§ 1321 TITLE 29—LABOR Page 506

1See References in Text note below.

SUBTITLE B—COVERAGE

SUBTITLE REFERRED TO IN OTHER SECTIONS

This subtitle is referred to in sections 1361, 1371 of

this title.

§ 1321. Coverage

(a) Plans covered

Except as provided in subsection (b) of this

section, this subchapter applies to any plan (including a successor plan) which, for a plan

year—

(1) is an employee pension benefit plan (as

defined in paragraph (2) of section 1002 of this

title) established or maintained—

(A) by an employer engaged in commerce

or in any industry or activity affecting commerce, or

(B) by any employee organization, or organization representing employees, engaged in

commerce or in any industry or activity affecting commerce, or

(C) by both,

which has, in practice, met the requirements

of part I of subchapter D of chapter 1 of title

26 (as in effect for the preceding 5 plan years

of the plan) applicable to the plans described

in paragraph (2) for the preceding 5 plan years;

or

(2) is, or has been determined by the Secretary of the Treasury to be, a plan described

in section 401(a) of title 26, or which meets, or

has been determined by the Secretary of the

Treasury to meet, the requirements of section

404(a)(2) of title 26.

For purposes of this subchapter, a successor plan

is considered to be a continuation of a predecessor plan. For this purpose, unless otherwise

specifically indicated in this subchapter, a successor plan is a plan which covers a group of employees which includes substantially the same

employees as a previously established plan, and

provides substantially the same benefits as that

plan provided.

(b) Plans not covered

This section does not apply to any plan—

(1) which is an individual account plan, as

defined in paragraph (34) of section 1002 of this

title,

(2) established and maintained for its employees by the Government of the United

States, by the government of any State or political subdivision thereof, or by any agency or

instrumentality of any of the foregoing, or to

which the Railroad Retirement Act of 1935 or

1937 [45 U.S.C. 231 et seq.] applies and which is

financed by contributions required under that

Act,

(3) which is a church plan as defined in section 414(e) of title 26, unless that plan has

made an election under section 410(d) of title

26, and has notified the corporation in accordance with procedures prescribed by the corporation, that it wishes to have the provisions

of this part apply to it,

(4)(A) established and maintained by a society, order, or association described in section

501(c)(8) or (9) of title 26, if no part of the contributions to or under the plan is made by employers of participants in the plan, or

(B) of which a trust described in section

501(c)(18) of title 26 is a part;

(5) which has not at any time after September 2, 1974, provided for employer contributions;

(6) which is unfunded and which is maintained by an employer primarily for the purpose of providing deferred compensation for a

select group of management or highly compensated employees;

(7) which is established and maintained outside of the United States primarily for the

benefit of individuals substantially all of

whom are nonresident aliens;

(8) which is maintained by an employer solely for the purpose of providing benefits for certain employees in excess of the limitations on

contributions and benefits imposed by section

415 of title 26 on plans to which that section

applies, without regard to whether the plan is

funded, and, to the extent that a separable

part of a plan (as determined by the corporation) maintained by an employer is maintained for such purpose, that part shall be

treated for purposes of this subchapter, as a

separate plan which is an excess benefit plan;

(9) which is established and maintained exclusively for substantial owners as defined in

section 1322(b)(6) 1 of this title;

(10) of an international organization which is

exempt from taxation under the International

Organizations Immunities Act [22 U.S.C. 288 et

seq.];

(11) maintained solely for the purpose of

complying with applicable workmen’s compensation laws or unemployment compensation or disability insurance laws;

(12) which is a defined benefit plan, to the

extent that it is treated as an individual account plan under paragraph (35)(B) of section

1002 of this title; or

(13) established and maintained by a professional service employer which does not at any

time after September 2, 1974, have more than

25 active participants in the plan.

(c) Definitions

(1) For purposes of subsection (b)(1) of this section, the term ‘‘individual account plan’’ does

not include a plan under which a fixed benefit is

promised if the employer or his representative

participated in the determination of that benefit.

(2) For purposes of this paragraph and for purposes of subsection (b)(13) of this section.

(A) the term ‘‘professional service employer’’ means any proprietorship, partnership, corporation, or other association or organization (i) owned or controlled by professional individuals or by executors or administrators of professional individuals, (ii) the

principal business of which is the performance

of professional services, and

(B) the term ‘‘professional individuals’’ includes but is not limited to, physicians, dentists, chiropractors, osteopaths, optometrists,

other licensed practitioners of the healing

arts, attorneys at law, public accountants,

public engineers, architects, draftsmen, actu-
Page 507 TITLE 29—LABOR § 1322

aries, psychologists, social or physical scientists, and performing artists.

(3) In the case of a plan established and maintained by more than one professional service

employer, the plan shall not be treated as a plan

described in subsection (b)(13) of this section if,

at any time after September 2, 1974, the plan has

more than 25 active participants.

(Pub. L. 93–406, title IV, §4021, Sept. 2, 1974, 88

Stat. 1014; Pub. L. 96–364, title IV, §402(a)(4),

Sept. 26, 1980, 94 Stat. 1298; Pub. L. 101–239, title

VII, §§7891(a)(1), 7894(g)(3)(A), Dec. 19, 1989, 103

Stat. 2445, 2451.)

