§ 432. Additional funding rules for multiemployer plans in endangered status or critical status

(i) the plan is no longer certified to be in critical or endangered status under paragraphs (1) and (2) of subsection (b), and

(ii) the plan is projected to avoid insolvency under section 418E.

(f) Rules for operation of plan during adoption and rehabilitation period

(1) Compliance with rehabilitation plan

(A) In general A plan may not be amended after the date of the adoption of a rehabilitation plan under subsection (e) so as to be inconsistent with the rehabilitation plan.

(B) Special rules for benefit increases A plan may not be amended after the date of the adoption of a rehabilitation plan under subsection (e) so as to increase benefits, including future benefit accruals, unless the plan actuary certifies that such increase is paid for out of additional contributions not contemplated by the rehabilitation plan, and, after taking into account the benefit increase, the multiemployer plan still is reasonably expected to emerge from critical status by the end of the rehabilitation period on the schedule contemplated in the rehabilitation plan.

(2) Restriction on lump sums and similar benefits

(A) In general Effective on the date the notice of certification of the plan’s critical status for the initial critical year under subsection (b)(3)(D) is sent, and notwithstanding section 411(d)(6), the plan shall not pay—

(i) any payment, in excess of the monthly amount paid under a single life annuity (plus any social security supplements described in the last sentence of section 411(a)(9)), to a participant or beneficiary whose annuity starting date (as defined in section 417(f)(2)) occurs after the date such notice is sent,

(ii) any payment for the purchase of an irrevocable commitment from an insurer to pay benefits, and

(iii) any other payment specified by the Secretary by regulations.

(B) Exception Subparagraph (A) shall not apply to a benefit which under section 411(a)(11) may be immediately distributed without the consent of the participant or to any makeup payment in the case of a retroactive annuity starting date or any similar payment of benefits owed with respect to a prior period.

(3) Special rules for plan adoption period During the period beginning on the date of the certification under subsection (b)(3)(A) for the initial critical year and ending on the date of the adoption of a rehabilitation plan—

(A) the plan sponsor may not accept a collective bargaining agreement or participation agreement with respect to the multiemployer plan that provides for—

(i) a reduction in the level of contributions for any participants,

(ii) a suspension of contributions with respect to any period of service, or

(iii) any new direct or indirect exclusion of younger or newly hired employees from plan participation, and

(B) no amendment of the 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 may be adopted unless the amendment is required as a condition of qualification under part I of subchapter D of chapter 1 or to comply with other applicable law.

(g) Adjustments disregarded in withdrawal liability determination

(1) Benefit reduction Any benefit reductions under subsection (e)(8) or (f), or benefit reductions or suspensions while in critical and declining status under subsection (e)(9), unless the withdrawal occurs more than ten years after the effective date of a benefit suspension by a plan in critical and declining status, shall be disregarded in determining a plan’s unfunded vested benefits for purposes of determining an employer’s withdrawal liability under section 4201 of the Employee Retirement Income Security Act of 1974.

(2) Surcharges Any surcharges under subsection (e)(7) shall be disregarded in determining the allocation of unfunded vested benefits to an employer under section 4211 of the Employee Retirement Income Security Act of 1974 and in determining the highest contribution rate under section 4219(c) of such Act, except for purposes of determining the unfunded vested benefits attributable to an employer under section 4211(c)(4) of such Act or a comparable method approved under section 4211(c)(5) of such Act.

(3) Contribution increases required by funding improvement or rehabilitation plan

(A) In general Any increase in the contribution rate (or other increase in contribution requirements unless due to increased levels of work, employment, or periods for which compensation is provided) that is required or made in order to enable the plan to meet the requirement of the funding improvement plan or rehabilitation plan shall be disregarded in determining the allocation of unfunded vested benefits to an employer under section 4211 of such Act and in determining the highest contribution rate under section 4219(c) of such Act, except for purposes of determining the unfunded vested benefits attributable to an employer under section 4211(c)(4) of such Act or a comparable method approved under section 4211(c)(5) of such Act.

(B) Special rules For purposes of this paragraph, any increase in the contribution rate (or other increase in contribution requirements) shall be deemed to be required or made in order to enable the plan to meet the requirement of the funding improvement plan or rehabilitation plan except for increases in contribution requirements due to increased levels of work, employment, or periods for which compensation is provided or additional contributions are used to provide an increase in benefits, including an increase in future benefit accruals, permitted by subsection (d)(1)(B) or (f)(1)(B).

(4) Emergence from endangered or critical status In the case of increases in the contribution rate (or other increases in contribution requirements unless due to increased levels of work, employment, or periods for which compensation is provided) disregarded pursuant to paragraph (3), this subsection shall cease to apply as of the expiration date of the collective bargaining agreement in effect when the plan emerges from endangered or critical status. Notwithstanding the preceding sentence, once the plan emerges from critical or endangered status, increases in the contribution rate disregarded pursuant to paragraph (3) shall continue to be disregarded in determining the highest contribution rate under section 4219(c) of such Act for plan years during which the plan was in endangered or critical status.

(5) Simplified calculations The Pension Benefit Guaranty Corporation shall prescribe simplified methods for the application of this subsection in determining withdrawal liability and payment amounts under section 4219(c) of such Act.

