PUBLIC LAW 113–97—APR. 7, 2014 128 STAT. 1101 

Public Law 113–97 

113th Congress 

An Act 

To amend the Employee Retirement Income Security Act of 1974 and the Internal 

Revenue Code of 1986 to provide for cooperative and small employer charity 

pension plans. 

Be it enacted by the Senate and House of Representatives of 

the United States of America in Congress assembled, 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Cooperative 

and Small Employer Charity Pension Flexibility Act’’. 

(b) TABLE OF CONTENTS.—The table of contents of this Act 

is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Congressional findings and declarations of policy. 

Sec. 3. Effective date. 

TITLE I—AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY 

ACT OF 1974 AND OTHER PROVISIONS 

Sec. 101. Definition of cooperative and small employer charity pension plans. 

Sec. 102. Funding rules applicable to cooperative and small employer charity pension plans. 

Sec. 103. Elections. 

Sec. 104. Transparency. 

Sec. 105. Sponsor education and assistance. 

TITLE II—AMENDMENTS TO INTERNAL REVENUE CODE OF 1986 

Sec. 201. Definition of cooperative and small employer charity pension plans. 

Sec. 202. Funding rules applicable to cooperative and small employer charity pension plans. 

Sec. 203. Election not to be treated as a CSEC plan. 

SEC. 2. CONGRESSIONAL FINDINGS AND DECLARATIONS OF POLICY. 

Congress finds as follows: 

(1) Defined benefit pension plans are a cost-effective way 

for cooperative associations and charities to provide their 

employees with economic security in retirement. 

(2) Many cooperative associations and charitable organizations are only able to provide their employees with defined 

benefit pension plans because those organizations are able to 

pool their resources using the multiple employer plan structure. 

(3) The pension funding rules should encourage cooperative 

associations and charities to continue to provide their employees 

with pension benefits. 

SEC. 3. EFFECTIVE DATE. 

Unless otherwise specified in this Act, the provisions of this 

Act shall apply to years beginning after December 31, 2013. 

Applicability. 

29 USC 401 note. 

29 USC 1001 

note. 

29 USC 1001 

note. 

Cooperative and 

Small Employer 

Charity Pension 

Flexibility Act. 

Apr. 7, 2014 

[H.R. 4275] 


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128 STAT. 1102 PUBLIC LAW 113–97—APR. 7, 2014 

TITLE I—AMENDMENTS TO EMPLOYEE 

RETIREMENT INCOME SECURITY ACT 

OF 1974 AND OTHER PROVISIONS 

SEC. 101. DEFINITION OF COOPERATIVE AND SMALL EMPLOYER 

CHARITY PENSION PLANS. 

Section 210 of the Employee Retirement Income Security Act 

of 1974 (29 U.S.C. 1060) is amended by adding at the end the 

following new subsection: 

‘‘(f) COOPERATIVE AND SMALL EMPLOYER CHARITY PENSION

PLANS.— 

‘‘(1) IN GENERAL.—For purposes of this title, except as 

provided in this subsection, a CSEC plan is an employee pension benefit plan (other than a multiemployer plan) that is 

a defined benefit plan— 

‘‘(A) to which section 104 of the Pension Protection 

Act of 2006 applies, without regard to— 

‘‘(i) section 104(a)(2) of such Act; 

‘‘(ii) the amendments to such section 104 by section 

202(b) of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010; and 

‘‘(iii) paragraph (3)(B); or 

‘‘(B) that, as of June 25, 2010, was maintained by 

more than one employer and all of the employers were 

organizations described in section 501(c)(3) of the Internal 

Revenue Code of 1986. 

‘‘(2) AGGREGATION.—All employers that are treated as a 

single employer under subsection (b) or (c) of section 414 of 

the Internal Revenue Code of 1986 shall be treated as a single 

employer for purposes of determining if a plan was maintained 

by more than one employer under paragraph (1)(B).’’. 

SEC. 102. FUNDING RULES APPLICABLE TO COOPERATIVE AND SMALL 

EMPLOYER CHARITY PENSION PLANS. 

(a) IN GENERAL.—Part 3 of title I of the Employee Retirement 

Income Security Act of 1974 (29 U.S.C. 1081 et seq.) is amended 

by adding at the end the following new section: 

‘‘SEC. 306. MINIMUM FUNDING STANDARDS. 

‘‘(a) GENERAL RULE.—For purposes of section 302, 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 302 

applies) over the total credits to such account for such years or, 

if less, the excess of the total charges to the alternative 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 

account. Such account shall be credited and charged solely 

as provided in this section. 

‘‘(2) CHARGES TO ACCOUNT.—For a plan year, the funding 

standard account shall be charged with the sum of— 

‘‘(A) the normal cost of the plan for the plan year, 

Definition. 

29 USC 1085a. 

Applicability. 


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‘‘(B) the amounts necessary to amortize in equal annual 

installments (until fully amortized)— 

‘‘(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 302 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 unfunded past service liability under the 

plan on the first day of the first plan year to which 

section 302 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 arising 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 meaning of section 302(c)(3)) 

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 amortized) over a period of 5 plan 

years any amount credited to the funding standard account 

under paragraph (3)(D), and 

‘‘(E) the amount necessary to amortize in equal annual 

installments (until fully amortized) over a period of 20 

years the contributions which would be required to be 

made under the plan but for the provisions of section 

302(c)(7)(A)(i)(I) (as in effect on the day before the enactment of the Pension Protection Act of 2006). 

‘‘(3) CREDITS TO ACCOUNT.—For a plan year, the funding 

standard account 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 amortized)— 

‘‘(i) separately, with respect to each plan year, 

the net decrease (if any) in unfunded past service 

liability under the plan arising 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 deficiency 

(within the meaning of section 302(c)(3)) for the plan year, 

and 


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‘‘(D) in the case of a plan year for which the accumulated funding deficiency is determined under the funding 

standard account if such plan year follows a plan year 

for which such deficiency was determined under the alternative minimum funding standard, the excess (if any) of 

any debit balance in the funding standard account (determined without regard to this subparagraph) over any debit 

balance in the alternative minimum funding standard 

account. 

‘‘(4) COMBINING AND OFFSETTING AMOUNTS TO BE AMOR- TIZED.—Under regulations prescribed by the Secretary 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 remaining amortization period for all items 

entering into such combined amount, and 

‘‘(B) may be offset against amounts required to be 

amortized under the other such paragraph, with the 

resulting amount to be amortized over a period determined 

on the basis of the remaining amortization periods for 

all items entering into whichever of the two amounts being 

offset is the greater. 

‘‘(5) INTEREST.— 

‘‘(A) IN GENERAL.—Except as provided in subparagraph 

(B), the funding standard account (and items therein) shall 

be charged or credited (as determined under regulations 

prescribed by the Secretary of the Treasury) with interest 

at the appropriate rate consistent with the rate or rates 

of interest used under the plan to determine costs. 

‘‘(B) EXCEPTION.—The interest rate used for purposes 

of computing the amortization charge described in subsection (b)(2)(C) or for purposes of any arrangement under 

subsection (d) for any plan year shall be the greater of— 

‘‘(i) 150 percent of the Federal mid-term rate (as 

in effect under section 1274 of the Internal Revenue 

Code of 1986 for the 1st month of such plan year), 

or 

‘‘(ii) the rate of interest determined under subparagraph (A). 

‘‘(6) AMORTIZATION SCHEDULES IN EFFECT.—Amortization 

schedules for amounts described in paragraphs (2) and (3) 

that are in effect as of the last day of the last plan year 

beginning before January 1, 2014, by reason of section 104 

of the Pension Protection Act of 2006 shall remain in effect 

pursuant to their terms and this section, except that such 

amounts shall not be amortized again under this section. 

‘‘(c) SPECIAL RULES.— 

‘‘(1) DETERMINATIONS TO BE MADE UNDER FUNDING

METHOD.—For purposes of this section, normal costs, accrued 

liability, past service liabilities, and experience gains and losses 

shall be determined under the funding method used to determine costs under the plan. 

‘‘(2) VALUATION OF ASSETS.— 

‘‘(A) IN GENERAL.—For purposes of this section, the 

value of the plan’s assets shall be determined on the basis 

of any reasonable actuarial method of valuation which 

Regulations. 

Regulations. 


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takes into account fair market value and which is permitted 

under regulations prescribed by the Secretary of the 

Treasury. 

‘‘(B) DEDICATED BOND PORTFOLIO.—The Secretary of 

the Treasury may by regulations provide that the value 

of any dedicated bond portfolio of a plan shall be determined by using the interest rate under section 302(b)(5) 

(as in effect on the day before the enactment of the Pension 

Protection Act of 2006). 

‘‘(3) ACTUARIAL ASSUMPTIONS MUST BE REASONABLE.—For 

purposes of this section, all costs, liabilities, rates of interest, 

and other factors under the plan shall be determined on the 

basis of actuarial assumptions and methods— 

‘‘(A) each of which is reasonable (taking into account 

the experience of the plan and reasonable expectations), 

and 

‘‘(B) which, in combination, offer the actuary’s best 

estimate of anticipated experience under the plan. 

‘‘(4) TREATMENT OF CERTAIN CHANGES AS EXPERIENCE GAIN

OR LOSS.—For purposes of this section, if— 

‘‘(A) a change in benefits under the Social Security 

Act or in other retirement benefits created under Federal 

or State law, or 

‘‘(B) a change in the definition of the term ‘wages’ 

under section 3121 of the Internal Revenue Code of 1986 

or a change in the amount of such wages taken into account 

under regulations prescribed for purposes of section 

401(a)(5) of such Code, 

results in an increase or decrease in accrued liability under 

a plan, such increase or decrease shall be treated as an experience loss or gain. 

‘‘(5) FUNDING METHOD AND PLAN YEAR.— 

‘‘(A) FUNDING METHODS AVAILABLE.—All funding 

methods available to CSEC plans under section 302 (as 

in effect on the day before the enactment of the Pension 

Protection Act of 2006) shall continue to be available under 

this section. 

‘‘(B) CHANGES.—If the funding method for a plan is 

changed, the new funding method shall become the funding 

method used to determine costs and liabilities under the 

plan only if the change is approved by the Secretary of 

the Treasury. If the plan year for a plan is changed, the 

new plan year shall become the plan year for the plan 

only if the change is approved by the Secretary of the 

Treasury. 

‘‘(C) APPROVAL REQUIRED FOR CERTAIN CHANGES IN

ASSUMPTIONS BY CERTAIN SINGLE-EMPLOYER PLANS SUBJECT

TO ADDITIONAL FUNDING REQUIREMENT.— 

‘‘(i) IN GENERAL.—No actuarial assumption (other 

than the assumptions described in subsection (h)(3)) 

used to determine the current liability for a plan to 

which this subparagraph applies may be changed without the approval of the Secretary of the Treasury. 

‘‘(ii) PLANS TO WHICH SUBPARAGRAPH APPLIES.— 

This subparagraph shall apply to a plan only if— 

‘‘(I) the plan is a CSEC plan, 

Determination. 


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‘‘(II) the aggregate unfunded vested benefits 

as of the close of the preceding plan year (as determined under section 4006(a)(3)(E)(iii)) of such plan 

and all other plans maintained by the contributing 

sponsors (as defined in section 4001(a)(13)) and 

members of such sponsors’ controlled groups (as 

defined in section 4001(a)(14)) which are covered 

by title IV (disregarding plans with no unfunded 

vested benefits) exceed $50,000,000, and 

‘‘(III) the change in assumptions (determined 

after taking into account any changes in interest 

rate and mortality table) results in a decrease 

in the funding shortfall of the plan for the current 

plan year that exceeds $50,000,000, or that exceeds 

$5,000,000 and that is 5 percent or more of the 

current liability of the plan before such change. 

‘‘(6) FULL FUNDING.—If, as of the close of a plan year, 

a plan would (without regard to this paragraph) have an 

accumulated funding deficiency (determined without regard to 

the alternative minimum funding standard account permitted 

under subsection (e)) in excess of the full funding limitation— 

‘‘(A) the funding standard account shall be credited 

with the amount of such excess, and 

‘‘(B) all amounts described in paragraphs (2)(B), (C), 

and (D) and (3)(B) of subsection (b) which are required 

to be amortized shall be considered fully amortized for 

purposes of such paragraphs. 

‘‘(7) FULL-FUNDING LIMITATION.—For purposes of paragraph 

(6), the term ‘full-funding limitation’ means the excess (if any) 

of— 

‘‘(A) the accrued liability (including normal cost) under 

the plan (determined under the entry age normal funding 

method if such accrued liability cannot be directly calculated under the funding method used for the plan), over 

‘‘(B) the lesser of— 

‘‘(i) the fair market value of the plan’s assets, 

or 

‘‘(ii) the value of such assets determined under 

paragraph (2). 

