Sec. 313. Trusteeship clarifications

2,439 words·~11 min read·/bill/113/s/1979/is/section-313

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Subsections

(a)and

(b)of section 4002 ( 29 U.S.C. 1342 ) are amended to read as follows: The corporation may institute proceedings under this section to terminate a plan whenever it determines that the plan must be terminated in order to protect the interests of the participants or to avoid any unreasonable deterioration of the financial condition of the plan or any unreasonable increase in the liability of the corporation, as shown by one or more of the following conditions: The plan has not met the minimum funding standard required under section 412 of the Internal Revenue Code of 1986, or has been notified by the Secretary of the Treasury that a notice of deficiency under section 6212 of such Code has been mailed with respect to the tax imposed under section 4971(a) of such Code. The plan will be unable to pay benefits when due. The reportable event described in section 4043(c)(7) has occurred. The possible long-run loss of the corporation with respect to the plan may reasonably be expected to increase unreasonably if the plan is not terminated. The corporation shall, as soon as practicable, institute proceedings under this section to terminate a single-employer plan whenever the corporation determines that the plan does not have assets available to pay benefits which are currently due under the terms of the plan. Notwithstanding any other provision of this subchapter, the corporation shall, to the extent practicable, pool assets of terminated plans for purposes of administration, investment, payment of liabilities of all such terminated plans, and such other purposes as the corporation determines to be appropriate in the administration of this title. Whenever the corporation makes a determination under subsection

(a)with respect to a plan or is required under subsection

(a)to institute proceedings under this section, the corporation may, upon notice to the plan, apply to the appropriate United States district court to appoint the corporation as the person to administer the plan with respect to which the determination is made pending the issuance of a decree under subsection

(c)ordering the termination of the plan. If, within 3 business days after the filing of an application under this subsection (or such other period as the court may order), the administrator of the plan consents to the appointment of the corporation to administer the plan, or fails to show why the corporation should not be so appointed, the court may grant the application and appoint the corporation to administer the plan in accordance with its terms until the corporation determines that the plan should be terminated or that termination is unnecessary. Notwithstanding any other provision of this title— upon the petition of a plan administrator or the corporation, the appropriate United States district court may appoint the corporation to administer the plan in accordance with the provisions of this section if the interests of the plan participants would be better served by such appointment, and upon the petition of the corporation, the appropriate United States district court shall appoint a trustee proposed by the corporation for a multiemployer plan which is in reorganization to which section 4041A(d) applies, unless such appointment would be adverse to the interests of the plan participants and beneficiaries in the aggregate. The corporation and plan administrator may agree to the appointment of the corporation to administer the plan without proceeding in accordance with the requirements of paragraphs

(1)and (2). . Subsection

(c)of such section 4042 is amended— by striking (c)(1) and all that follows through the end of paragraph

(1)and inserting the following: If the corporation is required under subsection

(a)to commence proceedings under this section with respect to a plan or, after issuing a notice under this section to a plan administrator, has determined that the plan should be terminated, the corporation may, upon notice to the plan administrator, apply to the appropriate United States district court for a decree enforcing the corporation's determination that the plan be terminated. The district court shall issue the decree under subparagraph

(A)unless such court finds, upon review of the administrative record of the corporation’s determination under subsection (a), that such determination was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. Upon granting a decree for which the corporation has applied under this subsection, the court shall authorize the corporation if appointed under subsection

(b)(or appoint the corporation if such corporation has not been appointed under such subsection and authorize the corporation) to terminate the plan in accordance with the provisions of this subtitle. If the corporation and the plan administrator agree that a plan should be terminated and agree to the appointment of the corporation to carry out the termination of the plan without proceeding in accordance with the requirements of this subsection (other than this subparagraph), the corporation shall have the power described in subsection (d)(1) and shall be subject to the duties described in subsection (d)(3) and any other duties imposed on the corporation under any other provision of law or by agreement between the corporation and the plan administrator. ; and in paragraph (2), by striking

