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 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 

non-pension 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