[Federal Register: July 6, 2005 (Volume 70, Number 128)]
[Notices]
[Page 38983-38984]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06jy05-138]
[[Page 38983]]
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PENSION BENEFIT GUARANTY CORPORATION
Pendency of Request for Approval of Special Withdrawal Liability
Rules; Service Employees International Union Local 25 and Participating
Employers Pension Trust
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Notice of pendency of request.
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SUMMARY: The Pension Benefit Guaranty Corporation (``PBGC'') has
received a request from the Service Employees International Union Local
25 and Participating Employers Pension Trust for approval of a plan
amendment providing for special withdrawal liability rules. Under
section 4203(f) of the Employee Retirement Income Security Act of 1974
and the PBGC's regulation on Extension of Special Withdrawal Liability
Rules, a multiemployer pension plan may, with PBGC approval, be amended
to provide for special withdrawal liability rules similar to those that
apply to the construction and entertainment industries. Such approval
is granted only if the PBGC determines that the rules apply to an
industry with characteristics that make use of the special rules
appropriate and that the rules will not pose a significant risk to the
PBGC. This notice advises interested persons of the pendency of this
request and invites public comment.
DATES: Comments must be submitted by August 22, 2005.
ADDRESSES: All written comments (at least three copies) should be
mailed or delivered to: Office of the Chief Counsel, Pension Benefit
Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005-4026.
Copies of the request for approval and any comments may be obtained by
writing to the PBGC's Communications and Public Affairs Department at
Suite 240 at the above address or by visiting that office or calling
202-326-4040 during normal business hours. (TTY and TDD users may call
the Federal relay service toll-free at 1-800-877-8339 and ask to be
connected to 202-326-4040.) Copies of the PBGC's regulation on
Extension of Special Withdrawal Liability Rules (29 CFR part 4203) and
of the originating request for approval may be accessed through the
PBGC's Web site (http://www.PBGC.gov).
FOR FURTHER INFORMATION CONTACT: Frank Anderson, Attorney, Office of
the Chief Counsel (22500), Pension Benefit Guaranty Corporation, 1200 K
Street, NW., Washington, DC 20005-4026; telephone 202-326-4020. (TTY
and TDD users may call the Federal relay service toll-free at 1-800-
877-8339 and ask to be connected to 202-326-4020).
SUPPLEMENTARY INFORMATION:
Background
Under section 4203(a) of ERISA, a complete withdrawal from a
multiemployer plan generally occurs when an employer permanently ceases
to have an obligation to contribute under the plan or permanently
ceases all covered operations under the plan. Under section 4205 of
ERISA, a partial withdrawal generally occurs when an employer (1)
reduces its contribution base units by seventy percent in each of three
consecutive years, or (2) permanently ceases to have an obligation to
contribute under one or more but fewer than all collective bargaining
agreements under which the employer has been obligated to contribute
under the plan, while continuing to perform work in the jurisdiction of
the collective bargaining agreement of the type for which contributions
were previously required or transfers such work to another location, or
(3) permanently ceases to have an obligation to contribute under the
plan for work performed at one or more but fewer than all of its
facilities, while continuing to perform work at the facility of the
type for which the obligation to contribute ceased.
Although the general rules on complete and partial withdrawal
identify events that normally result in a diminution of the plan's
contribution base, Congress recognized that, in certain industries and
under certain circumstances, a complete or partial cessation of the
obligation to contribute does not normally weaken the plan's
contribution base. For that reason, Congress established special
withdrawal rules for the construction and entertainment industries.
For construction industry plans and employers, section 4203(b)(2)
of ERISA provides that a complete withdrawal occurs only if an employer
ceases to have an obligation to contribute under a plan and the
employer either continues to perform previously covered work in the
jurisdiction of the collective bargaining agreement, or resumes such
work within five years without renewing the obligation to contribute at
the time of resumption. Section 4203(c)(1) of ERISA applies the same
special definition of complete withdrawal to the entertainment
industry, except that the pertinent jurisdiction is the jurisdiction of
the plan rather than the jurisdiction of the collective bargaining
agreement. In contrast, the general definition of complete withdrawal
in section 4203(a) of ERISA defines a withdrawal to include permanent
cessation of the obligation to contribute regardless of the continued
activities of the withdrawn employer.
