Multiemployer Pension Plan Amendments Act of 1980

Summary

Multiemployer Pension Plan Amendments of 1979 - Sets forth the findings and policy of this Act, including: (1) the protection of participants in financially distressed multiemployer pension plans; and (2) the encouragement of the growth and maintenance of such plans. Title I: Amendments to Title IV of the Employee Retirement Income Security Act of 1974 - Amends title IV of the Employee Retirement Income Security Act (ERISA) to direct the Pension Benefit Guaranty Corporation (PBGC) to guarantee nonforfeitable pension benefits (other than those becoming nonforfeitable solely on account of a plan termination) under the terms of an insolvent multiemployer plan, if such benefits have been in effect for five years: (1) before the plan's termination; or (2) before a plan year with respect to which the benefits were reduced under the multiemployer plan reorganization provisions of this Act. Specifies rules relating to such time periods. Sets forth a formula for determining the basic benefit guarantee level, and directs the PBGC to report to Congress within five years of enactment (and at least every subsequent fifth year) on the premiums needed to maintain such levels. Requires any such report which indicates the need for a premium increase to include a revised schedule of benefit guarantees which would be necessary without such increase. Stipulates that such revised schedule shall become effective if the proposed increase is not approved by Congress within a specified period. Provides that the proposed increase shall become effective as approved by Congress by a concurrent resolution. Directs the PBGC to propose regulations to establish a supplemental program to guarantee nonbasic benefits under multiemployer plans. Applies the existing aggregate limit on benefits guaranteed under single-employer plans to the basic benefits guaranteed under multiemployer plans. Provides that a multiemployer plan terminates as a result of: (1) the adoption of a plan amendment that (A) ends crediting of additional service to participants, or (B) causes the plan to become an individual account plan; or (2) the withdrawal of every employer from the plan. Specifies rules relating to the date of termination. Limits, in general, the payment of benefits of a terminated multiemployer plan to vested benefits as of the termination date. Requires benefits attributable to employer contributions, other than death benefits, to be paid as an annuity, unless the plan distributes its assets in satisfaction of all vested benefits, but authorizes the plan administrator to distribute the present value of a participant's entire nonforfeitable benefit attributable to such contributions up to $1,750. Allows the PBGC to: (1) authorize the payment of non-vested benefits, or lump-sum amounts greater than $1,750, under certain circumstances; and (2) prescribe reporting requirements, rules, and standards with respect to terminated plans. Makes an employer who withdraws from a multiemployer plan liable to the plan according to a specified formula. States that such withdrawal occurs when the employer permanently ceases: (1) to have an obligation to contribute (e.g. under a collective bargaining agreement); or (2) all covered options under the plan. States circumstances under which a withdrawal does not occur, and authorizes the PBGC to determine circumstances under which an employer has withdrawal liability when there is a substantial reduction in such employer's contributions. Sets forth a special withdrawal provision with respect to an employer required to contribute under a plan only for work performed in the building and construction industry, including that a withdrawal occurs if the employer continues to perform the type of work in the area covered by the plan for which contributions were previously required. Makes the amount of a withdrawing employer's liability a share of the plan's total unfunded vested obligations (as of the end of the preceding plan year), but authorizes the PBGC to establish a procedure by which a plan may adopt an alternative method of determining an employer's liability. Excepts from such liability certain minimal amounts; determined by a specified formula. Requires the amount of liability to be: (1) reduced by the amount of any unfunded vested liabilities which are transferred to another plan in connection with the withdrawal; and (2) determined by regulations of the PBGC where the withdrawal follows a merger of multiemployer plans (but not within the first plan year after such merger). Requires an employer to pay its withdrawal liability in quarterly installments of an annual amount, including accrued interest on the outstanding principle. Authorizes a plan administrator to accelerate payment in the event of a default, as defined by this Act. Allows a plan to adopt rules consistent with this Act for other terms for satisfaction of such liability. Makes the plan administrator responsible for identifying withdrawing employers and determining the amount of withdrawal liability, but gives any such employer the opportunity to identify inaccuracies and furnish additional information. Authorizes the PBGC to require a plan administrator to provide notice of withdrawals resulting in a significant reduction in the amount of aggregate contributions. Requires plan amendments authorized by the withdrawal provisions of this Act and which are adopted more than 18 months after enactment to be approved by the PBGC. Directs a plan administrator of a multiemployer plan to notify the PBGC of a proposed merger with or transfer to another plan. Specifies rules with respect to these activities. Makes a multiemployer plan which transfers assets or liabilities to a single-employer plan liable to the PBGC if the single-employer plan terminates within five years of the transfer, except where the PBGC has approved the transfer. Requires a transfer of assets from a multiemployer plan to another plan to comply with asset-transfer rules adopted by the multiemployer plan which are prudent, reasonable, and fair. Specifies a funding test ("reorganization index") to identify multiemployer plans which are financially distressed ("in reorganization"). Prohibits the present value of a participant's nonforfeitable benefit attributable to employer contributions (other than a death benefit) if such value exceeds $1,750 from being distributed, without PBGC approval. Requires