PRIA, Government Policy, Made Personal

Summary

Plan administrators or employers who sponsor a covered pension plan must tell the corporation within 30 days after they know a "reportable event" happened, unless they already told the corporation about it. The corporation can waive this 30-day rule or let the event be reported in the plan’s annual report. If an employer’s group of plans has more than $50,000,000 in unfunded vested benefits and is less than 90% funded, that employer must also tell the corporation at least 30 days before certain big events (the ones listed as items 9–13). Public companies that file reports under section 13 or 15(d) of the Securities Exchange Act, or their subsidiaries, do not have to give the 30-day advance notice. The corporation can waive the advance notice requirement too. A "reportable event" covers 13 kinds of problems, such as official notices that a plan lost its special plan status, plan changes that cut benefits, big drops in active workers, terminations or funding failures, inability to pay benefits, plan mergers or asset transfers, loss of a controlled-group member, bankruptcy of a sponsor, large owner payments, big dividend or stock redemptions, and transfers of a portion of plan liabilities — plus any other events the corporation names. Key numbers to remember: $10,000 for certain owner distributions, 10% for stock redemptions in 12 months, 3% for liability transfers in 12 months, and all distributions to one participant within 24 months count as one. The Treasury and Labor Departments must also notify the corporation about some of these events or if a plan looks unsafe. Information sent to the corporation under these rules is exempt from public disclosure under section 552, except when needed in legal actions or to Congress.

Title 29, §1343

Labor, Source: USLM XML via OLRC

(a)Notification that event has occurred

Within 30 days after the plan administrator or the contributing sponsor knows or has reason to know that a reportable event described in subsection (c) has occurred, he shall notify the corporation that such event has occurred, unless a notice otherwise required under this subsection has already been provided with respect to such event. The corporation is authorized to waive the requirement of the preceding sentence with respect to any or all reportable events with respect to any plan, and to require the notification to be made by including the event in the annual report made by the plan.

(b)Notification that event is about to occur

(1)The requirements of this subsection shall be applicable to a contributing sponsor if, as of the close of the preceding plan year—

(A)the aggregate unfunded vested benefits (as determined under section 1306(a)(3)(E)(iii) of this title) of plans subject to this subchapter which are maintained by such sponsor and members of such sponsor’s controlled groups (disregarding plans with no unfunded vested benefits) exceed $50,000,000, and

(B)the funded vested benefit percentage for such plans is less than 90 percent.

For purposes of subparagraph (B), the funded vested benefit percentage means the percentage which the aggregate value of the assets of such plans bears to the aggregate vested benefits of such plans (determined in accordance with section 1306(a)(3)(E)(iii) of this title).

(2)This subsection shall not apply to an event if the contributing sponsor, or the member of the contributing sponsor’s controlled group to which the event relates, is—

(A)a person subject to the reporting requirements of section 13 or 15(d) of the Securities Exchange Act of 1934 [15 U.S.C. 78m, 78o(d)], or

(B)a subsidiary (as defined for purposes of such Act [15 U.S.C. 78a et seq.]) of a person subject to such reporting requirements.

(3)No later than 30 days prior to the effective date of an event described in paragraph (9), (10), (11), (12), or (13) of subsection (c), a contributing sponsor to which the requirements of this subsection apply shall notify the corporation that the event is about to occur.

(4)The corporation may waive the requirement of this subsection with respect to any or all reportable events with respect to any contributing sponsor.

(c)Enumeration of reportable events

For purposes of this section a reportable event occurs—

(1)when the Secretary of the Treasury issues notice that a plan has ceased to be a plan described in section 1321(a)(2) of this title, or when the Secretary of Labor determines the plan is not in compliance with subchapter I of this chapter;

(2)when an amendment of the plan is adopted if, under the amendment, the benefit payable with respect to any participant may be decreased;

(3)when the number of active participants is less than 80 percent of the number of such participants at the beginning of the plan year, or is less than 75 percent of the number of such participants at the beginning of the previous plan year;

(4)when the Secretary of the Treasury determines that there has been a termination or partial termination of the plan within the meaning of section 411(d)(3) of title 26, but the occurrence of such a termination or partial termination does not, by itself, constitute or require a termination of a plan under this subchapter;

(5)when the plan fails to meet the minimum funding standards under section 412 of title 26 (without regard to whether the plan is a plan described in section 1321(a)(2) of this title) or under section 1082 of this title;

(6)when the plan is unable to pay benefits thereunder when due;

(7)when there is a distribution under the plan to a participant who is a substantial owner as defined in section 1321(d) of this title if—

(A)such distribution has a value of $10,000 or more;

