SUBCHAPTER III—PLAN TERMINATION INSURANCE
Subtitle A—Pension Benefit Guaranty Corporation
§1301. Definitions
(a) For purposes of this subchapter, the term—
(1) "administrator" means the person or persons described in paragraph (16) of
(2) "substantial employer", for any plan year of a single-employer plan, means one or more persons—
(A) who are contributing sponsors of the plan in such plan year,
(B) who, at any time during such plan year, are members of the same controlled group, and
(C) whose required contributions to the plan for each plan year constituting one of—
(i) the two immediately preceding plan years, or
(ii) the first two of the three immediately preceding plan years,
total an amount greater than or equal to 10 percent of all contributions required to be paid to or under the plan for such plan year;
(3) "multiemployer plan" means a plan—
(A) to which more than one employer is required to contribute,
(B) which is maintained pursuant to one or more collective bargaining agreements between one or more employee organizations and more than one employer, and
(C) which satisfies such other requirements as the Secretary of Labor may prescribe by regulation,
except that, in applying this paragraph—
(i) a plan shall be considered a multiemployer plan on and after its termination date if the plan was a multiemployer plan under this paragraph for the plan year preceding such termination, and
(ii) for any plan year which began before September 26, 1980, the term "multiemployer plan" means a plan described in
(4) "corporation", except where the context clearly requires otherwise, means the Pension Benefit Guaranty Corporation established under
(5) "fund" means the appropriate fund established under
(6) "basic benefits" means benefits guaranteed under
(7) "non-basic benefits" means benefits guaranteed under section 1322(c) 1 of this title or 1322a(g) of this title;
(8) "nonforfeitable benefit" means, with respect to a plan, a benefit for which a participant has satisfied the conditions for entitlement under the plan or the requirements of this chapter (other than submission of a formal application, retirement, completion of a required waiting period, or death in the case of a benefit which returns all or a portion of a participant's accumulated mandatory employee contributions upon the participant's death), whether or not the benefit may subsequently be reduced or suspended by a plan amendment, an occurrence of any condition, or operation of this chapter or title 26;
(9) Repealed.
(10) "plan sponsor" means, with respect to a multiemployer plan—
(A) the plan's joint board of trustees, or
(B) if the plan has no joint board of trustees, the plan administrator;
(11) "contribution base unit" means a unit with respect to which an employer has an obligation to contribute under a multiemployer plan, as defined in regulations prescribed by the Secretary of the Treasury;
(12) "outstanding claim for withdrawal liability" means a plan's claim for the unpaid balance of the liability determined under part 1 of subtitle E for which demand has been made, valued in accordance with regulations prescribed by the corporation;
(13) "contributing sponsor", of a single-employer plan, means a person described in
(14) in the case of a single-employer plan—
(A) "controlled group" means, in connection with any person, a group consisting of such person and all other persons under common control with such person;
(B) the determination of whether two or more persons are under "common control" shall be made under regulations of the corporation which are consistent and coextensive with regulations prescribed for similar purposes by the Secretary of the Treasury under subsections (b) and (c) of
(C)(i) notwithstanding any other provision of this subchapter, during any period in which an individual possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of an affected air carrier of which he was an accountable owner, whether through the ownership of voting securities, by contract, or otherwise, the affected air carrier shall be considered to be under common control not only with those persons described in subparagraph (B), but also with all related persons; and
(ii) for purposes of this subparagraph, the term—
(I) "affected air carrier" means an air carrier, as defined in
(II) "related person" means any person which was under common control (as determined under subparagraph (B)) with an affected air carrier on October 10, 1991, or any successor to such related person;
(III) "accountable owner" means any individual who on October 10, 1991, owned directly or indirectly through the application of
(IV) "successor" means any person that acquires, directly or indirectly through the application of
(V) "individual" means a living human being;
(15) "single-employer plan" means any defined benefit plan (as defined in
(16) "benefit liabilities" means the benefits of employees and their beneficiaries under the plan (within the meaning of
(17) "amount of unfunded guaranteed benefits", of a participant or beneficiary as of any date under a single-employer plan, means an amount equal to the excess of—
(A) the actuarial present value (determined as of such date on the basis of assumptions prescribed by the corporation for purposes of
(B) the current value (as of such date) of the assets of the plan which are required to be allocated to those benefits under
(18) "amount of unfunded benefit liabilities" means, as of any date, the excess (if any) of—
(A) the value of the benefit liabilities under the plan (determined as of such date on the basis of assumptions prescribed by the corporation for purposes of
(B) the current value (as of such date) of the assets of the plan;
(19) "outstanding amount of benefit liabilities" means, with respect to any plan, the excess (if any) of—
(A) the value of the benefit liabilities under the plan (determined as of the termination date on the basis of assumptions prescribed by the corporation for purposes of
(B) the value of the benefit liabilities which would be so determined by only taking into account benefits which are guaranteed under
(20) "person" has the meaning set forth in
(21) "affected party" means, with respect to a plan—
(A) each participant in the plan,
(B) each beneficiary under the plan who is a beneficiary of a deceased participant or who is an alternate payee (within the meaning of
(C) each employee organization representing participants in the plan, and
(D) the corporation,
except that, in connection with any notice required to be provided to the affected party, if an affected party has designated, in writing, a person to receive such notice on behalf of the affected party, any reference to the affected party shall be construed to refer to such person.
(b)(1) An individual who owns the entire interest in an unincorporated trade or business is treated as his own employer, and a partnership is treated as the employer of each partner who is an employee within the meaning of
(2) For purposes of subtitle E—
(A) except as otherwise provided in subtitle E, contributions or other payments shall be considered made under a plan for a plan year if they are made within the period prescribed under section 412(c)(10) 3 of title 26 (determined, in the case of a terminated plan, as if the plan had continued beyond the termination date), and
(B) the term "Secretary of the Treasury" means the Secretary of the Treasury or such Secretary's delegate.
(
Editorial Notes
References in Text
This chapter, referred to in subsec. (a)(8), was in the original "this Act", meaning
Section 412, referred to in subsec. (b)(2)(A), was amended generally by
Codification
In subsec. (a)(14)(C)(ii)(I), "
Amendments
2014—Subsec. (a)(9).
2006—Subsec. (a)(13).
1994—Subsec. (a)(13).
"(A) who is responsible, in connection with such plan, for meeting the funding requirements under
"(B) who is a member of the controlled group of a person described in subparagraph (A), has been responsible for meeting such funding requirements, and has employed a significant number (as may be defined in regulations of the corporation) of participants under such plan while such person was so responsible;".
1991—Subsec. (a)(14)(C).
1989—Subsecs. (a)(8), (13)(A), (14)(B), (b)(1), (2)(A).
1987—Subsec. (a)(16).
"(A) are guaranteed under
"(B) would be guaranteed under
"(C) constitute—
"(i) early retirement supplements or subsidies, or
"(ii) plant closing benefits,
irrespective of whether any such supplements, subsidies, or benefits are benefits guaranteed under
Subsec. (a)(18).
"(A) the actuarial present value (determined as of such date on the basis of assumptions prescribed by the corporation for purposes of
"(B) the current value (as of such date) of the assets of the plan which are required to be allocated to those benefit commitments under
Subsec. (a)(19).
"(A) the actuarial present value (determined as of the termination date on the basis of assumptions prescribed by the corporation for purposes of
"(B) the actuarial present value (determined as of such date on the basis of assumptions prescribed by the corporation for purposes of
1986—Subsec. (a)(2).
Subsec. (a)(13).
Subsec. (a)(14).
Subsec. (a)(15) to (21).
Subsec. (b).
1980—Subsec. (a)(2).
Subsec. (a)(3).
Subsec. (a)(6).
Subsec. (a)(7).
Subsec. (a)(8) to (12).
Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 2014 Amendment
Amendment by
Effective Date of 2006 Amendment
Amendment by
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1987 Amendment
"(A) plan terminations under section 4041 of ERISA [
"(B) plan terminations with respect to which proceedings are instituted by the Pension Benefit Guaranty Corporation under section 4042 of ERISA [
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Applicability of Amendments by Subtitles A and B of Title I of Pub. L. 109–280
For special rules on applicability of amendments by subtitles A (§§101–108) and B (§§111–116) of title I of
Coordination of Internal Revenue Code of 1986 With Employee Retirement Income Security Act of 1974
This subchapter not applicable in interpreting Internal Revenue Code of 1986, except to the extent specifically provided in such Code, or as determined by the Secretary of the Treasury, see section 9343(a) of
1 See References in Text note below.
2 So in original. The period probably should be a semicolon.
3 See References in Text note below.
§1302. Pension Benefit Guaranty Corporation
(a) Establishment within Department of Labor
There is established within the Department of Labor a body corporate to be known as the Pension Benefit Guaranty Corporation. In carrying out its functions under this subchapter, the corporation shall be administered by a Director, who shall be appointed by the President, by and with the advice and consent of the Senate, and who shall act in accordance with the policies established by the board. The purposes of this subchapter, which are to be carried out by the corporation, are—
(1) to encourage the continuation and maintenance of voluntary private pension plans for the benefit of their participants,
(2) to provide for the timely and uninterrupted payment of pension benefits to participants and beneficiaries under plans to which this subchapter applies, and
(3) to maintain premiums established by the corporation under
(b) Powers of corporation
To carry out the purposes of this subchapter, the corporation has the powers conferred on a nonprofit corporation under the District of Columbia Nonprofit Corporation Act and, in addition to any specific power granted to the corporation elsewhere in this subchapter or under that Act, the corporation has the power—
(1) to sue and be sued, complain and defend, in its corporate name and through its own counsel, in any court, State or Federal;
(2) to adopt, alter, and use a corporate seal, which shall be judicially noticed;
(3) to adopt, amend, and repeal, by the board of directors, bylaws, rules, and regulations relating to the conduct of its business and the exercise of all other rights and powers granted to it by this chapter and such other bylaws, rules, and regulations as may be necessary to carry out the purposes of this subchapter;
(4) to conduct its business (including the carrying on of operations and the maintenance of offices) and to exercise all other rights and powers granted to it by this chapter in any State or other jurisdiction without regard to qualification, licensing, or other requirements imposed by law in such State or other jurisdiction;
(5) to lease, purchase, accept gifts or donations of, or otherwise to acquire, to own, hold, improve, use, or otherwise deal in or with, and to sell, convey, mortgage, pledge, lease, exchange, or otherwise dispose of, any property, real, personal, or mixed, or any interest therein wherever situated;
(6) to appoint and fix the compensation of such officers, attorneys, employees, and agents as may be required, to determine their qualifications, to define their duties, and, to the extent desired by the corporation, require bonds for them and fix the penalty thereof, and to appoint and fix the compensation of experts and consultants in accordance with the provisions of
(7) to utilize the personnel and facilities of any other agency or department of the United States Government, with or without reimbursement, with the consent of the head of such agency or department; and
(8) to enter into contracts, to execute instruments, to incur liabilities, and to do any and all other acts and things as may be necessary or incidental to the conduct of its business and the exercise of all other rights and powers granted to the corporation by this chapter.
(c) Director
The Director shall be accountable to the board of directors. The Director shall serve for a term of 5 years unless removed by the President or the board of directors before the expiration of such 5-year term.
(d) Board of directors; compensation; reimbursement for expenses
(1) The board of directors of the corporation consists of the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Commerce. Members of the Board shall serve without compensation, but shall be reimbursed for travel, subsistence, and other necessary expenses incurred in the performance of their duties as members of the board. The Secretary of Labor is the chairman of the board of directors.
(2) A majority of the members of the board of directors in office shall constitute a quorum for the transaction of business. The vote of the majority of the members present and voting at a meeting at which a quorum is present shall be the act of the board of directors.
(3) Each member of the board of directors shall designate in writing an official, not below the level of Assistant Secretary, to serve as the voting representative of such member on the board. Such designation shall be effective until revoked or until a date or event specified therein. Any such representative may refer for board action any matter under consideration by the designating board member, but such representative shall not count toward establishment of a quorum as described under paragraph (2).
(4) The Inspector General of the corporation shall report to the board of directors, and not less than twice a year, shall attend a meeting of the board of directors to provide a report on the activities and findings of the Inspector General, including with respect to monitoring and review of the operations of the corporation.
(5) The General Counsel of the corporation shall—
(A) serve as the secretary to the board of directors, and advise such board as needed; and
(B) have overall responsibility for all legal matters affecting the corporation and provide the corporation with legal advice and opinions on all matters of law affecting the corporation, except that the authority of the General Counsel shall not extend to the Office of Inspector General and the independent legal counsel of such Office.
(6) Notwithstanding any other provision of this chapter, the Office of Inspector General and the legal counsel of such Office are independent of the management of the corporation and the General Counsel of the corporation.
(7) The board of directors may appoint and fix the compensation of employees as may be required to enable the board of directors to perform its duties. The board of directors shall determine the qualifications and duties of such employees and may appoint and fix the compensation of experts and consultants in accordance with the provisions of
(e) Meetings
(1) The board of directors shall meet at the call of its chairman, or as otherwise provided by the bylaws of the corporation, but in no case less than 4 times a year with not fewer than 2 members present. Not less than 1 meeting of the board of directors during each year shall be a joint meeting with the advisory committee under subsection (h).
(2)(A) Except as provided in subparagraph (B), the chairman of the board of directors shall make available to the public the minutes from each meeting of the board of directors.
(B) The minutes of a meeting of the board of directors, or a portion thereof, shall not be subject to disclosure under subparagraph (A) if the chairman reasonably determines that such minutes, or portion thereof, contain confidential employer information including information obtained under
(C) The minutes of a meeting, or portion of 1 thereof, exempt from disclosure pursuant to subparagraph (B) shall be exempt from disclosure under
(f) Adoption of bylaws; amendment, alteration; publication in the Federal Register
As soon as practicable, but not later than 180 days after September 2, 1974, the board of directors shall adopt initial bylaws and rules relating to the conduct of the business of the corporation. Thereafter, the board of directors may alter, supplement, or repeal any existing bylaw or rule, and may adopt additional bylaws and rules from time to time as may be necessary. The chairman of the board shall cause a copy of the bylaws of the corporation to be published in the Federal Register not less often than once each year.
(g) Exemption from taxation
(1) The corporation, its property, its franchise, capital, reserves, surplus, and its income (including, but not limited to, any income of any fund established under
(2) The receipts and disbursements of the corporation in the discharge of its functions shall be included in the totals of the budget of the United States Government. The United States is not liable for any obligation or liability incurred by the corporation.
(3) Omitted.
(h) Advisory committee to corporation
(1) There is established an advisory committee to the corporation, for the purpose of advising the corporation as to its policies and procedures relating to (A) the appointment of trustees in termination proceedings, (B) investment of moneys, (C) whether plans being terminated should be liquidated immediately or continued in operation under a trustee, (D) such other issues as the corporation may request from time to time, and (E) other issues as determined appropriate by the advisory committee. The advisory committee may also recommend persons for appointment as trustees in termination proceedings, make recommendations with respect to the investment of moneys in the funds, and advise the corporation as to whether a plan subject to being terminated should be liquidated immediately or continued in operation under a trustee. In the event of a vacancy or impending vacancy in the office of the Participant and Plan Sponsor Advocate established under
(2) The advisory committee consists of seven members appointed, from among individuals recommended by the board of directors, by the President. Of the seven members, two shall represent the interests of employee organizations, two shall represent the interests of employers who maintain pension plans, and three shall represent the interests of the general public. The President shall designate one member as chairman at the time of the appointment of that member.
(3) Members shall serve for terms of 3 years each, except that, of the members first appointed, one of the members representing the interests of employee organizations, one of the members representing the interests of employers, and one of the members representing the interests of the general public shall be appointed for terms of 2 years each, one of the members representing the interests of the general public shall be appointed for a term of 1 year, and the other members shall be appointed to full 3–year terms. The advisory committee shall meet at least six times each year and at such other times as may be determined by the chairman or requested by any three members of the advisory committee. Not less than 1 meeting of the advisory committee during each year shall be a joint meeting with the board of directors under subsection (e).
(4) Members shall be chosen on the basis of their experience with employee organizations, with employers who maintain pension plans, with the administration of pension plans, or otherwise on account of outstanding demonstrated ability in related fields. Of the members serving on the advisory committee at any time, no more than four shall be affiliated with the same political party.
(5) An individual appointed to fill a vacancy occurring other than by the expiration of a term of office shall be appointed only for the unexpired term of the member he succeeds. Any vacancy occurring in the office of a member of the advisory committee shall be filled in the manner in which that office was originally filled.
(6) The advisory committee shall appoint and fix the compensation of such employees as it determines necessary to discharge its duties, including experts and consultants in accordance with the provisions of
(7) Members of the advisory committee shall, for each day (including traveltime) during which they are attending meetings or conferences of the committee or otherwise engaged in the business of the committee, be compensated at a rate fixed by the corporation which is not in excess of the daily equivalent of the annual rate of basic pay in effect for grade GS–18 of the General Schedule, and while away from their homes or regular places of business they may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by
(8)
(i) Special rules regarding disasters, etc.
In the case of a pension or other employee benefit plan, or any sponsor, administrator, participant, beneficiary, or other person with respect to such plan, affected by a Presidentially declared disaster (as defined in
(j) Conflicts of interest
(1) In general
The Director of the corporation and each member of the board of directors shall not participate in a decision of the corporation in which the Director or such member has a direct financial interest. The Director of the corporation shall not participate in any activities that would present a potential conflict of interest or appearance of a conflict of interest without approval of the board of directors.
(2) Establishment of policy
The board of directors shall establish a policy that will inform the identification of potential conflicts of interests of the members of the board of directors and mitigate perceived conflicts of interest of such members and the Director of the corporation.
(k) Risk management officer
The corporation shall have a risk management officer whose duties include evaluating and mitigating the risk that the corporation might experience. The individual in such position shall coordinate the risk management efforts of the corporation, explain risks and controls to senior management and the board of directors of the corporation, and make recommendations.
(
Editorial Notes
References in Text
The District of Columbia Nonprofit Corporation Act, referred to in subsec. (b), is
This chapter, referred to in subsecs. (b)(3), (4), (8), (d)(6), and (i), was in original "this Act", meaning
The Federal Insurance Contributions Act, referred to in subsec. (g)(1), is act Aug. 16, 1954, ch. 736, §§3101, 3102, 3111, 3112, 3121 to 3128,
The Federal Unemployment Tax Act, referred to in subsec. (g)(1), is act Aug. 16, 1954, ch. 736, §§3301 to 3311,
Codification
A prior subsec. (c), as originally enacted by section 4002 of
Amendments
2022—Subsec. (h)(8).
2012—Subsec. (c).
Subsec. (d).
Subsec. (e).
Subsec. (h)(1).
Subsec. (h)(3).
Subsec. (j).
Subsec. (k).
2006—Subsec. (a).
2002—Subsec. (i).
1989—Subsec. (g)(1).
1980—Subsec. (b)(3).
Subsec. (g)(2).
1976—Subsec. (g)(1).
Statutory Notes and Related Subsidiaries
Effective Date of 2002 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Effective Date of 1976 Amendment
Senses of Congress
"(1)
"(2)
Quality Control Procedures for the Pension Benefit Guaranty Corporation
"(a)
Policies and Procedures Relating to the Policy, Research, and Analysis Department
"(1) develop written quality review policies and procedures for all modeling and actuarial work performed by the Corporation's Policy, Research, and Analysis Department; and
"(2) conduct a record management review of such Department to determine what records must be retained as Federal records."
Transition
References in Other Laws to GS–16, 17, or 18 Pay Rates
References in laws to the rates of pay for GS–16, 17, or 18, or to maximum rates of pay under the General Schedule, to be considered references to rates payable under specified sections of Title 5, Government Organization and Employees, see section 529 [title I, §101(c)(1)] of
1 So in original. The word "of" probably should not appear.
2 So in original. Probably should be "advisory committee".
§1303. Operation of corporation
(a) Investigatory authority; audit of statistically significant number of terminating plans
The corporation may make such investigations as it deems necessary to enforce any provision of this subchapter or any rule or regulation thereunder, and may require or permit any person to file with it a statement in writing, under oath or otherwise as the corporation shall determine, as to all the facts and circumstances concerning the matter to be investigated. The corporation shall annually audit a statistically significant number of plans terminating under
(b) Discovery powers vested in board members or officers designated by the chairman
For the purpose of any such investigation, or any other proceeding under this subchapter, the Director, any member of the board of directors of the corporation, or any officer designated by the Director or chairman, may administer oaths and affirmations, subpena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, or other records which the corporation deems relevant or material to the inquiry.
(c) Contempt
In the case of contumacy by, or refusal to obey a subpena issued to, any person, the corporation may invoke the aid of any court of the United States within the jurisdiction of which such investigation or proceeding is carried on, or where such person resides or carries on business, in requiring the attendance and testimony of witnesses and the production of books, papers, correspondence, memoranda, and other records. The court may issue an order requiring such person to appear before the corporation, or member or officer designated by the corporation, and to produce records or to give testimony related to the matter under investigation or in question. Any failure to obey such order of the court may be punished by the court as a contempt thereof. All process in any such case may be served in the judicial district in which such person is an inhabitant or may be found.
(d) Cooperation with other governmental agencies
In order to avoid unnecessary expense and duplication of functions among government agencies, the corporation may make such arrangements or agreements for cooperation or mutual assistance in the performance of its functions under this subchapter as is practicable and consistent with law. The corporation may utilize the facilities or services of any department, agency, or establishment of the United States or of any State or political subdivision of a State, including the services of any of its employees, with the lawful consent of such department, agency, or establishment. The head of each department, agency, or establishment of the United States shall cooperate with the corporation and, to the extent permitted by law, provide such information and facilities as it may request for its assistance in the performance of its functions under this subchapter. The Attorney General or his representative shall receive from the corporation for appropriate action such evidence developed in the performance of its functions under this subchapter as may be found to warrant consideration for criminal prosecution under the provisions of this or any other Federal law.
(e) Civil actions by corporation; jurisdiction; process; expeditious handling of case; costs; limitation on actions
(1) Civil actions may be brought by the corporation for appropriate relief, legal or equitable or both, to enforce (A) the provisions of this subchapter, and (B) in the case of a plan which is covered under this subchapter (other than a multiemployer plan) and for which the conditions for imposition of a lien described in section 1083(k)(1)(A) and (B) or 1085a(g)(1)(A) and (B) of this title or section 430(k)(1)(A) and (B) or 433(g)(1)(A) and (B) of title 26 have been met,
(2) Except as otherwise provided in this subchapter, where such an action is brought in a district court of the United States, it may be brought in the district where the plan is administered, where the violation took place, or where a defendant resides or may be found, and process may be served in any other district where a defendant resides or may be found.
(3) The district courts of the United States shall have jurisdiction of actions brought by the corporation under this subchapter without regard to the amount in controversy in any such action.
(4) Repealed.
(5) In any action brought under this subchapter, whether to collect premiums, penalties, and interest under
(6)(A) Except as provided in subparagraph (C), an action under this subsection may not be brought after the later of—
(i) 6 years after the date on which the cause of action arose, or
(ii) 3 years after the applicable date specified in subparagraph (B).
(B)(i) Except as provided in clause (ii), the applicable date specified in this subparagraph is the earliest date on which the corporation acquired or should have acquired actual knowledge of the existence of such cause of action.
(ii) If the corporation brings the action as a trustee, the applicable date specified in this subparagraph is the date on which the corporation became a trustee with respect to the plan if such date is later than the date described in clause (i).
(C) In the case of fraud or concealment, the period described in subparagraph (A)(ii) shall be extended to 6 years after the applicable date specified in subparagraph (B).
(f) Civil actions against corporation; appropriate court; award of costs and expenses; limitation on actions; jurisdiction; removal of actions
(1) Except with respect to withdrawal liability disputes under part 1 of subtitle E, any person who is a plan sponsor, fiduciary, employer, contributing sponsor, member of a contributing sponsor's controlled group, participant, or beneficiary, and is adversely affected by any action of the corporation with respect to a plan in which such person has an interest, or who is an employee organization representing such a participant or beneficiary so adversely affected for purposes of collective bargaining with respect to such plan, may bring an action against the corporation for appropriate equitable relief in the appropriate court.
(2) For purposes of this subsection, the term "appropriate court" means—
(A) the United States district court before which proceedings under
(B) if no such proceedings are being conducted, the United States district court for the judicial district in which the plan has its principal office, or
(C) the United States District Court for the District of Columbia.
(3) In any action brought under this subsection, the court may award all or a portion of the costs and expenses incurred in connection with such action to any party who prevails or substantially prevails in such action.
(4) This subsection shall be the exclusive means for bringing actions against the corporation under this subchapter, including actions against the corporation in its capacity as a trustee under section 1342 or 1349 1 of this title.
(5)(A) Except as provided in subparagraph (C), an action under this subsection may not be brought after the later of—
(i) 6 years after the date on which the cause of action arose, or
(ii) 3 years after the applicable date specified in subparagraph (B).
(B)(i) Except as provided in clause (ii), the applicable date specified in this subparagraph is the earliest date on which the plaintiff acquired or should have acquired actual knowledge of the existence of such cause of action.
(ii) In the case of a plaintiff who is a fiduciary bringing the action in the exercise of fiduciary duties, the applicable date specified in this subparagraph is the date on which the plaintiff became a fiduciary with respect to the plan if such date is later than the date specified in clause (i).
(C) In the case of fraud or concealment, the period described in subparagraph (A)(ii) shall be extended to 6 years after the applicable date specified in subparagraph (B).
(6) The district courts of the United States have jurisdiction of actions brought under this subsection without regard to the amount in controversy.
(7) In any suit, action, or proceeding in which the corporation is a party, or intervenes under
(
Editorial Notes
References in Text
Amendments
2014—Subsec. (e)(1)(B).
Subsec. (f)(1).
2006—Subsec. (b).
Subsec. (e)(1).
1994—Subsec. (a).
Subsec. (e)(1).
1986—Subsec. (a).
Subsec. (e)(6).
Subsec. (f).
1984—Subsec. (e)(4).
1980—Subsec. (a).
Subsec. (e)(1).
Subsec. (f).
