§ 1082. Minimum funding standards
(a)
Requirement to meet minimum funding standard
(1)
In general
A plan to which this part applies shall satisfy the minimum funding standard applicable to the plan for any plan year.
(2)
Minimum funding standard
For purposes of paragraph (1), a plan shall be treated as satisfying the minimum funding standard for a plan year if—
(A)
in the case of a defined benefit plan which is a single-employer plan, the employer makes contributions to or under the plan for the plan year which, in the aggregate, are not less than the minimum required contribution determined under section
1083 of this title for the plan for the plan year,
(B)
in the case of a money purchase plan which is a single-employer plan, the employer makes contributions to or under the plan for the plan year which are required under the terms of the plan, and
(C)
in the case of a multiemployer plan, the employers make contributions to or under the plan for any plan year which, in the aggregate, are sufficient to ensure that the plan does not have an accumulated funding deficiency under section
1084 of this title as of the end of the plan year.
(b)
Liability for contributions
(2)
Joint and several liability where employer member of controlled group
If the employer referred to in paragraph (1) is a member of a controlled group, each member of such group shall be jointly and severally liable for payment of such contributions.
(3)
Multiemployer plans in critical status
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).
(c)
Variance from minimum funding standards
(1)
Waiver in case of business hardship
(A)
In general
If—
(i)
an employer is (or in the case of a multiemployer plan, 10 percent or more of the number of employers contributing to or under the plan are) unable to satisfy the minimum funding standard for a plan year without temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan), and
(ii)
application of the standard would be adverse to the interests of plan participants in the aggregate,
the Secretary of the Treasury may, subject to subparagraph (C), waive the requirements of subsection (a) for such year with respect to all or any portion of the minimum funding standard. The Secretary of the Treasury shall not waive the minimum funding standard with respect to a plan for more than 3 of any 15 (5 of any 15 in the case of a multiemployer plan) consecutive plan years.
(B)
Effects of waiver
If a waiver is granted under subparagraph (A) for any plan year—
(2)
Determination of business hardship
For purposes of this subsection, the factors taken into account in determining temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan) shall include (but shall not be limited to) whether or not—
(3)
Waived funding deficiency
For purposes of this part, the term “waived funding deficiency” means the portion of the minimum funding standard under subsection (a) (determined without regard to the waiver) for a plan year waived by the Secretary of the Treasury and not satisfied by employer contributions.
(4)
Security for waivers for single-employer plans, consultations
(A)
Security may be required
(i)
In general
Except as provided in subparagraph (C), the Secretary of the Treasury may require an employer maintaining a defined benefit plan which is a single-employer plan (within the meaning of section
1301
(a)(15) of this title) to provide security to such plan as a condition for granting or modifying a waiver under paragraph (1).
(ii)
Special rules
Any security provided under clause (i) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Corporation, by a contributing sponsor (within the meaning of section
1301
(a)(13) of this title), or a member of such sponsor’s controlled group (within the meaning of section
1301
(a)(14) of this title).
(B)
Consultation with the Pension Benefit Guaranty Corporation
Except as provided in subparagraph (C), the Secretary of the Treasury shall, before granting or modifying a waiver under this subsection with respect to a plan described in subparagraph (A)(i)—
(C)
Exception for certain waivers
(i)
In general
The preceding provisions of this paragraph shall not apply to any plan with respect to which the sum of—
(I)
the aggregate unpaid minimum required contributions for the plan year and all preceding plan years, and
(II)
the present value of all waiver amortization installments determined for the plan year and succeeding plan years under section
1083
(e)(2) of this title,
is less than $1,000,000.
(ii)
Treatment of waivers for which applications are pending
The amount described in clause (i)(I) shall include any increase in such amount which would result if all applications for waivers of the minimum funding standard under this subsection which are pending with respect to such plan were denied.
