[Federal Register Volume 62, Number 84 (Thursday, May 1, 1997)]
[Proposed Rules]
[Pages 23700-23705]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11352]
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PENSION BENEFIT GUARANTY CORPORATION
29 CFR Part 4231
RIN 1212-AA69
Mergers and Transfers Between Multiemployer Plans
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Proposed rule.
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SUMMARY: The Pension Benefit Guaranty Corporation is proposing to amend
its regulation on Mergers and Transfers Between Multiemployer Plans to
clarify how the rules are to be applied to plans terminated by mass
withdrawal and to make other minor changes and clarifications in the
regulation.
DATES: Comments on these proposals must be received by June 30, 1997.
ADDRESSES: Comments may be mailed to the Office of the General Counsel,
suite 340, Pension Benefit Guaranty Corporation, 1200 K Street, NW.,
Washington, DC 20005-4026; delivered to that address between 9 a.m. and
4 p.m. on business days; faxed to 202-326-4112; or e-mailed to
reg.comments@pbgc.gov. Written comments will be available for public
inspection at the PBGC's Communications and Public Affairs Department,
suite 240 at the same address, between 9 a.m. and 4 p.m. on business
days.
FOR FURTHER INFORMATION CONTACT: Deborah C. Murphy, Attorney, Office of
the General Counsel, suite 340, Pension Benefit Guaranty Corporation,
1200 K Street, NW., Washington, DC 20005-4026; 202-326-4024 (202-326-
4179 for TTY and TDD).
SUPPLEMENTARY INFORMATION:
Background
Under section 4231(a) and (b) of ERISA, a merger, or a transfer of
assets and liabilities, between multiemployer plans must satisfy four
requirements unless otherwise provided in regulations prescribed by the
PBGC:
(1) The PBGC must receive 120 days' advance notice of the
transaction;
(2) Accrued benefits must not be reduced;
(3) There must be no reasonable likelihood that benefits will be
suspended as a result of plan insolvency; and
(4) An actuarial valuation of each affected plan must have been
performed as prescribed in section 4231(b)(4).
The PBGC's regulation on Mergers and Transfers Between
Multiemployer Plans (29 CFR part 4231 (formerly part 2672)) prescribes
procedures for requesting a determination that a merger or transfer
satisfies applicable requirements, allows the PBGC to waive the 120-day
notice requirement, and sets higher-level and lower-level requirements
for ``safe harbor'' plan solvency tests and for valuation standards.
Whether the higher-level or lower-level requirements apply depends on
whether a ``significant transfer'' is involved.
[[Page 23701]]
Terminated Plan Transactions
Transactions involving plans that have been terminated by mass
withdrawal under ERISA section 4041A(a)(2) are rare. The current
regulation does not make clear whether, and if so how, the merger and
transfer rules apply to these cases. Since such plans have no
contributing employers, and transactions involving them present more
risk than most others, it is important to specify how the merger and
transfer rules apply to them.
The amendment clarifies that transactions involving such plans are
subject to the merger and transfer rules and (except for ``de minimis''
transactions) are governed by the higher-level valuation standard and
``safe harbor'' solvency test. (Terminated plans, like other plans,
could satisfy the plan solvency requirement without recourse to the
``safe harbor'' test by demonstrating that benefits are not likely to
be suspended.) The amendment also extends to ``de minimis'' terminated
plan transactions the requirement that actuarial valuation reports be
submitted to the PBGC.
Significant Transfers
Both plans involved in a significant transfer are currently subject
to the higher-level valuation standard and ``safe harbor'' solvency
test, even if only one of the plans is significantly affected. The
standard for determining whether a plan is ``significantly affected''
is generally the same as the standard for determining whether a
transfer is a ``significant transfer'' under the existing regulation. A
transferor plan is significantly affected if the assets transferred
equal or exceed 15 percent of its pre-transfer assets. A transferee
plan is significantly affected if the unfunded accrued benefits
transferred equal or exceed 15 percent of its pre-transfer assets.
