29 U.S.C. § 1342 : US Code - Section 1342: Institution of termination proceedings by the corporation

Search 29 U.S.C. § 1342 : US Code - Section 1342: Institution of termination proceedings by the corporation

(a) Authority to institute proceedings to terminate a plan
The corporation may institute proceedings under this section to
terminate a plan whenever it determines that -
(1) the plan has not met the minimum funding standard required
under section 412 of title 26, or has been notified by the
Secretary of the Treasury that a notice of deficiency under
section 6212 of title 26 has been mailed with respect to the tax
imposed under section 4971(a) of title 26,
(2) the plan will be unable to pay benefits when due,
(3) the reportable event described in section 1343(c)(7) of
this title has occurred, or
(4) 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. The corporation may prescribe a simplified procedure to
follow in terminating small plans as long as that procedure
includes substantial safeguards for the rights of the participants
and beneficiaries under the plans, and for the employers who
maintain such plans (including the requirement for a court decree
under subsection (c) of this section). Notwithstanding any other
provision of this subchapter, the corporation is authorized to pool
assets of terminated plans for purposes of administration,
investment, payment of liabilities of all such terminated plans,
and such other purposes as it determines to be appropriate in the
administration of this subchapter.
(b) Appointment of trustee
(1) Whenever the corporation makes a determination under
subsection (a) of this section with respect to a plan or is
required under subsection (a) of this section to institute
proceedings under this section, it may, upon notice to the plan,
apply to the appropriate United States district court for the
appointment of a trustee to administer the plan with respect to
which the determination is made pending the issuance of a decree
under subsection (c) of this section 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 a trustee, or fails to show why a trustee should not
be appointed, the court may grant the application and appoint a
trustee to administer the plan in accordance with its terms until
the corporation determines that the plan should be terminated or
that termination is unnecessary. The corporation may request that
it be appointed as trustee of a plan in any case.
(2) Notwithstanding any other provision of this subchapter -
(A) upon the petition of a plan administrator or the
corporation, the appropriate United States district court may
appoint a trustee in accordance with the provisions of this
section if the interests of the plan participants would be better
served by the appointment of the trustee, and
(B) 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 or to which section 1341a(d) of this title
applies, unless such appointment would be adverse to the
interests of the plan participants and beneficiaries in the
aggregate.
(3) The corporation and plan administrator may agree to the
appointment of a trustee without proceeding in accordance with the
requirements of paragraphs (1) and (2).
(c) Adjudication that plan must be terminated
If the corporation is required under subsection (a) of this
section 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,
it may, upon notice to the plan administrator, apply to the
appropriate United States district court for a decree adjudicating
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 fund. If the trustee appointed under
subsection (b) of this section disagrees with the determination of
the corporation under the preceding sentence he may intervene in
the proceeding relating to the application for the decree, or make
application for such decree himself. Upon granting a decree for
which the corporation or trustee has applied under this subsection
the court shall authorize the trustee appointed under subsection
(b) of this section (or appoint a trustee if one has not been
appointed under such subsection and authorize him) 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 a trustee without
proceeding in accordance with the requirements of this subsection
(other than this sentence) the trustee shall have the power
described in subsection (d)(1) of this section and, in addition to
any other duties imposed on the trustee under law or by agreement
between the corporation and the plan administrator, the trustee is
subject to the duties described in subsection (d)(3) of this
section. Whenever a trustee appointed under this subchapter is
operating a plan with discretion as to the date upon which final
distribution of the assets is to be commenced, the trustee shall
notify the corporation at least 10 days before the date on which he
proposes to commence such distribution.
(3) (!1) In the case of a proceeding initiated under this
section, the plan administrator shall provide the corporation, upon
the request of the corporation, the information described in
clauses (ii), (iii), and (iv) of section 1341(c)(2)(A) of this
title.
(d) Powers of trustee
(1)(A) A trustee appointed under subsection (b) of this section
shall have the power -
(i) to do any act authorized by the plan or this subchapter to
be done by the plan administrator or any trustee of the plan;
(ii) to require the transfer of all (or any part) of the assets
and records of the plan to himself as trustee;
(iii) to invest any assets of the plan which he holds in
accordance with the provisions of the plan, regulations of the
corporation, and applicable rules of law;
(iv) to limit payment of benefits under the plan to basic
benefits or to continue payment of some or all of the benefits
which were being paid prior to his appointment;
(v) in the case of a multiemployer plan, to reduce benefits or
suspend benefit payments under the plan, give appropriate
notices, amend the plan, and perform other acts required or
authorized by subtitle (E) of this subchapter to be performed by
the plan sponsor or administrator;
(vi) to do such other acts as he deems necessary to continue
operation of the plan without increasing the potential liability
of the corporation, if such acts may be done under the provisions
of the plan; and
(vii) to require the plan sponsor, the plan administrator, any
contributing or withdrawn employer, and any employee organization
representing plan participants to furnish any information with
respect to the plan which the trustee may reasonably need in
order to administer the plan.
