PART 4208—REDUCTION OR WAIVER OF PARTIAL WITHDRAWAL LIABILITY Authority: 29 U.S.C. 1302(b)(3), 1388(c) and (e). Source: 61 FR 34093, July 1, 1996, unless otherwise noted. § 4208.1 Purpose and scope. (a) Purpose. (b) Scope. § 4208.2 Definitions. The following terms are defined in § 4001.2 of this chapter: employer, ERISA, IRS, Multiemployer Act, multiemployer plan, 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 Partial withdrawal year § 4208.3 Abatement. (a) General. (b) Determination of abatement. (c) Effects of abatement. (1) The employer's partial withdrawal liability shall be eliminated or its annual partial withdrawal liability payments shall be reduced in accordance with § 4208.6, as applicable; (2) The employer's liability for a subsequent withdrawal shall be determined in accordance with § 4208.7; (3) Any bonds furnished under § 4208.5 shall be canceled and any amounts held in escrow under § 4208.5 shall be refunded to the employer; and (4) Any withdrawal liability payments originally due and paid after the end of the plan year in which the conditions for abatement were satisfied, in excess of the amount due under this part after that date shall be credited to the remaining withdrawal liability payments, if any, owed by the employer, beginning with the first payment due after the revised payment schedule is issued pursuant to this paragraph. If the credited amount is greater than the outstanding amount of the employer's partial withdrawal liability, the amount remaining after satisfaction of the liability shall be refunded to the employer. Interest on the credited amount at the rate prescribed in part 4219, subpart C, of this chapter (relating to overdue, defaulted, and overpaid withdrawal liability) shall be added if the plan sponsor does not issue a revised payment schedule reflecting the credit or make the required refund within 60 days after receipt by the plan sponsor of a complete abatement application. Interest shall accrue from the 61st day. (d) Effects of non-abatement. (1) Any bond or escrow furnished under § 4208.5 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 or continue making its partial withdrawal liability payments as they are due to the plan. (e) Review of non-abatement determination. (1) Refund for waived liability. (2) Credit for reduced annual payment. § 4208.4 Conditions for abatement. (a) Waiver of liability for a 70-percent contribution decline. (1) The number of contribution base units with respect to which the employer has an obligation to contribute under the plan for each year is not less than 90 percent of the total number of contribution base units with respect to which the employer had an obligation to contribute to the plan for the high base year (as defined in paragraph (d) of this section). (2) The conditions of this paragraph are satisfied if— (i) The number of contribution base units with respect to which the employer has an obligation to contribute for each year exceeds 30 percent of the total number of contribution base units with respect to which the employer had an obligation to contribute to the plan for the high base year (as defined in paragraph (d) of this section); and (ii) The total number of contribution base units with respect to which all employers under the plan have obligations to contribute in each of the two years is not less than 90 percent of the total number of contribution base units for which all employers had obligations to contribute in the partial withdrawal year. (b) Waiver of liability for a partial cessation of the employer's contribution obligation. (1) Partial restoration of withdrawn work. (i) The employer makes contributions for the same facility or under the same collective bargaining agreement that gave rise to the partial withdrawal; (ii) The employer's contribution base units for that facility or under that agreement exceed 30 percent of the contribution base units with respect to which the employer had an obligation to contribute for that facility or under that agreement for the high base year (as defined in paragraph (d) of this section); and (iii) The total number of contribution base units with respect to which the employer has an obligation to contribute to the plan equals at least 90 percent of the total number of contribution base units with respect to which the employer had an obligation to contribute under the plan for the high base year (as defined in paragraph (d) of this section). (2) Substantial restoration of withdrawn work. (i) The employer makes contributions for the same facility or under the same collective bargaining agreement that gave rise to the partial withdrawal; (ii) The employer's contribution base units for that facility or under that agreement are not less than 90 percent of the contribution base units with respect to which the employer had an obligation to contribute for that facility or under that agreement for the high base year (as defined in paragraph (d) of this section); and (iii) The total number of contribution base units with respect to which the employer has an obligation to contribute to the plan equals or exceeds the sum of— (A) The number of contribution base units with respect to which the employer had an obligation to contribute in the year prior to the partial withdrawal year, determined without regard to the contribution base units for the facility or under the agreement that gave rise to the partial withdrawal; and (B) 90 percent of the contribution base units with respect to which the employer