[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: 29CFR4041.28]

[Page 747-748]
 
                             TITLE 29--LABOR
 
                          GUARANTY CORPORATION
 
PART 4041--TERMINATION OF SINGLE-EMPLOYER PLANS--Table of Contents
 
                 Subpart B--Standard Termination Process
 
Sec. 4041.28  Closeout of plan.

    (a) Distribution deadline. (1) In general. Unless a notice of 
noncompliance is issued under Sec. 4041.31(a), the plan administrator 
must complete the distribution of plan assets in satisfaction of plan 
benefits (through priority category 6 under section 4044 of ERISA and 
part 4044 of this chapter) by the later of--
    (i) 180 days after the expiration of the PBGC's 60-day (or extended) 
review period under Sec. 4041.26(a); or
    (ii) If the plan administrator meets the requirements of 
Sec. 4041.25(c), 120 days after receipt of a favorable determination 
from the IRS.
    (2) Revocation of notice of noncompliance. If the PBGC revokes a 
notice of noncompliance issued under Sec. 4041.31(a), the distribution 
deadline is extended until the 180th day after the date of the 
revocation.
    (b) Assets insufficient to satisfy plan benefits. If, at the time of 
any distribution, the plan administrator determines that plan assets are 
not sufficient to satisfy all plan benefits (with assets determined net 
of other liabilities, including PBGC premiums), the plan administrator 
may not make any further distribution of assets to effect the plan's 
termination and must promptly notify the PBGC.
    (c) Method of distribution. (1) In general. The plan administrator 
must, in accordance with all applicable requirements under the Code and 
ERISA, distribute plan assets in satisfaction of all plan benefits by 
purchase of an irrevocable commitment from an insurer or in another 
permitted form.
    (2) Lump sum calculations. In the absence of evidence establishing 
that another date is the ``annuity starting date'' under the Code, the 
distribution date is the ``annuity starting date'' for purposes of--
    (i) Calculating the present value of plan benefits that may be 
provided in a form other than by purchase of an irrevocable commitment 
from an insurer (e.g., in selecting the interest rate(s) to be used to 
value a lump sum distribution); and
    (ii) Determining whether plan benefits will be paid in such other 
form.
    (3) Selection of insurer. In the case of plan benefits that will be 
provided by purchase of an irrevocable commitment from an insurer, the 
plan administrator must select the insurer in accordance with the 
fiduciary standards of Title I of ERISA.
    (4) Participating annuity contracts. In the case of a plan in which 
any residual assets will be distributed to participants, a participating 
annuity contract may be purchased to satisfy the requirement that 
annuities be provided by the purchase of irrevocable commitments only if 
the portion of the price of the contract that is attributable to the 
participation feature--
    (i) Is not taken into account in determining the amount of residual 
assets; and
    (ii) Is not paid from residual assets allocable to participants.
    (5) Missing participants. The plan administrator must distribute 
plan benefits to missing participants in accordance with part 4050.
    (d) Provision of annuity contract. If plan benefits are provided 
through the purchase of irrevocable commitments--
    (1) Either the plan administrator or the insurer must, within 30 
days after it is available, provide each participant and beneficiary 
with a copy of the annuity contract or certificate showing the insurer's 
name and address and clearly reflecting the insurer's obligation to 
provide the participant's or beneficiary's plan benefits; and
    (2) If such a contract or certificate is not provided to the 
participant or beneficiary by the date on which the post-distribution 
certification is required to be filed in order to avoid the assessment 
of penalties under Sec. 4041.29(b), the plan administrator must, no 
later than that date, provide the participant and beneficiary with a 
notice that includes--
    (i) A statement that the obligation for providing the participant's 
or beneficiary's plan benefits has transferred to the insurer;
    (ii) The name and address of the insurer;
    (iii) The name, address, and telephone number of the person 
designated

[[Page 748]]

by the insurer to answer questions concerning the annuity; and
    (iv) A statement that the participant or beneficiary will receive 
from the plan administrator or insurer a copy of the annuity contract or 
a certificate showing the insurer's name and address and clearly 
reflecting the insurer's obligation to provide the participant's or 
beneficiary's plan benefits.