(B)such distribution is not made by reason of the death of the participant; and

(C)immediately after the distribution, the plan has nonforfeitable benefits which are not funded;

(8)when a plan merges, consolidates, or transfers its assets under section 1058 of this title, or when an alternative method of compliance is prescribed by the Secretary of Labor under section 1030 of this title;

(9)when, as a result of an event, a person ceases to be a member of the controlled group;

(10)when a contributing sponsor or a member of a contributing sponsor’s controlled group liquidates in a case under title 11, or under any similar Federal law or law of a State or political subdivision of a State;

(11)when a contributing sponsor or a member of a contributing sponsor’s controlled group declares an extraordinary dividend (as defined in section 1059(c) of title 26) or redeems, in any 12-month period, an aggregate of 10 percent or more of the total combined voting power of all classes of stock entitled to vote, or an aggregate of 10 percent or more of the total value of shares of all classes of stock, of a contributing sponsor and all members of its controlled group;

(12)when, in any 12-month period, an aggregate of 3 percent or more of the benefit liabilities of a plan covered by this subchapter and maintained by a contributing sponsor or a member of its controlled group are transferred to a person that is not a member of the controlled group or to a plan or plans maintained by a person or persons that are not such a contributing sponsor or a member of its controlled group; or

(13)when any other event occurs that may be indicative of a need to terminate the plan and that is prescribed by the corporation in regulations.

For purposes of paragraph (7), all distributions to a participant within any 24-month period are treated as a single distribution.

(d)Notification to corporation by Secretary of the Treasury

The Secretary of the Treasury shall notify the corporation—

(1)whenever a reportable event described in paragraph (1), (4), or (5) of subsection (c) occurs, or

(2)whenever any other event occurs which the Secretary of the Treasury believes indicates that the plan may not be sound.

(e)Notification to corporation by Secretary of Labor (f) Disclosure exemption

The Secretary of Labor shall notify the corporation—

(1)whenever a reportable event described in paragraph (1), (5), or (8) of subsection (c) occurs, or

(2)whenever any other event occurs which the Secretary of Labor believes indicates that the plan may not be sound.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Securities Exchange Act of 1934, referred to in subsec. (b)(2)(B), is act June 6, 1934, ch. 404, 48 Stat. 881, which is classified principally to chapter 2B (§ 78a et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see section 78a of Title 15 and Tables.

Amendments

2006—Subsec. (c)(7). Pub. L. 109–280 substituted “1321(d)” for “1322(b)(6)” in introductory provisions. 1994—Subsec. (a). Pub. L. 103–465, § 771(a), (e)(1), in first sentence, inserted “or the contributing sponsor” after “administrator”, substituted “subsection (c)” for “subsection (b)”, and inserted before period at end “, unless a notice otherwise required under this subsection has already been provided with respect to such event”, and struck out last sentence which read as follows: “Whenever an employer making contributions under a plan to which section 1321 of this title applies knows or has reason to know that a reportable event has occurred he shall notify the plan administrator immediately.” Subsec. (b). Pub. L. 103–465, § 771(b), added subsec. (b). Former subsec. (b) redesignated (c). Subsec. (c). Pub. L. 103–465, § 771(b), redesignated subsec. (b) as (c). Former subsec. (c) redesignated (d). Subsec. (c)(8) to (13). Pub. L. 103–465, § 771(c), struck out “or” at end of par. (8), added pars. (9) to (13), and struck out former par. (9) which read as follows: “when any other event occurs which the corporation determines may be indicative of a need to terminate the plan.”. Subsecs. (d), (e). Pub. L. 103–465, § 771(b), (e)(1), redesignated subsecs. (c) and (d) as (d) and (e), respectively, and substituted “subsection (c)” for “subsection (b)” in par. (1) of each subsec. Subsec. (f). Pub. L. 103–465, § 771(d), added subsec. (f). 1989—Subsec. (b)(4). Pub. L. 101–239 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.

Statutory Notes and Related Subsidiaries

Effective Date

of 2006 AmendmentAmendment by Pub. L. 109–280 effective Jan. 1, 2006, see section 407(d)(2) of Pub. L. 109–280, set out as a note under section 1321 of this title.

Effective Date

of 1994 AmendmentAmendment by Pub. L. 103–465 effective for events occurring 60 days or more after Dec. 8, 1994, see section 771(f) of Pub. L. 103–465, set out as a note under section 1342 of this title.

Effective Date

of 1989 AmendmentAmendment by Pub. L. 101–239 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 7891(f) of Pub. L. 101–239, set out as a note under section 1002 of this title.

§1343 Reportable Events

Summary

Title 29, §1343

Notes & Related Subsidiaries

Editorial Notes

References in Text

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Effective Date

Citations & Metadata