Page 443 TITLE 29—LABOR § 1112

‘‘Commission’’ and ‘‘Commission’s’’ for ‘‘Board’’ and

‘‘Board’s’’, respectively, inserted provision of notice to

the Secretary of Labor, and substituted ‘‘hire, retain,

employ, or otherwise place any other person to serve in

any capacity’’ for ‘‘permit any other person to serve in

any capacity referred to in paragraph (1) or (2)’’ and

‘‘Parole Commission’’ for ‘‘Board of Parole’’.

Subsec. (b). Pub. L. 98–473, §802(b), substituted ‘‘five

years’’ for ‘‘one year’’.

Subsec. (c)(1). Pub. L. 98–473, §802(c), substituted

‘‘, regardless of whether that judgment remains under

appeal’’ for ‘‘or the date of the final sustaining of such

judgment on appeal, whichever is the later event’’.

Subsec. (c)(3). Pub. L. 98–473, §230, inserted ‘‘or supervised release’’ after ‘‘parole’’.

Subsec. (d). Pub. L. 98–473, §802(d), added subsec. (d).

EFFECTIVE DATE OF 1987 AMENDMENT

Amendment by Pub. L. 100–182 applicable with respect to offenses committed after Dec. 7, 1987, see section 26 of Pub. L. 100–182, set out as a note under section 3006A of Title 18, Crimes and Criminal Procedure.

EFFECTIVE DATE OF 1984 AMENDMENT

Amendments by sections 229 and 230 of Pub. L. 98–473

effective Nov. 1, 1987, and applicable only to offenses

committed after the taking effect of such amendments,

see section 235(a)(1) of Pub. L. 98–473, set out as an Effective Date note under section 3551 of Title 18, Crimes

and Criminal Procedure.

Amendment by section 802 of Pub. L. 98–473 effective

with respect to any judgment of conviction entered by

the trial court after Oct. 12, 1984, except as otherwise

provided, see section 804 of Pub. L. 98–473, set out as a

note under section 504 of this title.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1109 of this title.

§ 1112. Bonding

(a) Requisite bonding of plan officials

Every fiduciary of an employee benefit plan

and every person who handles funds or other

property of such a plan (hereafter in this section

referred to as ‘‘plan official’’) shall be bonded as

provided in this section; except that—

(1) where such plan is one under which the

only assets from which benefits are paid are the

general assets of a union or of an employer, the

administrator, officers, and employees of such

plan shall be exempt from the bonding requirements of this section, and

(2) no bond shall be required of a fiduciary (or

of any director, officer, or employee of such fiduciary) if such fiduciary—

(A) is a corporation organized and doing

business under the laws of the United States

or of any State;

(B) is authorized under such laws to exercise

trust powers or to conduct an insurance business;

(C) is subject to supervision or examination

by Federal or State authority; and

(D) has at all times a combined capital and

surplus in excess of such a minimum amount

as may be established by regulations issued by

the Secretary, which amount shall be at least

$1,000,000. Paragraph (2) shall apply to a bank

or other financial institution which is authorized to exercise trust powers and the deposits

of which are not insured by the Federal Deposit Insurance Corporation, only if such bank

or institution meets bonding or similar requirements under State law which the Secretary determines are at least equivalent to

those imposed on banks by Federal law.

The amount of such bond shall be fixed at the

beginning of each fiscal year of the plan. Such

amount shall be not less than 10 per centum of

the amount of funds handled. In no case shall

such bond be less than $1,000 nor more than

$500,000, except that the Secretary, after due notice and opportunity for hearing to all interested parties, and after consideration of the

record, may prescribe an amount in excess of

$500,000, subject to the 10 per centum limitation

of the preceding sentence. For purposes of fixing

the amount of such bond, the amount of funds

handled shall be determined by the funds handled by the person, group, or class to be covered

by such bond and by their predecessor or predecessors, if any, during the preceding reporting

year, or if the plan has no preceding reporting

year, the amount of funds to be handled during

the current reporting year by such person,

group, or class, estimated as provided in regulations of the Secretary. Such bond shall provide

protection to the plan against loss by reason of

acts of fraud or dishonesty on the part of the

plan official, directly or through connivance

with others. Any bond shall have as surety

thereon a corporate surety company which is an

acceptable surety on Federal bonds under authority granted by the Secretary of the Treasury pursuant to sections 9304–9308 of title 31.

Any bond shall be in a form or of a type approved by the Secretary, including individual

bonds or schedule or blanket forms of bonds

which cover a group or class.

(b) Unlawful acts

It shall be unlawful for any plan official to

whom subsection (a) of this section applies, to

receive, handle, disburse, or otherwise exercise

custody or control of any of the funds or other

property of any employee benefit plan, without

being bonded as required by subsection (a) of

this section and it shall be unlawful for any plan

official of such plan, or any other person having

authority to direct the performance of such

functions, to permit such functions, or any of

them, to be performed by any plan official, with

respect to whom the requirements of subsection

(a) of this section have not been met.

(c) Conflict of interest prohibited in procuring

bonds

It shall be unlawful for any person to procure

any bond required by subsection (a) of this section from any surety or other company or

through any agent or broker in whose business

operations such plan or any party in interest in

such plan has any control or significant financial interest, direct or indirect.

