[Federal Register Volume 82, Number 3 (Thursday, January 5, 2017)]
[Notices]
[Pages 1376-1380]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31715]


=======================================================================
-----------------------------------------------------------------------

PENSION BENEFIT GUARANTY CORPORATION


Requests for Approving Certain Alternative Methods for Computing 
Withdrawal Liability; Settlement of Withdrawal and Mass Withdrawal 
Liability

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Request for information.

-----------------------------------------------------------------------

SUMMARY: This is a request for information (RFI) to inform PBGC on 
issues arising from arrangements between employers and multiemployer 
plans involving an alternative ``two-pool'' withdrawal liability 
method. PBGC seeks information from the general public and all 
interested stakeholders, including multiemployer plan participants and 
beneficiaries, organizations serving or representing retirees and other 
such individuals, multiemployer plan sponsors and professional 
advisors, contributing employers, unions, and other interested parties 
about these arrangements, including the various forms these 
arrangements may take, the terms and conditions that apply to new and 
existing contributing employers who enter into such arrangements, and 
the benefits and risks these arrangements may present to multiemployer 
plans and their participants, employers, the multiemployer pension 
insurance program, and other stakeholders in the multiemployer system.

DATES: Comments must be received on or before February 21, 2017 to be 
assured of consideration.

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] or 
[email protected].
     Mail or Hand Delivery: Regulatory Affairs Group, Office of 
the General Counsel, Pension Benefit Guaranty Corporation, 1200 K 
Street NW., Washington, DC 20005-4026.
    Comments received, including personal information provided, will be 
posted to www.pbgc.gov. Copies of comments may also be obtained by 
writing to Disclosure Division, Office of the 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.)

[[Page 1377]]


FOR FURTHER INFORMATION CONTACT: Daniel S. Liebman 
([email protected]), Deputy Assistant General Counsel for Legal 
Policy, Office of the General Counsel, at 202-326-4000, ext. 6510, or 
Constance Markakis ([email protected]), Assistant Chief 
Counsel for Multiemployer Law and Policy, Office of the General 
Counsel, at 202-326-4000, ext. 6779; (TTY/TDD users may call the 
Federal relay service toll-free at 1-800-877-8339 and ask to be 
connected to 202-326-4000, ext. 6510 or ext. 6779.)

SUPPLEMENTARY INFORMATION:

Background

    The Pension Benefit Guaranty Corporation (``PBGC'') is a federal 
corporation created under the Employee Retirement Income Security Act 
of 1974 (``ERISA'') to guarantee the payment of pension benefits earned 
by more than 39 million American workers and retirees in nearly 24,000 
private-sector defined benefit pension plans. PBGC administers two 
insurance programs--one for single-employer defined benefit pension 
plans and a second for multiemployer defined benefit pension plans. 
Each program is operated and financed separately from the other, and 
assets from one cannot be used to support the other. The multiemployer 
program protects benefits of approximately 10 million workers and 
retirees in approximately 1,400 plans.

Multiemployer Plan Withdrawal Liability in General

    A multiemployer pension plan is a collectively bargained plan 
involving two or more unrelated employers and is generally operated and 
administered by a joint board of trustees consisting of an equal number 
of employer and union appointees.
    Under ERISA, an employer that withdraws from a multiemployer 
pension plan in a complete or partial withdrawal may be liable to the 
plan for withdrawal liability. The purpose of withdrawal liability is 
to ameliorate the effects of an employer leaving a plan without paying 
its proportionate share of the plan's unfunded benefit obligations, 
which could undermine the plan's funding and increase the burden and 
risk to remaining employers, plan participants, and the multiemployer 
insurance program. It is important to note, however, that no matter how 
underfunded a plan may be, withdrawal liability only becomes payable 
upon the occurrence of a complete or partial withdrawal, as defined in 
sections 4203 and 4205 of ERISA, respectively.\1\
---------------------------------------------------------------------------

