Amended 1976, 1980, 1986, 1987, 1988, 1989, 1994, 1997, 2002, 2004, 2005, 2006
- 2006 Pub. L. 109-280 Pub. L. 109–280, § 111(a), reenacted heading without change and amended text generally, substituting provisions relating to minimum funding standard requirement, liability for contributions, variance from minimum funding standards, miscellaneous rules, and plans to which section applies, consisting of subsecs. (a) to (e), for provisions relating to general rule for satisfaction of minimum funding standard, funding standard account, special rules, variance from minimum funding standard, extension of amortization periods, requirements relating to waivers and extensions, alternative minimum funding standard, exceptions, certain insurance contract plans, certain terminated multiemployer plans, financial assistance, additional funding requirements for plans which are not multiemployer plans, quarterly contributions requirement, and imposition of lien where failure to make required contributions, consisting of subsecs. (a) to (n).
- 2006 Pub. L. 109-280 Pub. L. 109–280, § 301(b)(2), substituted “, 2005, 2006, and 2007” for “and 2005” in heading and “, 2005, 2006, or 2007” for “or 2005” in text.
- 2005 Pub. L. 109-135 Pub. L. 109–135 substituted “subsection (d)” for “subsection (c)”.
- 2004 Pub. L. 108-218 Pub. L. 108–218, § 101(b)(2), added subcl. (IV).
- 2004 Pub. L. 108-218 Pub. L. 108–218, § 102(b), added par. (12).
- 2004 Pub. L. 108-218 Pub. L. 108–218, § 101(b)(3), amended heading and text of par. (7) generally, substituting provisions relating to special rule for 2002 for provisions relating to special rules for 2002 and 2004.
- 2002 Pub. L. 107-147 Pub. L. 107–147, § 405(a)(1), added subcl. (III).
- 2002 Pub. L. 107-147 Pub. L. 107–147, § 405(a)(2), added par. (7).
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 1604(b)(2)(A), substituted “subclause (I)” for “clause (i)”.
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(1)(A), (2)(B), in introductory provisions, substituted “to which this subsection applies under paragraph (9)” for “which has an unfunded current liability”, and amended concluding provisions generally. Prior to amendment, concluding provisions read as follows: “Such increase shall not exceed the amount necessary to increase the funded current liability percentage to 100 percent.”
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(2)(A), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “the sum of the charges for such plan year under subparagraphs (B) (other than clauses (iv) and (v) thereof), (C), and (D) of subsection (b)(2), reduced by the sum of the credits for such plan year under subparagraph (B)(i) of subsection (b)(3), plus”.
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(3), added subpar. (C).
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(7)(B)(i), added subpar. (D).
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(4)(A), added subpars. (D) and (E).
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(4)(B), (7)(B)(iii), inserted “, the unamortized portion of the additional unfunded old liability, the unamortized portion of each unfunded mortality increase,” after “old liability”.
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(5), substituted “.40” for “.25” in cl. (i) and “60” for “35” in cl. (ii).
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(6)(A)(i), substituted “greatest of” for “greater of” in introductory provisions.
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(6)(A)(ii)–(iv), added cl. (iii).
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(6)(B), added subpar. (E).
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(7)(A), amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “(C) Interest rates used.—The rate of interest used to determine current liability shall be the rate of interest used under subsection (b)(5).”
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(1)(B), added par. (9).
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(7)(B)(ii), added par. (10).
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(8), added par. (11).
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 754(a), in introductory provisions, inserted “which has a funded current liability percentage (as defined in subsection (l)(8)) for the preceding plan year of less than 100 percent” before “fails” and substituted “the plan year” for “any plan year”.
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(6)(C)(i), substituted “greatest of” for “greater of” in introductory provisions.
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(6)(C)(ii)–(iv), added subcl. (III).
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(9)(A), added par. (5) and redesignated former par. (5) as (6).
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 768(a)(1), inserted at end “This subsection shall not apply to any plan to which section 4021 of the Employee Retirement Income Security Act of 1974 does not apply (as such section is in effect on the date of the enactment of the Retirement Protection Act of 1994).”