REFERENCES IN TEXT

The Railroad Retirement Act of 1935 or 1937, referred

to in subsec. (b)(2), means act Aug. 29, 1935, ch. 812, 49

Stat. 867, known as the Railroad Retirement Act of

1935. The Railroad Retirement Act of 1935 was amended

generally by act June 24, 1937, ch. 382, part I, 50 Stat.

307, and was known as the Railroad Retirement Act of

1937. The Railroad Retirement Act of 1937 was amended

generally and redesignated the Railroad Retirement

Act of 1974 by Pub. L. 93–445, title I, Oct. 16, 1974, 88

Stat. 1305, and is classified generally to subchapter IV

(§231 et seq.) of chapter 9 of Title 45, Railroads. For

complete classification of this Act to the Code, see

Tables.

Paragraph (6) of section 1322(b) of this title, referred

to in subsec. (b)(9), was redesignated as par. (5) by Pub.

L. 96–364, title IV, §403(c)(4), Sept. 26, 1980, 94 Stat. 1301.

The International Organizations Immunities Act, referred to in subsec. (b)(10), is title I of act Dec. 29, 1945,

ch. 652, 59 Stat. 669, as amended, which is classified

principally to subchapter XVIII (§288 et seq.) of chapter

7 of Title 22, Foreign Relations and Intercourse. For

complete classification of this Act to the Code, see

Short Title note set out under section 288 of Title 22

and Tables.

AMENDMENTS

1989—Subsec. (a). Pub. L. 101–239, §7894(g)(3)(A), substituted ‘‘this subchapter applies’’ for ‘‘this section applies’’ in introductory provisions.

Subsecs. (a)(1), (2), (b)(3), (4)(A), (8). Pub. L. 101–239,

§7891(a)(1), substituted ‘‘Internal Revenue Code of 1986’’

for ‘‘Internal Revenue Code of 1954’’, which for purposes

of codification was translated as ‘‘title 26’’ thus requiring no change in text.

1980—Subsec. (a). Pub. L. 96–364 inserted ‘‘unless

otherwise specifically indicated in this subchapter,’’

after ‘‘For this purpose,’’.

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by section 7891(a)(1) of Pub. L. 101–239 effective, except as otherwise provided, as if included in

the provision of the Tax Reform Act of 1986, Pub. L.

99–514, to which such amendment relates, see section

7891(f) of Pub. L. 101–239, set out as a note under section

1002 of this title.

Amendment by section 7894(g)(3)(A) 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 1980 AMENDMENT

Amendment by Pub. L. 96–364 effective Sept. 26, 1980,

except as specifically provided, see section 1461(e) of

this title.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1023, 1054, 1081,

1082, 1103, 1114, 1322, 1322a, 1323, 1341, 1341a, 1343, 1344,

1365, 1461 of this title; title 26 sections 401, 412, 4972.

§ 1322. Single-employer plan benefits guaranteed

(a) Nonforfeitable benefits

Subject to the limitations contained in subsection (b) of this section, the corporation shall

guarantee, in accordance with this section, the

payment of all nonforfeitable benefits (other

than benefits becoming nonforfeitable solely on

account of the termination of a plan) under a

single-employer plan which terminates at a time

when this subchapter applies to it.

(b) Exceptions

(1) Except to the extent provided in paragraph

(7)—

(A) no benefits provided by a plan which has

been in effect for less than 60 months at the

time the plan terminates shall be guaranteed

under this section, and

(B) any increase in the amount of benefits

under a plan resulting from a plan amendment

which was made, or became effective, whichever is later, within 60 months before the date

on which the plan terminates shall be disregarded.

(2) For purposes of this subsection, the time a

successor plan (within the meaning of section

1321(a) of this title) has been in effect includes

the time a previously established plan (within

the meaning of section 1321(a) of this title) was

in effect. For purposes of determining what benefits are guaranteed under this section in the

case of a plan to which section 1321 of this title

does not apply on September 3, 1974, the 60-

month period referred to in paragraph (1) shall

be computed beginning on the first date on

which such section does apply to the plan.

(3) The amount of monthly benefits described

in subsection (a) of this section provided by a

plan, which are guaranteed under this section

with respect to a participant, shall not have an

actuarial value which exceeds the actuarial

value of a monthly benefit in the form of a life

annuity commencing at age 65 equal to the lesser of—

(A) his average monthly gross income from

his employer during the 5 consecutive calendar year period (or, if less, during the number of calendar years in such period in which

he actively participates in the plan) during

which his gross income from that employer

was greater than during any other such period

with that employer determined by dividing 1

⁄12

of the sum of all such gross income by the

number of such calendar years in which he had

such gross income, or

(B) $750 multiplied by a fraction, the numerator of which is the contribution and benefit

base (determined under section 230 of the Social Security Act [42 U.S.C. 430]) in effect at

the time the plan terminates and the denominator of which is such contribution and benefit base in effect in calendar year 1974.

The provisions of this paragraph do not apply to

non-basic benefits. The maximum guaranteed

monthly benefit shall not be reduced solely on

account of the age of a participant in the case of

a benefit payable by reason of disability that occurred on or before the termination date, if the

participant demonstrates to the satisfaction of

the corporation that the Social Security Admin-