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Internal Revenue Code, § 420. Transfers Of Excess Pension Assets To Retiree Health Accounts

I.R.C. § 420(a) General Rule
If there is a qualified transfer of any excess pension assets of a defined benefit plan to a health benefits account, or an applicable life insurance account, which is part of such plan—
I.R.C. § 420(a)(1)
a trust which is part of such plan shall not be treated as failing to meet the requirements of subsection (a) or (h) of section 401 solely by reason of such transfer (or any other action authorized under this section),
I.R.C. § 420(a)(2)
no amount shall be includible in the gross income of the employer maintaining the plan solely by reason of such transfer,
I.R.C. § 420(a)(3)
such transfer shall not be treated—
I.R.C. § 420(a)(3)(A)
as an employer reversion for purposes of section 4980, or
I.R.C. § 420(a)(3)(B)
as a prohibited transaction for purposes of section 4975, and
I.R.C. § 420(a)(4)
the limitations of subsection (d) shall apply to such employer.
I.R.C. § 420(b) Qualified Transfer
For purposes of this section—
I.R.C. § 420(b)(1) In General
The term “qualified transfer” means a transfer—
I.R.C. § 420(b)(1)(A)
of excess pension assets of a defined benefit plan to a health benefits account, or an applicable life insurance account, which is part of such plan,
I.R.C. § 420(b)(1)(B)
which does not contravene any other provision of law, and
I.R.C. § 420(b)(1)(C)
with respect to which the following requirements are met in connection with the plan—
I.R.C. § 420(b)(1)(C)(i)
the use requirements of subsection (c)(1),
I.R.C. § 420(b)(1)(C)(ii)
the vesting requirements of subsection (c)(2), and
I.R.C. § 420(b)(1)(C)(iii)
the minimum cost requirements of subsection (c)(3).
I.R.C. § 420(b)(2) Only 1 Transfer Per Year
No more than 1 transfer with respect to any plan during a taxable year may be treated as a qualified transfer for purposes of this section. If there is a transfer from a defined benefit plan to both a health benefits account and an applicable life insurance account during any taxable year, such transfers shall be treated as 1 transfer for purposes of this paragraph.
I.R.C. § 420(b)(3) Limitation On Amount Transferred
The amount of excess pension assets which may be transferred to an account in a qualified transfer shall not exceed the amount which is reasonably estimated to be the amount the employer maintaining the plan will pay (whether directly or through reimbursement) out of such account during the taxable year of the transfer for qualified current retiree liabilities.
I.R.C. § 420(b)(4) Expiration
No transfer made after December 31, 2025, shall be treated as a qualified transfer.
I.R.C. § 420(c) Requirements Of Plans Transferring Assets
I.R.C. § 420(c)(1) Use Of Transferred Assets
I.R.C. § 420(c)(1)(A) In General
Any assets transferred to a health benefits account, or an applicable life insurance account, in a qualified transfer (and any income allocable thereto) shall be used only to pay qualified current retiree liabilities (other than liabilities of key employees not taken into account under subsection (e)(1)(E)) for the taxable year of the transfer (whether directly or through reimbursement). In the case of a qualified future transfer or collectively bargained transfer to which subsection (f) applies, any assets so transferred may also be used to pay liabilities described in subsection (f)(2)(C).
I.R.C. § 420(c)(1)(B) Amounts Not Used To Pay For Health Benefits Or Life Insurance
I.R.C. § 420(c)(1)(B)(i) In General
Any assets transferred to a health benefits account, or an applicable life insurance account, in a qualified transfer (and any income allocable thereto) which are not used as provided in subparagraph (A) shall be transferred out of the account to the transferor plan.
I.R.C. § 420(c)(1)(B)(ii) Tax Treatment Of Amounts
Any amount transferred out of an account under clause (i)
I.R.C. § 420(c)(1)(B)(ii)(I)
shall not be includible in the gross income of the employer for such taxable year, but
I.R.C. § 420(c)(1)(B)(ii)(II)
shall be treated as an employer reversion for purposes of section 4980 (without regard to subsection (d) thereof).
I.R.C. § 420(c)(1)(C) Ordering Rule
For purposes of this section, any amount paid out of a health benefits account, or an applicable life insurance account, shall be treated as paid first out of the assets and income described in subparagraph (A).
I.R.C. § 420(c)(2) Requirements Relating To Pension Benefits Accruing Before Transfer
The requirements of this paragraph are met if the plan provides that the accrued pension benefits of any participant or beneficiary under the plan become nonforfeitable in the same manner which would be required if the plan had terminated immediately before the qualified transfer (or in the case of a participant who separated during the 1-year period ending on the date of the transfer, immediately before such separation).
I.R.C. § 420(c)(3) Minimum Cost Requirements
I.R.C. § 420(c)(3)(A) In General
The requirements of this paragraph are met if each group health plan or arrangement under which applicable health benefits are provided, and each group-term life insurance plan under which applicable life insurance benefits are provided, provides that the applicable employer cost for each taxable year during the cost maintenance period shall not be less than the higher of the applicable employer costs for each of the 2 taxable years immediately preceding the taxable year of the qualified transfer or, in the case of a transfer which involves a plan maintained by an employer described in subsection (f)(2)(E)(i)(III), if the plan meets the requirements of subsection (f)(2)(D)(i)(II).
