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Federal Register / Vol. 86, No. 130 / Monday, July 12, 2021 / Rules and Regulations
benefit but not to exceed 100 years.
The cash flow projection should use an open group valuation until the plan reaches insolvency. Annual cash flow projections must reflect the following information:
A Fair market value of assets as of the beginning of the year, splitting the assets by special financial assistance and non-special financial assistance amounts.
B Contributions and withdrawal liability payments.
C Plan level benefit payments organized by participant type e.g., active, retiree, terminated vested for the projection period.
D Guaranteed benefits payable post insolvency by participant type e.g., active, retiree, terminated vested.
E Administrative expenses for the projection period.
F Assumed investment return separately for special financial assistance and non-special financial assistance amounts.
G Fair market value of assets as of the end of the year.
vi Any additional information PBGC
determines it needs to review a request for approval of a proposed transfer of assets or liabilities including a spinoff or merger.
g Withdrawal liability interest assumptions. A plan must use the interest assumptions under 4281.13a of this chapter to determine withdrawal liability for withdrawals after the plan year in which the plan receives payment of special financial assistance under 4262.12 and until the later of 1 Ten years after the end of the plan year in which the plan receives payment of special financial assistance under 4262.12; or 2 The last day of the plan year in which the plan no longer holds any special financial assistance or earnings thereon in a segregated account as required by 4262.13b2.
h Withdrawal liability settlement. 1
During the SFA coverage period, a plan must obtain PBGC approval for a proposed settlement of withdrawal liability if the amount of the liability settled is greater than $50 million calculated as the lesser of i The allocation of unfunded vested benefits to the employer under section 4211 of ERISA; or ii The present value of withdrawal liability payments assessed for the employer discounted using the interest assumptions under 4281.13a of this chapter.
2 PBGC will approve a proposed settlement of withdrawal liability if it determines
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i Implementation of the settlement is in the best interests of participants and beneficiaries; and ii The settlement does not create an unreasonable risk of loss to PBGC.
3 A request for approval of a proposed settlement of withdrawal liability 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 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 A copy of the proposed settlement agreement.
iv A description of the facts leading up to the proposed settlement, including A The date the employer withdrew from the plan;
B The calculation of the withdrawal liability amount, including payment dates and amounts listed in the schedule for liability payments provided to the withdrawn employer in accordance with section 4291b1A of ERISA;
C The amounts and dates of withdrawal liability payments made;
and D How the proposed settlement amount was determined discount rate used, financial condition of the employer, and other factors, as applicable.
v Most recent 3 years of audited financial statements and a 5-year cash flow projection for the employer with which the plan proposes to settle.
vi A copy of the most recent actuarial valuation report of the plan.
vii A statement certifying the trustees have determined that the proposed settlement is in the best interest of the plan and the plans participants and beneficiaries.
viii Any additional information PBGC determines it needs to review a request for approval of a proposed withdrawal liability settlement.
i Reporting. In accordance with the statement of compliance instructions on PBGCs website at www.pbgc.gov, a plan sponsor must file with PBGC each plan year, beginning with the plan year after the payment of special financial assistance and through the last day of the last plan year ending in 2051, a statement of compliance with the terms
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and conditions of the special financial assistance under this part and section 4262 of ERISA. The statement must be 1 Filed no later than 90 days after the end of the plan year; and 2 Signed and dated by a trustee who is a current member of the board of trustees and authorized to sign on behalf of the board of trustees, or by another authorized representative of the plan sponsor.
j Audit. As authorized under section 4003 of ERISA, PBGC may conduct periodic audits of a plan that has received special financial assistance to review compliance with the terms and conditions of the special financial assistance under this part and section 4262 of ERISA.
k Filing rules. The filing rules in this paragraph k apply to a request for PBGC approval under paragraph d, f, or h of this section and a statement of compliance under paragraph i of this section.
1 Method of filing. A filing described under paragraph d, f, h, or i of this section must be made electronically in accordance with the rules in subpart A
of part 4000 of this chapter. The time period for filing a request or statement of compliance must be computed under the rules in subpart D of part 4000 of this chapter.
2 Where to file. A filing described under paragraph d, f, h, or i of this section must be submitted as described in 4000.4 of this chapter.
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Other provisions.

a Special financial assistance is not capped by the guarantee under section 4022A of ERISA.
b A plan that receives special financial assistance must continue to pay premiums due under section 4007
of ERISA for participants and beneficiaries in the plan.
c A plan that receives special financial assistance is deemed to be in critical status within the meaning of section 305b2 of ERISA until the last day of the last plan year ending in 2051.
d A plan that receives special financial assistance and subsequently becomes insolvent under section 4245
of ERISA will be subject to the rules and guarantee for insolvent plans in effect when the plan becomes insolvent.
e A plan that receives special financial assistance is not eligible to apply for a suspension of benefits under section 305e9 of ERISA.
f A plan that receives special financial assistance and meets the eligibility requirements for partition of the plan under section 4233b of ERISA
may apply for partition.
g If any provision in this part is held to be invalid or unenforceable by its
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