PART 4219—NOTICE, COLLECTION, AND REDETERMINATION OF WITHDRAWAL LIABILITY Authority: 29 U.S.C. 1302(b)(3) and 1399(c)(6). Source: 61 FR 34102, July 1, 1996, unless otherwise noted. Subpart A—General § 4219.1 Purpose and scope. (a) Subpart A. (b) Subpart B Purpose. de minimis (2) Scope. (c) Subpart C. [61 FR 34102, July 1, 1996, as amended at 73 FR 79636, Dec. 30, 2008; 86 FR 1277, Jan. 8, 2021] § 4219.2 Definitions. (a) The following terms are defined in § 4001.2 of this chapter: employer, ERISA, IRS, mass withdrawal, multiemployer plan, nonforfeitable benefit, PBGC, plan, and plan year. (b) For purposes of this part: Initial withdrawal liability Mass withdrawal liability de minimis Mass withdrawal valuation date (1) In the case of a termination by mass withdrawal, the last day of the plan year in which the plan terminates; or (2) in the case of a withdrawal of substantially all employers pursuant to an agreement or arrangement to withdraw, the last day of the plan year as of which substantially all employers have withdrawn. Reallocation liability Reallocation record date Redetermination liability de minimis Unfunded vested benefits (c) For purposes of subpart B— Withdrawal [61 FR 34102, July 1, 1996, as amended at 73 FR 79636, Dec. 30, 2008; 86 FR 1277, Jan. 8, 2021] § 4219.3 Disregarding certain contributions. (a) General rule. (1) Surcharge. (2) Contribution increase. (i) The increases in contribution requirements are due to increased levels of work, employment, or periods for which compensation is provided. (ii) The additional contributions are used to provide an increase in benefits, including an increase in future benefit accruals, permitted by section 305(d)(1)(B) or (f)(1)(B) of ERISA and section 432(d)(1)(B) or (f)(1)(B) of the Code. (b) Simplified method for a plan that is no longer in endangered or critical status. (1) The employer's contribution rate as of the date that is the later of the last day of the first plan year that ends on or after December 31, 2014 and the last day of the plan year the employer first contributes to the plan (the “employer freeze date”) plus any contribution increases after the employer freeze date, and before the employer's withdrawal date that are determined in accordance with the rules under § 4219.3(a)(2)(ii); or (2) The highest contribution rate for any plan year after the plan year that includes the expiration date of the first collective bargaining agreement of the withdrawing employer requiring plan contributions that expires after the plan is no longer in endangered or critical status, or, if earlier, the date as of which the withdrawing employer renegotiated a contribution rate effective after the plan year the plan is no longer in endangered or critical status. (c) Example: (1) Facts. (2) Highest contribution rate. (d) Effective and applicability dates Effective date. (2) Applicability date. [86 FR 1277, Jan. 8, 2021] Subpart B—Redetermination of Withdrawal Liability Upon Mass Withdrawal § 4219.11 Withdrawal liability upon mass withdrawal. (a) Initial withdrawal liability. (b) Mass withdrawal liability. (1) Notify withdrawing employers, in accordance with § 4219.16(a), that a mass withdrawal has occurred; (2) Within 150 days after the mass withdrawal valuation date, determine the liability of withdrawn employers for de minimis (3) Within one year after the reallocation record date, determine the reallocation liability of withdrawn employers in accordance with § 4219.15; (4) Notify each withdrawing employer of the amount of mass withdrawal liability determined pursuant to this subpart and the schedule for payment of such liability, and demand payment of and collect that liability, in accordance with § 4219.16; and (5) Notify the PBGC of the occurrence of a mass withdrawal and certify, in accordance with § 4219.17, that determinations of mass withdrawal liability have been completed. (c) Extensions of time. § 4219.12 Employers liable upon mass withdrawal. (a) Liability for de minimis amounts. de minimis (b) Liability for 20-year-limitation amounts. (c) Liability for reallocation liability. (1) The employer has not been completely liquidated or dissolved; (2) The employer is not the subject of a case or proceeding under title 11, United States Code, or any case or proceeding under similar provisions of state insolvency laws, except that a plan sponsor may determine that such an employer is liable for reallocation liability if the plan sponsor determines that the employer is reasonably expected to be able to pay its initial withdrawal liability and its redetermination liability in full and on time to the plan; and (3) The plan sponsor has not determined that the employer's initial withdrawal liability or its redetermination liability is limited by section 4225 of ERISA. (d) General exclusion. (e) Free-look rule. de minimis (f) Payment of initial withdrawal liability. (g) Agreement presumed. § 4219.13 Amount of liability for de minimis An employer that is liable for de minimis de minimis de minimis § 4219.14 Amount of liability for 20-year-limitation amounts. An employer that is liable for 20-year-limitation amounts shall be liable to the plan for an amount equal to the present value of all initial withdrawal liability payments for which the employer was not liable pursuant to section 4219(c)(1)(B) of ERISA. The present value of such payments shall be determined as of the end of the plan year preceding the plan year in which the employer withdrew, using the assumptions that were used to determine the employer's payment schedule for initial withdrawal liability pursuant to section 4219(c)(1)(A)(ii) of ERISA. Any liability for 20-year-limitation amounts determined under this section shall be limited by section 4225 of ERISA to the extent that section would have been