83 FR 26312 - Pendency of Request for Exemption From the Bond/Escrow Requirement Relating to the Sale of Assets by an Employer Who Contributes to a Multiemployer Plan; Marlins Holdings LLC

PENSION BENEFIT GUARANTY CORPORATION

Federal Register Volume 83, Issue 109 (June 6, 2018)

This notice advises interested persons that the Pension Benefit Guaranty Corporation has received a request from Marlins Holdings LLC for an exemption from the bond or escrow requirement and contract requirements under the Employee Retirement Income Security Act of 1974, as amended, with respect to the Major League Baseball Players Benefit Plan. A sale of assets by an employer that contributes to a multiemployer pension plan will not constitute a complete or partial withdrawal from the plan if the transaction meets certain conditions. One of these conditions is that the purchaser post a bond or deposit money in escrow for the five-plan-year period beginning after the sale. The PBGC is authorized to grant individual and class exemptions from this requirement. Before granting an exemption, the statute and PBGC regulations require PBGC to give interested persons an opportunity to comment on the exemption request. The purpose of this notice is to advise interested persons of the exemption request and solicit their views on it.

[Federal Register Volume 83, Number 109 (Wednesday, June 6, 2018)]
[Notices]
[Pages 26312-26313]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-12129]



[[Page 26312]]

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PENSION BENEFIT GUARANTY CORPORATION


Pendency of Request for Exemption From the Bond/Escrow 
Requirement Relating to the Sale of Assets by an Employer Who 
Contributes to a Multiemployer Plan; Marlins Holdings LLC

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Notice of pendency of request.

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SUMMARY: This notice advises interested persons that the Pension 
Benefit Guaranty Corporation has received a request from Marlins 
Holdings LLC for an exemption from the bond or escrow requirement and 
contract requirements under the Employee Retirement Income Security Act 
of 1974, as amended, with respect to the Major League Baseball Players 
Benefit Plan. A sale of assets by an employer that contributes to a 
multiemployer pension plan will not constitute a complete or partial 
withdrawal from the plan if the transaction meets certain conditions. 
One of these conditions is that the purchaser post a bond or deposit 
money in escrow for the five-plan-year period beginning after the sale. 
The PBGC is authorized to grant individual and class exemptions from 
this requirement. Before granting an exemption, the statute and PBGC 
regulations require PBGC to give interested persons an opportunity to 
comment on the exemption request. The purpose of this notice is to 
advise interested persons of the exemption request and solicit their 
views on it.

DATES: Comments must be submitted on or before July 23, 2018.

ADDRESSES: Comments may be submitted by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Refer to the Marlins 
Holdings LLC in the subject line.
     Mail or Hand Delivery: Regulatory Affairs Division, Office 
of the General Counsel, Pension Benefit Guaranty Corporation, 1200 K 
Street NW, Washington, DC 20005-4026.
    All submissions received must include the agency's name (Pension 
Benefit Guaranty Corporation, or PBGC) and refer to Marlins Holdings 
LLC. All comments received will be posted without change to PBGC's 
website, http://www.pbgc.gov, including any personal information 
provided. Copies of comments may also be obtained by writing to 
Disclosure Division, Office of the General Counsel, Pension Benefit 
Guaranty Corporation, 1200 K Street NW, Washington, DC 20005-4026 or 
calling 202-326-4040 during normal business hours. (TTY users may call 
the Federal relay service toll-free at 1-800-877-8339 and ask to be 
connected to 202-326-4040.)

FOR FURTHER INFORMATION CONTACT: Bruce Perlin, Assistant General 
Counsel ([email protected]), 202-326-4020, ext. 6818, Jon 
Chatalian, Acting Assistant General Counsel ([email protected]), 
ext. 6757, or Mary A. Petrovic, Attorney ([email protected]), ext. 
4638, Office of the General Counsel, Suite 340, 1200 K Street NW, 
Washington, DC 20005-4026; (TTY/TDD users may call the Federal relay 
service toll-free at 1-800-877-8339 and ask to be connected to 202-326-
4020.)

SUPPLEMENTARY INFORMATION:

