Federal Register / Vol. 75, No. 153 / Tuesday, August 10, 2010 / Proposed Rules 48283 

Accomplishment Instructions of the service 

bulletin. 

(ii) If any cracking is found and the crack 

is 0.030 inch or less in length, before further 

flight repair the keyway, in accordance with 

the Accomplishment Instructions of the 

service bulletin. 

(iii) If any cracking is found and the crack 

is greater than 0.030 inch in length, before 

further flight, repair the crack using a method 

approved in accordance with the procedures 

specified in paragraph (h) of this AD 

Alternative Methods of Compliance 

(AMOCs) 

(h)(1) The Manager, Seattle Aircraft 

Certification Office (ACO), FAA, has the 

authority to approve AMOCs for this AD, if 

requested using the procedures found in 14 

CFR 39.19. Send information to ATTN: 

Nancy Marsh, Aerospace Engineer, Airframe 

Branch, ANM–120S, FAA, Seattle Aircraft 

Certification Office, 1601 Lind Avenue SW., 

Renton, Washington 98057–3356; telephone 

(425) 917–6440; fax (425) 917–6590. 

Information may be e-mailed to: 9–ANM– 

Seattle-ACO–AMOC–Request@faa.gov. 

(2) To request a different method of 

compliance or a different compliance time 

for this AD, follow the procedures in 14 CFR 

39.19. Before using any approved AMOC on 

any airplane to which the AMOC applies, 

notify your principal maintenance inspector 

(PMI) or principal avionics inspector (PAI), 

as appropriate, or lacking a principal 

inspector, your local Flight Standards District 

Office. The AMOC approval letter must 

specifically reference this AD. 

(3) An AMOC that provides an acceptable 

level of safety may be used for any repair 

required by this AD if it is approved by the 

Boeing Commercial Airplanes Organization 

Designation Authorization (ODA) that has 

been authorized by the Manager, Seattle ACO 

to make those findings. For a repair method 

to be approved, the repair must meet the 

certification basis of the airplane, and the 

approval must specifically refer to this AD. 

Issued in Renton, Washington, on July 30, 

2010. 

Ali Bahrami, 

Manager, Transport Airplane Directorate, 

Aircraft Certification Service. 

[FR Doc. 2010–19695 Filed 8–9–10; 8:45 am] 

BILLING CODE 4910–13–P 

PENSION BENEFIT GUARANTY 

CORPORATION 

29 CFR Parts 4062 and 4063 

RIN 1212–AB20 

Liability for Termination of SingleEmployer Plans; Treatment of 

Substantial Cessation of Operations 

AGENCY: Pension Benefit Guaranty 

Corporation. 

ACTION: Proposed rule. 

SUMMARY: ERISA section 4062(e) 

provides for reporting of and liability for 

certain substantial cessations of 

operations by employers that maintain 

single-employer plans. PBGC proposes 

to amend its current regulation on 

Liability for Termination of SingleEmployer Plans to provide guidance on 

the applicability and enforcement of 

ERISA section 4062(e). 

DATES: Comments must be submitted on 

or before October 12, 2010. 

ADDRESSES: Comments, identified by 

Regulation Identifier Number (RIN) 

1212–AB20, may be submitted by any of 

the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the Web 

site instructions for submitting 

comments. 

• E-mail: reg.comments@pbgc.gov. 

• Fax: 202–326–4224. 

• Mail or Hand Delivery: Legislative 

and Regulatory Department, 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–AB20). 

Comments received, including personal 

information provided, will be posted to 

http://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: 

Catherine B. Klion, Manager, or Deborah 

C. Murphy, Attorney, Regulatory and 

Policy Division, Legislative and 

Regulatory Department, Pension Benefit 

Guaranty Corporation, 1200 K Street, 

NW., Washington, DC 20005–4026; 202– 

326–4024. (TTY/TDD users may call the 

Federal relay service toll-free at 1–800– 

877–8339 and ask to be connected to 

202–326–4024.) 

SUPPLEMENTARY INFORMATION: 

Introduction 

Pension Benefit Guaranty Corporation 

(PBGC) administers the pension plan 

termination insurance program under 

title IV of the Employee Retirement 

Income Security Act of 1974 (ERISA). 

Under ERISA section 4002(b)(3), PBGC 

has authority to adopt, amend, and 

repeal regulations to carry out the 

purposes of title IV. 

Background of Proposed Rule 

ERISA section 4062(e) provides that 

‘‘[i]f an employer ceases operations at a 

facility in any location and, as a result 

of such cessation of operations, more 

than 20 percent of the total number of 

his employees who are participants 

under a plan established and 

maintained by him are separated from 

employment, the employer shall be 

treated with respect to that plan as if he 

were a substantial employer under a 

plan under which more than one 

employer makes contributions and the 

provisions of [ERISA sections] 4063, 

4064, and 4065 shall apply.’’ 

ERISA section 4063(a) requires the 

plan administrator of a multiple 

employer plan (that is, a singleemployer plan with at least two 

contributing sponsors that are not under 

common control) to notify PBGC within 

60 days after a substantial employer 

withdraws from the plan, and section 

4063(b) and (c) makes the withdrawn 

employer liable to provide a bond or 

escrow in a specified amount for five 

years from the date of withdrawal, to be 

applied—if the plan terminates within 

that period—against the plan’s 

underfunding. Section 4063(e) allows 

PBGC to waive this liability if there is 

an appropriate indemnity agreement 

among contributing sponsors of the 

plan, and ERISA section 4067 

authorizes PBGC to make alternative 

arrangements for satisfaction of liability 

under sections 4062 and 4063. (ERISA 

sections 4064 and 4065 deal with plan 

termination liability and annual reports 

by plan administrators.) 

The method described in section 

4063(b) for computing the amount of 

liability focuses on relative amounts of 

contributions by more than one 

employer and is thus impracticable for 

calculating liability triggered by an 

event involving a plan of a single 

employer under section 4062(e). 

However, section 4063(b) provides that 

PBGC ‘‘may also determine the liability 

on any other equitable basis prescribed 

by [PBGC] in regulations.’’ Pursuant to 

that authority, on June 16, 2006 (at 71 

FR 34819), PBGC published a final rule 

providing a formula for computing 

liability under section 4063(b) when 

there is an event described in section 

4062(e). The formula provided by the 

2006 rule apportions to an employer 

affected by an event under section 

4062(e) a fraction of plan termination 

liability based on the number of 

participants affected by the event. Over 

the next three-and-a-half years, PBGC 

resolved 37 cases under section 4062(e) 

through negotiated settlements valued at 

nearly $600 million, providing 

protection to over 65,000 participants. 


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1A contrary case is Hightower v. Texas Hospital 

Association, 65 F.3d 443 (5th Cir. 1995). The 

Hightower case does not discuss the actions an 

employer assuming sponsorship of an existing plan 

might take to be treated as having ‘‘established’’ (or 

‘‘re-established’’) the plan. 

Overview of Proposed Regulation 

The proposed rule would create a new 

subpart B of PBGC’s regulation on 

Liability for Termination of SingleEmployer Plans (29 CFR part 4062) that 

would focus on section 4062(e). The 

liability computation rules that were 

added to part 4062 by PBGC’s 2006 final 

rule (now in § 4062.8) would be moved 

to this new subpart B. The purpose and 

scope section of part 4062 and the crossreferences section of part 4063 

(Withdrawal Liability; Plans Under 

Multiple Controlled Groups) would be 

revised to reflect the proposed 

regulation, and the references to the 

applicability date of part 4062 (now 

over 20 years in the past) would be 

removed. 

Proposed subpart B addresses two 

general topics: The applicability and 

enforcement of section 4062(e). The 

provisions on applicability provide 

guidance on the kinds of events section 

4062(e) applies to (i.e., on what a 

‘‘section 4062(e) event’’ is). The 

enforcement provisions describe PBGC’s 

section 4062(e) investigatory program, 

provide rules for notifying PBGC of 

section 4062(e) events, explain how 

section 4062(e) liability is calculated 

and how it is to be satisfied, and require 

the preservation of records about events 

that may be section 4062(e) events. 

Subpart B would also provide for 

waivers in appropriate circumstances. 

Adoption of the regulatory provisions 

in this proposed rule will reduce 

uncertainty about PBGC’s interpretation 

of the statute, thereby permitting more 

rapid resolution of cases. Clearer rules, 

together with specific, detailed 

reporting provisions, should encourage 

self-reporting of events that PBGC now 

learns of only through its own 

investigations and may enable PBGC to 

process section 4062(e) cases more 

quickly, thereby protecting more 

participants. 

Further clarification of section 4062(e) 

is also warranted by requests from the 

public. Although PBGC’s 2006 rule on 

section 4062(e) was limited to the issue 

of the liability formula, several 

commenters asked for additional 

guidance to clarify the meaning of 

statutory terms used to describe when 

an event covered by section 4062(e) 

occurs. PBGC also regularly receives 

requests from pension professionals for 

interpretive guidance on section 

4062(e). This proposed rule provides 

such guidance. 

Applicability of Section 4062(e) 

PBGC proposes to provide guidance 

on whether and when a ‘‘section 4062(e) 

event’’ occurs by explaining each of the 

key terms that appear in the statute and 

in the proposed regulation: ‘‘operation,’’ 

‘‘facility,’’ ‘‘cease,’’ ‘‘separate,’’ and 

‘‘result.’’ The term ‘‘active participant 

base’’ would be introduced to describe 

the baseline number of active 

participants against which the 

statutorily required decline in active 

participants would be measured and to 

serve as the denominator of the 

apportionment fraction used in 

calculating liability for a section 4062(e) 

event. Discussions of the subpart B 

explanations of these terms follow. 