The amended regulation no longer automatically applies the higher-
level valuation standard and safe harbor solvency test to both plans
involved in a significant transfer if only one of the plans is
significantly affected. Instead, the higher-level standard and test are
just applied to the significantly affected plan. (In addition, as
discussed above, the higher-level standard and test are applied to any
plan that is involved in a non-de minimis terminated plan transaction).
Other Changes
The regulation currently requires that a compliance determination
request for a significant transfer include copies of all actuarial
valuations performed within the five years preceding the proposed
effective date of the transfer. This cannot be done where the last plan
year preceding the proposed effective date is in progress when the
compliance determination request is filed. The amended regulation calls
for the valuations performed within the five years preceding the
compliance determination request.
The amendment also modifies the higher-level valuation standard
slightly so that the actuarial assumptions and methods used in the pre-
merger valuation would be those expected to be used for the surviving
plan after the merger.
Under the current regulation, the requirement for 120 days' notice
can be waived only if the PBGC is satisfied that failure to complete
the transaction in a shorter time will harm participants or
beneficiaries. The PBGC typically completes its reviews in 60 to 90
days, and there is usually no reason to wait the full 120 days. The
proposed amendment would also permit a merger or transfer to be
consummated if (1) the PBGC determines that the transaction complies
with ERISA section 4231, or (2) the PBGC completes its review of the
transaction.
The PBGC is also making other conforming and clarifying changes.
Paperwork Reduction Act
The collection of information requirements in existing Part 4231
have been approved by the Office of Management and Budget under control
number 1212-0022. The PBGC has submitted these requirements, as amended
by this proposed rule, to the Office of Management and Budget for
review under section 3507(d) of the Paperwork Reduction Act of 1995.
The PBGC needs the information submitted under Part 4231 by plan
sponsors of multiemployer plans that are involved in mergers and
transfers in order to monitor compliance with the requirements for
mergers and spinoffs of multiemployer plans.
Based on its experience, the PBGC estimates that about 20
submissions will be made each year under the amended regulation, no
more than 2 of which will involve spin-offs or significantly affected
plans. The PBGC also believes, based on its experience, that virtually
all of these submissions will be prepared by outside actuaries,
lawyers, and other consultants. The PBGC estimates that it will cost a
plan an average of $455 for preparation of a submission that does not
involve a spin-off or a significantly affected plan and $705 for
preparation of a submission that involves a spin-off or a significantly
affected plan. Accordingly, the estimated annual cost burden of the
collection of information is $9,600.
Comments on the paperwork provisions of the proposed rule should be
mailed to the Office of Information and Regulatory Affairs, Office of
Management and Budget, Attention: Desk Officer for the Pension Benefit
Guaranty Corporation, Washington, DC 20503. The PBGC is soliciting
public comments to--
evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
evaluate the accuracy of the agency's estimate of the
burden of the proposed collection of information, including the
validity of the methodology and assumptions used;
enhance the quality, utility, and clarity of the
information to be collected; and
minimize 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.
In particular, the PBGC invites suggestions regarding procedures
for submitting some or all of the required information electronically.
Compliance With Rulemaking Guidelines
The PBGC has determined that this action is not a ``significant
regulatory action'' under the criteria set forth in Executive Order
12866.
The PBGC certifies that the amendment in this proposed rule would
not have a significant economic impact on a substantial number of small
entities. This certification is based on the fact that the primary
substantive effect of the proposed amendment would be to liberalize
certain existing requirements and to clarify the application of
existing requirements to a very rare category of transactions, viz.,
multiemployer mergers and transfers involving plans that have
terminated by mass withdrawal. (The PBGC is aware of only two such
transactions since Sec. 4231 of ERISA was enacted.) Accordingly, as
provided in section 605(b) of the Regulatory Flexibility Act,
compliance with sections 603 and 604 of the Regulatory Flexibility Act
is not required.
[[Page 23702]]
List of Subjects in 29 CFR Part 4231
Pensions, Reporting and recordkeeping requirements.
For the reasons given above, the PBGC proposes to amend 29 CFR part
4231 as follows.
