unfunded vested benefits

(3) (A) Except as provided in subparagraph (C), the annual premium rate payable to the corporation by all plans for basic benefits guaranteed under this subchapter is— (i) in the case of a single-employer plan other than a CSEC plan (as defined in section 1060(f)(1) of this title ) an amount for each individual who is a participant in such plan during the plan year equal to the sum of the additional premium (if any) determined under subparagraph (E) and— (I) for plan years beginning after December 31, 2005 , and before January 1, 2013 , $30; (II) for plan years beginning after December 31, 2012 , and before January 1, 2014 , $42; (III) for plan years beginning after December 31, 2013 and before January 1, 2015 ,, $49. (IV) for plan years beginning after December 31, 2014 , and before January 1, 2016 , $57; (V) for plan years beginning after December 31, 2015 , and before January 1, 2017 , $64; (VI) for plan years beginning after December 31, 2016 , and before January 1, 2018 , $69; (VII) for plan years beginning after December 31, 2017 , and before January 1, 2019 , $74; and (VIII) for plan years beginning after December 31, 2018 , $80. (ii) in the case of a multiemployer plan, for the plan year within which the date of enactment of the Multiemployer Pension Plan Amendments Act of 1980 falls, an amount for each individual who is a participant in such plan for such plan year equal to the sum of— (I) 50 cents, multiplied by a fraction the numerator of which is the number of months in such year ending on or before such date and the denominator of which is 12, and (II) $1.00, multiplied by a fraction equal to 1 minus the fraction determined under clause (i), (iii) in the case of a multiemployer plan, for plan years beginning after September 26, 1980 , and before January 1, 2006 , an amount equal to— (I) $1.40 for each participant, for the first, second, third, and fourth plan years, (II) $1.80 for each participant, for the fifth and sixth plan years, (III) $2.20 for each participant, for the seventh and eighth plan years, and (IV) $2.60 for each participant, for the ninth plan year, and for each succeeding plan year, (iv) in the case of a multiemployer plan, for plan years beginning after December 31, 2005 , and before January 1, 2013 , $8.00 for each individual who is a participant in such plan during the applicable plan year, (v) in the case of a multiemployer plan, for plan years beginning after December 31, 2012 , and before January 1, 2015 , $12.00 for each individual who is a participant in such plan during the applicable plan year, (vi) in the case of a multiemployer plan, for plan years beginning after December 31, 2014 , $26 for each individual who is a participant in such plan during the applicable plan year, or (vii) in the case of a CSEC plan (as defined in section 1060(f)(1) of this title ), for plan years beginning after December 31, 2018 , for each individual who is a participant in such plan during the plan year an amount equal to the sum of— (I) the additional premium (if any) determined under subparagraph (E), and (II) $19. (B) The corporation may prescribe by regulation the extent to which the rate described in subparagraph (A)(i) applies more than once for any plan year to an individual participating in more than one plan maintained by the same employer, and the corporation may prescribe regulations under which the rate described in clause (iii) or (iv) of subparagraph (A) will not apply to the same participant in any multiemployer plan more than once for any plan year. (C) (i) If the sum of— (I) the amounts in any fund for basic benefits guaranteed for multiemployer plans, and (II) the value of any assets held by the corporation for payment of basic benefits guaranteed for multiemployer plans, is for any calendar year less than 2 times the amount of basic benefits guaranteed by the corporation under this subchapter for multiemployer plans which were paid out of any such fund or assets during the preceding calendar year, the annual premium rates under subparagraph (A) shall be increased to the next highest premium level necessary to insure that such sum will be at least 2 times greater than such amount during the following calendar year. (ii) If the board of directors of the corporation determines that an increase in the premium rates under subparagraph (A) is necessary to provide assistance to plans which are receiving assistance under section 1431 of this title and to plans the board finds are reasonably likely to require such assistance, the board may order such increase in the premium rates. (iii) The maximum annual premium rate which may be established under this subparagraph is $2.60 for each participant. (iv) The provisions of this subparagraph shall not apply if the annual premium rate is increased to a level in excess of $2.60 per participant under any other provisions of this subchapter. (D) (i) Not later than 120 days before the date on which an increase