29 U.S.C. § 1342 | Institution of termination proceedings by the corporation

(a)

Authority to institute proceedings to terminate a plan

The corporation may institute proceedings under this section to terminate a plan whenever it determines that—

(1)

section 412 of title 26 section 6212 of title 26 section 4971(a) of title 26 the plan has not met the minimum funding standard required under , or has been notified by the Secretary of the Treasury that a notice of deficiency under has been mailed with respect to the tax imposed under ,

(2)

the plan will be unable to pay benefits when due,

(3)

section 1343(c)(7) of this title the reportable event described in has occurred, or

(4)

the possible long-run loss of the corporation 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 institute proceedings under this section to terminate a single-employer plan whenever the corporation determines that the plan does not have assets available to pay benefits which are currently due under the terms of the plan. The corporation 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 beneficiaries under the plans, and for the employers who maintain such plans (including the requirement for a court decree under subsection (c)). Notwithstanding any other provision of this subchapter, the corporation is authorized to pool assets of terminated plans for purposes of administration, investment, payment of liabilities of all such terminated plans, and such other purposes as it determines to be appropriate in the administration of this subchapter.

(b)

Appointment of trustee

(1)

Whenever the corporation makes a determination under subsection (a) with respect to a plan or is required under subsection (a) to institute proceedings under this section, it may, upon notice to the plan, apply to the appropriate United States district court for the appointment of a trustee to administer the plan with respect to which the determination is made pending the issuance of a decree under subsection (c) ordering the termination of the plan. If within 3 business days after the filing of an application under this subsection, or such other period as the court may order, the administrator of the plan consents to the appointment of a trustee, or fails to show why a trustee should not be appointed, the court may grant the application and appoint a trustee to administer the plan in accordance with its terms until the corporation determines that the plan should be terminated or that termination is unnecessary. The corporation may request that it be appointed as trustee of a plan in any case.

(2)

Notwithstanding any other provision of this subchapter—

(A)

upon the petition of a plan administrator or the corporation, the appropriate United States district court may appoint a trustee in accordance with the provisions of this section if the interests of the plan participants would be better served by the appointment of the trustee, and

(B)

section 1341a(d) of this title upon the petition of the corporation, the appropriate United States district court shall appoint a trustee proposed by the corporation for a multiemployer plan which is in reorganization or to which applies, unless such appointment would be adverse to the interests of the plan participants and beneficiaries in the aggregate.

(3)

The corporation and plan administrator may agree to the appointment of a trustee without proceeding in accordance with the requirements of paragraphs (1) and (2).

(c)

Adjudication that plan must be terminated

(1)

If the corporation is required under subsection (a) of this section to commence proceedings under this section with respect to a plan or, after issuing a notice under this section to a plan administrator, has determined that the plan should be terminated, it may, upon notice to the plan administrator, apply to the appropriate United States district court for a decree adjudicating that the plan must be terminated in order to protect the interests of the participants or to avoid any unreasonable deterioration of the financial condition of the plan or any unreasonable increase in the liability of the fund. If the trustee appointed under subsection (b) disagrees with the determination of the corporation under the preceding sentence he may intervene in the proceeding relating to the application for the decree, or make application for such decree himself. Upon granting a decree for which the corporation or trustee has applied under this subsection the court shall authorize the trustee appointed under subsection (b) (or appoint a trustee if one has not been appointed under such subsection and authorize him) to terminate the plan in accordance with the provisions of this subtitle. If the corporation and the plan administrator agree that a plan should be terminated and agree to the appointment of a trustee without proceeding in accordance with the requirements of this subsection (other than this sentence) the trustee shall have the power described in subsection (d)(1) and, in addition to any other duties imposed on the trustee under law or by agreement between the corporation and the plan administrator, the trustee is subject to the duties described in subsection (d)(3). Whenever a trustee appointed under this subchapter is operating a plan with discretion as to the date upon which final distribution of the assets is to be commenced, the trustee shall notify the corporation at least 10 days before the date on which he proposes to commence such distribution.

(2)

section 1341(c)(2)(A) of this title In the case of a proceeding initiated under this section, the plan administrator shall provide the corporation, upon the request of the corporation, the information described in clauses (ii), (iii), and (iv) of .

