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Federal Register / Vol. 86, No. 5 / Friday, January 8, 2021 / Rules and Regulations
adjustment to the denominator of the allocation fraction for a plan using a method other than the presumptive method or a similar method. The denominator after the first year of the 5year period is decreased by the contributions of any employers that withdrew and were unable to satisfy their withdrawal liability claims in any year before the employers withdrawal.
This adjustment is intended to approximate how a withdrawn employers withdrawal liability is calculated under the rolling-5 and modified presumptive methods by fully allocating the present value of the
suspended benefits to solvent employers. The adjustment is not necessary under the presumptive method, as that method has a specific adjustment for previously allocated withdrawal liabilities that are deemed uncollectible.

Under the static value method, the present value of the suspended benefits as of a single calculation date is used for all withdrawals in the 10-year period.
At the plan sponsors option, the present value could be determined as of:
1 The effective date of the benefit suspension as similar calculations are required as of that date to obtain approval of the benefit suspension; or 2 the last day of the plan year coincident with or following the date of the benefit suspension as calculations are required as of that date for other withdrawal liability purposes. The present value is determined using the amount of the benefit suspension as authorized by the Department of the Treasury under the plans application for benefit suspension.
Under the adjusted value method, the present value of the suspended benefits for a withdrawal in the first year of the 10-year period is the same as under the static value method. For withdrawals in years 210 of the 10-year period, the value of the suspended benefits is determined as of the revaluation date, the last day of the plan year before the employers withdrawal. The value of the suspended benefits is equal to the present value of the benefits not expected to be paid in the year of withdrawal or thereafter due to the benefit suspension. For example, assume that a calendar year multiemployer plan receives final authorization by the Secretary of the Treasury for a benefit suspension, effective January 1, 2018, and a contributing employer withdraws during the 2022 plan year. The revaluation date is December 31, 2021.
The value of the suspended benefits is the present value of the benefits not
expected to be paid after December 31, 2021, due to the benefit suspension.
For both methods, the withdrawing employers allocation fraction is the amount of the employers required contributions over a 5-year period divided by the amount of all employers contributions over the same 5-year period.
For the static value method, the 5-year period is determined based on the most recent 5 plan years ending before the plan year in which the benefit suspension takes effect. For the adjusted value method, the 5-year period is determined based on the most recent 5
plan years ending before the employers withdrawal which is the same 5-year period as is used for the simplified method for adjustable benefit reductions.
For both the static value method and the adjusted value method, the denominator of the allocation fraction is increased by any employer contributions owed with respect to earlier periods that were collected in the applicable 5-year period for the allocation fraction and decreased by any amount contributed by an employer that withdrew from the plan during those same 5 plan years, or, alternatively, adjusted as permitted under 4211.12
the same adjustments are made using the simplified method for adjustable benefit reductions.
For the static value method, the regulation requires an additional adjustment in the denominator of the allocation fraction for a plan using a method other than the presumptive method or similar method. The denominator after the first year of the 5year period is decreased by the contributions of any employers that withdrew and were unable to satisfy
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2. Employers Proportional Share of the Value of a Benefit Suspension a. Static Value Method and Adjusted Value Method PBGCs simplified framework provides two simplified methods that a plan sponsor may choose between to
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calculate a withdrawing employers proportional share of the value of a benefit suspensionthe static value method and the adjusted value method.
Both methods apply for any employer withdrawal that occurs within the 10
plan years after the end of the plan year that includes the effective date of the benefit suspension 10-year period. A
chart including a comparison of the two methods is in section III.B.3. below.
Under either method, an employers proportional share of the value of a benefit suspension is determined as follows
their withdrawal liability claims in any year before the employers withdrawal.
This adjustment is intended to approximate how a withdrawn employers withdrawal liability is calculated under the rolling-5 and modified presumptive methods by fully allocating the present value of the suspended benefits to solvent employers. The adjustment is not necessary under the presumptive method, as that method has a specific adjustment for previously allocated withdrawal liabilities that are deemed uncollectible.
An example illustrating the simplified framework using the static value method for disregarding a benefit suspension is provided in 4211.16e of PBGCs unfunded vested benefits allocation regulation.
b. Temporary Benefit Suspension If a benefit suspension is a temporary suspension of the plans payment obligations as authorized by the Department of the Treasury, the present value of the suspended benefits includes the value of the suspended benefits only through the ending period of the benefit suspension.
For example, assume that a calendaryear plan has an approved benefit suspension effective December 31, 2018, for a 15-year period ending December 31, 2033. Effective January 1, 2034, benefits are to be restored prospectively only to levels not less than those accrued as of December 30, 2018, plus benefits accrued after December 31, 2018. Employer A withdraws in a complete withdrawal during the 2022
plan year. The plan sponsor first determines Employer As allocable amount of unfunded vested benefits under section 4211 of ERISA. That
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