29 U.S.C. § 1085 — Additional funding rules for multiem-

Page 478 TITLE 29—LABOR § 1085 Pub. L. 109–280, set out as a note under section 412 of Title 26, Internal Revenue Code. § 1085. Additional funding rules for multiem- ployer plans in endangered status or critical status (a) General rule For purposes of this part, in the case of a mul- tiemployer plan in effect on July 16, 2006— (1) if the plan is in endangered status— (A) the plan sponsor shall adopt and imple- ment a funding improvement plan in accord- ance with the requirements of subsection (c), and (B) the requirements of subsection (d) shall apply during the funding plan adoption period and the funding improvement period, (2) if the plan is in critical status— (A) the plan sponsor shall adopt and imple- ment a rehabilitation plan in accordance with the requirements of subsection (e), and (B) the requirements of subsection (f) shall apply during the rehabilitation plan adop- tion period and the rehabilitation period, and (3) if the plan is in critical and declining sta- tus— (A) the requirements of paragraph (2) shall apply to the plan; and (B) the plan sponsor may, by plan amend- ment, suspend benefits in accordance with the requirements of subsection (e)(9). (b) Determination of endangered and critical sta- tus For purposes of this section— (1) Endangered status A multiemployer plan is in endangered sta- tus for a plan year if, as determined by the plan actuary under paragraph (3), the plan is not in critical status for the plan year and is not described in paragraph (5), and, as of the beginning of the plan year, either— (A) the plan’s funded percentage for such plan year is less than 80 percent, or (B) the plan has an accumulated funding deficiency for such plan year, or is projected to have such an accumulated funding defi- ciency for any of the 6 succeeding plan years, taking into account any extension of amortization periods under section 1084(d) of this title. For purposes of this section, a plan shall be treated as in seriously endangered status for a plan year if the plan is described in both sub- paragraphs (A) and (B). (2) Critical status A multiemployer plan is in critical status for a plan year if, as determined by the plan actuary under paragraph (3), the plan is de- scribed in 1 or more of the following subpara- graphs as of the beginning of the plan year: (A) A plan is described in this subpara- graph if— (i) the funded percentage of the plan is less than 65 percent, and (ii) the sum of— (I) the fair market value of plan assets, plus (II) the present value of the reasonably anticipated employer contributions for the current plan year and each of the 6 succeeding plan years, assuming that the terms of all collective bargaining agree- ments pursuant to which the plan is maintained for the current plan year continue in effect for succeeding plan years, is less than the present value of all non- forfeitable benefits projected to be payable under the plan during the current plan year and each of the 6 succeeding plan years (plus administrative expenses for such plan years). (B) A plan is described in this subpara- graph if— (i) the plan has an accumulated funding deficiency for the current plan year, not taking into account any extension of am- ortization periods under section 1084(d) of this title, or (ii) the plan is projected to have an accu- mulated funding deficiency for any of the 3 succeeding plan years (4 succeeding plan years if the funded percentage of the plan is 65 percent or less), not taking into ac- count any extension of amortization peri- ods under section 1084(d) of this title. (C) A plan is described in this subpara- graph if— (i)(I) the plan’s normal cost for the cur- rent plan year, plus interest (determined at the rate used for determining costs under the plan) for the current plan year on the amount of unfunded benefit liabil- ities under the plan as of the last date of the preceding plan year, exceeds (II) the present value of the reasonably anticipated employer and employee con- tributions for the current plan year, (ii) the present value, as of the beginning of the current plan year, of nonforfeitable benefits of inactive participants is greater than the present value of nonforfeitable benefits of active participants, and (iii) the plan has an accumulated funding deficiency for the current plan year, or is projected to have such a deficiency for any of the 4 succeeding plan years, not taking into account any extension of amortiza- tion periods under section 1084(d) of this title. (D) A plan is described in this subpara- graph if the sum of— (i) the fair market value of plan assets, plus (ii) the present value of the reasonably anticipated employer contributions for the current plan year and each of the 4 suc- ceeding plan years, assuming that the terms of all collective bargaining agree- ments pursuant to which the plan is main- tained for the current plan year continue in effect for succeeding plan years, is less than the present value of all benefits projected to be payable under the plan dur- ing the current plan year and each of the 4 succeeding plan years (plus administrative expenses for such plan years). Page 479 TITLE 29—LABOR § 1085 1 So in original. 2 So in original. Two cls. (iv) have been enacted. (3) Annual certification by plan actuary (A) In general Not later than the 90th day of each plan year of a multiemployer plan, the plan actu- ary shall certify to the Secretary of the Treasury and to the plan sponsor— (i) whether or not the plan is in endan- gered status for such plan year, or would be in endangered status for such plan year but for paragraph (5),,1 whether or not the plan is or will be in critical status for such plan year or for any of the succeeding 5 plan years, and whether or not the plan is or will be in critical and declining status for such plan year, and (ii) in the case of a plan which is in a funding improvement or rehabilitation pe- riod, whether or not the plan is making the scheduled progress in meeting the re- quirements of its funding improvement or rehabilitation plan. (B) Actuarial projections of assets and liabil- ities (i) In general Except as provided in clause (iv), in making the determinations and projec- tions under this subsection, the plan actu- ary shall make projections required for the current and succeeding plan years of the current value of the assets of the plan and the present value of all liabilities to par- ticipants and beneficiaries under the plan for the current plan year as of the begin- ning of such year. The actuary’s projec- tions shall be based on reasonable actu- arial estimates, assumptions, and methods that, except as provided in clause (iii), offer the actuary’s best estimate of antici- pated experience under the plan. The pro- jected present value of liabilities as of the beginning of such year shall be determined based on the most recent of either— (I) the actuarial statement required under section 1023(d) of this title with re- spect to the most recently filed annual report, or (II) the actuarial valuation for the pre- ceding plan year. (ii) Determinations of future contributions Any actuarial projection of plan assets shall assume— (I) reasonably anticipated employer contributions for the current and suc- ceeding plan years, assuming that the terms of the one or more collective bar- gaining agreements pursuant to which the plan is maintained for the current plan year continue in effect for suc- ceeding plan years, or (II) that employer contributions for the most recent plan year will continue indefinitely, but only if the plan actuary determines there have been no signifi- cant demographic changes that would make such assumption unreasonable. (iii) Projected industry activity Any projection of activity in the indus- try or industries covered by the plan, in- cluding future covered employment and contribution levels, shall be based on in- formation provided by the plan sponsor, which shall act reasonably and in good faith. (iv) 2 Projections relating to critical status in succeeding plan years Clauses (i) and (ii) (other than the 2nd sentence of clause (i)) may be disregarded by a plan actuary in the case of any cer- tification of whether a plan will be in crit- ical status in a succeeding plan year, ex- cept that a plan sponsor may not elect to be in critical status for a plan year under paragraph (4) in any case in which the cer- tification upon which such election would be based is made without regard to such clauses. (iv) 2 Projections of critical and declining status In determining whether a plan is in crit- ical and declining status as described in subsection (e)(9), clauses (i), (ii), and (iii) shall apply, except that— (I) if reasonable, the plan actuary shall assume that each contributing employer in compliance continues to comply through the end of the rehabilitation pe- riod or such later time as provided in subsection (e)(3)(A)(ii) with the terms of the rehabilitation plan that correspond to the schedule adopted or imposed under subsection (e), and (II) the plan actuary shall take into ac- count any suspensions of benefits de- scribed in subsection (e)(9) adopted in a prior plan year that are still in effect. (C) Penalty for failure to secure timely actu- arial certification Any failure of the plan’s actuary to certify the plan’s status under this subsection by the date specified in subparagraph (A) shall be treated for purposes of section 1132(c)(2) of this title as a failure or refusal by the plan administrator to file the annual report required to be filed with the Secretary under section 1021(b)(1) of this title. (D) Notice (i) In general In any case in which it is certified under subparagraph (A) that a multiemployer plan is or will be in endangered or critical status for a plan year or in which a plan sponsor elects to be in critical status for a plan year under paragraph (4), the plan sponsor shall, not later than 30 days after the date of the certification, provide noti- fication of the endangered or critical sta- tus to the participants and beneficiaries, the bargaining parties, the Pension Ben- efit Guaranty Corporation, and the Sec- retary. In any case in which a plan sponsor elects to be in critical status for a plan year under paragraph (4), the plan sponsor shall notify the Secretary of the Treasury of such election not later than 30 days Page 480 TITLE 29—LABOR § 1085 3 So in original. Probably should be followed by a comma. after the date of such certification or such other time as the Secretary of the Treas- ury may prescribe by regulations or other guidance. (ii) Plans in critical status If it is certified under subparagraph (A) that a multiemployer plan is or will be in critical status, the plan sponsor shall in- clude in the notice under clause (i) an ex- planation of the possibility that— (I) adjustable benefits (as defined in subsection (e)(8)) may be reduced, and (II) such reductions may apply to par- ticipants and beneficiaries whose benefit commencement date is on or after the date such notice is provided for the first plan year in which the plan is in critical status. (iii) In the case of a multiemployer plan that would be in endangered status but for paragraph (5), the plan sponsor shall pro- vide notice to the bargaining parties and the Pension Benefit Guaranty Corporation that the plan would be in endangered sta- tus but for such paragraph. (iv) Model notice The Secretary of the Treasury, in con- sultation with the Secretary 3 shall pre- scribe a model notice that a multiem- ployer plan may use to satisfy the require- ments under clauses (ii) and (iii). (v) Notice of projection to be in critical sta- tus in a future plan year In any case in which it is certified under subparagraph (A)(i) that a multiemployer plan will be in critical status for any of 5 succeeding plan years (but not for the cur- rent plan year) and the plan sponsor of such plan has not made an election to be in critical status for the plan year under paragraph (4), the plan sponsor shall, not later than 30 days after the date of the cer- tification, provide notification of the pro- jected critical status to the Pension Ben- efit Guaranty Corporation. (4) Election to be in critical status Notwithstanding paragraph (2) and subject to paragraph (3)(B)(iv)— (A) the plan sponsor of a multiemployer plan that is not in critical status for a plan year but that is projected by the plan actu- ary, pursuant to the determination under paragraph (3), to be in critical status in any of the succeeding 5 plan years may, not later than 30 days after the date of the