residual benefit of $89.38 is the 

portion of Participant A’s monthly benefit (taking 

into account benefit suspensions) that is not 

transferred to the successor plan as part of the 

guarantee amount payable by PBGC. As such, it 

would not be subject to a separate guarantee under 

section 4022A of ERISA. 

benefit’’ to mean the difference between 

the monthly benefit under section 

4233(e)(1)(A) of ERISA and the 

successor plan benefit. The following 

example illustrates the benefit payment 

responsibilities of an original plan and 

a successor plan in a partition: 

Assume Plan X has $200 million in 

accrued liabilities and $75 million in 

assets. Annual benefit payments total 

$15 million under the Plan. Plan X is 

projected to become insolvent within 10 

years. The actuary for Plan X advises the 

Board of Trustees of Plan X that 

maximum benefit suspensions under 

section 305(e)(9) of ERISA would reduce 

liabilities to $130 million and reduce 

benefit payments in the years following 

a partition to $10 million per year. 

The actuary for Plan X estimates that 

a partition under section 4233 of ERISA 

transferring $50 million of guaranteeliabilities payable by PBGC and 

corresponding benefit payments of $4 

million per year to a successor plan, in 

combination with maximum benefit 

suspensions, would enable Plan X to 

avoid insolvency within the meaning of 

section 4245. PBGC financial assistance 

payable to the successor plan would 

cover $4 million in annual guaranteed 

payments under the successor plan. 

Plan X would pay a total of $6 million 

in benefits in the year following 

partition, consisting of— 

• The additional residual benefit 

amounts necessary to raise the benefit 

level for participants and beneficiaries 

with benefits under the successor plan 

to the same amount they would have 

received under Plan X if the partition 

had not occurred, plus 

• Benefit payments for the 

participants and beneficiaries whose 

benefits were not transferred to the 

successor plan. 

Assume that before the partition, 

Participant A, a retired participant with 

25 years of service, received a Plan X 

benefit of $1,500 per month at normal 

retirement age payable as a single life 

annuity. Plan X proposes to transfer the 

guarantee portion of Participant A’s 

benefit to the successor plan. Since 

Participant A’s monthly accrual rate 

exceeds $44 ($1,500 ÷ 25 = $60), the 

guarantee amount (applying the 

guarantee formula under section 

4022A(c)) is $893.75 ($35.75 × 25 years 

of service = $893.75). If maximum 

benefit suspensions are approved, 

Participant A’s benefit would be 

reduced to 110 percent of his monthly 

guaranteed benefit amount (Participant 

A is not protected by the age limitations 

or the limitations on suspension of 

benefits based on disability under 

section 305(e)(9)(D) of ERISA). Upon the 

effective date of the partition, 

Participant A would receive a PBGCguaranteed monthly benefit of $893.75 

from the successor plan (the successor 

plan benefit), funded by PBGC financial 

assistance, and an $89.38 monthly 

residual benefit funded by Plan X.16

Section 4233.16(c) of the regulation 

provides that when a participant’s or 

beneficiary’s benefit is partially or 

wholly transferred to a successor plan, 

the PBGC guarantee applicable to such 

benefit is transferred to, and becomes 

payable under, the successor plan. The 

benefit remaining in the original plan as 

of the effective date of the partition (the 

residual benefit), if any, is not subject to 

a separate guarantee, and any increase 

in the PBGC guarantee amount payable 

under the original plan will arise solely, 

if at all, due to an increase in the 

accrued benefit under a plan 

amendment following the effective date 

of the partition, or an additional accrual 

attributable to service after the effective 

date of the partition. 

Section 4233.16(d) provides that 

subject to the conditions contained in 

section 4261 of ERISA, PBGC shall 

provide financial assistance to the 

successor plan in an amount sufficient 

to enable the successor plan to pay only 

the portion of the PBGC-guaranteed 

benefits transferred to the successor 

plan pursuant to the partition order, and 

reasonable and necessary administrative 

expenses if approved by PBGC. The 

receipt of benefits under a 

multiemployer plan receiving financial 

assistance from PBGC shall be 

considered the receipt of amounts from 

PBGC of guaranteed benefits. 

Finally, section 4233.16(e) provides 

that the plan sponsors of an original 

plan and a successor plan may, but are 

not required to, pay monthly benefits 

payable under the original plan and 

successor plan, respectively, in a single 

monthly payment pursuant to a written 

cost sharing or expense allocation 

agreement between the plans. 

Continuing Jurisdiction 

Section 4233.17 of the regulation 

describes PBGC’s continuing 

jurisdiction over the original plan and 

the successor plan. As noted above in 

the discussion of the RFI comments, 

while there were differing views on the 

need for additional post-partition 

oversight by PBGC to ensure compliance 

with MPRA’s post-partition 

requirements, PBGC has determined 

that additional oversight is necessary to 

ensure compliance with the partition 

order, statutory post-partition payment 

obligations, and proper stewardship of 

PBGC financial assistance. Consistent 

with this view, § 4233.16(a) provides 

that PBGC will continue to have 

jurisdiction over the original plan and 

the successor plan to carry out the 

purposes, terms, and conditions of the 

partition order, section 4233 of ERISA, 

and the regulations thereunder. Section 

4233.16(b) states that PBGC may, upon 

notice to the plan sponsor, make 

changes to the partition order in 

response to changed circumstances 

consistent with section 4233 of ERISA 

and Part 4233. 

Request for Comments 

In addition to the specific requests for 

comments identified above, PBGC 

encourages all interested parties to 

submit their comments, suggestions, 

and views concerning the provisions of 

this interim final rule, including the 

model notices. In particular, PBGC is 

interested in any area in which 

additional guidance may be needed. 

Applicability 

The amendments in this interim final 

rule are applicable to applications for 

partition submitted to PBGC on or after 

June 19, 2015. 

Compliance With Rulemaking 

Guidelines 

Executive Orders 12866 ‘‘Regulatory 

Planning and Review’’ and 13563 

‘‘Improving Regulation and Regulatory 

Review’’ 

Having determined that this 

rulemaking is a ‘‘significant regulatory 

action’’ under Executive Order 12866, 

the Office of Management and Budget 

has reviewed this proposed rule under 

Executive Order 12866. 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. Executive 

Orders 12866 and 13563 require a 

comprehensive regulatory impact 

analysis be performed for any 

economically significant regulatory 

action, defined as an action that would 

result in an annual effect of $100 


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17The OMB control number will be activated 

upon publication of this interim final rule. OMB 

approval will expire six months after publication. 

million or more on the national 

economy or which would have other 

substantial impacts. 

Pursuant to section 1(b)(1) of 

Executive Order 12866 (as amended by 

Executive Order 13422), PBGC has 

determined that regulatory action is 

required in this area. Principally, this 

regulatory action is necessary to 

implement the application and notice 

requirements under section 4233 of 

ERISA as amended and restated by 

MPRA. In accordance with OMB 

Circular A–4, PBGC also has examined 

the economic and policy implications of 

this interim final rule and has 

concluded that the action’s benefits 

justify its costs. 

Under Section 3(f)(1) of Executive 

Order 12866, a regulatory action is 

economically significant if ‘‘it is likely 

to result in a rule that may . . . [h]ave 

an annual effect on the economy of $100 

million or more or adversely affect in a 

material way the economy, a sector of 

the economy, productivity, competition, 

jobs, the environment, public health or 

safety, or State, local, or tribal 

governments or communities.’’ OMB 

has determined that this interim final 

rule does not cross the $100 million 

threshold for economic significance and 

is not otherwise economically 

significant. Most of the economic effect 

relating to partitions will be attributable 

to benefit suspensions. 