(2)In the case of and inserting

(2). Providing of information .—In the case of Subsection

(d)of such section 4042 is amended— in paragraph (1)(A)— by striking A trustee appointed under subsection

(b)and inserting If the corporation is appointed to administer a plan under subsection (b), the corporation ; in clause (ii), by striking himself as trustee and inserting the corporation ; in clause (iii), by striking he and inserting the corporation ; in clause (iv), by striking his appointment and inserting the appointment of the corporation ; in clause (vi), by striking he and inserting the corporation ; in clause (vii), by striking trustee and inserting corporation ; and by striking the flush language after clause

(vii)and inserting the following: If the court to which application is made under subsection

(c)dismisses the application with prejudice, or if the corporation fails to apply for a decree under subsection (c), within 30 days after the date on which the corporation is appointed under subsection (b), the corporation shall transfer all assets and records of the plan held by such corporation to the plan administrator not later than 3 business days after such dismissal or the expiration of such 30-day period, and shall not be liable to the plan or any other person for the acts of the corporation in administering the plan except for willful misconduct or gross negligence. The 30-day period described in the preceding sentence may be extended as provided by agreement between the plan administrator and the corporation or by court order. ; in paragraph (1)(B)— in the matter preceding clause (i), by striking trustee and inserting corporation ; by striking clauses

(iii)and (v); by redesignating clause

(iv)as clause (iii); and by redesignating clauses

(vi)through

(viii)as clauses

(iv)through (vi), respectively; in paragraph (2)— in the matter preceding subparagraph

(A)by striking his appointment, the trustee and inserting the appointment of the corporation to administer the plan, the corporation ; and in subparagraph

(D)by striking section ; and by striking paragraph

(3)and inserting the following: Except to the extent inconsistent with the provisions of this Act, the corporation, as appointed under this section, shall be subject to the same duties as those of a trustee under section 704 of title 11, United States Code, and shall be, with respect to the plan, a fiduciary within the meaning of section 3(21) (except to the extent that the provisions of this title are inconsistent with the requirements applicable under part 4 of subtitle B of title I). Notwithstanding any references in this section to administering a plan, the corporation shall not be considered a plan administrator within the meaning of section 3 and shall not be subject to the duties of a plan administrator under title I, including the duty to file reports on behalf of the plan. When appointed under subsection

(b)to administer a plan or granted a decree to terminate a plan under subsection (c), the corporation shall, within 30 days of the receipt of a written request from any participant or beneficiary of the plan (or as soon as practicable thereafter), furnish a copy of the plan document, summary plan description, and other instruments under which the plan is established or operated that relate to the participant’s or beneficiary’s benefit under the plan. The corporation may charge a reasonable fee to cover the cost of furnishing complete copies. . Subsection

(f)of such section 4042 is amended to read as follows: Upon the filing of an application for the appointment of the corporation to administer a plan or the issuance of a decree under this section, the court to which an application is made shall have exclusive jurisdiction of the plan involved and property of the plan, wherever located, with the powers, to the extent consistent with the purposes of this section, of a court of the United States having jurisdiction over cases under chapter 11 of title 11, United States Code. Pending an adjudication under subsection (c), such court shall stay, and upon appointment of the corporation to carry out the termination of the plan under this section, such court shall continue the stay of any pending mortgage foreclosure, equity receivership, or other proceeding to reorganize, conserve, or liquidate the plan or the property of the plan and any other suit against any receiver, conservator, or trustee of the plan or property of the plan. Pending such adjudication and upon the appointment of the corporation to carry out the termination of the plan, the court may stay any proceeding to enforce a lien against property of the plan or any other suit against the plan. . Such section 4042 is amended by striking subsection (h). Section 4002(h)(1) of such Act ( 29 U.S.C. 1302(h)(1) ) is amended— in the first sentence— in subparagraph (A), by striking the appointment of trustees in termination proceedings and inserting the appointment of the corporation to administer or carry out a termination of a plan under section 4042 ; and in subparagraph (C), by striking under a trustee and inserting under the corporation ; and in the second sentence— by striking recommend persons for appointment as trustees in termination proceedings, ; by striking the comma after funds ; and by striking under a trustee and inserting under the corporation . Section 4003 of such Act ( 29 U.S.C. 1303 ) is amended— in subsection (e)(6)(B), by amending clause

