[Federal Register Volume 72, Number 140 (Monday, July 23, 2007)]
[Notices]
[Pages 40176-40181]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-14247]


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PENSION BENEFIT GUARANTY CORPORATION


Election of Multiemployer Plan Status

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Notice.

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SUMMARY: This Notice establishes implementing procedures for a special 
election concerning multiemployer plan status that may be made under 
the Employee Retirement Income Security Act of 1974, as amended by the 
Pension Protection Act of 2006. Under these procedures, an eligible 
plan may elect to be a multiemployer plan for all purposes under ERISA 
and the Internal Revenue Code of 1986.

FOR FURTHER INFORMATION CONTACT: John H. Hanley, Director, or Constance 
Markakis, Attorney, Legislative and Regulatory Department, Pension 
Benefit Guaranty Corporation,1200 K Street, NW., Washington. DC 20005-
4026; 202-326-4024. (TTY/TDD users may call the Federal relay service 
toll-free at 1-800-877-8339 and ask to be connected to 202-326-4024.)

SUPPLEMENTARY INFORMATION: 

The Pension Protection Act of 2006

    The Pension Protection Act of 2006 (``PPA 2006''), Public Law 109-
280, 120 Stat. 780, became law on August 17, 2006, and amended the 
Employee Retirement Income Security Act of 1974 (``ERISA'') and the 
Internal Revenue Code of 1986 (the ``Code''). ERISA and the Code, as 
amended by section 1106 of PPA 2006, was further amended by section 
6611(a) of the fiscal year 2007 supplemental appropriations 
legislation, Public Law 110-28, 121 Stat. 112, which became law on May 
25, 2007. Reference in this document to any ERISA provision should be 
construed to include reference to any parallel provision in section 
414(f) of the Code.

Election of Multiemployer Plan Status Generally

    Section 1106 of PPA amended the definition of a ``multiemployer 
plan'' under ERISA and the Code to allow certain plans to elect to be 
multiemployer plans, pursuant to procedures prescribed by PBGC. An 
eligible plan may elect to be a multiemployer plan for all purposes 
under ERISA and the Code, provided that PBGC procedures are followed 
and the election is made on or before August 17, 2007. Under Public Law 
110-28, an election is effective starting with any plan year beginning 
on or after January 1, 1999, and ending before January 1, 2008, as 
designated by the plan in its election. No later than 30 days before an 
election is made, the plan administrator must give notice of the 
pending election to each plan participant and beneficiary, each labor 
organization representing such participants or beneficiaries, and each 
employer that has an obligation to contribute to the plan. (See Model 
Notice of Pending Election Regarding Plan's Status issued by the 
Department of Labor, http://www.dol.gov/ebsa/regs/fedreg/notices/2006009491.htm.) In order to be eligible for the election, a plan must 
satisfy the requirements of section 3(37)(G)(i)(I) or section 
3(37)(G)(i)(II) of ERISA.

Election To Revoke Single-Employer Plan Status

    Under section 3(37)(G)(i)(I) of ERISA, a plan may revoke an 
existing election under section 3(37)(E) to be treated as a single-
employer plan. An election made under section 3(37)(G)(i)(I) is 
irrevocable.
    Section 3(37)(E) of ERISA, as amended by the Multiemployer Pension 
Plan Amendments Act of 1980, permitted a plan that was excluded from 
multiemployer status under the prior contributions test,\1\ and that 
would otherwise be a multiemployer plan, to continue its single-
employer status. To do so, a plan was required to follow

[[Page 40177]]