‘‘Section 4062(e) Event’’ 

New subpart B would use the term 

‘‘section 4062(e) event’’ to refer to an 

event to which section 4062(e) applies. 

The proposed regulation would apply 

only to events involving singleemployer plans that are not multiple 

employer plans. ERISA section 4062(e) 

provides that if a section 4062(e) event 

occurs, the affected employer ‘‘shall be 

treated with respect to [the affected] 

plan as if he were a substantial 

employer under a plan under which 

more than one employer makes 

contributions.’’ The phrase ‘‘as if’’ 

implies that section 4062(e) does not 

itself apply to events involving plans 

under which more than one employer 

makes contributions. From the context 

and language of section 4062(e), 

therefore, PBGC concludes that the term 

‘‘plan’’ in section 4062(e) means a singleemployer plan that is not a multiple 

employer plan. Furthermore, the 

liability formula adopted by PBGC in 

2006 would produce anomalous results 

if applied to an event involving a 

multiple employer plan. 

The proposed regulation would 

require only that a plan be maintained 

by an employer—not both established 

and maintained—to come within the 

provisions of section 4062(e). In Rose v. 

Long Island R.R. Pension Plan, 828 F.2d 

910 (2nd Cir. 1987), the Second Circuit 

reasoned that a plan whose sponsorship 

has changed may be considered 

‘‘established’’ (or ‘‘re-established’’) by the 

new sponsor, notwithstanding that it 

has not first been formally ‘‘terminated.’’ 

In addition, in PBGC Opinion Letter 90– 

6, PBGC noted that it had ‘‘declined to 

interpret the conjunction of the terms 

‘established and maintained’ strictly in 

the context of the exemption from Title 

IV coverage for governmental plans 

[under] ERISA section 4021(b)(2) * * * 

because doing so would frustrate the 

intent of Congress in providing the 

exemption.’’ The opinion letter quoted 

from the Rose case, sanctioning that 

approach on the basis that ‘‘the status of 

the entity which currently maintains a 

particular pension plan bears more 

relation to Congress’ goals in enacting 

ERISA and its various exemptions than 

does the status of the entity which 

established the plan.’’ 1 The opinion 

letter applied the same principle to the 

exemption for substantial owner plans 

under ERISA section 4021(b)(9). 

PBGC believes that similar reasoning 

applies to ERISA section 4062(e), which 

also uses the phrase ‘‘established and 

maintained.’’ PBGC believes the textual 

analysis in the Rose case would be 

appropriate in interpreting this phrase 

in ERISA section 4062(e). In addition, 

Congress’s goal in enacting section 

4062(e) would appear to be frustrated, 

rather than promoted, by excluding 

from the ambit of that provision any 

case involving a plan established by a 

different employer from the employer 

maintaining the plan when the event 

occurred. Indeed, such an interpretation 

would seem to open a formalistic 

loophole that could be exploited where, 

by chance or foresight, a plan’s 

sponsorship changed. 

The proposed regulation would 

provide explicitly that evaluation of risk 

is not an element in deciding whether 

a section 4062(e) event has occurred. 

Sections 4062(e) and 4063 call for selfreporting by plan administrators. Each 

section describes a class of events that 

is to be reported. Neither section 

provides or even suggests that a plan 

administrator is to make a risk 

assessment and report an event to PBGC 

only if it creates risk for the plan or its 

participants or for PBGC. PBGC believes 

that section 4062(e) reflects a judgment 

that as a class, events described therein 

are indicative of increased risk of 

underfunded plan termination within 

five years—whether or not any 

particular risk factors appear to be 

present in particular cases. PBGC’s 

experience bears out this view. For 

example, in a recent section 4062(e) 

case, an employer opposed the 

assessment of liability under section 

4062(e) on the ground that its financial 

resources eliminated any risk to the 

termination insurance program. But 

shortly after reaching accord with 

PBGC, the employer entered bankruptcy 

with its plan underfunded because of an 

economic downturn in the industry. 

Thus PBGC believes that risk is not 

relevant in deciding whether a section 

4062(e) event has occurred, and the 

proposed regulation would provide that 

such decisions be made without regard 

to whether there might in a particular 


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2For example, an employer might conduct a 

manufacturing operation under the same roof with 

shipping and administrative functions—or with 

another, distinct manufacturing operation. If the 

employer ceased the manufacturing operation (or 

one of the two manufacturing operations) at the 

facility, the cessation might come within the scope 

of section 4062(e), even though the employer 

continued its other activity at the facility. 

3 ‘‘Voluntary’’ as used here does not connote 

something desirable or preferable, but merely refers 

to a discontinuance of activity that is not 

involuntary as described below. Thus, for example, 

a discontinuance of activity in response to an 

economic downturn is considered ‘‘voluntary’’ 

because it does not fall within the description of an 

involuntary discontinuance. 

case be (or appear to be) no risk to the 

plan, participants, or PBGC. However, 

as discussed below under Liability for 

section 4062(e) events, in making 

arrangements for the satisfaction of 

liability arising from section 4062(e) 

events, PBGC may take account of such 

circumstances as employer financial 

strength. 

The proposed regulation would also 

note that if an employer has two or more 

plans, section 4062(e) is applied 

separately to each plan, not on an 

aggregate basis. This principle is clear 

from section 4062(e)’s references to ‘‘a 

plan’’ and ‘‘that plan.’’ 

‘‘Operation’’ 

The proposed regulation uses the term 

‘‘operation’’ (singular rather than plural) 

to refer to a set of activities that 

constitutes an organizationally, 

operationally, or functionally distinct 

unit of an employer. PBGC proposes 

that section 4062(e) apply to cessation 

of an operation in this sense. This 

approach is consistent with PBGC’s 

practice and experience in its current 

enforcement activities under section 

4062(e). The regulation would also 

suggest some criteria that might be 

considered in identifying a set of 

activities as an operation, such as 

whether it is so treated by the employer 

or its employees or customers, by the 

public, or within the relevant industry. 

‘‘Facility’’ 

Section 4062(e) applies to cessation of 

an operation ‘‘at a facility in any 

location.’’ PBGC thinks that section 

4062(e) should be read as applying to an 

employer’s cessation of an operation at 

a ‘‘facility in any location,’’ even if the 

employer continues or resumes the 

operation at another ‘‘facility in any 

location.’’ Accordingly, under the 

proposed rule, the facility (or facility in 

any location) associated with an 

operation would simply be the place or 

places where the operation is 

performed. This would typically be a 

building or buildings, but could be or 

include any one or more enclosed or 

open areas or structures where one or 

more employees were engaged in the 

performance of the operation. 

PBGC’s view of ‘‘operation’’ and 

‘‘facility’’ means that a facility (a 

building, for example) may be the site 

of more than one operation. Under the 

proposed regulation, therefore, section 

4062(e) might apply where some but not 

all activity at a facility ceased, if the 

activity that ceased constituted an 

operation distinct from other activities 

in the facility.2

‘‘Cessation’’ 

PBGC proposes that where an 

employer discontinues activity that 

constitutes an operation at a facility, 

deciding whether a cessation has 

occurred for purposes of section 4062(e) 

should involve assessment of whether 

the discontinuance represents a mere 

cutback or contraction, or is so thorough 

that the employer’s conduct of the 

operation at the facility can no longer be 

considered on-going. The proposed 

regulation would address this issue for 

both voluntary and involuntary 

discontinuances. 

PBGC believes that whether an 

employer’s conduct of an operation at a 

facility ceases or remains on-going 

(though perhaps curtailed) depends on 

the degree to which the purpose of the 

operation continues to be fulfilled by 

the employer’s activity at the facility. 

PBGC thus proposes that an employer’s 

cessation of an operation at a facility be 

considered to occur only if the employer 

discontinues all significant activity at 

the facility in furtherance of the purpose 

of the operation. 

Thus, an employer might cease an 

operation at a facility even though 

insignificant activity at the facility in 

furtherance of the purpose of the 

operation continued. For example, 

while continued processing of materials 

on hand would typically constitute 

significant activity in furtherance of the 

purpose of an operation, desultory sales 

of left-over inventory would typically 

not. Continuing activity that does not 

further an operation’s purpose would be 

disregarded. For example, although 

maintenance and security activities may 

be important to a manufacturing 

operation, they do not further the 

purpose of the operation. Thus, a 

cessation of such an operation could 

occur even though there was a 

continuance of maintenance and guard 

services. 

While this approach is apt for 

‘‘voluntary’’ discontinuances pursuant to 

employer decision,3 it is less suitable for 

‘‘involuntary’’ discontinuances caused 

by events outside the employer’s 

control. Where a discontinuance of 

activity is thrust upon an employer, 

rather than stemming from the 

employer’s will, PBGC believes that the 

employer should have an opportunity to 

react—to resume or to decide not to 

resume the activity—before the 

discontinuance is characterized as a 

cessation under section 4062(e). 

PBGC proposes to provide two rules 

for involuntary discontinuances. In each 

situation, cessation would occur not 

when all significant activity stopped, 

but at a later date—unless the employer 

in the meantime resumed the operation 

at the facility (in which case there 

would be no cessation) or decided not 

to resume it (in which case the cessation 

would occur when the decision was 

made). One situation would be where 

the discontinuance of activity was 

caused by employee action, such as a 

strike or sickout. In this case, the 

cessation date would be put off until the 

employee action ended (and the 

employer would have a week in which 

to resume activity). The other situation 

would be where the discontinuance was 

caused by a sudden and unanticipated 

event (other than an employee action) 

such as a natural disaster. In this case, 

the cessation date would be deferred for 

30 days—time enough to resume work 

if the event causing the discontinuance 

left the operation viable. 

