Page 523 TITLE 29—LABOR § 1342

(f) Payment of benefits; reporting requirements

for terminated plans and rules and standards

for administration of such plans

(1) The plan sponsor of a terminated plan may

authorize the payment other than in the form of

an annuity of a participant’s entire nonforfeitable benefit attributable to employer contributions, other than a death benefit, if the value of

the entire nonforfeitable benefit does not exceed

$1,750. The corporation may authorize the payment of benefits under the terms of a terminated plan other than nonforfeitable benefits, or

the payment other than in the form of an annuity of benefits having a value greater than

$1,750, if the corporation determines that such

payment is not adverse to the interest of the

plan’s participants and beneficiaries generally

and does not unreasonably increase the corporation’s risk of loss with respect to the plan.

(2) The corporation may prescribe reporting

requirements for terminated plans, and rules

and standards for the administration of such

plans, which the corporation considers appropriate to protect the interests of plan participants and beneficiaries or to prevent unreasonable loss to the corporation.

(Pub. L. 93–406, title IV, §4041A, as added Pub. L.

96–364, title I, §103, Sept. 26, 1980, 94 Stat. 1216.)

EFFECTIVE DATE

Section 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 1081, 1322a, 1342,

1348, 1383, 1396, 1412, 1413, 1421, 1441, 1461 of this title;

title 26 sections 412, 418.

§ 1342. Institution of termination proceedings by

the corporation

(a) Authority to institute proceedings to terminate a plan

The corporation may institute proceedings

under this section to terminate a plan whenever

it determines that—

(1) the plan has not met the minimum funding standard required under section 412 of title

26, or has been notified by the Secretary of the

Treasury that a notice of deficiency under section 6212 of title 26 has been mailed with respect to the tax imposed under section 4971(a)

of title 26,

(2) the plan will be unable to pay benefits

when due,

(3) the reportable event described in section

1343(c)(7) of this title has occurred, or

(4) the possible long-run loss of the corporation with respect to the plan may reasonably

be expected to increase unreasonably if the

plan is not terminated.

The corporation shall as soon as practicable institute proceedings under this section to terminate a single-employer plan whenever the corporation determines that the plan does not have

assets available to pay benefits which are currently due under the terms of the plan. The corporation may prescribe a simplified procedure to

follow in terminating small plans as long as

that procedure includes substantial safeguards

for the rights of the participants and beneficiaries under the plans, and for the employers

who maintain such plans (including the requirement for a court decree under subsection (c) of

this section). Notwithstanding any other provision of this subchapter, the corporation is authorized to pool assets of terminated plans for

purposes of administration, investment, payment of liabilities of all such terminated plans,

and such other purposes as it determines to be

appropriate in the administration of this subchapter.

(b) Appointment of trustee

(1) Whenever the corporation makes a determination under subsection (a) of this section

with respect to a plan or is required under subsection (a) of this section to institute proceedings under this section, it may, upon notice to

the plan, apply to the appropriate United States

district court for the appointment of a trustee

to administer the plan with respect to which the

determination is made pending the issuance of a

decree under subsection (c) of this section ordering the termination of the plan. If within 3 business days after the filing of an application under

this subsection, or such other period as the

court may order, the administrator of the plan

consents to the appointment of a trustee, or

fails to show why a trustee should not be appointed, the court may grant the application

and appoint a trustee to administer the plan in

accordance with its terms until the corporation

determines that the plan should be terminated

or that termination is unnecessary. The corporation may request that it be appointed as

trustee of a plan in any case.

(2) Notwithstanding any other provision of

this subchapter—

(A) upon the petition of a plan administrator

or the corporation, the appropriate United

States district court may appoint a trustee in

accordance with the provisions of this section

if the interests of the plan participants would

be better served by the appointment of the

trustee, and

(B) upon the petition of the corporation, the

appropriate United States district court shall

appoint a trustee proposed by the corporation

for a multiemployer plan which is in reorganization or to which section 1341a(d) of this

title applies, unless such appointment would

be adverse to the interests of the plan participants and beneficiaries in the aggregate.

(3) The corporation and plan administrator

may agree to the appointment of a trustee without proceeding in accordance with the requirements of paragraphs (1) and (2).

