29 USC 1432 - Special financial assistance by the corporation

U.S Code last checked for updates: Apr 27, 2024

§ 1432.

Special financial assistance by the corporation

(a)

Special financial assistance

(1)

In general

(2)

Inapplicability of certain repayment obligation

(b)

Eligible multiemployer plans

(1)

In general

For purposes of this section, a multiemployer plan is an eligible multiemployer plan if—

(A)

the plan is in critical and declining status (within the meaning of section 1085(b)(6) of this title) in any plan year beginning in 2020 through 2022;

(B)

a suspension of benefits has been approved with respect to the plan under section 1085(e)(9) of this title as of March 11, 2021;

(C)

in any plan year beginning in 2020 through 2022, the plan is certified by the plan actuary to be in critical status (within the meaning of section 1085(b)(2) of this title), has a modified funded percentage of less than 40 percent, and has a ratio of active to inactive participants which is less than 2 to 3; or

(D)

the plan became insolvent for purposes of section 418E of title 26 after December 16, 2014, and has remained so insolvent and has not been terminated as of March 11, 2021.

(2)

Modified funded percentage

(c)

Applications for special financial assistance

Within 120 days of March 11, 2021, the corporation shall issue regulations or guidance setting forth requirements for special financial assistance applications under this section. In such regulations or guidance, the corporation shall—

(1)

limit the materials required for a special financial assistance application to the minimum necessary to make a determination on the application;

(2)

specify effective dates for transfers of special financial assistance following approval of an application, based on the effective date of the supporting actuarial analysis and the date on which the application is submitted; and

(3)

provide for an alternate application for special financial assistance under this section, which may be used by a plan that has been approved for a partition under section 1413 of this title before March 11, 2021.

(d)

Temporary priority consideration of applications

(1)

In general

The corporation may specify in regulations or guidance under subsection (c) that, during a period no longer than the first 2 years following March 11, 2021, applications may not be filed by an eligible multiemployer plan unless—

(A)

the eligible multiemployer plan is insolvent or is likely to become insolvent within 5 years of March 11, 2021;

(B)

the corporation projects the eligible multiemployer plan to have a present value of financial assistance payments under section 1431 of this title that exceeds $1,000,000,000 if the special financial assistance is not ordered;

(C)

the eligible multiemployer plan has implemented benefit suspensions under section 1085(e)(9) of this title as of March 11, 2021; or

(D)

the corporation determines it appropriate based on other similar circumstances.

(e)

Actuarial assumptions

(1)

Eligibility

(2)

Amount of financial assistance

In determining the amount of special financial assistance in its application, an eligible multiemployer plan shall—

(A)

use the interest rate used by the plan in its most recently completed certification of plan status before January 1, 2021, provided that such interest rate may not exceed the interest rate limit; and

(B)

for other assumptions, use the assumptions that the plan used in its most recently completed certification of plan status before January 1, 2021, unless such assumptions are unreasonable.

(3)

Interest rate limit

(4)

Changes in assumptions

(f)

Application deadline

(g)

Determinations on applications

(h)

Manner of payment

(i)

Amount and manner of special financial assistance

(1)

In general

(2)

No cap

(j)

Determination of amount of special financial assistance

(1)

In general

(2)

Projections

(k)

Reinstatement of suspended benefits

The Secretary, in coordination with the Secretary of the Treasury, shall ensure that an eligible multiemployer plan that receives special financial assistance under this section—

(1)

reinstates any benefits that were suspended under section 1085(e)(9) of this title or section 1426(a) of this title in accordance with guidance issued by the Secretary of the Treasury pursuant to section 432(k)(1)(B) of title 26, effective as of the first month in which the effective date for the special financial assistance occurs, for participants and beneficiaries as of such month; and

(2)

provides payments equal to the amount of benefits previously suspended under section 1085(e)(9) or 1426(a) of this title to any participants or beneficiaries in pay status as of the effective date of the special financial assistance, payable, as determined by the eligible multiemployer plan—

(A)

as a lump sum within 3 months of such effective date; or

(B)

in equal monthly installments over a period of 5 years, commencing within 3 months of such effective date, with no adjustment for interest.

(l)

Restrictions on the use of special financial assistance

(m)

Conditions on plans receiving special financial assistance

(1)

In general

(2)

Limitation

The corporation shall not impose conditions on an eligible multiemployer plan as a condition of, or following receipt of, special financial assistance under this section relating to—

(A)

any prospective reduction in plan benefits (including benefits that may be adjusted pursuant to section 1085(e)(8) of this title);

(B)

plan governance, including selection of, removal of, and terms of contracts with, trustees, actuaries, investment managers, and other service providers; or

(C)

any funding rules relating to the plan receiving special financial assistance under this section.

(3)

Payment of premiums

(4)

Assistance not considered for certain purposes

(5)

Insolvent plans

(6)

Ineligibility for other assistance

(n)

Coordination with Secretary of the Treasury

In prescribing the application process for eligible multiemployer plans to receive special financial assistance under this section and reviewing applications of such plans, the corporation shall coordinate with the Secretary of the Treasury in the following manner:

(1)

In the case of a plan which has suspended benefits under section 1085(e)(9) of this title—

(A)

in determining whether to approve the application, the corporation shall consult with the Secretary of the Treasury regarding the plan’s proposed method of reinstating benefits, as described in the plan’s application and in accordance with guidance issued by the Secretary of the Treasury, and

(B)

the corporation shall consult with the Secretary of the Treasury regarding the amount of special financial assistance needed based on the projected funded status of the plan as of the last day of the plan year ending in 2051, whether the plan proposes to repay benefits over 5 years or as a lump sum, as required by subsection (k)(2), and any other relevant factors, as determined by the corporation in consultation with the Secretary of the Treasury, to ensure the amount of assistance is sufficient to meet such requirement and is sufficient to pay benefits as required in subsection (j)(1).

(2)

In the case of any plan which proposes in its application to change the assumptions used, as provided in subsection (e)(4), the corporation shall consult with the Secretary of the Treasury regarding such proposed change in assumptions.

(3)

If the corporation specifies in regulations or guidance that temporary priority consideration is available for plans which are insolvent within the meaning of section 418E of title 26 or likely to become so insolvent or for plans which have suspended benefits under section 1085(e)(9) of this title, or that availability is otherwise based on the funded status of the plan under section 1085 of this title, as permitted by subsection (d), the corporation shall consult with the Secretary of the Treasury regarding any granting of priority consideration to such plans.

(Pub. L. 93–406, title IV, § 4262, as added Pub. L. 117–2, title IX, § 9704(b), Mar. 11, 2021, 135 Stat. 190.)

cite as: 29 USC 1432

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