Statutory Notes and Related Subsidiaries
Effective Date of 2014 Amendment
Amendment by
Effective Date of 2006 Amendment
Amendment by section 108(b)(2) of
Effective Date of 1994 Amendment
Amendment by section 776(b)(1) of
Effective Date of 1986 Amendment
Amendment by section 11016(c)(5) of
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Applicability of Amendments by Subtitles A and B of Title I of Pub. L. 109–280
For special rules on applicability of amendments by subtitles A (§§101–108) and B (§§111–116) of title I of
1 See References in Text note below.
§1304. Participant and Plan Sponsor Advocate
(a) In general
The board of directors of the corporation shall select a Participant and Plan Sponsor Advocate from the candidates nominated by the advisory committee to the corporation under
(b) Duties
The Participant and Plan Sponsor Advocate shall—
(1) act as a liaison between the corporation, sponsors of defined benefit pension plans insured by the corporation, and participants in pension plans trusteed by the corporation;
(2) advocate for the full attainment of the rights of participants in plans trusteed by the corporation;
(3) assist pension plan sponsors and participants in resolving disputes with the corporation;
(4) identify areas in which participants and plan sponsors have persistent problems in dealings with the corporation;
(5) to the extent possible, propose changes in the administrative practices of the corporation to mitigate problems;
(6) identify potential legislative changes which may be appropriate to mitigate problems; and
(7) refer instances of fraud, waste, and abuse, and violations of law to the Office of the Inspector General of the corporation.
(c) Removal
If the Participant and Plan Sponsor Advocate is removed from office or is transferred to another position or location within the corporation or the Department of Labor, the board of the 1 directors of the corporation shall communicate in writing the reasons for any such removal or transfer to Congress not less than 30 days before the removal or transfer. Nothing in this subsection shall prohibit a personnel action otherwise authorized by law, other than transfer or removal.
(d) Compensation
The annual rate of basic pay for the Participant and Plan Sponsor Advocate shall be the same rate as the highest rate of basic pay established for the Senior Executive Service under
(e) Annual report
(1) In general
Not later than December 31 of each calendar year, the Participant and Plan Sponsor Advocate shall report to the Health, Education, Labor, and Pensions Committee of the Senate, the Committee on Finance of the Senate, the Committee on Education and the Workforce of the House of Representatives, and the Committee on Ways and Means of the House of Representatives on the activities of the Office of the Participant and Plan Sponsor Advocate during the fiscal year ending during such calendar year.
(2) Content
Each report submitted under paragraph (1) shall—
(A) summarize the assistance requests received from participants and plan sponsors and describe the activities, and evaluate the effectiveness, of the Participant and Plan Sponsor Advocate during the preceding year;
(B) identify significant problems the Participant and Plan Sponsor Advocate has identified;
(C) include specific legislative and regulatory changes to address the problems; and
(D) identify any actions taken to correct problems identified in any previous report.
(3) Concurrent submission
The Participant and Plan Sponsor Advocate shall submit a copy of each report to the Secretary of Labor, the Director of the corporation, and any other appropriate official at the same time such report is submitted to the committees of Congress under paragraph (1).
(
Editorial Notes
Prior Provisions
A prior section 1304,
1 So in original. The word "the" probably should not appear.
§1304a. Sponsor education and assistance
(a) Definition
In this section, the term "CSEC plan" has the meaning given that term in subsection (f)(1) of
(b) Education
The Participant and Plan Sponsor Advocate established under
(
Editorial Notes
Codification
Section was enacted as part of the Cooperative and Small Employer Charity Pension Flexibility Act, and not as part of the Employee Retirement Income Security Act of 1974 which comprises this chapter.
Statutory Notes and Related Subsidiaries
Effective Date
Section applicable to years beginning after Dec. 31, 2013, see section 3 of
§1305. Pension benefit guaranty funds
(a) Establishment of four revolving funds on books of Treasury of the United States
There are established on the books of the Treasury of the United States four revolving funds to be used by the corporation in carrying out its duties under this subchapter. One of the funds shall be used with respect to basic benefits guaranteed under
(b) Credits to funds; availability of funds; investment of moneys in excess of current needs
(1) Each fund established under this section shall be credited with the appropriate portion of—
(A) premiums, penalties, interest, and charges collected under this subchapter,
(B) the value of the assets of a plan administered under
(C) the amount of any employer liability payments under subtitle D, to the extent that such payments exceed liabilities of the plan (taking into account all other plan assets),
(D) earnings on investments of the fund or on assets credited to the fund under this subsection,
(E) attorney's fees awarded to the corporation, and
(F) receipts from any other operations under this subchapter.
(2) Subject to the provisions of subsection (a), each fund shall be available—
(A) for making such payments as the corporation determines are necessary to pay benefits guaranteed under
(B) to purchase assets from a plan being terminated by the corporation when the corporation determines such purchase will best protect the interests of the corporation, participants in the plan being terminated, and other insured plans,
(C) to pay the operational and administrative expenses of the corporation, including reimbursement of the expenses incurred by the Department of the Treasury in maintaining the funds, and the Comptroller General in auditing the corporation, and
(D) to pay to participants and beneficiaries the estimated amount of benefits which are guaranteed by the corporation under this subchapter and the estimated amount of other benefits to which plan assets are allocated under
(3)(A) Whenever the corporation determines that the moneys of any fund are in excess of current needs, it may request the investment of such amounts as it determines advisable by the Secretary of the Treasury in obligations issued or guaranteed by the United States.
(B) Notwithstanding subparagraph (A)—
(i) the amounts of premiums received under
(I) for fiscal year 2016, $108,000,000;
(II) for fiscal year 2017, $111,000,000;
(III) for fiscal year 2018, $113,000,000;
(IV) for fiscal year 2019, $149,000,000; and
(V) for fiscal year 2020, $296,000,000;
(ii) premiums received in fiscal years specified in subclauses (I) through (V) of clause (i) shall be allocated in order first to the noninterest-bearing account in the amount specified and second to any other accounts within such fund; and
(iii) financial assistance, as provided under
(c) Repealed. Pub. L. 112–141, div. D, title II, §40234(a), July 6, 2012, 126 Stat. 858
(d) Establishment of fifth fund; purpose, availability, etc.
(1) A fifth fund shall be established for the reimbursement of uncollectible withdrawal liability under
(A) premiums, penalties, and interest charges collected under this subchapter, and
(B) earnings on investments of the fund or on assets credited to the fund.
The fund shall be available to make payments pursuant to the supplemental program established under
(2) The corporation may invest amounts of the fund in such obligations as the corporation considers appropriate.
(e) Establishment of sixth fund; purpose, availability, etc.
(1) A sixth fund shall be established for the supplemental benefit guarantee program provided under
(2) Such fund shall be credited with the appropriate—
(A) premiums, penalties, and interest charges collected under
(B) earnings on investments of the fund or on assets credited to the fund.
The fund shall be available for making payments pursuant to the supplemental benefit guarantee program established under
(3) The corporation may invest amounts of the fund in such obligations as the corporation considers appropriate.
(f) Deposit of premiums into separate revolving fund
(1) A seventh fund shall be established and credited with—
(A) premiums, penalties, and interest charges collected under
(B) premiums, penalties, and interest charges collected under
(C) earnings on investments of the fund or on assets credited to the fund.
(2) Amounts in the fund shall be available for transfer to other funds established under this section with respect to a single-employer plan but shall not be available to pay—
(A) administrative costs of the corporation, or
(B) benefits under any plan which was terminated before October 1, 1988,
unless no other amounts are available for such payment.
(3) The corporation may invest amounts of the fund in such obligations as the corporation considers appropriate.
(g) Other use of funds; deposits of repayments
(1) Amounts in any fund established under this section may be used only for the purposes for which such fund was established and may not be used to make loans to (or on behalf of) any other fund or to finance any other activity of the corporation.
(2) Any repayment to the corporation of any amount paid out of any fund in connection with a multiemployer plan shall be deposited in such fund.
(h) Voting by corporation of stock paid as liability
Any stock in a person liable to the corporation under this subchapter which is paid to the corporation by such person or a member of such person's controlled group in satisfaction of such person's liability under this subchapter may be voted only by the custodial trustees or outside money managers of the corporation.
(i) Special financial assistance for multiemployer pension plans
(1) An eighth fund shall be established for special financial assistance to multiemployer pension plans, as provided under
(2) There is appropriated from the general fund such amounts as are necessary for the costs of providing financial assistance under
(
Editorial Notes
Amendments
2021—Subsec. (i).
2014—Subsec. (b)(3).
2012—Subsec. (b)(1).
Subsec. (b)(2)(C) to (E).
Subsec. (b)(3).
Subsec. (c).
Subsec. (g)(2), (3).
1994—Subsec. (b)(2)(A).
1987—Subsec. (f).
Subsec. (g).
Subsec. (h).
1986—Subsec. (b)(1)(F), (G).
Subsec. (b)(2)(E).
Subsec. (g).
1980—Subsec. (a).
Subsec. (b)(2).
Subsecs. (d) to (f).
Statutory Notes and Related Subsidiaries
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1987 Amendment
Amendment by section 9312(c)(4) of
"(1)
"(2)
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
§1306. Premium rates
(a) Schedules for premium rates and bases for application; establishment, coverage, etc.
(1) The corporation shall prescribe such schedules of premium rates and bases for the application of those rates as may be necessary to provide sufficient revenue to the fund for the corporation to carry out its functions under this subchapter. The premium rates charged by the corporation for any period shall be uniform for all plans, other than multiemployer plans, insured by the corporation with respect to basic benefits guaranteed by it under
(2) The corporation shall maintain separate schedules of premium rates, and bases for the application of those rates, for—
(A) basic benefits guaranteed by it under
(B) basic benefits guaranteed by it under
(C) nonbasic benefits guaranteed by it under
(D) nonbasic benefits guaranteed by it under
(E) reimbursements of uncollectible withdrawal liability under
The corporation may revise such schedules whenever it determines that revised schedules are necessary. Except as provided in
(3)(A) Except as provided in subparagraph (C), the annual premium rate payable to the corporation by all plans for basic benefits guaranteed under this subchapter is—
(i) in the case of a single-employer plan other than a CSEC plan (as defined in
(I) for plan years beginning after December 31, 2005, and before January 1, 2013, $30;
(II) for plan years beginning after December 31, 2012, and before January 1, 2014, $42;
(III) for plan years beginning after December 31, 2013 and before January 1, 2015,,1 $49.2
(IV) for plan years beginning after December 31, 2014, and before January 1, 2016, $57;
(V) for plan years beginning after December 31, 2015, and before January 1, 2017, $64;
(VI) for plan years beginning after December 31, 2016, and before January 1, 2018, $69;
(VII) for plan years beginning after December 31, 2017, and before January 1, 2019, $74; and
(VIII) for plan years beginning after December 31, 2018, $80.3
(ii) in the case of a multiemployer plan, for the plan year within which the date of enactment of the Multiemployer Pension Plan Amendments Act of 1980 falls, an amount for each individual who is a participant in such plan for such plan year equal to the sum of—
(I) 50 cents, multiplied by a fraction the numerator of which is the number of months in such year ending on or before such date and the denominator of which is 12, and
(II) $1.00, multiplied by a fraction equal to 1 minus the fraction determined under clause (i),
(iii) in the case of a multiemployer plan, for plan years beginning after September 26, 1980, and before January 1, 2006, an amount equal to—
(I) $1.40 for each participant, for the first, second, third, and fourth plan years,
(II) $1.80 for each participant, for the fifth and sixth plan years,
(III) $2.20 for each participant, for the seventh and eighth plan years, and
(IV) $2.60 for each participant, for the ninth plan year, and for each succeeding plan year,
(iv) in the case of a multiemployer plan, for plan years beginning after December 31, 2005, and before January 1, 2013, $8.00 for each individual who is a participant in such plan during the applicable plan year,
(v) in the case of a multiemployer plan, for plan years beginning after December 31, 2012, and before January 1, 2015, $12.00 for each individual who is a participant in such plan during the applicable plan year,
(vi) in the case of a multiemployer plan, for plan years beginning after December 31, 2014, and before January 1, 2031, $26 for each individual who is a participant in such plan during the applicable plan year,
(vii) in the case of a CSEC plan (as defined in
(I) the additional premium (if any) determined under subparagraph (E), and
(II) $19, or
(viii) in the case of a multiemployer plan, for plan years beginning after December 31, 2030, $52 for each individual who is a participant in such plan during the applicable plan year.
(B) The corporation may prescribe by regulation the extent to which the rate described in subparagraph (A)(i) applies more than once for any plan year to an individual participating in more than one plan maintained by the same employer, and the corporation may prescribe regulations under which the rate described in clause (iii) or (iv) of subparagraph (A) will not apply to the same participant in any multiemployer plan more than once for any plan year.
(C)(i) If the sum of—
(I) the amounts in any fund for basic benefits guaranteed for multiemployer plans, and
(II) the value of any assets held by the corporation for payment of basic benefits guaranteed for multiemployer plans,
is for any calendar year less than 2 times the amount of basic benefits guaranteed by the corporation under this subchapter for multiemployer plans which were paid out of any such fund or assets during the preceding calendar year, the annual premium rates under subparagraph (A) shall be increased to the next highest premium level necessary to insure that such sum will be at least 2 times greater than such amount during the following calendar year.
(ii) If the board of directors of the corporation determines that an increase in the premium rates under subparagraph (A) is necessary to provide assistance to plans which are receiving assistance under
(iii) The maximum annual premium rate which may be established under this subparagraph is $2.60 for each participant.
(iv) The provisions of this subparagraph shall not apply if the annual premium rate is increased to a level in excess of $2.60 per participant under any other provisions of this subchapter.
(D)(i) Not later than 120 days before the date on which an increase under subparagraph (C)(ii) is to become effective, the corporation shall publish in the Federal Register a notice of the determination described in subparagraph (C)(ii), the basis for the determination, the amount of the increase in the premium, and the anticipated increase in premium income that would result from the increase in the premium rate. The notice shall invite public comment, and shall provide for a public hearing if one is requested. Any such hearing shall be commenced not later than 60 days before the date on which the increase is to become effective.
(ii) The board of directors shall review the hearing record established under clause (i) and shall, not later than 30 days before the date on which the increase is to become effective, determine (after consideration of the comments received) whether the amount of the increase should be changed and shall publish its determination in the Federal Register.
(E)(i) Except as provided in subparagraph (I), the additional premium determined under this subparagraph with respect to any plan for any plan year—
(I) shall be an amount equal to the amount determined under clause (ii) divided by the number of participants in such plan as of the close of the preceding plan year;
(II) in the case of plan years beginning in a calendar year after 2012 and before 2016, shall not exceed $400 4 and
(III) in the case of plan years beginning in a calendar year after 2015, shall not exceed $500.
(ii) The amount determined under this clause for any plan year shall be an amount equal to the applicable dollar amount under paragraph (8) for each $1,000 (or fraction thereof) of unfunded vested benefits under the plan as of the close of the preceding plan year.
(iii) Except as provided in clause (v), for purposes of clause (ii), the term "unfunded vested benefits" means, for a plan year, the excess (if any) of—
(I) the funding target of the plan as determined under
(II) the fair market value of plan assets for the plan year which are held by the plan on the valuation date.
(iv) The interest rate used in valuing benefits for purposes of subclause (I) of clause (iii) shall be equal to the first, second, or third segment rate for the month preceding the month in which the plan year begins, which would be determined under
(v) For purposes of clause (ii), in the case of a CSEC plan (as defined in
(I) the funding liability of the plan as determined under
(II) the fair market value of plan assets for the plan year which are held by the plan on the valuation date.
(F) For each plan year beginning in a calendar year after 2006 and before 2013, there shall be substituted for the premium rate specified in clause (i) of subparagraph (A) an amount equal to the greater of—
(i) the product derived by multiplying the premium rate specified in clause (i) of subparagraph (A) by the ratio of—
(I) the national average wage index (as defined in
(II) the national average wage index (as so defined) for 2004 (2012 in the case of plan years beginning after calendar year 2014); and
(ii) the premium rate in effect under clause (i) of subparagraph (A) for plan years beginning in the preceding calendar year.
If the amount determined under this subparagraph is not a multiple of $1, such product shall be rounded to the nearest multiple of $1.
(G) For each plan year beginning in a calendar year after 2019, there shall be substituted for the premium rate specified in clause (i) of subparagraph (A) an amount equal to the greater of—
(i) the product derived by multiplying the premium rate specified in clause (i) of subparagraph (A) by the ratio of—
(I) the national average wage index (as defined in
(II) the national average wage index (as so defined) for 2017; and
(ii) the premium rate in effect under clause (i) of subparagraph (A) for plan years beginning in the preceding calendar year.
If the amount determined under this subparagraph is not a multiple of $1, such product shall be rounded to the nearest multiple of $1.
(H) For each plan year beginning in a calendar year after 2006, there shall be substituted for the premium rate specified in clause (iv) of subparagraph (A) an amount equal to the greater of—
(i) the product derived by multiplying the premium rate specified in clause (iv) of subparagraph (A) by the ratio of—
(I) the national average wage index (as defined in
(II) the national average wage index (as so defined) for 2004; and
(ii) the premium rate in effect under clause (iv) of subparagraph (A) for plan years beginning in the preceding calendar year.
If the amount determined under this subparagraph is not a multiple of $1, such product shall be rounded to the nearest multiple of $1.
(I)(i) In the case of an employer who has 25 or fewer employees on the first day of the plan year, the additional premium determined under subparagraph (E) for each participant shall not exceed $5 multiplied by the number of participants in the plan as of the close of the preceding plan year.
(ii) For purposes of clause (i), whether an employer has 25 or fewer employees on the first day of the plan year is determined by taking into consideration all of the employees of all members of the contributing sponsor's controlled group. In the case of a plan maintained by two or more contributing sponsors, the employees of all contributing sponsors and their controlled groups shall be aggregated for purposes of determining whether the 25-or-fewer-employees limitation has been satisfied.
(J) For each plan year beginning in a calendar year after 2013, there shall be substituted for the premium rate specified in clause (v) of subparagraph (A) an amount equal to the greater of—
(i) the product derived by multiplying the premium rate specified in clause (v) of subparagraph (A) by the ratio of—
(I) the national average wage index (as defined in
(II) the national average wage index (as so defined) for 2011; and
(ii) the premium rate in effect under clause (v) of subparagraph (A) for plan years beginning in the preceding calendar year.
If the amount determined under this subparagraph is not a multiple of $1, such product shall be rounded to the nearest multiple of $1.
(K) For each plan year beginning in a calendar year after 2013 and before 2016, there shall be substituted for the dollar amount specified in subclause (II) of subparagraph (E)(i) an amount equal to the greater of—
(i) the product derived by multiplying such dollar amount by the ratio of—
(I) the national average wage index (as defined in
(II) the national average wage index (as so defined) for 2011; and
(ii) such dollar amount for plan years beginning in the preceding calendar year.
If the amount determined under this subparagraph is not a multiple of $1, such product shall be rounded to the nearest multiple of $1.
(L) For each plan year beginning in a calendar year after 2016, there shall be substituted for the dollar amount specified in subclause (III) of subparagraph (E)(i) an amount equal to the greater of—
(i) the product derived by multiplying such dollar amount by the ratio of—
(I) the national average wage index (as defined in
(II) the national average wage index (as so defined) for 2014; and
(ii) such dollar amount for plan years beginning in the preceding calendar year.
If the amount determined under this subparagraph is not a multiple of $1, such product shall be rounded to the nearest multiple of $1.
(M) For each plan year beginning in a calendar year after 2015, there shall be substituted for the dollar amount specified in clause (vi) of subparagraph (A) an amount equal to the greater of—
(i) the product derived by multiplying such dollar amount by the ratio of—
(I) the national average wage index (as defined in
(II) the national average wage index (as so defined) for 2013; and
(ii) such dollar amount for plan years beginning in the preceding calendar year.
If the amount determined under this subparagraph is not a multiple of $1, such product shall be rounded to the nearest multiple of $1.
(N) For each plan year beginning in a calendar year after 2031, there shall be substituted for the dollar amount specified in clause (viii) of subparagraph (A) an amount equal to the greater of—
(i) the product derived by multiplying such dollar amount by the ratio of—
(I) the national average wage index (as defined in
(II) the national average wage index (as so defined) for 2029; and
(ii) such dollar amount for plan years beginning in the preceding calendar year.
If the amount determined under this subparagraph is not a multiple of $1, such product shall be rounded to the nearest multiple of $1.
(4) The corporation may prescribe, subject to the enactment of a joint resolution in accordance with this section or
(5)(A) In carrying out its authority under paragraph (1) to establish schedules of premium rates, and bases for the application of those rates, for nonbasic benefits guaranteed under
(i) be uniform by category of nonbasic benefits guaranteed,
(ii) be based on the risks insured in each category, and
(iii) reflect the experience of the corporation (including experience which may be reasonably anticipated) in guaranteeing such benefits.
(B) Notwithstanding subparagraph (A), premium rates charged to any multiemployer plan by the corporation for any period for supplemental guarantees under
(6)(A) In carrying out its authority under paragraph (1) to establish premium rates and bases for basic benefits guaranteed under
(B) The corporation may establish annual premiums for single-employer plans composed of the sum of—
(i) a charge based on a rate applicable to the excess, if any, of the present value of the basic benefits of the plan which are guaranteed over the value of the assets of the plan, not in excess of 0.1 percent, and
(ii) an additional charge based on a rate applicable to the present value of the basic benefits of the plan which are guaranteed.
The rate for the additional charge referred to in clause (ii) shall be set by the corporation for every year at a level which the corporation estimates will yield total revenue approximately equal to the total revenue to be derived by the corporation from the charges referred to in clause (i) of this subparagraph.
(C) The corporation may establish annual premiums for single-employer plans based on—
(i) the number of participants in a plan, but such premium rates shall not exceed the rates described in paragraph (3),
(ii) unfunded basic benefits guaranteed under this subchapter, but such premium rates shall not exceed the limitations applicable to charges referred to in subparagraph (B)(i), or
(iii) total guaranteed basic benefits, but such premium rates shall not exceed the rates for additional charges referred to in subparagraph (B)(ii).
If the corporation uses two or more of the rate bases described in this subparagraph, the premium rates shall be designed to produce approximately equal amounts of aggregate premium revenue from each of the rate bases used.
(D) For purposes of this paragraph, the corporation shall by regulation define the terms "value of assets" and "present value of the benefits 5 of the plan which are guaranteed" in a manner consistent with the purposes of this subchapter and the provisions of this section.
(7)
(A)
(B)
(C)
(i)
(I) the 12-month period beginning with the first month following the month in which the termination date occurs, and
(II) each of the first two 12-month periods immediately following the period described in subclause (I).
(ii)
(D)
(i) Notwithstanding
(I) premiums under this paragraph shall be due within 30 days after the beginning of any applicable 12-month period, and
(II) the designated payor shall be the person who is the contributing sponsor as of immediately before the termination date.
(ii) The fifth sentence of
(8)
(A)
(i) $9 for plan years beginning in a calendar year before 2015;
(ii) for plan years beginning in calendar year 2015, the amount in effect for plan years beginning in 2014 (determined after application of subparagraph (C));
(iii) for plan years beginning after calendar year 2015, the amount in effect for plan years beginning in 2015 (determined after application of subparagraph (C));
(iv) for plan years beginning after calendar year 2016, the amount in effect for plan years beginning in 2016 (determined after application of subparagraph (C));
(v) for plan years beginning after calendar year 2017, the amount in effect for plan years beginning in 2017 (determined after application of subparagraph (C));
(vi) for plan years beginning after calendar year 2018, the amount in effect for plan years beginning in 2018 (determined after application of subparagraph (C));
(vii) for plan years beginning after calendar year 2019, the amount in effect for plan years beginning in 2019 (determined after application of subparagraph (C)); and
(viii) for plan years beginning after calendar year 2023, $52.
(B)
(i) the product derived by multiplying such applicable dollar amount for plan years beginning in that calendar year by the ratio of—
(I) the national average wage index (as defined in
(II) the national average wage index (as so defined) for the base year; and
(ii) such applicable dollar amount in effect for plan years beginning in the preceding calendar year.
If the amount determined under this subparagraph is not a multiple of $1, such product shall be rounded to the nearest multiple of $1.
(C)
(i) in the case of plan years beginning in calendar year 2014, by $4;
(ii) in the case of plan years beginning in calendar year 2015, by $10;
(iii) in the case of plan years beginning in calendar year 2016, by $5;
(iv) in the case of plan years beginning in calendar year 2017, by $3;
(v) in the case of plan years beginning in calendar year 2018, by $4; and
(vi) in the case of plan years beginning in calendar year 2019, by $4.
(D)
(i) 2010, in the case of plan years beginning in calendar year 2013 or 2014;
(ii) 2012, in the case of plan years beginning in calendar year 2015;
(iii) 2013, in the case of plan years beginning after calendar year 2015;
(iv) 2014, in the case of plan years beginning after calendar year 2016;
(v) 2015, in the case of plan years beginning after calendar year 2017;
(vi) 2016, in the case of plan years beginning after calendar year 2018; and
(vii) 2017, in the case of plan years beginning after calendar year 2019 and before 2024.
(E)
(b) Revised schedule; Congressional procedures applicable
(1) In order to place a revised schedule (other than a schedule described in subsection (a)(2)(C), (D), or (E)) in effect, the corporation shall transmit the proposed schedule, its proposed effective date, and the reasons for its proposal to the Committee on Ways and Means and the Committee on Education and Labor of the House of Representatives, and to the Committee on Finance and the Committee on Labor and Human Resources of the Senate.
(2) The succeeding paragraphs of this subsection are enacted by Congress as an exercise of the rulemaking power of the Senate and the House of Representatives, respectively, and as such they shall be deemed a part of the rules of each House, respectively, but applicable only with respect to the procedure to be followed in that House in the case of resolutions described in paragraph (3). They shall supersede other rules only to the extent that they are inconsistent therewith. They are enacted with full recognition of the constitutional right of either House to change the rules (so far as relating to the procedure of that House) at any time, in the same manner and to the same extent as in the case of any rule of that House.
(3) For the purpose of the succeeding paragraphs of this subsection, "resolution" means only a joint resolution, the matter after the resolving clause of which is as follows: "The proposed revised schedule transmitted to Congress by the Pension Benefit Guaranty Corporation on ____ is hereby approved.", the blank space therein being filled with the date on which the corporation's message proposing the rate was delivered.
(4) A resolution shall be referred to the Committee on Ways and Means and the Committee on Education and Labor of the House of Representatives and to the Committee on Finance and the Committee on Labor and Human Resources of the Senate.
