§1085. Additional funding rules for multiemployer plans in endangered status or critical status — Inbound Citations
29 U.S.C. § 1085
Cited by 49 provisions in release 119-102.
Citations to 29 U.S.C. § 1085 as a whole
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(II) in the case of a multiemployer plan, a statement, for the plan year to which the notice relates and the preceding 2 plan years, of the value of the plan assets (determined both in the same manner as under section 1084 of this title and under the rules of subclause (I)(aa)) and the value of the plan liabilities (determined in the same manner as under section 1084 of this title except that the method specified in section 1085(i)(8)1 of this title shall be used),
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(v) in the case of a multiemployer plan, whether the plan was in critical or endangered status under section 1085 of this title for such plan year and, if so—(I) a statement describing how a person may obtain a copy of the plan’s funding improvement or rehabilitation plan, as appropriate, adopted under section 1085 of this title and the actuarial and financial data that demonstrate any action taken by the plan toward fiscal improvement, and(II) a summary of any funding improvement plan, rehabilitation plan, or modification thereof adopted under section 1085 of this title during the plan year to which the notice relates,
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(I) a statement describing how a person may obtain a copy of the plan’s funding improvement or rehabilitation plan, as appropriate, adopted under section 1085 of this title and the actuarial and financial data that demonstrate any action taken by the plan toward fiscal improvement, and
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(II) a summary of any funding improvement plan, rehabilitation plan, or modification thereof adopted under section 1085 of this title during the plan year to which the notice relates,
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(vi) in the case of a multiemployer plan, whether the plan was in critical and declining status under section 1085 of this title for such plan year and, if so—(I) the projected date of insolvency;(II) a clear statement that such insolvency may result in benefit reductions; and(III) a statement describing whether the plan sponsor has taken legally permitted actions to prevent insolvency.2
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(K) in the case of a plan which was in critical or endangered status under section 1085 of this title for a plan year, the latest funding improvement or rehabilitation plan, and the contribution schedules applicable with respect to such funding improvement or rehabilitation plan (other than a contribution schedule applicable to a specific employer).
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(F) Whether the plan used the shortfall funding method (as such term is used in section 1085 of this title) for such plan year and, if so, the amount of the difference between the minimum required contribution for the year and the minimum required contribution which would have been required without regard to the use of such method, and the period of use of such method.
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(G) Whether the plan was in critical or endangered status under section 1085 of this title for such plan year, and if so, a summary of any funding improvement or rehabilitation plan (or modification thereto) adopted during the plan year, and the funded percentage of the plan.
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(E) whether the plan was in critical or endangered status under section 1085 of this title for such plan year and, if so, include—(i) a list of the actions taken by the plan to improve its funding status; and(ii) a statement describing how a person may obtain a copy of the plan’s funding improvement or rehabilitation plan, as applicable, adopted under section 1085 of this title and the actuarial and financial data that demonstrate any action taken by the plan toward fiscal improvement;
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(ii) a statement describing how a person may obtain a copy of the plan’s funding improvement or rehabilitation plan, as applicable, adopted under section 1085 of this title and the actuarial and financial data that demonstrate any action taken by the plan toward fiscal improvement;
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(ii) used the shortfall funding method (as such term is used in section 1085 of this title) for such plan year; and
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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 1085 of this title. This paragraph shall only apply if the plan sponsor adopts a rehabilitation plan in accordance with section 1085(e) of this title and complies with the terms of such rehabilitation plan (and any updates or modifications of the plan).
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(D) in the case of a plan year for which the accumulated funding deficiency is determined under the funding standard account if such plan year follows a plan year for which such deficiency was determined under the alternative minimum funding standard under section 1085 of this title (as in effect on the day before August 17, 2006), the excess (if any) of any debit balance in the funding standard account (determined without regard to this subparagraph) over any debit balance in the alternative minimum funding standard account.