PBGC procedures, including a written notice of election filed with 
PBGC. An election was effective upon written approval by PBGC.
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    \1\ Prior to amendment by the Multiemployer Pension Plan 
Amendments Act of 1980, the definition of a multiemployer plan 
excluded a plan if one of its employers contributed 50% or more of 
the total annual contributions made under the plan (or 75% or more 
of the total contributions, if a plan met the less than 50% 
contributions test for any preceding plan year). (ERISA sections 
3(37)(A)(iii) and 3(37)(B)(i) prior to September 26, 1980.)
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    In order to be eligible under PPA to revoke an election made under 
the 1980 Multiemployer Act, the plan must show that, for each of last 
three plan years before August 17, 2006, the plan would have been a 
multiemployer plan absent the election. Under section 3(37)(A), a 
multiemployer plan is defined as a plan to which more than one employer 
is required to contribute, that is maintained pursuant to one or more 
collective bargaining agreements between one or more employee 
organizations and more than one employer, and that satisfies the 
requirements established under Department of Labor (``DOL'') 
regulations. For these purposes, all trades or business (whether or not 
incorporated) under common control within the meaning of section 
4001(b)(1) of ERISA (or section 414(c) of the Code) are considered a 
single employer.
    DOL regulations (29 CFR 2510.3-37) prescribe other requirements 
that a plan must meet, in addition to those contained in section 
3(37)(A) of ERISA, to be a multiemployer plan. The regulation provides 
that a multiemployer plan established on or after September 2, 1974, 
must further meet the requirement that it was established for a 
substantial business purpose, which includes the interest of a labor 
organization in securing an employee benefit plan for its members, in 
accordance with relevant factors set forth under the regulation.

Election by Plans With Significant Contributions by Tax-Exempt 
Organizations

    Under section 3(37)(G)(i)(II) of ERISA, a plan may elect to be a 
multiemployer plan if it meets the criteria for a multiemployer plan 
under clauses (i) and (ii) of section 3(37)(A). Specifically, for the 
plan year ending after August 17, 2006, and for each of the three plan 
years ending immediately before the first plan year for which the plan 
elects multiemployer status, the plan must be a plan to which more than 
one employer is required to contribute, and that is maintained pursuant 
to one or more collective bargaining agreements. For these purposes, 
all trades or businesses (whether or not incorporated) under common 
control within the meaning of section 4001(b)(1) of ERISA (or section 
414(c) of the Code) are considered a single employer.
    In addition, the plan must have been established before September 
2, 1974, and, for each of the three plan years immediately preceding 
the first plan year for which the plan elects multiemployer status, 
substantially all of the plan's employer contributions must have been 
made or required to be made by organizations that were exempt from 
taxation under section 501 of the Code. A plan is not required to 
satisfy the multiemployer criteria if that plan was sponsored by an 
organization described in section 501(c)(5) of the Code, exempt from 
taxation under section 501(a) of the Code, and established in Chicago, 
Illinois, on August 12, 1881.
    An election under section 3(37)(G)(i)(II) is irrevocable, except 
that the plan ceases to be a multiemployer plan as of the plan year 
beginning immediately after the first plan year for which more than 
fifty percent of all of the plan's employer contributions were made or 
required to be made by organizations that were not exempt from taxation 
under section 501 of the Code.