‘‘(C) MINIMUM AMOUNT.— 

‘‘(i) IN GENERAL.—In no event shall the full-funding 

limitation determined under subparagraph (A) be less 

than the excess (if any) of— 

‘‘(I) 90 percent of the current liability (determined without regard to paragraph (4) of subsection (h)) of the plan (including the expected 

increase in such current liability due to benefits 

accruing during the plan year), over 

‘‘(II) the value of the plan’s assets determined 

under paragraph (2). 

‘‘(ii) ASSETS.—For purposes of clause (i), assets 

shall not be reduced by any credit balance in the 

funding standard account. 

‘‘(8) ANNUAL VALUATION.— 

‘‘(A) IN GENERAL.—For purposes of this section, a determination of experience gains and losses and a valuation 

of the plan’s liability shall be made not less frequently 

Regulations. 


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than once every year, except that such determination shall 

be made more frequently to the extent required in particular cases under regulations prescribed by the Secretary 

of the Treasury. 

‘‘(B) VALUATION DATE.— ‘‘(i) CURRENT YEAR.—Except as provided in clause 

(ii), the valuation referred to in subparagraph (A) shall 

be made as of a date within the plan year to which 

the valuation refers or within one month prior to the 

beginning of such year. 

‘‘(ii) USE OF PRIOR YEAR VALUATION.—The valuation referred to in subparagraph (A) may be made 

as of a date within the plan year prior to the year 

to which the valuation refers if, as of such date, the 

value of the assets of the plan are not less than 100 

percent of the plan’s current liability. 

‘‘(iii) ADJUSTMENTS.—Information under clause (ii) 

shall, in accordance with regulations, be actuarially 

adjusted to reflect significant differences in participants. 

‘‘(iv) LIMITATION.—A change in funding method to 

use a prior year valuation, as provided in clause (ii), 

may not be made unless as of the valuation date within 

the prior plan year, the value of the assets of the 

plan are not less than 125 percent of the plan’s current 

liability. 

‘‘(9) TIME WHEN CERTAIN CONTRIBUTIONS DEEMED MADE.— 

For purposes of this section, any contributions for a plan year 

made by an employer during the period— 

‘‘(A) beginning on the day after the last day of such 

plan year, and 

‘‘(B) ending on the day which is 81⁄2 months after 

the close of the plan year, 

shall be deemed to have been made on such last day. 

‘‘(10) ANTICIPATION OF BENEFIT INCREASES EFFECTIVE IN

THE FUTURE.—In determining projected benefits, the funding 

method of a collectively bargained CSEC plan described in 

section 413(a) of the Internal Revenue Code of 1986 shall 

anticipate benefit increases scheduled to take effect during 

the term of the collective bargaining agreement applicable to 

the plan. 

‘‘(d) EXTENSION OF AMORTIZATION PERIODS.—The period of 

years required to amortize any unfunded liability (described in 

any clause of subsection (b)(2)(B)) of any plan may be extended 

by the Secretary of the Treasury for a period of time (not in 

excess of 10 years) if such Secretary determines that such extension 

would carry out the purposes of this Act and provide adequate 

protection for participants under the plan and their beneficiaries, 

and if such Secretary determines that the failure to permit such 

extension would result in— 

‘‘(1) a substantial risk to the voluntary continuation of 

the plan, or 

‘‘(2) a substantial curtailment of pension benefit levels or 

employee compensation. 

‘‘(e) ALTERNATIVE MINIMUM FUNDING STANDARD.— ‘‘(1) IN GENERAL.—A CSEC plan which uses a funding 

method that requires contributions in all years not less than 


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128 STAT. 1108 PUBLIC LAW 113–97—APR. 7, 2014 

those required under the entry age normal funding method 

may maintain an alternative minimum funding standard 

account for any plan year. Such account shall be credited and 

charged solely as provided in this subsection. 

‘‘(2) CHARGES AND CREDITS TO ACCOUNT.—For a plan year 

the alternative minimum funding standard account shall be— 

‘‘(A) charged with the sum of— 

‘‘(i) the lesser of normal cost under the funding 

method used under the plan or normal cost determined 

under the unit credit method, 

‘‘(ii) the excess, if any, of the present value of 

accrued benefits under the plan over the fair market 

value of the assets, and 

‘‘(iii) an amount equal to the excess (if any) of 

credits to the alternative minimum standard account 

for all prior plan years over charges to such account 

for all such years, and 

‘‘(B) credited with the amount considered contributed 

by the employer to or under the plan for the plan year. 

‘‘(3) INTEREST.—The alternative minimum funding 

standard account (and items therein) shall be charged or credited with interest in the manner provided under subsection 

(b)(5) with respect to the funding standard account. 

‘‘(f) QUARTERLY CONTRIBUTIONS REQUIRED.— 

‘‘(1) IN GENERAL.—If a CSEC plan which has a funded 

current liability percentage for the preceding plan year of less 

than 100 percent fails to pay the full amount of a required 

installment for the plan year, then the rate of interest charged 

to the funding standard account under subsection (b)(5) with 

respect to the amount of the underpayment for the period 

of the underpayment shall be equal to the greater of— 

‘‘(A) 175 percent of the Federal mid-term rate (as in 

effect under section 1274 of the Internal Revenue Code 

of 1986 for the 1st month of such plan year), or 

‘‘(B) the rate of interest used under the plan in determining costs. 

‘‘(2) AMOUNT OF UNDERPAYMENT, PERIOD OF UNDERPAYMENT.—For purposes of paragraph (1)— 

‘‘(A) AMOUNT.—The amount of the underpayment shall 

be the excess of— 

‘‘(i) the required installment, over 

‘‘(ii) the amount (if any) of the installment contributed to or under the plan on or before the due date 

for the installment. 

‘‘(B) PERIOD OF UNDERPAYMENT.—The period for which 

interest is charged under this subsection with regard to 

any portion of the underpayment shall run from the due 

date for the installment to the date on which such portion 

is contributed to or under the plan (determined without 

regard to subsection (c)(9)). 

‘‘(C) ORDER OF CREDITING CONTRIBUTIONS.—For purposes of subparagraph (A)(ii), contributions shall be credited against unpaid required installments in the order in 

which such installments are required to be paid. 

‘‘(3) NUMBER OF REQUIRED INSTALLMENTS; DUE DATES.— 

For purposes of this subsection— 


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‘‘(A) PAYABLE IN 4 INSTALLMENTS.—There shall be 4 

required installments for each plan year. 

‘‘(B) TIME FOR PAYMENT OF INSTALLMENTS.— 

‘‘In the case of the following 

required installments: The due date is: 

1st ................................................. April 15

2nd ............................................... July 15

3rd ................................................ October 15

4th ................................................ January 15 of the following 

year. 

‘‘(4) AMOUNT OF REQUIRED INSTALLMENT.—For purposes of 

this subsection— 

‘‘(A) IN GENERAL.—The amount of any required installment shall be 25 percent of the required annual payment. 

‘‘(B) REQUIRED ANNUAL PAYMENT.—For purposes of 

subparagraph (A), the term ‘required annual payment’ 

means the lesser of— 

‘‘(i) 90 percent of the amount required to be contributed to or under the plan by the employer for the 

plan year under section 302 (without regard to any 

waiver under subsection (c) thereof), or 

‘‘(ii) 100 percent of the amount so required for 

the preceding plan year. 

Clause (ii) shall not apply if the preceding plan year was 

not a year of 12 months. 

‘‘(5) LIQUIDITY REQUIREMENT.— ‘‘(A) IN GENERAL.—A plan to which this paragraph 

applies shall be treated as failing to pay the full amount 

of any required installment to the extent that the value 

of the liquid assets paid in such installment is less than 

the liquidity shortfall (whether or not such liquidity shortfall exceeds the amount of such installment required to 

be paid but for this paragraph). 

‘‘(B) PLANS TO WHICH PARAGRAPH APPLIES.—This paragraph shall apply to a CSEC plan other than a plan 

described in section 302(d)(6)(A) (as in effect on the day 

before the enactment of the Pension Protection Act of 2006) 

which— 

‘‘(i) is required to pay installments under this subsection for a plan year, and 

‘‘(ii) has a liquidity shortfall for any quarter during 

such plan year. 

‘‘(C) PERIOD OF UNDERPAYMENT.—For purposes of paragraph (1), any portion of an installment that is treated 

as not paid under subparagraph (A) shall continue to be 

treated as unpaid until the close of the quarter in which 

the due date for such installment occurs. 

‘‘(D) LIMITATION ON INCREASE.—If the amount of any 

required installment is increased by reason of subparagraph (A), in no event shall such increase exceed the 

amount which, when added to prior installments for the 

plan year, is necessary to increase the funded current 

liability percentage (taking into account the expected 

Applicability. 


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increase in current liability due to benefits accruing during 

the plan year) to 100 percent. 

‘‘(E) DEFINITIONS.—For purposes of this paragraph— 

‘‘(i) LIQUIDITY SHORTFALL.—The term ‘liquidity 

shortfall’ means, with respect to any required installment, an amount equal to the excess (as of the last 

day of the quarter for which such installment is made) 

of the base amount with respect to such quarter over 

the value (as of such last day) of the plan’s liquid 

assets. 

‘‘(ii) BASE AMOUNT.— ‘‘(I) IN GENERAL.—The term ‘base amount’ 

means, with respect to any quarter, an amount 

equal to 3 times the sum of the adjusted disbursements from the plan for the 12 months ending 

on the last day of such quarter. 

‘‘(II) SPECIAL RULE.—If the amount determined 

under subclause (I) exceeds an amount equal to 

2 times the sum of the adjusted disbursements 

from the plan for the 36 months ending on the 

last day of the quarter and an enrolled actuary 

certifies to the satisfaction of the Secretary of the 

Treasury that such excess is the result of nonrecurring circumstances, the base amount with 

respect to such quarter shall be determined without regard to amounts related to those nonrecurring circumstances. 

‘‘(iii) DISBURSEMENTS FROM THE PLAN.—The term 

‘disbursements from the plan’ means all disbursements 

from the trust, including purchases of annuities, payments of single sums and other benefits, and administrative expenses. 

‘‘(iv) ADJUSTED DISBURSEMENTS.—The term 

‘adjusted disbursements’ means disbursements from 

the plan reduced by the product of— 

‘‘(I) the plan’s funded current liability percentage for the plan year, and 

‘‘(II) the sum of the purchases of annuities, 

payments of single sums, and such other disbursements as the Secretary of the Treasury shall provide in regulations. 

‘‘(v) LIQUID ASSETS.—The term ‘liquid assets’ 

means cash, marketable securities and such other 

assets as specified by the Secretary of the Treasury 

in regulations. 

‘‘(vi) QUARTER.—The term ‘quarter’ means, with 

respect to any required installment, the 3-month period 

preceding the month in which the due date for such 

installment occurs. 

‘‘(F) REGULATIONS.—The Secretary of the Treasury may 

prescribe such regulations as are necessary to carry out 

this paragraph. 

‘‘(6) FISCAL YEARS AND SHORT YEARS.— 

‘‘(A) FISCAL YEARS.—In applying this subsection to a 

plan year beginning on any date other than January 1, 

there shall be substituted for the months specified in this 

subsection, the months which correspond thereto. 

Applicability. 

Certification. 

Determination. 


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‘‘(B) SHORT PLAN YEAR.—This subsection shall be 

applied to plan years of less than 12 months in accordance 

with regulations prescribed by the Secretary of the 

Treasury. 

‘‘(g) IMPOSITION OF LIEN WHERE FAILURE TO MAKE REQUIRED

CONTRIBUTIONS.— ‘‘(1) IN GENERAL.—In the case of a plan to which this 

section applies, if— 

‘‘(A) any person fails to make a required installment 

under subsection (f) or any other payment required under 

this section before the due date for such installment or 

other payment, and 

‘‘(B) the unpaid balance of such installment or other 

payment (including interest), when added to the aggregate 

unpaid balance of all preceding such installments or other 

payments for which payment was not made before the 

due date (including interest), exceeds $1,000,000, 

then there shall be a lien in favor of the plan in the amount 

determined under paragraph (3) upon all property and rights 

to property, whether real or personal, belonging to such person 

and any other person who is a member of the same controlled 

group of which such person is a member. 

‘‘(2) PLANS TO WHICH SUBSECTION APPLIES.—This subsection 

shall apply to a CSEC plan for any plan year for which the 

funded current liability percentage of such plan is less than 

100 percent. This subsection shall not apply to any plan to 

which section 4021 does not apply (as such section is in effect 

on the date of the enactment of the Retirement Protection 

Act of 1994). 

‘‘(3) AMOUNT OF LIEN.—For purposes of paragraph (1), the 

amount of the lien shall be equal to the aggregate unpaid 

balance of required installments and other payments required 

under this section (including interest)— 

‘‘(A) for plan years beginning after 1987, and 

‘‘(B) for which payment has not been made before 

the due date. 

‘‘(4) NOTICE OF FAILURE; LIEN.— 

‘‘(A) NOTICE OF FAILURE.—A person committing a 

failure described in paragraph (1) shall notify the Pension 

Benefit Guaranty Corporation of such failure within 10 

days of the due date for the required installment or other 

payment. 

