[Federal Register Volume 74, Number 39 (Monday, March 2, 2009)]
[Notices]
[Pages 9114-9115]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-4312]


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PENSION BENEFIT GUARANTY CORPORATION


Pendency of Request for Approval of Special Withdrawal Liability 
Rules; Service Employees International Union Local 1 Pension Trust Fund

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 
1 Pension Trust Fund 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 plan amendment will be 
used in an industry with characteristics that would make use of the 
special rules appropriate and that the plan amendment would 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 April 16, 2009.

ADDRESSES: Comments may be mailed to the Office of the Chief Counsel, 
Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, 
DC 20005-4026, or delivered to Suite 340 at the above address. Comments 
also may be submitted electronically through the PBGC's Web site at 
http://[email protected] or by fax to 202-326-4112. 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 1200 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: Eric Field, Attorney, Office of the 
Chief Counsel, 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 either continuing to perform work in the 
jurisdiction of the collective bargaining agreement of the type for 
which contributions were previously required or transferring such work 
to another location or to an entity or entities owned or controlled by 
the employer, 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 are 
based on 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

[[Page 9115]]

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 would 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, 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 1 Pension Trust Fund (``Local 1 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 Communications and Public 
Affairs Department, PBGC, 1200 K Street, NW., Suite 1200, Washington, 
DC 20005.
    In brief, the Local 1 Plan, a multiemployer plan covering the 
residential building cleaning 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 July 1, 2005. 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 
April 16, 2009. 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 17th day of February, 2009.
Vincent K. Snowbarger,
Acting Director, Pension Benefit Guaranty Corporation.
[FR Doc. E9-4312 Filed 2-27-09; 8:45 am]
BILLING CODE 7708-01-P