Subject to the limitations contained in subsection (b), the corporation shall guarantee, in accordance with this section, the payment of all nonforfeitable benefits (other than benefits becoming nonforfeitable solely on account of the termination of a plan) under a single-employer plan which terminates at a time when this subchapter applies to it.
The provisions of this paragraph do not apply to non-basic benefits. The maximum guaranteed monthly benefit shall not be reduced solely on account of the age of a participant in the case of a benefit payable by reason of disability that occurred on or before the termination date, if the participant demonstrates to the satisfaction of the corporation that the Social Security Administration has determined that the participant satisfies the definition of disability under title II or XVI of the Social Security Act [42 U.S.C. 401 et seq.; 1381 et seq.], and the regulations thereunder. If a benefit payable by reason of disability is converted to an early or normal retirement benefit for reasons other than a change in the health of the participant, such early or normal retirement benefit shall be treated as a continuation of the benefit payable by reason of disability and this subparagraph 1 shall continue to apply.
For purposes of clause (iii), the constructive ownership rules of section 1563(e) of title 26 (other than paragraph (3)(C) thereof) shall apply, including the application of such rules under section 414(c) of title 26.
multiplied by the number of years (but not more than 5) the plan or amendment, as the case may be, has been in effect. In determining how many years a plan or amendment has been in effect for purposes of this paragraph, the first 12 months beginning with the date on which the plan or amendment is made or first becomes effective (whichever is later) constitutes one year, and each consecutive period of 12 months thereafter constitutes an additional year. This paragraph does not apply to benefits payable under a plan unless the corporation finds substantial evidence that the plan was terminated for a reasonable business purpose and not for the purpose of obtaining the payment of benefits by the corporation under this subchapter.
The corporation is authorized to guarantee the payment of such other classes of benefits and to establish the terms and conditions under which such other classes of benefits are guaranteed as it determines to be appropriate.
For purposes of subsection (a), a qualified preretirement survivor annuity (as defined in section 1055(e)(1) of this title) with respect to a participant under a terminated single-employer plan shall not be treated as forfeitable solely because the participant has not died as of the termination date.
For purposes of this section, the effective date of a plan amendment described in section 1054(i)(1) of this title shall be the effective date of the plan of reorganization of the employer described in section 1054(i)(1) of this title or, if later, the effective date stated in such amendment.
If a contributing sponsor of a plan has filed or has had filed against such person a petition seeking liquidation or reorganization in a case under title 11 or under any similar Federal law or law of a State or political subdivision, and the case has not been dismissed as of the termination date of the plan, then this section shall be applied by treating the date such petition was filed as the termination date of the plan.
If any plan makes an election under section 402(a)(1) of the Pension Protection Act of 2006 and is terminated effective before the end of the 10-year period beginning on the first day of the first applicable plan year-
1 So in original.
29 U.S.C. § 1322
EDITORIAL NOTES
REFERENCES IN TEXTThe Social Security Act, referred to in subsec. (b)(3), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Titles II, and XVI of the Act are classified generally to subchapters II (§401 et seq.) and XVI (§1381 et seq.), respectively, of chapter 7 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see section 1305 of Title 42 and Tables.Section 402(a)(1) of the Pension Protection Act of 2006, referred to in subsec. (h), is section 402(a)(1) of Pub. L. 109-280which is set out as a note under section 430 of Title 26, Internal Revenue Code.