    \1\ Section 4203(a) of ERISA provides that a complete withdrawal 
generally occurs when an employer (1) permanently ceases to have an 
obligation to contribute under the plan, or (2) permanently ceases 
all covered operations under the plan. Section 4212, in turn, 
defines an obligation to contribute under a plan as an obligation 
arising under one or more collective bargaining (or related) 
agreements or as an obligation arising under applicable labor-
management relations law. It also provides that if a principal 
purpose of any transaction is to evade or avoid liability under 
Title IV's withdrawal liability rules, those rules will be applied 
(and liability determined and collected) without regard to such 
transaction. The statute provides different factors for determining 
when a complete withdrawal occurs in the building and construction 
and entertainment industries. The rules for partial withdrawals, 
which generally are not relevant for purposes of this RFI, are 
contained in section 4205 of ERISA.
---------------------------------------------------------------------------

    In either case, the plan sponsor (typically the plan's board of 
trustees) is responsible for determining whether a complete or partial 
withdrawal has occurred, and, if so, the amount of any withdrawal 
liability and the employer's withdrawal liability payment schedule. 
Disputes between plans and employers with respect to withdrawal 
liability are required to be first resolved through arbitration and 
then, if necessary, the courts. Based on the structure of this 
statutory scheme, PBGC has not issued advisory opinions on whether a 
particular transaction or type of transaction would constitute a 
complete or partial withdrawal under ERISA, or the plan's calculation 
of liability for such a withdrawal.
    Two aspects of withdrawal liability that are particularly relevant 
to this RFI are (1) the method for determining a withdrawing employer's 
allocable share of the plan's unfunded vested benefits (``UVBs'') as 
provided under ERISA section 4211 (referred to in this RFI as 
``withdrawal liability allocation''), and (2) the amount and payment of 
an employer's withdrawal liability under section 4219 (referred to in 
this RFI as ``withdrawal liability payment'').\2\ Each of these aspects 
of withdrawal liability is discussed below.
---------------------------------------------------------------------------

    \2\ The combination of a plan's determining withdrawal liability 
allocation and the establishment of terms and conditions of 
withdrawal liability payment are generally referred to in this RFI 
as ``withdrawal liability arrangements.''
---------------------------------------------------------------------------

General Legal Framework of Withdrawal Liability Allocation

    There are four statutory methods for allocating UVBs to withdrawing 
employers under ERISA section 4211. These methods generally allocate 
all of a plan's UVBs (as determined under each method) among all 
employers participating in the plan, or among the employers who 
participated in the plan in the year the UVBs arose, based on the 
employer's share of total contributions.\3\ An employer's withdrawal 
liability is determined based on its allocable share of the plan's UVBs 
under the plan's allocation method, subject to adjustment.\4\
---------------------------------------------------------------------------

    \3\ Under ERISA sections 4211(b) and (c), the presumptive 
method, modified presumptive method, and rolling-five method 
allocate UVBs among employers based on contributions; the direct 
attribution method allocates UVBs based on assets and liabilities 
attributable to the employer and its employees as well as amounts 
that are uncollectable from employers that have previously withdrawn 
or that are insolvent. Under ERISA section 4211(c)(1), building and 
construction industry plans are prohibited from using any allocation 
method other than the single pool presumptive method set forth in 
ERISA section 4211(b), as applied to employers that perform work in 
the building and construction industry.
    \4\ Under section 4209 of ERISA, for example, the amount of UVBs 
allocable to an employer that withdraws may be reduced by $50,000 or 
three-quarters of one percent (.0075) of the plan's UVBs, whichever 
is less.
---------------------------------------------------------------------------

    In addition to the statutory methods, ERISA section 4211(c)(5)(A) 
requires PBGC to provide by regulation a procedure by which a plan may 
be amended to adopt an alternative method for allocating UVBs to 
employers that withdraw, subject to PBGC approval based on a 
determination that the method would not significantly increase the risk 
of loss to participants and beneficiaries or to the multiemployer 
insurance program. In determining whether an alternative withdrawal 
liability method satisfies that standard, PBGC applies the following 
criteria, which are set forth in 29 CFR 4211.23(b):

    (1) The method allocates the plan's UVBs, both for the adoption 
year and for the five subsequent plan years, to the same extent as 
any of the statutory allocation methods;
    (2) The method allocates UVBs on the basis of the withdrawn 
employer's share of contributions or UVBs attributable to the 
employer; and
    (3) The method fully reallocates among employers that have not 
withdrawn from the plan all UVBs that the plan sponsor has 
determined cannot be collected from withdrawn employers, or that are 
not assessed against withdrawn employers because of sections 4209, 
4219(c)(1)(B), or 4225 of ERISA.