Explanation of PBGC Procedures

Election Requirements

    Under section 2(b) of the procedures, a plan making an election 
under section 3(37)(G)(i)(I) of ERISA must demonstrate that it would 
have been a multiemployer plan but for the existing election. The 
specific information required under section 3(d) of the procedures to 
demonstrate compliance with section 3(37) includes the identity of the 
contributing employers to the plan, information on whether trades or 
businesses that are required to contribute to the plan are under common 
control, and copies of collective bargaining agreements for the three 
largest contributing employers to the plan (in amount of 
contributions).
    Pursuant to section 6611(a) of Public Law 110-28, for the limited 
purpose of this election and these procedures, a plan will be treated 
as maintained pursuant to one or more collective bargaining agreements 
if a collective bargaining agreement, expressly or otherwise, provides 
for or permits employer contributions to the plan by one or more 
employers that are signatory to such agreement, or participation in the 
plan by one or more employees of an employer that is signatory to such 
agreement, regardless of whether the plan was created, established, or 
maintained for such employees by virtue of another document that is not 
a collective bargaining agreement.
    In satisfying clause (iii) of section 3(37)(A) of ERISA, the 
procedures allow a plan some flexibility in establishing whether it was 
in existence before September 2, 1974. The procedures require the best 
available evidence that, before September 2, 1974, more than one 
employer was required to contribute to the plan under one or more 
collective bargaining agreements. PBGC may in its discretion accept 
evidence for this proof. For a plan established on or after September 
2, 1974, the procedures also require the plan to show compliance with 
29 CFR 2510.3-37(c) of the Department of Labor regulations.
    A plan making an election under section 2(b) of the procedures is 
required to submit a copy of PBGC's written decision approving the 
plan's post-1980 election to continue being a single-employer plan 
under section 3(37)(E) of ERISA. To address the possibility that a plan 
may no longer have PBGC's written decision, the procedures permit a 
plan to produce the plan amendment adopted pursuant to, and 
cotemporaneous with, the election under section 4303 of ERISA providing 
that the plan will be treated as a single-employer plan. In addition, 
the procedures require a written statement signed by the plan sponsor 
that the plan received PBGC's written approval for the election.
    Under section 2(c) of the procedures, a plan making an election 
under section 3(37)(G)(i)(II) of ERISA must provide evidence that it 
satisfies certain criteria for a multiemployer plan in section 3(37) 
for the first plan year ending after August 17, 2006, and for each of 
the three plan years ending immediately before the first plan year for 
which the plan elects multiemployer status. In this regard, the 
information required under section 3(d) (and the exceptions thereto) is 
the same as the information required for a plan electing multiemployer 
status under section 2(b), except that a plan eligible for the election 
under section 2(c) is not required to satisfy clause (iii) of section 
3(37)(A).
    For purposes of establishing that substantially all of the employer 
contributions were made or required to be made by organizations that 
are exempt from taxation under section 501 of the Code, the procedures 
require a copy of a governmental filing or document evidencing the tax-
exempt status of each contributing employer that meets this definition, 
for each of the three plan years ending immediately before the 
effective date of the multiemployer election; appropriate filings or 
documents include a current favorable determination letter issued by 
the Internal Revenue Service (``IRS'') approving the organization's 
exempt status, an IRS Form 990 or Form 990-EZ (Return of Organization 
Exempt from Income Tax) (copy of first page and

[[Page 40178]]

signed and dated last page), or a Form LM-2 or LM-3 (Labor Organization 
Annual Report) filed with the DOL (copy of signed and dated first 
page).
    A plan must also provide the amount of annual contributions that 
were made or required to be made in the aggregate by all tax-exempt 
organizations, and the percentage of such contributions to the total 
annual contributions to the plan. The PBGC procedures establish a safe 
harbor for plans certifying that at least 85 percent of all employer 
contributions for the relevant plan year were made or required to be 
made by tax-exempt organizations. A plan that meets this safe harbor is 
required to provide evidence of the tax-exempt status of only those 
employers needed to reach the 85 percent threshold, and not the tax-
exempt status of any additional employers. PBGC will review the filing 
of a plan that is unable to certify to the safe harbor provision and 
will approve the election if it determines that the requirements of 
section 3(37)(G)(i)(II)(bb) are met under all the relevant facts and 
circumstances

Notice to PBGC

    Section 3 of these procedures prescribes the requirements for 
giving notice of an election to PBGC, including due dates, how to file, 
and contents of the notice, which as explained above are necessary to 
satisfy the statutory requirements for an election. The plan's 
submission to PBGC must include a copy of the notice of the pending 
election of multiemployer plan status to participants and other parties 
and a written statement signed by the plan administrator that it has 
complied with the notice requirements in section 3(37)(G)(v)(I). 
Information provided under these procedures is subject to disclosure 
under FOIA.
    A summary checklist of information and documents for an election 
filing is found at the end of the procedures. A filing is considered 
complete if it substantially includes the information in the checklist. 
A complete filing is required for a timely election. PBGC may permit a 
plan sponsor to supplement or update a filing after the election 
deadline if PBGC determines that the omitted item was minor in nature 
and the plan sponsor reasonably believed that the filing was complete 
at the time it was filed, or the plan sponsor can show there was good 
cause for the omission. PBGC may request additional information 
relating to the requirements under these procedures at any time without 
affecting the timeliness of the filing.

