Monday, 

November 23, 2009 

Part IV 

Pension Benefit 

Guaranty 

Corporation 

29 CFR Parts 4000, 4001, 4043, et al. 

Pension Protection Act of 2006; 

Conforming Amendments; Reportable 

Events and Certain Other Notification 

Requirements; Proposed Rule 


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61248 Federal Register / Vol. 74, No. 224 / Monday, November 23, 2009 / Proposed Rules 

PENSION BENEFIT GUARANTY 

CORPORATION 

29 CFR Parts 4000, 4001, 4043, 4204, 

4206, 4211, and 4231 

RIN 1212–AB06 

Pension Protection Act of 2006; 

Conforming Amendments; Reportable 

Events and Certain Other Notification 

Requirements 

AGENCY: Pension Benefit Guaranty 

Corporation. 

ACTION: Proposed rule. 

SUMMARY: This is a proposed rule to 

conform PBGC’s reportable events 

regulation under section 4043 of ERISA 

and a number of other PBGC regulations 

to statutory changes made by the 

Pension Protection Act of 2006 (PPA 

2006) and to revisions of other PBGC 

regulations that implement the statutory 

changes. The rule would also eliminate 

most of the automatic waivers and filing 

extensions currently provided under the 

reportable events regulation and make 

other amendments to the regulation. For 

example, the rule would create two new 

reportable events based on provisions in 

PPA 2006 dealing with funding-based 

benefit limits and with asset transfers to 

retiree health benefits accounts. 

DATES: Comments must be submitted on 

or before January 22, 2010. 

ADDRESSES: Comments, identified by 

Regulation Identifier Number (RIN) 

1212–AB06, 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–AB06). 

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: John 

H. Hanley, Director, Legislative and 

Regulatory Department; or 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: 

Background 

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 section 4007 of ERISA, pension 

plans covered by Title IV must pay 

premiums to PBGC. Section 4006 of 

ERISA establishes the premium rates 

and includes provisions for determining 

the variable-rate premium (VRP), which 

is based on plan funding rules. PBGC 

has regulations on Premium Rates (29 

CFR part 4006) and Payment of 

Premiums (29 CFR part 4007) that 

implement the premium rules. A 

number of other provisions of ERISA, 

and of PBGC’s other regulations, refer to 

funding and premium rules. Thus, 

changes in the funding and premium 

rules may require changes in some other 

PBGC regulations, such as PBGC’s 

regulation on Reportable Events and 

Certain Other Notification Requirements 

(29 CFR part 4043), which implements 

section 4043 of ERISA (requiring that 

PBGC be notified of the occurrence of 

certain ‘‘reportable events’’). 

On August 17, 2006, the Pension 

Protection Act of 2006 (PPA 2006), 

Public Law 109–280, was signed into 

law. PPA 2006 makes changes to the 

plan funding rules in Title I of ERISA 

and in the Internal Revenue Code of 

1986 (Code) and amends the VRP 

provisions of section 4006 of ERISA to 

conform to the changes in the funding 

rules. On March 21, 2008, PBGC 

published in the Federal Register (at 73 

FR 15065) a final rule amending its 

premium rates regulation and its 

premium payment regulation to 

implement the changes to ERISA and 

the Code made by PPA 2006. The 

changes to the funding and premium 

rules are effective for plan years 

beginning after 2007. 

On November 28, 2007, PBGC issued 

Technical Update 07–2 (revised 

December 7, 2007 (corrected December 

15, 2007)) (http://www.pbgc.gov/ 

practitioners/law-regulations-informalguidance/content/tu16267.html), 

providing transitional guidance on the 

applicability of the changes made by 

PPA 2006, and the corresponding 

changes proposed for PBGC premium 

regulations, to the determination of 

funding-related amounts for purposes of 

the reportable events regulation. On 

March 24, 2008, PBGC issued Technical 

Update 08–2 (http://www.pbgc.gov/ 

practitioners/law-regulations-informalguidance/content/tu16372.html), 

providing a waiver for reporting of 

missed quarterly contributions by 

certain small employers in 2008. On 

January 9, 2009, PBGC issued Technical 

Update 09–1 (http://www.pbgc.gov/ 

practitioners/law-regulations-informalguidance/content/tu16637.html), 

providing interim guidance on 

compliance with reportable events 

requirements for plan years beginning in 

2009. On April 30, 2009, PBGC issued 

Technical Update 09–3 (http:// 

www.pbgc.gov/practitioners/lawregulations-informal-guidance/content/ 

tu16725.html), providing a waiver or 

alternative compliance method 

(depending on plan size) for reporting of 

missed quarterly contributions by 

certain small employers in 2009. 

Overview of Proposed Regulatory 

Changes 

This proposed rule would amend 

PBGC’s reportable events regulation to 

make the advance reporting threshold 

test consistent with the PPA 2006 

funding rules and PBGC’s new variablerate premium rules; eliminate most 

automatic waivers and filing extensions; 

create two new reportable events based 

on provisions in PPA 2006 dealing with 

funding-based benefit limits and with 

asset transfers to retiree health benefits 

accounts; reduce reporting of active 

participant reductions; clarify the 

provisions dealing with missed 

contributions and inability to pay 

benefits when due; clarify the benefit 

liability transfer event; remove from the 

regulation the lists of information items 

to be submitted (which are listed in the 

filing instructions); require filers to use 

PBGC forms to file reportable events 

notices; and eliminate the special 

‘‘partial electronic filing’’ provision. 

The rule would also amend six other 

PBGC regulations to revise statutory 

cross-references and otherwise 

accommodate the statutory and 

regulatory changes in the premium 

rules: the regulations on Filing, 

Issuance, Computation of Time, and 

Record Retention (29 CFR part 4000); 

Terminology (29 CFR part 4001); 

Variances for Sale of Assets (29 CFR 

part 4204); Adjustment of Liability for a 

Withdrawal Subsequent to a Partial 

Withdrawal (29 CFR part 4206); 

Allocating Unfunded Vested Benefits to 

Withdrawing Employers (29 CFR part 


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4211); and Mergers and Transfers 

Between Multiemployer Plans (29 CFR 

part 4231). 

Reportable Events 

PBGC proposes to amend the 

reportable events regulation to 

accommodate the changes to the 

funding and premium rules, to 

eliminate most automatic waivers and 

filing extensions, to add two new 

reportable events, and to make other 

modifications. 

Advance Reporting Test 

Under section 4043(a) of ERISA, plan 

administrators and contributing 

sponsors must notify PBGC of certain 

‘‘reportable events’’ within 30 days after 

they occur. Section 4043(b) of ERISA 

requires advance reporting by a 

contributing sponsor for certain 

reportable events if a ‘‘threshold test’’ is 

met, unless the contributing sponsor or 

controlled group member to which an 

event relates is a public company. The 

advance reporting threshold test is 

based on the aggregate funding level of 

plans maintained by the contributing 

sponsor and members of the 

contributing sponsor’s controlled group. 

The funding level criteria are expressed 

by reference to calculated values that 

are used to determine VRPs under 

section 4006 of ERISA. The reportable 

events regulation ties the statutory 

threshold test to the related provisions 

of the premium rates regulation. 

The advance reporting threshold test 

in ERISA section 4043(b)(1) says: ‘‘The 

[advance reporting] requirements of this 

subsection shall be applicable to a 

contributing sponsor if, as of the close 

of the preceding plan year— 

• The aggregate unfunded vested 

benefits [(UVBs)] (as determined under 

[ERISA] section 4006(a)(3)(E)(iii)) of 

plans subject to this title which are 

maintained by such sponsor and 

members of such sponsor’s controlled 

groups (disregarding plans with no 

unfunded vested benefits) exceed 

$50,000,000, and 

• The funded vested benefit 

percentage for such plans is less than 90 

percent. 

—For purposes of the second bullet 

above, the funded vested benefit 

percentage means the percentage 

which the aggregate value of the 

assets of such plans bears to the 

aggregate vested benefits of such 

plans (determined in accordance with 

[ERISA] section 4006(a)(3)(E)(iii)).’’ 

PPA 2006 revised ERISA section 

4006(a)(3)(E)(iii) to say that UVBs— 

‘‘means, for a plan year, the excess (if 

any) of * * * the funding target of the 

plan as determined under [ERISA] 

section 303(d) for the plan year by only 

taking into account vested benefits and 

by using the interest rate described in 

[ERISA section 4006(a)(3)(E)(iv)], over 

* * * the fair market value of plan 

assets for the plan year which are held 

by the plan on the valuation date.’’ 

