[Federal Register Volume 74, Number 39 (Monday, March 2, 2009)]
[Notices]
[Pages 9114-9115]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-4312]
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PENSION BENEFIT GUARANTY CORPORATION
Pendency of Request for Approval of Special Withdrawal Liability
Rules; Service Employees International Union Local 1 Pension Trust Fund
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Notice of pendency of request.
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SUMMARY: The Pension Benefit Guaranty Corporation (``PBGC'') has
received a request from the Service Employees International Union Local
1 Pension Trust Fund for approval of a plan amendment providing for
special withdrawal liability rules. Under section 4203(f) of the
Employee Retirement Income Security Act of 1974 and the PBGC's
regulation on Extension of Special Withdrawal Liability Rules, a
multiemployer pension plan may, with PBGC approval, be amended to
provide for special withdrawal liability rules similar to those that
apply to the construction and entertainment industries. Such approval
is granted only if the PBGC determines that the plan amendment will be
used in an industry with characteristics that would make use of the
special rules appropriate and that the plan amendment would not pose a
significant risk to the PBGC. This notice advises interested persons of
the pendency of this request and invites public comment.
DATES: Comments must be submitted by April 16, 2009.
ADDRESSES: Comments may be mailed to the Office of the Chief Counsel,
Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington,
DC 20005-4026, or delivered to Suite 340 at the above address. Comments
also may be submitted electronically through the PBGC's Web site at
http://[email protected] or by fax to 202-326-4112. Copies of the
request for approval and any comments may be obtained by writing to the
PBGC's Communications and Public Affairs Department at Suite 1200 at
the above address or by visiting that office or calling 202-326-4040
during normal business hours. (TTY and TDD users may call the Federal
relay service toll-free at 1-800-877-8339 and ask to be connected to
202-326-4040.) Copies of the PBGC's regulation on Extension of Special
Withdrawal Liability Rules (29 CFR part 4203) and of the originating
request for approval may be accessed through the PBGC's Web site
(http://www.pbgc.gov).
FOR FURTHER INFORMATION CONTACT: Eric Field, Attorney, Office of the
Chief Counsel, Pension Benefit Guaranty Corporation, 1200 K Street,
NW., Washington, DC 20005-4026; telephone 202-326-4020. (TTY and TDD
users may call the Federal relay service toll-free at 1-800-877-8339
and ask to be connected to 202-326-4020).
SUPPLEMENTARY INFORMATION:
Background
Under section 4203(a) of ERISA, a complete withdrawal from a
multiemployer plan generally occurs when an employer permanently ceases
to have an obligation to contribute under the plan or permanently
ceases all covered operations under the plan. Under section 4205 of
ERISA, a partial withdrawal generally occurs when an employer (1)
Reduces its contribution base units by seventy percent in each of three
consecutive years, or (2) permanently ceases to have an obligation to
contribute under one or more but fewer than all collective bargaining
agreements under which the employer has been obligated to contribute
under the plan, while either continuing to perform work in the
jurisdiction of the collective bargaining agreement of the type for
which contributions were previously required or transferring such work
to another location or to an entity or entities owned or controlled by
the employer, or (3) permanently ceases to have an obligation to
contribute under the plan for work performed at one or more but fewer
than all of its facilities, while continuing to perform work at the
facility of the type for which the obligation to contribute ceased.
Although the general rules on complete and partial withdrawal are
based on events that normally result in a diminution of the plan's
contribution base, Congress recognized that, in certain industries and
under certain circumstances, a complete or partial cessation of the
obligation to contribute
[[Page 9115]]
does not normally weaken the plan's contribution base. For that reason,
Congress established special withdrawal rules for the construction and
entertainment industries.