‘‘(B) PERIOD OF LIEN.—The lien imposed by paragraph 

(1) shall arise on the due date for the required installment 

or other payment and shall continue until the last day 

of the first plan year in which the plan ceases to be 

described in paragraph (1)(B). Such lien shall continue 

to run without regard to whether such plan continues 

to be described in paragraph (2) during the period referred 

to in the preceding sentence. 

‘‘(C) CERTAIN RULES TO APPLY.—Any amount with 

respect to which a lien is imposed under paragraph (1) 

shall be treated as taxes due and owing the United States 

and rules similar to the rules of subsections (c), (d), and 

(e) of section 4068 shall apply with respect to a lien imposed 

by subsection (a) and the amount with respect to such 

lien. 

Applicability. 

Regulations. 


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128 STAT. 1112 PUBLIC LAW 113–97—APR. 7, 2014 

‘‘(5) ENFORCEMENT.—Any lien created under paragraph (1) 

may be perfected and enforced only by the Pension Benefit 

Guaranty Corporation, or at the direction of the Pension Benefit 

Guaranty Corporation, by any contributing employer (or any 

member of the controlled group of the contributing employer). 

‘‘(6) DEFINITIONS.—For purposes of this subsection— 

‘‘(A) DUE DATE; REQUIRED INSTALLMENT.—The terms 

‘due date’ and ‘required installment’ have the meanings 

given such terms by subsection (f), except that in the case 

of a payment other than a required installment, the due 

date shall be the date such payment is required to be 

made under this section. 

‘‘(B) CONTROLLED GROUP.—The term ‘controlled group’ 

means any group treated as a single employer under subsections (b), (c), (m), and (o) of section 414 of the Internal 

Revenue Code of 1986. 

‘‘(h) CURRENT LIABILITY.—For purposes of this section— 

‘‘(1) IN GENERAL.—The term ‘current liability’ means all 

liabilities to employees and their beneficiaries under the plan. 

‘‘(2) TREATMENT OF UNPREDICTABLE CONTINGENT EVENT

BENEFITS.— 

‘‘(A) IN GENERAL.—For purposes of paragraph (1), any 

unpredictable contingent event benefit shall not be taken 

into account until the event on which the benefit is contingent occurs. 

‘‘(B) UNPREDICTABLE CONTINGENT EVENT BENEFIT.— 

The term ‘unpredictable contingent event benefit’ means 

any benefit contingent on an event other than— 

‘‘(i) age, service, compensation, death, or disability, 

or 

‘‘(ii) an event which is reasonably and reliably 

predictable (as determined by the Secretary of the 

Treasury). 

‘‘(3) INTEREST RATE AND MORTALITY ASSUMPTIONS USED.— 

‘‘(A) INTEREST RATE.—The rate of interest used to determine current liability under this section shall be the third 

segment rate determined under section 303(h)(2)(C). 

‘‘(B) MORTALITY TABLES.— 

‘‘(i) SECRETARIAL AUTHORITY.—The Secretary of the 

Treasury may by regulation prescribe mortality tables 

to be used in determining current liability under this 

subsection. Such tables shall be based upon the actual 

experience of pension plans and projected trends in 

such experience. In prescribing such tables, the Secretary of the Treasury shall take into account results 

of available independent studies of mortality of individuals covered by pension plans. 

‘‘(ii) PERIODIC REVIEW.—The Secretary of the 

Treasury shall periodically (at least every 5 years) 

review any tables in effect under this subsection and 

shall, to the extent the Secretary of the Treasury determines necessary, by regulation update the tables to 

reflect the actual experience of pension plans and projected trends in such experience. 

‘‘(C) SEPARATE MORTALITY TABLES FOR THE DISABLED.— 

Notwithstanding subparagraph (B)— 

Regulations. 


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‘‘(i) IN GENERAL.—In the case of plan years beginning after December 31, 1995, the Secretary of the 

Treasury shall establish mortality tables which may 

be used (in lieu of the tables under subparagraph 

(B)) to determine current liability under this subsection 

for individuals who are entitled to benefits under the 

plan on account of disability. The Secretary of the 

Treasury shall establish separate tables for individuals 

whose disabilities occur in plan years beginning before 

January 1, 1995, and for individuals whose disabilities 

occur in plan years beginning on or after such date. 

‘‘(ii) SPECIAL RULE FOR DISABILITIES OCCURRING

AFTER 1994.—In the case of disabilities occurring in 

plan years beginning after December 31, 1994, the 

tables under clause (i) shall apply only with respect 

to individuals described in such subclause who are 

disabled within the meaning of title II of the Social 

Security Act and the regulations thereunder. 

‘‘(4) CERTAIN SERVICE DISREGARDED.— 

‘‘(A) IN GENERAL.—In the case of a participant to whom 

this paragraph applies, only the applicable percentage of 

the years of service before such individual became a participant shall be taken into account in computing the current 

liability of the plan. 

‘‘(B) APPLICABLE PERCENTAGE.—For purposes of this 

subparagraph, the applicable percentage shall be determined as follows: 

‘‘If the years of participation 

are: 

The applicable percentage 

is: 

1 ..................................................... 20

2 ..................................................... 40

3 ..................................................... 60

4 ..................................................... 80

5 or more ....................................... 100. 

‘‘(C) PARTICIPANTS TO WHOM PARAGRAPH APPLIES.—This 

subparagraph shall apply to any participant who, at the 

time of becoming a participant— 

‘‘(i) has not accrued any other benefit under any 

defined benefit plan (whether or not terminated) maintained by the employer or a member of the same controlled group of which the employer is a member, 

‘‘(ii) who first becomes a participant under the 

plan in a plan year beginning after December 31, 1987, 

and 

‘‘(iii) has years of service greater than the minimum years of service necessary for eligibility to 

participate in the plan. 

‘‘(D) ELECTION.—An employer may elect not to have 

this subparagraph apply. Such an election, once made, 

may be revoked only with the consent of the Secretary 

of the Treasury. 

Applicability. 

Applicability. 


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128 STAT. 1114 PUBLIC LAW 113–97—APR. 7, 2014 

‘‘(i) FUNDED CURRENT LIABILITY PERCENTAGE.—For purposes 

of this section, the term ‘funded current liability percentage’ means, 

with respect to any plan year, the percentage which— 

‘‘(1) the value of the plan’s assets determined under subsection (c)(2), is of 

‘‘(2) the current liability under the plan. 

‘‘(j) FUNDING RESTORATION STATUS.—Notwithstanding any 

other provisions of this section— 

‘‘(1) NORMAL COST PAYMENT.— ‘‘(A) IN GENERAL.—In the case of a CSEC plan that 

is in funding restoration status for a plan year, for purposes 

of section 302, the term ‘accumulated funding deficiency’ 

means, for such plan year, the greater of— 

‘‘(i) the amount described in subsection (a), or 

‘‘(ii) the excess of the normal cost of the plan 

for the plan year over the amount actually contributed 

to or under the plan for the plan year. 

‘‘(B) NORMAL COST.—In the case of a CSEC plan that 

uses a spread gain funding method, for purposes of this 

subsection, the term ‘normal cost’ means normal cost as 

determined under the entry age normal funding method. 

‘‘(2) PLAN AMENDMENTS.—In the case of a CSEC plan that 

is in funding restoration status for a plan year, no amendment 

to such plan may take effect during such plan year if such 

amendment has the effect of increasing liabilities of the plan 

by means of increases in benefits, establishment of new benefits, 

changing the rate of benefit accrual, or changing the rate at 

which benefits become nonforfeitable. This paragraph shall not 

apply to any plan amendment that is required to comply with 

any applicable law. This paragraph shall cease to apply with 

respect to any plan year, effective as of the first day of the 

plan year (or if later, the effective date of the amendment) 

upon payment by the plan sponsor of a contribution to the 

plan (in addition to any contribution required under this section 

without regard to this paragraph) in an amount equal to the 

increase in the funding liability of the plan attributable to 

the plan amendment. 

‘‘(3) FUNDING RESTORATION PLAN.—The sponsor of a CSEC 

plan shall establish a written funding restoration plan within 

180 days of the receipt by the plan sponsor of a certification 

from the plan actuary that the plan is in funding restoration 

status for a plan year. Such funding restoration plan shall 

consist of actions that are calculated, based on reasonably 

anticipated experience and reasonable actuarial assumptions, 

to increase the plan’s funded percentage to 100 percent over 

a period that is not longer than the greater of 7 years or 

the shortest amount of time practicable. Such funding restoration plan shall take into account contributions required under 

this section (without regard to this paragraph). If a plan 

remains in funding restoration status for 2 or more years, 

such funding restoration plan shall be updated each year after 

the 1st such year within 180 days of receipt by the plan sponsor 

of a certification from the plan actuary that the plan remains 

in funding restoration status for the plan year. 

‘‘(4) ANNUAL CERTIFICATION BY PLAN ACTUARY.—Not later 

than the 90th day of each plan year of a CSEC plan, the 

plan actuary shall certify to the plan sponsor whether or not 

Deadline. 

Deadline. 

Certification. 

Termination 

date. 

Definitions. 

Definition. 


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PUBLIC LAW 113–97—APR. 7, 2014 128 STAT. 1115 

the plan is in funding restoration status for the plan year, 

based on the plan’s funded percentage as of the beginning 

of the plan year. For this purpose, the actuary may conclusively 

rely on an estimate of— 

‘‘(A) the plan’s funding liability, based on the funding 

liability of the plan for the preceding plan year and on 

reasonable actuarial estimates, assumptions, and methods, 

and 

‘‘(B) the amount of any contributions reasonably anticipated to be made for the preceding plan year. 

Contributions described in subparagraph (B) shall be taken 

into account in determining the plan’s funded percentage as 

of the beginning of the plan year. 

‘‘(5) DEFINITIONS.—For purposes of this subsection— 

‘‘(A) FUNDING RESTORATION STATUS.—A CSEC plan 

shall be treated as in funding restoration status for a 

plan year if the plan’s funded percentage as of the beginning of such plan year is less than 80 percent. 

‘‘(B) FUNDED PERCENTAGE.—The term ‘funded percentage’ means the ratio (expressed as a percentage) which— 

‘‘(i) the value of plan assets (as determined under 

subsection (c)(2)), bears to 

‘‘(ii) the plan’s funding liability. 

‘‘(C) FUNDING LIABILITY.—The term ‘funding liability’ 

for a plan year means the present value of all benefits 

accrued or earned under the plan as of the beginning 

of the plan year, based on the assumptions used by the 

plan pursuant to this section, including the interest rate 

described in subsection (b)(5)(A) (without regard to subsection (b)(5)(B)). 

‘‘(D) SPREAD GAIN FUNDING METHOD.—The term ‘spread 

gain funding method’ has the meaning given such term 

under rules and forms issued by the Secretary of the 

Treasury.’’. 

(b) SEPARATE RULES FOR CSEC PLANS.— (1) IN GENERAL.—Paragraph (2) of section 302(a) of the 

Employee Retirement Income Security Act of 1974 (29 U.S.C. 

1082(a)) is amended by striking ‘‘and’’ at the end of subparagraph (B), by striking the period at the end of subparagraph 

(C) and inserting ‘‘, and’’, and by inserting at the end thereof 

the following new subparagraph: 

‘‘(D) in the case of a CSEC plan, the employers make 

contributions to or under the plan for any plan year which, 

in the aggregate, are sufficient to ensure that the plan 

does not have an accumulated funding deficiency under 

section 306 as of the end of the plan year.’’. 

(2) CONFORMING AMENDMENTS.—Section 302 of the 

Employee Retirement Income Security Act of 1974 (29 U.S.C. 