certifi- cation under paragraph (3)(A), elect to be in critical status effective for the current plan year, (B) the plan year in which the plan sponsor elects to be in critical status under subpara- graph (A) shall be treated for purposes of this section as the first year in which the plan is in critical status, regardless of the date on which the plan first satisfies the cri- teria for critical status under paragraph (2), and (C) a plan that is in critical status under this paragraph shall not emerge from crit- ical status except in accordance with sub- section (e)(4)(B). (5) Special rule A plan is described in this paragraph if— (A) as part of the actuarial certification of endangered status under paragraph (3)(A) for the plan year, the plan actuary certifies that the plan is projected to no longer be de- scribed in either paragraph (1)(A) or para- graph (1)(B) as of the end of the tenth plan year ending after the plan year to which the certification relates, and (B) the plan was not in critical or endan- gered status for the immediately preceding plan year. (6) Critical and declining status For purposes of this section, a plan in crit- ical status shall be treated as in critical and declining status if the plan is described in one or more of subparagraphs (A), (B), (C), and (D) of paragraph (2) and the plan is projected to become insolvent within the meaning of sec- tion 1426 of this title during the current plan year or any of the 14 succeeding plan years (19 succeeding plan years if the plan has a ratio of inactive participants to active participants that exceeds 2 to 1 or if the funded percentage of the plan is less than 80 percent). (c) Funding improvement plan must be adopted for multiemployer plans in endangered sta- tus (1) In general In any case in which a multiemployer plan is in endangered status for a plan year, the plan sponsor, in accordance with this subsection— (A) shall adopt a funding improvement plan not later than 240 days following the re- quired date for the actuarial certification of endangered status under subsection (b)(3)(A), and (B) within 30 days after the adoption of the funding improvement plan— (i) shall provide to the bargaining par- ties 1 or more schedules showing revised benefit structures, revised contribution structures, or both, which, if adopted, may reasonably be expected to enable the mul- tiemployer plan to meet the applicable benchmarks in accordance with the fund- ing improvement plan, including— (I) one proposal for reductions in the amount of future benefit accruals nec- essary to achieve the applicable bench- marks, assuming no amendments in- creasing contributions under the plan (other than amendments increasing con- tributions necessary to achieve the ap- plicable benchmarks after amendments have reduced future benefit accruals to the maximum extent permitted by law), and (II) one proposal for increases in con- tributions under the plan necessary to achieve the applicable benchmarks, as- suming no amendments reducing future benefit accruals under the plan, and (ii) may, if the plan sponsor deems ap- propriate, prepare and provide the bar- Page 481 TITLE 29—LABOR § 1085 gaining parties with additional informa- tion relating to contribution rates or ben- efit reductions, alternative schedules, or other information relevant to achieving the applicable benchmarks in accordance with the funding improvement plan. For purposes of this section, the term ‘‘ap- plicable benchmarks’’ means the require- ments applicable to the multiemployer plan under paragraph (3) (as modified by para- graph (5)). (2) Exception for years after process begins Paragraph (1) shall not apply to a plan year if such year is in a funding plan adoption pe- riod or funding improvement period by reason of the plan being in endangered status for a preceding plan year. For purposes of this sec- tion, such preceding plan year shall be the ini- tial determination year with respect to the funding improvement plan to which it relates. (3) Funding improvement plan For purposes of this section— (A) In general A funding improvement plan is a plan which consists of the actions, including op- tions or a range of options to be proposed to the bargaining parties, formulated to pro- vide, based on reasonably anticipated experi- ence and reasonable actuarial assumptions, for the attainment by the plan during the funding improvement period of the following requirements: (i) Increase in plan’s funding percentage The plan’s funded percentage as of the close of the funding improvement period equals or exceeds a percentage equal to the sum of— (I) such percentage as of the beginning of the first plan year for which the plan is certified to be in endangered status pursuant to paragraph (b)(3), plus (II) 33 percent of the difference be- tween 100 percent and the percentage under subclause (I). (ii) Avoidance of accumulated funding defi- ciencies No accumulated funding deficiency for the last plan year during the funding im- provement period (taking into account any extension of amortization periods under section 1084(d) of this title). (B) Seriously endangered plans In the case of a plan in seriously endan- gered status, except as provided in para- graph (5), subparagraph (A)(i)(II) shall be ap- plied by substituting ‘‘20 percent’’ for ‘‘33 percent’’. (4) Funding improvement period For purposes of this section— (A) In general The funding improvement period for any funding improvement plan adopted pursuant to this subsection is the 10-year period be- ginning on the first day of the first plan year of the multiemployer plan beginning after the earlier of— (i) the second anniversary of the date of the adoption of the funding improvement plan, or (ii) the expiration of the collective bar- gaining agreements in effect on the due date for the actuarial certification of en- dangered status for the initial determina- tion year under subsection (b)(3)(A) and covering, as of such due date, at least 75 percent of the active participants in such multiemployer plan. (B) Seriously endangered plans In the case of a plan in seriously endan- gered status, except as provided in para- graph (5), subparagraph (A) shall be applied by substituting ‘‘15-year period’’ for ‘‘10-year period’’. (C) Coordination with changes in status (i) Plans no longer in endangered status If the plan’s actuary certifies under sub- section (b)(3)(A) for a plan year in any funding plan adoption period or funding improvement period that the plan is no longer in endangered status and is not in critical status, the funding plan adoption period or funding improvement period, whichever is applicable, shall end as of the close of the preceding plan year. (ii) Plans in critical status If the plan’s actuary certifies under sub- section (b)(3)(A) for a plan year in any funding plan adoption period or funding improvement period that the plan is in critical status, the funding plan adoption period or funding improvement period, whichever is applicable, shall end as of the close of the plan year preceding the first plan year in the rehabilitation period with respect to such status. (D) Plans in endangered status at end of pe- riod If the plan’s actuary certifies under sub- section (b)(3)(A) for the first plan year fol- lowing the close of the period described in subparagraph (A) that the plan is in endan- gered status, the provisions of this sub- section and subsection (d) shall be applied as if such first plan year were an initial deter- mination year, except that the plan may not be amended in a manner inconsistent with the funding improvement plan in effect for the preceding plan year until a new funding improvement plan is adopted. (5) Special rules for seriously endangered plans more than 70 percent funded (A) In general If the funded percentage of a plan in seri- ously endangered status was more than 70 percent as of the beginning of the initial de- termination year— (i) paragraphs (3)(B) and (4)(B) shall apply only if the plan’s actuary certifies, within 30 days after the certification under subsection (b)(3)(A) for the initial deter- mination year, that, based on the terms of the plan and the collective bargaining agreements in effect at the time of such Page 482 TITLE 29—LABOR § 1085 4 So in original. Probably should be ‘‘paragraphs’’. certification, the plan is not projected to meet the requirements of paragraph (3)(A) (without regard to paragraphs (3)(B) and (4)(B)), and (ii) if there is a certification under clause (i), the plan may, in formulating its funding improvement plan, only take into account the rules of paragraph 4 (3)(B) and (4)(B) for plan years in the funding im- provement period beginning on or before the date on which the last of the collective bargaining agreements described in para- graph (4)(A)(ii) expires. (B) Special rule after expiration of agree- ments Notwithstanding subparagraph (A)(ii), if, for any plan year ending after the date de- scribed in subparagraph (A)(ii), the plan ac- tuary certifies (at the time of the annual certification under subsection (b)(3)(A) for such plan year) that, based on the terms of the plan and collective bargaining agree- ments in effect at the time of that annual certification, the plan is not projected to be able to meet the requirements of paragraph (3)(A) (without regard to paragraphs (3)(B) and (4)(B)), paragraphs (3)(B) and (4)(B) shall continue to apply for such year. (6) Updates to funding improvement plan and schedules (A) Funding improvement plan The plan sponsor shall annually update the funding improvement plan and shall file the update with the plan’s annual report under section 1024 of this title. (B) Schedules The plan sponsor shall annually update any schedule of contribution rates provided under this subsection to reflect the experi- ence of the plan. (C) Duration of schedule A schedule of contribution rates provided by the plan sponsor and relied upon by bar- gaining parties in negotiating a collective bargaining agreement shall remain in effect for the duration of that collective bar- gaining agreement. (7) Imposition of schedule where failure to adopt funding improvement plan (A) Initial contribution schedule If— (i) a collective bargaining agreement providing for contributions under a multi- employer plan that was in effect at the time the plan entered endangered status expires, and (ii) after receiving one or more schedules from the plan sponsor under paragraph (1)(B), the bargaining parties with respect to such agreement fail to adopt a contribu- tion schedule with terms consistent with the funding improvement plan and a schedule from the plan sponsor, the plan sponsor shall implement the sched- ule described in paragraph (1)(B)(i)(I) begin- ning on the date specified in subparagraph (C). (B) Subsequent contribution schedule If— (i) a collective bargaining agreement providing for contributions under a multi- employer plan in accordance with a sched- ule provided by the plan sponsor pursuant to a funding improvement plan (or im- posed under subparagraph (A)) expires while the plan is still in endangered sta- tus, and (ii) after receiving one or more updated schedules from the plan sponsor under paragraph (6)(B), the bargaining parties with respect to such agreement fail to adopt a contribution schedule with terms consistent with the updated funding im- provement plan and a schedule from the plan sponsor, then the contribution schedule applicable under the expired collective bargaining agreement, as updated and in effect on the date the collective bargaining agreement ex- pires, shall be implemented by the plan sponsor beginning on the date specified in subparagraph (C). (C) Date of implementation The date specified in this subparagraph is the date which is 180 days after the date on which the collective bargaining agreement described in subparagraph (A) or (B) expires. (D) Failure to make scheduled contributions Any failure to make a contribution under a schedule of contribution rates provided under this paragraph shall be treated as a delinquent contribution under section 1145 of this title and shall be enforceable as such. (8) Funding plan adoption period For purposes of this section, the term ‘‘fund- ing plan adoption period’’ means the period be- ginning on the date of the certification under subsection (b)(3)(A) for the initial determina- tion year and ending on the day before the first day of the funding improvement period. (d) Rules for operation of plan during adoption and improvement periods (1) Compliance with funding improvement plan (A) In general A plan may not be amended after the date of the