PART 4281—DUTIES OF PLAN SPONSOR FOLLOWING MASS WITHDRAWAL Authority: 29 U.S.C. 1302(b)(3), 1341(a), 1399(c)(1)(D), 1431, and 1441. Source: 61 FR 34118, July 1, 1996, unless otherwise noted. Subpart A—General Provisions § 4281.1 Purpose and scope. (a) General Purpose. (2) Scope. (b) Subpart B. (c) Subpart C. (d) Subpart D. § 4281.2 Definitions. The following terms are defined in § 4001.2 of this chapter: annuity, employer, ERISA, fair market value, IRS, insurer, irrevocable commitment, mass withdrawal, multiemployer plan, nonforfeitable benefit, normal retirement age, PBGC, person, plan, plan administrator, and plan year. In addition, for purposes of this part: Actuarial valuation Available resources Benefits subject to reduction Financial assistance Insolvency benefit level Insolvency year Insolvent Pro rata Reasonably expected to enter pay status Resource benefit level Valuation date [61 FR 34118, July 1, 1996, as amended at 84 FR 18725, May 2, 2019] § 4281.3 Filing and issuance rules. (a) Method of filing. (b) Method of issuance. (c) Filing and issuance dates. (d) Where to file. (e) Computation of time. [84 FR 18725, May 2, 2019] Subpart B—Valuation of Plan Benefits and Plan Assets § 4281.11 Valuation dates. (a) Annual actuarial valuation of mass-withdrawal-terminated plans. (b) Valuations related to mass withdrawal reallocation liability. (1) If the plan terminates by mass withdrawal, the last day of the plan year in which the plan terminates; or (2) If substantially all the employers withdraw from the plan pursuant to an agreement or arrangement to withdraw from the plan, the last day of the plan year as of which substantially all employers have withdrawn from the plan pursuant to the agreement or arrangement. [61 FR 34118, July 1, 1996, as amended at 84 FR 18725, May 2, 2019] § 4281.12 Benefits to be valued. (a) Form of benefit. (1) If a benefit is in pay status as of the valuation date, the plan sponsor shall value the form of benefit being paid. (2) If a benefit is not in pay status as of the valuation date but a valid election with respect to the form of benefit has been made on or before the valuation date, the plan sponsor shall value the form of benefit so elected. (3) If a benefit is not in pay status as of the valuation date and no valid election with respect to the form of benefit has been made on or before the valuation date, the plan sponsor shall value the form of benefit that, under the terms of the plan or applicable law, is payable in the absence of a valid election. (b) Timing of benefit. (1) By assuming that the starting date of each benefit is the earliest date, not preceding the valuation date, that could be elected; or (2) By using any other assumption that the plan sponsor demonstrates to the satisfaction of the PBGC is more reasonable under the circumstances. § 4281.13 Benefit valuation methods—in general. Except as otherwise provided in § 4281.16 (regarding plans that are closing out), the plan sponsor must value benefits as of the valuation date by— (a) Using the interest assumptions under § 4044.54 of this chapter; (b) Using the mortality assumptions under § 4044.53 of this chapter; (c) Using interpolation methods, where necessary, at least as accurate as linear interpolation; (d) Applying valuation formulas that accord with generally accepted actuarial principles and practices; and (e) Adjusting the values to reflect the loading for expenses in accordance with § 4044.52(d) of this chapter. [61 FR 34118, July 1, 1996, as amended at 63 FR 38307, July 16, 1998; 84 FR 18726, May 2, 2019; 89 FR 48309, June 6, 2024; 90 FR 39329, Aug. 15, 2025] §§ 4281.14-4281.15 [Reserved] § 4281.16 Benefit valuation methods—plans closing out. (a) Applicability. (1) Plans closed out before valuation. (2) Plans to be closed out after valuation. (b) Valuation rule. § 4281.17 Asset valuation methods—in general. (a) General rule. (b) Assets other than withdrawal liability claims. (c) Adjustment for administrative liabilities. § 4281.18 Outstanding claims for withdrawal liability. (a) Value of claim. (1) If the schedule of withdrawal liability payments provides for one or more series of equal payments, the plan sponsor shall value each series of payments as an annuity certain in accordance with the provisions of § 4281.13. (2) If the schedule of withdrawal liability payments provides for one or more payments that are not part of