under subparagraph (C)(ii) is to become effective, the corporation shall publish in the Federal Register a notice of the determination described in subparagraph (C)(ii), the basis for the determination, the amount of the increase in the premium, and the anticipated increase in premium income that would result from the increase in the premium rate. The notice shall invite public comment, and shall provide for a public hearing if one is requested. Any such hearing shall be commenced not later than 60 days before the date on which the increase is to become effective. (ii) The board of directors shall review the hearing record established under clause (i) and shall, not later than 30 days before the date on which the increase is to become effective, determine (after consideration of the comments received) whether the amount of the increase should be changed and shall publish its determination in the Federal Register. (E) (i) Except as provided in subparagraph (H), the additional premium determined under this subparagraph with respect to any plan for any plan year— (I) shall be an amount equal to the amount determined under clause (ii) divided by the number of participants in such plan as of the close of the preceding plan year; (II) in the case of plan years beginning in a calendar year after 2012 and before 2016, shall not exceed $400 and (III) in the case of plan years beginning in a calendar year after 2015, shall not exceed $500. (ii) The amount determined under this clause for any plan year shall be an amount equal to the applicable dollar amount under paragraph (8) for each $1,000 (or fraction thereof) of unfunded vested benefits under the plan as of the close of the preceding plan year. (iii) Except as provided in clause (v), for purposes of clause (ii), the term “unfunded vested benefits” means, for a plan year, the excess (if any) of— (I) the funding target of the plan as determined under section 1083(d) of this title for the plan year by only taking into account vested benefits and by using the interest rate described in clause (iv), over (II) the fair market value of plan assets for the plan year which are held by the plan on the valuation date. (iv) The interest rate used in valuing benefits for purposes of subclause (I) of clause (iii) shall be equal to the first, second, or third segment rate for the month preceding the month in which the plan year begins, which would be determined under section 1083(h)(2)(C) of this title (notwithstanding any regulations issued by the corporation, determined by not taking into account any adjustment under clause (iv) thereof) if section 1083(h)(2)(D) of this title were applied by using the monthly yields for the month preceding the month in which the plan year begins on investment grade corporate bonds with varying maturities and in the top 3 quality levels rather than the average of such yields for a 24-month period. (v) For purposes of clause (ii), in the case of a CSEC plan (as defined in section 1060(f)(1) of this title ), the term “unfunded vested benefits” means, for plan years beginning after December 31, 2018 , the excess (if any) of— (I) the funding liability of the plan as determined under section 1085a(j)(5)(C) of this title for the plan year by only taking into account vested benefits, over (II) the fair market value of plan assets for the plan year which are held by the plan on the valuation date. (F) For each plan year beginning in a calendar year after 2006 and before 2013, there shall be substituted for the premium rate specified in clause (i) of subparagraph (A) an amount equal to the greater of— (i) the product derived by multiplying the premium rate specified in clause (i) of subparagraph (A) by the ratio of— (I) the national average wage index (as defined in section 409(k)(1) of title 42 ) for the first of the 2 calendar years preceding the calendar year in which such plan year begins, to (II) the national average wage index (as so defined) for 2004 (2012 in the case of plan years beginning after calendar year 2014); and (ii) the premium rate in effect under clause (i) of subparagraph (A) for plan years beginning in the preceding calendar year. If the amount determined under this subparagraph is not a multiple of $1, such product shall be rounded to the nearest multiple of $1. (G) For each plan year beginning in a calendar year after 2019, there shall be substituted for the premium rate specified in clause (i) of subparagraph (A) an amount equal to the greater of— (i) the product derived by multiplying the premium rate specified in clause (i) of subparagraph (A) by the ratio of— (I) the national average wage index (as defined in section 409(k)(1) of title 42 ) for the first of the 2 calendar years preceding the calendar year in which such plan year begins, to (II) the national average wage index (as so defined) for 2017; and (ii) the premium rate in effect under clause (i) of subparagraph (A) for plan years beginning in the preceding calendar