---
kind: "section"
citation: "29 C.F.R. § 4062.8"
title: "29"
number: "4062.8"
heading: "Liability pursuant to section 4062(e)."
url: "https://uscodex.org/cfr/29/4062.8"
---

# §4062.8. Liability pursuant to section 4062(e).

- (a) **Liability amount.** If, pursuant to [section 4062(e)](/cfr/29/4062.md?p=e) of ERISA, an employer ceases operations at a facility in any location and, as a result of such cessation of operations, more than 20% of the total number of the employer's employees who are participants under a plan established and maintained by the employer are separated from employment, the PBGC will determine the amount of liability under [section 4063(b)](/cfr/29/4063.md?p=b) of ERISA to be the amount described in [section 4062](/cfr/29/4062.md) of ERISA for the entire plan, as if the plan had been terminated by the PBGC immediately after the date of the cessation of operations, multiplied by a fraction—
  - (1) The numerator of which is the number of the employer's employees who are participants under the plan and are separated from employment as a result of the cessation of operations; and
  - (2) The denominator of which is the total number of the employer's current employees, as determined immediately before the cessation of operations, who are participants under the plan.
- (b) **Example.** Company X sponsors a pension plan with 50,000 participants of which 20,000 are current employees and 30,000 are retirees or deferred vested participants. On a PBGC termination basis, the plan is underfunded by $80 million. Company X ceases operations at a facility resulting in the separation from employment of 5,000 employees, all of whom are participants in the pension plan. A [section 4062(e)](/cfr/29/4062.md?p=e) event has occurred, and the PBGC will determine the amount of employer liability under [section 4063(b)](/cfr/29/4063.md?p=b) of ERISA. The numerator described in [paragraph (a)(1)](#a-1) of this section is 5,000 and the denominator described in [paragraph (a)(2)](#a-2) of this section is 20,000. Therefore, the amount of liability under [section 4063(b)](/cfr/29/4063.md?p=b) of ERISA pursuant to [section 4062(e)](/cfr/29/4062.md?p=e) is $20 million (5,000/20,000 × $80 million).

## Notes

### Amendments

[71 FR 34822, June 16, 2006]

### Authority

Authority: 29 U.S.C. 1302(b)(3), 1362-1364, 1367, 1368.

### Source

Source: 61 FR 34079, July 1, 1996, unless otherwise noted.

### Amendments

[71 FR 34822, June 16, 2006]