The section 303 of ERISA referred to 

here is a completely new section added 

by PPA 2006. Under new ERISA section 

303(g)(1), the value of plan assets and 

the funding target of a plan for a plan 

year are determined as of the valuation 

date of the plan for the plan year. Under 

new ERISA section 303(g)(2), the 

valuation date for virtually all plans 

subject to advance reporting under 

ERISA section 4043 will be the first day 

of the plan year. Thus, while ERISA 

section 4043(b)(1) refers to UVBs, assets, 

and vested benefits ‘‘as of the close of 

the preceding plan year,’’ in nearly all 

cases these quantities must, with respect 

to plan years beginning after 2007, be 

calculated as of the beginning of a plan 

year. This creates an ambiguity with 

regard to the date as of which the 

advance reporting threshold test is to be 

applied. 

The proposed rule would resolve this 

ambiguity by requiring that the advance 

reporting threshold test be applied as of 

the valuation date for ‘‘the preceding 

plan year.’’ That is the same date as of 

which UVBs, assets, and vested benefits 

must be determined for premium 

purposes for the preceding plan year 

under the premium rates regulation as 

amended by PBGC’s final rule on VRPs 

under PPA 2006. Measuring these 

quantities as of that date for purposes of 

the advanced reporting threshold test 

will thus be less burdensome than 

requiring that separate computations be 

made as of the close of that year. It will 

also enable a plan to determine before 

a reportable event occurs (and before an 

advance report is due) whether it is 

subject to the advance reporting 

requirement. 

The proposed rule would make a 

number of editorial changes to the 

advance reporting threshold provisions 

with a view to improving clarity and 

simplicity as well as accommodating the 

changes discussed above. It would also 

provide that the plans whose funding 

status is taken into account in applying 

the threshold test are determined as of 

the due date for the report, and that the 

‘‘public company’’ status of a 

contributing sponsor or controlled 

group member to which the event 

relates is also determined as of that date. 

Although the existing regulation does 

not explicitly address this issue, PBGC 

believes it is implicit that these 

determinations be current. Requiring 

that they be made as of the due date for 

the report ensures currency. 

Automatic Waivers and Extensions 

Section 4043.4 of the reportable 

events regulation provides that PBGC 

may grant waivers and extensions case 

by case. In addition, the existing 

regulation provides automatic waivers 

and extensions for most of the 

reportable events. For example, waivers 

are provided for small plans, for wellfunded plans, and for events affecting 

de minimis segments of controlled 

groups or foreign entities. In many 

cases, where it may be impossible to 

know by the filing due date whether 

criteria for a particular waiver are met, 

an extension gives a potential filer an 

opportunity to determine whether the 

waiver applies. 

PBGC proposes to eliminate most of 

these automatic waivers and extensions, 

as indicated in the following tables. The 

complete waivers provided for certain 

statutory events in §§ 4043.21 

(disqualification or noncompliance), 

4043.22 (amendment decreasing 

benefits), 4043.24 (termination), and 

4043.28 (merger, consolidation, or 

transfer) would be retained. 

POST-EVENT NOTICES

Event Current waivers Proposed waivers Current 

extensions 

Proposed 

extensions 

Active participant reduction 

(§ 4043.23).

• Small plan .....................

• Well-funded plan. 

• Prior event reported 

within 1 year.

• 30 days after current 

VRP due date.

None. 

• 30 days after next 5500 

due date.

• Following year flat-rate 

premium due date.


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POST-EVENT NOTICES—Continued 

Event Current waivers Proposed waivers Current 

extensions 

Proposed 

extensions 

Missed contribution 

(§ 4043.25).

• Payment within 30 days 

of due date.

None .................................. None .................................. None. 

Inability to pay benefits 

when due (§ 4043.26).

• Large plan ..................... • Large plan ..................... None .................................. None. 

Distribution to substantial 

owner (§ 4043.27).

• Distribution up to § 415 

limit.

None .................................. • 30 days after current 

VRP due date.

None. 

• Distribution up to 1% of 

assets.

• Well-funded plan. 

Change in contributing 

sponsor or controlled 

group (§ 4043.29).

• De minimis transaction .. • De minimis transaction .. • 30 days after current 

VRP due date.

None. 

• Foreign entity ................ ........................................... • 30 days after next 5500 

due date.

• Well-funded plan ........... ........................................... • 30 days after Form 10Q 

or press release.

Liquidation (§ 4043.30) ...... • De minimis transaction .. None .................................. • 30 days after current 

VRP due date.

None. 

• Foreign entity ................ ........................................... • 30 days after next 5500 

due date.

• Well-funded plan ........... ........................................... • 30 days after Form 10Q 

or press release.

Extraordinary distribution 

or stock redemption 

(§ 4043.31).

• Statutory event ..............

• De minimis transaction ..

• Statutory event .............. • 30 days after current 

VRP due date.

None. 

• Foreign entity ................ • De minimis transaction .. • 30 days after next 5500 

due date.

• Well-funded plan ........... ........................................... • 30 days after Form 10Q 

or press release.

Transfer of benefit liabilities (§ 4043.32).• Transfer of all assets 

and liabilities.

None .................................. None .................................. None. 

• De minimis transfer. 

• § 414(l) safe harbor. 

• Plans fully funded. 

Funding waiver application 

(§ 4043.33).

None .................................. None .................................. None .................................. None. 

Loan default (§ 4043.34) ... • Cure or waiver ............... • Cure or waiver ............... • 30 days after current 

VRP due date.

• 1 day after cure period, 

acceleration, or default 

notice. 

• Foreign entity ................ ........................................... • 30 days after next 5500 

due date.

• Well-funded plan ........... ........................................... • 1 day after cure period, 

acceleration, or default 

notice.

Bankruptcy (§ 4043.35) ..... • Foreign entity ................ None .................................. • 30 days after filer has 

actual knowledge.

None. 

ADVANCE NOTICES

Event Current waivers Proposed waivers Current extensions Proposed extensions 

Change in contributing 

sponsor or controlled 

group (§ 4043.62).

• Change in sponsor of 

small plan.

• De minimis transaction. 

• De minimis transaction .. None .................................. None. 

Liquidation (§ 4043.63) ...... • De minimis transaction .. None .................................. None .................................. None. 

Extraordinary distributions 

or stock redemption 

(§ 4043.64).

• De minimis transaction .. • De minimis transaction .. None .................................. None. 

Transfer of benefit liabilities (§ 4043.65).• Transfer of all assets 

and liabilities.

None .................................. None .................................. None. 

• De minimis transfer. 

• § 414(l) safe harbor. 

• Plans fully funded. 

Funding waiver application 

(§ 4043.66).

None .................................. None .................................. 10 days after event ........... Same day as event. 

Loan default (§ 4043.67) ... • Cure or waiver ............... • Cure or waiver ............... • 10 days after default ..... • 10 days after default. 

• 1 day after cure period, 

acceleration, or default 

notice.

• 1 day after cure period, 

acceleration, or default 

notice. 


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ADVANCE NOTICES—Continued 

Event Current waivers Proposed waivers Current extensions Proposed extensions 

Bankruptcy (§ 4043.68) ..... ........................................... ........................................... • 10 days after event ....... • 10 days after event. 

Reportable events often signal 

financial distress and possible plan 

termination. When PBGC has timely 

information about a reportable event, it 

can take steps to encourage plan 

continuation—for example, by exploring 

alternative funding options with the 

plan sponsor—or, if plan termination is 

called for, to minimize the plan’s 

potential funding shortfall through 

involuntary termination and maximize 

recovery of the shortfall from all 

possible sources. Without such timely 

information, PBGC typically learns that 

a plan is in danger only when most 

opportunities for protecting participants 

and the pension insurance system may 

have been lost. 

PBGC believes that many of the 

automatic waivers and extensions in the 

existing reportable events regulation are 

depriving it of early warnings that 

would enable it to mitigate distress 

situations. For example, of the 88 small 

plans terminated in 2007, 21 involved 

situations where, but for an automatic 

waiver, an active participant reduction 

reportable event notice would have been 

required an average of three years before 

termination. Had those notices been 

filed, the need for some of those 

terminations might have been avoided, 

and PBGC might have been able to 

reduce the impact of other terminations 

on the pension insurance system. 

PBGC believes that the increased 

reporting burden stemming from the 

elimination of most of the automatic 

waivers and extensions is justified by 

PBGC’s need for timely information that 

may contribute to plan continuation or 

the minimizing of funding shortfalls. 

