29 U.S.C. § 1202 — Procedures with respect to continued

Page 620 TITLE 29—LABOR § 1202 (2) The Secretary of Labor may not request an opportunity to comment upon such an applica- tion unless he has been requested in writing to do so by the Pension Benefit Guaranty Corpora- tion or by the lesser of— (A) 10 employees, or (B) 10 percent of the employees who qualify as interested parties within the meaning of the regulations referred to in sub- section (a). Upon receiving such a request, the Secretary of Labor shall furnish a copy of the request to the Secretary of the Treasury within 5 days (excluding Saturdays, Sundays, and legal public holidays (as set forth in section 6103 of title 5)). (3) Upon receiving such a request from the Secretary of Labor, the Secretary of the Treas- ury shall furnish to the Secretary of Labor such information held by the Secretary of the Treas- ury relating to the application as the Secretary of Labor may request. (4) The Secretary of Labor shall, within 30 days after receiving a request from the Pension Benefit Guaranty Corporation or from the nec- essary number of employees who qualify as in- terested parties, notify the Secretary of the Treasury, the Pension Benefit Guaranty Cor- poration, and such employees with respect to whether he is going to comment on the applica- tion to which the request relates and with re- spect to any matters raised in such request on which he is not going to comment. If the Sec- retary of Labor indicates in the notice required under the preceding sentence that he is not going to comment on all or part of the matters raised in such request, the Secretary of the Treasury shall afford the corporation, and such employees, an opportunity to comment on the application with respect to any matter on which the Secretary of Labor has declined to com- ment. (c) Intervention by Pension Benefit Guaranty Corporation or Secretary of Labor into de- claratory judgment action under section 7476 of title 26, action by Corporation authorized The Pension Benefit Guaranty Corporation and, upon petition of a group of employees re- ferred to in subsection (b)(2), the Secretary of Labor, may intervene in any action brought for declaratory judgment under section 7476 of title 26 in accordance with the provisions of such sec- tion. The Pension Benefit Guaranty Corporation is permitted to bring an action under such sec- tion 7476 under such rules as may be prescribed by the United States Tax Court. (d) Notification and information by Secretary of the Treasury to Secretary of Labor upon issuance by Secretary of the Treasury of a determination letter to applicant If the Secretary of the Treasury determines that a plan or trust to which this section applies meets the applicable requirements of part I of subchapter D of chapter 1 of title 26 and issues a determination letter to the applicant, the Sec- retary shall notify the Secretary of Labor of his determination and furnish such information and material relating to the application and deter- mination held by the Secretary of the Treasury as the Secretary of Labor may request for the proper administration of subchapter I of this chapter. The Secretary of Labor shall accept the determination of the Secretary of the Treasury as prima facie evidence of initial compliance by the plan with the standards of parts 2, 3, and 4 of subtitle B of subchapter I of this chapter. The determination of the Secretary of the Treasury shall not be prima facie evidence on issues relat- ing solely to part 4 of subtitle B of subchapter I. If an application for such a determination is withdrawn, or if the Secretary of the Treasury issues a determination that the plan or trust does not meet the requirements of such part I, the Secretary shall notify the Secretary of Labor of the withdrawal or determination. (e) Effective date This section does not apply with respect to an application for any plan received by the Sec- retary of the Treasury before the date on which section 410 of title 26 applies to the plan, or on which such section will apply if the plan is de- termined by the Secretary to be a qualified plan. (Pub. L. 93–406, title III, § 3001, Sept. 2, 1974, 88 Stat. 995; Pub. L. 100–203, title IX, § 9343(b), Dec. 22, 1987, 101 Stat. 1330–372; Pub. L. 101–239, title VII, § 7891(a)(1), Dec. 19, 1989, 103 Stat. 2445.) Editorial Notes AMENDMENTS 1989—Subsecs. (a), (b)(1), (c) to (e). Pub. L. 101–239 sub- stituted ‘‘Internal Revenue Code of 1986’’ for ‘‘Internal Revenue Code of 1954’’, which for purposes of codifica- tion was translated as ‘‘title 26’’ thus requiring no change in text. 1987—Subsec. (d). Pub. L. 100–203 inserted after second sentence ‘‘The determination of the Secretary of the Treasury shall not be prima facie evidence on issues re- lating solely to part 4 of subtitle B of subchapter I.’’ Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1989 AMENDMENT Amendment by Pub. L. 101–239 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 7891(f) of Pub. L. 101–239, set out as a note under section 1002 of this title. § 1202. Procedures with respect to continued compliance with Internal Revenue require- ments relating to participation, vesting, and funding standards (a) Notification by Secretary of the Treasury to Secretary of Labor of issuance of a prelimi- nary notice of intent to disqualify or of com- mencement of proceedings to determine sat- isfaction of requirements In carrying out the provisions of part I of sub- chapter D of chapter 1 of title 26 with respect to whether a plan or a trust meets the require- ments of section 410(a) or 411 of title 26 (relating to minimum participation standards and min- imum vesting standards, respectively), the Sec- retary of the Treasury shall notify the Sec- retary of Labor when the Secretary of the Treas- ury issues a preliminary notice of intent to dis- qualify related to the plan or trust or, if earlier, at the time of commencing any proceeding to determine whether the plan or trust satisfies such requirements. Unless the Secretary of the Page 621 TITLE 29—LABOR § 1202 1 See References in Text note below. Treasury finds that the collection of a tax im- posed under title 26 is in jeopardy, the Secretary of the Treasury shall not issue a determination that the plan or trust does not satisfy the re- quirements of such section until the expiration of a period of 60 days after the date on which he notifies the Secretary of Labor of such review. The Secretary of the Treasury, in his discretion, may extend the 60-day period referred to in the preceding sentence if he determines that such an extension would enable the Secretary of Labor to obtain compliance with such requirements by the plan within the extension period. Except as otherwise provided in this chapter, the Sec- retary of Labor shall not generally apply part 2 of subtitle B of subchapter I of this chapter to any plan or trust subject to sections 410(a) and 411 of title 26, but shall refer alleged general vio- lations of the vesting or participation standards to the Secretary of the Treasury. (The preceding sentence shall not apply to matters relating to individuals benefits.) (b) Notification to Secretary of Labor before Sec- retary of the Treasury sends notice of defi- ciency under section 4971 of title 26; waiver of imposition of tax; requests for investiga- tion; consultation Unless the Secretary of the Treasury finds that the collection of a tax is in jeopardy, in carrying out the provisions of section 4971 of title 26 (relating to taxes on the failure to meet minimum funding standards), the Secretary of the Treasury shall notify the Secretary of Labor before sending a notice of deficiency with re- spect to any tax imposed under that section on an employer, and, in accordance with the provi- sions of subsection (d) of that section, afford the Secretary of Labor an opportunity to comment on the imposition of the tax in the case. The Secretary of the Treasury may waive the impo- sition of the tax imposed under section 4971(b) of title 26 in appropriate cases. Upon receiving a written request from the Secretary of Labor or from the Pension Benefit Guaranty Corporation, the Secretary of the Treasury shall cause an in- vestigation to be commenced expeditiously with respect to whether the tax imposed under sec- tion 4971 of title 26 should be applied with re- spect to any employer to which the request re- lates. The Secretary of the Treasury and the Secretary of Labor shall consult with each other from time to time with respect to the provisions of section 412 of title 26 (relating to minimum funding standards) and with respect to the fund- ing standards applicable under subchapter I of this chapter in order to coordinate the rules ap- plicable under such standards. (c) Extended application of regulations pre- scribed by