29 U.S.C. § 1432 — Special financial assistance by the cor-

Page 728 TITLE 29—LABOR § 1431 determinations made in plan years beginning after 2007.’’ WITHDRAWAL LIABILITY OF EMPLOYER FROM PLAN TER- MINATING WHILE PLAN INSOLVENT WITHIN THIS SEC- TION: DETERMINATIONS, FACTORS, ETC. Pub. L. 96–364, title I, § 108(c)(3), Sept. 26, 1980, 94 Stat. 1268, provided that: ‘‘(A) For the purpose of determining the withdrawal liability of an employer under title IV of the Employee Retirement Income Security Act of 1974 [this sub- chapter] from a plan that terminates while the plan is insolvent (within the meaning of section 4245 of such Act [this section]), the plan’s unfunded vested benefits shall be reduced by an amount equal to the sum of all overburden credits that were applied in determining the plan’s accumulated funding deficiency for all plan years preceding the first plan year in which the plan is insolvent, plus interest thereon. ‘‘(B) The provisions of subparagraph (A) apply only if— ‘‘(i) the plan would have been eligible for the over- burden credit in the last plan year beginning before the date of the enactment of this Act [Sept. 26, 1980], if section 4243 of the Employee Retirement Income Security Act of 1974 [former section 1423 of this title] had been in effect for that plan year, and ‘‘(ii) the Pension Benefit Guaranty Corporation de- termines that the reduction of unfunded vested bene- fits under subparagraph (A) would not significantly increase the risk of loss to the corporation.’’ PART 4—FINANCIAL ASSISTANCE § 1431. Assistance by corporation (a) Authority; procedure applicable; amount If, upon receipt of an application for financial assistance under section 1426(f) of this title or section 1441(d) of this title, the corporation verifies that the plan is or will be insolvent and unable to pay basic benefits when due, the cor- poration shall provide the plan financial assist- ance in an amount sufficient to enable the plan to pay basic benefits under the plan. (b) Conditions; repayment terms (1) Financial assistance shall be provided under such conditions as the corporation deter- mines are equitable and are appropriate to pre- vent unreasonable loss to the corporation with respect to the plan. (2) A plan which has received financial assist- ance shall repay the amount of such assistance to the corporation on reasonable terms con- sistent with regulations prescribed by the cor- poration. (c) Assistance pending final determination of ap- plication Pending determination of the amount de- scribed in subsection (a), the corporation may provide financial assistance in such amounts as it considers appropriate in order to avoid undue hardship to plan participants and beneficiaries. (Pub. L. 93–406, title IV, § 4261, as added Pub. L. 96–364, title I, § 104(2), Sept. 26, 1980, 94 Stat. 1261.) Editorial Notes EFFECTIVE DATE Part effective Sept. 26, 1980, except as specifically provided, see section 1461(e) of this title. § 1432. Special financial assistance by the cor- poration (a) Special financial assistance (1) In general The corporation shall provide special finan- cial assistance to an eligible multiemployer plan under this section, upon the application of a plan sponsor of such a plan for such assist- ance. (2) Inapplicability of certain repayment obliga- tion A plan receiving special financial assistance pursuant to this section shall not be subject to repayment obligations with respect to such special financial assistance. (b) Eligible multiemployer plans (1) In general For purposes of this section, a multiem- ployer plan is an eligible multiemployer plan if— (A) the plan is in critical and declining status (within the meaning of section 1085(b)(6) of this title) in any plan year be- ginning in 2020 through 2022; (B) a suspension of benefits has been ap- proved with respect to the plan under sec- tion 1085(e)(9) of this title as of March 11, 2021; (C) in any plan year beginning in 2020 through 2022, the plan is certified by the plan actuary to be in critical status (within the meaning of section 1085(b)(2) of this title), has a modified funded percentage of less than 40 percent, and has a ratio of active to inactive participants which is less than 2 to 3; or (D) the plan became insolvent for purposes of section 418E of title 26 after December 16, 2014, and has remained so insolvent and has not been terminated as of March 11, 2021. (2) Modified funded percentage For purposes of paragraph (1)(C), the term ‘‘modified funded percentage’’ means the per- centage equal to a fraction the numerator of which is current value of plan assets (as de- fined in section 1002(26) of this title) and the denominator of which is current liabilities (as defined in section 431(c)(6)(D) of title 26 and section 1084(c)(6)(D) of this title). (c) Applications for special financial assistance Within 120 days of March 11, 2021, the corpora- tion shall issue regulations or guidance setting forth requirements for special financial assist- ance applications under this section. In such regulations or guidance, the corporation shall— (1) limit the materials required for a special financial assistance application to the min- imum necessary to make a determination on the application; (2) specify effective dates for transfers of special financial assistance following approval of an application, based on the effective date of the supporting actuarial analysis and the date on which the application is submitted; and (3) provide for an alternate application for special financial assistance under this section, Page 729 TITLE 29—LABOR § 1432 which may be used by a plan that has been ap- proved for a partition under section 1413 of this title before March 11, 2021. (d) Temporary priority consideration of applica- tions (1) In general The corporation may specify in regulations or guidance under subsection (c) that, during a period no longer than the first 2 years fol- lowing March 11, 2021, applications may not be filed by an eligible multiemployer plan un- less— (A) the eligible multiemployer plan is in- solvent or is likely to become insolvent within 5 years of March 11, 2021; (B) the corporation projects the eligible multiemployer plan to have a present value of financial assistance payments under sec- tion 1431 of this title that exceeds $1,000,000,000 if the special financial assist- ance is not ordered; (C) the eligible multiemployer plan has implemented benefit suspensions under sec- tion 1085(e)(9) of this title as of March 11, 2021; or (D) the corporation determines it appro- priate based on other similar circumstances. (e) Actuarial assumptions (1) Eligibility For purposes of determining eligibility for special financial assistance, the corporation shall accept assumptions incorporated in a multiemployer plan’s determination that it is in critical status or critical and declining sta- tus (within the meaning of section 1085(b) of this title) for certifications of plan status completed before January 1, 2021, unless such assumptions are clearly erroneous. For certifi- cations of plan status completed after Decem- ber 31, 2020, a plan shall determine whether it is in critical or critical and declining status for purposes of eligibility for special financial assistance by using the assumptions that the plan used in its most recently completed cer- tification of plan status before January 1, 2021, unless such assumptions (excluding the plan’s interest rate) are unreasonable. (2) Amount of financial assistance In determining the amount of special finan- cial assistance in its application, an eligible multiemployer plan shall— (A) use the interest rate used by the plan in its most recently completed certification of plan status before January 1, 2021, pro- vided that such interest rate may not exceed the interest rate limit; and (B) for other assumptions, use the assump- tions that the plan used in its most recently completed certification of plan status before January 1, 2021, unless such assumptions are unreasonable. (3) Interest rate limit The interest rate limit for purposes of this subsection is the rate specified in section 1083(h)(2)(C)(iii) of this title (disregarding modifications made under clause (iv) of such section) for the month in which the applica- tion for special financial assistance is filed by the eligible multiemployer plan or the 3 pre- ceding months, with such specified rate in- creased by 200 basis points. (4) Changes in assumptions If a plan determines that use of one or more prior assumptions is unreasonable, the plan may propose in its application to change such assumptions, provided that the plan discloses such changes in its application and describes why such assumptions are no longer reason- able. The corporation shall accept such changed assumptions unless it determines the changes are unreasonable, individually or in the aggregate. The plan may not propose a change to the interest rate otherwise required under this subsection for eligibility or finan- cial assistance amount. (f) Application deadline Any application by a plan for special financial assistance under this section shall be submitted to the corporation (and, in the case of a plan to which section 432(k)(1)(D) of title 26 applies, to the Secretary of the Treasury) no later than De- cember 31, 2025, and any revised application for special financial assistance shall be submitted no later than December 31, 2026. (g) Determinations on applications A plan’s application for special financial as- sistance under this section that is timely filed in accordance with the regulations or guidance issued under subsection (c) shall be deemed ap- proved unless the corporation notifies the plan within 120 days of the filing of the application that the application is incomplete, any proposed change or assumption is unreasonable, or the plan is not eligible under this section. Such no- tice shall specify the reasons the plan is ineli- gible for special financial assistance, any pro- posed change or assumption is unreasonable, or information is needed to complete the applica- tion. If a plan is denied assistance under this subsection, the plan may submit a revised appli- cation under this section. Any revised applica- tion for special financial assistance submitted by a plan shall be deemed approved unless the corporation notifies the plan within 120 days of the filing of the revised application that the ap- plication is incomplete, any proposed change or assumption is unreasonable, or the plan is not eligible under this section. Special financial as- sistance issued by the corporation shall be effec- tive on a date determined by the corporation, but no later than 1 year after a plan’s special fi- nancial assistance application is approved by the corporation or deemed approved. The cor- poration shall not pay any special financial as- sistance after September 30, 2030. (h) Manner of payment The payment made by the corporation to an eligible multiemployer plan under this section shall be made as a single, lump sum payment. (i) Amount and manner of special financial as- sistance (1) In general Special financial assistance under this sec- tion shall be a