(5) If a committee to which has been referred a resolution has not reported it before the expiration of 10 calendar days after its introduction, it shall then (but not before) be in order to move to discharge the committee from further consideration of that resolution, or to discharge the committee from further consideration of any other resolution with respect to the proposed adjustment which has been referred to the committee. The motion to discharge may be made only by a person favoring the resolution, shall be highly privileged (except that it may not be made after the committee has reported a resolution with respect to the same proposed rate), and debate thereon shall be limited to not more than 1 hour, to be divided equally between those favoring and those opposing the resolution. An amendment to the motion is not in order, and it is not in order to move to reconsider the vote by which the motion is agreed to or disagreed to. If the motion to discharge is agreed to or disagreed to, the motion may not be renewed, nor may another motion to discharge the committee be made with respect to any other resolution with respect to the same proposed rate.
(6) When a committee has reported, or has been discharged from further consideration of a resolution, it is at any time thereafter in order (even though a previous motion to the same effect has been disagreed to) to move to proceed to the consideration of the resolution. The motion is highly privileged and is not debatable. An amendment to the motion is not in order, and it is not in order to move to reconsider the vote by which the motion is agreed to or disagreed to. Debate on the resolution shall be limited to not more than 10 hours, which shall be divided equally between those favoring and those opposing the resolution. A motion further to limit debate is not debatable. An amendment to, or motion to recommit, the resolution is not in order, and it is not in order to move to reconsider the vote by which the resolution is agreed to or disagreed to.
(7) Motions to postpone, made with respect to the discharge from committee, or the consideration of, a resolution and motions to proceed to the consideration of other business shall be decided without debate. Appeals from the decisions of the Chair relating to the application of the rules of the Senate or the House of Representatives, as the case may be, to the procedure relating to a resolution shall be decided without debate.
(c) Rates for plans for basic benefits
(1) Except as provided in subsection (a)(3), and subject to paragraph (2), the rate for all plans for basic benefits guaranteed under this subchapter with respect to plan years ending after September 2, 1974, is—
(A) in the case of each plan which was not a multiemployer plan in a plan year—
(i) with respect to each plan year beginning before January 1, 1978, an amount equal to $1 for each individual who was a participant in such plan during the plan year,
(ii) with respect to each plan year beginning after December 31, 1977, and before January 1, 1986, an amount equal to $2.60 for each individual who was a participant in such plan during the plan year, and 6
(iii) with respect to each plan year beginning after December 31, 1985, and before January 1, 1988, an amount equal to $8.50 for each individual who was a participant in such plan during the plan year, and
(iv) with respect to each plan year beginning after December 31, 1987, and before January 1, 1991, an amount equal to $16 for each individual who was a participant in such plan during the plan year, and
(B) in the case of each plan which was a multiemployer plan in a plan year, an amount equal to 50 cents for each individual who was a participant in such plan during the plan year.
(2) The rate applicable under this subsection for the plan year preceding September 1, 1975, is the product of—
(A) the rate described in the preceding sentence; and
(B) a fraction—
(i) the numerator of which is the number of calendar months in the plan year which ends after September 2, 1974, and before the date on which the new plan year commences, and
(ii) the denominator of which is 12.
(
Editorial Notes
References in Text
The plan year within which the date of enactment of the Multiemployer Pension Plan Amendments Act of 1980 falls, referred to in subsec. (a)(3)(A)(ii), refers to the plan year within which the date of the enactment of
Amendments
2022—Subsec. (a)(3)(E)(i).
Subsec. (a)(8)(A)(viii).
Subsec. (a)(8)(B).
Subsec. (a)(8)(D)(vii).
2021—Subsec. (a)(3)(A)(vi).
Subsec. (a)(3)(A)(vii).
Subsec. (a)(3)(A)(viii).
Subsec. (a)(3)(N).
2019—Subsec. (a)(3)(A)(i).
Subsec. (a)(3)(A)(vii).
Subsec. (a)(3)(E).
Subsec. (a)(3)(E)(v).
Subsec. (a)(8)(A).
Subsec. (a)(8)(E).
2015—Subsec. (a)(3)(A)(i)(VI) to (VIII).
Subsec. (a)(3)(G).
Subsec. (a)(3)(G)(i)(II).
Subsec. (a)(8)(A)(v) to (vii).
Subsec. (a)(8)(C).
Subsec. (a)(8)(C)(iv) to (vi).
Subsec. (a)(8)(D)(v) to (vii).
2014—Subsec. (a)(3)(A)(v), (vi).
Subsec. (a)(3)(M).
2013—Subsec. (a)(3)(A)(i)(III).
Subsec. (a)(3)(A)(i)(IV), (V).
Subsec. (a)(3)(E)(i)(I).
Subsec. (a)(3)(E)(i)(II).
Subsec. (a)(3)(E)(i)(III).
Subsec. (a)(3)(F).
Subsec. (a)(3)(G).
Subsec. (a)(3)(H) to (J).
Subsec. (a)(3)(K).
Subsec. (a)(3)(L).
Subsec. (a)(8)(A)(iv).
Subsec. (a)(8)(C)(ii).
Subsec. (a)(8)(C)(iii).
Subsec. (a)(8)(D)(iv).
2012—Subsec. (a)(3)(A)(i).
Subsec. (a)(3)(A)(iv).
Subsec. (a)(3)(A)(v).
Subsec. (a)(3)(E)(i).
Subsec. (a)(3)(E)(ii).
Subsec. (a)(3)(E)(iv).
Subsec. (a)(3)(F).
Subsec. (a)(3)(F)(i)(II).
Subsec. (a)(3)(I).
Subsec. (a)(3)(J).
Subsec. (a)(8).
2008—Subsec. (a)(3)(A)(i).
2006—Subsec. (a)(3)(A)(i).
Subsec. (a)(3)(A)(iii).
Subsec. (a)(3)(A)(iv).
Subsec. (a)(3)(B).
Subsec. (a)(3)(E)(i).
Subsec. (a)(3)(E)(iii).
Subsec. (a)(3)(E)(iii)(V).
Subsec. (a)(3)(E)(iv).
Subsec. (a)(3)(F).
Subsec. (a)(3)(G).
Subsec. (a)(3)(H).
Subsec. (a)(7).
Subsec. (a)(7)(C)(ii).
Subsec. (a)(7)(E).
2004–Subsec. (a)(3)(E)(iii)(IV).
Subsec. (a)(3)(E)(iii)(V).
2002—Subsec. (a)(3)(E)(iii)(IV).
1994—Subsec. (a)(3)(E)(iii).
Subsec. (a)(3)(E)(iv), (v).
"(iv)(I) Except as provided in this clause, the aggregate increase in the premium payable with respect to any participant by reason of this subparagraph shall not exceed $53.
"(II) If an employer made contributions to a plan during 1 or more of the 5 plan years preceding the 1st plan year to which this subparagraph applies in an amount not less than the maximum amount allowable as a deduction with respect to such contributions under
1990—Subsec. (a)(3)(A)(i).
Subsec. (a)(3)(E)(ii).
Subsec. (a)(3)(E)(iv)(I).
Subsec. (c)(1)(A)(iv).
1989—Subsec. (a)(3)(E)(v).
Subsec. (c)(1)(A)(iii).
1987—Subsec. (a)(3)(A)(i).
Subsec. (a)(3)(E).
Subsec. (c)(1)(A).
1986—Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (a)(3)(A)(i).
Subsec. (a)(4).
Subsec. (a)(6).
Subsec. (b)(3).
Subsec. (c)(1)(A).
1980—Subsec. (a).
Subsec. (b).
Subsec. (c).
Statutory Notes and Related Subsidiaries
Change of Name
Committee on Education and Labor of House of Representatives changed to Committee on Education and the Workforce of House of Representatives by House Resolution No. 5, One Hundred Eighteenth Congress, Jan. 9, 2023.
Committee on Labor and Human Resources of Senate changed to Committee on Health, Education, Labor, and Pensions of Senate by Senate Resolution No. 20, One Hundred Sixth Congress, Jan. 19, 1999.
Effective Date of 2022 Amendment
Effective Date of 2015 Amendment
Effective Date of 2014 Amendment
Effective Date of 2013 Amendment
Effective Date of 2012 Amendment
Amendment by section 40211(b)(3)(C) of
Effective Date of 2008 Amendment
Amendment by
Effective Date of 2006 Amendment
"(1)
"(2)
"(A)
"(B)
Effective Date of 2004 Amendments
Amendment by
Amendment by
Effective Date of 1994 Amendment
"(A)
"(B)
"(i) $53, and
"(ii) the product derived by multiplying—
"(I) the excess (if any) of the amount determined under clause (i) of section 4006(a)(3)(E) of the Employee Retirement Income Security Act of 1974 [subsec. (a)(3)(E) of this section], over $53, by
"(II) the applicable percentage.
For purposes of this subparagraph, the applicable percentage shall be the percentage specified in the following table:
| For the plan year beginning: | The applicable percentage is: | |
|---|---|---|
| on or after | but before | |
| July 1, 1994 | July 1, 1995 | 20 percent |
| July 1, 1995 | July 1, 1996 | 60 percent." |
Effective Date of 1990 Amendment
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1987 Amendment
Amendment by
Effective Date of 1986 Amendment
"(1)
"(2)
Effective Date of 1980 Amendment
Amendment by
Modification of Transition Rule to Pension Funding Requirements
For modification of transition rule to pension funding requirements in the case of a plan that was not required to pay a variable rate premium for the plan year beginning in 1996, has not, in any plan year beginning after 1995, merged with another plan (other than a plan sponsored by an employer that was in 1996 within the controlled group of the plan sponsor), and is sponsored by a company that is engaged primarily in the interurban or interstate passenger bus service, see section 115(a)–(c) of
Applicability of This Section to Certain Plans Maintained by Commercial Airlines
For special rules on applicability of this section to certain plans maintained by commercial airlines, see section 402 of
Transitional Rule
"(1) January 1, 1998, or
"(2) the date the regulated public utility begins to collect from utility customers rates that reflect the costs incurred or projected to be incurred for additional premiums under section 4006(a)(3)(E) of the Employee Retirement Income Security Act of 1974 [subsec. (a)(3)(E) of this section] pursuant to final and nonappealable determinations by all public utility commissions (or other authorities having jurisdiction over the rates and terms of service by the regulated public utility) that the costs are just and reasonable and recoverable from customers of the regulated public utility."
"(1)
"(2)
"(3)
Single-Employer Pension Plan Termination Insurance Premium Study
Studies and Reports Respecting Graduated Premium Rate Schedules and Union Mandated Withdrawals From Multiemployer Pension Plans
2 So in original. The period probably should be a semicolon.
3 So in original. The period probably should be a comma.
4 So in original. Probably should be followed by a semicolon.
5 So in original. Probably should be preceded by "basic".
6 So in original. The word "and" probably should not appear.
§1307. Payment of premiums
(a) Premiums payable when due; accrual; waiver or reduction
The designated payor of each plan shall pay the premiums imposed by the corporation under this subchapter with respect to that plan when they are due. Premiums under this subchapter are payable at the time, and on an estimated, advance, or other basis, as determined by the corporation. Premiums imposed by this subchapter on September 2, 1974 (applicable to that portion of any plan year during which such date occurs) are due within 30 days after such date. Premiums imposed by this subchapter on the first plan year commencing after September 2, 1974, are due within 30 days after such plan year commences. Premiums shall continue to accrue until a plan's assets are distributed pursuant to a termination procedure, or until a trustee is appointed pursuant to
(b) Late payment charge; waiver; interest on overpayment
(1) If any basic benefit premium is not paid when it is due the corporation is authorized to assess a late payment charge of not more than 100 percent of the premium payment which was not timely paid. The preceding sentence shall not apply to any payment of premium made within 60 days after the date on which payment is due, if before such date, the designated payor obtains a waiver from the corporation based upon a showing of substantial hardship arising from the timely payment of the premium. The corporation is authorized to grant a waiver under this subsection upon application made by the designated payor, but the corporation may not grant a waiver if it appears that the designated payor will be unable to pay the premium within 60 days after the date on which it is due. If any premium is not paid by the last date prescribed for a payment, interest on the amount of such premium at the rate imposed under
(2) The corporation is authorized to pay, subject to regulations prescribed by the corporation, interest on the amount of any overpayment of premium refunded to a designated payor. Interest under this paragraph shall be calculated at the same rate and in the same manner as interest is calculated for underpayments under paragraph (1).
(c) Civil action to recover premium penalty and interest
If any designated payor fails to pay a premium when due, the corporation is authorized to bring a civil action in any district court of the United States within the jurisdiction of which the plan assets are located, the plan is administered, or in which a defendant resides or is found for the recovery of the amount of the premium penalty, and interest, and process may be served in any other district. The district courts of the United States shall have jurisdiction over actions brought under this subsection by the corporation without regard to the amount in controversy.
(d) Basic benefits guarantee not stopped by designated payor's failure to pay premiums when due
The corporation shall not cease to guarantee basic benefits on account of the failure of a designated payor to pay any premium when due.
(e) Designated payor
(1) For purposes of this section, the term "designated payor" means—
(A) the contributing sponsor or plan administrator in the case of a single-employer plan, and
(B) the plan administrator in the case of a multiemployer plan.
(2) If the contributing sponsor of any single-employer plan is a member of a controlled group, each member of such group shall be jointly and severally liable for any premiums required to be paid by such contributing sponsor. For purposes of the preceding sentence, the term "controlled group" means any group treated as a single employer under subsection (b), (c), (m), or (o) of
(
Editorial Notes
Amendments
2006—Subsec. (b).
1989—Subsec. (b).
1987—Subsecs. (a) to (d).
Subsec. (e).
1980—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1987 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Pension Payment Acceleration
§1308. Annual report by the corporation
(a) As soon as practicable after the close of each fiscal year the corporation shall transmit to the President and the Congress a report relative to the conduct of its business under this subchapter for that fiscal year. The report shall include financial statements setting forth the finances of the corporation at the end of such fiscal year and the result of its operations (including the source and application of its funds) for the fiscal year and shall include an actuarial evaluation of the expected operations and status of the funds established under
(b) The report under subsection (a) shall include—
(1) a summary of the Pension Insurance Modeling System microsimulation model, including the specific simulation parameters, specific initial values, temporal parameters, and policy parameters used to calculate the financial statements for the corporation;
(2) a comparison of—
(A) the average return on investments earned with respect to assets invested by the corporation for the year to which the report relates; and
(B) an amount equal to 60 percent of the average return on investment for such year in the Standard & Poor's 500 Index, plus 40 percent of the average return on investment for such year in the Lehman Aggregate Bond Index (or in a similar fixed income index); and
(3) a statement regarding the deficit or surplus for such year that the corporation would have had if the corporation had earned the return described in paragraph (2)(B) with respect to assets invested by the corporation.
(
Editorial Notes
Amendments
2006—
§1309. Portability assistance
The corporation shall provide advice and assistance to individuals with respect to evaluating the economic desirability of establishing individual retirement accounts or other forms of individual retirement savings for which a deduction is allowable under
(
Editorial Notes
Amendments
1989—
Statutory Notes and Related Subsidiaries
Effective Date of 1989 Amendment
Amendment by
§1310. Authority to require certain information
(a) Information required
Each person described in subsection (b) shall provide the corporation annually, on or before a date specified by the corporation in regulations, with—
(1) such records, documents, or other information that the corporation specifies in regulations as necessary to determine the liabilities and assets of plans covered by this subchapter; and
(2) copies of such person's audited (or, if unavailable, unaudited) financial statements, and such other financial information as the corporation may prescribe in regulations.
(b) Persons required to provide information
The persons covered by subsection (a) are each contributing sponsor, and each member of a contributing sponsor's controlled group, of a single-employer plan covered by this subchapter, if—
(1) the funding target attainment percentage (as defined in subsection (d)) at the end of the preceding plan year of a plan maintained by the contributing sponsor or any member of its controlled group is less than 80 percent;
(2) the conditions for imposition of a lien described in section 1083(k)(1)(A) and (B) or 1085a(g)(1)(A) and (B) of this title or section 430(k)(1)(A) and (B) or 433(g)(1)(A) and (B) of title 26 have been met with respect to any plan maintained by the contributing sponsor or any member of its controlled group; or
(3) minimum funding waivers in excess of $1,000,000 have been granted with respect to any plan maintained by the contributing sponsor or any member of its controlled group, and any portion thereof is still outstanding.
(c) Information exempt from disclosure requirements
Any information or documentary material submitted to the corporation pursuant to this section shall be exempt from disclosure under
(d) Additional information required
(1) In general
The information submitted to the corporation under subsection (a) shall include—
(A) the amount of benefit liabilities under the plan determined using the assumptions used by the corporation in determining liabilities;
(B) the funding target of the plan determined as if the plan has been in at-risk status for at least 5 plan years; and
(C) the funding target attainment percentage of the plan.
(2) Definitions
For purposes of this subsection:
(A) Funding target
The term "funding target" has the meaning provided under
(B) Funding target attainment percentage
The term "funding target attainment percentage" has the meaning provided under
(C) At-risk status
The term "at-risk status" has the meaning provided in
(3) Pension stabilization disregarded
For purposes of this section, the segment rates used in determining the funding target and funding target attainment percentage shall be determined by not taking into account any adjustment under section 1083(h)(2)(C)(iv) 1 of this title.
(e) Notice to Congress
The corporation shall, on an annual basis, submit to the Committee on Health, Education, Labor, and Pensions and the Committee on Finance of the Senate and the Committee on Education and the Workforce and the Committee on Ways and Means of the House of Representatives, a summary report in the aggregate of the information submitted to the corporation under this section.
(
Editorial Notes
References in Text
Amendments
2014—Subsec. (b)(2).
2012—Subsec. (d)(3).
2008—Subsec. (d)(2)(B).
2006—Subsec. (b)(1).
Subsec. (b)(2).
Subsecs. (d), (e).
Statutory Notes and Related Subsidiaries
Effective Date of 2014 Amendment
Amendment by
Effective Date of 2012 Amendment
Amendment by
Effective Date of 2008 Amendment
Amendment by
Effective Date of 2006 Amendment
Amendment by section 108(b)(3) of
Effective Date
Applicability of Amendments by Subtitles A and B of Title I of Pub. L. 109–280
For special rules on applicability of amendments by subtitles A (§§101–108) and B (§§111–116) of title I of
1 See References in Text note below.
§1311. Repealed. Pub. L. 109–280, title V, §501(b)(1), Aug. 17, 2006, 120 Stat. 939
Section,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal applicable to plan years beginning after Dec. 31, 2006, see section 501(d)(1) of
Subtitle B—Coverage
§1321. Coverage
(a) Plans covered
Except as provided in subsection (b), this subchapter applies to any plan (including a successor plan) which, for a plan year—
(1) is an employee pension benefit plan (as defined in paragraph (2) of
(A) by an employer engaged in commerce or in any industry or activity affecting commerce, or
(B) by any employee organization, or organization representing employees, engaged in commerce or in any industry or activity affecting commerce, or
(C) by both,
which has, in practice, met the requirements of part I of subchapter D of
(2) is, or has been determined by the Secretary of the Treasury to be, a plan described in
For purposes of this subchapter, a successor plan is considered to be a continuation of a predecessor plan. For this purpose, unless otherwise specifically indicated in this subchapter, a successor plan is a plan which covers a group of employees which includes substantially the same employees as a previously established plan, and provides substantially the same benefits as that plan provided.
(b) Plans not covered
This section does not apply to any plan—
(1) which is an individual account plan, as defined in paragraph (34) of
(2) established and maintained for its employees by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing, or to which the Railroad Retirement Act of 1935 or 1937 [
(3) which is a church plan as defined in
(4)(A) established and maintained by a society, order, or association described in section 501(c)(8) or (9) of title 26, if no part of the contributions to or under the plan is made by employers of participants in the plan, or
(B) of which a trust described in
(5) which has not at any time after September 2, 1974, provided for employer contributions;
(6) which is unfunded and which is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees;
(7) which is established and maintained outside of the United States primarily for the benefit of individuals substantially all of whom are nonresident aliens;
(8) which is maintained by an employer solely for the purpose of providing benefits for certain employees in excess of the limitations on contributions and benefits imposed by
(9) which is established and maintained exclusively for substantial owners;
(10) of an international organization which is exempt from taxation under the International Organizations Immunities Act [
(11) maintained solely for the purpose of complying with applicable workmen's compensation laws or unemployment compensation or disability insurance laws;
(12) which is a defined benefit plan, to the extent that it is treated as an individual account plan under paragraph (35)(B) of
(13) established and maintained by a professional service employer which does not at any time after September 2, 1974, have more than 25 active participants in the plan.
(c) Definitions
(1) For purposes of subsection (b)(1), the term "individual account plan" does not include a plan under which a fixed benefit is promised if the employer or his representative participated in the determination of that benefit.
(2) For purposes of this paragraph and for purposes of subsection (b)(13)—
(A) the term "professional service employer" means any proprietorship, partnership, corporation, or other association or organization (i) owned or controlled by professional individuals or by executors or administrators of professional individuals, (ii) the principal business of which is the performance of professional services, and
(B) the term "professional individuals" includes but is not limited to, physicians, dentists, chiropractors, osteopaths, optometrists, other licensed practitioners of the healing arts, attorneys at law, public accountants, public engineers, architects, draftsmen, actuaries, psychologists, social or physical scientists, and performing artists.
(3) In the case of a plan established and maintained by more than one professional service employer, the plan shall not be treated as a plan described in subsection (b)(13) if, at any time after September 2, 1974, the plan has more than 25 active participants.
(d) Substantial owner defined
For purposes of subsection (b)(9), the term "substantial owner" means an individual who, at any time during the 60-month period ending on the date the determination is being made—
(1) owns the entire interest in an unincorporated trade or business,
(2) in the case of a partnership, is a partner who owns, directly or indirectly, more than 10 percent of either the capital interest or the profits interest in such partnership, or
(3) in the case of a corporation, owns, directly or indirectly, more than 10 percent in value of either the voting stock of that corporation or all the stock of that corporation.
For purposes of paragraph (3), the constructive ownership rules of
(
Editorial Notes
References in Text
The Railroad Retirement Act of 1935 or 1937, referred to in subsec. (b)(2), means act Aug. 29, 1935, ch. 812,
The International Organizations Immunities Act, referred to in subsec. (b)(10), is title I of act Dec. 29, 1945, ch. 652,
Amendments
2008—Subsec. (b)(14).
2006—Subsec. (b)(2).
Subsec. (b)(9).
Subsec. (b)(14).
Subsec. (d).
1989—Subsec. (a).
Subsecs. (a)(1), (2), (b)(3), (4)(A), (8).
1980—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment by
Effective Date of 2006 Amendment
"(1)
"(A) under section 4041(c) of the Employee Retirement Income Security Act of 1974 (
"(B) under section 4042 of such Act (
"(2)
Amendment by section 906(a)(2)(B), (b)(2) of
Effective Date of 1989 Amendment
Amendment by section 7891(a)(1) of
Amendment by section 7894(g)(3)(A) of
Effective Date of 1980 Amendment
Amendment by
1 So in original. The comma probably should be a semicolon.
2 So in original. A semicolon probably should appear.
§1322. Single-employer plan benefits guaranteed
(a) Nonforfeitable benefits
Subject to the limitations contained in subsection (b), the corporation shall guarantee, in accordance with this section, the payment of all nonforfeitable benefits (other than benefits becoming nonforfeitable solely on account of the termination of a plan) under a single-employer plan which terminates at a time when this subchapter applies to it.
(b) Exceptions
(1) Except to the extent provided in paragraph (7)—
(A) no benefits provided by a plan which has been in effect for less than 60 months at the time the plan terminates shall be guaranteed under this section, and
(B) any increase in the amount of benefits under a plan resulting from a plan amendment which was made, or became effective, whichever is later, within 60 months before the date on which the plan terminates shall be disregarded.
(2) For purposes of this subsection, the time a successor plan (within the meaning of
(3) The amount of monthly benefits described in subsection (a) provided by a plan, which are guaranteed under this section with respect to a participant, shall not have an actuarial value which exceeds the actuarial value of a monthly benefit in the form of a life annuity commencing at age 65 equal to the lesser of—
(A) his average monthly gross income from his employer during the 5 consecutive calendar year period (or, if less, during the number of calendar years in such period in which he actively participates in the plan) during which his gross income from that employer was greater than during any other such period with that employer determined by dividing 1/12 of the sum of all such gross income by the number of such calendar years in which he had such gross income, or
(B) $750 multiplied by a fraction, the numerator of which is the contribution and benefit base (determined under section 230 of the Social Security Act [
The provisions of this paragraph do not apply to non-basic benefits. The maximum guaranteed monthly benefit shall not be reduced solely on account of the age of a participant in the case of a benefit payable by reason of disability that occurred on or before the termination date, if the participant demonstrates to the satisfaction of the corporation that the Social Security Administration has determined that the participant satisfies the definition of disability under title II or XVI of the Social Security Act [
(4)(A) The actuarial value of a benefit, for purposes of this subsection, shall be determined in accordance with regulations prescribed by the corporation.
(B) For purposes of paragraph (3)—
(i) the term "gross income" means "earned income" within the meaning of
(ii) in the case of a participant in a plan under which contributions are made by more than one employer, amounts received as gross income from any employer under that plan shall be aggregated with amounts received from any other employer under that plan during the same period, and
(iii) any non-basic benefit shall be disregarded.
(5)(A) For purposes of this paragraph, the term "majority owner" means an individual who, at any time during the 60-month period ending on the date the determination is being made—
(i) owns the entire interest in an unincorporated trade or business,
(ii) in the case of a partnership, is a partner who owns, directly or indirectly, 50 percent or more of either the capital interest or the profits interest in such partnership, or
(iii) in the case of a corporation, owns, directly or indirectly, 50 percent or more in value of either the voting stock of that corporation or all the stock of that corporation.
For purposes of clause (iii), the constructive ownership rules of
(B) In the case of a participant who is a majority owner, the amount of benefits guaranteed under this section shall equal the product of—
(i) a fraction (not to exceed 1) the numerator of which is the number of years from the later of the effective date or the adoption date of the plan to the termination date, and the denominator of which is 10, and
(ii) the amount of benefits that would be guaranteed under this section if the participant were not a majority owner.
