(a) General rules— (1)
Distribution . Except as provided in paragraphs (b), (e), and (f) of this section and
§ 4041.8 of this part, if the PBGC does not issue a notice of noncompliance within the period specified in
§ 4041.25 or, if a notice of noncompliance is issued and later revoked after reconsideration under
§ 4041.26(c), the plan administrator shall complete the distribution of plan assets in accordance with
paragraph (c) of this section within 180 days after the expiration of the review period specified in
§ 4041.25 (or, if applicable, the date on which the PBGC revokes the notice of noncompliance) or, if applicable, within the time prescribed in part 4050 of this chapter.
(2) Post-distribution requirements. The plan administrator shall file with the PBGC a post-distribution certification in accordance with paragraph (h) of this section and, if any of the plan's benefit liabilities payable to a participant or beneficiary have been distributed through the purchase of irrevocable commitments, the plan administrator also shall provide such participant or beneficiary with a notice, contract, or certificate in accordance with paragraph (g) of this section.
(b) Assets insufficient to satisfy benefit liabilities. Before distributing plan assets to close out the plan, the plan administrator shall determine that plan assets are, in fact, sufficient to satisfy all benefit liabilities. In determining if plan assets are sufficient, the plan administrator shall subtract all liabilities (other than the future benefit liabilities that will be provided when assets are distributed), e.g., benefit payments due before the distribution date; PBGC premiums for all plan years through and including the plan year in which assets are distributed; expenses, fees, and other administrative costs. If plan assets are not sufficient to satisfy all benefit liabilities, the plan administrator shall not make any distribution of assets to effect the plan's termination. In the event of an insufficiency, the plan administrator shall promptly notify the PBGC.
(c) Method of distribution. The plan administrator shall distribute plan assets in accordance with
§ 4041.6 by purchasing irrevocable commitments from an insurer in satisfaction of all benefit liabilities that must be provided in annuity form, and by otherwise providing all benefit liabilities that need not be provided in annuity form. The plan administrator shall comply with part 4050 of this chapter (dealing with missing participants), if applicable.
(d) Failure to distribute within 180-day period. Except as provided in paragraphs (e) and (f) of this section, failure to distribute assets in accordance with
paragraph (c) of this section within the 180-day distribution period set forth in
paragraph (a)(1) of this section, because of an insufficiency of plan assets as described in
paragraph (b) of this section or for any other reason, shall nullify the termination. All actions taken to effect the plan's termination shall be null and void, and the plan shall be an ongoing plan. In this event, the plan administrator shall notify affected parties (other than the PBGC) in writing, in accordance with
§ 4041.26(d), that the plan is not going to terminate or, if applicable, that the termination was invalid but that a new notice of intent to terminate is being issued.
(e) Automatic extension of time for distribution— (1) Requirements for automatic extension. The plan administrator shall be entitled to an automatic extension of the 180-day period in which to complete the distribution of plan assets if the plan administrator—
(i) Submits to the IRS a complete request for a determination with respect to the plan's tax-qualification status upon termination (“determination letter”) on or before the date that the plan administrator files the standard termination notice with the PBGC;
(ii) Does not receive a determination letter at least 60 days before the expiration of the 180-day period; and
(iii) On or before the expiration of the 180-day period, notifies the PBGC in writing that an extension of the distribution deadline is required and certifies that the conditions in this paragraph have been met.
(2) Extension period. If the requirements in
paragraph (e)(1) of this section are met, the time within which the plan administrator shall complete the distribution of plan assets is automatically extended until the 60th day after receipt of a favorable determination letter from the IRS.
(f) Discretionary extension of time for distribution. If the plan administrator will be unable to complete the distribution of plan assets within the 180-day (or extended) period for any reason other than an insufficiency described in
paragraph (b) of this section, the plan administrator may request, and the PBGC shall grant or deny, in its discretion, an extension of time within which to complete the distribution according to the following rules:
(1) The plan administrator shall file a written request for a discretionary extension with the PBGC at least 30 days before the expiration of the 180-day (or extended) distribution period, explain the reason(s) for the request, and provide a date certain by which the distribution will be made if the extension is granted.
(2) The PBGC will not grant a discretionary extension based on failure to meet the requirements for an automatic extension under paragraph (e) of this section or failure to locate all participants or beneficiaries.
(3) The PBGC will grant a discretionary extension, in whole or in part, only if it is satisfied that the delay in making the distribution is not due to the action or inaction of the plan administrator or the contributing sponsor and that the distribution can in fact be completed by the date requested.
(g) Notice of annuity contract. In the case of the distribution of benefit liabilities through the purchase of irrevocable commitments—
(1) Either the plan administrator or the insurer shall, as soon as practicable, provide each participant and beneficiary with a copy of the annuity contract or certificate showing the insurer's name and address and clearly reflecting the insurer's obligation to provide the participant's or beneficiary's benefit;
(2) If such a contract or certificate is not available on or before the date on which the post-distribution certificate is required to be filed pursuant to paragraph (h) of this section, the plan administrator shall, no later than such date, provide each participant and beneficiary with a written notice stating—
(i) That the obligation for providing the participant's or beneficiary's plan benefits has transferred to the insurer;
(ii) The name and address of the insurer;
(iii) The name, address, and telephone number of the person designated by the insurer to answer questions concerning the annuity; and
(iv) That the participant or beneficiary will receive from the plan administrator or insurer a copy of the annuity contract or a certificate showing the insurer's name and address and clearly reflecting the insurer's obligation to provide the participant's or beneficiary's benefit; and
(3) The plan administrator shall certify to the PBGC, as part of the post-distribution certification required under
paragraph (h) of this section, that the requirements in paragraph (g)(1) or (g)(2) of this section have been satisfied.
(h) Post-distribution certification. Within 30 days after the last distribution date, the plan administrator shall file with the PBGC a PBGC Form 501, Post-Distribution Certification for Standard Termination, that has been completed in accordance with the instructions thereto. This requirement shall be considered satisfied if, in accordance with
§ 4050.6 (a)(2) and (a)(3) of this chapter, the plan administrator files a preliminary post-distribution certification within 30 days after the last distribution date and, in addition, timely files an amended post-distribution certification that otherwise satisfies all applicable requirements.
29 C.F.R. § 4041.27 — Notice of annuity information. · CFR 1997 annual edition (revised as of 1997-07-01) · https://pensionresource.website/EAMain?content=EAMain.Law&id=cfr29-4041.27&asof=1995-01-04 · printed Oct 19, 2026