transfer of funds in the amount necessary as demonstrated by the plan sponsor Page 730 TITLE 29—LABOR § 1432 1 So in original. Probably should be preceded by ‘‘section’’. on the application for such special financial assistance, in accordance with the require- ments described in subsection (j). Special fi- nancial assistance shall be paid to such plan as soon as practicable upon approval of the ap- plication by the corporation. (2) No cap Special financial assistance granted by the corporation under this section shall not be capped by the guarantee under 1322a 1 of this title. (j) Determination of amount of special financial assistance (1) In general The amount of financial assistance provided to a multiemployer plan eligible for financial assistance under this section shall be such amount required for the plan to pay all bene- fits due during the period beginning on the date of payment of the special financial assist- ance payment under this section and ending on the last day of the plan year ending in 2051, with no reduction in a participant’s or bene- ficiary’s accrued benefit as of March 11, 2021, except to the extent of a reduction in accord- ance with section 1085(e)(8) of this title adopt- ed prior to the plan’s application for special fi- nancial assistance under this section, and tak- ing into account the reinstatement of benefits required under subsection (k). (2) Projections The funding projections for purposes of this section shall be performed on a deterministic basis. (k) Reinstatement of suspended benefits The Secretary, in coordination with the Sec- retary of the Treasury, shall ensure that an eli- gible multiemployer plan that receives special financial assistance under this section— (1) reinstates any benefits that were sus- pended under section 1085(e)(9) of this title or section 1426(a) of this title in accordance with guidance issued by the Secretary of the Treas- ury pursuant to section 432(k)(1)(B) of title 26, effective as of the first month in which the ef- fective date for the special financial assist- ance occurs, for participants and beneficiaries as of such month; and (2) provides payments equal to the amount of benefits previously suspended under section 1085(e)(9) or 1426(a) of this title to any partici- pants or beneficiaries in pay status as of the effective date of the special financial assist- ance, payable, as determined by the eligible multiemployer plan— (A) as a lump sum within 3 months of such effective date; or (B) in equal monthly installments over a period of 5 years, commencing within 3 months of such effective date, with no ad- justment for interest. (l) Restrictions on the use of special financial as- sistance Special financial assistance received under this section and any earnings thereon may be used by an eligible multiemployer plan to make benefit payments and pay plan expenses. Special financial assistance and any earnings on such assistance shall be segregated from other plan assets. Special financial assistance shall be in- vested by plans in investment-grade bonds or other investments as permitted by the corpora- tion. (m) Conditions on plans receiving special finan- cial assistance (1) In general The corporation, in consultation with the Secretary of the Treasury, may impose, by regulation or other guidance, reasonable con- ditions on an eligible multiemployer plan that receives special financial assistance relating to increases in future accrual rates and any retroactive benefit improvements, allocation of plan assets, reductions in employer con- tribution rates, diversion of contributions to, and allocation of expenses to, other benefit plans, and withdrawal liability. (2) Limitation The corporation shall not impose conditions on an eligible multiemployer plan as a condi- tion of, or following receipt of, special finan- cial assistance under this section relating to— (A) any prospective reduction in plan bene- fits (including benefits that may be adjusted pursuant to section 1085(e)(8) of this title); (B) plan governance, including selection of, removal of, and terms of contracts with, trustees, actuaries, investment managers, and other service providers; or (C) any funding rules relating to the plan receiving special financial assistance under this section. (3) Payment of premiums An eligible multiemployer plan receiving special financial assistance under this section shall continue to pay all premiums due under section 1307 of this title for participants and beneficiaries in the plan. (4) Assistance not considered for certain pur- poses An eligible multiemployer plan that receives special financial assistance shall be deemed to be in critical status within the meaning of sec- tion 1085(b)(2) of this title until the last plan year ending in 2051. (5) Insolvent plans An eligible multiemployer plan receiving special financial assistance under this section that subsequently becomes insolvent will be subject to the current rules and guarantee for insolvent plans. (6) Ineligibility for other assistance An eligible multiemployer plan that receives special financial assistance under this section is not eligible to apply for a new suspension of benefits under section 1085(e)(9)(G) of this title. (n) Coordination with Secretary of the Treasury In prescribing the application process for eligi- ble multiemployer plans to receive special fi- nancial assistance under this section and re- Page 731 TITLE 29—LABOR § 1441 1 See References in Text note below. viewing applications of such plans, the corpora- tion shall coordinate with the Secretary of the Treasury