[Code of Federal Regulations]
[Title 29, Volume 9]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR4043.23]

[Page 830-831]
 
                             TITLE 29--LABOR
 
            CHAPTER XL--PENSION BENEFIT GUARANTY CORPORATION
 
PART 4043_REPORTABLE EVENTS AND CERTAIN OTHER NOTIFICATION REQUIREMENTS
--Table of Contents
 
            Subpart B_Post-Event Notice of Reportable Events
 
Sec. 4043.23  Active participant reduction.

    (a) Reportable event. A reportable event occurs when the number of 
active participants under a plan is reduced to less than 80 percent of 
the number of active participants at the beginning of the plan year, or 
to less than 75 percent of the number of active participants at the 
beginning of the previous plan year.
    (b) Initial information required. In addition to the information in 
Sec. 4043.3(b), the notice shall include--
    (1) A statement explaining the cause of the reduction (e.g., 
facility shutdown or sale); and
    (2) The number of active participants at the date the reportable 
event occurs, at the beginning of the plan year, and at the beginning of 
the prior plan year.
    (c) Waivers--(1) Small plan. Notice is waived if the plan has fewer 
than 100 participants at the beginning of either the current or the 
previous plan year.
    (2) Plan funding. Notice is waived if--
    (i) No variable rate premium. No variable rate premium is required 
to be paid for the plan for the event year;
    (ii) $1 million unfunded vested benefits. As of the testing date for 
the event year, the plan has less than $1 million in unfunded vested 
benefits; or
    (iii) No unfunded vested benefits. As of the testing date for the 
event year, the plan would have no unfunded vested benefits if unfunded 
vested benefits were determined in accordance with the assumptions and 
methodology in Sec. 4010.4(b)(2) of this chapter.
    (3) No facility closing event/80-percent funded. Notice is waived 
if--
    (i) The active participant reduction would not be reportable if only 
those active participant reductions resulting from cessation of 
operations at one or more facilities were taken into account; and

[[Page 831]]

    (ii) As of the testing date for the event year, the fair market 
value of the plan's assets is at least 80 percent of the plan's vested 
benefits amount.
    (d) Extensions. The notice date is extended to the latest of--
    (1) Form 1 extension. 30 days after the plan's variable rate premium 
filing due date for the event year if a waiver under any of paragraphs 
(c)(2)(i) through (c)(2)(iii) or (c)(3) of this section would apply if 
``the plan year preceding the event year'' were substituted for ``the 
event year'';
    (2) Form 5500 extension. 30 days after the plan's Form 5500 due date 
that next follows the date the reportable event occurs, provided the 
event would not be reportable counting only those participant reductions 
resulting from cessation of operations at a single facility; and
    (3) Form 1-ES extension. The due date for the Form 1-ES for the plan 
year following the event year if--
    (i) The plan is required to file a Form 1-ES for the plan year 
following the event year;
    (ii) The event would not be reportable counting only those 
participant reductions resulting from cessation of operations at a 
single facility; and
    (iii) The participant reduction represents no more than 20 percent 
of the total active participants (at the beginning of the plan year(s) 
in which the reduction occurs) in all plans maintained by any member of 
the plan's controlled group.
    (e) Determination of the number of active participants--(1) 
Determination date. The number of active participants at the beginning 
of a plan year may be determined by using the number of active 
participants at the end of the previous plan year.
    (2) Active participant. ``Active participant'' means a participant 
who--
    (i) Is receiving compensation for work performed;
    (ii) Is on paid or unpaid leave granted for a reason other than a 
layoff;
    (iii) Is laid off from work for a period of time that has lasted 
less than 30 days; or
    (iv) Is absent from work due to a recurring reduction in employment 
that occurs at least annually.