However, PBGC plans to monitor 

reportable events filings to determine 

whether some automatic waivers and 

extensions can be restored (or newly 

crafted waivers or extensions provided) 

without jeopardizing efforts to protect 

the benefits of participants in troubled 

plans and the pension insurance 

program. For each waiver and extension 

eliminated, PBGC solicits public 

comment on whether it has struck the 

correct balance between ensuring 

relevant information is received timely 

and increased reporting burden on the 

regulated community. 

Active Participant Reduction—Facility 

Closings 

An active participant reduction may 

occur as the result of a substantial 

cessation of operations under ERISA 

section 4062(e) or a substantial 

employer withdrawal under ERISA 

section 4063(a). Events covered by 

section 4062(e) or 4063(a) must be 

reported to PBGC under section 4063(a). 

With a view to avoiding duplicative 

reporting, PBGC proposes to limit the 

active participant reduction event by 

excluding from consideration—in 

determining whether a reportable 

active-participant-reduction event has 

occurred—active participant reductions 

to the extent that they (1) fall within the 

provisions of section 4062(e) or 4063(a) 

and (2) are timely reported to PBGC as 

required under ERISA section 4063(a). 

Active Participant Reduction— 

Frequency of Reporting 

The description of the active 

participant reduction event in the 

statute and the existing regulation 

suggests that reporting could be 

required multiple times in the course of 

a year if multiple reductions occurred. 

In fact, any such report leads PBGC to 

monitor the situation for an extended 

period of time; while that monitoring 

continues, additional formal reports of 

active participant reductions are 

unnecessary. Accordingly, the proposed 

rule would waive reporting for this 

event if another active participant 

reduction was reported within the past 

year. 

Failure To Contribute—Clarification 

PBGC proposes to clarify the language 

in § 4043.25, dealing with the reportable 

event of failure to make required 

contributions. This reportable event 

does not apply only to contributions 

required by statute (including quarterly 

contributions under ERISA section 

303(j)(3) and Code section 430(j)(3), 

liquidity shortfall contributions under 

ERISA section 303(j)(4) and Code 

section 430(j)(4), and contributions to 

amortize funding waivers under ERISA 

section 303(e) and Code section 430(e)). 

It also applies to contributions required 

as a condition of a funding waiver that 

do not fall within the statutory 

provisions on waiver amortization 

charges. The proposed revision would 

make this point clearer. (Note that such 

‘‘non-statutory’’ contributions are not 

considered under § 4043.81, dealing 

with missed contributions that give rise 

to liens under ERISA section 303(k) and 

Code section 430(k).) 

Inability To Pay Benefits When Due— 

Clarification 

PBGC proposes to clarify the language 

in the provision dealing with automatic 

waiver of the reporting requirement for 

inability to pay benefits when due. This 

provision reflects PBGC’s judgment that 

it need not require reporting of this 

event by larger plans that are subject to 

the ‘‘liquidity shortfall’’ rules imposing 

more stringent contribution 

requirements where liquid assets are 

insufficient to cover anticipated 

disbursement requirements. For these 

larger plans, (1) if the contributions 

required by the liquidity shortfall rules 

are made, the inability to pay benefits 

when due is resolved, and (2) if the 

required contributions are not made, 

that fact is reportable to PBGC as a 

failure to make required contributions. 

Accordingly, this provision waives 

reporting unless the plan is a small plan 

that is exempt from the liquidity 

shortfall provisions. 

Transfer of Benefit Liabilities—Cashouts 

and Annuitizations 

Section 4043(c)(12) of ERISA requires 

reporting to PBGC when, in any 12- 

month period, three percent or more of 

a plan’s benefit liabilities are transferred 

to a person outside the transferor plan’s 

controlled group or to a plan or plans 

maintained by a person or persons 

outside the transferor plan’s controlled 

group. Transfers of benefit liabilities are 

of concern to PBGC because they may 

reduce the transferor plan’s funded 

percentage and because the transferee 

may not be as financially healthy as the 

transferor. 

The existing text of the reportable 

events regulation does not make clear 

whether the satisfaction of benefit 

liabilities through the payment of a 

lump sum or the purchase of an 

irrevocable commitment to provide an 

annuity constitutes a transfer of benefit 

liabilities for purposes of this reporting 

requirement. PBGC has received 

inquiries seeking clarification of this 

point. PBGC proposes to provide that 

such cashouts and annuitizations do not 

constitute transfers of benefit liabilities 

that must be reported under the 

regulation. 

Section 436 of the Code and section 

206(g) of ERISA (as added by PPA 2006) 

prohibit or limit cashouts and 

annuitizations by significantly 


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underfunded plans. These provisions 

thus tend to prevent cashouts and 

annuitizations that would most 

seriously reduce a transferor plan’s 

funded percentage. And since cashouts 

and annuitizations satisfy benefit 

liabilities (rather than transferring them 

to another plan), there is no concern 

about a transferee plan’s financial 

health. 

Transfer of Benefit Liabilities—Plans of 

Other Controlled Group Members 

Section 4043.32(a) of the existing 

reportable events regulation requires 

post-event reporting not only for the 

plan that transfers benefit liabilities, but 

also for every other plan maintained by 

a member of the transferor plan’s 

controlled group. However, existing 

§ 4043.32(d) provides a waiver that in 

effect limits the post-event reporting 

obligation to the transferor plan. 

Existing § 4043.65 (dealing with 

advance reporting of benefit liability 

transfers) does not provide a similar 

waiver. 

PBGC has concluded that it is 

unnecessary to extend the advance 

reporting requirement for benefit 

liability transfers beyond the transferor 

plan. Accordingly, PBGC proposes to 

revise § 4043.32(a) to narrow the 

reporting requirement to the transferor 

plan; to remove § 4043.32(d) (which 

would be redundant); and to revise 

§ 4043.65(a) to remove the provision 

requiring that § 4043.32(d) be 

disregarded. The effect of these changes 

would be to leave the post-event notice 

requirement unchanged and to limit the 

advance notice requirement to the 

transferor plan. 

New Reportable Event—Low Adjusted 

Funding Target Attainment Percentage 

Section 436 of the Code and section 

206(g) of ERISA (as added by PPA 2006) 

provide that if a plan’s ‘‘adjusted 

funding target attainment percentage’’ is 

less than 60 percent, the plan in general 

must cease benefit accruals; may not be 

amended to increase benefits, establish 

new benefits, or increase accrual or 

vesting rates; and may not pay 

unpredictable contingent event benefits 

(such as shut-down benefits) or lump 

sums, or annuitize benefits. ‘‘Adjusted 

funding target attainment percentage’’ (a 

variant of the funding target attainment 

percentage) is defined in Code section 

436(j)(2) and ERISA section 206(g)(9)(B). 

Code section 436(h) and ERISA section 

206(g)(7) provide a number of rules 

under which the adjusted funding target 

attainment percentage (AFTAP) is 

presumed in specified circumstances to 

have specified values. 

PBGC shares Congress’s concern 

about the financial health of plans with 

AFTAPs below 60 percent and believes 

that a funding percentage that low may 

(depending on the financial condition of 

the contributing sponsor and controlled 

group members) be indicative of a need 

to terminate the plan. Accordingly, 

PBGC proposes to create a new 

reportable event under ERISA section 

4043(c)(13) that would occur when an 

enrolled actuary certifies that a plan’s 

AFTAP is less than 60 percent or when 

the AFTAP is presumed to be less than 

60 percent under one of the rules in 

Code section 436(h) and ERISA section 

206(g)(7). This would be both a postevent notice event and an advance 

notice event (although the due date for 

the advance notice would be extended 

until ten days after the event occurs). 

New Reportable Event—Transfer to 

Retiree Health Account 

Section 420(f) of the Internal Revenue 

Code (as added by PPA 2006) permits a 

pension plan to transfer ‘‘excess pension 

assets’’ to a health benefits account 

under the plan to fund health benefits 

for a ‘‘transfer period’’ of up to 10 years. 

The term ‘‘excess pension assets’’ is 

defined for this purpose as the amount 

by which plan assets exceed 120 percent 

of plan liabilities for benefits (including 

benefits accruing during the year). If the 

ratio of assets to liabilities falls below 

120 percent at any valuation date during 

the transfer period, additional 

contributions must be made to the 

pension plan, or assets must be 

transferred back from the health benefits 

account to the pension plan, to restore 

the funding ratio to 120 percent. 

