Table of Contents
A plan administrator of a single-employer plan covered by PBGC's termination insurance program that has sufficient assets to provide all plan benefits may voluntarily terminate the plan in a standard termination. The plan administrator must follow specific steps and meet specific deadlines. These steps and deadlines are briefly summarized below and explained in more detail in sections II through IV of this package.
Step 1: Select a proposed termination date.
Step 2: Issue a Notice of Intent to Terminate (NOIT) to affected parties (other than PBGC) at least 60 days and not more than 90 days before the proposed termination date. Affected parties (see Appendix A, Glossary of Terms) include participants, beneficiaries of deceased participants, alternate payees under qualified domestic relations orders, and employee organizations representing participants. (See section II.C.)
Step 3: Issue a Notice of Plan Benefits (NOPB) to participants, beneficiaries of deceased participants, and alternate payees no later than the time the plan administrator files the Standard Termination Notice (PBGC Form 500) with PBGC. (See section II.D.)
Note: If the plan administrator wants to qualify for the distribution deadline linked to receipt of the IRS determination letter, the determination request must be submitted to the IRS no later than the time the plan administrator files the Form 500 with PBGC. (See section II.H.)
Step 4: File a Standard Termination Notice (PBGC Form 500, including the Schedule EA-S, NOIT, sample NOPBs) with PBGC on or before the 180th day after the proposed termination date. (See section II.E.)
Note: PBGC has 60 days after receiving a complete Form 500 to review the information and documents submitted for the termination to determine whether it will issue a notice of non-compliance in accordance with 29 U.S.C. §1341(b)(2)(C).
Step 5: If any benefits may be distributed in an annuity form, provide a Notice of Annuity Information to affected parties other than PBGC no later than 45 days before the distribution date. (See section II.C.)
Step 6: Distribute plan assets to satisfy all plan benefits by the distribution deadline. The distribution deadline is the later of (a) 180 days after expiration of PBGC's 60-day review period, or (b) 120 days after receipt of a favorable IRS determination letter provided that the plan administrator submits a valid request for an IRS determination letter by the time he or she files the Form 500 with PBGC. (See section II.H.)
Step 7: If the plan has missing participants, follow the rules for distributing benefits of missing participants described in PBGC Schedule MP package.
Step 8: Provide a Notice of Annuity Contract to participants receiving their plan benefits in the form of an annuity no later than 30 days after all plan benefits are distributed. (See section II.H.4.)
Step 9: File a Post-Distribution Certification (PBGC Form 501) with PBGC no later than 30 days after all plan benefits are distributed, or no later than 60 days if you certify to PBGC in an email within the 30-day time frame that all assets have been distributed. (See section II.I.)
Note: PBGC may assess a penalty for late filing of a Form 501. However, PBGC will do so only the Form 501 is filed more than 90 days after the distribution deadline (including extensions) described in section II.H.1.
This package contains (1) a glossary of terms used in the standard termination process (see Appendix A); (2) a model NOIT that the plan administrator may use or adapt (see Appendix B); (3) information on state guaranty association coverage of annuities (see section II.C and Appendix C); (4) a model commitment to make the plan sufficient for plan benefits (see Appendix D); (5) PBGC Form 500, which includes the Schedules EA-S (the required enrolled actuary certification) and REP-S (an optional form for designating an authorized representative); and (6) PBGC Form 501 (the post-distribution certification), along with detailed instructions for completing the forms (see section IV). The Missing Participant Program forms and instructions are in a separate PBGC Schedule MP Package.
The specific rules for terminating a single-employer plan in a standard termination and for distributing benefits to missing participants are set forth in sections 4041(a), 4041(b) and 4050 of the Employee Retirement Income Security Act (ERISA) and in PBGC's regulations on Termination of Single-Employer Plans, 29 CFR Part 4041, Subparts A and B, and Missing Participants, 29 CFR Part 4050. PBGC's regulations under section 4050 of ERISA were recently amended. The amendments apply to plans that terminate on or after January 1, 2018. Plans with a termination date before January 1, 2018, should refer to the provisions of 29 CFR Part 4050 in effect prior to these amendments.
See PBGC's website, www.pbgc.gov, for these regulations along with FAQs about terminations and termination forms and instructions for downloading.
To terminate a plan in a standard termination, the plan administrator, within specified timeframes, must notify participants of the proposed termination; provide participants detailed information on their plan benefits; file certain information, including actuarial information, with PBGC; and, if PBGC does not issue a notice of noncompliance, distribute plan assets to satisfy all plan benefits under the plan.
Failure to Comply. top Failure to comply with the standard termination requirements or failure to meet the deadlines may cause the proposed termination to be nullified. To avoid inadvertently missing deadlines, the plan administrator should, early in the termination process, review the rules for computing due dates (see section II.A) and begin collecting the data necessary to complete a standard termination (e.g., participant and beneficiary information, including current addresses, and the location and value of plan assets).
Note: PBGC may extend certain deadlines as discussed in section II.J (see 29 CFR § 4041.30).
Consequence of Nullification. top If the termination is nullified, the plan administrator may not make a final distribution of assets and the plan is an ongoing plan for all purposes. If the plan administrator still intends to terminate the plan, he or she will have to start the process again, beginning with issuance of a new NOIT establishing a new proposed termination date for the plan.
If a plan administrator fails to provide any required information within the specified time limit, PBGC may assess a penalty under ERISA section 4071. Under PBGC's penalty policy, the penalty rate is generally $25 per day for the first 90 days and $50 per day thereafter, with lower rates for small plans. PBGC may also pursue any other equitable or legal remedies available to it under the law, including, if appropriate, the issuance of a Notice of Noncompliance (NONC). See 29 CFR § 4041.6.
Post-Termination Amendments. top The plan administrator may take into account a plan amendment that is adopted after a plan's termination date only if certain conditions are met (see section II.H.3).
Conversion to a Defined Contribution (DC) Plan. top Converting a defined benefit plan to a defined contribution plan is a voluntary termination of the defined benefit plan and is subject to all rules and requirements governing such terminations.
Cessation of Accruals. top For plans with 100 or more participants, ERISA section 204(h) and Treas. Reg. § 54.4980F-1 generally provide that a plan may not be amended to provide for a significant reduction in the rate of future benefit accrual unless, at least 45 days before the effective date of the plan amendment, the plan administrator provides a written notice setting forth the plan amendment and its effective date to participants, alternate payees, and employee organizations representing participants. For plans with fewer than 100 participants, substitute "15 days" for "45 days." If the plan terminates in accordance with Title IV of ERISA, section 204(h) is deemed to be satisfied as of the termination date. (See Treas. Reg. § 54.4980F- I, Q&A-17(b).)
Note: A NOIT must include a statement concerning the cessation of accruals under the plan (see 29 CFR § 4041.23(b) (4) and section II. C of these instructions). If the termination is not successfully completed, a NOIT does not serve as an ERISA section 204(h) notice unless the NOIT meets all section 204(h) requirements.
Making Plans Sufficient. top To facilitate the termination of a plan and the distribution of assets in a standard termination, a contributing sponsor or controlled group member may make a commitment in writing to the plan to contribute, by the distribution date, the amount necessary to make the plan sufficient for all plan benefits (see the specific instructions to item 6, Schedule EA-S). In addition, majority owners (see Appendix A, Glossary of Terms, for definition) may agree to forgo receipt of all or part of their plan benefits until the benefits of all other plan participants have been satisfied (see the specific instructions to item 7, Schedule EA-S).
Benefit Restrictions. top For participants who deferred receipt of a portion of their benefits when they terminated employment or retired because of a restriction on prohibited payments under Internal Revenue Code § 436(d), 26 U.S. C. § 436(d) (see Note at beginning of Section II.H on benefit Restrictions), the remainder of the benefit must be distributed at plan termination.
IRS Determination Letter. top Plan administrators who want to defer the final distribution of plan assets until 120 days after receipt of a favorable tax qualification (on termination) determination letter from the IRS must submit a valid request for the determination to the IRS by the time the standard termination notice is filed with PBGC.
Voluntary Termination of an Insufficient Plan. top A single-employer plan covered by PBGC's termination insurance program that does not have sufficient assets to satisfy all plan benefits can terminate voluntarily only if the contributing sponsor(s) and each member of the contributing sponsor's controlled group satisfy the requirements for a distress termination pursuant to ERISA section 4041(c) and 29 CFR Part 4041, Subpart C. The distress termination rules are described in detail in a separate PBGC distress termination package, which also contains the necessary forms and instructions.
Payment of PBGC Premiums. top Premiums must be paid for a terminating plan through the plan year in which the plan administrator completes the distribution of plan assets pursuant to the standard termination. Interest and penalties accrue if premiums are not timely paid, and PBGC may initiate collection actions to obtain payment. To avoid the possibility that the employer will be out of business or plan records and personnel will not be available by the normal premium due date, the due date for a terminating plan's final premium is the earlier of:
Questions regarding premiums may be submitted by emailing premiums@pbgc.gov or by phoning (800) 736-2444 (select the "premium" option).
(see 29 CFR § 4041.3 and 29 Part 4000, Subpart D)
In computing any period of time, if you are counting forward, begin counting on the day after the event occurs and count the last day of the period. If you are counting backwards, begin counting on the day before the event occurs and count the first day of the period. If you counted forward and the last day of the period is a weekend or Federal holiday, then the period runs until the next regular business day after the last day of the period. If an event cannot be more than a certain number of days before a certain date and the last day of the period is a weekend or Federal holiday, then the period runs until the next regular business day before the last day of the period.
Note: A proposed termination date may be any day, including a Saturday, Sunday or Federal holiday.
Example: Suppose you are issuing a notice of intent to terminate. The notice must be issued at least 60 days, but not more than 90 days, before the proposed termination date. Suppose the 60th day before the proposed termination date is a Saturday. Your notice is timely if you issue it on the following Monday even though that is only 58 days before the proposed termination date. Similarly, if the 90th day before the proposed termination date is Monday, September 4, 2017 (a Federal holiday), your notice is timely if you issue it on Friday, September 1, even though that is 93 days before the proposed termination date.