Congress also established special partial withdrawal liability
rules for the construction and entertainment industries. Under section
4208(d)(1) of ERISA, ``[a]n employer to whom section 4203(b) (relating
to the building and construction industry) applies is liable for a
partial withdrawal only if the employer's obligation to contribute
under the plan is continued for no more than an insubstantial portion
of its work in the craft and area jurisdiction of the collective
bargaining agreement of the type for which contributions are
required.'' Under section 4208(d)(2) of ERISA, ``[a]n employer to whom
section 4203(c) (relating to the entertainment industry) applies shall
have no liability for a partial withdrawal except under the conditions
and to the extent prescribed by the [PBGC] by regulation.''
Section 4203(f) of ERISA provides that the PBGC may prescribe
regulations under which plans in other industries may be amended to
provide for special withdrawal liability rules similar to the rules
prescribed in section 4203(b) and (c) of ERISA. Section 4203(f)(2) of
ERISA provides that such regulations shall permit the use of special
withdrawal liability rules only in industries (or portions thereof) in
which the PBGC determines that the characteristics that would make use
of such rules appropriate are clearly shown, and that the use of such
rules will not pose a significant risk to the insurance system under
Title IV of ERISA. Section 4208(e)(3) of ERISA provides that the PBGC
shall prescribe by regulation a procedure by which plans may be amended
to adopt special partial withdrawal liability rules upon a finding by
the PBGC that the adoption of such rules is consistent with the
purposes of Title IV of ERISA.
The PBGC's regulation on Extension of Special Withdrawal Liability
Rules (29 CFR part 4203) prescribes procedures whereby a multiemployer
plan may ask PBGC to approve a plan amendment that establishes special
complete or partial withdrawal liability rules. The regulation may be
accessed on the PBGC's Web site (http://www.PBGC.gov).
Request
The PBGC has received a request from the Service Employees
International Union Local 25 and Participating
[[Page 38984]]
Employers Pension Trust (``Local 25 Plan'') for approval of a plan
amendment providing for special withdrawal liability rules. A copy of
the originating request, and PBGC's summary of the actuarial reports
that the plan provided, may be accessed on the PBGC's Web site (http://www.PBGC.gov
). A copy of the complete filing may be requested from the
PBGC Disclosure Officer. The fax number is 202-326-4042. It may also be
obtained by writing the Disclosure Officer, PBGC, 1200 K Street, NW.,
Suite 240, Washington, DC 20005.
In brief, the Local 25 Plan, a multiemployer plan covering the
commercial building cleaning and security industry in Chicago,
represents that the industry has characteristics similar to those of
the construction industry. The plan has adopted an amendment
prescribing special withdrawal liability rules, which, if approved by
the PBGC, would be effective as of September 30, 2002. Under the
proposed amendment, complete withdrawal of an employer would occur only
under conditions similar to those described in ERISA section
4203(b)(2), or certain other conditions including a mass withdrawal.
Partial withdrawal of an employer would occur only under conditions
similar to those described in ERISA section 4208(d)(1). The request
includes actuarial data to support the plan's contention that the
amendment will not pose a significant risk to the insurance system
under Title IV of ERISA.
Comments
All interested persons are invited to submit written comments
concerning the pending request to the PBGC at the above address by
August 22, 2005. All comments will be made a part of the record.
Comments received will be available for public inspection at the
address set forth above.
Issued in Washington, DC, on this 27 day of June, 2005.
Vincent K. Snowbarger,
Acting Executive Director, Pension Benefit Guaranty Corporation.
[FR Doc. 05-13201 Filed 7-5-05; 8:45 am]
BILLING CODE 7708-01-P