§ 1363 TITLE 29—LABOR Page 536

Subsecs. (e), (f). Pub. L. 100–203, §9312(b)(1)(B), redesignated subsec. (f) as (e). Former subsec. (e) redesignated (d).

1986—Pub. L. 99–272, §11011(a)(2), substituted ‘‘Liability for termination of single-employer plans under a

distress termination or a termination by the corporation’’ for ‘‘Liability of employer’’ in section catchline.

Subsec. (a). Pub. L. 99–272, §11011(a)(2), added subsec.

(a) specifying persons liable and the nature and extent

of liability and struck out former subsec. (a) specifying

employers covered.

Subsec. (b). Pub. L. 99–272, §11011(a)(2), added subsec.

(b) relating to liability to corporation and struck out

former subsec. (b) relating to amount of liability.

Subsec. (c). Pub. L. 99–272, §11011(a)(2), added subsec.

(c) relating to liability to section 1349 trust and struck

out former subsec. (c) relating to method of determining net worth of employer.

Subsec. (d). Pub. L. 99–272, §11011(a)(2), added subsec.

(d) relating to liability to section 1342 trustee and

struck out former subsec. (d) relating to corporate reorganizations.

Subsec. (e). Pub. L. 99–272, §11011(a), added subsec. (e)

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

Subsec. (f). Pub. L. 99–272, §11011(a)(1), (b), redesignated former subsec. (e) as (f), and substituted in heading ‘‘Treatment of substantial cessation of operations’’

for ‘‘Cessation of operations at one facility’’.

1980—Subsec. (a). Pub. L. 96–364 substituted ‘‘singleemployee plan’’ for ‘‘plan (other than a multiemployer

plan)’’.

1978—Subsec. (c)(2). Pub. L. 95–598 substituted ‘‘title

11’’ and ‘‘a debtor in a case under chapter 7 of such

title’’ for ‘‘the Bankruptcy Act’’ and ‘‘the subject of a

proceeding under that Act’’, respectively.

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by section 7881(f)(2), (10)(A), (B) 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.

EFFECTIVE DATE OF 1987 AMENDMENT

Amendment by 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.

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.

SPECIAL DELAYED PAYMENT RULE

Section 11012(d) of Pub. L. 99–272 provided that: ‘‘In

the case of a distress termination under section 4041(c)

of the Employee Retirement Income Security Act of

1974 (as amended by section 11009) [29 U.S.C. 1341(c)]

pursuant to a notice of intent to terminate filed before

January 1, 1987, no payment of liability otherwise payable as provided in section 4062(c)(2)(B) of such Act [29

U.S.C. 1362(c)(2)(B)] (as amended by this section [Act])

shall be required to be made before January 1, 1989.’’

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1322, 1341, 1342,

1363, 1364, 1367, 1368, 1370, 1398, 1412 of this title; title 26

section 404.

§ 1363. Liability of substantial employer for withdrawal from single-employer plans under

multiple controlled groups

(a) Single-employer plans with two or more contributing sponsors

Except as provided in subsection (d) of this

section, the plan administrator of a single-employer plan which has two or more contributing

sponsors at least two of whom are not under

common control—

(1) shall notify the corporation of the withdrawal during a plan year of a substantial employer for such plan year from the plan, within

60 days after such withdrawal, and

(2) request that the corporation determine

the liability of all persons with respect to the

withdrawal of the substantial employer.

The corporation shall, as soon as practicable

thereafter, determine whether there is liability

resulting from the withdrawal of the substantial

employer and notify the liable persons of such

liability.

(b) Computation of liability

Except as provided in subsection (c) of this

section, any one or more contributing sponsors

who withdraw, during a plan year for which they

constitute a substantial employer, from a single-employer plan which has two or more contributing sponsors at least two of whom are not

under common control, shall, upon notification

of such contributing sponsors by the corporation

as provided by subsection (a) of this section, be

liable, together with the members of their controlled groups, to the corporation in accordance

with the provisions of section 1362 of this title

and this section. The amount of liability shall

be computed on the basis of an amount determined by the corporation to be the amount described in section 1362 of this title for the entire

plan, as if the plan had been terminated by the

corporation on the date of the withdrawal referred to in subsection (a)(1) of this section multiplied by a fraction—

(1) the numerator of which is the total

amount required to be contributed to the plan

by such contributing sponsors for the last 5

years ending prior to the withdrawal, and

(2) the denominator of which is the total

amount required to be contributed to the plan

by all contributing sponsors for such last 5

years.

