Payment of special financial assistance.

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§ 4262.12 Payment of special financial assistance.

(a) Amount of special financial assistance.

(1) The amount of special financial assistance to be paid to or for a plan by PBGC will be the total of -

(i) The amount required as demonstrated by the plan sponsor on the application for such special financial assistance, determined under § 4262.4 as of the SFA measurement date; plus

(ii) Interest on the amount in paragraph (a)(1)(i) of this section from the SFA measurement date to the date PBGC sends payment (not the bank settlement date) at a rate equal to the interest rate required under § 4262.4(e)(1); plus

(iii) The amount owed to PBGC under section 4261 of ERISA determined as of the date PBGC sends payment of special financial assistance; minus

(iv) Financial assistance payments under section 4261 of ERISA received by the plan between the SFA measurement date and the date PBGC sends payment of special financial assistance, with interest on each such financial assistance payment from the date thereof to the date PBGC sends payment as described in paragraph (a)(1)(ii) of this section calculated at a rate equal to the interest rate required under § 4262.4(e)(1).

(2) The plan must include in its application payment instructions in accordance with the special financial instructions on PBGC's website at www.pbgc.gov. Payment will be considered made by PBGC when, in accordance with the payment instructions in the application, PBGC no longer has ownership of the amount being paid. Any adjustment for delay will be borne by PBGC only to the extent that it arises while PBGC has ownership of the funds.

(b) Repayment of traditional financial assistance. If a plan has an obligation to repay financial assistance under section 4261 of ERISA, PBGC will -

(1) Issue a written demand for repayment of financial assistance when the application is approved; and

(2) Deduct the amount of financial assistance, including interest, that the plan owes PBGC from the special financial assistance before payment to the plan.

(c) Date of payment of special financial assistance. Special financial assistance issued by PBGC will be paid as soon as practicable upon approval of the plan's special financial assistance application but not later than the earlier of -

(1) Ninety days after a plan's special financial assistance application is approved by PBGC or deemed approved; or

(2) September 30, 2030.

(d) Manner of payment. The payment of special financial assistance to a plan will be made by PBGC in a lump sum or substantially so and is not a loan subject to repayment obligations. Notwithstanding the foregoing, the following payment obligations apply:

(1) Special financial assistance is subject to recalculation or adjustment to correct a clerical or arithmetic error. PBGC will, and plans must, make payments as needed to reflect any such recalculation or adjustment in a timely manner.

(2) If PBGC determines that a payment for special financial assistance to a plan exceeded the amount to which the plan was entitled, any excess payment constitutes a debt to the Federal Government. If not paid within 90 calendar days after demand, PBGC may reduce the debt by any action permitted by Federal statute. Except where otherwise provided by statutes or regulations, PBGC will charge interest and other amounts permitted on an overdue debt in accordance with the Federal Claims Collection Standards (31 CFR parts 900 through 999). The date from which interest is computed is not extended by litigation or the filing of any form of appeal.


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