Employee Benefits Security Administration, Labor.
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.Start Further Info
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.End Further Info End Preamble Start Supplemental 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.Start Printed Page 69595 Start Printed Page 69596 Start Printed Page 69597 Start Signature
Signed at Washington, DC, this 28th day of November, 2006.
Bradford P. Campbell,
Acting Assistant Secretary, Employee Benefits Security Administration, Department of Labor.
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[FR Doc. 06-9491 Filed 11-30-06; 8:45 am]
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