limiting had the employer's initial withdrawal liability been determined without regard to the 20-year limitation. § 4219.15 Determination of reallocation liability. (a) General rule. (b) Amount of unfunded vested benefits to be reallocated. (c) Amount of reallocation liability. (1) Initial allocable share. (i) The numerator of which is the yearly average of the employer's contribution base units during the three plan years preceding the employer's withdrawal; and (ii) The denominator of which is the sum of the yearly averages calculated under paragraph (c)(1)(i) of this section for each employer liable for reallocation liability. (2) Allocation of unassessable amounts. (3) Contribution base unit. (d) Plan rules. [61 FR 34102, July 1, 1996, as amended at 73 FR 79636, Dec. 30, 2008] § 4219.16 Imposition of liability. (a) Notice of mass withdrawal. (1) The mass withdrawal valuation date; (2) A description of the consequences of a mass withdrawal under this subpart; and (3) A statement that each employer obligated to make initial withdrawal liability payments shall continue to make those payments in accordance with its schedule. Failure of the plan sponsor to notify an employer of a mass withdrawal as required by this paragraph shall not cancel the employer's mass withdrawal liability or waive the plan's claim for such liability. (b) Notice of redetermination liability. de minimis (1) The amount of the employer's liability, if any, for de minimis (2) The amount of the employer's liability, if any, for 20-year-limitation amounts determined pursuant to § 4219.14; (3) The schedule for payment of the liability determined under paragraph (f) of this section; (4) A demand for payment of the liability in accordance with the schedule; and (5) A statement of when the plan sponsor expects to issue notices of reallocation liability to liable employers. (c) Notice of reallocation liability. (1) The amount of the employer's reallocation liability determined pursuant to § 4219.15; (2) The schedule for payment of the liability determined under paragraph (f) of this section; and (3) A demand for payment of the liability in accordance with the schedule. (d) Notice to employers not liable. (e) Combined notices. (1) A notice of mass withdrawal with a notice of withdrawal issued pursuant to § 4219.18(d); and (2) A notice of redetermination liability with a notice of liability issued pursuant to § 4219.18(e). (f) Payment schedules. (1) Employers owing initial withdrawal liability as of mass withdrawal valuation date. i.e., (2) Other employers. (g) Review of mass withdrawal liability determinations. (h) Cessation of withdrawal liability obligations. (i) Determination that a mass withdrawal has not occurred. de minimis § 4219.17 Filings with PBGC. (a) Filing requirements In general. (2) Method of filing. (3) Computation of time. (b) Who shall file. (c) When to file. (d) Where to file. (e) Date of filing. (f) Contents of notice of mass withdrawal. (1) The name of the plan. (2) The name, address and telephone number of the plan sponsor and of the duly authorized representative, if any, of the plan sponsor. (3) The nine-digit Employer Identification Number (EIN) assigned by the IRS to the plan sponsor and the three-digit Plan Identification Number (PIN) assigned by the plan sponsor to the plan, and, if different, the EIN or PIN last filed with the PBGC. If no EIN or PIN has been assigned, the notice shall so indicate. (4) The mass withdrawal valuation date. (5) A description of the facts on which the plan sponsor has based its determination that a mass withdrawal has occurred, including the number of contributing employers withdrawn and the number remaining in the plan, and a description of the effect of the mass withdrawal on the plan's contribution base. (g) Contents of certifications. (1) The name of the plan. (2) The name, address and telephone number of the plan sponsor and of the duly authorized representative, if any, of the plan sponsor. (3) The nine-digit Employer Identification Number (EIN) assigned by the IRS to the plan sponsor and the three-digit Plan Identification Number (PIN) last assigned by the plan sponsor to the plan, and, if different, the EIN or PIN filed with the PBGC. If no EIN or PIN has been assigned, the notice shall so indicate. (4) Identification of the liability determination to which the certification relates. (5) A certification, signed by the plan sponsor or a duly authorized representative, that the determinations have been made and the notices given in accordance with this subpart. (6) For reallocation liability certifications— (i) A certification, signed by the plan's actuary, that the determination of unfunded vested benefits has been done in accordance with part 4281, subpart B; and (ii) A copy of plan rules, if any, adopted pursuant to § 4219.15(d). (h) Additional information. [61 FR 34102, July 1, 1996, as amended at 68 FR 61355, Oct. 28, 2003] § 4219.18 Withdrawal in a plan year in which substantially all employers withdraw. (a) General rule. de minimis (b) Amount of liability. de minimis (c) Plan sponsor's obligations. (1) Determine and collect initial withdrawal liability of every employer that has completely or partially withdrawn, in accordance with sections 4201 and 4202 of ERISA; (2) Notify each employer that is or may be liable under this section, in accordance with paragraph (d) of this section; (3) Within 90 days after the end of the plan year in which the withdrawal occurred, determine, in accordance with paragraph (b) of this section, the liability of each withdrawing employer that is liable under this section; (4) Notify each liable employer, in accordance with paragraph (e) of this section, of the amount of its liability under this section, demand payment of and collect that