Background

    Section 4204 of the Employee Retirement Income Security Act of 
1974, as amended by the Multiemployer Pension Plan Amendments Act of 
1980 (ERISA), provides that a bona fide arm's-length sale of assets of 
a contributing employer to an unrelated party will not be considered a 
withdrawal if three conditions are met. These conditions, enumerated in 
section 4204(a)(1)(A)-(C), are that--
    (A) the purchaser has an obligation to contribute to the plan with 
respect to covered operations for substantially the same number of 
contribution base units for which the seller was obligated to 
contribute;
    (B) the purchaser obtains a bond or places an amount in escrow, for 
a period of five plan years after the sale, equal to the greater of the 
seller's average required annual contribution to the plan for the three 
plan years preceding the year in which the sale occurred or the 
seller's required annual contribution for the plan year preceding the 
year in which the sale occurred; and
    (C) the contract of sale provides that if the purchaser withdraws 
from the plan within the first five plan years beginning after the sale 
and fails to pay any of its liability to the plan, the seller shall be 
secondarily liable for the liability it (the seller) would have had but 
for section 4204.
    The bond or escrow described above would be paid to the plan if the 
purchaser withdraws from the plan or fails to make any required 
contributions to the plan within the first five plan years beginning 
after the sale. Additionally, section 4204(b)(1) of ERISA provides that 
if a sale of assets is covered by section 4204, the purchaser assumes 
by operation of law the contribution record of the seller for the plan 
year in which the sale occurred and the preceding four plan years.
    Section 4204(c) of ERISA authorizes the Pension Benefit Guaranty 
Corporation (``PBGC'') to grant individual or class variances or 
exemptions from the purchaser's bond/escrow requirement of section 
4204(a)(1)(B) when warranted. The legislative history of section 4204 
indicates a Congressional intent that the statute be administered in a 
manner that assures protection of the plan with the least practicable 
intrusion into normal business transactions. Senate Committee on Labor 
and Human Resources, 96th Cong., 2nd Sess., S.1076, The Multiemployer 
Pension Plan Amendments Act of 1980: Summary and Analysis of 
Considerations 16 (Comm. Print, April 1980); 128 Cong. Rec. S10117 
(July 29, 1980). The granting of a variance or exemption from the bond/
escrow requirement does not constitute a finding by the PBGC that a 
particular transaction satisfies the other requirements of section 
4204(a)(1).
    Under the PBGC's regulation on variances for sales of assets (29 
CFR part 4204), a request for a variance or exemption from the bond/
escrow requirement under any of the tests established in the regulation 
(29 CFR parts 4204.12 & 4204.13) is to be made to the plan in question. 
The PBGC will consider a variance or exemption request only when the 
request is not based on satisfaction of one of the four regulatory 
tests under regulation sections 4204.12 and 4204.13 or when the parties 
assert that the financial information necessary to show satisfaction of 
one of the regulatory tests is privileged or confidential financial 
information within the meaning of 5 U.S.C. 552(b)(4) (Freedom of 
Information Act).
    Under section 4204.22 of the regulation, the PBGC shall approve a 
request for a variance or exemption if it determines that approval of 
the request is warranted, in that it--
    (1) would more effectively or equitably carry out the purposes of 
Title IV of the Act; and
    (2) would not significantly increase the risk of financial loss to 
the plan.
    Section 4204(c) of ERISA and section 4204.22(b) of the regulation 
require the PBGC to publish a notice of the pendency of a request for a 
variance or exemption in the Federal Register, and to provide 
interested parties with an opportunity to comment on the proposed 
variance or exemption.

[[Page 26313]]

The Request

    The PBGC has received a request from Marlins Holdings LLC (the 
``Purchaser'') for an exemption from the bond or escrow requirement and 
contract requirements of section 4204(a)(1)(B) and (C) with respect to 
its purchase of the Miami Marlins Major League Baseball franchise from 
Miami Marlins, L.P. (the ``Seller'') on February 21, 2018. In the 
request, the Purchaser represents among other things that:
    1. The Seller was obligated to contribute to the Major League 
Baseball Players Benefit Plan (the ``Plan'') for certain employees of 
the sold operations.
    2. The Purchaser has agreed to assume the obligation to contribute 
to the Plan for substantially the same number of contribution base 
units as the Seller.
    3. The Seller has agreed to be secondarily liable for any 
withdrawal liability it would have had with respect to the sold 
operations (if not for section 4204) should the Purchaser withdraw from 
the Plan and fail to pay its withdrawal liability.
    4. The estimated amount of the withdrawal liability of the Seller 
with respect to the operations subject to the sale is $19,169,342.
    5. The amount of the bond/escrow established under section 
4204(a)(1)(B) is $4,781,000.
    6. Major League Baseball has a unique structure in which the Plan 
is funded from the Major League Central Fund (the ``Central Fund''), 
maintained and administered by the Commissioner of Baseball. Under this 
structure, contributions to the Plan for all participating employers 
are paid by the Office of the Commissioner of Baseball from the Central 
Fund on behalf of each participating employer in satisfaction of the 
employer's pension liability under the Plan's funding agreement. The 
monies in the Central Fund are derived directly from common revenues 
related to the All-Star Game, post-season games, certain media rights 
and other common revenues (collectively, the ``Revenues'').
    7. In support of the exemption request, the requester asserts that, 
``the Plan is funded from the Central Fund that is maintained and 
administered by the Commissioner of Baseball.'' Major League Baseball 
pays contributions directly to the Plan from the Central Fund. Further, 
the requester asserts that, ``the Plan enjoys a substantial degree of 
security with respect to contributions on behalf of the Clubs. A change 
in ownership of a Club does not affect the obligation of the Central 
Fund to fund the Plan. As such, approval of this exemption request 
would not increase the risk of financial loss to the Plan.''
    8. A complete copy of the request was sent to the Plan and to the 
Major League Baseball Players Association by certified mail, return 
receipt requested.

Comments

    All interested persons are invited to submit written comments on 
the pending exemption request to the above address. All comments will 
be made a part of the record. The PBGC will make the comments received 
available on its website, www.pbgc.gov. Copies of the comments and the 
non-confidential portions of the request may be obtained by writing or 
visiting the PBGC's Communications Outreach and Legislative Affairs 
Department (COLA) at the above address or by visiting that office or 
calling 202-326-4343 during normal business hours.

    Issued in Washington, DC.
William Reeder,
Director, Pension Benefit Guaranty Corporation.
[FR Doc. 2018-12129 Filed 6-5-18; 8:45 am]
BILLING CODE 7709-01-P