In addition to and in lieu of the manner prescribed in the preceding sentence, the corporation may also determine such liability on any

other equitable basis prescribed by the corporation in regulations. Any amount collected by

the corporation under this subsection shall be
Page 537 TITLE 29—LABOR § 1363

held in escrow subject to disposition in accordance with the provisions of paragraphs (2) and

(3) of subsection (c) of this section.

(c) Bond in lieu of payment of liability; 5-year

termination period

(1) In lieu of payment of a contributing sponsor’s liability under this section, the contributing sponsor may be required to furnish a bond to

the corporation in an amount not exceeding 150

percent of his liability to insure payment of his

liability under this section. The 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 under sections 9304–9308 of title 31. Any

such 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.

(2) If the plan is not terminated under section

1341(c) or 1342 of this title within the 5-year period commencing on the day of withdrawal, the

liability is abated and any payment held in escrow shall be refunded without interest (or the

bond cancelled) in accordance with bylaws or

rules prescribed by the corporation.

(3) If the plan terminates under section 1341(c)

or 1342 of this title within the 5-year period commencing on the day of withdrawal, the corporation shall—

(A) demand payment or realize on the bond

and hold such amount in escrow for the benefit

of the plan;

(B) treat any escrowed payments under this

section as if they were plan assets and apply

them in a manner consistent with this subtitle; and

(C) refund any amount to the contributing

sponsor which is not required to meet any obligation of the corporation with respect to the

plan.

(d) Alternate appropriate procedure

The provisions of this subsection apply in the

case of a withdrawal described in subsection (a)

of this section, and the provisions of subsections

(b) and (c) of this section shall not apply, if the

corporation determines that the procedure provided for under this subsection is consistent

with the purposes of this section and section

1364 of this title and is more appropriate in the

particular case. Upon a showing by the plan administrator of the plan that the withdrawal

from the plan by one or more contributing sponsors has resulted, or will result, in a significant

reduction in the amount of aggregate contributions to or under the plan, the corporation

may—

(1) require the plan fund to be equitable allocated between those participants no longer

working in covered service under the plan as a

result of the withdrawal, and those participants who remain in covered service under the

plan;

(2) treat that portion of the plan funds allocable under paragraph (1) to participants no

longer in covered service as a plan terminated

under section 1342 of this title; and

(3) treat that portion of the plan fund allocable to participants remaining in covered service as a separate plan.

(e) Indemnity agreement

The corporation is authorized to waive the application of the provisions of subsections (b), (c),

and (d) of this section whenever it determines

that there is an indemnity agreement in effect

among contributing sponsors under the plan

which is adequate to satisfy the purposes of this

section and of section 1364 of this title.

(Pub. L. 93–406, title IV, §4063, Sept. 2, 1974, 88

Stat. 1030; Pub. L. 96–364, title IV, §403(h), Sept.

26, 1980, 94 Stat. 1301; Pub. L. 99–272, title XI,

§11016(a)(5)(A), Apr. 7, 1986, 100 Stat. 268.)

CODIFICATION

In subsec. (c)(1), ‘‘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.

AMENDMENTS

1986—Pub. L. 99–272, §11016(a)(5)(A)(vi), inserted ‘‘from

single-employer plans under multiple controlled

groups’’ in section catchline.

Subsec. (a). Pub. L. 99–272, §11016(a)(5)(A)(i), in introductory par., substituted ‘‘single-employer plan which

has two or more contributing sponsors at least two of

whom are not under common control’’ for ‘‘plan under

which more than one employer makes contributions

(other than a multiemployer plan)’’, in par. (1), substituted ‘‘withdrawal during a plan year of a substantial employer for such plan year’’ for ‘‘withdrawal of a

substantial employer’’, in par. (2), substituted ‘‘of all

persons with respect to the withdrawal of the substantial employer’’ for ‘‘of such employer under this subtitle with respect to such withdrawal’’, and in concluding provision substituted ‘‘whether there is liability resulting from the withdrawal of the substantial employer’’ for ‘‘whether such employer is liable for any

amount under this subtitle with respect to the withdrawal’’ and ‘‘notify the liable persons’’ for ‘‘notify

such employer’’.