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 768(a)(2), reenacted par. (3) heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of paragraph (1), the amount of the lien shall be equal to the lesser of—
“(A) the amount by which the unpaid balances described in paragraph (1)(B) (including interest) exceed $1,000,000, or
“(B) the aggregate unpaid balance of required installments and other payments required under this section (including interest)—
“(i) for plan years beginning after 1987, and
“(ii) for which payment has not been made before the due date.”
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 768(a)(3), struck out “60th day following the” before “due date”.
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7881(c)(1), substituted “for benefit liabilities” for “the benefit liabilities”.
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7881(a)(1)(A), substituted “reducing (but not below zero)” for “reducing”.
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7881(a)(2)(A), substituted “liability and the unamortized portion of the unfunded existing benefit increase liability” for “liability”.
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7881(a)(3)(A), substituted “the first plan year beginning after December 31, 1988” for “October 17, 1987”.
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7881(a)(4)(A)(i), added subcl. (III).
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7881(a)(4)(A)(ii), added cl. (iv).
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7881(a)(5)(A)(i), struck out “reduced by any credit balance in the funding standard account” after “under subsection (c)(2)”.
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7881(a)(5)(A)(ii), added subpar. (E).
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7881(b)(3)(A), substituted “defined benefit plan (other than” for “plan (other than” in introductory provisions.
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7881(b)(6)(A)(i), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the rate under subsection (b)(5).”
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7881(b)(4)(A), amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “In the case of a plan with any unpredictable contingent event benefit liabilities—
“(i) such liabilities shall not be taken into account in computing the required annual payment under subparagraph (B), and
“(ii) each required installment shall be increased by the greater of—
“(I) the amount of benefits described in subsection (l)(5)(A)(i) paid during the 3-month period preceding the month in which the due date for such installment occurs, or
“(II) 25 percent of the amount determined under subsection (l)(5)(A)(ii) for the plan year.”
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 2005(a)(2)(A), (d)(1), amended cl. (i) identically, substituting “October 29” for “October 17” and amended cl. (iii) identically, substituting “October 28” for “October 16”.
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9306(e)(1), substituted “$1,000,000” for “$2,000,000” at end.
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9306(d)(1), substituted “plan, and each participant, beneficiary, and alternate payee (within the meaning of section 414(p)(8)). Such notice shall include a description of the extent to which the plan is funded for benefits which are guaranteed under title IV of such Act and the benefit liabilities.” for “plan.”
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9303(a)(1), added subsec. (l).
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9304(b)(1), added subsec. (m).
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9304(e)(1), added subsec. (n).
- 1986 Pub. L. 99-272 Pub. L. 99–272, § 11015(a)(2), substituted in heading “Requirements relating to waivers and extensions” for “Benefits may not be increased during waiver or extension period” and in par. (1) heading “Benefits may not be increased during waiver or extension period” for “In general”, and added par. (3).
- 1986 Pub. L. 99-272 Pub. L. 99–272, § 11016(c)(4), added par. (4).
- 1980 Pub. L. 96-364 Pub. L. 96–364, § 203(3), added subsecs. (j) and (k).
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1901(a)(63), substituted reference to Sept. 2, 1974, for reference to the date of enactment of the Employee Retirement Income Security Act of 1974 in par. (5) and substituted reference to Sept. 1, 1974, for reference to the day before the date of enactment of the Employee Retirement Income Security Act of 1974 in the provisions following par. (6).
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
Cases: United States v. Reorganized CF&I Fabricators of Utah, Inc., 518 U.S. 213 (1996); Vinson & Elkins v. Commissioner, 7 F.3d 1235 (5th Cir. 1993)
Forms: Form 5500
Final rules 2
(a) Requirement to meet minimum funding standard
Amended 1976, 1980
- 1980 Pub. L. 96-364 Pub. L. 96–364, § 208(c), inserted provisions relating to plan years where multiemployer plan is in reorganization.
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
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(1) In general A plan to which this section applies shall satisfy the minimum funding standard applicable to the plan for any plan year.
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(2) Minimum funding standard For purposes of paragraph (1), a plan shall be treated as satisfying the minimum funding standard for a plan year if—
Amended 1984
- 1984 Pub. L. 98-369 Pub. L. 98–369 struck out “or 405(a)” after “section 403(a)”.
