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Federal Register / Vol. 86, No. 130 / Monday, July 12, 2021 / Rules and Regulations paragraph f5 of this section, Plan A
is treated as being entitled to special financial assistance of $0.
iv Example 4. 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, Plan As contribution rate was reduced. Plan As benefit formula states that the monthly benefit accrual for a participant for a plan year is 2.0% of the contributions paid on behalf of the participant for that plan year. Since there is a pre-existing linkage between benefit accruals and contributions, the event described in paragraph f4 of this section includes both the reduction in benefit accruals and the reduction in the contribution rate. If the contribution rate reduction and the reduction in benefit accruals had not occurred, Plan A would, as of the SFA measurement date, be entitled to special financial assistance of $8X. Plan A does not provide a demonstration that the risk of loss to participants and beneficiaries is reduced disregarding special financial assistance due to the reduction in contribution rate and the reduction in benefit accruals. As a result of the events described in paragraph f4 of this section, the limitation in paragraph f1i of this section reduces Plan As special financial assistance from $10X
to $8X.

actuarial principles and practices, taking into account the experience of the plan and reasonable expectations.
The actuarys selection of assumptions about future covered employment and contribution levels including contribution base units and contribution rates may be based on information provided by the plan sponsor, which must act in good faith in providing the information.
2 If a plan has a change in assumptions under paragraph c of this section, each of the actuarial assumptions and methods other than the interest rate must be reasonable and the combination of those actuarial assumptions and methods excluding the interest rate must also be reasonable.
c Changes in assumptions. If a plan determines that use of an assumption described in 4262.3d2 or 4262.4e2 is unreasonable, the plans application may include a proposed change in the assumptions excluding the plans interest rate assumption.
1 The application for special financial assistance must i Describe why the original assumption is no longer reasonable;
ii Propose to use a different assumption the changed assumption;
and iii Demonstrate that the changed assumption is reasonable.
2 PBGC will provide guidelines for changed assumptions on PBGCs website at www.pbgc.gov.

4262.5 PBGC review of plan assumptions.

4262.6

a In general. 1 As set forth in 4262.3d1, PBGC will accept the assumptions used by a plan to determine eligibility for special financial assistance under 4262.3d1
unless PBGC determines that such assumptions are clearly erroneous.
2 PBGC will accept the assumptions used by a plan to determine eligibility for special financial assistance under 4262.3d2 or to determine the amount of special financial assistance under 4262.4e2 unless PBGC
determines that an assumption is unreasonable.
3 PBGC will accept a plans changes in assumptions under paragraph c of this section except to the extent that PBGC determines that an assumption is individually unreasonable, or the proposed changed assumptions are unreasonable in the aggregate.
b Reasonableness of assumptions.
1 Each of the actuarial assumptions and methods used for the actuarial projections excluding the interest rate assumption must be reasonable in accordance with generally accepted
a In general. An application for special financial assistance must include the information specified in this section and 4262.7 plan information and 4262.8 actuarial and financial information; a copy of the executed plan amendment required under paragraph e1 of this section; a copy of the proposed plan amendment required under paragraph e2 of this section; a completed checklist; and other information as described in the special financial assistance instructions on PBGCs website at www.pbgc.gov. If any of the information required for an application for special financial assistance under this part is not accurately completed or not filed with the application, the application will not be considered complete.
b Required trustee signature. An application for special financial assistance must 1 Be signed and dated by an authorized trustee, who is a current member of the board of trustees and who is authorized to sign on behalf of the board of trustees, or by another
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authorized representative of the plan sponsor; and 2 Include the following statements signed by an authorized trustee who is a current member of the board of trustees: Under penalties of perjury under the laws of the United States of America, I declare that I have examined this application, including accompanying documents, and, to the best of my knowledge and belief, the application contains all the relevant facts relating to the application, and such facts are true, correct, and complete.
c Actuarial calculations. All calculations that are required in an application for special financial assistance under this part must include a certification by the plans enrolled actuary.
d Clarifying information. PBGC may require a plan sponsor to file additional information to clarify or verify information provided in the plans application. The plan sponsor must promptly file any such information with PBGC upon request.
e Duty to amend and supplement application. The plan sponsor of a plan applying for special financial assistance must 1 Amend the plan to include the following special financial assistance provision effective through the end of the last plan year ending in 2051:
Beginning with the SFA measurement date selected by the plan in the plans application for special financial assistance, the plan shall be administered in accordance with the restrictions and conditions specified in section 4262 of ERISA and 29 CFR part 4262. This amendment is contingent upon approval by PBGC of the plans application for special financial assistance.
2 Amend the plan to reinstate benefits, as described in 4262.15a1, and make payments of previously suspended benefits, described in 4262.15a2, in accordance with guidance issued by the Secretary of the Treasury under section 432k2 of the Code.
3 During any time in which an application is pending approval by PBGC, the plan sponsor must promptly notify PBGC in writing as soon as the plan sponsor becomes aware that any material fact or representation contained in or relating to the application, or in any supporting documents, is no longer accurate, or that any material fact or representation was omitted from the application or supporting documents.
f Disclosure of information. Unless confidential under the Privacy Act, all information that is filed with PBGC for
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