As indicated in the discussion of 

‘‘facility’’ above, PBGC believes that 

section 4062(e) may apply to an 

employer’s cessation of an operation at 

one facility even if the employer 

continues or resumes the operation at 

another facility. For example, where an 

employer has been performing 

manufacturing, shipping, and 

administrative functions under a single 

roof, section 4062(e) could apply where 

the employer moves the manufacturing 

operation outside the United States and 

has manufactured goods shipped in 

bulk to the original U.S. facility for 

distribution using the employer’s own 

existing shipping operation. 

Similarly, PBGC believes that section 

4062(e) applies to an employer’s 

cessation of an operation at a facility 

even if the operation is continued or 

resumed by another employer at the 

same or another facility. One example of 

this would be the not uncommon 

situation where one employer sells the 

assets used in an operation to another 

employer that continues or resumes the 

operation. 


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4For example, assume that the workers in an 

operation represent 21 percent of active participants 

in a plan and that when all activity in furtherance 

of the purpose of the operation stops, 19 percent 

(out of the 21 percent) lose their jobs but the 

remaining 2 percent keep working until the 

machinery used in the operation has been crated for 

disposal. A section 4062(e) event would not occur 

on the cessation date, but only when the over-20- 

percent active participant reduction requirement 

was satisfied. 

5 In general, such a transfer would not terminate 

the transferred employee’s participation in the plan, 

although it would typically mean that the employee 

would accrue no further benefits under the plan. 

The proposed regulation would thus 

provide that continuance or resumption 

of an operation at another facility or by 

another employer is to be disregarded in 

deciding whether a cessation has 

occurred. 

The proposed regulation would also 

reflect PBGC’s view that it is irrelevant 

whether an employer begins a new 

operation contemporaneously with its 

discontinuance of an existing operation, 

either at the same or another facility. A 

section 4062(e) event concerns itself 

with the cessation of one operation and 

the effect of that cessation on the 

employment of participants in the 

affected plan. Undertaking a second 

operation does not nullify the 

discontinuance of the first or the impact 

of that discontinuance on those 

participants. Of course, if enough of 

those participants were retained by the 

employer in connection with the new 

operation to avoid a drop of more than 

20 percent in the active participantcount, there would be no section 

4062(e) event. 

Under the proposed regulation, any 

hope or expectation the employer may 

have that the discontinued work will be 

resumed would be irrelevant to whether 

the discontinuance is a cessation. A 

cessation does not ripen into a section 

4062(e) event unless it results in a 

decline of more than 20 percent in the 

number of active participants in the 

affected plan. Where such a decline 

occurs because an employer 

discontinues activities constituting an 

operation at a facility, PBGC believes 

that the event should not fail to be 

covered by section 4062(e) because the 

activity may resume. 

The proposed regulation would use 

the term ‘‘cessation date’’ for the date 

when a cessation occurs as discussed 

above. Since an employer’s cessation of 

an operation at a facility is only part of 

what constitutes a section 4062(e) event 

(the other part being a resultant drop of 

more than 20 percent in the active 

participant-count), the date of a section 

4062(e) event might be later than the 

associated cessation date.4

‘‘Separation’’ 

The fact that an employer ceases an 

operation at a facility does not in itself 

constitute a section 4062(e) event. 

Under section 4062(e), it must also be 

true that ‘‘as a result of such cessation 

of operations, more than 20 percent of 

the total number of [the employer’s] 

employees who are participants under 

[the affected plan] are separated from 

employment.’’ PBGC believes that 

‘‘separation’’ as used here logically and 

naturally refers to separation from 

employment with the employer, rather 

than separation from employment in the 

operation. 

Thus, PBGC believes that the 

requirement of separation is not 

satisfied if an employee is merely 

transferred within the employer’s 

organization—for example, from work 

in the ceasing operation to work outside 

it—even if the transfer takes the 

employee out of the category of 

employees covered by the plan.5 By the 

same token, PBGC believes that if an 

employer ceases an operation, but the 

operation is continued or resumed by a 

new employer, the fact that a person 

previously employed by the original 

employer continues to work in the 

operation as an employee of the new 

employer does not mean that the person 

has not separated from employment 

(with the original employer). 

Accordingly, the proposed regulation’s 

discussion of separation would be 

couched in terms of the employment 

relationship between the employer and 

the employee. 

The 60-day period within which 

notice of a section 4062(e) event must be 

given does not begin to run until a 

section 4062(e) event has occurred—that 

is, until there has been both a cessation 

by an employer of an operation at a 

facility and a separation from 

employment of more than 20 percent of 

the active participants in the affected 

plan. To know the reporting deadline, 

therefore, it is as important for the plan 

administrator to fix promptly the dates 

when participants separate from 

employment as it is to fix the cessation 

date promptly. In some cases (e.g., 

discharges and quits), fixing the 

separation date is relatively 

straightforward. Other cases (e.g., 

layoffs) may raise doubt about whether 

or when a separation has occurred. It is 

important to avoid having doubt of this 

kind delay decisions about whether the 

20-percent threshold has been exceeded 

and a section 4062(e) event has thus 

occurred. 

The proposed regulation would 

provide that an employee separates from 

employment when the employee 

discontinues the active performance, 

pursuant to the employee’s employment 

relationship with the employer, of 

activities in furtherance of any of the 

employer’s operations, unless, when the 

discontinuance occurs, it is reasonably 

certain that the employee will resume 

such active work within 30 days—for 

example, after a two-week holiday 

shutdown. This standard would allow a 

plan administrator to decide 

immediately whether a separation 

occurred when an employee 

discontinued active work. If, however, 

the 30 days pass without the employee’s 

having returned, the employee would be 

considered to have separated from 

employment when active work stopped. 

The focus on active performance of 

activities pursuant to the employment 

relationship would mean that continued 

provision of benefits to an employee, 

such as the continued granting of 

credited service for pension purposes, 

would be disregarded in deciding 

whether a separation from employment 

occurred. 

The proposed regulation would also 

include a special rule under which an 

employee’s separation before a cessation 

was complete would be ignored if, by 

the cessation date, (1) the employee was 

rehired or a replacement was hired, and 

(2) the rehired or replacement employee 

was a participant in the plan. 

‘‘Result’’ 

The proposed regulation would 

provide that a separation from 

employment results from the cessation 

of an operation if the separation would 

not have occurred when it did had the 

cessation not occurred. Thus, for 

example, if an employee had been 

planning to retire in a year or two but 

chose to retire sooner upon learning of 

a shutdown that would eliminate her 

job, the separation would be the result 

of the shutdown; whereas if (before 

learning of the shutdown) she had been 

planning to retire immediately and 

retired as planned after she learned of 

the shutdown, the separation would not 

be a result of the shutdown. 

The proposed regulation would 

provide that whether a separation 

occurs before, on, or after the cessation 

date is not considered decisive of 

whether the separation is the result of 

the cessation. An operation may not 

cease instantaneously, and some 

employees may leave before the 

cessation date because the operation in 

which they are employed is in the 

process of shutting down, although 

significant activity in furtherance of the 

purpose of the operation is still ongoing. 

Yet other employees may continue to 

work after the cessation date—for 


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6See the definition of ‘‘active participant’’ in 

§ 4043.23 of PBGC’s regulation on Reportable 

Events and Certain Other Notification Requirements 

(29 CFR part 4043). 

example, disassembling machinery and 

guarding the premises until the plant 

and equipment can be sold—before they 

finally leave. 

The proposed regulation would also 

provide that an employee’s separation 

may result from the cessation of an 

operation at a facility even if the 

employee’s employment has been in 

another operation or even at another 

facility. Ceasing one operation can have 

an impact on other operations, whether 

or not they also cease. For example, an 

employer might have one operation to 

assemble widgets from pre-fabricated 

parts, and another operation to fabricate 

widget parts for use in the employer’s 

own widget manufactory or for sale to 

other widget manufacturers. If the 

employer shut down the widget 

assembly operation, there would be 

reduced demand for widget parts, the 

fabrication operation would cut back, 

and some fabrication employees would 

lose their jobs—as a result of the 

shutdown of the widget assembly 

operation. And if there was reduced 

demand for widget parts in the industry 

generally, the shutdown of the 

employer’s widget assembly operation 

might even cause the shutdown of its 

fabrication operation, and thus all of the 

fabrication employees might be 

separated as a result of the shutdown of 

the assembly operation. 

To supplement the general rule on 

when separation from employment 

results from an employer’s cessation of 

an operation at a facility, PBGC is 

proposing four presumptions based on 

the relationship between the timing of a 

separation and the timing of events 

involved in a cessation. 

The first presumption (applicable to a 

voluntary cessation) would be that if an 

employee is employed in an operation 

at a facility and involuntarily separates 

from employment on or after the date 

when the employer decides to cease the 

operation at the facility, the employee 

has separated from employment as a 

result of the cessation. 

The second presumption (also 

applicable to a voluntary cessation) 

would be that if an employee in an 

operation at a facility voluntarily 

separates from employment after the 

employer decision to cease the 

operation at the facility becomes known 

(to the employee, to employees 

generally, or to the public), the 

separation results from the cessation. 

The third presumption would be that 

if a cessation is involuntary, and an 

employee in the operation voluntarily or 

involuntarily separates from 

employment on or after the date of the 

event that caused the cessation, the 

separation results from the cessation. 

The fourth presumption would be that 

if an employee employed in an 

operation becomes employed by a new 

employer that continues or resumes the 

operation, the employee has separated 

from employment with the original 

employer as a result of the cessation. 

PBGC believes that these four 

presumptions reflect reasonable 

inferences and will simplify application 

of the proposed regulation; nonetheless, 

any of the presumptions could be 

rebutted by appropriate evidence. 