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(A) in the case of a defined benefit plan which is not a multiemployer plan or a CSEC plan, the employer makes contributions to or under the plan for the plan year which, in the aggregate, are not less than the minimum required contribution determined under section 430 for the plan for the plan year,
Amended 2014
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(2)(A), substituted “multiemployer plan or a CSEC plan” for “multiemployer plan”.
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(B) in the case of a money purchase plan which is not a multiemployer plan, the employer makes contributions to or under the plan for the plan year which are required under the terms of the plan,
(C) in the case of a multiemployer plan, the employers make contributions to or under the plan for any plan year which, in the aggregate, are sufficient to ensure that the plan does not have an accumulated funding deficiency under section 431 as of the end of the plan year, and
(D) in the case of a CSEC plan, the employers make contributions to or under the plan for any plan year which, in the aggregate, are sufficient to ensure that the plan does not have an accumulated funding deficiency under section 433 as of the end of the plan year.
Amended 2014
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(1), added subpar. (D).
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(b) Liability for contributions
Amended 1976, 1980, 1987, 1989, 2004, 2006
- 2006 Pub. L. 109-280 Pub. L. 109–280, § 301(b)(1), substituted “, 2005, 2006, and 2007” for “and 2005” in heading and “2008” for “2006” in text.
- 2004 Pub. L. 108-218 Pub. L. 108–218, § 101(b)(1)(C), inserted “or (III)” after “subclause (II)”.
- 2004 Pub. L. 108-218 Pub. L. 108–218, § 101(b)(1)(A), (B), added subcl. (II), redesignated former subcl. (II) as (III), and, in subcl. (III), inserted “or (II)” after “permissible under subclause (I)” and substituted “such subclause” for “subclause (I)” before period at end.
- 2004 Pub. L. 108-218 Pub. L. 108–218, § 104(b), added subpar. (F).
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7881(d)(1)(A), struck out “for purposes of this section and for purposes of determining current liability,” before “the interest rate” in introductory provisions.
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9307(e)(1), amended par. (5) generally. Prior to amendment, par. (5) read as follows: “The funding standard account (and items therein) shall be charged or credited (as determined under regulations prescribed by the Secretary) with interest at the appropriate rate consistent with the rate or rates of interest used under the plan to determine costs.”
- 1980 Pub. L. 96-364 Pub. L. 96–364, § 203(1), (2), struck out in pars. (2)(B)(ii), (iii), and (3)(B)(i) provisions respecting applicability of multiemployer plans with 40 plan years and in pars. (2)(B)(iv) and (3)(B)(ii) provisions respecting applicability of multiemployer plans with 20 year plans and added pars. (6) and (7).
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
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(1) In general Except as provided in paragraph (2), the amount of any contribution required by this section (including any required installments under paragraphs (3) and (4) of section 430(j) or under section 433(f)) shall be paid by the employer responsible for making contributions to or under the plan.
Amended 2014
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(2)(B), substituted “430(j) or under section 433(f)” for “430(j)”.
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(2) Joint and several liability where employer member of controlled group If the employer referred to in paragraph (1) is a member of a controlled group, each member of such group shall be jointly and severally liable for payment of such contributions.
Amended 1987, 1997
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 1521(c)(1), added subpar. (E).
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9303(a)(2), inserted at end “For additional requirements in the case of plans other than multiemployer plans, see subsection (l).”
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9307(a)(1)(A), substituted “5 plan years (15 plan years in the case of a multiemployer plan)” for “15 plan years”.
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9307(a)(1)(B), substituted “10 plan years (30 plan years in the case of a multiemployer plan)” for “30 plan years”.
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9307(a)(1)(A), substituted “5 plan years (15 plan years in the case of a multiemployer plan)” for “15 plan years”.
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(3) Multiemployer plans in critical status Paragraph (1) shall not apply in the case of a multiemployer plan for any plan year in which the plan is in critical status pursuant to section 432. This paragraph shall only apply if the plan sponsor adopts a rehabilitation plan in accordance with section 432(e) and complies with such rehabilitation plan (and any modifications of the plan).