Based on a review of financial 

resources available for partition, PBGC 

expects that fewer than 20 plans would 

be approved for partition over the next 

three years (about six plans per year), 

and that the total financial assistance 

PBGC will provide to those plans will 

be less than $60 million per year. 

Administrative Procedure Act 

The Administrative Procedure Act (5 

U.S.C. 553(b)) provides that notice and 

comment requirements do not apply 

when an agency, for good cause, finds 

that they are impracticable, 

unnecessary, or contrary to the public 

interest. MPRA was signed into law on 

December 16, 2014, and with respect to 

the amendments to section 4233 of 

ERISA, is effective for plan years 

beginning after December 31, 2014. 

MPRA did not impose a deadline to 

issue regulations under section 4233 of 

ERISA. However, as explained above, 

the partition rule under section 4233 is 

inextricably linked to the benefit 

suspension rule under section 305(e)(9) 

of ERISA, which requires the Treasury 

Secretary, in consultation with PBGC 

and the Secretary of Labor, to publish 

appropriate guidance not later than 180 

days after the date of the enactment of 

MPRA. While neither section 4233 nor 

section 305(e)(9) expressly requires a 

plan sponsor to file concurrent 

applications for partition and benefit 

suspensions, the statutory provisions 

were designed to act in tandem. 

Under section 305(e)(9)(D)(v) of 

ERISA, in any case in which a 

suspension of benefits with respect to a 

plan is made in combination with a 

partition of the plan under section 4233 

of ERISA, the suspension of benefits 

may not take effect prior to the effective 

date of such partition. In other words, 

for a plan that requires both benefit 

suspensions and partition to remain 

solvent, the benefit suspension cannot 

take effect prior to the effective date of 

the partition. 

Similarly, the actuarial certification 

under section 305(e)(9)(C)(i) requires a 

plan actuary to take into account the 

proposed suspensions of benefits (and if 

applicable, a proposed partition of the 

plan under section 4233 of ERISA), for 

purposes of certifying that a plan is 

projected to avoid insolvency within the 

meaning of section 4245 of ERISA. 

Finally, section 305(e)(9)(D)(iv) of 

ERISA provides that any suspensions of 

benefits, in the aggregate (and, if 

applicable, considered in combination 

with a partition of the plan under 

section 4233 of ERISA), shall be 

reasonably estimated to achieve, but not 

materially exceed, the level that is 

necessary to avoid insolvency. 

Most plans that will require a 

partition will also require a benefit 

suspension. The longer the delay, the 

more expensive the partition and the 

less likely that PBGC will be able to 

afford to provide assistance, resulting in 

greater harm to the public and the 

pension insurance system. 

Accordingly, because regulatory 

guidance is required to implement 

section 4233, including the procedure 

for the plan sponsor to submit an 

application for partition and to provide 

notice to participants and beneficiaries, 

and because section 4233 is inextricably 

linked to the suspension of benefit rules 

under section 305(e)(9), which requires 

Treasury to publish appropriate 

guidance not later than 180 days after 

the date of the enactment of MPRA, 

PBGC has determined that prior notice 

and comment through the issuance of a 

notice of proposed rulemaking is 

impracticable and that the public 

interest is best served by making this 

interim final rule effective on June 19, 

2015. However, PBGC is requesting 

comments on this interim final rule and 

may make changes to the interim final 

rule in response to those comments. 

For the same reasons, pursuant to 

section 553(d)(3) of the Administrative 

Procedure Act (5 U.S.C. 553(d)(3)), 

PBGC is making this rule effective upon 

publication. 

Regulatory Flexibility Act 

Because PBGC is not publishing a 

general notice of proposed rulemaking 

under 5 U.S.C. 553, the regulatory 

flexibility analysis requirements of the 

Regulatory Flexibility Act do not apply. 

Paperwork Reduction Act 

The information requirements under 

this interim final rule—information to 

be reported to PBGC and information to 

be disclosed to participants—have been 

approved by the OMB under the 

Paperwork Reduction Act (OMB control 

number 1212–xxxx).17

PBGC estimates that over the next 

three years about six plans per year will 

apply for partition and that the total 

annual burden of this information 

collection will be about 78 hours and 

$58,800. 

Comments on the information 

requirements under this interim final 

rule should be mailed to the Office of 

Information and Regulatory Affairs, 

Office of Management and Budget, 

Attention: Desk Officer for Pension 

Benefit Guaranty Corporation, via 

electronic mail at OIRA_DOCKET@

omb.eop.gov or by fax to (202) 395– 

6974. Comments may be submitted 

through August 18, 2015. Comments 

may address (among other things)— 

• Whether the collection of 

information is needed for the proper 

performance of PBGC’s functions and 

will have practical utility; 

• The accuracy of PBGC’s estimate of 

the burden of the proposed collection of 

information, including the validity of 

the methodology and assumptions used; 

• Enhancement of the quality, utility, 

and clarity of the information to be 

collected; and 

• Minimizing the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated, 

electronic, mechanical, or other 

technological collection techniques or 

other forms of information technology, 

e.g., permitting electronic submission of 

responses. 

List of Subjects in 29 CFR Part 4233 

Employee benefit plans, Pension 

insurance, Reporting and recordkeeping 

requirements. 

For the reasons given above, PBGC is 

amending 29 CFR chapter XL by adding 

part 4233 to read as follows: 


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35230 Federal Register / Vol. 80, No. 118 / Friday, June 19, 2015 / Rules and Regulations 

PART 4233—PARTITIONS OF 

ELIGIBLE MULTIEMPLOYER PLANS 

Sec. 

4233.1 Purpose and scope. 

4233.2 Definitions. 

4233.3 Application filing requirements. 

4233.4 Information to be filed. 

4233.5 Plan information. 

4233.6 Partition information. 

4233.7 Actuarial and financial information. 

4233.8 Participant census data. 

4233.9 Financial assistance information. 

4233.10 Initial review. 

4233.11 Notice of application for partition. 

4233.12 PBGC action on application for 

partition. 

4233.13 Coordinated application process 

for partition and benefit suspension. 

4233.14 Partition order. 

4233.15 Nature and operation of successor 

plan. 

4233.16 Coordination of benefits under 

original plan and successor plan. 

4233.17 Continuing jurisdiction. 

Appendix A to Part 4233—Model 

Notices 

Authority: 29 U.S.C. 1302(b)(3), 1413. 

§ 4233.1 Purpose and scope. 

The purpose of this part is to 

prescribe rules governing applications 

for partition under section 4233 of 

ERISA, and related notice requirements. 

§ 4233.2 Definitions. 

The following terms are defined in 

§ 4001.2 of this chapter: ERISA, IRS, 

multiemployer plan, PBGC, plan, and 

plan sponsor. In addition, the following 

terms are defined for purposes of this 

part: 

Advocate means the Participant and 

Plan Sponsor Advocate under section 

4004 of ERISA. 

Application for partition means a plan 

sponsor’s application for partition under 

section 4233 of ERISA and this part. 

Application for a suspension of 

benefits means a plan sponsor’s 

application for a suspension of benefits 

to the Secretary of the Treasury 

(Treasury) under section 305(e)(9)(G) of 

ERISA. 

Completed application means an 

application for partition for which 

PBGC has made a determination under 

§ 4233.10 that the application contains 

all required information and satisfies 

the requirements described in §§ 4233.4 

through 4233.9. 

Effective date of partition means the 

date upon which a partition is effective 

and which is set forth in a partition 

order. 

Financial assistance means financial 

assistance from PBGC under section 

4261 of ERISA. 

