§1082 — Title 29 Labor | U.S. Code

Summary

Plans must meet a yearly minimum funding test. How a plan meets it depends on the type of plan. For a single‑employer defined benefit plan (not a CSEC plan), the employer must make at least the required contribution. For a single‑employer money purchase plan, the employer must make the contributions the plan calls for. For multiemployer and CSEC plans, the employers must contribute enough so the plan does not end the year with a funding shortfall. The employer(s) must pay the required amounts. If an employer is part of a controlled group, every member of that group is jointly responsible for the payments. For a multiemployer plan in critical status that has a required rehabilitation plan and follows it, the usual single‑employer payment rule does not apply. The Treasury Secretary can give a temporary waiver if an employer (or at least 10% of the contributing employers for a multiemployer or CSEC plan) cannot meet the test without a temporary, substantial business hardship and a waiver is better for participants overall. Any waived shortfall becomes a “waived funding deficiency” and must be paid back over time as the law requires. The Secretary cannot waive an amount that came from an earlier waiver. Hardship factors include operating losses, high unemployment in the business or industry, falling industry sales or profits, and whether the plan will continue only if the waiver is granted. The Secretary may require security from a single‑employer defined benefit plan as a condition of a waiver; that security can be enforced only by the Pension Benefit Guaranty Corporation (PBGC) or at its direction by certain plan sponsors. Before granting such a waiver, the Secretary must notify the PBGC and give it 30 days to comment, and must consider PBGC comments and any written views from employee organizations. A single‑employer plan must apply for a waiver by the 15th day of the 3rd month after the plan year ends. Applicants must notify affected parties about the application and include how well the plan is funded for guaranteed benefits and for all liabilities. While a waiver or extension is in effect, the plan generally cannot adopt amendments that increase liabilities, with limited exceptions. Changes to the funding method or plan year need Treasury approval. An amendment adopted after a plan year may apply if done within 2½ months after that year (2 years for multiemployer plans) and it does not reduce accrued benefits. Controlled group — a group of companies treated as one employer under certain tax rules.

Title 29, §1082

Labor — Source: USLM XML via OLRC

(a)(1)A plan to which this part applies shall satisfy the minimum funding standard applicable to the plan for any plan year.

(2)For 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)(1)Except as provided in paragraph (2), the amount of any contribution required by this section (including any required installments under paragraphs (3) and (4) of section 1083(j) of this title or under section 1085a(f) of this title) shall be paid by the employer responsible for making contributions to or under the plan.

(2)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)Paragraph (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 section 1085 of this title. This paragraph shall only apply if the plan sponsor adopts a rehabilitation plan in accordance with section 1085(e) of this title and complies with the terms of such rehabilitation plan (and any updates or modifications of the plan).

(c)(1)(A)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,

(B)If 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 section 1085a(b)(3)(C) of this title with the amount of the waived funding deficiency and such amount shall be amortized as required under section 1085a(b)(2)(C) of this title.

(C)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)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)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)(A)(i)Except 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 section 1301(a)(15) of this title) to provide security to such plan as a condition for granting or modifying a waiver under paragraph (1) or for granting an extension under section 1085a(d) of this title.

(ii)Any 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 section 1301(a)(13) of this title), or a member of such sponsor’s controlled group (within the meaning of section 1301(a)(14) of this title).

(B)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) 11 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.

(C)(i)The 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,

(ii)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)For purposes of this subparagraph—

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

(II)For 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 section 1083 of this title for the plan year.

(5)(A)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)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).

(6)(A)The 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 section 1301(a)(21) of this title). 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)The Secretary of the Treasury shall consider any relevant information provided by a person to whom notice was given under subparagraph (A).

(7)(A)No 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 section 1084(d) of this title or section 1085a(d) of this title 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)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)For corresponding duties of the Secretary of the Treasury with regard to implementation of title 26, see section 412(c) of title 26.

(d)(1)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)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,

