TitleI - Amendments to Title IV of the Employee Retirement Income Security Act of 1974=
Amends title IV of the Employee Retirement Income Security Act (ERISA) to direct the Pension Benefit Guaranty Corporation (PBGC) to guarantee nonforfeitable pension benefits (other than those becoming nonforfeitable solely on account of a plan termination) under the terms of an insolvent multiemployer plan, if such benefits have been in effect for five years:
(1) before the plan's termination; or
(2) before a plan year with respect to which the benefits were reduced under the multiemployer plan reorganization provisions of this Act. Specifies rules relating to such time periods.
Sets forth a formula for determining the basic-benefit guarantee level.
Directs the PBGC to report to Congress within five years of enactment (and at least every subsequent fifth year) on:
(1) the premiums needed to maintain such levels; and
(2) whether such levels may be increased without increasing the basic-benefit premiums for multiemployer plans under such title.
Requires any such report which indicates the need for a premium increase to include revised schedules of:
(1) basic-benefit guarantees which would be necessary without such increase;
(2) basic-benefit premiums necessary to support existing basic-benefit guarantees; and
(3) basic-benefit guarantees for which the schedule of premiums necessary is higher than the existing premium schedule but lower than such revised schedule of premiums.
Declares that the revised schedule of benefit guarantees without an increase in premiums shall become effective if a proposed increase is not approved by Congress within a specified period.
Provides that a proposed increase shall become effective as approved by Congress by a concurrent resolution.
Requires any such report which indicates that basic-benefit guarantees can be increased without increasing basic-benefit premiums to include revised schedules of:
(1) increases in the basic-benefit guarantees which can be supported by the existing schedule of basic-benefit premiums; and
(2) basic-benefit premiums sufficient to support the existing basic-benefit guarantees.
Declares that such revised schedules shall go into effect as approved by a concurrent resolution.
Directs the PBGC to propose regulations to establish a supplemental program to guarantee nonbasic benefits under the multiemployer plans.
Requires that, for such supplemental program:
(1) coverage be available by January 1, 1983;
(2) participation be on voluntary basis;
(3) plans electing supplemental coverage continue to pay premiums at a specified rate to a revolving fund for guaranteed benefits;
(4) financing be only out of premiums collected specifically under such supplemental program;
(5) election of coverage be within a specified time and be irrevocable unless otherwise provided by regulations; and
(6) a plan have a specified amount of assets in order to elect supplemental coverage.
Provides that, in the case of a participant or beneficiary under a multiemployer plan who is in pay status on July 29, 1980,or who is within 36 months of the normal retirement age and has a nonforfeitable right to a pension under such a plan on that date, the benefit guaranteed by the PBGC shall be determined without regard to the amendments made by this Act. Applies the existing aggregate limit on benefits guaranteed under single-employer plans to the basic benefits guaranteed under multiemployer plans to the basic benefits guaranteed under multiemployer plans.
Provides that a multiemployer plan terminates as a result of:
(1) the adoption of a plan amendment that (A) ends crediting of additional service to participants, or (B) causes the plan to become an individual account plan; or
(2) the withdrawal of every employer from the plan.
Specifies rules relating to the date of termination.
Limits in general, the payment of benefits of a terminated multiemployer plan to vested benefits as of the termination date.
Requires benefits attributable to employer contributions, other than death benefits, to be paid as an annuity, unless the plan distributes its assets in satisfaction of all vested benefits, but authorizes the plan sponsor to distribute the present value of a participant's entire nonforfeitable benefits attributable to such contributions up to $1,750.
Allows the PBGC to:
(1) authorize the payment of non-vested benefits, or lump-sum amounts greater than $1,750 under certain circumstances; and
(2) prescribe reporting requirements, rules, and standards with respect to terminated plans.
Makes an employer who withdraws from a multiemployer plan liable to the plan according to a specified formula.
States that such withdrawal occurs when the employer permanently ceases:
(1) to have an obligation to contribute (e.g.
under a collective bargaining agreement); or
(2) all covered options under the plan.
States circumstances under which a withdrawal does not occur.
Sets forth special withdrawal provisions with respect to employers required to contribute under plans only for work performed in:
(1) the building and construction industry;
(2) certain portions of the entertainment industry; or
(3) the long and short haul trucking industry, the household goods moving industry, or the public warehousing industry.
Authorizes the PBGC to make regulations altering the entertainment industry special withdrawal provisions as these may apply to the motion picture industry.
Authorizes the PBGC to extend the construction industry definition of withdrawal to other industries or parts of industries where appropriate.