(c) Adjudication that plan must be terminated

If the corporation is required under subsection

(a) of this section to commence proceedings

under this section with respect to a plan or,

after issuing a notice under this section to a

plan administrator, has determined that the

plan should be terminated, it may, upon notice

to the plan administrator, apply to the appropriate United States district court for a decree

adjudicating that the plan must be terminated

in order to protect the interests of the participants or to avoid any unreasonable deterioration of the financial condition of the plan or any
§ 1342 TITLE 29—LABOR Page 524

1So in original. No pars. (1) and (2) have been designated. 2So in original.

unreasonable increase in the liability of the

fund. If the trustee appointed under subsection

(b) of this section disagrees with the determination of the corporation under the preceding sentence he may intervene in the proceeding relating to the application for the decree, or make

application for such decree himself. Upon granting a decree for which the corporation or trustee

has applied under this subsection the court shall

authorize the trustee appointed under subsection (b) of this section (or appoint a trustee

if one has not been appointed under such subsection and authorize him) to terminate the

plan in accordance with the provisions of this

subtitle. If the corporation and the plan administrator agree that a plan should be terminated

and agree to the appointment of a trustee without proceeding in accordance with the requirements of this subsection (other than this sentence) the trustee shall have the power described in subsection (d)(1) of this section and,

in addition to any other duties imposed on the

trustee under law or by agreement between the

corporation and the plan administrator, the

trustee is subject to the duties described in subsection (d)(3) of this section. Whenever a trustee

appointed under this subchapter is operating a

plan with discretion as to the date upon which

final distribution of the assets is to be commenced, the trustee shall notify the corporation

at least 10 days before the date on which he proposes to commence such distribution.

(3) 1 In the case of a proceeding initiated under

this section, the plan administrator shall provide the corporation, upon the request of the

corporation, the information described in

clauses (ii), (iii), and (iv) of section 1341(c)(2)(A)

of this title.

(d) Powers of trustee

(1)(A) A trustee appointed under subsection (b)

of this section shall have the power—

(i) to do any act authorized by the plan or

this subchapter to be done by the plan administrator or any trustee of the plan;

(ii) to require the transfer of all (or any

part) of the assets and records of the plan to

himself as trustee;

(iii) to invest any assets of the plan which he

holds in accordance with the provisions of the

plan, regulations of the corporation, and applicable rules of law;

(iv) to limit payment of benefits under the

plan to basic benefits or to continue payment

of some or all of the benefits which were being

paid prior to his appointment;

(v) in the case of a multiemployer plan, to

reduce benefits or suspend benefit payments

under the plan, give appropriate notices,

amend the plan, and perform other acts required or authorized by subtitle (E) of this

subchapter to be performed by the plan sponsor or administrator;

(vi) to do such other acts as he deems necessary to continue operation of the plan without increasing the potential liability of the

corporation, if such acts may be done under

the provisions of the plan; and

(vii) to require the plan sponsor, the plan administrator, any contributing or withdrawn

employer, and any employee organization representing plan participants to furnish any information with respect to the plan which the

trustee may reasonably need in order to administer the plan.

If the court to which application is made under

subsection (c) of this section dismisses the application with prejudice, or if the corporation fails

to apply for a decree under subsection (c) of this

section, within 30 days after the date on which

the trustee is appointed under subsection (b) of

this section, the trustee shall transfer all assets

and records of the plan held by him to the plan

administrator within 3 business days after such

dismissal or the expiration of such 30-day period, and shall not be liable to the plan or any

other person for his acts as trustee except for

willful misconduct, or for conduct in violation

of the provisions of part 4 of subtitle B of subchapter I of this chapter (except as provided in

subsection (d)(1)(A)(v) of this section). The 30-

day period referred to in this subparagraph may

be extended as provided by agreement between

the plan administrator and the corporation or

by court order obtained by the corporation.

(B) If the court to which an application is

made under subsection (c) of this section issues

the decree requested in such application, in addition to the powers described in subparagraph

(A), the trustee shall have the power—

(i) to pay benefits under the plan in accordance with the requirements of this subchapter;

(ii) to collect for the plan any amounts due

the plan, including but not limited to the

power to collect from the persons obligated to

meet the requirements of section 1082 of this

title or the terms of the plan;

(iii) to receive any payment made by the

corporation to the plan under this subchapter;

(iv) to commence, prosecute, or defend on

behalf of the plan any suit or proceeding involving the plan;

(v) to issue, publish, or file such notices,

statements, and reports as may be required by

the corporation or any order of the court;

(vi) to liquidate the plan assets;

(vii) to recover payments under section

1345(a) of this title; and

(viii) to do such other acts as may be necessary to comply with this subchapter or any

order of the court and to protect the interests

of plan participants and beneficiaries.

