PRIA, Government Policy, Made Personal

Summary

Most rules in this part start on January 1, 1975. The Secretary can start making regulations on September 2, 1974. For plans that existed on September 2, 1974, the Secretary may delay some rules (sections 1102; 1103 except 1103(c); 1105 except 1105(a) and (d); and 1110(a)) until not later than January 1, 1976 if delay is needed to change the plan documents and is not harmful to participants. If a plan ended after June 30, 1974 and before January 1, 1975 and section 1321 applied when it ended, the part applies to that plan on September 2, 1974. Rules in sections 1106 and 1107(a) about prohibited transactions do not apply until June 30, 1984 to certain loans, credits, leases, and sales between a plan and a party in interest (someone connected to the plan) that were under binding contracts in effect on July 1, 1974 (or renewals), stayed at least as favorable as arm’s‑length deals, and were not prohibited when made. Some service arrangements are excepted until June 30, 1977 under similar conditions. Sales of property owned by a plan on June 30, 1974 are allowed if the plan must sell to follow section 1107(a) and it gets at least adequate payment. An election (or failure to elect) by a disqualified person under section 2003(c)(1)(B) is treated as if it happened before the effective date for this part (but not for section 1144). These timing rules do not apply to amendments made after September 2, 1974.

Title 29, §1114

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(a)Except as provided in subsections (b), (c), and (d), this part shall take effect on January 1, 1975.

(b)(1)The provisions of this part authorizing the Secretary to promulgate regulations shall take effect on September 2, 1974.

(2)Upon application of a plan, the Secretary may postpone until not later than January 1, 1976, the applicability of any provision of section 1102, 1103 (other than 1103(c)), 1105 (other than 1105(a) and (d)), and 1110(a) of this title, as it applies to any plan in existence on September 2, 1974, if he determines such postponement is (A) necessary to amend the instrument establishing the plan under which the plan is maintained and (B) not adverse to the interest of participants and beneficiaries.

(3)This part shall take effect on September 2, 1974, with respect to a plan which terminates after June 30, 1974, and before January 1, 1975, and to which at the time of termination section 1321 of this title applies.

(c)section 1106 and 1107(a) of this title (relating to prohibited transactions) shall not apply—

(1)until June 30, 1984, to a loan of money or other extension of credit between a plan and a party in interest under a binding contract in effect on July 1, 1974 (or pursuant to renewals of such a contract), if such loan or other extension of credit remains at least as favorable to the plan as an arm’s-length transaction with an unrelated party would be, and if the execution of the contract, the making of the loan, or the extension of credit was not, at the time of such execution, making, or extension, a prohibited transaction (within the meaning of section 503(b) of title 26 or the corresponding provisions of prior law);

(2)until June 30, 1984, to a lease or joint use of property involving the plan and a party in interest pursuant to a binding contract in effect on July 1, 1974 (or pursuant to renewals of such a contract), if such lease or joint use remains at least as favorable to the plan as an arm’s-length transaction with an unrelated party would be and if the execution of the contract was not, at the time of such execution, a prohibited transaction (within the meaning of section 503(b) of title 26 or the corresponding provisions of prior law);

(3)until June 30, 1984, to the sale, exchange or other disposition of property described in paragraph (2) between a plan and a party in interest if—

(A)in the case of a sale, exchange, or other disposition of the property by the plan to the party in interest, the plan receives an amount which is not less than the fair market value of the property at the time of such disposition; and

(B)in the case of the acquisition of the property by the plan, the plan pays an amount which is not in excess of the fair market value of the property at the time of such acquisition;

(4)until June 30, 1977, to the provision of services, to which paragraphs (1), (2), and (3) do not apply between a plan and a party in interest—

(A)under a binding contract in effect on July 1, 1974 (or pursuant to renewals of such contract), or

(B)if the party in interest ordinarily and customarily furnished such services on June 30, 1974, if such provision of services remains at least as favorable to the plan as an arm’s-length transaction with an unrelated party would be and if such provision of services was not, at the time of such provision, a prohibited transaction (within the meaning of section 503(b) of title 26) or the corresponding provisions of prior law; or

(5)the sale, exchange, or other disposition of property which is owned by a plan on June 30, 1974, and all times thereafter, to a party in interest, if such plan is required to dispose of such property in order to comply with the provisions of section 1107(a) of this title (relating to the prohibition against holding excess employer securities and employer real property), and if the plan receives not less than adequate consideration.

(d)Any election, or failure to elect, by a disqualified person under section 2003(c)(1)(B) of this Act shall be treated for purposes of this part (but not for purposes of section 1144 of this title) as an act or omission occurring before the effective date of this part.

(e)The preceding provisions of this section shall not apply with respect to amendments made to this part in provisions enacted after September 2, 1974.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 2003(c)(1)(B) of this Act, referred to in subsec. (d), is section 2003(c)(1)(B) of Pub. L. 93–406, which is set out as an

Savings Provision

s note under section 4975 of Title 26, Internal Revenue Code.

Amendments

1989—Subsec. (c)(2). Pub. L. 101–239, § 7894(e)(6), 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, and substituted “or the corresponding provisions of prior law)” for “) or the corresponding provisions of prior law”. Subsec. (e). Pub. L. 101–239, § 7894(h)(4), added subsec. (e).

Statutory Notes and Related Subsidiaries

Effective Date

of 1989 AmendmentAmendment by Pub. L. 101–239 effective, except as otherwise provided, as if originally included in the provision of the Employee Retirement Income Security Act of 1974, Pub. L. 93–406, to which such amendment relates, see section 7894(i) of Pub. L. 101–239, set out as a note under section 1002 of this title.

§1114 Effective Date