Filing Methods. top You may file PBGC Form 500 (including Schedules EA-S and REP-S) and Form 501 by hand, mail, or commercial delivery service, or electronically via email to STfilings@pbgc.gov.
Note: Current information on how to file, including permitted filing methods, fax numbers, and mail and e-mail addresses is on PBGC's website at https://www.pbgc.gov. Under all filing methods, the Form 500 (including Schedule EA-S, REP-S, and notices) must be submitted together.
Filing Date. top Your filing date will be the date you send your filing (the "send date"), provided you meet certain requirements that are summarized below. If you do not meet these requirements, your filing date is the date the PBGC receives your submission. (If you file your submission by hand, your filing date is the date of receipt of your hand-delivered submission at the proper address.)
If PBGC receives your submission after 5:00 p.m. (Washington, D.C. time) on a business day, or anytime on a weekend or Federal holiday, PBGC treats it as received on the next business day.
Filings by mail. top If you file your submission using the U.S. Postal Service, your filing date is the date you mail your submission by the last collection of the day, provided that the submission: (1) meets the applicable postal requirements; (2) is properly addressed; and (3) is sent by First-Class Mail (or another class that is at least equivalent). If you mail the submission after the last collection of the day, or if there is no scheduled collection that day, your filing date is the date of the next scheduled collection. If you meet these requirements, the PBGC makes the following presumptions:
Legible postmark date. If your submission has a legible U.S. Postal Service postmark, the PBGC presumes that the postmark date is the filing date.
Legible private meter date. If your submission has a legible postmark made by a private postage meter (but no legible U.S. Postal Service postmark) and arrives at the proper address by the time reasonably expected, the PBGC presumes that the metered postmark date is your filing date.
You may prove an earlier send date.
Filings using a commercial delivery service. top If you file your submission using a commercial delivery service, your filing date is the date you deposit your submission by the last scheduled collection of the day for the type of delivery you use (such as two-day delivery or overnight delivery) with the commercial delivery service, provided that the submission meets the applicable requirements of the commercial delivery service and is properly addressed, and the delivery service meets one of the requirements listed below. If you deposit it later than that last scheduled collection of the day, or if there is no scheduled collection that day, your filing date is the date of the next scheduled collection. The delivery service must meet one of the following requirements:
Delivery within two days. It must be reasonable to expect your submission will arrive at the proper address by 5:00 p.m. on the second business day after the next scheduled collection; or
Designated private delivery service. You must use a "designated private delivery service" within the meaning of section 7502(f) of the Code. PBGC's website, www.pbgc.gov, lists those designated private delivery services. You should make sure that both the provider and the particular type of delivery (such as two-day delivery) are designated.
Where to file. top PBGC Forms 500 (including schedules and notices) and 501 (including supporting documentation) may be filed by hand, mail, fax, commercial delivery service or by e-mail (see "Filing Methods" at section II.A.1 above) to:
Pension Benefit Guaranty Corporation
Standard Termination Compliance Division
Processing and Technical Assistance Branch
445 12th Street, SW
Washington, DC 20024-2101
By e-mail: STfilings@pbgc.gov
By fax: (202) 326-4001 or (202) 326-4260
All notices must be readable and written in a manner calculated to be understood by the average plan participant. Additional information may be provided with a notice only if the information is not misleading.
Issuance Methods. top Notices may be issued by any method that is reasonably calculated to ensure actual receipt of the material by the intended recipient. Permissible methods of issuance include hand delivery, first class mail, electronic delivery by electronic media, and commercial delivery service to the affected party's last known address. Note: Posting is not a permissible method.
PBGC's issuance rules describe in detail a safe harbor method (for delivery by electronic media) that meets the requirement of using measures reasonably calculated to ensure actual receipt (see 29 CFR § 4000.14(b)). You may view these rules (and the rules on how PBGC determines your issuance date) on PBGC's website, www.pbgc.gov.
For an e-mail issuance with an attachment, you must include, in the body of your e-mail, the name and telephone number of the person to contact if the intended recipient needs you to resubmit your filing or issuance.
Issuance Date. top Generally, your issuance date is the date on which you send the notice if you meet the "send date" requirements in PBGC's rules at Part 4000, summarized below. If you do not meet these requirements, the issuance date is the date the intended recipient receives your notice. (If you issue your notice by hand, your issuance date is the date of receipt of your hand-delivered notice at the proper address.)
Issuances by mail. top If you issue your notice using the U.S. Postal Service, your issuance date is the date you mail your notice by the last collection of the day, provided that the notice: (1) meets the applicable postal requirements; (2) is properly addressed; and (3) is sent by First-Class Mail (or another class that is at least equivalent). If you mail the notice after the last collection of the day, or if there is no scheduled collection that day, your issuance date is the date of the next scheduled collection. If you meet these requirements, PBGC makes the following presumptions:
Legible postmark date. If your notice has a legible U.S. Postal Service postmark, PBGC presumes that the postmark date is the issuance date.
Legible private meter date. If your notice has a legible postmark made by a private postage meter (but no legible U.S. Postal Service postmark) and arrives at the proper address by the time reasonably expected, PBGC presumes that the metered postmark date is your issuance date.
You may prove an earlier issuance date.
Issuances using a commercial delivery service. top If you issue your notice using a commercial delivery service, your issuance date is the date you deposit your notice by the last scheduled collection of the day for the type of delivery you use (such as two-day delivery or overnight delivery) with the commercial delivery service, provided that the notice meets the applicable requirements of the commercial delivery service and is properly addressed, and the delivery service meets one of the requirements listed below. If you deposit it later than that last scheduled collection of the day, or if there is no scheduled collection that day, your issuance date is the date of the next scheduled collection. The delivery service must meet one of the following requirements:
Delivery within two days. It must be reasonable to expect your notice will arrive at the proper address by 5:00 p.m. on the second business day after the next scheduled collection; or
Designated private delivery service. You must use a "designated private delivery service" within the meaning of section 7502(f) of the Internal Revenue Code (Title 26, USC). PBGC's website, www.pbgc.gov, lists those designated private delivery services. You should make sure that both the provider and the particular type of delivery (such as two-day delivery) are designated.
Issuances using electronic delivery. top Your issuance date is the date you send your notice if you comply with the electronic safe harbor method (see 29 CFR § 4000.14(b)). If you do not comply with the safe harbor method, but you use measures reasonably calculated to ensure actual receipt of the material by the intended recipient, then your issuance date is the date of receipt at the proper address.
Failure to meet address requirement. top If you send your electronic issuance to the wrong address (but you meet the other applicable requirements), your filing or issuance date is the date of receipt at the proper address.
Reason to believe issuance not received or defective. top If you have reason to believe that the intended recipient has not received your issuance (or has received it in a form that is not useable), you must promptly resend it to get your original issuance date.
Request to resend issuance for technical reasons. top The intended recipient may, for good reason (of a technical nature), ask you to resend all or a portion of your issuance (for example, because of a technical problem in opening an attachment to your e-mail). If you comply with the request or otherwise resolve the problem (e.g., by providing advice that the recipient uses to open the attachment to your e-mail), within a reasonable time, your issuance date for the issuance (or portion) that the intended recipient asked you to resend is the date you provided your original issuance.
Special Rule for Foreign Languages. top This rule applies to (1) a plan that covers fewer than 100 participants at the beginning of a plan year in which 25% or more of all plan participants are literate only in the same non-English language; or (2) a plan that covers 100 or more participants in which 500 or more participants or 10% or more of all plan participants, whichever is less, are literate only in the same non-English language. The plan administrator of such a plan must, for any notice to affected parties, include a prominent legend in that common non-English language advising them how to obtain assistance in understanding the notice, or provide the notice in that common non-English language to those affected parties who are literate only in that language.
Example: The plan administrator of a terminating plan in which 30% of the participants are literate only in Spanish must either (1) include on each notice a statement with the name, address and telephone number of an individual fluent in Spanish who may be contacted for assistance with questions concerning the notice, or (2) provide a copy of the notice in Spanish to those persons literate only in Spanish.
Omission of Affected Parties. top If the plan administrator discovers additional affected parties after expiration of the deadline for issuance of any notice, the notice will be considered timely if (l) the plan administrator could not reasonably have been expected to know of the additional affected parties or the failure to notify was due to administrative error involving only a de minimis percent of affected parties, and the plan administrator promptly issues the notice to each additional affected party, or (2) the plan administrator could not locate the affected party after making reasonable efforts, and issues the notice promptly when the affected party is located.
Note: The plan administrator need not issue a notice to the estate of a deceased participant if the estate is not entitled to a distribution.
(see 29 CFR § 4041.22)
A plan administrator may not distribute plan assets in connection with the termination until PBGC's review period ends. The plan administrator must continue to carry out the normal operations of the plan during the termination process. These operations include, e.g., putting participants into pay status, collecting contributions due the plan, investing plan assets and making loans to participants in accordance with plan provisions.
However, during the period beginning on the first day the plan administrator issues a notice of intent to terminate until the last day of PBGC's review period, the plan administrator, except as described below, must not:
Exception: The plan administrator may provide benefits attributable to employer contributions either through the purchase of an irrevocable commitment or in a form other than as an annuity if (1) the participant has separated from active employment or is otherwise permitted under the Code to receive the distribution, (2) the distribution is consistent with prior plan practice, and (3) the distribution is not reasonably expected to jeopardize the plan's sufficiency for plan benefits.
Note: A distribution, transfer, or allocation of assets to a participant, beneficiary or alternate payee, or to an insurer for the benefit of such a person, made in anticipation of plan termination may be a violation of Title IV of ERISA (see 29 CFR § 4044.4(b)).
If, after beginning the standard termination process, the plan administrator determines that the plan is insufficient for plan benefits, he or she should stop the termination process and notify PBGC.
(see 29 CFR § 4041.23)
At least 60 days and no more than 90 days before the proposed termination date, the plan administrator must issue a written NOIT to each person (other than PBGC) who is an affected party as of the proposed termination date. Affected parties include (1) participants, (2) beneficiaries of deceased participants, (3) alternate payees under applicable qualified domestic relations orders, (4) employee organizations currently representing participants and (5) for any group of participants not currently represented by an employee organization, the employee organization, if any, that last represented the group within the 5-year period preceding issuance of the NOIT.
