29 U.S.C. § 1413 — Partitions of eligible multiemployer plans

Page 722 TITLE 29—LABOR § 1413 1 See References in Text note below. (B) fails to make any determination regard- ing the adequacy with which such interests are protected with respect to such transfer of liabilities. If, after the receipt of such application, the cor- poration requests from the plan sponsor addi- tional information necessary for the determina- tion, the running of the 180-day period shall be suspended from the date of such request until the receipt by the corporation of the additional information requested. The corporation may by regulation prescribe procedures and standards for the issuance of determinations under this paragraph. This paragraph shall not apply to any application submitted less than 180 days after September 26, 1980. (3) A multiemployer plan shall not be liable to the corporation as provided in paragraph (1) in the case of a transfer from the multiemployer plan to a single-employer plan of liabilities which accrued under a single-employer plan which merged with the multiemployer plan, if, the value of liabilities transferred to the single- employer plan does not exceed the value of the liabilities for benefits which accrued before the merger, and the value of the assets transferred to the single-employer plan is substantially equal to the value of the assets which would have been in the single-employer plan if the em- ployer had maintained and funded it as a sepa- rate plan under which no benefits accrued after the date of the merger. (4) The corporation may make equitable ar- rangements with multiemployer plans which are liable under this subsection for satisfaction of their liability. (d) Guarantee of benefits under single-employer plan Benefits under a single-employer plan to which liabilities are transferred in accordance with this section are guaranteed under section 1322 of this title to the extent provided in that section as of the effective date of the transfer and the plan is a successor plan. (e) Transfer of liabilities by multiemployer plan to single-employer plan (1) Except as provided in paragraph (2), a mul- tiemployer plan may not transfer liabilities to a single-employer plan unless the plan sponsor of the plan to which the liabilities would be trans- ferred agrees to the transfer. (2) In the case of a transfer described in sub- section (c)(3), paragraph (1) of this subsection is satisfied by the advance agreement to the trans- fer by the employer who will be obligated to contribute to the single-employer plan. (f) Additional requirements by corporation for protection of interests of plan participants, beneficiaries and corporation; approval by corporation of transfer of assets or liabilities to single-employer plan from plan in reorga- nization; covered transfers in connection with termination (1) The corporation may prescribe by regula- tion such additional requirements with respect to the transfer of assets or liabilities as may be necessary to protect the interests of plan par- ticipants and beneficiaries and the corporation. (2) Except as otherwise determined by the cor- poration, a transfer of assets or liabilities to a single-employer plan from a plan in reorganiza- tion under section 1421 1 of this title is not effec- tive unless the corporation approves such trans- fer. (3) No transfer to which this section applies, in connection with a termination described in sec- tion 1341a(a)(2) of this title shall be effective un- less the transfer meets such requirements as may be established by the corporation to pre- vent an increase in the risk of loss to the cor- poration. (Pub. L. 93–406, title IV, § 4232, as added Pub. L. 96–364, title I, § 104(2), Sept. 26, 1980, 94 Stat. 1245.) Editorial Notes REFERENCES IN TEXT Section 1421 of this title, referred to in subsec. (f)(2), was repealed by Pub. L. 113–235, div. O, title I, § 108(a)(1), Dec. 16, 2014, 128 Stat. 2786. § 1413. Partitions of eligible multiemployer plans (a) Authority of corporation (1) Upon the application by the plan sponsor of an eligible multiemployer plan for a partition of the plan, the corporation may order a partition of the plan in accordance with this section. The corporation shall make a determination regard- ing the application not later than 270 days after the date such application was filed (or, if later, the date such application was completed) in ac- cordance with regulations promulgated by the corporation. (2) Not later than 30 days after submitting an application for partition of a plan under para- graph (1), the plan sponsor of the plan shall no- tify the participants and beneficiaries of such application, in the form and manner prescribed by regulations issued by the corporation. (b) Eligible multiemployer plans For purposes of this section, a multiemployer plan is an eligible multiemployer plan if— (1) the plan is in critical and declining sta- tus (as defined in section 1085(b)(4) of this title); (2) the corporation determines, after con- sultation with the Participant and Plan Spon- sor Advocate selected under section 1304 of this title, that the plan sponsor has taken (or is taking concurrently with an application for partition) all reasonable measures to avoid in- solvency, including the maximum benefit sus- pensions under section 1085(e)(9) of this title, if applicable; (3) the corporation reasonably expects that— (A) a partition of the plan will reduce the corporation’s expected long-term loss with respect to the plan; and (B) a partition of the plan is necessary for the plan to remain solvent; (4) the corporation certifies to Congress that its ability to meet existing financial assist- ance obligations to other plans (including any