29 C.F.R. § 4041.3 — Computation of time; filing and issuance rules.

(a) Exclusive means of voluntary plan termination . A plan may be voluntarily terminated by the plan administrator only if all of the requirements for a standard termination set forth in paragraph (b) of this section are satisfied or all of the requirements for a distress termination set forth in paragraph (c) of this section are satisfied.

(b) Requirements for a standard termination . A plan may be terminated in a standard termination only if—

(1) The plan administrator issues a notice of intent to terminate to each affected party in accordance with § 4041.21 at least 60 days and not more than 90 days before the proposed termination date;

(2) The plan administrator files a standard termination notice with the PBGC in accordance with § 4041.24 no later than 120 days after the proposed termination date or, if applicable, no later than the due date established in an extension notice issued under § 4041.8;

(3) The plan administrator issues notices of plan benefits to plan participants and beneficiaries in accordance with §§ 4041.22 and 4041.23 no later than the date that the standard termination notice is filed with the PBGC;

(4) The PBGC does not issue a notice of noncompliance to the plan administrator pursuant to § 4041.26; and

(5) The plan administrator distributes plan assets in accordance with § 4041.27(c) within the 180-day (or extended) distribution period under § 4041.27(a), (e), and (f) (or, where applicable, within the time prescribed in part 4050 of this chapter), in satisfaction of all benefit liabilities under the plan.

(c) Requirements for a distress termination . A plan may be terminated in a distress termination only if—

(1) The plan administrator issues a notice of intent to terminate to each affected party in accordance with § 4041.41 at least 60 days and not more than 90 days before the proposed termination date;

(2) The plan administrator files a distress termination notice with the PBGC in accordance with § 4041.43 no later than 120 days after the proposed termination date or, if applicable, no later than the due date established in an extension notice issued under § 4041.8; and

(3) The PBGC determines that each contributing sponsor and each member of its controlled group satisfy one of the distress criteria set forth in paragraph (e) of this section.

(d) Effect of failure to satisfy requirements . (1) If the plan administrator does not satisfy all of the requirements of paragraph (b) of this section for a standard termination or, except as provided in paragraph (d)(2)(i) of this section, all of the requirements of paragraph (c) of this section for a distress termination, any action taken to effect the plan termination shall be null and void, and the plan shall be an ongoing plan. A plan administrator who still desires to terminate the plan shall initiate the termination process again, starting with the issuance of a new notice of intent to terminate.

(2)

(i) The PBGC may, upon its own motion, waive any requirement with respect to notices to be filed with the PBGC under paragraph (c)(1) or (c)(2) of this section if the PBGC believes that it will be less costly or administratively burdensome to the PBGC to do so. The PBGC will not entertain requests for waivers under this paragraph.

(ii) Notwithstanding any other provision of this part, the PBGC retains the authority in any case to initiate a plan termination in accordance with the provisions of section 4042 of ERISA.

(e) Distress criteria . In a distress termination, each contributing sponsor and each member of its controlled group shall satisfy at least one (but not necessarily the same one) of the following criteria in order for a distress termination to occur:

(1) Liquidation . This criterion is met if, as of the proposed termination date—

(i) A person has filed or had filed against it a petition seeking liquidation in a case under title 11, United States Code, or under a similar federal law or law of a State or political subdivision of a State, or a case described in paragraph (e)(2) of this section has been converted to such a case; and

(ii) The case has not been dismissed.

(2) Reorganization . This criterion is met if—

(i) As of the proposed termination date, a person has filed or had filed against it a petition seeking reorganization in a case under title 11, United States Code, or under a similar law of a state or a political subdivision of a state, or a case described in paragraph (e)(1) of this section has been converted to such a case;

(ii) As of the proposed termination date, the case has not been dismissed;

(iii) The person notifies the PBGC of any request to the bankruptcy court (or other appropriate court in a case under such similar law of a state or a political subdivision of a state) for approval of the plan termination by concurrently filing with the PBGC a copy of the motion requesting court approval, including any documents submitted in support of the request; and

(iv) The bankruptcy court or other appropriate court determines that, unless the plan is terminated, such person will be unable to pay all its debts pursuant to a plan of reorganization and will be unable to continue in business outside the reorganization process and approves the plan termination.

(3) Inability to continue in business. This criterion is met if a person demonstrates to the satisfaction of the PBGC that, unless a distress termination occurs, the person will be unable to pay its debts when due and to continue in business.

(4) Unreasonably burdensome pension costs. This criterion is met if a person demonstrates to the satisfaction of the PBGC that the person's costs of providing pension coverage have become unreasonably burdensome solely as a result of declining covered employment under all single-employer plans for which that person is a contributing sponsor.

(f) Non-duplicative efforts.

(1) If a person requests approval of the plan termination by a court, as described in paragraph (e)(2) of this section, the PBGC—

(i) Will normally enter an appearance to request that the court make specific findings as to whether the contributing sponsor or controlled group member meets the distress test in paragraph (e)(3) of this section, or state that it is unable to make such findings;

(ii) Will provide the court with any information it has that may be germane to the court's ruling;

(iii) Will, if the person has requested, or later requests, a determination by the PBGC under paragraph (e)(3) of this section, defer action on the request until the court makes its determination; and

(iv) Will be bound by a final and non-appealable order of the court.

(2) If a person requests a determination by the PBGC under paragraph (e)(3) of this section, the PBGC determines that the distress criterion is not met, and the person thereafter requests approval of the plan termination by a court, as described in paragraph (e)(2) of this section, the PBGC will advise the court of its determination and make its administrative record available to the court.

(g) Non-recognition of certain actions. If the PBGC finds that a person undertook any action or failed to act for the principal purpose of satisfying any of the distress criteria contained in paragraph (e) of this section, rather than for a reasonable business purpose, the PBGC shall disregard such act or failure to act in determining whether the person has satisfied any of those criteria.