adoption of a funding improvement plan under subsection (c) so as to be incon- sistent with the funding improvement plan. (B) Special rules for benefit increases A plan may not be amended after the date of the adoption of a funding improvement plan under subsection (c) so as to increase benefits, including future benefit accruals, unless the plan actuary certifies that such increase is paid for out of additional con- tributions not contemplated by the funding improvement plan, and, after taking into ac- count the benefit increase, the multiem- ployer plan still is reasonably expected to meet the applicable benchmark on the Page 483 TITLE 29—LABOR § 1085 schedule contemplated in the funding im- provement plan. (2) Special rules for plan adoption period During the period beginning on the date of the certification under subsection (b)(3)(A) for the initial determination year and ending on the date of the adoption of a funding improve- ment plan— (A) the plan sponsor may not accept a col- lective bargaining agreement or participa- tion agreement with respect to the multiem- ployer plan that provides for— (i) a reduction in the level of contribu- tions for any participants, (ii) a suspension of contributions with respect to any period of service, or (iii) any new direct or indirect exclusion of younger or newly hired employees from plan participation, and (B) no amendment of the plan which in- creases 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 may be adopted unless the amendment is required as a condition of qualification under part I of subchapter D of chapter 1 of title 26 or to comply with other applicable law. (e) Rehabilitation plan must be adopted for mul- tiemployer plans in critical status (1) In general In any case in which a multiemployer plan is in critical status for a plan year, the plan sponsor, in accordance with this subsection— (A) shall adopt a rehabilitation plan not later than 240 days following the required date for the actuarial certification of crit- ical status under subsection (b)(3)(A), and (B) within 30 days after the adoption of the rehabilitation plan— (i) shall provide to the bargaining par- ties 1 or more schedules showing revised benefit structures, revised contribution structures, or both, which, if adopted, may reasonably be expected to enable the mul- tiemployer plan to emerge from critical status in accordance with the rehabilita- tion plan, and (ii) may, if the plan sponsor deems ap- propriate, prepare and provide the bar- gaining parties with additional informa- tion relating to contribution rates or ben- efit reductions, alternative schedules, or other information relevant to emerging from critical status in accordance with the rehabilitation plan. The schedule or schedules described in sub- paragraph (B)(i) shall reflect reductions in fu- ture benefit accruals and adjustable benefits, and increases in contributions, that the plan sponsor determines are reasonably necessary to emerge from critical status. One schedule shall be designated as the default schedule and such schedule shall assume that there are no increases in contributions under the plan other than the increases necessary to emerge from critical status after future benefit accru- als and other benefits (other than benefits the reduction or elimination of which are not per- mitted under section 1054(g) of this title) have been reduced to the maximum extent per- mitted by law. (2) Exception for years after process begins Paragraph (1) shall not apply to a plan year if such year is in a rehabilitation plan adop- tion period or rehabilitation period by reason of the plan being in critical status for a pre- ceding plan year. For purposes of this section, such preceding plan year shall be the initial critical year with respect to the rehabilitation plan to which it relates. (3) Rehabilitation plan For purposes of this section— (A) In general A rehabilitation plan is a plan which con- sists of— (i) actions, including options or a range of options to be proposed to the bargaining parties, formulated, based on reasonably anticipated experience and reasonable ac- tuarial assumptions, to enable the plan to cease to be in critical status by the end of the rehabilitation period and may include reductions in plan expenditures (including plan mergers and consolidations), reduc- tions in future benefit accruals or in- creases in contributions, if agreed to by the bargaining parties, or any combination of such actions, or (ii) if the plan sponsor determines that, based on reasonable actuarial assumptions and upon exhaustion of all reasonable measures, the plan can not reasonably be expected to emerge from critical status by the end of the rehabilitation period, rea- sonable measures to emerge from critical status at a later time or to forestall pos- sible insolvency (within the meaning of section 1426 of this title). A rehabilitation plan must provide annual standards for meeting the requirements of such rehabilitation plan. Such plan shall also include the schedules required to be provided under paragraph (1)(B)(i) and if clause (ii) applies, shall set forth the alter- natives considered, explain why the plan is not reasonably expected to emerge from critical status by the end of the rehabilita- tion period, and specify when, if ever, the plan is expected to emerge from critical sta- tus in accordance with the rehabilitation plan. (B) Updates to rehabilitation plan and sched- ules (i) Rehabilitation plan The plan sponsor shall annually update the rehabilitation plan and shall file the update with the plan’s annual report under section 1024 of this title. (ii) Schedules The plan sponsor shall annually update any schedule of contribution rates pro- vided under this subsection to reflect the experience of the plan. Page 484 TITLE 29—LABOR § 1085 5 So in original. Probably should be ‘‘clause’’. 6 So in original. Probably should be followed by a comma. (iii) Duration of schedule A schedule of contribution rates pro- vided by the plan sponsor and relied upon by bargaining parties in negotiating a col- lective bargaining agreement shall remain in effect for the duration of that collective bargaining agreement. (C) Imposition of schedule where failure to adopt rehabilitation plan (i) Initial contribution schedule If— (I) a collective bargaining agreement providing for contributions under a mul- tiemployer plan that was in effect at the time the plan entered critical status ex- pires, and (II) after receiving one or more sched- ules from the plan sponsor under para- graph (1)(B), the bargaining parties with respect to such agreement fail to adopt a contribution schedule with terms con- sistent with the rehabilitation plan and a schedule from the plan sponsor under paragraph (1)(B)(i), the plan sponsor shall implement the schedule described in the last sentence of paragraph (1) beginning on the date speci- fied in clause (iii). (ii) Subsequent contribution schedule If— (I) a collective bargaining agreement providing for contributions under a mul- tiemployer plan in accordance with a schedule provided by the plan sponsor pursuant to a rehabilitation plan (or im- posed under subparagraph (C)(i)) expires while the plan is still in critical status, and (II) after receiving one or more up- dated schedules from the plan sponsor under subparagraph (B)(ii), the bar- gaining parties with respect to such agreement fail to adopt a contribution schedule with terms consistent with the updated rehabilitation plan and a sched- ule from the plan sponsor, then the contribution schedule applicable under the expired collective bargaining agreement, as updated and in effect on the date the collective bargaining agreement expires, shall be implemented by the plan sponsor beginning on the date specified in clause (iii). (iii) Date of implementation The date specified in this subparagraph 5 is the date which is 180 days after the date on which the collective bargaining agree- ment described in clause (i) or (ii) expires. (iv) Failure to make scheduled contribu- tions Any failure to make a contribution under a schedule of contribution rates pro- vided under this subsection shall be treat- ed as a delinquent contribution under sec- tion 1145 of this title and shall be enforce- able as such. (4) Rehabilitation period For purposes of this section— (A) In general The rehabilitation period for a plan in critical status is the 10-year period begin- ning on the first day of the first plan year of the multiemployer plan following the earlier of— (i) the second anniversary of the date of the adoption of the rehabilitation plan, or (ii) the expiration of the collective bar- gaining agreements in effect on the due date for the actuarial certification of crit- ical status for the initial critical year under subsection (a)(1) and covering, as of such date 6 at least 75 percent of the active participants in such multiemployer plan. If a plan emerges from critical status as pro- vided under subparagraph (B) before the end of such 10-year period, the rehabilitation pe- riod shall end with the plan year preceding the plan year for which the determination under subparagraph (B) is made. (B) Emergence (i) In general A plan in critical status shall remain in such status until a plan year for which the plan actuary certifies, in accordance with subsection (b)(3)(A), that— (I) the plan is not described in one or more of the subparagraphs in subsection (b)(2) as of the beginning of the plan year; (II) the plan is not projected to have an accumulated funding deficiency for the plan year or any of the 9 succeeding plan years, without regard to the use of the shortfall method but taking into account any extension of amortization periods under section 1084(d)(2) of this title or section 1084 of this title (as in effect prior to the enactment of the Pension Protection Act of 2006); and (III) the plan is not projected to be- come insolvent within the meaning of section 1426 of this title for any of the 30 succeeding plan years. (ii) Plans with certain amortization exten- sions (I) Special emergence rule Notwithstanding clause (i), a plan in critical status that has an automatic ex- tension of amortization periods under section 1084(d)(1) of this title shall no longer be in critical status if the plan ac- tuary certifies for a plan year, in accord- ance with subsection (b)(3)(A), that— (aa) the plan is not projected to have an accumulated funding deficiency for the plan year or any of the 9 suc- ceeding plan years, without regard to the use of the shortfall method but taking into account any extension of amortization periods under section 1084(d)(1) of this title; and Page 485 TITLE 29—LABOR § 1085 (bb) the plan is not projected to be- come insolvent within the meaning of section 1426 of this title for any of the 30 succeeding plan years, regardless of whether the plan is described in one or more of the subparagraphs in subsection (b)(2) as of the beginning of the plan year. (II) Reentry into critical status A plan that emerges from critical sta- tus under subclause (I) shall not reenter critical status for any subsequent plan year unless— (aa) the plan is projected to have an accumulated funding deficiency for the plan year or any of the 9 succeeding plan years, without regard to the use of the shortfall method but taking into account any extension of amortization periods under section 1084(d) of this title; or (bb) the plan is projected to become insolvent within the meaning of sec- tion 1426 of this title for any of the 30 succeeding plan years. (5) Rehabilitation plan adoption period For purposes of this section, the term ‘‘reha- bilitation plan adoption period’’ means the pe- riod beginning on the date of the certification under subsection (b)(3)(A) for the initial crit- ical year and ending on the day before the first day of the rehabilitation period. (6) Limitation on reduction in rates of future accruals Any reduction in the rate of future accruals under the default schedule described in the last sentence of paragraph (1) shall not reduce the rate of future accruals below— (A) a monthly benefit (payable as a single life annuity commencing at the partici- pant’s normal retirement age) equal to 1 per- cent of the contributions required to be made with respect to a participant, or the equivalent standard accrual rate for a par- ticipant or group of participants under the collective bargaining agreements in effect as of the first day of the initial critical year, or (B) if lower, the accrual rate under the plan on such first day. The equivalent standard accrual rate shall be determined by the plan