Amended 1987, 2006, 2008
- 2008 Pub. L. 110-458 Pub. L. 110–458, § 102(b)(2)(H), substituted “the plan sponsor adopts” for “the plan adopts”.
- 2006 Pub. L. 109-280 Pub. L. 109–280, § 212(c), added par. (3).
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9307(a)(1)(A), substituted “5 plan years (15 plan years in the case of a multiemployer plan)” for “15 plan years”.
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9307(a)(1)(B), substituted “10 plan years (30 plan years in the case of a multiemployer plan)” for “30 plan years”.
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(c) Variance from minimum funding standards
Amended 1976, 1987, 1989, 1994, 2001, 2002
- 2002 Pub. L. 107-147 Pub. L. 107–147, § 411(v)(1)(A), substituted “100 percent” for “125 percent”.
- 2002 Pub. L. 107-147 Pub. L. 107–147, § 411(v)(1)(B), added cl. (iv).
- 2001 Pub. L. 107-16 Pub. L. 107–16, § 661(a), reenacted heading without change and amended text of par. (9) generally. Prior to amendment, text read as follows: “For purposes of this section, a determination of experience gains and losses and a valuation of the plan’s liability shall be made not less frequently than once every year, except that such determination shall be made more frequently to the extent required in particular cases under regulations prescribed by the Secretary.”
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 753(a), added par. (12).
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7881(a)(6)(A), substituted “Annual” for “3-year” in heading and “every year” for “every 3 years” in text.
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7881(b)(1)(A), substituted “Defined benefit plans” for “Plans” in heading and “defined benefit plan other” for “plan other” in introductory provisions.
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7881(b)(2)(A), substituted “Other” for “Multiemployer” in heading and “plan not described in subparagraph (A)” for “multiemployer plan” in text.
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9304(a)(1), amended par. (10) generally. Prior to amendment, par. (10) read as follows: “For purposes of this section, any contributions for a plan year made by an employer after the last day of such plan year, but not later than two and one-half months after such day, shall be deemed to have been made on such last day. For purposes of this paragraph, such two and one-half month period may be extended for not more than six months under regulations prescribed by the Secretary.”
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9305(b)(1), added par. (11).
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
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(1) Waiver in case of business hardship
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(A) In general If—
Amended 2018
- 2018 Pub. L. 115-141 Pub. L. 115–141, § 401(a)(83), inserted period at end of concluding provisions.
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(i) an employer is (or in the case of a multiemployer plan or a CSEC plan, 10 percent or more of the number of employers contributing to or under the plan are) unable to satisfy the minimum funding standard for a plan year without temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan), and
Amended 2008, 2014
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(2)(A), substituted “multiemployer plan or a CSEC plan, 10 percent” for “multiemployer plan, 10 percent”.
- 2008 Pub. L. 110-458 Pub. L. 110–458, § 101(a)(2)(A), substituted “the plan are” for “the plan is”.
(ii) application of the standard would be adverse to the interests of plan participants in the aggregate,
the Secretary may, subject to subparagraph (C), waive the requirements of subsection (a) for such year with respect to all or any portion of the minimum funding standard. The Secretary shall not waive the minimum funding standard with respect to a plan for more than 3 of any 15 (5 of any 15 in the case of a multiemployer plan) consecutive plan years.
(B) Effects of waiver If a waiver is granted under subparagraph (A) for any plan year—
(i) in the case of a defined benefit plan which is not a multiemployer plan or a CSEC plan, the minimum required contribution under section 430 for the plan year shall be reduced by the amount of the waived funding deficiency and such amount shall be amortized as required under section 430(e),
Amended 2014
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(2)(A), substituted “multiemployer plan or a CSEC plan” for “multiemployer plan”.
(ii) in the case of a multiemployer plan, the funding standard account shall be credited under section 431(b)(3)(C) with the amount of the waived funding deficiency and such amount shall be amortized as required under section 431(b)(2)(C), and
(iii) in the case of a CSEC plan, the funding standard account shall be credited under section 433(b)(3)(C) with the amount of the waived funding deficiency and such amount shall be amortized as required under section 433(b)(2)(C).