PART 4231--MERGERS AND TRANSFERS BETWEEN MULTIEMPLOYER PLANS
1. The authority citation for part 4231 continues to read as
follows:
Authority: 29 U.S.C. 1302(b)(3), 1411.
2. In Sec. 4231.1, paragraph (a) is amended by adding a sentence at
the end of the paragraph to read as follows:
Sec. 4231.1 Purpose and scope.
(a) Purpose. * * * The collections of information in this part have
been approved by the Office of Management and Budget under OMB control
number 1212-0022.
3. In Sec. 4231.2, the first sentence is amended by adding the word
``EIN,'' after the word ``chapter:'' and before the word ``ERISA'', by
removing the word ``and'', and by adding a comma and the words ``and
PN'' after the words ``plan year'' and before the period; the
definition of significant transfer is removed; and new definitions of
significantly affected plan and unfunded accrued benefits are added to
read as follows:
Sec. 4231.2 Definitions.
* * * * *
Significantly affected plan means a plan that--
(1) Transfers assets that equal or exceed 15 percent of its assets
before the transfer,
(2) Receives a transfer of unfunded accrued benefits that equal or
exceed 15 percent of its assets before the transfer,
(3) Is created by a spinoff from another plan, or
(4) Engages in a merger or transfer (other than a de minimis merger
or transfer) either--
(i) After such plan has terminated under section 4041A(a)(2) of
ERISA, or
(ii) With another plan that has so terminated.
* * * * *
Unfunded accrued benefits means the excess of the present value of
a plan's accrued benefits over the fair market value of its assets,
determined on the basis of the actuarial valuation required under
Sec. 4231.5(b).
Sec. 4231.3 [Amended]
4. In Sec. 4231.3, paragraph (a)(2) is amended by removing the
words ``involved in'' and adding in their place the words ``that
existed before''; and the introductory text of paragraph (a)(3) is
amended by removing the words ``involved in'' and adding in their place
the words ``that exists after''. As so revised, paragraph (a)(2) and
the introductory text of paragraph (a)(3) of Sec. 4231.3 read as
follows:
Sec. 4231.3 Requirements for mergers and transfers.
(a) General requirements. * * *
* * * * *
(2) Actuarial valuations of the plans that existed before the
merger or transfer shall have been performed in accordance with
Sec. 4231.5.
(3) For each plan that exists after the transaction, an enrolled
actuary shall--
* * * * *
Sec. 4231.3 [Amended]
5. At the end of Sec. 4231.3, the words ``(Approved by the Office
of Management and Budget under control number 1212-0022)'' are removed.
6. Section 4231.5 is revised to read as follows:
Sec. 4231.5 Valuation requirement.
(a) In general. For a plan that is not a significantly affected
plan, the actuarial valuation requirement under section 4231(b)(4) of
ERISA and Sec. 4231.3(a)(2) is satisfied if an actuarial valuation has
been performed for the plan based on the plan's assets and liabilities
as of a date not more than three years before the date on which the
notice of the merger or transfer is filed.
(b) Significantly affected plans. (1) The actuarial valuation
requirement under section 4231(b)(4) of ERISA and Sec. 4231.3(a)(2) is
satisfied for a significantly affected plan only if an actuarial
valuation has been performed for the plan based on the plan's assets
and liabilities as of a date not earlier than the first day of the last
plan year ending before the proposed effective date of the transaction.
(2) In the case of a transfer, the valuation shall separately
identify assets, contributions, and liabilities being transferred and
shall be based on the actuarial assumptions and methods that are
expected to be used for the plan for the first plan year beginning
after the transfer.
(3) In the case of a merger involving a plan that has terminated
under section 4041A(a)(2) of ERISA, the valuation shall be based on the
actuarial assumptions and methods that are expected to be used for the
plan resulting from the merger for the first plan year beginning after
the merger.
7. In Sec. 4231.6, paragraphs (a) and (b) are redesignated as
paragraphs (b) and (a) respectively; the introductory texts of
redesignated paragraphs (a) and (b) are revised; and redesignated
paragraph (b)(4) and paragraph (c)(1) are revised, to read as follows:
Sec. 4231.6 Plan solvency tests.
