§432. Additional funding rules for multiemployer plans in endangered status or critical status — Inbound Citations
26 U.S.C. § 432
Cited by 23 provisions in release 119-102.
Citations to 26 U.S.C. § 432 as a whole
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(A) no tax shall be imposed under this section for a taxable year with respect to a multiemployer plan if, for the plan years ending with or within the taxable year, the plan is in critical status pursuant to section 432, and
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(B) any tax imposed under this subsection for a taxable year with respect to a multiemployer plan if, for the plan years ending with or within the taxable year, the plan is in endangered status pursuant to section 432 shall be in addition to any other tax imposed by this section.
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(A) If any funding improvement plan or rehabilitation plan in effect under section 432 with respect to a multiemployer plan requires an employer to make a contribution to the plan, there is hereby imposed a tax on each failure of the employer to make the required contribution within the time required under such plan.
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(6) For purposes of this subsection, any term used in this subsection which is also used in section 432 shall have the meaning given such term by section 432.
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(I) whether the plan is in endangered or critical status under section 1085 of title 29 and section 432 of title 26 as of the first day of such plan year;
Citations to §432(b)(2)
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(1) 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.
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(1) 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.
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(2) 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.
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(3) 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.
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(1) 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—(A) notify the Secretary and the parties described in section 101(f)(1) of the Employee Retirement Income Security Act of 1974 of that determination, and(B) inform the parties described in section 101(f)(1) of the Employee Retirement Income Security Act of 1974 that if insolvency occurs certain benefit payments will be suspended, but that basic benefits will continue to be paid.
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(2) 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.
Citations to §432(b)(3)(A)(ii)
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(ii) has received a certification under section 432(b)(3)(A)(ii) for 3 consecutive plan years that the plan is not making the scheduled progress in meeting its requirements under the rehabilitation plan,
Citations to §432(e)
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(3) Paragraph (1) shall not apply in the case of a multiemployer plan for any plan year in which the plan is in critical status pursuant to section 432. This paragraph shall only apply if the plan sponsor adopts a rehabilitation plan in accordance with section 432(e) and complies with such rehabilitation plan (and any modifications of the plan).
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(i) fails to meet the requirements of section 432(e) by the end of the rehabilitation period, or
Citations to §432(e)(1)(A)
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(ii) the amount equal to $1,100 multiplied by the number of days during the taxable year which are included in the period beginning on the day following the close of the 240-day period described in section 432(e)(1)(A) and ending on the day on which the rehabilitation plan is adopted.
Citations to §432(e)(3)
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(i) the Plan shall be treated as if it were in critical status for purposes of sections 412(b)(3), 432(e)(3), and 4971(g)(1)(A) of title 26 and sections 1082(b)(3) and 1085(e)(3) of title 29;
Citations to §432(e)(9)
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(h) Subsections (a) and (c) shall not apply to a plan that, for the plan year, is operating under section 432(e)(9), regarding benefit suspensions by certain multiemployer plans in critical and declining status.
Citations to §432(j)(2)
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(B) The transfers described in subparagraph (A) shall cease as of the first fiscal year beginning after the first plan year for which the funded percentage (as defined in section 432(j)(2) of title 26) of the 1974 UMWA Pension Plan is at least 100 percent.
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(II) the funded percentage (as defined in section 432(j)(2) of title 26) as of the first day of such plan year, and the underlying actuarial value of assets and liabilities taken into account in determining such percentage;
Citations to §432(j)(9)
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(ii) For purposes of clause (i), the term “plan sponsor” has the meaning given such term by section 432(j)(9).
Citations to §432(k)(1)(B)
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(1) reinstates any benefits that were suspended under section 1085(e)(9) of this title or section 1426(a) of this title in accordance with guidance issued by the Secretary of the Treasury pursuant to section 432(k)(1)(B) of title 26, effective as of the first month in which the effective date for the special financial assistance occurs, for participants and beneficiaries as of such month; and
Citations to §432(k)(1)(D)
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(f) Any application by a plan for special financial assistance under this section shall be submitted to the corporation (and, in the case of a plan to which section 432(k)(1)(D) of title 26 applies, to the Secretary of the Treasury) no later than December 31, 2025, and any revised application for special financial assistance shall be submitted no later than December 31, 2026.