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Federal Register / Vol. 86, No. 130 / Monday, July 12, 2021 / Rules and Regulations
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securities whose investible assets are invested solely in fixed income securities denominated in U.S. dollars, with an average credit quality, weighted by market value, that meets the definition of investment grade.
3 Investment grade means publicly traded securities for which the issuer has at least adequate capacity to meet the financial commitments under the security for the projected life of the asset or exposure.
4 Leverage means the right to a return on a capital base that exceeds the investment which was contributed to the entity or instrument achieving a return.
c Holdings. A plan must hold permissible investments in either 1 Individual bonds, securities, or other debt securities; or 2 Permissible fund vehicles.
d Quality of permissible investments. Permissible investments must be considered investment grade by a fiduciary, within the meaning of section 321 of ERISA, who is or seeks the advice of an experienced investor such as an Investment Advisor registered under section 203 of the Investment Advisors Act of 1940, except that up to 5 percent of the aggregate market value of a plans assets attributable to special financial assistance may be invested in securities or permissible fund vehicles that were investment grade at the time of purchase but are no longer investment grade.
e Leverage and derivative limitations on permissible fund vehicles or portfolio of individual securities held by the plan.
1 Permissible investments, whether held through permissible fund vehicles or directly through a portfolio of individual securities may not be supplemented by derivatives or otherwise leveraged in a way that could increase the interest rate risk or credit risk in the fund vehicle or portfolio beyond the risk in a portfolio of physical securities, meeting the definition of permissible investments in paragraph a of this section, equal to the market value of the portfolio; and 2 Any notional derivative exposure, other than exposure gained through a permissible fund vehicle, must be supported by liquid assets that are cash or cash equivalents denominated in U.S.
dollars.
4262.15 Reinstatement of benefits previously suspended.

a In accordance with guidance issued by the Secretary of the Treasury under section 432k of the Code, a plan with benefits that were suspended under sections 305e9 or 4245a of ERISA must:

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1 Reinstate any benefits that were suspended for participants and beneficiaries effective as of the first month in which the special financial assistance is paid to the plan; and 2 Make payments equal to the amounts of benefits previously suspended to any participants or beneficiaries who are in pay status as of the date that the special financial assistance is paid.
b A plan must make the payments in paragraph a2 of this section either in:
1 A single lump sum no later than 3 months after the date that the special financial assistance is paid to the plan;
or 2 Equal monthly installments over a period of 5 years, with the first installment paid no later than 3 months after the date that the special financial assistance is paid to the plan, with no installment payment adjusted for interest.
c The plan sponsor of a plan with benefits that were suspended under sections 305e9 or 4245a of ERISA
must issue 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 are in notice of reinstatement instructions available on PBGCs website at www.pbgc.gov.
4262.16 Conditions for special financial assistance.

a In general. A plan that receives special financial assistance must be administered in accordance with the conditions in this section.
b Benefit increases. This paragraph b applies to benefits and benefit increases described in section 4022Ab1 of ERISA without regard to the time the benefit or benefit increase has been in effect. This paragraph b does not apply to the reinstatement of benefits that were suspended under sections 305e9 or 4245a of ERISA
as provided under 4262.15 or a restoration of benefits under 26 CFR
1.432e91e3.
1 Retrospective. A benefit or benefit increase must not be adopted during the SFA coverage period if it is in whole or in part attributable to service accrued or other events occurring before the adoption date of the amendment.
2 Prospective. A benefit or benefit increase must not be adopted during the SFA coverage period unless i The plan actuary certifies that employer contribution increases projected to be sufficient to pay for the benefit increase have been adopted or agreed to; and
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ii Those increased contributions were not included in the determination of the special financial assistance.
c Allocation of plan assets. During the SFA coverage period, plan assets, including special financial assistance, must be invested in permissible investments as described in 4262.14
sufficient to pay for at least 1 year or until the date the plan is projected to become insolvent, if earlier of projected benefit payments and administrative expenses.
d Contribution decreases. 1 During the SFA coverage period, the contributions to a plan that receives special financial assistance required for each contribution base unit must not be less than, and the definition of the contribution base units used must not be different from, those set forth in collective bargaining agreements or plan documents including contribution increases to the end of the collective bargaining agreements in effect on March 11, 2021, unless the plan sponsor determines that the change lessens the risk of loss to plan participants and beneficiaries and, if the contribution reduction affects annual contributions over $10 million and over 10 percent of all employer contributions, PBGC also determines that the change lessens the risk of loss to plan participants and beneficiaries.
2 A request for PBGC approval of a proposed contribution change that affects annual contributions over $10
million and over 10 percent of all employer contributions must be submitted by the plan sponsor or its duly authorized representative and must contain all of the following information:
i Name, address, email, and telephone number of the plan sponsor and the plan sponsors authorized representatives, if any.
ii The nine-digit employer identification number EIN assigned to the plan sponsor by the IRS and the three-digit plan identification number PN assigned to the plan by the plan sponsor, and, if different, the EIN and PN last filed with PBGC. If an EIN or PN
has not been assigned, that should be indicated.
iii Name, address, email, and telephone number of the contributing employer for which the proposed contribution change is being submitted, and the employers authorized representatives, if any.
iv Names and addresses of each controlled group member, along with a chart depicting the structure of the controlled group by entity and its ownership with ownership percentage.
v Audited financial statements income statement, balance sheet, cash
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