(h) Expedited resolution of plan sponsor decisions If, within 60 days of the due date for adoption of a funding improvement plan under subsection (c) or a rehabilitation plan under subsection (e), the plan sponsor of a plan in endangered status or a plan in critical status has not agreed on a funding improvement plan or rehabilitation plan, then any member of the board or group that constitutes the plan sponsor may require that the plan sponsor enter into an expedited dispute resolution procedure for the development and adoption of a funding improvement plan or rehabilitation plan.

(i) Nonbargained participation

(1) Both bargained and nonbargained employee-participants In the case of an employer that contributes to a multiemployer plan with respect to both employees who are covered by one or more collective bargaining agreements and employees who are not so covered, if the plan is in endangered status or in critical status, benefits of and contributions for the nonbargained employees, including surcharges on those contributions, shall be determined as if those nonbargained employees were covered under the first to expire of the employer’s collective bargaining agreements in effect when the plan entered endangered or critical status.

(2) Nonbargained employees only In the case of an employer that contributes to a multiemployer plan only with respect to employees who are not covered by a collective bargaining agreement, this section shall be applied as if the employer were the bargaining party, and its participation agreement with the plan were a collective bargaining agreement with a term ending on the first day of the plan year beginning after the employer is provided the schedule or schedules described in subsections (c) and (e).

(j) Definitions; actuarial method For purposes of this section—

(1) Bargaining party The term “bargaining party” means—

(A)

(i) except as provided in clause (ii), an employer who has an obligation to contribute under the plan; or

(ii) in the case of a plan described under section 404(c), or a continuation of such a plan, the association of employers that is the employer settlor of the plan; and

(B) an employee organization which, for purposes of collective bargaining, represents plan participants employed by an employer who has an obligation to contribute under the plan.

(2) Funded percentage The term “funded percentage” means the percentage equal to a fraction—

(A) the numerator of which is the value of the plan’s assets, as determined under section 431(c)(2), and

(B) the denominator of which is the accrued liability of the plan, determined using actuarial assumptions described in section 431(c)(3).

(3) Accumulated funding deficiency The term “accumulated funding deficiency” has the meaning given such term in section 431(a).

(4) Active participant The term “active participant” means, in connection with a multiemployer plan, a participant who is in covered service under the plan.

(5) Inactive participant The term “inactive participant” means, in connection with a multiemployer plan, a participant, or the beneficiary or alternate payee of a participant, who—

(A) is not in covered service under the plan, and

(B) is in pay status under the plan or has a nonforfeitable right to benefits under the plan.

(6) Pay status A person is in pay status under a multiemployer plan if—

(A) at any time during the current plan year, such person is a participant or beneficiary under the plan and is paid an early, late, normal, or disability retirement benefit under the plan (or a death benefit under the plan related to a retirement benefit), or

(B) to the extent provided in regulations of the Secretary, such person is entitled to such a benefit under the plan.

(7) Obligation to contribute The term “obligation to contribute” has the meaning given such term under section 4212(a) of the Employee Retirement Income Security Act of 1974.

(8) Actuarial method Notwithstanding any other provision of this section, the actuary’s determinations with respect to a plan’s normal cost, actuarial accrued liability, and improvements in a plan’s funded percentage under this section shall be based upon the unit credit funding method (whether or not that method is used for the plan’s actuarial valuation).

(9) Plan sponsor For purposes of this section, section 431, and section 4971(g):

(A) In general The term “plan sponsor” means, with respect to any multiemployer plan, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan.

(B) Special rule for section 404(c) plans In the case of a plan described in section 404(c) (or a continuation of such plan), such term means the bargaining parties described in paragraph (1).

(10) Benefit commencement date The term “benefit commencement date” means the annuity starting date (or in the case of a retroactive annuity starting date, the date on which benefit payments begin).

(k) Rules relating to eligible multiemployer plans

(1) Plans applying for special financial assistance In the case of an eligible multiemployer plan which applies for special financial assistance under section 4262 of such Act— 11 Probably means section 4262 of the Employee Retirement Income Security Act of 1974, see References in Text note below.

(A) In general Such application shall be submitted in accordance with the requirements of such section, including any guidance issued thereunder by the Pension Benefit Guaranty Corporation.

(B) Reinstatement of suspended benefits In the case of a plan for which a suspension of benefits has been approved under subsection (e)(9), the application shall describe the manner in which suspended benefits will be reinstated in accordance with paragraph (2)(A) and guidance issued by the Secretary if the plan receives special financial assistance.

(C) Amount of financial assistance

(i) In general In determining the amount of special financial assistance to be specified in its application, an eligible multiemployer plan shall—

(I) use the interest rate used by the plan in its most recently completed certification of plan status before January 1, 2021, provided that such interest rate does not exceed the interest rate limit, and

(II) for other assumptions, use the assumptions that the plan used in its most recently completed certification of plan status before January 1, 2021, unless such assumptions are unreasonable.

(ii) Interest rate limit For purposes of clause (i), the interest rate limit is the rate specified in section 430(h)(2)(C)(iii) (disregarding modifications made under clause (iv) of such section) for the month in which the application for special financial assistance is filed by the eligible multiemployer plan or the 3 preceding months, with such specified rate increased by 200 basis points.

(iii) Changes in assumptions If a plan determines that use of one or more prior assumptions is unreasonable, the plan may propose in its application to change such assumptions, provided that the plan discloses such changes in its application and describes why such assumptions are no longer reasonable. The plan may not propose a change to the interest rate otherwise required under this subsection for eligibility or financial assistance amount.