Amended 2014
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(2)(C), added cl. (iii).
(C) Waiver of amortized portion not allowed The Secretary may not waive under subparagraph (A) any portion of the minimum funding standard under subsection (a) for a plan year which is attributable to any waived funding deficiency for any preceding plan year.
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(2) Determination of business hardship For purposes of this subsection, the factors taken into account in determining temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan) shall include (but shall not be limited to) whether or not—
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(A) the employer is operating at an economic loss,
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(B) there is substantial unemployment or underemployment in the trade or business and in the industry concerned,
Amended 1987
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9303(d)(1), inserted at end “In the case of a plan other than a multiemployer plan, this subparagraph shall not apply, but the Secretary may by regulations provide that the value of any dedicated bond portfolio of such plan shall be determined by using the interest rate under subsection (b)(5).”
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(C) the sales and profits of the industry concerned are depressed or declining, and
(D) it is reasonable to expect that the plan will be continued only if the waiver is granted.
(3) Waived funding deficiency For purposes of this section and part III of this subchapter, the term “waived funding deficiency” means the portion of the minimum funding standard under subsection (a) (determined without regard to the waiver) for a plan year waived by the Secretary and not satisfied by employer contributions.
Amended 1987
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9307(b)(1), amended par. (3) generally. Prior to amendment, par. (3) read as follows: “For purposes of this section, all costs, liabilities, rates of interest, and other factors under the plan shall be determined on the basis of actuarial assumptions and methods which, in the aggregate, are reasonable (taking into account the experience of the plan and reasonable expectations) and which, in combination, offer the actuary’s best estimate of anticipated experience under the plan.”
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(4) Security for waivers for single-employer plans, consultations
(A) Security may be required
(i) In general Except as provided in subparagraph (C), the Secretary may require an employer maintaining a defined benefit plan which is a single-employer plan (within the meaning of section 4001(a)(15) of the Employee Retirement Income Security Act of 1974) to provide security to such plan as a condition for granting or modifying a waiver under paragraph (1) or for granting an extension under section 433(d).
Amended 2014
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(2)(D), substituted “under paragraph (1) or for granting an extension under section 433(d)” for “under paragraph (1)”.
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(ii) Special rules Any security provided under clause (i) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Corporation, by a contributing sponsor (within the meaning of section 4001(a)(13) of the Employee Retirement Income Security Act of 1974), or a member of such sponsor’s controlled group (within the meaning of section 4001(a)(14) of such Act).
(B) Consultation with the Pension Benefit Guaranty Corporation Except as provided in subparagraph (C), the Secretary shall, before granting or modifying a waiver under this subsection or an extension under section 433(d) with respect to a plan described in subparagraph (A)(i)—
Amended 2014, 2018
- 2018 Pub. L. 115-141 Pub. L. 115–141, § 401(a)(84), inserted “section” before “433(d)” in introductory provisions.
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(2)(E), substituted “waiver under this subsection or an extension under 433(d)” for “waiver under this subsection” in introductory provisions.
(i) provide the Pension Benefit Guaranty Corporation with—
(I) notice of the completed application for any waiver, modification, or extension, and
Amended 2014
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(2)(F), substituted “waiver, modification, or extension” for “waiver or modification”.
(II) an opportunity to comment on such application within 30 days after receipt of such notice, and
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(ii) consider—
(I) any comments of the Corporation under clause (i)(II), and
(II) any views of any employee organization (within the meaning of section 3(4) of the Employee Retirement Income Security Act of 1974) representing participants in the plan which are submitted in writing to the Secretary in connection with such application.
Information provided to the Corporation under this subparagraph shall be considered tax return information and subject to the safeguarding and reporting requirements of section 6103(p).
(C) Exception for certain waivers or extensions
Amended 2014
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(2)(G), substituted “waivers or extensions” for “waivers” in heading.
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(i) In general The preceding provisions of this paragraph shall not apply to any plan with respect to which the sum of—
(I) the aggregate unpaid minimum required contributions (within the meaning of section 4971(c)(4)) for the plan year and all preceding plan years, or the accumulated funding deficiency under section 433, whichever is applicable,
Amended 2014
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(2)(I), substituted “or the accumulated funding deficiency under section 433, whichever is applicable,” for “and” at end.