the plan administrator of a multiemployer plan to notify plan participants, contributing employers, and labor organizations representing participants that the plan is in reorganization and accrued benefits may be reduced, or an excise tax imposed on employers, if contributions are not increased. Establishes a minimum contribution requirement (MCR) which each multiemployer plan must satisfy for each plan year that it is in reorganization. Stipulates that a plan satisfies the MCR if it does not have a reorganization deficiency, as defined by this Act, for the plan year. Entitles a plan in reorganization which is "overburdened" (basically, that the "pay status participants," such as retirees, exceed the number of contributing participants) to apply an overburden credit against such plan's reorganization deficiency. Allows a plan in reorganization to be amended, under specified procedures, to reduce or eliminate accrued benefits attributable to employer contributions which are not guaranteeable by the PBGC. Defines as "insolvent" a multiemployer plan which: (1) is in reorganization; (2) has been amended to reduce accrued benefits to the guaranteeable (basic) level; and (3) has insufficient available resources to pay benefits under the plan when due for the plan year. Requires plan sponsors to determine and certify a "resource benefit level" (a reduced level of benefits based on available resources, but not below the guaranteeable level). Provides that nonbasic benefit payments above such level shall be suspended, unless the PBGC prescribes an alternative procedure with respect to a supplemental guarantee program. Requires a plan sponsor who determines at the end of an insolvency year that the plan's available resources could have supported payments above the resource benefit level to distribute such excess resources. Provides for the distribution of benefits which have not been paid at the resource benefit level. Directs the PBGC, upon verification that a plan is or will be insolvent, to provide sufficient financial assistance for the payment of basic benefits under such plans. Requires the plans to repay the PBGC on reasonable terms consistent with regulations. Requires repayment within 180 days with respect to plans for which the resource benefit level for the following plan year exceeds the basic benefit level. Specifies benefit requirements with respect to a plan which terminates because of the withdrawal of all employers. Requires benefit reductions in a plan from which all employers have withdrawn to conform to the requirements for benefit reductions for a plan in reorganization. Applies to a plan from which all employers have withdrawn and is insolvent the suspension and assistance provisions with respect to a plan in reorganization. Gives to a plan fiduciary, employer, plan participant or beneficiary (or employee organization representing such participant or beneficiary) who is adversely affected by the act of any party under this subtitle a cause of action in a district court (except against the Secretary of the Treasury) without regard to the amount in controversy. Makes the Federal court jurisdiction exclusive, but authorizes a plan fiduciary to bring an action in State court to collect withdrawal liability. Authorizes double damages in such an action. Establishes a civil penalty of up to $100 per day for failure to comply with a notice requirement under this subtitle. Directs the PBGC to prescribe four separate schedules of insurance premium rates and bases, including basic benefits for single-employer and multiemployer plans and nonbasic benefits for such plans. Sets forth a graduated increase in the basic benefits for multiemployer plans (but retains the current annual premium for single- employer plans). Authorizes the PBGC to require a plan administrator of a multiemployer plan to include in the plan's annual report information which is necessary to enforce this subtitle. Repeals a provision of ERISA relating to contingent employer liability insurance. Title II: Amendments to Title II of the Employee Retirement Income Security Act of 1974 - Amends title II of ERISA and the Internal Revenue Code to revise the amortization periods for charging past service liabilities and experience gains and losses to the funding standard account of multiemployer plans. Stipulates that, for a plan in reorganization, the accumulated funding deficiency used to determine the excise tax sanction for a violation of the minimum funding standard equals the reorganization deficiency. Permits an employer to deduct withdrawal liability payments under title IV of ERISA, without regard to the amortization requirements generally applicable to the deductability of plan contributions. Revises the minimum vesting requirements with respect to multiemployer plans. Title III: Amendments to Title I of the Employee Retirement Income Security Act of 1974 - Amends title I of ERISA to redefine a multiemployer plan to eliminate that provision of the current definition relating to the proportion of the aggregate contributions which are made by any employer. Stipulates that a terminated multiemployer plan to which title IV of ERISA applies is required to meet the minimum funding standards of such Act as long as any employer remains in the plan. Title IV: Related Technical, Conforming and Clerical Amendments - Amends ERISA to make technical amendments. Requires a plan fiduciary to discharge his or her duties in accordance with standards under such Act and in accordance with the documents and instruments governing the plan. Directs the appropriate district court to appoint a trustee upon the petition of the PBGC for a multiemployer plan in reorganization, unless the appointment would be adverse to the participants' interests. Limits the provision relating to the allocation of plan assets to single employer plans. Requires the Secretary of the Treasury to consult with the PBGC before publishing any proposed or final regulations authorized by the new provisions relating to multiemployer plans in reorganization.

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3 official files

• Indefinitely postponed in Senate

  summary · EN · 29 July 1980

  Open at official source

• Reported to Senate with amendment(s)

  summary · EN · 24 July 1980

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• Introduced in Senate

  summary · EN · 3 May 1979

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