PART 4207—REDUCTION OR WAIVER OF COMPLETE WITHDRAWAL LIABILITY Authority: 29 U.S.C. 1302(b)(3), 1387. Source: 61 FR 34088, July 1, 1996, unless otherwise noted. § 4207.1 Purpose and scope. (a) Purpose. (b) Scope. § 4207.2 Definitions. The following terms are defined in § 4001.2 of this chapter: employer, ERISA, IRS, Multiemployer Act, multiemployer plan, nonforfeitable benefit, PBGC, plan, and plan year. In addition, for purposes of this part: Complete withdrawal Eligible employer (1) A restoration involving a mere change in identity, form or place of organization, however effected; (2) A reorganization involving a liquidation into a parent corporation; (3) A merger, consolidation or division solely between (or among) trades or businesses (whether or not incorporated) of the employer; or (4) An acquisition by or of, or a merger or combination with another trade or business. Partial withdrawal Period of withdrawal Unfunded vested benefits [61 FR 34088, July 1, 1996, as amended at 86 FR 1270, Jan. 8, 2021] § 4207.3 Abatement. (a) General. (b) Determination of abatement. (c) Effects of abatement. (1) The employer shall have no obligation to make future withdrawal liability payments to the plan with respect to its complete withdrawal; (2) The employer's liability for a subsequent withdrawal shall be determined in accordance with § 4207.7 or § 4207.8, as applicable; (3) Any bonds furnished under § 4207.4 shall be cancelled and any amounts held in escrow under § 4207.4 shall be refunded to the employer; and (4) Any withdrawal liability payments due after the reentry and made by the employer to the plan shall be refunded by the plan without interest. (d) Effects of non-abatement. (1) The bond or escrow furnished under § 4207.4 shall be paid to the plan within 30 days after the date of the plan sponsor's notice under paragraph (b) of this section; (2) The employer shall pay to the plan within 30 days after the date of the plan sponsor's notice under paragraph (b) of this section, the amount of its withdrawal liability payment or payments, with respect to which the bond or escrow was furnished, in excess of the bond or escrow; (3) The employer shall resume making its withdrawal liability payments as they are due to the plan; and (4) The employer shall be treated as a new employer for purposes of any future application of the withdrawal liability rules in sections 4201-4225 of title IV of ERISA with respect to its participation in the plan after its reentry into the plan, except that in plans using the “direct attribution” method (section 4211(c)(4) of ERISA), the nonforfeitable benefits attributable to service with the employer shall include nonforfeitable benefits attributable to service prior to reentry that were not nonforfeitable at that time. (e) Collection of payments due and review of non-abatement determination. (1) Review of non-abatement determination. (2) Determination of abatement. (i) The amount of the employer's withdrawal liability payment or payments, without interest, due after its reentry and made by the employer. (ii) The bond or escrow paid to the plan under paragraph (d)(1) of this section. (iii) The amount of the employer's withdrawal liability payment or payments in excess of the bond or escrow, paid to the plan under paragraph (d)(2) of this section. (iv) Any withdrawal liability payment made by the employer to the plan pursuant to paragraph (d)(3) of this section after the plan sponsor's notice under paragraph (b) of this section. § 4207.4 Withdrawal liability payments during pendency of abatement determination. (a) General rule. (b) Bond/escrow. (c) Notice of bond/escrow. (d) Plan amendments concerning bond/escrow. § 4207.5 Requirements for abatement. (a) General rule. (b) Measurement period. (c) Base year. § 4207.6 Partial withdrawals after reentry. (a) General rule. (b) Partial withdrawal—70-percent contribution decline. (1) Definition of “3-year testing period. (2) Contribution base units for high base year. (i) The employer's contribution base units for that plan year; or (ii) The average of the employer's contribution base units for the three plan years preceding the plan year in which the employer completely withdrew from the plan. (c) Partial withdrawal—partial cessation of contribution obligation. § 4207.7 Liability for subsequent complete withdrawals and related adjustments for allocating unfunded vested benefits. (a) General. (b) Allocation of unfunded vested benefits for subsequent withdrawal in plans using “presumptive” method. (1) The unamortized amount of the employer's allocable shares of the amounts described in section 4211(b)(1), for the plan years preceding the initial withdrawal, determined as if the employer had not previously withdrawn; (2) The sum of the unamortized annual credits attributable to the year of the initial withdrawal and each succeeding year ending prior to reentry; and (3) The unamortized amount of the employer's allocable shares of the amounts described in section 4211(b)(1)(A) and (C) for plan years ending after its reentry. For purposes of paragraph (b)(2), the annual credit for a plan year is the amount by which the employer's withdrawal liability payments for the year exceed the greater of the employer's imputed contributions or actual contributions for the year. The employer's imputed contributions for a year shall equal the average annual required contributions of the employer for the three plan years preceding the initial withdrawal. The amount of the credit for a plan year is reduced by 5 percent of the original amount for each succeeding plan year ending prior to the year of the subsequent withdrawal. (c) Allocation of unfunded vested benefits for subsequent withdrawal in plans using “modified presumptive” or “rolling-5” method. (1) The amount determined under section 4211 (c)(2) or (c)(3) of ERISA, as appropriate, as if the date of reentry were the employer's initial date of participation in the plan; and (2) The outstanding balance, as of the date of reentry, of the unfunded vested benefits allocated to the employer for its previous withdrawal (as defined in paragraph (c)(2)(i) of this section) reduced as if that amount were being fully amortized in level annual installments, at the plan's funding rate as of the date of reentry, over the period described in paragraph (c)(2)(ii), beginning with the first plan year after