Note: A NOIT must also be issued to a person who becomes a beneficiary of a deceased participant or an alternate payee after the proposed termination date and on or before the distribution date. That NOIT will not be untimely, provided the "after-discovered affected parties" requirements described in section II.A.2, "Omission of Affected Parties," are satisfied.
Proposed Termination Date. top The proposed termination date may be any day, including a Saturday, Sunday, or Federal holiday.
Example: For purposes of issuing a NOIT, assume a proposed termination date of May 12, 2013 (a Sunday). For the NOIT to be timely, it must be issued no later than March 13, 2013, and no earlier than February 11, 2013. In counting backwards, start with May 11, 2013 (a Saturday), as day 1.
Contents of NOIT. top A NOIT must contain the information, including the Notice of Annuity Information, listed below. (See Appendix B for a model NOIT, which may be used or adapted by the plan administrator.)
=> Each contributing sponsor's name and employer identification number (EIN).
=> Plan name and plan number.
=> Name, address and telephone number of a contact person.
=> Statement that the plan administrator intends to terminate the plan in a standard termination.
=> Proposed termination date.
=> Statement that the plan administrator will notify the affected party if the proposed termination date changes or the termination does not occur.
=> Statement that, in order to terminate, plan assets must be sufficient to provide all plan benefits.
=> One of the following statements concerning the cessation of accruals under the plan, whichever applies:
Note: The plan administrator may simply provide a copy of the SPD with the NOIT rather than including this statement in the NOIT. The plan administrator may impose a reasonable charge to cover the cost of furnishing the SPD to the extent allowed under regulations issued by the Department of Labor (see 29 CFR § 2520.104b-30). Some affected parties (e.g., a union) are not entitled to receive a copy of the SPD under ERISA section 104. The plan administrator may, but need not, include this statement in the NOIT issued to any such affected parties.
=> For those persons who are in pay status as of the proposed termination date, a statement (as applicable) that their monthly (or other periodic) benefit amounts will not be affected by the plan's termination, or explaining how such benefit amounts will be affected under plan provisions.
=> Statement that, after plan assets have been distributed to provide all plan benefits, either through the purchase of an annuity contract or in another form permitted by the plan, PBGC's guarantee ends.
Notice of Annuity Information. top The NOIT to an affected party entitled to plan benefits, other than an affected party whose plan benefits will be distributed in the form of a nonconsensual lump sum (a lump sum payment that may be distributed without the consent of the participant or the participant's spouse in accordance with the plan's provisions for de minimis benefit amounts; the payment may not exceed the dollar limit under § 411(a)(11) of the Code) must include the following annuity information.
If the identity-of-insurer information is known at the time the NOIT is issued:
=> Name and address of each insurer from whom, or from among whom, the plan administrator intends to purchase annuity contracts.
=> Statement that, if the plan administrator later decides to select a different insurer, the plan administrator will issue a supplemental notice no later than 45 days before the distribution date.
=> Statement concerning state guaranty association coverage of annuities that:
See Appendix C for a model notice providing this information, which may be used or adapted by the plan administrator.
If the identity-of-insurer information is not known at the time the NOIT is issued:
=> Statement that annuity contracts may be purchased to provide some or all of the benefits under the plan, but the plan administrator has not yet identified the insurer or insurers from whom the plan may purchase the annuities.
=> Statement that affected parties will be notified at a later date (but no later than 45 days before the distribution date) of the name and address of each insurer from whom, or from among whom, the plan administrator intends to purchase annuity contracts.
Supplemental Notice of Annuity Information. top If the NOIT did not include the identity of potential insurers, or if annuities will be purchased from insurers other than those identified in the NOIT (or in a prior supplemental notice), the plan administrator must issue a Supplemental Notice of Annuity Information to -
The supplemental notice must include:
=> Name and address of each insurer from whom (if known), or from among whom (if specific insurer not known), the plan administrator intends to purchase annuity contracts.
=> Statement that, if the plan administrator later decides to select a different insurer, the plan administrator will issue a written supplemental notice no later than 45 days before the distribution date.
=> Unless the information on state guaranty association coverage of annuities described above was previously provided, that information and the statement that PBGC's guarantee ends after plan assets have been distributed.
Special Rule for Spin-off/Termination Transactions. For a spin-off/termination transaction, the plan administrator must provide all participants, beneficiaries of deceased who are (as of the proposed termination date of the terminating plan) covered by an ongoing plan with —
The issuance rules in section II.A.2 apply to these notices. (See the instructions in Part III for item 18b of Form 500 for other requirements relating to spin-off/termination transactions.)
(see 29 CFR § 4041.24)
The plan administrator must issue an NOPB to each affected party who is, as of the proposed termination date, a participant, a beneficiary of a deceased participant, or an alternate payee under an applicable qualified domestic relations order no later than the time the plan administrator files the standard termination notice with PBGC (see section II.E).
Note: An NOPB must also be issued to a person who becomes a beneficiary of a deceased participant or an alternate payee after the proposed termination date and on or before the distribution date. (The NOPB will be saved from being untimely, provided the "after-discovered affected parties" requirements described in section II.A.2 are satisfied.)
Contents of NOPB. top An NOPB must contain both general information and specific additional information for three categories of participants: (1) persons in pay status as of the termination date; (2) persons not then in pay status but who, as of the termination date, have made valid benefit elections or for whom the plan administrator has determined that the benefit will be payable as a lump sum; and (3) all others.
General information:
=> Contributing sponsor's name and employer identification number (EIN).
=> Plan name and plan number (PN).
=> Name, address and telephone number of a contact person for benefit questions.
=> Proposed termination date given in the NOIT and, if any, the extended proposed termination date given in the standard termination notice (see section II.E).
=> If the amount of the plan benefits described in the NOPB is an estimate, a statement that the amount is an estimate and plan benefits paid may be greater than or less than the estimate.
=> Except for a participant or beneficiary in pay status for more than one year as of the proposed termination date,
Note: The plan administrator should highlight (e.g., bold or all capital letters) the requests for corrected or, if applicable, additional information.
For persons in pay status as of the termination date:
=> Amount and form of the participant's or beneficiary's plan benefits payable as of the proposed termination date.
=> Amount and form of plan benefits, if any, payable to a beneficiary upon the participant's death and the name of the beneficiary.
=> Amount and date of any increase or decrease in the benefit that has already occurred or is scheduled to occur after the proposed termination date and an explanation of the increase or decrease, including, where applicable, a reference to the pertinent plan provision.
For persons who, as of the termination date, have validly elected a form and starting date, or for whom, as of such date, the plan administrator has determined that the benefits will be paid in a nonconsensual lump sum:
=> Amount and form of the participant's or beneficiary's plan benefits payable as of the projected benefit starting date, and what that date is.
=> Amount and form of plan benefits, if any, payable to a beneficiary upon the participant's death and the name of the beneficiary.
=> Amount and date of any increase or decrease in the benefit that has already occurred or is scheduled to occur after the proposed termination date and an explanation of the increase or decrease, including, where applicable, a reference to the pertinent plan provisions.
=> If the plan benefits will be paid in any form other than a lump sum, and the age at which, or the form in which, the plan benefits will be paid differs from the normal retirement benefit, the age or form stated in the plan for the normal retirement benefit and the age or form adjustment factors.
If the plan benefits will be paid in a lump sum:
For all other persons not in pay status as of the termination date (or for whom a portion of the person's benefit is not in pay status):
=> Amount of the participant's or beneficiary's plan benefits payable at normal retirement age in any one form permitted under the plan, and a description of that form.
=> Availability of any alternative benefit forms, including those payable to a beneficiary upon the participant's death, either before or after benefits commence.
=> If the participant or beneficiary is or may become entitled to a benefit payable before normal retirement age, amount and form of benefit that would be payable at the earliest benefit commencement date (or, if more than one such form is payable at the earliest benefit commencement date, any one of those forms) and whether the benefit commencing on such date would be subject to future reduction.
=> If the plan benefits may be paid in a lump sum:
Special Rule for Spin-off/Termination Transactions. For a spin-off/termination transaction where there is a reversion of residual assets to an employer, the plan administrator must provide an NOPB containing the information described above to all participants, beneficiaries of deceased participants, and alternate payees in the original plan who are (as of the proposed termination date of the terminating plan) covered by an ongoing plan. The NOPB must be issued no later than the time the plan administrator files the standard termination notice for any terminating plan.
(see 29 CFR § 4041.25)
The plan administrator must file with PBGC a Form 500, Standard Termination Notice, with Schedule EA-S, the standard termination certification of sufficiency, completed in accordance with the instructions to the form (see sections III and IV). Form 500 (including copies of the NOIT and sample NOPBs for various categories of participants and beneficiaries) must be filed on or before the 180th day after the proposed termination date.
Note: Plan administrators who want to defer the final distribution of plan assets until 120 days after receipt of a favorable tax qualification determination letter from the IRS must submit a valid request for the determination to the IRS by the time the standard termination notice is filed with PBGC.
Proposed Termination Date. top The plan administrator may select on PBGC Form 500 a proposed termination date that is later than the date specified in the NOIT. The new termination date cannot be more than 90 days after the earliest date on which the plan administrator issued a NOIT to any affected party.
Note: Where there is a change in the proposed termination date, the plan may become subject to benefits restrictions under § 436 of the Code because of a change in its adjusted funding target attainment percentage between the earlier proposed DOPT and the later proposed DOPT or by application of the presumptions rules under § 436(h) between those dates. See Treas. Reg § 1.436-1 and Note at beginning of section II.H on benefit restrictions.
Contents of Standard Termination Notice. top See the specific instructions to PBGC Form 500 (section IV.A) and the Schedule EA-S (section IV.B).
(see 29 CFR § 4041.26)
PBGC has 60 days after receipt of a complete Form 500 filing (including all required attachments) at the address listed in section II.A to review the termination to determine whether it will issue a notice of noncompliance (see section G below). PBGC will notify the filer in writing of the receipt date so that the filer can determine when the 60-day review period will expire. The review period may be extended if PBGC and the plan administrator agree, in writing, to an extension before the expiration of the review period.