(D) Plans applying for priority consideration In the case of a plan applying for special financial assistance under rules providing for temporary priority consideration, as provided in paragraph (4)(C), such plan’s application shall be submitted to the Secretary in addition to the Pension Benefit Guaranty Corporation.

(2) Plans receiving special financial assistance In the case of an eligible multiemployer plan receiving special financial assistance under section 4262 of the Employee Retirement Income Security Act of 1974—

(A) Reinstatement of suspended benefits The plan shall—

(i) reinstate any benefits that were suspended under subsection (e)(9) or section 4245(a) of the Employee Retirement Income Security Act of 1974, effective as of the first month in which the effective date for the special financial assistance occurs, for participants and beneficiaries as of such month, and

(ii) provide payments equal to the amount of benefits previously suspended to any participants or beneficiaries in pay status as of the effective date of the special financial assistance, payable, as determined by the plan—

(I) as a lump sum within 3 months of such effective date; or

(II) in equal monthly installments over a period of 5 years, commencing within 3 months of such effective date, with no adjustment for interest.

(B) Restrictions on the use of special financial assistance Special financial assistance received by the plan may be used to make benefit payments and pay plan expenses. Such assistance shall be segregated from other plan assets, and shall be invested by the plan in investment-grade bonds or other investments as permitted by regulations or other guidance issued by the Pension Benefit Guaranty Corporation.

(C) Conditions on plans receiving special financial assistance

(i) In general The Pension Benefit Guaranty Corporation, in consultation with the Secretary, may impose, by regulation or other guidance, reasonable conditions on an eligible multiemployer plan receiving special financial assistance relating to increases in future accrual rates and any retroactive benefit improvements, allocation of plan assets, reductions in employer contribution rates, diversion of contributions and allocation of expenses to other benefit plans, and withdrawal liability.

(ii) Limitation The Pension Benefit Guaranty Corporation shall not impose conditions on an eligible multiemployer plan as a condition of, or following receipt of, special financial assistance relating to—

(I) any prospective reduction in plan benefits (including benefits that may be adjusted pursuant to subsection (e)(8)),

(II) plan governance, including selection of, removal of, and terms of contracts with, trustees, actuaries, investment managers, and other service providers, or

(III) any funding rules relating to the plan.

(D) Assistance disregarded for certain purposes

(i) Funding standards Special financial assistance received by the plan shall not be taken into account for determining contributions required under section 431.

(ii) Insolvent plans If the plan becomes insolvent within the meaning of section 418E after receiving special financial assistance, the plan shall be subject to all rules applicable to insolvent plans.

(E) Ineligibility for suspension of benefits The plan shall not be eligible to apply for a new suspension of benefits under subsection (e)(9)(G).

(3) Eligible multiemployer plan

(A) In general For purposes of this section, a multiemployer plan is an eligible multiemployer plan if—

(i) the plan is in critical and declining status in any plan year beginning in 2020 through 2022,

(ii) a suspension of benefits has been approved with respect to the plan under subsection (e)(9) as of the date of the enactment of this subsection;

(iii) in any plan year beginning in 2020 through 2022, the plan is certified by the plan actuary to be in critical status, has a modified funded percentage of less than 40 percent, and has a ratio of active to inactive participants which is less than 2 to 3, or

(iv) the plan became insolvent within the meaning of section 418E after December 16, 2014, and has remained so insolvent and has not been terminated as of the date of enactment of this subsection.

(B) Modified funded percentage For purposes of subparagraph (A)(iii), the term “modified funded percentage” means the percentage equal to a fraction the numerator of which is current value of plan assets (as defined in section 3(26) of the Employee Retirement Income Security Act of 1974) and the denominator of which is current liabilities (as defined in section 431(c)(6)(D)).

(4) Coordination with pension benefit guaranty corporation In prescribing the application process for eligible multiemployer plans to receive special financial assistance under section 4262 of the Employee Retirement Income Security Act of 1974 and reviewing applications of such plans, the Pension Benefit Guaranty Corporation shall coordinate with the Secretary in the following manner:

(A) In the case of a plan which has suspended benefits under subsection (e)(9)—

(i) in determining whether to approve the application, such corporation shall consult with the Secretary regarding the plan’s proposed method of reinstating benefits, as described in the plan’s application and in accordance with guidance issued by the Secretary, and

(ii) such corporation shall consult with the Secretary regarding the amount of special financial assistance needed based on the projected funded status of the plan as of the last day of the plan year ending in 2051, whether the plan proposes to repay benefits over 5 years or as a lump sum, as required by paragraph (2)(A)(ii), and any other relevant factors, as determined by such corporation in consultation with the Secretary, to ensure the amount of assistance is sufficient to meet such requirement and is sufficient to pay benefits as required in section 4262(j)(1) of such Act.

(B) In the case of any plan which proposes in its application to change the assumptions used, as provided in paragraph (1)(C)(iii), such corporation shall consult with the Secretary regarding such proposed change in assumptions.

(C) If such corporation specifies in regulations or guidance that temporary priority consideration is available for plans which are insolvent within the meaning of section 418E or likely to become so insolvent or for plans which have suspended benefits under subsection (e)(9), or that availability is otherwise based on the funded status of the plan under this section, as permitted by section 4262(d) of such Act, such corporation shall consult with the Secretary regarding any granting of priority consideration to such plans.