The 120-percent required funding 

ratio in this new provision is less than 

the 125-percent ratio previously 

required under Code section 420, and 

the transfer period can be much longer, 

entailing potentially the transfer of 

significantly greater amounts of plan 

assets. Furthermore, because the 

actuarial assumptions used to apply the 

120-percent test under Code section 420 

may differ significantly from the 

assumptions that would be used to 

value plan liabilities if a plan 

termination were to occur during the 

transfer period, a plan could be 

underfunded for termination purposes 

even if it could pass the 120-percent 

funding test in Code section 420. PBGC 

is accordingly concerned that large 

transfers under Code section 420(f), 

especially if the funded ratio falls below 

120 percent during the transfer period, 

may indicate a need to terminate the 

plan. 

PBGC therefore proposes to create a 

new reportable event that would occur 

if a section 420(f) transfer of $10 million 

or more is made or if, following such a 

transfer, the funded ratio falls below 120 

percent during the transfer period. This 

would be a post-event notice event only. 

(Even with advance notice, PBGC could 

not prevent such a transfer if it 

complied with the law; post-event 

reporting would give PBGC an 

opportunity to monitor the plan going 

forward.) 

Requiring Use of Forms; Putting Data 

Submission Requirements in 

Instructions 

PBGC issues three reporting forms for 

use under the reportable events 

regulation. Form 10 is for post-event 

reporting under subpart B of the 

regulation; Form 10–Advance is for 

advance reporting under subpart C of 

the regulation; and Form 200 is for 

reporting under subpart D of the 

regulation. 

Under the existing regulation, use of 

PBGC forms for reporting events under 

subparts B and C of the regulation is 

optional. The data items in the forms do 

not correspond exactly with those in the 

regulation, and the regulation 

recognizes that filers that use the forms 

may report different information from 

those that do not use the forms. With a 

view to greater uniformity in the 

reporting process and attendant 

administrative simplicity for PBGC, 

PBGC proposes to make use of 

prescribed reportable events forms 

mandatory. PBGC also proposes to 

revise the forms and instructions (see 

the discussion of Paperwork Reduction 

Act requirements infra). 

Consistent with this change, PBGC 

proposes to eliminate from the 

regulation the lists of information items 

that must be reported, so that the 

information to be reported would be 

described in the filing instructions only 

(rather than in both the filing 

instructions and the regulation). PBGC 

anticipates that as uncertainties about 

the operation of new PPA 2006 

provisions are resolved, it may be 

appropriate to make changes in the 

information required to be submitted 

with reportable events notices, 

particularly those for failures to make 

required contributions timely. 

‘‘Partial Electronic Filing’’ Rule 

The existing regulation contains a 

‘‘partial electronic filing’’ provision 

under which a filing is considered 

timely made if certain basic information 

(specified in PBGC’s reporting 

instructions) is submitted on time 

electronically and followed up within 

one or two business days (depending on 

the type of report) with the remaining 


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required information. This provision 

has facilitated last-minute filing where 

some required information consisted of 

documents that could not conveniently 

be sent electronically. But in the years 

since the regulation was issued, it has 

become common for documents to be 

created electronically and easy to create 

electronic images of documents that do 

not exist in electronic form. Thus PBGC 

believes that the ‘‘partial electronic 

filing’’ provision is no longer needed 

and that it is reasonable to require that 

all the information required for a filing 

be submitted on time, either 

electronically or on paper. Accordingly, 

PBGC proposes to eliminate the ‘‘partial 

electronic filing’’ provision. In the case 

of Form 200 filings, PBGC will accept an 

imaged signature, so that Form 200 

filers need not submit a paper filing 

with ink signatures. (Forms 10 and 10– 

Advance do not require signatures.) 

Other Changes 

The proposed rule would make a 

number of editorial and clarifying 

changes to part 4043 and would add 

definitional cross-references, change 

statutory cross-references to track 

changes made by PPA 2006, and update 

language to conform to usage in PPA 

2006 and regulations and reporting 

requirements thereunder. Some 

definitions of terms used in only one 

section of the regulation would be 

moved to the sections where they are 

used. 

The proposed changes to the 

reportable events regulation make it 

unnecessary to define a number of terms 

at the beginning of the regulation. 

Accordingly, the definitions of ‘‘de 

minimis 10-percent segment,’’ ‘‘fair 

market value of the plan’s assets,’’ 

‘‘foreign entity,’’ ‘‘foreign-linked entity,’’ 

‘‘foreign parent,’’ ‘‘Form 5500 due date,’’ 

‘‘public company,’’ ‘‘testing date,’’ 

‘‘ultimate parent,’’ ‘‘unfunded vested 

benefits,’’ ‘‘variable-rate premium,’’ and 

‘‘vested benefits amount’’ would be 

removed from § 4043.2. The definition 

of ‘‘de minimis 5-percent segment’’ (a 

term that in the existing regulation is 

defined by reference to the definition of 

‘‘de minimis 10-percent segment’’) 

would be made self-contained. 

PBGC recognizes that the changes 

made by PPA 2006 in the statutory 

provisions dealing with missed 

contributions—which are reportable 

under §§ 4043.25 and 4043.81—affect 

the computation of interest on missed 

contributions, which in turn affects the 

reporting requirements. This proposed 

rule includes no amendment to the 

reportable events regulation dealing 

with such issues, but PBGC may provide 

further guidance on this subject, taking 

into account as appropriate any relevant 

guidance from the Internal Revenue 

Service. 

Other Regulations 

Several other PBGC regulations also 

refer to plan funding concepts: The 

regulations on Filing, Issuance, 

Computation of Time, and Record 

Retention (29 CFR part 4000); 

Terminology (29 CFR part 4001); 

Variances for Sale of Assets (29 CFR 

part 4204); Adjustment of Liability for a 

Withdrawal Subsequent to a Partial 

Withdrawal (29 CFR part 4206); 

Allocating Unfunded Vested Benefits to 

Withdrawing Employers (29 CFR part 

4211); and Mergers and Transfers 

Between Multiemployer Plans (29 CFR 

part 4231). Thus, these regulations must 

also be revised to be consistent with 

ERISA and the Code as amended by 

PPA 2006 and with the revised 

premium regulations. This proposed 

rule would make the necessary 

conforming revisions. 

Applicability 

In general, the changes to the 

reportable events regulation made by 

this rule would apply to post-event 

reports for reportable events occurring 

on or after the effective date of this rule 

and to advance reports due on or after 

the effective date of this rule. Technical 

Updates 07–2, 08–2, 09–1, and 09–3 

would be superseded by this rule with 

respect to any circumstances to which 

this rule would apply. 

Compliance With Rulemaking 

Guidelines 

E.O. 12866 

The PBGC has determined, in 

consultation with the Office of 

Management and Budget, that this rule 

is a ‘‘significant regulatory action’’ 

under Executive Order 12866. The 

Office of Management and Budget has 

therefore reviewed this notice 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 reportable events regulation 

requires only the filing of notices and 

that the economic impact of filing is not 

significant. 

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. There are 

two information collections under the 

reportable events regulation, approved 

under OMB control number 1212–0013 

(covering subparts B and C) and OMB 

control number 1212–0041 (covering 

subpart D), both of which expire March 

31, 2012. Copies of PBGC’s requests 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. 

PBGC is proposing the following 

changes to these information 

requirements: 

• PBGC’s experience is that in order 

to assess the significance of virtually 

every reportable events filing, it must 

obtain from the filer the most recent 

month-end statement of the market 

value of plan assets, the most recent 

adjusted funding target attainment 

percentage (AFTAP) certification, and 

the most recent actuarial valuation 

report that contains or is supplemented 

with all the items of information 

described in § 4010.8(a)(11) of PBGC’s 

regulation on Annual Financial and 

Actuarial Information Reporting (29 

CFR part 4010). Accordingly, PBGC 

proposes to require that every reportable 

events filing include these items. 

• To provide better identification of 

controlled group members, PBGC 

proposes to require that lists of 

controlled group members include 

addresses as well as names. 

• PBGC has found that some filers 

that should file Form 200 under 

§ 4043.81 of the reportable events 

regulation (missed contributions 

totaling over $1 million) file only Form 

10 under § 4043.25 (missed 

contributions of any amount). This has 

led to delays in enforcing liens under 

ERISA section 302(f) and Code section 

412(n) (corresponding to ERISA section 

303(k) and Code section 430(k) as 

amended by PPA 2006). To address this 

issue, PBGC proposes that the 

information collections under the 

reportable events regulation include a 

requirement to report the aggregate 

outstanding balance (with interest) of all 

prior contributions not timely made. 

