Pension Benefit Guaranty Corporation 

76-101 

August 16, 1976 

REFERENCE: 

 [*1] 4044 Allocation of Assets

4048 Date of Termination

4062(b) Liability of Employer in Single Employer Plans. Amount of Employer Liability 

OPINION: 

 Further to our telephone conversation of July 27, 1976, the following is addressed to your several questions

concerning administration of the pension agreement between: * * * and * * * (the "plan" ). 

You initially questioned the basis for your authority to require that plan participants furnish you certain information

relating to disability, which information was submitted to or issued by the Social Security Administration. You need this

information in order to turn over information we require to value benefits as of the date of termination. 

The Pension Benefit Guaranty Corporation ("PBGC" ) takes the position that, because no valuation for purposes of

the Valuation of Benefits regulation, § 2610.4(c), 40 Fed. Reg. 57983 (1975), can be performed without this

information, you are clearly required as Plan Administrator to submit such information. However, because the Employee

Retirement Income Security Act of 1974 does not specifically authorize a Plan Administrator to obtain the information,

the Act does not authorize you to compel its release if [*2] a participant refuses to cooperate with your request. If a

refusal occurs, you should note the individual's name, the fact that request was made, and any reason given for the refusal.

 Your second inquiry concerns the effect of requiring plan participants to requalify for disability retirement under

the terms of the plan document. Specifically you asked whether your contemplated review would extend the date of

termination and therefore be inconsistent with a proposed termination date of November 22, 1975. Requalification of

disability retirees pursuant to the plan provisions would not revive the plan. However, after reviewing the issue with the

General Counsel, I caveat that the results of the review would not affect the amount of employer liability established by

§ 4062, 29 U.S.C. § 1362 (Supp. IV, 1974), which is based on the insufficiency as of the date of termination. 

The reasoning supporting the PBGC's policy is that such a reexamination would encourage an employer to pay

benefits without proper qualification contrary to the requirements of a plan document; when the employer decided to

terminate the plan, to reduce its liability for the insufficiency generated by excessive [*3] payments; and thereby to put

the PBGC in the position of defending the propriety of the reduction should a retiree judicially challenge the reduction.

If you determine to extend contributions and accruals until such time as the review were empleted, thereby extending

the termination date, the foregoing policy considerations would not apply. The decision is yours to make as Plan

Administrator: Extension of the plan to reassess the propriety of payments, with an increased insufficiency for continued

contributions and accruals (in addition to any penalties provided by the plan document), must be balanced against the

reduction in any insufficiency resulting from reduction of benefits to qualifying levels. Under this procedure the

employer, which made the reevaluation, properly would be the party against whom a disability retires would lodge a

challenge to any reduction. 

I realize that you were without prior knowledge or reason to know of overpayments and want to attempt an in-depth

review of payments as part of the certification procedure. However, benefits have been paid out in circumstances

wherein the responsible Plan Administrator knew or had reason to know that payees were nonqualifying, [*4] and the

PBGC is not authorized at this late date to allow the employer to adjust its liability. 

Please telephone me if you have any further questions. 

Christine O. Cook 

Attorney 

Office of the General Counsel