[Federal Register Volume 70, Number 128 (Wednesday, July 6, 2005)]
[Notices]
[Pages 38983-38984]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-13201]



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PENSION BENEFIT GUARANTY CORPORATION


Pendency of Request for Approval of Special Withdrawal Liability 
Rules; Service Employees International Union Local 25 and Participating 
Employers Pension Trust

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Notice of pendency of request.

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SUMMARY: The Pension Benefit Guaranty Corporation (``PBGC'') has 
received a request from the Service Employees International Union Local 
25 and Participating Employers Pension Trust for approval of a plan 
amendment providing for special withdrawal liability rules. Under 
section 4203(f) of the Employee Retirement Income Security Act of 1974 
and the PBGC's regulation on Extension of Special Withdrawal Liability 
Rules, a multiemployer pension plan may, with PBGC approval, be amended 
to provide for special withdrawal liability rules similar to those that 
apply to the construction and entertainment industries. Such approval 
is granted only if the PBGC determines that the rules apply to an 
industry with characteristics that make use of the special rules 
appropriate and that the rules will not pose a significant risk to the 
PBGC. This notice advises interested persons of the pendency of this 
request and invites public comment.

DATES: Comments must be submitted by August 22, 2005.

ADDRESSES: All written comments (at least three copies) should be 
mailed or delivered to: Office of the Chief Counsel, Pension Benefit 
Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005-4026. 
Copies of the request for approval and any comments may be obtained by 
writing to the PBGC's Communications and Public Affairs Department at 
Suite 240 at the above address or by visiting that office or calling 
202-326-4040 during normal business hours. (TTY and TDD users may call 
the Federal relay service toll-free at 1-800-877-8339 and ask to be 
connected to 202-326-4040.) Copies of the PBGC's regulation on 
Extension of Special Withdrawal Liability Rules (29 CFR part 4203) and 
of the originating request for approval may be accessed through the 
PBGC's Web site (http://www.PBGC.gov).

FOR FURTHER INFORMATION CONTACT: Frank Anderson, Attorney, Office of 
the Chief Counsel (22500), Pension Benefit Guaranty Corporation, 1200 K 
Street, NW., Washington, DC 20005-4026; telephone 202-326-4020. (TTY 
and TDD users may call the Federal relay service toll-free at 1-800-
877-8339 and ask to be connected to 202-326-4020).

SUPPLEMENTARY INFORMATION:

