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Federal Register / Vol. 86, No. 130 / Monday, July 12, 2021 / Rules and Regulations
after the end of the plan year and in accordance with the statement of compliance instructions on PBGCs website at www.pbgc.gov.
PBGC may conduct periodic audits of plans that have received SFA to review compliance with the terms and conditions of the SFA program.

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Reinstatement of Benefits Previously Suspended Section 4262k of ERISA imposes two conditions on a plan that receives SFA
and previously suspended benefits in accordance with sections 305e9 or 4245a of ERISA. A plan must reinstate any benefits that were suspended and must provide payments to certain participants or beneficiaries to make up past amounts of benefits previously suspended.
As provided under section 4262k of ERISA,19 4262.15 requires plans to reinstate these previously suspended benefits as of the month in which SFA
is paid, and to provide make-up payments with respect to the previously suspended benefits, in accordance with guidance issued by the Treasury Department and the IRS. This guidance has been issued as Notice 202138.
Section 4262k and 4262.15 give the plan sponsor flexibility to design payment of make-up amounts as a single lump sum within 3 months of the payment date of SFA, or in equal monthly installments over a period of 5
years, commencing within 3 months of the payment date, with no installment payment adjusted for interest.
The plan sponsor of a plan with benefits that were suspended under section 305e9 or 4245a of ERISA is required in 4262.15c to furnish a notice of reinstatement to participants and beneficiaries whose benefits were previously suspended and then reinstated in accordance with section 4262k of ERISA. The requirements for the notice, including content requirements, are in notice of reinstatement instructions, in an addendum to the SFA application instructions, available on PBGCs website at www.pbgc.gov.
PBGC is providing for this notice of reinstatement so that participants and beneficiaries are adequately informed about the amount and calculation of 19 Section 4262k of ERISA contains rules that are parallel to section 432k of the Code. Under section 9704d3 of ARP, the Secretary of the Treasury has interpretive jurisdiction over the rules for determining the benefit reinstatement and makeup payments that must be made by a multiemployer plan receiving SFA, for purposes of ERISA as well as the Code. Under section 4262k, the Secretary of Labor, in coordination with Secretary of the Treasury, must ensure benefits are reinstated and previously suspended benefits paid.

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reinstatement and make-up payments, taking into account any restoration of benefits under 26 CFR 1.432e9
1e3, and know when to expect the reinstatement and make-up payments.
The notice also informs participants and beneficiaries how to contact the Department of Labor if they need assistance in understanding their rights under the reinstatement process. The Department has advised that if participants and beneficiaries better understand the benefits they will be receiving as a result of the plan receiving SFA, it will help the Department meet its obligations under section 4262k of ERISA to ensure that suspended benefits are reinstated and make-up payments made.
Section 4262k of ERISA states that the Secretary, in coordination with the Secretary of the Treasury, shall ensure that an eligible multiemployer plan that receives special financial assistance reinstates suspended benefits and provides make-up payments required by the statute. The Department of Labor notes that it will need access to, and if requested, copies of records to ensure that plans receiving SFA reinstate the suspended benefits of participants and beneficiaries as required by section 4262k. Plan fiduciaries have an obligation under title I of ERISA to maintain complete and accurate records, including information the Department may need to ensure the timely reinstatement of suspended benefits and payment of make-up payments under section 4262k of ERISA. The Department has advised that a plans failure to maintain adequate and complete records could result in violations of sections 107, 209, and 404
of ERISA. The Department is considering issuing guidance to address the records and information that plans receiving SFA will need to maintain and retain to comply with title I of ERISA.
Other Provisions Section 4262 of ERISA contains other provisions that apply to SFA and plans receiving SFA. These provisions are enumerated under 4262.17 of the regulation:
SFA must not be capped by the guarantee under section 4022A of ERISA.
A plan receiving SFA is required to continue to pay premiums due under section 4007 of ERISA for participants and beneficiaries in the plan.
A plan that receives SFA is deemed to be in critical status within the meaning of section 305b2 of ERISA
until the last plan year ending in 2051.
A plan that receives SFA and subsequently becomes insolvent under
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section 4245 of ERISA will be subject to the rules and guarantee for insolvent plans in effect when the plan becomes insolvent.
A plan that receives SFA is not eligible to apply for a suspension of benefits under section 305e9 of ERISA.
Section 4262.17 also provides that a plan that receives SFA and meets the eligibility requirements for partition of the plan under section 4233b of ERISA
may apply for partition under section 4233. One of those requirements, in section 4233b2, provides that a multiemployer plan is eligible for partition if the corporation determines, after consultation with the Participant and Plan Sponsor Advocate . . ., that the plan sponsor has taken or is taking concurrently with an application for partition all reasonable measures to avoid insolvency, including the maximum benefit suspensions under section 305e9, if applicable.
Section 4262m6 provides that a plan that receives SFA is not eligible to apply for a subsequent suspension of benefits under MPRA. Therefore, for a plan that has received SFA, a suspension of benefits under section 305e9 is not applicable within the meaning of section 4233b2 and is not a reasonable measure available to the plan.
Finally, 4262.17 includes a severability provision that provides that if any of the provisions of this interim final rule are found to be invalid or stayed pending further agency action, the remaining portions of the rule would remain operative.
Compliance With Rulemaking Guidelines Administrative Procedure Act The Administrative Procedure Act at 5 U.S.C. 553b provides that notice and comment requirements do not apply when an agency, for good cause, finds that they are impracticable, unnecessary, or contrary to the public interest. An exception is also provided at 5 U.S.C. 553d3 to the requirement of a 30-day delay before the effective date of a rule for good cause found and published with the rule. Section 9704
of the American Rescue Plan ARP Act of 2021 set up a Special Financial Assistance Program for Financially Troubled Multiemployer Plans. PBGC
is issuing this rule without advance notice and public comment as an interim final rule to allow for immediate implementation of this program.
Under new section 4262c of ERISA, PBGC is mandated to issue regulations or guidance setting forth the
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