§ 1085b TITLE 29—LABOR Page 426

Information provided to the corporation under

this subsection shall be considered tax return

information and subject to the safeguarding and

reporting requirements of section 6103(p) of title

26.

(c) Exception for certain waivers and extensions

(1) In general

The preceding provisions of this section

shall not apply to any plan with respect to

which the sum of—

(A) the outstanding balance of the accumulated funding deficiencies (within the

meaning of section 1082(a)(2) of this title and

section 412(a) of title 26) of the plan,

(B) the outstanding balance of the amount

of waived funding deficiencies of the plan

waived under section 1083 of this title or section 412(d) of title 26, and

(C) the outstanding balance of the amount

of decreases in the minimum funding standard allowed under section 1084 of this title or

section 412(e) of title 26,

is less than $1,000,000.

(2) Accumulated funding deficiencies

For purposes of paragraph (1)(A), accumulated funding deficiencies shall include any increase in such amount which would result if

all applications for waivers of the minimum

funding standard under section 1083 of this

title or section 412(d) of title 26 and for extensions of the amortization period under section

1084 of this title or section 412(e) of title 26

which are pending with respect to such plan

were denied.

(Pub. L. 93–406, title I, §306, as added Pub. L.

99–272, title XI, §11015(a)(1)(A)(ii), Apr. 7, 1986,

100 Stat. 264; amended Pub. L. 100–203, title IX,

§9306(e)(2), Dec. 22, 1987, 101 Stat. 1330–355; Pub.

L. 101–239, title VII, §7891(a)(1), Dec. 19, 1989, 103

Stat. 2445.)

PRIOR PROVISIONS

A prior section 306 of Pub. L. 93–406 was renumbered

section 308 and is classified to section 1086 of this title.

AMENDMENTS

1989—Subsecs. (b), (c). Pub. L. 101–239 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. (c)(1). Pub. L. 100–203, §9306(e)(2), substituted ‘‘$1,000,000’’ for ‘‘$2,000,000’’.

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by 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.

EFFECTIVE DATE OF 1987 AMENDMENT

Amendment by Pub. L. 100–203 applicable in the case

of any application submitted after Dec. 17, 1987, and

any waiver granted pursuant to such an application,

see section 9306(f) of Pub. L. 100–203, set out as a note

under section 412 of Title 26, Internal Revenue Code.

EFFECTIVE DATE

Section 11015(a)(3) of Pub. L. 99–272 provided that:

‘‘The amendments made by this subsection [enacting

this section and amending section 1061 of this title and

section 412 of Title 26, Internal Revenue Code] shall

apply with respect to applications for waivers, extensions, and modifications filed on or after the date of the

enactment of this Act [Apr. 7, 1986].’’

§ 1085b. Security required upon adoption of plan

amendment resulting in significant underfunding

(a) In general

If—

(1) a defined benefit plan (other than a

multiemployer plan) to which the requirements of section 1082 of this title apply adopts

an amendment an effect of which is to increase current liability under the plan for a

plan year, and

(2) the funded current liability percentage of

the plan for the plan year in which the amendment takes effect is less than 60 percent, including the amount of the unfunded current liability under the plan attributable to the plan

amendment,

the contributing sponsor (or any member of the

controlled group of the contributing sponsor)

shall provide security to the plan.

(b) Form of security

The security required under subsection (a) of

this section shall consist of—

(1) a bond issued by a corporate surety company that is an acceptable surety for purposes

of section 1112 of this title,

(2) cash, or United States obligations which

mature in 3 years or less, held in escrow by a

bank or similar financial institution, or

(3) such other form of security as is satisfactory to the Secretary of the Treasury and the

parties involved.

(c) Amount of security

The security shall be in an amount equal to

the excess of—

(1) the lesser of—

(A) the amount of additional plan assets

which would be necessary to increase the

funded current liability percentage under

the plan to 60 percent, including the amount

of the unfunded current liability under the

plan attributable to the plan amendment, or

(B) the amount of the increase in current

liability under the plan attributable to the

plan amendment and any other plan amendments adopted after December 22, 1987, and

before such plan amendment, over

(2) $10,000,000.

(d) Release of security

The security shall be released (and any

amounts thereunder shall be refunded together

with any interest accrued thereon) at the end of

the first plan year which ends after the provision of the security and for which the funded

current liability percentage under the plan is

not less than 60 percent. The Secretary of the

Treasury may prescribe regulations for partial

releases of the security by reason of increases in

the funded current liability percentage.

(e) Notice

A contributing sponsor which is required to

provide security under subsection (a) of this sec-
Page 427 TITLE 29—LABOR § 1086

tion shall notify the Pension Benefit Guaranty

Corporation within 30 days after the amendment

requiring such security takes effect. Such notice

shall contain such information as the Corporation may require.

(f) Definitions

For purposes of this section, the terms ‘‘current liability’’, ‘‘funded current liability percentage’’, and ‘‘unfunded current liability’’ shall

have the meanings given such terms by section

1082(d) of this title, except that in computing

unfunded current liability there shall not be

taken into account any unamortized portion of

the unfunded old liability amount as of the close

of the plan year.

