26 U.S.C. § 418E
Notwithstanding section 411, in any case in which benefit payments under an insolvent multiemployer plan exceed the resource benefit level, any such payments of benefits which are not basic benefits shall be suspended, in accordance with this section, to the extent necessary to reduce the sum of such payments and the payments of such basic benefits to the greater of the resource benefit level or the level of basic benefits, unless an alternative procedure is prescribed by the Pension Benefit Guaranty Corporation under section 4022A(g)(5) of the Employee Retirement Income Security Act of 1974.
For purposes of this section, for a plan year-
A multiemployer plan is insolvent if the plan's available resources are not sufficient to pay benefits under the plan when due for the plan year, or if the plan is determined to be insolvent under subsection (d).
The term "resource benefit level" means the level of monthly benefits determined under subsections (c)(1) and (3) and (d)(3) to be the highest level which can be paid out of the plan's available resources.
The term "available resources" means the plan's cash, marketable assets, contributions, withdrawal liability payments, and earnings, less reasonable administrative expenses and amounts owed for such plan year to the Pension Benefit Guaranty Corporation under section 4261(b)(2) of the Employee Retirement Income Security Act of 1974.
The term "insolvency year" means a plan year in which a plan is insolvent.
The plan sponsor of a plan in critical status, as described in section 432(b)(2), shall determine in writing the plan's resource benefit level for each insolvency year, based on the plan sponsor's reasonable projection of the plan's available resources and the benefits payable under the plan.
Notwithstanding paragraph (2), if a plan sponsor determines in writing a resource benefit level for a plan year which is below the level of basic benefits, the payment of all benefits other than basic benefits shall be suspended for that plan year.
If, by the end of an insolvency year, the plan sponsor determines in writing that the plan's available resources in that insolvency year could have supported benefit payments above the resource benefit level for that insolvency year, the plan sponsor shall distribute the excess resources to the participants and beneficiaries who received benefit payments from the plan in that insolvency year, in accordance with regulations prescribed by the Secretary.
For purposes of this paragraph, the term "excess resources" means available resources above the amount necessary to support the resource benefit level, but no greater than the amount necessary to pay benefits for the plan year at the benefit levels under the plan.
If, by the end of an insolvency year, any benefit has not been paid at the resource benefit level, amounts up to the resource benefit level which were unpaid shall be distributed to the participants and beneficiaries, in accordance with regulations prescribed by the Secretary, to the extent possible taking into account the plan's total available resources in that insolvency year.
Except as provided in paragraph (4) or (5), a plan is not required to make retroactive benefit payments with respect to that portion of a benefit which was suspended under this section.
As of the end of the first plan year in which a plan is in critical status, as described in section 432(b)(2), and at least every 3 plan years thereafter (unless the plan is no longer in critical status, as described in section 432(b)(2)), the plan sponsor shall compare the value of plan assets for that plan year with the total amount of benefit payments made under the plan for that plan year. Unless the plan sponsor determines that the value of plan assets exceeds 3 times the total amount of benefit payments, the plan sponsor shall determine whether the plan will be insolvent in any of the next 5 plan years. If the plan sponsor makes such a determination that the plan will be insolvent in any of the next 5 plan years, the plan sponsor shall make the comparison under this paragraph at least annually until the plan sponsor makes a determination that the plan will not be insolvent in any of the next 5 plan years.
If, at any time, the plan sponsor of a plan in critical status, as described in section 432(b)(2), reasonably determines, taking into account the plan's recent and anticipated financial experience, that the plan's available resources are not sufficient to pay benefits under the plan when due for the next plan year, the plan sponsor shall make such determination available to interested parties.
The plan sponsor of a plan in critical status, as described in section 432(b)(2), shall determine in writing for each insolvency year the resource benefit level and the level of basic benefits no later than 3 months before the insolvency year.
If the plan sponsor of a plan in critical status, as described in section 432(b)(2), determines under subsection (d)(1) or (2) that the plan may become insolvent (within the meaning of subsection (b)(1)), the plan sponsor shall-
No later than 2 months before the first day of each insolvency year, the plan sponsor of a plan in critical status, as described in section 432(b)(2), shall notify the Secretary, the Pension Benefit Guaranty Corporation, the parties described in section 418A(a)(2), and the plan participants and beneficiaries of the resource benefit level determined in writing for that insolvency year.
In any case in which the plan sponsor anticipates that the resource benefit level for an insolvency year may not exceed the level of basic benefits, the plan sponsor shall notify the Pension Benefit Guaranty Corporation.
Notice required by this subsection shall be given in accordance with regulations prescribed by the Pension Benefit Guaranty Corporation, except that notice to the Secretary shall be given in accordance with regulations prescribed by the Secretary.
The Pension Benefit Guaranty Corporation may prescribe a time other than the time prescribed by this section for the making of a determination or the filing of a notice under this section.
If the plan sponsor of an insolvent plan for which the resource benefit level is above the level of basic benefits anticipates that, for any month in an insolvency year, the plan will not have funds sufficient to pay basic benefits, the plan sponsor may apply for financial assistance from the Pension Benefit Guaranty Corporation under section 4261 of the Employee Retirement Income Security Act of 1974.