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(10) in the case of a multiemployer plan that has been certified by the actuary to be in endangered or critical status under section 1085 of this title, if the plan sponsor—(A) has not adopted a funding improvement or rehabilitation plan under that section by the deadline established in such section, or(B) fails to update or comply with the terms of the funding improvement or rehabilitation plan in accordance with the requirements of such section,by an employer that has an obligation to contribute with respect to the multiemployer plan or an employee organization that represents active participants in the multiemployer plan, for an order compelling the plan sponsor to adopt a funding improvement or rehabilitation plan or to update or comply with the terms of the funding improvement or rehabilitation plan in accordance with the requirements of such section and the funding improvement or rehabilitation plan; or
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(A) for each violation by such sponsor of the requirement under section 1085 of this title to adopt by the deadline established in that section a funding improvement plan or rehabilitation plan with respect to a multiemployer plan which is in endangered or critical status, or
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(B) in the case of a plan in endangered status which is not in seriously endangered status, for failure by the plan to meet the applicable benchmarks under section 1085 of this title by the end of the funding improvement period with respect to the plan.
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(3) If the corporation specifies in regulations or guidance that temporary priority consideration is available for plans which are insolvent within the meaning of section 418E of title 26 or likely to become so insolvent or for plans which have suspended benefits under section 1085(e)(9) of this title, or that availability is otherwise based on the funded status of the plan under section 1085 of this title, as permitted by subsection (d), the corporation shall consult with the Secretary of the Treasury regarding any granting of priority consideration to such plans.
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(iii) the provisions of subsections (c) and (d) of section 432 of such Code and subsections (c) and (d) of section 1085 of title 29 shall not apply.
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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 §1085(b)
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(1) For purposes of determining eligibility for special financial assistance, the corporation shall accept assumptions incorporated in a multiemployer plan’s determination that it is in critical status or critical and declining status (within the meaning of section 1085(b) of this title) for certifications of plan status completed before January 1, 2021, unless such assumptions are clearly erroneous. For certifications of plan status completed after December 31, 2020, a plan shall determine whether it is in critical or critical and declining status for purposes of eligibility for special financial assistance by using the assumptions that the plan used in its most recently completed certification of plan status before January 1, 2021, unless such assumptions (excluding the plan’s interest rate) are unreasonable.
Citations to §1085(b)(2)
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(1) The plan sponsor of a plan in critical status, as described in subsection1 1085(b)(2) of this title, 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 subsection1 1085(b)(2) of this title,,2 and at least every 3 plan years thereafter (unless the plan is no longer in critical status, as described in subsection1 1085(b)(2) of this title,),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 subsection1 1085(b)(2) of this title, 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 subsection1 1085(b)(2) of this title, 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 subsection1 1085(b)(2) of this title, 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 of the Treasury,3 the parties described in section 1021(f)(1) of this title of that determination, and(B) inform the parties described in section 1021(f)(1) of this title 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 subsection1 1085(b)(2) of this title, shall notify the Secretary of the Treasury, the corporation, and the parties described in paragraph (1)(B) of the resource benefit level determined in writing for that insolvency year.
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(C) in any plan year beginning in 2020 through 2022, the plan is certified by the plan actuary to be in critical status (within the meaning of section 1085(b)(2) of this title), has a modified funded percentage of less than 40 percent, and has a ratio of active to inactive participants which is less than 2 to 3; or
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(4) An eligible multiemployer plan that receives special financial assistance shall be deemed to be in critical status within the meaning of section 1085(b)(2) of this title until the last plan year ending in 2051.
Citations to §1085(b)(4)
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(A) one or more of the multiemployer plans participating in the merger is in critical and declining status (as defined in section 1085(b)(4) of this title);
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(1) the plan is in critical and declining status (as defined in section 1085(b)(4) of this title);
Citations to §1085(b)(6)
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(A) the plan is in critical and declining status (within the meaning of section 1085(b)(6) of this title) in any plan year beginning in 2020 through 2022;
Citations to §1085(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 1085 of this title. This paragraph shall only apply if the plan sponsor adopts a rehabilitation plan in accordance with section 1085(e) of this title and complies with the terms of such rehabilitation plan (and any updates or modifications of the plan).
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(ii) the Plan shall maintain and comply with its rehabilitation plan under section 432(e) of such Code and section 1085(e) of title 29, including any updates thereto; and
Citations to §1085(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 §1085(e)(8)
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(1) The amount of financial assistance provided to a multiemployer plan eligible for financial assistance under this section shall be such amount required for the plan to pay all benefits due during the period beginning on the date of payment of the special financial assistance payment under this section and ending on the last day of the plan year ending in 2051, with no reduction in a participant’s or beneficiary’s accrued benefit as of March 11, 2021, except to the extent of a reduction in accordance with section 1085(e)(8) of this title adopted prior to the plan’s application for special financial assistance under this section, and taking into account the reinstatement of benefits required under subsection (k).
