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Federal Register / Vol. 86, No. 130 / Monday, July 12, 2021 / Rules and Regulations Priority group
Description of priority group
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Plans already insolvent or projected to become insolvent before March 11, 2022.
Plans that implemented a benefit suspension under section 305e9 of ERISA as of March 11, 2021.
Plans expected to be insolvent within 1 year of the date an application for SFA is filed.
Plans in critical and declining status that had 350,000 or more participants.
Plans projected to become insolvent before March 11, 2023

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Plans projected to become insolvent before March 11, 2026

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Plans for which PBGC computes the present value of financial assistance under section 4261 of ERISA to be in excess of $1 billion in the absence of SFA.
Additional plans that may be added by PBGC based on other circumstances similar to those described for priority groups 16.

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As priority groups open, PBGC will continue to accept applications from plans in earlier priority groups. While the priority mechanism may entail a relatively short deferral of an application for a given plan until its respective priority group opens, the amount of SFA ultimately awarded will reflect the amount required to pay all benefits due pursuant to the statute.14
Applications of plans in a priority category must also be submitted to the Secretary of the Treasury under section 432k1D of the Code. If that requirement applies to an application, PBGC will transmit the application to the Treasury Department on behalf of the plan, and the Treasury Department has provided in guidance Notice 2021
38 that it will treat the requirement under section 432k1D as satisfied.
The third mechanism is a notification system on PBGCs website to keep prospective applicants apprised of when a filing window opens or closes and if applicable to what priority groups filing is limited. This mechanism will enable applicants to know when the system is accepting their priority groups filing.
In sum, the system works like this:
Applications will be accepted initially only from plans in the highest priority group. PBGC will begin accepting applications from the other priority groups as of the dates described earlier in this section of the preamble and set forth in 4262.10d2 of the regulation and posted on PBGCs website at www.pbgc.gov.
Applications are processed based on capacity. An application will be considered filed on the date it is electronically submitted to PBGC if the application meets any applicable 14 For instance, the value of plan assets may fluctuate during a deferral period and the amount of SFA will adjust based on that experience.

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Date plans may apply for SFA
Beginning on July 9, 2021.
Beginning on January 1, 2022, or earlier date specified on PBGCs website.
Beginning on April 1, 2022, or earlier date specified on PBGCs website.
Beginning on July 1, 2022, or earlier date specified on PBGCs website.
Date to be specified on PBGCs website at least 21 days in advance of such date, but no later than February 11, 2023.
Date to be specified on PBGCs website at least 21 days in advance of such date, but no later than February 11, 2023.
Date to be specified on PBGCs website no later than March 11, 2023.

priority requirements and can be accommodated in accordance with the processing system. Otherwise, PBGC
will not consider the application filed and will notify the applicant that the application must be filed in accordance with the processing system and instructions on PBGCs website.
PBGC will accept as many applications as the agency estimates it can process in 120 days. Once the number of applications reaches that level, the filing window will temporarily close until PBGC has capacity to process more applications.
PBGC will maintain a dedicated web page for applications on its website at www.pbgc.gov to inform prospective applicants about the current status of the filing window, as well as to provide advance notice of when PBGC expects to open or temporarily close the filing window. PBGC will contact interested prospective applicants via email when such new information is available.
PBGC will also post information about the status of filed applications.
A plan sponsor may contact PBGC
informally to discuss a potential application for SFA.
Emergency Filings PBGC recognizes that in rare circumstances a plan may experience an event that brings it closer to insolvency than previously projected. Consistent with section 4262d1D of ERISA, which allows PBGC to add priority categories as it determines appropriate based on other similar circumstances, PBGC is including an emergency filing process to accept priority applications from a plan that is insolvent or expected to be insolvent under section 4245a of ERISA within 1 year of filing an application, or a plan that has implemented a suspension of benefits under section 305e9 of ERISA as of
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March 11, 2021. Beginning with PBGCs acceptance of priority group 2 filings, PBGC will accept emergency filings from these plans during periods when PBGC would not otherwise accept such applications. A filer submitting an application under the emergency filing process must substantiate the claim of emergency status and notify PBGC, in accordance with the SFA instructions on PBGCs website at www.pbgc.gov, before submission of the impending application.
PBGC Action on Applications Section 4262g of ERISA provides that PBGC can either approve or deny an application for SFA and establishes a short time period during which PBGC
must act or an application is deemed approved. As described under 4262.11
of the regulation, PBGC must act on an application within 120 days after the date an initial or revised application is properly and timely filed. If PBGC
approves an application, it will notify the plan sponsor of the payment of SFA
in accordance with 4262.12.
If PBGC denies an application, it will notify the plan sponsor in writing of the reasons for the denial. An application may be denied because it is incomplete it does not accurately include the information required to be filed;
because an assumption is unreasonable, a proposed change in assumption is individually unreasonable, or the proposed changed assumptions are unreasonable in the aggregate; or because the plan is not an eligible multiemployer plan. For example, pending approval of an application if PBGC determines that documentation supporting a certification of critical and declining status is missing or the plan sponsor has not responded to a PBGC
request for information to clarify an item in that documentation, PBGCs
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