[Federal Register Volume 76, Number 247 (Friday, December 23, 2011)]
[Notices]
[Pages 80410-80411]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-32962]


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PENSION BENEFIT GUARANTY CORPORATION


Pendency of Request for Approval of Special Withdrawal Liability 
Rules; the Cultural Institutions Pension Plan

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Notice of pendency of request.

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SUMMARY: This notice advises interested persons that the Pension 
Benefit Guaranty Corporation (``PBGC'') has received a request from The 
Cultural Institutions Pension Plan for approval of a plan amendment 
providing for special withdrawal liability rules. Under Sec.  4203(f) 
of the Employee Retirement Income Security Act of 1974 and 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 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 PBGC. Before 
granting an approval, PBGC's regulations require PBGC to give 
interested persons an opportunity to comment on the request. The 
purpose of this notice is to advise interested persons of the request 
and to solicit their views on it.

DATES: Comments must be submitted on or before February 6, 2012.

ADDRESSES: Comments may be submitted by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the Web site instructions for submitting comments.
     Email: [email protected].
     Fax: (202) 326-4224.
     Mail or Hand Delivery: Legislative and Regulatory 
Department, Pension Benefit Guaranty Corporation, 1200 K Street NW., 
Washington, DC 20005-4026. Comments received, including personal 
information provided, will be posted to http://www.pbgc.gov. Copies of 
comments may also be obtained by writing to Disclosure Division, Office 
of General Counsel, Pension Benefit Guaranty Corporation, 1200 K Street 
NW., Washington, DC 20005-4026, 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.)

FOR FURTHER INFORMATION CONTACT: Theresa Anderson, Attorney, Office of 
the Chief Counsel, Suite 340, 1200 K Street NW., Washington, DC 20005-
4026, (202) 326-4020. (For TTY/TTD users, call the Federal relay 
service toll free at 1 (800) 877-8339 and ask to be connected to (202) 
326-4020.)

SUPPLEMENTARY INFORMATION:

[[Page 80411]]

Background

    Section 4203(a) of the Employee Retirement Income Security Act of 
1974, as amended by the Multiemployer Pension Plan Amendments Act of 
1980 (``ERISA''), provides that 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 Sec.  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 
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 
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 
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 normally does not 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, Sec.  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 Sec.  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 Sec.  
4208(d)(1) of ERISA, ``[a]n employer to whom Sec.  420[3](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 Sec.  4208(d)(2) of ERISA, ``[a]n employer to whom 
Sec.  420[3](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)(1) of ERISA provides that 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 Sec.  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 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 PBGC shall 
prescribe by regulation a procedure by which plans may be amended to 
adopt special partial withdrawal liability rules upon a finding by PBGC 
that the adoption of such rules is consistent with the purposes of 
Title IV of ERISA.
    PBGC's regulations on Extension of Special Withdrawal Liability 
Rules (29 CFR part 4203) prescribes procedures for a multiemployer plan 
to ask PBGC to approve a plan amendment that establishes special 
complete or partial withdrawal liability rules. The regulation may be 
accessed on PBGC's Web site (http://www.pbgc.gov).
    Section 4203.5(b) of the regulation requires PBGC to publish a 
notice of the pendency of a request for approval of special withdrawal 
liability rules in the Federal Register, and to provide interested 
parties with an opportunity to comment on the request.

The Request

    PBGC received a request, dated January 11, 2011, from The Cultural 
Institutions Pension Plan (``Cultural Plan''), which the Cultural Plan 
subsequently amended, for approval of a plan amendment providing for 
special withdrawal liability rules. PBGC's summary of the actuarial 
reports provided by the Cultural Plan may be accessed on 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 11101, Washington, DC 20005.
    In brief, the Cultural Plan is a multiemployer plan covering 
cultural institutions, such as zoos and museums, and New York City-
funded daycare programs. The Cultural Plan's submission represents that 
the industry for which the rule is requested has characteristics 
similar to those of the construction industry. The Cultural Plan 
submitted an amendment prescribing special withdrawal liability rules, 
which, if approved by PBGC, would be retroactively effective as of July 
1, 2009, to the extent permitted by ERISA Sec.  4214(a). Under the 
proposed amendment, complete withdrawal of an employer would occur 
only: (a) Under conditions similar to those described in ERISA Sec.  
4203(b)(2) for the building and construction rule; (b) upon the 
employer's sale or transfer of a substantial portion of its business or 
assets to another entity who performs such work in the jurisdiction of 
the collective bargaining agreement but has no obligation to contribute 
to the Cultural Plan; or (c) when the employer ceases to have an 
obligation to contribute in connection with the withdrawal of every or 
substantially all employer(s) from the Cultural Plan. Partial 
withdrawal of an employer would occur only under conditions similar to 
those described in ERISA Sec.  4208(d)(1). The proposed amendment would 
not apply to any employer who made contributions for non-collectively-
bargained employees in the year of withdrawal and the four preceding 
plan years. 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.

    Issued at Washington, DC, December 15th, 2011.
Joshua Gotbaum,
Director.
[FR Doc. 2011-32962 Filed 12-22-11; 8:45 am]
BILLING CODE 7709-01-P