(Added Pub. L. 109–280, title II, § 212(a), Aug. 17, 2006, 120 Stat. 899; amended Pub. L. 110–458, title I, § 102(b)(2)(A)–(G), Dec. 23, 2008, 122 Stat. 5101, 5102; Pub. L. 113–235, div. O, title I, §§ 102(b), 103(b), 104(b), 105(b), 106(b), 107(b), 109(b), title II, § 201(b)(1)–(6), Dec. 16, 2014, 128 Stat. 2776, 2778, 2780–2782, 2784, 2790, 2810–2822; Pub. L. 115–141, div. U, title IV, § 401(a)(102)–(107), Mar. 23, 2018, 132 Stat. 1189; Pub. L. 117–2, title IX, § 9704(d), Mar. 11, 2021, 135 Stat. 195.)

Inflation Adjusted Items for Certain Years

For inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table under section 401 of this title.

Editorial Notes

References in Text

The Employee Retirement Income Security Act of 1974, referred to in text, is Pub. L. 93–406, Sept. 2, 1974, 88 Stat. 829. Sections 3, 101, 103, 104, 502, 515, 4004, 4022A, 4201, 4203, 4211, 4212, 4219, 4233, 4245, and 4262 of the Act are classified to sections 1002, 1021, 1023, 1024, 1132, 1145, 1304, 1322a, 1381, 1383, 1391, 1392, 1399, 1413, 1426, and 1432, respectively, of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under section 1001 of Title 29 and Tables.

The enactment of the Pension Protection Act of 2006, referred to in subsec. (e)(4)(B)(i)(II), means the enactment of Pub. L. 109–280, which was approved Aug. 17, 2006.

The date of enactment of the Multiemployer Pension Reform Act of 2014, referred to in subsec. (e)(9)(D)(vii)(III), is the date of enactment of div. O of Pub. L. 113–235, which was approved Dec. 16, 2014.

Section 230 of the Social Security Act, referred to in subsec. (e)(9)(H)(v)(III)(bb), is classified to section 430 of Title 42, The Public Health and Welfare.

The date of enactment of this subsection, referred to in subsec. (k)(3)(A)(ii), (iv), is the date of enactment of Pub. L. 117–2, which was approved Mar. 11, 2021.

Amendments

2021—Subsec. (a)(4). Pub. L. 117–2, § 9704(d)(1), added par. (4).

Subsec. (b)(7). Pub. L. 117–2, § 9704(d)(2), added par. (7).

Subsec. (k). Pub. L. 117–2, § 9704(d)(3), added subsec. (k).

2018—Subsec. (b)(3)(A)(i). Pub. L. 115–141, § 401(a)(102), substituted “in endangered status for such plan year, or would be in endangered status for such plan year but for paragraph (5), whether or not” for “in endangered status for such plan year, whether or not”.

Subsec. (b)(3)(B)(iv), (v). Pub. L. 115–141, § 401(a)(103), redesignated cl. (iv), relating to projections of critical and declining status, as (v).

Subsec. (b)(3)(D)(iv). Pub. L. 115–141, § 401(a)(104), inserted comma after “Labor”.

Subsec. (e)(8)(C)(iii). Pub. L. 115–141, § 401(a)(105), substituted “The Secretary shall” for “the Secretary shall” in concluding provisions.

Subsec. (f)(3). Pub. L. 115–141, § 401(a)(106), amended introductory provisions generally. Prior to amendment, text read as follows: “During the rehabilitation plan adoption period—”.

Subsec. (g)(1). Pub. L. 115–141, § 401(a)(107), substituted “subsection (e)(9)” for “subsection (e)(9))”.

2014—Subsec. (a)(3). Pub. L. 113–235, § 201(b)(1), added par. (3).

Subsec. (b)(1). Pub. L. 113–235, § 104(b)(1)(A), substituted “the plan is not in critical status for the plan year and is not described in paragraph (5),” for “the plan is not in critical status for the plan year”.

Subsec. (b)(3)(A)(i). Pub. L. 113–235, § 201(b)(3), substituted “, whether” for “and whether” and inserted “, and whether or not the plan is or will be in critical and declining status for such plan year” before “, and” at end.

Pub. L. 113–235, § 104(b)(3), which directed insertion of “, or would be in endangered status for such plan year but for paragraph (5),” after “endangered status for a plan year”, could not be executed because the phrase “endangered status for a plan year” did not appear in cl. (i).

Pub. L. 113–235, § 102(b)(2)(A), substituted “or for any of the succeeding 5 plan years, and” for “, and” at end.

Subsec. (b)(3)(B)(i). Pub. L. 113–235, § 102(b)(2)(B)(i), substituted “Except as provided in clause (iv), in making the determinations” for “In making the determinations”.

Subsec. (b)(3)(B)(iv). Pub. L. 113–235, § 201(b)(4), added cl. (iv) relating to projections of critical and declining status.

Pub. L. 113–235, § 102(b)(2)(B)(ii), added cl. (iv) relating to projections relating to critical status in succeeding plan years.

Subsec. (b)(3)(D)(i). Pub. L. 113–235, § 102(b)(3)(A)(ii), inserted at end “In any case in which a plan sponsor elects to be in critical status for a plan year under paragraph (4), the plan sponsor shall notify the Secretary of the Treasury of such election not later than 30 days after the date of such certification or such other time as the Secretary of the Treasury may prescribe by regulations or other guidance.”

Pub. L. 113–235, § 102(b)(3)(A)(i), inserted “or in which a plan sponsor elects to be in critical status for a plan year under paragraph (4)” after “endangered or critical status for a plan year”.