liabilities associated with multiemployer plans that are insolvent or that are projected to become insolvent within 10 years) will not be impaired by such partition; and Page 723 TITLE 29—LABOR § 1414 (5) the cost to the corporation arising from such partition is paid exclusively from the fund for basic benefits guaranteed for multi- employer plans. (c) Transfer of liabilities The corporation’s partition order shall provide for a transfer to the plan referenced in sub- section (d)(1) of the minimum amount of the plan’s liabilities necessary for the plan to re- main solvent. (d) Plans created by partition orders (1) The plan created by the partition order is a successor plan to which section 1322a of this title applies. (2) The plan sponsor of an eligible multiem- ployer plan prior to the partition and the ad- ministrator of such plan shall be the plan spon- sor and the administrator, respectively, of the plan created by the partition order. (3) In the event an employer withdraws from the plan that was partitioned within ten years following the date of the partition order, with- drawal liability shall be computed under section 1381 of this title with respect to both the plan that was partitioned and the plan created by the partition order. If the withdrawal occurs more than ten years after the date of the partition order, withdrawal liability shall be computed under section 1381 of this title only with respect to the plan that was partitioned (and not with respect to the plan created by the partition order). (e) Payment of benefits and premiums for bene- ficiaries of partitioned plans (1) For each participant or beneficiary of the plan whose benefit was transferred to the plan created by the partition order pursuant to a par- tition, the plan that was partitioned shall pay a monthly benefit to such participant or bene- ficiary for each month in which such benefit is in pay status following the effective date of such partition in an amount equal to the excess of— (A) the monthly benefit that would be paid to such participant or beneficiary for such month under the terms of the plan (taking into account benefit suspensions under section 1085(e)(9) of this title and any plan amend- ments following the effective date of such par- tition) if the partition had not occurred, over (B) the monthly benefit for such participant or beneficiary which is guaranteed under sec- tion 1322a of this title. (2) In any case in which a plan provides a ben- efit improvement (as defined in section 1085(e)(9)(E)(vi) of this title) that takes effect after the effective date of the partition, the plan shall pay to the corporation for each year during the 10-year period following the partition effec- tive date, an annual amount equal to the lesser of— (A) the total value of the increase in benefit payments for such year that is attributable to the benefit improvement, or (B) the total benefit payments from the plan created by the partition for such year. Such payment shall be made at the time of, and in addition to, any other premium imposed by the corporation under this subchapter. (3) The plan that was partitioned shall pay the premiums imposed by the corporation under this subchapter with respect to participants whose benefits were transferred to the plan created by the partition order for each year during the 10- year period following the partition effective date. (f) Notice of partition orders to Congress Not later than 14 days after the partition order, the corporation shall provide notice of such order to the Committee on Education and the Workforce of the House of Representatives, the Committee on Ways and Means of the House of Representatives, the Committee on Finance of the Senate, the Committee on Health, Edu- cation, Labor, and Pensions of the Senate, and any affected participants or beneficiaries. (Pub. L. 93–406, title IV, § 4233, as added Pub. L. 96–364, title I, § 104(2), Sept. 26, 1980, 94 Stat. 1246; amended Pub. L. 113–235, div. O, title I, § 122(a)(1), Dec. 16, 2014, 128 Stat. 2795.) Editorial Notes AMENDMENTS 2014—Pub. L. 113–235 amended section generally. Prior to amendment, section related to partition of multiem- ployer plans. Statutory Notes and Related Subsidiaries EFFECTIVE DATE 2014 AMENDMENT Pub. L. 113–235, div. O, title I, § 122(b), Dec. 16, 2014, 128 Stat. 2796, provided that: ‘‘The amendments made by this section [amending this section] shall apply with respect to plan years beginning after December 31, 2014.’’ § 1414. Asset transfer rules (a) Applicability and scope A transfer of assets from a multiemployer plan to another plan shall comply with asset- transfer rules which shall be adopted by the multiemployer plan and which— (1) do not unreasonably restrict the transfer of plan assets in connection with the transfer of plan liabilities, and (2) operate and are applied uniformly with respect to each proposed transfer, except that the rules may provide for reasonable vari- ations taking into account the potential fi- nancial impact of a proposed transfer on the multiemployer plan. Plan rules authorizing asset transfers consistent with the requirements of section 1412(c)(3) of this title shall be considered to satisfy the re- quirements of this subsection. (b) Exemption of de minimis transfers The corporation shall prescribe regulations which exempt de minimis transfers of assets from the requirements of this part. (c) Written reciprocity agreements This part shall not apply to transfers of assets pursuant to written reciprocity agreements, ex- cept to the extent provided in regulations pre- scribed by the corporation. (Pub. L. 93–406, title IV, § 4234, as added Pub. L. 96–364, title I, § 104(2), Sept. 26, 1980, 94 Stat. 1247.)