Rules for Administrative Review of Agency Decisions; Distress Terminations of Single-Employer Plans; Standard Terminations of Single- Employer Plans

PENSION BENEFIT GUARANTY CORPORATION

29 CFR Parts 2606, 2616, and 2617

Rules for Administrative Review of Agency Decisions; Distress

Terminations of Single-Employer Plans; Standard Terminations of Single-

Employer Plans

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Final rule.

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SUMMARY: On August 24, 1993, the Pension Benefit Guaranty Corporation

(``PBGC'') published an interim rule with request for comments amending

certain of its regulations (Administrative Review of Agency Decisions

and Standard Terminations of Single-Employer Plans) to permit the

PBGC's Executive Director to grant relief from deadlines in the event

of a major disaster. The PBGC is now adopting these amendments as a

final rule and also is amending its distress termination regulation in

order to give the Executive Director the authority to grant relief

similar to that given in the interim rule for standard terminations.

EFFECTIVE DATE: April 14, 1994.

FOR FURTHER INFORMATION CONTACT: Harold J. Ashner, Assistant General

Counsel, or Renae R. Hubbard, Special Counsel, Office of the General

Counsel, Pension Benefit Guaranty Corporation, 1200 K Street NW.,

Washington, DC 20005, 202-326-4024 (202-326-4179 for TTY and TDD).

(These are not toll-free numbers.)

SUPPLEMENTARY INFORMATION: On August 24, 1993, the Pension Benefit

Guaranty Corporation (``PBGC'') published an interim rule with request

for comments amending its regulations on Rules for Administrative

Review of Agency Decisions and Standard Terminations of Single-Employer

Plans (29 CFR parts 2606 and 2617, 58 FR 44738; as corrected, 58 FR

48680, September 17, 1993). The interim rule provided that, when the

President of the United States declares, under the Disaster Relief Act

of 1974, as amended (42 U.S.C. 5121, 5122(2), 5141(b)), that a major

disaster (such as the 1993 flood disaster in the midwestern United

States) exists, the PBGC's Executive Director (or his or her designee)

may grant relief from certain regulatory deadlines by which persons are

to submit filings to the PBGC or take other actions. The PBGC received

no comments and is adopting the interim rule as a final rule without

change.

Before the interim rule was published, Secs. 2606.33 and 2606.53 of

the PBGC's administrative review regulation (29 CFR part 2606) provided

deadlines for filing a request for reconsideration or appeal of an

initial determination, and Sec. 2606.4 provided for extensions of those

deadlines for good cause shown and only if requested in writing by the

applicable filing deadline. The PBGC concluded that, when a major

disaster like the 1993 midwestern flood is declared, the above

deadlines do not serve the agency's objective of making timely review

available to aggrieved persons. As amended, Sec. 2606.4 provides that

the deadlines for filing a request for reconsideration or appeal may be

extended by the Executive Director (or his or her designee) when a

major disaster is declared. The extension may be for a period of up to

180 days and applies to any aggrieved person who resides in, or whose

principal place of business is within, a designated disaster area, or

with respect to whom the office of the service provider, bank,

insurance company, or other person maintaining the information

necessary to file the request for reconsideration or appeal is within a

designated disaster area.

Similarly, as amended Secs. 2617.25 and 2617.28 of the PBGC's

standard termination regulation (29 CFR part 2617) include an exception

to the deadlines (1) for filing the standard termination notice with

the PBGC (Secs. 2617.3(b)(2) and 2617.25(a)) and, consequently, for

issuing notices of plan benefits to participants and beneficiaries

(Secs. 2617.3(b)(3) and 2617.23(a)) and (2) for completing the

distribution of plan assets (Sec. 2617.28(a), (e), and (f)). As in the

administrative review regulation, the Executive Director (or his or her

designee) may extend these deadlines for a period of up to 180 days

when a major disaster is declared. The extension applies to plan

terminations with respect to which the principal place of business of

the contributing sponsor or the plan administrator, or the office of

the service provider, bank, insurance company, or other person

maintaining the information necessary to issue the notices of plan

benefits or file the standard termination notice, or to complete the

distribution of plan assets (as applicable), is within a designated

disaster area.

The PBGC believes that similar relief should be available for plans

terminating in distress terminations pursuant to section 4041(c) of the

Employee Retirement Income Security Act of 1974, as amended, and the

PBGC's distress termination regulation (29 CFR part 2616). Sections

2616.3(b), 2616.24, and 2616.25(c)(2) establish deadlines for filing a

distress termination notice and related information with the PBGC.

Section 2616.27(a)(1) establishes the deadline for issuing notices of

benefit distribution in those few terminations where the plan is

sufficient for at least guaranteed benefits and, accordingly, plan

assets may be distributed to participants and beneficiaries in a manner

similar to a standard termination distribution. (The notices of

distribution are similar to the notices of plan benefits required in

standard terminations under 29 CFR 2617.23.) Finally,

Sec. 2616.29(a)(1) contains distribution procedures and deadlines that

are generally the same as those in standard terminations; that section

cross-references 29 CFR 2617.28 (c), (e), and (f) and provides the same

180-day (unless extended) deadline for distribution.

