[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: 29CFR4043.27]

[Page 832-833]
 
                             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. 4043.27  Distribution to a substantial owner.

    (a) Reportable event. A reportable event occurs for a plan when--
    (1) There is a distribution to a substantial owner of a contributing 
sponsor of the plan;
    (2) The total of all distributions made to the substantial owner 
within the one-year period ending with the date of such distribution 
exceeds $10,000;
    (3) The distribution is not made by reason of the substantial 
owner's death; and
    (4) Immediately after the distribution, the plan has nonforfeitable 
benefits (as provided in Sec. 4022.5) that are not funded.
    (b) Initial information required. In addition to the information in 
Sec. 4043.3(b), the notice shall include--
    (1) The name, address and telephone number of the substantial owner 
receiving the distribution(s); and
    (2) The amount, form, and date of each distribution.
    (c) Waivers--(1) Distribution up to section 415 limit. Notice is 
waived if the total of all distributions made to the substantial owner 
within the one-year period ending with the date of the distribution does 
not exceed the limitation (as of the date the reportable event occurs) 
under section 415(b)(1)(A) of the Code (as adjusted in accordance with 
section 415(d)) when expressed as an annual benefit in the form of a 
straight life annuity to a participant beginning at Social Security 
retirement age ($120,000 for calendar year 1996).
    (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) 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; or
    (iii) 80-percent funded. 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.
    (3) Distribution up to one percent of assets. Notice is waived if 
the sum of the values of all distributions that are made to the 
substantial owner within the one-year period ending with the date of the 
distribution is one percent

[[Page 833]]

or less of the end-of-year current value of the plan's assets (as 
required to be reported on the plan's Form 5500) for either of the two 
plan years immediately preceding the event year.
    (d) Form 1 extension. The notice date is extended until 30 days 
after the plan's variable rate premium filing due date for the event 
year, provided that a waiver under any of paragraphs (c)(2)(i) through 
(c)(2)(iii) of this section would apply if ``the plan year preceding the 
event year'' were substituted for ``the event year.''
    (e) Determination rules--(1) Valuation of distribution. The value of 
a distribution under this section is the sum of--
    (i) The cash amounts actually received by the substantial owner;
    (ii) The purchase price of any irrevocable commitment; and
    (iii) The fair market value of any other assets distributed, 
determined as of the date of distribution to the substantial owner.
    (2) Date of substantial owner distribution. The date of distribution 
to a substantial owner of a cash distribution is the date it is received 
by the substantial owner. The date of distribution to a substantial 
owner of an irrevocable commitment is the date on which the obligation 
to provide benefits passes from the plan to the insurer. The date of any 
other distribution to a substantial owner is the date when the plan 
relinquishes control over the assets transferred directly or indirectly 
to the substantial owner.
    (3) Determination date. The determination of whether a participant 
is (or has been in the preceding 60 months) a substantial owner is made 
on the date when there has been a distribution that would be reportable 
under this section if made to a substantial owner.