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Pension Resource

29 C.F.R. § 4006.5

Exemptions and special rules.
CFR 1997 annual edition (revised as of 1997-07-01) · superseded Jul 1, 1998
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Historical text in effect Jul 1, 1997 through Jun 30, 1998. View current · Compare with current
(a) Variable-rate premium exemptions. A plan described in any of paragraphs (a)(1)-(a)(5) of this section is not required to determine its unfunded vested benefits under § 4006.4 and does not owe a variable-rate premium under § 4006.3(b).
(1) Certain fully funded plans. A plan is described in this paragraph if the plan had fewer than 500 participants on the last day of the plan year preceding the premium payment year, and an enrolled actuary certifies in accordance with the Premium Payment Package that, as of that date, the plan had no unfunded vested benefits (valued at the interest rate prescribed in § 4006.4(b)(1)).
(2) Plans without vested benefit liabilities. A plan is described in this paragraph if it did not have any participants with vested benefits as of the last day of the plan year preceding the premium payment year, and the plan administrator so certifies in accordance with the Premium Payment Package.
(3) Section 412(i) plans. A plan is described in this paragraph if the plan was a plan described in section 412(i) of the Code and the regulations thereunder at all times during the plan year preceding the premium payment year and the plan administrator so certifies, in accordance with the Premium Payment Package. If the plan is a new plan or a newly-covered plan, the certification under this paragraph shall be made as of the due date for the premium under § 4007.11(c) and shall certify to the plan's status at all times during the premium payment year through such due date.
(4) Plans terminating in standard terminations. The exemption for a plan described in this paragraph is conditioned upon the plan's making a final distribution of assets in a standard termination. If a plan is ultimately unable to do so, the exemption is revoked and all variable-rate amounts not paid pursuant to this exemption are due retroactive to the applicable due date(s). A plan is described in this paragraph if—
(i) The plan administrator has issued notices of intent to terminate the plan in a standard termination in accordance with section 4041(a)(2) of ERISA; and
(ii) The proposed termination date set forth in the notice of intent to terminate is on or before the last day of the plan year preceding the premium payment year.
(5) Plans at full funding limit. A plan is described in this paragraph if, on or before the earlier of the due date for payment of the variable-rate portion of the premium under § 4007.11 or the date that portion is paid, the plan's contributing sponsor or contributing sponsors made contributions to the plan for the plan year preceding the premium payment year in an amount not less than the full funding limitation for such preceding plan year under section 302(c)(7) of ERISA and section 412(c)(7) of the Code (determined in accordance with paragraphs (a)(5)(i) and (a)(5)(ii) of this section). In order for a plan to qualify for this exemption, an enrolled actuary must certify that the plan has met the requirements of this paragraph.
(i) Determination of full funding limitation. The determination of whether contributions for the preceding plan year were in an amount not less than the full funding limitation under section 302(c)(7) of ERISA and section 412(c)(7) of the Code for such preceding plan year shall be based on the methods of computing the full funding limitation, including actuarial assumptions and funding methods, used by the plan (provided such assumptions and methods met all requirements, including the requirements for reasonableness, under section 302 of ERISA and section 412 of the Code) with respect to such preceding plan year. Plan assets shall not be reduced by the amount of any credit balance in the plan's funding standard account.
(ii) Rounding of de minimis amounts. Any contribution that is rounded down to no less than the next lower multiple of one hundred dollars (in the case of full funding limitations up to one hundred thousand dollars) or to no less than the next lower multiple of one thousand dollars (in the case of full funding limitations above one hundred thousand dollars) shall be deemed for purposes of this paragraph to be in an amount equal to the full funding limitation.
(b) Special rule for determining vested benefits for certain large plans. With respect to a plan that had 500 or more participants on the last day of the plan year preceding the premium payment year, if an enrolled actuary determines pursuant to § 4006.4(a) that the actuarial value of plan assets equals or exceeds the value of all benefits accrued under the plan (valued at the interest rate prescribed in § 4006.4(b)(1)), the enrolled actuary need not determine the value of the plan's vested benefits, and may instead report in the Premium Payment Package the value of the accrued benefits.