sponsor based on the standard or average contribution base units which the plan sponsor determines to be rep- resentative for active participants and such other factors as the plan sponsor determines to be relevant. Nothing in this paragraph shall be construed as limiting the ability of the plan sponsor to prepare and provide the bargaining parties with alternative schedules to the de- fault schedule that establish lower or higher accrual and contribution rates than the rates otherwise described in this paragraph. (7) Automatic employer surcharge (A) Imposition of surcharge Each employer otherwise obligated to make contributions for the initial critical year shall be obligated to pay to the plan for such year a surcharge equal to 5 percent of the contributions otherwise required under the applicable collective bargaining agree- ment (or other agreement pursuant to which the employer contributes). For each suc- ceeding plan year in which the plan is in critical status for a consecutive period of years beginning with the initial critical year, the surcharge shall be 10 percent of the contributions otherwise so required. (B) Enforcement of surcharge The surcharges under subparagraph (A) shall be due and payable on the same sched- ule as the contributions on which the sur- charges are based. Any failure to make a surcharge payment shall be treated as a de- linquent contribution under section 1145 of this title and shall be enforceable as such. (C) Surcharge to terminate upon collective bargaining agreement renegotiation The surcharge under this paragraph shall cease to be effective with respect to employ- ees covered by a collective bargaining agree- ment (or other agreement pursuant to which the employer contributes), beginning on the effective date of a collective bargaining agreement (or other such agreement) that includes terms consistent with a schedule presented by the plan sponsor under para- graph (1)(B)(i), as modified under subpara- graph (B) of paragraph (3). (D) Surcharge not to apply until employer re- ceives notice The surcharge under this paragraph shall not apply to an employer until 30 days after the employer has been notified by the plan sponsor that the plan is in critical status and that the surcharge is in effect. (E) Surcharge not to generate increased ben- efit accruals Notwithstanding any provision of a plan to the contrary, the amount of any surcharge under this paragraph shall not be the basis for any benefit accrual under the plan. (8) Benefit adjustments (A) Adjustable benefits (i) In general Notwithstanding section 1054(g) of this title, the plan sponsor shall, subject to the notice requirements in subparagraph (C), make any reductions to adjustable bene- fits which the plan sponsor deems appro- priate, based upon the outcome of collec- tive bargaining over the schedule or sched- ules provided under paragraph (1)(B)(i). (ii) Exception for retirees Except in the case of adjustable benefits described in clause (iv)(III), the plan spon- sor of a plan in critical status shall not re- duce adjustable benefits of any participant or beneficiary whose benefit commence- ment date is before the date on which the plan provides notice to the participant or beneficiary under subsection (b)(3)(D) for the initial critical year. (iii) Plan sponsor flexibility The plan sponsor shall include in the schedules provided to the bargaining par- Page 486 TITLE 29—LABOR § 1085 ties an allowance for funding the benefits of participants with respect to whom con- tributions are not currently required to be made, and shall reduce their benefits to the extent permitted under this sub- chapter and considered appropriate by the plan sponsor based on the plan’s then cur- rent overall funding status. (iv) Adjustable benefit defined For purposes of this paragraph, the term ‘‘adjustable benefit’’ means— (I) benefits, rights, and features under the plan, including post-retirement death benefits, 60-month guarantees, dis- ability benefits not yet in pay status, and similar benefits, (II) any early retirement benefit or re- tirement-type subsidy (within the mean- ing of section 1054(g)(2)(A) of this title) and any benefit payment option (other than the qualified joint and survivor an- nuity), and (III) benefit increases that would not be eligible for a guarantee under section 1322a of this title on the first day of ini- tial critical year because the increases were adopted (or, if later, took effect) less than 60 months before such first day. (B) Normal retirement benefits protected Except as provided in subparagraph (A)(iv)(III), nothing in this paragraph shall be construed to permit a plan to reduce the level of a participant’s accrued benefit pay- able at normal retirement age. (C) Notice requirements (i) In general No reduction may be made to adjustable benefits under subparagraph (A) unless no- tice of such reduction has been given at least 30 days before the general effective date of such reduction for all participants and beneficiaries to— (I) plan participants and beneficiaries, (II) each employer who has an obliga- tion to contribute (within the meaning of section 1392(a) of this title) under the plan, and (III) each employee organization which, for purposes of collective bar- gaining, represents plan participants em- ployed by such an employer. (ii) Content of notice The notice under clause (i) shall con- tain— (I) sufficient information to enable participants and beneficiaries to under- stand the effect of any reduction on their benefits, including an estimate (on an annual or monthly basis) of any affected adjustable benefit that a participant or beneficiary would otherwise have been eligible for as of the general effective date described in clause (i), and (II) information as to the rights and remedies of plan participants and bene- ficiaries as well as how to contact the Department of Labor for further infor- mation and assistance where appro- priate. (iii) Form and manner Any notice under clause (i)— (I) shall be provided in a form and manner prescribed in regulations of the Secretary of the Treasury, in consulta- tion with the Secretary, (II) shall be written in a manner so as to be understood by the average plan participant, and (III) may be provided in written, elec- tronic, or other appropriate form to the extent such form is reasonably acces- sible to persons to whom the notice is re- quired to be provided. The Secretary of the Treasury shall in the regulations prescribed under subclause (I) establish a model notice that a plan spon- sor may use to meet the requirements of this subparagraph. (9) Benefit suspensions for multiemployer plans in critical and declining status (A) In general Notwithstanding section 1054(g) of this title and subject to subparagraphs (B) through (I), the plan sponsor of a plan in critical and declining status may, by plan amendment, suspend benefits which the sponsor deems appropriate. (B) Suspension of benefits (i) Suspension of benefits defined For purposes of this subsection, the term ‘‘suspension of benefits’’ means the tem- porary or permanent reduction of any cur- rent or future payment obligation of the plan to any participant or beneficiary under the plan, whether or not in pay sta- tus at the time of the suspension of bene- fits. (ii) Length of suspensions Any suspension of benefits made under subparagraph (A) shall remain in effect until the earlier of when the plan sponsor provides benefit improvements in accord- ance with subparagraph (E) or the suspen- sion of benefits expires by its own terms. (iii) No liability The plan shall not be liable for any ben- efit payments not made as a result of a suspension of benefits under this para- graph. (iv) Applicability For purposes of this paragraph, all ref- erences to suspensions of benefits, in- creases in benefits, or resumptions of sus- pended benefits with respect to partici- pants shall also apply with respect to ben- efits of beneficiaries or alternative payees of participants. (v) Retiree representative (I) In general In the case of a plan with 10,000 or more participants, not later than 60 days prior to the plan sponsor submitting an application to suspend benefits, the plan sponsor shall select a participant of the Page 487 TITLE 29—LABOR § 1085 plan in pay status to act as a retiree rep- resentative. The retiree representative shall advocate for the interests of the re- tired and deferred vested participants and beneficiaries of the plan throughout the suspension approval process. (II) Reasonable expenses from plan The plan shall provide for reasonable expenses by the retiree representative, including reasonable legal and actuarial support, commensurate with the plan’s size and funded status. (III) Special rule relating to fiduciary sta- tus Duties performed pursuant to sub- clause (I) shall not be subject to section 1104(a) of this title. The preceding sen- tence shall not apply to those duties as- sociated with an application to suspend benefits pursuant to subparagraph (G) that are performed by the retiree rep- resentative who is also a plan trustee. (C) Conditions for suspensions The plan sponsor of a plan in critical and declining status for a plan year may suspend benefits only if the following conditions are met: (i) Taking into account the proposed sus- pensions of benefits (and, if applicable, a proposed partition of the plan under sec- tion 1413 of this title), the plan actuary certifies that the plan is projected to avoid insolvency within the meaning of section 1426 of this title, assuming the suspensions of benefits continue until the suspensions of benefits expire by their own terms or if no such expiration date is set, indefinitely. (ii) The plan sponsor determines, in a written record to be maintained through- out the period of the benefit suspension, that the plan is still projected to become insolvent unless benefits are suspended under this paragraph, although all reason- able measures to avoid insolvency have been taken (and continue to be taken dur- ing the period of the benefit suspension). In its determination, the plan sponsor may take into account factors including the following: (I) Current and past contribution lev- els. (II) Levels of benefit accruals (includ- ing any prior reductions in the rate of benefit accruals). (III) Prior reductions (if any) of adjust- able benefits. (IV) Prior suspensions (if any) of bene- fits under this subsection. (V) The impact on plan solvency of the subsidies and ancillary benefits available to active participants. (VI) Compensation levels of active par- ticipants relative to employees in the participants’ industry generally. (VII) Competitive and other economic factors facing contributing employers. (VIII) The impact of benefit and con- tribution levels on retaining active par- ticipants and bargaining groups under the plan. (IX) The impact of past and antici- pated contribution increases under the plan on employer attrition and retention levels. (X) Measures undertaken by the plan sponsor to retain or attract contributing employers. (D) Limitations on suspensions Any suspensions of benefits made by a plan sponsor pursuant to this paragraph shall be subject to the following limitations: (i) The monthly benefit of any partici- pant or beneficiary may not be reduced below 110 percent of the monthly benefit which is guaranteed by the Pension Ben- efit Guaranty Corporation under section 1322a of this title on the date of the sus- pension. (ii)(I) In the case of a participant or ben- eficiary who has attained 75 years of age as of the effective date of the suspension, not more than the applicable percentage of the maximum suspendable benefits of such participant or beneficiary may be sus- pended under this paragraph. (II) For purposes of subclause (I), the maximum suspendable benefits of a partic- ipant or beneficiary is the portion of the benefits of such participant or beneficiary that would be suspended pursuant to this paragraph without regard to this clause; (III) For purposes of subclause (I), the applicable percentage is a percentage equal to the quotient obtained by divid- ing— (aa) the number of months during the period beginning with the month after the month in which occurs the effective date of the suspension and ending with the month during which the participant or beneficiary attains the age of 80, by (bb) 60 months. (iii) No benefits based on disability (as defined under the plan) may be suspended under this paragraph. (iv) Any suspensions of benefits, in the aggregate (and, if applicable, considered in combination with a partition of the plan under section 1413 