Page 497 TITLE 29—LABOR § 1305

Sept. 2, 1974, and powers and functions of a receiver to

assume control of terminated plan and its assets.

EFFECTIVE DATE OF REPEAL

Repeal effective Jan. 1, 1986, with certain exceptions,

see section 11019 of Pub. L. 99–272, set out as an Effective Date of 1986 Amendment note under section 1341 of

this title.

§ 1305. Pension benefit guaranty funds

(a) Establishment of four revolving funds on

books of Treasury of the United States

There are established on the books of the

Treasury of the United States for revolving

funds to be used by the corporation in carrying

out its duties under this subchapter. One of the

funds shall be used with respect to basic benefits

guaranteed under section 1322 of this title, one

of the funds shall be used with respect to basic

benefits guaranteed under section 1322a of this

title, one of the funds shall be used with respect

to nonbasic benefits guaranteed under section

1322 of this title (if any), and the remaining fund

shall be used with respect to nonbasic benefits

guaranteed under section 1322a of this title (if

any), other than subsection (g)(2) thereof (if

any). Whenever in this subchapter reference is

made to the term ‘‘fund’’ the reference shall be

considered to refer to the appropriate fund established under this subsection.

(b) Credits to funds; availability of funds; investment of moneys in excess of current needs

(1) Each fund established under this section

shall be credited with the appropriate portion

of—

(A) funds borrowed under subsection (c) of

this section,

(B) premiums, penalties, interest, and

charges collected under this subchapter,

(C) the value of the assets of a plan administered under section 1342 of this title by a

trustee to the extent that they exceed the liabilities of such plan,

(D) the amount of any employer liability

payments under subtitle D of this subchapter,

to the extent that such payments exceed liabilities of the plan (taking into account all

other plan assets),

(E) earnings on investments of the fund or

on assets credited to the fund under this subsection,

(F) attorney’s fees awarded to the corporation, and

(G) receipts from any other operations under

this subchapter.

(2) Subject to the provisions of subsection (a)

of this section, each fund shall be available—

(A) for making such payments as the corporation determines are necessary to pay benefits guaranteed under section 1322 or 1322a of

this title or benefits payable under section

1350 of this title,

(B) to purchase assets from a plan being terminated by the corporation when the corporation determines such purchase will best protect the interests of the corporation, participants in the plan being terminated, and other

insured plans,

(C) to repay to the Secretary of the Treasury

such sums as may be borrowed (together with

interest thereon) under subsection (c) of this

section,

(D) to pay the operational and administrative expenses of the corporation, including reimbursement of the expenses incurred by the

Department of the Treasury in maintaining

the funds, and the Comptroller General in auditing the corporation, and

(E) to pay to participants and beneficiaries

the estimated amount of benefits which are

guaranteed by the corporation under this subchapter and the estimated amount of other

benefits to which plan assets are allocated

under section 1344 of this title, under singleemployer plans which are unable to pay benefits when due or which are abandoned.

(3) Whenever the corporation determines that

the moneys of any fund are in excess of current

needs, it may request the investment of such

amounts as it determines advisable by the Secretary of the Treasury in obligations issued or

guaranteed by the United States but, until all

borrowings under subsection (c) of this section

have been repaid, the obligations in which such

excess moneys are invested may not yield a rate

of return in excess of the rate of interest payable on such borrowings.

(c) Authority to issue notes or other obligations;

purchase by Secretary of the Treasury as

public debt transaction

The corporation is authorized to issue to the

Secretary of the Treasury notes or other obligations in an aggregate amount of not to exceed

$100,000,000, in such forms and denominations,

bearing such maturities, and subject to such

terms and conditions as may be prescribed by

the Secretary of the Treasury. Such notes or

other obligations shall bear interest at a rate

determined by the Secretary of the Treasury,

taking into consideration the current average

market yield on outstanding marketable obligations of the United States of comparable maturities during the month preceding the issuance

of such notes or other obligations of the corporation. The Secretary of the Treasury is authorized and directed to purchase any notes or

other obligations issued by the corporation

under this subsection, and for that purpose he is

authorized to use as a public debt transaction

the proceeds from the sale of any securities issued under chapter 31 of title 31, and the purposes for which securities may be issued under

that chapter, are extended to include any purchase of such notes and obligations. The Secretary of the Treasury may at any time sell any

of the notes or other obligations acquired by

him under this subsection. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes or other obligations shall be

treated as public debt transactions of the United

States.

(d) Establishment of fifth fund; purpose, availability, etc.

(1) A fifth fund shall be established for the reimbursement of uncollectible withdrawal liability under section 1402 of this title, and shall be

credited with the appropriate—

(A) premiums, penalties, and interest

charges collected under this subchapter, and
§ 1305 TITLE 29—LABOR Page 498

(B) earnings on investments of the fund or

on assets credited to the fund.

The fund shall be available to make payments

pursuant to the supplemental program established under section 1402 of this title, including

those expenses and other charges determined to

be appropriate by the corporation.

