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Notes

29 C.F.R. §§ 4231.13–4231.16

4 sections in range

§4231.13. Plan information for financial assistance merger.

29 C.F.R. § 4231.13

A request for a financial assistance merger must include the following information for each plan involved in the merger:
(a)
The most recent trust agreement, including all amendments adopted since the last restatement.
(b)
The most recent plan document, including all amendments adopted since the last restatement.
(c)
The most recent summary plan description (SPD), and all summaries of material modification issued since the most recent SPD.
(d)
If applicable, the most recent rehabilitation plan (or funding improvement plan), including all subsequent amendments and updates, and the percentage of total contributions received under each schedule of the rehabilitation plan (or funding improvement plan) for the most recent plan year available.
(e)
A copy of the plan's most recent IRS determination letter.
(f)
A copy of the plan's most recent Form 5500 (Annual Report Form) and all schedules and attachments (including the audited financial statement).
(g)
A current listing of employers who have an obligation to contribute to the plan, and the approximate number of participants for whom each employer is currently making contributions.
(h)
A schedule of withdrawal liability payments collected in each of the most recent five plan years.
(i)
If applicable, a copy of the plan sponsor's application for suspension of benefits under section 305(e)(9)(G) of ERISA (including all attachments and exhibits).
Notes, amendments, and revision history

Authority

Authority: 29 U.S.C. 1302(b)(3)

Source

Source: 83 FR 46653, Sept. 14, 2018, unless otherwise noted.

§4231.14. Description of financial assistance merger.

29 C.F.R. § 4231.14

A request for a financial assistance merger must include the following information about the proposed financial assistance merger:
(a)
A detailed description of the proposed financial assistance merger, including any larger integrated transaction of which the merger is a part (including, but not limited to, an application for suspension of benefits under section 305(e)(9)(G) of ERISA).
(b)
A narrative description of the events that led to the plan sponsors' decision to submit a request for a financial assistance merger.
(c)
A narrative description of significant risks and assumptions relating to the proposed financial assistance merger and the projections provided in support of the request.
(d)
A detailed description of the estimated total amount of financial assistance the plan sponsors request for each year, including the supporting data, calculations, assumptions, and a description of the methodology used to determine the estimated amounts.
Notes, amendments, and revision history

Authority

Authority: 29 U.S.C. 1302(b)(3)

Source

Source: 83 FR 46653, Sept. 14, 2018, unless otherwise noted.

§4231.15. Actuarial and financial information for financial assistance merger.