    The regulation also sets forth the applicable filing and 
information requirements for a multiemployer plan that seeks PBGC 
approval of an alternative withdrawal liability method. While the 
regulation does not require actuarial and other financial information, 
such as projected cash flows with and without a two-pool allocation 
arrangement, as part of the application, PBGC has the authority to

[[Page 1378]]

require a plan sponsor to submit any information necessary to review an 
alternative allocation method.\5\
---------------------------------------------------------------------------

    \5\ 29 CFR 4211.22(e).
---------------------------------------------------------------------------

    PBGC's authority to review and approve an alternative withdrawal 
liability allocation method request is limited to the application of 
Title IV of ERISA, and any decision to approve or deny such as request 
is subject to reconsideration under Part 4003 of PBGC's regulations. 
Finally, in accordance with ERISA section 4214, multiemployer plan 
amendments and rules authorized under Title IV must operate and be 
applied uniformly with respect to each employer with the exception that 
special provisions may be made to take into account the 
creditworthiness of an employer.

General Legal Framework of Withdrawal Liability Payment

    As soon as practicable after an employer's withdrawal, the plan 
sponsor must notify the employer of the amount of its withdrawal 
liability--determined in accordance with one of the statutory 
allocation methods discussed above, or if approved by PBGC, an 
alternative method--and provide a payment schedule.
    Section 4219(c) of ERISA governs the payment of withdrawal 
liability. Under section 4219(c)(1)(A), an employer's withdrawal 
liability must be paid over the number of years necessary to amortize 
its withdrawal liability, but in no event more than 20 years (an 
exception to the 20-year cap applies in the case of a mass withdrawal). 
The plan calculates the annual amount of withdrawal liability payment 
due under a formula set forth in the statute that is intended to 
approximate the level of contributions the employer would have made had 
the employer not withdrawn.\6\
---------------------------------------------------------------------------

    \6\ Under ERISA section 4219(c)(1), each annual payment is the 
product of (1) the employer's highest contribution rate in the ten 
plan years ending with the year of withdrawal, and (2) the average 
number of contribution base units (e.g., hours worked) for the 
highest three consecutive plan years during the 10-year period 
preceding the year of withdrawal. Section 305(g) of ERISA, as added 
by the Multiemployer Reform Act of 2014 (``MPRA''), provide special 
rules for determining, among other things, an employer's highest 
contribution rate for plans in endangered and critical status under 
sections 305(b)(1) and (b)(2), respectively.
---------------------------------------------------------------------------

    Sections 4219(c)(7) and 4224 of ERISA, which are virtually 
identical, provide plan sponsors with some latitude regarding the 
satisfaction of an employer's withdrawal liability. They provide that a 
plan may adopt other rules for terms and conditions for the 
satisfaction of an employer's withdrawal liability allocation if such 
rules are consistent with ERISA and PBGC regulations. The legislative 
history of ERISA section 4224 indicates that the purpose of providing 
latitude in this area is to enable trustees to weigh the costs of 
collection against the expected return in order to maximize net 
recovery consistent with their fiduciary duties.
    PBGC has issued a regulation under 29 CFR part 4219 that provides 
rules on the notice, collection, and redetermination of withdrawal 
liability, but that regulation does not address a plan's adoption of 
alternative terms and conditions for the satisfaction of an employer's 
withdrawal liability. PBGC has not issued a regulation under ERISA 
section 4224, though PBGC has the authority to prescribe such a 
regulation.
    Consistent with the legislative history of these provisions, PBGC 
has previously noted that the decision to modify and reduce an 
employer's withdrawal liability payment pursuant to plan rules adopted 
in accordance with sections 4219(c)(7) and 4224 of ERISA is subject to 
the fiduciary standards prescribed by Title I of ERISA.\7\ Thus, in 
addition to compliance with ERISA, and any applicable provision in PBGC 
regulations, plan actions must meet fiduciary standards. The United 
States Department of Labor, Employee Benefit Security Administration 
(``EBSA''), is responsible for enforcing the fiduciary standards 
prescribed by Title I of ERISA. Any questions concerning the 
application of the fiduciary standards in a specific case should be 
directed to EBSA.
---------------------------------------------------------------------------