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(II) the present value of all waiver amortization installments determined for the plan year and succeeding plan years under section 430(e)(2) or 433(b)(2)(C), whichever is applicable, and
Amended 2014
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(2)(J), substituted “430(e)(2) or 433(b)(2)(C), whichever is applicable, and” for “430(e)(2),”.
(III) the total amounts not paid by reason of an extension in effect under section 433(d),
Amended 2014
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(2)(K), added subcl. (III).
is less than $1,000,000.
(ii) Treatment of waivers or extensions for which applications are pending The amount described in clause (i)(I) shall include any increase in such amount which would result if all applications for waivers or extensions with respect to the minimum funding standard under this subsection which are pending with respect to such plan were denied.
Amended 2014
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(2)(L), substituted “for waivers or extensions with respect to” for “for waivers of”.
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(2)(G), substituted “waivers or extensions” for “waivers” in heading.
(5) Special rules for single-employer plans
Amended 1994
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 752(a), designated existing provisions as subpar. (A), inserted subpar. heading, and added subpar. (B).
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(A) Application must be submitted before date 2½ months after close of year In the case of a defined benefit plan which is not a multiemployer plan, no waiver may be granted under this subsection with respect to any plan for any plan year unless an application therefor is submitted to the Secretary not later than the 15th day of the 3rd month beginning after the close of such plan year.
(B) Special rule if employer is member of controlled group In the case of a defined benefit plan which is not a multiemployer plan, if an employer is a member of a controlled group, the temporary substantial business hardship requirements of paragraph (1) shall be treated as met only if such requirements are met—
(i) with respect to such employer, and
(ii) with respect to the controlled group of which such employer is a member (determined by treating all members of such group as a single employer).
The Secretary may provide that an analysis of a trade or business or industry of a member need not be conducted if the Secretary determines such analysis is not necessary because the taking into account of such member would not significantly affect the determination under this paragraph.
(6) Advance notice
(A) In general The Secretary shall, before granting a waiver under this subsection, require each applicant to provide evidence satisfactory to the Secretary that the applicant has provided notice of the filing of the application for such waiver to each affected party (as defined in section 4001(a)(21) of the Employee Retirement Income Security Act of 1974). Such notice shall include a description of the extent to which the plan is funded for benefits which are guaranteed under title IV of the Employee Retirement Income Security Act of 1974 and for benefit liabilities.
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(B) Consideration of relevant information The Secretary shall consider any relevant information provided by a person to whom notice was given under subparagraph (A).
(7) Restriction on plan amendments
Amended 1987, 1994, 1997, 2001
- 2001 Pub. L. 107-16 Pub. L. 107–16, § 651(a)(2), reenacted heading and introductory provisions without change and amended table generally, substituting present provisions for provisions which had set out applicable percentage of 155 in the case of any plan year beginning in 1999 or 2000, 160 in the case of any plan year beginning in 2001 or 2002, 165 in the case of any plan year beginning in 2003 or 2004, and 170 in the case of any plan year beginning in 2005 and succeeding years.
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 1521(c)(3)(A), inserted “and” at end of cl. (i), substituted a period for “, and” at end of cl. (ii), and struck out cl. (iii) which read as follows: “for the treatment under this section of contributions which would be required to be made under the plan but for the provisions of subparagraph (A)(i)(I).”
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 1521(a)(B), added subpar. (F).
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(10)(B), added subpar. (E).
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9301(a), substituted “Full-funding” for “Full funding” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of paragraph (6), the term full funding limitation means the excess (if any) of—
“(A) the accrued liability (including normal cost) under the plan (determined under the entry age normal funding method if such accrued liability cannot be directly calculated under the funding method used for the plan), over
“(B) the lesser of the fair market value of the plan’s assets or the value of such assets determined under paragraph (2).”