Insolvent has the same meaning as 

insolvent under section 4245(b) of 

ERISA. 

Interested party means, with respect 

to a plan— 

(1) Each participant in the plan; 

(2) Each beneficiary of a deceased 

participant; 

(3) Each alternate payee under an 

applicable qualified domestic relations 

order, as defined in section 206(d)(3) of 

ERISA; 

(4) Each employer that has an 

obligation to contribute under the plan; 

and 

(5) Each employee organization that 

currently has a collective bargaining 

agreement pursuant to which the plan is 

maintained. 

Original plan means an eligible 

multiemployer plan under 4233(b) of 

ERISA that is partitioned upon the 

issuance of a partition order under 

section 4233(c) of ERISA. 

Partition order means a formal PBGC 

order of partition under section 4233 of 

ERISA and § 4233.14. 

Proposed partition means a proposed 

partition as structured and described by 

the plan sponsor in an application for 

partition. 

Remain solvent has the same meaning 

as ‘‘avoid insolvency’’ in section 

305(e)(9)(D)(iv) of ERISA and the 

regulations thereunder, with respect to 

the determinations made by PBGC 

under sections 4233(b)(3) and 4233(c) of 

ERISA. 

Residual benefit means, with respect 

to a participant or beneficiary whose 

benefit was partially transferred to a 

successor plan pursuant to a partition 

order, the portion of the benefit payable 

under the original plan, the amount of 

which is equal to the difference between 

the benefit defined in section 

4233(e)(1)(A) of ERISA, and the 

successor plan benefit. The residual 

benefit as of the effective date of the 

partition is not subject to a separate 

guarantee under section 4022A of 

ERISA. 

Successor plan means the plan 

created by a partition order under 

section 4233(c) of ERISA. 

Successor plan benefit means, with 

respect to a participant or beneficiary 

whose benefit was wholly or partially 

transferred from an original plan to a 

successor plan, the portion of the 

accrued nonforfeitable monthly benefit 

which would be guaranteed under 

section 4022A as of the effective date of 

the partition, calculated under the terms 

of the original plan without reflecting 

any changes relating to a benefit 

suspension under section 305(e)(9) of 

ERISA. The payment of a successor plan 

benefit is subject to the limitations and 

conditions contained in sections 

4022A(a)–(f) of ERISA. 

§ 4233.3 Application filing requirements. 

(a) Method of filing. PBGC applies the 

rules in part 4000, subpart A of this 

chapter to determine permissible 

methods of filing with PBGC under this 

part, and the rules in part 4000, subpart 

D of this chapter to determine the 

computation of time. 

(b) Who may file. An application for 

partition under section 4233 of ERISA 

must be submitted by the plan sponsor. 

The application must be signed and 

dated by an authorized trustee who is a 

current member of the board of trustees, 

and must include the following 

statement under penalties of perjury: 

‘‘Under penalties of perjury, I declare 

that I have examined this application, 

including accompanying documents, 

and, to the best of my knowledge and 

belief, the application contains all the 

relevant facts relating to the application, 

and such facts are true, correct, and 

complete.’’ A stamped signature or 

faxed signature is not permitted. 

(c) Where to file. See § 4000.4 of this 

chapter for information on where to file. 

§ 4233.4 Information to be filed. 

(a) General. An application for 

partition must include the information 

specified in § 4233.5 (plan information), 

§ 4233.6 (partition information), 

§ 4233.7 (actuarial and financial 

information), § 4233.8 (participant 

census data), and § 4233.9 (financial 

assistance information). If any of the 

information is not included, the 

application will not be considered 

complete. 

(b) Additional information. (1) PBGC 

may require a plan sponsor to submit 

additional information necessary to 

make a determination on an application 

under this part and any information 

PBGC may need to calculate or verify 

the amount of financial assistance 

necessary for a partition. Any additional 

information must be submitted by the 

date specified in PBGC’s request. 

(2) PBGC may suspend the running of 

the 270-day review period (described in 

§ 4233.10) pending the submission of 

any additional information requested by 

PBGC, or upon the issuance of a 

conditional determination under 

§ 4233.12(c). 

(c) Duty to amend and supplement 

application. During any time in which 

an application is pending final action by 

PBGC, the plan sponsor must promptly 

notify PBGC in writing of any material 

fact or representation contained in or 

relating to the application, or in any 

supporting documents, that is no longer 

accurate, or any material fact or 

representation omitted from the 

application or supporting documents, 

that the plan sponsor discovers. 


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§ 4233.5 Plan information. 

An application for partition must 

include the following information with 

respect to the plan: 

(a) The name of the plan, Employer 

Identification Number (EIN), and threedigit Plan Number (PN). 

(b) The name, address, and telephone 

number of the plan sponsor and the 

plan sponsor’s duly authorized 

representative, if any. 

(c) The most recent trust agreement, 

including all amendments adopted 

since the last restatement. 

(d) The most recent plan document, 

including all amendments adopted 

since the last restatement. 

(e) The most recent summary plan 

description (SPD), and all summaries of 

material modification (SMM) issued 

since the effective date of the most 

recent SPD. 

(f) The most recent rehabilitation plan 

(or funding improvement plan, if 

applicable), including all subsequent 

amendments and updates, and the 

percentage of total contributions 

received under each schedule of the 

rehabilitation plan for the most recent 

plan year available. 

(g) A copy of the plan’s most recent 

IRS determination letter. 

(h) A copy of the plan’s most recent 

Form 5500 (Annual Report Form) and 

all schedules and attachments 

(including the audited financial 

statement). 

(i) A current listing of employers who 

have an obligation to contribute to the 

plan, and the approximate number of 

participants for whom each employer is 

currently making contributions. 

(j) A schedule of withdrawal liability 

payments collected in each of the most 

recent five plan years. 

§ 4233.6 Partition information. 

An application for partition must 

include the following information with 

respect to the proposed partition: 

(a) A detailed description of the 

proposed partition, including the 

proposed structure, proposed effective 

date, and any larger integrated 

transaction of which the proposed 

partition is a part (including, but not 

limited to, an application for suspension 

of benefits under section 305(e)(9)(G), or 

a merger under section 4231 of ERISA). 

(b) A narrative description of the 

events that led to the plan sponsor’s 

decision to submit an application for 

partition (and, if applicable, application 

for suspension of benefits). 

(c) A narrative description of 

significant risks and assumptions 

relating to the proposed partition and 

the projections provided in support of 

the application. 

(d) If applicable, a copy of the plan 

sponsor’s application for suspension of 

benefits (including all attachments and 

exhibits). If the plan sponsor intends to 

apply for a suspension of benefits with 

Treasury, but has not yet submitted an 

application to Treasury, a draft of the 

application may be filed, which must be 

supplemented by filing a copy of the 

completed application within the 

timeframe established in § 4233.10(d). 

(e) A detailed description of all 

measures the plan sponsor has taken (or 

is taking) to avoid insolvency, and any 

measures the plan sponsor considered 

taking but did not take, including the 

factor(s) the plan sponsor considered in 

making these determinations. Include 

all relevant documentation relating to 

the plan sponsor’s determination that it 

has taken (or is taking) measures to 

avoid insolvency. 

(f) A detailed description of the 

estimated benefit amounts the plan 

sponsor has determined are necessary to 

be partitioned for the plan to remain 

solvent, including the following 

information: 

(1) The estimated number of 

participants and beneficiaries whose 

benefits (or any portion thereof) would 

be transferred, including the number of 

retirees receiving payments (if any), 

terminated vested participants (if any), 

and active participants (if any). 

(2) Supporting data, calculations, 

assumptions, and a description of the 

methodology used to determine the 

estimated benefit amounts. 