    \7\ PBGC Op. Ltr. (Aug. 19, 1991); see also PBGC Op. Ltr. 82-24 
(Aug. 5, 1982).
---------------------------------------------------------------------------

Mass Withdrawal Liability

    In addition to the withdrawal liability rules discussed above, 
ERISA provides special rules for calculating withdrawal liability in 
the event of a mass withdrawal. In general, a mass withdrawal occurs 
upon the withdrawal of every contributing employer, the cessation of 
the obligation of all employers to contribute under the plan, or the 
withdrawal of substantially all of a plan's contributing employers 
pursuant to an agreement or arrangement to withdraw.\8\
---------------------------------------------------------------------------

    \8\ See ERISA section 4041A(a)(2) and 29 CFR 4001.2.
---------------------------------------------------------------------------

    In a mass withdrawal, employers generally lose the benefit of any 
applicable de minimis reduction under section 4209(c), and any 
reduction due to the 20-year payment cap limitation under section 
4219(c)(1)(D)(i) of ERISA. In addition, employers are subject to 
``reallocation liability,'' which is the amount required to allocate 
fully a plan's UVBs among the withdrawing employers, including 
liability for UVBs not otherwise collectible by the plan, such as 
amounts uncollectible due to the bankruptcy of other employers, and a 
recalculation of UVBs based on PBGC plan termination discount rates and 
other prescribed assumptions. While these factors may increase the 
amount of UVBs allocable to an employer, they generally do not affect 
the amount of the employer's withdrawal liability installment payments, 
merely the duration of those payments.
    PBGC has promulgated a regulation, 29 CFR part 4219, which sets 
rules for determining reallocation liability. The regulation also 
permits plans to adopt alternative rules, provided that such rules 
allocate the plan's UVBs to substantially the same extent as the 
prescribed rules.

Requests for PBGC Approval of Two-Pool Alternative Withdrawal Liability

    In an effort to encourage new employers who may be reluctant to 
participate in multiemployer plans due to withdrawal liability, as well 
as current contributing employers who may be reluctant to continue, 
some plans have been exploring plan design changes to mitigate and 
manage withdrawal liability.\9\ One such plan design change is a ``two-
pool'' alternative withdrawal liability arrangement.\10\
---------------------------------------------------------------------------

    \9\ In addition to large and financially strong employers, small 
employers are also concerned about the burden of withdrawal 
liability. See e.g., testimony on burden of withdrawal on small 
employers at House Education and the Workforce Subcommittee on 
Health, Employment, Labor, and Pensions Hearing on ``Strengthening 
the Multiemployer Pension System: How Will Proposed Reforms Affect 
Employers, Workers, and Retirees?,'' October 29, 2013. http://edworkforce.house.gov/uploadedfiles/duncan_testimony_written.pdf.
    \10\ The two-pool method described in this RFI is also sometimes 
referred to as a hybrid withdrawal liability allocation method. A 
statutory allocation method under ERISA section 4211 involving plans 
in existence prior to 1980 has also been referred to as a two-pool 
method but this method is not the same as the two-pool methods 
described in this RFI.
---------------------------------------------------------------------------

    While there are significant variations in the form and substance of 
such arrangements, they all include a change to an alternative method 
for allocating UVBs under a plan, which requires PBGC approval under 
ERISA section 4211(c)(5). If approved, the change essentially results 
in the creation of two separate withdrawal liability pools: A ``new 
pool'' \11\ of UVBs relating to the future liabilities of ``new 
employers'' and an ``old pool'' of UVBs relating to the past and future 
liabilities of ``existing employers.'' In general, an