Incomplete Filing. top If the Form 500 filing is incomplete, PBGC may, based upon the nature and extent of the omission, provide the plan administrator an opportunity to complete the filing. In such cases, the filing will be deemed complete (for purposes of determining the timeliness of the Form 500) as of the date originally filed, provided the plan administrator files the missing information and document(s) (including all required attachments to the Form 500) by the later of (1) the 180th day after the proposed termination date or (2) the 30th day after the date of PBGC notice that the filing was incomplete. PBGC will determine, however, whether to begin its 60-day review period as of the date it receives the original filing or the missing information, and notify the plan administrator of its determination.
Additional Information. top PBGC may in any case require the submission of additional information relevant to the termination proceeding. This information must be submitted within 30 days after the date of a written request by PBGC, or within a different time period specified by PBGC in its request. PBGC may in its discretion shorten the time period where it determines that the interests of PBGC or participants may be prejudiced by a delay in receipt of the information.
A request for additional information suspends the running of PBGC's 60-day review period. The review period begins running again on the day the required information is received and continues for the greater of (1) the number of days remaining in the review period or (2) five regular business days.
(see 29 CFR § 4041.31)
A NONC ends the standard termination proceeding, nullifies all actions taken to terminate the plan, and renders the plan an ongoing plan.
During PBGC's Review Period. top PBGC will issue a NONC within its 60-day (or extended) review period whenever PBGC determines that -
PBGC may decide not to issue a NONC based on a failure to meet a notice requirement described in paragraphs (1), (2), (3) or (5) above if PBGC determines that issuance of the NONC would be inconsistent with the interests of participants and beneficiaries.
After PBGC's Review Period. top PBGC may issue a NONC or suspend a termination proceeding for a failure to meet a requirement described in (1) through (5) above after expiration of its 60-day (or extended) review period, including after a PBGC audit, if PBGC determines such action is necessary to carry out the purposes of Title IV.
PBGC may issue a NONC at any time if the plan administrator fails to properly complete the final distribution of plan assets (e.g., by failing to satisfy any of the requirements for providing all plan benefits in the form of an irrevocable commitment or other permitted form, or by failing to complete the distribution before the distribution deadline).
Request for Reconsideration. top A plan administrator may request reconsideration of a NONC. Any request for reconsideration, if submitted timely and in accordance with the rules prescribed in PBGC's regulation on Administrative Review (29 CFR Part 4003), automatically stays the effectiveness of the NONC until PBGC issues its decision on reconsideration.
Note: Once a NONC is issued: (1) the running of all time periods relating to the termination will be suspended and (2) the plan administrator can take no further action to terminate the plan (except by initiation of a new termination) unless and until the NONC is revoked pursuant to a decision by PBGC on reconsideration. In addition, where the proposed termination is withdrawn or nullified because the plan assets are not sufficient to satisfy all plan benefits under the plan, the ongoing plan may be subject to benefits restrictions under § 436 of the Code. See Treas. Reg. § 1.436-1(a)(3)(ii)(A).
Notice to Affected Parties. top If a NONC becomes effective because either the plan administrator does not request reconsideration or PBGC issues a decision upon reconsideration affirming issuance of the NONC, the plan administrator must notify affected parties other than PBGC in writing that the plan is not going to terminate or, if applicable, that the termination was invalid and that a new NOIT is being or will be issued. The plan administrator must also notify persons who received an annuity notice or NOPB because the proposed termination was part of a spin-off/termination transaction (see sections II.C and II.D and 29 CFR §§ 4041.23, 4041.24 and 4041.27).
Correction of Errors. top PBGC will not issue a NONC based solely on the plan administrator's inclusion of erroneous information (or omission of correct information) in a notice required to be provided to any person if:
(see 29 CFR § 4041.28)
Unless PBGC issues a NONC, the plan administrator must complete the distribution of plan assets by purchasing annuity contracts that are irrevocable commitments, or by otherwise providing all plan benefits (see section II.H.2 for the rules governing distribution of plan benefits).
NOTE: Under 29 CFR § 4041.28(c), the plan administrator of a plan that terminates in a standard termination must close out the plan in accordance with all applicable requirements under the Code and ERISA, including:
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A distribution of assets by the purchase of annuity contracts occurs when the obligation for providing the plan benefits passes irrevocably from the plan to the insurer.
A distribution of assets in a manner other than by the purchase of an annuity contract occurs on the date on which the benefits are delivered to the participant or beneficiary (or to another plan, benefit arrangement, or other recipient authorized by the participant or beneficiary in accordance with applicable law and regulations) personally or by deposit with a mail or courier service (as evidenced by a postmark or written receipt).
The plan administrator must complete the distribution of plan assets in satisfaction of all plan benefits (through priority category 6 under ERISA section 4044 and 29 CFR Part 4044) by the later of (a) 180 days after PBGC review period ends (i.e., generally by no later than 240 days after PBGC's receipt of a complete and valid Form 500 filing), or (b) 120 days after the plan's receipt of a favorable IRS determination letter. The IRS determination letter deadline described in (b) above is available only if, on or before the time the plan administrator files the Form 500 with PBGC, the plan administrator submits to IRS a valid request for a determination letter with respect to the plan's tax-qualification status upon termination. This deadline does not apply to a distribution of residual assets, whether to the employer or to participants and beneficiaries.
Note: Failure to timely distribute plan assets in satisfaction of plan benefits may cause the termination to be nullified.
A plan administrator may request an extension of the time to file for an IRS determination letter to qualify for the IRS determination letter distribution deadline in accordance with the rules described in section II.J of these instructions and 29 CFR § 4041.30. Such a request will be deemed to be granted unless PBGC notifies the plan administrator otherwise within 60 days after receipt of the request or, if later, by the end of PBGC's 60-day (or extended) review period. PBGC will notify the plan administrator in writing of the date it receives the request.
Extensions of Distribution Deadline. top The 180-day distribution deadline or the IRS determination letter distribution deadline described above may be extended only under the circumstances described below. (If more than one extension applies, the deadline is extended to the latest applicable date.)
Note: If, late in the distribution process, the plan administrator (1) locates a participant or beneficiary who was thought to be missing or (2) learns that a participant or beneficiary whom the plan administrator thought was located is, in fact, missing, the plan administrator should request a discretionary extension of the distribution deadline.
Except for missing participants (see section II.H.5), each participant must be offered all optional forms of benefits for which he or she is eligible under the terms of the plan. Plan benefits may be distributed in a form other than an annuity (e.g., an immediate lump sum) only if the plan provides for such a distribution and (1) the participant elects the alternative form in writing, with the written consent of his or her spouse, or (2) for participants not already in pay status, the present value of the participant's benefit (valued in accordance with the rules described under "Valuation of Other Benefits" in the instructions to item 6 of Schedule EA-S), is at or below the plan's cash out limit for de minimis benefit amounts, which may not exceed the dollar limit under § 411(a)(11) of the Code (currently $5,000).
Note: For an election of a lump sum to be valid, the participant must have the opportunity to commence an annuity immediately (see Treas. Reg. § 1.417(e)-1(b)(1)).
If plan benefits are not payable in an optional form under the conditions described above, plan benefits must be distributed by the purchase from an insurer of an annuity contract that is an irrevocable commitment. The plan administrator must select the insurer in accordance with the fiduciary standards of Title I of ERISA. Unless the participant is already in pay status, or has both elected to retire and elected a particular benefit form, the irrevocable commitment (annuity contract) must preserve all benefit options under the plan in accordance with Code § 411 and related regulations.
Note: Spousal consent is required for married participants for all options (other than a qualified joint and survivor annuity) if the present value of the participant's plan benefit is more than the plan's cash out limit for de minimis benefit amounts.
Participating Annuities. top A participating annuity contract may be purchased to provide plan benefits if all plan benefits will be guaranteed under the annuity contract as the unconditional, irrevocable, and noncancellable obligation of the insurer. For a plan in which any residual assets will be distributed to participants: (1) the additional premium for the participation feature must not be paid from the residual assets allocable to participants, and (2) the amount of residual assets must be determined using the price of the annuities for all plan benefits without the participation feature. If these requirements are not satisfied, a nonparticipating annuity contract must be purchased to close out the plan.
Plan Benefits. A participant's or beneficiary's plan benefits are determined under the plan's provisions in effect on the plan's termination date. However, an amendment that is adopted after the plan's termination date is taken into account with respect to a participant's or beneficiary's plan benefits to the extent the amendment (1) does not decrease the value of the participant's or beneficiary's plan benefits under the plan's provisions in effect on the termination date; and (2) does not eliminate or restrict an optional form of benefit available to the participant or beneficiary on the termination date. Thus, for example, a post-termination amendment that eliminates an ancillary benefit, or that increases the dollar limit (subject to the dollar limit under § 411(a)(11) of the Code) for nonconsensual lump sums, would not be taken into account in determining a participant's or beneficiary's plan benefits.
Residual Assets. In a plan in which participants or beneficiaries will receive some or all of the plan's residual assets based on an allocation formula, the amount of the plan's residual assets, and each participant's or beneficiary's share of the residual, is determined under the plan's provisions in effect on the termination date. However, an amendment adopted after the termination date is taken into account with respect to a participant's or beneficiary's allocation of residual assets only to the extent the amendment does not decrease the value of the participant's or beneficiary's allocation of residual assets under the plan's provisions in effect on the termination date.
Permitted Decreases. An amendment shall not be treated as decreasing the value of a participant's or beneficiary's plan benefits or allocation of residual assets to the extent (1) the decrease is necessary to meet a qualification requirement under Code § 401; (2) the participant's or beneficiary's allocation of residual assets is paid in the form of an increase in the participant's or beneficiary's plan benefits; or (3) the decrease is offset by assets that would otherwise revert to the contributing sponsor or by additional contributions.