Subsec. (b)(3)(D)(iii). Pub. L. 113–235, § 104(b)(2)(B), added cl. (iii). Former cl. (iii) redesignated (iv).

Subsec. (b)(3)(D)(iv). Pub. L. 113–235, § 104(b)(2)(A), (C), redesignated cl. (iii) as (iv) and substituted “clauses (ii) and (iii)” for “clause (ii)”.

Pub. L. 113–235, § 102(b)(3)(B), added cl. (iv).

Subsec. (b)(3)(D)(v). Pub. L. 113–235, § 104(b)(2)(A), redesignated cl. (iv) as (v).

Subsec. (b)(4). Pub. L. 113–235, § 102(b)(1), added par. (4).

Subsec. (b)(5). Pub. L. 113–235, § 104(b)(1)(B), added par. (5).

Subsec. (b)(6). Pub. L. 113–235, § 201(b)(2), added par. (6).

Subsec. (c)(3)(A)(i)(I). Pub. L. 113–235, § 105(b)(1), substituted “of the first plan year for which the plan is certified to be in endangered status pursuant to paragraph (b)(3)” for “of such period”.

Subsec. (c)(3)(A)(ii). Pub. L. 113–235, § 105(b)(2), substituted “the last plan year” for “any plan year”.

Subsec. (c)(7). Pub. L. 113–235, § 107(b)(1), amended par. (7) generally. Prior to amendment, par. (7) related to imposition of default schedule where failure to adopt funding improvement plan.

Subsec. (d). Pub. L. 113–235, § 106(b), amended subsec. (d) generally. Prior to amendment, subsec. (d) related to rules for operation of plan during adoption and improvement periods.

Subsec. (e)(3)(C). Pub. L. 113–235, § 107(b)(2), amended subpar. (C) generally. Prior to amendment, subpar. (C) related to imposition of default schedule where failure to adopt rehabilitation plan.

Subsec. (e)(4)(B). Pub. L. 113–235, § 103(b), amended subpar. (B) generally. Prior to amendment, subpar. (B) related to emergence of a plan from critical status.

Subsec. (e)(9). Pub. L. 113–235, § 201(b)(5), added par. (9).

Pub. L. 113–235, § 109(b)(1), struck out par. (9) which related to adjustments disregarded in withdrawal liability determination.

Subsec. (f)(3). Pub. L. 113–235, § 109(b)(2)(A), redesignated par. (4) as (3) and struck out former par. (3). Prior to amendment, text of par. (3) read as follows “Any benefit reductions under this subsection shall be disregarded in determining a plan’s unfunded vested benefits for purposes of determining an employer’s withdrawal liability under section 4201 of the Employee Retirement Income Security Act of 1974.”

Subsec. (f)(4). Pub. L. 113–235, § 109(b)(2)(B), which directed amendment of par. (4) as redesignated by section 109(b)(2)(A) of Pub. L. 113–235 by substituting “During the period beginning on the date of the certification under subsection (b)(3)(A) for the initial critical year and ending on the date of the adoption of a rehabilitation plan—” for “During the rehabilitation plan adoption period—”, could not be executed because there was no par. (4) after the amendment by Pub. L. 113–295, § 109(b)(2)(A). See below.

Pub. L. 113–235, § 109(b)(2)(A), redesignated par. (4) as (3).

Subsec. (g). Pub. L. 113–235, § 109(b)(4), added subsec. (g). Former subsec. (g) redesignated (h).

Subsec. (g)(1). Pub. L. 113–235, § 201(b)(6), inserted “, or benefit reductions or suspensions while in critical and declining status under subsection (e)(9)), unless the withdrawal occurs more than ten years after the effective date of a benefit suspension by a plan in critical and declining status,” after “benefit reductions under subsection (e)(8) or (f)”.

Subsecs. (h) to (j). Pub. L. 113–235, § 109(b)(3), redesignated subsecs. (g) to (i) as (h) to (j), respectively.

2008—Subsec. (b)(3)(C). Pub. L. 110–458, § 102(b)(2)(A), substituted “section 101(b)(1)” for “section 101(b)(4)”.

Subsec. (b)(3)(D)(iii). Pub. L. 110–458, § 102(b)(2)(B), substituted “The Secretary, in consultation with the Secretary of Labor” for “The Secretary of Labor”.

Subsec. (c)(3)(A)(ii). Pub. L. 110–458, § 102(b)(2)(C)(i), substituted “section 431(d)” for “section 304(d)”.

Subsec. (c)(7)(A)(ii). Pub. L. 110–458, § 102(b)(2)(C)(ii)(I), substituted “to adopt a contribution schedule with terms consistent with the funding improvement plan and a schedule from the plan sponsor,” for “to agree on changes to contribution or benefit schedules necessary to meet the applicable benchmarks in accordance with the funding improvement plan,”.

Subsec. (c)(7)(B). Pub. L. 110–458, § 102(b)(2)(C)(ii)(II), added subpar. (B), and struck out former subpar. (B). Prior to amendment, text read as follows: “The date specified in this subparagraph is the earlier of the date—

“(i) on which the Secretary of Labor certifies that the parties are at an impasse, or

“(ii) which is 180 days after the date on which the collective bargaining agreement described in subparagraph (A) expires.”

