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29 U.S. Code § 1082 - Minimum funding standards

(a) Requirement to meet minimum funding standard

(1) In general

Aplan to which this part applies shall satisfy the minimum funding standard applicable to theplan for anyplan year.

(2) Minimum funding standardFor purposes of paragraph (1), aplan shall be treated as satisfying the minimum funding standard for aplan year if—

(A)

in the case of a defined benefitplan which is asingle-employer plan (other than a CSEC plan), the employermakes contributions to or under the planfor the planyear which, in the aggregate, are not less than the minimum required contribution determined undersection 1083 of this title for the planfor the planyear,

(B)

in the case of a money purchaseplan which is asingle-employer plan, the employermakes contributions to or under the planfor the planyear which are required under the terms of the plan,

(C)

in the case of a multiemployerplan, theemployers make contributions to or under the planfor any planyear which, in the aggregate, are sufficient to ensure that the plandoes not have an accumulated funding deficiency undersection 1084 of this title as of the end of the planyear, and

(D)

in the case of a CSECplan, theemployers make contributions to or under the planfor any planyear which, in the aggregate, are sufficient to ensure that the plandoes not have an accumulated funding deficiency undersection 1085a of this title as of the end of the planyear.

(b) Liability for contributions

(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) ofsection 1083(j) of this title or undersection 1085a(f) of this title) shall be paid by the employerresponsible for making contributions to or under the plan.

(2) Joint and several liability where employer member of controlled group

If theemployer referred to in paragraph (1) is a member of acontrolled group, each member of such group shall be jointly and severally liable for payment of such contributions.

(3) Multiemployer plans in critical status

Paragraph (1) shall not apply in the case of a multiemployerplan for anyplan year in which theplan is in critical status pursuant tosection 1085 of this title. This paragraph shall only apply if the plan sponsoradopts a rehabilitation planin accordance withsection 1085(e) of this title and complies with the terms of such rehabilitation plan(and any updates or modifications of the plan).

(1) Waiver in case of business hardship

(A) In generalIf—

(i)

anemployer is (or in the case of a multiemployer planor a CSEC plan, 10 percent or more of the number ofemployers contributing to or under the planare) unable to satisfy the minimum funding standard for a planyear without temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan), and

(ii)

application of the standard would be adverse to the interests ofplan participants in the aggregate,

theSecretary of the Treasury 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. TheSecretary of the Treasury shall not waive the minimum funding standard with respect to a planfor more than 3 of any 15 (5 of any 15 in the case of a multiemployer plan) consecutive planyears.

(B) Effects of waiverIf a waiver is granted under subparagraph (A) for anyplan year—

(i)

in the case of asingle-employer plan (other than a CSEC plan), the minimum required contribution undersection 1083 of this title for the planyear shall be reduced by the amount of the waived funding deficiencyand such amount shall be amortized as required undersection 1083(e) of this title,

(ii)

in the case of a multiemployerplan, the funding standard account shall be credited undersection 1084(b)(3)(C) of this title with the amount of the waived funding deficiencyand such amount shall be amortized as required undersection 1084(b)(2)(C) of this title, and

(iii)

in the case of a CSECplan, the funding standard account shall be credited undersection 1085a(b)(3)(C) of this title with the amount of the waived funding deficiencyand such amount shall be amortized as required undersection 1085a(b)(2)(C) of this title.

TheSecretary of the Treasury may not waive under subparagraph (A) any portion of the minimum funding standard under subsection (a) for a planyear which is attributable to anywaived funding deficiency for any preceding planyear.

(2) Determination of business hardshipFor purposes of this subsection, the factors taken into account in determining temporary substantial business hardship (substantial business hardship in the case of a multiemployerplan) shall include (but shall not be limited to) whether or not—

(A)

theemployer is operating at an economic loss,

(B)

there is substantial unemployment or underemployment in the trade or business and in the industry concerned,

(C)

the sales and profits of the industry concerned are depressed or declining, and

(D)

it is reasonable to expect that theplan will be continued only if the waiver is granted.

(3) Waived funding deficiency

For purposes of this part, the term “waived funding deficiency” means the portion of the minimum funding standard under subsection (a) (determined without regard to the waiver) for a planyear waived by the Secretaryof the Treasury and not satisfied by employercontributions.