‘‘Active Participant Base’’ 

A section 4062(e) event occurs only if 

‘‘as a result of [a] cessation of operations, 

more than 20 percent of the total 

number of [the employer’s] employees 

who are participants under [the affected 

plan] are separated from employment.’’ 

To apply the 20-percent test, one must 

know the base number against which 

the 20 percent is measured. The statute 

provides that this base number is ‘‘the 

total number of [the employer’s] 

employees who are participants under 

[the affected plan],’’ but it does not say 

as of what point in time the number is 

to be fixed, although one may infer that 

it is to be a pre-cessation number. 

The formula for calculating liability 

for a section 4062(e) event that PBGC 

added to the termination liability 

regulation in 2006 also refers to a base 

number—the denominator of a fraction 

that is applied to total termination 

liability to find the liability for a section 

4062(e) event. Section 4062.8(a)(2) of 

the current regulation describes this 

base number as ‘‘the total number of the 

employer’s current employees, as 

determined immediately before the 

cessation of operations, who are 

participants under the plan.’’ This 

description is consistent with the 

description of a base number in section 

4062(e), and administrative convenience 

is clearly served by using the same 

number for the statutory 20-percent 

threshold test and for the apportionment 

fraction in the regulatory formula for 

liability. 

However, the existing regulatory 

language—‘‘immediately before the 

cessation’’—does not provide as much 

specificity about timing as PBGC thinks 

desirable. PBGC thus proposes to 

prescribe rules that are consistent with, 

but more specific than, the existing 

statutory and regulatory language, 

describing when to count active 

participants for purposes of fixing a 

single base number for both the 20- 

percent test and the liability formula. 

PBGC proposes to call this number the 

‘‘active participant base.’’ 

The key to PBGC’s proposal is to 

identify when a cessation begins, and 

employment starts to be affected by the 

cessation process, so that active 

participants can be counted just before 

then. For a voluntary cessation, carried 

out pursuant to an employer decision, 

that decision marks the beginning of the 

cessation process, and the active 

participant base would be measured 

immediately before that decision. For an 

involuntary cessation, the active 

participant base would be measured 

immediately before the event that 

causes the cessation (strike, natural 

disaster, etc.). 

In counting active participants, the 

proposed regulation would use the same 

formulation for describing active 

employment as in the provision on 

separation from employment: Active 

performance, pursuant to the 

employment relationship with the 

employer, of activities in furtherance of 

the employer’s operations (or reasonable 

certainty of resuming such active work 

within 30 days, with a ‘‘reality check’’ if 

30 days have passed). Thus, the active 

participant base would be measured on 

a basis consistent with the rules about 

measuring the number of participants 

who separate from employment. 

In response to a public comment, 

PBGC’s 2006 final rule prescribing the 

section 4062(e) liability computation 

formula clarified that, in calculating the 

denominator of the fraction in the 

formula (the number of employee 

participants immediately before the 

cessation), only current employees are 

included. The proposed formulation of 

the active participant base would make 

this point more clearly. 

The proposal would also clarify that 

an employee need not be accruing 

benefits under a plan to be a participant 

in the plan.6 Freezing a plan should not 

make the employer immune from 

section 4062(e). 

Enforcement of Section 4062(e) 

Proposed subpart B would describe 

two processes for PBGC to learn about 

section 4062(e) events: PBGC 

investigations and reports to PBGC by 

plan administrators. It would also 

describe the liability that arises when a 

section 4062(e) event occurs and how 

the liability is satisfied and would 

prescribe recordkeeping requirements. 

Provision would also be made for 

waivers in appropriate circumstances. 

PBGC Investigations 

Under ERISA section 4003(a), PBGC 

has authority to make such 

investigations as it deems necessary to 


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7The absence heretofore of a section 4062(e) 

event reporting form made it possible to combine 

a section 4062(e) event notice with a reportable 

event notice under § 4043.23 of PBGC’s reportable 

events regulation. PBGC’s proposal to require the 

use of prescribed forms to file notice of section 

4062(e) events would make this unworkable. 

However, information already submitted to PBGC in 

a reportable event notice would not need to be 

resubmitted in a section 4062(e) event notice. 

8Section 4071 penalties are not the only 

applicable enforcement mechanism. 

9 In particular, no change would be made to the 

requirement to measure termination liability (on 

which section 4062(e) liability is based) as of the 

cessation date rather than as of the section 4062(e) 

event date. 

enforce title IV and regulations 

thereunder (such as the regulation 

under section 4062(e) that PBGC is here 

proposing). PBGC’s section 4062(e) 

enforcement has been strongly 

supported by investigations, and PBGC 

expects its section 4062(e) investigatory 

activity to continue, notwithstanding 

the inclusion in the proposed regulation 

of detailed reporting requirements. 

The investigation provision in 

proposed subpart B would include a 

deadline for responding to PBGC 

information requests, and failure to 

respond by the deadline could result in 

the assessment of penalties under 

ERISA section 4071 (see Late filing 

penalties below). There would also be a 

requirement to correct or update 

information submitted to PBGC that was 

or became materially wrong or outdated. 

Notice Requirement 

Under ERISA section 4063(a), the 

plan administrator of a multiple 

employer plan must report the 

withdrawal of a substantial employer 

from the plan to PBGC within 60 days 

after the withdrawal. Since section 

4062(e) refers to section 4063 for the 

procedures to be followed for section 

4062(e) events, the proposed rule would 

provide, consistent with the statute, that 

notice of a section 4062(e) event must be 

filed with PBGC by the plan 

administrator of the affected plan within 

60 days. The 60 days would run from 

the later of the cessation date or the date 

when the number of active participant 

separations resulting from the cessation 

exceeds 20 percent of the active 

participant base. 

Filing forms and instructions, 

including filing methods, filing 

addresses, required data, etc., would be 

posted on PBGC’s Web site.7 The 

proposed regulation would also provide 

cross-references to filing rules in PBGC’s 

regulation on Filing, Issuance, 

Computation of Time, and Record 

Retention (29 CFR part 4000). PBGC 

could require submission of 

supplementary information, ordinarily 

with a 45-day response period, which 

could be shortened if necessary to avoid 

prejudice to PBGC, the plan, or 

participants. The affected employer 

would be required to furnish necessary 

information to the plan administrator of 

the affected plan. Any filed information 

that a filer discovered to be materially 

wrong or outdated would have to be 

promptly corrected. Thus, for example, 

if more employees separated from 

employment as a result of a cessation 

after the cessation had been reported to 

PBGC, and the number of additional 

separations would materially affect 

liability, the additional separations 

would have to be reported to PBGC. 

To simplify section 4062(e) reporting, 

PBGC proposes to permit a plan 

administrator to disregard affected 

participants who were not employed at 

the facility where the affected operation 

was carried out. PBGC’s experience 

suggests that effective and efficient 

enforcement of section 4062(e) is not 

usually best served by focusing the 

administrative resources of PBGC and 

plan administrators on tracing the 

effects of a cessation on employment at 

facilities beyond the one associated with 

the ceased operation. Accordingly, the 

proposed regulation would permit a 

plan administrator to ignore separations 

at other facilities in deciding whether a 

section 4062(e) event had occurred, 

when to file notice of an event, and how 

many affected participants to report in 

the notice. Only if PBGC specifically 

requested information about separations 

at other facilities would they need to be 

reported. In that case, however, or if 

identified in a PBGC investigation, 

separations at other facilities that were 

caused by a cessation would be counted 

in both the 20-percent threshold test 

and the liability calculation for the 

cessation. 

Information submitted to PBGC under 

the proposed regulation would be 

protected from disclosure to the extent 

provided in the Freedom of Information 

Act and 18 U.S.C. 1905 (dealing with 

commercial and financial information). 

Late Filing Penalties 

ERISA section 4071 authorizes PBGC 

to assess a penalty against any person 

that fails to timely provide any notice or 

other material information required 

under section 4062(e) or 4063 or 

regulations thereunder (which would 

include the proposed regulation).8

Under section 4071 and the Federal 

Civil Monetary Penalty Inflation 

Adjustment Act of 1990, as amended by 

the Debt Collection Improvement Act of 

1996, the maximum penalty is currently 

$1,100 per day. See PBGC’s regulation 

on Penalties for Failure To Provide 

Certain Notices or Other Material 

Information (29 CFR part 4071). 

On July 18, 1995 (at 60 FR 36837), 

PBGC issued a statement of policy on 

penalties for failure to provide required 

information in a timely manner. The 

statement said that PBGC would— 

consider the facts and circumstances of each 

case to assure that the penalty fits the 

violation. Among the factors the PBGC will 

consider are the importance and timesensitivity of the required information, the 

extent of the omission of information, the 

willfulness of the failure to provide the 

required information, the length of delay in 

providing the information, and the size of the 

plan. 

In general, the policy statement said that 

PBGC would assess penalties much 

lower than $1,100 per day—$25 per day 

for the first 90 days of delinquency and 

$50 per day thereafter, with limitations 

based on plan size. However, it also said 

that PBGC may assess larger penalties if 

circumstances warrant, such as ‘‘if the 

harm to participants or the PBGC 

resulting from a failure to timely 

provide material information is 

substantial.’’ Such ‘‘larger penalties’’ 

would of course be subject to the 

$1,100-per-day limitation. (The policy 

statement noted in particular that 

penalties for violations under subparts C 

and D of PBGC’s reportable events 

regulation would generally be at the 

$1,100-per-day level.) PBGC believes 

similarly that violations of the notice 

requirement under sections 4062(e) and 

4063 may well result in substantial 

harm to participants and PBGC, 

especially because of the five-year 

limitation on maintaining a bond or 

escrow under ERISA section 4063(c)(2). 