(3)

Disclosure of termination information.—

(A)

In general.—

(i)

Information from plan sponsor or administrator .—

A plan sponsor or plan administrator of a single-employer plan that has received a notice from the corporation of a determination that the plan should be terminated under this section shall provide to an affected party any information provided to the corporation in connection with the plan termination.

(ii)

Information from corporation .—

The corporation shall provide a copy of the administrative record, including the trusteeship decision record of a termination of a plan described under clause (i).

(B)

Timing of disclosure .—

The plan sponsor, plan administrator, or the corporation, as applicable, shall provide the information described in subparagraph (A) not later than 15 days after—

(i)

receipt of a request from an affected party for such information; or

(ii)

in the case of information described under subparagraph (A)(i), the provision of any new information to the corporation relating to a previous request by an affected party.

(C)

Confidentiality.—

(i)

In general .—

The plan administrator, the plan sponsor, or the corporation shall not provide information under subparagraph (A) in a form which includes any information that may directly or indirectly be associated with, or otherwise identify, an individual participant or beneficiary.

(ii)

Limitation .—

section 552(b) of title 5 section 1341(c)(2)(D)(iv) of this titleA court may limit disclosure under this paragraph of confidential information described in to authorized representatives (within the meaning of ) of the participants or beneficiaries that agree to ensure the confidentiality of such information.

(D)

Form and manner of information; charges.—

(i)

Form and manner .—

The corporation may prescribe the form and manner of the provision of information under this paragraph, which shall include delivery in written, electronic, or other appropriate form to the extent that such form is reasonably accessible to individuals to whom the information is required to be provided.

(ii)

Reasonable charges .—

A plan sponsor may charge a reasonable fee for any information provided under this paragraph in other than electronic form.

(d)

Powers of trustee

(1)

(A)

A trustee appointed under subsection (b) shall have the power—

(i)

to do any act authorized by the plan or this subchapter to be done by the plan administrator or any trustee of the plan;

(ii)

to require the transfer of all (or any part) of the assets and records of the plan to himself as trustee;

(iii)

to invest any assets of the plan which he holds in accordance with the provisions of the plan, regulations of the corporation, and applicable rules of law;

(iv)

to limit payment of benefits under the plan to basic benefits or to continue payment of some or all of the benefits which were being paid prior to his appointment;

(v)

1 So in original. Probably should be “subtitle E”.

in the case of a multiemployer plan, to reduce benefits or suspend benefit payments under the plan, give appropriate notices, amend the plan, and perform other acts required or authorized by subtitle (E)  to be performed by the plan sponsor or administrator;

(vi)

to do such other acts as he deems necessary to continue operation of the plan without increasing the potential liability of the corporation, if such acts may be done under the provisions of the plan; and

(vii)

to require the plan sponsor, the plan administrator, any contributing or withdrawn employer, and any employee organization representing plan participants to furnish any information with respect to the plan which the trustee may reasonably need in order to administer the plan.

2 See References in Text note below.

If the court to which application is made under subsection (c) dismisses the application with prejudice, or if the corporation fails to apply for a decree under subsection (c), within 30 days after the date on which the trustee is appointed under subsection (b), the trustee shall transfer all assets and records of the plan held by him to the plan administrator within 3 business days after such dismissal or the expiration of such 30-day period, and shall not be liable to the plan or any other person for his acts as trustee except for willful misconduct, or for conduct in violation of the provisions of part 4 of subtitle B of subchapter I of this chapter (except as provided in subsection (d)(1)(A)(v)). The 30-day period referred to in this subparagraph may be extended as provided by agreement between the plan administrator and the corporation or by court order obtained by the corporation.

(B)

If the court to which an application is made under subsection (c) issues the decree requested in such application, in addition to the powers described in subparagraph (A), the trustee shall have the power—

(i)

to pay benefits under the plan in accordance with the requirements of this subchapter;

(ii)

section 1082 of this title to collect for the plan any amounts due the plan, including but not limited to the power to collect from the persons obligated to meet the requirements of or the terms of the plan;

(iii)

to receive any payment made by the corporation to the plan under this subchapter;

(iv)

to commence, prosecute, or defend on behalf of the plan any suit or proceeding involving the plan;

(v)

to issue, publish, or file such notices, statements, and reports as may be required by the corporation or any order of the court;

(vi)

to liquidate the plan assets;

(vii)

section 1345(a) of this title to recover payments under ; and

(viii)

to do such other acts as may be necessary to comply with this subchapter or any order of the court and to protect the interests of plan participants and beneficiaries.