PBGC Action

    Depending on the number of filings PBGC receives and the volume of 
material submitted with each file, there may be some delay before PBGC 
is able to determine that the information requirements set forth in the 
procedures are met. A plan that has properly filed an election is not 
prohibited from acting in accordance with the election solely because 
PBGC has not issued a decision approving or disapproving the election 
on or before August 17, 2007. However, if PBGC subsequently disapproves 
the election, any actions taken by the plan will need to be corrected.
    PBGC will issue a written decision on a plan's request for approval 
of an election. PBGC will approve the election based on its 
determination that a plan has complied with these procedures based on 
the plan's information and representations in its notice of election to 
PBGC. PBGC may audit the plan to verify any information or 
representation made and may revoke its approval if the plan is unable 
to verify the representations made or the information submitted. 
Consistent with section 4003 of ERISA, plans should maintain records 
necessary to verify the representations and information submitted in 
support of the election. In addition, PBGC may audit a plan for 
continued compliance with the legally-mandated percentage of tax-exempt 
contributing employers or other statutory or regulatory requirements. 
The Code and ERISA may impose additional recordkeeping requirements 
that are under the jurisdiction of the Internal Revenue Service or the 
Department of Labor. See section 6001 of the Code and section 107 of 
ERISA.
    PBGC approval has no effect on the rights of private parties nor 
the authority of other Federal agencies. However, PBGC has been advised 
by both the Internal Revenue Service and the Department of Labor that, 
for the limited purposes of an election under section 3(37)(G) of ERISA 
and section 414(f)(6) of the Code, the agencies will follow the safe 
harbor for a demonstration that substantially all of the plan's 
employer contributions were made by tax-exempt organizations.
    The information collection in these procedures has been approved by 
the Office of Management and Budget under OMB control number 1212-0062. 
An agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless it displays a currently 
valid OMB control number.

PBGC Procedures Election of Multiemployer Plan Status

Sec.
1 Purpose and Scope.
2 Eligibility and Requirements for Election.
3 Notice of Election.
4 PBGC Action on Election.

    Authority: 29 U.S.C. 1002(3)(37).

Section 1 Purpose and Scope

    (a) Purpose. This notice establishes procedures for an eligible 
plan to elect under section 3(37)(G) of the Employee Retirement Income 
Security Act of 1974, as amended (``ERISA''), and section 414(f)(6) of 
the Internal Revenue Code of 1986, as amended (``Code''), to be a 
multiemployer plan for all purposes under ERISA and the Code.
    (b) Scope. This notice applies to any plan covered under section 
4021(a) of ERISA:
    (1) That made an election to be treated as a single-employer plan 
pursuant to section 3(37)(E) and section 4303 of ERISA, and that 
otherwise satisfies the criteria for a multiemployer plan under section 
3(37)(G) of ERISA, and
    (2) That satisfies certain criteria for a multiemployer plan under 
section 3(37)(G) of ERISA or is otherwise specifically described, that 
is sponsored in large part by organizations that are exempt from 
taxation under section 501 of the Code, and that was established before 
September 2, 1974.

Section 2 Eligibility and Requirements for Election

    (a) General rule. A plan that is eligible to make an election under 
paragraph (b) or paragraph (c) of this section and makes a valid 
election in accordance with the procedures in section 3 and within the 
time limits specified in paragraph (e) of this section will be treated 
as a multiemployer plan for all purposes under ERISA and the Code. An 
election made under this notice is irrevocable, except as provided 
under paragraph (f) of this section.
    (b) Eligibility for election to revoke single-employer status. A 
plan may elect to be a multiemployer plan if--
    (1) The plan made an irrevocable election to be a single-employer 
plan pursuant to section 3(37)(E) and section 4303 of ERISA; and
    (2) For each of the last three plan years ending on or before 
August 17, 2006, the plan would have been a multiemployer plan 
described in section 3(37) of ERISA (modified in accordance with 
paragraph (e) of section 3 of these procedures), absent the election 
under section 3(37)(E). (For this purpose, all trades or businesses 
(whether or not incorporated) under common control within the meaning 
of section 4001(b)(1)

[[Page 40179]]