Thus, such violations may well warrant 

section 4071 penalties larger than the 

‘‘general’’ ($25/$50-per-day) penalty, 

subject to the $1,100-per-day limitation. 

Liability for Section 4062(e) Events 

The liability formula for section 

4062(e) events that PBGC added to the 

termination liability regulation in 2006 

would be preserved under this proposed 

rule,9 with clarification about how the 

calculation is done and some editorial 

changes (including rewording for 

consistency with terminology used in 

the rest of subpart B). 

The proposed clarification relates to 

the provision (in both the existing and 

proposed regulation) that liability for a 

section 4062(e) event is based on a 

computation of termination liability 

performed as if the plan had been 

terminated by PBGC immediately after 

the cessation date. PBGC believes that 

termination liability for this purpose 

should be fixed and determinable as of 


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10See for example PBGC Opinion Letters 76–8, 

76–52, 77–123, 77–134, 77–147, 78–29, 82–29, 85– 

8, and 86–13. 

the cessation date and should not take 

account of changes in assets or 

liabilities after the cessation date, such 

as from the receipt of contributions or 

the accrual of additional benefits. 

Ignoring post-cessation-date changes 

will promote simplicity and avoid the 

possibility that the liability calculation 

might differ depending on how long 

after the cessation date it was actually 

performed. This provision reflects 

PBGC’s current practice. 

PBGC proposes to remove the 

example in the current regulation that 

illustrates the computation of the 

fraction that is applied to termination 

liability to arrive at the liability that 

arises from a section 4062(e) event. The 

example was intended to make clear 

that the number of pre-event active 

participants does not include 

participants who are not currently 

working for the employer when the preevent participant-count is measured. 

PBGC believes that its proposed 

formulation of the active participant 

base makes this point clear without the 

need for an example. 

In general, PBGC proposes that it 

would prescribe one of the statutory 

methods (described in ERISA section 

4063(b) and (c)(1)) for satisfying liability 

arising from a section 4062(e) event. 

However, the proposed regulation 

would permit the continuation of 

PBGC’s practice, as authorized by 

ERISA section 4067, of negotiating with 

affected employers in appropriate cases 

on the manner in which the liability is 

to be satisfied, with a view to 

accommodating employer interests to 

the extent consistent with protecting the 

plan, participants, and PBGC as 

contemplated by the statute. For 

example, in some cases section 4062(e) 

liability might be satisfied through 

additional plan funding contributions 

that would not be added to the plan’s 

prefunding balance. Or, in appropriate 

cases, where a new, financially sound 

employer continues or resumes an 

operation, and the original employer’s 

workers are employed by the new 

employer, the proposed regulation 

would enable PBGC to consider the 

original employer’s liability satisfied 

through the new employer’s adoption of 

the original employer’s plan (or the 

portion of the plan covering the affected 

operation). 

Recordkeeping and Waivers 

PBGC proposes to require that 

employers and plan administrators 

preserve records about potential section 

4062(e) events that tend to show 

whether a section 4062(e) event in fact 

occurred and if so how much the 

resultant liability is. The recordkeeping 

provision would also permit PBGC to 

proceed on the basis of reasonable 

assumptions if employer or plan records 

were insufficient. The proposed record 

retention period would be five years, 

which matches the period for which the 

security provided by an employer with 

respect to a section 4062(e) event can be 

held—and thus PBGC’s window for 

enforcing section 4062(e). 

New subpart B would also include a 

provision explicitly authorizing PBGC 

to grant waivers where warranted by the 

circumstances. PBGC’s experience with 

section 4062(e) enforcement suggests 

that PBGC may encounter situations it 

does not now foresee, and this waiver 

provision is meant to provide a measure 

of flexibility in interpreting and 

applying the law. 

Provisions Not in the Rule 

The proposal does not include an 

exemption for small plans. Such an 

exemption was suggested by a 

commenter on PBGC’s 2006 rulemaking 

that codified the section 4062(e) liability 

formula. PBGC believes that the 

protection afforded by section 4062(e) is 

appropriate for small plans (and their 

participants) as well as for large plans. 

Furthermore, to the extent that small 

plans present less underfunding 

potential than large plans (and thus less 

potential exposure for the pension 

insurance system), the liability under 

section 4062(e) will also be less, and 

thus the burden of satisfying it should 

not be disproportionate. Finally, PBGC 

believes that the guidance in this 

proposed rule should make compliance 

relatively easy for small and large plans 

alike. These considerations militate 

against an exemption for small plans. 

The proposal also includes no 

exemption for well-funded plans. As 

noted above for small plans, the better 

a plan is funded, the lower (other things 

being equal) would be its liability for a 

section 4062(e) event under the formula 

provided in the regulation. If a plan 

were so well funded that it had no 

termination liability under ERISA 

section 4062, its liability for a section 

4062(e) event would be zero. But 

termination liability computations are 

complex, and PBGC would not expect 

plans to make such computations 

simply to claim exemption from the 

section 4062(e) event reporting 

requirement. 

The fact that a plan is undergoing a 

standard termination would likewise be 

ignored under the proposed rule. Until 

distributions pursuant to a standard 

termination are complete, there is the 

possibility that plan assets will be found 

insufficient to complete the standard 

termination process and that the plan 

will remain ongoing. However, PBGC 

might forbear to pursue section 4062(e) 

liability where a standard termination 

was in process. And if distributions 

under a standard termination are 

complete by the deadline for giving 

notice of a section 4062(e) event, PBGC 

generally would not enforce the notice 

requirement. 

Effect on Prior Opinions 

PBGC has in the past issued a number 

of opinion letters dealing with ERISA 

section 4062(e).10 While this proposed 

regulation does not explicitly address 

all details relating to section 4062(e), 

PBGC’s intent in issuing the regulation 

is to set forth all of its current section 

4062(e) guidance, supported by the 

discussion in this preamble. 

Accordingly, the regulation would 

displace and supersede all of PBGC’s 

prior opinion letter pronouncements 

addressing section 4062(e). 

Applicability 

PBGC proposes that the amendments 

made by this rule apply to section 

4062(e) events with cessation dates on 

or after the effective date of the 

amendments. 

Compliance With Rulemaking 

Guidelines 

E.O. 12866 

The PBGC has determined, in 

consultation with the Office of 

Management and Budget, that this 

proposed rule is a ‘‘significant regulatory 

action’’ under Executive Order 12866. 

The Office of Management and Budget 

has therefore reviewed this proposed 

rule under E.O. 12866. 

Regulatory Flexibility Act 

PBGC certifies under section 605(b) of 

the Regulatory Flexibility Act (5 U.S.C. 

601 et seq.) that the amendments in this 

rule will not have a significant 

economic impact on a substantial 

number of small entities. Accordingly, 

as provided in section 605 of the 

Regulatory Flexibility Act (5 U.S.C. 601 

et seq.), sections 603 and 604 do not 

apply. This certification is based on the 

fact that the proposed regulatory 

amendments require only the filing of 

notices and that the economic impact of 

filing is not significant. Furthermore, 

section 4062(e) is generally not relevant 

for small employers. Small employers 

tend not to have multiple operations. 

For a small employer with a defined 

benefit pension plan, the cessation of an 

operation almost always would be 


wwoods2 on DSK1DXX6B1PROD with PROPOSALS_PART 1
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accompanied by plan termination. 

Section 4062(e) protection is only 

relevant when the plan is ongoing after 

the cessation of operations. Since 

publication of PBGC’s 2006 final rule on 

calculation of liability under section 

4062(e), only a handful of the potential 

section 4062(e) cases reviewed by PBGC 

involved plans with 100 or fewer 

participants. 

Paperwork Reduction Act 

PBGC is submitting the information 

requirements under this proposed rule 

to the Office of Management and Budget 

for review and approval under the 

Paperwork Reduction Act. Copies of 

PBGC’s request may be obtained free of 

charge by contacting the Disclosure 

Division of the Office of the General 

Counsel of PBGC, 1200 K Street, NW., 

Washington, DC 20005, 202–326–4040. 

The proposed information collection 

will also be available on PBGC’s Web 

site. 

PBGC is proposing to require that 

notices of section 4062(e) events be filed 

using a PBGC form and include the 

following information: 

• Identifying and contact information 

for the affected plan, the plan 

administrator, other plans covering 

affected participants, the contributing 

sponsor, and members of the 

contributing sponsor’s controlled group. 

• A description of current and 

proposed plan provisions dealing with 

lump sum options, shutdowns, and 

early retirement benefits. 

• A description of any current or 

proposed plan termination proceedings, 

plan mergers, or changes in contributing 

sponsor or controlled group. 

• A description of the affected 

operation and associated facility. 

• A general description of the section 

4062(e) event, including whether the 

affected operation is to be continued or 

resumed by the affected employer or a 

new employer at the same or another 

facility. 

• The date used to calculate the 

active participant base, the date of any 

employer decision to cease the affected 

operation, the date (and nature) of any 

event that caused the cessation (other 

than an employer decision), the 

cessation date, and the date when the 

number of affected participants 

exceeded 20 percent of the active 

participant base. 

• A copy of any press release or other 

announcement of the employer’s 

cessation decision (including any notice 

issued pursuant to the Worker 

Adjustment and Retraining Notification 

(WARN) Act) and the date when it was 

issued. 

• A description of any severance or 

retirement incentives offered since the 

date one year before the date of the 

employer decision to cease the 

operation. 

• The active participant base. 

• The number of affected participants 

as of the date when the filing was 

prepared. 

• The number of participants in the 

affected plan who have not separated 

from employment as of the date when 

the filing was prepared but who the 

employer believes will separate from 

employment as a result of the section 

4062(e) event. 

