Model Notice of Pending Election of Multiemployer Plan Status
[12/01/2006]
Volume 71, Number 231, Page 69594-69598
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
ZRIN 1210-ZA11
Model Notice of Pending Election of Multiemployer Plan Status
AGENCY: Employee Benefits Security Administration, Labor.
ACTION: Notice.
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SUMMARY: This document contains a Model Notice of Pending Election of
Multiemployer Plan Status. The Pension Protection Act of 2006 (PPA),
Public Law 109-280, permits certain plans that would otherwise be
treated as multiemployer plans to elect to revoke a prior election to
be treated as single-employer plans, and certain other plans to elect
to be treated as multiemployer plans. The PPA requires plan
administrators to provide notice of such an election to each plan
participant and beneficiary, each labor organization representing such
participants or beneficiaries, and each employer that has an obligation
to contribute to the plan, and further requires the Secretary of Labor
to prescribe a model notice.
FOR FURTHER INFORMATION CONTACT: David Lurie, Employee Benefits
Security Administration (EBSA), U.S. Department of Labor, (202) 693-
8510. This is not a toll-free number.
SUPPLEMENTARY INFORMATION: Section 1106 of the PPA added subparagraph
(G) to section 3(37) of the Employee Retirement Income Security Act of
1974 (ERISA) and paragraph (6) to section 414(f) of the Internal
Revenue Code of 1986 (the Code). The new provisions permit a plan that
had made an election under subparagraph (E) of section 3(37) of ERISA
and paragraph (5) of section 414(f) of the Code to be treated as a
single-employer plan to elect to revoke such election within one year
following the date of enactment of the PPA pursuant to procedures
prescribed by the Pension Benefit Guaranty Corporation (PBGC), provided
certain conditions are satisfied. In addition, the new provisions
permit certain other plans to elect to be treated as a multiemployer
plan for all purposes under ERISA and the Code, pursuant to procedures
prescribed by the PBGC. Any election under 3(37)(G) is effective
starting with the first plan year ending after August 17, 2006. An
eligible plan is (1) a plan that either (A) is maintained pursuant to
one or more collective bargaining agreements and to which more than one
employer is required to contribute, or (B) is described as having been
established in Chicago, Illinois on August 12, 1881, and is sponsored
by an organization described in section 501(c)(5) of the Code and
exempt from tax under section 501(a) of the Code, and (2) the plan
meets the following requirements: (A) For each of the three plan years
immediately before the date of enactment of the PPA the plan satisfied
the above conditions or is so described, (B) substantially all of the
employer contributions for each of those plan years were made or
required to be made by organizations that were exempt from tax under
section 501 of the Code, and (C) the plan was established prior to
September 2, 1974.
Section 3(37)(G)(v)(I) further provides that the plan administrator
of a plan making an election pursuant to section 3(37)(G) shall provide
notice of the pending election no later than 30 days before the
election is made to each plan participant and beneficiary, each labor
organization representing such participants or beneficiaries, and each
employer that has an obligation to contribute to the plan, describing
the principal differences between the guarantee programs under Title IV
and the benefit restrictions under Title I for single-employer and
multiemployer plans, along with such other information the plan
administrator chooses to include.
Section 3(37)(G)(v)(II) requires the Secretary of Labor to
prescribe a model notice for this purpose within 180 days of the date
of enactment of the PPA. In order to satisfy this directive, the
Department is publishing this Notice, which contains a Model Notice of
Pending Election of Multiemployer Plan Status. The Department will
consider that plan administrators who use the Model Notice to notify
participants, beneficiaries, labor organizations, and employers of
their plan's change of status no later than 30 days before an election
is made to have satisfied their obligations under section
3(37)(G)(v)(I). The Model Notice is also available on EBSA's Web site
at http://www.dol.gov/ebsa.
The Department has consulted with the PBGC in connection with the
development of the Model Notice. The PBGC has advised that it will
establish procedures and provide guidance for making the election
provided for in section 3(37)(G). The Department is of the view that no
election under 3(37)(G) is effective unless made pursuant to such
procedures, including certification by the plan administrator that it
has complied with the notice requirements in section 3(37)(G)(v)(I). In
this regard, section 3(37)(G)(v)(III) provides the Secretary of Labor
with authority to assess civil penalties for a failure to provide such
a notice.
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Signed at Washington, DC, this 28th day of November, 2006.
Bradford P. Campbell,
Acting Assistant Secretary, Employee Benefits Security Administration,
Department of Labor.
[FR Doc. 06-9491 Filed 11-30-06; 8:45 am]
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