(iii)
Unpaid minimum required contribution
For purposes of this subparagraph—
(I)
In general
The term “unpaid minimum required contribution” means, with respect to any plan year, any minimum required contribution under section
1083 of this title for the plan year which is not paid on or before the due date (as determined under section
1083
(j)(1) of this title) for the plan year.
(II)
Ordering rule
For purposes of subclause (I), any payment to or under a plan for any plan year shall be allocated first to unpaid minimum required contributions for all preceding plan years on a first-in, first-out basis and then to the minimum required contribution under section
1083 of this title for the plan year.
(5)
Special rules for single-employer plans
(A)
Application must be submitted before date 21/2 months after close of year
In the case of a single-employer plan, no waiver may be granted under this subsection with respect to any plan for any plan year unless an application therefor is submitted to the Secretary of the Treasury not later than the 15th day of the 3rd month beginning after the close of such plan year.
(B)
Special rule if employer is member of controlled group
In the case of a single-employer plan, if an employer is a member of a controlled group, the temporary substantial business hardship requirements of paragraph (1) shall be treated as met only if such requirements are met—
(ii)
with respect to the controlled group of which such employer is a member (determined by treating all members of such group as a single employer).
The Secretary of the Treasury may provide that an analysis of a trade or business or industry of a member need not be conducted if such Secretary determines such analysis is not necessary because the taking into account of such member would not significantly affect the determination under this paragraph.
(6)
Advance notice
(A)
In general
The Secretary of the Treasury shall, before granting a waiver under this subsection, require each applicant to provide evidence satisfactory to such Secretary that the applicant has provided notice of the filing of the application for such waiver to each affected party (as defined in section
1301
(a)(21) of this title). Such notice shall include a description of the extent to which the plan is funded for benefits which are guaranteed under subchapter III and for benefit liabilities.
(7)
Restriction on plan amendments
(A)
In general
No amendment of a plan which increases the liabilities of the plan by reason of any increase in benefits, any change in the accrual of benefits, or any change in the rate at which benefits become nonforfeitable under the plan shall be adopted if a waiver under this subsection or an extension of time under section
1084
(d) of this title is in effect with respect to the plan, or if a plan amendment described in subsection (d)(2) which reduces the accrued benefit of any participant has been made at any time in the preceding 12 months (24 months in the case of a multiemployer plan). If a plan is amended in violation of the preceding sentence, any such waiver, or extension of time, shall not apply to any plan year ending on or after the date on which such amendment is adopted.
(d)
Miscellaneous rules
(1)
Change in method or year
If the funding method or a plan year for a plan is changed, the change shall take effect only if approved by the Secretary of the Treasury.
(2)
Certain retroactive plan amendments
For purposes of this section, any amendment applying to a plan year which—
(A)
is adopted after the close of such plan year but no later than 21/2 months after the close of the plan year (or, in the case of a multiemployer plan, no later than 2 years after the close of such plan year),
(B)
does not reduce the accrued benefit of any participant determined as of the beginning of the first plan year to which the amendment applies, and
(C)
does not reduce the accrued benefit of any participant determined as of the time of adoption except to the extent required by the circumstances,
shall, at the election of the plan administrator, be deemed to have been made on the first day of such plan year. No amendment described in this paragraph which reduces the accrued benefits of any participant shall take effect unless the plan administrator files a notice with the Secretary of the Treasury notifying him of such amendment and such Secretary has approved such amendment, or within 90 days after the date on which such notice was filed, failed to disapprove such amendment. No amendment described in this subsection shall be approved by the Secretary of the Treasury unless such Secretary determines that such amendment is necessary because of a temporary substantial business hardship (as determined under subsection (c)(2)) or a substantial business hardship (as so determined) in the case of a multiemployer plan and that a waiver under subsection (c) (or, in the case of a multiemployer plan, any extension of the amortization period under section
1084
(d) of this title) is unavailable or inadequate.
(3)
Controlled group
For purposes of this section, the term “controlled group” means any group treated as a single employer under subsection (b), (c), (m), or (o) of section
414 of title 26.