(2) As soon as practicable after his appointment, the trustee shall give notice to interested

parties of the institution of proceedings under

this subchapter to determine whether the plan

should be terminated or to terminate the plan,

whichever is applicable. For purposes of this

paragraph, the term ‘‘interested party’’ means—

(A) the plan administrator,

(B) each participant in the plan and each

beneficiary of a deceased participant,

(C) each employer who may be subject to liability under section 1362, 1363, or 1364 of this

title,

(D) each employer who is or may be liable to

the plan under section2 part 1 of subtitle E of

this subchapter,
Page 525 TITLE 29—LABOR § 1342

(E) each employer who has an obligation to

contribute, within the meaning of section

1392(a) of this title, under a multiemployer

plan, and

(F) each employee organization which, for

purposes of collective bargaining, represents

plan participants employed by an employer described in subparagraph (C), (D), or (E).

(3) Except to the extent inconsistent with the

provisions of this chapter, or as may be otherwise ordered by the court, a trustee appointed

under this section shall be subject to the same

duties as those of a trustee under section 704 of

title 11, and shall be, with respect to the plan, a

fiduciary within the meaning of paragraph (21)

of section 1002 of this title and under section

4975(e) of title 26 (except to the extent that the

provisions of this subchapter are inconsistent

with the requirements applicable under part 4 of

subtitle B of subchapter I of this chapter and of

such section 4975).

(e) Filing of application notwithstanding pendency of other proceedings

An application by the corporation under this

section may be filed notwithstanding the pendency in the same or any other court of any

bankruptcy, mortgage foreclosure, or equity receivership proceeding, or any proceeding to reorganize, conserve, or liquidate such plan or its

property, or any proceeding to enforce a lien

against property of the plan.

(f) Exclusive jurisdiction; stay of other proceedings

Upon the filing of an application for the appointment of a trustee or the issuance of a decree under this section, the court to which an

application is made shall have exclusive jurisdiction of the plan involved and its property

wherever located with the powers, to the extent

consistent with the purposes of this section, of a

court of the United States having jurisdiction

over cases under chapter 11 of title 11. Pending

an adjudication under subsection (c) of this section such court shall stay, and upon appointment by it of a trustee, as provided in this section such court shall continue the stay of, any

pending mortgage foreclosure, equity receivership, or other proceeding to reorganize, conserve, or liquidate the plan or its property and

any other suit against any receiver, conservator,

or trustee of the plan or its property. Pending

such adjudication and upon the appointment by

it of such trustee, the court may stay any proceeding to enforce a lien against property of the

plan or any other suit against the plan.

(g) Venue

An action under this subsection may be

brought in the judicial district where the plan

administrator resides or does business or where

any asset of the plan is situated. A district court

in which such action is brought may issue process with respect to such action in any other judicial district.

(h) Compensation of trustee and professional

service personnel appointed or retained by

trustee

(1) The amount of compensation paid to each

trustee appointed under the provisions of this

subchapter shall require the prior approval of

the corporation, and, in the case of a trustee appointed by a court, the consent of that court.

(2) Trustees shall appoint, retain, and compensate accountants, actuaries, and other professional service personnel in accordance with

regulations prescribed by the corporation.

(Pub. L. 93–406, title IV, §4042, Sept. 2, 1974, 88

Stat. 1021; Pub. L. 95–598, title III, §321(a), Nov.

6, 1978, 92 Stat. 2678; Pub. L. 96–364, title IV,

§402(a)(6), Sept. 26, 1980, 94 Stat. 1298; Pub. L.

99–272, title XI, §§11010, 11016(c)(10), (11), Apr. 7,

1986, 100 Stat. 253, 274; Pub. L. 100–203, title IX,

§§9312(c)(3), 9314(b), 9314(b), Dec. 22, 1987, 101

Stat. 1330–363, 1330–366, 1330–367; Pub. L. 101–239,

title VII, §§7881(g)(7), 7891(a)(1), 7893(e), Dec. 19,

1989, 103 Stat. 2441, 2445, 2447; Pub. L. 103–465,

title VII, §771(e)(2), Dec. 8, 1994, 108 Stat. 5043.)

