29 U.S.C. § 1082 | Minimum funding standards

(a)

Requirement to meet minimum funding standard

(1)

In general

A plan to which this part applies shall satisfy the minimum funding standard applicable to the plan for any plan year.

(2)

Minimum funding standard

For purposes of paragraph (1), a plan shall be treated as satisfying the minimum funding standard for a plan year if—

(A)

section 1083 of this title in the case of a defined benefit plan which is a single-employer plan (other than a CSEC plan), the employer makes contributions to or under the plan for the plan year which, in the aggregate, are not less than the minimum required contribution determined under for the plan for the plan year,

(B)

in the case of a money purchase plan which is a single-employer plan, the employer makes contributions to or under the plan for the plan year which are required under the terms of the plan,

(C)

section 1084 of this title in the case of a multiemployer plan, the employers make contributions to or under the plan for any plan year which, in the aggregate, are sufficient to ensure that the plan does not have an accumulated funding deficiency under as of the end of the plan year, and

(D)

section 1085a of this title in the case of a CSEC plan, the employers make contributions to or under the plan for any plan year which, in the aggregate, are sufficient to ensure that the plan does not have an accumulated funding deficiency under as of the end of the plan year.

(b)

Liability for contributions

(1)

In general

section 1083(j) of this title section 1085a(f) of this titleExcept as provided in paragraph (2), the amount of any contribution required by this section (including any required installments under paragraphs (3) and (4) of or under ) shall be paid by the employer responsible for making contributions to or under the plan.

(2)

Joint and several liability where employer member of controlled group

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

(3)

Multiemployer plans in critical status

section 1085 of this title section 1085(e) of this titleParagraph (1) shall not apply in the case of a multiemployer plan for any plan year in which the plan is in critical status pursuant to . This paragraph shall only apply if the plan sponsor adopts a rehabilitation plan in accordance with and complies with the terms of such rehabilitation plan (and any updates or modifications of the plan).

(c)

Variance from minimum funding standards

(1)

Waiver in case of business hardship

(A)

In general

If—

(i)

an employer is (or in the case of a multiemployer plan or a CSEC plan, 10 percent or more of the number of employers contributing to or under the plan are) unable to satisfy the minimum funding standard for a plan year 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 of plan participants in the aggregate,

the Secretary 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. The Secretary of the Treasury shall not waive the minimum funding standard with respect to a plan for more than 3 of any 15 (5 of any 15 in the case of a multiemployer plan) consecutive plan years.

(B)

Effects of waiver

If a waiver is granted under subparagraph (A) for any plan year—

(i)

section 1083 of this title section 1083(e) of this title in the case of a single-employer plan (other than a CSEC plan), the minimum required contribution under for the plan year shall be reduced by the amount of the waived funding deficiency and such amount shall be amortized as required under ,

(ii)

section 1084(b)(3)(C) of this title section 1084(b)(2)(C) of this title in the case of a multiemployer plan, the funding standard account shall be credited under with the amount of the waived funding deficiency and such amount shall be amortized as required under , and

(iii)

section 1085a(b)(3)(C) of this title section 1085a(b)(2)(C) of this title in the case of a CSEC plan, the funding standard account shall be credited under with the amount of the waived funding deficiency and such amount shall be amortized as required under .

(C)

Waiver of amortized portion not allowed

The Secretary of the Treasury may not waive under subparagraph (A) any portion of the minimum funding standard under subsection (a) for a plan year which is attributable to any waived funding deficiency for any preceding plan year.

(2)

Determination of business hardship

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

(A)

the employer 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 the plan 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 plan year waived by the Secretary of the Treasury and not satisfied by employer contributions.

(4)

Security for waivers for single-employer plans, consultations

(A)

Security may be required

(i)

In general

section 1301(a)(15) of this title section 1085a(d) of this titleExcept as provided in subparagraph (C), the Secretary of the Treasury may require an employer maintaining a defined benefit plan which is a single-employer plan (within the meaning of ) to provide security to such plan as a condition for granting or modifying a waiver under paragraph (1) or for granting an extension under .