Subsec. (b). Pub. L. 99–272, §11016(a)(5)(A)(ii), in introductory par., substituted ‘‘any one or more contributing sponsors who withdraw, during a plan year for

which they constitute a substantial employer, from a

single-employer plan which has two or more contributing sponsors at least two of whom are not under common control, shall, upon notification of such contributing sponsors by the corporation as provided by subsection (a) of this section, be liable, together with the

members of their controlled groups,’’ for ‘‘an employer

who withdraws from a plan to which section 1321 of this

title applies, during a plan year for which he was a substantial employer, and who is notified by the corporation as provided by subsection (a) of this section, shall

be liable’’, ‘‘amount of liability’’ for ‘‘amount of such

employer’s liability’’, and ‘‘the withdrawal referred to

in subsection (a)(1) of this section’’ for ‘‘the employer’s

withdrawal’’, in par. (1), substituted ‘‘such contributing

sponsors’’ for ‘‘such employer’’, in par. (2), substituted

‘‘all contributing sponsors’’ for ‘‘all employers’’, and in

concluding provision substituted ‘‘such liability’’ for

‘‘the liability of each such employer’’.

Subsec. (c)(1). Pub. L. 99–272, §11016(a)(5)(A)(iii)(I),

substituted ‘‘of a contributing sponsor’s liability under

this section, the contributing sponsor’’ for ‘‘of his liability under this section the employer’’.

Subsec. (c)(2). Pub. L. 99–272, §11016(a)(5)(A)(iii)(II),

inserted ‘‘under section 1341(c) or 1342 of this title’’ and

substituted ‘‘liability is’’ for ‘‘liability of such employer is’’ and ‘‘(or the bond cancelled)’’ for ‘‘to the employer (or his bond cancelled)’’.

Subsec. (c)(3). Pub. L. 99–272, §11016(a)(5)(A)(iii)(III),

in introductory par., inserted ‘‘under section 1341(c) or

1342 of this title’’ and, in subpar. (C), substituted ‘‘contributing sponsor’’ for ‘‘employer’’.
§ 1364 TITLE 29—LABOR Page 538

Subsec. (d). Pub. L. 99–272, §11016(a)(5)(A)(iv), in introductory par., substituted ‘‘of the plan that the withdrawal from the plan by one or more contributing sponsors’’ for ‘‘of a plan (other than a multiemployer plan)

that the withdrawal from the plan by any employer or

employers’’ and struck out ‘‘by employers’’ after ‘‘contributions to or under the plan’’, in par. (1), substituted

‘‘the withdrawal’’ for ‘‘their employer’s withdrawal’’,

and in par. (2), substituted ‘‘plan terminated under section 1342 of this title’’ for ‘‘termination’’.

Subsec. (e). Pub. L. 99–272, §11016(a)(5)(A)(v), struck

out ‘‘to any employer or plan administrator’’ before

‘‘whenever it determines’’ and substituted ‘‘contributing sponsors’’ for ‘‘all other employers’’.

1980—Subsecs. (a), (d). Pub. L. 96–364 inserted provisions excepting a multiemployer plan.

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 1322, 1342, 1362,

1365, 1367, 1368, 1370, 1461 of this title; title 26 section

404.

§ 1364. Liability on termination of single-employer plans under multiple controlled

groups

(a) This section applies to all contributing

sponsors of a single-employer plan which has

two or more contributing sponsors at least two

of whom are not under common control at the

time such plan is terminated under section

1341(c) or 1342 of this title, or who, at any time

within the 5 plan years preceding the date of

termination, made contributions under the plan.