(c) Special rule for determining unfunded vested benefits for plans terminating in distress or involuntary terminations. A plan described in this paragraph may determine its unfunded vested benefits by using the special alternative calculation method set forth in this paragraph. A plan is described in this paragraph if it has issued notices of intent to terminate in a distress termination in accordance with section 4041(a)(2) of ERISA with a proposed termination date on or before the last day of the plan year preceding the premium payment year, or if the PBGC has instituted proceedings to terminate the plan in accordance with section 4042 of ERISA and has sought a termination date on or before the last day of the plan year preceding the premium payment year. Pursuant to this paragraph, a plan shall determine its unfunded vested benefits in accordance with the alternative calculation method in § 4006.4(c), except that—
(1) The calculation shall be based on the Form 5500, Schedule B, for the plan year which includes (in the case of a distress termination) the proposed termination date or (in the case of an involuntary termination) the termination date sought by the PBGC, or, if no Schedule B is filed for that plan year, on the Schedule B for the immediately preceding plan year;
(2) All references in § 4006.4(c) and § 4006.4(d) to the first day of the plan year preceding the premium payment year shall be deemed to refer to the first day of the plan year for which the Schedule B was filed;
(3) The value of the sum of the plan's current liability as of the first day of the plan year preceding the premium payment year for vested benefits of active and terminated vested participants not in pay status, computed in accordance with section 302(d)(7) of ERISA and section 412(l)(7) of the Code, shall be adjusted (in lieu of the adjustment required by § 4006.4(c)(1)) by multiplying that value by the sum of 1 plus the product of .07 and the number of years (rounded to the nearest hundredth of a year) between the date of the Schedule B data and (in the case of a distress termination) the proposed termination date or (in the case of an involuntary termination) the termination date sought by the PBGC; and
(4) The exponent, “Y,” in the time adjustment formula of § 4006.4(c)(5) shall be deemed to equal the number of years (rounded to the nearest hundredth of a year) between the date of the Schedule B data and the last day of the plan year preceding the premium payment year.
(d) Special determination date rule for new and newly-covered plans . In the case of a new plan or a newly-covered plan, all references in §§ 4006.3, 4006.4, and paragraphs (a) and (b) of this section to the last day of the plan year preceding the premium payment year shall be deemed to refer to the first day of the premium payment year or, if later, the date on which the plan became effective for benefit accruals for future service, and for purposes of determining the plan's premium, the number of plan participants, and (for a single-employer plan) the amount of the plan's unfunded vested benefits and the applicability of any exemption or special rule under paragraph (a) or (b) of this section, shall be determined as of such first day or later date.
(e) Special determination date rule for certain mergers and spinoffs . (1) With respect to a plan described in paragraph (e)(2) of this section, all references in §§ 4006.3, 4006.4, and this section, as applicable, to the last day of the plan year preceding the premium payment year shall be deemed to refer to the first day of the premium payment year.
(2) A plan is described in this paragraph (e)(2) if—
(i) The plan engages in a merger or spinoff that is not de minimis pursuant to the regulations under section 414(l) of the Code (in the case of single-employer plans) or pursuant to part 4231 of this chapter (in the case of multiemployer plans), as applicable;
(ii) The merger or spinoff is effective on the first day of the plan's premium payment year; and
(iii) The plan is the transferee plan in the case of a merger or the transferor plan in the case of a spinoff.
