[Code of Federal Regulations]
[Title 29, Volume 9]
[Revised as of July 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR4022.81]

[Page 729-730]
 
                             TITLE 29--LABOR
 
                          GUARANTY CORPORATION
 
PART 4022--BENEFITS PAYABLE IN TERMINATED SINGLE-EMPLOYER PLANS--Table of Contents
 
Subpart E--PBGC Recoupment and Reimbursement of Benefit Overpayments and 
                              Underpayments
 
Sec. 4022.81  General rules.


    (a) Recoupment of benefit overpayments. If at any time the PBGC 
determines that net benefits paid with respect to any participant in a 
PBGC-trusteed plan exceed the total amount to which the participant (and 
any beneficiary) is entitled up to that time under title IV of ERISA, 
and the participant (or beneficiary) is, as of the termination date, 
entitled to receive future benefit payments, the PBGC will recoup the 
net overpayment in accordance with paragraph (c) of this section and 
Sec. 4022.82. Notwithstanding the previous sentence, the PBGC may, in 
its discretion, recover overpayments by methods other than recouping in 
accordance with the rules in this subpart. The PBGC will not normally do 
so unless net benefits paid after the termination date exceed those to 
which a participant (and any beneficiary) is entitled under the terms of 
the plan before any reductions under subpart D.
    (b) Reimbursement of benefit underpayments. If at any time the PBGC 
determines that net benefits paid with respect to a participant in a 
PBGC-trusteed plan are less than the amount to which the participant 
(and any beneficiary) is entitled up to that time under title IV of 
ERISA, the PBGC will reimburse the participant or beneficiary for the 
net underpayment in accordance with paragraph (c) of this section and 
Sec. 4022.83.
    (c) Amount to be recouped or reimbursed. In order to determine the 
amount to be recouped from, or reimbursed to, a participant (or 
beneficiary), the PBGC will calculate a monthly account balance for each 
month ending after the termination date. The PBGC will start with a 
balance of zero as of the end of the calendar month ending immediately 
prior to the termination date and determine the account balance as of 
the end of each month thereafter as follows:
    (1) Debit for overpayments. The PBGC will subtract from the account 
balance the amount of overpayments made in that month. Only overpayments 
made on or after the latest of the proposed termination date, the 
termination date, or, if no notice of intent to terminate was issued, 
the date on which proceedings to terminate the plan are instituted 
pursuant to section 4042 of ERISA will be included.
    (2) Credit for underpayments. The PBGC will add to the account 
balance the amount of underpayments made in that month. Only 
underpayments made on or after the termination date will be included.
    (3) Credit for interest on net underpayments. If at the end of a 
month there is a positive account balance (a net underpayment), the PBGC 
will add to the account balance interest thereon for that month using--
    (i) For months after May 1998, the applicable federal mid-term rate 
(as determined by the Secretary of the Treasury pursuant to section 
1274(d)(1)(C)(ii) of the Code) for that month (or, where the rate for a 
month

[[Page 730]]

is not available at the time the PBGC calculates the amount to be 
recouped or reimbursed, the most recent month for which the rate is 
available) based on monthly compounding; and
    (ii) For May 1998 and earlier months, the immediate annuity rate 
established for lump sum valuations as set forth in Table II of Appendix 
B of part 4044 of this chapter.
    (4) No interest on net overpayments. If at the end of a month, there 
is a negative account balance (a net overpayment), there will be no 
interest adjustment for that month.

[63 FR 29354, May 29, 1998]