• In missed contribution cases, there 

is sometimes a credit balance that is 

available for application to a 

contribution that is due. PBGC needs to 

be able to determine whether all or a 

portion of the credit balance has been 

properly applied toward payment of the 


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61254 Federal Register / Vol. 74, No. 224 / Monday, November 23, 2009 / Proposed Rules 

contribution. Accordingly, PBGC 

proposes to require filers of both Form 

10 and Form 200 to indicate how much 

(if any) of the carryover balance or 

prefunding balance was used for partial 

payment of the missed contribution and 

submit copies of election letters relating 

to application of the carryover balance 

and prefunding balance to the 

contribution. 

• To assist PBGC in assessing the 

impact of a change in contributing 

sponsor or controlled group, PBGC 

proposes to require submission of 

‘‘before-and-after’’ financial statements 

for post-event as well as advance 

reporting. Where the event is the loss of 

one or more controlled group members, 

financial statements would be required 

for the controlled group before and after 

the loss of the departing member(s). 

Where the event is a transfer of a plan 

to another controlled group, financial 

statements would be required for the old 

and new controlled groups. (Filers 

would not be penalized if they were 

unable to obtain financial statements 

from controlled groups other than their 

own.) 

• To help PBGC assess the 

significance of a loan default or an 

extraordinary distribution or stock 

redemption, PBGC proposes to require 

filings for these events to include 

financial statements for all controlled 

group members to the extent not 

publicly available. 

• PBGC Form 10–Advance (used for 

advance reporting under subpart C of 

the reportable events regulation) 

currently includes a requirement for the 

benefit liability transfer event that both 

the transferor and the transferee (and 

contributing sponsors) be identified. 

Form 10 (used for post-event reporting 

under subpart B) calls only for the 

identity of the transferee. PBGC 

proposes to change the Form 10 

requirement to correspond to the 

requirement of Form 10–Advance. 

• To assist PBGC in assessing the 

impact of a transfer of benefit liabilities, 

PBGC proposes to require submission of 

financial statements for both the 

transferor controlled group and the 

transferee controlled group. (Filers 

would not be penalized if they were 

unable to obtain financial statements 

from controlled groups other than their 

own.) 

• PBGC Form 10 currently requires 

for the bankruptcy event that the 

bankruptcy petition and docket (or 

similar documents) be submitted. Form 

10–Advance requires that all documents 

filed in the relevant proceeding be 

submitted. Both forms require that the 

last date for filing claims be reported if 

known. PBGC proposes to replace these 

requirements with a requirement that 

filers simply identify the judicial 

district where the bankruptcy petition 

was filed and the docket number of the 

filing. 

• When an advance report of an 

extraordinary dividend or stock 

redemption is made, PBGC has a 30-day 

window in which to determine whether 

there is a basis for taking action before 

the dividend is paid and, if so, to act. 

In order to do so, PBGC needs 

information about contributing 

sponsors’ financial health. Accordingly, 

PBGC proposes to add a requirement for 

contributing sponsor financial 

statements to the information 

submission requirements for advance 

reporting of extraordinary dividends 

and stock redemptions. 

• PBGC proposes to require that the 

notice of a low adjusted funding target 

attainment percentage certified by an 

enrolled actuary include a copy of the 

enrolled actuary’s certification. 

• If a section 420(f) transfer of $10 

million or more is made, PBGC proposes 

to require that the notice to PBGC 

include a calculation demonstrating that 

the transfer does not reduce pension 

assets below 120 percent of liabilities 

for pension benefits. 

• If, following a section 420(f) transfer 

of $10 million or more, the funded ratio 

falls below 120 percent during the 

transfer period, PBGC proposes to 

require that the notice to PBGC include 

a calculation demonstrating how (by 

making additional pension plan 

contributions or by transferring assets 

back from the health benefits account to 

the pension plan) pension assets were 

restored to an amount not less than 120 

percent of liabilities for pension 

benefits. 

PBGC needs the information in 

reportable events filings under subparts 

B and C of part 4043 (Forms 10 and 10- 

Advance) to determine whether it 

should terminate plans that experience 

events that indicate plan or contributing 

sponsor financial problems. PBGC 

estimates that it will receive such filings 

from about 1,615 respondents each year 

and that the total annual burden of the 

collection of information will be about 

6,890 hours and $2,411,500. 

PBGC needs the information in 

missed contribution filings under 

subpart D of part 4043 (Form 200) to 

determine the amounts of statutory liens 

arising under ERISA section 303(k) and 

Code section 430(k) and to evaluate the 

funding status of plans with respect to 

which such liens arise and the financial 

condition of the persons responsible for 

their funding. PBGC estimates that it 

will receive such filings from about 797 

respondents each year and that the total 

annual burden of the collection of 

information will be about 1,636 hours 

and $572,600. 

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 January 22, 

2010, the Office of Management and 

Budget requests that comments be 

received on or before December 23, 2009 

to ensure their consideration. Comments 

may address (among other things)— 

• Whether each 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 each 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 each 

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 4000 

Employee benefit plans, Pension 

insurance, Reporting and recordkeeping 

requirements. 

29 CFR Part 4001 

Employee benefit plans, Pension 

insurance. 

29 CFR Part 4043 

Employee benefit plans, Pension 

insurance, Reporting and recordkeeping 

requirements. 

29 CFR Part 4204 

Employee benefit plans, Pension 

insurance, Reporting and recordkeeping 

requirements. 

29 CFR Part 4206 

Employee benefit plans, Pension 

insurance. 

29 CFR Part 4211 

Employee benefit plans, Pension 

insurance, Reporting and recordkeeping 

requirements. 


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29 CFR Part 4231 

Employee benefit plans, Pension 

insurance, Reporting and recordkeeping 

requirements. 

For the reasons given above, PBGC 

proposes to amend 29 CFR parts 4000, 

4001, 4043, 4204, 4206, 4211, and 4231 

as follows. 

PART 4000—FILING, ISSUANCE, 

COMPUTATION OF TIME, AND 

RECORD RETENTION 

1. The authority citation for part 4000 

is revised to read as follows: 

Authority: 29 U.S.C. 1083(k), 1302(b)(3). 

§ 4000.53 [Amended] 

2. In § 4000.53, paragraphs (c) and (d) 

are amended by removing the words 

‘‘section 302(f)(4), section 307(e), and’’ 

where they occur in each paragraph and 

adding in their place the words ‘‘section 

101(f), section 303(k)(4), and’’. 

PART 4001—TERMINOLOGY 

3. The authority citation for part 4001 

continues to read as follows: 

Authority: 29 U.S.C. 1301, 1302(b)(3). 

§ 4001.2 [Amended] 

4. In § 4001.2: 

a. The definition of ‘‘controlled 

group’’ is amended by removing the 

words ‘‘section 412(c)(11)(B) of the Code 

or section 302(c)(11)(B) of ERISA’’ and 

adding in their place the words ‘‘section 

412(b)(2) of the Code or section 

302(b)(2) of ERISA’’. 

b. The definition of ‘‘funding standard 

account’’ is amended by removing the 

words ‘‘section 302(b) of ERISA or 

section 412(b) of the Code’’ and adding 

in their place the words ‘‘section 304(b) 

of ERISA or section 431(b) of the Code’’. 

c. The definition of ‘‘substantial 

owner’’ is amended by removing the 

words ‘‘section 4022(b)(5)(A)’’ and 

adding in their place the words ‘‘section 

4021(d)’’. 

PART 4043—REPORTABLE EVENTS 

AND CERTAIN OTHER NOTIFICATION 

REQUIREMENTS 

5. The authority citation for part 4043 

is revised to read as follows: 

Authority: 29 U.S.C. 1083(k), 1302(b)(3), 

1343. 

§ 4043.1 [Amended] 

6. Section 4043.1 is amended by 

removing the reference ‘‘302(f)(4)’’ and 

adding in its place the reference 

‘‘303(k)(4)’’; and by removing the 

reference ‘‘412(n)(4)’’ and adding in its 

place the reference ‘‘430(k)(4)’’. 

