29 U.S.C. § 1341a — Termination of multiemployer plans

Page 671 TITLE 29—LABOR § 1341a the notification described in subparagraph (A)(i) and with respect to which a notice of sufficiency has been issued by the Corporation before the date of the enactment of this Act, clause (i)(I) shall apply, except that the 90-day period referred to in clause (i)(I) shall begin on the date of the enactment of this Act. ‘‘(C) TERMINATIONS PROCEEDING AS DISTRESS TER- MINATION.—In the case of a plan termination de- scribed in paragraph (1) with respect to which the Corporation has been provided the notification de- scribed in subparagraph (A)(ii), if the requirements of section 4041(c)(2)(B) of such Act (as amended by this title) are met, the termination shall be treated as a distress termination under section 4041(c) of such Act (as amended by this title). ‘‘(D) TERMINATION OF PROCEEDINGS BY PLAN ADMIN- ISTRATOR.— ‘‘(i) IN GENERAL.—Except as provided in clause (ii), in the case of a plan termination described in paragraph (1) with respect to which the Corpora- tion has been provided the notification described in subparagraph (A)(iii), the termination shall not take effect. ‘‘(ii) TERMINATIONS WITH RESPECT TO WHICH FINAL DISTRIBUTION OF ASSETS HAS COMMENCED.— Clause (i) shall not apply with respect to a termi- nation with respect to which the final distribu- tion of assets has commenced before the date of the enactment of this Act unless, within 90 days after the date of the enactment of this Act, the plan has been restored in accordance with proce- dures issued by the Corporation pursuant to sub- section (c). ‘‘(E) AUTHORITY OF CORPORATION TO EXTEND 90-DAY PERIODS TO PERMIT STANDARD TERMINATION.—The Corporation may, on a case-by-case basis in accord- ance with subsection (c), provide for extensions of the applicable 90-day period referred to in clause (i) or (ii) of subparagraph (B) if it is demonstrated to the satisfaction of the Corporation that— ‘‘(i) the plan could not otherwise, pursuant to the preceding provisions of this paragraph, termi- nate in a termination treated as a standard ter- mination 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) AUTHORITY TO PRESCRIBE TEMPORARY PROCE- DURES.—The Pension Benefit Guaranty Corporation may prescribe temporary procedures for purposes of carrying out the amendments made by this title [see Short Title of 1986 Amendment note set out under sec- tion 1001 of this title] during the 180-day period begin- ning on the date described in subsection (a).’’ EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96–364 effective Sept. 26, 1980, except as specifically provided, see section 1461(e) of this title. 60-DAY EXTENSION BY PENSION BENEFIT GUARANTY CORPORATION FOR NOTICE OF NONCOMPLIANCE Pub. L. 99–272, title XI, § 11008(c), Apr. 7, 1986, 100 Stat. 247, provided that: ‘‘In the case of a standard termi- nation of a plan under section 4041(b) of the Employee Retirement Income Security Act of 1974 (as amended by this section) [29 U.S.C. 1341(b)] with respect to which a notice of intent to terminate is filed before 120 days after the date of the enactment of this Act [Apr. 7, 1986], the Pension Benefit Guaranty Corporation may, without the consent of the plan administrator, extend the 60-day period under section 4041(b)(2)(C)(i) of such Act (as so amended) for a period not to exceed 60 days.’’ SPECIAL TEMPORARY RULE FOR TERMINATION OF SINGLE-EMPLOYER PLAN Pub. L. 99–272, title XI, § 11008(d), Apr. 7, 1986, 100 Stat. 247, provided that: ‘‘(1) REQUIREMENTS TO BE MET BEFORE FINAL DISTRIBU- TION OF ASSETS.—In the case of the termination of a single-employer plan described in paragraph (2) with re- spect to which the amount payable to the employer pursuant to section 4044(d) [29 U.S.C. 1344(d)] exceeds $1,000,000 (determined as of the proposed date of final distribution of assets), the final distribution of assets pursuant to such termination may not occur unless the Pension Benefit Guaranty Corporation— ‘‘(A) determines that the assets of the plan are suf- ficient for benefit commitments (within the meaning of section 4041(d)(1) of the Employee Retirement In- come Security Act of 1974 (as amended by section 11007) [29 U.S.C. 1341(d)(1)]) under the plan, and ‘‘(B) issues to the plan administrator a written no- tice setting forth the determination described in sub- paragraph (A). ‘‘(2) PLANS TO WHICH SUBSECTION APPLIES.—A single- employer plan is described in this paragraph if— ‘‘(A) the plan administrator has filed a notice of in- tent 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 suffi- ciency for such plan before the date of the enact- ment 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 no- tice 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 re- garding such termination— ‘‘(i) in the case of plans described in subparagraph (A)(i), before 15 days after the date of the enact- ment 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) CONSIDERATION OF COMPLAINTS.