(b) The corporation shall determine the liability with respect to each contributing sponsor

and each member of its controlled group in a

manner consistent with section 1362 of this title,

except that the amount of liability determined

under section 1362(b)(1) of this title with respect

to the entire plan shall be allocated to each controlled group by multiplying such amount by a

fraction—

(1) the numerator of which is the amount required to be contributed to the plan for the

last 5 plan years ending prior to the termination date by persons in such controlled

group as contributing sponsors, and

(2) the denominator of which is the total

amount required to be contributed to the plan

for such last 5 plan years by all persons as contributing sponsors,

and section 1368(a) of this title shall be applied

separately with respect to each controlled

group. The corporation may also determine the

liability of each such contributing sponsor and

member of its controlled group on any other

equitable basis prescribed by the corporation in

regulations.

(Pub. L. 93–406, title IV, §4064, Sept. 2, 1974, 88

Stat. 1031; Pub. L. 96–364, title IV, §403(i), Sept.

26, 1980, 94 Stat. 1301; Pub. L. 99–272, title XI,

§11016(a)(5)(B), Apr. 7, 1986, 100 Stat. 270; Pub. L.

100–203, title IX, §9312(b)(2)(C)(i), Dec. 22, 1987,

101 Stat. 1330–361; Pub. L. 101–239, title VII,

§7881(f)(3)(A), Dec. 19, 1989, 103 Stat. 2440.)

AMENDMENTS

1989—Subsec. (b). Pub. L. 101–239 substituted ‘‘section

1368(a)’’ for ‘‘clauses (i)(II) and (ii) of section

1362(b)(1)(A)’’.

1987—Subsec. (b). Pub. L. 100–203 amended first sentence generally. Prior to amendment, first sentence

read as follows: ‘‘The corporation shall determine the

liability with respect to each contributing sponsor and

each member of its controlled group in a manner consistent with section 1362 of this title, except that—

‘‘(1) the amount of the liability determined under

section 1362(b)(1) of this title with respect to the entire plan—

‘‘(A) shall be determined without regard to

clauses (i)(II) and (ii) of section 1362(b)(1)(A) of this

title, and

‘‘(B) shall be allocated to each controlled group

by multiplying such amount by a fraction—

‘‘(i) the numerator of which is the amount required to be contributed to the plan for the last

5 plan years ending prior to the termination date

by persons in such controlled group as contributing sponsors, and

‘‘(ii) the denominator of which is the total

amount required to be contributed to the plan for

such last 5 plan years by all persons as contributing sponsors,

and clauses (i)(II) and (ii) of section 1362(b)(1)(A) of

this title shall be applied separately with respect to

each such controlled group, and

‘‘(2) the amount of the liability determined under

section 1362(c)(1) of this title with respect to the entire plan shall be allocated to each controlled group

by multiplying such amount by the fraction described

in paragraph (1)(B) in connection with such controlled group.’’

1986—Pub. L. 99–272, §11016(a)(5)(B)(iii), substituted

‘‘on termination of single-employer plans under multiple controlled groups’’ for ‘‘of employers on termination of plan maintained by more than one employer’’

in section catchline.

Subsec. (a). Pub. L. 99–272, §11016(a)(5)(B)(i), substituted ‘‘all contributing sponsors of a single-employer plan which has two or more contributing sponsors at least two of whom are not under common control’’ for ‘‘all employers who maintain a plan under

which more than one employer makes contributions

(other than a multiemployer plan)’’ and inserted

‘‘under section 1341(c) or 1342 of this title’’ after ‘‘terminated’’.

Subsec. (b). Pub. L. 99–272, §11016(a)(5)(B)(ii), amended

subsec. (b) generally, substituting reference to each

contributing sponsor and each member of its controlled

group for reference to each employer of a plan maintained by more than one employer and inserted provisions that liability determined under section 1362(b)(1)

of this title with respect to the entire plan be determined without regard to cls. (i)(II) and (ii) of section

1362(b)(1)(A) of this title and that the amount of liability determined under section 1362(c)(1) of this title with

respect to the entire plan be allocated to each controlled group by multiplying such amount by the fraction described in par. (1)(B) in connection with such

controlled group.

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

excepting a multiemployer plan.

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 OF 1987 AMENDMENT

Amendment by Pub. L. 100–203 applicable with respect to plan terminations under section 1341 of this