For construction industry plans and employers, section 4203(b)(2)
of ERISA provides that a complete withdrawal occurs only if an employer
ceases to have an obligation to contribute under a plan, and the
employer either continues to perform previously covered work in the
jurisdiction of the collective bargaining agreement or resumes such
work within five years without renewing the obligation to contribute at
the time of resumption. Section 4203(c)(1) of ERISA applies the same
special definition of complete withdrawal to the entertainment
industry, except that the pertinent jurisdiction is the jurisdiction of
the plan rather than the jurisdiction of the collective bargaining
agreement. In contrast, the general definition of complete withdrawal
in section 4203(a) of ERISA defines a withdrawal to include permanent
cessation of the obligation to contribute regardless of the continued
activities of the withdrawn employer.
Congress also established special partial withdrawal liability
rules for the construction and entertainment industries. Under section
4208(d)(1) of ERISA, ``[a]n employer to whom section 4203(b) (relating
to the building and construction industry) applies is liable for a
partial withdrawal only if the employer's obligation to contribute
under the plan is continued for no more than an insubstantial portion
of its work in the craft and area jurisdiction of the collective
bargaining agreement of the type for which contributions are
required.'' Under section 4208(d)(2) of ERISA, ``[a]n employer to whom
section 4203(c) (relating to the entertainment industry) applies shall
have no liability for a partial withdrawal except under the conditions
and to the extent prescribed by the [PBGC] by regulation.''
Section 4203(f) of ERISA provides that the PBGC may prescribe
regulations under which plans in other industries may be amended to
provide for special withdrawal liability rules similar to the rules
prescribed in section 4203(b) and (c) of ERISA. Section 4203(f)(2) of
ERISA provides that such regulations shall permit the use of special
withdrawal liability rules only in industries (or portions thereof) in
which the PBGC determines that the characteristics that would make use
of such rules appropriate are clearly shown, and that the use of such
rules would not pose a significant risk to the insurance system under
Title IV of ERISA. Section 4208(e)(3) of ERISA provides that the PBGC
shall prescribe by regulation a procedure by which plans may be amended
to adopt special partial withdrawal liability rules upon a finding by
the PBGC that the adoption of such rules is consistent with the
purposes of Title IV of ERISA.
The PBGC's regulation, Extension of Special Withdrawal Liability
Rules (29 CFR part 4203), prescribes procedures whereby a multiemployer
plan may ask PBGC to approve a plan amendment that establishes special
complete or partial withdrawal liability rules. The regulation may be
accessed on the PBGC's Web site (http://www.pbgc.gov).
Request
The PBGC has received a request from the Service Employees
International Union Local 1 Pension Trust Fund (``Local 1 Plan'') for
approval of a plan amendment providing for special withdrawal liability
rules. A copy of the originating request, and PBGC's summary of the
actuarial reports that the plan provided, may be accessed on the PBGC's
Web site (http://www.pbgc.gov). A copy of the complete filing may be
requested from the PBGC Disclosure Officer. The fax number is 202-326-
4042. It may also be obtained by writing the Communications and Public
Affairs Department, PBGC, 1200 K Street, NW., Suite 1200, Washington,
DC 20005.
In brief, the Local 1 Plan, a multiemployer plan covering the
residential building cleaning industry in Chicago, represents that the
industry has characteristics similar to those of the construction
industry. The plan has adopted an amendment prescribing special
withdrawal liability rules, which, if approved by the PBGC, would be
effective as of July 1, 2005. Under the proposed amendment, complete
withdrawal of an employer would occur only under conditions similar to
those described in ERISA section 4203(b)(2), or certain other
conditions including a mass withdrawal. Partial withdrawal of an
employer would occur only under conditions similar to those described
in ERISA section 4208(d)(1). The request includes actuarial data to
support the plan's contention that the amendment will not pose a
significant risk to the insurance system under Title IV of ERISA.
Comments
All interested persons are invited to submit written comments
concerning the pending request to the PBGC at the above address by
April 16, 2009. All comments will be made a part of the record.
Comments received will be available for public inspection at the
address set forth above.
Issued in Washington, DC, on this 17th day of February, 2009.
Vincent K. Snowbarger,
Acting Director, Pension Benefit Guaranty Corporation.
[FR Doc. E9-4312 Filed 2-27-09; 8:45 am]
BILLING CODE 7708-01-P