[[Page 1379]]

alternative method such as this is permissible if it satisfies the 
statutory and regulatory requirements under ERISA section 4211 
discussed above.\12\
---------------------------------------------------------------------------

    \11\ The new pool often allocates UVBs under the direct 
attribution method.
    \12\ Building and construction industry plans may adopt an 
alternative allocation method only for non-construction industry 
employers.
---------------------------------------------------------------------------

    For existing employers that transition to the new pool, withdrawal 
liability is assessed at then-current UVB levels and annual payment 
amounts. Any future increases in UVBs in the old pool \13\ and 
``unassessable'' liabilities \14\ are allocated solely to, and payable 
by, the remaining employers in the old pool. In exchange for relief 
from future increases in withdrawal liability under the old pool, 
existing employers that transition to the new pool must generally pay, 
or begin to pay, their frozen old-pool withdrawal. This, in turn may 
provide needed income to the plan and potentially extend plan solvency.
---------------------------------------------------------------------------

    \13\ Underfunding may increase for a variety of reasons, 
including from investment losses and increases in ``orphan 
liability'' (i.e., liabilities of the plan to pay benefits to 
retirees of companies that have withdrawn from the plan and that are 
no longer making contributions).
    \14\ I.e., Such as liabilities relating to transitioning 
employers in excess of the 20-year payment cap.
---------------------------------------------------------------------------

PBGC Experience

    PBGC handles requests for approval of two-pool alternative 
withdrawal liability arrangements on a case-by-case basis. Since 2011, 
PBGC has received about twenty requests to approve two-pool alternative 
withdrawal liability arrangements. PBGC approved some early requests 
for two-pool alternative allocation methods, finding that they 
satisfied the regulatory requirements under 29 CFR 4211.23. However, 
those requests did not seek approval of the specific terms and 
conditions the plans were separately arranging with existing employers 
and such information was not included in the documentation submitted to 
PBGC under section 4211(c) of ERISA and the regulations thereunder. (In 
other, later cases, PBGC has been asked to approve the special plan 
rules on payment and settlement terms.)
    PBGC has observed that some plans have offered existing employers 
favorable settlement terms on their withdrawal liability allocation or 
payments, such as discounted lump sum or accelerated payments, reduced 
allocation amounts, lower annual payment amounts, or modified payment 
schedules. In some cases, new and transitioning employers have also 
received relief from contribution rate increases that apply to 
employers remaining in the old pool. Finally, and perhaps most 
significantly, under some arrangements, employers have asked the plan 
for relief in the event of mass withdrawal liability, because 
reallocation and redetermination liability can substantially increase 
an employer's liability to the plan.\15\
---------------------------------------------------------------------------

    \15\ As an example in the case of redetermination liability, 
assume an employer's allocable share of unfunded vested benefits as 
of the end of 2016 is $60M. If the employer's annual withdrawal 
liability payment is $2.5M (based on its highest rate and highest 
average 3-year contribution base units for the preceding 10 years) 
and the present value of such payments capped at 20 years is $30M, 
then the employer's liability would potentially double if the 
employer became subject to mass withdrawal liability.
---------------------------------------------------------------------------

    With respect to the early cases PBGC approved, information 
regarding the terms of the settlements could have affected PBGC's 
analysis of whether the statutory criteria had been satisfied. Thus, 
PBGC's current practice is to request information on any proposed 
withdrawal liability settlement arrangements at the outset of PBGC's 
analysis of the alternative allocation method approval request.
    Evaluating the impact of a two-pool method on participants and 
beneficiaries and the multiemployer insurance program is a highly 
complex matter, involving analysis of the probability of various events 
and comparing the actuarial present value of benefits under various 
scenarios to form an opinion about the merits of a proposed method. For 
more complex situations, PBGC may ask for certain actuarial information 
from the plan and inquire into the financial situations of various 
employers.\16\ PBGC analyzes the information to see if there is reason 
to believe that changes in the allocation method and settlement 
structure create a potential risk of loss. If PBGC finds that there is 
a substantial risk of loss, PBGC engages with the plan trustees and 
their representatives to discuss possible modifications to the proposal 
to mitigate that risk.
---------------------------------------------------------------------------