(a) In general. For a plan that is not a significantly affected
plan, the plan solvency requirement of section 4231(b)(3) of ERISA and
Sec. 4231.3(a)(3)(i) is satisfied if --
* * * * *
(b) Significantly affected plans. The plan solvency requirement of
section 4231(b)(3) of ERISA and Sec. 4231.3(a)(3)(i) is satisfied for a
significantly affected plan if all of the following requirements are
met:
* * * * *
(4) Contributions for the amortization period shall equal or exceed
unfunded accrued benefits plus expected normal costs. The actuary may
select as the amortization period either--
(i) The first 25 plan years beginning on or after the proposed
effective date of the transaction, or
(ii) The amortization period for the resulting base when the
combined charge base and the combined credit base are offset under
section 412(b)(4) of the Code.
(c) Rules for determinations. * * *
(1) Expected contributions after a merger or transfer shall be
determined by assuming that contributions for each plan year will equal
contributions for the last full plan year ending before the date on
which the notice of merger or transfer is filed with the PBGC.
Contributions shall be adjusted, however, to reflect--
(i) The merger or transfer,
(ii) Any change in the rate of employer contributions that has been
negotiated (whether or not in effect), and
(iii) Any trend of changing contribution base units over the
preceding five plan years or other period of time that can be
demonstrated to be more appropriate.
* * * * *
Sec. 4231.6 [Amended]
8. In Sec. 4231.6, redesignated paragraph (a)(1) is amended by
removing the word ``in'' and adding in its place the word ``for'';
redesignated paragraphs (b)(1) through (b)(3) are amended by removing
the word ``transfer'' wherever it appears and adding in its place the
word ``transaction''; redesignated paragraph (b)(2) is amended by
removing the word ``during'' and adding in its place the word ``for'';
paragraph (c)(2) is amended by adding the words ``expected to be''
[[Page 23703]]
after the words ``and assumptions'' and before the words ``used by the
plan'' and by removing the words ``is using'' and adding in their place
the word ``uses''; paragraph (c)(4) is amended by removing the words
``to the plan sponsor''; and paragraph (c)(5) is amended by adding the
words ``to be'' after the words ``interest assumption'' and before the
words ``used for''. As so revised, redesignated paragraphs (a)(1) and
(b)(1) through (b)(3) and paragraphs (c)(2), (c)(4), and (c)(5), of
Sec. 4231.6 read as follows:
Sec. 4231.6 Plan solvency tests.
(a) In general. * * *
(1) The fair market value of plan assets immediately after the
merger or transfer equals or exceeds five times the benefit payments
for the last plan year ending before the proposed effective date of the
merger or transfer; or
* * * * *
(b) Significantly affected plans. * * *
(1) Expected contributions shall equal or exceed the estimated
amount necessary to satisfy the minimum funding requirement of section
412(a) of the Code (including reorganization funding, if applicable)
for the five plan years beginning on or after the proposed effective
date of the transaction.
(2) The fair market value of plan assets immediately after the
transaction shall equal or exceed the total amount of expected benefit
payments for the first five plan years beginning on or after the
proposed effective date of the transaction.
(3) Expected contributions for the first plan year beginning on or
after the proposed effective date of the transaction shall equal or
exceed expected benefit payments for that plan year.
* * * * *
(c) Rules for determinations * * *
* * * * *
(2) Expected normal costs shall be determined under the funding
method and assumptions expected to be used by the plan actuary for
purposes of determining the minimum funding requirement under section
412 of the Code (which requires that such assumptions be reasonable in
the aggregate). If the plan uses an aggregate funding method, normal
costs shall be determined under the entry age normal method.
* * * * *
(4) The fair market value of plan assets immediately after the
merger or transfer shall be based on the most recent data available
immediately before the date on which the notice is filed.
(5) Expected investment earnings shall be determined using the same
interest assumption to be used for determining the minimum funding
requirement under section 412 of the Code.
* * * * *
9. In Sec. 4231.7, paragraph (a) is revised, and paragraph (c)(3)
is added, to read as follows:
Sec. 4231.7 De minimis mergers and transfers.