1082) is amended— 

(A) by striking ‘‘multiemployer plan’’ the first place 

it appears in clause (i) of subsection (c)(1)(A) and the last 

place it appears in paragraph (2) of subsection (d), and 

inserting ‘‘multiemployer plan or a CSEC plan’’, 

(B) by striking ‘‘303(j)’’ in paragraph (1) of subsection 

(b) and inserting ‘‘303(j) or under section 306(f)’’, 

(C)(i) by striking ‘‘and’’ at the end of clause (i) of 

subsection (c)(1)(B), 


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128 STAT. 1116 PUBLIC LAW 113–97—APR. 7, 2014 

(ii) by striking the period at the end of clause (ii) 

of subsection (c)(1)(B), and inserting ‘‘, and’’, and 

(iii) by inserting the following new clause after clause 

(ii) of subsection (c)(1)(B): 

‘‘(iii) in the case of a CSEC plan, the funding 

standard account shall be credited under section 

306(b)(3)(C) with the amount of the waived funding 

deficiency and such amount shall be amortized as 

required under section 306(b)(2)(C).’’, 

(D) by striking ‘‘under paragraph (1)’’ in clause (i) 

of subsection (c)(4)(A) and inserting ‘‘under paragraph (1) 

or for granting an extension under section 306(d)’’, 

(E) by striking ‘‘waiver under this subsection’’ in 

subparagraph (B) of subsection (c)(4) and inserting ‘‘waiver 

under this subsection or an extension under 306(d)’’, 

(F) by striking ‘‘waiver or modification’’ in subclause 

(I) of subsection (c)(4)(B)(i) and inserting ‘‘waiver, modification, or extension’’, 

(G) by striking ‘‘waivers’’ in the heading of subsection 

(c)(4)(C) and of clause (ii) of subsection (c)(4)(C) and 

inserting ‘‘waivers or extensions’’, 

(H) by striking ‘‘section 304(d)’’ in subparagraph (A) 

of subsection (c)(7) and in paragraph (2) of subsection (d) 

and inserting ‘‘section 304(d) or section 306(d)’’, 

(I) by striking ‘‘and’’ at the end of subclause (I) of 

subsection (c)(4)(C)(i) and adding ‘‘or the accumulated 

funding deficiency under section 306, whichever is 

applicable,’’, 

(J) by striking ‘‘303(e)(2),’’ in subclause (II) of subsection (c)(4)(C)(i) and inserting ‘‘303(e)(2) or 306(b)(2)(C), 

whichever is applicable, and’’, 

(K) by adding immediately after subclause (II) of subsection (c)(4)(C)(i) the following new subclause: 

‘‘(III) the total amounts not paid by reason 

of an extension in effect under section 306(d),’’, 

(L) by striking ‘‘for waivers of’’ in clause (ii) of subsection (c)(4)(C) and inserting ‘‘for waivers or extensions 

with respect to’’, and 

(M) by striking ‘‘single-employer plan’’ in subparagraph 

(A) of subsection (a)(2) and in clause (i) of subsection 

(c)(1)(B) and inserting ‘‘single-employer plan (other than 

a CSEC plan)’’. 

(3) BENEFIT RESTRICTIONS.—Subsection (g) of section 206 

of the Employee Retirement Income Security Act of 1974 (29 

U.S.C. 1056) is amended by adding at the end thereof the 

following new paragraph: 

‘‘(12) CSEC PLANS.—This subsection shall not apply to a 

CSEC plan (as defined in section 210(f)).’’. 

(4) BENEFIT INCREASES.—Paragraph (3) of section 204(i) 

of the Employee Retirement Income Security Act of 1974 (29 

U.S.C. 1054(i)) is amended by striking ‘‘multiemployer plans’’ 

and inserting ‘‘multiemployer plans or CSEC plans’’. 

(5) SECTION 103.—Subparagraph (B) of section 103(d)(8) 

of the Employee Retirement Income Security Act of 1974 (29 

U.S.C. 1023(d)(8)) is amended by striking ‘‘303(h) and 304(c)(3)’’ 

and inserting ‘‘303(h), 304(c)(3), and 306(c)(3)’’. 


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PUBLIC LAW 113–97—APR. 7, 2014 128 STAT. 1117 

(6) SECTION 502.—Subsection (c) of section 502 of the 

Employee Retirement Income Security Act of 1974 is amended— 

(A) by redesignating the last paragraph as paragraph 

(11), and 

(B) by adding at the end the following new paragraph: 

‘‘(12) The Secretary may assess a civil penalty against 

any sponsor of a CSEC plan of up to $100 a day from the 

date of the plan sponsor’s failure to comply with the requirements of section 306(j)(3) to establish or update a funding 

restoration plan.’’. 

(7) SECTION 4003.—Subparagraph (B) of section 4003(e)(1) 

of the Employee Retirement Income Security Act of 1974 (29 

U.S.C. 1303(e)(1)) is amended by striking ‘‘303(k)(1)(A) and 

(B) of this Act or section 430(k)(1)(A) and (B) of the Internal 

Revenue Code of 1986’’ and inserting ‘‘303(k)(1)(A) and (B) 

or 306(g)(1)(A) and (B) of this Act or section 430(k)(1)(A) and 

(B) or 433(g)(1)(A) and (B) of the Internal Revenue Code of 

1986’’. 

(8) SECTION 4010.—Paragraph (2) of section 4010(b) of the 

Employee Retirement Income Security Act of 1974 (29 U.S.C. 

1310(b)) is amended by striking ‘‘303(k)(1)(A) and (B) of this 

Act or section 430(k)(1)(A) and (B) of the Internal Revenue 

Code of 1986’’ and inserting ‘‘303(k)(1)(A) and (B) or 306(g)(1)(A) 

and (B) of this Act or section 430(k)(1)(A) and (B) or 433(g)(1)(A) 

and (B) of the Internal Revenue Code of 1986’’. 

(9) SECTION 4071.—Section 4071 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1371) is amended 

by striking ‘‘section 303(k)(4)’’ and inserting ‘‘section 303(k)(4) 

or 306(g)(4)’’. 

SEC. 103. ELECTIONS. 

(a) ELECTION NOT TO BE TREATED AS A CSEC PLAN.—Subsection (f) of section 210 of the Employee Retirement Income Security Act of 1974, as added by section 101, is amended by adding 

at the end the following new paragraph: 

‘‘(3) ELECTION.— 

‘‘(A) IN GENERAL.—If a plan falls within the definition 

of a CSEC plan under this subsection (without regard 

to this paragraph), such plan shall be a CSEC plan unless 

the plan sponsor elects not later than the close of the 

first plan year of the plan beginning after December 31, 

2013, not to be treated as a CSEC plan. An election under 

the preceding sentence shall take effect for such plan year 

and, once made, may be revoked only with the consent 

of the Secretary of the Treasury. 

‘‘(B) SPECIAL RULE.—If a plan described in subparagraph (A) is treated as a CSEC plan, section 104 of the 

Pension Protection Act of 2006, as amended by the 

Preservation of Access to Care for Medicare Beneficiaries 

and Pension Relief Act of 2010, shall cease to apply to 

such plan as of the first date as of which such plan is 

treated as a CSEC plan.’’. 

(b) ELECTION TO CEASE TO BE TREATED AS AN ELIGIBLE

CHARITY PLAN.—Subsection (d) of section 104 of the Pension Protection Act of 2006, as added by section 202 of the Preservation 

of Access to Care for Medicare Beneficiaries and Pension Relief 

Act of 2010, is amended— 26 USC 401 note. 

Deadline. 

29 USC 1132. 


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128 STAT. 1118 PUBLIC LAW 113–97—APR. 7, 2014 

(1) by striking ‘‘For purposes of’’ and inserting ‘‘(1) IN

GENERAL.—For purposes of’’, and 

(2) by adding at the end the following: 

‘‘(2) ELECTION NOT TO BE AN ELIGIBLE CHARITY PLAN.— A plan sponsor may elect for a plan to cease to be treated 

as an eligible charity plan for plan years beginning after 

December 31, 2013. Such election shall be made at such time 

and in such form and manner as shall be prescribed by the 

Secretary of the Treasury. Any such election may be revoked 

only with the consent of the Secretary of the Treasury. 

‘‘(3) ELECTION TO USE FUNDING OPTIONS AVAILABLE TO

OTHER PLAN SPONSORS.— ‘‘(A) A plan sponsor that makes the election described 

in paragraph (2) may elect for a plan to apply the rules 

described in subparagraphs (B), (C), and (D) for plan years 

beginning after December 31, 2013. Such election shall 

be made at such time and in such form and manner as 

shall be prescribed by the Secretary of the Treasury. Any 

such election may be revoked only with the consent of 

the Secretary of the Treasury. 

‘‘(B) Under the rules described in this subparagraph, 

for the first plan year beginning after December 31, 2013, 

a plan has— 

‘‘(i) an 11-year shortfall amortization base, 

‘‘(ii) a 12-year shortfall amortization base, and 

‘‘(iii) a 7-year shortfall amortization base. 

‘‘(C) Under the rules described in this subparagraph, 

section 303(c)(2)(A) and (B) of the Employee Retirement 

Income Security Act of 1974, and section 430(c)(2)(A) and 

(B) of the Internal Revenue Code of 1986 shall be applied 

by— 

‘‘(i) in the case of an 11-year shortfall amortization 

base, substituting ‘11-plan-year period’ for ‘7-plan-year 

period’ wherever such phrase appears, and 

‘‘(ii) in the case of a 12-year shortfall amortization 

base, substituting ‘12-plan-year period’ for ‘7-plan-year 

period’ wherever such phrase appears. 

‘‘(D) Under the rules described in this subparagraph, 

section 303(c)(7) of the Employee Retirement Income Security Act of 1974 and section 430(c)(7) of the Internal Revenue Code of 1986 shall apply to a plan for which an 

election has been made under subparagraph (A). Such 

provisions shall apply in the following manner: 

‘‘(i) The first plan year beginning after December 

31, 2013, shall be treated as an election year, and 

no other plan years shall be so treated. 

‘‘(ii) All references in section 303(c)(7) of such Act 

and section 430(c)(7) of such Code to ‘February 28, 

2010’ or ‘March 1, 2010’ shall be treated as references 

to ‘February 28, 2013’ or ‘March 1, 2013’, respectively. 

‘‘(E) For purposes of this paragraph, the 11-year 

amortization base is an amount, determined for the first 

plan year beginning after December 31, 2013, equal to 

the unamortized principal amount of the shortfall amortization base (as defined in section 303(c)(3) of the Employee 

Retirement Income Security Act of 1974 and section 

430(c)(3) of the Internal Revenue Code of 1986) that would 

Applicability. 

Applicability. 


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PUBLIC LAW 113–97—APR. 7, 2014 128 STAT. 1119 

have applied to the plan for the first plan beginning after 

December 31, 2009, if— 

‘‘(i) the plan had never been an eligible charity 

plan, 

‘‘(ii) the plan sponsor had made the election 

described in section 303(c)(2)(D)(i) of the Employee 

Retirement Income Security Act of 1974 and in section 

430(c)(2)(D)(i) of the Internal Revenue Code of 1986 

to have section 303(c)(2)(D)(i) of such Act and section 

430(c)(2)(D)(iii) of such Code apply with respect to the 

shortfall amortization base for the first plan year beginning after December 31, 2009, and 

‘‘(iii) no event had occurred under paragraph (6) 

or (7) of section 303(c) of such Act or paragraph (6) 

or (7) of section 430(c) of such Code that, as of the 

first day of the first plan year beginning after 

December 31, 2013, would have modified the shortfall 

amortization base or the shortfall amortization installments with respect to the first plan year beginning 

after December 31, 2009. 

‘‘(F) For purposes of this paragraph, the 12-year 

amortization base is an amount, determined for the first 

plan year beginning after December 31, 2013, equal to 

the unamortized principal amount of the shortfall amortization base (as defined in section 303(c)(3) of the Employee 

Retirement Income Security Act of 1974 and section 

430(c)(3) of the Internal Revenue Code of 1986) that would 

have applied to the plan for the first plan beginning after 

December 31, 2010, if— 

‘‘(i) the plan had never been an eligible charity 

plan, 

‘‘(ii) the plan sponsor had made the election 

described in section 303(c)(2)(D)(i) of the Employee 

Retirement Income Security Act of 1974 and in section 

430(c)(2)(D)(i) of the Internal Revenue Code of 1986 

to have section 303(c)(2)(D)(i) of such Act and section 

430(c)(2)(D)(iii) of such Code apply with respect to the 

shortfall amortization base for the first plan year beginning after December 31, 2010, and 

‘‘(iii) no event had occurred under paragraph (6) 

or (7) of section 303(c) of such Act or paragraph (6) 

or (7) of section 430(c) of such Code that, as of the 

first day of the first plan year beginning after 

December 31, 2013, would have modified the shortfall 

amortization base or the shortfall amortization installments with respect to the first plan year beginning 

after December 31, 2010. 

‘‘(G) For purposes of this paragraph, the 7-year shortfall amortization base is an amount, determined for the 

first plan year beginning after December 31, 2013, equal 

to— 

‘‘(i) the shortfall amortization base for the first 

plan year beginning after December 31, 2013, without 

regard to this paragraph, minus 

‘‘(ii) the sum of the 11-year shortfall amortization 

base and the 12-year shortfall amortization base. 

Applicability. 

Applicability. 


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128 STAT. 1120 PUBLIC LAW 113–97—APR. 7, 2014 

‘‘(4) RETROACTIVE ELECTION.—Not later than December 31, 

2014, a plan sponsor may make a one-time, irrevocable, retroactive election to not be treated as an eligible charity plan. 

Such election shall be effective for plan years beginning after 

December 31, 2007, and shall be made by providing reasonable 

notice to the Secretary of the Treasury.’’. 