(3) If applicable, a description of any 

classifications or specific group(s) of 

participants and beneficiaries whose 

benefits (or any portion thereof) the plan 

sponsor proposes to transfer, and the 

plan sponsor’s rationale or basis for 

selecting those classifications or groups. 

(g) A copy of the draft notice of 

application for partition described in 

§ 4233.11. 

§ 4233.7 Actuarial and financial 

information. 

(a) Required information. An 

application for partition must include 

the following plan actuarial and 

financial information: 

(1) A copy of the plan’s most recent 

actuarial report and copies of the 

actuarial reports for the two preceding 

plan years. 

(2) A copy of the plan actuary’s most 

recent certification of critical and 

declining status, including a detailed 

description of the assumptions used in 

the certification, the basis for the 

projection of future contributions, 

withdrawal liability payments, 

investment return assumptions, and any 

other assumption that may have a 

material effect on projections. 

(3) A detailed statement of the basis 

for the conclusion that the plan will not 

remain solvent without a partition and, 

if applicable, suspension of benefits, 

including supporting data, calculations, 

assumptions, and a description of the 

methodology. Include as an exhibit 

annual cash flow projections for the 

plan without partition (or suspension, if 

applicable) through the projected date of 

insolvency. Annual cash flow 

projections must reflect the following 

information: 

(i) Market value of assets as of the 

beginning of the year. 

(ii) Contributions and withdrawal 

liability payments. 

(iii) Benefit payments. 

(iv) Administrative expenses. 

(v) Market value of assets at year end. 

(4) A long-term projection reflecting 

reduced benefit disbursements at the 

PBGC-guarantee level after insolvency, 

and a statement of the present value of 

all future financial assistance without a 

partition (using the interest and 

mortality assumptions applicable to the 

valuation of plans terminated by mass 

withdrawal as specified in § 4281.13 of 

this chapter and other reasonable 

actuarial assumptions, including 

retirement age, form of benefit payment, 

and administrative expenses, certified 

by an enrolled actuary). 

(5) A detailed statement of the basis 

for the conclusion that the original plan 

will remain solvent if the application for 

partition, and, if applicable, the 

application for suspension of benefits, is 

granted, including supporting data, 

calculations, assumptions, and a 

description of the methodology, which 

must be consistent with section 

305(e)(9)(D)(iv) and the regulations 

thereunder (including any adjustment to 

the cash flows in the initial year to 

incorporate recent actual fund activity 

required to be included under that 

section). Annual cash flow projections 

for the original plan with partition (and 

suspension, if applicable) must be 

included as an exhibit and must reflect 

the following information: 

(i) Market value of assets as of the 

beginning of the year. 

(ii) Contributions and withdrawal 

liability payments. 

(iii) Benefit payments. 

(iv) Administrative expenses. 

(v) Market value of assets at year end. 

(6) If applicable, a copy of the plan 

actuary’s certification under section 

305(e)(9)(C)(i) of ERISA. 

(7) The plan’s projected insolvency 

date with benefit suspension alone (if 

applicable), including supporting data. 

(8) A long-term projection reflecting 

benefit disbursements from the 


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35232 Federal Register / Vol. 80, No. 118 / Friday, June 19, 2015 / Rules and Regulations 

successor plan, and a statement of the 

present value of all future financial 

assistance to be paid as a result of a 

partition (using the interest and 

mortality assumptions applicable to the 

valuation of plans terminated by mass 

withdrawal as specified in § 4281.13 of 

this chapter and other reasonable 

actuarial assumptions, including 

retirement age, form of benefit payment, 

and administrative expenses, certified 

by an enrolled actuary). 

(b) Additional projections. PBGC may 

ask the plan for additional projections 

based on assumptions that it specifies. 

(c) Actuarial calculations and 

assumptions. (1) General. All 

calculations required by this part must 

be performed by an enrolled actuary. 

(2) Assumptions. All calculations 

required by this part must be consistent 

with calculations used for purposes of 

an application for suspension of benefits 

under section 305(e)(9) of ERISA, and 

based on methods and assumptions 

each of which is reasonable (taking into 

account the experience of the plan and 

reasonable expectations), and which, in 

combination, offer the actuary’s best 

estimate of anticipated experience 

under the plan. Any change(s) in 

assumptions from the most recent 

actuarial valuation, and critical and 

declining status certification, must be 

disclosed and must be accompanied by 

a statement explaining the reason(s) for 

any change(s) in assumptions. 

(3) Updates. PBGC may, in its 

discretion, require updated calculations 

and representations based on the actual 

effective date of a partition, revised 

actuarial assumptions, or for other good 

cause. 

§ 4233.8 Participant census data. 

An application for partition must 

include a copy of the census data used 

for the projections described in 

§ 4233.7(a)(3) and (5), including: 

(a) Participant type (retiree, 

beneficiary, disabled, terminated vested, 

active, alternate payee). 

(b) Date of birth. 

(c) Credited service for guarantee 

calculation (i.e., number of years of 

participation). 

(d) Vested accrued monthly benefit 

before benefit suspension under section 

305(e)(9) of ERISA. 

(e) Vested accrued monthly benefit 

after benefit suspension under section 

305(e)(9) of ERISA. 

(f) Monthly benefit guaranteed by 

PBGC (determined under the terms of 

the original plan without respect to 

benefit suspensions). 

(g) Benefit commencement date (for 

participants in pay status and others for 

which the reported benefit is not 

payable at Normal Retirement Date). 

(h) For each participant in pay 

status— 

(1) Form of payment, and 

(2) Data relevant to the form of 

payment, including: 

(i) For a joint and survivor benefit, the 

beneficiary’s benefit amount (before and 

after suspension) and the beneficiary’s 

date of birth; 

(ii) For a Social Security level income 

benefit, the date of any change in the 

benefit amount, and the benefit amount 

after such change; 

(iii) For a 5-year certain or 10-year 

certain benefit (or similar benefit), the 

relevant defined period. 

(iv) For a form of payment not 

otherwise described in this section, the 

data necessary for the valuation of the 

form of payment, including the benefit 

amount before and after suspension. 

(i) If an actuarial increase for 

postponed retirement applies or if the 

form of annuity is a Social Security 

level income option, the monthly vested 

benefit payable at normal retirement age 

in normal form of annuity. 

§ 4233.9 Financial assistance information. 

(a) Required information. An 

application for partition must include 

the estimated amount of annual 

financial assistance requested from 

PBGC for the first year the plan receives 

financial assistance if partition is 

approved. 

(b) Additional information. PBGC may 

ask the plan for additional information 

in accordance with § 4233.4(b)(1). 

§ 4233.10 Initial review. 

(a) Determination on completed 

application. PBGC will make a 

determination on an application not 

later than 270 days after the date such 

application is deemed completed. 

(b) Incomplete application. If the 

application is incomplete, PBGC will 

issue a written notice to the plan 

sponsor describing the information 

missing from the application. 

(c) Complete application. Upon 

making a determination that an 

application is complete (i.e., the 

application includes all the information 

specified in §§ 4233.5 through 4233.9), 

PBGC will issue a written notice to the 

plan sponsor. The date of the written 

notice will mark the beginning of 

PBGC’s 270-day review period under 

section 4233(a)(1) of ERISA, and the 

plan sponsor’s 30-day notice period 

under 4233(a)(2) of ERISA. 

(d) Special rule for coordinated 

applications for partition and benefit 

suspension. For a plan requiring both 

partition and benefit suspensions to 

remain solvent, PBGC’s initial 

determination that a partition 

application is complete will be 

conditioned on the plan sponsor’s filing 

of an application for benefit suspensions 

with Treasury within 30 days after 

receiving written notice from PBGC 

under paragraph (c) of this section. Such 

a plan is permitted, but not required, to 

issue a combined notice under 

§ 4233.13(b). 