Secretary of the Treasury relating to minimum participation standards, min- imum vesting standards, and minimum fund- ing standards Regulations prescribed by the Secretary of the Treasury under sections 410(a), 411, and 412 of title 26 (relating to minimum participation standards, minimum vesting standards, and minimum funding standards, respectively) shall also apply to the minimum participation, vest- ing, and funding standards set forth in parts 2 and 3 of subtitle B of subchapter I of this chap- ter. Except as otherwise expressly provided in this chapter, the Secretary of Labor shall not prescribe other regulations under such parts, or apply the regulations prescribed by the Sec- retary of the Treasury under sections 410(a), 411, 412 of title 26 and applicable to the minimum participation, vesting, and funding standards under such parts in a manner inconsistent with the way such regulations apply under sections 410(a), 411, and 412 of title 26. (d) Opportunity afforded Secretary of the Treas- ury to intervene in cases involving construc- tion or application of minimum standards; review of briefs filed by Pension Benefit Guaranty Corporation or Secretary of Labor The Secretary of Labor and the Pension Ben- efit Guaranty Corporation, before filing briefs in any case involving the construction or applica- tion of minimum participation standards, min- imum vesting standards, or minimum funding standards under subchapter I of this chapter shall afford the Secretary of the Treasury a rea- sonable opportunity to review any such brief. The Secretary of the Treasury shall have the right to intervene in any such case. (e) Consultative requirements respecting pro- mulgation of proposed or final regulations The Secretary of the Treasury shall consult with the Pension Benefit Guaranty Corporation with respect to any proposed or final regulation authorized by subpart C of part I of subchapter D of chapter 1 of title 26, or by sections 1421 through 1426 1 of this title, before publishing any such proposed or final regulation. (Pub. L. 93–406, title III, § 3002, Sept. 2, 1974, 88 Stat. 996; Pub. L. 96–364, title IV, § 402(b)(3), Sept. 26, 1980, 94 Stat. 1299; Pub. L. 101–239, title VII, § 7891(a)(1), Dec. 19, 1989, 103 Stat. 2445.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsecs. (a), (c), was in the original ‘‘this Act’’, meaning Pub. L. 93–406, known as the Employee Retirement Income Security Act of 1974. Titles I, III, and IV of such Act are classified prin- cipally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 1001 of this title and Tables. Subpart C of part I of subchapter D of chapter 1 of title 26, referred to in subsec. (e), commences with former section 418 of Title 26, Internal Revenue Code. Section 418 was repealed by Pub. L. 113–235, div. O, title I, § 108(b)(1), Dec. 16, 2014, 128 Stat. 2787. Sections 1421 through 1425 of this title, referred to in subsec. (e), were repealed by Pub. L. 113–235, div. O, title I, § 108(a)(1), Dec. 16, 2014, 128 Stat. 2786. AMENDMENTS 1989—Subsecs. (a) to (c), (e). Pub. L. 101–239 sub- stituted ‘‘Internal Revenue Code of 1986’’ for ‘‘Internal Revenue Code of 1954’’ wherever appearing, which for purposes of codification was translated as ‘‘title 26’’. 1980—Subsec. (e). Pub. L. 96–364 added subsec. (e). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1989 AMENDMENT Amendment by Pub. L. 101–239 effective, except as otherwise provided, as if included in the provision of Page 622 TITLE 29—LABOR § 1202a the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 7891(f) of Pub. L. 101–239, set out as a note under section 1002 of this title. 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. § 1202a. Employee plans compliance resolution system (a) In general The Secretary of the Treasury shall have full authority to establish and implement the Em- ployee Plans Compliance Resolution System (or any successor program) and any other employee plans correction policies, including the author- ity to waive income, excise, or other taxes to en- sure that any tax, penalty, or sanction is not ex- cessive and bears a reasonable relationship to the nature, extent, and severity of the failure. (b) Improvements The Secretary of the Treasury shall continue to update and improve the Employee Plans Com- pliance Resolution System (or any successor program), giving special attention to— (1) increasing the awareness and