AMENDMENTS2006-Subsec. (b)(5). Pub. L. 109-280, §407(a), amended par. (5) generally. Prior to amendment, par. (5) related to the amount of benefits guaranteed under this section in the case of a participant in a plan who was covered by the plan as a substantial owner.Subsec. (b)(8). Pub. L. 109-280, §403(a), added par. (8).Subsec. (c)(3)(A). Pub. L. 109-280, §408(b)(1), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: "Except as provided in subparagraph (C), for purposes of this subsection, the term 'recovery ratio' means the average ratio, with respect to prior plan terminations described in subparagraph (B), of-"(i) the value of the recovery of the corporation under section 1362, 1363, or 1364 of this title in connection with such prior terminations, to"(ii) the amount of unfunded benefit liabilities under such plans as of the termination date in connection with such prior terminations."Subsec. (c)(3)(B)(ii). Pub. L. 109-280, §408(a), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: "notices of intent to terminate were provided after December 17, 1987, and during the 5-Federal fiscal year period ending with the fiscal year preceding the fiscal year in which occurs the date of the notice of intent to terminate with respect to the plan termination for which the recovery ratio is being determined."Subsec. (g). Pub. L. 109-280, §404(a), which directed amendment of this section, as amended by Pub. L. 109-280 by adding subsec. (g) at the end, was executed by adding subsec. (g) after subsec. (f) and before subsec. (h) to reflect the probable intent of Congress.Subsec. (h). Pub. L. 109-280, §402(g)(2)(A), added subsec. (h).1994-Subsec. (b)(3). Pub. L. 103-465, §777(a), inserted at end "The maximum guaranteed monthly benefit shall not be reduced solely on account of the age of a participant in the case of a benefit payable by reason of disability that occurred on or before the termination date, if the participant demonstrates to the satisfaction of the corporation that the Social Security Administration has determined that the participant satisfies the definition of disability under title II or XVI of the Social Security Act, and the regulations thereunder. If a benefit payable by reason of disability is converted to an early or normal retirement benefit for reasons other than a change in the health of the participant, such early or normal retirement benefit shall be treated as a continuation of the benefit payable by reason of disability and this subparagraph shall continue to apply."Subsec. (f). Pub. L. 103-465, §766(c), added subsec. (f).1989-Subsec. (a). Pub. L. 101-239, §7894(g)(3)(B), substituted "this subchapter" for "section 1321 of this title".Subsec. (b)(2). Pub. L. 101-239, §7894(g)(1), substituted "60-month" for "60 month".Subsec. (b)(4)(B)(i), (5)(A), (6). Pub. L. 101-239, §7891(a)(1), 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.Subsec. (c)(1). Pub. L. 101-239, §7881(f)(11), substituted "under section 1344(a) of this title. Such payment shall be made to such participant" for "under section 1344(a) of this title, to such participant". Pub. L. 101-239, §7881(f)(4), struck out "(in the case of a deceased participant)" before "to such participant's beneficiaries".Subsec. (c)(3)(B)(ii). Pub. L. 101-239, §7881(f)(5), inserted before period at end ", and during the 5-Federal fiscal year period ending with the fiscal year preceding the fiscal year in which occurs the date of the notice of intent to terminate with respect to the plan termination for which the recovery ratio is being determined". 1987-Subsecs. (c) to (e). Pub. L. 100-203 added subsec. (c) and redesignated former subsecs. (c) and (d) as (d) and (e), respectively.1986-Subsec. (b)(7). Pub. L. 99-272, §11016(c)(8), in provisions following subpar. (B) substituted "12 months beginning with" for "12 months following".Subsec. (d). Pub. L. 99-272, §11016(c)(9), added subsec. (d). 1980-Subsec. (a). Pub. L. 96-364, §403(c)(2), inserted ", in accordance with this section," after "guarantee" and "single-employer" before "plan which", and struck out "the terms of" after "under".Subsec. (b). Pub. L. 96-364, §403(c)(3), (4), in par. (1) substituted "(7)" for "(8)", struck out par. (5) relating to receipt of a life annuity commencing at age 65, and redesignated pars. (6) to (8) as (5) to (7), respectively.