reentry. (i) The outstanding balance of the unfunded vested benefits allocated to an employer for its previous withdrawal is the excess of the amount determined under section 4211 (c)(2) or (c)(3) of ERISA as of the end of the plan year in which the employer initially withdrew, accumulated with interest at the plan's funding rate for that year, from that year to the date of reentry, over the withdrawal liability payments made by the employer, accumulated with interest from the date of payment to the date of reentry at the plan's funding rate for the year of entry. (ii) The period referred to in paragraph (c)(2) for plans using the modified presumptive method is the greater of five years, or the number of full plan years remaining on the amortization schedule under section 4211(c)(2)(B)(i) of ERISA. For plans using the rolling-5 method, the period is five years. (d) Adjustments applicable to all employers in plans using “presumptive” method. (1) The sum of the unamortized amounts of the annual credits of a reentered employer shall be treated as a reallocated amount under section 4211(b)(4) of ERISA in the plan year in which the employer reenters. (2) In the event that the 5-year period used to compute the denominator of the fraction described in section 4211 (b)(2)(E) and (b)(4)(D) of ERISA includes a year during the period of withdrawal of a reentered employer, the contributions for a year during the period of withdrawal shall be adjusted to include any actual or imputed contributions of the employer, as determined under paragraph (b) of this section. (e) Adjustments applicable to all employers in plans using “direct attribution” method. (1) The nonforfeitable benefits attributable to service with a reentered employer prior to its initial withdrawal shall be treated as benefits that are attributable to service with that employer. (2) For purposes of section 4211(c)(4)(D)(ii) and (iii) of ERISA, withdrawal liability payments made by a reentered employer shall be treated as contributions made by the reentered employer. (f) Plans using alternative allocation methods under section 4211(c)(5). (g) Adjustments to amount of annual withdrawal liability payments for subsequent withdrawal. (1) The employer's contribution base units or the required employer contributions, as applicable, for that year; or (2) The average of the employer's contribution base units or of the required employer contributions, as applicable, for those plan years not during the period of withdrawal, within the ten consecutive plan years ending before the plan year in which the employer's subsequent complete withdrawal occurred. § 4207.8 Liability for subsequent partial withdrawals. (a) General. (b) Liability for a 70-percent contribution decline. (1) Definition of “3-year testing period. (2) Determination date of section 4211 allocable share. (3) Calculation of fractional share of section 4211 amount. (i) The employer's contribution base units for that plan year; or (ii) The average of the employer's contribution base units for the three plan years preceding the plan year in which the employer completely withdrew from the plan. (4) Contribution base units for high base year. (c) Liability for partial cessation of contribution obligation. § 4207.9 Special rules. (a) Employer that has withdrawn and reentered the plan before the effective date of this part. (b) Employer with multiple complete withdrawals that has reentered the plan before effective date of this part. (1) The plan sponsor shall determine whether the employer satisfies the requirements for abatement under § 4207.5 based on the most recent complete withdrawal. (2) If the employer satisfies the requirements for abatement, the employer's liability with respect to all previous complete withdrawals shall be abated. (3) If the liability is abated, §§ 4207.6 and 4207.7 shall be applied as if the employer's earliest complete withdrawal were its initial complete withdrawal. (c) Employer with multiple complete withdrawals that has not reentered the plan as of the effective date of this part. (d) Combination of withdrawn employer with contributing employer. (1) By subtracting from the measurement period contribution base units the contribution base units for which the non-withdrawn portion of the employer was obligated to contribute in the last plan year ending prior to the combination; (2) By determining the base year contribution base units solely by reference to the contribution base units of the withdrawn portion of the employer; and (3) By using the date of the combination, rather than the date of resumption of covered operations, to begin the measurement period. (e) Combination of two or more withdrawn employers. § 4207.10 Plan rules for abatement. (a) General rule. (b) Who may request. (c) Where to file. (d) Information. (1) The name and address of the plan for which the plan amendment is being submitted and the telephone number of the plan sponsor or its duly authorized representative. (2) The nine-digit Employer Identification Number (EIN) assigned to the plan sponsor by the IRS and the three-digit Plan Identification Number (PN) assigned to the plan by the plan sponsor, and, if different, the EIN and PN last filed with the PBGC. If no EIN or PN has been assigned, that should be indicated. (3) A copy of the executed amendment, including— (i) The date on which the amendment was adopted; (ii) The proposed effective date; and (iii) The full text of the rules on the reduction or waiver of complete withdrawal liability. (4) A copy of the most recent actuarial valuation report of the plan. (5) A statement certifying that notice of the adoption of the amendment and of the request for approval filed under this section has been given to all employers that have an obligation to contribute under the plan and to all employee organizations representing employees covered under the plan. (e) Supplemental information. (f) Criteria for PBGC approval. (1) Implementation of the rule would be adverse to the interest of plan participants and beneficiaries; or (2) The rule would increase the PBGC's risk of loss with respect to the plan. [61 FR 34088, July 1, 1996, as amended at 68 FR 61355, Oct. 28, 2003; 90 FR 39328, Aug. 15, 2025] § 4207.11 Method of filing; method and date of issuance. (a) Method of filing. (b) Method of issuance. (c) Date of issuance. [68 FR 61355, Oct. 28, 2003]