[Federal Register Volume 71, Number 231 (Friday, December 1, 2006)]
[Notices]
[Pages 69594-69598]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-9491]



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DEPARTMENT OF LABOR

Employee Benefits Security Administration

ZRIN 1210-ZA11


Model Notice of Pending Election of Multiemployer Plan Status

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Notice.

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SUMMARY: This document contains a Model Notice of Pending Election of 
Multiemployer Plan Status. The Pension Protection Act of 2006 (PPA), 
Public Law 109-280, permits certain plans that would otherwise be 
treated as multiemployer plans to elect to revoke a prior election to 
be treated as single-employer plans, and certain other plans to elect 
to be treated as multiemployer plans. The PPA requires plan 
administrators to provide notice of such an election to each plan 
participant and beneficiary, each labor organization representing such 
participants or beneficiaries, and each employer that has an obligation 
to contribute to the plan, and further requires the Secretary of Labor 
to prescribe a model notice.

FOR FURTHER INFORMATION CONTACT: David Lurie, Employee Benefits 
Security Administration (EBSA), U.S. Department of Labor, (202) 693-
8510. This is not a toll-free number.

SUPPLEMENTARY INFORMATION: Section 1106 of the PPA added subparagraph 
(G) to section 3(37) of the Employee Retirement Income Security Act of 
1974 (ERISA) and paragraph (6) to section 414(f) of the Internal 
Revenue Code of 1986 (the Code). The new provisions permit a plan that 
had made an election under subparagraph (E) of section 3(37) of ERISA 
and paragraph (5) of section 414(f) of the Code to be treated as a 
single-employer plan to elect to revoke such election within one year 
following the date of enactment of the PPA pursuant to procedures 
prescribed by the Pension Benefit Guaranty Corporation (PBGC), provided 
certain conditions are satisfied. In addition, the new provisions 
permit certain other plans to elect to be treated as a multiemployer 
plan for all purposes under ERISA and the Code, pursuant to procedures 
prescribed by the PBGC. Any election under 3(37)(G) is effective 
starting with the first plan year ending after August 17, 2006. An 
eligible plan is (1) a plan that either (A) is maintained pursuant to 
one or more collective bargaining agreements and to which more than one 
employer is required to contribute, or (B) is described as having been 
established in Chicago, Illinois on August 12, 1881, and is sponsored 
by an organization described in section 501(c)(5) of the Code and 
exempt from tax under section 501(a) of the Code, and (2) the plan 
meets the following requirements: (A) For each of the three plan years 
immediately before the date of enactment of the PPA the plan satisfied 
the above conditions or is so described, (B) substantially all of the 
employer contributions for each of those plan years were made or 
required to be made by organizations that were exempt from tax under 
section 501 of the Code, and (C) the plan was established prior to 
September 2, 1974.
    Section 3(37)(G)(v)(I) further provides that the plan administrator 
of a plan making an election pursuant to section 3(37)(G) shall provide 
notice of the pending election no later than 30 days before the 
election is made to each plan participant and beneficiary, each labor 
organization representing such participants or beneficiaries, and each 
employer that has an obligation to contribute to the plan, describing 
the principal differences between the guarantee programs under Title IV 
and the benefit restrictions under Title I for single-employer and 
multiemployer plans, along with such other information the plan 
administrator chooses to include.
    Section 3(37)(G)(v)(II) requires the Secretary of Labor to 
prescribe a model notice for this purpose within 180 days of the date 
of enactment of the PPA. In order to satisfy this directive, the 
Department is publishing this Notice, which contains a Model Notice of 
Pending Election of Multiemployer Plan Status. The Department will 
consider that plan administrators who use the Model Notice to notify 
participants, beneficiaries, labor organizations, and employers of 
their plan's change of status no later than 30 days before an election 
is made to have satisfied their obligations under section 
3(37)(G)(v)(I). The Model Notice is also available on EBSA's Web site 
at http://www.dol.gov/ebsa.
    The Department has consulted with the PBGC in connection with the 
development of the Model Notice. The PBGC has advised that it will 
establish procedures and provide guidance for making the election 
provided for in section 3(37)(G). The Department is of the view that no 
election under 3(37)(G) is effective unless made pursuant to such 
procedures, including certification by the plan administrator that it 
has complied with the notice requirements in section 3(37)(G)(v)(I). In 
this regard, section 3(37)(G)(v)(III) provides the Secretary of Labor 
with authority to assess civil penalties for a failure to provide such 
a notice.
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    Signed at Washington, DC, this 28th day of November, 2006.
Bradford P. Campbell,
Acting Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
[FR Doc. 06-9491 Filed 11-30-06; 8:45 am]
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