(c) DEEMED ELECTION.—For purposes of the Internal Revenue 

Code of 1986, sections 4(b)(2) and 4021(b)(3) of the Employee Retirement Income Security Act of 1974, and all other purposes, a plan 

shall be deemed to have made an irrevocable election under section 

410(d) of the Internal Revenue Code of 1986 if— 

(1) the plan was established before January 1, 2014; 

(2) the plan falls within the definition of a CSEC plan; 

(3) the plan sponsor does not make an election under 

section 210(f)(3)(A) of the Employee Retirement Income Security 

Act of 1974 and section 414(y)(3)(A) of the Internal Revenue 

Code of 1986, as added by this Act; and 

(4) the plan, plan sponsor, administrator, or fiduciary 

remits one or more premium payments for the plan to the 

Pension Benefit Guaranty Corporation for a plan year beginning 

after December 31, 2013. 

(d) EFFECTIVE DATE.—The amendments made by this section 

shall apply as of the date of enactment of this Act. 

SEC. 104. TRANSPARENCY. 

(a) NOTICE TO PARTICIPANTS.— 

(1) IN GENERAL.—Paragraph (2) of section 101(f) of the 

Employee Retirement Income Security Act of 1974 (29 U.S.C. 

1021(f)) is amended by adding at the end the following new 

subparagraph: 

‘‘(E) EFFECT OF CSEC PLAN RULES ON PLAN FUNDING.— 

In the case of a CSEC plan, each notice under paragraph 

(1) shall include— 

‘‘(i) a statement that different rules apply to CSEC 

plans than apply to single-employer plans, 

‘‘(ii) for the first 2 plan years beginning after 

December 31, 2013, a statement that, as a result of 

changes in the law made by the Cooperative and Small 

Employer Charity Pension Flexibility Act, the contributions to the plan may have changed, and 

‘‘(iii) in the case of a CSEC plan that is in funding 

restoration status for the plan year, a statement that 

the plan is in funding restoration status for such plan 

year. 

A copy of the statement required under clause (iii) shall 

be provided to the Secretary, the Secretary of the Treasury, 

and the Director of the Pension Benefit Guaranty Corporation.’’. 

(2) MODEL NOTICE.—The Secretary of Labor may modify 

the model notice required to be published under section 501(c) 

of the Pension Protection Act of 2006 to include the information 

described in section 101(f)(2)(E) of the Employee Retirement 

Income Security Act of 1974, as added by this subsection. 

(b) NOTICE OF FAILURE TO MEET MINIMUM FUNDING STANDARDS.— 

(1) PENDING WAIVERS.—Paragraph (2) of section 101(d) of 

the Employee Retirement Income Security Act of 1974 (29 

29 USC 1021 

note. 

26 USC 1060 

note. 

26 USC 410 note. 

Effective date. 

Deadline. 


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PUBLIC LAW 113–97—APR. 7, 2014 128 STAT. 1121 

U.S.C. 1021(d)) is amended by striking ‘‘303’’ and inserting 

‘‘303 or 306’’. 

(2) DEFINITIONS.—Paragraph (3) of section 101(d) of the 

Employee Retirement Income Security Act of 1974 (21 U.S.C. 

1021(d)) is amended by striking ‘‘303(j)’’ and inserting ‘‘303(j) 

or 306(f), whichever is applicable’’. 

(c) ADDITIONAL REPORTING REQUIREMENTS.—Section 103 of the 

Employee Retirement Income Security Act of 1974 (29 U.S.C. 1023) 

is amended by adding at the end the following new subsection: 

‘‘(g) ADDITIONAL INFORMATION WITH RESPECT TO MULTIPLE

EMPLOYER PLANS.—With respect to any multiple employer plan, 

an annual report under this section for a plan year shall include 

a list of participating employers and a good faith estimate of the 

percentage of total contributions made by such participating 

employers during the plan year.’’. 

SEC. 105. SPONSOR EDUCATION AND ASSISTANCE. 

(a) DEFINITION.—In this section, the term ‘‘CSEC plan’’ has 

the meaning given that term in subsection (f)(1) of section 210 

of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 

1060(f)(1)) (as added by this Act). 

(b) EDUCATION.—The Participant and Plan Sponsor Advocate 

established under section 4004 of the Employee Retirement Income 

Security Act of 1974 (29 U.S.C. 1304) shall make itself available 

to assist CSEC plan sponsors and participants as part of the duties 

it performs under the general supervision of the Board of Directors 

under section 4004(b) of such Act (29 U.S.C. 1304(b)). 

TITLE II—AMENDMENTS TO INTERNAL 

REVENUE CODE OF 1986 

SEC. 201. DEFINITION OF COOPERATIVE AND SMALL EMPLOYER 

CHARITY PENSION PLANS. 

Section 414 of the Internal Revenue Code of 1986 is amended 

by adding at the end the following new subsection: 

‘‘(y) COOPERATIVE AND SMALL EMPLOYER CHARITY PENSION

PLANS.— 

‘‘(1) IN GENERAL.—For purposes of this title, except as 

provided in this subsection, a CSEC plan is a defined benefit 

plan (other than a multiemployer plan)— 

‘‘(A) to which section 104 of the Pension Protection 

Act of 2006 applies, without regard to— 

‘‘(i) section 104(a)(2) of such Act; 

‘‘(ii) the amendments to such section 104 by section 

202(b) of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010; and 

‘‘(iii) paragraph (3)(B); or 

‘‘(B) that, as of June 25, 2010, was maintained by 

more than one employer and all of the employers were 

organizations described in section 501(c)(3). 

‘‘(2) AGGREGATION.—All employers that are treated as a 

single employer under subsection (b) or (c) shall be treated 

as a single employer for purposes of determining if a plan 

was maintained by more than one employer under paragraph 

(1)(B).’’. 

Applicability. 

26 USC 414. 

29 USC 1304a. 


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128 STAT. 1122 PUBLIC LAW 113–97—APR. 7, 2014 

SEC. 202. FUNDING RULES APPLICABLE TO COOPERATIVE AND SMALL 

EMPLOYER CHARITY PENSION PLANS. 

(a) IN GENERAL.—Subpart A of part III of subchapter D of 

chapter 1 of subtitle A of the Internal Revenue Code of 1986 

is amended by adding at the end the following new section: 

‘‘SEC. 433. MINIMUM FUNDING STANDARDS. 

‘‘(a) GENERAL RULE.—For purposes of section 412, 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 412 

applies) over the total credits to such account for such years or, 

if less, the excess of the total charges to the alternative 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 

account. Such account shall be credited and charged solely 

as provided in this section. 

‘‘(2) CHARGES TO ACCOUNT.—For a plan year, the funding 

standard account 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 amortized)— 

‘‘(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 412 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 unfunded past service liability under the 

plan on the first day of the first plan year to which 

section 412 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 arising 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 meaning of section 412(c)(3)) 

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 amortized) over a period of 5 plan 

years any amount credited to the funding standard account 

under paragraph (3)(D), and 

‘‘(E) the amount necessary to amortize in equal annual 

installments (until fully amortized) over a period of 20 

years the contributions which would be required to be 

Time period. 

Applicability. 

26 USC 433. 


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made under the plan but for the provisions of section 

412(c)(7)(A)(i)(I) (as in effect on the day before the enactment of the Pension Protection Act of 2006). 

‘‘(3) CREDITS TO ACCOUNT.—For a plan year, the funding 

standard account 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 amortized)— 

‘‘(i) separately, with respect to each plan year, 

the net decrease (if any) in unfunded past service 

liability under the plan arising 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 deficiency 

(within the meaning of section 412(c)(3)) for the plan year, 

and 

‘‘(D) in the case of a plan year for which the accumulated funding deficiency is determined under the funding 

standard account if such plan year follows a plan year 

for which such deficiency was determined under the alternative minimum funding standard, the excess (if any) of 

any debit balance in the funding standard account (determined without regard to this subparagraph) over any debit 

balance in the alternative minimum funding standard 

account. 

‘‘(4) COMBINING AND OFFSETTING AMOUNTS TO BE AMORTIZED.—Under regulations prescribed by the Secretary, 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 remaining amortization period for all items 

entering into such combined amount, and 

‘‘(B) may be offset against amounts required to be 

amortized under the other such paragraph, with the 

resulting amount to be amortized over a period determined 

on the basis of the remaining amortization periods for 

all items entering into whichever of the two amounts being 

offset is the greater. 

‘‘(5) INTEREST.— 

‘‘(A) IN GENERAL.—Except as provided in subparagraph 

(B), the funding standard account (and items therein) shall 

be charged or credited (as determined under regulations 

prescribed by the Secretary) with interest at the appropriate rate consistent with the rate or rates of interest 

used under the plan to determine costs. 

‘‘(B) EXCEPTION.—The interest rate used for purposes 

of computing the amortization charge described in subsection (b)(2)(C) or for purposes of any arrangement under 

subsection (d) for any plan year shall be the greater of— 

Regulations. 

Regulations. 

Time periods. 


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‘‘(i) 150 percent of the Federal mid-term rate (as 

in effect under section 1274 for the 1st month of such 

plan year), or 

‘‘(ii) the rate of interest determined under subparagraph (A). 

‘‘(6) AMORTIZATION SCHEDULES IN EFFECT.—Amortization 

schedules for amounts described in paragraphs (2) and (3) 

that are in effect as of the last day of the last plan year 

beginning before January 1, 2014, by reason of section 104 

of the Pension Protection Act of 2006 shall remain in effect 

pursuant to their terms and this section, except that such 

amounts shall not be amortized again under this section. 

‘‘(c) SPECIAL RULES.— ‘‘(1) DETERMINATIONS TO BE MADE UNDER FUNDING

METHOD.—For purposes of this section, normal costs, accrued 

liability, past service liabilities, and experience gains and losses 

shall be determined under the funding method used to determine costs under the plan. 

‘‘(2) VALUATION OF ASSETS.— 

‘‘(A) IN GENERAL.—For purposes of this section, the 

value of the plan’s assets shall be determined on the basis 

of any reasonable actuarial method of valuation which 

takes into account fair market value and which is permitted 

under regulations prescribed by the Secretary. 

‘‘(B) DEDICATED BOND PORTFOLIO.—The Secretary may 

by regulations provide that the value of any dedicated 

bond portfolio of a plan shall be determined by using the 

interest rate under section 412(b)(5) (as in effect on the 

day before the enactment of the Pension Protection Act 

of 2006). 

‘‘(3) ACTUARIAL ASSUMPTIONS MUST BE REASONABLE.—For 

purposes of this section, all costs, liabilities, rates of interest, 

and other factors under the plan shall be determined on the 

basis of actuarial assumptions and methods— 

‘‘(A) each of which is reasonable (taking into account 

the experience of the plan and reasonable expectations), 

and 

‘‘(B) which, in combination, offer the actuary’s best 

estimate of anticipated experience under the plan. 

‘‘(4) TREATMENT OF CERTAIN CHANGES AS EXPERIENCE GAIN

OR LOSS.—For purposes of this section, if— 

‘‘(A) a change in benefits under the Social Security 

Act or in other retirement benefits created under Federal 

or State law, or 

‘‘(B) a change in the definition of the term ‘wages’ 

under section 3121 or a change in the amount of such 

wages taken into account under regulations prescribed for 

purposes of section 401(a)(5), 

results in an increase or decrease in accrued liability under 

a plan, such increase or decrease shall be treated as an experience loss or gain. 

‘‘(5) FUNDING METHOD AND PLAN YEAR.— 

‘‘(A) FUNDING METHODS AVAILABLE.—All funding 

methods available to CSEC plans under section 412 (as 

in effect on the day before the enactment of the Pension 

Protection Act of 2006) shall continue to be available under 

this section. 


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‘‘(B) CHANGES.—If the funding method for a plan is 

changed, the new funding method shall become the funding 

method used to determine costs and liabilities under the 

plan only if the change is approved by the Secretary. If 

the plan year for a plan is changed, the new plan year 

shall become the plan year for the plan only if the change 

is approved by the Secretary. 

‘‘(C) APPROVAL REQUIRED FOR CERTAIN CHANGES IN

ASSUMPTIONS BY CERTAIN SINGLE-EMPLOYER PLANS SUBJECT

TO ADDITIONAL FUNDING REQUIREMENT.— ‘‘(i) IN GENERAL.—No actuarial assumption (other 

than the assumptions described in subsection (h)(3)) 

used to determine the current liability for a plan to 

which this subparagraph applies may be changed without the approval of the Secretary. 

‘‘(ii) PLANS TO WHICH SUBPARAGRAPH APPLIES.— This subparagraph shall apply to a plan only if— 

‘‘(I) the plan is a CSEC plan, 

‘‘(II) the aggregate unfunded vested benefits 

as of the close of the preceding plan year (as determined under section 4006(a)(3)(E)(iii) of the 

Employee Retirement Income Security Act of 1974) 

of such plan and all other plans maintained by 

the contributing sponsors (as defined in section 

4001(a)(13) of such Act) and members of such sponsors’ controlled groups (as defined in section 

4001(a)(14) of such Act) which are covered by title 

IV (disregarding plans with no unfunded vested 

benefits) exceed $50,000,000, and 

‘‘(III) the change in assumptions (determined 

after taking into account any changes in interest 

rate and mortality table) results in a decrease 

in the funding shortfall of the plan for the current 

plan year that exceeds $50,000,000, or that exceeds 

$5,000,000 and that is 5 percent or more of the 

current liability of the plan before such change. 