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(A) any prospective reduction in plan benefits (including benefits that may be adjusted pursuant to section 1085(e)(8) of this title);
Citations to §1085(e)(9)
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(2) the corporation determines, after consultation with the Participant and Plan Sponsor Advocate selected under section 1304 of this title, that the plan sponsor has taken (or is taking concurrently with an application for partition) all reasonable measures to avoid insolvency, including the maximum benefit suspensions under section 1085(e)(9) of this title, if applicable;
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(A) the monthly benefit that would be paid to such participant or beneficiary for such month under the terms of the plan (taking into account benefit suspensions under section 1085(e)(9) of this title and any plan amendments following the effective date of such partition) if the partition had not occurred, over
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(g) Subsections (a) and (c) shall not apply to a plan that, for the plan year, is operating under section 1085(e)(9) of this title, regarding benefit suspensions by certain multiemployer plans in critical and declining status.
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(B) a suspension of benefits has been approved with respect to the plan under section 1085(e)(9) of this title as of March 11, 2021;
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(C) the eligible multiemployer plan has implemented benefit suspensions under section 1085(e)(9) of this title as of March 11, 2021; or
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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
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(2) provides payments equal to the amount of benefits previously suspended under section 1085(e)(9) or 1426(a) of this title to any participants or beneficiaries in pay status as of the effective date of the special financial assistance, payable, as determined by the eligible multiemployer plan—(A) as a lump sum within 3 months of such effective date; or(B) in equal monthly installments over a period of 5 years, commencing within 3 months of such effective date, with no adjustment for interest.
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(1) In the case of a plan which has suspended benefits under section 1085(e)(9) of this title—(A) in determining whether to approve the application, the corporation shall consult with the Secretary of the Treasury regarding the plan’s proposed method of reinstating benefits, as described in the plan’s application and in accordance with guidance issued by the Secretary of the Treasury, and(B) the corporation shall consult with the Secretary of the Treasury regarding the amount of special financial assistance needed based on the projected funded status of the plan as of the last day of the plan year ending in 2051, whether the plan proposes to repay benefits over 5 years or as a lump sum, as required by subsection (k)(2), and any other relevant factors, as determined by the corporation in consultation with the Secretary of the Treasury, to ensure the amount of assistance is sufficient to meet such requirement and is sufficient to pay benefits as required in subsection (j)(1).
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(3) If the corporation specifies in regulations or guidance that temporary priority consideration is available for plans which are insolvent within the meaning of section 418E of title 26 or likely to become so insolvent or for plans which have suspended benefits under section 1085(e)(9) of this title, or that availability is otherwise based on the funded status of the plan under section 1085 of this title, as permitted by subsection (d), the corporation shall consult with the Secretary of the Treasury regarding any granting of priority consideration to such plans.
Citations to §1085(e)(9)(E)(vi)
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(2) In any case in which a plan provides a benefit improvement (as defined in section 1085(e)(9)(E)(vi) of this title) that takes effect after the effective date of the partition, the plan shall pay to the corporation for each year during the 10-year period following the partition effective date, an annual amount equal to the lesser of—(A) the total value of the increase in benefit payments for such year that is attributable to the benefit improvement, or(B) the total benefit payments from the plan created by the partition for such year.Such payment shall be made at the time of, and in addition to, any other premium imposed by the corporation under this subchapter.
Citations to §1085(e)(9)(G)
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(6) An eligible multiemployer plan that receives special financial assistance under this section is not eligible to apply for a new suspension of benefits under section 1085(e)(9)(G) of this title.
Citations to §1085(i)
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(II) in the case of a multiemployer plan, a statement as to whether the plan’s funded percentage (as defined in section 1085(i)1 of this title) for the plan year to which the notice relates, and for the 2 preceding plan years, is at least 100 percent (and, if not, the actual percentages),
Citations to §1085(i)(2)
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(ii) in the case of a multiemployer plan, has the meaning given such term in section 1085(i)(2) of this title.