Sets forth conditions which a seller and purchaser must meet in order that a sale of assets not be considered a complete or partial withdrawal of an employer.
Provides that, with specified exceptions, withdrawal by an employer from a plan occurs if there is:
(1) a 70 percent contribution decline; and
(2) a partial cessation of the employer's contribution obligation.
Permits a plan in which a majority of the covered employees are in the retail food industry to be amended to provide that partial withdrawal occurs if there is a 35 percent contribution decline.
Sets forth procedures for determining the amount of employer liability in the case of a partial withdrawal from a plan.
Directs the PBGC to provide regulations, upon determination of consistency with the purposes of such Act:
(1) for the reduction or waiver of complete withdrawal liability in the event that an employer who has withdrawn from a plan subsequently resumes covered positions under the plan or renews an obligation to contribute under the plan; and
(2) for procedures for plan amendments to provide for such reductions or waivers.
Provides for reduction or abatement of partial withdrawal liability.
Provides for reduction of withdrawal liability by a de minimis amount.
Sets forth mandatory and discretionary de minimis rules, inapplicable in cases of mass employer withdrawals.
(Sets the mandatory de minimis reduction ceiling at $100,000.) Exempts from withdrawal liability employers who had obligations to contribute to a plan (except one primarily covering building and construction industry employees) for only specified temporary periods.
Sets forth methods for computing withdrawal liability under specified conditions.
Permits a plan to provide that determination of withdrawal liability be based on its own reasonable-in-the-aggregate actuarial assumptions or on the actuarial assumptions set forth in PBGC regulations.
Prohibits specified plan rules or amendments relating to withdrawal liability from applying retroactively without the affected employer's consent.
Requires uniform operation and application of all plan rules and amendments with respect to each employer, but permits special provisions to take employer credit worthiness into account.
Requires plan sponsors to give notice to all employers with contributions obligations and all employee organizations representing employees covered under the plan of any plan rules or amendments adopted.
Authorizes the PBGC to require the multiemployer plan sponsor to notify the PBGC of withdrawals which have or will result in significant reduction in the amount of aggregate employer contributions under the plan.
(1) special rules for specified plans;
(2) partial application of liability in case of certain withdrawals prior to April 29, 1980;
(3) withdrawal not to occur merely because of change in business form or suspension of contributions during a labor dispute; and
(4) notice and collection of withdrawal liability.
Makes the plan sponsor responsible for identifying withdrawing employers and determining the amount of withdrawal liability, but gives any such employer the opportunity to identify inaccuracies and furnish additional information.
Requires plan amendments which are authorized by the withdrawal provision of this Act and adopted more than 36 months after enactment to be approved by the PBGC. Directs the PBGC to disapprove such amendments only upon determination that such amendments create an unreasonable risk of loss to plan participants and beneficiaries or to the PBGC. Requires that disputes between an employer and a multiemployer plan sponsor concerning a plan's determination of withdrawal liability or unfunded vested benefits be resolved through arbitration.
Treats a plan, for purposes of such arbitration, as having met its burden of proof with respect to its unfunded vested benefits if certain standards are satisfied.
Requires employers to pay withdrawal liability as originally determined pending resolution of such dispute, but provides that failure to pay an installment before the conclusion of arbitration does not accelerate payment of future installments.
Permits any party to such arbitration to bring an action in U.S. district court to enforce, vacate, or modify the arbitrator's award.
Provides that, in such action, there be a rebuttable presumption that the arbitrator's findings of fact were correct.
Directs the PBGC to establish, by May 1, 1982, a supplemental program to reimburse multiemployer plans for withdrawal liability payments which are due from employers and which are determined to be uncollectible because of bankruptcy or insolvency proceedings involving the employer (or because of other reasons the PBGC considers appropriate).
Requires that plans which elect such coverage pay premiums to the corporation to cover the cost of such program.
Authorizes the PBGC to enter into arrangements with private insurers to carry out in whole or in part such supplemental program.
Permits plan sponsors of multiemployer plans to establish or participate in withdrawal liability payments funds, which are trusts:
(1) established and maintained as tax-exempt organizations;
(2) maintaining agreements covering a substantial portion of the participants in plans eligible to participate in the fund;
(3) funded by payments by the participating plans; and
(4) administered by a Board of Trustees, with equal presentation of contributing employers and participating employees.
Requires that such funds be maintained for the exclusive purpose of paying specified withdrawal liability and withdrawal liability-type payments to plans and reasonable administrative expenses for a fund's operation.
Provides that such funds be subrogated to the rights of a plan against a withdrawn employer for specified amounts paid by a fund to a plan.