‘‘(6) FULL FUNDING.—If, as of the close of a plan year, 

a plan would (without regard to this paragraph) have an 

accumulated funding deficiency (determined without regard to 

the alternative minimum funding standard account permitted 

under subsection (e)) in excess of the full funding limitation— 

‘‘(A) the funding standard account shall be credited 

with the amount of such excess, and 

‘‘(B) all amounts described in paragraphs (2)(B), (C), 

and (D) and (3)(B) of subsection (b) which are required 

to be amortized shall be considered fully amortized for 

purposes of such paragraphs. 

‘‘(7) FULL-FUNDING LIMITATION.—For purposes of paragraph 

(6), the term ‘full-funding limitation’ means the excess (if any) 

of— 

‘‘(A) the accrued liability (including normal cost) under 

the plan (determined under the entry age normal funding 

method if such accrued liability cannot be directly calculated under the funding method used for the plan), over 

‘‘(B) the lesser of— 

‘‘(i) the fair market value of the plan’s assets, 

or 


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‘‘(ii) the value of such assets determined under 

paragraph (2). 

‘‘(C) MINIMUM AMOUNT.— 

‘‘(i) IN GENERAL.—In no event shall the full-funding 

limitation determined under subparagraph (A) be less 

than the excess (if any) of— 

‘‘(I) 90 percent of the current liability (determined without regard to paragraph (4) of subsection (h)) of the plan (including the expected 

increase in such current liability due to benefits 

accruing during the plan year), over 

‘‘(II) the value of the plan’s assets determined 

under paragraph (2). 

‘‘(ii) ASSETS.—For purposes of clause (i), assets 

shall not be reduced by any credit balance in the 

funding standard account. 

‘‘(8) ANNUAL VALUATION.— 

‘‘(A) IN GENERAL.—For purposes of this section, a determination of experience gains and losses and a valuation 

of the plan’s liability shall be made not less frequently 

than once every year, except that such determination shall 

be made more frequently to the extent required in particular cases under regulations prescribed by the Secretary. 

‘‘(B) VALUATION DATE.— 

‘‘(i) CURRENT YEAR.—Except as provided in clause 

(ii), the valuation referred to in subparagraph (A) shall 

be made as of a date within the plan year to which 

the valuation refers or within one month prior to the 

beginning of such year. 

‘‘(ii) USE OF PRIOR YEAR VALUATION.—The valuation referred to in subparagraph (A) may be made 

as of a date within the plan year prior to the year 

to which the valuation refers if, as of such date, the 

value of the assets of the plan are not less than 100 

percent of the plan’s current liability. 

‘‘(iii) ADJUSTMENTS.—Information under clause (ii) 

shall, in accordance with regulations, be actuarially 

adjusted to reflect significant differences in participants. 

‘‘(iv) LIMITATION.—A change in funding method to 

use a prior year valuation, as provided in clause (ii), 

may not be made unless as of the valuation date within 

the prior plan year, the value of the assets of the 

plan are not less than 125 percent of the plan’s current 

liability. 

‘‘(9) TIME WHEN CERTAIN CONTRIBUTIONS DEEMED MADE.— 

For purposes of this section, any contributions for a plan year 

made by an employer during the period— 

‘‘(A) beginning on the day after the last day of such 

plan year, and 

‘‘(B) ending on the day which is 81⁄2 months after 

the close of the plan year, 

shall be deemed to have been made on such last day. 

‘‘(10) ANTICIPATION OF BENEFIT INCREASES EFFECTIVE IN

THE FUTURE.—In determining projected benefits, the funding 

method of a collectively bargained CSEC plan described in 

section 413(a) shall anticipate benefit increases scheduled to 

Determination. 

Deadline. 


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take effect during the term of the collective bargaining agreement applicable to the plan. 

‘‘(d) EXTENSION OF AMORTIZATION PERIODS.—The period of 

years required to amortize any unfunded liability (described in 

any clause of subsection (b)(2)(B)) of any plan may be extended 

by the Secretary for a period of time (not in excess of 10 years) 

if the Secretary determines that such extension would carry out 

the purposes of the Employee Retirement Income Security Act 

of 1974 and provide adequate protection for participants under 

the plan and their beneficiaries, and if the Secretary determines 

that the failure to permit such extension would result in— 

‘‘(1) a substantial risk to the voluntary continuation of 

the plan, or 

‘‘(2) a substantial curtailment of pension benefit levels or 

employee compensation. 

‘‘(e) ALTERNATIVE MINIMUM FUNDING STANDARD.— 

‘‘(1) IN GENERAL.—A CSEC plan which uses a funding 

method that requires contributions in all years not less than 

those required under the entry age normal funding method 

may maintain an alternative minimum funding standard 

account for any plan year. Such account shall be credited and 

charged solely as provided in this subsection. 

‘‘(2) CHARGES AND CREDITS TO ACCOUNT.—For a plan year 

the alternative minimum funding standard account shall be— 

‘‘(A) charged with the sum of— 

‘‘(i) the lesser of normal cost under the funding 

method used under the plan or normal cost determined 

under the unit credit method, 

‘‘(ii) the excess, if any, of the present value of 

accrued benefits under the plan over the fair market 

value of the assets, and 

‘‘(iii) an amount equal to the excess (if any) of 

credits to the alternative minimum standard account 

for all prior plan years over charges to such account 

for all such years, and 

‘‘(B) credited with the amount considered contributed 

by the employer to or under the plan for the plan year. 

‘‘(3) INTEREST.—The alternative minimum funding 

standard account (and items therein) shall be charged or credited with interest in the manner provided under subsection 

(b)(5) with respect to the funding standard account. 

‘‘(f) QUARTERLY CONTRIBUTIONS REQUIRED.— 

‘‘(1) IN GENERAL.—If a CSEC plan which has a funded 

current liability percentage for the preceding plan year of less 

than 100 percent fails to pay the full amount of a required 

installment for the plan year, then the rate of interest charged 

to the funding standard account under subsection (b)(5) with 

respect to the amount of the underpayment for the period 

of the underpayment shall be equal to the greater of— 

‘‘(A) 175 percent of the Federal mid-term rate (as in 

effect under section 1274 for the 1st month of such plan 

year), or 

‘‘(B) the rate of interest used under the plan in determining costs. 

‘‘(2) AMOUNT OF UNDERPAYMENT, PERIOD OF UNDERPAYMENT.—For purposes of paragraph (1)— 

Determinations. 


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‘‘(A) AMOUNT.—The amount of the underpayment shall 

be the excess of— 

‘‘(i) the required installment, over 

‘‘(ii) the amount (if any) of the installment contributed to or under the plan on or before the due date 

for the installment. 

‘‘(B) PERIOD OF UNDERPAYMENT.—The period for which 

interest is charged under this subsection with regard to 

any portion of the underpayment shall run from the due 

date for the installment to the date on which such portion 

is contributed to or under the plan (determined without 

regard to subsection (c)(9)). 

‘‘(C) ORDER OF CREDITING CONTRIBUTIONS.—For purposes of subparagraph (A)(ii), contributions shall be credited against unpaid required installments in the order in 

which such installments are required to be paid. 

‘‘(3) NUMBER OF REQUIRED INSTALLMENTS; DUE DATES.— For purposes of this subsection— 

‘‘(A) PAYABLE IN 4 INSTALLMENTS.—There shall be 4 

required installments for each plan year. 

‘‘(B) TIME FOR PAYMENT OF INSTALLMENTS.— 

‘‘In the case of the following 

required installments: The due date is: 

1st ................................................. April 15

2nd ............................................... July 15

3rd ................................................ October 15

4th ................................................ January 15 of the following 

year. 

‘‘(4) AMOUNT OF REQUIRED INSTALLMENT.—For purposes of 

this subsection— 

‘‘(A) IN GENERAL.—The amount of any required installment shall be 25 percent of the required annual payment. 

‘‘(B) REQUIRED ANNUAL PAYMENT.—For purposes of 

subparagraph (A), the term ‘required annual payment’ 

means the lesser of— 

‘‘(i) 90 percent of the amount required to be contributed to or under the plan by the employer for the 

plan year under section 412 (without regard to any 

waiver under subsection (c) thereof), or 

‘‘(ii) 100 percent of the amount so required for 

the preceding plan year. 

Clause (ii) shall not apply if the preceding plan year was 

not a year of 12 months. 

‘‘(5) LIQUIDITY REQUIREMENT.— ‘‘(A) IN GENERAL.—A plan to which this paragraph 

applies shall be treated as failing to pay the full amount 

of any required installment to the extent that the value 

of the liquid assets paid in such installment is less than 

the liquidity shortfall (whether or not such liquidity shortfall exceeds the amount of such installment required to 

be paid but for this paragraph). 

‘‘(B) PLANS TO WHICH PARAGRAPH APPLIES.—This paragraph shall apply to a CSEC plan other than a plan 


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described in section 412(l)(6)(A) (as in effect on the day 

before the enactment of the Pension Protection Act of 2006) 

which— 

‘‘(i) is required to pay installments under this subsection for a plan year, and 

‘‘(ii) has a liquidity shortfall for any quarter during 

such plan year. 

‘‘(C) PERIOD OF UNDERPAYMENT.—For purposes of paragraph (1), any portion of an installment that is treated 

as not paid under subparagraph (A) shall continue to be 

treated as unpaid until the close of the quarter in which 

the due date for such installment occurs. 

‘‘(D) LIMITATION ON INCREASE.—If the amount of any 

required installment is increased by reason of subparagraph (A), in no event shall such increase exceed the 

amount which, when added to prior installments for the 

plan year, is necessary to increase the funded current 

liability percentage (taking into account the expected 

increase in current liability due to benefits accruing during 

the plan year) to 100 percent. 

‘‘(E) DEFINITIONS.—For purposes of this paragraph— 

‘‘(i) LIQUIDITY SHORTFALL.—The term ‘liquidity 

shortfall’ means, with respect to any required installment, an amount equal to the excess (as of the last 

day of the quarter for which such installment is made) 

of the base amount with respect to such quarter over 

the value (as of such last day) of the plan’s liquid 

assets. 

‘‘(ii) BASE AMOUNT.— 

‘‘(I) IN GENERAL.—The term ‘base amount’ 

means, with respect to any quarter, an amount 

equal to 3 times the sum of the adjusted disbursements from the plan for the 12 months ending 

on the last day of such quarter. 

‘‘(II) SPECIAL RULE.—If the amount determined 

under subclause (I) exceeds an amount equal to 

2 times the sum of the adjusted disbursements 

from the plan for the 36 months ending on the 

last day of the quarter and an enrolled actuary 

certifies to the satisfaction of the Secretary that 

such excess is the result of nonrecurring circumstances, the base amount with respect to such 

quarter shall be determined without regard to 

amounts related to those nonrecurring circumstances. 

‘‘(iii) DISBURSEMENTS FROM THE PLAN.—The term 

‘disbursements from the plan’ means all disbursements 

from the trust, including purchases of annuities, payments of single sums and other benefits, and administrative expenses. 

‘‘(iv) ADJUSTED DISBURSEMENTS.—The term 

‘adjusted disbursements’ means disbursements from 

the plan reduced by the product of— 

‘‘(I) the plan’s funded current liability percentage for the plan year, and 

Certification. 


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‘‘(II) the sum of the purchases of annuities, 

payments of single sums, and such other disbursements as the Secretary shall provide in regulations. 

‘‘(v) LIQUID ASSETS.—The term ‘liquid assets’ 

means cash, marketable securities and such other 

assets as specified by the Secretary in regulations. 

‘‘(vi) QUARTER.—The term ‘quarter’ means, with 

respect to any required installment, the 3-month period 

preceding the month in which the due date for such 

installment occurs. 

‘‘(F) REGULATIONS.—The Secretary may prescribe such 

regulations as are necessary to carry out this paragraph. 

‘‘(6) FISCAL YEARS AND SHORT YEARS.— ‘‘(A) FISCAL YEARS.—In applying this subsection to a 

plan year beginning on any date other than January 1, 

there shall be substituted for the months specified in this 

subsection, the months which correspond thereto. 

‘‘(B) SHORT PLAN YEAR.—This subsection shall be 

applied to plan years of less than 12 months in accordance 

with regulations prescribed by the Secretary. 

‘‘(g) IMPOSITION OF LIEN WHERE FAILURE TO MAKE REQUIRED

CONTRIBUTIONS.— 

‘‘(1) IN GENERAL.—In the case of a plan to which this 

section applies, if— 

‘‘(A) any person fails to make a required installment 

under subsection (f) or any other payment required under 

this section before the due date for such installment or 

other payment, and 

‘‘(B) the unpaid balance of such installment or other 

payment (including interest), when added to the aggregate 

unpaid balance of all preceding such installments or other 

payments for which payment was not made before the 

due date (including interest), exceeds $1,000,000, 

then there shall be a lien in favor of the plan in the amount 

determined under paragraph (3) upon all property and rights 

to property, whether real or personal, belonging to such person 

and any other person who is a member of the same controlled 

group of which such person is a member. 