The amendments in this final rule permit the PBGC's Executive

Director (or his or her designee) to extend the above deadlines in the

same circumstances as were provided for standard terminations in the

interim rule. (The PBGC did not include distress terminations in the

interim rule because the small number of distress terminations filed

annually lessened the need for prompt action; however, these provisions

are essentially procedural in that they establish alternative

mechanisms for obtaining extensions of filing or other deadlines (5

U.S.C. 553(b)(A)), and the notice and public procedure and delayed

effective date requirements of 5 U.S.C. 553 therefore do not apply.)

E.O. 12866

The PBGC has determined that this action is not a ``significant

regulatory action'' under the criteria set forth in Executive Order

12866, because it will not have an annual effect on the economy of $100

million or more or adversely affect in a material way the economy, a

sector of the economy, productivity, competition, jobs, the

environment, public health or safety, or State, local, or tribal

governments or communities; create a serious inconsistency or otherwise

interfere with an action taken or planned by another agency; materially

alter the budgetary impact of entitlements, grants, user fees, or loan

programs or the rights and obligations of recipients thereof; or raise

novel legal or policy issues arising out of legal mandates, the

President's priorities, or the principles set forth in Executive Order

12866.

List of Subjects

29 CFR Part 2606

Administrative practice and procedure, Organization and functions

(Government agencies), Pension insurance, Pensions.

29 CFR Parts 2616 and 2617

Employee benefit plans, Pension insurance, Pensions, Reporting

requirements.

In consideration of the foregoing, the interim final rule amending

29 CFR parts 2606 and 2617, as published on August 24, 1993, at 58 FR

44738 and corrected on September 17, 1993, at 58 FR 48600, is adopted

as a final rule without change, and 29 CFR part 2616 is amended as

follows:

PART 2616--DISTRESS TERMINATIONS OF SINGLE-EMPLOYER PLANS

1. The authority citation for part 2616 continues to read as

follows:

Authority: 29 U.S.C. 1302(b)(3), 1341, 1344.

Sec. 2616.3 [Amended]

2. Paragraph (b)(2) of Sec. 2616.3 is amended by adding ``or, if

applicable, no later than the due date established in an extension

notice issued under Sec. 2616.10'' after ``date'' and before the

semicolon.

2a. Section 2616.10 is redesignated as Sec. 2616.11.

3. A new Sec. 2616.10 is added to subpart A to read as follows:

Sec. 2616.10 Disaster relief.

(a) Notwithstanding any other provision in this part, when the

President of the United States declares that, under the Disaster Relief

Act of 1974, as amended (42 U.S.C. 5121, 5122(2), 5141(b)), a major

disaster exists, the Executive Director of the PBGC (or his or her

designee) may, by issuing one or more notices of disaster relief,

extend the due date for filing the distress termination notice pursuant

to Sec. 2616.24, for issuing the notices of benefit distribution

pursuant to Sec. 2616.27(a)(1), or for completing the distribution of

plan assets pursuant to Sec. 2616.29, by up to 180 days.

(b) The due date extension or extensions shall apply only to plan

terminations with respect to which the principal place of business of

the contributing sponsor or the plan administrator, or the office of

the service provider, bank, insurance company, or other person

maintaining the information necessary to file the distress termination

notice, to issue the notices of benefit distribution, or to complete

the distribution of plan assets (as applicable), is within a designated

disaster area.

(c) The distress termination notice filed pursuant to Sec. 2616.24,

or the post-distribution certification filed pursuant to

Sec. 2616.29(b) shall identify the distress termination notice filing

or the distribution (as applicable) as being qualified for the due date

extension.

4. Section 2616.24 is amended by adding paragraph (d) to read as

follows:

Sec. 2616.24 Distress termination notice.

* * * * *

(d) Due date extension. Notwithstanding the provisions of

paragraphs (a), (b), and (c) of this section, the due date for filing

PBGC Form 601 or other information required under this section may be

extended by a notice issued under Sec. 2616.10.

Sec. 2616.25 [Amended]

5. Paragraph (c)(2) of Sec. 2616.25 is amended by adding ``, or, if

applicable, no later than the due date established in an extension

notice issued under Sec. 2616.10'' after ``later'' and before the

period.

Sec. 2616.27 [Amended]

6. Paragraph (a)(1) of Sec. 2616.27 is amended by adding ``or, if

applicable, no later than the due date established in an extension

notice issued under Sec. 2616.10'' after ``distribution notice'' and

before the comma.

Sec. 2616.29 [Amended]

7. Paragraph (a)(1) of Sec. 2616.29 is amended by removing

``2617.28 (c), (e) and (f)'' and adding in its place ``2617.28(c)'' and

by adding ``(except as provided in Sec. 2616.10 or 2617.28 (e) or

(f))'' after ``61st day and'' and before ``no later than''.

Issued in Washington, DC this 8th day of April 1994.

Martin Slate,

Executive Director, Pension Benefit Guaranty Corporation.

[FR Doc. 94-8886 Filed 4-13-94; 8:45 am]

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