Prohibits payments from such funds to a plan on the occasion of a withdrawal or partial withdrawal of an employer from such plan if the employees representing the withdrawn contribution base unit to continue, after such withdrawal, to be represented in collective bargaining negotiations with such employer by the labor organization which represented such employees immediately preceding such withdrawal.
Permits the establishment of employer-funded payment funds to pay plan-related liabilities in certain circumstances, by employers in the building and construction industry on behalf of plans which primarily cover employees in such industry.
Authorizes the PBGC to prescribe regulations for withdrawal liability payment funds.
Allows a plan to provide, under PBGC regulations, an alternative method of payment which permits a temporary reduction in the payment of withdrawal liability of an employer in financial distress.
Requires a plan to provide such an alternative method to an employer if an arbitrator determines, upon application by a plan or an employer, that such method is in the best interests of plan participants and beneficiaries.
Provides for limitations on withdrawal liability of employers in specified cases of:
(2) individual employers; and
(3) asset sales.
Prohibits a plan sponsor, unless otherwise provided by PBGC regulations, from causing a multiemployer plan to merge with one or more multiemployer plans, or engage in a transfer of assets or liabilities to or from another multiemployer plan, unless:
(1) the plan sponsor gives 120 days prior notice to the PBGC of a merger with or transfer of plan assets or liability to another plan;
(2) no accrued benefit of a participant beneficiary will be lower immediately after the merger or transfer;
(3) benefits are not reasonably expected to be subject to specified suspensions; and
(4) specified actuarial valuations have been performed.
Requires that no accrued benefits may be lower immediately after merger or transfer of liabilities between single-member plans and multiemployer plans.
Makes a multiemployer plan which transfers assets or liabilities to a single-employer plan liable to the PBGC if the single-employer plan terminates within 60 months of the transfer, except where the PBGC has approved the transfer or has failed to rule on the adequacy of the protection of interest within a 180-day period.
Sets forth exceptions from such liability.
Authorizes the PBGC to make equitable arrangements for satisfaction of such liability.
Provides that benefits transferred to a single-employer plan under such merger or transfer rules are thereafter to be governed by single-employer plan termination rules.
Prohibits a multiemployer plan from transferring liabilities to a single-employer plan unless the single-employer plan sponsor agrees (except in specified cases where there is advance agreement by the employer obligated to contribute to the single-employer plan).
Authorizes the PBGC to prescribe additional requirements, necessary to protect plan participants and beneficiaries and the PBGC for transfers of assets or liabilities.
Requires PBGC approval for transfers of assets or liabilities to single-employer plans from plans in reorganization.
Requires transfers in connection with terminations due to mass withdrawal to meet any PBGC requirements established to prevent an increase in the risk of loss to the PBGC. Permits plan sponsors to request the PBGC for an order partitioning a plan.
Requires that prior to such order the PBGC notify the plan sponsor and the participants and beneficiaries whose benefit entitlement would be partitioned.
Authorizes the PBGC to order partitioning the plan, if the PBGC finds that:
(1) a bankruptcy or similar proceeding with respect to an employer has resulted or will result in a substantial reduction in the amount of aggregate contributions under the plan;
(2) such plan is likely to become insolvent;
(3) contributions will have to be increased significantly in reorganization to meet the minimum contribution requirement and prevent insolvency; and
(4) partition will significantly reduce such risk of insolvency.
Requires that such partition order provide for transfer of no more than the nonforfeitable benefits directly attributable to service with such employer and an equitable share of plan assets.
Declares that the new plan to which the benefits attributable to the bankrupt employer are transferred is to be treated as:
(1) a successor plan for multiemployer benefit guarantee purposes; and
(2) a plan terminated by mass withdrawal, with respect to which only the bankrupt employer has withdrawal liability.
Authorizes the PBGC to seek a court decree partitioning the plan and appointing a trustee for the new terminated plan.
Requires a transfer of assets from a multiemployer plan to another plan to comply with asset-transfer rules adopted by the multiemployer plan which are reasonable and fair.
Directs the PBGC to prescribe regulations which exempt de minimis transfers from the transfer rules of this Act. Exempts from such rules transfers of assets pursuant to written reciprocity agreements, unless otherwise provided by the PBGC regulations.
Provides for transfers in cases of complete or partial withdrawal attributable to a certified change in collective bargaining representative.
Requires the plan sponsor to transfer the appropriate amount of assets and liabilities to the new plan, upon timely request by the new plan and the employer's consent to the transfer, under specified conditions.
