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(a) Failure to meet pre-distribution requirements—
(1) In general. Except as provided in paragraphs (a)(2) and (c) of this section, the PBGC will issue a notice of noncompliance within the 60-day (or extended) time period prescribed by §4041.26(a) whenever it determines that—
(i) The plan administrator failed to issue the notice of intent to terminate to all affected parties (other than the PBGC) in accordance with §4041.23;
(ii) The plan administrator failed to issue notices of plan benefits to all affected parties entitled to plan benefits in accordance with §4041.24;
(iii) The plan administrator failed to file the standard termination notice in accordance with §4041.25;
(iv) As of the distribution date proposed in the standard termination notice, plan assets will not be sufficient to satisfy all plan benefits under the plan; or
(v) In the case of a spin-off/termination transaction (as described in §4041.23(c)), the plan administrator failed to issue any notice required by §4041.23(c), §4041.24(f), or §4041.27(a)(2) in accordance with such section.
(2) Interests of participants. The PBGC may decide not to issue a notice of noncompliance based on a failure to meet a requirement under paragraphs (a)(1)(i) through (a)(1)(iii) or (a)(1)(v) of this section if it determines that issuance of the notice would be inconsistent with the interests of participants and beneficiaries.
(3) Continuing authority. The PBGC may issue a notice of noncompliance or suspend the termination proceeding based on a failure to meet a requirement under paragraphs (a)(1)(i) through (a)(1)(v) of this section after expiration of the 60-day (or extended) time period prescribed by §4041.26(a) (including upon audit) if the PBGC determines such action is necessary to carry out the purposes of Title IV.
(b) Failure to meet distribution requirements—
(1) In general. If the PBGC determines, as part of an audit or otherwise, that the plan administrator has not satisfied any distribution requirement of §4041.28(a) or (c), it may issue a notice of noncompliance.
(2) Criteria. In deciding whether to issue a notice of noncompliance under paragraph (b)(1) of this section, the PBGC may consider—
(i) The nature and extent of the failure to satisfy a requirement of §4041.28(a) or (c);
(ii) Any corrective action taken by the plan administrator; and
(iii) The interests of participants and beneficiaries.
(3) Late distributions. The PBGC will not issue a notice of noncompliance for failure to distribute timely based on any facts disclosed in the post-distribution certification if 60 or more days have passed from the PBGC's receipt of the post-distribution certification. The 60-day period may be extended by agreement between the plan administrator and the PBGC.
(c) Correction of errors. The PBGC will not issue a notice of noncompliance based solely on the plan administrator's inclusion of erroneous information (or omission of correct information) in a notice required to be provided to any person under this part if—
(1) The PBGC determines that the plan administrator acted in good faith in connection with the error;
(2) The plan administrator corrects the error no later than—
(i) In the case of an error in the notice of plan benefits under §4041.24, the latest date an election notice may be provided to the person; or
(ii) In any other case, as soon as practicable after the plan administrator knows or should know of the error, or by any later date specified by the PBGC; and
(3) The PBGC determines that the delay in providing the correct information will not substantially harm any person.
(d) Reconsideration. A plan administrator may request reconsideration of a notice of noncompliance in accordance with the rules prescribed in part 4003, subpart C.
(e) Consequences of notice of noncompliance—
(1) Effect on termination. A notice of noncompliance ends the standard termination proceeding, nullifies all actions taken to terminate the plan, and renders the plan an ongoing plan. A notice of noncompliance is effective upon the expiration of the period within which the plan administrator may request reconsideration under paragraph (d) of this section or, if reconsideration is requested, a decision by the PBGC upholding the notice. However, once a notice is issued, the running of all time periods specified in ERISA or this part relevant to the termination will be suspended, and the plan administrator may take no further action to terminate the plan (except by initiation of a new termination) unless and until the notice is revoked. A plan administrator that still desires to terminate a plan must initiate the termination process again, starting with the issuance of a new notice of intent to terminate.
(2) Effect on plan administration. If the PBGC issues a notice of noncompliance, the prohibitions in §4041.22(a)(1) and (a)(2) will cease to apply—
(i) Upon expiration of the period during which reconsideration may be requested or, if earlier, at the time the plan administrator decides not to request reconsideration; or
(ii) If reconsideration is requested, upon PBGC issuance of a decision on reconsideration upholding the notice of noncompliance.
(3) Revocation of notice of noncompliance. If a notice of noncompliance is revoked, unless the PBGC provides otherwise, any time period suspended by the issuance of the notice will resume running from the date of the revocation. In no case will the review period under §4041.26(a) end less than 60 days from the date the PBGC received the standard termination notice.
(f) If no notice of noncompliance is issued. A standard termination is deemed to be valid if—
(1) The plan administrator files a standard termination notice under §4041.25 and the PBGC does not issue a notice of noncompliance pursuant to §4041.31(a); and
(2) The plan administrator files a post-distribution certification under §4041.29 and the PBGC does not issue a notice of noncompliance pursuant to §4041.31(b).
(g) Notice to affected parties. Upon a decision by the PBGC on reconsideration affirming the issuance of a notice of noncompliance or, if earlier, upon the plan administrator's decision not to request reconsideration, the plan administrator must notify the affected parties (other than the PBGC), and any persons who were provided notice under §4041.23(c), in writing that the plan is not going to terminate or, if applicable, that the termination was invalid but that a new notice of intent to terminate is being issued.