(f) Special refund rule for certain short plan years . A plan described in this paragraph (f) is entitled to a refund for a short plan year. The amount of the refund will be determined by prorating the premium for the short plan year by the number of months (treating a part of a month as a month) in the short plan year. A plan is described in this paragraph if—
(1) The plan is a new or newly-covered plan that becomes effective for premium purposes on a date other than the first day of its first plan year;
(2) The plan adopts an amendment changing its plan year, resulting in a short plan year;
(3) The plan's assets are distributed pursuant to the plan's termination, in which case the short plan year for purposes of computing the amount of the refund under this paragraph shall be deemed to end on the asset distribution date or, if later (in the case of a single-employer plan), the date 30 days prior to the date the PBGC receives the plan's post-distribution certification; or
(4) The plan is a single-employer plan and a trustee of the plan is appointed pursuant to section 4042 of ERISA, in which case the short plan year for purposes of computing the amount of the refund under this paragraph shall be deemed to end on the date of appointment.
(g) Special rules for plans of regulated public utilities . (1) This paragraph (g) applies to a premium payment year beginning before 1998 of a plan maintained by one or more contributing sponsors at least one of which is a regulated public utility. For this purpose, a regulated public utility is one that, as of the beginning of the premium payment year, is described in section 7701(a)(33)(A)(i) of the Code and has not begun to collect from utility customers rates that reflect the costs incurred or projected to be incurred for additional premiums under section 4006(a)(3)(E) of ERISA pursuant to final and nonappealable determinations by all public utility commissions (or other authorities having jurisdiction over the rates and terms of service by the regulated public utility) that the costs are just and reasonable and recoverable from customers of the regulated public utility.
(2) Limitation on variable-rate premium and required interest rate. If every contributing sponsor of a plan described in paragraph (a) of this section is a regulated public utility, then, notwithstanding the provisions of §§ 4006.3(b) and 4006.4(b)(1),—
(i) The variable-rate premium shall not be greater than $53 multiplied by the number of participants in the plan on the last day of the plan year preceding the premium payment year; and
(ii) If the premium payment year begins after June 1997, § 4006.4(b)(1) shall be applied as if the applicable percentage referred to therein were 80 percent.
(3) Proportional application of limitation rules. If a plan is described in paragraph (g)(1) of this section but also has a contributing sponsor that is not a regulated public utility and participants who are not regulated public utility participants (determined under any reasonable method consistently applied among participants and from year to year), the limitations in paragraph (g)(2) of this section shall be applied in proportion to the number of regulated public utility participants in accordance with the Premium Payment Package.
(4) Special variable-rate premium rule for certain small regulated public utility plans paying maximum variable-rate premium. A plan whose variable-rate premium is subject to the limitation described in paragraph (g)(2)(i) of this section is not required to determine its unfunded vested benefits under § 4006.4 if—
(i) The number of participants required to be taken into account in computing the plan's premium for the premium payment year is fewer than 500; and
(ii) The plan pays a variable-rate premium equal to $53 multiplied by the number of participants in the plan on the last day of the plan year preceding the premium payment year.
(5) Effect of omitted or inadequate information. The variable-rate premium of a plan described in paragraph (g)(2) of this section may be deemed to be $53 multiplied by the number of participants in the plan on the last day of the plan year preceding the premium payment year if—
(i) Any item or items necessary to establish the correct variable-rate premium for the plan are omitted from the plan's premium filing; or
(ii) In connection with an audit, the plan's records fail, in the PBGC's judgment, to establish that the plan's unfunded vested benefits were of the amount reported by the plan for the premium payment year.
29 C.F.R. § 4006.5 — Exemptions and special rules. · CFR 1997 annual edition (revised as of 1997-07-01) · https://pensionresource.website/EAMain?content=EAMain.Law&id=cfr29-4006.5&asof=1997-07-01 · printed Oct 16, 2026
On this page
  • (a) Variable-rate premium exemptions.