(6)(A) No benefits accrued under a plan after the date on which the Secretary of the Treasury issues notice that he has determined that any trust which is a part of a plan does not meet the requirements of
(B) No benefits accrued under a plan after the date on which an amendment of the plan is adopted which causes the Secretary of the Treasury to determine that any trust under the plan has ceased to meet the requirements of
(7) Benefits described in paragraph (1) are guaranteed only to the extent of the greater of—
(A) 20 percent of the amount which, but for the fact that the plan or amendment has not been in effect for 60 months or more, would be guaranteed under this section, or
(B) $20 per month,
multiplied by the number of years (but not more than 5) the plan or amendment, as the case may be, has been in effect. In determining how many years a plan or amendment has been in effect for purposes of this paragraph, the first 12 months beginning with the date on which the plan or amendment is made or first becomes effective (whichever is later) constitutes one year, and each consecutive period of 12 months thereafter constitutes an additional year. This paragraph does not apply to benefits payable under a plan unless the corporation finds substantial evidence that the plan was terminated for a reasonable business purpose and not for the purpose of obtaining the payment of benefits by the corporation under this subchapter.
(8) If an unpredictable contingent event benefit (as defined in
(c) Payment by corporation to participants and beneficiaries of recovery percentage of outstanding amount of benefit liabilities
(1) In addition to benefits paid under the preceding provisions of this section with respect to a terminated plan, the corporation shall pay the portion of the amount determined under paragraph (2) which is allocated with respect to each participant under
(2) The amount determined under this paragraph is an amount equal to the product derived by multiplying—
(A) the outstanding amount of benefit liabilities under the plan (including interest calculated from the termination date), by
(B) the applicable recovery ratio.
(3)(A)
(i) the sum of the values of all recoveries under
(ii) the sum of all unfunded benefit liabilities under such plans as of the termination date in connection with any such prior termination.
(B) A plan termination described in this subparagraph is a termination with respect to which—
(i) the corporation has determined the value of recoveries under
(ii) notices of intent to terminate were provided (or in the case of a termination by the corporation, a notice of determination under
(C) In the case of a terminated plan with respect to which the outstanding amount of benefit liabilities exceeds $20,000,000, for purposes of this section, the term "recovery ratio" means, with respect to the termination of such plan, the ratio of—
(i) the value of the recoveries of the corporation under
(ii) the amount of unfunded benefit liabilities under such plan as of the termination date.
(4) Determinations under this subsection shall be made by the corporation. Such determinations shall be binding unless shown by clear and convincing evidence to be unreasonable.
(d) Authorization to guarantee other classes of benefits
The corporation is authorized to guarantee the payment of such other classes of benefits and to establish the terms and conditions under which such other classes of benefits are guaranteed as it determines to be appropriate.
(e) Nonforfeitability of preretirement survivor annuity
For purposes of subsection (a), a qualified preretirement survivor annuity (as defined in
(f) Effective date of plan amendments
For purposes of this section, the effective date of a plan amendment described in
(g) Bankruptcy filing substituted for termination date
If a contributing sponsor of a plan has filed or has had filed against such person a petition seeking liquidation or reorganization in a case under title 11 or under any similar Federal law or law of a State or political subdivision, and the case has not been dismissed as of the termination date of the plan, then this section shall be applied by treating the date such petition was filed as the termination date of the plan.
(h) Special rule for plans electing certain funding requirements
If any plan makes an election under section 402(a)(1) of the Pension Protection Act of 2006 and is terminated effective before the end of the 10-year period beginning on the first day of the first applicable plan year—
(1) this section shall be applied—
(A) by treating the first day of the first applicable plan year as the termination date of the plan, and
(B) by determining the amount of guaranteed benefits on the basis of plan assets and liabilities as of such assumed termination date, and
(2) notwithstanding
(A) the amount of guaranteed benefits under this section (determined without regard to paragraph (1) and on the basis of plan assets and liabilities as of the actual date of plan termination), exceeds
(B) the amount determined under paragraph (1).
(
Editorial Notes
References in Text
The Social Security Act, referred to in subsec. (b)(3), is act Aug. 14, 1935, ch. 531,
Section 402(a)(1) of the Pension Protection Act of 2006, referred to in subsec. (h), is section 402(a)(1) of
Amendments
2006—Subsec. (b)(5).
Subsec. (b)(8).
Subsec. (c)(3)(A).
"(i) the value of the recovery of the corporation under
"(ii) the amount of unfunded benefit liabilities under such plans as of the termination date in connection with such prior terminations."
Subsec. (c)(3)(B)(ii).
Subsec. (g).
Subsec. (h).
1994—Subsec. (b)(3).
Subsec. (f).
1989—Subsec. (a).
Subsec. (b)(2).
Subsec. (b)(4)(B)(i), (5)(A), (6).
Subsec. (c)(1).
Subsec. (c)(3)(B)(ii).
1987—Subsecs. (c) to (e).
1986—Subsec. (b)(7).
Subsec. (d).
1980—Subsec. (a).
Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment
Amendment by section 402(g)(2)(A) of
Amendment by section 407(a) of
Effective Date of 1994 Amendment
Amendment by section 766(c) of
Effective Date of 1989 Amendment
Amendment by section 7881(f)(4), (5), (11) of
Amendment by section 7891(a)(1) of
Amendment by section 7894(g)(1), (3)(B) of
Effective Date of 1987 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Transitional Rule Regarding Amendments by Section 9312 of Pub. L. 100–203
"(i)
"(I) subparagraph (A) of section 4022(c)(3) of ERISA [
"(II) subparagraph (C) of section 4022(c)(3) of ERISA (as so amended) shall apply irrespective of the outstanding amount of benefit liabilities under the plan.
"(ii) [Repealed.
§1322a. Multiemployer plan benefits guaranteed
(a) Benefits of covered plans subject to guarantee
The corporation shall guarantee, in accordance with this section, the payment of all nonforfeitable benefits (other than benefits becoming nonforfeitable solely on account of the termination of a plan) under a multiemployer plan—
(1) to which this subchapter applies, and
(2) which is insolvent under
(b) Benefits or benefit increases not eligible for guarantee
(1)(A) For purposes of this section, a benefit or benefit increase which has been in effect under a plan for less than 60 months is not eligible for the corporation's guarantee. For purposes of this paragraph, any month of any plan year during which the plan was insolvent or terminated (within the meaning of
(B) For purposes of this section, a benefit or benefit increase which has been in effect under a plan for less than 60 months before the first day of the plan year for which an amendment reducing the benefit or the benefit increase is taken into account under section 1425(a)(2) 1 of this title in determining the minimum contribution requirement for the plan year under section 1423(b) 1 of this title is not eligible for the corporation's guarantee.
(2) For purposes of this section—
(A) the date on which a benefit or a benefit increase under a plan is first in effect is the later of—
(i) the date on which the documents establishing or increasing the benefit were executed, or
(ii) the effective date of the benefit or benefit increase;
(B) the period of time for which a benefit or a benefit increase has been in effect under a successor plan includes the period of time for which the benefit or benefit increase was in effect under a previously established plan; and
(C) in the case of a plan to which
(c) Determinations respecting amount of guarantee
(1) Except as provided in subsection (g), the monthly benefit of a participant or a beneficiary which is guaranteed under this section by the corporation with respect to a plan is the product of—
(A) 100 percent of the accrual rate up to $11, plus 75 percent of the lesser of—
(i) $33, or
(ii) the accrual rate, if any, in excess of $11, and
(B) the number of the participant's years of credited service.
(2) For purposes of this section, the accrual rate is—
(A) the monthly benefit of the participant or beneficiary which is described in subsection (a) and which is eligible for the corporation's guarantee under subsection (b), except that such benefit shall be—
(i) no greater than the monthly benefit which would be payable under the plan at normal retirement age in the form of a single life annuity, and
(ii) determined without regard to any reduction under
(B) the participant's years of credited service.
(3) For purposes of this subsection—
(A) a year of credited service is a year in which the participant completed—
(i) a full year of participation in the plan, or
(ii) any period of service before participation which is credited for purposes of benefit accrual as the equivalent of a full year of participation;
(B) any year for which the participant is credited for purposes of benefit accrual with a fraction of the equivalent of a full year of participation shall be counted as such a fraction of a year of credited service; and
(C) years of credited service shall be determined by including service which may otherwise be disregarded by the plan under
(4) For purposes of subsection (a), in the case of a qualified preretirement survivor annuity (as defined in
(d) Amount of guarantee of reduced benefit
In the case of a benefit which has been reduced under
(1) the reduced benefit, or
(2) the amount determined under subsection (c).
(e) Ineligibility of benefits for guarantee
The corporation shall not guarantee benefits under a multiemployer plan which, under
(f) Study, report, etc., respecting premium increase in existing basic-benefit guarantee levels; Congressional procedures applicable for revision of schedules
(1) No later than 5 years after September 26, 1980, and at least every fifth year thereafter, the corporation shall—
(A) conduct a study to determine—
(i) the premiums needed to maintain the basic-benefit guarantee levels for multiemployer plans described in subsection (c), and
(ii) whether the basic-benefit guarantee levels for multiemployer plans may be increased without increasing the basic-benefit premiums for multiemployer plans under this subchapter; and
(B) report such determinations to the Committee on Ways and Means and the Committee on Education and Labor of the House of Representatives and to the Committee on Finance and the Committee on Labor and Human Resources of the Senate.
(2)(A) If the last report described in paragraph (1) indicates that a premium increase is necessary to support the existing basic-benefit guarantee levels for multiemployer plans, the corporation shall transmit to the Committee on Ways and Means and the Committee on Education and Labor of the House of Representatives and to the Committee on Finance and the Committee on Labor and Human Resources of the Senate by March 31 of any calendar year in which congressional action under this subsection is requested—
(i) a revised schedule of basic-benefit guarantees for multiemployer plans which would be necessary in the absence of an increase in premiums approved in accordance with
(ii) a revised schedule of basic-benefit premiums for multiemployer plans which is necessary to support the existing basic-benefit guarantees for such plans, and
(iii) a revised schedule of basic-benefit guarantees for multiemployer plans for which the schedule of premiums necessary is higher than the existing premium schedule for such plans but lower than the revised schedule of premiums for such plans specified in clause (ii), together with such schedule of premiums.
(B) The revised schedule of increased premiums referred to in subparagraph (A)(ii) or (A)(iii) shall go into effect as approved by the enactment of a joint resolution.
(C) If an increase in premiums is not so enacted, the revised guarantee schedule described in subparagraph (A)(i) shall go into effect on the first day of the second calendar year following the year in which such revised guarantee schedule was submitted to the Congress.
(3)(A) If the last report described in paragraph (1) indicates that basic-benefit guarantees for multiemployer plans can be increased without increasing the basic-benefit premiums for multiemployer plans under this subchapter, the corporation shall submit to the Committee on Ways and Means and the Committee on Education and Labor of the House of Representatives and to the Committee on Finance and the Committee on Labor and Human Resources of the Senate by March 31 of the calendar year in which congressional action under this paragraph is requested—
(i) a revised schedule of increases in the basic-benefit guarantees which can be supported by the existing schedule of basic-benefit premiums for multiemployer plans, and
(ii) a revised schedule of basic-benefit premiums sufficient to support the existing basic-benefit guarantees.
(B) The revised schedules referred to in subparagraph (A)(i) or subparagraph (A)(ii) shall go into effect as approved by the enactment of a joint resolution.
(4)(A) The succeeding subparagraphs of this paragraph are enacted by the Congress as an exercise of the rulemaking power of the Senate and the House of Representatives, respectively, and as such they shall be deemed a part of the rules of each House, respectively, but applicable only with respect to the procedure to be followed in that House in the case of joint resolutions (as defined in subparagraph (B)). Such subparagraphs shall supersede other rules only to the extent that they are inconsistent therewith. They are enacted with full recognition of the constitutional right of either House to change the rules (so far as relating to the procedure of that House) at any time, in the same manner, and to the same extent as in the case of any rule of that House.
(B) For purposes of this subsection, "joint resolution" means only a joint resolution, the matter after the resolving clause of which is as follows: "The proposed schedule described in transmitted to the Congress by the Pension Benefit Guaranty Corporation on is hereby approved.", the first blank space therein being filled with "section 4022A(f)(2)(A)(ii) of the Employee Retirement Income Security Act of 1974", "section 4022A(f)(2)(A)(iii) of the Employee Retirement Income Security Act of 1974", "section 4022A(f)(3)(A)(i) of the Employee Retirement Income Security Act of 1974", or "section 4022A(f)(3)(A)(ii) of the Employee Retirement Income Security Act of 1974" (whichever is applicable), and the second blank space therein being filled with the date on which the corporation's message proposing the revision was submitted.
(C) The procedure for disposition of a joint resolution shall be the procedure described in section 1306(b)(4) through (7) of this title.
(g) Guarantee of payment of other classes of benefits and establishment of terms and conditions of guarantee; promulgation of regulations for establishment of supplemental program to guarantee benefits otherwise ineligible; status of benefits; applicability of revised schedule of premiums
(1) The corporation may guarantee the payment of such other classes of benefits under multiemployer plans, and establish the terms and conditions under which those other classes of benefits are guaranteed, as it determines to be appropriate.
(2)(A) The corporation shall prescribe regulations to establish a supplemental program to guarantee benefits under multiemployer plans which would be guaranteed under this section but for the limitations in subsection (c). Such regulations shall be proposed by the corporation no later than the end of the 18th calendar month following September 26, 1980. The regulations shall make coverage under the supplemental program available no later than January 1, 1983. Any election to participate in the supplemental program shall be on a voluntary basis, and a plan electing such coverage shall continue to pay the premiums required under
(B) The regulations prescribed under this paragraph shall provide—
(i) that a plan must elect coverage under the supplemental program within the time permitted by the regulations;
(ii) unless the corporation determines otherwise, that a plan may not elect supplemental coverage unless the value of the assets of the plan as of the end of the plan year preceding the plan year in which the election must be made is an amount equal to 15 times the total amount of the benefit payments made under the plan for that year; and
(iii) such other reasonable terms and conditions for supplemental coverage, including funding standards and any other reasonable limitations with respect to plans or benefits covered or to means of program financing, as the corporation determines are necessary and appropriate for a feasible supplemental program consistent with the purposes of this subchapter.
(3) Any benefits guaranteed under this subsection shall be considered nonbasic benefits for purposes of this subchapter.
(4)(A) No revised schedule of premiums under this subsection, after the initial schedule, shall go into effect unless—
(i) the revised schedule is submitted to the Congress, and
(ii) a joint resolution described in subparagraph (B) is not enacted before the close of the 60th legislative day after such schedule is submitted to the Congress.
(B) For purposes of subparagraph (A), a joint resolution described in this subparagraph is a joint resolution the matter after the resolving clause of which is as follows: "The revised premium schedule transmitted to the Congress by the Pension Benefit Guaranty Corporation under section 4022A(g)(4) of the Employee Retirement Income Security Act of 1974 on is hereby disapproved.", the blank space therein being filled with the date on which the revised schedule was submitted.
(C) For purposes of subparagraph (A), the term "legislative day" means any calendar day other than a day on which either House is not in session because of a sine die adjournment or an adjournment of more than 3 days to a day certain.
(D) The procedure for disposition of a joint resolution described in subparagraph (B) shall be the procedure described in paragraphs (4) through (7) of
(5) Regulations prescribed by the corporation to carry out the provisions of this subsection, may, to the extent provided therein, supersede the requirements of
(h) Applicability to nonforfeitable benefits accrued as of July 30, 1980; manner and extent of guarantee
(1) Except as provided in paragraph (3), subsections (b) and (c) shall not apply with respect to the nonforfeitable benefits accrued as of July 29, 1980, with respect to a participant or beneficiary under a multiemployer plan—
(1) 2 who is in pay status on July 29, 1980, or
(2) 3 who is within 36 months of the normal retirement age and has a nonforfeitable right to a pension as of that date.
(2) The benefits described in paragraph (1) shall be guaranteed by the corporation in the same manner and to the same extent as benefits are guaranteed by the corporation under
(3) This subsection does not apply with respect to a plan for plan years following a plan year—
(A) in which the plan has terminated within the meaning of
(B) in which it is determined by the corporation that substantially all the employers have withdrawn from the plan pursuant to an agreement or arrangement to withdraw.
(
Editorial Notes
References in Text
Section 4022A(f)(2)(A)(ii), (iii), (3)(A)(i), and (ii) of the Employee Retirement Income Security Act of 1974, referred to in subsec. (f)(4)(B), is classified to subsec. (f)(2)(A)(ii), (iii), (3)(A)(i) and (ii) of this section.
Section 4022A(g)(4) of the Employee Retirement Income Security Act of 1974, referred to in subsec. (g)(4)(B), is classified to subsec. (g)(4) of this section.
Amendments
2014—Subsec. (c)(4).
2000—Subsec. (c)(1)(A).
Subsec. (c)(1)(A)(i).
Subsec. (c)(2) to (6).
1989—Subsec. (a)(1).
Subsecs. (c)(3)(A)(ii), (4)(C), (5)(A)(ii), (6), (d), (g)(5).
Subsec. (f)(2)(B).
1986—Subsec. (f)(2)(B).
Subsec. (f)(2)(C).
Subsec. (f)(3)(B).
Subsec. (f)(4)(A).
Subsec. (f)(4)(B).
Subsec. (f)(4)(C).
Subsec. (g)(4)(A)(ii).
Subsec. (g)(4)(B).
Subsec. (g)(4)(D).
Statutory Notes and Related Subsidiaries
Change of Name
Committee on Education and Labor of House of Representatives changed to Committee on Education and the Workforce of House of Representatives by House Resolution No. 5, One Hundred Eighteenth Congress, Jan. 9, 2023.
Committee on Labor and Human Resources of Senate changed to Committee on Health, Education, Labor, and Pensions of Senate by Senate Resolution No. 20, One Hundred Sixth Congress, Jan. 19, 1999.
Effective Date of 2014 Amendment
Effective Date of 2000 Amendment
Effective Date of 1989 Amendment
Amendment by section 7891(a)(1) of
Amendment by section 7893(b) of
Effective Date of 1986 Amendment
Amendment by
Effective Date
Section effective Sept. 26, 1980, except as specifically provided, see
1 See References in Text note below.
2 So in original. Probably should be "(A)".
3 So in original. Probably should be "(B)".
§1322b. Aggregate limit on benefits guaranteed; criteria applicable
(a) Notwithstanding
(b) For purposes of this section—
(1) the receipt of benefits under a multiemployer plan receiving financial assistance from the corporation shall be considered the receipt of amounts from the corporation pursuant to a guarantee by the corporation of basic benefits except to the extent provided in regulations prescribed by the corporation, and
(2) the date on which a multiemployer plan, whether or not terminated, begins receiving financial assistance from the corporation shall be considered a date of plan termination.
(
Statutory Notes and Related Subsidiaries
Effective Date
Section effective Sept. 26, 1980, except as specifically provided, see
§1323. Plan fiduciaries
Notwithstanding any other provision of this chapter, a fiduciary of a plan to which
(
Editorial Notes
References in Text
This chapter, referred to in text, was in the original "this Act", meaning
Prior Provisions
A prior section 1323,
Statutory Notes and Related Subsidiaries
Effective Date
Section effective Sept. 26, 1980, except as specifically provided, see
Subtitle C—Terminations
§1341. Termination of single-employer plans
(a) General rules governing single-employer plan terminations
(1) Exclusive means of plan termination
Except in the case of a termination for which proceedings are otherwise instituted by the corporation as provided in
(2) 60-day notice of intent to terminate
Not less than 60 days before the proposed termination date of a standard termination under subsection (b) or a distress termination under subsection (c), the plan administrator shall provide to each affected party (other than the corporation in the case of a standard termination) a written notice of intent to terminate stating that such termination is intended and the proposed termination date. The written notice shall include any related additional information required in regulations of the corporation.
(3) Adherence to collective bargaining agreements
The corporation shall not proceed with a termination of a plan under this section if the termination would violate the terms and conditions of an existing collective bargaining agreement. Nothing in the preceding sentence shall be construed as limiting the authority of the corporation to institute proceedings to involuntarily terminate a plan under
(b) Standard termination of single-employer plans
(1) General requirements
A single-employer plan may terminate under a standard termination only if—
(A) the plan administrator provides the 60-day advance notice of intent to terminate to affected parties required under subsection (a)(2),
(B) the requirements of subparagraphs (A) and (B) of paragraph (2) are met,
(C) the corporation does not issue a notice of noncompliance under subparagraph (C) of paragraph (2), and
(D) when the final distribution of assets occurs, the plan is sufficient for benefit liabilities (determined as of the termination date).
(2) Termination procedure
(A) Notice to the corporation
As soon as practicable after the date on which the notice of intent to terminate is provided pursuant to subsection (a)(2), the plan administrator shall send a notice to the corporation setting forth—
(i) certification by an enrolled actuary—
(I) of the projected amount of the assets of the plan (as of a proposed date of final distribution of assets),
(II) of the actuarial present value (as of such date) of the benefit liabilities (determined as of the proposed termination date) under the plan, and
(III) that the plan is projected to be sufficient (as of such proposed date of final distribution) for such benefit liabilities,
(ii) such information as the corporation may prescribe in regulations as necessary to enable the corporation to make determinations under subparagraph (C), and
(iii) certification by the plan administrator that—
(I) the information on which the enrolled actuary based the certification under clause (i) is accurate and complete, and
(II) the information provided to the corporation under clause (ii) is accurate and complete.
Clause (i) and clause (iii)(I) shall not apply to a plan described in section 412(i) 1 of title 26.
(B) Notice to participants and beneficiaries of benefit commitments 2
No later than the date on which a notice is sent by the plan administrator under subparagraph (A), the plan administrator shall send a notice to each person who is a participant or beneficiary under the plan—
(i) specifying the amount of the benefit liabilities (if any) attributable to such person as of the proposed termination date and the benefit form on the basis of which such amount is determined, and
(ii) including the following information used in determining such benefit liabilities:
(I) the length of service,
(II) the age of the participant or beneficiary,
(III) wages,
(IV) the assumptions, including the interest rate, and
(V) such other information as the corporation may require.
Such notice shall be written in such manner as is likely to be understood by the participant or beneficiary and as may be prescribed in regulations of the corporation.
(C) Notice from the corporation of noncompliance
(i) In general
Within 60 days after receipt of the notice under subparagraph (A), the corporation shall issue a notice of noncompliance to the plan administrator if—
(I) it determines, based on the notice sent under paragraph (2)(A) of subsection (b), that there is reason to believe that the plan is not sufficient for benefit liabilities,
(II) it otherwise determines, on the basis of information provided by affected parties or otherwise obtained by the corporation, that there is reason to believe that the plan is not sufficient for benefit liabilities, or
(III) it determines that any other requirement of subparagraph (A) or (B) of this paragraph or of subsection (a)(2) has not been met, unless it further determines that the issuance of such notice would be inconsistent with the interests of participants and beneficiaries.
(ii) Extension
The corporation and the plan administrator may agree to extend the 60-day period referred to in clause (i) by a written agreement signed by the corporation and the plan administrator before the expiration of the 60-day period. The 60-day period shall be extended as provided in the agreement and may be further extended by subsequent written agreements signed by the corporation and the plan administrator made before the expiration of a previously agreed upon extension of the 60-day period. Any extension may be made upon such terms and conditions (including the payment of benefits) as are agreed upon by the corporation and the plan administrator.
(D) Final distribution of assets in absence of notice of noncompliance
The plan administrator shall commence the final distribution of assets pursuant to the standard termination of the plan as soon as practicable after the expiration of the 60-day (or extended) period referred to in subparagraph (C), but such final distribution may occur only if—
(i) the plan administrator has not received during such period a notice of noncompliance from the corporation under subparagraph (C), and
(ii) when such final distribution occurs, the plan is sufficient for benefit liabilities (determined as of the termination date).
(3) Methods of final distribution of assets
(A) In general
In connection with any final distribution of assets pursuant to the standard termination of the plan under this subsection, the plan administrator shall distribute the assets in accordance with
(i) purchase irrevocable commitments from an insurer to provide all benefit liabilities under the plan, or
(ii) in accordance with the provisions of the plan and any applicable regulations, otherwise fully provide all benefit liabilities under the plan. A transfer of assets to the corporation in accordance with
(B) Certification to the corporation of final distribution of assets
Within 30 days after the final distribution of assets is completed pursuant to the standard termination of the plan under this subsection, the plan administrator shall send a notice to the corporation certifying that the assets of the plan have been distributed in accordance with the provisions of subparagraph (A) so as to pay all benefit liabilities under the plan.
(4) Continuing authority
Nothing in this section shall be construed to preclude the continued exercise by the corporation, after the termination date of a plan terminated in a standard termination under this subsection, of its authority under
(5) Special rule for certain plans where cessation or change in membership of a controlled group
(A) In general
Except as provided in subparagraphs (B) and (D), if—
(i) there is 3 transaction or series of transactions which result in a person ceasing to be a member of a controlled group, and
(ii) such person immediately before the transaction or series of transactions maintained a single-employer plan which is a defined benefit plan which is fully funded,
then the interest rate used in determining whether the plan is sufficient for benefit liabilities or to otherwise assess plan liabilities for purposes of this subsection or
(B) Limitations
Subparagraph (A) shall not apply to any transaction or series of transactions unless—
(i) any employer maintaining the plan immediately before or after such transaction or series of transactions—
(I) has an outstanding senior unsecured debt instrument which is rated investment grade by each of the nationally recognized statistical rating organizations for corporate bonds that has issued a credit rating for such instrument, or
(II) if no such debt instrument of such employer has been rated by such an organization but 1 or more of such organizations has made an issuer credit rating for such employer, all such organizations which have so rated the employer have rated such employer investment grade, and
(ii) the employer maintaining the plan after the transaction or series of transactions employs at least 20 percent of the employees located in the United States who were employed by such employer immediately before the transaction or series of transactions.
(C) Fully funded
For purposes of subparagraph (A), a plan shall be treated as fully funded with respect to any transaction or series of transactions if—
(i) in the case of a transaction or series of transactions which occur in a plan year beginning before January 1, 2008, the funded current liability percentage determined under
(ii) in the case of a transaction or series of transactions which occur in a plan year beginning on or after such date, the funding target attainment percentage determined under
(D) 2 year limitation
Subparagraph (A) shall not apply to any transaction or series of transactions if the plan referred to in subparagraph (A)(ii) is terminated under subsection (c) or
(c) Distress termination of single-employer plans
(1) In general
A single-employer plan may terminate under a distress termination only if—
(A) the plan administrator provides the 60-day advance notice of intent to terminate to affected parties required under subsection (a)(2),
(B) the requirements of subparagraph (A) of paragraph (2) are met, and
(C) the corporation determines that the requirements of subparagraphs (B) and (D) of paragraph (2) are met.