A plan sponsor who has determined a resource benefit level for an insolvency year which is below the level of basic benefits shall apply for financial assistance from the Pension Benefit Guaranty Corporation under section 4261 of the Employee Retirement Income Security Act of 1974.
Any amount of any financial assistance from the Pension Benefit Guaranty Corporation to any plan, and any repayment of such amount, shall be taken into account under this subpart in such manner as determined by the Secretary.
26 U.S.C. § 418E
EDITORIAL NOTES
REFERENCES IN TEXTSection 4022A(g)(5) of the Employee Retirement Income Security Act of 1974, referred to in subsec. (a), is classified to section 1322a(g)(5) of Title 29, Labor.Section 4261 of the Employee Retirement Income Security Act of 1974, referred to in subsecs. (b)(3) and (f), is classified to section 1431 of Title 29, Labor.Section 101(f)(1) of the Employee Retirement Income Security Act of 1974, referred to in subsec. (e)(1), is classified to section 1021(f)(1) of Title 29, Labor.
AMENDMENTS2018- Pub. L. 115-141, §401(a) (92), substituted "section 432(b)(2)" for "subsection 432(b)(2)" wherever appearing. Subsec. (d)(1). Pub. L. 115-141, §401(a) (93), substituted "section 432(b)(2)," for "section 432(b)(2),,", "section 432(b)(2))" for "section 432(b)(2),)", and "compare the value of plan assets for that plan year with" for "compare the value of plan assets (determined in accordance with section 418B(b)(3)(B)(ii)) for that plan year with".Subsec. (e)(1)(A). Pub. L. 115-141, §401(a) (94), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: "notify the Secretary, the Pension Benefit Guaranty Corporation, the parties described in section 418A(a)(2), and the plan participants and beneficiaries of that determination, and".2014-Subsec. (c)(1). Pub. L. 113-235, §108(b)(2)(A), substituted "critical status, as described in subsection 432(b)(2)," for "reorganization".Subsec. (c)(2). Pub. L. 113-235, §108(b)(2)(B), designated existing provisions as subpar. (A), struck out "(within the meaning of section 418(b)(6))" after "pay status", and added subpar. (B).Subsec. (d). Pub. L. 113-235, §108(b)(2)(A), substituted "critical status, as described in subsection 432(b)(2)," for "reorganization" wherever appearing.Subsec. (d)(1). Pub. L. 113-235, §108(b)(2)(C)(i), which directed amendment of par. (1) by striking out "(determined in accordance with section 418B(3)(B)(ii))", could not be executed because the phrase "(determined in accordance with section 418B(3)(B)(ii))" did not appear. Subsec. (d)(4). Pub. L. 113-235, §108(b)(2)(C) (ii), added par. (4).Subsec. (e)(1). Pub. L. 113-235, §108(b)(2)(A), substituted "critical status, as described in subsection 432(b)(2)," for "reorganization".Subsec. (e)(1)(A). Pub. L. 113-235, §108(b)(2)(D)(i), which directed substitution of "the parties described in section 101(f)(1) of the Employee Retirement Income Security Act of 1974" for "the corporation, the parties described in section 418A(a)(2), and the plan participants and beneficiaries", could not be executed because the phrase "the corporation, the parties described in section 418A(a)(2), and the plan participants and beneficiaries" did not appear.Subsec. (e)(1)(B). Pub. L. 113-235, §108(b)(2)(D) (ii), substituted "section 101(f)(1) of the Employee Retirement Income Security Act of 1974" for "section 418A(a)(2) and the plan participants and beneficiaries". Subsec. (e)(2). Pub. L. 113-235, §108(b)(2)(A), substituted "critical status, as described in subsection 432(b)(2)," for "reorganization".Subsec. (h). Pub. L. 113-235, §108(b)(2)(E), added subsec. (h). 2006-Subsec. (d)(1). Pub. L. 109-280 substituted "5 plan years" for "3 plan years" the second place it appeared and inserted at end "If the plan sponsor makes such a determination that the plan will be insolvent in any of the next 5 plan years, the plan sponsor shall make the comparison under this paragraph at least annually until the plan sponsor makes a determination that the plan will not be insolvent in any of the next 5 plan years."
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2014 AMENDMENT Amendment by Pub. L. 113-235 applicable with respect to plan years beginning after Dec. 31, 2014, see section 108(c) of div. O of Pub. L. 113-235, set out as an Effective Date of Repeal note under section 418 of this title.
EFFECTIVE DATE OF 2006 AMENDMENT Pub. L. 109-280, §213(b), Aug. 17, 2006, 120 Stat. 918, provided that: "The amendments made by this section [amending this section] shall apply with respect to the determinations made in plan years beginning after 2007."
EFFECTIVE DATESection effective, with respect to each plan, on the first day of the first plan year beginning on or after the earlier of the date on which the last collective-bargaining agreement providing for employer contributions under the plan, which was in effect on Sept. 26, 1980, expires, without regard to extensions agreed to after such date, or 3 years after Sept. 26, 1980, see section 210 of Pub. L. 96-364, set out as a note under section 194A of this title.
- Secretary of the Treasury
- The term "Secretary of the Treasury" means the Secretary of the Treasury, personally, and shall not include any delegate of his.
- Secretary
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- corporation
- The term "corporation" includes associations, joint-stock companies, and insurance companies.
- person
- The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.