(4) Security for waivers for single-employer plans, consultations

(A) Security may be required

(i) In general

Except as provided in subparagraph (C), theSecretary of the Treasury may require an employermaintaining a defined benefit planwhich is asingle-employer plan (within the meaning ofsection 1301(a)(15) of this title) to provide securityto such planas a condition for granting or modifying a waiver under paragraph (1) or for granting an extension undersection 1085a(d) of this title.

(ii) Special rules

Anysecurity provided under clause (i) may be perfected and enforced only by thePension Benefit Guaranty Corporation, or at the direction of the Corporation, by a contributing sponsor (within the meaning ofsection 1301(a)(13) of this title), or a member of such sponsor’s controlled group(within the meaning ofsection 1301(a)(14) of this title).

(B) Consultation with thePension Benefit Guaranty CorporationExcept as provided in subparagraph (C), theSecretary of the Treasury shall, before granting or modifying a waiver under this subsection or an extension under 1085a(d) [1] of this title with respect to a plandescribed in subparagraph (A)(i)—

(i) provide thePension Benefit Guaranty Corporation with—

(I)

notice of the completed application for any waiver, modification, or extension, and

(II)

an opportunity to comment on such application within 30 days after receipt of such notice, and

(ii) consider—

(I)

any comments of the Corporation under clause (i)(II), and

(II)

any views of anyemployee organization (within the meaning ofsection 1002(4) of this title) representing participantsin the planwhich are submitted in writing to the Secretaryof the Treasury 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 ofsection 6103(p) of title 26.

(i) In generalThe preceding provisions of this paragraph shall not apply to anyplan with respect to which the sum of—

(I)

the aggregateunpaid minimum required contributions for the planyear and all preceding planyears, or the accumulated funding deficiency undersection 1085a of this title, whichever is applicable,

(II)

thepresent value of all waiver amortization installments determined for the planyear and succeeding planyears under section1083(e)(2) or1085a(b)(2)(C) of this title, whichever is applicable, and

(III)

the total amounts not paid by reason of an extension in effect undersection 1085a(d) of this title,

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 suchplan were denied.

(iii) Unpaid minimum required contributionFor purposes of this subparagraph—

(I) In general

The term “unpaid minimum required contribution” means, with respect to any planyear, any minimum required contribution undersection 1083 of this title for the planyear which is not paid on or before the due date (as determined undersection 1083(j)(1) of this title) for the planyear.

(II) Ordering rule

For purposes of subclause (I), any payment to or under aplan for anyplan year shall be allocated first tounpaid minimum required contributions for all preceding planyears on a first-in, first-out basis and then to the minimum required contribution undersection 1083 of this title for the planyear.

(5) Special rules for single-employer plans

(A) Application must be submitted before date 2½ months after close of year

In the case of asingle-employer plan, no waiver may be granted under this subsection with respect to any planfor any planyear unless an application therefor is submitted to the Secretaryof the Treasury not later than the 15th day of the 3rd month beginning after the close of such planyear.

(B) Special rule if employer is member of controlled groupIn the case of asingle-employer plan, if an employeris a member of acontrolled 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 suchemployer, and

(ii)

with respect to thecontrolled group of which such employeris a member (determined by treating all members of such group as a single employer).

TheSecretary of the Treasury may provide that an analysis of a trade or business or industry of a member need not be conducted if suchSecretary 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

TheSecretary of the Treasury shall, before granting a waiver under this subsection, require each applicant to provide evidence satisfactory to suchSecretary that the applicant has provided notice of the filing of the application for such waiver to each affected party (as defined insection 1301(a)(21) of this title). Such notice shall include a description of the extent to which the planis funded for benefits which are guaranteed under subchapter III and for benefit liabilities.

(B) Consideration of relevant information

TheSecretary of the Treasury shall consider any relevant information provided by a personto whom notice was given under subparagraph (A).