(2) Termination requirements
(A) Information submitted to the corporation
As soon as practicable after the date on which the notice of intent to terminate is provided pursuant to subsection (a)(2), the plan administrator shall provide the corporation, in such form as may be prescribed by the corporation in regulations, the following information:
(i) such information as the corporation may prescribe by regulation as necessary to make determinations under subparagraph (B) and paragraph (3);
(ii) unless the corporation determines the information is not necessary for purposes of paragraph (3)(A) or
(I) the amount (as of the proposed termination date and, if applicable, the proposed distribution date) of the current value of the assets of the plan,
(II) the actuarial present value (as of such dates) of the benefit liabilities under the plan,
(III) whether the plan is sufficient for benefit liabilities as of such dates,
(IV) the actuarial present value (as of such dates) of benefits under the plan guaranteed under
(V) whether the plan is sufficient for guaranteed benefits as of such dates;
(iii) in any case in which the plan is not sufficient for benefit liabilities as of such date—
(I) the name and address of each participant and beneficiary under the plan as of such date, and
(II) such other information as shall be prescribed by the corporation by regulation as necessary to enable the corporation to be able to make payments to participants and beneficiaries as required under
(iv) certification by the plan administrator that—
(I) the information on which the enrolled actuary based the certifications under clause (ii) is accurate and complete, and
(II) the information provided to the corporation under clauses (i) and (iii) is accurate and complete.
Clause (ii) and clause (iv)(I) shall not apply to a plan described in section 412(i) 1 of title 26.
(B) Determination by the corporation of necessary distress criteria
Upon receipt of the notice of intent to terminate required under subsection (a)(2) and the information required under subparagraph (A), the corporation shall determine whether the requirements of this subparagraph are met as provided in clause (i), (ii), or (iii). The requirements of this subparagraph are met if each person who is (as of the proposed termination date) a contributing sponsor of such plan or a member of such sponsor's controlled group meets the requirements of any of the following clauses:
(i) Liquidation in bankruptcy or insolvency proceedings
The requirements of this clause are met by a person if—
(I) such person has filed or has had filed against such person, as of the proposed termination date, a petition seeking liquidation in a case under title 11 or under any similar Federal law or law of a State or political subdivision of a State (or a case described in clause (ii) filed by or against such person has been converted, as of such date, to a case in which liquidation is sought), and
(II) such case has not, as of the proposed termination date, been dismissed.
(ii) Reorganization in bankruptcy or insolvency proceedings
The requirements of this clause are met by a person if—
(I) such person has filed, or has had filed against such person, as of the proposed termination date, a petition seeking reorganization in a case under title 11 or under any similar law of a State or political subdivision of a State (or a case described in clause (i) filed by or against such person has been converted, as of such date, to such a case in which reorganization is sought),
(II) such case has not, as of the proposed termination date, been dismissed,
(III) such person timely submits to the corporation any request for the approval of the bankruptcy court (or other appropriate court in a case under such similar law of a State or political subdivision) of the plan termination, and
(IV) the bankruptcy court (or such other appropriate court) determines that, unless the plan is terminated, such person will be unable to pay all its debts pursuant to a plan of reorganization and will be unable to continue in business outside the
(iii) Termination required to enable payment of debts while staying in business or to avoid unreasonably burdensome pension costs caused by declining workforce
The requirements of this clause are met by a person if such person demonstrates to the satisfaction of the corporation that—
(I) unless a distress termination occurs, such person will be unable to pay such person's debts when due and will be unable to continue in business, or
(II) the costs of providing pension coverage have become unreasonably burdensome to such person, solely as a result of a decline of such person's workforce covered as participants under all single-employer plans of which such person is a contributing sponsor.
(C) Notification of determinations by the corporation
The corporation shall notify the plan administrator as soon as practicable of its determinations made pursuant to subparagraph (B).
(D) Disclosure of termination information
(i) In general
A plan administrator that has filed a notice of intent to terminate under subsection (a)(2) shall provide to an affected party any information provided to the corporation under subparagraph (A) or the regulations under subsection (a)(2) not later than 15 days after—
(I) receipt of a request from the affected party for the information; or
(II) the provision of new information to the corporation relating to a previous request.
(ii) Confidentiality
(I) In general
The plan administrator shall not provide information under clause (i) in a form that includes any information that may directly or indirectly be associated with, or otherwise identify, an individual participant or beneficiary.
(II) Limitation
A court may limit disclosure under this subparagraph of confidential information described in
(iii) Form and manner of information; charges
(I) Form and manner
The corporation may prescribe the form and manner of the provision of information under this subparagraph, which shall include delivery in written, electronic, or other appropriate form to the extent that such form is reasonably accessible to individuals to whom the information is required to be provided.
(II) Reasonable charges
A plan administrator may charge a reasonable fee for any information provided under this subparagraph in other than electronic form.
(iv) Authorized representative
For purposes of this subparagraph, the term "authorized representative" means any employee organization representing participants in the pension plan.
(3) Termination procedure
(A) Determinations by the corporation relating to plan sufficiency for guaranteed benefits and for benefit liabilities
If the corporation determines that the requirements for a distress termination set forth in paragraphs (1) and (2) are met, the corporation shall—
(i) determine that the plan is sufficient for guaranteed benefits (as of the termination date) or that the corporation is unable to make such determination on the basis of information made available to the corporation,
(ii) determine that the plan is sufficient for benefit liabilities (as of the termination date) or that the corporation is unable to make such determination on the basis of information made available to the corporation, and
(iii) notify the plan administrator of the determinations made pursuant to this subparagraph as soon as practicable.
(B) Implementation of termination
After the corporation notifies the plan administrator of its determinations under subparagraph (A), the termination of the plan shall be carried out as soon as practicable, as provided in clause (i), (ii), or (iii).
(i) Cases of sufficiency for benefit liabilities
In any case in which the corporation determines that the plan is sufficient for benefit liabilities, the plan administrator shall proceed to distribute the plan's assets, and make certification to the corporation with respect to such distribution, in the manner described in subsection (b)(3), and shall take such other actions as may be appropriate to carry out the termination of the plan.
(ii) Cases of sufficiency for guaranteed benefits without a finding of sufficiency for benefit liabilities
In any case in which the corporation determines that the plan is sufficient for guaranteed benefits, but further determines that it is unable to determine that the plan is sufficient for benefit liabilities on the basis of the information made available to it, the plan administrator shall proceed to distribute the plan's assets in the manner described in subsection (b)(3), make certification to the corporation that the distribution has occurred, and take such actions as may be appropriate to carry out the termination of the plan.
(iii) Cases without any finding of sufficiency
In any case in which the corporation determines that it is unable to determine that the plan is sufficient for guaranteed benefits on the basis of the information made available to it, the corporation shall commence proceedings in accordance with
(C) Finding after authorized commencement of termination that plan is unable to pay benefits
(i) Finding with respect to benefit liabilities which are not guaranteed benefits
If, after the plan administrator has begun to terminate the plan as authorized under subparagraph (B)(i), the plan administrator finds that the plan is unable, or will be unable, to pay benefit liabilities which are not benefits guaranteed by the corporation under
(ii) Finding with respect to guaranteed benefits
If, after the plan administrator has begun to terminate the plan as authorized by subparagraph (B)(i) or (ii), the plan administrator finds that the plan is unable, or will be unable, to pay all benefits under the plan which are guaranteed by the corporation under
(D) Administration of the plan during interim period
(i) In general
The plan administrator shall—
(I) meet the requirements of clause (ii) for the period commencing on the date on which the plan administrator provides a notice of distress termination to the corporation under subsection (a)(2) and ending on the date on which the plan administrator receives notification from the corporation of its determinations under subparagraph (A), and
(II) meet the requirements of clause (ii) commencing on the date on which the plan administrator or the corporation makes a finding under subparagraph (C)(ii).
(ii) Requirements
The requirements of this clause are met by the plan administrator if the plan administrator—
(I) refrains from distributing assets or taking any other actions to carry out the proposed termination under this subsection,
(II) pays benefits attributable to employer contributions, other than death benefits, only in the form of an annuity,
(III) does not use plan assets to purchase irrevocable commitments to provide benefits from an insurer, and
(IV) continues to pay all benefit liabilities under the plan, but, commencing on the proposed termination date, limits the payment of benefits under the plan to those benefits which are guaranteed by the corporation under
In the event the plan administrator is later determined not to have met the requirements for distress termination, any benefits which are not paid solely by reason of compliance with subclause (IV) shall be due and payable immediately (together with interest, at a reasonable rate, in accordance with regulations of the corporation).
(d) Sufficiency
For purposes of this section—
(1) Sufficiency for benefit liabilities
A single-employer plan is sufficient for benefit liabilities if there is no amount of unfunded benefit liabilities under the plan.
(2) Sufficiency for guaranteed benefits
A single-employer plan is sufficient for guaranteed benefits if there is no amount of unfunded guaranteed benefits under the plan.
(e) Limitation on the conversion of a defined benefit plan to a defined contribution plan
The adoption of an amendment to a plan which causes the plan to become a plan described in
(
Editorial Notes
References in Text
Section 412, referred to in subsecs. (b)(2)(A) and (c)(2)(A), was amended generally by
Amendments
2008—Subsec. (b)(5)(A).
Subsec. (c)(2)(D)(i).
2006—Subsec. (b)(5).
Subsec. (c)(1)(C).
Subsec. (c)(2)(D).
1994—Subsec. (b)(2)(C)(i)(I).
Subsec. (b)(2)(C)(i)(III).
Subsec. (b)(3)(A)(ii).
Subsec. (c)(2)(B)(i)(I).
1989—Subsec. (b)(2)(A).
Subsec. (b)(2)(B).
Subsec. (b)(3)(B).
Subsec. (c)(2)(A)(ii).
Subsec. (c)(2)(A)(iii)(II).
Subsec. (c)(2)(B).
Subsec. (c)(2)(B)(i), (ii).
Subsec. (c)(3)(C)(i).
Subsec. (c)(3)(D).
Subsec. (c)(3)(D)(ii)(I).
Subsec. (d)(1).
1987—Subsec. (b)(1)(D).
Subsec. (b)(2)(A).
Subsec. (b)(2)(A)(i).
Subsec. (b)(2)(A)(iii).
Subsec. (b)(2)(B).
Subsec. (b)(2)(C)(i)(II), (D)(ii).
Subsec. (b)(3)(A)(i).
Subsec. (b)(3)(A)(ii).
Subsec. (b)(3)(B).
Subsec. (c)(2)(A).
Subsec. (c)(2)(A)(ii).
Subsec. (c)(2)(A)(iii).
Subsec. (c)(2)(A)(iv).
Subsec. (c)(2)(B).
Subsec. (c)(2)(B)(i).
Subsec. (c)(2)(B)(ii)(I).
Subsec. (c)(2)(B)(ii)(II).
Subsec. (c)(2)(B)(ii)(III).
Subsec. (c)(2)(B)(ii)(IV).
Subsec. (c)(2)(C), (D).
Subsec. (c)(3)(A).
Subsec. (c)(3)(B)(i).
Subsec. (c)(3)(B)(ii).
Subsec. (c)(3)(B)(iii).
Subsec. (c)(3)(C)(i).
Subsec. (c)(3)(D)(ii)(IV).
Subsec. (d)(1).
1986—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Subsec. (e).
Subsec. (f).
1980—Subsec. (a).
Subsec. (g).
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment by
Effective Date of 2006 Amendment
"(1)
"(2)
Effective Date of 1994 Amendment
Amendment by section 776(b)(3) of
Effective Date of 1989 Amendment
Amendment by section 7881(f)(7), (g)(1)–(6) of
Amendment by section 7893(c), (d) of
Effective Date of 1987 Amendment
Amendment by section 9312(c)(1), (2) of
Amendment by section 9313(a)(1)–(2)(E), (b)(1)–(5) of
Effective Date of 1986 Amendment
"(a)
"(1) notices of intent to terminate were filed with the Pension Benefit Guaranty Corporation under section 4041 of the Employee Retirement Income Security Act of 1974 [
"(2) proceedings were commenced under section 4042 of such Act [
"(b)
"(1)
"(2)
"(A) the plan administrator provided notice to the participants in the plan regarding the termination in compliance with applicable regulations of the Pension Benefit Guaranty Corporation as in effect on the date of the notice, and
"(B) the notice of intent to terminate provided to the Pension Benefit Guaranty Corporation in connection with the termination was filed with the Corporation not less than 10 days before the proposed date of termination specified in the notice.
For purposes of section 4041 of such Act (as amended by this title), the proposed date of termination specified in the notice of intent to terminate referred to in subparagraph (B) shall be considered the proposed termination date.
"(3)
"(A)
"(i) that the plan administrator wishes the termination to proceed as a standard termination under section 4041(b) of the Employee Retirement Income Security Act of 1974 (as amended by this title) [
"(ii) that the plan administrator wishes the termination to proceed as a distress termination under section 4041(c) of such Act (as amended by this title) in accordance with subparagraph (C), or
"(iii) that the plan administrator wishes to stop the termination proceedings in accordance with subparagraph (D).
"(B)
"(i)
"(I)
"(II)
"(ii)
"(C)
"(D)
"(i)
"(ii)
"(E)
"(i) the plan could not otherwise, pursuant to the preceding provisions of this paragraph, terminate in a termination treated as a standard termination under section 4041(b) of the Employee Retirement Income Security Act of 1974 (as amended by this title), and
"(ii) the extension would result in a greater likelihood that benefit commitments under the plan would be paid in full,
except that any such period may not be so extended beyond one year after the date of the enactment of this Act.
"(c)
Effective Date of 1980 Amendment
Amendment by
60-Day Extension by Pension Benefit Guaranty Corporation for Notice of Noncompliance
Special Temporary Rule for Termination of Single-Employer Plan
"(1)
"(A) determines that the assets of the plan are sufficient for benefit commitments (within the meaning of section 4041(d)(1) of the Employee Retirement Income Security Act of 1974 (as amended by section 11007) [
"(B) issues to the plan administrator a written notice setting forth the determination described in subparagraph (A).
"(2)
"(A) the plan administrator has filed a notice of intent to terminate with the Pension Benefit Guaranty Corporation, and—
"(i) the filing was made before January 1, 1986, and the Corporation has not issued a notice of sufficiency for such plan before the date of the enactment of this Act [Apr. 7, 1986], or
"(ii) the filing is made on or after January 1, 1986, and before 60 days after the date of the enactment of this Act and the Corporation has not issued a notice of sufficiency for such plan before the date of the enactment of this Act, and
"(B) of the persons who are (as of the termination date) participants in the plan, the lesser of 10 percent or 200 have filed complaints with the Corporation regarding such termination—
"(i) in the case of plans described in subparagraph (A)(i), before 15 days after the date of the enactment of this Act, or
"(ii) in any other case, before the later of 15 days after the date of the enactment of this Act or 45 days after the date of the filing of such notice.
"(3)
"(4)
"(A)
"(B)
1 See References in Text note below.
2 So in original. Probably should be "benefit liabilities".
3 So in original. The word "a" probably should appear.
§1341a. Termination of multiemployer plans
(a) Determinative factors
Termination of a multiemployer plan under this section occurs as a result of—
(1) the adoption after September 26, 1980, of a plan amendment which provides that participants will receive no credit for any purpose under the plan for service with any employer after the date specified by such amendment;
(2) the withdrawal of every employer from the plan, within the meaning of
(3) the adoption of an amendment to the plan which causes the plan to become a plan described in
(b) Date of termination
(1) The date on which a plan terminates under paragraph (1) or (3) of subsection (a) is the later of—
(A) the date on which the amendment is adopted, or
(B) the date on which the amendment takes effect.
(2) The date on which a plan terminates under paragraph (2) of subsection (a) is the earlier of—
(A) the date on which the last employer withdraws, or
(B) the first day of the first plan year for which no employer contributions were required under the plan.
(c) Duties of plan sponsor of amended plan
Except as provided in subsection (f)(1), the plan sponsor of a plan which terminates under paragraph (2) of subsection (a) shall—
(1) limit the payment of benefits to benefits which are nonforfeitable under the plan as of the date of the termination, and
(2) pay benefits attributable to employer contributions, other than death benefits, only in the form of an annuity, unless the plan assets are distributed in full satisfaction of all nonforfeitable benefits under the plan.
(d) Duties of plan sponsor of nonoperative plan
The plan sponsor of a plan which terminates under paragraph (2) of subsection (a) shall reduce benefits and suspend benefit payments in accordance with
(e) Amount of contribution of employer under amended plan for each plan year subsequent to plan termination date
In the case of a plan which terminates under paragraph (1) or (3) of subsection (a), the rate of an employer's contributions under the plan for each plan year beginning on or after the plan termination date shall equal or exceed the highest rate of employer contributions at which the employer had an obligation to contribute under the plan in the 5 preceding plan years ending on or before the plan termination date, unless the corporation approves a reduction in the rate based on a finding that the plan is or soon will be fully funded.
(f) Payment of benefits; reporting requirements for terminated plans and rules and standards for administration of such plans
(1) The plan sponsor of a terminated plan may authorize the payment other than in the form of an annuity of a participant's entire nonforfeitable benefit attributable to employer contributions, other than a death benefit, if the value of the entire nonforfeitable benefit does not exceed $1,750. The corporation may authorize the payment of benefits under the terms of a terminated plan other than nonforfeitable benefits, or the payment other than in the form of an annuity of benefits having a value greater than $1,750, if the corporation determines that such payment is not adverse to the interest of the plan's participants and beneficiaries generally and does not unreasonably increase the corporation's risk of loss with respect to the plan.
(2) The corporation may prescribe reporting requirements for terminated plans, and rules and standards for the administration of such plans, which the corporation considers appropriate to protect the interests of plan participants and beneficiaries or to prevent unreasonable loss to the corporation.
(
Statutory Notes and Related Subsidiaries
Effective Date
Section effective Sept. 26, 1980, except as specifically provided, see
§1342. Institution of termination proceedings by the corporation
(a) Authority to institute proceedings to terminate a plan
The corporation may institute proceedings under this section to terminate a plan whenever it determines that—
(1) the plan has not met the minimum funding standard required under
(2) the plan will be unable to pay benefits when due,
(3) the reportable event described in
(4) the possible long-run loss of the corporation with respect to the plan may reasonably be expected to increase unreasonably if the plan is not terminated.
The corporation shall as soon as practicable institute proceedings under this section to terminate a single-employer plan whenever the corporation determines that the plan does not have assets available to pay benefits which are currently due under the terms of the plan. The corporation may prescribe a simplified procedure to follow in terminating small plans as long as that procedure includes substantial safeguards for the rights of the participants and beneficiaries under the plans, and for the employers who maintain such plans (including the requirement for a court decree under subsection (c)). Notwithstanding any other provision of this subchapter, the corporation is authorized to pool assets of terminated plans for purposes of administration, investment, payment of liabilities of all such terminated plans, and such other purposes as it determines to be appropriate in the administration of this subchapter.
(b) Appointment of trustee
(1) Whenever the corporation makes a determination under subsection (a) with respect to a plan or is required under subsection (a) to institute proceedings under this section, it may, upon notice to the plan, apply to the appropriate United States district court for the appointment of a trustee to administer the plan with respect to which the determination is made pending the issuance of a decree under subsection (c) ordering the termination of the plan. If within 3 business days after the filing of an application under this subsection, or such other period as the court may order, the administrator of the plan consents to the appointment of a trustee, or fails to show why a trustee should not be appointed, the court may grant the application and appoint a trustee to administer the plan in accordance with its terms until the corporation determines that the plan should be terminated or that termination is unnecessary. The corporation may request that it be appointed as trustee of a plan in any case.
(2) Notwithstanding any other provision of this subchapter—
(A) upon the petition of a plan administrator or the corporation, the appropriate United States district court may appoint a trustee in accordance with the provisions of this section if the interests of the plan participants would be better served by the appointment of the trustee, and
(B) upon the petition of the corporation, the appropriate United States district court shall appoint a trustee proposed by the corporation for a multiemployer plan which is in reorganization or to which
(3) The corporation and plan administrator may agree to the appointment of a trustee without proceeding in accordance with the requirements of paragraphs (1) and (2).
(c) Adjudication that plan must be terminated
(1) If the corporation is required under subsection (a) of this section to commence proceedings under this section with respect to a plan or, after issuing a notice under this section to a plan administrator, has determined that the plan should be terminated, it may, upon notice to the plan administrator, apply to the appropriate United States district court for a decree adjudicating that the plan must be terminated in order to protect the interests of the participants or to avoid any unreasonable deterioration of the financial condition of the plan or any unreasonable increase in the liability of the fund. If the trustee appointed under subsection (b) disagrees with the determination of the corporation under the preceding sentence he may intervene in the proceeding relating to the application for the decree, or make application for such decree himself. Upon granting a decree for which the corporation or trustee has applied under this subsection the court shall authorize the trustee appointed under subsection (b) (or appoint a trustee if one has not been appointed under such subsection and authorize him) to terminate the plan in accordance with the provisions of this subtitle. If the corporation and the plan administrator agree that a plan should be terminated and agree to the appointment of a trustee without proceeding in accordance with the requirements of this subsection (other than this sentence) the trustee shall have the power described in subsection (d)(1) and, in addition to any other duties imposed on the trustee under law or by agreement between the corporation and the plan administrator, the trustee is subject to the duties described in subsection (d)(3). Whenever a trustee appointed under this subchapter is operating a plan with discretion as to the date upon which final distribution of the assets is to be commenced, the trustee shall notify the corporation at least 10 days before the date on which he proposes to commence such distribution.
(2) In the case of a proceeding initiated under this section, the plan administrator shall provide the corporation, upon the request of the corporation, the information described in clauses (ii), (iii), and (iv) of
(3)
(A)
(i)
(ii)
(B)
(i) receipt of a request from an affected party for such information; or
(ii) in the case of information described under subparagraph (A)(i), the provision of any new information to the corporation relating to a previous request by an affected party.
(C)
(i)
(ii)
(D)
(i)
(ii)
(d) Powers of trustee
(1)(A) A trustee appointed under subsection (b) shall have the power—
(i) to do any act authorized by the plan or this subchapter to be done by the plan administrator or any trustee of the plan;
(ii) to require the transfer of all (or any part) of the assets and records of the plan to himself as trustee;
(iii) to invest any assets of the plan which he holds in accordance with the provisions of the plan, regulations of the corporation, and applicable rules of law;
(iv) to limit payment of benefits under the plan to basic benefits or to continue payment of some or all of the benefits which were being paid prior to his appointment;
(v) in the case of a multiemployer plan, to reduce benefits or suspend benefit payments under the plan, give appropriate notices, amend the plan, and perform other acts required or authorized by subtitle (E) 1 to be performed by the plan sponsor or administrator;
(vi) to do such other acts as he deems necessary to continue operation of the plan without increasing the potential liability of the corporation, if such acts may be done under the provisions of the plan; and
(vii) to require the plan sponsor, the plan administrator, any contributing or withdrawn employer, and any employee organization representing plan participants to furnish any information with respect to the plan which the trustee may reasonably need in order to administer the plan.
If the court to which application is made under subsection (c) dismisses the application with prejudice, or if the corporation fails to apply for a decree under subsection (c), within 30 days after the date on which the trustee is appointed under subsection (b), the trustee shall transfer all assets and records of the plan held by him to the plan administrator within 3 business days after such dismissal or the expiration of such 30-day period, and shall not be liable to the plan or any other person for his acts as trustee except for willful misconduct, or for conduct in violation of the provisions of part 4 of subtitle B of subchapter I of this chapter (except as provided in subsection (d)(1)(A)(v)).2 The 30-day period referred to in this subparagraph may be extended as provided by agreement between the plan administrator and the corporation or by court order obtained by the corporation.
(B) If the court to which an application is made under subsection (c) issues the decree requested in such application, in addition to the powers described in subparagraph (A), the trustee shall have the power—
(i) to pay benefits under the plan in accordance with the requirements of this subchapter;
(ii) to collect for the plan any amounts due the plan, including but not limited to the power to collect from the persons obligated to meet the requirements of
(iii) to receive any payment made by the corporation to the plan under this subchapter;
(iv) to commence, prosecute, or defend on behalf of the plan any suit or proceeding involving the plan;
(v) to issue, publish, or file such notices, statements, and reports as may be required by the corporation or any order of the court;
(vi) to liquidate the plan assets;
(vii) to recover payments under
(viii) to do such other acts as may be necessary to comply with this subchapter or any order of the court and to protect the interests of plan participants and beneficiaries.
(2) As soon as practicable after his appointment, the trustee shall give notice to interested parties of the institution of proceedings under this subchapter to determine whether the plan should be terminated or to terminate the plan, whichever is applicable. For purposes of this paragraph, the term "interested party" means—
(A) the plan administrator,
(B) each participant in the plan and each beneficiary of a deceased participant,
(C) each employer who may be subject to liability under
(D) each employer who is or may be liable to the plan under section 3 part 1 of subtitle E,
(E) each employer who has an obligation to contribute, within the meaning of
(F) each employee organization which, for purposes of collective bargaining, represents plan participants employed by an employer described in subparagraph (C), (D), or (E).
(3) Except to the extent inconsistent with the provisions of this chapter, or as may be otherwise ordered by the court, a trustee appointed under this section shall be subject to the same duties as those of a trustee under
(e) Filing of application notwithstanding pendency of other proceedings
An application by the corporation under this section may be filed notwithstanding the pendency in the same or any other court of any bankruptcy, mortgage foreclosure, or equity receivership proceeding, or any proceeding to reorganize, conserve, or liquidate such plan or its property, or any proceeding to enforce a lien against property of the plan.
(f) Exclusive jurisdiction; stay of other proceedings
Upon the filing of an application for the appointment of a trustee or the issuance of a decree under this section, the court to which an application is made shall have exclusive jurisdiction of the plan involved and its property wherever located with the powers, to the extent consistent with the purposes of this section, of a court of the United States having jurisdiction over cases under
(g) Venue
An action under this subsection may be brought in the judicial district where the plan administrator resides or does business or where any asset of the plan is situated. A district court in which such action is brought may issue process with respect to such action in any other judicial district.
(h) Compensation of trustee and professional service personnel appointed or retained by trustee
(1) The amount of compensation paid to each trustee appointed under the provisions of this subchapter shall require the prior approval of the corporation, and, in the case of a trustee appointed by a court, the consent of that court.
(2) Trustees shall appoint, retain, and compensate accountants, actuaries, and other professional service personnel in accordance with regulations prescribed by the corporation.
(
Editorial Notes
References in Text
Subsection (d)(1)(A)(v), referred to in subsec. (d)(1)(A), was redesignated subsec. (d)(1)(A)(vi) of this section by
This chapter, referred to in subsec. (d)(3), was in the original "this Act", meaning
Amendments
2008—Subsec. (c)(3)(C)(i).