(2)

As soon as practicable after his appointment, the trustee shall give notice to interested parties of the institution of proceedings under this subchapter to determine whether the plan should be terminated or to terminate the plan, whichever is applicable. For purposes of this paragraph, the term “interested party” means—

(A)

the plan administrator,

(B)

each participant in the plan and each beneficiary of a deceased participant,

(C)

each employer who may be subject to liability under section 1362, 1363, or 1364 of this title,

(D)

3 So in original.

each employer who is or may be liable to the plan under section  part 1 of subtitle E,

(E)

section 1392(a) of this title each employer who has an obligation to contribute, within the meaning of , under a multiemployer plan, and

(F)

each employee organization which, for purposes of collective bargaining, represents plan participants employed by an employer described in subparagraph (C), (D), or (E).

(3)

section 704 of title 11 section 1002 of this title section 4975(e) of title 26 Except to the extent inconsistent with the provisions of this chapter, or as may be otherwise ordered by the court, a trustee appointed under this section shall be subject to the same duties as those of a trustee under , and shall be, with respect to the plan, a fiduciary within the meaning of paragraph (21) of and under (except to the extent that the provisions of this subchapter are inconsistent with the requirements applicable under part 4 of subtitle B of subchapter I of this chapter and of such section 4975).

(e)

Filing of application notwithstanding pendency of other proceedings

An application by the corporation under this section may be filed notwithstanding the pendency in the same or any other court of any bankruptcy, mortgage foreclosure, or equity receivership proceeding, or any proceeding to reorganize, conserve, or liquidate such plan or its property, or any proceeding to enforce a lien against property of the plan.

(f)

Exclusive jurisdiction; stay of other proceedings

Upon the filing of an application for the appointment of a trustee or the issuance of a decree under this section, the court to which an application is made shall have exclusive jurisdiction of the plan involved and its property wherever located with the powers, to the extent consistent with the purposes of this section, of a court of the United States having jurisdiction over cases under chapter 11 of title 11. Pending an adjudication under subsection (c) such court shall stay, and upon appointment by it of a trustee, as provided in this section such court shall continue the stay of, any pending mortgage foreclosure, equity receivership, or other proceeding to reorganize, conserve, or liquidate the plan or its property and any other suit against any receiver, conservator, or trustee of the plan or its property. Pending such adjudication and upon the appointment by it of such trustee, the court may stay any proceeding to enforce a lien against property of the plan or any other suit against the plan.

(g)

Venue

An action under this subsection may be brought in the judicial district where the plan administrator resides or does business or where any asset of the plan is situated. A district court in which such action is brought may issue process with respect to such action in any other judicial district.

(h)

Compensation of trustee and professional service personnel appointed or retained by trustee

(1)

The amount of compensation paid to each trustee appointed under the provisions of this subchapter shall require the prior approval of the corporation, and, in the case of a trustee appointed by a court, the consent of that court.

(2)

Trustees shall appoint, retain, and compensate accountants, actuaries, and other professional service personnel in accordance with regulations prescribed by the corporation.

Pub. L. 93–406, title IV, § 4042Sept. 2, 197488 Stat. 1021 Pub. L. 95–598, title III, § 321(a)Nov. 6, 197892 Stat. 2678 Pub. L. 96–364, title IV, § 402(a)(6)Sept. 26, 198094 Stat. 1298 Pub. L. 99–272, title XIApr. 7, 1986100 Stat. 253 Pub. L. 100–203, title IXDec. 22, 1987101 Stat. 1330–363 Pub. L. 101–239, title VIIDec. 19, 1989103 Stat. 2441 Pub. L. 103–465, title VII, § 771(e)(2)Dec. 8, 1994108 Stat. 5043 Pub. L. 109–280, title V, § 506(b)Aug. 17, 2006120 Stat. 947 Pub. L. 110–458, title I, § 105(e)(2)Dec. 23, 2008122 Stat. 5105(, , ; , , ; , , ; , §§ 11010, 11016(c)(10), (11), , , 274; , §§ 9312(c)(3), 9314(b), 9314(b), , , 1330–366, 1330–367; , §§ 7881(g)(7), 7891(a)(1), 7893(e), , , 2445, 2447; , , ; , , ; , , .)