of this title), shall be reasonably estimated to achieve, but not materially exceed, the level that is nec- essary to avoid insolvency. (v) In any case in which a suspension of benefits with respect to a plan is made in combination with a partition of the plan under section 1413 of this title, the suspen- sion of benefits may not take effect prior to the effective date of such partition. (vi) Any suspensions of benefits shall be equitably distributed across the partici- pant and beneficiary population, taking into account factors, with respect to par- ticipants and beneficiaries and their bene- fits, that may include one or more of the following: (I) Age and life expectancy. (II) Length of time in pay status. (III) Amount of benefit. (IV) Type of benefit: survivor, normal retirement, early retirement. Page 488 TITLE 29—LABOR § 1085 (V) Extent to which participant or ben- eficiary is receiving a subsidized benefit. (VI) Extent to which participant or beneficiary has received post-retirement benefit increases. (VII) History of benefit increases and reductions. (VIII) Years to retirement for active employees. (IX) Any discrepancies between active and retiree benefits. (X) Extent to which active participants are reasonably likely to withdraw sup- port for the plan, accelerating employer withdrawals from the plan and increas- ing the risk of additional benefit reduc- tions for participants in and out of pay status. (XI) Extent to which benefits are at- tributed to service with an employer that failed to pay its full withdrawal li- ability. (vii) In the case of a plan that includes the benefits described in clause (III), bene- fits suspended under this paragraph shall— (I) first, be applied to the maximum extent permissible to benefits attrib- utable to a participant’s service for an employer which withdrew from the plan and failed to pay (or is delinquent with respect to paying) the full amount of its withdrawal liability under section 1381(b)(1) of this title or an agreement with the plan, (II) second, except as provided by sub- clause (III), be applied to all other bene- fits that may be suspended under this paragraph, and (III) third, be applied to benefits under a plan that are directly attributable to a participant’s service with any employer which has, prior to December 16, 2014— (aa) withdrawn from the plan in a complete withdrawal under section 1383 of this title and has paid the full amount of the employer’s withdrawal liability under section 1381(b)(1) of this title or an agreement with the plan, and (bb) pursuant to a collective bar- gaining agreement, assumed liability for providing benefits to participants and beneficiaries of the plan under a separate, single-employer plan spon- sored by the employer, in an amount equal to any amount of benefits for such participants and beneficiaries re- duced as a result of the financial sta- tus of the plan. (E) Benefit improvements (i) In general The plan sponsor may, in its sole discre- tion, provide benefit improvements while any suspension of benefits under the plan remains in effect, except that the plan sponsor may not increase the liabilities of the plan by reason of any benefit improve- ment for any participant or beneficiary not in pay status by the first day of the plan year for which the benefit improve- ment takes effect, unless— (I) such action is accompanied by equi- table benefit improvements in accord- ance with clause (ii) for all participants and beneficiaries whose benefit com- mencement dates were before the first day of the plan year for which the ben- efit improvement for such participant or beneficiary not in pay status took effect; and (II) the plan actuary certifies that after taking into account such benefits improvements the plan is projected to avoid insolvency indefinitely under sec- tion 1426 of this title. (ii) Equitable distribution of benefit im- provements (I) Limitation The projected value of the total liabil- ities for benefit improvements for par- ticipants and beneficiaries not in pay status by the date of the first day of the plan year in which the benefit improve- ments are proposed to take effect, as de- termined as of such date, may not exceed the projected value of the liabilities aris- ing from benefit improvements for par- ticipants and beneficiaries with benefit commencement dates prior to the first day of such plan year, as so determined. (II) Equitable distribution of benefits The plan sponsor shall equitably dis- tribute any increase in total liabilities for benefit improvements in clause (i) to some or all of the participants and bene- ficiaries whose benefit commencement date is before the date of the first day of the plan year in which the benefit im- provements are proposed to take effect, taking into account the relevant factors described in subparagraph (D)(vi) and the extent to which the benefits of the par- ticipants and beneficiaries were sus- pended. (iii) Special rule for resumptions of bene- fits only for participants in pay status The plan sponsor may increase liabilities of the plan through a resumption of bene- fits for participants and beneficiaries in pay status only if the plan sponsor equi- tably distributes the value of resumed ben- efits to some or all of the participants and beneficiaries in pay status, taking into ac- count the relevant factors described in subparagraph (D)(vi). (iv) Special rule for certain benefit in- creases This subparagraph shall not apply to a resumption of suspended benefits or plan amendment which increases liabilities with respect to participants and bene- ficiaries not in pay status by the first day of the plan year in which the benefit im- provements took effect which— (I) the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, determines to be reasonable and which provides for only de minimis increases in the liabilities of the plan, or Page 489 TITLE 29—LABOR § 1085 (II) is required as a condition of quali- fication under part I of subchapter D of chapter 1 of subtitle A of title 26 or to comply with other applicable law, as de- termined by the Secretary of the Treas- ury. (v) Additional limitations Except for resumptions of suspended benefits described in clause (iii), the limi- tations on benefit improvements while a suspension of benefits is in effect under this paragraph shall be in addition to any other applicable limitations on increases in benefits imposed on a plan. (vi) Definition of benefit improvement For purposes of this subparagraph, the term ‘‘benefit improvement’’ means, with respect to a plan, a resumption of sus- pended benefits, an increase in benefits, an increase in the rate at which benefits ac- crue, or an increase in the rate at which benefits become nonforfeitable under the plan. (F) Notice requirements (i) In general No suspension of benefits may be made pursuant to this paragraph unless notice of such proposed suspension has been given by the plan sponsor concurrently with an application for approval of such suspension submitted under subparagraph (G) to the Secretary of the Treasury to— (I) such plan participants and bene- ficiaries who may be contacted by rea- sonable efforts, (II) each employer who has an obliga- tion to contribute (within the meaning of section 1392(a) of this title) under the plan, and (III) each employee organization which, for purposes of collective bar- gaining, represents plan participants em- ployed by such an employer. (ii) Content of notice The notice under clause (i) shall con- tain— (I) sufficient information to enable participants and beneficiaries to under- stand the effect of any suspensions of benefits, including an individualized es- timate (on an annual or monthly basis) of such effect on each participant or ben- eficiary, (II) a description of the factors consid- ered by the plan sponsor in designing the benefit suspensions, (III) a statement that the application for approval of any suspension of bene- fits shall be available on the website of the Department of the Treasury and that comments on such application will be ac- cepted, (IV) information as to the rights and remedies of plan participants and bene- ficiaries, (V) if applicable, a statement describ- ing the appointment of a retiree rep- resentative, the date of appointment of such representative, identifying informa- tion about the retiree representative (in- cluding whether the representative is a plan trustee), and how to contact such representative, and (VI) information on how to contact the Department of the Treasury for further information and assistance where appro- priate. (iii) Form and manner Any notice under clause (i)— (I) shall be provided in a form and manner prescribed in guidance by the Secretary of the Treasury, in consulta- tion with the Pension Benefit Guaranty Corporation and the Secretary of Labor, notwithstanding any other provision of law, (II) shall be written in a manner so as to be understood by the average plan participant, and (III) may be provided in written, elec- tronic, or other appropriate form to the extent such form is reasonably acces- sible to persons to whom the notice is re- quired to be provided. (iv) Other notice requirement Any notice provided under clause (i) shall fulfill the requirement for notice of a significant reduction in benefits described in section 1054(h) of this title. (v) Model notice The Secretary of the Treasury, in con- sultation with the Pension Benefit Guar- anty Corporation and the Secretary of Labor, shall in the guidance prescribed under clause (iii)(I) establish a model no- tice that a plan sponsor may use to meet the requirements of this subparagraph. (G) Approval process by the Secretary of the Treasury in consultation with the Pen- sion Benefit Guaranty Corporation and the Secretary of Labor (i) In general The plan sponsor of a plan in critical and declining status for a plan year that seeks to suspend benefits must submit an appli- cation to the Secretary of the Treasury for approval of the suspensions of benefits. If the plan sponsor submits an application for approval of the suspensions, the Sec- retary of the Treasury, in consultation with the Pension Benefit Guaranty Cor- poration and the Secretary of Labor, shall approve the application upon finding that the plan is eligible for the suspensions and has satisfied the criteria of subparagraphs (C), (D), (E), and (F). (ii) Solicitation of comments Not later than 30 days after receipt of the application under clause (i), the Sec- retary of the Treasury, in consultation with the Pension Benefit Guaranty Cor- poration and the Secretary of Labor, shall publish a notice in the Federal Register soliciting comments from contributing employers, employee organizations, and Page 490 TITLE 29—LABOR § 1085 participants and beneficiaries of the plan for which an application was made and other interested parties. The application for approval of the suspension of benefits shall be published on the website of the Secretary of the Treasury. (iii) Required action; deemed approval The Secretary of the Treasury, in con- sultation with the Pension Benefit Guar- anty Corporation and the Secretary of Labor, shall approve or deny any applica- tion for suspensions of benefits under this paragraph within 225 days after the sub- mission of such application. An applica- tion for suspension of benefits shall be deemed approved unless, within such 225 days, the Secretary of the Treasury noti- fies the plan sponsor that it has failed to satisfy one or more of the criteria de- scribed in this paragraph. If the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, rejects a plan sponsor’s application, the Secretary of the Treasury shall provide notice to the plan sponsor detailing the specific reasons for the rejection, including reference to the specific requirement not satisfied. Ap- proval or denial by the Secretary of the Treasury of an application shall be treated as a final agency action for purposes of section 704 of title 5. (iv) Agency review In evaluating whether the plan sponsor has met the criteria specified in clause (ii) of subparagraph (C), the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Sec- retary of Labor, shall review the plan sponsor’s consideration of factors under such clause. (v) Standard for accepting plan sponsor de- terminations In evaluating the plan sponsor’s applica- tion, the Secretary of the Treasury shall accept the plan sponsor’s determinations unless it concludes, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, that the plan sponsor’s determinations were clearly er- roneous. (H) Participant ratification process (i) In general