(e) Informal consultation. Nothing in 

this subsection precludes a plan sponsor 

from contacting PBGC on an informal 

basis to discuss a potential partition 

application. 

§ 4233.11 Notice of application for 

partition. 

(a) When to file. Not later than 30 days 

after receipt of the written notice 

described in § 4233.10(c) that an 

application for partition is complete, the 

plan sponsor must provide notice of 

such application to each interested 

party and PBGC, in accordance with the 

rules in part 4000, subpart B of this 

chapter. 

(b) Form of notice. The notice must be 

readable and written in a matter 

calculated to be understood by the 

average plan participant. The Model 

Notices in Appendix A to this part 

(when properly completed) are 

examples of notices meeting the 

requirements of this section. 

(c) Information required. A notice of 

completed application for partition 

must include the following information: 

(1) Identifying information. The name 

of the plan, the name, address, and 

phone number of the plan sponsor, the 

Employer Identification Number (EIN), 

and three-digit Plan Number (PN). 

(2) Relevant partition application 

dates. A brief statement that the plan 

sponsor has submitted an application 

for partition to PBGC, the date of the 

completed application under 

§ 4233.10(c), and a statement that PBGC 

must issue its decision not later than 

270 days after the date on which PBGC 

notified the plan sponsor that the 

application was complete. 

(3) Application for suspension of 

benefits. If applicable, a statement of 

whether the plan sponsor has submitted 

an application for suspension of benefits 

under section 305(e)(9)(G) of ERISA, 

and, if so, information on how to obtain 

a copy of the application and notice 

required by section 305(e)(9)(F) of 

ERISA. 

(4) Description of statutory partition 

provisions. A brief description of the 

requirements under section 4233 of 

ERISA, and other related statutory 

requirements, including: 


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(i) The interrelationship between the 

partition rules under section 4233 of 

ERISA and suspensions of benefits 

under section 305(e)(9) of ERISA (if 

applicable). 

(ii) The multiemployer guarantee 

under section 4022A of ERISA. 

(iii) The eligibility requirements for a 

partition under section 4233(b) of 

ERISA, including the Advocate 

consultation requirement. 

(5) Impact of partition on interested 

parties. A brief description of how the 

proposed partition may impact affected 

participants, beneficiaries, and alternate 

payees including: 

(i) A statement describing the benefit 

payment obligations of the original plan 

and the successor plan. 

(ii) A statement explaining that the 

Board of Trustees of the original plan 

will also administer the successor plan, 

but the successor plan will be funded 

solely by PBGC financial assistance 

payments. 

(6) Partition application contents 

summary. A brief summary of the 

content of the plan sponsor’s 

application for partition, including the 

following information: 

(i) The plan’s critical and declining 

status and projected insolvency date. 

(ii) A statement that the plan sponsor 

has taken (or is taking) all reasonable 

measures to avoid insolvency, including 

the maximum benefit suspensions 

under section 305(e)(9), if applicable. 

(iii) If known, a brief statement on the 

proposed total estimated amount and 

percentage of liabilities to be 

partitioned. 

(iv) If known, a brief statement 

summarizing the proposed class or 

classes of participants whose benefits 

would be partially or wholly transferred 

if the application for partition is 

granted, including a summary of the 

factors considered by the plan sponsor 

in preparing its application. 

(7) Contact information for plan 

sponsor. The name, address, and 

telephone number of the plan sponsor 

or other person designated by the plan 

sponsor to answer inquiries concerning 

the application for partition. 

(8) Contact information for PBGC. 

Multiemployer Program Division, PBGC, 

1200 K Street, NW., Washington, DC 

20005–4026, Multiemployerprogram@

pbgc.gov. 

(9) Contact information for 

Participant and Plan Sponsor Advocate. 

PBGC Participant and Plan Sponsor 

Advocate, 1200 K Street NW., 

Washington, DC 20005–4026, 

Advocate@pbgc.gov. 

(d) Model notice. The appendix to this 

section contains two model notices— 

one for plan sponsors that submit 

coordinated applications for partition 

with PBGC and for benefit suspensions 

with Treasury, and one for plans 

sponsors who apply for partition only. 

The model notices are intended to assist 

plan sponsors in discharging their 

notice obligations under section 

4233(a)(2) of ERISA and this part. Use 

of the model notices is not mandatory, 

but will be deemed to satisfy the 

requirements of section 4233(a)(2) of 

ERISA and this part. 

(e) Foreign languages. The plan 

sponsor of a plan that covers the 

numbers or percentages in § 2520.104b– 

10(e) of this title of participants literate 

only in the same non-English language 

must, for any notice to interested 

parties— 

(1) Include a prominent legend in that 

common non-English language advising 

them how to obtain assistance in 

understanding the notice; or 

(2) Provide the notice in that common 

non-English language to those interested 

parties literate only in that language. 

§ 4233.12 PBGC action on application for 

partition. 

(a) Review period. Except as provided 

in paragraph (c) of this section, PBGC 

will approve or deny an application for 

partition submitted to it under this part 

within 270 days after the date PBGC 

issued a notice to the plan sponsor of 

the completed application under 

§ 4233.10(c). 

(b) Determination on application. 

PBGC may approve or deny an 

application at its discretion. PBGC will 

notify the plan sponsor in writing of 

PBGC’s decision on an application. If 

PBGC denies the application, PBGC’s 

written decision will state the reason(s) 

for the denial. If PBGC approves the 

application, PBGC will issue a partition 

order under section 4233(c) of ERISA 

and § 4233.14. 

(c) Conditional determination on 

application. At the request of a plan 

sponsor, PBGC may, in its discretion, 

issue a preliminary approval of an 

application conditioned on Treasury 

issuing a final authorization to suspend 

under section 305(e)(9)(H)(vi) of ERISA 

and any other terms and conditions set 

forth in the conditional approval. The 

conditional approval will include a 

written statement of preliminary 

findings, conclusions, and conditions. 

The conditional approval is not a final 

agency action. The proposed partition 

will only become effective upon 

satisfaction of the required conditions, 

and the issuance of an order of partition 

under section 4233(c) of ERISA. 

(d) Final agency action. Except as 

provided in paragraph (c) of this 

section, PBGC’s decision on an 

application for partition under this 

section is a final agency action for 

purposes of judicial review under the 

Administrative Procedure Act (5 U.S.C. 

701 et seq.). 

§ 4233.13 Coordinated application process 

for partition and benefit suspension. 

(a) Interagency coordination. For a 

plan sponsor that has requested a 

conditional approval of a partition 

pursuant to § 4233.12(c), PBGC may 

render either a conditional approval or 

a final denial of the application on an 

expedited basis, provided that the plan 

sponsor has submitted a completed 

application to PBGC as prescribed by 

§ 4233.10. PBGC will consult with 

Treasury and the Department of Labor 

in the course of reviewing an 

application for partition. 

(1) If PBGC denies the application for 

partition, it will notify the plan sponsor 

in writing of PBGC’s decision in 

accordance with § 4233.12(b), and will 

notify Treasury to allow it to take 

appropriate action on the benefit 

suspension application. 

(2) If PBGC grants a conditional 

approval of partition, it will notify the 

plan sponsor in writing of PBGC’s 

decision in accordance with 

§ 4233.12(c), and will provide Treasury 

with a copy of PBGC’s decision along 

with PBGC’s record of the decision. 