(ii)

Special rules

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

(B)

Consultation with the Pension Benefit Guaranty Corporation

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

Except as provided in subparagraph (C), the Secretary of the Treasury shall, before granting or modifying a waiver under this subsection or an extension under 1085a(d)  of this title with respect to a plan described in subparagraph (A)(i)—

(i)

provide the Pension 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)

section 1002(4) of this title any views of any employee organization (within the meaning of ) representing participants in the plan which are submitted in writing to the Secretary of the Treasury in connection with such application.

section 6103(p) of title 26Information provided to the Corporation under this subparagraph shall be considered tax return information and subject to the safeguarding and reporting requirements of .

(C)

Exception for certain waivers or extensions

(i)

In general

The preceding provisions of this paragraph shall not apply to any plan with respect to which the sum of—

(I)

section 1085a of this title the aggregate unpaid minimum required contributions for the plan year and all preceding plan years, or the accumulated funding deficiency under , whichever is applicable,

(II)

the present value of all waiver amortization installments determined for the plan year and succeeding plan years under section 1083(e)(2) or 1085a(b)(2)(C) of this title, whichever is applicable, and

(III)

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

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 such plan were denied.

(iii)

Unpaid minimum required contribution

For purposes of this subparagraph—

(I)

In general

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

(II)

Ordering rule

section 1083 of this titleFor purposes of subclause (I), any payment to or under a plan for any plan year shall be allocated first to unpaid minimum required contributions for all preceding plan years on a first-in, first-out basis and then to the minimum required contribution under for the plan year.

(5)

Special rules for single-employer plans

(A)

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

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

(B)

Special rule if employer is member of controlled group

In the case of a single-employer plan, if an employer is a member of a controlled 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 such employer, and

(ii)

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

The Secretary of the Treasury may provide that an analysis of a trade or business or industry of a member need not be conducted if such Secretary 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

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

(B)

Consideration of relevant information

The Secretary of the Treasury shall consider any relevant information provided by a person to whom notice was given under subparagraph (A).

(7)

Restriction on plan amendments

(A)

In general

section 1084(d) of this title section 1085a(d) of this titleNo amendment of a plan which increases the liabilities of the plan 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 the plan shall be adopted if a waiver under this subsection or an extension of time under or is in effect with respect to the plan, or if a plan amendment described in subsection (d)(2) which reduces the accrued benefit of any participant has been made at any time in the preceding 12 months (24 months in the case of a multiemployer plan). If a plan is amended in violation of the preceding sentence, any such waiver, or extension of time, shall not apply to any plan year ending on or after the date on which such amendment is adopted.

(B)

Exception

Subparagraph (A) shall not apply to any plan amendment which—

(i)

the Secretary 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

section 412(c) of title 26For corresponding duties of the Secretary of the Treasury with regard to implementation of title 26, see .

(d)

Miscellaneous rules

(1)

Change in method or year

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

(2)

Certain retroactive plan amendments

For purposes of this section, any amendment applying to a plan year which—

(A)

is adopted after the close of such plan year but no later than 2½ months after the close of the plan year (or, in the case of a multiemployer plan, no later than 2 years after the close of such plan year),

(B)

does not reduce the accrued benefit of any participant determined as of the beginning of the first plan year to which the amendment applies, and

(C)

does not reduce the accrued benefit of any participant determined as of the time of adoption except to the extent required by the circumstances,

section 1084(d) of this title section 1085a(d) of this titleshall, at the election of the plan administrator, be deemed to have been made on the first day of such plan year. No amendment described in this paragraph which reduces the accrued benefits of any participant shall take effect unless the plan administrator files a notice with the Secretary of the Treasury notifying him of such amendment and such Secretary has 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 Secretary of the Treasury unless such Secretary determines 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 plan and that a waiver under subsection (c) (or, in the case of a multiemployer plan or a CSEC plan, any extension of the amortization period under or ) is unavailable or inadequate.

(3)

Controlled group

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

Pub. L. 93–406, title I, § 302 Pub. L. 109–280, title I, § 101(b)Aug. 17, 2006120 Stat. 784 Pub. L. 110–458, title IDec. 23, 2008122 Stat. 5093 Pub. L. 113–97, title I, § 102(b)(1)Apr. 7, 2014128 Stat. 1115(, as added and amended , title II, § 202(d), , , 885; , §§ 101(a)(1), 102(b)(1)(A), , , 5100; , (2), , .)

