29 U.S.C. § 1362 : US Code - Section 1362: Liability for termination of single-employer plans under a distress termination or a termination by corporation

Search 29 U.S.C. § 1362 : US Code - Section 1362: Liability for termination of single-employer plans under a distress termination or a termination by corporation

(a) In general
In any case in which a single-employer plan is terminated in a
distress termination under section 1341(c) of this title or a
termination otherwise instituted by the corporation under section
1342 of this title, any person who is, on the termination date, a
contributing sponsor of the plan or a member of such a contributing
sponsor's controlled group shall incur liability under this
section. The liability under this section of all such persons shall
be joint and several. The liability under this section consists of -

(1) liability to the corporation, to the extent provided in
subsection (b) of this section, and
(2) liability to the trustee appointed under subsection (b) or
(c) of section 1342 of this title, to the extent provided in
subsection (c) of this section.
(b) Liability to corporation
(1) Amount of liability
(A) In general
Except as provided in subparagraph (B), the liability to the
corporation of a person described in subsection (a) of this
section shall be the total amount of the unfunded benefit
liabilities (as of the termination date) to all participants
and beneficiaries under the plan, together with interest (at a
reasonable rate) calculated from the termination date in
accordance with regulations prescribed by the corporation.
(B) Special rule in case of subsequent insufficiency
For purposes of subparagraph (A), in any case described in
section 1341(c)(3)(C)(ii) of this title, actuarial present
values shall be determined as of the date of the notice to the
corporation (or the finding by the corporation) described in
such section.
(2) Payment of liability
(A) In general
Except as provided in subparagraph (B), the liability to the
corporation under this subsection shall be due and payable to
the corporation as of the termination date, in cash or
securities acceptable to the corporation.
(B) Special rule
Payment of so much of the liability under paragraph (1)(A) as
exceeds 30 percent of the collective net worth of all persons
described in subsection (a) of this section (including
interest) shall be made under commercially reasonable terms
prescribed by the corporation. The parties involved shall make
a reasonable effort to reach agreement on such commercially
reasonable terms. Any such terms prescribed by the corporation
shall provide for deferral of 50 percent of any amount of
liability otherwise payable for any year under this
subparagraph if a person subject to such liability demonstrates
to the satisfaction of the corporation that no person subject
to such liability has any individual pre-tax profits for such
person's fiscal year ending during such year.
(3) Alternative arrangements
The corporation and any person liable under this section may
agree to alternative arrangements for the satisfaction of
liability to the corporation under this subsection.
(c) Liability to section 1342 trustee
A person described in subsection (a) of this section shall be
subject to liability under this subsection to the trustee appointed
under subsection (b) or (c) of section 1342 of this title. The
liability of such person under this subsection shall consist of -
(1) the outstanding balance of the accumulated funding
deficiencies (within the meaning of section 1082(a)(2) of this
title and section 412(a) of title 26) of the plan (if any)
(which, for purposes of this subparagraph, shall include the
amount of any increase in such accumulated funding deficiencies
of the plan which would result if all pending applications for
waivers of the minimum funding standard under section 1083 of
this title or section 412(d) of title 26 and for extensions of
the amortization period under section 1084 of this title or
section 412(e) of title 26 with respect to such plan were denied
and if no additional contributions (other than those already made
by the termination date) were made for the plan year in which the
termination date occurs or for any previous plan year),
(2) the outstanding balance of the amount of waived funding
deficiencies of the plan waived before such date under section
1083 of this title or section 412(d) of title 26 (if any), and
(3) the outstanding balance of the amount of decreases in the
minimum funding standard allowed before such date under section
1084 of this title or section 412(e) of title 26 (if any),
together with interest (at a reasonable rate) calculated from the
termination date in accordance with regulations prescribed by the
corporation. The liability under this subsection shall be due and
payable to such trustee as of the termination date, in cash or
securities acceptable to such trustee.
(d) Definitions
(1) Collective net worth of persons subject to liability
(A) In general
The collective net worth of persons subject to liability in
connection with a plan termination consists of the sum of the
individual net worths of all persons who -
(i) have individual net worths which are greater than zero,
and
(ii) are (as of the termination date) contributing sponsors
of the terminated plan or members of their controlled groups.
(B) Determination of net worth
For purposes of this paragraph, the net worth of a person is -

(i) determined on whatever basis best reflects, in the
determination of the corporation, the current status of the
person's operations and prospects at the time chosen for
determining the net worth of the person, and
(ii) increased by the amount of any transfers of assets
made by the person which are determined by the corporation to
be improper under the circumstances, including any such
transfers which would be inappropriate under title 11 if the
person were a debtor in a case under chapter 7 of such title.
(C) Timing of determination
For purposes of this paragraph, determinations of net worth
shall be made as of a day chosen by the corporation (during the
120-day period ending with the termination date) and shall be
computed without regard to any liability under this section.
(2) Pre-tax profits
The term "pre-tax profits" means -
(A) except as provided in subparagraph (B), for any fiscal
year of any person, such person's consolidated net income
(excluding any extraordinary charges to income and including
any extraordinary credits to income) for such fiscal year, as
shown on audited financial statements prepared in accordance
with generally accepted accounting principles, or
(B) for any fiscal year of an organization described in
section 501(c) of title 26, the excess of income over expenses
(as such terms are defined for such organizations under
generally accepted accounting principles),
before provision for or deduction of Federal or other income tax,
any contribution to any single-employer plan of which such person
is a contributing sponsor at any time during the period beginning
on the termination date and ending with the end of such fiscal
year, and any amounts required to be paid for such fiscal year
under this section. The corporation may by regulation require
such information to be filed on such forms as may be necessary to
determine the existence and amount of such pre-tax profits.
(e) Treatment of substantial cessation of operations
If an employer ceases operations at a facility in any location
and, as a result of such cessation of operations, more than 20
percent of the total number of his employees who are participants
under a plan established and maintained by him are separated from
employment, the employer shall be treated with respect to that plan
as if he were a substantial employer under a plan under which more
than one employer makes contributions and the provisions of
sections 1363, 1364, and 1365 of this title shall apply.