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(A) In general No amendment of a plan which increases the liabilities of the plan by reason of any increase in benefits, any change in the accrual of benefits, or any change in the rate at which benefits become nonforfeitable under the plan shall be adopted if a waiver under this subsection or an extension of time under section 431(d) or section 433(d) is in effect with respect to the plan, or if a plan amendment described in subsection (d)(2) which reduces the accrued benefit of any participant has been made at any time in the preceding 12 months (24 months in the case of a multiemployer plan). If a plan is amended in violation of the preceding sentence, any such waiver, or extension of time, shall not apply to any plan year ending on or after the date on which such amendment is adopted.
Amended 1994, 1997, 2001, 2008, 2014
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(2)(H), substituted “section 431(d) or section 433(d)” for “section 431(d)”.
- 2008 Pub. L. 110-458 Pub. L. 110–458, § 101(a)(2)(B), inserted “which reduces the accrued benefit of any participant” after “subsection (d)(2)”.
- 2001 Pub. L. 107-16 Pub. L. 107–16, § 651(a)(1), substituted “in the case of plan years beginning before January 1, 2004, the applicable percentage” for “the applicable percentage”.
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 1521(a)(A), substituted “the applicable percentage” for “150 percent”.
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(10)(A), inserted “(including the expected increase in current liability due to benefits accruing during the plan year)” after “current liability”.
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(B) Exception Subparagraph (A) shall not apply to any plan amendment which—
Amended 1994
- 1994 Pub. L. 103-465 Pub. L. 103–465, § 751(a)(10)(C), reenacted subpar. (B) heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of subparagraphs (A) and (D), the term ‘current liability’ has the meaning given such term by subsection (l)(7) (without regard to subparagraph (D) thereof).”
(i) the Secretary determines to be reasonable and which provides for only de minimis increases in the liabilities of the plan,
(ii) only repeals an amendment described in subsection (d)(2), or
(iii) is required as a condition of qualification under part I of subchapter D of chapter 1.
Amended 2018
- 2018 Pub. L. 115-141 Pub. L. 115–141, § 401(a)(85), struck out comma after “subchapter D”.
(d) Miscellaneous rules
Amended 1976, 1987
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9306(a)(1)(A), added par. (4).
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9306(a)(1)(C), added par. (5).
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
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(1) Change in method or year If the funding method or a plan year for a plan is changed, the change shall take effect only if approved by the Secretary.
Amended 1986, 1987, 1989, 2008
- 2008 Pub. L. 110-458 Pub. L. 110–458, § 101(a)(2)(C), struck out “, the valuation date,” after “If the funding method”.
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7881(b)(6)(A)(ii), substituted “costs (including adjustments under subsection (b)(5)(B))” for “costs”.
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9306(a)(1)(B), struck out “substantial” after “in case of” in heading, and substituted “temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan)” for “substantial business hardship” in text.
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9306(b)(1), substituted “more than 3 of any 15 (5 of any 15 in the case of a multiemployer plan)” for “more than 5 of any 15”.
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9306(c)(1)(A), substituted “The interest rate used for purposes of computing the amortization charge described in subsection (b)(2)(C) for any plan year shall be—” and subpars. (A) and (B) for “The interest rate used for purposes of computing the amortization charge described in section 412(b)(2)(C) for a variance granted under this subsection shall be the rate determined under section 6621(b).”
- 1986 Pub. L. 99-272 Pub. L. 99–272, § 11015(b)(2)(A), inserted provision that the interest rate used for purposes of computing the amortization charge described in section 412(b)(2)(C) for a variance granted under this subsection be the rate determined under section 6621(b).
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(2) Certain retroactive plan amendments For purposes of this section, any amendment applying to a plan year which—
Amended 1987, 2014
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(2)(H), substituted “section 431(d) or section 433(d)” for “section 431(d)” in concluding provisions.
- 2014 Pub. L. 113-97 Pub. L. 113–97, § 202(c)(2)(A), substituted “multiemployer plan or a CSEC plan, any extension” for “multiemployer plan, any extension” in concluding provisions.
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9306(a)(1)(B), struck out “substantial” after “Determination of” in heading, and substituted “temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan)” for “substantial business hardship” in introductory provisions.