2006—Subsec. (c).
1994—Subsec. (a)(3).
1989—Subsec. (a).
Subsecs. (a)(1), (d)(3).
1987—Subsec. (a).
Subsec. (c)(3).
Subsec. (i).
1986—
Subsec. (a).
Subsec. (a)(2).
Subsec. (b)(1).
Subsec. (c).
Subsec. (d)(1)(B)(ii).
Subsec. (d)(3).
Subsec. (i).
1980—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (d)(1)(A).
Subsec. (d)(1)(B).
Subsec. (d)(2)(D) to (F).
1978—Subsec. (f).
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment by
Effective Date of 2006 Amendment
Amendment by
Effective Date of 1994 Amendment
Effective Date of 1989 Amendment
Amendment by section 7881(g)(7) of
Amendment by section 7891(a)(1) of
Amendment by section 7893(e) of
Effective Date of 1987 Amendment
Amendment by section 9312(c)(3) of
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Effective Date of 1978 Amendment
Amendment by
1 So in original. Probably should be "subtitle E".
2 See References in Text note below.
§1343. Reportable events
(a) Notification that event has occurred
Within 30 days after the plan administrator or the contributing sponsor knows or has reason to know that a reportable event described in subsection (c) has occurred, he shall notify the corporation that such event has occurred, unless a notice otherwise required under this subsection has already been provided with respect to such event. The corporation is authorized to waive the requirement of the preceding sentence with respect to any or all reportable events with respect to any plan, and to require the notification to be made by including the event in the annual report made by the plan.
(b) Notification that event is about to occur
(1) The requirements of this subsection shall be applicable to a contributing sponsor if, as of the close of the preceding plan year—
(A) the aggregate unfunded vested benefits (as determined under
(B) the funded vested benefit percentage for such plans is less than 90 percent.
For purposes of subparagraph (B), the funded vested benefit percentage means the percentage which the aggregate value of the assets of such plans bears to the aggregate vested benefits of such plans (determined in accordance with
(2) This subsection shall not apply to an event if the contributing sponsor, or the member of the contributing sponsor's controlled group to which the event relates, is—
(A) a person subject to the reporting requirements of section 13 or 15(d) of the Securities Exchange Act of 1934 [
(B) a subsidiary (as defined for purposes of such Act [
(3) No later than 30 days prior to the effective date of an event described in paragraph (9), (10), (11), (12), or (13) of subsection (c), a contributing sponsor to which the requirements of this subsection apply shall notify the corporation that the event is about to occur.
(4) The corporation may waive the requirement of this subsection with respect to any or all reportable events with respect to any contributing sponsor.
(c) Enumeration of reportable events
For purposes of this section a reportable event occurs—
(1) when the Secretary of the Treasury issues notice that a plan has ceased to be a plan described in
(2) when an amendment of the plan is adopted if, under the amendment, the benefit payable with respect to any participant may be decreased;
(3) when the number of active participants is less than 80 percent of the number of such participants at the beginning of the plan year, or is less than 75 percent of the number of such participants at the beginning of the previous plan year;
(4) when the Secretary of the Treasury determines that there has been a termination or partial termination of the plan within the meaning of
(5) when the plan fails to meet the minimum funding standards under
(6) when the plan is unable to pay benefits thereunder when due;
(7) when there is a distribution under the plan to a participant who is a substantial owner as defined in
(A) such distribution has a value of $10,000 or more;
(B) such distribution is not made by reason of the death of the participant; and
(C) immediately after the distribution, the plan has nonforfeitable benefits which are not funded;
(8) when a plan merges, consolidates, or transfers its assets under
(9) when, as a result of an event, a person ceases to be a member of the controlled group;
(10) when a contributing sponsor or a member of a contributing sponsor's controlled group liquidates in a case under title 11, or under any similar Federal law or law of a State or political subdivision of a State;
(11) when a contributing sponsor or a member of a contributing sponsor's controlled group declares an extraordinary dividend (as defined in
(12) when, in any 12-month period, an aggregate of 3 percent or more of the benefit liabilities of a plan covered by this subchapter and maintained by a contributing sponsor or a member of its controlled group are transferred to a person that is not a member of the controlled group or to a plan or plans maintained by a person or persons that are not such a contributing sponsor or a member of its controlled group; or
(13) when any other event occurs that may be indicative of a need to terminate the plan and that is prescribed by the corporation in regulations.
For purposes of paragraph (7), all distributions to a participant within any 24-month period are treated as a single distribution.
(d) Notification to corporation by Secretary of the Treasury
The Secretary of the Treasury shall notify the corporation—
(1) whenever a reportable event described in paragraph (1), (4), or (5) of subsection (c) occurs, or
(2) whenever any other event occurs which the Secretary of the Treasury believes indicates that the plan may not be sound.
(e) Notification to corporation by Secretary of Labor
The Secretary of Labor shall notify the corporation—
(1) whenever a reportable event described in paragraph (1), (5), or (8) of subsection (c) occurs, or
(2) whenever any other event occurs which the Secretary of Labor believes indicates that the plan may not be sound.
(f) Disclosure exemption
Any information or documentary material submitted to the corporation pursuant to this section shall be exempt from disclosure under
(
Editorial Notes
References in Text
The Securities Exchange Act of 1934, referred to in subsec. (b)(2)(B), is act June 6, 1934, ch. 404,
Amendments
2006—Subsec. (c)(7).
1994—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (c)(8) to (13).
Subsecs. (d), (e).
Subsec. (f).
1989—Subsec. (b)(4).
Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment
Amendment by
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by
§1344. Allocation of assets
(a) Order of priority of participants and beneficiaries
In the case of the termination of a single-employer plan, the plan administrator shall allocate the assets of the plan (available to provide benefits) among the participants and beneficiaries of the plan in the following order:
(1) First, to that portion of each individual's accrued benefit which is derived from the participant's contributions to the plan which were not mandatory contributions.
(2) Second, to that portion of each individual's accrued benefit which is derived from the participant's mandatory contributions.
(3) Third, in the case of benefits payable as an annuity—
(A) in the case of the benefit of a participant or beneficiary which was in pay status as of the beginning of the 3-year period ending on the termination date of the plan, to each such benefit, based on the provisions of the plan (as in effect during the 5-year period ending on such date) under which such benefit would be the least,
(B) in the case of a participant's or beneficiary's benefit (other than a benefit described in subparagraph (A)) which would have been in pay status as of the beginning of such 3-year period if the participant had retired prior to the beginning of the 3-year period and if his benefits had commenced (in the normal form of annuity under the plan) as of the beginning of such period, to each such benefit based on the provisions of the plan (as in effect during the 5-year period ending on such date) under which such benefit would be the least.
For purposes of subparagraph (A), the lowest benefit in pay status during a 3-year period shall be considered the benefit in pay status for such period.
(4) Fourth—
(A) to all other benefits (if any) of individuals under the plan guaranteed under this subchapter (determined without regard to
(B) to the additional benefits (if any) which would be determined under subparagraph (A) if
For purposes of this paragraph,
(5) Fifth, to all other nonforfeitable benefits under the plan.
(6) Sixth, to all other benefits under the plan.
(b) Adjustment of allocations; reallocations; mandatory contributions; establishment of subclasses and categories
For purposes of subsection (a)—
(1) The amount allocated under any paragraph of subsection (a) with respect to any benefit shall be properly adjusted for any allocation of assets with respect to that benefit under a prior paragraph of subsection (a).
(2) If the assets available for allocation under any paragraph of subsection (a) (other than paragraphs (4), (5), and (6)) are insufficient to satisfy in full the benefits of all individuals which are described in that paragraph, the assets shall be allocated pro rata among such individuals on the basis of the present value (as of the termination date) of their respective benefits described in that paragraph.
(3) If assets available for allocation under paragraph (4) of subsection (a) are insufficient to satisfy in full the benefits of all individuals who are described in that paragraph, the assets shall be allocated first to benefits described in subparagraph (A) of that paragraph. Any remaining assets shall then be allocated to benefits described in subparagraph (B) of that paragraph. If assets allocated to such subparagraph (B) are insufficient to satisfy in full the benefits described in that subparagraph, the assets shall be allocated pro rata among individuals on the basis of the present value (as of the termination date) of their respective benefits described in that subparagraph.
(4) This paragraph applies if the assets available for allocation under paragraph (5) of subsection (a) are not sufficient to satisfy in full the benefits of individuals described in that paragraph.
(A) If this paragraph applies, except as provided in subparagraph (B), the assets shall be allocated to the benefits of individuals described in such paragraph (5) on the basis of the benefits of individuals which would have been described in such paragraph (5) under the plan as in effect at the beginning of the 5-year period ending on the date of plan termination.
(B) If the assets available for allocation under subparagraph (A) are sufficient to satisfy in full the benefits described in such subparagraph (without regard to this subparagraph), then for purposes of subparagraph (A), benefits of individuals described in such subparagraph shall be determined on the basis of the plan as amended by the most recent plan amendment effective during such 5-year period under which the assets available for allocation are sufficient to satisfy in full the benefits of individuals described in subparagraph (A) and any assets remaining to be allocated under such subparagraph shall be allocated under subparagraph (A) on the basis of the plan as amended by the next succeeding plan amendment effective during such period.
(5) If the Secretary of the Treasury determines that the allocation made pursuant to this section (without regard to this paragraph) results in discrimination prohibited by
(6) The term "mandatory contributions" means amounts contributed to the plan by a participant which are required as a condition of employment, as a condition of participation in such plan, or as a condition of obtaining benefits under the plan attributable to employer contributions. For this purpose, the total amount of mandatory contributions of a participant is the amount of such contributions reduced (but not below zero) by the sum of the amounts paid or distributed to him under the plan before its termination.
(7) A plan may establish subclasses and categories within the classes described in paragraphs (1) through (6) of subsection (a) in accordance with regulations prescribed by the corporation.
(c) Increase or decrease in value of assets
Any increase or decrease in the value of the assets of a single-employer plan occurring during the period beginning on the later of (1) the date a trustee is appointed under
(d) Distribution of residual assets; restrictions on reversions pursuant to recently amended plans; assets attributable to employee contributions; calculation of remaining assets
(1) Subject to paragraph (3), any residual assets of a single-employer plan may be distributed to the employer if—
(A) all liabilities of the plan to participants and their beneficiaries have been satisfied,
(B) the distribution does not contravene any provision of law, and
(C) the plan provides for such a distribution in these circumstances.
(2)(A) In determining the extent to which a plan provides for the distribution of plan assets to the employer for purposes of paragraph (1)(C), any such provision, and any amendment increasing the amount which may be distributed to the employer, shall not be treated as effective before the end of the fifth calendar year following the date of the adoption of such provision or amendment.
(B) A distribution to the employer from a plan shall not be treated as failing to satisfy the requirements of this paragraph if the plan has been in effect for fewer than 5 years and the plan has provided for such a distribution since the effective date of the plan.
(C) Except as otherwise provided in regulations of the Secretary of the Treasury, in any case in which a transaction described in
(D) For purposes of this subsection, the term "employer" includes any member of the controlled group of which the employer is a member. For purposes of the preceding sentence, the term "controlled group" means any group treated as a single employer under subsection (b), (c), (m) or (o) of
(3)(A) Before any distribution from a plan pursuant to paragraph (1), if any assets of the plan attributable to employee contributions remain after satisfaction of all liabilities described in subsection (a), such remaining assets shall be equitably distributed to the participants who made such contributions or their beneficiaries (including alternate payees, within the meaning of
(B) For purposes of subparagraph (A), the portion of the remaining assets which are attributable to employee contributions shall be an amount equal to the product derived by multiplying—
(i) the market value of the total remaining assets, by
(ii) a fraction—
(I) the numerator of which is the present value of all portions of the accrued benefits with respect to participants which are derived from participants' mandatory contributions (referred to in subsection (a)(2)), and
(II) the denominator of which is the present value of all benefits with respect to which assets are allocated under paragraphs (2) through (6) of subsection (a).
(C) For purposes of this paragraph, each person who is, as of the termination date—
(i) a participant under the plan, or
(ii) an individual who has received, during the 3-year period ending with the termination date, a distribution from the plan of such individual's entire nonforfeitable benefit in the form of a single sum distribution in accordance with
shall be treated as a participant with respect to the termination, if all or part of the nonforfeitable benefit with respect to such person is or was attributable to participants' mandatory contributions (referred to in subsection (a)(2)).
(4) Nothing in this subsection shall be construed to limit the requirements of
(e) Bankruptcy filing substituted for termination date
If a contributing sponsor of a plan has filed or has had filed against such person a petition seeking liquidation or reorganization in a case under title 11 or under any similar Federal law or law of a State or political subdivision, and the case has not been dismissed as of the termination date of the plan, then subsection (a)(3) shall be applied by treating the date such petition was filed as the termination date of the plan.
(f) Valuation of section 1362(c) liability for determining amounts payable by corporation to participants and beneficiaries
(1) In general
In the case of a terminated plan, the value of the recovery of liability under
(A) the amount of liability under
(B) the applicable section 1362(c) recovery ratio.
(2) Section 1362(c) recovery ratio
For purposes of this subsection—
(A) In general
Except as provided in subparagraph (C), the term "section 1362(c) recovery ratio" means the ratio which—
(i) the sum of the values of all recoveries under
(ii) the sum of all the amounts of liability under
(B) Prior terminations
A plan termination described in this subparagraph is a termination with respect to which—
(i) the value of recoveries under
(ii) notices of intent to terminate were provided (or in the case of a termination by the corporation, a notice of determination under
(C) Exception
In the case of a terminated plan with respect to which the outstanding amount of benefit liabilities exceeds $20,000,000, the term "section 1362(c) recovery ratio" means, with respect to the termination of such plan, the ratio of—
(i) the value of the recoveries on behalf of the plan under
(ii) the amount of the liability owed under
(3) Subsection not to apply
This subsection shall not apply with respect to the determination of—
(A) whether the amount of outstanding benefit liabilities exceeds $20,000,000, or
(B) the amount of any liability under
(4) Determinations
Determinations under this subsection shall be made by the corporation. Such determinations shall be binding unless shown by clear and convincing evidence to be unreasonable.
(
Editorial Notes
References in Text
The enactment of the Omnibus Budget Reconciliation Act of 1990, referred to in subsec. (d)(4), is the enactment of
Amendments
2008—Subsecs. (e), (f).
2006—Subsec. (a)(4)(B).
Subsec. (b)(2).
Subsec. (b)(3) to (7).
Subsec. (e).
1990—Subsec. (d)(4).
1989—Subsec. (a)(1).
Subsec. (b)(4).
Subsec. (d)(3).
1987—Subsec. (b)(4).
Subsec. (d)(1).
Subsec. (d)(2).
Subsec. (d)(3).
1986—Subsec. (a).
Subsec. (a)(4)(A).
Subsec. (a)(4)(B).
1980—Subsec. (a).
Subsec. (c).
Subsec. (d)(1).
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment by
Effective Date of 2006 Amendment
Amendment by section 404(b) of
Amendment by section 407(b) of
Amendment by section 408(b)(2) of
Effective Date of 1990 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by section 7881(e)(3) of
Amendment by section 7891(a)(1) of
Amendment by section 7894(g)(2) of
Effective Date of 1987 Amendment
"(1) plan terminations under section 4041 of ERISA [
"(2) plan terminations with respect to which proceedings are instituted by the Pension Benefit Guaranty Corporation under section 4042 of ERISA [
Except as provided in subsection (a)(2) [set out below], the amendments made by subsection (a) [amending this section] shall apply to any provision of the plan or plan amendment adopted after December 17, 1987."
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Transitional Rule Relating to Restrictions on Employer Reversions Upon Plan Termination Pursuant to Recently Amended Plans
Special Temporary Rule for Termination of Single-Employer Plan
For special temporary rule relating to requirements to be met before the final distribution of assets in the case of the termination of certain single-employer plans with respect to which the amount payable to the employer pursuant to subsec. (d) of this section exceeds $1,000,000, see section 11008(d) of
§1345. Recapture of payments
(a) Authorization to recover benefits
Except as provided in subsection (c), the trustee is authorized to recover for the benefit of a plan from a participant the recoverable amount (as defined in subsection (b)) of all payments from the plan to him which commenced within the 3-year period immediately preceding the time the plan is terminated.
(b) Recoverable amount
For purposes of subsection (a) the recoverable amount is the excess of the amount determined under paragraph (1) over the amount determined under paragraph (2).
(1) The amount determined under this paragraph is the sum of the amount of the actual payments received by the participant within the 3-year period.
(2) The amount determined under this paragraph is the sum of—
(A) the sum of the amount such participant would have received during each consecutive 12-month period within the 3 years if the participant received the benefit in the form described in paragraph (3),
(B) the sum for each of the consecutive 12-month periods of the lesser of—
(i) the excess, if any, of $10,000 over the benefit in the form described in paragraph (3), or
(ii) the excess of the actual payment, if any, over the benefit in the form described in paragraph (3), and
(C) the present value at the time of termination of the participant's future benefits guaranteed under this subchapter as if the benefits commenced in the form described in paragraph (3).
(3) The form of benefit for purposes of this subsection shall be the monthly benefit the participant would have received during the consecutive 12-month period, if he had elected at the time of the first payment made during the 3-year period, to receive his interest in the plan as a monthly benefit in the form of a life annuity commencing at the time of such first payment.
(c) Payments made on or after death or disability of participant; waiver of recovery in case of hardship
(1) In the event of a distribution described in section 1343(b)(7) 1 of this title the 3-year period referred to in subsection (b) shall not end sooner than the date on which the corporation is notified of the distribution.
(2) The trustee shall not recover any payment made from a plan after or on account of the death of a participant, or to a participant who is disabled (within the meaning of
(3) The corporation is authorized to waive, in whole or in part, the recovery of any amount which the trustee is authorized to recover for the benefit of a plan under this section in any case in which it determines that substantial economic hardship would result to the participant or his beneficiaries from whom such amount is recoverable.
(
Editorial Notes
References in Text
Amendments
1989—Subsec. (c)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 1989 Amendment
Amendment by
1 See References in Text note below.
§1346. Reports to trustee
The corporation and the plan administrator of any plan to be terminated under this subtitle shall furnish to the trustee such information as the corporation or the plan administrator has and, to the extent practicable, can obtain regarding—
(1) the amount of benefits payable with respect to each participant under a plan to be terminated,
(2) the amount of basic benefits guaranteed under
(3) the present value, as of the time of termination, of the aggregate amount of basic benefits payable under
(4) the fair market value of the assets of the plan at the time of termination,
(5) the computations under
(6) any other information with respect to the plan the trustee may require in order to terminate the plan.
(
Editorial Notes
Amendments
1980—Par. (2).
Par. (3).
Statutory Notes and Related Subsidiaries
Effective Date of 1980 Amendment
Amendment by
§1347. Restoration of plans
Whenever the corporation determines that a plan which is to be terminated under
(
Editorial Notes
Amendments
1989—
1986—
Statutory Notes and Related Subsidiaries
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by
§1348. Termination date
(a) For purposes of this subchapter the termination date of a single-employer plan is—
(1) in the case of a plan terminated in a standard termination in accordance with the provisions of
(2) in the case of a plan terminated in a distress termination in accordance with the provisions of
(3) in the case of a plan terminated in accordance with the provisions of
(4) in the case of a plan terminated under
(b) For purposes of this subchapter, the date of termination of a multiemployer plan is—
(1) in the case of a plan terminated in accordance with the provisions of
(2) in the case of a plan terminated in accordance with the provisions of
(
Editorial Notes
Amendments
1986—Subsec. (a).
1980—Subsec. (a).
Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
§1349. Repealed. Pub. L. 100–203, title IX, §9312(a), Dec. 22, 1987, 101 Stat. 1330–361
Section,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal applicable with respect to plan terminations under
§1350. Missing participants
(a) General rule
(1) Payment to the corporation
A plan administrator satisfies
(A) transfers the participant's designated benefit to the corporation or purchases an irrevocable commitment from an insurer in accordance with clause (i) of
(B) provides the corporation such information and certifications with respect to such designated benefits or irrevocable commitments as the corporation shall specify.
(2) Treatment of transferred assets
A transfer to the corporation under this section shall be treated as a transfer of assets from a terminated plan to the corporation as trustee, and shall be held with assets of terminated plans for which the corporation is trustee under
(3) Payment by the corporation
After a missing participant whose designated benefit was transferred to the corporation is located—
(A) in any case in which the plan could have distributed the benefit of the missing participant in a single sum without participant or spousal consent under
(B) in any other case, the corporation shall pay a benefit based on the designated benefit and the assumptions prescribed by the corporation at the time that the corporation received the designated benefit.
The corporation shall make payments under subparagraph (B) available in the same forms and at the same times as a guaranteed benefit under
(b) Definitions
For purposes of this section—
(1) Missing participant
The term "missing participant" means a participant or beneficiary under a terminating plan whom the plan administrator cannot locate after a diligent search.
(2) Designated benefit
The term "designated benefit" means the single sum benefit the participant would receive—
(A) under the plan's assumptions, in the case of a distribution that can be made without participant or spousal consent under
(B) under the assumptions of the corporation in effect on the date that the designated benefit is transferred to the corporation, in the case of a plan that does not pay any single sums other than those described in subparagraph (A); or
(C) under the assumptions of the corporation or of the plan, whichever provides the higher single sum, in the case of a plan that pays a single sum other than those described in subparagraph (A).
(c) Multiemployer plans
The corporation shall prescribe rules similar to the rules in subsection (a) for multiemployer plans covered by this subchapter that terminate under
(d) Plans not otherwise subject to subchapter
(1) Transfer to corporation
The plan administrator of a plan described in paragraph (4) may elect to transfer a missing participant's benefits to the corporation upon termination of the plan.
(2) Information to the corporation
To the extent provided in regulations, the plan administrator of a plan described in paragraph (4) shall, upon termination of the plan, provide the corporation information with respect to benefits of a missing participant if the plan transfers such benefits—
(A) to the corporation, or
(B) to an entity other than the corporation or a plan described in paragraph (4)(B)(ii).
(3) Payment by the corporation
If benefits of a missing participant were transferred to the corporation under paragraph (1), the corporation shall, upon location of the participant or beneficiary, pay to the participant or beneficiary the amount transferred (or the appropriate survivor benefit) either—
(A) in a single sum (plus interest), or
(B) in such other form as is specified in regulations of the corporation.
(4) Plans described
A plan is described in this paragraph if—
(A) the plan is a pension plan (within the meaning of
(i) to which the provisions of this section do not apply (without regard to this subsection),
(ii) which is not a plan described in paragraph (2), (3), (4), (6), (7), (8), (9), (10), or (11) of
(iii) which,1 was a plan described in
(B) at the time the assets are to be distributed upon termination, the plan—
(i) has missing participants, and
(ii) has not provided for the transfer of assets to pay the benefits of all missing participants to another pension plan (within the meaning of
(5) Certain provisions not to apply
Subsections (a)(1) and (a)(3) shall not apply to a plan described in paragraph (4).
(e) Regulatory authority
The corporation shall prescribe such regulations as are necessary to carry out the purposes of this section, including rules relating to what will be considered a diligent search, the amount payable to the corporation, and the amount to be paid by the corporation.
(
Editorial Notes
Amendments
2008—Subsec. (d)(4)(A)(ii), (iii).
2006—Subsecs. (c) to (e).
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment by
Effective Date of 2006 Amendment
Amendment by
Effective Date
Section effective with respect to distributions that occur in plan years commencing on or after Jan. 1, 1996, see section 776(e) of
1 So in original. The comma probably should not appear.
Subtitle D—Liability
§1361. Amounts payable by corporation
The corporation shall pay benefits under a single-employer plan terminated under this subchapter subject to the limitations and requirements of subtitle B of this subchapter. The corporation shall provide financial assistance to pay benefits under a multiemployer plan which is insolvent under
(
Editorial Notes
Amendments
1980—
Statutory Notes and Related Subsidiaries
Effective Date of 1980 Amendment
Amendment by
§1362. Liability for termination of single-employer plans under a distress termination or a termination by corporation
(a) In general
In any case in which a single-employer plan is terminated in a distress termination under
(1) liability to the corporation, to the extent provided in subsection (b), and
(2) liability to the trustee appointed under subsection (b) or (c) of
(b) Liability to corporation
(1) Amount of liability
(A) In general
Except as provided in subparagraph (B), the liability to the corporation of a person described in subsection (a) shall be the total amount of the unfunded benefit liabilities (as of the termination date) to all participants and beneficiaries under the plan, together with interest (at a reasonable rate) calculated from the termination date in accordance with regulations prescribed by the corporation.
(B) Special rule in case of subsequent insufficiency
For purposes of subparagraph (A), in any case described in
(2) Payment of liability
(A) In general
Except as provided in subparagraph (B), the liability to the corporation under this subsection shall be due and payable to the corporation as of the termination date, in cash or securities acceptable to the corporation.
(B) Special rule
Payment of so much of the liability under paragraph (1)(A) as exceeds 30 percent of the collective net worth of all persons described in subsection (a) (including interest) shall be made under commercially reasonable terms prescribed by the corporation. The parties involved shall make a reasonable effort to reach agreement on such commercially reasonable terms. Any such terms prescribed by the corporation shall provide for deferral of 50 percent of any amount of liability otherwise payable for any year under this subparagraph if a person subject to such liability demonstrates to the satisfaction of the corporation that no person subject to such liability has any individual pre-tax profits for such person's fiscal year ending during such year.
(3) Alternative arrangements
The corporation and any person liable under this section may agree to alternative arrangements for the satisfaction of liability to the corporation under this subsection.
(c) Liability to section 1342 trustee
A person described in subsection (a) shall be subject to liability under this subsection to the trustee appointed under subsection (b) or (c) of
(1) the sum of the shortfall amortization charge (within the meaning of
(2) the sum of the waiver amortization charge (within the meaning of
together with interest (at a reasonable rate) calculated from the termination date in accordance with regulations prescribed by the corporation. The liability under this subsection shall be due and payable to such trustee as of the termination date, in cash or securities acceptable to such trustee.
(d) Definitions
(1) Collective net worth of persons subject to liability
(A) In general
The collective net worth of persons subject to liability in connection with a plan termination consists of the sum of the individual net worths of all persons who—
(i) have individual net worths which are greater than zero, and
(ii) are (as of the termination date) contributing sponsors of the terminated plan or members of their controlled groups.