of ERISA (or section 414(c) of the Code) are considered a single 
employer.)
    (c) Eligibility for election to be a multiemployer plan by plans 
maintained by tax-exempt employers. Except as provided in paragraph (d) 
of this section, a plan may elect to be a multiemployer plan if--
    (1) For the first plan year ending after August 17, 2006, and each 
of the three plan years ending immediately before the first plan year 
for which the plan elects multiemployer status, the plan met the 
criteria in section 3(37)(A)(i) and (ii) of ERISA (modified in 
accordance with paragraph (e) of section 3 of these procedures). (For 
this purpose, all trades or businesses (whether or not incorporated) 
under common control within the meaning of section 4001(b)(1) of ERISA 
(or section 414(c) of the Code) are considered a single employer.) 
Solely for purposes of this election and these procedures, a plan would 
not be treated as failing to satisfy the requirement for more than one 
employer in section 3(37)(A)(i) and (ii) for the first plan year ending 
after August 17, 2006, solely as a result of a reduction to less than 
two employers required to contribute pursuant to a collective 
bargaining agreement that occurs in the intervening period from the 
effective date of the election;
    (2) For each of the last three plan years ending immediately before 
the first plan year for which the plan elects multiemployer status, 
substantially all of the plan's employer contributions were made or 
required to be made by employers that were exempt from taxation under 
section 501 of the Code (see paragraph (c) of section 4); and
    (3) The plan was established prior to September 2, 1974.
    (d) Exception. The conditions stated in paragraph (c)(1) of this 
section are met if the plan is sponsored by an organization which is 
described in section 501(c)(5) of the Code and exempt from taxation 
under section 501(a) of the Code, and which was established in Chicago, 
Illinois, on August 12, 1881.
    (e) Requirements for an effective election. An election is 
effective only if--
    (1) A written notice of the election that conforms with the 
requirements of section 3 of these procedures is filed by the plan with 
PBGG on or before August 17, 2007, and at least 30 days after the plan 
administrator has provided notice of the pending election to each plan 
participant and beneficiary, each labor organization representing such 
participants or beneficiaries, and each employer that has an obligation 
to contribute to the plan, in accordance with ERISA section 
3(37)(G)(v)(I); and
    (2) The election is approved by PBGC.
    (f) Effect of election. An election approved by PBGC will be 
effective for all purposes under ERISA and the Code as of the first day 
of the first plan year for which the plan elects multiemployer status, 
starting with any plan year beginning on or after January 1, 1999, and 
ending before January 1, 2008. If approved, an election will be 
irrevocable, except that a plan described in paragraph (c) of this 
section will automatically cease to be a multiemployer plan as of the 
first day of the plan year beginning immediately after the first plan 
year for which a majority of its employer contributions were made or 
required to be made by organizations that were not exempt from taxation 
under section 501 of the Code.

Section 3 Notice of Election

    (a) General. A written notice of election must be filed with PBGC 
no later than August 17, 2007. The notice of election must include a 
copy of the notice of the pending election provided to participants and 
other parties in accordance with ERISA section 3(37)(G)(v)(I) and a 
signed statement signed by the plan administrator that it has complied 
with the notice requirements in section 3(37)(G)(v)(I).
    (b) Who must sign notice. A notice under these procedures must be 
signed by the plan sponsor or a duly authorized representative acting 
on behalf of the plan sponsor.
    (c) How to file. A notice under these procedures may be filed by 
hand, mail, commercial delivery service, or electronic means. The 
notice may be provided to: Multiemployer Program Division, Pension 
Benefit Guaranty Corporation, 1200 K Street, NW., Suite 930, 
Washington, DC 20005, faxed to 202-326-4243, or e-mailed to 
[email protected].
    (d) Content. In addition to the information required in paragraph 
(a) of this section, and except as provided in paragraph (g) of this 
section, each notice under these procedures must contain the following 
information:
    (1) The name of the plan and the plan's PN and EIN (if applicable);
    (2) The name, address and telephone number of the plan 
administrator, and of the duly-authorized representative, if any, of 
the plan administrator;
    (3) The first plan year for which an election is effective with 
respect to the plan;
    (4) For each of the three plan years ending immediately before the 
first plan year for which the plan elects multiemployer status--
    (i) The trust agreement, plan document, plan amendments, and 
summary plan description in effect;
    (ii) The name and EIN of each employer required to contribute to 
the plan and information as to whether any trades or businesses 
required to contribute to the plan are under common control; and
    (iii) A copy of each collective bargaining agreement obligating an 
employer to make contributions to the plan for the three largest 
contributing employers to the plan (in amount of contributions).
    (5) For a plan electing multiemployer status under paragraph (b) of 
section 2--
    (i) The information described in paragraph (d)(4) of this section 
for each of the three plan years ending on or before August 17, 2006 
(rather than for the plan years described in paragraph (d)(4));
    (ii) A copy of the PBGC's decision approving the plan's application 
to stay a single-employer plan pursuant to section 3(37)(E) of ERISA, 
or, if such documentation is unavailable, a copy of the plan amendment 
required pursuant to section 4303 of ERISA providing that the plan will 
be treated as a single-employer plan, evidence that the amendment was 
adopted contemporaneous with the election, and a written statement 
signed by the plan sponsor that the plan's election to be a single-
employer plan under section 3(37)(E) of ERISA was approved by the PBGC; 
and
    (iii) For a plan established--
    (I) Before September 2, 1974, the best available evidence that, for 
the plan year preceding September 2, 1974, the plan was one to which 
more than one employer was required to contribute under one or more 
collective bargaining agreements between one or more employee 
organizations and more than one employer;
    (II) On or after September 2, 1974, demonstrate that the 
requirement (I) above is met and show compliance with 29 CFR 2510.3-
37(c) of the Department of Labor regulations.
    (6) For a plan electing multiemployer status under paragraph (c) of 
section 2--
    (i) The information described in paragraph (d)(4) of this section 
for the first plan year ending after August 17, 2006 (in addition to 
the plan years described in paragraph (d)(4)), or, documentation 
showing that there has been a reduction in the intervening period since 
the plan years described in paragraph (d)(4) to less than two of the 
number of employers required to contribute pursuant to a collective 
bargaining agreement;

