§1202 Procedures with Respect to Continued Compliance with Internal Revenue Requirements Relating to Participation, Vesting, and Funding Standards

Summary

The Treasury Secretary must tell the Labor Secretary when Treasury starts a review or issues a preliminary notice that a retirement plan or trust might be disqualified for not meeting participation or vesting rules (sections 410(a) and 411). Treasury cannot make a final finding that the plan fails those rules until 60 days after telling Labor, unless collecting a tax is in danger. Treasury can extend that 60-day period to give Labor time to get the plan into compliance. Labor usually must not use its own enforcement process for these plan-wide participation or vesting problems and should send general complaints to Treasury instead, except when the issue is about a person’s individual benefit. Before sending a deficiency notice for the funding tax under section 4971, Treasury must notify Labor and give Labor a chance to comment. Treasury may waive the tax under section 4971(b) in proper cases. If Labor or the Pension Benefit Guaranty Corporation asks in writing, Treasury must quickly investigate whether the tax should apply to an employer. Treasury’s rules under sections 410(a), 411, and 412 also apply to similar standards in other parts of the law, and Labor must not make conflicting rules. Labor and the PBGC must let Treasury review briefs in court cases about these standards, and Treasury may join those cases. Treasury must consult with the PBGC before publishing certain proposed or final regulations (including those under sections 1421–1426).