knowledge of small employers concerning the availability and use of the program; (2) taking into account special concerns and circumstances that small employers face with respect to compliance and correction of com- pliance failures; (3) extending the duration of the self-correc- tion period under the Self-Correction Program for significant compliance failures; (4) expanding the availability to correct in- significant compliance failures under the Self- Correction Program during audit; and (5) assuring that any tax, penalty, or sanc- tion that is imposed by reason of a compliance failure is not excessive and bears a reasonable relationship to the nature, extent, and sever- ity of the failure. (Pub. L. 109–280, title XI, § 1101, Aug. 17, 2006, 120 Stat. 1055.) Editorial Notes CODIFICATION Section was enacted as part of the Pension Protec- tion Act of 2006, and not as part of the Employee Re- tirement Income Security Act of 1974 which comprises this chapter. § 1203. Procedures in connection with prohibited transactions (a) Notification to Secretary of Labor; oppor- tunity to comment on imposition of tax under section 4975 of title 26; waiver; re- quests for investigations Unless the Secretary of the Treasury finds that the collection of a tax is in jeopardy, in carrying out the provisions of section 4975 of title 26 (relating to tax on prohibited trans- actions) the Secretary of the Treasury shall, in accordance with the provisions of subsection (h) of such section, notify the Secretary of Labor before sending a notice of deficiency with re- spect to the tax imposed by subsection (a) or (b) of such section, and, in accordance with the pro- visions of subsection (h) of such section, afford the Secretary an opportunity to comment on the imposition of the tax in any case. The Sec- retary of the Treasury shall have authority to waive the imposition of the tax imposed under section 4975(b) in appropriate cases. Upon receiv- ing a written request from the Secretary of Labor or from the Pension Benefit Guaranty Corporation, the Secretary of the Treasury shall cause an investigation to be carried out with re- spect to whether the tax imposed by section 4975 of title 26 should be applied to any person re- ferred to in the request. (b) Consultation The Secretary of the Treasury and the Sec- retary of Labor shall consult with each other from time to time with respect to the provisions of section 4975 of title 26 (relating to tax on pro- hibited transactions) and with respect to the provisions of subchapter I of this chapter relat- ing to prohibited transactions and exemptions therefrom in order to coordinate the rules appli- cable under such standards. (c) Transmission of information to Secretary of the Treasury Whenever the Secretary of Labor obtains in- formation indicating that a party-in-interest or disqualified person is violating section 1106 of this title, he shall transmit such information to the Secretary of the Treasury. (Pub. L. 93–406, title III, § 3003, Sept. 2, 1974, 88 Stat. 998; Pub. L. 101–239, title VII, § 7891(a)(1), Dec. 19, 1989, 103 Stat. 2445.) Editorial Notes AMENDMENTS 1989—Subsecs. (a), (b). Pub. L. 101–239 substituted ‘‘In- ternal Revenue Code of 1986’’ for ‘‘Internal Revenue Code of 1954’’, which for purposes of codification was translated as ‘‘title 26’’ thus requiring no change in text. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1989 AMENDMENT Amendment by Pub. L. 101–239 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 7891(f) of Pub. L. 101–239, set out as a note under section 1002 of this title. § 1204. Coordination between the Department of the Treasury and the Department of Labor (a) Whenever in this chapter or in any provi- sion of law amended by this chapter the Sec- retary of the Treasury and the Secretary of Labor are required to carry out provisions relat- ing to the same subject matter (as determined by them) they shall consult with each other and shall develop rules, regulations, practices, and forms which, to the extent appropriate for the efficient administration of such provisions, are designed to reduce duplication of effort, duplica- tion of reporting, conflicting or overlapping re- quirements, and the burden of compliance with such provisions by plan administrators, employ- ers, and participants and beneficiaries. (b) In order to avoid unnecessary expense and duplication of functions among Government