Brief Case
Pension Resource

29 C.F.R. § 4231.6

Plan solvency tests.
CFR 1997 annual edition (revised as of 1997-07-01) · superseded Jul 1, 1998
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(a) Significant transfers. A significant transfer satisfies the plan solvency requirement of section 4231(b)(3) of ERISA and § 4231.3(a)(3)(i) if all of the following requirements are met by each plan involved in the transfer:
(1) Expected contributions shall equal or exceed the estimated amount necessary to satisfy the minimum funding requirement of section 412(a) of the Code (including reorganization funding, if applicable) for the five plan years beginning on or after the proposed effective date of the transfer.
(2) The fair market value of plan assets immediately after the transfer shall equal or exceed the total amount of expected benefit payments during the first five plan years beginning on or after the proposed effective date of the transfer.
(3) Expected contributions for the first plan year beginning on or after the proposed effective date of the transfer shall equal or exceed expected benefit payments for that plan year.
(4) Contributions for the amortization period shall equal or exceed unfunded accrued benefits plus expected normal costs.
(i) Notwithstanding paragraph (c)(4) of this section, unfunded accrued benefits means the excess of the present value of accrued benefits over the fair market value of the assets, determined on the basis of the actuarial valuation required under § 4231.5(b).
(ii) Amortization period means either 25 plan years or the amortization period for the resulting base when the combined charge base and the combined credit base are offset under section 412(b)(4) of the Code. The actuary may select either period.
(b) Mergers and non-significant transfers. A merger or non-significant transfer satisfies the plan solvency requirement of section 4231(b)(3) of ERISA and § 4231.3(a)(3)(i) if, for the merged plan or for each plan that continues after the transfer—
(1) The fair market value of plan assets immediately after the merger or transfer equals or exceeds five times the benefit payments in the last plan year ending before the proposed effective date of the merger or transfer; or
(2) In each of the first five plan years beginning after the proposed effective date of the merger or transfer, expected plan assets plus expected contributions and investment earnings equal or exceed expected expenses and benefit payments for the plan year.
(c) Rules for determinations. In determining whether a transaction satisfies the plan solvency requirements set forth in this section, the following rules apply:
(1) Expected contributions after a merger or transfer shall be determined by assuming that contributions will equal contributions received in or accrued for the last full plan year ending before the date on which the notice of merger or transfer is filed with the PBGC. Contributions shall be adjusted, however, to reflect any change in the rate of employer contributions that has been negotiated (whether or not in effect), or a trend of changing contribution base units over the preceding five plan years or other period of time that can be demonstrated to be more appropriate.
(2) Expected normal costs shall be determined under the funding method and assumptions used by the plan actuary for purposes of determining the minimum funding requirement under section 412 of the Code (which requires that such assumptions be reasonable in the aggregate). If the plan is using an aggregate funding method, normal costs shall be determined under the entry age normal method.
(3) Expected benefit payments shall be determined by assuming that current benefits remain in effect and that all scheduled increases in benefits occur.
(4) The fair market value of plan assets immediately after the merger or transfer shall be based on the most recent data available to the plan sponsor immediately before the date on which the notice is filed.
(5) Expected investment earnings shall be determined using the same interest assumption used for determining the minimum funding requirement under section 412 of the Code.
(6) Expected expenses shall be determined using expenses in the last plan year ending before the notice is filed, adjusted to reflect any anticipated changes.
(7) Expected plan assets for a plan year shall be determined by adjusting the most current data on fair market value of plan assets to reflect expected contributions, investment earnings, benefit payments and expenses for each plan year between the date of the most current data and the beginning of the plan year for which expected assets are being determined.
29 C.F.R. § 4231.6 — Plan solvency tests. · CFR 1997 annual edition (revised as of 1997-07-01) · https://pensionresource.website/EAMain?content=EAMain.Law&id=cfr29-4231.6&asof=1997-07-01 · printed Oct 16, 2026
On this page
  • (a) Significant transfers.
  • (b) Mergers and non-significant transfers.
  • (c) Rules for determinations.
Implements
ERISA § 4231 (29 U.S.C. § 1411) Mergers and transfers between multiemployer plans
Cited by (code & regs)
Guidance addressing this section
PBGC
Final Rules
Proposed Rules
Also cited in 2 other documents
PBGC
Final Rules
  • 80 FR 54980 Sep 11, 2015 — Reportable Events and Certain Other Notification Requirements
Proposed Rules
  • 78 FR 20039Proposed Apr 3, 2013 — Reportable Events and Certain Other Notification Requirements Comments due Jun 3, 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, 2016CFR 2015 annual edition (revised as of 2015-07-01) run 127View · Redline (sign in)
Jul 1, 2016Oct 14, 2018eCFR amendment effective 2017-01-01 run 2680 FR 55010, Sept. 11, 2015View · Redline (sign in)
Oct 15, 2018currenteCFR editorial change effective 2018-10-15 run 2View · Redline (sign in)
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