[[Page 40180]]

    (ii) For each of the three plan years ending immediately before the 
first plan year for which the plan elects multiemployer status, a list 
of all employers that made contributions or were required to make 
contributions to the plan and that were also exempt from taxation under 
section 501 of the Code, and with respect to each such employer, a copy 
of a favorable determination letter issued by the Internal Revenue 
Service (``IRS'') approving the organization's exempt status that is 
currently effective, an IRS Form 990 or Form 990-EZ (Return of 
Organization Exempt from Income Tax) (copy of first page and signed and 
dated last page) applicable to each tax year ending with or within the 
last three plan years, or a Form LM-2 or LM-3 (Labor Organization 
Annual Report) filed with the DOL (copy of signed and dated first page) 
applicable to each fiscal year ending with or within the last three 
plan years. If the plan sponsor certifies to the safe harbor provision 
in clause (iii) of this subparagraph (6), documentation on the tax-
exempt status of employers beyond the safe harbor is not required;
    (iii) The amount of the annual contributions in the aggregate that 
were made or required to be made by all tax-exempt organizations listed 
in paragraph (d)(6)(ii) of this section for each year described in such 
paragraph (d)(6)(ii), and the percentage of the contributions made or 
required to be made in the aggregate by all tax-exempt organizations to 
the total annual contributions to the plan. If at least 85 percent of 
all employer contributions for the relevant plan year were made or 
required to be made by tax-exempt organizations, submit a written 
statement by the plan sponsor to that effect; and
    (iv) A plan document, trust instrument, plan amendment, or Plan 
Description Form D-1 or Annual Report Form D-2 under the Welfare and 
Pension Plans Disclosure Act, from a period in the plan's existence 
prior to September 2, 1974 (if this documentation is unavailable, a 
plan may submit for PBGC's review documentation from a later date that 
provides substantial evidence of the plan's existence before September 
2, 1974).
    (e) Collective bargaining agreement. For the limited purpose of 
this election and these procedures, a collective bargaining agreement 
means a written agreement between a bona fide employee representative 
and an employer that, expressly or otherwise, provides for or permits 
employer contributions to the plan by one or more employers that are 
signatory to such agreement, or participation in the plan by one or 
more employees of an employer that is signatory to such agreement, 
regardless of whether the plan was created, established, or maintained 
for such employees by virtue of another document that is not a 
collective bargaining agreement.
    (f) Additional information. In addition to the information 
described in paragraph (d) of this section, PBGC may require the plan 
sponsor to submit any other information directly related to these 
requirements that PBGC determines it needs to review a notice of 
election. Additional information must be submitted within 60 days of 
PBGC's request.
    (g) Exception for a certain plan. A plan sponsored by an 
organization which is described in section 501(c)(5) of the Code and 
exempt from tax under section 501(a) of the Code and which was 
established in Chicago, Illinois, on August 12, 1881, that files a 
notice under these procedures must establish its identity accordingly 
and is not required to provide the information described in paragraph 
(d)(4)(iii) of this section.