Editorial Notes

References in Text

Pub. L. 96–364, title IV, § 402(a)(6)(E)(ii)Sept. 26, 198094 Stat. 1298Subsection (d)(1)(A)(v), referred to in subsec. (d)(1)(A), was redesignated subsec. (d)(1)(A)(vi) of this section by , , .

Pub. L. 93–406 section 1001 of this titleThis chapter, referred to in subsec. (d)(3), was in the original “this Act”, meaning , known as the Employee Retirement Income Security Act of 1974. Titles I, III, and IV of such Act are classified principally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

Amendments

Pub. L. 110–4582008—Subsec. (c)(3)(C)(i). substituted “, the plan sponsor, or the corporation” for “and plan sponsor” and “subparagraph (A)” for “subparagraph (A)(i)”.

Pub. L. 109–2802006—Subsec. (c). designated first par. as par. (1), redesignated par. (3) as (2), and added a new par. (3).

Pub. L. 103–4651994—Subsec. (a)(3). substituted “1343(c)(7)” for “1343(b)(7)”.

Pub. L. 101–239, § 7893(e)1989—Subsec. (a). , inserted period after “terms of the plan” at end of second sentence.

Pub. L. 101–239, § 7881(g)(7)Pub. L. 100–203, § 9314(b), made technical correction to directory language of , see 1987 Amendment note below.

Pub. L. 101–239, § 7891(a)(1)Subsecs. (a)(1), (d)(3). , substituted “Internal 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.

Pub. L. 100–203, § 9314(b)Pub. L. 101–239, § 7881(g)(7)section 9314(b) of Pub. L. 100–2031987—Subsec. (a). , as amended by , amended last sentence generally. Prior to amendment, last sentence read as follows: “The corporation is authorized to pool the assets of terminated plans for purposes of administration and such other purposes, not inconsistent with its duties to the plan participants and the employer maintaining the plan under this subchapter, as it determines to be required for the efficient administration of this subchapter.” Another amended subsec. (c) of this section, see below.

Pub. L. 100–203, § 9314(b)section 9314(b) of Pub. L. 100–203Subsec. (c)(3). , added par. (3). Another amended subsec. (a) of this section, see above.

Pub. L. 100–203, § 9312(c)(3)section 1349 of this title section 1322 of this titleSubsec. (i). , struck out subsec. (i) which read as follows: “In any case in which a plan is terminated under this section in a termination proceeding initiated by the corporation pursuant to subsection (a), the corporation shall establish a separate trust in connection with the plan for purposes of , unless the corporation determines that all benefit commitments under the plan are benefits guaranteed by the corporation under or that there is no amount of unfunded benefit commitments under the plan.”

Pub. L. 99–272, § 11010(a)(1)(B)Subsec. (a). , in provision following par. (4) inserted provision that the corporation as soon as practicable institute proceedings under this section to terminate a single-employer plan whenever the corporation determines that the plan does not have assets available to pay benefits currently due under the terms of the plan.

Pub. L. 99–272, § 11010(a)(1)(A)Subsec. (a)(2). , substituted “will be” for “is”.

Pub. L. 99–272, § 11010(a)(2)(A)Subsec. (b)(1). , inserted “or is required under subsection (a) to institute proceedings under this section,”.

Pub. L. 99–272, § 11010(a)(2)(B)Subsec. (c). , substituted “is required under subsection (a) of this section to commence proceedings under this section with respect to a plan or, after issuing a notice under this section to a plan administrator,” for “has issued a notice under this section to a plan administrator and (whether or not a trustee has been appointed under subsection (b))”.

Pub. L. 99–272, § 11016(c)(10)section 1082 of this titleSubsec. (d)(1)(B)(ii). , inserted “, including but not limited to the power to collect from the persons obligated to meet the requirements of or the terms of the plan”.

Pub. L. 99–272, § 11016(c)(11)section 704 of title 11 section 75 of title 11Subsec. (d)(3). , substituted “those of a trustee under ” for “a trustee appointed under ”.