If the plan administrator distributed plan benefits to any participant or beneficiary through the purchase of annuity contracts, either the plan administrator or the insurer must, within 30 days after it is available, provide each such participant and beneficiary (other than a missing participant) with a copy of the annuity contract or a certificate showing the insurer's name and address and clearly stating the insurer's obligation to provide the participant's or beneficiary's plan benefits.
If such a contract or certificate is not provided to the participant or beneficiary by the date on which the Form 501 is required to be filed to avoid the assessment of penalties (see section II.I), the plan administrator must, no later than that date, provide the participant and beneficiary with a notice stating:
The plan administrator must distribute the plan benefits of Missing Participants either by purchasing an annuity contract from an insurance company or paying the value of the Missing Participant's benefit to PBGC. The rules related to Missing Participants differ depending on when the plan terminates.
For pre-2018 terminations, the rules are described in detail in a separate package of instructions and forms (Schedule MP Package). For post-2017 terminations, the rules are described in detail in the instructions for Form MP-100. Both sets of instructions are available on PBGC's Forms for Practitioners webpage.
(see 29 CFR § 4041.29)
The plan administrator must file a completed PBGC Form 501 with PBGC within 30 days after the last distribution date for plan benefits, or within 60 days after that date if an email certification is sent to PBGC within 30 days after the last distribution date for plan benefits (through priority category 6 under ERISA section 4044 and 29 CFR Part 4044), for any affected party. The e-mail certification must be sent to:
STfilings@pbgc.gov
Include in the subject line: "Post-Distribution Certification/Case No. xxxxxxx" Include in the body of the email:
The filing due date for the Form 501 is unaffected by the timing of any distribution of residual assets, whether to the employer or to participants and beneficiaries.
Exception If a plan with missing participants terminates before January 1, 2018, the due date for filing Form 501 is 30 (or 60 if a timely email certification was sent) days after the deemed distribution date rather than 30 days (or 60 if a timely email certification was sent) after the last distribution date. (See Schedule MP Package for more information).
PBGC may assess a penalty for late filing of a Form 501 or email certification. However, PBGC will do so only if the Form 501 is filed more than 90 days after the distribution deadline (including extensions) described in section II.H.1. Note that the plan administrator may want to file the Form 501 before the end of this penalty-free zone to ensure that, if the plan is audited, the audit will take place within a reasonable time period. As required by ERISA section 4003(a), PBGC audits a statistically significant number of plans terminating in standard terminations. PBGC periodically selects plans to audit from among those plan terminations for which PBGC has recently received the Form 501. Therefore, if you want your plan to be included in an audit pool as soon as possible, you should file the Form 501 as soon as possible (but keep in mind that doing so may accelerate the due date of the final premium filing. See premium filing instructions).
(see 29 CFR § 4041.30)
PBGC may in its discretion extend a deadline for taking a required action to a later date. PBGC will grant such an extension where it finds compelling reasons why it is not administratively feasible for the plan administrator (or other persons acting on behalf of the plan administrator) to take the action until the later date and the delay is brief. PBGC will consider (1) the length of the delay and (2) whether ordinary business care and prudence in attempting to meet the deadline is exercised.
Note: PBGC will not extend the following statutory deadlines: (1) that the NOIT be issued not less than 60 days before the proposed termination date, (2) that the NOPB be issued by the time the plan administrator files the standard termination notice with PBGC, and (3) that certification to PBGC that all assets have been distributed (the Form 501or the email certification)be filed with PBGC within 30 days after the last distribution date. Although PBGC may assess a penalty for late filing of a Form 501 and email certification, it will do so only if the Form 501 is filed more than 90 days after the distribution deadline (including extensions) described in section II.H.1.
If the plan administrator files a request for an extension with PBGC later than the 15th day before the applicable deadline, the plan administrator must include a justification for not filing the request earlier.
Requests for extensions must be in writing and -
Addressed to:
Pension Benefit Guaranty Corporation
Standard Termination Compliance Division
Processing and Technical Assistance Branch
445 12th Street, SW
Washington, D.C. 20024-2101
E-mailed to: STfilings@pbgc.gov; or
Faxed to: (202) 326-4001 or (202) 326-4260.
(see 29 CFR § 4041.5)
Each contributing sponsor and the plan administrator of a terminated plan must maintain all records necessary to demonstrate compliance with section 4041 of ERISA and 29 CFR Part 4041 for six years after the date the Form 501 is filed with PBGC. For rules on maintaining records electronically, see 29 CFR Part 4000, Subpart E (also available on PBGC's website, www.pbgc.gov.
Note: If a contributing sponsor or the plan administrator maintains information in accordance with this requirement, the other(s) need not maintain that information.
These records include the plan documents and all underlying data, including worksheets prepared by or at the direction of the enrolled actuary, used in determining the amount, form, and value of the plan benefits of each individual.
Within 30 days after receipt of PBGC's written request for records or by a later date specified in the request, the contributing sponsor or plan administrator, as applicable, must make all such records available to PBGC upon request for inspection and photocopying (or, for electronic records, for inspection, electronic copying, and printout) at the location where they are kept (or another mutually agreeable location), or must submit the records to PBGC.
You may obtain forms and instructions from PBGC's website at www.pbgc.gov.
If you have any questions, call the toll-free telephone number at PBGC's Customer Service Center for Plan Administrators and Pension Professionals (1-800-736-2444). (TTY/ASCII users may call the Federal relay text phone line toll free at 1-800-877-8339 and ask to be connected to 1-800-736-2444.)
Email addresses:
This part contains the instructions for the following PBGC termination forms:
Form 500 is the Standard Termination Notice that the plan administrator must file with PBGC pursuant to ERISA section 4041(b)(2) and 29 CFR § 4041.25 to advise PBGC of a proposed standard termination and to provide various information and documents (see instructions in section IV.A for a detailed description of what documents are required to be filed with the Form 500 submitted to PBGC, including copies of the NOIT and sample NOPBs for various categories of participants and beneficiaries). Form 500 also includes Schedule EA-S and Schedule REP-S.
Schedule EA-S is the Standard Termination Certification of Sufficiency that must be used by the enrolled actuary or, in certain situations, the plan administrator to certify that a single-employer plan terminating in a standard termination is projected to have sufficient assets to provide all plan benefits.
Schedule REP-S is the Designation of Representative form that the plan administrator may use to designate a representative or representatives to act on his or her behalf before PBGC on some or all matters relating to the termination of a specified pension plan. Schedule REP-S also may be used to revoke a prior designation.
Form 501 is the Post-Distribution Certification that the plan administrator must file with PBGC pursuant to ERISA section 4041(b)(3)(B) and 29 CFR § 4041.29(a) to certify that the distribution of plan assets was completed in accordance with ERISA section 4041(b) and 29 CFR § 4041.28.
How to Complete the Forms. top The filer should ensure that an appropriate response is provided for each item, as follows:
Who Must File. top The plan administrator or the plan administrator's authorized representative must submit all filings required to be made with PBGC. Schedule REP-S (or another form for designating a representative) must accompany the filing if it is made by a representative of the plan administrator.
Note: While an authorized representative may submit the filing and sign any cover letter, the plan administrator must sign the Form 500, Schedule REP-S or other designation (where the filing includes a designation), and Form 501 in all cases.
If the designated plan administrator is a board (or similar group) composed of employer and employee representatives, then at least one employer representative and one employee representative must sign the forms. If the plan does not designate a plan administrator or it designates the plan sponsor or contributing sponsor as the plan administrator, the forms must be signed by an officer of the plan sponsor or contributing sponsor who has the authority to sign on behalf of that entity.
Schedule EA-S must be signed by an enrolled actuary unless the plan is a Code § 412(e)(3) plan. In that case, the Schedule EA-S must be signed either by the enrolled actuary or by the plan administrator.
Form 500 and Schedule EA-S, along with any required supplemental information or documents (e.g., documents required to be filed with the Form 500; see items 11a-b and 13 below), must be filed on or before the 180th day after the proposed termination date (see section II.A.1 for filing rules).
1a-b top Enter the complete name of the plan as it appears in the plan document, and the last day of the plan year.
2a-b top Enter the name, address, and telephone number of the contributing sponsor. If the plan covers the employees of more than one contributing sponsor, enter the name of the contributing sponsor with the greatest number of participants.
2c-d top Enter the 9-digit employer identification number (EIN) assigned to the contributing sponsor named in 2a by the Internal Revenue Service for income tax purposes and the 3-digit plan number (PN) assigned by the plan sponsor.
2e top If the EIN or PN entered in item 2c or 2d is different from that used in earlier filings with PBGC (including premium and reportable event filings for this plan), enter the EIN(s) and PN(s) previously reported.
2f top Enter the same 6-digit industry code that you entered on your most recent premium filing.
3a-c top Enter the name, address, telephone number and e-mail address (3c is optional) of the individual, board, or other entity, if any, specifically designated as plan administrator by the terms of the plan or trust agreement. If none is so designated, or is the same as 2a, enter "same." (Under section 3(16)(A)(ii) of ERISA, if an administrator is not designated by the plan, the plan sponsor is the administrator.)
3d-f top Enter the name, address, telephone number and e-mail address (3f is optional) of person to be contacted for more information. If none is so designated or is the same as 3a, enter "same."
4a-b top If the plan administrator is filing for a tax qualification determination from the IRS and wants to defer the deadline for the final distribution of plan assets until 120 days after receipt of a favorable determination letter, the plan administrator must submit the determination request to the IRS by the time the Form 500 is filed with PBGC. The IRS determination letter distribution deadline (see section II.H.1) is available to a plan that files with the IRS by the time the Form 500 is filed with PBGC. Enter the date you filed the determination request with IRS in 4b.
5a-b top For purposes of 5, "multiple-employer plan" means a single-employer plan maintained by two or more contributing sponsors that are not members of the same controlled group. Under such a plan, all plan assets are available to pay benefits to all plan participants and beneficiaries, regardless of employer. If "Yes," is checked, a list of the names and EINs of all contributing sponsors of the multiple-employer plan must be attached to the Form 500.
6a-c top Check reason(s) for plan termination. If the termination is due to more than one reason, rank all reasons that apply in order of importance, i.e., enter "1" in box for the most important reason, "2" in box for next most important reason, etc., until ranks are entered for all reasons that apply.
