Mergers and Transfers Between Multiemployer Plans

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

[email protected]. 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