‘‘(2) PLANS TO WHICH SUBSECTION APPLIES.—This subsection 

shall apply to a CSEC plan for any plan year for which the 

funded current liability percentage of such plan is less than 

100 percent. This subsection shall not apply to any plan to 

which section 4021 of the Employee Retirement Income Security 

Act of 1974 does not apply (as such section is in effect on 

the date of the enactment of the Retirement Protection Act 

of 1994). 

‘‘(3) AMOUNT OF LIEN.—For purposes of paragraph (1), the 

amount of the lien shall be equal to the aggregate unpaid 

balance of required installments and other payments required 

under this section (including interest)— 

‘‘(A) for plan years beginning after 1987, and 

‘‘(B) for which payment has not been made before 

the due date. 

‘‘(4) NOTICE OF FAILURE; LIEN.— ‘‘(A) NOTICE OF FAILURE.—A person committing a 

failure described in paragraph (1) shall notify the Pension 

Deadline. 

Applicability. 

Regulations. 

Applicability. 


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Benefit Guaranty Corporation of such failure within 10 

days of the due date for the required installment or other 

payment. 

‘‘(B) PERIOD OF LIEN.—The lien imposed by paragraph 

(1) shall arise on the due date for the required installment 

or other payment and shall continue until the last day 

of the first plan year in which the plan ceases to be 

described in paragraph (1)(B). Such lien shall continue 

to run without regard to whether such plan continues 

to be described in paragraph (2) during the period referred 

to in the preceding sentence. 

‘‘(C) CERTAIN RULES TO APPLY.—Any amount with 

respect to which a lien is imposed under paragraph (1) 

shall be treated as taxes due and owing the United States 

and rules similar to the rules of subsections (c), (d), and 

(e) of section 4068 of the Employee Retirement Income 

Security Act of 1974 shall apply with respect to a lien 

imposed by subsection (a) and the amount with respect 

to such lien. 

‘‘(5) ENFORCEMENT.—Any lien created under paragraph (1) 

may be perfected and enforced only by the Pension Benefit 

Guaranty Corporation, or at the direction of the Pension Benefit 

Guaranty Corporation, by any contributing employer (or any 

member of the controlled group of the contributing employer). 

‘‘(6) DEFINITIONS.—For purposes of this subsection— 

‘‘(A) DUE DATE; REQUIRED INSTALLMENT.—The terms 

‘due date’ and ‘required installment’ have the meanings 

given such terms by subsection (f), except that in the case 

of a payment other than a required installment, the due 

date shall be the date such payment is required to be 

made under this section. 

‘‘(B) CONTROLLED GROUP.—The term ‘controlled group’ 

means any group treated as a single employer under subsections (b), (c), (m), and (o) of section 414. 

‘‘(h) CURRENT LIABILITY.—For purposes of this section— 

‘‘(1) IN GENERAL.—The term ‘current liability’ means all 

liabilities to employees and their beneficiaries under the plan. 

‘‘(2) TREATMENT OF UNPREDICTABLE CONTINGENT EVENT

BENEFITS.— 

‘‘(A) IN GENERAL.—For purposes of paragraph (1), any 

unpredictable contingent event benefit shall not be taken 

into account until the event on which the benefit is contingent occurs. 

‘‘(B) UNPREDICTABLE CONTINGENT EVENT BENEFIT.— 

The term ‘unpredictable contingent event benefit’ means 

any benefit contingent on an event other than— 

‘‘(i) age, service, compensation, death, or disability, 

or 

‘‘(ii) an event which is reasonably and reliably 

predictable (as determined by the Secretary). 

‘‘(3) INTEREST RATE AND MORTALITY ASSUMPTIONS USED.— ‘‘(A) INTEREST RATE.—The rate of interest used to determine current liability under this section shall be the third 

segment rate determined under section 430(h)(2)(C). 

‘‘(B) MORTALITY TABLES.— ‘‘(i) SECRETARIAL AUTHORITY.—The Secretary may 

by regulation prescribe mortality tables to be used 

Applicability. 


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128 STAT. 1132 PUBLIC LAW 113–97—APR. 7, 2014 

in determining current liability under this subsection. 

Such tables shall be based upon the actual experience 

of pension plans and projected trends in such experience. In prescribing such tables, the Secretary shall 

take into account results of available independent 

studies of mortality of individuals covered by pension 

plans. 

‘‘(ii) PERIODIC REVIEW.—The Secretary shall 

periodically (at least every 5 years) review any tables 

in effect under this subsection and shall, to the extent 

the Secretary determines necessary, by regulation 

update the tables to reflect the actual experience of 

pension plans and projected trends in such experience. 

‘‘(C) SEPARATE MORTALITY TABLES FOR THE DISABLED.— 

Notwithstanding subparagraph (B)— 

‘‘(i) IN GENERAL.—In the case of plan years beginning after December 31, 1995, the Secretary shall 

establish mortality tables which may be used (in lieu 

of the tables under subparagraph (B)) to determine 

current liability under this subsection for individuals 

who are entitled to benefits under the plan on account 

of disability. The Secretary shall establish separate 

tables for individuals whose disabilities occur in plan 

years beginning before January 1, 1995, and for 

individuals whose disabilities occur in plan years 

beginning on or after such date. 

‘‘(ii) SPECIAL RULE FOR DISABILITIES OCCURRING

AFTER 1994.—In the case of disabilities occurring in 

plan years beginning after December 31, 1994, the 

tables under clause (i) shall apply only with respect 

to individuals described in such subclause who are 

disabled within the meaning of title II of the Social 

Security Act and the regulations thereunder. 

‘‘(4) CERTAIN SERVICE DISREGARDED.— 

‘‘(A) IN GENERAL.—In the case of a participant to whom 

this paragraph applies, only the applicable percentage of 

the years of service before such individual became a participant shall be taken into account in computing the current 

liability of the plan. 

‘‘(B) APPLICABLE PERCENTAGE.—For purposes of this 

subparagraph, the applicable percentage shall be determined as follows: 

‘‘If the years of participation 

are: 

The applicable percentage 

is: 

1 ..................................................... 20

2 ..................................................... 40

3 ..................................................... 60

4 ..................................................... 80

5 or more ....................................... 100. 

‘‘(C) PARTICIPANTS TO WHOM PARAGRAPH APPLIES.—This 

subparagraph shall apply to any participant who, at the 

time of becoming a participant— 

Applicability. 

Regulations. 


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PUBLIC LAW 113–97—APR. 7, 2014 128 STAT. 1133 

‘‘(i) has not accrued any other benefit under any 

defined benefit plan (whether or not terminated) maintained by the employer or a member of the same controlled group of which the employer is a member, 

‘‘(ii) who first becomes a participant under the 

plan in a plan year beginning after December 31, 1987, 

and 

‘‘(iii) has years of service greater than the minimum years of service necessary for eligibility to 

participate in the plan. 

‘‘(D) ELECTION.—An employer may elect not to have 

this subparagraph apply. Such an election, once made, 

may be revoked only with the consent of the Secretary. 

‘‘(i) FUNDED CURRENT LIABILITY PERCENTAGE.—For purposes 

of this section, the term ‘funded current liability percentage’ means, 

with respect to any plan year, the percentage which— 

‘‘(1) the value of the plan’s assets determined under subsection (c)(2), is of 

‘‘(2) the current liability under the plan. 

‘‘(j) FUNDING RESTORATION STATUS.—Notwithstanding any 

other provisions of this section— 

‘‘(1) NORMAL COST PAYMENT.— 

‘‘(A) IN GENERAL.—In the case of a CSEC plan that 

is in funding restoration status for a plan year, for purposes 

of section 412, the term ‘accumulated funding deficiency’ 

means, for such plan year, the greater of— 

‘‘(i) the amount described in subsection (a), or 

‘‘(ii) the excess of the normal cost of the plan 

for the plan year over the amount actually contributed 

to or under the plan for the plan year. 

‘‘(B) NORMAL COST.—In the case of a CSEC plan that 

uses a spread gain funding method, for purposes of this 

subsection, the term ‘normal cost’ means normal cost as 

determined under the entry age normal funding method. 

‘‘(2) PLAN AMENDMENTS.—In the case of a CSEC plan that 

is in funding restoration status for a plan year, no amendment 

to such plan may take effect during such plan year if such 

amendment has the effect of increasing liabilities of the plan 

by means of increases in benefits, establishment of new benefits, 

changing the rate of benefit accrual, or changing the rate at 

which benefits become nonforfeitable. This paragraph shall not 

apply to any plan amendment that is required to comply with 

any applicable law. This paragraph shall cease to apply with 

respect to any plan year, effective as of the first day of the 

plan year (or if later, the effective date of the amendment) 

upon payment by the plan sponsor of a contribution to the 

plan (in addition to any contribution required under this section 

without regard to this paragraph) in an amount equal to the 

increase in the funding liability of the plan attributable to 

the plan amendment. 

‘‘(3) FUNDING RESTORATION PLAN.—The sponsor of a CSEC 

plan shall establish a written funding restoration plan within 

180 days of the receipt by the plan sponsor of a certification 

from the plan actuary that the plan is in funding restoration 

status for a plan year. Such funding restoration plan shall 

consist of actions that are calculated, based on reasonably 

anticipated experience and reasonable actuarial assumptions, 

Deadline. 

Effective date. 

Definitions. 

Definition. 


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128 STAT. 1134 PUBLIC LAW 113–97—APR. 7, 2014 

to increase the plan’s funded percentage to 100 percent over 

a period that is not longer than the greater of 7 years or 

the shortest amount of time practicable. Such funding restoration plan shall take into account contributions required under 

this section (without regard to this paragraph). If a plan 

remains in funding restoration status for 2 or more years, 

such funding restoration plan shall be updated each year after 

the 1st such year within 180 days of receipt by the plan sponsor 

of a certification from the plan actuary that the plan remains 

in funding restoration status for the plan year. 

‘‘(4) ANNUAL CERTIFICATION BY PLAN ACTUARY.—Not later 

than the 90th day of each plan year of a CSEC plan, the 

plan actuary shall certify to the plan sponsor whether or not 

the plan is in funding restoration status for the plan year, 

based on the plan’s funded percentage as of the beginning 

of the plan year. For this purpose, the actuary may conclusively 

rely on an estimate of— 

‘‘(A) the plan’s funding liability, based on the funding 

liability of the plan for the preceding plan year and on 

reasonable actuarial estimates, assumptions, and methods, 

and 

‘‘(B) the amount of any contributions reasonably anticipated to be made for the preceding plan year. 

Contributions described in subparagraph (B) shall be taken 

into account in determining the plan’s funded percentage as 

of the beginning of the plan year. 

‘‘(5) DEFINITIONS.—For purposes of this subsection— 

‘‘(A) FUNDING RESTORATION STATUS.—A CSEC plan 

shall be treated as in funding restoration status for a 

plan year if the plan’s funded percentage as of the beginning of such plan year is less than 80 percent. 

‘‘(B) FUNDED PERCENTAGE.—The term ‘funded percentage’ means the ratio (expressed as a percentage) which— 

‘‘(i) the value of plan assets (as determined under 

subsection (c)(2)), bears to 

‘‘(ii) the plan’s funding liability. 

‘‘(C) FUNDING LIABILITY.—The term ‘funding liability’ 

for a plan year means the present value of all benefits 

accrued or earned under the plan as of the beginning 

of the plan year, based on the assumptions used by the 

plan pursuant to this section, including the interest rate 

described in subsection (b)(5)(A) (without regard to subsection (b)(5)(B)). 

‘‘(D) SPREAD GAIN FUNDING METHOD.—The term ‘spread 

gain funding method’ has the meaning given such term 

under rules and forms issued by the Secretary. 

‘‘(E) PLAN SPONSOR.—The term ‘plan sponsor’ means, 

with respect to a CSEC plan, the association, committee, 

joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan.’’. 

(b) CSEC PLANS.—Section 413 of the Internal Revenue Code 

of 1986 is amended by adding at the end the following new subsection: 

‘‘(d) CSEC PLANS.—Notwithstanding any other provision of this 

section, in the case of a CSEC plan— 

26 USC 413. 

Deadline. 

Deadline. 

Certification. 


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PUBLIC LAW 113–97—APR. 7, 2014 128 STAT. 1135 

‘‘(1) FUNDING.—The requirements of section 412 shall be 

determined as if all participants in the plan were employed 

by a single employer. 

‘‘(2) APPLICATION OF PROVISIONS.—Paragraphs (1), (2), (3), 

and (5) of subsection (c) shall apply. 