(B) Determination of net worth
For purposes of this paragraph, the net worth of a person is—
(i) determined on whatever basis best reflects, in the determination of the corporation, the current status of the person's operations and prospects at the time chosen for determining the net worth of the person, and
(ii) increased by the amount of any transfers of assets made by the person which are determined by the corporation to be improper under the circumstances, including any such transfers which would be inappropriate under title 11 if the person were a debtor in a case under
(C) Timing of determination
For purposes of this paragraph, determinations of net worth shall be made as of a day chosen by the corporation (during the 120-day period ending with the termination date) and shall be computed without regard to any liability under this section.
(2) Pre-tax profits
The term "pre-tax profits" means—
(A) except as provided in subparagraph (B), for any fiscal year of any person, such person's consolidated net income (excluding any extraordinary charges to income and including any extraordinary credits to income) for such fiscal year, as shown on audited financial statements prepared in accordance with generally accepted accounting principles, or
(B) for any fiscal year of an organization described in
before provision for or deduction of Federal or other income tax, any contribution to any single-employer plan of which such person is a contributing sponsor at any time during the period beginning on the termination date and ending with the end of such fiscal year, and any amounts required to be paid for such fiscal year under this section. The corporation may by regulation require such information to be filed on such forms as may be necessary to determine the existence and amount of such pre-tax profits.
(e) Treatment of substantial cessation of operations
(1) General rule
Except as provided in paragraphs (3) and (4), if there is a substantial cessation of operations at a facility in any location, the employer shall be treated with respect to any single employer plan established and maintained by the employer covering participants at such facility as if the employer were a substantial employer under a plan under which more than one employer makes contributions and the provisions of
(2) Substantial cessation of operations
For purposes of this subsection:
(A) In general
The term "substantial cessation of operations" means a permanent cessation of operations at a facility which results in a workforce reduction of a number of eligible employees at the facility equivalent to more than 15 percent of the number of all eligible employees of the employer, determined immediately before the earlier of—
(i) the date of the employer's decision to implement such cessation, or
(ii) in the case of a workforce reduction which includes 1 or more eligible employees described in paragraph (6)(B), the earliest date on which any such eligible employee was separated from employment.
(B) Workforce reduction
Subject to subparagraphs (C) and (D), the term "workforce reduction" means the number of eligible employees at a facility who are separated from employment by reason of the permanent cessation of operations of the employer at the facility.
(C) Relocation of workforce
An eligible employee separated from employment at a facility shall not be taken into account in computing a workforce reduction if, within a reasonable period of time, the employee is replaced by the employer, at the same or another facility located in the United States, by an employee who is a citizen or resident of the United States.
(D) Dispositions
If, whether by reason of a sale or other disposition of the assets or stock of a contributing sponsor (or any member of the same controlled group as such a sponsor) of the plan relating to operations at a facility or otherwise, an employer (the "transferee employer") other than the employer which experiences the substantial cessation of operations (the "transferor employer") conducts any portion of such operations, then—
(i) an eligible employee separated from employment with the transferor employer at the facility shall not be taken into account in computing a workforce reduction if—
(I) within a reasonable period of time, the employee is replaced by the transferee employer by an employee who is a citizen or resident of the United States; and
(II) in the case of an eligible employee who is a participant in a single employer plan maintained by the transferor employer, the transferee employer, within a reasonable period of time, maintains a single employer plan which includes the assets and liabilities attributable to the accrued benefit of the eligible employee at the time of separation from employment with the transferor employer; and
(ii) an eligible employee who continues to be employed at the facility by the transferee employer shall not be taken into account in computing a workforce reduction if—
(I) the eligible employee is not a participant in a single employer plan maintained by the transferor employer, or
(II) in any other case, the transferee employer, within a reasonable period of time, maintains a single employer plan which includes the assets and liabilities attributable to the accrued benefit of the eligible employee at the time of separation from employment with the transferor employer.
(3) Exemption for plans with limited underfunding
Paragraph (1) shall not apply with respect to a single employer plan if, for the plan year preceding the plan year in which the cessation occurred—
(A) there were fewer than 100 participants with accrued benefits under the plan as of the valuation date of the plan for the plan year (as determined under
(B) the ratio of the market value of the assets of the plan to the funding target of the plan for the plan year was 90 percent or greater.
(4) Election to make additional contributions to satisfy liability
(A) In general
An employer may elect to satisfy the employer's liability with respect to a plan by reason of paragraph (1) by making additional contributions to the plan in the amount determined under subparagraph (B) for each plan year in the 7-plan-year period beginning with the plan year in which the cessation occurred. Any such additional contribution for a plan year shall be in addition to any minimum required contribution under
(i) the due date for the minimum required contribution for such year under
(ii) in the case of the first such contribution, the date that is 1 year after the date on which the employer notifies the Corporation of the substantial cessation of operations or the date the Corporation determines a substantial cessation of operations has occurred, and in the case of subsequent contributions, the same date in each succeeding year.
(B) Amount determined
(i) In general
Except as provided in clause (iii), the amount determined under this subparagraph with respect to each plan year in the 7-plan-year period is the product of—
(I) 1/7 of the unfunded vested benefits determined under
(II) the reduction fraction.
(ii) Reduction fraction
For purposes of clause (i), the reduction fraction of a single employer plan is equal to—
(I) the number of participants with accrued benefits in the plan who were included in computing the workforce reduction under paragraph (2)(B) as a result of the cessation of operations at the facility; divided by
(II) the number of eligible employees of the employer who are participants with accrued benefits in the plan, determined as of the same date the determination under paragraph (2)(A) is made.
(iii) Limitation
The additional contribution under this subparagraph for any plan year shall not exceed the excess, if any, of—
(I) 25 percent of the difference between the market value of the assets of the plan and the funding target of the plan for the preceding plan year; over
(II) the minimum required contribution under
(C) Permitted cessation of annual installments when plan becomes sufficiently funded
An employer's obligation to make additional contributions under this paragraph shall not apply to—
(i) the first plan year (beginning on or after the first day of the plan year in which the cessation occurs) for which the ratio of the market value of the assets of the plan to the funding target of the plan for the plan year is 90 percent or greater, or
(ii) any plan year following such first plan year.
(D) Coordination with funding waivers
(i) In general
If the Secretary of the Treasury issues a funding waiver under
(ii) Notice
An employer maintaining a plan with respect to which such a funding waiver has been issued or a request for such a funding waiver is pending shall provide notice to the Secretary of the Treasury, in such form and at such time as the Secretary of the Treasury shall provide, of a cessation of operations to which paragraph (1) applies.
(E) Enforcement
(i) Notice
An employer making the election under this paragraph shall provide notice to the Corporation, in accordance with rules prescribed by the Corporation, of—
(I) such election, not later than 30 days after the earlier of the date the employer notifies the Corporation of the substantial cessation of operations or the date the Corporation determines a substantial cessation of operations has occurred;
(II) the payment of each additional contribution, not later than 10 days after such payment;
(III) any failure to pay the additional contribution in the full amount for any year in the 7-plan-year period, not later than 10 days after the due date for such payment;
(IV) the waiver under subparagraph (D)(i) of the obligation to make an additional contribution for any year, not later than 30 days after the funding waiver described in such subparagraph is granted; and
(V) the cessation of any obligation to make additional contributions under subparagraph (C), not later than 10 days after the due date for payment of the additional contribution for the first plan year to which such cessation applies.
(ii) Acceleration of liability to the plan for failure to pay
If an employer fails to pay the additional contribution in the full amount for any year in the 7-plan-year period by the due date for such payment, the employer shall, as of such date, be liable to the plan in an amount equal to the balance which remains unpaid as of such date of the aggregate amount of additional contributions required to be paid by the employer during such 7-year-plan period. The Corporation may waive or settle the liability described in the preceding sentence, at the discretion of the Corporation.
(iii) Civil action
The Corporation may bring a civil action in the district courts of the United States in accordance with
(5) Definitions
For purposes of this subsection:
(A) Eligible employee
The term "eligible employee" means an employee who is eligible to participate in an employee pension benefit plan (as defined in
(B) Funding target
The term "funding target" means, with respect to any plan year, the funding target as determined under
(C) Market value
The market value of the assets of a plan shall be determined in the same manner as for purposes of
(6) Special rules
(A) Change in operation of certain facilities and property
For purposes of paragraphs (1) and (2), an employer shall not be treated as ceasing operations at a qualified lodging facility (as defined in
(B) Aggregation of prior separations
The workforce reduction under paragraph (2) with respect to any cessation of operations shall be determined by taking into account any separation from employment of any eligible employee at the facility (other than a separation which is not taken into account as workforce reduction by reason of subparagraph (C) or (D) of paragraph (2)) which—
(i) is related to the permanent cessation of operations of the employer at the facility, and
(ii) occurs during the 3-year period preceding such cessation.
(C) No addition to prefunding balance
For purposes of
(
Editorial Notes
Amendments
2014—Subsec. (e).
2006—Subsec. (c)(1) to (3).
"(1) the outstanding balance of the accumulated funding deficiencies (within the meaning of
"(2) the outstanding balance of the amount of waived funding deficiencies of the plan waived before such date under
"(3) the outstanding balance of the amount of decreases in the minimum funding standard allowed before such date under
1989—Subsec. (a).
Subsec. (b)(2)(B).
Subsecs. (c)(1), (d)(2)(B).
Subsec. (d)(3).
1987—Subsec. (b)(1)(A).
"(i) the lesser of—
"(I) the total amount of unfunded guaranteed benefits (as of the termination date) of all participants and beneficiaries under the plan, or
"(II) 30 percent of the collective net worth of all persons described in subsection (a),
and
"(ii) the excess (if any) of—
"(I) 75 percent of the amount described in clause (i)(I), over
"(II) the amount described in clause (i)(II),
together with interest (at a reasonable rate) calculated from the termination date in accordance with regulations prescribed by the corporation."
Subsec. (c).
Subsec. (d).
Subsec. (d)(3).
Subsecs. (e), (f).
1986—
Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Subsec. (e).
Subsec. (f).
1980—Subsec. (a).
1978—Subsec. (c)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 2014 Amendment
"(1)
"(2)
Effective Date of 2006 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by section 7881(f)(2), (10)(A), (B) of
Amendment by section 7891(a)(1) of
Effective Date of 1987 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Effective Date of 1978 Amendment
Amendment by
Direction to the Pension Benefit Guaranty Corporation
Applicability of Amendments by Subtitles A and B of Title I of Pub. L. 109–280
For special rules on applicability of amendments by subtitles A (§§101–108) and B (§§111–116) of title I of
Special Delayed Payment Rule
1 So in original. Probably should be preceded by "section".
§1363. Liability of substantial employer for withdrawal from single-employer plans under multiple controlled groups
(a) Single-employer plans with two or more contributing sponsors
Except as provided in subsection (d), the plan administrator of a single-employer plan which has two or more contributing sponsors at least two of whom are not under common control—
(1) shall notify the corporation of the withdrawal during a plan year of a substantial employer for such plan year from the plan, within 60 days after such withdrawal, and
(2) request that the corporation determine the liability of all persons with respect to the withdrawal of the substantial employer.
The corporation shall, as soon as practicable thereafter, determine whether there is liability resulting from the withdrawal of the substantial employer and notify the liable persons of such liability.
(b) Computation of liability
Except as provided in subsection (c), any one or more contributing sponsors who withdraw, during a plan year for which they constitute a substantial employer, from a single-employer plan which has two or more contributing sponsors at least two of whom are not under common control, shall, upon notification of such contributing sponsors by the corporation as provided by subsection (a), be liable, together with the members of their controlled groups, to the corporation in accordance with the provisions of
(1) the numerator of which is the total amount required to be contributed to the plan by such contributing sponsors for the last 5 years ending prior to the withdrawal, and
(2) the denominator of which is the total amount required to be contributed to the plan by all contributing sponsors for such last 5 years.
In addition to and in lieu of the manner prescribed in the preceding sentence, the corporation may also determine such liability on any other equitable basis prescribed by the corporation in regulations. Any amount collected by the corporation under this subsection shall be held in escrow subject to disposition in accordance with the provisions of paragraphs (2) and (3) of subsection (c).
(c) Bond in lieu of payment of liability; 5-year termination period
(1) In lieu of payment of a contributing sponsor's liability under this section, the contributing sponsor may be required to furnish a bond to the corporation in an amount not exceeding 150 percent of his liability to insure payment of his liability under this section. The bond shall have as surety thereon a corporate surety company which is an acceptable surety on Federal bonds under authority granted by the Secretary of the Treasury under
(2) If the plan is not terminated under
(3) If the plan terminates under
(A) demand payment or realize on the bond and hold such amount in escrow for the benefit of the plan;
(B) treat any escrowed payments under this section as if they were plan assets and apply them in a manner consistent with this subtitle; and
(C) refund any amount to the contributing sponsor which is not required to meet any obligation of the corporation with respect to the plan.
(d) Alternate appropriate procedure
The provisions of this subsection apply in the case of a withdrawal described in subsection (a), and the provisions of subsections (b) and (c) shall not apply, if the corporation determines that the procedure provided for under this subsection is consistent with the purposes of this section and
(1) require the plan fund to be equitably allocated between those participants no longer working in covered service under the plan as a result of the withdrawal, and those participants who remain in covered service under the plan;
(2) treat that portion of the plan funds allocable under paragraph (1) to participants no longer in covered service as a plan terminated under
(3) treat that portion of the plan fund allocable to participants remaining in covered service as a separate plan.
(e) Indemnity agreement
The corporation is authorized to waive the application of the provisions of subsections (b), (c), and (d) of this section whenever it determines that there is an indemnity agreement in effect among contributing sponsors under the plan which is adequate to satisfy the purposes of this section and of
(
Editorial Notes
Codification
In subsec. (c)(1), "
Amendments
1986—
Subsec. (a).
Subsec. (b).
Subsec. (c)(1).
Subsec. (c)(2).
Subsec. (c)(3).
Subsec. (d).
Subsec. (e).
1980—Subsecs. (a), (d).
Statutory Notes and Related Subsidiaries
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
§1364. Liability on termination of single-employer plans under multiple controlled groups
(a) This section applies to all contributing sponsors of a single-employer plan which has two or more contributing sponsors at least two of whom are not under common control at the time such plan is terminated under
(b) The corporation shall determine the liability with respect to each contributing sponsor and each member of its controlled group in a manner consistent with
(1) the numerator of which is the amount required to be contributed to the plan for the last 5 plan years ending prior to the termination date by persons in such controlled group as contributing sponsors, and
(2) the denominator of which is the total amount required to be contributed to the plan for such last 5 plan years by all persons as contributing sponsors,
and
(
Editorial Notes
Amendments
1989—Subsec. (b).
1987—Subsec. (b).
"(1) the amount of the liability determined under
"(A) shall be determined without regard to clauses (i)(II) and (ii) of
"(B) shall be allocated to each controlled group by multiplying such amount by a fraction—
"(i) the numerator of which is the amount required to be contributed to the plan for the last 5 plan years ending prior to the termination date by persons in such controlled group as contributing sponsors, and
"(ii) the denominator of which is the total amount required to be contributed to the plan for such last 5 plan years by all persons as contributing sponsors,
and clauses (i)(II) and (ii) of
"(2) the amount of the liability determined under
1986—
Subsec. (a).
Subsec. (b).
1980—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1987 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
§1365. Annual report of plan administrator
For each plan year for which
(1) a copy of each notification required under
(2) a statement disclosing whether any reportable event (described in section 1343(b) 1 of this title) occurred during the plan year except to the extent the corporation waives such requirement, and
(3) in the case of a multiemployer plan, information with respect to such plan which the corporation determines is necessary for the enforcement of subtitle E and requires by regulation, which may include—
(A) a statement certified by the plan's enrolled actuary of—
(i) the value of all vested benefits under the plan as of the end of the plan year, and
(ii) the value of the plan's assets as of the end of the plan year;
(B) a statement certified by the plan sponsor of each claim for outstanding withdrawal liability (within the meaning of
(C) the number of employers having an obligation to contribute to the plan and the number of employers required to make withdrawal liability payments.
The report shall be filed within 6 months after the close of the plan year to which it relates. The corporation shall cooperate with the Secretary of the Treasury and the Secretary of Labor in an endeavor to coordinate the timing and content, and possibly obtain the combination, of reports under this section with reports required to be made by plan administrators to such Secretaries.
(
Editorial Notes
References in Text
Amendments
1980—
Statutory Notes and Related Subsidiaries
Effective Date of 1980 Amendment
Amendment by
1 See References in Text note below.
§1366. Annual notification to substantial employers
The plan administrator of each single-employer plan which has at least two contributing sponsors at least two of whom are not under common control shall notify, within 6 months after the close of each plan year, any contributing sponsor of the plan who is described in
(
Editorial Notes
Amendments
1989—
1986—
1980—
Statutory Notes and Related Subsidiaries
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
§1367. Recovery of liability for plan termination
The corporation is authorized to make arrangements with contributing sponsors and members of their controlled groups who are or may become liable under
(
Editorial Notes
Amendments
1989—
1987—
1986—
Statutory Notes and Related Subsidiaries
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1987 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by
§1368. Lien for liability
(a) Creation of lien
If any person liable to the corporation under
(b) Term of lien
The lien imposed by subsection (a) arises on the date of termination of a plan, and continues until the liability imposed under
(c) Priority
(1) Except as otherwise provided under this section, the priority of a lien imposed under subsection (a) shall be determined in the same manner as under
(A) "lien imposed by section 4068 of the Employee Retirement Income Security Act of 1974 [
(B) "the corporation" for "the Secretary" in subsections (a) and (b)(9)(C);
(C) "the payment of the amount on which the section 4068(a) lien is based" for "the collection of any tax under this title" in subsection (b)(3);
(D) "a person whose property is subject to the lien" for "the taxpayer" in subsections (b)(8), (c)(2)(A)(i) (the first place it appears), (c)(2)(A)(ii), (c)(2)(B), (c)(4)(B), and (c)(4)(C) (in the matter preceding clause (i));
(E) "such person" for "the taxpayer" in subsections (c)(2)(A)(i) (the second place it appears) and (c)(4)(C)(ii);
(F) "payment of the loan value of the amount on which the lien is based is made to the corporation" for "satisfaction of a levy pursuant to section 6332(b)" in subsection (b)(9)(C);
(G) "section 4068(a) lien" for "tax lien" each place it appears in subsections (c)(1), (c)(2)(A), (c)(2)(B), (c)(3)(B)(iii), (c)(4)(B), (d), and (h)(5); and
(H) "the date on which the lien is first filed" for "the date of the assessment of the tax" in subsection (g)(3)(A).
(2) In a case under title 11 or in insolvency proceedings, the lien imposed under subsection (a) shall be treated in the same manner as a tax due and owing to the United States for purposes of title 11 or
(3) For purposes of applying
(4) For purposes of this subsection, notice of the lien imposed by subsection (a) shall be filed in the same manner as under section 6323(f) and (g) of title 26.
(d) Civil action; limitation period
(1) In any case where there has been a refusal or neglect to pay the liability imposed under
(2) The liability imposed by
(e) Release or subordination
If the corporation determines that release of the lien or subordination of the lien to any other creditor of the liable person would not adversely affect the collection of the liability imposed under
(f) Definitions
For purposes of this section—
(1) The collective net worth of persons subject to liability in connection with a plan termination shall be determined as provided in
(2) The term "pre-tax profits" has the meaning provided in
(
Editorial Notes
Codification
A former subsec. (f) of this section was originally subsec. (e) of
Amendments
1989—Subsec. (a).
Subsec. (c).
Subsec. (c)(2).
Subsec. (f).
1987—Subsec. (a).
1986—
Subsec. (a).
Subsec. (c)(1).
Subsec. (d)(1), (2).
Subsec. (e).
1978—Subsec. (c)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 1989 Amendment
Amendment by section 7881(f)(3)(B), (10)(C), (12) of
Amendment by section 7891(a)(1) of
Effective Date of 1987 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1978 Amendment
Amendment by
1 So in original. Probably should be followed by a period.
§1369. Treatment of transactions to evade liability; effect of corporate reorganization
(a) Treatment of transactions to evade liability
If a principal purpose of any person in entering into any transaction is to evade liability to which such person would be subject under this subtitle and the transaction becomes effective within five years before the termination date of the termination on which such liability would be based, then such person and the members of such person's controlled group (determined as of the termination date) shall be subject to liability under this subtitle in connection with such termination as if such person were a contributing sponsor of the terminated plan as of the termination date. This subsection shall not cause any person to be liable under this subtitle in connection with such plan termination for any increases or improvements in the benefits provided under the plan which are adopted after the date on which the transaction referred to in the preceding sentence becomes effective.
(b) Effect of corporate reorganization
For purposes of this subtitle, the following rules apply in the case of certain corporate reorganizations:
(1) Change of identity, form, etc.
If a person ceases to exist by reason of a reorganization which involves a mere change in identity, form, or place of organization, however effected, a successor corporation resulting from such reorganization shall be treated as the person to whom this subtitle applies.
(2) Liquidation into parent corporation
If a person ceases to exist by reason of liquidation into a parent corporation, the parent corporation shall be treated as the person to whom this subtitle applies.
(3) Merger, consolidation, or division
If a person ceases to exist by reason of a merger, consolidation, or division, the successor corporation or corporations shall be treated as the person to whom this subtitle applies.
(
Statutory Notes and Related Subsidiaries
Effective Date
Section effective Jan. 1, 1986, with certain exceptions, see section 11019 of
§1370. Enforcement authority relating to terminations of single-employer plans
(a) In general
Any person who is with respect to a single-employer plan a fiduciary, contributing sponsor, member of a contributing sponsor's controlled group, participant, or beneficiary, and is adversely affected by an act or practice of any party (other than the corporation) in violation of any provision of
(1) to enjoin such act or practice, or
(2) to obtain other appropriate equitable relief (A) to redress such violation or (B) to enforce such provision.
(b) Status of plan as party to action and with respect to legal process
A single-employer plan may be sued under this section as an entity. Service of summons, subpoena, or other legal process of a court upon a trustee or an administrator of a single-employer plan in such trustee's or administrator's capacity as such shall constitute service upon the plan. If a plan has not designated in the summary plan description of the plan an individual as agent for the service of legal process, service upon any contributing sponsor of the plan shall constitute such service. Any money judgment under this section against a single-employer plan shall be enforceable only against the plan as an entity and shall not be enforceable against any other person unless liability against such person is established in such person's individual capacity.
(c) Jurisdiction and venue
The district courts of the United States shall have exclusive jurisdiction of civil actions under this section. Such actions may be brought in the district where the plan is administered, where the violation took place, or where a defendant resides or may be found, and process may be served in any other district where a defendant resides or may be found. The district courts of the United States shall have jurisdiction, without regard to the amount in controversy or the citizenship of the parties, to grant the relief provided for in subsection (a) in any action.
(d) Right of corporation to intervene
A copy of the complaint or notice of appeal in any action under this section shall be served upon the corporation by certified mail. The corporation shall have the right in its discretion to intervene in any action.
(e) Awards of costs and expenses
(1) General rule
In any action brought under this section, the court in its discretion may award all or a portion of the costs and expenses incurred in connection with such action, including reasonable attorney's fees, to any party who prevails or substantially prevails in such action.
(2) Exemption for plans
Notwithstanding the preceding provisions of this subsection, no plan shall be required in any action to pay any costs and expenses (including attorney's fees).
(f) Limitation on actions
(1) In general
Except as provided in paragraph (3), an action under this section may not be brought after the later of—
(A) 6 years after the date on which the cause of action arose, or
(B) 3 years after the applicable date specified in paragraph (2).
(2) Applicable date
(A) General rule
Except as provided in subparagraph (B), the applicable date specified in this paragraph is the earliest date on which the plaintiff acquired or should have acquired actual knowledge of the existence of such cause of action.
(B) Special rule for plaintiffs who are fiduciaries
In the case of a plaintiff who is a fiduciary bringing the action in the exercise of fiduciary duties, the applicable date specified in this paragraph is the date on which the plaintiff became a fiduciary with respect to the plan if such date is later than the date described in subparagraph (A).
(3) Cases of fraud or concealment
In the case of fraud or concealment, the period described in paragraph (1)(B) shall be extended to 6 years after the applicable date specified in paragraph (2).
(
Editorial Notes
Amendments
1989—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1989 Amendment
Amendment by
Effective Date
Section effective Jan. 1, 1986, with certain exceptions, see section 11019 of
§1371. Penalty for failure to timely provide required information
The corporation may assess a penalty, payable to the corporation, against any person who fails to provide any notice or other material information required under this subtitle, subtitle A, B, or C, or
(
Editorial Notes
Amendments
2014—
2008—
2006—
1989—
Statutory Notes and Related Subsidiaries
Effective Date of 2014 Amendment
Amendment by
Effective Date of 2008 Amendment
Amendment by
Effective Date of 2006 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by
Applicability of Amendments by Subtitles A and B of Title I of Pub. L. 109–280
For special rules on applicability of amendments by subtitles A (§§101–108) and B (§§111–116) of title I of
Subtitle E—Special Provisions for Multiemployer Plans
Editorial Notes
Codification
part 1—employer withdrawals
§1381. Withdrawal liability established; criteria and definitions
(a) If an employer withdraws from a multiemployer plan in a complete withdrawal or a partial withdrawal, then the employer is liable to the plan in the amount determined under this part to be the withdrawal liability.
(b) For purposes of subsection (a)—
(1) The withdrawal liability of an employer to a plan is the amount determined under
(A) first, by any de minimis reduction applicable under
(B) next, in the case of a partial withdrawal, in accordance with
(C) then, to the extent necessary to reflect the limitation on annual payments under
(D) finally, in accordance with
(2) The term "complete withdrawal" means a complete withdrawal described in
(3) The term "partial withdrawal" means a partial withdrawal described in
(
Editorial Notes
Prior Provisions
A prior section 1381,
Statutory Notes and Related Subsidiaries
Effective Date
Part effective Sept. 26, 1980, see
Elimination of Retroactive Application of Amendments Made by Multiemployer Pension Plan Amendments Act of 1980, Pub. L. 96–364
"(a)
"(1)
"(2)
"(c)
"(d)
Applicability to Certain Employers Withdrawn Before Sept. 26, 1980, From Multiemployer Plan Covering Employees in Seagoing Industry; Effective Date, Coverage, Etc.
§1382. Determination and collection of liability; notification of employer
When an employer withdraws from a multiemployer plan, the plan sponsor, in accordance with this part, shall—
(1) determine the amount of the employer's withdrawal liability,
(2) notify the employer of the amount of the withdrawal liability, and
(3) collect the amount of the withdrawal liability from the employer.