year. If the amount determined under this subparagraph is not a multiple of $1, such product shall be rounded to the nearest multiple of $1. (H) For each plan year beginning in a calendar year after 2006, there shall be substituted for the premium rate specified in clause (iv) of subparagraph (A) an amount equal to the greater of— (i) the product derived by multiplying the premium rate specified in clause (iv) of subparagraph (A) by the ratio of— (I) the national average wage index (as defined in section 409(k)(1) of title 42 ) for the first of the 2 calendar years preceding the calendar year in which such plan year begins, to (II) the national average wage index (as so defined) for 2004; and (ii) the premium rate in effect under clause (iv) of subparagraph (A) for plan years beginning in the preceding calendar year. If the amount determined under this subparagraph is not a multiple of $1, such product shall be rounded to the nearest multiple of $1. (I) (i) In the case of an employer who has 25 or fewer employees on the first day of the plan year, the additional premium determined under subparagraph (E) for each participant shall not exceed $5 multiplied by the number of participants in the plan as of the close of the preceding plan year. (ii) For purposes of clause (i), whether an employer has 25 or fewer employees on the first day of the plan year is determined by taking into consideration all of the employees of all members of the contributing sponsor’s controlled group. In the case of a plan maintained by two or more contributing sponsors, the employees of all contributing sponsors and their controlled groups shall be aggregated for purposes of determining whether the 25-or-fewer-employees limitation has been satisfied. (J) For each plan year beginning in a calendar year after 2013, there shall be substituted for the premium rate specified in clause (v) of subparagraph (A) an amount equal to the greater of— (i) the product derived by multiplying the premium rate specified in clause (v) of subparagraph (A) by the ratio of— (I) the national average wage index (as defined in section 409(k)(1) of title 42 ) for the first of the 2 calendar years preceding the calendar year in which such plan year begins, to (II) the national average wage index (as so defined) for 2011; and (ii) the premium rate in effect under clause (v) of subparagraph (A) for plan years beginning in the preceding calendar year. If the amount determined under this subparagraph is not a multiple of $1, such product shall be rounded to the nearest multiple of $1. (K) For each plan year beginning in a calendar year after 2013 and before 2016, there shall be substituted for the dollar amount specified in subclause (II) of subparagraph (E)(i) an amount equal to the greater of— (i) the product derived by multiplying such dollar amount by the ratio of— (I) the national average wage index (as defined in section 409(k)(1) of title 42 ) for the first of the 2 calendar years preceding the calendar year in which such plan year begins, to (II) the national average wage index (as so defined) for 2011; and (ii) such dollar amount for plan years beginning in the preceding calendar year. If the amount determined under this subparagraph is not a multiple of $1, such product shall be rounded to the nearest multiple of $1. (L) For each plan year beginning in a calendar year after 2016, there shall be substituted for the dollar amount specified in subclause (III) of subparagraph (E)(i) an amount equal to the greater of— (i) the product derived by multiplying such dollar amount by the ratio of— (I) the national average wage index (as defined in section 409(k)(1) of title 42 ) for the first of the 2 calendar years preceding the calendar year in which such plan year begins, to (II) the national average wage index (as so defined) for 2014; and (ii) such dollar amount for plan years beginning in the preceding calendar year. If the amount determined under this subparagraph is not a multiple of $1, such product shall be rounded to the nearest multiple of $1. (M) For each plan year beginning in a calendar year after 2015, there shall be substituted for the dollar amount specified in clause (vi) of subparagraph (A) an amount equal to the greater of— (i) the product derived by multiplying such dollar amount by the ratio of— (I) the national average wage index (as defined in section 409(k)(1) of title 42 ) for the first of the 2 calendar years preceding the calendar year in which such plan year begins, to (II) the national average wage index (as so defined) for 2013; and (ii) such dollar amount for plan years beginning in the preceding calendar year. If the amount determined under this subparagraph is not a multiple of $1, such product shall be rounded to the nearest multiple of $1.

Source

29 USC § 1306(a)(3)


Scoping language

None identified, default scope is assumed to be the parent (subtitle A) of this section.
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