Background

    Under section 4203(a) of ERISA, a complete withdrawal from a 
multiemployer plan generally occurs when an employer permanently ceases 
to have an obligation to contribute under the plan or permanently 
ceases all covered operations under the plan. Under section 4205 of 
ERISA, a partial withdrawal generally occurs when an employer (1) 
reduces its contribution base units by seventy percent in each of three 
consecutive years, or (2) permanently ceases to have an obligation to 
contribute under one or more but fewer than all collective bargaining 
agreements under which the employer has been obligated to contribute 
under the plan, while continuing to perform work in the jurisdiction of 
the collective bargaining agreement of the type for which contributions 
were previously required or transfers such work to another location, or 
(3) permanently ceases to have an obligation to contribute under the 
plan for work performed at one or more but fewer than all of its 
facilities, while continuing to perform work at the facility of the 
type for which the obligation to contribute ceased.
    Although the general rules on complete and partial withdrawal 
identify events that normally result in a diminution of the plan's 
contribution base, Congress recognized that, in certain industries and 
under certain circumstances, a complete or partial cessation of the 
obligation to contribute does not normally weaken the plan's 
contribution base. For that reason, Congress established special 
withdrawal rules for the construction and entertainment industries.
    For construction industry plans and employers, section 4203(b)(2) 
of ERISA provides that a complete withdrawal occurs only if an employer 
ceases to have an obligation to contribute under a plan and the 
employer either continues to perform previously covered work in the 
jurisdiction of the collective bargaining agreement, or resumes such 
work within five years without renewing the obligation to contribute at 
the time of resumption. Section 4203(c)(1) of ERISA applies the same 
special definition of complete withdrawal to the entertainment 
industry, except that the pertinent jurisdiction is the jurisdiction of 
the plan rather than the jurisdiction of the collective bargaining 
agreement. In contrast, the general definition of complete withdrawal 
in section 4203(a) of ERISA defines a withdrawal to include permanent 
cessation of the obligation to contribute regardless of the continued 
activities of the withdrawn employer.
    Congress also established special partial withdrawal liability 
rules for the construction and entertainment industries. Under section 
4208(d)(1) of ERISA, ``[a]n employer to whom section 4203(b) (relating 
to the building and construction industry) applies is liable for a 
partial withdrawal only if the employer's obligation to contribute 
under the plan is continued for no more than an insubstantial portion 
of its work in the craft and area jurisdiction of the collective 
bargaining agreement of the type for which contributions are 
required.'' Under section 4208(d)(2) of ERISA, ``[a]n employer to whom 
section 4203(c) (relating to the entertainment industry) applies shall 
have no liability for a partial withdrawal except under the conditions 
and to the extent prescribed by the [PBGC] by regulation.''
    Section 4203(f) of ERISA provides that the PBGC may prescribe 
regulations under which plans in other industries may be amended to 
provide for special withdrawal liability rules similar to the rules 
prescribed in section 4203(b) and (c) of ERISA. Section 4203(f)(2) of 
ERISA provides that such regulations shall permit the use of special 
withdrawal liability rules only in industries (or portions thereof) in 
which the PBGC determines that the characteristics that would make use 
of such rules appropriate are clearly shown, and that the use of such 
rules will not pose a significant risk to the insurance system under 
Title IV of ERISA. Section 4208(e)(3) of ERISA provides that the PBGC 
shall prescribe by regulation a procedure by which plans may be amended 
to adopt special partial withdrawal liability rules upon a finding by 
the PBGC that the adoption of such rules is consistent with the 
purposes of Title IV of ERISA.
    The PBGC's regulation on Extension of Special Withdrawal Liability 
Rules (29 CFR part 4203) prescribes procedures whereby a multiemployer 
plan may ask PBGC to approve a plan amendment that establishes special 
complete or partial withdrawal liability rules. The regulation may be 
accessed on the PBGC's Web site (http://www.PBGC.gov).

Request

    The PBGC has received a request from the Service Employees 
International Union Local 25 and Participating

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Employers Pension Trust (``Local 25 Plan'') for approval of a plan 
amendment providing for special withdrawal liability rules. A copy of 
the originating request, and PBGC's summary of the actuarial reports 
that the plan provided, may be accessed on the PBGC's Web site (http://www.PBGC.gov). A copy of the complete filing may be requested from the 
PBGC Disclosure Officer. The fax number is 202-326-4042. It may also be 
obtained by writing the Disclosure Officer, PBGC, 1200 K Street, NW., 
Suite 240, Washington, DC 20005.
    In brief, the Local 25 Plan, a multiemployer plan covering the 
commercial building cleaning and security industry in Chicago, 
represents that the industry has characteristics similar to those of 
the construction industry. The plan has adopted an amendment 
prescribing special withdrawal liability rules, which, if approved by 
the PBGC, would be effective as of September 30, 2002. Under the 
proposed amendment, complete withdrawal of an employer would occur only 
under conditions similar to those described in ERISA section 
4203(b)(2), or certain other conditions including a mass withdrawal. 
Partial withdrawal of an employer would occur only under conditions 
similar to those described in ERISA section 4208(d)(1). The request 
includes actuarial data to support the plan's contention that the 
amendment will not pose a significant risk to the insurance system 
under Title IV of ERISA.

Comments

    All interested persons are invited to submit written comments 
concerning the pending request to the PBGC at the above address by 
August 22, 2005. All comments will be made a part of the record. 
Comments received will be available for public inspection at the 
address set forth above.

    Issued in Washington, DC, on this 27 day of June, 2005.
Vincent K. Snowbarger,
Acting Executive Director, Pension Benefit Guaranty Corporation.
[FR Doc. 05-13201 Filed 7-5-05; 8:45 am]
BILLING CODE 7708-01-P