No suspension of benefits may take ef- fect pursuant to this paragraph prior to a vote of the participants of the plan with respect to the suspension. (ii) Administration of vote Not later than 30 days after approval of the suspension by the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Sec- retary of Labor, under subparagraph (G), the Secretary of the Treasury, in consulta- tion with the Pension Benefit Guaranty Corporation and the Secretary of Labor, shall administer a vote of participants and beneficiaries of the plan. Except as pro- vided in clause (v), the suspension shall go into effect following the vote unless a ma- jority of all participants and beneficiaries of the plan vote to reject the suspension. The plan sponsor may submit a new sus- pension application to the Secretary of the Treasury for approval in any case in which a suspension is prohibited from taking ef- fect pursuant to a vote under this subpara- graph. (iii) Ballots The plan sponsor shall provide a ballot for the vote (subject to approval by the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Cor- poration and the Secretary of Labor) that includes the following: (I) A statement from the plan sponsor in support of the suspension. (II) A statement in opposition to the suspension compiled from comments re- ceived pursuant to subparagraph (G)(ii). (III) A statement that the suspension has been approved by the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor. (IV) A statement that the plan sponsor has determined that the plan will be- come insolvent unless the suspension takes effect. (V) A statement that insolvency of the plan could result in benefits lower than benefits paid under the suspension. (VI) A statement that insolvency of the Pension Benefit Guaranty Corpora- tion would result in benefits lower than benefits paid in the case of plan insol- vency. (iv) Communication by plan sponsor It is the sense of Congress that, depend- ing on the size and resources of the plan and geographic distribution of the plan’s participants, the plan sponsor should take such steps as may be necessary to inform participants about proposed benefit sus- pensions through in-person meetings, tele- phone or internet-based communications, mailed information, or by other means. (v) Systemically important plans (I) In general Not later than 14 days after a vote under this subparagraph rejecting a sus- pension, the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, shall determine whether the plan is a systemically important plan. If the Secretary of the Treasury, in con- sultation with the Pension Benefit Guar- anty Corporation and the Secretary of Labor, determines that the plan is a sys- temically important plan, not later than the end of the 90-day period beginning on the date the results of the vote are cer- tified, the Secretary of the Treasury shall, notwithstanding such adverse vote— Page 491 TITLE 29—LABOR § 1085 (aa) permit the implementation of the suspension proposed by the plan sponsor; or (bb) permit the implementation of a modification by the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, of such suspension (so long as the plan is pro- jected to avoid insolvency within the meaning of section 1426 of this title under such modification). (II) Recommendations Not later than 30 days after a deter- mination by the Secretary of the Treas- ury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, that the plan is sys- temically important, the Participant and Plan Sponsor Advocate selected under section 1304 of this title may sub- mit recommendations to the Secretary of the Treasury with respect to the sus- pension or any revisions to the suspen- sion. (III) Systemically important plan defined (aa) In general For purposes of this subparagraph, a systemically important plan is a plan with respect to which the Pension Ben- efit Guaranty Corporation projects the present value of projected financial as- sistance payments exceeds $1,000,000,000 if suspensions are not im- plemented. (bb) Indexing For calendar years beginning after 2015, there shall be substituted for the dollar amount specified in item (aa) an amount equal to the product of such dollar amount and a fraction, the nu- merator of which is the contribution and benefit base (determined under section 430 of title 42) for the preceding calendar year and the denominator of which is such contribution and benefit base for calendar year 2014. If the amount otherwise determined under this item is not a multiple of $1,000,000, such amount shall be rounded to the next lowest multiple of $1,000,000. (vi) Final authorization to suspend In any case in which a suspension goes into effect following a vote pursuant to clause (ii) (or following a determination under clause (v) that the plan is a system- ically important plan), the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, shall issue a final authorization to suspend with respect to the suspension not later than 7 days after such vote (or, in the case of a suspension that goes into effect under clause (v), at a time sufficient to allow the implementa- tion of the suspension prior to the end of the 90-day period described in clause (v)(I)). (I) Judicial review (i) Denial of application An action by the plan sponsor chal- lenging the denial of an application for suspension of benefits by the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, may only be brought following such denial. (ii) Approval of suspension of benefits (I) Timing of action An action challenging a suspension of benefits under this paragraph may only be brought following a final authoriza- tion to suspend by the Secretary of the Treasury, in consultation with the Pen- sion Benefit Guaranty Corporation and the Secretary of Labor, under subpara- graph (H)(vi). (II) Standards of review (aa) In general A court shall review an action chal- lenging a suspension of benefits under this paragraph in accordance with sec- tion 706 of title 5. (bb) Temporary injunction A court reviewing an action chal- lenging a suspension of benefits under this paragraph may not grant a tem- porary injunction with respect to such suspension unless the court finds a clear and convincing likelihood that the plaintiff will prevail on the merits of the case. (iii) Restricted cause of action A participant or beneficiary affected by a benefit suspension under this paragraph shall not have a cause of action under this subchapter. (iv) Limitation on action to suspend bene- fits No action challenging a suspension of benefits following the final authorization to suspend or the denial of an application for suspension of benefits pursuant to this paragraph may be brought after one year after the earliest date on which the plain- tiff acquired or should have acquired ac- tual knowledge of the existence of such cause of action. (J) Special rule for emergence from critical status A plan certified to be in critical and de- clining status pursuant to projections made under subsection (b)(3) for which a suspen- sion of benefits has been made by the plan sponsor pursuant to this paragraph shall not emerge from critical status under paragraph (4)(B), until such time as— (i) the plan is no longer certified to be in critical or endangered status under para- graphs (1) and (2) of subsection (b), and (ii) the plan is projected to avoid insol- vency under section 1426 of this title. Page 492 TITLE 29—LABOR § 1085 7 So in original. There is no opening parenthesis corresponding to the second closing parenthesis. (f) Rules for operation of plan during adoption and rehabilitation period (1) Compliance with rehabilitation plan (A) In general A plan may not be amended after the date of the adoption of a rehabilitation plan under subsection (e) so as to be inconsistent with the rehabilitation plan. (B) Special rules for benefit increases A plan may not be amended after the date of the adoption of a rehabilitation plan under subsection (e) so as to increase bene- fits, including future benefit accruals, unless the plan actuary certifies that such increase is paid for out of additional contributions not contemplated by the rehabilitation plan, and, after taking into account the benefit increase, the multiemployer plan still is rea- sonably expected to emerge from critical status by the end of the rehabilitation pe- riod on the schedule contemplated in the re- habilitation plan. (2) Restriction on lump sums and similar bene- fits (A) In general Effective on the date the notice of certifi- cation of the plan’s critical status for the initial critical year under subsection (b)(3)(D) is sent, and notwithstanding sec- tion 1054(g) of this title, the plan shall not pay— (i) any payment, in excess of the month- ly amount paid under a single life annuity (plus any social security supplements de- scribed in the last sentence of section 1054(b)(1)(G) of this title), to a participant or beneficiary whose annuity starting date (as defined in section 1055(h)(2) of this title) occurs after the date such notice is sent, (ii) any payment for the purchase of an irrevocable commitment from an insurer to pay benefits, and (iii) any other payment specified by the Secretary of the Treasury by regulations. (B) Exception Subparagraph (A) shall not apply to a ben- efit which under section 1053(e) of this title may be immediately distributed without the consent of the participant or to any makeup payment in the case of a retroactive annuity starting date or any similar payment of ben- efits owed with respect to a prior period. (3) Special rules for plan adoption period During the period beginning on the date of the certification under subsection (b)(3)(A) for the initial critical year and ending on the date of the adoption of a rehabilitation plan— (A) the plan sponsor may not accept a col- lective bargaining agreement or participa- tion agreement with respect to the multiem- ployer plan that provides for— (i) a reduction in the level of contribu- tions for any participants, (ii) a suspension of contributions with respect to any period of service, or (iii) any new direct or indirect exclusion of younger or newly hired employees from plan participation, and (B) no amendment of the plan which in- creases 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 may be adopted unless the amendment is required as a condition of qualification under part I of subchapter D of chapter 1 of title 26 or to comply with other applicable law. (g) Adjustments disregarded in withdrawal li- ability determination (1) Benefit reduction Any benefit reductions under subsection (e)(8) or (f) or benefit reductions or suspen- sions while in critical and declining status under subsection (e)(9)),7 unless the with- drawal occurs more than ten years after the effective date of a benefit suspension by a plan in critical and declining status, shall be dis- regarded in determining a plan’s unfunded vested benefits for purposes of determining an employer’s withdrawal liability under section 1381 of this title. (2) Surcharges Any surcharges under subsection (e)(7) shall be disregarded in determining the allocation of unfunded vested benefits to an employer under section 1391 of this title and in deter- mining the highest contribution rate under section 1399(c) of this title, except for purposes of determining the unfunded vested benefits attributable to an employer under section 1391(c)(4) of this title or a comparable method approved under section 1391(c)(5) of this title. (3) Contribution increases required by funding improvement or rehabilitation plan (A) In general Any increase in the contribution rate (or other increase in contribution requirements unless due to increased levels of work, em- ployment, or periods for which compensa- tion is provided) that is required or made in order to enable the plan to meet the require- ment of the funding improvement plan or re- habilitation plan shall be disregarded in de- termining the allocation of unfunded vested benefits to an employer under section 1391 of this title and in determining the highest contribution rate under section 1399(c) of this title, except for purposes of determining the unfunded vested benefits attributable to an employer under section 1391(c)(4) of this title or a comparable method approved under section 1391(c)(5) of this title. (B) Special rules For purposes of this paragraph, any in- crease in the contribution rate (or other in- crease in contribution requirements) shall be deemed to be required or made in order to enable the plan to meet the requirement of the funding improvement plan or rehabilita- tion plan except for