7 top Check statement(s) which describe(s) any change in the organization or structure of the contributing sponsor associated with the plan's termination.
8a-d top For purposes of 8a, "active participants" includes currently employed participants. Retirees should be reported in 8b, separated vested participants in 8c, and separated nonvested participants should be reported in 8d if they are still retaining credited service under the plan (e.g., they were not deemed to have been cashed-out). Participants who deferred receipt of a portion of their benefits when they terminated employment or retired because of benefit restrictions under Code § 436(d) should be reported in 8c.
9a-h top For each box, enter the estimated percent of currently employed participants that are covered under the terminating plan that you expect to be covered under no plan (9a), or one or more types of new or existing plans listed in 9b-h. Currently employed participants should be included in each applicable percent.
10 top If the number entered in either 9b, 9c, or 9d is greater than zero, check "Yes" if the types and levels of benefits under the new or existing defined benefit plan will be substantially the same as under the terminating plan for all affected participants (i.e., participants who will be covered under the new plan). Otherwise, check "No."
11a-b top The proposed termination date entered in item 11a may be later than the proposed termination date specified in the NOIT, but it may not be later than the 90th day after the earliest date a NOIT is issued to any affected party.
Example: The plan administrator begins issuing the NOIT on March 3, 2017, and completes the issuance to all affected parties on March 6, 2013, specifying a proposed termination date of May 6, 2017 (63 days after March 3, 2017). In item 11a, the plan administrator may specify a proposed termination date of any day from May 5, 2017, to and including June 1, 2017.
Note: A copy of the NOIT issued must be attached to the Form 500 submitted to the PBGC.
12a top Enter the earliest date any NOIT was issued to any affected party (see section II.A.2 for issuance rules).
12b top Enter the latest date any NOIT was issued to any affected party.
The "latest" date of issuance of any NOIT is the date when the last NOIT is issued to any affected party reasonably known or discovered during the 60-90 day period before the proposed termination date. The plan administrator is responsible for taking all necessary and appropriate steps under the circumstances to locate all affected parties.
13 top Enter the latest date on which any NOPB was issued to any affected party other than any employee organization (see section II.A.2 for issuance rules).
The "latest" date of issuance of any NOPB is the date when the last notice is issued to any person reasonably identified as being entitled to an NOPB on or before the date the Form 500 is filed with PBGC. The plan administrator is responsible for taking all necessary and appropriate steps under the circumstances to locate all affected parties.
Note: Copies of sample NOPBs issued to each category of participants (actives, retirees, separated vesteds, and separated non-vesteds) must be attached to the Form 500 submitted to PBGC.
14a top If PBGC is advised, before the 60-day (or extended) period in 29 CFR § 4041.26(a) ends, that a formal challenge to the plan termination has been initiated, PBGC will suspend the termination proceeding and will so advise the plan administrator in writing. If PBGC is advised of a challenge to the termination after the 60-day (or extended) period ends but before the termination procedure is concluded, PBGC may suspend the termination proceedings and, if it does, will so advise the plan administrator in writing. (See 29 CFR § 4041.7.) For this purpose, the following definitions apply:
Formal challenge to a termination means the occurrence of any of the following actions asserting that the termination would violate the terms and conditions of an existing collective bargaining agreement: (A) the commencement of any procedure specified in the collective bargaining agreement for resolving disputes under the agreement, or (B) the commencement of any action before an arbitrator, administrative agency or board, or court under applicable labor-management relations law.
Existing collective bargaining agreement means a collective bargaining agreement that (1) has not been made inoperative by a judicial ruling and (2) by its terms, has not expired or is extended beyond its stated expiration date because neither of the collective bargaining parties took the required action to terminate it. When a collective bargaining agreement no longer meets both conditions, it ceases to be an "existing collective bargaining agreement," whether or not any or all of its terms may continue to apply by operation of law.
14b top If you checked "Yes" in item 14a, attach a copy of the formal challenge and a statement describing what action was initiated, who initiated the action, the date it was initiated, and the current status of the challenge.
15 top PBGC premiums are due for each year up to and including the plan year in which assets are distributed pursuant to the termination.
16a-b top Section 4044(d) of ERISA permits a distribution of residual assets to the employer if (1) all liabilities of the plan to participants and their beneficiaries have been satisfied, (2) the distribution does not contravene any provision of law, and (3) the plan provides for such a distribution in these circumstances (see item 17 below). In addition, in a plan that provided for mandatory employee contributions, the portion of the residual assets attributable to those contributions must be equitably distributed to the participants who made such contributions (see ERISA section 4044(d)(3)).
If residual assets will be returned to the employer, check "Yes" in item 16a and enter the estimated amount of residual assets in item 16b. If item 16a is checked "No" or "NA," do not complete remainder of Part III; go to Part IV.
17a top Unless there is a plan provision providing for a reversion of residual assets to the employer, residual assets cannot revert to the employer. If there is a provision providing for a reversion of residual assets to the employer, check "Yes," to item 17a, and go to item 17b; otherwise check "No," and go to item 18a.
17b top Even if a plan has a reversion provision, under ERISA section 4044(d)(2), a plan provision permitting an employer to recover residual assets (or a plan amendment increasing the amount of such assets that may revert to the employer) is not effective before the end of the fifth calendar year following the adoption of the amendment unless:
If (1) applies to the reversion provision, check "Yes" to item 17b and go to item 18a. Otherwise, check "No" to item 17b and go to item 17c.
17c top Enter the adoption date of the reversion provision and the effective date of the plan.
18a top Check "Yes" in item 18a if the plan has been involved in a spin-off/termination transaction. Otherwise, check "No." If "No" is checked to item 18a, do not complete the remainder of Part III; go to Part IV.
18b top If a transfer of assets or liabilities is part of a spin-off/termination transaction, generally the termination would not be recognized and any asset reversion to the contributing sponsor would be treated as a diversion of assets for a purpose other than the exclusive benefit of employees and beneficiaries, unless the requirements in the Guidelines (see Appendix A, Glossary of Terms, for definition) are satisfied as follows:
Check "Yes" in item 18b if all of the above requirements are satisfied, and go to item 18c.
If all of the Guideline requirements are not satisfied, check "No" or "N/A", as applicable, and go to item 18d.
18c top Enter dates requested, then go to Part IV.
18d top If you checked "No" or "N/A" to item 18b, attach a statement describing the spin-off/termination transaction and explaining why the Guidelines were not, or did not need to be, followed.
Part IV should be completed and signed by the plan's administrator.
Schedule EA-S must be used to certify that a plan terminating in a standard termination is projected to have sufficient assets to provide all plan benefits as of the proposed distribution date, as required under ERISA section 4041(b)(2)(A). For participants who deferred receipt of a portion of their benefits when they terminated employment or retired because of a restriction on prohibited payments under Code § 436(d) (see Note at beginning of section II.H on benefit restrictions), this includes the remainder of their benefits which must be distributed at plan termination.
The Schedule EA-S must be signed by the enrolled actuary, unless the plan is a Code § 412(e)(3) plan. For a Code § 412(e)(3) plan, either the enrolled actuary or the plan administrator may sign the Schedule EA-S.
The information entered in Part I should be the same as that entered in Part I of the Form 500 that you filed, or are filing, with PBGC. If the plan covers the employees of more than one contributing sponsor, the EIN of the contributing sponsor with the greatest number of participants should be used.
2-3 top Check "Yes" to item 2 if this is a plan described in Code § 412(e)(3) and enter the name, address and telephone number of the insurer in item 3. If "No" is checked, leave item 3 blank and go to Part III.
Part III must be completed by the plan's enrolled actuary if "No" was checked to item 2. If "Yes" was checked, either the plan administrator or enrolled actuary may complete Part III.
4 top Enter the proposed distribution date. The proposed distribution date may not be earlier than the 61st day, nor later than the 240th day, following the filing date of the Form 500 (see section II.A for rules on computation of time).
Example: The plan administrator files the Form 500 on March 22, 2017. The earliest possible proposed distribution date is May 22, 2017. The latest possible proposed distribution date is November 17, 2017.
For the rules governing the time period in which the actual distribution date may fall, see section II.H.1. The actual distribution date need not match the proposed distribution date.
5 top Check whether the value of the plan assets are projected to be sufficient to provide all plan benefits, as of the proposed distribution date. For calculation of plan benefits in statutory hybrid plans, see Note at beginning of section II.H.
6 top Enter the estimated fair market value of the plan assets available to pay for plan benefits, valued as of the proposed distribution date. Plan assets available to pay for plan benefits include all plan assets remaining after subtracting all liabilities (other than liabilities for future plan benefits that will be provided when assets are distributed). Liabilities include benefit payments due before the distribution date; PBGC premiums for all plan years through and including the plan year in which assets are distributed; and expenses, fees, and other administrative costs.
The enrolled actuary may include as a plan asset for this purpose the value of a commitment by a contributing sponsor or controlled group member to contribute any additional sums necessary to make a plan sufficient for all plan benefits, in accordance with the rules in 29 CFR § 4041.21(b)(1). (See Appendix D for a model commitment to make a plan sufficient.)
7 top Enter the estimated present value of plan benefits as of the proposed distribution date. For participants who deferred receipt of a portion of their benefits whey they terminated employment or retired because of benefit restrictions under Code § 436(d), this includes the remainder of their benefits that must be distributed at plan termination (see Note at beginning of section II.H on benefit restrictions). Value of plan benefits includes:
Value of Annuity Contracts. The value of plan benefits that will be provided through the purchase of annuity contracts is the cost quoted by an insurer to provide such plan benefits.
Note: Because insurers may require that bids be exercised within a fairly short period of time, it may not be possible prior to filing the Form 500 to obtain a bid that would remain open until the proposed distribution date. Accordingly, the plan administrator is not required to actually obtain a bid before item 7 is completed and may enter an estimated cost in item 7.
Value of Non-Annuity Benefits (excluding payments of designated benefits to PBGC for Missing Participants)
8 top Enter the estimated total amount of residual assets.