(7) Restriction on plan amendments

(A) In general

No amendment of aplan which increases the liabilities of theplan 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 theplan shall be adopted if a waiver under this subsection or an extension of time undersection 1084(d) of this title orsection 1085a(d) of this title is in effect with respect to the plan, or if a planamendment described in subsection (d)(2) which reduces the accrued benefitof any participanthas been made at any time in the preceding 12 months (24 months in the case of a multiemployer plan). If a planis amended in violation of the preceding sentence, any such waiver, or extension of time, shall not apply to any planyear ending on or after the date on which such amendment is adopted.

(B) ExceptionSubparagraph (A) shall not apply to anyplan amendment which—

(i)

theSecretary of the Treasury 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 of title 26.

(8) Cross reference

For corresponding duties of theSecretary of the Treasury with regard to implementation of title 26, seesection 412(c) of title 26.

(d) Miscellaneous rules

(1) Change in method or year

If the funding method or aplan year for aplan is changed, the change shall take effect only if approved by theSecretary of the Treasury.

(2) Certain retroactive plan amendmentsFor purposes of this section, any amendment applying to aplan year which—

(A)

is adopted after the close of suchplan year but no later than 2½ months after the close of theplan year (or, in the case of a multiemployerplan, no later than 2 years after the close of suchplan year),

(B)

does not reduce theaccrued benefit of any participantdetermined as of the beginning of the first planyear to which the amendment applies, and

(C)

does not reduce theaccrued benefit of any participantdetermined as of the time of adoption except to the extent required by the circumstances,

shall, at the election of theplan administrator, be deemed to have been made on the first day of such planyear. No amendment described in this paragraph which reduces theaccrued benefits of any participantshall take effect unless the plan administratorfiles a notice with the Secretaryof the Treasury notifying him of such amendment and such Secretaryhas 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 Secretaryof the Treasury unless such Secretarydetermines 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 planand that a waiver under subsection (c) (or, in the case of a multiemployer planor a CSEC plan, any extension of the amortization period undersection 1084(d) of this title orsection 1085a(d) of this title) is unavailable or inadequate.

(3) Controlled group

For purposes of this section, the term “controlled group” means any group treated as a single employerunder subsection (b), (c), (m), or (o) ofsection 414 of title 26.

(Pub. L. 93–406, title I, § 302, as added and amendedPub. L. 109–280, title I, § 101(b), title II, § 202(d),Aug. 17, 2006,120 Stat. 784, 885;Pub. L. 110–458, title I, §§ 101(a)(1), 102(b)(1)(A),Dec. 23, 2008,122 Stat. 5093, 5100;Pub. L. 113–97, title I, § 102(b)(1), (2),Apr. 7, 2014,128 Stat. 1115.)

[1] So in original. Probably should be preceded by “section”.

Prior Provisions

A prior section 1082,Pub. L. 93–406, title I, § 302,Sept. 2, 1974,88 Stat. 869;Pub. L. 96–364, title III, § 304(b),Sept. 26, 1980,94 Stat. 1293;Pub. L. 100–203, title IX, §§ 9301(b), 9303(b), (d)(2), 9304(a)(2), (b)(2), (e)(2), 9305(b)(2), 9307(a)(2), (b)(2), (e)(2),Dec. 22, 1987,101 Stat. 1330–332, 1330–337, 1330–342, 1330–344, 1330–346, 1330–349, 1330–352, 1330–356 to 1330–358;Pub. L. 100–647, title II, § 2005(a)(2)(B), (d)(2),Nov. 10, 1988,102 Stat. 3610, 3612;Pub. L. 101–239, title VII, §§ 7881(a)(1)(B), (2)(B), (3)(B), (4)(B), (5)(B), (6)(B), (b)(1)(B), (2)(B), (3)(B), (4)(B), (6)(B)(i), (d)(1)(B), (2), (4), 7891(a)(1), 7892(b), 7894(d)(2), (5),Dec. 19, 1989,103 Stat. 2435–2439, 2445, 2447, 2449, 2450;Pub. L. 101–508, title XII, § 12012(c),Nov. 5, 1990,104 Stat. 1388–572;Pub. L. 103–465, title VII, §§ 761(a)(1)–(9)(A), (10), 762(a), 763(a), 764(a), 768(b),Dec. 8, 1994,108 Stat. 5024–5031, 5033–5036, 5041;Pub. L. 105–34, title XV, § 1521(b), (c)(2), (3)(B), title XVI, § 1604(b)(2)(B),Aug. 5, 1997,111 Stat. 1069, 1070, 1097;Pub. L. 107–16, title VI, §§ 651(b), 661(b),June 7, 2001,115 Stat. 129, 142;Pub. L. 107–147, title IV, §§ 405(b), 411(v)(2),Mar. 9, 2002,116 Stat. 42, 52;Pub. L. 108–218, title I, §§ 101(a)(1)–(3), 102(a), 104(a)(1),Apr. 10, 2004,118 Stat. 596, 597, 599, 604;Pub. L. 109–135, title IV, § 412(x)(2),Dec. 21, 2005,119 Stat. 2638;Pub. L. 109–280, title III, § 301(a)(1), (2),Aug. 17, 2006,120 Stat. 919, related to minimum funding standards, prior to repeal byPub. L. 109–280, title I, § 101(a), (d),Aug. 17, 2006,120 Stat. 784, 789, applicable to planyears beginning after 2007.