(a) Special plan solvency rule. The determination of whether a de
minimis merger or transfer satisfies the plan solvency requirement in
Sec. 4231.6(a) may be made without regard to any other de minimis
mergers or transfers that have occurred since the last actuarial
valuation.
* * * * *
(c) De minimis transfer defined. * * *
* * * * *
(3) The transferee plan is not a plan that has terminated under
section 4041A(a)(2) of ERISA.
* * * * *
Sec. 4231.7 [Amended]
10. In Sec. 4231.7, paragraph (c)(1) is amended by removing the
word ``and''; paragraph (c)(2) is amended by removing the period and
adding in its place a semicolon and the word ``and''; paragraph (d) is
amended by removing the words ``merger or transfer'' and adding in
their place the word ``transaction'', by adding the word ``actuarial''
after the words ``the most recent'' and before the word ``valuation'',
and by removing the words ``performed for purposes of section 412(b) of
the Code''; the introductory text of paragraph (e)(2) is amended by
adding the words ``de minimis'' after the words ``all previous'' and
before the words ``mergers and transfers''; paragraph (e)(2)(i) is
amended by removing the words ``from the plan'' and adding in their
place the words ``from a plan''; and paragraph (e)(2)(ii) is amended by
removing the words ``to the plan'' and adding in their place the words
``to a plan''. As so revised, paragraphs (c)(1), (c)(2), (d), and
(e)(2) of Sec. 4231.7 read as follows:
Sec. 4231.7 De minimis mergers and transfers.
* * * * *
(c) De minimis transfer defined. * * *
(1) The fair market value of the assets transferred, if any, is
less than 3 percent of the fair market value of all the assets of the
transferor plan;
(2) The present value of the accrued benefits transferred (whether
or not vested) is less than 3 percent of the fair market value of all
the assets of the transferee plan; and
* * * * *
(d) Value of assets and benefits. For purposes of paragraphs (b)
and (c) of this section, the value of plan assets and accrued benefits
may be determined as of any date prior to the proposed effective date
of the transaction, but not earlier than the date of the most recent
actuarial valuation.
* * * * *
(e) Aggregation required. * * *
* * * * *
(2) A transfer is not de minimis if, when aggregated with all
previous de minimis mergers and transfers effective within the same
plan year--
(i) The value of all assets transferred from a plan equals or
exceeds 3 percent of the value of the plan's assets; or
(ii) The present value of all accrued benefits transferred to a
plan equals or exceeds 3 percent of the plan's assets.
11. In Sec. 4231.8, paragraphs (d), (e)(1)(iii), (e)(2), (e)(6),
and (f) are revised to read as follows:
Sec. 4231.8 Notice of merger or transfer.
* * * * *
(d) Filing date. For purposes of paragraph (a) of this section, the
notice is not considered filed until all of the information required by
paragraph (e) of this section has been submitted. Information filed
under this part is considered filed--
(1) On the date of the United States postmark stamped on the cover
in which the information is mailed, if--
(i) The postmark was made by the United States Postal Service; and
(ii) The information was mailed postage prepaid, properly addressed
to the PBGC; or
(2) On the date it is received by the PBGC, if the conditions
stated in paragraph (d)(1) of this section are not met. Information
received on a weekend or Federal holiday or after 5:00 p.m. on a
weekday is considered filed on the next regular business day.
(e) * * *
(1) * * *
* * * * *
(iii) The plan sponsor's EIN and the plan's PN and, if different,
the EIN or PN last filed with the PBGC. If no EIN or PN has been
assigned, the notice shall so indicate.
(2) Whether the transaction being reported is a merger or transfer,
whether it involves any plan that has terminated under section
4041A(a)(2) of ERISA, whether any significantly affected plan is
involved in the transaction (and, if so, identifying each such plan),
and whether it is a de minimis transaction
[[Page 23704]]
as defined in Sec. 4231.7 (and, if so, including an enrolled actuary's
certification to that effect).
* * * * *
(6) For each plan that exists before a transaction (unless the
transaction is de minimis and does not involve any plan that has
terminated under section 4041A(a)(2) of ERISA), a copy of the most
recent actuarial valuation report that satisfies the requirements of
Sec. 4231.5.