(ii)to read as follows: If the corporation brings the action on behalf of a plan that the corporation was appointed to administer or terminate under section 4042, the applicable date specified in this subparagraph is the date on which the corporation was so appointed if such date is later than the date described in clause (i). ; and in subsection (f)(4), by striking the corporation in its capacity as a trustee under section 4042 or 4049 and inserting the corporation in its capacity as a trustee under section 4049 or in its capacity in administering a plan pursuant to its appointment under section 4042(b) or carrying out the termination of a plan pursuant to its appointment under section 4042(c) . Section 4004(b) of such Act ( 29 U.S.C. 1304(b) ) is amended— in paragraph (1), by striking pension plans trusteed by the corporation and inserting pension plans for which the corporation has been appointed under section 4042 to carry out their termination ; and in paragraph (2), by striking plans trusteed by the corporation and inserting plans for which the corporation has been appointed under section 4042 to carry out their termination . Section 4005(b)(1)(B) of such Act (29 U.S.C. 1305(b)(1)(B)) is amended by striking a plan administered under section 4042 by a trustee and inserting a plan that the corporation has been appointed to terminate under section 4042 . Section 4007(a) of such Act ( 29 U.S.C. 1307(a) ) is amended by striking a trustee and inserting the corporation . Section 4044 of such Act ( 29 U.S.C. 1344 ) is amended— in subsection (c), by striking the date a trustee is appointed under section 4042(b) and inserting the date the corporation is appointed under section 4042(b) to administer the plan ; and in subsection (f)— in paragraph (2)(C)(ii), by striking the trustee appointed under section 4042(b) or

(c)and inserting the corporation, for the account of the plan ; and in paragraph (3), by amending subparagraph

(B)to read as follows: the amount of any liability to the corporation under section 4062(b) or (c). . Section 4045 of such Act ( 29 U.S.C. 1345 ) is amended by striking trustee each place such term appears in subsections

(a)and

(c)and inserting corporation . Section 4046 of such Act ( 29 U.S.C. 1346 ) is repealed. The table of sections for subtitle C of title IV of such Act is amended by striking the item relating to section 4046. Section 4048 of such Act ( 29 U.S.C. 1348 ) is amended— in subsection (a)(4), by striking (or the trustee) ; and in subsection (b)(2), by striking (or the trustee appointed under section 4042(b)(2), if any) . Section 4050(a)(2) of such Act ( 29 U.S.C. 1350(a)(2) ) is amended by striking to the corporation as trustee, and shall be held with assets of terminated plans for which the corporation is trustee under section 4042 and inserting to the corporation, as appointed under section 4042 to carry out the termination of a plan, and shall be held with assets of terminated plans that the corporation has been appointed to terminate under section 4042 . Section 4062 of such Act ( 29 U.S.C. 1362 ), as amended by sections 303 and 321, is amended— in subsection (a), by striking paragraphs

(1)and

(2)and inserting the following: liability to the corporation, for the account of the corporation, to the extent provided in subsection (b), and liability to the corporation, for the account of the plan, to the extent provided in subsection (c). ; in the heading of subsection (b), by inserting after for its own account ; and corporation in subsection (c)— in the heading, by striking and inserting section 4042 trustee ; and the Corporation for the Account of the Plan in the matter preceding paragraph (1), by striking the trustee appointed under subsection

(b)or

(c)of section 4042 and inserting the corporation, for the account of the plan, as appointed under section 4042 to carry out the termination of the plan .

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