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khammond on DSKJM1Z7X2PROD with RULES2

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Federal Register / Vol. 86, No. 130 / Monday, July 12, 2021 / Rules and Regulations
performed on a deterministic basis using a single set of assumptions as described in paragraph e of this section. The projections must be based on participant census data as of the first day of the plan year in which the plans initial application for special financial assistance is filed, or, if the date on which the plans initial application for special financial assistance is filed is less than 270 days after the beginning of the current plan year and the actuarial valuation for the current plan year is not complete, the projections may instead be based on the participant census data as of the first day of the plan year preceding the year in which the plans initial application for special financial assistance is filed.
e Actuarial assumptions. The amount of special financial assistance must be determined in accordance with generally accepted actuarial principles and practices and the provisions in this paragraph e.
1 The assumed interest rate is the lesser of the rate in paragraph e1i or ii of this section.
i The interest rate in this paragraph e1i is the interest rate used for funding standard account purposes as projected in the plans most recently completed certification of plan status before January 1, 2021.
ii The interest rate in this paragraph e1ii is the interest rate that is 200
basis points higher than the rate specified in section 303h2Ciii of ERISA disregarding modifications made under clause iv of such section for the month in which the plans application for special financial assistance is filed or one of the 3
preceding months, as selected by the plan.
2 The assumptions other than the interest rate are those used for the plans most recently completed certification of plan status before January 1, 2021, unless such assumptions are unreasonable.
3 If a plan determines that use of the assumptions under paragraph e2 of this section is unreasonable, the plans application may include a proposed change in the assumptions excluding the plans interest rate assumption under paragraph e1 of this section, as described in 4262.5.
f Certain events1 General rules.
i The special financial assistance of a plan that experiences one or more of the events described in paragraphs f2, 3, and 4 of this section during the period beginning on July 9, 2021, and ending on the SFA measurement date is limited to the amount of special financial assistance that would have applied to the plan on the SFA

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measurement date if the events had not occurred, as determined in a reasonable manner.
ii The special financial assistance of a plan that experiences a merger event during the period described in paragraph f1i of this section is limited to the sum of the amounts of special financial assistance that would have applied to the plans involved in the merger on the SFA measurement date if the merger had not occurred, as determined in a reasonable manner. If any of the plans involved in the merger also experiences one or more of the events described in paragraph f2, 3, or 4 of this section during the period described in paragraph f1i of this section, the amount of special financial assistance for that plan on the SFA
measurement date, determined as if the merger had not occurred, must be determined in accordance with paragraph f1i of this section.
2 Transfers. The event described in this paragraph f2 is a transfer of assets or liabilities including a spinoff.
3 Benefit increases. The event described in this paragraph f3 is the execution of a plan amendment increasing accrued or projected benefits under a plan, other than a restoration of suspended benefits that satisfies the requirements of 26 CFR 1.432e9
1e3.
4 Contribution reductions. The event described in this paragraph f4 is the execution of a document reducing a plans contribution rate including any reduction in benefit accruals adopted simultaneously or arising from a preexisting linkage between benefit accruals and contributions, but only if the plan does not demonstrate in accordance with the special financial assistance instructions on PBGCs website at www.pbgc.gov that the risk of loss to participants and beneficiaries is reduced disregarding special financial assistance by execution of the document. The document referred to in this paragraph f4 is either i A collective bargaining agreement not rejected by the plan; or ii A document reallocating contribution rates.
5 Effect of pre-event ineligibility. In determining the amount of special financial assistance that would have applied to a plan if an event described in this paragraph f had not occurred, if the plan would have been ineligible for special financial assistance under 4262.3 in the absence of the event, then the amount of special financial assistance is deemed to be $0 zero.
6 Examples. The following examples illustrate the provisions of paragraph f of this section.

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i Example 1. Plan A applies for special financial assistance. If the limitation in paragraph f1i of this section did not apply, Plan A would be entitled to special financial assistance in the amount of $20X. Before the SFA
measurement date, but on or after July 9, 2021, Plan A transferred a portion of its assets and liabilities to Plan B. If the transfer had not occurred, Plan A
would, as of the SFA measurement date, be entitled to special financial assistance in the amount of $40X.
Although an event described in paragraph f2 of this section occurred with respect to Plan A, Plan As special financial assistance is unaffected by the limitation in paragraph f1i of this section and is $20X. Plan B also applies for special financial assistance. If the limitation in paragraph f1i of this section did not apply, Plan B would be entitled to special financial assistance in the amount of $30X. If the transfer from Plan A had not occurred, Plan B would, as of the SFA measurement date, be ineligible for special financial assistance. As a result of the event described in paragraph f2 of this section, the limitation in paragraph f1i of this section reduces Plan Bs special financial assistance from $30X
to $0.
ii Example 2. Plan C applies for special financial assistance. If the limitation in paragraph f1ii of this section did not apply, Plan C would be entitled to special financial assistance in the amount of $40X. Before the SFA
measurement date, but on or after July 9, 2021, Plans A and B were merged into existing Plan C. If the mergers had not occurred, Plan A would not be eligible for special financial assistance, and Plan B and Plan C would be entitled, respectively, to $10X and $5X of special financial assistance as of the SFA
measurement date. As a result of the merger event described in paragraph f1ii of this section, the limitation in paragraph f1ii of this section reduces Plan Cs special financial assistance from $40X to $15X.
iii Example 3. Plan A applies for special financial assistance. If the limitation in paragraph f1i of this section did not apply, Plan A would be entitled to special financial assistance in the amount of $10X. Before the SFA
measurement date, but on or after July 9, 2021, projected benefits under Plan A
were increased. If the increase had not occurred, Plan A would, as of the SFA
measurement date, be ineligible for special financial assistance. As a result of the event described in paragraph f3 of this section, applying the limitation in paragraph f1i of this section and in accordance with
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