* * * * *
(f) Waiver of notice. The PBGC may waive the notice requirements of
this section and section 4231(b)(1) of ERISA if--
(1) A plan sponsor demonstrates to the satisfaction of the PBGC
that failure to complete the merger or transfer in less than 120 days
after filing the notice will cause harm to participants or
beneficiaries of the plans involved in the transaction;
(2) The PBGC determines that the transaction complies with the
requirements of section 4231 of ERISA; or
(3) The PBGC completes its review of the transaction.
Sec. 4231.8 [Amended]
12. In Sec. 4231.8, paragraph (c) is amended by removing the words
``by mail or submitted by hand''; paragraph (e)(3) is amended by
removing the words ``merger or transfer'' and adding in their place the
word ``transaction''; paragraph (e)(4) is amended by removing the words
``the plan provision'' and adding in their place the words ``each plan
provision''; the introductory text of paragraph (e)(5) is amended by
removing the word ``One'' and adding in its place the words ``For each
plan that exists after the transaction, one''; paragraph (e)(5)(i) is
removed and paragraphs (e)(5)(ii) and (e)(5)(iii) are redesignated as
paragraphs (e)(5)(i) and (e)(5)(ii) respectively; redesignated
paragraph (e)(5)(i) is amended by removing the words ``merger or
transfer'' and adding in their place the word ``plan''; the
introductory text of paragraph (e)(7) is amended by removing the words
``a significant transfer'' and adding in their place the words ``each
significantly affected plan that exists after the transaction'' and by
removing the reference ``Sec. 4231.6(a)'' and adding in its place the
reference ``Sec. 4231.6(b)''; and paragraphs (e)(7)(i) through
(e)(7)(v) are amended by removing the word ``each'' wherever it occurs
and adding in its place the word ``the'', and by removing the word
``transfer'' wherever it occurs and adding in its place the word
``transaction''. As so revised, paragraphs (c), (e)(3), and (e)(4), the
introductory text of paragraph (e)(5), redesignated paragraph
(e)(5)(i), and paragraph (e)(7) of Sec. 4231.8 read as follows:
Sec. 4231.8 Notice of merger or transfer.
* * * * *
(c) Where to file. The notice shall be delivered to Reports
Processing, Insurance Operations Department, Pension Benefit Guaranty
Corporation, 1200 K Street NW., Washington, DC 20005-4026.
* * * * *
(e) * * *
* * * * *
(3) The proposed effective date of the transaction.
(4) A copy of each plan provision stating that no participant's or
beneficiary's accrued benefit will be lower immediately after the
merger or transfer than the benefit immediately before the transaction.
(5) For each plan that exists after the transaction, one of the
following statements, certified by an enrolled actuary:
(i) A statement that the plan satisfies the applicable plan
solvency test set forth in Sec. 4231.6, indicating which is the
applicable test.
* * * * *
(7) For each significantly affected plan that exists after the
transaction, the following information used in making the plan solvency
determination under Sec. 4231.6(b):
(i) The present value of the accrued benefits and fair market value
of plan assets under the valuation required by Sec. 4231.5(b),
allocable to the plan after the transaction.
(ii) The fair market value of assets in the plan after the
transaction (determined in accordance with Sec. 4231.6(c)(4)).
(iii) The expected benefit payments for the plan in the first plan
year beginning on or after the proposed effective date of the
transaction (determined in accordance with Sec. 4231.6(c)(3)).
(iv) The contribution rates in effect for the plan for the first
plan year beginning on or after the proposed effective date of the
transaction.
(v) The expected contributions for the plan in the first plan year
beginning on or after the proposed effective date of the transaction
(determined in accordance with Sec. 4231.6(c)(1)).
* * * * *
Sec. 4231.8 [Amended]
13. At the end of Sec. 4231.8, the words ``(Approved by the Office
of Management and Budget under control number 1212-0022)'' are removed.
14. In Sec. 4231.9, the first sentence of the introductory text of
paragraph (a) is removed and a new sentence is added in its place, to
read as follows:
Sec. 4231.9 Request for compliance determination.