(
§1383. Complete withdrawal
(a) Determinative factors
For purposes of this part, a complete withdrawal from a multiemployer plan occurs when an employer—
(1) permanently ceases to have an obligation to contribute under the plan, or
(2) permanently ceases all covered operations under the plan.
(b) Building and construction industry
(1) Notwithstanding subsection (a), in the case of an employer that has an obligation to contribute under a plan for work performed in the building and construction industry, a complete withdrawal occurs only as described in paragraph (2), if—
(A) substantially all the employees with respect to whom the employer has an obligation to contribute under the plan perform work in the building and construction industry, and
(B) the plan—
(i) primarily covers employees in the building and construction industry, or
(ii) is amended to provide that this subsection applies to employers described in this paragraph.
(2) A withdrawal occurs under this paragraph if—
(A) an employer ceases to have an obligation to contribute under the plan, and
(B) the employer—
(i) continues to perform work in the jurisdiction of the collective bargaining agreement of the type for which contributions were previously required, or
(ii) resumes such work within 5 years after the date on which the obligation to contribute under the plan ceases, and does not renew the obligation at the time of the resumption.
(3) In the case of a plan terminated by mass withdrawal (within the meaning of
(c) Entertainment industry
(1) Notwithstanding subsection (a), in the case of an employer that has an obligation to contribute under a plan for work performed in the entertainment industry, primarily on a temporary or project-by-project basis, if the plan primarily covers employees in the entertainment industry, a complete withdrawal occurs only as described in subsection (b)(2) applied by substituting "plan" for "collective bargaining agreement" in subparagraph (B)(i) thereof.
(2) For purposes of this subsection, the term "entertainment industry" means—
(A) theater, motion picture (except to the extent provided in regulations prescribed by the corporation), radio, television, sound or visual recording, music, and dance, and
(B) such other entertainment activities as the corporation may determine to be appropriate.
(3) The corporation may by regulation exclude a group or class of employers described in the preceding sentence from the application of this subsection if the corporation determines that such exclusion is necessary—
(A) to protect the interest of the plan's participants and beneficiaries, or
(B) to prevent a significant risk of loss to the corporation with respect to the plan.
(4) A plan may be amended to provide that this subsection shall not apply to a group or class of employers under the plan.
(d) Other determinative factors
(1) Notwithstanding subsection (a), in the case of an employer who—
(A) has an obligation to contribute under a plan described in paragraph (2) primarily for work described in such paragraph, and
(B) does not continue to perform work within the jurisdiction of the plan,
a complete withdrawal occurs only as described in paragraph (3).
(2) A plan is described in this paragraph if substantially all of the contributions required under the plan are made by employers primarily engaged in the long and short haul trucking industry, the household goods moving industry, or the public warehousing industry.
(3) A withdrawal occurs under this paragraph if—
(A) an employer permanently ceases to have an obligation to contribute under the plan or permanently ceases all covered operations under the plan, and
(B) either—
(i) the corporation determines that the plan has suffered substantial damage to its contribution base as a result of such cessation, or
(ii) the employer fails to furnish a bond issued by a corporate surety company that is an acceptable surety for purposes of
(4) If, after an employer furnishes a bond or escrow to a plan under paragraph (3)(B)(ii), the corporation determines that the cessation of the employer's obligation to contribute under the plan (considered together with any cessations by other employers), or cessation of covered operations under the plan, has resulted in substantial damage to the contribution base of the plan, the employer shall be treated as having withdrawn from the plan on the date on which the obligation to contribute or covered operations ceased, and such bond or escrow shall be paid to the plan. The corporation shall not make a determination under this paragraph more than 60 months after the date on which such obligation to contribute or covered operations ceased.
(5) If the corporation determines that the employer has no further liability under the plan either—
(A) because it determines that the contribution base of the plan has not suffered substantial damage as a result of the cessation of the employer's obligation to contribute or cessation of covered operations (considered together with any cessation of contribution obligation, or of covered operations, with respect to other employers), or
(B) because it may not make a determination under paragraph (4) because of the last sentence thereof,
then the bond shall be cancelled or the escrow refunded.
(6) Nothing in this subsection shall be construed as a limitation on the amount of the withdrawal liability of any employer.
(e) Date of complete withdrawal
For purposes of this part, the date of a complete withdrawal is the date of the cessation of the obligation to contribute or the cessation of covered operations.
(f) Special liability withdrawal rules for industries other than construction and entertainment industries; procedures applicable to amend plans
(1) The corporation may prescribe regulations under which plans in industries other than the construction or entertainment industries may be amended to provide for special withdrawal liability rules similar to the rules described in subsections (b) and (c).
(2) Regulations under paragraph (1) shall permit use of special withdrawal liability rules—
(A) only in industries (or portions thereof) in which, as determined by the corporation, the characteristics that would make use of such rules appropriate are clearly shown, and
(B) only if the corporation determines, in each instance in which special withdrawal liability rules are permitted, that use of such rules will not pose a significant risk to the corporation under this subchapter.
(
§1384. Sale of assets
(a) Complete or partial withdrawal not occurring as a result of sale and subsequent cessation of covered operations or cessation of obligation to contribute to covered operations; continuation of liability of seller
(1) A complete or partial withdrawal of an employer (hereinafter in this section referred to as the "seller") under this section does not occur solely because, as a result of a bona fide, arm's-length sale of assets to an unrelated party (hereinafter in this section referred to as the "purchaser"), the seller ceases covered operations or ceases to have an obligation to contribute for such operations, if—
(A) the purchaser has an obligation to contribute to the plan with respect to the operations for substantially the same number of contribution base units for which the seller had an obligation to contribute to the plan;
(B) the purchaser provides to the plan for a period of 5 plan years commencing with the first plan year beginning after the sale of assets, a bond issued by a corporate surety company that is an acceptable surety for purposes of
(i) the average annual contribution required to be made by the seller with respect to the operations under the plan for the 3 plan years preceding the plan year in which the sale of the employer's assets occurs, or
(ii) the annual contribution that the seller was required to make with respect to the operations under the plan for the last plan year before the plan year in which the sale of the assets occurs,
which bond or escrow shall be paid to the plan if the purchaser withdraws from the plan, or fails to make a contribution to the plan when due, at any time during the first 5 plan years beginning after the sale; and
(C) the contract for sale provides that, if the purchaser withdraws in a complete withdrawal, or a partial withdrawal with respect to operations, during such first 5 plan years, the seller is secondarily liable for any withdrawal liability it would have had to the plan with respect to the operations (but for this section) if the liability of the purchaser with respect to the plan is not paid.
(2) If the purchaser—
(A) withdraws before the last day of the fifth plan year beginning after the sale, and
(B) fails to make any withdrawal liability payment when due,
then the seller shall pay to the plan an amount equal to the payment that would have been due from the seller but for this section.
(3)(A) If all, or substantially all, of the seller's assets are distributed, or if the seller is liquidated before the end of the 5 plan year period described in paragraph (1)(C), then the seller shall provide a bond or amount in escrow equal to the present value of the withdrawal liability the seller would have had but for this subsection.
(B) If only a portion of the seller's assets are distributed during such period, then a bond or escrow shall be required, in accordance with regulations prescribed by the corporation, in a manner consistent with subparagraph (A).
(4) The liability of the party furnishing a bond or escrow under this subsection shall be reduced, upon payment of the bond or escrow to the plan, by the amount thereof.
(b) Liability of purchaser
(1) For the purposes of this part, the liability of the purchaser shall be determined as if the purchaser had been required to contribute to the plan in the year of the sale and the 4 plan years preceding the sale the amount the seller was required to contribute for such operations for such 5 plan years.
(2) If the plan is in reorganization in the plan year in which the sale of assets occurs, the purchaser shall furnish a bond or escrow in an amount equal to 200 percent of the amount described in subsection (a)(1)(B).
(c) Variances or exemptions from continuation of liability of seller; procedures applicable
The corporation may by regulation vary the standards in subparagraphs (B) and (C) of subsection (a)(1) if the variance would more effectively or equitably carry out the purposes of this subchapter. Before it promulgates such regulations, the corporation may grant individual or class variances or exemptions from the requirements of such subparagraphs if the particular case warrants it. Before granting such an individual or class variance or exemption, the corporation—
(1) shall publish notice in the Federal Register of the pendency of the variance or exemption,
(2) shall require that adequate notice be given to interested persons, and
(3) shall afford interested persons an opportunity to present their views.
(d) "Unrelated party" defined
For purposes of this section, the term "unrelated party" means a purchaser or seller who does not bear a relationship to the seller or purchaser, as the case may be, that is described in
(
Editorial Notes
Amendments
1989—Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 1989 Amendment
Amendment by
§1385. Partial withdrawals
(a) Determinative factors
Except as otherwise provided in this section, there is a partial withdrawal by an employer from a plan on the last day of a plan year if for such plan year—
(1) there is a 70-percent contribution decline, or
(2) there is a partial cessation of the employer's contribution obligation.
(b) Criteria applicable
For purposes of subsection (a)—
(1)(A) There is a 70-percent contribution decline for any plan year if during each plan year in the 3-year testing period the employer's contribution base units do not exceed 30 percent of the employer's contribution base units for the high base year.
(B) For purposes of subparagraph (A)—
(i) The term "3-year testing period" means the period consisting of the plan year and the immediately preceding 2 plan years.
(ii) The number of contribution base units for the high base year is the average number of such units for the 2 plan years for which the employer's contribution base units were the highest within the 5 plan years immediately preceding the beginning of the 3-year testing period.
(2)(A) There is a partial cessation of the employer's contribution obligation for the plan year if, during such year—
(i) the employer permanently ceases to have an obligation to contribute under one or more but fewer than all collective bargaining agreements under which the employer has been obligated to contribute under the plan but continues to perform work in the jurisdiction of the collective bargaining agreement of the type for which contributions were previously required or transfers such work to another location or to an entity or entities owned or controlled by the employer, or
(ii) an employer permanently ceases to have an obligation to contribute under the plan with respect to work performed at one or more but fewer than all of its facilities, but continues to perform work at the facility of the type for which the obligation to contribute ceased.
(B) For purposes of subparagraph (A), a cessation of obligations under a collective bargaining agreement shall not be considered to have occurred solely because, with respect to the same plan, one agreement that requires contributions to the plan has been substituted for another agreement.
(c) Retail food industry
(1) In the case of a plan in which a majority of the covered employees are employed in the retail food industry, the plan may be amended to provide that this section shall be applied with respect to such plan—
(A) by substituting "35 percent" for "70 percent" in subsections (a) and (b), and
(B) by substituting "65 percent" for "30 percent" in subsection (b).
(2) Any amendment adopted under paragraph (1) shall provide rules for the equitable reduction of withdrawal liability in any case in which the number of the plan's contribution base units, in the 2 plan years following the plan year of withdrawal of the employer, is higher than such number immediately after the withdrawal.
(3)
(d) Continuation of liability of employer for partial withdrawal under amended plan
In the case of a plan described in
(
Editorial Notes
References in Text
This chapter, referred to in subsec. (d), was in the original "this Act", meaning
Amendments
2006—Subsec. (b)(2)(A)(i).
1989—Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment
Effective Date of 1989 Amendment
Amendment by
Applicability to Certain Employers Engaged in Trade or Business of Shipping Bulk Cargoes in Great Lakes Maritime Industry
"(A) For the purpose of applying section 4205 of the Employee Retirement Income Security Act of 1974 [this section] in the case of an employer described in subparagraph (B)—
"(i) 'more than 75 percent' shall be substituted for '70 percent' in subsections (a) and (b) of such section.
"(ii) '25 percent or less' shall be substituted for '30 percent' in subsection (b) of such section, and
"(iii) the number of contribution units for the high base year shall be the average annual number of such units for calendar years 1970 and 1971.
"(B) An employer is described in this subparagraph if—
"(i) the employer is engaged in the trade or business of shipping bulk cargoes in the Great Lakes Maritime Industry, and whose fleet consists of vessels the gross registered tonnage of which was at least 7,800, as stated in the American Bureau of Shipping Record, and
"(ii) whose fleet during any 5 years from the period 1970 through and including 1979 has experienced a 33 percent or more increase in the contribution units as measured from the average annual contribution units for the calendar years 1970 and 1971."
Applicability to Specified Plan Year, Cessation of Contribution Obligations, and Contribution Base Units of Employer
"(1) subsection (a)(1) of such section shall not apply to any plan year beginning before September 26, 1982,
"(2) subsection (a)(2) of such section shall not apply with respect to any cessation of contribution obligations occurring before September 26, 1980, and
"(3) in applying subsection (b) of such section, the employer's contribution base units for any plan year ending before September 26, 1980, shall be deemed to be equal to the employer's contribution base units for the last plan year ending before such date."
Liability of Certain Employers Announcing Publicly Before December 13, 1979, Total Cessation of Covered Operations at a Facility in a State; Amount, Coverage, Determinative Factors, Etc.
"(1) In the case of a partial withdrawal under section 4205 of the Employee Retirement Income Security Act of 1974 [this section], an employer who—
"(A) before December 13, 1979, had publicly announced the total cessation of covered operations at a facility in a State (and such cessation occurred within 12 months after the announcement),
"(B) had not been obligated to make contributions to the plan on behalf of the employees at such facility for more than 8 years before the discontinuance of contributions, and
"(C) after the discontinuance of contributions does not within 1 year after the date of the partial withdrawal perform work in the same State of the type for which contributions were previously required,
shall be liable under such section with respect to such partial withdrawal in an amount not greater than the amount determined under paragraph (2).
"(2) The amount determined under this paragraph is the excess (if any) of—
"(A) the present value (on the withdrawal date) of the benefits under the plan which—
"(i) were vested on the withdrawal date (or, if earlier, at the time of separation from service with the employer at the facility),
"(ii) were accrued by employees who on December 13, 1979 (or, if earlier, at the time of separation from service with the employer at the facility), were employed at the facility, and
"(iii) are attributable to service with the withdrawing employer, over
"(B)(i) the sum of—
"(I) all employer contributions to the plan on behalf of employees at the facility before the withdrawal date,
"(II) interest (to the withdrawal date) on amounts described in subclause (I), and
"(III) $100,000, reduced by
"(ii) the sum of—
"(I) the benefits paid under the plan on or before the withdrawal date with respect to former employees who separated from employment at the facility, and
"(II) interest (to the withdrawal date) on amounts described in subclause (I).
"(3) For purposes of paragraph (2)—
"(A) actuarial assumptions shall be those used in the last actuarial report completed before December 13, 1979,
"(B) the term 'withdrawal date' means the date on which the employer ceased work at the facility of the type for which contributions were previously required, and
"(C) the term 'facility' means the facility referred to in paragraph (1)."
§1386. Adjustment for partial withdrawal; determination of amount; reduction for partial withdrawal liability; procedures applicable
(a) The amount of an employer's liability for a partial withdrawal, before the application of
(1) the amount determined under
(A) on the date of the partial withdrawal, or
(B) in the case of a partial withdrawal described in
multiplied by
(2) a fraction which is 1 minus a fraction—
(A) the numerator of which is the employer's contribution base units for the plan year following the plan year in which the partial withdrawal occurs, and
(B) the denominator of which is the average of the employer's contribution base units for—
(i) except as provided in clause (ii), the 5 plan years immediately preceding the plan year in which the partial withdrawal occurs, or
(ii) in the case of a partial withdrawal described in
(b)(1) In the case of an employer that has withdrawal liability for a partial withdrawal from a plan, any withdrawal liability of that employer for a partial or complete withdrawal from that plan in a subsequent plan year shall be reduced by the amount of any partial withdrawal liability (reduced by any abatement or reduction of such liability) of the employer with respect to the plan for a previous plan year.
(2) The corporation shall prescribe such regulations as may be necessary to provide for proper adjustments in the reduction provided by paragraph (1) for—
(A) changes in unfunded vested benefits arising after the close of the prior year for which partial withdrawal liability was determined,
(B) changes in contribution base units occurring after the close of the prior year for which partial withdrawal liability was determined, and
(C) any other factors for which it determines adjustment to be appropriate,
so that the liability for any complete or partial withdrawal in any subsequent year (after the application of the reduction) properly reflects the employer's share of liability with respect to the plan.
(
§1387. Reduction or waiver of complete withdrawal liability; procedures and standards applicable
(a) The corporation shall provide by regulation for the reduction or waiver of liability for a complete withdrawal in the event that an employer who has withdrawn from a plan subsequently resumes covered operations under the plan or renews an obligation to contribute under the plan, to the extent that the corporation determines that reduction or waiver of withdrawal liability is consistent with the purposes of this chapter.
(b) The corporation shall prescribe by regulation a procedure and standards for the amendment of plans to provide alternative rules for the reduction or waiver of liability for a complete withdrawal in the event that an employer who has withdrawn from the plan subsequently resumes covered operations or renews an obligation to contribute under the plan. The rules may apply only to the extent that the rules are consistent with the purposes of this chapter.
(
Editorial Notes
References in Text
This chapter, referred to in text, was in the original "this Act", meaning
§1388. Reduction of partial withdrawal liability
(a) Obligation of employer for payments for partial withdrawal for plan years beginning after the second consecutive plan year following the partial withdrawal year; criteria applicable; furnishing of bond in lieu of payment of partial withdrawal liability
(1) If, for any 2 consecutive plan years following the plan year in which an employer has partially withdrawn from a plan under
(2)(A) For any plan year for which the number of contribution base units with respect to which an employer who has partially withdrawn under
(B) If the plan sponsor determines under paragraph (1) that the employer has no further liability to the plan for the partial withdrawal, then the bond shall be cancelled.
(C) If the plan sponsor determines under paragraph (1) that the employer continues to have liability to the plan for the partial withdrawal, then—
(i) the bond shall be paid to the plan,
(ii) the employer shall immediately be liable for the outstanding amount of liability due with respect to the plan year for which the bond was posted, and
(iii) the employer shall continue to make the partial withdrawal liability payments as they are due.
(b) Obligation of employer for payments for partial withdrawal for plan years beginning after the second consecutive plan year; other criteria applicable
If—
(1) for any 2 consecutive plan years following a partial withdrawal under
(2) the total number of contribution base units with respect to which all employers under the plan have obligations to contribute in each of such 2 consecutive years is not less than 90 percent of the total number of contribution base units for which all employers had obligations to contribute in the partial withdrawal plan year;
then, the employer shall have no obligation to make payments with respect to such partial withdrawal (other than delinquent payments) for plan years beginning after the second such consecutive plan year.
(c) Pro rata reduction of amount of partial withdrawal liability payment of employer for plan year following partial withdrawal year
In any case in which, in any plan year following a partial withdrawal under
(d) Building and construction industry; entertainment industry
(1) An employer to whom section 1383(b) 2 of this title (relating to the building and construction industry) applies is liable for a partial withdrawal only if the employer's obligation to contribute under the plan is continued for no more than an insubstantial portion of its work in the craft and area jurisdiction of the collective bargaining agreement of the type for which contributions are required.
(2) An employer to whom section 1383(c) 2 of this title (relating to the entertainment industry) applies shall have no liability for a partial withdrawal except under the conditions and to the extent prescribed by the corporation by regulation.
(e) Reduction or elimination of partial withdrawal liability under any conditions; criteria; procedures applicable
(1) The corporation may prescribe regulations providing for the reduction or elimination of partial withdrawal liability under any conditions with respect to which the corporation determines that reduction or elimination of partial withdrawal liability is consistent with the purposes of this chapter.
(2) Under such regulations, reduction of withdrawal liability shall be provided only with respect to subsequent changes in the employer's contributions for the same operations, or under the same collective bargaining agreement, that gave rise to the partial withdrawal, and changes in the employer's contribution base units with respect to other facilities or other collective bargaining agreements shall not be taken into account.
(3) The corporation shall prescribe by regulation a procedure by which a plan may by amendment adopt rules for the reduction or elimination of partial withdrawal liability under any other conditions, subject to the approval of the corporation based on its determination that adoption of such rules by the plan is consistent with the purposes of this chapter.
(
Editorial Notes
References in Text
"
This chapter, referred to in subsec. (e)(1), (3), was in the original "this Act", meaning
1 So in original. Probably should be "title),".
2 See References in Text note below.
§1389. De minimis rule
(a) Reduction of unfunded vested benefits allocable to employer withdrawn from plan
Except in the case of a plan amended under subsection (b), the amount of the unfunded vested benefits allocable under
(1) ¾ of 1 percent of the plan's unfunded vested obligations (determined as of the end of the plan year ending before the date of withdrawal), or
(2) $50,000,
reduced by the amount, if any, by which the unfunded vested benefits allowable to the employer, determined without regard to this subsection, exceeds $100,000.
(b) Amendment of plan for reduction of amount of unfunded vested benefits allocable to employer withdrawn from plan
A plan may be amended to provide for the reduction of the amount determined under
(1) the amount determined under subsection (a), or
(2) the lesser of—
(A) the amount determined under subsection (a)(1), or
(B) $100,000,
reduced by the amount, if any, by which the amount determined under
(c) Nonapplicability
This section does not apply—
(1) to an employer who withdraws in a plan year in which substantially all employers withdraw from the plan, or
(2) in any case in which substantially all employers withdraw from the plan during a period of one or more plan years pursuant to an agreement or arrangement to withdraw, to an employer who withdraws pursuant to such agreement or arrangement.
(d) Presumption of employer withdrawal from plan pursuant to agreement or arrangement applicable in action or proceeding to determine or collect withdrawal liability
In any action or proceeding to determine or collect withdrawal liability, if substantially all employers have withdrawn from a plan within a period of 3 plan years, an employer who has withdrawn from such plan during such period shall be presumed to have withdrawn from the plan pursuant to an agreement or arrangement, unless the employer proves otherwise by a preponderance of the evidence.
(
§1390. Nonapplicability of withdrawal liability for certain temporary contribution obligation periods; exception
(a) An employer who withdraws from a plan in complete or partial withdrawal is not liable to the plan if the employer—
(1) first had an obligation to contribute to the plan after September 26, 1980,
(2) had an obligation to contribute to the plan for no more than the lesser of—
(A) 6 consecutive plan years preceding the date on which the employer withdraws, or
(B) the number of years required for vesting under the plan,
(3) was required to make contributions to the plan for each such plan year in an amount equal to less than 2 percent of the sum of all employer contributions made to the plan for each such year, and
(4) has never avoided withdrawal liability because of the application of this section with respect to the plan.
(b) Subsection (a) shall apply to an employer with respect to a plan only if—
(1) the plan is amended to provide that subsection (a) applies;
(2) the plan provides, or is amended to provide, that the reduction under
(3) the ratio of the assets of the plan for the plan year preceding the first plan year for which the employer was required to contribute to the plan to the benefit payments made during that plan year was at least 8 to 1.
(
Editorial Notes
Amendments
2006—Subsec. (b)(1) to (4).
1989—Subsec. (b)(3).
Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment
Effective Date of 1989 Amendment
Amendment by
§1391. Methods for computing withdrawal liability
(a) Determination of amount of unfunded vested benefits allocable to employer withdrawn from plan
The amount of the unfunded vested benefits allocable to an employer that withdraws from a plan shall be determined in accordance with subsection (b), (c), or (d) of this section.
(b) Factors determining computation of amount of unfunded vested benefits allocable to employer withdrawn from plan
(1) Except as provided in subsections (c) and (d), the amount of unfunded vested benefits allocable to an employer that withdraws is the sum of—
(A) the employer's proportional share of the unamortized amount of the change in the plan's unfunded vested benefits for plan years ending after September 25, 1980, as determined under paragraph (2),
(B) the employer's proportional share, if any, of the unamortized amount of the plan's unfunded vested benefits at the end of the plan year ending before September 26, 1980, as determined under paragraph (3); and
(C) the employer's proportional share of the unamortized amounts of the reallocated unfunded vested benefits (if any) as determined under paragraph (4).
If the sum of the amounts determined with respect to an employer under paragraphs (2), (3), and (4) is negative, the unfunded vested benefits allocable to the employer shall be zero.
(2)(A) An employer's proportional share of the unamortized amount of the change in the plan's unfunded vested benefits for plan years ending after September 25, 1980, is the sum of the employer's proportional shares of the unamortized amount of the change in unfunded vested benefits for each plan year in which the employer has an obligation to contribute under the plan ending—
(i) after such date, and
(ii) before the plan year in which the withdrawal of the employer occurs.
(B) The change in a plan's unfunded vested benefits for a plan year is the amount by which—
(i) the unfunded vested benefits at the end of the plan year; exceeds
(ii) the sum of—
(I) the unamortized amount of the unfunded vested benefits for the last plan year ending before September 26, 1980, and
(II) the sum of the unamortized amounts of the change in unfunded vested benefits for each plan year ending after September 25, 1980, and preceding the plan year for which the change is determined.
(C) The unamortized amount of the change in a plan's unfunded vested benefits with respect to a plan year is the change in unfunded vested benefits for the plan year, reduced by 5 percent of such change for each succeeding plan year.
(D) The unamortized amount of the unfunded vested benefits for the last plan year ending before September 26, 1980, is the amount of the unfunded vested benefits as of the end of that plan year reduced by 5 percent of such amount for each succeeding plan year.
(E) An employer's proportional share of the unamortized amount of a change in unfunded vested benefits is the product of—
(i) the unamortized amount of such change (as of the end of the plan year preceding the plan year in which the employer withdraws); multiplied by
(ii) a fraction—
(I) the numerator of which is the sum of the contributions required to be made under the plan by the employer for the year in which such change arose and for the 4 preceding plan years, and
(II) the denominator of which is the sum for the plan year in which such change arose and the 4 preceding plan years of all contributions made by employers who had an obligation to contribute under the plan for the plan year in which such change arose reduced by the contributions made in such years by employers who had withdrawn from the plan in the year in which the change arose.
(3) An employer's proportional share of the unamortized amount of the plan's unfunded vested benefits for the last plan year ending before September 26, 1980, is the product of—
(A) such unamortized amount; multiplied by—
(B) a fraction—
(i) the numerator of which is the sum of all contributions required to be made by the employer under the plan for the most recent 5 plan years ending before September 26, 1980, and
(ii) the denominator of which is the sum of all contributions made for the most recent 5 plan years ending before September 26, 1980, by all employers—
(I) who had an obligation to contribute under the plan for the first plan year ending on or after such date, and
(II) who had not withdrawn from the plan before such date.
(4)(A) An employer's proportional share of the unamortized amount of the reallocated unfunded vested benefits is the sum of the employer's proportional share of the unamortiz