Prior Provisions

Pub. L. 93–406, title I, § 302Sept. 2, 197488 Stat. 869 Pub. L. 96–364, title III, § 304(b)Sept. 26, 198094 Stat. 1293 Pub. L. 100–203, title IXDec. 22, 1987101 Stat. 1330–332 Pub. L. 100–647, title II, § 2005(a)(2)(B)Nov. 10, 1988102 Stat. 3610 Pub. L. 101–239, title VIIDec. 19, 1989103 Stat. 2435–2439 Pub. L. 101–508, title XII, § 12012(c)Nov. 5, 1990104 Stat. 1388–572 Pub. L. 103–465, title VIIDec. 8, 1994108 Stat. 5024–5031 Pub. L. 105–34, title XV, § 1521(b)Aug. 5, 1997111 Stat. 1069 Pub. L. 107–16, title VIJune 7, 2001115 Stat. 129 Pub. L. 107–147, title IVMar. 9, 2002116 Stat. 42 Pub. L. 108–218, title IApr. 10, 2004118 Stat. 596 Pub. L. 109–135, title IV, § 412(x)(2)Dec. 21, 2005119 Stat. 2638 Pub. L. 109–280, title III, § 301(a)(1)Aug. 17, 2006120 Stat. 919 Pub. L. 109–280, title I, § 101(a)Aug. 17, 2006120 Stat. 784A prior section 1082, , , ; , , ; , §§ 9301(b), 9303(b), (d)(2), 9304(a)(2), (b)(2), (e)(2), 9305(b)(2), 9307(a)(2), (b)(2), (e)(2), , , 1330–337, 1330–342, 1330–344, 1330–346, 1330–349, 1330–352, 1330–356 to 1330–358; , (d)(2), , , 3612; , §§ 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), , , 2445, 2447, 2449, 2450; , , ; , §§ 761(a)(1)–(9)(A), (10), 762(a), 763(a), 764(a), 768(b), , , 5033–5036, 5041; , (c)(2), (3)(B), title XVI, § 1604(b)(2)(B), , , 1070, 1097; , §§ 651(b), 661(b), , , 142; , §§ 405(b), 411(v)(2), , , 52; , §§ 101(a)(1)–(3), 102(a), 104(a)(1), , , 597, 599, 604; , , ; , (2), , , related to minimum funding standards, prior to repeal by , (d), , , 789, applicable to plan years beginning after 2007.

Editorial Notes

Amendments

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

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

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

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

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

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

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

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

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

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

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

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

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

Pub. L. 113–97, § 102(b)(2)(L)Subsec. (c)(4)(C)(ii). , 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.

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

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

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

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

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

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

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

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

Statutory Notes and Related Subsidiaries

Effective Date of 2014 Amendment

Pub. L. 113–97Dec. 31, 2013section 3 of Pub. L. 113–97 section 401 of Title 26Amendment by applicable to years beginning after , see , set out as a note under , Internal Revenue Code.

Effective Date of 2008 Amendment

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

Effective Date of 2006 Amendment

Pub. L. 109–280, title II, § 202(f)Aug. 17, 2006120 Stat. 885

“(1)

In general .—

section 1085 of this title section 1132 of this titleThe amendments made by this section [enacting and amending this section and ] shall apply with respect to plan years beginning after 2007.

“(2)

Special rule for certain notices .—

29 U.S.C. 1085(b)(3)Aug. 17, 2006In any case in which a plan’s actuary certifies that it is reasonably expected that a multiemployer plan will be in critical status under section 305(b)(3) of the Employee Retirement Income Security Act of 1974 [], as added by this section, with respect to the first plan year beginning after 2007, the notice required under subparagraph (D) of such section may be provided at any time after the date of enactment [], 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 multiemployer plan—

“(A)

January 1, 2002June 30, 2005 with respect to which benefits were reduced pursuant to a plan amendment adopted on or after , and before , and

“(B)

June 30, 2005 which, pursuant to the plan document, the trust agreement, or a formal written communication from the plan sponsor to participants provided before , 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.”

, , , provided that:

Effective Date

Pub. L. 109–280, title I, § 101(d)Aug. 17, 2006120 Stat. 789

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

, , , provided that:

Regulations

Sept. 2, 1974section 1031 of this titleSecretary authorized, effective , to promulgate regulations wherever provisions of this subchapter call for the promulgation of regulations, see .

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

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

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

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