If the court to which application is made under subsection (c) of
this section dismisses the application with prejudice, or if the
corporation fails to apply for a decree under subsection (c) of
this section, within 30 days after the date on which the trustee is
appointed under subsection (b) of this section, the trustee shall
transfer all assets and records of the plan held by him to the plan
administrator within 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 his acts as trustee except for willful
misconduct, or for conduct in violation of the provisions of part 4
of subtitle B of subchapter I of this chapter (except as provided
in subsection (d)(1)(A)(v) of this section). The 30-day period
referred to in this subparagraph may be extended as provided by
agreement between the plan administrator and the corporation or by
court order obtained by the corporation.
(B) If the court to which an application is made under subsection
(c) of this section issues the decree requested in such
application, in addition to the powers described in subparagraph
(A), the trustee shall have the power -
(i) to pay benefits under the plan in accordance with the
requirements of this subchapter;
(ii) to collect for the plan any amounts due the plan,
including but not limited to the power to collect from the
persons obligated to meet the requirements of section 1082 of
this title or the terms of the plan;
(iii) to receive any payment made by the corporation to the
plan under this subchapter;
(iv) to commence, prosecute, or defend on behalf of the plan
any suit or proceeding involving the plan;
(v) to issue, publish, or file such notices, statements, and
reports as may be required by the corporation or any order of the
court;
(vi) to liquidate the plan assets;
(vii) to recover payments under section 1345(a) of this title;
and
(viii) to do such other acts as may be necessary to comply with
this subchapter or any order of the court and to protect the
interests of plan participants and beneficiaries.
(2) As soon as practicable after his appointment, the trustee
shall give notice to interested parties of the institution of
proceedings under this subchapter to determine whether the plan
should be terminated or to terminate the plan, whichever is
applicable. For purposes of this paragraph, the term "interested
party" means -
(A) the plan administrator,
(B) each participant in the plan and each beneficiary of a
deceased participant,
(C) each employer who may be subject to liability under section
1362, 1363, or 1364 of this title,
(D) each employer who is or may be liable to the plan under
section (!2) part 1 of subtitle E of this subchapter,
(E) each employer who has an obligation to contribute, within
the meaning of section 1392(a) of this title, under a
multiemployer plan, and
(F) each employee organization which, for purposes of
collective bargaining, represents plan participants employed by
an employer described in subparagraph (C), (D), or (E).
(3) Except to the extent inconsistent with the provisions of this
chapter, or as may be otherwise ordered by the court, a trustee
appointed under this section shall be subject to the same duties as
those of a trustee under section 704 of title 11, and shall be,
with respect to the plan, a fiduciary within the meaning of
paragraph (21) of section 1002 of this title and under section
4975(e) of title 26 (except to the extent that the provisions of
this subchapter are inconsistent with the requirements applicable
under part 4 of subtitle B of subchapter I of this chapter and of
such section 4975).
(e) Filing of application notwithstanding pendency of other
proceedings
An application by the corporation under this section may be filed
notwithstanding the pendency in the same or any other court of any
bankruptcy, mortgage foreclosure, or equity receivership
proceeding, or any proceeding to reorganize, conserve, or liquidate
such plan or its property, or any proceeding to enforce a lien
against property of the plan.
(f) Exclusive jurisdiction; stay of other proceedings
Upon the filing of an application for the appointment of a
trustee 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 its property 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. Pending an adjudication under
subsection (c) of this section such court shall stay, and upon
appointment by it of a trustee, as provided in 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 its property and any other suit against
any receiver, conservator, or trustee of the plan or its property.
Pending such adjudication and upon the appointment by it of such
trustee, the court may stay any proceeding to enforce a lien
against property of the plan or any other suit against the plan.
(g) Venue
An action under this subsection may be brought in the judicial
district where the plan administrator resides or does business or
where any asset of the plan is situated. A district court in which
such action is brought may issue process with respect to such
action in any other judicial district.
(h) Compensation of trustee and professional service personnel
appointed or retained by trustee
(1) The amount of compensation paid to each trustee appointed
under the provisions of this subchapter shall require the prior
approval of the corporation, and, in the case of a trustee
appointed by a court, the consent of that court.
(2) Trustees shall appoint, retain, and compensate accountants,
actuaries, and other professional service personnel in accordance
with regulations prescribed by the corporation.