REFERENCES IN TEXT

This chapter, referred to in subsec. (d)(3), was in the

original ‘‘this Act’’, meaning Pub. L. 93–406, known as

the Employee Retirement Income Security Act of 1974.

Titles I, III, and IV of such Act are classified principally to this chapter. For complete classification of

this Act to the Code, see Short Title note set out under

section 1001 of this title and Tables.

AMENDMENTS

1994—Subsec. (a)(3). Pub. L. 103–465 substituted

‘‘1343(c)(7)’’ for ‘‘1343(b)(7)’’.

1989—Subsec. (a). Pub. L. 101–239, §7893(e), inserted period after ‘‘terms of the plan’’ at end of second sentence.

Pub. L. 101–239, §7881(g)(7), made technical correction

to directory language of Pub. L. 100–203, §9314(b), see

1987 Amendment note below.

Subsecs. (a)(1), (d)(3). 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.

1987—Subsec. (a). Pub. L. 100–203, §9314(b), as amended

by Pub. L. 101–239, §7881(g)(7), amended last sentence

generally. Prior to amendment, last sentence read as

follows: ‘‘The corporation is authorized to pool the assets of terminated plans for purposes of administration

and such other purposes, not inconsistent with its duties to the plan participants and the employer maintaining the plan under this subchapter, as it determines to be required for the efficient administration of

this subchapter.’’ Another section 9314(b) of Pub. L.

100–203 amended subsec. (c) of this section, see below.

Subsec. (c)(3). Pub. L. 100–203, §9314(b), added par. (3).

Another section 9314(b) of Pub. L. 100–203 amended subsec. (a) of this section, see above.

Subsec. (i). Pub. L. 100–203, §9312(c)(3), struck out subsec. (i) which read as follows: ‘‘In any case in which a

plan is terminated under this section in a termination

proceeding initiated by the corporation pursuant to

subsection (a) of this section, the corporation shall establish a separate trust in connection with the plan for

purposes of section 1349 of this title, unless the corporation determines that all benefit commitments under

the plan are benefits guaranteed by the corporation

under section 1322 of this title or that there is no

amount of unfunded benefit commitments under the

plan.’’

1986—Pub. L. 99–272, §11010(c), substituted ‘‘Institution of termination proceedings by the corporation’’ for

‘‘Termination by corporation’’ in section catchline.

Subsec. (a). Pub. L. 99–272, §11010(a)(1)(B), in provision

following par. (4) inserted provision that the corporation as soon as practicable institute proceedings under

this section to terminate a single-employer plan whenever the corporation determines that the plan does not

have assets available to pay benefits currently due

under the terms of the plan.
§ 1343 TITLE 29—LABOR Page 526

Subsec. (a)(2). Pub. L. 99–272, §11010(a)(1)(A), substituted ‘‘will be’’ for ‘‘is’’.

Subsec. (b)(1). Pub. L. 99–272, §11010(a)(2)(A), inserted

‘‘or is required under subsection (a) of this section to

institute proceedings under this section,’’.

Subsec. (c). Pub. L. 99–272, §11010(a)(2)(B), substituted

‘‘is required under subsection (a) of this section to commence proceedings under this section with respect to a

plan or, after issuing a notice under this section to a

plan administrator,’’ for ‘‘has issued a notice under this

section to a plan administrator and (whether or not a

trustee has been appointed under subsection (b) of this

section)’’.

Subsec. (d)(1)(B)(ii). Pub. L. 99–272, §11016(c)(10), inserted ‘‘, including but not limited to the power to collect from the persons obligated to meet the requirements of section 1082 of this title or the terms of the

plan’’.

Subsec. (d)(3). Pub. L. 99–272, §11016(c)(11), substituted

‘‘those of a trustee under section 704 of title 11’’ for ‘‘a

trustee appointed under section 75 of title 11’’.

Subsec. (i). Pub. L. 99–272, §11010(b), added subsec. (i).

1980—Subsec. (a). Pub. L. 96–364, §402(a)(6)(A), substituted ‘‘terminated plans’’ for ‘‘such small plans’’.

Subsec. (b). Pub. L. 96–364, §402(a)(6)(B), redesignated

existing provisions as par. (1) and added pars. (2) and

(3).

Subsec. (c). Pub. L. 96–364, §402(a)(6)(C), (D), substituted ‘‘unreasonable’’ for ‘‘further’’ wherever appearing, and ‘‘of the participants or’’ for ‘‘of the participants and’’.