(3) If Treasury does not issue the final 

authorization to suspend, PBGC’s 

preliminary and conditional approval 

under § 4233.12(c) will be null and 

void. 

(4) If Treasury issues a final 

authorization to suspend, PBGC will 

issue a final partition order under 

§ 4233.14 and section 4233(c) of ERISA. 

(b) Combined notice. A plan sponsor 

submitting an application for benefit 

suspensions under section 305(e)(9) of 

ERISA with Treasury, and a partition 

under section 4233 of ERISA with 

PBGC, may combine the PBGC model 

notice for coordinated applications 

provided at Appendix A with the 

Treasury model notice in Appendix A of 

Rev. Proc. 2015–34 in satisfaction of the 

notice requirement of this part. 

§ 4233.14 Partition order. 

(a) General Provisions. The partition 

order will describe the liabilities to be 

transferred to the successor plan under 

section 4233(c) of ERISA, and the 

manner in which financial assistance 

will be provided by PBGC under section 

4261 of ERISA. The partition order will 

also set forth PBGC’s findings and 

conclusions on an application for 

partition, the effective date of partition, 

the obligations and responsibilities of 

the plan sponsor to the original plan 


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and successor plan, and such other 

information as PBGC may deem 

appropriate. 

(b) Terms and conditions. The 

partition order will set forth the terms 

and conditions of the partition and will 

incorporate by reference the applicable 

requirements under sections 4233(d) 

and 4233(e) of ERISA. 

(1) The plan sponsors of the original 

plan and the successor plan must 

amend the original plan and successor 

plan, respectively, to reflect the benefits 

payable to participants and beneficiaries 

as a result of the partition order. 

(2) The plan sponsors of the original 

plan and successor plan must maintain 

a written record of the respective plans’ 

compliance with the terms of the 

partition order, section 4233 of ERISA, 

and this part. 

§ 4233.15 Nature and operation of 

successor plan. 

(a) Nature of plan. The plan created 

by the partition order is a successor plan 

to which section 4022A applies, and an 

insolvent plan under section 4245 of 

ERISA. 

(b) Treatment of plan. The successor 

plan will be treated as a terminated 

multiemployer plan to which section 

4041A(d) of ERISA applies because 

there are no contributing employers 

with an obligation to contribute within 

the meaning of section 4212 of ERISA as 

of the effective date of the partition. The 

treatment of the successor plan as a 

terminated plan under this paragraph 

will not be taken into account for 

purposes of determining the withdrawal 

liability of contributing employers to the 

original plan under sections 4201 and 

4233(d)(3) of ERISA. 

(c) Administration of plan. The plan 

sponsor of the original plan and the 

administrator of such plan will be the 

plan sponsor and the administrator, 

respectively, of the successor plan. 

PBGC will retain the right to remove 

and replace the plan sponsor of the 

successor plan pursuant to section 

4042(b)(2) of ERISA. 

§ 4233.16 Coordination of benefits under 

original plan and successor plan. 

(a) Successor plan benefits. Subject to 

the limitations contained in section 

4022A of ERISA, the only benefit 

amounts payable under a successor plan 

are successor plan benefits as defined in 

§ 4233.2. 

(b) Guarantee of successor plan 

benefit. When a participant’s or 

beneficiary’s benefit is partially or 

wholly transferred to a successor plan, 

the PBGC guarantee applicable to such 

benefit becomes payable under the 

successor plan. The benefit remaining in 

the original plan as of the effective date 

of the partition, if any, is not subject to 

a new guarantee, and any increase in the 

PBGC guarantee amount payable under 

the original plan will arise solely, if at 

all, due to an increase in the accrued 

benefit under a plan amendment 

following the effective date of the 

partition, or an additional accrual 

attributable to service after the effective 

date of the partition. 

(c) PBGC financial assistance. Subject 

to the conditions contained in section 

4261 of ERISA, PBGC will provide 

financial assistance to the successor 

plan in an amount sufficient to enable 

the successor plan to pay only the 

PBGC-guaranteed amount transferred to 

the successor plan pursuant to the 

partition order, and reasonable and 

necessary administrative expenses if 

approved by PBGC. The receipt of 

benefits payable under a successor plan 

receiving financial assistance from 

PBGC will be treated as the receipt of 

guaranteed benefits under section 

4022A. 

(d) Payment of monthly benefits. The 

plan sponsors of an original plan and a 

successor plan may, but are not required 

to, pay monthly benefits payable under 

the original plan and successor plan, 

respectively, in a single monthly 

payment pursuant to a written costsharing or expense allocation agreement 

between the plans. 

§ 4233.17 Continuing jurisdiction. 

(a) PBGC will continue to have 

jurisdiction over the original plan and 

the successor plan to carry out the 

purposes, terms, and conditions of the 

partition order, section 4233 of ERISA, 

and this part. 

(b) PBGC may, upon providing notice 

to the plan sponsor, make changes to the 

partition order in response to changed 

circumstances consistent with section 

4233 of ERISA and this part. 

Appendix A to Part 4233—Model 

Notices 

NOTICE OF APPLICATION FOR 

PARTITION FOR [INSERT PLAN NAME] 

[For plans filing an application for partition 

only] 

[Insert Date] 

This notice is to inform you that, on [insert 

Date], [insert Plan Sponsor’s Name] (‘‘Board 

of Trustees’’) filed a complete application 

with the Pension Benefit Guaranty 

Corporation (‘‘PBGC’’) requesting approval 

for a partition of the [insert Pension Fund 

name, Employer Identification Number, and 

three-digit Plan Number] (the ‘‘Plan’’). 

What is partition? 

A multiemployer plan that is in critical 

and declining status may apply to PBGC for 

an order that separates (i.e., partitions) and 

transfers the PBGC-guaranteed portion of 

certain participants’ and beneficiaries’ 

benefits to a newly-created successor plan. 

The total amount transferred from the 

original plan to the successor plan is the 

minimum amount needed to keep the 

original plan solvent. While the Board of 

Trustees will administer the successor plan, 

PBGC will provide financial assistance to the 

successor plan to pay the transferred benefits. 

PBGC guarantees benefits up to a legal 

limit. However, if the PBGC-guaranteed 

amount payable by the successor plan is less 

than the benefit payable under the original 

plan, Federal law requires the original plan 

to pay the difference. Therefore, partition 

will not change the total amount payable to 

any participant or beneficiary. 

What are the rules for partition? 

Federal law permits, but does not require, 

PBGC to approve an application for partition. 

PBGC generally will make a decision on the 

application for partition within 270 days. A 

plan is eligible for partition if certain 

requirements are met, including: 

1. The pension plan is in critical and 

declining status. A plan is in critical and 

declining status if it is in critical status 

(which generally means the plan’s funded 

percentage is less than 65%) and is projected 

to run out of money within 15 years (or 20 

years if there are twice as many inactive as 

active participants, or if the plan’s funded 

percentage is less than 80%). 

2. PBGC determines, after consulting with 

the PBGC Participant and Plan Sponsor 

Advocate, that the Board of Trustees has 

taken (or is taking) all reasonable measures 

to avoid insolvency. Reasonable measures 

may include contribution increases or 

reductions in the rate of benefit accruals. 

3. PBGC determines that: (1) Providing 

financial assistance in a partition will be 

significantly less than providing financial 

assistance in the event the plan becomes 

insolvent; and (2) partition is necessary for 

the plan to remain solvent. 

4. PBGC certifies to Congress that its ability 

to meet existing financial assistance 

obligations to other multiemployer plans 

(including plans that are insolvent or 

projected to become insolvent within 10 

years) will not be impaired by the partition. 

5. The cost of the partition is paid 

exclusively from PBGC’s multiemployer 

insurance fund. 