increases in contribu- tion requirements due to increased levels of work, employment, or periods for which Page 493 TITLE 29—LABOR § 1085 compensation is provided or additional con- tributions are used to provide an increase in benefits, including an increase in future ben- efit accruals, permitted by subsection (d)(1)(B) or (f)(1)(B). (4) Emergence from endangered or critical sta- tus In the case of increases in the contribution rate (or other increases in contribution re- quirements unless due to increased levels of work, employment, or periods for which com- pensation is provided) disregarded pursuant to paragraph (3), this subsection shall cease to apply as of the expiration date of the collec- tive bargaining agreement in effect when the plan emerges from endangered or critical sta- tus. Notwithstanding the preceding sentence, once the plan emerges from critical or endan- gered status, increases in the contribution rate disregarded pursuant to paragraph (3) shall continue to be disregarded in deter- mining the highest contribution rate under section 1399(c) of this title for plan years dur- ing which the plan was in endangered or crit- ical status. (5) Simplified calculations The Pension Benefit Guaranty Corporation shall prescribe simplified methods for the ap- plication of this subsection in determining withdrawal liability and payment amounts under section 1399(c) of this title. (h) Expedited resolution of plan sponsor deci- sions If, within 60 days of the due date for adoption of a funding improvement plan under subsection (c) or a rehabilitation plan under subsection (e), the plan sponsor of a plan in endangered status or a plan in critical status has not agreed on a funding improvement plan or rehabilitation plan, then any member of the board or group that constitutes the plan sponsor may require that the plan sponsor enter into an expedited dispute resolution procedure for the develop- ment and adoption of a funding improvement plan or rehabilitation plan. (i) Nonbargained participation (1) Both bargained and nonbargained em- ployee-participants In the case of an employer that contributes to a multiemployer plan with respect to both employees who are covered by one or more col- lective bargaining agreements and employees who are not so covered, if the plan is in endan- gered status or in critical status, benefits of and contributions for the nonbargained em- ployees, including surcharges on those con- tributions, shall be determined as if those non- bargained employees were covered under the first to expire of the employer’s collective bar- gaining agreements in effect when the plan en- tered endangered or critical status. (2) Nonbargained employees only In the case of an employer that contributes to a multiemployer plan only with respect to employees who are not covered by a collective bargaining agreement, this section shall be ap- plied as if the employer were the bargaining party, and its participation agreement with the plan were a collective bargaining agree- ment with a term ending on the first day of the plan year beginning after the employer is provided the schedule or schedules described in subsections (c) and (e). (j) Definitions; actuarial method For purposes of this section— (1) Bargaining party The term ‘‘bargaining party’’ means— (A)(i) except as provided in clause (ii), an employer who has an obligation to con- tribute under the plan; or (ii) in the case of a plan described under section 404(c) of title 26, or a continuation of such a plan, the association of employers that is the employer settlor of the plan; and (B) an employee organization which, for purposes of collective bargaining, represents plan participants employed by an employer who has an obligation to contribute under the plan. (2) Funded percentage The term ‘‘funded percentage’’ means the percentage equal to a fraction— (A) the numerator of which is the value of the plan’s assets, as determined under sec- tion 1084(c)(2) of this title, and (B) the denominator of which is the ac- crued liability of the plan, determined using actuarial assumptions described in section 1084(c)(3) of this title. (3) Accumulated funding deficiency The term ‘‘accumulated funding deficiency’’ has the meaning given such term in section 1084(a) of this title. (4) Active participant The term ‘‘active participant’’ means, in connection with a multiemployer plan, a par- ticipant who is in covered service under the plan. (5) Inactive participant The term ‘‘inactive participant’’ means, in connection with a multiemployer plan, a par- ticipant, or the beneficiary or alternate payee of a participant, who— (A) is not in covered service under the plan, and (B) is in pay status under the plan or has a nonforfeitable right to benefits under the plan. (6) Pay status A person is in pay status under a multiem- ployer plan if— (A) at any time during the current plan year, such person is a participant or bene- ficiary under the plan and is paid an early, late, normal, or disability retirement benefit under the plan (or a death benefit under the plan related to a retirement benefit), or (B) to the extent provided in regulations of the Secretary of the Treasury, such person is entitled to such a benefit under the plan. (7) Obligation to contribute The term ‘‘obligation to contribute’’ has the meaning given such term under section 1392(a) of this title. Page 494 TITLE 29—LABOR § 1085 (8) Actuarial method Notwithstanding any other provision of this section, the actuary’s determinations with re- spect to a plan’s normal cost, actuarial ac- crued liability, and improvements in a plan’s funded percentage under this section shall be based upon the unit credit funding method (whether or not that method is used for the plan’s actuarial valuation). (9) Plan sponsor In the case of a plan described under section 404(c) of title 26, or a continuation of such a plan, the term ‘‘plan sponsor’’ means the bar- gaining parties described under paragraph (1). (10) Benefit commencement date The term ‘‘benefit commencement date’’ means the annuity starting date (or in the case of a retroactive annuity starting date, the date on which benefit payments begin). (Pub. L. 93–406, title I, § 305, as added Pub. L. 109–280, title II, § 202(a), Aug. 17, 2006, 120 Stat. 868; amended Pub. L. 110–458, title I, § 102(b)(1)(B)–(G), Dec. 23, 2008, 122 Stat. 5100, 5101; Pub. L. 113–235, div. O, title I, §§ 102(a), 103(a), 104(a), 105(a), 106(a), 107(a), 109(a), title II, § 201(a)(1)–(3), (5)–(7)(A), Dec. 16, 2014, 128 Stat. 2774, 2777, 2779, 2781, 2783, 2789, 2798, 2799–2809.) Editorial Notes REFERENCES IN TEXT The enactment of the Pension Protection Act of 2006, referred to in subsec. (e)(4)(B)(i)(II), means the enact- ment of Pub. L. 109–280, which was approved Aug. 17, 2006. PRIOR PROVISIONS A prior section 1085, Pub. L. 93–406, title I, § 305, Sept. 2, 1974, 88 Stat. 873, related to alternative minimum funding standard, prior to repeal by Pub. L. 109–280, title I, § 101(a), (d), Aug. 17, 2006, 120 Stat. 784, 789, appli- cable to plan years beginning after 2007. AMENDMENTS 2014—Subsec. (a)(3). Pub. L. 113–235, § 201(a)(1), added par. (3). Subsec. (b)(1). Pub. L. 113–235, § 104(a)(1)(A), sub- stituted ‘‘the plan is not in critical status for the plan year and is not described in paragraph (5),’’ for ‘‘the plan is not in critical status for the plan year’’. Subsec. (b)(3)(A)(i). Pub. L. 113–235, § 201(a)(3), sub- stituted ‘‘, whether’’ for ‘‘and whether’’ and inserted ‘‘, and whether or not the plan is or will be in critical and declining status for such plan year’’ before ‘‘, and’’ at end. Pub. L. 113–235, § 104(a)(3), which directed insertion of ‘‘, or would be in endangered status for such plan year but for paragraph (5),’’ after ‘‘endangered status for a plan year’’, was executed by making the insertion after ‘‘endangered status for such plan year’’ to reflect the probable intent of Congress. Pub. L. 113–235, § 102(a)(2)(A), substituted ‘‘or for any of the succeeding 5 plan years, and’’ for ‘‘, and’’ at end. Subsec. (b)(3)(B)(i). Pub. L. 113–235, § 102(a)(2)(B)(i), substituted ‘‘Except as provided in clause (iv), in mak- ing the determinations’’ for ‘‘In making the determina- tions’’. Subsec. (b)(3)(B)(iv). Pub. L. 113–235, § 201(a)(5), added cl. (iv) relating to projections of critical and declining status. Pub. L. 113–235, § 102(a)(2)(B)(ii), added cl. (iv) relating to projections relating to critical status in succeeding plan years. Subsec. (b)(3)(D)(i). Pub. L. 113–235, § 102(a)(3)(A)(ii), inserted at end ‘‘In any case in which a plan sponsor elects to be in critical status for a plan year under paragraph (4), the plan sponsor shall notify the Sec- retary of the Treasury of such election not later than 30 days after the date of such certification or such other time as the Secretary of the Treasury may pre- scribe by regulations or other guidance.’’ Pub. L. 113–235, § 102(a)(3)(A)(i), inserted ‘‘or in which a plan sponsor elects to be in critical status for a plan year under paragraph (4)’’ after ‘‘endangered or critical status for a plan year’’. Subsec. (b)(3)(D)(iii). Pub. L. 113–235, § 104(a)(2)(B), added cl. (iii). Former cl. (iii) redesignated (iv). Subsec. (b)(3)(D)(iv). Pub. L. 113–235, § 104(a)(2)(C), substituted ‘‘clauses (ii) and (iii)’’ for ‘‘clause (ii)’’. Pub. L. 113–235, § 104(a)(2)(A), redesignated cl. (iii) as (iv). Former cl. (iv) redesignated (v). Pub. L. 113–235, § 102(a)(3)(B), added cl. (iv). Subsec. (b)(3)(D)(v). Pub. L. 113–235, § 104(a)(2)(A), re- designated cl. (iv) as (v). Subsec. (b)(4). Pub. L. 113–235, § 102(a)(1), added par. (4). Subsec. (b)(5). Pub. L. 113–235, § 104(a)(1)(B), added par. (5). Subsec. (b)(6). Pub. L. 113–235, § 201(a)(2), added par. (6). Subsec. (c)(3)(A)(i)(I). Pub. L. 113–235, § 105(a)(1), sub- stituted ‘‘of the first plan year for which the plan is certified to be in endangered status pursuant to para- graph (b)(3)’’ for ‘‘of such period’’. Subsec. (c)(3)(A)(ii). Pub. L. 113–235, § 105(a)(2), sub- stituted ‘‘the last plan year’’ for ‘‘any plan year’’. Subsec. (c)(7). Pub. L. 113–235, § 107(a)(1), amended par. (7) generally. Prior to amendment, par. (7) related to imposition of default schedule where failure to adopt funding improvement plan. Subsec. (d). Pub. L. 113–235, § 106(a), amended subsec. (d) generally. Prior to amendment, subsec. (d) related to rules for operation of plan during adoption and im- provement periods. Subsec. (e)(3)(C). Pub. L. 113–235, § 107(a)(2), amended subpar. (C) generally. Prior to amendment, subpar. (C) related to imposition of default schedule where failure to adopt rehabilitation plan. Subsec. (e)(4)(B). Pub. L. 113–235, § 103(a), amended subpar. (B) generally. Prior to amendment, subpar. (B) related to emergence of plan from critical status. Subsec. (e)(9). Pub. L. 113–235, § 201(a)(6), added par. (9). Pub. L. 113–235, § 109(a)(1), struck out par. (9) which related to adjustments disregarded in withdrawal li- ability determination. Subsec. (f)(3), (4). Pub. L. 113–235, § 109(a)(2), redesig- nated par. (4) as (3), substituted ‘‘During the period be- ginning on the date of the certification under sub- section (b)(3)(A) for the initial critical year and ending on the date of the adoption of a rehabilitation plan—’’ for ‘‘During the rehabilitation plan adoption period—’’ in introductory provisions, and struck out former par. (3). Text read as follows ‘‘Any benefit reductions under this subsection shall be disregarded in determining a plan’s unfunded vested benefits for purposes of deter- mining an employer’s withdrawal liability under sec- tion 1381 of this title.’’ Subsec. (g). Pub. L. 113–235, § 109(a)(4), added subsec. (g). Former subsec. (g) redesignated (h). Subsec. (g)(1). Pub. L. 113–235, § 201(a)(7)(A), inserted ‘‘or benefit reductions or suspensions while in critical and declining status under subsection (e)(9)), unless the withdrawal occurs more than ten years after the effec- tive date of a benefit suspension by a plan in critical and declining status,’’ after ‘‘benefit reductions under subsection (e)(8) or (f)’’. Subsecs. (h) to (j). Pub. L. 113–235, § 109(a)(3), redesig- nated subsecs. (g), (h), and (i) as (h), (i), and (j), respec- tively. 