Specifies a funding test ("reorganization index") to identify multiemployer plans which are financially distressed ("in reorganization").
Requires that, except as provided by PBGC regulations, while a plan is in reorganization a participant's nonforfeitable benefit (other than a death benefit) which is attributable to employer contributions and which has an actuarial present value of more than $1,750, may only be paid in the form of an annuity which by itself or with other benefits provides substantially level payments over the expected life of the participant.
Requires the plan sponsor of a multiemployer plan to notify contributing employers and labor organizations representing participants that the plan is in reorganization and that an excise tax may be imposed on employers if contributions are not increased.
Authorizes the PBGC to prescribe additional reorganization notice or information requirements.
Requires a plan in reorganization to continue to maintain its funding standard account and to meet special minimum contribution requirements (MCR). Subjects employers to excise taxes on accumulated funding deficiencies (or to conditions for waiver of such deficiencies), if contributions are not sufficient to satisfy requirements for a plan year.
Establishes a minimum contribution requirement (MCR) which each multiemployer plan must satisfy for each plan year that it is in a reorganization deficiency, as defined by this Act, for the plan year.
Prohibits the minimum contribution requirement applicable to a plan for a particular plan year from exceeding a specified amount.
Entitles a plan in reorganization which is "overburdened" (basically, that the "pay status participants", such as retirees, exceed the number of participants) to apply an overburden credit against such plan's reorganization deficiency.
Defines as "insolvent" a multiemployer plan which has insufficient available resources to pay benefits under the plan when due for the plan year.
Requires plan sponsors to determine and certify a "resource benefit level" (a reduced level of benefits based on available resources, but not below the guaranteeable level).
Provides that non-basic benefit payments above such level shall be suspended, unless the PBGC prescribes an alternative procedure with respect to a supplemental guarantee program.
Requires a plan sponsor who determines at the end of an insolvency year that the plan's available resources could have supported payments above the resources benefit level to distribute such excess resources.
Provides for the distribution of benefits which have not been paid at the resource benefit level.
Directs the PBGC, upon verification that a plan is or will be insolvent, to provide sufficient financial assistance for the payment of basic benefits under such plans.
Requires the plans to repay the PBGC on reasonable terms consistent with regulations.
Specifies benefit requirements with respect to a plan which terminates because of the withdrawal of all employers.
Requires the plan sponsor, in such cases to amend the plan to reduce benefits to a specified extent and suspend certain benefit payments.
Sets forth special rules for the termination of an insolvent plan.
Gives to a plan fiduciary, employer, plan participant or beneficiary (an employee organization representing such participant or beneficiary for collective bargaining purposes) who is adversely affected by the act of any party under specified provisions of this Act a cause of action in a district court without regard to the amount in controversy.
(Does not authorize actions against the Secretary of the Treasury, the Secretary of Labor, or the PBGC.) Makes the Federal court jurisdiction exclusive, but authorizes a plan fiduciary to bring an action in a State court to collect withdrawal liability.
Establishes a civil penalty of up to $100 per day for failure to comply with a notice requirement under specified provisions of this Act. Directs the PBGC to prescribe five separate schedules of insurance premiums rates and bases, including basic benefits for single-employer and multiemployer plans and nonbasic benefits for such plans, and reimbursement of uncollectible withdrawal liability.
Sets forth a graduated increase in the basic benefits for multiemployer plans (but retains the current annual premium for single-employer plans).
Continues the present-law rules for determination of premiums with respect to single employer plans.
Provides for notice in the Federal Register and public hearings on specified increases.
Provides for Congressional review of specified revised schedules of premiums.
Authorizes the PBGC to require a plan administer of a multiemployer plan to include in the plan's annual report information which is necessary to enforce specified provisions of this Act. Repeals the contingent employer liability insurance provisions of ERISA. Sets forth transition rules and effective dates.
Includes special withdrawal provisions for certain employers engaged in the trade or business of shipping bulk cargoes in the Great Lakes Maritime Industry. Makes withdrawal liability provisions effective May 31, 1979 with respect to certain employers who withdrew from multiemployer plans covering employees in the seagoing industry (in connection with ports on the U.S. West Coast). Permits a plan sponsor of a multiemployer plan to irrevocably elect that the plan not be considered a multiemployer plan, but be considered a single-employer plan, for any purpose under ERISA or the Internal Revenue Code of 1954, if the plan:
(1) was not a multiemployer plan on the day before the enactment of this Act; and
(2) had been identified as such in specified filings.
Directs the PBGC to prescribe procedures for such election.
Requires that such election be made within one year after the date of enactment of this Act. =