(d) Exclusiveness of statutory basis for bonding

requirement for persons handling funds or

other property of employee benefit plans

Nothing in any other provision of law shall require any person, required to be bonded as provided in subsection (a) of this section because he

handles funds or other property of an employee

benefit plan, to be bonded insofar as the handling by such person of the funds or other property of such plan is concerned.
§ 1113 TITLE 29—LABOR Page 444

(e) Regulations

The Secretary shall prescribe such regulations

as may be necessary to carry out the provisions

of this section including exempting a plan from

the requirements of this section where he finds

that (1) other bonding arrangements or (2) the

overall financial condition of the plan would be

adequate to protect the interests of the beneficiaries and participants. When, in the opinion

of the Secretary, the administrator of a plan offers adequate evidence of the financial responsibility of the plan, or that other bonding arrangements would provide adequate protection

of the beneficiaries and participants, he may exempt such plan from the requirements of this

section.

(Pub. L. 93–406, title I, §412, Sept. 2, 1974, 88 Stat.

888.)

CODIFICATION

In subsec. (a), ‘‘sections 9304–9308 of title 31’’ substituted for ‘‘sections 6 through 13 of title 6, United

States Code’’ on authority of Pub. L. 97–258, §4(b), Sept.

13, 1982, 96 Stat. 1067, the first section of which enacted

Title 31, Money and Finance.

REGULATIONS

Secretary authorized, effective Sept. 2, 1974, to promulgate regulations wherever provisions of this part

call for the promulgation of regulations, see sections

1031 and 1114 of this title.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1028, 1085b, 1383,

1384 of this title; title 26 section 401.

§ 1113. Limitation of actions

No action may be commenced under this subchapter with respect to a fiduciary’s breach of

any responsibility, duty, or obligation under

this part, or with respect to a violation of this

part, after the earlier of—

(1) six years after (A) the date of the last action which constituted a part of the breach or

violation, or (B) in the case of an omission the

latest date on which the fiduciary could have

cured the breach or violation, or

(2) three years after the earliest date on

which the plaintiff had actual knowledge of

the breach or violation;

except that in the case of fraud or concealment,

such action may be commenced not later than

six years after the date of discovery of such

breach or violation.

(Pub. L. 93–406, title I, §413, Sept. 2, 1974, 88 Stat.

889; Pub. L. 100–203, title IX, §9342(b), Dec. 22,

1987, 101 Stat. 1330–371; Pub. L. 101–239, title VII,

§§7881(j)(4), 7894(e)(5), Dec. 19, 1989, 103 Stat. 2443,

2450.)

AMENDMENTS

1989—Pub. L. 101–239, §7894(e)(5), struck out ‘‘(a)’’ before ‘‘No action’’.

Par. (2). Pub. L. 101–239, §7881(j)(4), struck out comma

after ‘‘violation’’.

1987—Subsec. (a)(2). Pub. L. 100–203 struck out ‘‘(A)’’

after ‘‘date’’ and struck out ‘‘or (B) on which a report

from which he could reasonably be expected to have obtained knowledge of such breach or violation was filed

with the Secretary under this subchapter’’.

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by section 7881(j)(4) of Pub. L. 101–239 effective, except as otherwise provided, as if included in

the provision of the Pension Protection Act, Pub. L.

100–203, §§9302–9346, to which such amendment relates,

see section 7882 of Pub. L. 101–239, set out as a note

under section 401 of Title 26, Internal Revenue Code.

Amendment by section 7894(e)(5) of Pub. L. 101–239 effective, except as otherwise provided, as if originally

included in the provision of the Employee Retirement

Income Security Act of 1974, Pub. L. 93–406, to which

such amendment relates, see section 7894(i) of Pub. L.

101–239, set out as a note under section 1002 of this title.

EFFECTIVE DATE OF 1987 AMENDMENT

Amendment by Pub. L. 100–203 applicable with respect to reports required to be filed after Dec. 31, 1987,

see section 9342(d)(1) of Pub. L. 100–203, set out as a note

under section 1132 of this title.

§ 1114. Effective date

(a) Except as provided in subsections (b), (c),

and (d) of this section, this part shall take effect

on January 1, 1975.

(b)(1) The provisions of this part authorizing

the Secretary to promulgate regulations shall

take effect on September 2, 1974.

(2) Upon application of a plan, the Secretary

may postpone until not later than January 1,

1976, the applicability of any provision of sections 1102, 1103 (other than 1103(c)), 1105 (other

than 1105(a) and (d)), and 1110(a) of this title, as

it applies to any plan in existence on September

2, 1974, if he determines such postponement is

(A) necessary to amend the instrument establishing the plan under which the plan is maintained and (B) not adverse to the interest of participants and beneficiaries.

(3) This part shall take effect on September 2,

1974, with respect to a plan which terminates

after June 30, 1974, and before January 1, 1975,

and to which at the time of termination section

1321 of this title applies.

(c) Sections 1106 and 1107(a) of this title (relating to prohibited transactions) shall not apply—

(1) until June 30, 1984, to a loan of money or

other extension of credit between a plan and a

party in interest under a binding contract in

effect on July 1, 1974 (or pursuant to renewals

of such a contract), if such loan or other extension of credit remains at least as favorable

to the plan as an arm’s-length transaction

with an unrelated party would be, and if the

execution of the contract, the making of the

loan, or the extension of credit was not, at the

time of such execution, making, or extension,

a prohibited transaction (within the meaning

of section 503(b) of title 26 or the corresponding provisions of prior law);

(2) until June 30, 1984, to a lease or joint use

of property involving the plan and a party in

interest pursuant to a binding contract in effect on July 1, 1974 (or pursuant to renewals of

such a contract), if such lease or joint use remains at least as favorable to the plan as an

arm’s-length transaction with an unrelated

party would be and if the execution of the contract was not, at the time of such execution,

a prohibited transaction (within the meaning

of section 503(b) of title 26 or the corresponding provisions of prior law);

(3) until June 30, 1984, to the sale, exchange

or other disposition of property described in

paragraph (2) between a plan and a party in interest if—