Why is partition needed? 

The Plan is in critical and declining status, 

is [insert funded percentage] funded, and is 

projected to become insolvent by [insert 

expected insolvency date]. The Board of 

Trustees asserts that it has taken reasonable 

measures to avoid insolvency, but has 

determined that these measures are 

insufficient and that the proposed partition is 

necessary for the Plan to avoid insolvency. 

[Insert brief statement of the amount of 

liabilities the Board of Trustees proposes to 

partition and indicate whether it is the 

minimum amount needed for the Plan to 

remain solvent.] [If applicable, insert brief 

statement summarizing the proposed classes 

of participants and beneficiaries whose 

benefits will be partially or wholly transferred 


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if the application is granted, and a summary 

of the factors considered.] If instead the Plan 

is allowed to become insolvent, the benefits 

of all participants and beneficiaries whose 

benefits exceed the PBGC-guaranteed amount 

would be reduced to the PBGC-guaranteed 

amount. 

What is PBGC’s multiemployer plan 

guarantee? 

Federal law sets the maximum that PBGC 

may guarantee. For multiemployer plan 

benefits, PBGC guarantees a monthly benefit 

payment equal to 100 percent of the first $11 

of the Plan’s monthly benefit accrual rate, 

plus 75 percent of the next $33 of the accrual 

rate, times each year of credited service. The 

PBGC’s maximum guarantee, therefore, is 

$35.75 per month times a participant’s years 

of credited service. 

PBGC guarantees vested pension benefits 

payable at normal retirement age, early 

retirement benefits, and certain survivor 

benefits, if the participant met the eligibility 

requirements for a benefit before plan 

termination or insolvency. A benefit or 

benefit increase that has been in effect for 

less than 60 months is not eligible for PBGC’s 

guarantee. PBGC also does not guarantee 

benefits above the normal retirement benefit, 

disability benefits not in pay status, or nonpension benefits, such as health insurance, 

life insurance, death benefits, vacation pay, 

or severance pay. 

How will I know when PBGC has made a 

decision on the application for partition? 

If PBGC approves the Board of Trustees’ 

application for partition, PBGC will issue a 

notice to affected participants and 

beneficiaries whose benefits will be 

transferred to the successor plan no later than 

14 days after it issues the order of partition. 

You may also visit www.pbgc.gov/MPRA for 

a list of applications for partition received by 

PBGC and the status of those applications. 

Your Rights To Receive Information About 

Your Plan and its Benefits 

Your plan’s Summary Plan Description 

(‘‘SPD’’) will include information on the 

procedures for claiming benefits, which will 

apply to both the original and successor 

plans until the Plan provides you a new SPD. 

You also have the legal right to request 

documents from the original plan to help you 

understand the partition and your rights such 

as: 

• The plan document, trust agreement, and 

other documents governing the Plan (e.g., 

collective bargaining agreements); 

• The latest SPD and summaries of 

material modification; 

• The Plan’s Form 5500 annual reports, 

including audited financial statements, filed 

with the U.S. Department of Labor during the 

last six years; 

• The Plan’s annual funding notices for the 

last six years; 

• Actuarial reports (including reports 

submitted in support of the application for 

partition) furnished to the Plan within the 

last six years; 

• The Plan’s current rehabilitation plan, 

including contribution schedules; and 

• Any quarterly, semi-annual or annual 

financial reports prepared for the Plan by an 

investment manager, fiduciary or other 

advisor and furnished to the Plan within the 

last six years. 

If your benefits are transferred to the 

successor plan, you will be furnished a 

successor plan SPD within 120 days of the 

partition; and the plan document, trust 

agreement, and other documents governing 

the successor plan will be available for 

review following the partition. 

The plan administrator must respond to 

your request for these documents within 30 

days, and may charge you the cost per page 

for the least expensive means of reproducing 

documents, but cannot charge more than 25 

cents per page. The Plan’s Form 5500 annual 

reports are also available free of charge at 

http://www.dol.gov/ebsa/5500main.html. 

Some of the documents also may be available 

for examination, without charge, at the plan 

administrator’s office, your worksite, or 

union hall. 

Plan Contact Information 

For more information about this Notice, 

you may contact: 

[Insert Name of Plan Administrator, address, 

email address, and phone number] 

PBGC Contact Information 

Multiemployer Program Division, PBGC, 

1200 K Street NW., Washington, DC 

20005–4026 

Email: Multiemployerprogram@pbgc.gov 

Phone: (202) 326–4000 x6535 

PBGC Participant and Plan Sponsor 

Advocate Contact Information 

Constance Donovan, PBGC, 1200 K Street 

NW., Washington, DC 20005–4026 

Email: Advocate@pbgc.gov. 

Phone: (202) 326–4488 

NOTICE OF APPLICATION FOR 

PARTITION FOR [INSERT PLAN NAME] 

[For plans filing coordinated applications for 

partition and suspension of benefits] 

[Insert Date] 

This notice is to inform you that, on [insert 

Date], [insert Plan Sponsor’s Name] (‘‘Board 

of Trustees’’) filed a complete application 

with the Pension Benefit Guaranty 

Corporation (‘‘PBGC’’) requesting approval 

for a partition of the [insert Pension Fund 

name, Employer Identification Number, and 

three-digit Plan Number] (the ‘‘Plan’’). [Insert 

statement that the plan sponsor has 

submitted an application for suspension of 

benefits under section 305(e)(9)(G) of ERISA, 

and identify how to obtain a copy of the 

application and notice required by section 

305(e)(9)(F) of ERISA.] 

What is partition? 

A multiemployer plan that is in critical 

and declining status may apply to PBGC for 

an order that separates (i.e., partitions) and 

transfers the PBGC-guaranteed portion of 

certain participants’ and beneficiaries’ 

benefits to a newly-created successor plan. 

The total amount transferred from the 

original plan to the successor plan is the 

minimum amount needed to keep the 

original plan solvent. While the Board of 

Trustees will administer the successor plan, 

PBGC will provide financial assistance to the 

successor plan to pay the transferred benefits. 

PBGC guarantees benefits up to a legal 

limit. However, if the PBGC-guaranteed 

amount payable by the successor plan is less 

than the benefit payable under the original 

plan after taking into account benefit 

reductions or any plan amendments after the 

effective date of the partition, Federal law 

requires the original plan to pay the 

difference. Therefore, partition will not 

further change the total amount payable to 

any participant or beneficiary. 

What are the rules for partition? 

Federal law permits, but does not require, 

PBGC to approve an application for partition. 

PBGC generally will make a decision on the 

application for partition within 270 days. A 

plan is eligible for partition if certain 

requirements are met, including: 

1. The pension plan is in critical and 

declining status. A plan is in critical and 

declining status if it is in critical status 

(which generally means the plan’s funded 

percentage is less than 65%) and is projected 

to run out of money within 15 years (or 20 

years if there are at least twice as many 

inactive as active participants, or if the plan’s 

funded percentage is less than 80%). 

2. PBGC determines, after consulting with 

the PBGC Participant and Plan Sponsor 

Advocate, that the Board of Trustees has 

taken (or is taking) all reasonable measures 

to avoid insolvency, including reducing 

benefits to the maximum allowed under the 

law. 

3. PBGC determines that: (1) Providing 

financial assistance in a partition will be 

significantly less than providing financial 

assistance in the event the plan becomes 

insolvent; and (2) partition is necessary for 

the plan to remain solvent. 

4. PBGC certifies to Congress that its ability 

to meet existing financial assistance 

obligations to other multiemployer plans 

(including plans that are insolvent or 

projected to become insolvent within 10 

years) will not be impaired by the partition. 

