Sec. 112. Amendment to definition of insolvency
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Section 4245 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1426 ) is amended— by amending subsection
(a)to read as follows: Notwithstanding sections 203 and 204, an insolvent multiemployer plan shall suspend the payments of benefits which are not basic benefits, in accordance with this section, and terminate the plan under section 4041A(a)(4). ; in subsection (b)— by striking paragraphs
(1)and
(2)and inserting the following: a multiemployer plan is insolvent if the plan’s available resources in any of the next 5 plan years are projected not to be sufficient to pay benefits under the plan when due for the plan year; ; by redesignating paragraphs
(3)and
(4)as paragraphs
(2)and (3), respectively; and in paragraph (2), as so redesignated, by inserting expected before contributions ; by striking subsection (c); by redesignating subsections
(d)through
(g)as subsections
(c)through (f), respectively; in subsection (c), as so redesignated— in paragraph (1)— by striking critical status, as described in subsection 305(b)(2),) and inserting such critical status) ; by striking 3 times and inserting 10 times ; and by striking 5 plan years each place such term appears and inserting 8 plan years ; in paragraph (2)— by striking plan's available resources are not sufficient to pay benefits under the plan when due for the next plan year and inserting plan will be insolvent in any of the next 10 plan years ; and by inserting and the corporation before the period at the end; by striking paragraph (3); and by redesignating paragraph
(4)as paragraph (3); in subsection (d), as so redesignated— in paragraph (1)— by striking subsection (d)(1) or
(2)and inserting subsection (c)(1) or
(2); and by striking Treasury, in subparagraph
(A)and inserting Treasury and ; in paragraph (2)— by striking resource benefit level determined in writing for that insolvency year and inserting reduction of benefit payments to the level of basic benefits and the termination of the plan under section 4041A(a)(4) as of the first day of the seventh full plan month of the plan’s first insolvency year under subsection (b)(3) ; and by striking each insolvency year and inserting the first insolvency year ; by striking paragraph (3); and by redesignating paragraphs
(4)and
(5)as paragraphs
(3)and (4), respectively; in subsection (e), as so redesignated— in paragraph
(1)by striking , for which the resource benefit level is above the level of basic benefits, ; and by striking paragraph
(2)and inserting after paragraph
(1)the following new paragraph: A plan sponsor who has determined that the plan's available resources for an insolvency year are below the level of basic benefits shall apply for financial assistance from the corporation under section 4261. ; and in subsection (f), as so redesignated, by striking Subsections
(a)and
(c)and inserting Subsection
(a). Section 418E of the Internal Revenue Code of 1986 is amended— by amending subsection
(a)to read as follows: Notwithstanding section 411, an insolvent multiemployer plan shall suspend the payments of benefits which are not basic benefits, in accordance with this section, and terminate the plan under section 4041A(a)(4) of the Employee Retirement Income Security Act of 1974. ; in subsection (b)— by striking paragraphs
(1)and
(2)and inserting the following: A multiemployer plan is insolvent if the plan’s available resources in any of the next 5 plan years are projected not to be sufficient to pay benefits under the plan when due for the plan year. ; by redesignating paragraphs
(3)and
(4)as paragraphs
(2)and (3), respectively; and in paragraph (2), as so redesignated, by inserting expected before contributions ; by striking subsection (c); by redesignating subsections
(d)through
(h)as subsections
(c)through (g), respectively; in subsection (c), as so redesignated— in paragraph (1)— by striking critical status, as described in subsection 432(b)(2)) and inserting such critical status) ; by striking 3 times and inserting 10 times ; and by striking 5 plan years each place such term appears and inserting 8 plan years ; in paragraph (2)— by striking plan's available resources are not sufficient to pay benefits under the plan when due for the next plan year and inserting plan will be insolvent in any of the next 10 plan years ; and by inserting and the corporation before the period at the end; by striking paragraph (3); and by redesignating paragraph
(4)as paragraph (3); in subsection (d), as so redesignated— in paragraph (1), by striking subsection (d)(1) or
(2)and inserting subsection (c)(1) or
(2); in paragraph (2)— by striking resource benefit level determined in writing for that insolvency year and inserting reduction of benefit payments to the level of basic benefits and the termination of the plan under section 4041A(a)(4) of the Employee Retirement Income Security Act of 1974 as of the first day of the seventh full plan month of the plan’s first insolvency year under subsection (b)(3) ; by striking each insolvency year and inserting the first insolvency year ; and by striking in the heading and inserting Resource benefit level ; Notice of insolvency by striking paragraph (3); and by redesignating paragraphs
(4)and
(5)as paragraphs
(3)and (4), respectively; in subsection (e), as so redesignated— in paragraph
(1)by striking , for which the resource benefit level is above the level of basic benefits, ; and by striking paragraph
(2)and inserting after paragraph
(1)the following new paragraph: A plan sponsor who has determined that the plan’s available resources for an insolvency year are below the level of basic benefits shall apply for financial assistance from the Pension Benefit Guaranty Corporation under section 4261 of the Employee Retirement Income Security Act of 1974. ; and in subsection (g), as so redesignated, by striking Subsections
(a)and
(c)and inserting Subsection
(a). The Pension Benefit Guaranty Corporation shall issue regulations implementing the amendments made by this section. Such regulations shall address the assumptions a plan may use in projecting whether a plan’s available resources in any of the next 5 plan years are projected not to be sufficient to pay benefits under the plan when due.
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Sec. 112
Amendment to definition of insolvency
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