[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 
[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