2008—Subsec. (b)(3)(C). Pub. L. 110–458, § 102(b)(1)(B), substituted ‘‘section 1021(b)(1)’’ for ‘‘section 1021(b)(4)’’. Subsec. (b)(3)(D)(iii). Pub. L. 110–458, § 102(b)(1)(C), substituted ‘‘The Secretary of the Treasury, in con- sultation with the Secretary’’ for ‘‘The Secretary’’. Page 495 TITLE 29—LABOR § 1085 Subsec. (c)(7)(A)(ii). Pub. L. 110–458, § 102(b)(1)(D)(i), substituted ‘‘to adopt a contribution schedule with terms consistent with the funding improvement plan and a schedule from the plan sponsor,’’ for ‘‘to agree on changes to contribution or benefit schedules necessary to meet the applicable benchmarks in accordance with the funding improvement plan,’’. Subsec. (c)(7)(B), (C). Pub. L. 110–458, § 102(b)(1)(D)(ii), (iii), added subpars. (B) and (C) and struck out former subpar. (B). Prior to amendment, text read as follows: ‘‘The date specified in this subparagraph is the earlier of the date— ‘‘(i) on which the Secretary certifies that the par- ties are at an impasse, or ‘‘(ii) which is 180 days after the date on which the collective bargaining agreement described in sub- paragraph (A) expires.’’ Subsec. (e)(3)(C)(i)(II). Pub. L. 110–458, § 102(b)(1)(E)(i)(I), substituted ‘‘to adopt a contribution schedule with terms consistent with the rehabilitation plan and a schedule from the plan sponsor under para- graph (1)(B)(i),’’ for ‘‘contribution or benefit schedules with terms consistent with the rehabilitation plan and the schedule from the plan sponsor under paragraph (1)(B)(i),’’. Subsec. (e)(3)(C)(ii), (iii). Pub. L. 110–458, § 102(b)(1)(E)(i)(II), (III), added cls. (ii) and (iii) and struck out former cl. (ii). Prior to amendment, text read as follows: ‘‘The date specified in this clause is the earlier of the date— ‘‘(I) on which the Secretary certifies that the par- ties are at an impasse, or ‘‘(II) which is 180 days after the date on which the collective bargaining agreement described in clause (i) expires.’’ Subsec. (e)(4)(A)(ii). Pub. L. 110–458, § 102(b)(1)(E)(ii)(I), struck out ‘‘the date of’’ before ‘‘the due date’’. Subsec. (e)(4)(B). Pub. L. 110–458, § 102(b)(1)(E)(ii)(II), substituted ‘‘but taking’’ for ‘‘and taking’’. Subsec. (e)(6). Pub. L. 110–458, § 102(b)(1)(E)(iii), sub- stituted ‘‘the last sentence of paragraph (1)’’ for ‘‘para- graph (1)(B)(i)’’ in introductory provisions and ‘‘estab- lish’’ for ‘‘established’’ in concluding provisions. Subsec. (e)(8)(C)(iii). Pub. L. 110–458, § 102(b)(1)(E)(iv), substituted ‘‘the Secretary of the Treasury, in con- sultation with the Secretary’’ for ‘‘the Secretary’’ in subcl. (I) and ‘‘Secretary of the Treasury’’ for ‘‘Sec- retary’’ in concluding provisions. Subsec. (e)(9)(B). Pub. L. 110–458, § 102(b)(1)(E)(v), sub- stituted ‘‘the allocation of unfunded vested benefits to an employer’’ for ‘‘an employer’s withdrawal liability’’. Subsec. (f)(2)(A)(i). Pub. L. 110–458, § 102(b)(1)(F), in- serted at end ‘‘to a participant or beneficiary whose an- nuity starting date (as defined in section 1055(h)(2) of this title) occurs after the date such notice is sent,’’. Subsec. (g). Pub. L. 110–458, § 102(b)(1)(G), inserted ‘‘under subsection (c)’’ before ‘‘or a rehabilitation plan under subsection (e)’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2014 AMENDMENT Amendment by section 102(a) of Pub. L. 113–235 appli- cable with respect to plan years beginning after Dec. 31, 2014, see section 102(c) of div. O of Pub. L. 113–235, set out as a note under section 432 of Title 26, Internal Rev- enue Code. Amendment by section 103(a) of Pub. L. 113–235 appli- cable with respect to plan years beginning after Dec. 31, 2014, see section 103(c) of div. O of Pub. L. 113–235, set out as a note under section 432 of Title 26, Internal Rev- enue Code. Amendment by section 104(a) of Pub. L. 113–235 appli- cable with respect to plan years beginning after Dec. 31, 2014, see section 104(c) of div. O of Pub. L. 113–235, set out as a note under section 432 of Title 26, Internal Rev- enue Code. Amendment by section 105(a) of Pub. L. 113–235 appli- cable with respect to plan years beginning after Dec. 31, 2014, see section 105(c) of div. O of Pub. L. 113–235, set out as a note under section 432 of Title 26, Internal Rev- enue Code. Amendment by section 106(a) of Pub. L. 113–235 appli- cable with respect to plan years beginning after Dec. 31, 2014, see section 106(c) of div. O of Pub. L. 113–235, set out as a note under section 432 of Title 26, Internal Rev- enue Code. Amendment by section 107(a) of Pub. L. 113–235 appli- cable with respect to plan years beginning after Dec. 31, 2014, see section 107(c) of div. O of Pub. L. 113–235, set out as a note under section 432 of Title 26, Internal Rev- enue Code. Amendment by section 109(a) of Pub. L. 113–235 appli- cable to benefit reductions and increases in the con- tribution rate or other required contribution increases that go into effect during plan years beginning after Dec. 31, 2014, and to surcharges the obligation for which accrue on or after Dec. 31, 2014, see section 109(c) of div. O of Pub. L. 113–235, set out as a note under section 432 of Title 26, Internal Revenue Code. EFFECTIVE DATE OF 2008 AMENDMENT Amendment by Pub. L. 110–458 effective as if included in the provisions of Pub. L. 109–280 to which the amend- ment relates, except as otherwise provided, see section 112 of Pub. L. 110–458, set out as a note under section 72 of Title 26, Internal Revenue Code. EFFECTIVE DATE Section applicable with respect to plan years begin- ning after 2007, with special rules for certain notices and certain restored benefits, see section 202(f) of Pub. L. 109–280, set out as an Effective Date of 2006 Amend- ment note under section 1082 of this title. TEMPORARY DELAY OF DESIGNATION OF MULTIEM- PLOYER PLANS AS IN ENDANGERED, CRITICAL, OR CRITICAL AND DECLINING STATUS For provisions allowing election of delay of status designation of endangered, critical, or critical and de- clining multiemployer plans for purposes of this sec- tion, see section 9701 of Pub. L. 117–2, set out as a note under section 432 of Title 26, Internal Revenue Code. TEMPORARY EXTENSION OF THE FUNDING IMPROVEMENT AND REHABILITATION PERIODS FOR MULTIEMPLOYER PENSION PLANS IN CRITICAL AND ENDANGERED STA- TUS FOR 2020 OR 2021 For provisions allowing election of extension of fund- ing improvement period or rehabilitation period of en- dangered or critical multiemployer plans for purposes of this section, see section 9702 of Pub. L. 117–2, set out as a note under section 432 of Title 26, Internal Revenue Code. GUIDANCE Pub. L. 113–235, div. O, title II, § 201(a)(8), Dec. 16, 2014, 128 Stat. 2810, provided that: ‘‘Not later than 180 days after the date of the enactment of this Act [Dec. 16, 2014], the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, shall publish appropriate guidance to implement section 305(e)(9) of the Employee Retire- ment Income Security Act of 1974 (29 U.S.C. 1085(e)(9)).’’ TEMPORARY DELAY OF DESIGNATION OF MULTIEM- PLOYER PLANS AS IN ENDANGERED OR CRITICAL STA- TUS For provisions allowing election of delay of status designation of endangered or critical multiemployer plans for purposes of this section, see section 204 of Pub. L. 110–458, set out as a note under section 432 of Title 26, Internal Revenue Code. TEMPORARY EXTENSION OF THE FUNDING IMPROVEMENT AND REHABILITATION PERIODS FOR MULTIEMPLOYER PENSION PLANS IN CRITICAL AND ENDANGERED STA- TUS FOR 2008 OR 2009 For provisions allowing election of extension of fund- ing improvement period or rehabilitation period of en- Page 496 TITLE 29—LABOR § 1085a dangered or critical multiemployer plans for purposes of this section, see section 205 of Pub. L. 110–458, set out as a note under section 432 of Title 26, Internal Revenue Code. SPECIAL RULE FOR CERTAIN BENEFITS FUNDED UNDER AN AGREEMENT APPROVED BY THE PENSION BENEFIT GUARANTY CORPORATION For applicability of this section to a multiemployer plan that is a party to an agreement that was approved by the Pension Benefit Guaranty Corporation prior to June 30, 2005, and that increases benefits and provides for certain withdrawal liability rules, see section 206 of Pub. L. 109–280, set out as a note under section 412 of Title 26, Internal Revenue Code. § 1085a. Minimum funding standards (a) General rule For purposes of section 1082 of this title, the term ‘‘accumulated funding deficiency’’ for a CSEC plan means the excess of the total charges to the funding standard account for all plan years (beginning with the first plan year to which section 1082 of this title applies) over the total credits to such account for such years or, if less, the excess of the total charges to the al- ternative minimum funding standard account for such plan years over the total credits to such account for such years. (b) Funding standard account (1) Account required Each plan to which this section applies shall establish and maintain a funding standard ac- count. Such account shall be credited and charged solely as provided in this section. (2) Charges to account For a plan year, the funding standard ac- count shall be charged with the sum of— (A) the normal cost of the plan for the plan year, (B) the amounts necessary to amortize in equal annual installments (until fully amor- tized)— (i) in the case of a plan in existence on January 1, 1974, the unfunded past service liability under the plan on the first day of the first plan year to which section 1082 of this title applies, over a period of 40 plan years, (ii) in the case of a plan which comes into existence after January 1, 1974, but before the first day of the first plan year beginning after December 31, 2013, the un- funded past service liability under the plan on the first day of the first plan year to which section 1082 of this title applies, over a period of 30 plan years, (iii) separately, with respect to each plan year, the net increase (if any) in unfunded past service liability under the plan aris- ing from plan amendments adopted in such year, over a period of 15 plan years, (iv) separately, with respect to each plan year, the net experience loss (if any) under the plan, over a period of 5 plan years, and (v) separately, with respect to each plan year, the net loss (if any) resulting from changes in actuarial assumptions used under the plan, over a period of 10 plan years, (C) the amount necessary to amortize each waived funding deficiency (within the mean- ing of section 1082(c)(3) of this title) for each prior plan year in equal annual installments (until fully amortized) over a period of 5 plan years, (D) the amount necessary to amortize in equal annual installments (until fully amor- tized) over a period of 5 plan years any amount credited to the funding standard ac- count under paragraph (3)(D), and (E) the amount necessary to amortize in equal annual installments (until fully amor- tized) over a period of 20 years the contribu- tions which would be required to be made under the plan but for the provisions of sec- tion 1082(c)(7)(A)(i)(I) of this title (as in ef- fect on the day before August 17, 2006). (3) Credits to account For a plan year, the funding standard ac- count shall be credited with the sum of— (A) the amount considered contributed by the employer to or under the plan for the plan year, (B) the amount necessary to amortize in equal annual installments (until fully amor- tized)— (i) separately, with respect to each plan year, the net decrease (if any) in unfunded past service liability under the plan aris- ing from plan amendments adopted in such year, over a period of 15 plan years, (ii) separately, with respect to each plan year, the net experience gain (if any) under the plan, over a period of 5 plan years, and (iii) separately, with respect to each plan year, the net gain (if any) resulting from changes in actuarial assumptions used under the plan, over a period of 10 plan years, (C) the amount of the waived funding defi- ciency (within the meaning of section 1082(c)(3) of this title) for the plan year, and (D) in the case of a plan year for which the accumulated funding deficiency is deter- mined under the funding standard account if such plan year follows a plan year for which such deficiency was determined under the al- ternative minimum funding standard, the excess (if any) of any debit balance in the funding standard account (determined with- out regard to this subparagraph) over any debit balance in the alternative minimum funding standard account. (4) Combining and offsetting amounts to be amortized Under regulations prescribed by the Sec- retary of the Treasury, amounts required to be amortized under paragraph (2) or paragraph (3), as the case may be— (A) may be combined into one amount under such paragraph to be amortized over a period determined on the basis of the re- maining amortization period for all items entering into such combined amount, and (B) may be offset against amounts re- quired to be amortized under the other such paragraph, with the resulting amount to be