(a) Suspension upon formal challenge to termination. (1)(i) If the PBGC is advised, before the 60-day (or extended) period specified in
§ 4041.25 ends (in a standard termination) or before issuance of a notice of inability to determine sufficiency or a distribution notice pursuant to
§ 4041.45(b) or (c) (in a distress termination), that a formal challenge to the termination (as described in
paragraph (b) of this section) has been initiated, the PBGC shall suspend the termination proceeding and shall so advise the plan administrator in writing.
(ii) If the PBGC is advised of a challenge described in
paragraph (a)(1)(i) of this section after the 60-day (or extended) period specified in
§ 4041.25 ends (in a standard termination) or after issuance of a notice of inability to determine sufficiency or a distribution notice pursuant to
§ 4041.45(b) or (c) (in a distress termination) but before the termination procedure is concluded pursuant to this part, the PBGC may suspend the termination proceeding and, if it does, shall so advise the plan administrator in writing.
(2) The rules in paragraphs (a)(3) or (a)(4) (as appropriate) shall apply during a period of suspension beginning on the date of the PBGC's written notification to the plan administrator and ending with the final resolution of the challenge to the termination:
(3) In a standard termination—
(i) The running of all time periods specified in ERISA or this part relevant to the termination shall be suspended; and
(ii) The plan administrator shall comply with the prohibitions in
§ 4041.4.
(4) In a distress termination—
(i) The suspension shall stay the issuance by the PBGC of any notice of inability to determine sufficiency or distribution notice or, if any such notice was previously issued, shall stay its effectiveness;
(ii) The plan administrator shall comply with the prohibitions in
§ 4041.4; and
(iii) The plan administrator shall file a distress termination notice with the PBGC in the manner and within the time specified in
§ 4041.43.
(b) Formal challenge to termination. For purposes of this section, a formal challenge to a plan termination is initiated when any of the following actions is taken, asserting that the termination would violate the terms and conditions of an existing collective bargaining agreement:
(1) The commencement of any procedure specified in the collective bargaining agreement for resolving disputes under the agreement; or
(2) The commencement of any action before an arbitrator, administrative agency or board, or court under applicable labor-management relations law.
(c) Resolution of challenge. Immediately upon the final resolution (as described in paragraph (d) of this section) of the formal challenge to the termination, the plan administrator shall notify the PBGC in writing of the outcome of the challenge, and shall provide the PBGC with a copy of the award or order, if any. If the validity of the proposed termination has been upheld, the plan administrator also shall advise the PBGC whether the plan administrator wishes to continue the proposed termination.
(1) Challenge sustained. If the arbitrator, agency, board, or court has determined (or the parties have agreed) that the proposed termination violates an existing collective bargaining agreement, the PBGC shall dismiss the termination proceeding, all actions taken to effect the plan termination shall be null and void, and the plan shall be an ongoing plan. In this event, in a distress termination,
§ 4041.4(g) shall apply as of the date of the dismissal by the PBGC.
(2) Termination sustained. If the arbitrator, agency, board, or court has determined (or the parties have agreed) that the proposed termination does not violate an existing collective bargaining agreement and the plan administrator wishes to proceed with the termination, the PBGC shall reactivate the termination proceeding by sending a written notice thereof to the plan administrator, and the following rules shall apply:
(i) The termination proceeding shall continue from the point where it was suspended;
(ii) All actions taken to effect the termination before the suspension shall be effective;
(iii) Any time periods that were suspended shall resume running from the date of the PBGC's notice of the reactivation of the proceeding;
(iv) Any time periods that had fewer than 15 days remaining shall be extended to the 15th day after the date of the PBGC's notice, or such later date as the PBGC may specify, and
(v) In a distress termination, the PBGC shall proceed to issue a notice of inability to determine sufficiency or a distribution notice (or reactivate any such notice stayed under
paragraph (a)(3) of this section), either with or without first requesting updated information from the plan administrator pursuant to
§ 4041.43(c).
(d) Final resolution of challenge. For purposes of this section, a formal challenge to a proposed termination is finally resolved when—
(1) The parties involved in the challenge enter into a settlement that resolves the challenge;
(2) A final award, administrative decision, or court order is issued that is not subject to review or appeal; or
(3) A final award, administrative decision, or court order is issued that is not appealed, or review or enforcement of which is not sought, within the time for filing an appeal or requesting review or enforcement.
(e) Involuntary termination by the PBGC. Notwithstanding any other provision of this section, the PBGC retains the authority in any case to initiate a plan termination in accordance with the provisions of
section 4042 of ERISA.
29 C.F.R. § 4041.5 — Record retention and availability. · CFR 1997 annual edition (revised as of 1997-07-01) · https://pensionresource.website/EAMain?content=EAMain.Law&id=cfr29-4041.5&asof=1997-07-01 · printed Oct 16, 2026