(2) The corporation may invest amounts of the

fund in such obligations as the corporation considers appropriate.

(e) Establishment of sixth fund; purpose, availability, etc.

(1) A sixth fund shall be established for the

supplemental benefit guarantee program provided under section 1322a(g)(2) of this title.

(2) Such fund shall be credited with the appropriate—

(A) premiums, penalties, and interest

charges collected under section 1322a(g)(2) of

this title, and

(B) earnings on investments of the fund or

on assets credited to the fund.

The fund shall be available for making payments pursuant to the supplemental benefit

guarantee program established under section

1322a(g)(2) of this title, including those expenses

and other charges determined to be appropriate

by the corporation.

(3) The corporation may invest amounts of the

fund in such obligations as the corporation considers appropriate.

(f) Deposit of premiums into separate revolving

fund

(1) A seventh fund shall be established and

credited with—

(A) premiums, penalties, and interest

charges collected under section 1306(a)(3)(A)(i)

of this title (not described in subparagraph

(B)) to the extent attributable to the amount

of the premium in excess of $8.50,

(B) premiums, penalties, and interest

charges collected under section 1306(a)(3)(E) of

this title, and

(C) earnings on investments of the fund or

on assets credited to the fund.

(2) Amounts in the fund shall be available for

transfer to other funds established under this

section with respect to a single-employer plan

but shall not be available to pay—

(A) administrative costs of the corporation,

or

(B) benefits under any plan which was terminated before October 1, 1988,

unless no other amounts are available for such

payment.

(3) The corporation may invest amounts of the

fund in such obligations as the corporation considers appropriate.

(g) Other use of funds; deposits of repayments

(1) Amounts in any fund established under this

section may be used only for the purposes for

which such fund was established and may not be

used to make loans to (or on behalf of) any other

fund or to finance any other activity of the corporation.

(2) None of the funds borrowed under subsection (c) of this section may be used to make

loans to (or on behalf of) any fund other than a

fund described in the second sentence of subsection (a) of this section.

(3) Any repayment to the corporation of any

amount paid out of any fund in connection with

a multiemployer plan shall be deposited in such

fund.

(h) Voting by corporation of stock paid as liability

Any stock in a person liable to the corporation

under this subchapter which is paid to the corporation by such person or a member of such

person’s controlled group in satisfaction of such

person’s liability under this subchapter may be

voted only by the custodial trustees or outside

money managers of the corporation.

(Pub. L. 93–406, title IV, §4005, Sept. 2, 1974, 88

Stat. 1009; Pub. L. 96–364, title IV, §403(a), Sept.

26, 1980, 94 Stat. 1300; Pub. L. 99–272, title XI,

§11016(a)(1), (2), (c)(7), Apr. 7, 1986, 100 Stat. 268,

274; Pub. L. 100–203, title IX, §§9312(c)(4), 9331(d),

Dec. 22, 1987, 101 Stat. 1330–364, 1330–368; Pub. L.

103–465, title VII, §776(b)(2), Dec. 8, 1994, 108 Stat.

5048.)

CODIFICATION

In subsec. (c), ‘‘chapter 31 of title 31’’ and ‘‘that chapter’’ substituted for ‘‘the Second Liberty Bond Act, as

amended’’ and ‘‘that Act, as amended,’’, respectively,

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.

AMENDMENTS

1994—Subsec. (b)(2)(A). Pub. L. 103–465, which directed

the amendment of subpar. (A) by inserting ‘‘or benefits

payable under section 1350 of this title’’ after ‘‘section

1322a of this title’’, was executed by making the insertion after ‘‘section 1322 or 1322a of this title’’ to reflect

the probable intent of Congress.

1987—Subsec. (f). Pub. L. 100–203, §9331(d), added subsec. (f). Former subsec. (f) redesignated (g).

Subsec. (g). Pub. L. 100–203, §9331(d), redesignated

former subsec. (f) as (g). Former subsec. (g) redesignated (h).

Pub. L. 100–203, §9312(c)(4), struck out ‘‘or fiduciaries

with respect to trusts to which the requirements of section 1349 of this title apply’’ after ‘‘money managers of

the corporation’’.

Subsec. (h). Pub. L. 100–203, §9331(d), redesignated

former subsec. (g) as (h).

1986—Subsec. (b)(1)(F), (G). Pub. L. 99–272, §11016(a)(2),

added subpar. (F) and redesignated former subpar. (F)

as (G).

Subsec. (b)(2)(E). Pub. L. 99–272, §11016(a)(1), added

subpar. (E).

Subsec. (g). Pub. L. 99–272, §11016(c)(7), added subsec.

(g).

1980—Subsec. (a). Pub. L. 96–364, §403(a)(1), substituted provisions respecting benefits guaranteed

under sections 1322 and 1322a of this title, for provisions

respecting benefits guaranteed under sections 1322 and

1323 of this title.

Subsec. (b)(2). Pub. L. 96–364, §403(a)(2), (3), in subpar.