in the following manner: (1) In the case of a plan which has suspended benefits under section 1085(e)(9) of this title— (A) in determining whether to approve the application, the corporation shall consult with the Secretary of the Treasury regard- ing the plan’s proposed method of rein- stating benefits, as described in the plan’s application and in accordance with guidance issued by the Secretary of the Treasury, and (B) the corporation shall consult with the Secretary of the Treasury regarding the amount of special financial assistance need- ed based on the projected funded status of the plan as of the last day of the plan year ending in 2051, whether the plan proposes to repay benefits over 5 years or as a lump sum, as required by subsection (k)(2), and any other relevant factors, as determined by the corporation in consultation with the Sec- retary of the Treasury, to ensure the amount of assistance is sufficient to meet such requirement and is sufficient to pay benefits as required in subsection (j)(1). (2) In the case of any plan which proposes in its application to change the assumptions used, as provided in subsection (e)(4), the cor- poration shall consult with the Secretary of the Treasury regarding such proposed change in assumptions. (3) If the corporation specifies in regulations or guidance that temporary priority consider- ation is available for plans which are insolvent within the meaning of section 418E of title 26 or likely to become so insolvent or for plans which have suspended benefits under section 1085(e)(9) of this title, or that availability is otherwise based on the funded status of the plan under section 1085 of this title, as per- mitted by subsection (d), the corporation shall consult with the Secretary of the Treasury re- garding any granting of priority consideration to such plans. (Pub. L. 93–406, title IV, § 4262, as added Pub. L. 117–2, title IX, § 9704(b), Mar. 11, 2021, 135 Stat. 190.) PART 5—BENEFITS AFTER TERMINATION § 1441. Benefits under certain terminated plans (a) Amendment of plan by plan sponsor to re- duce benefits, and suspension of benefit pay- ments Notwithstanding sections 1053 and 1054 of this title, the plan sponsor of a terminated multiem- ployer plan to which section 1341a(d) of this title applies shall amend the plan to reduce benefits, and shall suspend benefit payments, as required by this section. (b) Determinations respecting value of non- forfeitable benefits under terminated plan and value of assets of plan (1) The value of nonforfeitable benefits under a terminated plan referred to in subsection (a), and the value of the plan’s assets, shall be deter- mined in writing, in accordance with regula- tions prescribed by the corporation, as of the end of the plan year during which section 1341a(d) of this title becomes applicable to the plan, and each plan year thereafter. (2) For purposes of this section, plan assets in- clude outstanding claims for withdrawal liabil- ity (within the meaning of section 1301(a)(12) of this title). (c) Amendment of plan by plan sponsor to reduce benefits for conservation of assets; factors applicable (1) If, according to the determination made under subsection (b), the value of nonforfeitable benefits exceeds the value of the plan’s assets, the plan sponsor shall amend the plan to reduce benefits under the plan to the extent necessary to ensure that the plan’s assets are sufficient, as determined and certified in accordance with reg- ulations prescribed by the corporation, to dis- charge when due all of the plan’s obligations with respect to nonforfeitable benefits. (2) Any plan amendment required by this sub- section shall, in accordance with regulations prescribed by the Secretary of the Treasury— (A) reduce benefits only to the extent nec- essary to comply with paragraph (1); (B) reduce accrued benefits only to the ex- tent that those benefits are not eligible for the corporation’s guarantee under section 1322a(b) of this title; (C) comply with the rules for and limitations on benefit reductions under a plan in reorga- nization, as prescribed in section 1425 1 of this title, except to the extent that the corpora- tion prescribes other rules and limitations in regulations under this section; and (D) take effect no later than 6 months after the end of the plan year for which it is deter- mined that the value of nonforfeitable benefits exceeds the value of the plan’s assets. (d) Suspension of benefit payments; determina- tive factors; powers and duties of plan spon- sor; retroactive benefit payments (1) In any case in which benefit payments under a plan which is insolvent under paragraph (2)(A) exceed the resource benefit level, any such payments which are not basic benefits shall be suspended, in accordance with this subsection, to the extent necessary to reduce the sum of such payments and such basic benefits to the greater of the resource benefit level or the level of basic benefits, unless an alternative proce- dure is prescribed by the corporation in connec- tion with a supplemental guarantee program es- tablished under section 1322a(g)(2) of this title. (2) For purposes of this subsection, for a plan year— (A) a plan is insolvent if— (i) the plan has been amended to reduce benefits to the extent permitted by sub- section (c), and (ii) the plan’s available resources are not sufficient to pay benefits under the plan when due for the plan year; and (B) ‘‘resource benefit level’’ and ‘‘available resources’’ have the meanings set forth in paragraphs (2) and (3), respectively, of section 1426(b) of this title.