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(A) is adopted after the close of such plan year but no later than 2½ months after the close of the plan year (or, in the case of a multiemployer plan, no later than 2 years after the close of such plan year),
(B) does not reduce the accrued benefit of any participant determined as of the beginning of the first plan year to which the amendment applies, and
(C) does not reduce the accrued benefit of any participant determined as of the time of adoption except to the extent required by the circumstances,
shall, at the election of the plan administrator, be deemed to have been made on the first day of such plan year. No amendment described in this paragraph which reduces the accrued benefits of any participant shall take effect unless the plan administrator files a notice with the Secretary notifying him of such amendment and the Secretary has approved such amendment, or within 90 days after the date on which such notice was filed, failed to disapprove such amendment. No amendment described in this subsection shall be approved by the Secretary unless the Secretary determines that such amendment is necessary because of a temporary substantial business hardship (as determined under subsection (c)(2)) or a substantial business hardship (as so determined) in the case of a multiemployer plan and that a waiver under subsection (c) (or, in the case of a multiemployer plan or a CSEC plan, any extension of the amortization period under section 431(d) or section 433(d)) is unavailable or inadequate.
(3) Controlled group For purposes of this section, the term “controlled group” means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414.
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(e) Plans to which section applies
Amended 1986, 1987
- 1987 Pub. L. 100-203 Pub. L. 100–203, § 9306(c)(1)(B), substituted last two sentences for “The interest rate applicable under any arrangement entered into by the Secretary in connection with an extension granted under this subsection shall be the rate determined under section 6621(b).”
- 1986 Pub. L. 99-272 Pub. L. 99–272, § 11015(b)(2)(B), inserted provision that the interest rate applicable under any arrangement entered into by the Secretary in connection with an extension granted under this subsection be the rate determined under section 6621(b).
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(1) In general Except as provided in paragraphs (2) and (4), this section applies to a plan if, for any plan year beginning on or after the effective date of this section for such plan under the Employee Retirement Income Security Act of 1974—
(A) such plan included a trust which qualified (or was determined by the Secretary to have qualified) under section 401(a), or
(B) such plan satisfied (or was determined by the Secretary to have satisfied) the requirements of section 403(a).
(2) Exceptions This section shall not apply to—
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(A) any profit-sharing or stock bonus plan,
(B) any insurance contract plan described in paragraph (3),
(C) any governmental plan (within the meaning of section 414(d)),
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(D) any church plan (within the meaning of section 414(e)) with respect to which the election provided by section 410(d) has not been made,
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(E) any plan which has not, at any time after September 2, 1974, provided for employer contributions, or
(F) any plan established and maintained by a society, order, or association described in section 501(c)(8) or (9), if no part of the contributions to or under such plan are made by employers of participants in such plan.
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No plan described in subparagraph (C), (D), or (F) shall be treated as a qualified plan for purposes of section 401(a) unless such plan meets the requirements of section 401(a)(7) as in effect on September 1, 1974.
(3) Certain insurance contract plans A plan is described in this paragraph if—
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(A) the plan is funded exclusively by the purchase of individual insurance contracts,
(B) such contracts provide for level annual premium payments to be paid extending not later than the retirement age for each individual participating in the plan, and commencing with the date the individual became a participant in the plan (or, in the case of an increase in benefits, commencing at the time such increase becomes effective),
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(C) benefits provided by the plan are equal to the benefits provided under each contract at normal retirement age under the plan and are guaranteed by an insurance carrier (licensed under the laws of a State to do business with the plan) to the extent premiums have been paid,
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(D) premiums payable for the plan year, and all prior plan years, under such contracts have been paid before lapse or there is reinstatement of the policy,
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(E) no rights under such contracts have been subject to a security interest at any time during the plan year, and
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(F) no policy loans are outstanding at any time during the plan year.
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A plan funded exclusively by the purchase of group insurance contracts which is determined under regulations prescribed by the Secretary to have the same characteristics as contracts described in the preceding sentence shall be treated as a plan described in this paragraph.
(4) Certain terminated multiemployer plans This section applies with respect to a terminated multiemployer plan to which section 4021 of the Employee Retirement Income Security Act of 1974 applies until the last day of the plan year in which the plan terminates (within the meaning of section 4041A(a)(2) of such Act).