USC - Minimum funding standards

View all text of Part 3 [§ 1081 - § 1086]

§ 1082. Minimum funding standards

(a) Requirement to meet minimum funding standard

(1) In general

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

(A) 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 section 1083 of this title 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) 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 section 1084 of this title as of the end of the plan year, and

(D) 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 section 1085a of this title as of the end of the plan year.

(b) Liability for contributions

(1) In general

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

(3) Multiemployer plans in critical status

(1) Waiver in case of business hardship

(A) In generalIf—

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

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

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

(iii) in the case of a CSEC plan, the funding standard account shall be credited under

(2) Determination of business hardshipFor purposes of this subsection, the factors taken into account in determining temporary substantial business hardship (substantial business hardship in the case of a 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,

(D) it is reasonable to expect that the plan will be continued only if the waiver is granted.

(3) Waived funding deficiency

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

(A) Security may be required

(i) In general

(ii) Special rules

(B) Consultation with the Pension Benefit Guaranty CorporationExcept 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) 1

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

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

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

(i) In generalThe preceding provisions of this paragraph shall not apply to any plan with respect to which the sum of—(I) the aggregate unpaid minimum required contributions for the plan year and all preceding plan years, or the accumulated funding deficiency under section 1085a of this title, 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) the total amounts not paid by reason of an extension in effect under section 1085a(d) of this title,

is less than $1,000,000.

(ii) Treatment of waivers or extensions for which applications are pending

(iii) Unpaid minimum required contributionFor purposes of this subparagraph—(I) In general(II) Ordering rule

(5) Special rules for single-employer plans

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

(B) Special rule if employer is member of controlled groupIn 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

(B) Consideration of relevant information

(7) Restriction on plan amendments

(A) In general

(B) ExceptionSubparagraph (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

(d) Miscellaneous rules

(1) Change in method or year

(2) Certain retroactive plan amendmentsFor 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,

shall, 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 section 1084(d) of this title or section 1085a(d) of this title) is unavailable or inadequate.

(3) Controlled group

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