7. In § 4043.2: 

a. The introductory text is amended 

by removing the word ‘‘Code’’ and 

adding in its place the words ‘‘benefit 

liabilities, Code’’; and by removing the 

words ‘‘plan administrator, proposed 

termination date’’ and adding in their 

place the words ‘‘plan administrator, 

plan year, proposed termination date’’. 

b. The definitions of de minimis 10- 

percent segment, fair market value of 

the plan’s assets, foreign entity, foreignlinked entity, foreign parent, Form 5500 

due date, public company, testing date, 

ultimate parent, unfunded vested 

benefits, variable-rate premium, and 

vested benefits are removed. 

c. The definitions of event year and 

notice date are amended by removing 

the words ‘‘the reportable event’’ and 

adding in their place the words ‘‘a 

reportable event’’ in each of the two 

definitions. 

d. The definition of de minimis 5- 

percent segment is revised to read as 

follows: 

§ 4043.2 Definitions. 

* * * * * 

De minimis 5-percent segment means, 

in connection with a plan’s controlled 

group, one or more entities that in the 

aggregate have for a fiscal year— 

(1) Revenue not exceeding 5 percent 

of the controlled group’s revenue; 

(2) Annual operating income not 

exceeding the greatest of— 

(i) 5 percent of the controlled group’s 

annual operating income; 

(ii) 5 percent of the controlled group’s 

first $200 million in net tangible assets 

at the end of the fiscal year(s); or 

(iii) $5 million; and 

(3) Net tangible assets at the end of 

the fiscal year(s) not exceeding the 

greater of— 

(i) 5 percent of the controlled group’s 

net tangible assets at the end of the 

fiscal year(s); or 

(ii) $5 million. 

* * * * * 

8. In § 4043.3: 

a. Paragraph (a)(1) is amended by 

removing the words ‘‘by this part’’ and 

adding in their place the words ‘‘under 

this part’’. 

b. Paragraph (d) is amended by 

removing the words ‘‘submission of 

additional information’’ and adding in 

their place the words ‘‘submission of 

additional information not specified in 

its forms and instructions’’. 

c. Paragraphs (b) and (c) are revised to 

read as follows: 

§ 4043.3 Requirement of notice. 

* * * * * 

(b) Contents of reportable event 

notice. A person required to file a 

reportable event notice under subpart B 

or C of this part shall file, by the notice 

date, the form specified by PBGC for 

that purpose, with the information 

specified in PBGC’s reportable events 

instructions. 

(c) Reportable event forms and 

instructions. The PBGC shall issue 

reportable events forms and instructions 

and make them available on its Web 

site. 

* * * * * 

9. In § 4043.4: 

a. Paragraphs (a), (b), (c), and (d) are 

redesignated as paragraphs (b), (c), (d), 

and (a) respectively. 

b. Newly redesignated paragraph (a) is 

amended by removing the heading 

‘‘Other waivers and extensions.’’ and 

adding in its place the heading ‘‘Waivers 

and extensions—in general.’’. 

c. Newly redesignated paragraph (b) is 

revised to read as follows: 

§ 4043.4 Waivers and extensions. 

* * * * * 

(b) Waivers and extensions—specific 

events. For some reportable events, 

automatic waivers from reporting and 

information requirements and 

extensions of time are provided in 

subparts B and C of this part. If an 

occurrence constitutes two or more 

reportable events, reporting 

requirements for each event are 

determined independently. For 

example, reporting is automatically 

waived for an occurrence that 

constitutes a reportable event under 

more than one section only if the 

requirements for an automatic waiver 

under each section are satisfied. 

* * * * * 

10. Section 4043.5 is amended by 

adding the following sentence at the 

beginning of the text of the section: 

§ 4043.5 How and where to file. 

Reportable event notices required 

under this part must be filed using the 

forms and in accordance with the 

instructions promulgated by PBGC, 

which are posted on PBGC’s Web site. 

* * * 

§ 4043.6 [Amended] 

11. In § 4043.6: 

a. Paragraph (a) is amended by 

removing the heading ‘‘Post-Event 

notice filings.’’ and adding in its place 

the heading ‘‘Post-event notice filings.’’. 

b. Paragraph (b) is amended by 

removing the heading ‘‘Advance notice 

and Form 200 Filings.’’ and adding in its 

place the heading ‘‘Advance notice and 

Form 200 filings.’’. 

c. Paragraph (c) is removed. 

12. In § 4043.23: 

a. The text of paragraph (a) is 

designated as paragraph (a)(1) and a 

paragraph heading is added. 


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b. New paragraph (a)(2) is added. 

c. Paragraphs (b) and (d) are removed. 

d. Paragraph (e) is redesignated as 

paragraph (b). 

e. And paragraph (c) is revised. 

The addition and revision read as 

follows: 

§ 4043.23 Active participant reduction. 

(a) Reportable event—(1) In general. 

* * *. 

(2) Certain participant reductions 

disregarded. For purposes of paragraph 

(a)(1) of this section, a reduction in the 

number of active participants is to be 

disregarded to the extent that the 

reduction— 

(i) Is attributable to a substantial 

cessation of operations under ERISA 

section 4062(e) or to the withdrawal of 

a substantial employer under ERISA 

section 4063(a), and 

(ii) Is timely reported to PBGC under 

ERISA section 4063(a). 

* * * * * 

(c) Waiver. Notice is waived for an 

event (the ‘‘current event’’) if the notice 

date for another event (the ‘‘prior 

event’’) under paragraph (a) of this 

section was not more than 12 months 

before the notice date for the current 

event and the prior event was reported 

to PBGC in accordance with the 

requirements of this part. 

13. Section 4043.25 is revised to read 

as follows: 

§ 4043.25 Failure to make required funding 

payment. 

(a) Reportable event. A reportable 

event occurs when— 

(1) A contribution required under 

sections 302 and 303 of ERISA or 

sections 412 and 430 of the Code is not 

made by the due date for the payment 

under ERISA section 303(j) or Code 

section 430(j), or 

(2) Any other contribution required as 

a condition of a funding waiver is not 

made when due. 

(b) Alternative method of 

compliance—Form 200 filed. If, with 

respect to the same failure, a filing is 

made in accordance with § 4043.81, that 

filing satisfies the requirements of this 

section. 

14. In § 4043.26: 

a. Paragraph (a)(2) is amended in the 

second sentence by removing the words 

‘‘Liquid assets and disbursements from 

the plan’’ and adding in their place the 

words ’’ ‘Liquid assets’ and 

‘disbursements from the plan’ ’’; by 

removing the reference ‘‘302(e)(5)(E)’’ 

and adding in its place the reference 

‘‘303(j)(4)(E)’’; and by removing the 

reference ‘‘412(m)(5)(E)’’ and adding in 

its place the reference ‘‘430(j)(4)(E)’’. 

b. Paragraph (c) is removed. 

c. Paragraph (b) is revised to read as 

follows: 

§ 4043.26 Inability to pay benefits when 

due. 

* * * * * 

(b) Waiver. Notice is waived unless 

the reportable event occurs during a 

plan year for which the plan is exempt 

from the liquidity shortfall rules in 

section 303(j)(4) of ERISA and section 

430(j)(4) of the Code because it is 

described in section 303(g)(2)(B) of 

ERISA and section 430(g)(2)(B) of the 

Code. 

§ 4043.27 [Amended] 

15. In § 4043.27: 

a. Paragraph (a)(4) is amended by 

removing the words ‘‘as provided in 

§ 4022.5’’ and adding in their place the 

words ‘‘as provided in § 4022.5 of this 

chapter’’. 

b. Paragraphs (b), (c), and (d) are 

removed, and paragraph (e) is 

redesignated as paragraph (b). 

16. In § 4043.29: 

a. Paragraphs (c) and (d) are removed, 

and paragraph (e) is redesignated as 

paragraph (c). 

b. The introductory text of newly 

redesignated paragraph (c) is amended 

by removing the words ‘‘waivers apply’’ 

and adding in their place the words 

‘‘waiver applies’’. 

c. Paragraph (b) is revised to read as 

follows: 

§ 4043.29 Change in contributing sponsor 

or controlled group. 

* * * * * 

(b) Waiver; de minimis 10-percent 

segment. Notice is waived if the person 

or persons that will cease to be members 

of the plan’s controlled group represent 

a de minimis 10-percent segment of the 

plan’s old controlled group for the most 

recent fiscal year(s) ending on or before 

the date the reportable event occurs. For 

this purpose, ‘‘de minimis 10-percent 

segment’’ means, in connection with a 

plan’s controlled group, one or more 

entities that in the aggregate have for a 

fiscal year— 

(1) Revenue not exceeding 10 percent 

of the controlled group’s revenue; 

(2) Annual operating income not 

exceeding the greatest of— 

(i) 10 percent of the controlled group’s 

annual operating income; 

(ii) 5 percent of the controlled group’s 

first $200 million in net tangible assets 

at the end of the fiscal year(s); or 

(iii) $5 million; and 

(3) Net tangible assets at the end of 

the fiscal year(s) not exceeding the 

greater of— 

(i) 10 percent of the controlled group’s 

net tangible assets at the end of the 

fiscal year(s); or 

(ii) $5 million. 