‘‘(3) DEDUCTION LIMITATIONS.—Each applicable limitation 

provided by section 404(a) shall be determined as if all participants in the plan were employed by a single employer. The 

amounts contributed to or under the plan by each employer 

who maintains the plan (for the portion of the taxable year 

included within a plan year) shall be considered not to exceed 

such applicable limitation if the anticipated employer contributions for such plan year of all employers (determined in a 

reasonable manner not inconsistent with regulations prescribed 

by the Secretary) do not exceed such limitation. If such anticipated contributions exceed such limitation, the portion of each 

such employer’s contributions which is not deductible under 

section 404 shall be determined in accordance with regulations 

prescribed by the Secretary. 

‘‘(4) ALLOCATIONS.—Allocations of amounts under paragraph (3) and subsection (c)(5) among the employers 

maintaining the plan shall not be inconsistent with the regulations prescribed for this purpose by the Secretary.’’. 

(c) SEPARATE RULES FOR CSEC PLANS.— 

(1) IN GENERAL.—Paragraph (2) of section 412(a) of the 

Internal Revenue Code of 1986 is amended by striking ‘‘and’’ 

at the end of subparagraph (B), by striking the period at 

the end of subparagraph (C) and inserting ‘‘, and’’, and by 

inserting at the end thereof the following new subparagraph: 

‘‘(D) in the case of a CSEC plan, the employers make 

contributions to or under the plan for any plan year which, 

in the aggregate, are sufficient to ensure that the plan 

does not have an accumulated funding deficiency under 

section 433 as of the end of the plan year.’’. 

(2) CONFORMING AMENDMENTS.—Section 412 of such Code 

is amended— 

(A) by striking ‘‘multiemployer plan’’ in paragraph (A) 

of subsection (a)(2), in clause (i) of subsection (c)(1)(B), 

the first place it appears in clause (i) of subsection (c)(1)(A), 

and the last place it appears in paragraph (2) of subsection 

(d), and inserting ‘‘multiemployer plan or a CSEC plan’’, 

(B) by striking ‘‘430(j)’’ in paragraph (1) of subsection 

(b) and inserting ‘‘430(j) or under section 433(f)’’, 

(C)(i) by striking ‘‘and’’ at the end of clause (i) of 

subsection (c)(1)(B), 

(ii) by striking the period at the end of clause (ii) 

of subsection (c)(1)(B) and inserting ‘‘, and’’, and 

(iii) by inserting the following new clause after clause 

(ii) of subsection (c)(1)(B): 

‘‘(iii) in the case of a CSEC plan, the funding 

standard account shall be credited under section 

433(b)(3)(C) with the amount of the waived funding 

deficiency and such amount shall be amortized as 

required under section 433(b)(2)(C).’’, 

(D) by striking ‘‘under paragraph (1)’’ in clause (i) 

of subsection (c)(4)(A) and inserting ‘‘under paragraph (1) 

or for granting an extension under section 433(d)’’, 

26 USC 412. 

Determination. 

Regulations. 


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128 STAT. 1136 PUBLIC LAW 113–97—APR. 7, 2014 

(E) by striking ‘‘waiver under this subsection’’ in 

subparagraph (B) of subsection (c)(4) and inserting ‘‘waiver 

under this subsection or an extension under 433(d)’’, 

(F) by striking ‘‘waiver or modification’’ in subclause 

(I) of subsection (c)(4)(B)(i) and inserting ‘‘waiver, modification, or extension’’, 

(G) by striking ‘‘waivers’’ in the heading of subsection 

(c)(4)(C) and of clause (ii) of subsection (c)(4)(C) and 

inserting ‘‘waivers or extensions’’, 

(H) by striking ‘‘section 431(d)’’ in subparagraph (A) 

of subsection (c)(7) and in paragraph (2) of subsection (d) 

and inserting ‘‘section 431(d) or section 433(d)’’, 

(I) by striking ‘‘and’’ at the end of subclause (I) of 

subsection (c)(4)(C)(i) and inserting ‘‘or the accumulated 

funding deficiency under section 433, whichever is 

applicable,’’, 

(J) by striking ‘‘430(e)(2),’’ in subclause (II) of subsection (c)(4)(C)(i) and inserting ‘‘430(e)(2) or 433(b)(2)(C), 

whichever is applicable, and’’, 

(K) by adding immediately after subclause (II) of subsection (c)(4)(C)(i) the following new subclause: 

‘‘(III) the total amounts not paid by reason 

of an extension in effect under section 433(d),’’, 

and 

(L) by striking ‘‘for waivers of’’ in clause (ii) of subsection (c)(4)(C) and inserting ‘‘for waivers or extensions 

with respect to’’. 

(3) BENEFIT RESTRICTIONS.— 

(A) IN GENERAL.—Paragraph (29) of section 401(a) of 

such Code is amended by striking ‘‘multiemployer plan’’ 

and inserting ‘‘multiemployer plan or a CSEC plan’’. 

(B) CONFORMING CHANGE.—Subsection (a) of section 

436 of such Code is amended by striking ‘‘single-employer 

plan’’ and inserting ‘‘single-employer plan (other than a 

CSEC plan)’’. 

(4) BENEFIT INCREASES.—Subparagraph (C) of section 

401(a)(33) of such Code is amended by striking ‘‘multiemployer 

plans’’ and inserting ‘‘multiemployer plans or CSEC plans’’. 

(5) LIQUIDITY SHORTFALLS.— 

(A) IN GENERAL.—Subparagraph (A) of section 

401(a)(32) of such Code is amended by striking ‘‘430(j)(4)’’ 

each place it appears and inserting ‘‘430(j)(4) or 433(f)(5)’’. 

(B) PERIOD OF SHORTFALL.—Subparagraph (C) of section 401(a)(32) of such Code is amended by striking 

‘‘430(j)(3) by reason of section 430(j)(4)(A) thereof’’ and 

inserting ‘‘430(j)(3) or 433(f) by reason of section 430(j)(4)(A) 

or 433(f)(5), respectively’’. 

(6) DEDUCTION LIMITS.—Subsection (o) of section 404 of 

such Code is amended by adding at the end the following 

new paragraph: 

‘‘(8) CSEC PLANS.—Solely for purposes of this subsection, 

a CSEC plan shall be treated as though section 430 applied 

to such plan and the minimum required contribution for any 

plan year shall be the amount described in section 

412(a)(2)(D).’’. 

Applicability. 

26 USC 404. 

26 USC 436. 

26 USC 401. 


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PUBLIC LAW 113–97—APR. 7, 2014 128 STAT. 1137 

(7) SECTION 420.—Paragraph (5) of section 420(e) of such 

Code is amended by striking ‘‘section 430’’ each place it appears 

and inserting ‘‘sections 430 and 433’’. 

(8) COORDINATION WITH SECTION 4971.— (A) Subsection (a) of section 4971 of such Code is 

amended by striking ‘‘and’’ at the end of paragraph (1), 

by striking the period at the end of paragraph (2) and 

inserting ‘‘, and’’, and by adding at the end thereof the 

following new paragraph: 

‘‘(3) in the case of a CSEC plan, 10 percent of the CSEC 

accumulated funding deficiency as of the end of the plan year 

ending with or within the taxable year.’’. 

(B) Subsection (b) of section 4971 of such Code is 

amended— 

(i) by striking ‘‘or’’ at the end of paragraph (1), 

by adding ‘‘or’’ at the end of paragraph (2), and by 

inserting immediately after paragraph (2) the following 

new paragraph: 

‘‘(3) a tax is imposed under subsection (a)(3) on any CSEC 

accumulated funding deficiency and the CSEC accumulated 

funding deficiency is not corrected within the taxable period,’’, 

and 

(ii) by striking ‘‘minimum required contributions 

or accumulated funding deficiency’’ and inserting ‘‘minimum required contribution, accumulated funding deficiency, or CSEC accumulated funding deficiency’’. 

(C) Subsection (c) of section 4971 of such Code is 

amended— 

(i) by striking ‘‘accumulated funding deficiency’’ 

each place it appears in paragraph (2) and inserting 

‘‘accumulated funding deficiency or CSEC accumulated 

funding deficiency’’, 

(ii) by striking ‘‘accumulated funding deficiency 

or unpaid minimum required contribution’’ each place 

it appears in paragraph (3) and inserting ‘‘accumulated 

funding deficiency, CSEC accumulated funding deficiency, or unpaid minimum required contribution’’, and 

(iii) by adding at the end the following new paragraph: 

‘‘(5) CSEC ACCUMULATED FUNDING DEFICIENCY.—The term 

‘CSEC accumulated funding deficiency’ means the accumulated 

funding deficiency determined under section 433.’’. 

(D) Paragraph (1) of section 4971(d) of such Code is 

amended by striking ‘‘accumulated funding deficiency or 

unpaid minimum required contribution’’ and inserting 

‘‘accumulated funding deficiency, CSEC accumulated 

funding deficiency, or unpaid minimum required contribution’’. 

(E) Subsection (f) of section 4971 of such Code is 

amended— 

(i) by striking ‘‘430(j)(4)’’ in paragraph (1) and 

inserting ‘‘430(j)(4) or 433(f)’’, 

(ii) by striking ‘‘430(j)’’ in paragraph (1)(B) and 

inserting ‘‘430(j) or 433(f), whichever is applicable’’, 

and 

(iii) by striking ‘‘412(m)(5)’’ in paragraph (3)(A) 

and inserting ‘‘430(j) or 433(f), whichever is applicable’’. 

Definition. 

26 USC 4971. 

26 USC 420. 


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128 STAT. 1138 PUBLIC LAW 113–97—APR. 7, 2014 

(9) EXCISE TAX ON FAILURE TO ADOPT FUNDING RESTORATION

PLAN.—Section 4971 of such Code is amended by redesignating 

subsection (h) as subsection (i), and by inserting after subsection (g) the following new subsection: 

‘‘(h) FAILURE OF A CSEC PLAN SPONSOR TO ADOPT FUNDING

RESTORATION PLAN.— ‘‘(1) IN GENERAL.—In the case of a CSEC plan that is 

in funding restoration status (within the meaning of section 

433(j)(5)(A)), there is hereby imposed a tax on the failure of 

such plan to adopt a funding restoration plan within the time 

prescribed under section 433(j)(3). 

‘‘(2) AMOUNT OF TAX.—The amount of the tax imposed 

under paragraph (1) with respect to any plan sponsor for any 

taxable year shall be the amount equal to $100 multiplied 

by the number of days during the taxable year which are 

included in the period beginning on the day following the close 

of the 180-day period described in section 433(j)(3) and ending 

on the day on which the funding restoration plan is adopted. 

‘‘(3) WAIVER BY SECRETARY.—In the case of a failure 

described in paragraph (1) which the Secretary determines 

is due to reasonable cause and not to willful neglect, the Secretary may waive a portion or all of the tax imposed by such 

paragraph. 

‘‘(4) LIABILITY FOR TAX.—The tax imposed by paragraph 

(1) shall be paid by the plan sponsor (within the meaning 

of section 433(j)(5)(E)).’’. 

(10) REPORTING.— 

(A) IN GENERAL.—Paragraph (2) of section 6059(b) of 

such Code is amended by striking ‘‘430,’’ and inserting 

‘‘430, the accumulated funding deficiency under section 

433,’’. 

(B) ASSUMPTIONS.—Subparagraph (B) of section 

6059(b)(3) of such Code is amended by striking ‘‘430(h)(1) 

or 431(c)(3)’’ and inserting ‘‘430(h)(1), 431(c)(3), or 

433(c)(3)’’. 

SEC. 203. ELECTION NOT TO BE TREATED AS A CSEC PLAN. 

(a) IN GENERAL.—Section 414(y) of the Internal Revenue Code 

of 1986, as added by section 201, is amended by adding at the 

end the following new paragraph: 

‘‘(3) ELECTION.— 

‘‘(A) IN GENERAL.—If a plan falls within the definition 

of a CSEC plan under this subsection (without regard 

to this paragraph), such plan shall be a CSEC plan unless 

the plan sponsor elects not later than the close of the 

first plan year of the plan beginning after December 31, 

2013, not to be treated as a CSEC plan. An election under 

the preceding sentence shall take effect for such plan year 

and, once made, may be revoked only with the consent 

of the Secretary. 

‘‘(B) SPECIAL RULE.—If a plan described in subparagraph (A) is treated as a CSEC plan, section 104 of the 

Pension Protection Act of 2006, as amended by the 

Preservation of Access to Care for Medicare Beneficiaries 

and Pension Relief Act of 2010, shall cease to apply to 

such plan as of the first date as of which such plan is 

treated as a CSEC plan.’’. 

Deadline. 

26 USC 414. 

26 USC 6059. 

Time periods. 

Taxes. 

26 USC 4971. 


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PUBLIC LAW 113–97—APR. 7, 2014 128 STAT. 1139 

LEGISLATIVE HISTORY—H.R. 4275 (S. 1302): 

CONGRESSIONAL RECORD, Vol. 160 (2014): 

Mar. 24, considered and passed House. 

Mar. 25, considered and passed Senate. 

Æ 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply as of the date of enactment of this Act. 

Approved April 7, 2014. 

26 USC 414 note. 


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