9 top Enter that portion of the amount in item 8 that will be distributed to the employer pursuant to ERISA section 4044(d). If the amount entered in item 9 is $1 million or more and if any benefits are to be distributed other than through annuity contracts, you must attach the statement described in item 12.
10 top Enter that portion of the amount in item 8 that will be distributed to participants. This amount includes the amount of the residual assets, if any, that are attributable to mandatory employee contributions.
Note: The sum of the amounts in item 9 and item 10 must equal the amount in item 8.
11 top Check "Yes" if the plan has ever required that participants contribute to the plan.
If there are residual assets and the plan required employee contributions, the portion of the residual assets attributable to such employee contributions must be determined pursuant to ERISA section 4044(d)(3).
12 top If the amount entered in item 9 is $1 million or more and if any benefits are to be distributed other than through annuity contracts, attach a statement that describes the interest rates and mortality tables that will be used to value the plan benefits that are to be distributed other than through the purchase of annuity contracts and the source, e.g., that the interest rate is the rate specified in the plan as of the appropriate date (see instructions to item 7 on page 20). (If the interest rate is PBGC rate, include the deferral factors or rate structure that will be used to value the benefits for participants who are not immediately eligible for an annuity.)
Based on who completed Part III, either Part IV should be completed and signed by the plan's enrolled actuary, or Part V should be completed and signed by the plan administrator.
Schedule REP-S may be used to designate a person or persons to represent you before PBGC on some or all matters relating to the termination of your pension plan. Schedule REP-S (or another form for designating a representative) must be filed simultaneously with Form 500 and Schedule EA-S if Form 500 is submitted by a representative or representatives of the plan administrator. However, you may file Schedule REP-S at any time that you wish to designate a representative or representatives in connection with a standard termination. Schedule REP-S also may be used to revoke a prior designation.
The information entered in Part I should be the same as that entered in Part I of the Form 500 that you filed, or are filing, with PBGC. If the plan covers the employees of more than one contributing sponsor, the EIN of the contributing sponsor with the greatest number of participants should be used.
3 top The name of the plan administrator must be entered in item 3.
4a-f top Enter the name, address, telephone number, and e-mail (this last item is optional) for up to two representatives.
5 top If there are any matters relating to the termination of the plan that you wish to exclude from the representative's authorization to act on your behalf, list the matters in item 5.
If you want a previous designation for the same termination to remain in effect, check "Yes" in items 6a and 6b and attach to this schedule a copy of the earlier designation(s) of representative that will remain in effect. If "No" is checked for item 6a, 6b should be left blank.
The plan administrator must sign the Schedule REP-S. PBGC will accept original pre-printed forms, photocopies of the forms, or downloaded forms.
Note: If the plan administrator is a board (or similar group) composed of employer and employee representatives, at least one employer representative and one employee representative must sign this form. If the plan does not designate a plan administrator or it designates the plan sponsor or contributing sponsor as the plan administrator, this form must be signed by an officer of the plan sponsor or contributing sponsor who has the authority to sign on behalf of that entity.
The plan administrator must file Form 501, the Post-Distribution Certification, with PBGC within 30 days after the last distribution date for any affected party, or within 60 days if an email certification is sent to PBGC within 30 days after the last distribution date for any affected party. PBGC may assess a penalty for late filing of a Form 501 and email certification. However, PBGC will do so only if the Form 501 is filed more than 90 days after the distribution deadline (including extensions) described in section II.H.1. The distribution of plan assets in satisfaction of plan benefits (through priority category 6 under ERISA section 4044 and 29 CFR Part 4044) must generally be completed by the later of (1) 180 days after the expiration of PBGC’s 60-day (or extended) review period for determining whether to issue a notice of noncompliance, or (2) the IRS determination letter distribution deadline described in section II.H.1 and 29 CFR § 4041.28(a)(1)(ii). (See also section II.H.1 for rules for an extension of the distribution deadline.)
Note: The plan administrator of a plan with one or more Missing Participants must file the applicable Missing Participants Form (i.e. Schedule MP for terminations before 2018 or Form MP-100 for terminations after 2017) with the Form 501. (See section II.H.5.)
Before completing any part of this form, check the box below if you previously filed one or more Forms 501 for this plan. If you check the box, provide the date(s) of any filing(s).
1a-c top The information entered in item 1 (Plan name, EIN, and plan number) should be the same as that entered in Part I of the PBGC Schedule EA-S that you filed with PBGC. If the plan covers the employees of more than one contributing sponsor, the EIN of the contributing sponsor with the greatest number of participants should be used.
Note: A copy of the most recent complete plan document and any amendments to it must be attached to the Form 501.
2 top Enter PBGC Case Number, which will be on PBGC's letter acknowledging receipt of the Form 500 for this plan.
3a top Enter the last distribution date (see definition of "distribution date" in Appendix A).
3b top If your distribution deadline is the IRS determination letter distribution deadline described in section II.H.1, enter the date of receipt of the IRS determination letter with respect to the plan's tax-qualification status upon termination.
4 top Check "Yes" if you provided the name and address of the insurer(s) no later than 45 days before the date of distribution to each individual other than: (1) an unlocated participant or beneficiary; or (2) an individual whose benefit was distributed as a nonconsensual lump sum. Check "No" if not. Check "N/A" if annuities were not purchased.
5 top Check "No" if any participants or beneficiaries are missing. Note that the definition of "missing," as well as the rules related to search requirements, differ depending on when the plan terminates. If the date of plan termination is:
If any participants or beneficiaries are missing, you must submit a Missing Participants Filing (i.e., Schedule MP for terminations before 2018 or Form MP-100 for terminations after 2017).
6a top Check the applicable box with respect to participants and beneficiaries for whom an irrevocable commitment was purchased. Check the "N/A" box if no irrevocable commitments were purchased (i.e., if all participants and beneficiaries received a lump sum).
If you checked "No," attach a statement explaining why a copy of the annuity contract, certificate, or written notice was not provided, your efforts to provide copies, and when copies were expected to be provided to any individuals who had not received them by the time you filed for Form 501.
If you checked "N/A," attach an explanation (e.g., all participants and beneficiaries received a lump sum).
6b top Complete this item only if you checked the "Yes" box in Item 6a.
Enter latest date that annuity contracts, certificates, or written notices were provided to each individual for whom an annuity was purchased.
7 top Enter the name(s) and address(es) of the insurer(s), if any, that have made an irrevocable commitment to provide plan benefits under the plan, along with the annuity contract numbers. The name(s) must be the complete official name(s) of record for the insurer(s).
8 top Enter the name, address, and telephone number of the person to be contacted for access to plan or employer records used to compute benefits. If such records are in the possession of more than one person, attach a listing that provides this information for each person who has possession of plan records. The contributing sponsor or plan administrator must keep records supporting the calculation and valuation of benefits and assets for at least six years after the date the Form 501 is filed with PBGC.
9a top Enter the number of participants or beneficiaries for whom annuities were purchased broken down between those who are missing (as defined in the applicable regulation) and those who were not missing.
9b top Enter the number of participants or beneficiaries who received a lump sum (including direct transfers to IRAs or other retirement plans) broken down between consensual and nonconsensual lump sums.
9c top Enter the number of participants or beneficiaries whose benefits were transferred to PBGC under the Missing Participants Program in line 9(c)(1). Leave line 9(c)(2) blank.
9d top Enter the number of participants or beneficiaries for whom no distribution was made.
9e top Enter the sum of line 9(a)(3), 9(b)(3), 9(c)(1), and 9(d).
9a top Enter the total cost of annuity purchases (e.g., the price paid for a nonparticipating annuity contract) in line 9(a)(3). Report only the total in line 9(a)(3), i.e., there is no need to breakdown the cost between missing and non-missing participants.
9b top Enter the total amount paid as lump sums broken down between the value for participants and beneficiaries who received consensual lump sums and those who received nonconsensual lump sums.
9c top The data to be reported differs depending on when the plan terminated.
If the date of plan termination is before January 1, 2018:
If the date of plan termination is on or after January 1, 2018:
9e top Enter the sum of line 9(a)(3), 9(b)(3), 9(c)(1), and 9(c)(2).
The counts and values reported should include all distributions made after the plan's termination date that were made in the normal course of business (e.g., to individuals who retired or terminated employment while you were administering the plan during the termination process), as well as distributions made to close out the plan at termination. If this filing is an amended Form 501, see instructions at beginning of Part I.
Note: If column (1) of item 9e (Total count of participants and beneficiaries) does not match the total count of participants and beneficiaries reported on the Form 500, item 8e, or if the total value of distributions reported in column (2) of item 9e (Total value of distributions) is less than the estimated present value of plan benefits reported on item 7 on Schedule EA-S to Form 500, attach a statement to the Form 501 explaining the difference(s). If the count for column (1) of item 9d (No Distributions) is greater than zero, attach a statement to the Form 501 with an explanation as to why no distribution was made.
The following documents must be attached to the Form 501:
Part III should be completed and signed by the plan's administrator.
Affected party means, with respect to a plan -
If an affected party has designated, in writing, a person to receive a notice on behalf of the affected party, any reference to the affected party (in connection with the notice) shall be construed to refer to such person.
Participants who deferred receipt of a portion of their benefit when they terminated employment or retired because of benefit restrictions on prohibited payments under Code § 436 (see Note at beginning of section II.H on benefit restrictions) are affected parties
Benefit liabilities means the benefits of participants and their beneficiaries under the plan (within the meaning of Code § 401(a)(2)).
Benefit Determination Date means, with respect to a plan that terminates on or after January 1, 2018, the date as of which the amount to be transferred to PBGC under the Missing Participants Program is determined. This term has no meaning with respect to a plan that terminates before January 1, 2018.
Cash balance plan means a defined benefit plan that defines a participant's benefit in terms of a hypothetical account balance based generally on a formula using pay credits and interest credits, which may be converted to a benefit payable as an annuity. A cash balance plan is a type of statutory hybrid plan.
Code means the Internal Revenue Code of 1986, as amended.
Contributing sponsor means a person who is a contributing sponsor as defined in ERISA section 4001(a)(13).