• The number of active participants 

in the affected plan who had separated 

from employment as of the date when 

the filing was prepared but who were 

not counted as affected participants. 

• The name and address of each 

union representing affected participants. 

• A copy of each collective bargaining 

agreement covering affected 

participants. 

• The affected plan’s most recent 

adjusted funding target attainment 

percentage (AFTAP) certification and 

most recent actuarial valuation report, 

including or supplemented by all of the 

information described in § 4010.8(a)(11) 

of PBGC’s regulation on Annual 

Financial and Actuarial Information 

Reporting (29 CFR part 4010). 

• A summary of plan amendments, 

significant changes in plan population, 

changes in plan assumptions, and 

amounts and dates of lump sums paid 

that are not reflected in the most recent 

actuarial valuation report. 

• The market value of plan assets as 

of, or as close as possible to, the 

cessation date. 

PBGC needs this information to 

calculate the liability arising from a 

section 4062(e) event and decide how 

that liability should be satisfied. PBGC 

estimates that it will receive filings from 

about 200 respondents each year and 

that the total annual burden of the 

collection of information will be about 

1,000 hours and $350,000. 

Comments on the paperwork 

provisions under this proposed rule 

should be sent 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. Although comments 

may be submitted through October 12, 

2010, the Office of Management and 

Budget requests that comments be 

received on or before September 9, 2010 

to ensure their consideration. Comments 

may address (among other things)— 

• Whether the proposed 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 

29 CFR Part 4062 

Employee benefit plans, Pension 

insurance, Reporting and recordkeeping 

requirements. 

29 CFR Part 4063 

Employee benefit plans, Pension 

insurance. 

For the reasons given above, PBGC 

proposes to amend 29 CFR parts 4062 

and 4063 as follows. 

PART 4062—LIABILITY FOR 

TERMINATION OF SINGLE-EMPLOYER 

PLANS 

1. The authority citation for part 4062 

is revised to read as follows: 

Authority: 29 U.S.C. 1302(b)(3), 1303(a), 

1362–1364, 1367, 1368. 

2. Section 4062.1 is revised to read as 

follows: 

§ 4062.1 Purpose and scope. 

Subpart A of this part sets forth rules 

for calculation and payment of the 

liability incurred, under section 4062(b) 

of ERISA, upon termination of any 

single-employer plan and, to the extent 

appropriate, calculation of the liability 

incurred with respect to multiple 

employer plans under sections 4063 and 

4064 of ERISA. Subpart B of this part 

sets forth rules under section 4062(e) of 

ERISA, including rules for reporting 

section 4062(e) events and for 

calculating and satisfying liability 

arising from such events. 

§ 4062.3 [Amended] 

3. In § 4062.3, paragraph (b) is 

amended by removing the reference 

‘‘§ 4062.9(c)’’ and adding in its place the 

reference ‘‘§ 4062.8(c)’’; and by removing 

the reference ‘‘§ 4062.9(b)’’ and adding 

in its place the reference ‘‘§ 4062.8(b)’’. 


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§ 4062.7 [Amended] 

4. In § 4062.7, paragraph (a) is 

amended by removing the reference 

‘‘§ 4062.9’’ and adding in its place the 

reference ‘‘§ 4062.8’’. 

§ 4062.8 [Removed] 

5. Section 4062.8 is removed. 

§§ 4062.9, 4062.10, and 4062.11 

[Redesignated as §§ 4062.8, 4062.9, and 

4062.10] 

6. Sections 4062.9, 4062.10, and 

4062.11 are redesignated as §§ 4062.8, 

4062.9, and 4062.10 respectively. 

§ 4062.1 through § 4062.10 [Designated] 

7. Newly redesignated §§ 4062.1 

through 4062.10 are designated as 

subpart A with the heading ‘‘Subpart 

A— General Termination Liability 

Rules’’. 

8. A new subpart B is added to read 

as follows: 

Subpart B—Treatment of Substantial 

Cessation of Operations 

Sec. 

4062.21 Purpose and scope. 

4062.22 Definitions. 

4062.23 ‘‘Section 4062(e) event.’’ 

4062.24 ‘‘Operation.’’ 

4062.25 ‘‘Facility’’ or ‘‘facility in any 

location.’’ 

4062.26 ‘‘Cease’’ and ‘‘cessation.’’ 

4062.27 ‘‘Separate’’ and ‘‘separation.’’ 

4062.28 ‘‘Result.’’ 

4062.29 ‘‘Active participant base.’’ 

4062.30 PBGC investigations. 

4062.31 Reporting requirement. 

4062.32 Amount of liability. 

4062.33 Manner of satisfying liability. 

4062.34 Recordkeeping. 

4062.35 Waivers. 

Subpart B—Treatment of Substantial 

Cessation of Operations 

§ 4062.21 Purpose and scope. 

This subpart B provides guidance 

about the applicability and enforcement 

of ERISA section 4062(e). 

§ 4062.22 Definitions. 

For purposes of this subpart B: 

Active participant base has the 

meaning described in § 4062.29. 

Affected employer means an employer 

that ceases an operation at a facility. 

Affected operation means the 

operation that an affected employer 

ceases. 

Affected participant means an 

employee of an affected employer who 

is a participant in an affected plan and 

who separates from employment with 

the affected employer as a result of the 

affected employer’s ceasing the affected 

operation. 

Affected plan means a singleemployer plan that is maintained by an 

affected employer, that is not a multiple 

employer plan, and that includes as 

participants employees of the affected 

employer who separate from 

employment as a result of the affected 

employer’s ceasing the affected 

operation. 

Cease and cessation have the meaning 

described in § 4062.26. 

Cessation date means the date when 

an employer ceases an operation at a 

facility as described in § 4062.26. 

Employer has the meaning described 

in § 4001.2 of this chapter. 

Facility and facility in any location 

have the meaning described in 

§ 4062.25. 

Operation has the meaning described 

in § 4062.24. 

Result has the meaning described in 

§ 4062.28. 

Section 4062(e) event has the meaning 

described in § 4062.23. 

Separate and separation have the 

meaning described in § 4062.27. 

§ 4062.23 ‘‘Section 4062(e) event.’’ 

(a) In general. A section 4062(e) event 

occurs if— 

(1) An employer maintains a singleemployer plan that is not a multiple 

employer plan; 

(2) The employer ceases an operation 

at a facility in any location; 

(3) As a result of the cessation, one or 

more persons who are employees of the 

employer and participants in the plan 

are separated from employment; and 

(4) The number of such persons who 

are so separated is more than 20 percent 

of the active participant base associated 

with the cessation. 

(b) Risk disregarded. Whether a 

section 4062(e) event has occurred is 

decided without regard to the existence 

or non-existence, when the event occurs 

or when the decision is made, of risk or 

apparent risk to a plan, its participants, 

or PBGC. However, PBGC may assess 

risk in making arrangements for 

satisfaction of liability for a section 

4062(e) event. 

(c) Plan-by-plan application. This 

subpart B applies separately to each 

plan of an affected employer. 

§ 4062.24 ‘‘Operation.’’ 

An operation is a set of activities that 

constitutes an organizationally, 

operationally, or functionally distinct 

unit of an employer. Whether a set of 

activities is an operation may depend on 

whether it is (or similar sets of activities 

are) so considered or treated in the 

relevant industry, in the employer’s 

organizational structure or accounts, in 

relevant collective bargaining 

agreements, by the employer’s 

employees or customers, or by the 

public. 

§ 4062.25 ‘‘Facility’’ or ‘‘facility in any 

location.’’ 

The facility (or facility in any 

location) associated with an operation is 

the place or places where the operation 

is performed. A facility is typically a 

building or buildings. However, a 

facility may be or include any one or 

more enclosed or open areas or 

structures. The same facility may be 

associated with more than one 

operation. 

§ 4062.26 ‘‘Cease’’ and ‘‘cessation.’’ 

(a) Voluntary cessation. Unless 

paragraph (b) of this section applies, an 

employer is considered to cease an 

operation at a facility when the 

employer discontinues all significant 

activity at the facility in furtherance of 

the purpose of the operation. 

(b) Involuntary cessation. 

(1) Cessation caused by employee 

action. If a discontinuance of activity 

described in paragraph (a) of this 

section is caused by employee action 

such as a strike or sickout, then the 

employer is considered to cease the 

operation at the facility on the earlier 

of— 

(i) The date when the employee action 

ends, unless within one week after that 

date the employer has resumed 

significant activity at the facility in 

furtherance of the purpose of the 

operation, or 

(ii) The date when the employer 

decides not to resume significant 

activity at the facility in furtherance of 

the purpose of the operation. 

(2) Other involuntary cessation. If a 

discontinuance of activity described in 

paragraph (a) of this section is caused by 

a sudden and unanticipated event (other 

than an employee action) such as a 

natural disaster, then the employer is 

considered to cease the operation at the 

facility on the earlier of— 

(i) The date that is 30 days after the 

discontinuance, unless on that date the 

employer has resumed significant 

activity at the facility in furtherance of 

the purpose of the operation, or 

(ii) The date when the employer 

decides not to resume significant 

activity at the facility in furtherance of 

the purpose of the operation. 

(c) Follow-on operations disregarded. 

Whether an employer ceases an 

operation at a facility is decided without 

regard to whether— 

(1) The operation is continued or 

resumed— 

(i) At another facility, or 

(ii) By another employer; or 

(2) When the operation is 

discontinued, a different operation is 

undertaken. 


wwoods2 on DSK1DXX6B1PROD with PROPOSALS_PART 1
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§ 4062.27 ‘‘Separate’’ and ‘‘separation.’’ 

