[Code of Federal Regulations]
[Title 29, Volume 9]
[Revised as of July 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR4022.26]

[Page 798]
 
                             TITLE 29--LABOR
 
            CHAPTER XL--PENSION BENEFIT GUARANTY CORPORATION
 
PART 4022_BENEFITS PAYABLE IN TERMINATED SINGLE-EMPLOYER PLANS--Table 
of Contents
 
              Subpart B_Limitations on Guaranteed Benefits
 
Sec. 4022.26  Phase-in of benefit guarantee for participants who are 
substantial owners.

    (a) Scope. This section shall apply to the guarantee of all benefits 
described in subpart A (subject to the limitations in Sec. 4022.21) 
with respect to participants who are substantial owners at the 
termination date or who were substantial owners at any time within the 
5-year period preceding that date.
    (b) Phase-in formula when there have been no benefit increases. 
Benefits provided by a plan under which there has been no benefit 
increase, other than the adoption of the plan, shall be guaranteed to 
the extent provided in the following formula: The monthly amount 
computed under Sec. 4022.22 multiplied by a fraction not to exceed 1, 
the numerator of which is the number of full years prior to the 
termination date that the substantial owner was an active participant 
under the plan, and the denominator of which is 30. Active participation 
under a plan commences at the later of the date on which the plan is 
adopted or becomes effective.
    (c) Phase-in formula when there have been benefit increases. If 
there has been a benefit increase under the plan, other than the 
adoption of the plan, benefits provided by each such increase shall be 
guaranteed to the extent provided in the following formula: The amount 
of the guaranteeable benefit increase computed under Sec. 4022.24 
multiplied by a fraction not to exceed 1, the numerator of which is the 
number of full years prior to the termination date that the benefit 
increase was in effect and during which the substantial owner was an 
active participant under the plan, and the denominator of which is 30. 
However, in no event shall the total benefits guaranteed under all such 
benefit increases exceed the benefits which are guaranteed under 
paragraph (b) of this section with respect to a plan described therein.
    (d) For the purpose of computing the benefits guaranteed under this 
section, in the case of a substantial owner who becomes an active 
participant under a plan after a benefit increase (other than the 
adoption of the plan) has been put into effect, the plan as it exists at 
the time he commences his participation shall be deemed to be the 
original plan with respect to him.

[61 FR 34028, July 1, 1996, as amended at 62 FR 67729, Dec. 30, 1997]