—The Corporation shall consider and respond to such complaints not later than 90 days after the date on which the Corporation makes the determination described in paragraph (1)(A). The Corporation may hold informal hearings to expe- dite consideration of such complaints. Any such hear- ing shall be exempt from the requirements of chapter 5 of title 5, United States Code. ‘‘(4) DELAY ON ISSUANCE OF NOTICE.— ‘‘(A) GENERAL RULE.—Except as provided in sub- paragraph (B), the Corporation shall not issue any notice described in paragraph (1)(B) until 90 days after the date on which the Corporation makes the determination described in paragraph (1)(A). ‘‘(B) EXCEPTION IN CASES OF SUBSTANTIAL BUSINESS HARDSHIP.—Except in the case of an acquisition, take- over, or leveraged buyout, the preceding provisions of this subsection shall not apply if the contributing sponsor demonstrates to the satisfaction of the Cor- poration that the contributing sponsor is experi- encing substantial business hardship. For purposes of this subparagraph, a contributing sponsor shall be considered as experiencing substantial business hard- ship if the contributing sponsor has been operating, and can demonstrate that the contributing sponsor will continue to operate, at an economic loss.’’ § 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 par- Page 672 TITLE 29—LABOR § 1342 ticipants 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 section 1383 of this title, or the cessation of the obligation of all employers to contribute under the plan; or (3) the adoption of an amendment to the plan which causes the plan to become a plan described in section 1321(b)(1) of this title. (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 re- quired 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 as- sets 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 re- duce benefits and suspend benefit payments in accordance with section 1441 of this title. (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 high- est 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 nonforfeit- able benefit attributable to employer contribu- tions, other than a death benefit, if the value of the entire nonforfeitable benefit does not exceed $1,750. The corporation may authorize the pay- ment of benefits under the terms of a termi- nated plan other than nonforfeitable benefits, or the payment other than in the form of an annu- ity 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 corpora- tion’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 appro- priate to protect the interests of plan partici- pants and beneficiaries or to prevent unreason- able loss to the corporation. (Pub. L. 93–406, title IV, § 4041A, as added Pub. L. 96–364, title I, § 103, Sept. 26, 1980, 94 Stat. 1216.) Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective Sept. 26, 1980, except as specifically provided, see section 1461(e) of this title. § 1342. Institution of termination proceedings by the corporation (a) Authority to institute proceedings to termi- nate 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 fund- ing standard required under section 412 of title 26, or has been notified by the Secretary of the Treasury that a notice of deficiency under sec- tion 6212 of title 26 has been mailed with re- spect to the tax imposed under section 4971(a) of title 26, (2) the plan will be unable to pay benefits when due, (3) the reportable event described in section 1343(c)(7) of this title has occurred, or (4) the possible long-run loss of the corpora- tion 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 in- stitute proceedings under this section to termi- nate a single-employer plan whenever the cor- poration determines that the plan does not have assets available to pay benefits which are cur- rently due under the terms of the plan. The cor- poration 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 bene- ficiaries under the plans, and for the employers who maintain such plans (including the require- ment for a court decree under subsection (c)). Notwithstanding any other provision of this sub- chapter, the corporation is authorized to pool assets of terminated plans for purposes of ad- ministration, investment, payment of liabilities of all such terminated plans, and such other pur- poses as it determines to be appropriate in the administration of this subchapter. (b) Appointment of trustee (1) Whenever the corporation makes a deter- mination under subsection (a) with respect to a