(a) General. The plan sponsor(s) of one or more plans involved in a
merger or transfer, or the duly authorized representative(s) acting on
behalf of the plan sponsor(s), may file a request for a determination
that the transaction complies with the requirements of section 4231 of
ERISA. * * *
* * * * *
Sec. 4231.9 [Amended]
15. In Sec. 4231.9, the paragraph heading of paragraph (b) is
revised to read ``Contents of request.''; paragraph (b) (other than the
paragraph heading), and paragraphs (b)(1), (b)(2), and (b)(3), are
redesignated as paragraph (b)(1), and paragraphs (b)(1)(i), (b)(1)(ii),
and (b)(1)(iii), respectively; redesignated paragraph (b)(1) is amended
by adding the paragraph heading ``General.''; the introductory text of
redesignated paragraph (b)(1) is amended by removing the words ``de
minimus'' and adding in their place the words ``de minimis'';
redesignated paragraph (b)(1)(ii) is amended by removing the words
``the certification that'' and adding in their place the words ``each
certification that a plan involved in''; redesignated paragraph
(b)(1)(iii) is amended by removing the words ``a significant transfer''
and adding in their place the words ``each significantly affected
plan'' and by removing the words ``proposed effective date of the
transfer'' and adding in their place the words ``date of filing the
notice required under Sec. 4231.8''; paragraph (c), and paragraphs
(c)(1) and (c)(2), are redesignated as paragraph (b)(2), and paragraphs
(b)(2)(i) and (b)(2)(ii), respectively; the introductory text of
redesignated paragraph (b)(2) is amended by removing the paragraph
heading and adding in its place the heading ``De minimis merger or
transfer.'' and by adding the words ``for each plan that exists after
the transaction'' after the words ``following statements'' and before
the comma; and redesignated paragraph (b)(2)(i) is amended by removing
the words ``merger or transfer'' and adding in their place the word
``plan'' and by removing the reference ``Sec. 4231.6(b)'' and adding in
its place the reference ``Sec. 4231.6(a)''. Therefore, paragraphs (c)
introductory text, (c)(1) and (c)(2) are redesignated as paragraphs
(b)(2) introductory text,
[[Page 23705]]
(b)(2)(i) and (b)(2)(ii), respectively, and the revised paragraph (b)
reads as follows:
Sec. 4231.9 Request for compliance determination.
* * * * *
(b) Contents of request--
(1) General. A request for a compliance determination concerning a
merger or transfer that is not de minimis shall contain --
(i) A copy of the merger or transfer agreement;
(ii) A summary of the required calculations, including a complete
description of assumptions and methods, on which the enrolled actuary
based each certification that a plan involved in the merger or transfer
satisfied a plan solvency test described in Sec. 4231.6; and
(iii) For each significantly affected plan, copies of all actuarial
valuations performed within the 5 years preceding the date of filing
the notice required under Sec. 4231.8.
(2) De minimis merger or transfer. A request for a compliance
determination concerning a de minimis merger or transfer shall contain
one of the following statements for each plan that exists after the
transaction, certified by an enrolled actuary:
(i) A statement that the plan satisfies one of the plan solvency
tests set forth in Sec. 4231.6(a), indicating which test is satisfied.
(ii) A statement of the basis on which the actuary has determined
that benefits under the plan are not reasonably expected to be subject
to suspension under section 4245 of ERISA, including supporting data or
calculations, assumptions and methods.
Sec. 4231.9 [Amended]
16. At the end of Sec. 4231.9, the words ``(Approved by the Office
of Management and Budget under control number 1212-0022)'' are removed.
Sec. 4231.10 [Amended]
17. At the end of Sec. 4231.10, the words ``(Approved by the Office
of Management and Budget under control number 1212-0022)'' are removed.
Issued in Washington DC, this 25th day of April, 1997.
John Seal,
Acting Executive Director, Pension Benefit Guaranty Corporation.
[FR Doc. 97-11352 Filed 4-30-97; 8:45 am]
BILLING CODE 7708-01-P