Subsec. (e)(3)(C)(i)(II). Pub. L. 110–458, § 102(b)(2)(D)(i)(I), substituted “to adopt a contribution schedule with terms consistent with the rehabilitation plan and a schedule from the plan sponsor under paragraph (1)(B)(i),” for “contribution or benefit schedules with terms consistent with the rehabilitation plan and the schedule from the plan sponsor under paragraph (1)(B)(i),”.

Subsec. (e)(3)(C)(ii). Pub. L. 110–458, § 102(b)(2)(D)(i)(II), added cl. (ii) and struck out former cl. (ii). Prior to amendment, text read as follows: “The date specified in this clause is the earlier of the date—

“(I) on which the Secretary of Labor certifies that the parties are at an impasse, or

“(II) which is 180 days after the date on which the collective bargaining agreement described in clause (i) expires.”

Subsec. (e)(4)(A)(ii). Pub. L. 110–458, § 102(b)(2)(D)(ii)(I), struck out “the date of” after “in effect on”.

Subsec. (e)(4)(B). Pub. L. 110–458, § 102(b)(2)(D)(ii)(II), substituted “but taking” for “and taking”.

Subsec. (e)(6). Pub. L. 110–458, § 102(b)(2)(D)(iii), substituted “the last sentence of paragraph (1)” for “paragraph (1)(B)(i)” in introductory provisions and “establish” for “established” in concluding provisions.

Subsec. (e)(8)(A)(i). Pub. L. 110–458, § 102(b)(2)(D)(iv)(I), substituted “section 411(d)(6)” for “section 204(g)”.

Subsec. (e)(8)(C)(i)(II). Pub. L. 110–458, § 102(b)(2)(D)(iv)(II), inserted “of the Employee Retirement Income Security Act of 1974” after “section 4212(a)”.

Subsec. (e)(8)(C)(iii). Pub. L. 110–458, § 102(b)(2)(D)(iv)(IV), which directed substitution of “the Secretary” for “the Secretary of Labor” in last sentence, was executed by making the substitution for “The Secretary of Labor”, to reflect the probable intent of Congress.

Subsec. (e)(8)(C)(iii)(I). Pub. L. 110–458, § 102(b)(2)(D)(iv)(III), substituted “the Secretary, in consultation with the Secretary of Labor” for “the Secretary of Labor”.

Subsec. (e)(9)(B). Pub. L. 110–458, § 102(b)(2)(D)(v), substituted “the allocation of unfunded vested benefits to an employer” for “an employer’s withdrawal liability”.

Subsec. (f)(2)(A)(i). Pub. L. 110–458, § 102(b)(2)(E), substituted “section 411(a)(9)” for “411(b)(1)(A)” and inserted at end “to a participant or beneficiary whose annuity starting date (as defined in section 417(f)(2)) occurs after the date such notice is sent,”.

Subsec. (g). Pub. L. 110–458, § 102(b)(2)(F), inserted “under subsection (c)” after “for adoption of a funding improvement plan”.

Subsec. (i)(3). Pub. L. 110–458, § 102(b)(2)(G)(i), substituted “section 431(a)” for “section 412(a)”.

Subsec. (i)(9). Pub. L. 110–458, § 102(b)(2)(G)(ii), added par. (9) and struck out former par. (9). Prior to amendment, text read as follows: “In the case of a plan described under section 404(c), or a continuation of such a plan, the term ‘plan sponsor’ means the bargaining parties described under paragraph (1).”

Statutory Notes and Related Subsidiaries

Effective Date of 2014 Amendment

Pub. L. 113–235, div. O, title I, § 102(c), Dec. 16, 2014, 128 Stat. 2777, provided that: “The amendments made by this section [amending this section and section 1085 of Title 29, Labor] shall apply with respect to plan years beginning after December 31, 2014.”

Pub. L. 113–235, div. O, title I, § 103(c), Dec. 16, 2014, 128 Stat. 2779, provided that: “The amendments made by this section [amending this section and section 1085 of Title 29, Labor] shall apply with respect to plan years beginning after December 31, 2014.”

Pub. L. 113–235, div. O, title I, § 104(c), Dec. 16, 2014, 128 Stat. 2781, provided that: “The amendments made by this section [amending this section and section 1085 of Title 29, Labor] shall apply with respect to plan years beginning after December 31, 2014.”

Pub. L. 113–235, div. O, title I, § 105(c), Dec. 16, 2014, 128 Stat. 2781, provided that: “The amendments made by this section [amending this section and section 1085 of Title 29, Labor] shall apply with respect to plan years beginning after December 31, 2014.”

Pub. L. 113–235, div. O, title I, § 106(c), Dec. 16, 2014, 128 Stat. 2783, provided that: “The amendments made by this section [amending this section and section 1085 of Title 29, Labor] shall apply with respect to plan years beginning after December 31, 2014.”

Pub. L. 113–235, div. O, title I, § 107(c), Dec. 16, 2014, 128 Stat. 2786, provided that: “The amendments made by this section [amending this section and section 1085 of Title 29, Labor] shall apply with respect to plan years beginning after December 31, 2014.”

Pub. L. 113–235, div. O, title I, § 109(c), Dec. 16, 2014, 128 Stat. 2792, provided that: “The amendments made by this section [amending this section and section 1085 of Title 29, Labor] shall apply to benefit reductions and increases in the contribution rate or other required contribution increases that go into effect during plan years beginning after December 31, 2014 and to surcharges the obligation for which accrue on or after December 31, 2014.”