  • (b) Special rule for determining vested benefits for certain la…
  • (c) Special rule for determining unfunded vested benefits for p…
  • (d) (d) Special determination date rule for new and newly-cover…
  • (e) (e) Special determination date rule for certain mergers and…
  • (f) (f) Special refund rule for certain short plan years . A pl…
  • (g) (g) Special rules for plans of regulated public utilities .…
Implements
ERISA § 4006 (29 U.S.C. § 1306) Premium rates
Cited by (code & regs)
Guidance addressing this section
PBGC
Proposed Rules
  • 90 FR 6894Proposed Jan 21, 2025 — Miscellaneous Corrections, Clarifications, and Improvements Comments due Mar 24, 2025 (g)(h)
  • 84 FR 30666Proposed Jun 27, 2019 — Miscellaneous Corrections, Clarifications, and Improvements Comments due Aug 26, 2019 (a)(3)(a)(4)(e)(f)(f)(1)
Final Rules
Also cited in 4 other documents
PBGC
Final Rules
  • 90 FR 39320 Aug 15, 2025 — Miscellaneous Corrections, Clarifications, and Improvements (g)(h)
  • 88 FR 76660 Nov 7, 2023 — Technical Amendments: Special Financial Assistance Withdrawal Liability Condition; SECURE 2.0 Act; and Other Updates (b)
  • 79 FR 13547 Mar 11, 2014 — Premium Rates; Payment of Premiums; Reducing Regulatory Burden
Proposed Rules
  • 78 FR 44056Proposed Jul 23, 2013 — Premium Rates; Payment of Premiums; Reducing Regulatory Burden Comments due Sep 23, 2013

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Each row is a version of the text as published by the official source. Code dates are the edition/release point that first reflected the change; regulation dates are eCFR effective dates. The library checks the official sources automatically, so new versions appear here on their own; “run” opens the sync that recorded a version.

EffectiveThroughSourceAmended by
Jul 1, 1997Jun 30, 1998CFR 1997 annual edition (revised as of 1997-07-01) run 127View
Jul 1, 1998Jun 30, 2001CFR 2000 annual edition (revised as of 2000-07-01) run 12762 FR 60428, Nov. 7, 1997View · Redline (sign in)
Jul 1, 2001Jun 30, 2004CFR 2003 annual edition (revised as of 2003-07-01) run 12765 FR 75163, Dec. 1, 2000View · Redline (sign in)
Jul 1, 2004Jun 30, 2006CFR 2005 annual edition (revised as of 2005-07-01) run 12765 FR 75163, Dec. 1, 2000View · Redline (sign in)
Jul 1, 2006Jun 30, 2008CFR 2007 annual edition (revised as of 2007-07-01) run 12771 FR 31081, June 1, 2005View · Redline (sign in)
Jul 1, 2008Jun 30, 2009CFR 2008 annual edition (revised as of 2008-07-01) run 12773 FR 15075, Mar. 21, 2008View · Redline (sign in)
Jul 1, 2009Jun 30, 2014CFR 2013 annual edition (revised as of 2013-07-01) run 12773 FR 15075, Mar. 21, 2008View · Redline (sign in)
Jul 1, 2014Feb 3, 2020eCFR amendment effective 2017-01-01 run 2679 FR 13560, Mar. 11, 2014View · Redline (sign in)
Feb 4, 2020Mar 4, 2020eCFR amendment effective 2020-02-04 run 2679 FR 13560, Mar. 11, 2014View · Redline (sign in)
Mar 5, 2020Nov 6, 2023eCFR editorial change effective 2020-03-05 run 2685 FR 6058, Feb. 4, 2020View · Redline (sign in)
Nov 7, 2023Dec 6, 2023eCFR amendment effective 2023-11-07 run 2685 FR 6058, Feb. 4, 2020View · Redline (sign in)
Dec 7, 2023Aug 14, 2025eCFR amendment effective 2023-12-07 run 2688 FR 76664, Nov. 7, 2023View · Redline (sign in)
Aug 15, 2025Sep 14, 2025eCFR amendment effective 2025-08-15 run 2688 FR 76664, Nov. 7, 2023View · Redline (sign in)
Sep 15, 2025currenteCFR amendment effective 2025-09-15 run 290 FR 39327, Aug. 15, 2025View · Redline (sign in)
Provision-level history (blame)