* * * * * 

§ 4043.30 [Amended] 

17. In § 4043.30: 

a. The heading of paragraph (a) is 

removed, and the introductory text of 

paragraph (a) is redesignated as the 

introductory text of § 4043.30. 

b. Paragraphs (b), (c), and (d) are 

removed. 

c. Paragraphs (a)(1), (a)(2), and (a)(3) 

are redesignated as paragraphs (a), (b), 

and (c). 

§ 4043.31 [Amended] 

18. In § 4043.31: 

a. Paragraphs (b), (c)(3), (c)(4), (c)(5), 

and (d) are removed. 

b. Paragraph (c) is redesignated as 

paragraph (b). 

c. Paragraph (e) is redesignated as 

paragraph (c). 

d. The reference ‘‘(e)’’ is removed and 

the reference ‘‘(c)’’ is added in its place 

once in paragraph (a) introductory text, 

once in paragraph (a)(1)(i), once in 

paragraph (a)(1)(ii), twice in paragraph 

(a)(2), twice in paragraph (a)(3), once in 

newly redesignated paragraph (c)(2)(i), 

once in newly redesignated paragraph 

(c)(2)(ii), once in newly redesignated 

paragraph (c)(5), and once in newly 

redesignated paragraph (c)(6)(iii). 

19. In § 4043.32: 

a. Paragraphs (b) and (d) are removed. 

b. Paragraph (a)(2) is redesignated as 

paragraph (b). 

c. The heading of paragraph (a)(1) is 

removed, and the introductory text of 

paragraph (a)(1) is redesignated as the 

introductory text of paragraph (a). 

d. Paragraphs (a)(1)(i) and (a)(1)(ii) are 

redesignated as paragraphs (a)(1) and 

(a)(2). 

e. Redesignated paragraph (a)(1) is 

amended by removing the words ‘‘or 

any other plan maintained by a person 

in the plan’s controlled group’’. 

f. Paragraph (c) is revised to read as 

follows: 

§ 4043.32 Transfer of benefit liabilities. 

* * * * * 

(c) Distributions of lump sums and 

annuities. For purposes of paragraph (a) 

of this section, the payment of a lump 

sum, or purchase of an irrevocable 

commitment to provide an annuity, in 

satisfaction of benefit liabilities is not a 

transfer of benefit liabilities. 

§ 4043.33 [Amended] 

20. In § 4043.33: 

a. Paragraph (b) is removed. 

b. The heading of paragraph (a) is 

removed, and the text of paragraph (a) 

is redesignated as the text of § 4043.33. 

c. The figures ‘‘303’’ are removed and 

the figures ‘‘302(c)’’ are added in their 


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place; and the figures ‘‘412(d)’’ are 

removed and the figures ‘‘412(c)’’ are 

added in their place. 

§ 4043.34 [Amended] 

21. In § 4043.34: 

a. Paragraph (a) introductory text is 

amended by removing the words 

‘‘default by’’ and adding in their place 

the words ‘‘default under a loan 

agreement by’’. 

b. Paragraph (a)(3) introductory text is 

amended by removing the colon and 

adding in its place a dash. 

c. Paragraphs (b), (c)(2), (c)(3), (d)(3), 

and (d)(4) are removed. 

d. The heading of paragraph (c) 

introductory text is removed. 

e. Paragraph (c)(1) is redesignated as 

paragraph (b). 

f. Newly redesignated paragraph (b) is 

amended by removing the heading 

‘‘Default cured.’’ and adding in its place 

the heading ‘‘Waiver for cure of 

default.’’. 

g. Paragraph (d)(5) is redesignated as 

paragraph (d)(3), and paragraph (d) is 

redesignated as paragraph (c). 

h. Redesignated paragraph (c)(1) is 

amended by removing the words ‘‘(d)(2) 

or (d)(3)’’ and adding in their place the 

figures ‘‘(c)(2)’’. 

i. Redesignated paragraph (c)(2) is 

amended by removing the heading 

‘‘Cure period extensions.’’ and adding in 

its place the heading ‘‘Extensions.’’. 

§ 4043.35 [Amended] 

22. In § 4043.35: 

a. Paragraphs (b), (c), and (d) are 

removed. 

b. The heading of paragraph (a) 

introductory text is removed, and the 

introductory text of paragraph (a) is 

redesignated as the introductory text of 

§ 4043.35. 

c. Paragraphs (a)(1), (a)(2), (a)(3), 

(a)(4), and (a)(5) are redesignated as 

paragraphs (a), (b), (c), (d), and (e). 

23. New §§ 4043.36 and 4043.37 are 

added to subpart B to read as follows: 

§ 4043.36 Adjusted funding target 

attainment percentage under 60 percent. 

A reportable event occurs for a plan 

when the plan’s adjusted funding target 

attainment percentage under Code 

section 436(j)(2) and ERISA section 

206(g)(9)(B) either— 

(a) Is certified by an enrolled actuary 

to be less than 60 percent, or 

(b) Is presumed under Code section 

436(h) and ERISA section 206(g)(7) to be 

less than 60 percent. 

§ 4043.37 Transfer of assets to retiree 

health account or subsequent reduction in 

funding ratio. 

A reportable event occurs for a plan 

when either— 

(a) The plan makes a qualified future 

transfer or a collectively bargained 

transfer under Code section 420(f) of 

$10 million dollars or more, or 

(b) On any valuation date of the plan 

during the transfer period described in 

Code section 420(f)(5) following any 

transfer described in paragraph (a) of 

this section, 120 percent of the sum of 

the funding target and the target normal 

cost determined under Code section 430 

for the plan year exceeds the lesser of— 

(1) The fair market value of the plan’s 

assets (reduced by the prefunding 

balance and funding standard account 

carryover balance determined under 

Code section 430(f)), or 

(2) The value of plan assets as 

determined under Code section 

430(g)(3) after reduction under Code 

section 430(f). 

24. In § 4043.61, paragraphs (a), (b), 

and (c) are revised to read as follows: 

§ 4043.61 Advance reporting filing 

obligation. 

(a) In general. Unless a waiver or 

extension applies with respect to the 

plan, each contributing sponsor of a 

plan is required to notify the PBGC no 

later than 30 days before the effective 

date of a reportable event described in 

this subpart C if the contributing 

sponsor is subject to advance reporting 

for the reportable event. If there is a 

change in contributing sponsor, the 

reporting obligation applies to the 

person who is the contributing sponsor 

of the plan on the notice date. 

(b) Persons subject to advance 

reporting. A contributing sponsor of a 

plan is subject to the advance reporting 

requirement under paragraph (a) of this 

section for a reportable event if— 

(1) On the notice date, neither the 

contributing sponsor nor any member of 

the plan’s controlled group to which the 

event relates is a person subject to the 

reporting requirements of section 13 or 

15(d) of the Securities Exchange Act of 

1934 or a subsidiary (as defined for 

purposes of the Securities Exchange Act 

of 1934) of a person subject to such 

reporting requirements; and 

(2) The aggregate unfunded vested 

benefits, determined in accordance with 

paragraph (c) of this section, are more 

than $50 million; and 

(3) The aggregate value of plan assets, 

determined in accordance with 

paragraph (c) of this section, is less than 

90 percent of the aggregate premium 

funding target, determined in 

accordance with paragraph (c) of this 

section. 

(c) Funding determinations. For 

purposes of paragraph (b) of this 

section, the aggregate unfunded vested 

benefits, aggregate value of plan assets, 

and aggregate premium funding target 

are determined by aggregating the 

unfunded vested benefits, values of plan 

assets, and premium funding targets 

(respectively), as determined for 

premium purposes in accordance with 

part 4006 of this chapter for the plan 

year preceding the effective date of the 

event, of plans maintained (on the 

notice date) by the contributing sponsor 

and any members of the contributing 

sponsor’s controlled group, disregarding 

plans with no unfunded vested benefits 

(as so determined). 