Pub. L. 113–235, div. O, title II, § 201(c), Dec. 16, 2014, 128 Stat. 2822, provided that: “The amendments made by this section [amending this section and sections 1021, 1085, 1303 and 1399 of Title 29, Labor] shall take effect on the date of the enactment of this Act [Dec. 16, 2014].”

Effective Date of 2008 Amendment

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

Effective Date

Section applicable with respect to plan years beginning after 2007, with special rules for certain notices and certain restored benefits, see section 212(e) of Pub. L. 109–280, set out as an Effective Date of 2006 Amendment note under section 412 of this title.

Temporary Delay of Designation of Multiemployer Plans as in Endangered, Critical, or Critical and Declining Status

Pub. L. 117–2, title IX, § 9701, Mar. 11, 2021, 135 Stat. 186, provided that: “(a) In General.—Notwithstanding the actuarial certification under section 305(b)(3) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1085(b)(3)] and section 432(b)(3) of the Internal Revenue Code of 1986, if a plan sponsor of a multiemployer plan elects the application of this section, then, for purposes of section 305 of such Act and section 432 of such Code—“(1) the status of the plan for its first plan year beginning during the period beginning on March 1, 2020, and ending on February 28, 2021, or the next succeeding plan year (as designated by the plan sponsor in such election), shall be the same as the status of such plan under such sections for the plan year preceding such designated plan year, and “(2) in the case of a plan which was in endangered or critical status for the plan year preceding the designated plan year described in paragraph (1), the plan shall not be required to update its plan or schedules under section 305(c)(6) of such Act and section 432(c)(6) of such Code, or section 305(e)(3)(B) of such Act and section 432(e)(3)(B) of such Code, whichever is applicable, until the plan year following the designated plan year described in paragraph (1). “(b) Exception for Plans Becoming Critical During Election.—If—“(1) an election was made under subsection (a) with respect to a multiemployer plan, and “(2) such plan has, without regard to such election, been certified by the plan actuary under section 305(b)(3) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1085(b)(3)] and section 432(b)(3) of the Internal Revenue Code of 1986 to be in critical status for the designated plan year described in subsection (a)(1), then such plan shall be treated as a plan in critical status for such plan year for purposes of applying section 4971(g)(1)(A) of such Code, section 302(b)(3) of such Act [29 U.S.C. 1082(b)(3)] (without regard to the second sentence thereof), and section 412(b)(3) of such Code (without regard to the second sentence thereof). “(c) Election and Notice.—“(1) Election.—An election under subsection (a)—“(A) shall be made at such time and in such manner as the Secretary of the Treasury or the Secretary’s delegate may prescribe and, once made, may be revoked only with the consent of the Secretary, and “(B) if made—“(i) before the date the annual certification is submitted to the Secretary or the Secretary’s delegate under section 305(b)(3) of such Act [29 U.S.C. 1085(b)(3)] and section 432(b)(3) of such Code, shall be included with such annual certification, and “(ii) after such date, shall be submitted to the Secretary or the Secretary’s delegate not later than 30 days after the date of the election. “(2) Notice to participants.—“(A) In general.—Notwithstanding section 305(b)(3)(D) of the Employee Retirement Income Security Act of 1974 and section 432(b)(3)(D) of the Internal Revenue Code of 1986, if, by reason of an election made under subsection (a), the plan is in neither endangered nor critical status—“(i) the plan sponsor of a multiemployer plan shall not be required to provide notice under such sections, and “(ii) the plan sponsor shall provide to the participants and beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corporation, and the Secretary of Labor a notice of the election under subsection (a) and such other information as the Secretary of the Treasury (in consultation with the Secretary of Labor) may require— “(I) if the election is made before the date the annual certification is submitted to the Secretary or the Secretary’s delegate under section 305(b)(3) of such Act and section 432(b)(3) of such Code, not later than 30 days after the date of the certification, and “(II) if the election is made after such date, not later than 30 days after the date of the election. “(B) Notice of endangered status.—Notwithstanding section 305(b)(3)(D) of such Act and section 432(b)(3)(D) of such Code, if the plan is certified to be in critical status for any plan year but is in endangered status by reason of an election made under subsection (a), the notice provided under such sections shall be the notice which would have been provided if the plan had been certified to be in endangered status.”

Temporary Extension of the Funding Improvement and Rehabilitation Periods for Multiemployer Pension Plans in Critical and Endangered Status for 2020 or 2021

Pub. L. 117–2, title IX, § 9702, Mar. 11, 2021, 135 Stat. 188, provided that: “(a) In General.—If the plan sponsor of a multiemployer plan which is in endangered or critical status for a plan year beginning in 2020 or 2021 (determined after application of section 9701) elects the application of this section, then, for purposes of section 305 of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1085] and section 432 of the Internal Revenue Code of 1986, the plan’s funding improvement period or rehabilitation period, whichever is applicable, shall be extended by 5 years. “(b) Definitions and Special Rules.—For purposes of this section—“(1) Election.—An election under this section shall be made at such time, and in such manner and form, as (in consultation with the Secretary of Labor) the Secretary of the Treasury or the Secretary’s delegate may prescribe. “(2) Definitions.—Any term which is used in this section which is also used in section 305 of the Employee Retirement Income Security Act of 1974 and section 432 of the Internal Revenue Code of 1986 shall have the same meaning as when used in such sections. “(c) Effective Date.—This section shall apply to plan years beginning after December 31, 2019.”

