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Pension Resource

29 C.F.R. § 4041.42

Administration of plan during termination process.
eCFR editorial change effective 2017-01-01 · current · last amended by 63 FR 29355, May 29, 1998
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Amended effective Jul 1, 1998 by 63 FR 29355, May 29, 1998. See what changed
(a) General rule. Except to the extent specifically prohibited by this section, during the pendency of termination proceedings the plan administrator must continue to carry out the normal operations of the plan, such as putting participants into pay status, collecting contributions due the plan, and investing plan assets.
(b) Prohibitions after issuing notice of intent to terminate. The plan administrator may not make loans to plan participants beginning on the first day he or she issues a notice of intent to terminate, and from that date until a distribution is permitted pursuant to § 4041.50, the plan administrator may not—
(1) Distribute plan assets pursuant to, or (except as required by this part) take any other actions to implement, the termination of the plan;
(2) Pay benefits attributable to employer contributions, other than death benefits, in any form other than as an annuity; or
(3) Purchase irrevocable commitments to provide benefits from an insurer.
(c) Limitation on benefit payments on or after proposed termination date. Beginning on the proposed termination date, the plan administrator must reduce benefits to the level determined under part 4022, subpart D, of this chapter.
(d) Failure to qualify for distress termination. In any case where the PBGC determines, pursuant to § 4041.44(c) or § 4041.46(c)(1), that the requirements for a distress termination are not satisfied—
(1) The prohibitions in paragraph (b) of this section, other than those in paragraph (b)(1), will cease to apply—
(i) Upon expiration of the period during which reconsideration may be requested under §§ 4041.44(e) and 4041.46(e) or, if earlier, at the time the plan administrator decides not to request reconsideration; or
(ii) If reconsideration is requested, upon PBGC issuance of its decision on reconsideration.
(2) Any benefits that were not paid pursuant to paragraph (c) of this section will be due and payable as of the effective date of the PBGC's determination, together with interest from the date (or dates) on which the unpaid amounts were originally due until the date on which they are paid in full at the rate or rates prescribed under § 4022.81(c)(3) of this chapter.
(e) Effect of subsequent insufficiency. If the plan administrator makes a finding of subsequent insufficiency for guaranteed benefits pursuant to § 4041.49(b), or the PBGC notifies the plan administrator that it has made a finding of subsequent insufficiency for guaranteed benefits pursuant to § 4041.40(d), the prohibitions in paragraph (b) of this section will apply in accordance with § 4041.49(e).
Source credit, amendments & notes

[62 FR 60428, Nov. 7, 1997, as amended at 63 FR 29355, May 29, 1998]

29 C.F.R. § 4041.42 — Administration of plan during termination process. · eCFR editorial change effective 2017-01-01 · https://pensionresource.website/EAMain?content=EAMain.Law&id=cfr29-4041.42 · printed Oct 16, 2026
On this page
  • (a) General rule.
  • (b) Prohibitions after issuing notice of intent to terminate.
  • (c) Limitation on benefit payments on or after proposed termina…
  • (d) Failure to qualify for distress termination.
  • (e) Effect of subsequent insufficiency.
Implements
ERISA § 4041 (29 U.S.C. § 1341) Termination of single-employer plans
Cited by (code & regs)
Guidance addressing this section

No documents are primarily about this section.

Also cited in 2 other documents
PBGC
Proposed Rules
  • 76 FR 67105Proposed Oct 31, 2011 — Cash Balance Plans; Benefit Determinations and Plan Valuations for Statutory Hybrid Plans; Pension Protection Act of 2006 Comments due Dec 30, 2011 (d)
Final Rules
  • 76 FR 34590 Jun 14, 2011 — Bankruptcy Filing Date Treated as Plan Termination Date for Certain Purposes; Guaranteed Benefits; Allocation of Plan Assets; Pension Protection Act of 2006 (c)

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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, 1998currenteCFR editorial change effective 2017-01-01 run 263 FR 29355, May 29, 1998View · Redline (sign in)
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