Pub. L. 99–272, § 11010(b)Subsec. (i). , added subsec. (i).

Pub. L. 96–364, § 402(a)(6)(A)1980—Subsec. (a). , substituted “terminated plans” for “such small plans”.

Pub. L. 96–364, § 402(a)(6)(B)Subsec. (b). , redesignated existing provisions as par. (1) and added pars. (2) and (3).

Pub. L. 96–364, § 402(a)(6)(C)Subsec. (c). , (D), substituted “unreasonable” for “further” wherever appearing, and “of the participants or” for “of the participants and”.

Pub. L. 96–364, § 402(a)(6)(E)Subsec. (d)(1)(A). , added cls. (v) and (vii) and redesignated former cl. (v) as (vi).

Pub. L. 96–364, § 402(a)(6)(F)section 1344 of this titleSubsec. (d)(1)(B). , (G), in cl. (i) substituted “requirements of this subchapter” for “allocation requirements of ”, and in cl. (iv) struck out exception respecting adverse party status of corporation.

Pub. L. 96–364, § 402(a)(6)(H)Subsec. (d)(2)(D) to (F). –(J), added subpars. (D) to (F).

Pub. L. 95–5981978—Subsec. (f). substituted “of a court of the United States having jurisdiction over cases under chapter 11 of title 11” for “of a court of bankruptcy and of a court in a proceeding under chapter X of the Bankruptcy Act” in first sentence and struck out “bankruptcy,” before “mortgage foreclosure” in second sentence.

Statutory Notes and Related Subsidiaries

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. 109–280Aug. 17, 2006section 506(c) of Pub. L. 109–280 section 1341 of this titleAmendment by applicable to any plan termination under this subchapter with respect to which the notice of intent to terminate, or in the case of a termination by the Pension Benefit Guaranty Corporation, a notice of determination under this section occurs after , with transition rule, see , set out as a note under .

Effective Date of 1994 Amendment

Pub. L. 103–465, title VII, § 771(f)Dec. 8, 1994108 Stat. 5043

section 1343 of this titleDec. 8, 1994“The amendments made by this section [amending this section and ] shall be effective for events occurring 60 days or more after the date of enactment of this Act [].”

, , , provided that:

Effective Date of 1989 Amendment

section 7881(g)(7) of Pub. L. 101–239 Pub. L. 100–203 section 7882 of Pub. L. 101–239 section 401 of Title 26Amendment by effective, except as otherwise provided, as if included in the provision of the Pension Protection Act, , §§ 9302–9346, to which such amendment relates, see , set out as a note under , Internal Revenue Code.

section 7891(a)(1) of Pub. L. 101–239 Pub. L. 99–514 section 7891(f) of Pub. L. 101–239 section 1002 of this titleAmendment by effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, , to which such amendment relates, see , set out as a note under .

section 7893(e) of Pub. L. 101–239 Pub. L. 99–272, title XI section 7893(h) of Pub. L. 101–239 section 1002 of this titleAmendment by effective as if included in the provision of the Single-Employer Pension Plan Amendments Act of 1986, , to which such amendment relates, see , set out as a note under .

Effective Date of 1987 Amendment

section 9312(c)(3) of Pub. L. 100–203 section 1341 of this title section 1341(a)(2) of this titleDec. 17, 1987section 9312(d)(1) of Pub. L. 100–203 section 1301 of this titleAmendment by applicable with respect to plan terminations under with respect to which notices of intent to terminate are provided under after , and plan terminations with respect to which proceedings are instituted by the Pension Benefit Guaranty Corporation under this section after that date, see , as amended, set out as a note under .

Effective Date of 1986 Amendment

Pub. L. 99–272Jan. 1, 1986section 11019 of Pub. L. 99–272 section 1341 of this titleAmendment by effective , with certain exceptions, see , set out as a note under .

Effective Date of 1980 Amendment

Pub. L. 96–364Sept. 26, 1980section 1461(e) of this titleAmendment by effective , except as specifically provided, see .

Effective Date of 1978 Amendment

Pub. L. 95–598Oct. 1, 1979section 402(a) of Pub. L. 95–598 section 101 of Title 11Amendment by effective , see , set out as an Effective Date note preceding , Bankruptcy.