29 CFR 4043.31 - Extraordinary dividend or stock redemption.

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§ 4043.31 Extraordinary dividend or stock redemption.

(a) Reportable event. A reportable event occurs for a plan when any member of the plan's controlled group declares a dividend or redeems its own stock and the amount or net value of the distribution, when combined with other such distributions during the same fiscal year of the person, exceeds the person's net income before after-tax gain or loss on any sale of assets, as determined in accordance with generally accepted accounting principles, for the prior fiscal year. A distribution by a person to a member of its controlled group is disregarded.

(b) Determination rules. For purposes of paragraph (a) of this section, the net value of a non-cash distribution is the fair market value of assets transferred by the person making the distribution, reduced by the fair market value of any liabilities assumed or consideration given by the recipient in connection with the distribution. Net value determinations should be based on readily available fair market value(s) or independent appraisal(s) performed within one year before the distribution is made. To the extent that fair market values are not readily available and no such appraisals exist, the fair market value of an asset transferred in connection with a distribution or a liability assumed by a recipient of a distribution is deemed to be equal to 200 percent of the book value of the asset or liability on the books of the person making the distribution. Stock redeemed is deemed to have no value.

(c) Waivers -

(1) De minimis 10-percent segment. Notice under this section is waived if the person making the distribution is a de minimis 10-percent segment of the plan's controlled group for the most recent fiscal year(s) ending on or before the date the reportable event occurs.

(2) Foreign entity. Notice under this section is waived if the person making the distribution is a foreign entity other than a foreign parent.

(3) Small plan. Notice under this section is waived if the plan had 100 or fewer participants for whom flat-rate premiums were payable for the plan year preceding the event year.

(4) Low-default-risk. Notice under this section is waived if each contributing sponsor of the plan and the highest level U.S. parent of each contributing sponsor are low-default-risk on the date of the event.

(5) Well-funded plan. Notice under this section is waived if the plan is in the well-funded plan safe harbor for the event year.

(6) Public company. Notice under this section is waived if any contributing sponsor of the plan before the transaction is a public company and the contributing sponsor timely files a SEC Form 8-K disclosing the event under an item of the Form 8-K other than under Item 2.02 (Results of Operations and Financial Condition) or in financial statements under Item 9.01 (Financial Statements and Exhibits).

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

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United States Code

Title 29 published on 2015-07-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 29 CFR Part 4043 after this date.

  • 2015-09-11; vol. 80 # 176 - Friday, September 11, 2015
    1. 80 FR 54980 - Reportable Events and Certain Other Notification Requirements
      GPO FDSys XML | Text
      PENSION BENEFIT GUARANTY CORPORATION
      Final rule.
      Effective October 13, 2015. See Applicability in SUPPLEMENTARY INFORMATION.
      29 CFR Parts 4000, 4001, 4043, 4204, 4206, and 4231