    \16\ PBGC has identified the need for certain technical 
requirements in all such proposals (e.g., the requirement that the 
two pools collapse if, for example, all employers transition to the 
new pool, and the requirement that assets in excess of benefits in 
the new pool be allocated to the old pool).
---------------------------------------------------------------------------

    While PBGC has gained considerable experience in analyzing several 
complicated two-pool alternative withdrawal liability requests over the 
last three years, the practice of adopting two-pool alternative 
withdrawal liability allocation methods and accompanying withdrawal 
liability payment arrangements is still evolving as plan sponsors 
become more aware of the sensitive balancing of risks and benefits 
among stakeholders implicated by two-pool alternative allocation 
methods. Plan sponsors continue to propose innovative ways to encourage 
long-term commitments of employers and contributions to multiemployer 
plans, and PBGC encourages the innovative use of existing statutory and 
regulatory tools to reduce risk to employers (e.g., investment risk and 
orphan liability risk) while protecting promised benefits. PBGC also 
benefits from learning about such innovative practices, which in turn 
allows PBGC to be a resource to other plans looking for ways to 
stabilize and increase their contribution base.

Request for Information

    PBGC is requesting information from the general public and all 
interested stakeholders, including multiemployer plan participants and 
beneficiaries, organizations serving or representing retirees and other 
such individuals, multiemployer plan sponsors and professional 
advisors, contributing employers, unions, and other interested parties 
about these arrangements. PBGC is particularly interested in learning 
about the terms and conditions that apply to new and existing 
contributing employers that enter into such arrangements, including:
     Alternative benefit schedules,
     special allocation and payment terms for withdrawal 
liability and mass withdrawal liability,
     the various forms alternative withdrawal liability 
arrangements may take, and
     the benefits and risks these arrangements may present to 
participants and the multiemployer insurance program.

In addition to those general issues, PBGC is also seeking comment and 
information on the specific questions listed below.
    In responding to this RFI, please provide as much specificity and 
detail as possible, as well as any supporting documentation, including 
any relevant research and analyses related to two-pool alternative 
withdrawal liability arrangements. Respondents need not answer all of 
the questions below.

Plan and Employer Objectives in Establishing Two-Pool Withdrawal 
Liability Allocation Methods and Payment Terms

     What are the potential benefits, if any, of two-pool 
arrangements for plans, active participants, retirees, terminated 
participants and beneficiaries of existing contributing employers, 
potential new contributing employers, unions, and PBGC?
     What are the potential risks, if any, of two-pool 
arrangements for plans, active participants, retirees, terminated 
participants and beneficiaries of existing

[[Page 1380]]

contributing employers, potential new contributing employers, unions, 
and PBGC?
     In a two-pool withdrawal liability allocation arrangement 
that permits existing employers to be treated as new employers, what 
factors would a board of trustees consider in determining whether to 
allow an existing employer to be treated as a new employer?
     In a two-pool withdrawal liability allocation arrangement 
that permits existing employers to be treated as new employers, how 
should discounted withdrawal liability settlements, or the potential 
for such settlements, factor in PBGC's significant risk analysis under 
29 CFR 4211.23(a)?
     In a two-pool withdrawal liability allocation arrangement 
that includes changes to a plan's mass withdrawal liability allocation 
rules, how should such changes factor in PBGC's significant risk 
analysis under 29 CFR 4211.23(a)?
     Given that the terms for participation in a new employer 
pool may vary among plans, are there certain terms and conditions of 
two-pool withdrawal liability arrangements that raise particular issues 
of significant risk?
     How do plans evaluate any tradeoffs between short-term 
benefits of adoption of two-pool alternative withdrawal liability 
arrangements (e.g., infusion of new capital, retention of employers) 
and long-term risks created thereby?
     What are the public's views on other interests that may be 
affected by two-pool withdrawal liability allocation methods and 
special settlement terms that apply only to new-pool employers? Are 
there distinct interests among small businesses, participants, large 
employers, and plans? Are there distinct interests of orphan 
participants?
     How would widespread implementation of two-pool 
alternative withdrawal liability arrangements impact the larger 
multiemployer insurance system?
     Are there alternative arrangements for dealing with 
withdrawal liability concerns addressed by two-pool alternative 
withdrawal liability allocation methods that plans are considering that 
achieve the same goals (including, in particular, alternatives to 
providing mass withdrawal liability relief)?

