Section 4041.28 - Closeout of plan(a)Distribution deadline - (1)In general. Unless a notice of noncompliance is issued under § 4041.31(a) , the plan administrator must complete the distribution of plan assets in satisfaction of plan benefits (through priority category 6 under section 4044 of ERISA and part 4044 of this chapter) by the later of-(i) 180 days after the expiration of the PBGC's 60-day (or extended) review period under § 4041.26(a) ; or(ii) If the plan administrator meets the requirements of § 4041.25(c) , 120 days after receipt of a favorable determination from the IRS.(2)Revocation of notice of noncompliance. If the PBGC revokes a notice of noncompliance issued under § 4041.31(a) , the distribution deadline is extended until the 180th day after the date of the revocation.(3)Missing participants and beneficiaries. The distribution deadline is considered met with respect to a missing distributee to whom subpart A of part 4050 of this chapter applies if the benefit transfer amount for the missing distributee is considered timely transferred to PBGC under subpart A of part 4050 of this chapter.(b)Assets insufficient to satisfy plan benefits. If, at the time of any distribution, the plan administrator determines that plan assets are not sufficient to satisfy all plan benefits (with assets determined net of other liabilities, including PBGC premiums), the plan administrator may not make any further distribution of assets to effect the plan's termination and must promptly notify the PBGC.(c)Method of distribution -(1)In general. The plan administrator must, in accordance with all applicable requirements under the Code and ERISA, distribute plan assets in satisfaction of all plan benefits by purchase of an irrevocable commitment from an insurer or in another permitted form.(2)Lump sum calculations. In the absence of evidence establishing that another date is the "annuity starting date" under the Code, the distribution date is the "annuity starting date" for purposes of-(i) Calculating the present value of plan benefits that may be provided in a form other than by purchase of an irrevocable commitment from an insurer (e.g., in selecting the interest rate(s) to be used to value a lump sum distribution); and(ii) Determining whether plan benefits will be paid in such other form.(3)Selection of insurer. In the case of plan benefits that will be provided by purchase of an irrevocable commitment from an insurer, the plan administrator must select the insurer in accordance with the fiduciary standards of Title I of ERISA.(4)Participating annuity contracts. In the case of a plan in which any residual assets will be distributed to participants, a participating annuity contract may be purchased to satisfy the requirement that annuities be provided by the purchase of irrevocable commitments only if the portion of the price of the contract that is attributable to the participation feature- (i) Is not taken into account in determining the amount of residual assets; and(ii) Is not paid from residual assets allocable to participants.(5)Missing participants. The plan administrator must distribute plan benefits to missing participants in accordance with subpart A of part 4050 of this chapter.(d)Provision of annuity contract. If plan benefits are provided through the purchase of irrevocable commitments-(1) Either the plan administrator or the insurer must, within 30 days after it is available, provide each participant and beneficiary with a copy of the annuity contract or certificate showing the insurer's name and address and clearly reflecting the insurer's obligation to provide the participant's or beneficiary's plan benefits; and(2) If such a contract or certificate is not provided to the participant or beneficiary by the date on which the post-distribution certification is required to be filed in order to avoid the assessment of penalties under § 4041.29(b) , the plan administrator must, no later than that date, provide the participant and beneficiary with a notice that includes-(i) A statement that the obligation for providing the participant's or beneficiary's plan benefits has transferred to the insurer;(ii) The name and address of the insurer;(iii) The name, address, and telephone number of the person designated by the insurer to answer questions concerning the annuity; and(iv) A statement that the participant or beneficiary will receive from the plan administrator or insurer a copy of the annuity contract or a certificate showing the insurer's name and address and clearly reflecting the insurer's obligation to provide the participant's or beneficiary's plan benefits.62 FR 60428, Nov. 7, 1997, as amended at 82 FR 60818, Dec. 22, 2017