had an obligation to contribute for that facility or under that agreement in either the year prior to the partial withdrawal year or the high base year (as defined in paragraph (d) of this section), whichever is less. (c) Reduction in annual partial withdrawal liability payment Partial withdrawals under section 4205(a)(1). (i) 110 percent (or such lower number as the plan may, by amendment, adopt) of the number of contribution base units with respect to which the employer had an obligation to contribute in the partial withdrawal year; or (ii) The total number of contribution base units with respect to which the employer had an obligation to contribute to the plan for the plan year following the partial withdrawal year. (2) Partial withdrawals under section 4205(a)(2). (i) The number of contribution base units for the reentered facility or agreement during that year; and (ii) The total number of contribution base units with respect to which the employer had an obligation to contribute to the plan for the year following the partial withdrawal year. (d) High base year. § 4208.5 Withdrawal liability payments during pendency of abatement determination. (a) Bond/Escrow. (b) Amount of bond/escrow. (c) Notice of bond/escrow. (d) Plan amendments concerning bond/escrow. (e) Plan sponsor determination. § 4208.6 Computation of reduced annual partial withdrawal liability payment. (a) Amount of reduced payment. (1) The reduced annual payment amount for an employer that satisfies § 4208.4(c)(1) shall be determined by substituting the number of contribution base units in the plan year in which the requirements are satisfied for the number of contribution base units in the year following the partial withdrawal year in the numerator of the fraction described in section 4206(a)(2)(A) of ERISA. (2) The reduced annual payment for an employer that satisfies § 4208.4(c)(2) shall be determined by adding the contribution base units for which the employer is obligated to contribute with respect to the reentered facility or agreement in the year in which the requirements are satisfied to the numerator of the fraction described in section 4206(a)(2)(A) of ERISA. (b) Credit for reduction. § 4208.7 Adjustment of withdrawal liability for subsequent withdrawals. The liability of an employer for a partial or complete withdrawal from a plan subsequent to a partial withdrawal from that plan in a prior plan year shall be reduced in accordance with part 4206 of this chapter. § 4208.8 Multiple partial withdrawals in one plan year. (a) General rule. (b) Partial withdrawals under section 4205 (a)(1) and (a)(2) in the same plan year. (c) Multiple partial cessations of the employer's contribution obligation. (1) Resumption of work at all facilities and under all bargaining agreements. (2) Resumption at fewer than all facilities or under fewer than all bargaining agreements. (i) With respect to a resumption of work under § 4208.4(b)(1), the condition under this paragraph is satisfied if, for the two consecutive plan years referred to in § 4208.4(b)(1), the employer's contribution base units for any reentered facility or agreement exceed 30 percent of the number of contribution base units with respect to which the employer had an obligation to contribute for that facility or under that agreement for the base year (as defined in paragraph (d) of this section). (ii) With respect to a resumption of work under § 4208.4(b)(2), the condition under this paragraph is satisfied if, for the two consecutive plan years referred to in § 4208.4(b)(2), the employer's contribution base units for any reentered facility or agreement exceed 90 percent of the number of contribution base units with respect to which the employer had an obligation to contribute for that facility or under that agreement for the base year (as defined in paragraph (d) of this section). (iii) The employer's reduced withdrawal liability and, if any, the reduced annual payments of the liability shall be determined by adding the average number of contribution base units that the employer is required to contribute for those two consecutive years for that facility(ies) or agreement(s) to the numerator of the fraction described in section 4206(a)(2)(A) of ERISA. The amount of any remaining partial withdrawal liability shall be paid over the schedule originally established starting with the first payment due after the revised payment schedule is issued under § 4208.3(c)(4). (d) Base year. § 4208.9 Plan adoption of additional abatement conditions. (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 (PIN) assigned to the plan by the plan sponsor, and, if different, also the EIN-PIN last filed with the PBGC. If an EIN-PIN has not 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; (iii) The full text of the rules on the reduction or waiver of partial withdrawal liability; and (iv) The full text of the rules adjusting the reduction in the employer's liability for a subsequent partial or complete withdrawal, as required by section 4206(b)(1) of ERISA. (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) The amendment is not adverse to the interests of plan participants and beneficiaries in the aggregate; and (2) The amendment would not significantly increase the PBGC's risk of loss with respect to the plan. (Approved by the Office of Management and Budget under control no. 1212-0039) [61 FR 34093, July 1, 1996, as amended at 68 FR 61355, Oct. 28, 2003] § 4208.10 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]