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Pension Resource

29 C.F.R. § 4041.6

Effect of failure to provide required information.
CFR 1997 annual edition (revised as of 1997-07-01) · superseded Jul 1, 1998
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(a) General rule. Except as provided in paragraphs (b) and (d) of this section (or, where applicable, in part 4050 of this chapter), when a plan is closed out under § 4041.27 (in a standard termination) or § 4041.48 (in a distress termination), any benefit that is payable as an annuity under the provisions of the plan must be provided in annuity form through the purchase from an insurer of a single premium, nonparticipating, nonsurrenderable annuity contract that constitutes an irrevocable commitment by the insurer to provide the benefits purchased.
(b) Exceptions to annuity requirement. A benefit that is payable as an annuity under the provisions of a plan need not be provided in annuity form if the plan provides for an alternative form of distribution and either paragraph (b)(1) or (b)(2) of this section applies:
(1) The participant is not in pay status as of the distribution date, and the present value of the participant's total benefit under the plan, including amounts previously distributed to the participant, is $3,500 or less, determined in accordance with sections 411(a)(11) and 417(e)(3) of the Code and the regulations thereunder. The present value of such benefits shall be determined using the interest rate or rates as of—
(i) The date set forth in the plan for such purpose, provided that the plan provision is in accord with section 417(e)(3) of the Code and the regulations thereunder (substituting “distribution date” for “annuity starting date” wherever used in the plan); or
(ii) If the plan does not provide for such a date, the distribution date.
(2) The participant elected the alternative form of distribution in writing, with the written consent of his or her spouse, in accordance with the requirements of sections 401(a)(11), 411(a)(11), and 417 of the Code and the regulations thereunder.
(c) Optional benefit forms. Except as permitted by sections 401(a)(11), 411(d)(6), and 417 of the Code and the regulations thereunder, an annuity contract purchased to satisfy the annuity requirement shall preserve all applicable benefit options provided under the plan as of the termination date.
(d) Participating annuities— (1) General rule. Notwithstanding the requirement of paragraph (a) of this section that an annuity contract be nonparticipating, a participating annuity contract may be purchased to satisfy the annuity requirement if the plan can provide for all benefit liabilities and—
(i) All benefit liabilities will be guaranteed under the annuity contract as the unconditional, irrevocable, and noncancellable obligation of the insurer;
(ii) In no event, including unfavorable investment or actuarial experience, can the amounts payable to participants under the annuity contract decrease except to correct mistakes; and
(iii) As provided in paragraph (d)(2) of this section, no amount of residual assets to which participants are entitled will be used to pay for the participation feature.
(2) Plans with residual assets. If all or a portion of the residual assets of a plan will be distributed to participants—
(i) The additional premium for the participation feature must be paid from the contributing sponsor's share, if any, of the residual assets or from assets of the contributing sponsor; and
(ii) If the plan provided for mandatory employee contributions, the amount of residual assets must be determined using the price of the annuities for all benefit liabilities without the participation feature.
29 C.F.R. § 4041.6 — Effect of failure to provide required information. · CFR 1997 annual edition (revised as of 1997-07-01) · https://pensionresource.website/EAMain?content=EAMain.Law&id=cfr29-4041.6&asof=1997-07-01 · printed Oct 16, 2026
On this page
  • (a) General rule.
  • (b) Exceptions to annuity requirement.
  • (c) Optional benefit forms.
  • (d) (d) Participating annuities— (1) General rule. Notwithstand…
Implements
ERISA § 4041 (29 U.S.C. § 1341) Termination of single-employer plans
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Also cited in 1 other documents
PBGC
Final Rules
  • 81 FR 29765 May 13, 2016 — Adjustment of Civil Penalties

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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, 2016CFR 2015 annual edition (revised as of 2015-07-01) run 127View · Redline (sign in)
Jul 1, 2016Dec 31, 2016CFR 2016 annual edition (revised as of 2016-07-01) run 127View · Redline (sign in)
Jan 1, 2017currenteCFR amendment effective 2017-01-01 run 281 FR 29766, May 13, 2016View · Redline (sign in)
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