Subsec. (d)(1)(A). Pub. L. 96–364, §402(a)(6)(E), added

cls. (v) and (vii) and redesignated former cl. (v) as (vi).

Subsec. (d)(1)(B). Pub. L. 96–364, §402(a)(6)(F), (G), in

cl. (i) substituted ‘‘requirements of this subchapter’’ for

‘‘allocation requirements of section 1344 of this title’’,

and in cl. (iv) struck out exception respecting adverse

party status of corporation.

Subsec. (d)(2)(D) to (F). Pub. L. 96–364,

§402(a)(6)(H)–(J), added subpars. (D) to (F).

1978—Subsec. (f). Pub. L. 95–598 substituted ‘‘of a

court of the United States having jurisdiction over

cases under chapter 11 of title 11’’ for ‘‘of a court of

bankruptcy and of a court in a proceeding under chapter X of the Bankruptcy Act’’ in first sentence and

struck out ‘‘bankruptcy,’’ before ‘‘mortgage foreclosure’’ in second sentence.

EFFECTIVE DATE OF 1994 AMENDMENT

Section 771(f) of Pub. L. 103–465 provided that: ‘‘The

amendments made by this section [amending this section and section 1343 of this title] shall be effective for

events occurring 60 days or more after the date of enactment of this Act [Dec. 8, 1994].’’

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by section 7881(g)(7) 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 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 7893(e) of Pub. L. 101–239 effective as if included in the provision of the Single-Employer Pension Plan Amendments Act of 1986, Pub. L.

99–272, title XI, to which such amendment relates, see

section 7893(h) of Pub. L. 101–239, set out as a note

under section 1002 of this title.

EFFECTIVE DATE OF 1987 AMENDMENT

Amendment by section 9312(c)(3) of Pub. L. 100–203 applicable with respect to plan terminations under section 1341 of this title with respect to which notices of

intent to terminate are provided under section

1341(a)(2) of this title after Dec. 17, 1987, and plan terminations with respect to which proceedings are instituted by the Pension Benefit Guaranty Corporation

under this section after that date, see section 9312(d)(1)

of Pub. L. 100–203, as amended, set out as a note under

section 1301 of this title.

EFFECTIVE DATE OF 1986 AMENDMENT

Amendment by Pub. L. 99–272 effective Jan. 1, 1986,

with certain exceptions, see section 11019 of Pub. L.

99–272, set out as a note under section 1341 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.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95–598 effective Oct. 1, 1979,

see section 402(a) of Pub. L. 95–598, set out as an Effective Date note preceding section 101 of Title 11, Bankruptcy.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1103, 1104, 1303,

1305, 1307, 1341, 1344, 1347, 1348, 1350, 1362, 1363, 1364, 1370,

1413 of this title.

§ 1343. Reportable events

(a) Notification that event has occurred

Within 30 days after the plan administrator or

the contributing sponsor knows or has reason to

know that a reportable event described in subsection (c) of this section has occurred, he shall

notify the corporation that such event has occurred, unless a notice otherwise required under

this subsection has already been provided with

respect to such event. The corporation is authorized to waive the requirement of the preceding sentence with respect to any or all reportable events with respect to any plan, and to require the notification to be made by including

the event in the annual report made by the plan.

(b) Notification that event is about to occur

(1) The requirements of this subsection shall

be applicable to a contributing sponsor if, as of

the close of the preceding plan year—

(A) the aggregate unfunded vested benefits

(as determined under section 1306(a)(3)(E)(iii)

of this title) of plans subject to this subchapter which are maintained by such sponsor

and members of such sponsor’s controlled

groups (disregarding plans with no unfunded

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

(B) the funded vested benefit percentage for

such plans is less than 90 percent.

For purposes of subparagraph (B), the funded

vested benefit percentage means the percentage

which the aggregate value of the assets of such

plans bears to the aggregate vested benefits of

such plans (determined in accordance with section 1306(a)(3)(E)(iii) of this title).

(2) This subsection shall not apply to an event

if the contributing sponsor, or the member of

the contributing sponsor’s controlled group to

which the event relates, is—

(A) a person subject to the reporting requirements of section 13 or 15(d) of the Securities

Exchange Act of 1934 [15 U.S.C. 78m, 78o(d)], or

(B) a subsidiary (as defined for purposes of

such Act [15 U.S.C. 78a et seq.]) of a person

subject to such reporting requirements.