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2006 AMENDMENT Amendment by section 402(g)(2)(A) of Pub. L. 109-280 applicable to plan years ending after Aug. 17, 2006, see section 402(j) of Pub. L. 109-280set out as a Special Funding Rules for Certain Plans Maintained by Commercial Airlines note under section 430 of Title 26, Internal Revenue Code. Pub. L. 109-280, title IV, §403(b), Aug. 17, 2006, 120 Stat. 928, provided that: "The amendment made by this section [amending this section] shall apply to benefits that become payable as a result of an event which occurs after July 26, 2005." Pub. L. 109-280, title IV, §404(c), Aug. 17, 2006, 120 Stat. 928, provided that: "The amendments made this section [amending this section and section 1344 of this title] shall apply with respect to proceedings initiated under title 11, United States Code, or under any similar Federal law or law of a State or political subdivision, on or after the date that is 30 days after the date of enactment of this Act [Aug. 17, 2006]."Amendment by section 407(a) of Pub. L. 109-280applicable to plan terminations under section 1341(c) of this title with respect to which notices of intent to terminate are provided under section 1341(a)(2) of this title after Dec. 31, 2005, and under section 1342 of this title with respect to which notices of determination are provided under such section after such date, see section 407(d)(1) of Pub. L. 109-280 set out as a note under section 1321 of this title. Pub. L. 109-280, title IV, §408(c), Aug. 17, 2006, 120 Stat. 932, provided that: "The amendments made by this section [amending this section and section 1344 of this title] shall apply for any termination for which notices of intent to terminate are provided (or in the case of a termination by the corporation, a notice of determination under section 4042 under the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1342] is issued) on or after the date which is 30 days after the date of enactment of this section [Aug. 17, 2006]."
EFFECTIVE DATE OF 1994 AMENDMENT Amendment by section 766(c) of Pub. L. 103-465 applicable to plan amendments adopted on or after Dec. 8, 1994, see section 766(d) of Pub. L. 103-465 set out as a note under section 401 of Title 26, Internal Revenue Code. Pub. L. 103-465, title VII, §777(b), Dec. 8, 1994, 108 Stat. 5049, provided that: "The amendment made by this section [amending this section] shall be effective for plan terminations under section 4041(c) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1341(c)] with respect to which notices of intent to terminate are provided under section 4041(a)(2) of such Act [29 U.S.C. 1342], or under section 4042 of such Act with respect to which proceedings are instituted by the corporation, on or after the date of enactment of this Act [Dec. 8, 1994]."
EFFECTIVE DATE OF 1989 AMENDMENT Amendment by section 7881(f)(4), (5), (11) of Pub. L. 101-239effective, except as otherwise provided, as if included in the provision of the Pension Protection Act, Pub. L. 100-203, §§9302 - 9346, to which such amendment relates, see section 7882 of Pub. L. 101-239 set out as a note under section 401 of Title 26, Internal Revenue Code.Amendment by section 7891(a)(1) of 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.Amendment by section 7894(g)(1), (3)(B) of 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.
EFFECTIVE DATE OF 1987 AMENDMENT Amendment by Pub. L. 100-203 applicable with respect to plan terminations under section 1341 of this title with respect to which notices of intent to terminate are provided under section 1341(a)(2) of this title after Dec. 17, 1987, and plan terminations with respect to which proceedings are instituted by the Pension Benefit Guaranty Corporation under section 1342 of this title after that date, see section 9312(d)(1) of Pub. L. 100-203 as amended, set out as a note under section 1301 of this title.
EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99-272 effective Jan. 1, 1986, with certain exceptions, see section 11019 of Pub. L. 99-272 set out as a note under section 1341 of this title.
EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96-364 effective Sept. 26, 1980, except as specifically provided, see section 1461(e) of this title.
TRANSITIONAL RULE REGARDING AMENDMENTS BY SECTION 9312 OF PUB. L. 100-203Pub. L. 100-203, title IX, §9312(b)(3)(B), Dec. 22, 1987, 101 Stat. 1330-363, as amended by Pub. L. 101-239, title VII, §7881(f)(1), (6), Dec. 19, 1989, 103 Stat. 2440, provided that:"(i) IN GENERAL.-In the case of any plan termination to which the amendments made by this section [amending sections 1301, 1305, 1322, 1341, 1342, 1349, 1362, 1364, and 1368 of this title and repealing section 1349 of this title] apply and with respect to which notices of intent to terminate were provided on or before December 17, 1990- "(I) subparagraph (A) of section 4022(c)(3) of ERISA [29 U.S.C. 1322(c)(3)(A)] (as amended by this paragraph) shall not apply, and "(II) subparagraph (C) of section 4022(c)(3) of ERISA (as so amended) shall apply irrespective of the outstanding amount of benefit liabilities under the plan."(ii) [Repealed. Pub. L. 101-239, title VII, §7881(f)(6), Dec. 19, 1989, 103 Stat. 2440.]"