(Pub. L. 93–406, title I, §307, as added Pub. L.

100–203, title IX, §9341(b)(2), Dec. 22, 1987, 101

Stat. 1330–370; amended Pub. L. 101–239, title VII,

§7881(i)(1)(B)–(3)(A), (4)(B), Dec. 19, 1989, 103 Stat.

2442.)

PRIOR PROVISIONS

A prior section 307 of Pub. L. 93–406 was renumbered

section 308 and is classified to section 1086 of this title.

AMENDMENTS

1989—Subsec. (a)(1). Pub. L. 101–239, §7881(i)(4)(B), inserted ‘‘to which the requirements of section 1082 of

this title apply’’ after ‘‘multiemployer plan)’’.

Subsec. (c)(1)(B). Pub. L. 101–239, §7881(i)(1)(B), which

directed amendment of subsec. (c)(1)(B) by inserting

‘‘and any other plan amendments adopted after December 22, 1987, and before such plan amendment’’ without

specifying where such language was to be inserted, was

executed by making the insertion after ‘‘to the plan

amendment’’, as the probable intent of Congress.

Subsec. (d). Pub. L. 101–239, §7881(i)(2), inserted ‘‘of

the Treasury’’ after ‘‘Secretary’’.

Subsecs. (e), (f). Pub. L. 101–239, §7881(i)(3)(A), added

subsec. (e) and redesignated former subsec. (e) as (f).

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by 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.

EFFECTIVE DATE

This section applicable to plan amendments adopted

after Dec. 22, 1987, except that, in the case of a plan

maintained pursuant to one or more collective bargaining agreements between employee representatives and

one or more employers ratified before Dec. 22, 1987, this

section not applicable to plan amendments adopted

pursuant to collective bargaining agreements ratified

before Dec. 22, 1987, see section 9341(c) of Pub. L.

100–203, set out as an Effective Date of 1987 Amendment

note under section 401 of Title 26, Internal Revenue

Code.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1371 of this title.

§ 1086. Effective dates

(a) Except as otherwise provided in this section, this part shall apply in the case of plan

years beginning after September 2, 1974.

(b) Except as otherwise provided in subsections (c) and (d) of this section, in the case of

a plan in existence on January 1, 1974, this part

shall apply in the case of plan years beginning

after December 31, 1975.

(c)(1) In the case of a plan maintained on January 1, 1974, pursuant to one or more agreements

which the Secretary finds to be collective bargaining agreements between employee representatives and one or more employers, this

part shall apply only with respect to plan years

beginning after the earlier of the date specified

in subparagraph (A) or (B) of section 1061(c)(1) of

this title.

(2) This subsection shall apply with respect to

a plan if (and only if) the application of this subsection results in a later effective date for this

part than the effective date required by subsection (b) of this section.

(d) In the case of a plan the administrator of

which elects under section 1017(d) of this Act to

have the provisions of the Internal Revenue

Code of 1954 relating to participation, vesting,

funding, and form of benefit to apply to a plan

year and to all subsequent plan years, this part

shall apply to plan years beginning on the earlier of the first plan year to which such election

applies or the first plan year determined under

subsections (a), (b), and (c) of this section.

(e) In the case of a plan maintained by a labor

organization which is exempt from tax under

section 501(c)(5) of title 26 exclusively for the

benefit of its employees and their beneficiaries,

this part shall be applied by substituting for the

term ‘‘December 31, 1975’’ in subsection (b) of

this section, the earlier of—

(1) the date on which the second convention

of such labor organization held after September 2, 1974, ends or

(2) December 31, 1980,

but in no event shall a date earlier than the

later of December 31, 1975, or the date determined under subsection (c) of this section be

substituted.

(f) The preceding provisions of this section

shall not apply with respect to amendments

made to this part in provisions enacted after

September 2, 1974.

(Pub. L. 93–406, title I, §308, formerly §306, Sept.

2, 1974, 88 Stat. 874, renumbered §307, Pub. L.

99–272, title XI, §11015(a)(1)(A)(i), Apr. 7, 1986, 100

Stat. 264; renumbered §308, Pub. L. 100–203, title

IX, §9341(b)(1), Dec. 22, 1987, 101 Stat. 1330–370;

amended Pub. L. 101–239, title VII, §7894(h)(3),

Dec. 19, 1989, 103 Stat. 2451.)

REFERENCES IN TEXT

Section 1017 of this Act, referred to in subsec. (d), is

section 1017 of Pub. L. 93–406, which is set out as an Effective Date; Transitional Rules note under section 410

of Title 26, Internal Revenue Code.

The Internal Revenue Code of 1954, referred to in subsec. (d), was redesignated the Internal Revenue Code of

1986 by Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095,

and is classified to Title 26.

AMENDMENTS

1989—Subsec. (f). Pub. L. 101–239 added subsec. (f).

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by 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.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1061 of this title.