29 C.F.R. § 4231.15

A request for a financial assistance merger must include the following actuarial and financial information for the plans involved in the merger:
(a)
A copy of the actuarial valuation performed for each of the two plan years before the most recent actuarial valuation filed in accordance with § 4231.9(f).
(b)
If applicable, a copy of the plan actuary's most recent annual actuarial certification under section 305(b)(3) of ERISA, including a detailed description of the assumptions used in the certification, and the basis under which they were determined. The description must include information about the assumptions used for the projection of future contributions, withdrawal liability payments, and investment returns, and any other assumption that may have a material effect on projections.
(c)
A detailed statement certified by an enrolled actuary that the merger is necessary for one or more of the plans involved to avoid or postpone insolvency, including the basis for the conclusion, supporting data, calculations, assumptions, and a description of the methodology. This statement must demonstrate for each critical and declining status plan involved in the merger that the date the plan projects to become insolvent (without reflecting the merger) is earlier than the date the merged plan projects to become insolvent (the merged plan may reflect the proposed financial assistance). Include as an exhibit annual cash flow projections for each critical and declining status plan involved in the merger through the date the plan projects to become insolvent (using an open group valuation and without reflecting the merger). Annual cash flow projections must reflect the following information:
(1)
Fair market value of assets as of the beginning of the year.
(2)
Contributions and withdrawal liability payments.
(3)
Benefit payments organized by participant type (e.g., active, retiree, terminated vested).
(4)
Administrative expenses.
(5)
Fair market value of assets as of the end of the year.
(d)
For each critical and declining status plan involved in the merger, a long-term projection (at least 50 to 90 years) of benefit disbursements by participant type (e.g., active, retiree, terminated vested) (without reflecting the merger) reflecting reduced benefit disbursements at the PBGC-guarantee level (which may be estimated) beginning with the proposed effective date of the merger (using a closed group valuation and no accruals after the proposed effective date of the merger). Include the supporting data, calculations, assumptions, and, if applicable, a description of estimates used for this projection.
(e)
A detailed statement certified by an enrolled actuary that financial assistance is necessary for the merged plan to become or remain solvent, including the basis for the conclusion, supporting data, calculations, assumptions, and a description of the methodology. Include as an exhibit annual cash flow projections for the merged plan with the proposed financial assistance (based on the actuarial assumptions and methods that will be used under the merged plan). Annual cash flow projections must reflect the information listed in paragraphs (c)(1) through (5) of this section. In addition, include as an exhibit a statement certified by an enrolled actuary of whether the merged plan would be in critical status for purposes of paragraph (e)(1) or (2) of this section, including the basis for the conclusion.
(1)
If the merged plan would be in critical status immediately following the merger without the proposed financial assistance (as reasonably determined by the enrolled actuary or as set forth in this paragraph), the enrolled actuary's certified statement must demonstrate that the merged plan will avoid insolvency under section 305(e)(9)(D)(iv) of ERISA and the regulations thereunder (excluding stochastic projections) with the proposed financial assistance. The enrolled actuary may determine whether the merged plan would be in critical status based on the combined data and projections underlying the status certifications of each of the plans for the plan year immediately preceding the merger, including any selected updates in the data based on the experience of the plans in the immediately preceding plan year (reasonable adjustments are permitted but not required).
(2)
If the merged plan would not be in critical status immediately following the merger without the proposed financial assistance (as reasonably determined by the enrolled actuary or as set forth in paragraph (e)(1) of this section), the enrolled actuary's certified statement must demonstrate that the merged plan is not projected to become insolvent during the 20 plan years beginning after the proposed effective date of the merger with the proposed financial assistance (using the methodologies set forth under section 305(b)(3)(B)(iv) of ERISA and the regulations thereunder). If such a demonstration is possible without the proposed financial assistance, or if the amount of financial assistance requested exceeds the amount needed to satisfy this demonstration, the enrolled actuary's certified statement must demonstrate that financial assistance is necessary to mitigate the adverse effects of the merger on the merged plan's ability to remain solvent. The demonstration that financial assistance is necessary to mitigate the adverse effects of the merger on the merged plan's ability to remain solvent may be based on stress testing over a long-term period (and may reflect reasonable future adverse experience), using a reasonable method in accordance with generally accepted actuarial standards.
(f)
If applicable, a copy of the plan actuary's certification under section 305(e)(9)(C)(i) of ERISA.
(g)
The rules in § 4231.6(c) apply to the solvency projections described in paragraphs (c) and (e) of this section, unless section 305(e)(9)(D)(iv) of ERISA and the regulations thereunder apply and specify otherwise.
Notes, amendments, and revision history

Authority

Authority: 29 U.S.C. 1302(b)(3)

Source

Source: 83 FR 46653, Sept. 14, 2018, unless otherwise noted.

§4231.16. Participant census data for financial assistance merger.

29 C.F.R. § 4231.16

A request for a financial assistance merger must include a copy of the census data used for the projections described in § 4231.15(c) through (e), including:
(a)
Participant type (retiree, beneficiary, disabled, terminated vested, active, alternate payee).
(b)
Gender.
(c)
Date of birth.
(d)
Credited service for guarantee calculation (i.e., number of years of participation).
(e)
Vested accrued monthly benefit.
(f)
Monthly benefit guaranteed by PBGC.
(g)
Benefit commencement date (for participants in pay status and others for which the reported benefit will not be payable at normal retirement age).
(h)
For each participant in pay status—
(1)
Form of payment, and
(2)
Data relevant to the form of payment, including—
(i)
For a joint-and-survivor benefit, the beneficiary's benefit amount and the beneficiary's date of birth;
(ii)
For a Social Security level income benefit, the date of any change in the benefit amount, and the benefit amount after such change;
(iii)
For a 5-year certain or 10-year certain benefit (or similar benefit), the relevant defined period; or
(iv)
For a form of payment not otherwise described in this section, the data necessary for the valuation of the form of payment.
(i)
If an actuarial increase for postponed retirement applies, or if the form of annuity is a Social Security level income benefit, the monthly vested benefit payable at normal retirement age in normal form of annuity.
Notes, amendments, and revision history

Authority

Authority: 29 U.S.C. 1302(b)(3)

Source

Source: 83 FR 46653, Sept. 14, 2018, unless otherwise noted.