(A) inserted reference to section 1322a of this title,

struck out subpar. (B) relating to payments under section 1323 of this title, and redesignated former subpars.

(C) to (E) as (B) to (D), respectively.

Subsecs. (d) to (f). Pub. L. 96–364, §403(a)(4), added

subsecs. (d) to (f).

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103–465 effective with respect

to distributions that occur in plan years commencing

on or after Jan. 1, 1996, see section 776(e) of Pub. L.

103–465, set out as a note under section 1056 of this title.
Page 499 TITLE 29—LABOR § 1306

EFFECTIVE DATE OF 1987 AMENDMENT

Amendment by section 9312(c)(4) 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 section 1342 of this title 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.

Section 9331(f) of Pub. L. 100–203 provided that:

‘‘(1) IN GENERAL.—The amendments made by this section [amending this section and sections 1306 and 1307

of this title] shall apply to plan years beginning after

December 31, 1987.

‘‘(2) SEPARATE ACCOUNTING.—The amendments made

by subsection (d) [amending this section] shall apply to

fiscal years beginning after September 30, 1988.’’

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.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1301, 1302, 1308,

1322a, 1361, 1461 of this title.

§ 1306. Premium rates

(a) Schedules for premium rates and bases for

application; establishment, coverage, etc.

(1) The corporation shall prescribe such schedules of premium rates and bases for the application of those rates as may be necessary to provide sufficient revenue to the fund for the corporation to carry out its functions under this

subchapter. The premium rates charged by the

corporation for any period shall be uniform for

all plans, other than multiemployer plans, insured by the corporation with respect to basic

benefits guaranteed by it under section 1322 of

this title, and shall be uniform for all multiemployer plans with respect to basic benefits guaranteed by it under section 1322a of this title.

(2) The corporation shall maintain separate

schedules of premium rates, and bases for the

application of those rates, for—

(A) basic benefits guaranteed by it under

section 1322 of this title for single-employer

plans,

(B) basic benefits guaranteed by it under

section 1322a of this title for multiemployer

plans,

(C) nonbasic benefits guaranteed by it under

section 1322 of this title for single-employer

plans,

(D) nonbasic benefits guaranteed by it under

section 1322a of this title for multiemployer

plans, and

(E) reimbursements of uncollectible withdrawal liability under section 1402 of this title.

The corporation may revise such schedules

whenever it determines that revised schedules

are necessary. Except as provided in section

1322a(f) of this title, in order to place a revised

schedule described in subparagraph (A) or (B) in

effect, the corporation shall proceed in accordance with subsection (b)(1) of this section, and

such schedule shall apply only to plan years beginning more than 30 days after the date on

which a joint resolution approving such revised

schedule is enacted.

(3)(A) Except as provided in subparagraph (C),

the annual premium rate payable to the corporation by all plans for basic benefits guaranteed under this subchapter is—

(i) in the case of a single-employer plan, for

plan years beginning after December 31, 1990,

an amount equal to the sum of $19 plus the additional premium (if any) determined under

subparagraph (E) for each individual who is a

participant in such plan during the plan year;

(ii) in the case of a multiemployer plan, for

the plan year within which the date of enactment of the Multiemployer Pension Plan

Amendments Act of 1980 falls, an amount for

each individual who is a participant in such

plan for such plan year equal to the sum of—

(I) 50 cents, multiplied by a fraction the

numerator of which is the number of months

in such year ending on or before such date

and the denominator of which is 12, and

(II) $1.00, multiplied by a fraction equal to

1 minus the fraction determined under

clause (i),

(iii) in the case of a multiemployer plan, for

plan years beginning after September 26, 1980,

an amount equal to—

(I) $1.40 for each participant, for the first,

second, third, and fourth plan years,

(II) $1.80 for each participant, for the fifth

and sixth plan years,

(III) $2.20 for each participant, for the seventh and eighth plan years, and

(IV) $2.60 for each participant, for the

ninth plan year, and for each succeeding

plan year.

(B) The corporation may prescribe by regulation the extent to which the rate described in

subparagraph (A)(i) applies more than once for

any plan year to an individual participating in

more than one plan maintained by the same employer, and the corporation may prescribe regulations under which the rate described in subparagraph (A)(iii) will not apply to the same

participant in any multiemployer plan more

than once for any plan year.

(C)(i) If the sum of—

(I) the amounts in any fund for basic benefits guaranteed for multiemployer plans, and

(II) the value of any assets held by the corporation for payment of basic benefits guaranteed for multiemployer plans,

is for any calendar year less than 2 times the

amount of basic benefits guaranteed by the corporation under this subchapter for multiemployer plans which were paid out of any such

fund or assets during the preceding calendar

year, the annual premium rates under subparagraph (A) shall be increased to the next highest

premium level necessary to insure that such

sum will be at least 2 times greater than such

amount during the following calendar year.

(ii) If the board of directors of the corporation

determines that an increase in the premium

rates under subparagraph (A) is necessary to