a series of equal payments as described in paragraph (a)(1) of this section, the plan sponsor shall value each such unequal payment as a lump-sum payment in accordance with the provisions of § 4281.13. (b) Employers neither liquidated nor in insolvency proceedings. (1) The employer has not been completely liquidated or dissolved; and (2) The employer is not the subject of any case or proceeding under title 11, United States Code, or any case or proceeding under similar provisions of state insolvency laws; except that the claim for withdrawal liability of an employer that is the subject of a proceeding described in this paragraph (b)(2) shall be valued under paragraph (a) of this section if the plan sponsor determines that the employer is reasonably expected to be able to pay its withdrawal liability in full and on time. (c) Claims against other employers. Subpart C—Benefit Reductions § 4281.31 Plan amendment. The plan sponsor of a plan described in § 4281.31 shall amend the plan to eliminate those benefits subject to reduction in excess of the value of benefits that can be provided by plan assets. Such reductions shall be effected by a pro rata reduction of all benefits subject to reduction or by elimination or pro rata reduction of any category of benefit. Benefit reductions required by this section shall apply only prospectively. An amendment required under this section shall take effect no later than six months after the end of the plan year for which it is determined that the value of nonforfeitable benefits exceeds the value of the plan's assets. § 4281.32 Notices of benefit reductions. (a) Requirement of notices. (b) When delivered. (1) 45 days after the amendment reducing benefits is adopted; or (2) The date of the first reduced benefit payment. (c) Method of issuance to participants and beneficiaries. (d) Contents of notice to the PBGC. (1) The name of the plan. (2) The name, address, and telephone number of the plan sponsor and of the plan sponsor's duly authorized representative, if any. (3) The nine-digit Employer Identification Number (EIN) assigned by the IRS to the plan sponsor and the three-digit Plan Number (PN) assigned by the plan sponsor to the plan, and, if different, the EIN or PN last filed with the PBGC. If no EIN or PN has been assigned, the notice shall so state. (4) The case number assigned by the PBGC to the filing of the plan's notice of termination pursuant to part 4041A, subpart B, of this chapter. (5) A statement that a plan amendment reducing benefits has been adopted, listing the date of adoption and the effective date of the amendment. (6) A certification, signed by the plan sponsor or its duly authorized representative, that notice of the benefit reductions has been given to all participants and beneficiaries whose benefits are reduced by the plan amendment, in accordance with the requirements of this section. (e) Contents of notice to participants and beneficiaries. (1) The name of the plan. (2) A statement that a plan amendment reducing benefits has been adopted, listing the date of adoption and the effective date of the amendment. (3) A summary of the amendment, including a description of the effect of the amendment on the benefits to which it applies. (4) The name, address, and telephone number of the plan administrator or other person designated by the plan sponsor to answer inquiries concerning benefits. [61 FR 34118, July 1, 1996, as amended at 68 FR 61457, Oct. 28, 2003; 84 FR 18726, May 2, 2019] § 4281.33 Restoration of benefits. (a) General. (b) Notice to the PBGC. Subpart D—Benefit Suspensions § 4281.41 Benefit suspensions. If the plan sponsor determines that the plan is or is expected to be insolvent for a plan year, the plan sponsor shall suspend benefits to the extent necessary to reduce the benefits to the greater of the resource benefit level or the level of guaranteed benefits. § 4281.42 Retroactive payments. (a) Erroneous resource benefit level. (b) Benefits paid below resource benefit level. § 4281.43 Notice of insolvency. (a) Requirement of notice. (b) When to provide notice. (i) Ninety (90) days before the beginning of the insolvency year; or (ii) Thirty (30) days after the date the insolvency determination is made. (2) The plan sponsor may deliver the notices of insolvency under paragraph (a) of this section to participants and beneficiaries in pay status concurrently with the