5. The cost of the partition is paid 

exclusively from PBGC’s multiemployer 

insurance fund. 

Why are partition and benefit reductions 

needed? 

The Plan is in critical and declining status, 

is [insert funded percentage] funded, and is 

projected to become insolvent by [insert 

expected insolvency date]. The Board of 

Trustees has taken reasonable measures to 

avoid insolvency, but has determined that 

these measures are insufficient and that the 

proposed partition and reduction of benefits 

combined are necessary for the Plan to avoid 

insolvency. 

[Insert brief statement of the amount of 

liabilities the Board of Trustees proposes to 

partition and indicate whether it is the 

minimum amount needed for the Plan to 

remain solvent.] [If applicable, insert brief 

statement summarizing the proposed classes 

of participants and beneficiaries whose 

benefits will be partially or wholly transferred 

if the application is granted, and a summary 

of the factors considered.] If instead the Plan 

is allowed to become insolvent, the benefits 


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of all participants and beneficiaries whose 

benefits exceed the PBGC-guaranteed amount 

would be reduced to the PBGC-guaranteed 

amount. 

What is PBGC’s multiemployer plan 

guarantee? 

Federal law sets the maximum that PBGC 

may guarantee. For multiemployer plan 

benefits, PBGC guarantees a monthly benefit 

payment equal to 100 percent of the first $11 

of the Plan’s monthly benefit accrual rate, 

plus 75 percent of the next $33 of the accrual 

rate, times each year of credited service. 

PBGC’s maximum guarantee, therefore, is 

$35.75 per month times a participant’s years 

of credited service. 

PBGC guarantees vested pension benefits 

payable at normal retirement age, early 

retirement benefits, and certain survivor 

benefits, if the participant met the eligibility 

requirements for a benefit before plan 

termination or insolvency. A benefit or 

benefit increase that has been in effect for 

less than 60 months is not eligible for PBGC’s 

guarantee. PBGC also does not guarantee 

benefits above the normal retirement benefit, 

disability benefits not in pay status, or nonpension benefits, such as health insurance, 

life insurance, death benefits, vacation pay, 

or severance pay. 

How will I know when PBGC has made a 

decision on the application for partition? 

If PBGC approves the Board of Trustees’ 

application for partition, PBGC will issue a 

notice to affected participants and 

beneficiaries whose benefits will be 

transferred to the successor plan no later than 

14 days after it issues the order of partition. 

You may also visit www.pbgc.gov/MPRA for 

a list of applications for partition received by 

PBGC and the status of those applications. 

How do I obtain information on the 

application for approval to reduce benefits? 

The application for approval of the 

proposed reduction of benefits will be 

publicly available within 30 days after the 

Treasury Department receives the 

application. See www.treasury.gov for a copy 

of the application, instructions on how to 

send comments on the application, and how 

to contact the Treasury Department for 

further information and assistance. 

Your Rights To Receive Information About 

Your Plan and its Benefits 

Your Plan’s Summary Plan Description 

(‘‘SPD’’) will include information on the 

procedures for claiming benefits, which will 

apply to both the original and successor 

plans until the Plan provides you a new SPD. 

You also have the legal right to request 

documents from the original plan to help you 

understand the partition and your rights such 

as: 

• The plan document, trust agreement, and 

other documents governing the Plan (e.g., 

collective bargaining agreements); 

• The latest SPD and summaries of 

material modification; 

• The Plan’s Form 5500 annual reports, 

including audited financial statements, filed 

with the U.S. Department of Labor during the 

last six years; 

• The Plan’s annual funding notices for the 

last six years; 

• Actuarial reports (including reports 

submitted in support of the application for 

partition) furnished to the Plan within the 

last six years; 

• The Plan’s current rehabilitation plan, 

including contribution schedules; and 

• Any quarterly, semi-annual or annual 

financial reports prepared for the Plan by an 

investment manager, fiduciary or other 

advisor and furnished to the Plan within the 

last six years. 

If your benefits are transferred to the 

successor plan, you will be furnished a 

successor plan SPD within 120 days of the 

partition; and the plan document, trust 

agreement, and other documents governing 

the successor plan will be available for 

review following the partition. 

The plan administrator must respond to 

your request for these documents within 30 

days, and may charge you the cost per page 

for the least expensive means of reproducing 

documents, but cannot charge more than 25 

cents per page. The Plan’s Form 5500 annual 

reports are also available free of charge at 

http://www.dol.gov/ebsa/5500main.html. 

Some of the documents also may be available 

for examination, without charge, at the plan 

administrator’s office, your worksite, or 

union hall. 

Plan Contact Information 

For more information about this Notice, 

you may contact: 

[Insert Name of Plan Administrator, address, 

email address, and phone number] 

PBGC Contact Information 

Multiemployer Program Division, PBGC, 

1200 K Street NW., Washington, DC 

20005–4026 

Email: Multiemployerprogram@pbgc.gov 

Phone: (202) 326–4000 x6535 

PBGC Participant and Plan Sponsor 

Advocate Contact Information 

Constance Donovan, PBGC, 1200 K Street 

NW., Washington, DC 20005–4026 

Email: Advocate@pbgc.gov 

Phone: (202) 326–4488 

Issued in Washington, DC, this 10th day of 

June, 2015. 

Alice C. Maroni, 

Acting Director, Pension Benefit Guaranty 

Corporation. 

[FR Doc. 2015–14930 Filed 6–17–15; 11:15 am] 

BILLING CODE 7709–02–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 100 

[Docket Number USCG–2015–0329] 

RIN 1625–AA08 

Special Local Regulations for Marine 

Events, Atlantic Ocean; Atlantic City, 

New Jersey 

AGENCY: Coast Guard, DHS. 

ACTION: Temporary Final Rule. 

SUMMARY: The Coast Guard is 

temporarily changing the enforcement 

date of the special local regulation for 

the recurring OPA Atlantic City Grand 

Prix boat race, held in the waters of the 

North Atlantic Ocean, adjacent to 

Atlantic City, New Jersey. The change of 

enforcement date for the special local 

regulation is necessary to provide for 

the safety of life on navigable waters 

during the event. This action will 

restrict vessel traffic in the waters of the 

Atlantic Ocean adjacent to Atlantic City, 

New Jersey, during the event, from 

10:00 a.m. to 6:00 p.m. on June 20, 2015 

and June 21, 2015. 

DATES: This rule is effective June 20–21, 

2015. 

ADDRESSES: Documents mentioned in 

this preamble are part of docket [USCG– 

2015–0329]. To view documents 

mentioned in this preamble as being 

available in the docket, go to http://

www.regulations.gov, type the docket 

number in the ‘‘SEARCH’’ box and click 

‘‘SEARCH.’’ Click on Open Docket 

Folder on the line associated with this 

rulemaking. You may also visit the 

Docket Management Facility in Room 

W12–140 on the ground floor of the 

Department of Transportation West 

Building, 1200 New Jersey Avenue SE., 

Washington, DC 20590, between 9 a.m. 

and 5 p.m., Monday through Friday, 

except Federal holidays. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this rule, call or 

email Lieutenant Brennan Dougherty, 

U.S. Coast Guard, Sector Delaware Bay, 

Chief Waterways Management Division, 

Coast Guard; telephone (215) 271–4851, 

email Brennan.P.Dougherty@uscg.mil. If 

you have questions on viewing or 

submitting material to the docket, call 

Cheryl Collins, Program Manager, 

Docket Operations, telephone (202) 

366–9826. 

SUPPLEMENTARY INFORMATION: 

Table of Acronyms 

DHS Department of Homeland Security 


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