Editorial Notes

Amendments

2014—Subsec. (a)(2)(A).Pub. L. 113–97, § 102(b)(2)(M), substituted“single-employer plan(other than a CSEC plan)” for“single-employer plan”.

Subsec. (a)(2)(D).Pub. L. 113–97, § 102(b)(1), added subpar. (D).

Subsec. (b)(1).Pub. L. 113–97, § 102(b)(2)(B), substituted “section 1083(j) of this title or undersection 1085a(f) of this title” for “section 1083(j) of this title”.

Subsec. (c)(1)(A)(i).Pub. L. 113–97, § 102(b)(2)(A), substituted “multiemployer planor a CSEC plan, 10 percent” for “multiemployer plan, 10 percent”.

Subsec. (c)(1)(B)(i).Pub. L. 113–97, § 102(b)(2)(M), substituted“single-employer plan(other than a CSEC plan)” for“single-employer plan”.

Subsec. (c)(1)(B)(iii).Pub. L. 113–97, § 102(b)(2)(C), added cl. (iii).

Subsec. (c)(4)(A)(i).Pub. L. 113–97, § 102(b)(2)(D), substituted “under paragraph (1) or for granting an extension undersection 1085a(d) of this title” for “under paragraph (1)”.

Subsec. (c)(4)(B).Pub. L. 113–97, § 102(b)(2)(E), substituted “waiver under this subsection or an extension under 1085a(d) of this title” for “waiver under this subsection” in introductory provisions.

Subsec. (c)(4)(B)(i)(I).Pub. L. 113–97, § 102(b)(2)(F), substituted “waiver, modification, or extension” for “waiver or modification”.

Subsec. (c)(4)(C).Pub. L. 113–97, § 102(b)(2)(G), substituted “waivers or extensions” for “waivers” in heading.

Subsec. (c)(4)(C)(i)(I).Pub. L. 113–97, § 102(b)(2)(I), substituted “or the accumulated funding deficiency undersection 1085a of this title, whichever is applicable,” for “and” at end.

Subsec. (c)(4)(C)(i)(II).Pub. L. 113–97, § 102(b)(2)(J), substituted “section 1083(e)(2) or 1085a(b)(2)(C) of this title, whichever is applicable, and” for “section 1083(e)(2) of this title,”.

Subsec. (c)(4)(C)(i)(III).Pub. L. 113–97, § 102(b)(2)(K), added subcl. (III).

Subsec. (c)(4)(C)(ii).Pub. L. 113–97, § 102(b)(2)(L), substituted “for waivers or extensions with respect to” for “for waivers of”.

Pub. L. 113–97, § 102(b)(2)(G), substituted “waivers or extensions” for “waivers” in heading.

Subsec. (c)(7)(A).Pub. L. 113–97, § 102(b)(2)(H), substituted “section 1084(d) of this title orsection 1085a(d) of this title” for “section 1084(d) of this title”.

Subsec. (d)(2).Pub. L. 113–97, § 102(b)(2)(H), substituted “section 1084(d) of this title orsection 1085a(d) of this title” for “section 1084(d) of this title” in concluding provisions.

Pub. L. 113–97, § 102(b)(2)(A), substituted “multiemployer planor a CSEC plan” for “multiemployer plan” in concluding provisions.