first benefit payment made after the date the insolvency determination is made. (c) Method of issuance to participants and beneficiaries. (1) A method permitted under the rules in subpart B of part 4000 of this chapter. (2) For participants and beneficiaries, other than those in pay status or reasonably expected to enter pay status during the insolvency year for which the notice is given, and other than alternate payees, the plan sponsor may post the notice at participants' work sites or publish the notice in a union newsletter or in a newspaper of general circulation in the area or areas where participants reside. Except with respect to an alternate payee, notice to a participant is deemed notice to that participant's beneficiary or beneficiaries. [84 FR 18726, May 2, 2019] § 4281.44 Contents of notice of insolvency. (a) Notice to PBGC. www.pbgc.gov (b) Notice to participants and beneficiaries. (1) The name of the plan. (2) A statement of the plan year for which the plan sponsor has determined that the plan is or is expected to be insolvent. (3) A statement that benefits above the amount that can be paid from available resources or the level guaranteed by PBGC, whichever is greater, will be suspended during the insolvency year, with a brief explanation of which benefits are guaranteed by PBGC under section 4022A of ERISA. (4) The name, address, and telephone number of the plan administrator or other person designated by the plan sponsor to answer inquiries concerning benefits. [84 FR 18726, May 2, 2019] § 4281.45 Notice of insolvency benefit level. (a) Requirement of notice. (1) Except as provided in paragraph (a)(2) of this section, for the initial insolvency year and for any insolvency year following the initial insolvency year, if there is a change in insolvency benefit level that affects plan payees generally, provide the notices of insolvency benefit level to PBGC and to plan payees. (2) For any insolvency year following the initial insolvency year, if there is a change in the insolvency benefit level that affects only one plan payee or a class of plan payees but not plan payees generally (treating commencement of a person's benefits for this purpose as a change in the insolvency benefit level for that person), provide the notices of insolvency benefit level to PBGC and to each affected plan payee. (b) Combined notices. (c) When to provide notice. (i) Ninety (90) days before the beginning of the insolvency year; or (ii) Thirty (30) days after the date the insolvency determination is made. (2) The plan sponsor may deliver the notices required under this section to participants and beneficiaries in pay status or reasonably expected to enter pay status during the insolvency year for which the notice is given concurrently with the first benefit payment made after the date the insolvency determination is made. (d) Method of issuance to participants and beneficiaries. [84 FR 18726, May 2, 2019] § 4281.46 Contents of notice of insolvency benefit level. (a) Notice to PBGC. www.pbgc.gov (b) Notice to participants and beneficiaries in or entering pay status. (1) The name of the plan. (2) The insolvency year for which the notice is being sent. (3) The monthly benefit that the participant or beneficiary may expect to receive during the insolvency year. (4) A statement that in subsequent plan years, depending on the plan's available resources, this benefit level may be increased or decreased but not below the level guaranteed by PBGC, and that the participant or beneficiary will be notified in advance of the new benefit level if it is less than the participant's full nonforfeitable benefit under the plan. (5) The amount of the participant's or beneficiary's monthly nonforfeitable benefit under the plan. (6) The amount of the participant's or beneficiary's monthly benefit that is guaranteed by PBGC. (7) The name, address, and telephone number of the plan administrator or other person designated by the plan sponsor to answer inquiries concerning benefits. [84 FR 18726, May 2, 2019] § 4281.47 Application for financial assistance. (a) General. (b) When, how, and where to apply Initial application. (2) Recurring application. (3) How and where to apply. (c) Contents of application Initial application. www.pbgc.gov (2) Recurring application. www.pbgc.gov (3) Additional information. [61 FR 34118, July 1, 1996, as amended at 84 FR 18727, May 2, 2019]