(a) In general. An employee of an 

employer separates from employment 

when the employee discontinues the 

active performance, pursuant to the 

employee’s employment relationship 

with the employer, of activities in 

furtherance of any of the employer’s 

operations, unless, when the 

discontinuance occurs, it is reasonably 

certain that the employee will resume 

such active work for the employer 

within 30 days. However, if the 30-day 

period passes and the employee has not 

resumed active work for the employer, 

the employee will be considered to have 

separated from employment when the 

discontinuance occurred. 

(b) Employees rehired or replaced. If 

an employer ceases an operation at a 

facility, the separation from 

employment of an employee who is a 

participant in the affected plan is 

disregarded in computing the number of 

affected participants if the separation is 

before the cessation date and, as of the 

cessation date, either— 

(1) The employee has been rehired 

and is an employee of the employer and 

a participant in the affected plan, or 

(2) The employee has been replaced 

and the replacement is an employee of 

the employer and a participant in the 

affected plan. 

§ 4062.28 ‘‘Result.’’ 

(a) In general. An employee separates 

from employment as a result of an 

employer’s cessation of an operation at 

a facility if— 

(1) The employee separates from 

employment with the employer, and 

(2) The separation would not have 

occurred when it did if the employer’s 

cessation of the operation at the facility 

had not occurred. 

(b) Circumstances not decisive. An 

employee’s separation from 

employment may result from an 

employer’s cessation of an operation at 

a facility— 

(1) Whether separation occurs before, 

on, or after the cessation date, 

(2) Whether or not the employee is 

employed in the operation that ceases, 

and 

(3) Whether or not the employee is 

employed at the facility associated with 

the operation that ceases. 

(c) Presumption; voluntary cessation; 

involuntary separation. An employee’s 

separation from employment with an 

employer is presumed to be a result of 

the employer’s cessation of an operation 

at a facility if— 

(1) The employee is employed by the 

employer in the operation, 

(2) The cessation is described in 

§ 4062.26(a) and not in § 4062.26(b), and 

(3) The employee involuntarily 

separates from employment with the 

employer on or after the date of the 

employer decision pursuant to which 

the cessation occurred. 

(d) Presumption; voluntary cessation; 

voluntary separation. An employee’s 

separation from employment with an 

employer is presumed to be a result of 

the employer’s cessation of an operation 

at a facility if— 

(1) The employee is employed by the 

employer in the operation, 

(2) The cessation is described in 

§ 4062.26(a) and not in § 4062.26(b), and 

(3) The employee voluntarily 

separates from employment with the 

employer on or after the earliest date 

when the employer decision pursuant to 

which the cessation occurred becomes 

known to the employee, to employees 

generally, or to the public. 

(e) Presumption; involuntary 

cessation. An employee’s separation 

from employment with an employer is 

presumed to be a result of the 

employer’s cessation of an operation at 

a facility if— 

(1) The employee is employed by the 

employer in the operation, 

(2) The cessation is described in 

§ 4062.26(b), and 

(3) The employee voluntarily or 

involuntarily separates from 

employment with the employer on or 

after the date of the event that causes 

the cessation. 

(f) Presumption; employment by new 

employer. An employee’s separation 

from employment with an employer is 

presumed to be a result of the 

employer’s cessation of an operation at 

a facility if— 

(1) The employee is employed by the 

employer in the operation, 

(2) Another employer (the ‘‘new 

employer’’) continues or resumes the 

operation at the same or another facility, 

and 

(3) The employee becomes employed 

by the new employer. 

§ 4062.29 ‘‘Active participant base.’’ 

(a) In general. The active participant 

base associated with a cessation is the 

total number of persons who, 

immediately before the applicable date 

in paragraph (b) of this section, were— 

(1) Participants in the affected plan, 

and 

(2) Employees of the affected 

employer either— 

(i) Engaged in the active performance, 

pursuant to their employment 

relationship with the employer, of 

activities in furtherance of the 

employer’s operations, or 

(ii) Reasonably certain to resume such 

active work for the employer within 30 

days, but a person is not counted in the 

active participant base under this 

paragraph (a)(2)(ii) if the 30-day period 

passes and the employee has not 

resumed active work for the employer. 

(b) Applicable date. For purposes of 

paragraph (a) of this section, the 

applicable date is— 

(1) For a cessation described in 

§ 4062.26(a) and not in § 4062.26(b), the 

date of the employer decision pursuant 

to which the cessation occurred, and 

(2) For a cessation described in 

§ 4062.26(b), the date of the event that 

caused the cessation. 

(c) ‘‘Participant.’’ For purposes of this 

subpart B, whether an individual is a 

participant in a plan at a particular time 

is decided without regard to whether 

the individual is accruing benefits 

under the plan at that time. 

§ 4062.30 PBGC investigations. 

(a) In general. PBGC may make such 

investigations as it considers necessary 

to enforce section 4062(e) and this 

subpart B and in particular to discover 

whether section 4062(e) events have 

occurred and whether notices required 

under § 4062.31 have been timely filed. 

(b) PBGC information requests. If 

PBGC requests from any person 

information about any event that may be 

a section 4062(e) event, the person must 

file the requested information within 45 

days after PBGC’s request or within a 

different time specified in the request. 

PBGC may specify a shorter time where 

it finds that the interests of PBGC, 

participants, or the pension insurance 

system may be prejudiced by a delay in 

the receipt of the information (for 

example, where timely enforcement of 

section 4062(e) of ERISA may be 

jeopardized). 

(c) Duty to update or correct. If a 

person that has filed information with 

PBGC pursuant to a request under 

paragraph (b) of this section discovers 

that any information so filed (including 

the number of affected participants) is 

materially erroneous or has become 

materially outdated, the person must 

promptly file with PBGC the correct or 

updated information. 

(d) PBGC determinations. On the basis 

of information gleaned from an 

investigation or otherwise obtained, 

PBGC may determine that a section 

4062(e) event has occurred and 

determine the amount of liability arising 

from the event. 

§ 4062.31 Reporting requirement. 

(a) Notice required; who must file. If 

a section 4062(e) event occurs, the plan 

administrator of the affected plan must 

file a notice of the event with PBGC. 

The filing of the notice constitutes a 


wwoods2 on DSK1DXX6B1PROD with PROPOSALS_PART 1
Federal Register / Vol. 75, No. 153 / Tuesday, August 10, 2010 / Proposed Rules 48293 

request that PBGC determine the 

liability with respect to the event. 

(b) When to file. 

(1) In general. Notice of a section 

4062(e) event must be filed with PBGC 

within 60 days after the later of— 

(i) The cessation date, or 

(ii) The date when the number of 

affected participants is more than 20 

percent of the active participant base. 

(2) Filing date; computation of time. 

See subparts C and D of part 4000 of this 

chapter for information on ascertaining 

filing dates and computing periods of 

time. 

(c) How to file. See §§ 4000.3 and 

4000.4 of this chapter for information on 

how and where to file. Notice of a 

section 4062(e) event must be filed in 

accordance with PBGC’s instructions for 

filing section 4062(e) event notices, 

posted on PBGC’s Web site (http:// 

www.pbgc.gov). 

(d) Additional information. If PBGC 

requests additional information from the 

plan administrator of an affected plan 

about a section 4062(e) event of which 

the plan administrator has given notice, 

the plan administrator must file the 

requested information within 45 days 

after PBGC’s request or within a 

different time specified in the request. 

PBGC may specify a shorter time where 

it finds that the interests of PBGC, 

participants, or the pension insurance 

system may be prejudiced by a delay in 

the receipt of the information (for 

example, where timely enforcement of 

section 4062(e) of ERISA may be 

jeopardized). 

(e) Requirement for employer to 

provide information. An employer that 

may be an affected employer must 

timely provide to the plan administrator 

of any plan that may be an affected plan 

any information that the plan 

administrator needs— 

(1) To decide whether and when a 

section 4062(e) event has occurred, and 

(2) To file under this section. 

(f) Duty to update or correct. If the 

plan administrator of an affected plan 

discovers or is notified by the affected 

employer that any information filed 

with PBGC under this section (including 

the number of affected participants) is 

materially erroneous or has become 

materially outdated, the plan 

administrator must promptly file with 

PBGC the correct or updated 

information. 

(g) Disregarding certain affected 

participants for notice purposes. In 

deciding whether notice of a section 

4062(e) event is required, the due date 

of the notice, and the number of affected 

participants to be reported in the notice 

(and any update or correction of the 

notice under paragraph (f) of this 

section), a plan administrator may 

disregard affected participants who 

were not employed at the facility 

associated with the affected operation. 

This provision does not apply to— 

(1) PBGC investigations under 

§ 4062.30, or 

(2) A request under paragraph (d) of 

this section for information about 

affected participants who were not 

employed at the facility associated with 

the affected operation (or any update or 

correction under paragraph (f) of this 

section of information provided in 

response to such a request). 

§ 4062.32 Amount of liability. 

(a) Determination of liability. PBGC 

will determine the amount of liability 

with respect to a section 4062(e) event 

in accordance with this section. 

(b) Amount of liability. The amount of 

liability for a section 4062(e) event is 

the amount that PBGC determines to be 

the amount described in section 4062 of 

ERISA for the entire affected plan, 

computed as if the plan had been 

terminated by PBGC immediately after 

the cessation date, multiplied by a 

fraction— 

(1) The numerator of which is the 

number of affected participants, and 

(2) The denominator of which is the 

active participant base. 

(c) Post-cessation changes 

disregarded. For purposes of paragraph 

(b) of this section, the amount described 

in section 4062 of ERISA for the entire 

affected plan is calculated without 

regard to any change in the affected 

plan’s assets or benefit liabilities after 

the cessation date, such as an increase 

in assets due to receipt of contributions 

after the cessation date or an increase in 

liabilities due to accruals after that date. 