* * * * * 

§ 4043.62 [Amended] 

25. In § 4043.62: 

a. Paragraph (a) is amended by 

removing the words ‘‘and information 

required’’ from the paragraph heading; 

and by removing the words 

‘‘§ 4043.29(a), and the notice shall 

include the information described in 

§ 4043.29(b) and, if known, the expected 

effective date of the reportable event’’ 

and adding in their place the figures 

‘‘§ 4043.29(a)’’. 

b. Paragraph (b) is amended by 

removing the heading. 

c. Paragraph (b)(1) is removed. 

d. Paragraph (b)(2) is amended by 

removing the heading ‘‘De minimis 5- 

percent segment.’’ and adding in its 

place the heading ‘‘Waiver; de minimis 

5-percent segment.’’. 

e. Paragraph (b)(2) is redesignated as 

paragraph (b). 

§ 4043.63 [Amended] 

26. In § 4043.63: 

a. Paragraph (a) is amended by 

removing the paragraph heading; and by 

removing the words ‘‘§ 4043.30(a), and 

the notice shall include the information 

described in § 4043.30(b) and, if known, 

the expected effective date of the 

reportable event’’ and adding in their 

place the reference ‘‘§ 4043.30’’. 

b. Paragraph (b) is removed. 

c. The text of paragraph (a) is 

redesignated as the text of § 4043.63. 

§ 4043.64 [Amended] 

27. In § 4043.64: 

a. Paragraph (a) is amended by 

removing the words ‘‘and information 

required’’ from the paragraph heading; 

and by removing the last sentence of the 

paragraph. 

b. Paragraph (b) is amended by 

removing the word ‘‘Waiver’’ from the 

paragraph heading and adding in its 

place the words ‘‘Waiver; de minimis 5- 

percent segment’’. 

§ 4043.65 [Amended] 

28. In § 4043.65: 

a. Paragraph (a) is amended by 

removing the paragraph heading; and by 


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61258 Federal Register / Vol. 74, No. 224 / Monday, November 23, 2009 / Proposed Rules 

removing the words ‘‘§ 4043.32(a) 

(determined without regard to 

§ 4043.32(d)), and the notice shall 

include the information described in 

§ 4043.32(b)’’ and adding in their place 

the reference ‘‘4043.32(a)’’. 

b. Paragraph (b) is removed. 

c. The text of paragraph (a) is 

redesignated as the text of § 4043.65. 

§ 4043.66 [Amended] 

29. In 4043.66: 

a. Paragraph (a) is amended by 

removing the words ‘‘and information 

required’’ from the heading; and by 

removing the words ‘‘§ 4043.33(a), and 

the notice shall include the information 

described in § 4043.33(b)’’ and adding 

in their place the reference ‘‘§ 4043.33’’. 

b. Paragraph (b) is amended by 

removing the words ‘‘10 days after’’ and 

adding in their place the words ‘‘the 

day’’; and by removing the words ‘‘has 

occurred’’ and adding in their place the 

word ‘‘occurs’’. 

§ 4043.67 [Amended] 

30. In § 4043.67, paragraph (a) is 

amended by removing the words ‘‘and 

information required’’ from the heading; 

and by removing the last sentence of the 

paragraph. 

§ 4043.68 [Amended] 

31. In § 4043.68, paragraph (a) is 

amended by removing the words ‘‘and 

information required’’ from the heading; 

and by removing the words 

‘‘§ 4043.35(a), and the notice shall 

include the information described in 

§ 4043.35(b)’’ and adding in their place 

the reference ‘‘§ 4043.35’’. 

32. New §§ 4043.69 and 4043.70 are 

added to subpart C to read as follows: 

§ 4043.69 Adjusted funding target 

attainment percentage under 60 percent. 

(a) Reportable event. Advance notice 

is required when a plan’s adjusted 

funding target attainment percentage is 

certified or presumed to be less than 60 

percent, as described in § 4043.36. 

(b) Extension. The notice date is 

extended until 10 days after the 

reportable event has occurred. 

§ 4043.70 Transfer of assets to retiree 

health account or subsequent reduction in 

funding ratio. 

Advance notice is waived for a 

reportable event described in § 4043.37. 

33. In § 4043.81: 

a. Paragraph (a) introductory text is 

amended by removing the reference 

‘‘302(f)(4)’’ and adding in its place the 

reference ‘‘303(k)(4)’’; by removing the 

reference ‘‘412(n)(4)’’ and adding in its 

place the reference ‘‘430(k)(4)’’; by 

removing the words ‘‘required 

installment or any other’’ and adding in 

their place the word ‘‘contribution’’; by 

removing the words ‘‘section 302 of 

ERISA and section 412 of the Code’’ and 

adding in their place the words 

‘‘sections 302 and 303 of ERISA and 

sections 412 and 430 of the Code’’; and 

by removing the words ‘‘installments or 

other’’. 

b. Paragraph (a)(2) is amended by 

removing the reference ‘‘302(f)(4)’’ and 

adding in its place the reference 

‘‘303(k)(4)’’; and by removing the 

reference ‘‘412(n)(4)’’ and adding in its 

place the reference ‘‘430(k)(4)’’. 

c. Paragraph (b) is amended by 

removing the reference ‘‘302(f)’’ and 

adding in its place the reference 

‘‘303(k)’’; and by removing the reference 

‘‘412(n)’’ and adding in its place the 

reference ‘‘430(k)’’. 

d. Paragraph (c) is added to read as 

follows: 

§ 4043.81 PBGC Form 200, notice of failure 

to make required contributions; 

supplementary information. 

* * * * * 

(c) Ultimate parent. For purposes of 

this section, the term ‘‘ultimate parent’’ 

means the parent at the highest level in 

the chain of corporations and/or other 

organizations constituting a parentsubsidiary controlled group. 

PART 4204—VARIANCES FOR SALE 

OF ASSETS 

34. The authority citation for part 

4204 continues to read as follows: 

Authority: 29 U.S.C. 1302(b)(3), 1384(c). 

§ 4204.12 [Amended] 

35. Section 4204.12 is amended by 

removing the reference ‘‘412(b)(3)(A)’’ 

and adding in its place the reference 

‘‘431(b)(3)(A)’’. 

PART 4206—ADJUSTMENT OF 

LIABILITY FOR A WITHDRAWAL 

SUBSEQUENT TO A PARTIAL 

WITHDRAWAL 

36. The authority citation for part 

4206 continues to read as follows: 

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

1386(b). 

§ 4206.7 [Amended] 

37. Section 4206.7 is amended by 

removing the reference ‘‘412(b)(4)’’ and 

adding in its place the reference 

‘‘431(b)(5)’’. 

PART 4211—ALLOCATING UNFUNDED 

VESTED BENEFITS TO WITHDRAWING 

EMPLOYERS 

38. The authority citation for part 

4211 continues to read as follows: 

Authority: 29 U.S.C. 1302(b)(3); 1391(c)(1), 

(c)(2)(D), (c)(5)(A), (c)(5)(B), (c)(5)(D), and (f). 

PART 4231—MERGERS AND 

TRANSFERS BETWEEN 

MULTIEMPLOYER PLANS 

39. The authority citation for part 

4231 continues to read as follows: 

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

§ 4231.2 [Amended] 

40. In § 4231.2, the definitions of 

‘‘actuarial valuation’’ and ‘‘fair market 

value of assets’’ are amended by 

removing the words ‘‘section 302 of 

ERISA and section 412 of the Code’’ 

wherever they appear in each definition 

and adding in their place the words 

‘‘section 304 of ERISA and section 431 

of the Code’’. 

§ 4231.6 [Amended] 

41. In § 4231.6: 

a. Paragraph (b)(4)(ii) is amended by 

removing the reference ‘‘412(b)(4)’’ and 

adding in its place the reference 

‘‘431(b)(5)’’. 

b. Paragraph (c)(2) is amended by 

removing the words ‘‘section 412 of the 

Code (which requires that such 

assumptions be reasonable in the 

aggregate)’’ and adding in their place the 

words ‘‘section 431 of the Code (which 

requires that each such assumption be 

reasonable)’’. 

c. Paragraph (c)(5) is amended by 

removing the figure ‘‘412’’ and adding 

in their place the figure ‘‘431’’. 

Issued in Washington, DC, this 18th day of 

November, 2009. 

Vincent K. Snowbarger, 

Acting Director, Pension Benefit Guaranty 

Corporation. 

[FR Doc. E9–28056 Filed 11–20–09; 8:45 am] 

BILLING CODE 7709–01–P 


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