2008—Subsec. (b)(3).Pub. L. 110–458, § 102(b)(1)(A), substituted “the plan sponsoradopts” for “the planadopts”.

Subsec. (c)(1)(A)(i).Pub. L. 110–458, § 101(a)(1)(A), substituted “the planare” for “the planis”.

Subsec. (c)(7)(A).Pub. L. 110–458, § 101(a)(1)(B), inserted “which reduces the accrued benefitof any participant” after “subsection (d)(2)”.

Subsec. (d)(1).Pub. L. 110–458, § 101(a)(1)(C), struck out “, the valuation date,” after “funding method”.

2006—Subsec. (b)(3).Pub. L. 109–280, § 202(d), added par. (3).

Statutory Notes and Related Subsidiaries

Effective Date of 2014 Amendment

Amendment byPub. L. 113–97 applicable to years beginning afterDec. 31, 2013, seesection 3 of Pub. L. 113–97, set out as a note undersection 401 of Title 26,Internal Revenue Code.

Effective Date of 2008 Amendment

Amendment byPub. L. 110–458 effective as if included in the provisions ofPub. L. 109–280 to which the amendment relates, except as otherwise provided, seesection 112 of Pub. L. 110–458, set out as a note undersection 72 of Title 26,Internal Revenue Code.

Effective Date of 2006 Amendment

Pub. L. 109–280, title II, § 202(f),Aug. 17, 2006,120 Stat. 885, provided that:

“(1) In general.—

The amendments made by this section [enactingsection 1085 of this title and amending this section andsection 1132 of this title] shall apply with respect to planyears beginning after 2007.

“(2) Special rule for certain notices.—

In any case in which aplan’s actuary certifies that it is reasonably expected that a multiemployerplan will be in critical status under section 305(b)(3) of theEmployee Retirement Income Security Act of 1974 [29 U.S.C. 1085(b)(3)], as added by this section, with respect to the first planyear beginning after 2007, the notice required under subparagraph (D) of such section may be provided at any time after the date of enactment [Aug. 17, 2006], so long as it is provided on or before the last date for providing the notice under such subparagraph.

“(3) Special rule for certain restored benefits.—In the case of a multiemployerplan—

“(A)

with respect to which benefits were reduced pursuant to aplan amendment adopted on or afterJanuary 1, 2002, and beforeJune 30, 2005, and

“(B)

which, pursuant to theplan document, the trust agreement, or a formal written communication from theplan sponsor to participantsprovided beforeJune 30, 2005, provided for the restoration of such benefits,

the amendments made by this section shall not apply to such benefit restorations to the extent that any restriction on the providing or accrual of such benefits would otherwise apply by reason of such amendments.”

Effective Date

Pub. L. 109–280, title I, § 101(d),Aug. 17, 2006,120 Stat. 789, provided that:

“The amendments made by this section [enacting this section and repealing formersection 1082 of this title and sections 1083 to 1085, 1085a, 1085b, and 1086 of this title] shall apply to planyears beginning after 2007.”

Regulations

Secretary authorized, effectiveSept. 2, 1974, to promulgate regulations wherever provisions of this subchapter call for the promulgation of regulations, seesection 1031 of this title.

Applicability of Amendments by Subtitles A and B of Title I ofPub. L. 109–280

For special rules on applicability of amendments by subtitles A (§§ 101–108) and B (§§ 111–116) of title I ofPub. L. 109–280 to certain eligible cooperative plans, PBGC settlement plans, and eligible government contractor plans, see sections 104, 105, and 106 ofPub. L. 109–280, set out as notes undersection 401 of Title 26,Internal Revenue Code.

Special Rule for Certain Benefits Funded Under an Agreement Approved by thePension Benefit Guaranty Corporation

For applicability of amendment bysection 202(d) of Pub. L. 109–280 to a multiemployer planthat is a party to an agreement that was approved by thePension Benefit Guaranty Corporation prior toJune 30, 2005, and that increases benefits and provides for certain withdrawal liability rules, seesection 206 of Pub. L. 109–280, set out as a note undersection 412 of Title 26,Internal Revenue Code.

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29 U.S. Code § 1082 - Minimum funding standards

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