Guidance

Pub. L. 113–235, div. O, title II, § 201(b)(7), Dec. 16, 2014, 128 Stat. 2822, provided that: “Not later than 180 days after the date of the enactment of this Act [Dec. 16, 2014], the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, shall publish appropriate guidance to implement section 432(e)(9) of the Internal Revenue Code of 1986.”

Temporary Delay of Designation of Multiemployer Plans as in Endangered or Critical Status

Pub. L. 110–458, title II, § 204, Dec. 23, 2008, 122 Stat. 5118, provided that: “(a) In General.—Notwithstanding the actuarial certification under section 305(b)(3) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1085(b)(3)] and section 432(b)(3) of the Internal Revenue Code of 1986, if a plan sponsor of a multiemployer plan elects the application of this section, then, for purposes of section 305 of such Act and section 432 of such Code—“(1) the status of the plan for its first plan year beginning during the period beginning on October 1, 2008, and ending on September 30, 2009, shall be the same as the status of such plan under such sections for the plan year preceding such plan year, and “(2) in the case of a plan which was in endangered or critical status for the preceding plan year described in paragraph (1), the plan shall not be required to update its plan or schedules under section 305(c)(6) of such Act and section 432(c)(6) of such Code, or section 305(e)(3)(B) of such Act and section 432(e)(3)(B) of such Code, whichever is applicable, until the plan year following the first plan year described in paragraph (1). If section 305 of the Employee Retirement Income Security Act of 1974 and section 432 of the Internal Revenue Code of 1986 did not apply to the preceding plan year described in paragraph (1), the plan actuary shall make a certification of the status of the plan under section 305(b)(3) of such Act and section 432(b)(3) of such Code for the preceding plan year in the same manner as if such sections had applied to such preceding plan year. “(b) Exception for Plans Becoming Critical During Election.—If—“(1) an election was made under subsection (a) with respect to a multiemployer plan, and “(2) such plan has, without regard to such election, been certified by the plan actuary under section 305(b)(3) of such Act [29 U.S.C. 1085(b)(3)] and section 432(b)(3) of such Code to be in critical status for the first plan year described in subsection (a)(1), then such plan shall be treated as a plan in critical status for such plan year for purposes of applying section 4971(g)(1)(A) of such Code, section 302(b)(3) of such Act [29 U.S.C. 1082(b)(3)] (without regard to the second sentence thereof), and section 412(b)(3) of such Code (without regard to the second sentence thereof). “(c) Election and Notice.—“(1) Election.—An election under subsection (a) shall—“(A) be made at such time and in such manner as the Secretary of the Treasury or the Secretary’s delegate may prescribe and, once made, may be revoked only with the consent of the Secretary, and “(B) if the election is made—“(i) before the date the annual certification is submitted to the Secretary or the Secretary’s delegate under section 305(b)(3) of such Act [29 U.S.C. 1085(b)(3)] and section 432(b)(3) of such Code, be included with such annual certification, and “(ii) after such date, be submitted to the Secretary or the Secretary’s delegate not later than 30 days after the date of the election. “(2) Notice to participants.—“(A) In general.—Notwithstanding section 305(b)(3)(D) of such Act and section 431(b)(3)(D) of such Code, if the plan is neither in endangered nor critical status by reason of an election made under subsection (a)—“(i) the plan sponsor of a multiemployer plan shall not be required to provide notice under such sections, and “(ii) the plan sponsor shall provide to the participants and beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corporation, and the Secretary of Labor a notice of the election and such other information as the Secretary of the Treasury (in consultation with the Secretary of Labor) may require— “(I) if the election is made before the date the annual certification is submitted to the Secretary or the Secretary’s delegate under section 305(b)(3) of such Act and section 432(b)(3) of such Code, not later than 30 days after the date of the certification, and “(II) if the election is made after such date, not later than 30 days after the date of the election. “(B) Notice of endangered status.—Notwithstanding section 305(b)(3)(D) of such Act and section 431(b)(3)(D) of such Code, if the plan is certified to be in critical status for any plan year but is in endangered status by reason of an election made under subsection (a), the notice provided under such sections shall be the notice which would have been provided if the plan had been certified to be in endangered status.”

Temporary Extension of the Funding Improvement and Rehabilitation Periods for Multiemployer Pension Plans in Critical and Endangered Status for 2008 or 2009

Pub. L. 110–458, title II, § 205, Dec. 23, 2008, 122 Stat. 5120, provided that: “(a) In General.—If the plan sponsor of a multiemployer plan which is in endangered or critical status for a plan year beginning in 2008 or 2009 (determined after application of section 204 [of Pub. L. 110–458, set out above]) elects the application of this section, then, for purposes of section 305 of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1085] and section 432 of the Internal Revenue Code of 1986—“(1) except as provided in paragraph (2), the plan’s funding improvement period or rehabilitation period, whichever is applicable, shall be 13 years rather than 10 years, and “(2) in the case of a plan in seriously endangered status, the plan’s funding improvement period shall be 18 years rather than 15 years. “(b) Definitions and Special Rules.—For purposes of this section—“(1) Election.—An election under this section shall be made at such time, and in such manner and form, as (in consultation with the Secretary of Labor) the Secretary of the Treasury or the Secretary’s delegate may prescribe. “(2) Definitions.—Any term which is used in this section which is also used in section 305 of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1085] and section 432 of the Internal Revenue Code of 1986 shall have the same meaning as when used in such sections. “(c) Effective Date.—This section shall apply to plan years beginning after December 31, 2007.”

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

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