Controlled group means, in connection with any person, a group consisting of such person and all other persons under common control with such person, determined under 29 CFR § 4001.3. Notwithstanding the preceding sentence, for purposes of determining the persons liable for contributions under Code § 412(b)(2) or ERISA section 302(c)(11)(B), or for premiums under ERISA section 4007(e)(2), a controlled group also includes any group treated as a single employer under Code § 414(m) or (o). Any reference to the controlled group of a plan means all contributing sponsors of the plan and all members of each contributing sponsor's controlled group.
Deemed distribution date means, with respect to a plan that terminates before January 1, 2018, (1) the last day of the period in which a distribution may be made under 29 CFR Part 4041, or (2) if the plan administrator selects an earlier date that is no earlier than the date when all benefit distributions have been made under the plan except for distributions for Missing Participants whose designated benefits are paid to PBGC, such earlier date. This term has no meaning with respect to a plan that terminates on or after January 1, 2018.
Distribution date means:
ERISA means the Employee Retirement Income Security Act of 1974, as amended.
Guidelines means the Joint Implementation Guidelines issued by PBGC, the Department of the Treasury, and the Department of Labor on May 24, 1984, for processing defined benefit pension plan terminations involving asset reversions to the contributing sponsor.
Insurer means a company authorized to do business as an insurance carrier under the laws of a state as defined under Section 3(10) of ERISA.
Irrevocable commitment means an obligation by an insurer to pay benefits to a named participant or surviving beneficiary, if the obligation cannot be cancelled under the terms of the insurance contract (except for fraud or mistake) without the consent of the participant or beneficiary and is legally enforceable by the participant or beneficiary.
IRS means the Internal Revenue Service.
Majority owner means, with respect to a contributing sponsor of a single-employer plan, an individual who owns, directly or indirectly
Mandatory employee contributions means amounts contributed to a plan by a participant which are required as a condition of employment, as a condition of participation in the plan, or as a condition of obtaining benefits under the plan attributable to employer contributions.
Missing participant means a participant or beneficiary that, in the case of a plan terminates:
Notice of intent to terminate means the notice of a proposed termination of a single-employer plan, as required by ERISA section 4041(a)(2) and 29 CFR § 4041.23 (in a standard termination) or § 4041.43 (in a distress termination).
Notice of noncompliance means a notice issued to a plan administrator by PBGC pursuant to 29 CFR § 4041.31 advising the plan administrator that the requirements for a standard termination have not been satisfied and that the plan is an ongoing plan.
Notice of plan benefits means the notice to each participant and beneficiary required by 29 CFR § 4041.24.
Participant means —
Plan benefits means benefit liabilities determined as of the termination date (taking into account the rules in 29 CFR § 4041.8(a)). (See section II.H.3.)
Proposed distribution date means the date chosen by the plan administrator as the tentative date for the distribution of plan assets pursuant to a standard termination. A proposed distribution date may not be earlier than the 61st day, or later than the 240th day, following the day on which the plan administrator files the Form 500 with PBGC.
Proposed termination date means the date specified as such by the plan administrator in the notice of intent to terminate or, if later, in the standard termination notice.
Residual assets means the plan assets remaining after all plan benefits and other liabilities (e.g., PBGC premiums) of the plan have been satisfied (taking into account the rules in 29 CFR § 4041.8(b)). (See section II.H.3.)
Section 412(e)(3) plan means a plan described in Code § 412(e)(3) and its related regulations.
Single-employer plan means any defined benefit plan (as defined in ERISA section 3(35)) that is not a multiemployer plan (as defined in ERISA section 4001(a)(3)) and that is covered by Title IV of ERISA.
Spin-off/termination transaction means a transaction in which a single defined benefit plan is split into two or more plans and there is a reversion of residual assets to an employer upon the termination of one or more but fewer than all of the resulting plans.
Standard termination means the voluntary termination, in accordance with ERISA section 4041(b) and 29 CFR Part 4041, Subpart B, of a single-employer plan that is able to provide for all plan benefits when plan assets are distributed.
Standard termination notice means the notice filed with PBGC pursuant to 29 CFR § 4041.25.
State guaranty association means an association of insurers created by a State, the District of Columbia, or the Commonwealth of Puerto Rico to pay benefits and to continue coverage, within statutory limits, under life and health insurance policies and annuity contracts when an insurer fails.
Statutory hybrid plan means, in general, a cash balance plan, a pension equity plan, or other hybrid defined benefit pension plan under the terms of which the accumulated benefit of a participant (or any portion thereof) is expressed as the balance of a hypothetical account maintained for the participant or as the current value of an accumulated percentage of the participant's final average compensation.
(See section II.C for the requirements for a NOIT.)
| Month/Day/Year |
| NOTICE OF INTENT TO TERMINATE [PLAN NAME] |
| The [plan administrator] intends to terminate the [plan name] in a standard termination. The law requires that we provide you with written notice of the proposed termination. |
| In order for this plan to terminate, plan assets must be sufficient to provide all plan benefits. If the proposed termination does not occur, the [plan administrator] will notify you in writing. |
| NAME AND EIN OF EACH CONTRIBUTING SPONSOR: [Name], EIN: [#########] |
| PN: [###] |
| FOR CURRENT RETIREES: [Include whichever statement applies] |
|
| PROPOSED TERMINATION DATE: MM/DD/YY |
|
| CONTACT PERSON: If you have any questions concerning the plan's termination, contact: |
| [Name, Address, Phone Number] |
| CESSATION OF ACCRUALS: [Include one of the following statements, whichever applies.] |
|
| OBTAINING A SUMMARY PLAN DESCRIPTION: |
|
| NOTIFICATION OF PLAN BENEFITS: |
|
| IDENTITY OF INSURER(S): [For all participants and beneficiaries, except those who will receive benefits in the form of a nonconsensual lump sum include whichever statement applies.] |
|
| END OF PBGC GUARANTEE: |
|
| STATE GUARANTY ASSOCIATION COVERAGE: [Required only first time insurer(s) is/are identified.] |
|
Your pension plan may pay you your pension benefit in the form of an annuity purchased from a licensed insurance company. Once the plan purchases an annuity for you, the insurance company will be responsible for paying your benefit.
All states, Puerto Rico and the District of Columbia have "guaranty associations." The purpose of a guaranty association is to protect policyholders, up to specified limits, in the event the insurance company is financially unable to meet its obligations.
If you receive your pension benefits in the form of an annuity and the insurance company becomes unable to pay, a guaranty association may be responsible for all, part or none of your annuity. Generally, where you live at the time the insurance company is unable to pay determines which guaranty association is responsible. In certain circumstances, other factors, such as where the insurance company is licensed to do business, determine which guaranty association may be responsible.
Each guaranty association has dollar limits on the extent of its coverage. In most states, guaranty association coverage limits are $100,000 for individual annuities with an overall benefit "cap" for an individual life of $300,000, though some states have maximums that are higher. However, state laws vary and can change over time, and different states may calculate the value of annuities differently.
This notice is to help you understand the general nature of the guaranty association protection of the annuity you may receive. It is only a summary. If you need information now or in the event the insurance company fails, a list of the addresses and telephone numbers of guaranty association offices is available by contacting PBGC's Customer Contact Center, PO Box 151750, Alexandria, VA 22315-1750, telephone: 1-(800) 400-7242 or go to PBGC's website at www.pbgc.gov/stateguaranty.
This agreement, by and between [name of company] (the "Company") and [name of plan] (the "Plan") shall be effective as of the last date executed.
Whereas, the Plan is an employee pension benefit plan as described in § 3(2)(A) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461; and
Whereas the Company is [describe entity, e.g., corporation, partnership]; and
Whereas, the Company is a contributing sponsor of the Plan, or a member of the contributing sponsor's controlled group, as described in §§ 4001(a) (13) and (14) of ERISA, 29 U.S.C. §§ 1301(a) (13) and (14); and
Whereas, the Plan is covered by the termination insurance provisions of Title IV of ERISA, 29 U.S.C. §§ 1301-1461; and
Whereas, the Plan administrator has issued or intends to issue to each affected party a notice of intent to terminate the Plan, pursuant to § 4041(a)(2) of ERISA, 29 U.S.C. § 1341(a)(2); and
Whereas, the Company wishes the Plan to be sufficient for plan benefits, as described in 29 CFR § 4041.2; and
Whereas, the parties understand that if the Plan is not able to satisfy all its obligations for plan benefits, it will not be able to terminate in a standard termination under § 4041(b) of ERISA, 29 U.S.C. § 1341(b); and
Whereas, the Company is not a debtor in a bankruptcy or other insolvency proceeding.
[Alternative Paragraph]
Whereas, the Company is a debtor in a bankruptcy or other insolvency proceeding and the court before which the proceeding is pending approves this commitment.
Whereas, the Company is a debtor in a bankruptcy or other insolvency proceeding and this commitment is unconditionally guaranteed, by an entity or person not in bankruptcy, to be met at or before the time distribution of assets is required in this standard termination.
Now therefore, the parties hereto agree as follows:
| Date: ____________________________ | Date: ____________________________ | |
| By: ______________________________ | By: ______________________________ | |
| Company: _________________________ | Plan: ____________________________ |
PBGC needs this information to ensure that a standard termination under section 4041(b) of ERISA is completed in accordance with statutory and regulatory requirements. Participants need the information so that they will be informed about the status of the proposed termination of their plan and about their benefits upon termination. You are required to provide this information pursuant to section 4041(b) of ERISA and 29 CFR Part 4041, Subparts A and B. The information provided to PBGC may be subject to disclosure under the Freedom of Information Act or protected from disclosure by the Privacy Act, as applicable.
This collection of information has been approved by the Office of Management and Budget (OMB) under control number 1212-0036. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
PBGC estimates that it will take an average of 21 hours and $4,100 to comply with standard termination requirements, including requirements for missing participants. These are estimates and the actual time will vary depending on the circumstances of a given plan.
If you have comments concerning the accuracy of these estimates or suggestions for making the forms simpler, please send your comments to the Pension Benefit Guaranty Corporation, Office of General Counsel, 445 12th Street, SW, Washington, D.C., 20024.