Section 4 PBGC Action on Election

    (a) General. PBGC's decision approving or disapproving an election 
will be in writing. If PBGC disapproves the election, the decision will 
state the reasons for the determination. PBGC will approve the election 
based on its determination that a plan has complied with these 
procedures based on the plan's information and representations in its 
notice of election to PBGC. PBGC may audit a plan to verify any 
information or representation made and may revoke its approval if the 
plan is unable to verify the representations made or the information 
submitted. Consistent with section 4003 of ERISA, plans should maintain 
records necessary to verify the representations and information 
submitted in support of the election. The Code and ERISA may impose 
additional recordkeeping requirements that are under the jurisdiction 
of the Internal Revenue Service or the Department of Labor. See section 
6001 of the Code and section 107 of ERISA.
    (b) Effect of PBGC decision. PBGC approval has no effect on the 
rights of private parties nor the authority of other Federal agencies. 
However, PBGC has been advised by both the Internal Revenue Service and 
the Department of Labor that, for the limited purposes of an election 
under section 3(37)(G) of ERISA and section 414(f)(6) of the Code, the 
agencies will follow the safe harbor provision under section 4(c).
    (c) Safe Harbor (Tax-Exempt Organizations). A plan will be deemed 
to comply with the requirement that substantially all of the plan's 
employer contributions were made or required to be made by tax-exempt 
organizations if the plan certifies that at least 85 percent of all 
employer contributions for the relevant plan year were made or required 
to be made by employers that were exempt from taxation under section 
501 of the Code.
    PBGC will review the filing of a plan that is unable to certify to 
the safe harbor provision and will approve the election if it 
determines that the requirements of section 3(37)(G)(i)(II)(bb) are met 
under all the relevant facts and circumstances.

    Issued in Washington, DC, on this 18th day of July 2007.
Charles E. F. Millard,
Interim Director, Pension Benefit Guaranty Corporation.

Checklist of Documents and Information

I. Name of plan
    Plan number
    Plan EIN
    Name, address, telephone number of plan administrator and 
representative (if any)
    First PY for which the plan is electing multiemployer status
II. For each of 3 PYs ending before first PY that plan elects 
multiemployer status:
     Trust agreement (one copy if same for 3 years)
     Plan document (one copy if same for 3 years)
     Summary plan description (one copy if same for 3 years)
     Plan amendments
     Name and EIN of each employer required to contribute to 
plan
     Information whether trades or businesses required to 
contribute to plan are under common control
     Copies of collective bargaining agreements for 3 
largest contributing employers (in amount of contributions)
III. For plans electing under section 2(b) of the procedures:
     Information in II is required for each of 3 PYs ending 
before 8-17-2006 (rather than PYs described in II)
     PBGC approval of election to stay a single-employer 
plan under ERISA section 3(37)(E), or copy of amendment, evidence of 
timeliness, and certification that election was approved
     Best available evidence that before 9-2-74, plan had 
more than 1 contributing employer under collective bargaining 
agreements
     If plan established after 9-2-74, best available 
evidence that plan had more than 1 contributing employer under 
collective bargaining agreements and compliance with section 2510.3-
37(c) of DOL regulations
IV. For plans electing under section 2(c) of the procedures:

[[Page 40181]]

     Information in II is required for PY ending after 8-17-
2006 (or, evidence of a reduction in number of employers to less 
than two since the PYs described in II), in addition to PYs 
described in II
     For PYs described in II, list contributing employers 
exempt under section 501
     For employers listed above, evidence of exempt status--
IRS approval letter; IRS Form 990 or Form 990-EZ (first page and 
signed and dated last page only); copy of LM-2 or LM-3 (signed and 
dated first page only)
     For PYs described in II, aggregate contributions by 
employers listed above, and percentage of the total annual 
contributions to plan
     If percentage above at least 85%, written statement by 
plan administrator
     Plan document, trust instrument, plan amendment, Plan 
Description Form D-1, or Annual Report Form D-2 from period before 
9-2-74, or if unavailable, documentation from later date providing 
substantial evidence of plan's existence before 9-2-74

 [FR Doc. E7-14247 Filed 7-20-07; 8:45 am]
BILLING CODE 7709-01-P