Plan Experience and Expected Future Action

     Should PBGC anticipate more plans contemplating adoption 
of two-pool alternative withdrawal liability arrangements? If so, is 
this seen as a relatively temporary phenomenon or something that could 
be a lasting feature of plan risk management?
     Are there plans that considered adopting two-pool 
alternative withdrawal liability allocation arrangements but decided 
against it? If so, why?
     What is the role of collective bargaining in the creation 
and implementation of two-pool alternative withdrawal liability 
arrangements?
     For a plan that has adopted a two-pool alternative 
withdrawal liability arrangement that allows existing employers to 
participate in the new pool, did the arrangement affect the plan's 
ability to retain existing employers that otherwise would have 
withdrawn? Please provide examples to the extent possible.
     For a plan that has adopted a two-pool alternative 
withdrawal liability arrangement, did the arrangement affect the plan's 
ability to increase its contribution base as a result? Please provide 
examples to the extent possible.
     For a plan that has adopted a two-pool alternative 
withdrawal liability arrangement, have there been any legal challenges 
related to any aspect of the arrangement by employers, unions, or 
participants and beneficiaries. If so, please provide examples to the 
extent possible.

PBGC Role

     Would the public and stakeholders find it useful to learn 
more from PBGC about innovative means proposed by some plans to balance 
the interests of all stakeholders and reduce the risk of loss? For 
instance, some trustees require a commitment to remain in the plan in 
exchange for withdrawal liability relief. Also, in balancing 
stakeholder interests, trustees of some plans offer relief from 
reallocation liability but not redetermination liability, or condition 
mass withdrawal liability relief on remaining in the plan through plan 
insolvency.
     How can PBGC better identify the interests of all 
stakeholders impacted by two-pool alternative withdrawal liability 
arrangements?
     Should PBGC separately, or at least formally as part of a 
request for approval of an alternative withdrawal liability allocation 
method, approve proposed withdrawal liability payment terms and 
conditions?
     What are the benefits to plans and other stakeholders from 
PBGC approval of two-pool alternative withdrawal liability 
arrangements?
     Is there a need for PBGC to more widely communicate its 
process for considering two-pool alternative withdrawal liability 
arrangement approval requests?

Information Issues

     What is the quality of notices given to all employers and 
to all employee organizations by plans about the adoption of an 
amendment to the plan to implement a two-pool method of withdrawal 
liability allocation? What type(s) of information would participants 
and beneficiaries find most helpful?
     What information should PBGC require to be submitted in a 
request for PBGC approval of two-pool alternative withdrawal liability 
allocation methods? Are there ways to minimize burden on plans and 
participating employers in providing such information in an initial 
application?
     What types of actuarial and administrative information and 
data do multiemployer plans generally maintain that would allow PBGC to 
analyze the impact on the risk of loss to the plan and participants of 
settlement terms for mass withdrawal liability for employers jumping to 
a new pool? Is there some actuarial information, particularly cash flow 
information that is not readily available?
    Although PBGC is specifically requesting comments on the issues and 
questions discussed above, PBGC also invites comment on any other issue 
relating to alternative withdrawal liability arrangements. PBGC's 
consideration of public comments is independent of, and without 
prejudice to, PBGC's ongoing review and determination of any request 
for approval of any alternative allocation arrangement.

    Signed in Washington, DC.
W. Thomas Reeder,
Director, Pension Benefit Guaranty Corporation.
[FR Doc. 2016-31715 Filed 1-4-17; 8:45 am]
 BILLING CODE 7709-02-P