§ 4062.33 Manner of satisfying liability. 

(a) In general. PBGC will decide in 

accordance with ERISA how the 

liability for a section 4062(e) event is to 

be satisfied. In general, PBGC will 

require that liability for a section 

4062(e) event be satisfied either— 

(1) By paying the amount of the 

liability to PBGC to be held in escrow 

under section 4063(b) of ERISA, or 

(2) By furnishing a bond in an amount 

not exceeding 150 percent of the 

amount of the liability under section 

4063(c)(1) of ERISA. 

(b) Other arrangements. PBGC may 

make arrangements for satisfaction of 

liability for a section 4062(e) event other 

than those in paragraph (a) of this 

section. For example, in appropriate 

cases: 

(1) PBGC may permit liability for a 

section 4062(e) event to be satisfied 

through one or more additional plan 

funding contributions that would not be 

added to the plan’s prefunding balance. 

(2) If an affected operation is 

continued or resumed by another 

employer (the ‘‘new employer’’), and the 

new employer employs in the operation 

persons who were employed by the 

affected employer in the operation, 

PBGC may permit the liability for the 

section 4062(e) event to be satisfied by 

the new employer’s adoption or 

maintenance of the affected plan or of 

a plan that holds substantially all of the 

liabilities and assets of the affected plan 

attributable to employees employed in 

the affected operation. 

§ 4062.34 Recordkeeping. 

(a) Each employer that maintains a 

single-employer plan that is not a 

multiple employer plan, and the plan 

administrator of each such plan, must 

keep for five years, with respect to any 

discontinuance of all significant activity 

in furtherance of the purpose of an 

operation of the employer at a facility, 

all records that bear on whether there 

was a section 4062(e) event and on the 

calculation of liability with respect to 

the event. 

(b) If PBGC finds that an employer or 

plan administrator referred to in 

paragraph (a) of this section has failed 

to keep records sufficient to determine 

whether a section 4062(e) event has 

occurred or the amount of liability 

arising from such an event, PBGC may 

make such determination on the basis of 

reasonable assumptions not inconsistent 

with information that PBGC knows of 

and considers reliable. 

§ 4062.35 Waivers. 

PBGC may waive any provision of this 

subpart B to accommodate the facts and 

circumstances of particular cases and 

promote the equitable and rational 

interpretation and application of title 

IV. 

PART 4063—WITHDRAWAL LIABILITY; 

PLANS UNDER MULTIPLE 

CONTROLLED GROUPS 

9. The authority citation for part 4063 

continues to read as follows: 

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

10. In section 4063.1, paragraph (a) is 

amended by revising the second 

sentence to read as follows: 

§ 4063.1 Cross references. 

(a) * * * Part 4062 also sets forth 

rules under section 4062(e) of ERISA, 

including rules for reporting section 

4062(e) events and for calculating and 

satisfying liability arising from such 

events. 

* * * * * 


wwoods2 on DSK1DXX6B1PROD with PROPOSALS_PART 1
48294 Federal Register / Vol. 75, No. 153 / Tuesday, August 10, 2010 / Proposed Rules 

Issued in Washington, DC, August 4, 2010. 

Joshua Gotbaum, 

Director, Pension Benefit Guaranty 

Corporation. 

[FR Doc. 2010–19627 Filed 8–9–10; 8:45 am] 

BILLING CODE 7709–01–P 

DEPARTMENT OF THE INTERIOR 

Fish and Wildlife Service 

50 CFR Part 17 

[Docket No. FWS-R8-ES-2010-0049] 

[MO-92210-0-0008-B2] 

Endangered and Threatened Wildlife 

and Plants; 90-Day Finding on a 

Petition to List Arctostaphylos 

franciscana as Endangered with 

Critical Habitat 

AGENCY: Fish and Wildlife Service, 

Interior. 

ACTION: Notice of petition finding and 

initiation of status review. 

SUMMARY: We, the U.S. Fish and 

Wildlife Service (Service), announce a 

90-day finding on a petition to list 

Arctostaphylos franciscana (Franciscan 

manzanita or San Francisco manzanita) 

as endangered under the Endangered 

Species Act of 1973, as amended, (Act) 

and to designate critical habitat. Based 

on our review, we find that the petition 

presents substantial scientific or 

commercial information indicating that 

listing this species may be warranted. 

Therefore, with the publication of this 

notice, we are initiating a review of the 

status of the species to determine if 

listing the species is warranted. To 

ensure that the status review is 

comprehensive, we are requesting 

scientific and commercial data and 

other information regarding this species. 

Based on the status review, we will 

issue a 12–month finding on the 

petition, which will address whether 

the petitioned action is warranted, as 

provided in section 4(b)(3)(B) of the Act. 

DATES: To allow us adequate time to 

conduct this review, we request that we 

receive information on or before October 

12, 2010. Please note that if you are 

using the Federal eRulemaking Portal 

(see ADDRESSES section, below), the 

deadline for submitting an electronic 

comment is 11:59 p.m. Eastern Daylight 

Savings Time on this date. 

After October 12, 2010, you must 

submit information directly to the Field 

Office (see FOR FURTHER INFORMATION

CONTACT section below). Please note that 

we might not be able to address or 

incorporate information that we receive 

after the above requested date. 

ADDRESSES: You may submit 

information by one of the following 

methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. In the box that 

reads ‘‘Enter Keyword or ID,’’ enter the 

Docket number for this finding, which 

is -[FWS-R8-ES-2010-0049]. Check the 

box that reads ‘‘Open for Comment/ 

Submission,’’ and then click the Search 

button. You should then see an icon that 

reads ‘‘Submit a Comment.’’ Please 

ensure that you have found the correct 

rulemaking before submitting your 

comment. 

• U.S. mail or hand-delivery: Public 

Comments Processing, Attn: [FWS-R8- 

ES-2010-0049]; Division of Policy and 

Directives Management; U.S. Fish and 

Wildlife Service; 4401 N. Fairfax Drive, 

Suite 222; Arlington, VA 22203. 

We will post all information we 

receive on http://www.regulations.gov. 

This generally means that we will post 

any personal information you provide 

us (see the Request for Information 

section below for more details). 

FOR FURTHER INFORMATION CONTACT: 

Karen Leyse, Listing Coordinator, 

Sacramento Fish and Wildlife Office, 

2800 Cottage Way, Room W-2605, 

Sacramento, CA 95825; by telephone 

916-414-6600; or by facsimile 916-414- 

6712. If you use a telecommunications 

device for the deaf (TDD), please call the 

Federal Information Relay Service 

(FIRS) at 800-877-8339. 

SUPPLEMENTARY INFORMATION: 

Request for Information 

When we make a finding that a 

petition presents substantial 

information indicating that listing a 

species may be warranted, we are 

required to promptly review the status 

of the species (status review). For the 

status review to be complete and based 

on the best available scientific and 

commercial information, we request 

information on Arctostaphylos 

franciscana from governmental 

agencies, Native American tribes, the 

scientific community, industry, and any 

other interested parties. We seek 

information on: 

(1) The species’ biology, range, and 

population trends, including; 

(a) Requirements for reproduction, 

nutrition, and habitat; 

(b) Genetics and taxonomy; 

(c) Historical and current range 

including distribution patterns; 

(d) Historical and current population 

levels, and current and projected trends; 

and 

(e) Past and ongoing conservation 

measures for the species, its habitat, or 

both. 

(2) The factors that are the basis for 

making a listing determination for a 

species under section 4(a) of the 

Endangered Species Act of 1973, as 

amended (Act) (16 U.S.C. 1531 et seq.), 

which are: 

(a) The present or threatened 

destruction, modification, or 

curtailment of its habitat or range; 

(b) Overutilization for commercial, 

recreational, scientific, or educational 

purposes; 

(c) Disease or predation; 

(d) The inadequacy of existing 

regulatory mechanisms; or 

(e) Other natural or manmade factors 

affecting its continued existence. 

(3) The potential effects of climate 

change on this species and its habitat. 

If, after the status review, we 

determine that listing Arctostaphylos 

franciscana is warranted, we will 

propose critical habitat (see definition 

in section 3(5)(A) of the Act), under 

section 4 of the Act, to the maximum 

extent prudent and determinable at the 

time we propose to list the species. 

Therefore, within the geographical range 

currently occupied by A. franciscana, 

we request data and information on: 

(1) What may constitute ‘‘physical or 

biological features essential to the 

conservation of the species’’; 

(2) Where these features are currently 

found; and 

(3) Whether any of these features may 

require special management 

considerations or protection. 

In addition, we request data and 

information on ‘‘specific areas outside 

the geographical area occupied by the 

species’’ that are ‘‘essential to the 

conservation of the species.’’ Please 

provide specific comments and 

information as to what, if any, critical 

habitat you think we should propose for 

designation if the species is proposed 

for listing, and why such habitat meets 

the requirements of section 4 of the Act. 

Please include sufficient information 

with your submission (such as scientific 

journal articles or other publications) to 

allow us to verify any scientific or 

commercial information you include. 

Submissions merely stating support 

for or opposition to the action under 

consideration without providing 

supporting information, although noted, 

will not be considered in making a 

determination. Section 4(b)(1)(A) of the 

Act directs that determinations as to 

whether any species is a threatened or 

endangered species must be made 

‘‘solely on the basis of the best scientific 

and commercial data available.’’ 

You may submit your information by 

one of the methods listed in the 

ADDRESSES section. If you submit 

information via http:// 


wwoods2 on DSK1DXX6B1PROD with PROPOSALS_PART 1