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

Notes & Related Subsidiaries

Prior Provisions

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

Editorial Notes

Amendments

2014—Subsec. (a)(2)(A). Pub. L. 113–97, § 102(b)(2)(M), substituted “single-employer plan (other than a CSEC plan)” for “single-employer plan”. Subsec. (a)(2)(D). Pub. L. 113–97, § 102(b)(1), added subpar. (D). Subsec. (b)(1). Pub. L. 113–97, § 102(b)(2)(B), substituted “section 1083(j) of this title or under section 1085a(f) of this title” for “section 1083(j) of this title”. Subsec. (c)(1)(A)(i). Pub. L. 113–97, § 102(b)(2)(A), substituted “multiemployer plan or a CSEC plan, 10 percent” for “multiemployer plan, 10 percent”. Subsec. (c)(1)(B)(i). Pub. L. 113–97, § 102(b)(2)(M), substituted “single-employer plan (other than a CSEC plan)” for “single-employer plan”. Subsec. (c)(1)(B)(iii). Pub. L. 113–97, § 102(b)(2)(C), added cl. (iii). Subsec. (c)(4)(A)(i). Pub. L. 113–97, § 102(b)(2)(D), substituted “under paragraph (1) or for granting an extension under section 1085a(d) of this title” for “under paragraph (1)”. Subsec. (c)(4)(B). Pub. L. 113–97, § 102(b)(2)(E), substituted “waiver under this subsection or an extension under 1085a(d) of this title” for “waiver under this subsection” in introductory provisions. Subsec. (c)(4)(B)(i)(I). Pub. L. 113–97, § 102(b)(2)(F), substituted “waiver, modification, or extension” for “waiver or modification”. Subsec. (c)(4)(C). Pub. L. 113–97, § 102(b)(2)(G), substituted “waivers or extensions” for “waivers” in heading. Subsec. (c)(4)(C)(i)(I). Pub. L. 113–97, § 102(b)(2)(I), substituted “or the accumulated funding deficiency under section 1085a of this title, whichever is applicable,” for “and” at end. Subsec. (c)(4)(C)(i)(II). Pub. L. 113–97, § 102(b)(2)(J), substituted “section 1083(e)(2) or 1085a(b)(2)(C) of this title, whichever is applicable, and” for “section 1083(e)(2) of this title,”. Subsec. (c)(4)(C)(i)(III). Pub. L. 113–97, § 102(b)(2)(K), added subcl. (III). Subsec. (c)(4)(C)(ii). Pub. L. 113–97, § 102(b)(2)(L), substituted “for waivers or extensions with respect to” for “for waivers of”. Pub. L. 113–97, § 102(b)(2)(G), substituted “waivers or extensions” for “waivers” in heading. Subsec. (c)(7)(A). Pub. L. 113–97, § 102(b)(2)(H), substituted “section 1084(d) of this title or section 1085a(d) of this title” for “section 1084(d) of this title”. Subsec. (d)(2). Pub. L. 113–97, § 102(b)(2)(H), substituted “section 1084(d) of this title or section 1085a(d) of this title” for “section 1084(d) of this title” in concluding provisions. Pub. L. 113–97, § 102(b)(2)(A), substituted “multiemployer plan or a CSEC plan” for “multiemployer plan” in concluding provisions. 2008—Subsec. (b)(3). Pub. L. 110–458, § 102(b)(1)(A), substituted “the plan sponsor adopts” for “the plan adopts”. Subsec. (c)(1)(A)(i). Pub. L. 110–458, § 101(a)(1)(A), substituted “the plan are” for “the plan is”. Subsec. (c)(7)(A). Pub. L. 110–458, § 101(a)(1)(B), inserted “which reduces the accrued benefit of any participant” after “subsection (d)(2)”. Subsec. (d)(1). Pub. L. 110–458, § 101(a)(1)(C), struck out “, the valuation date,” after “funding method”. 2006—Subsec. (b)(3). Pub. L. 109–280, § 202(d), added par. (3).

Statutory Notes and Related Subsidiaries

Effective Date

of 2014 AmendmentAmendment by Pub. L. 113–97 applicable to years beginning after Dec. 31, 2013, see section 3 of Pub. L. 113–97, set out as a note under section 401 of Title 26, Internal Revenue Code.

Effective Date

of 2008 AmendmentAmendment 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 Title 26, Internal Revenue Code.

Effective Date

of 2006 Amendment Pub. L. 109–280, title II, § 202(f), Aug. 17, 2006, 120 Stat. 885, provided that: “(1) In general.—The

Amendments

made by this section [enacting section 1085 of this title and amending this section and section 1132 of this title] shall apply with respect to plan years beginning after 2007. “(2) Special rule for certain notices.—In 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 [29 U.S.C. 1085(b)(3)], 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 [Aug. 17, 2006], so long as it is provided on or before the last date for providing the notice under such subparagraph. “(3) Special rule for certain restored benefits.—In the case of a multiemployer plan—“(A) with respect to which benefits were reduced pursuant to a plan amendment adopted on or after

January 1, 2002, and before

June 30, 2005, and “(B) which, pursuant to the plan document, the trust agreement, or a formal written communication from the plan sponsor to participants provided before

June 30, 2005, provided for the restoration of such benefits, the

Amendments

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

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.”

Effective Date

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

Amendments

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

Regulations

Secretary authorized, effective Sept. 2, 1974, to promulgate

Regulations

wherever provisions of this subchapter call for the promulgation of

Regulations

, see section 1031 of this title. Applicability of

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by Subtitles A and B of Title I of Pub. L. 109–280For special rules on applicability of

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by subtitles A (§§ 101–108) and B (§§ 111–116) of title I of Pub. L. 109–280 to certain eligible cooperative plans, PBGC settlement plans, and eligible government contractor plans, see section 104, 105, and 106 of Pub. L. 109–280, set out as notes under section 401 of Title 26, Internal Revenue Code. Special Rule for Certain Benefits Funded Under an Agreement Approved by the Pension Benefit Guaranty CorporationFor applicability of amendment by section 202(d) of Pub. L. 109–280 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 Title 26, Internal Revenue Code.

§1082 Minimum funding standards

Summary

Title 29, §1082

Notes & Related Subsidiaries

Prior Provisions

Editorial Notes

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Statutory Notes and Related Subsidiaries

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Regulations

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Citations & Metadata