liability; and (5) Certify to the PBGC that determinations of liability have been completed, in accordance with paragraph (g) of this section. (d) Notice of withdrawal. (e) Notice of liability. (1) The amount of the employer's liability for de minimis (2) A schedule for payment of the liability, determined under § 4219.16(f); and (3) A demand for payment of the liability in accordance with the schedule. (f) Review of liability determinations. (g) Notice to the PBGC. (1) The plan year in which the withdrawal occurred. (2) A description of the effect of the withdrawal, including the number of contributing employers that withdrew in the plan year in which substantially all employers withdrew, the number of employers remaining in the plan, and a description of the effect of the withdrawal on the plan's contribution base. (3) A certification, signed by the plan sponsor or duly authorized representative, that determinations have been made and notices given in accordance with this section. § 4219.19 Method and date of issuance; computation of time. The PBGC applies the rules in subpart B of part 4000 of this chapter to determine permissible methods of issuance under this subpart. The PBGC applies the rules in subpart C of part 4000 of this chapter to determine the date that an issuance under this subpart was provided. The PBGC applies the rules in subpart D of part 4000 of this chapter to compute any time period for issuances to third parties under this subpart. [68 FR 61356, Oct. 28, 2003] Subpart C—Overdue, Defaulted, and Overpaid Withdrawal Liability § 4219.31 Overdue and defaulted withdrawal liability; overpayment. (a) Overdue withdrawal liability payment. (b) Default. (i) The failure of an employer to pay any overdue withdrawal liability payment within 60 days after the employer receives written notification from the plan sponsor that the payment is overdue; and (ii) Any other event described in rules adopted by the plan which indicates a substantial likelihood that an employer will be unable to pay its withdrawal liability. (2) In the event of a default, a plan sponsor may require immediate payment of all or a portion of the outstanding amount of an employer's withdrawal liability, plus interest. In the event that the plan sponsor accelerates only a portion of the outstanding amount of an employer's withdrawal liability, the plan sponsor shall establish a new schedule of payments for the remaining amount of the employer's withdrawal liability. (c) Plan review or arbitration of liability determination. (1) A default as a result of failure to make any payments shall not occur until the 61st day after the last of— (i) Expiration of the period described in section 4219(b)(2)(A) of ERISA; (ii) If the employer requests review under section 4219(b)(2)(A) of ERISA of the plan's withdrawal liability determination or the schedule of payments established by the plan, expiration of the period described in section 4221(a)(1) of ERISA for initiation of arbitration; or (iii) If arbitration is timely initiated either by the plan, the employer or both, issuance of the arbitrator's decision. (2) Any amounts due before the expiration of the period described in paragraph (c)(1) shall be paid in accordance with the schedule established by the plan sponsor. If a payment is not made when due under the schedule, the payment is overdue and interest shall accrue in accordance with the rules and at the same rate set forth in § 4219.32. (d) Overpayments. § 4219.32 Interest on overdue, defaulted and overpaid withdrawal liability. (a) Interest assessed. (1) Shall assess interest on overdue withdrawal liability payments from the due date, as defined in paragraph (d) of this section, until the date paid, as defined in paragraph (e); and (2) In the event of a default, may assess interest on any accelerated portion of the outstanding withdrawal liability from the due date, as defined in paragraph (d) of this section, until the date paid, as defined in paragraph (e). (b) Interest rate. (c) Calculation of interest. (1) For each full calendar quarter in the period from the due date (or date of overpayment) to the date paid (or date of refund), one-fourth of the annual rate in effect for that quarter; (2) For each full calendar month in a partial quarter in that period, one-twelfth of the annual rate in effect for that quarter; and (3) For each day in a partial month in that period, one-three-hundred-sixtieth of the annual rate in effect for that month. (d) Due date. (e) Date paid. § 4219.33 Plan rules concerning overdue and defaulted withdrawal liability. Plans may adopt rules relating to overdue and defaulted withdrawal liability, provided that those rules are consistent with ERISA. These rules may include, but are not limited to, rules for determining the rate of interest to be charged on overdue, defaulted and overpaid withdrawal liability (provided that the rate reflects prevailing market rates for comparable obligations); rules providing reasonable grace periods during which late payments may be made without interest; additional definitions of default which indicate a substantial likelihood that an employer will be unable to pay its withdrawal liability; and rules pertaining to acceleration of the outstanding balance on default. Plan rules adopted under this section shall be reasonable. Plan rules shall operate and be applied uniformly with respect to each employer, except that the rules may take into account the creditworthiness of an employer. Rules which take into account the creditworthiness of an employer shall state with particularity the categories of creditworthiness the plan will use, the specific differences in treatment accorded employers in different categories, and the standards and procedures for assigning an employer to a category.