I.R.C. § 420(c)(3)(B) Applicable Employer Cost
For purposes of this paragraph, the term “applicable employer cost” means, with respect to any taxable year, the amount determined by dividing—
I.R.C. § 420(c)(3)(B)(i)
the qualified current retiree liabilities of the employer for such taxable year determined—
I.R.C. § 420(c)(3)(B)(i)(I)
separately with respect to applicable health benefits and applicable life insurance benefits,
I.R.C. § 420(c)(3)(B)(i)(II)
without regard to any reduction under subsection (e)(1)(B), and
I.R.C. § 420(c)(3)(B)(i)(III)
in the case of a taxable year in which there was no qualified transfer, in the same manner as if there had been such a transfer at the end of the taxable year, by
I.R.C. § 420(c)(3)(B)(ii)
the number of individuals to whom coverage was provided during such taxable year for the benefits with respect to which the determination under clause (i) is made.
I.R.C. § 420(c)(3)(C) Election To Compute Cost Separately
An employer may elect to have this paragraph applied separately for applicable health benefits with respect to individuals eligible for benefits under title XVIII of the Social Security Act at any time during the taxable year and with respect to individuals not so eligible, and separately for applicable life insurance benefits with respect to individuals age 65 or older at any time during the taxable year and with respect to individuals under age 65 during the taxable year.
I.R.C. § 420(c)(3)(D) Cost Maintenance Period
For purposes of this paragraph, the term “cost maintenance period” means the period of 5 taxable years beginning with the taxable year in which the qualified transfer occurs. If a taxable year is in two or more overlapping cost maintenance periods, this paragraph shall be applied by taking into account the highest applicable employer cost required to be provided under subparagraph (A) for such taxable year.
I.R.C. § 420(c)(3)(E) Regulations
I.R.C. § 420(c)(3)(E)(i) In General
The Secretary shall prescribe such regulations as may be necessary to prevent an employer who significantly reduces retiree health coverage or retiree life insurance coverage, as the case may be, during the cost maintenance period from being treated as satisfying the minimum cost requirement of this subsection.
I.R.C. § 420(c)(3)(E)(ii) Insignificant Cost Reductions For Retiree Health Coverage Permitted
I.R.C. § 420(c)(3)(E)(ii)(I) In General
An eligible employer shall not be treated as failing to meet the requirements of this paragraph for any taxable year if, in lieu of any reduction of retiree health coverage permitted under the regulations prescribed under clause (i), the employer reduces applicable employer cost by an amount not in excess of the reduction in costs which would have occurred if the employer had made the maximum permissible reduction in retiree health coverage under such regulations. In applying such regulations to any subsequent taxable year, any reduction in applicable employer cost under this clause shall be treated as if it were an equivalent reduction in retiree health coverage.
I.R.C. § 420(c)(3)(E)(ii)(II) Eligible Employer
For purposes of subclause (I), an employer shall be treated as an eligible employer for any taxable year if, for the preceding taxable year, the qualified current retiree liabilities of the employer with respect to applicable health benefits were at least 5 percent of the gross receipts of the employer. For purposes of this subclause, the rules of paragraphs (2), (3)(B), and (3)(C) of section 448(c) shall apply in determining the amount of an employer's gross receipts.
I.R.C. § 420(d) Limitations On Employer
For purposes of this title—
I.R.C. § 420(d)(1) Deduction Limitations
No deduction shall be allowed—
I.R.C. § 420(d)(1)(A)
for the transfer of any amount to a health benefits account, or an applicable life insurance account, in a qualified transfer (or any retransfer to the plan under subsection (c)(1)(B)),
I.R.C. § 420(d)(1)(B)
for qualified current retiree liabilities paid out of the assets (and income) described in subsection (c)(1), or
I.R.C. § 420(d)(1)(C)
for any amounts to which subparagraph (B) does not apply and which are paid for qualified current retiree liabilities for the taxable year to the extent such amounts are not greater than the excess (if any) of—
I.R.C. § 420(d)(1)(C)(i)
the amount determined under subparagraph (A) (and income allocable thereto), over
I.R.C. § 420(d)(1)(C)(ii)
the amount determined under subparagraph (B).
I.R.C. § 420(d)(2) No Contributions Allowed
An employer may not contribute, any amount to a health benefits account or welfare benefit fund (as defined in section 419(e)(1)) with respect to qualified current retiree liabilities for which transferred assets are required to be used under subsection (c)(1).
I.R.C. § 420(e) Definition And Special Rules
For purposes of this section—
I.R.C. § 420(e)(1) Qualified Current Retiree Liabilities
For purposes of this section—
I.R.C. § 420(e)(1)(A) In General
The term “qualified current retiree liabilities” means, with respect to any taxable year, the aggregate amounts (including administrative expenses) which would have been allowable as a deduction to the employer for such taxable year with respect to applicable health benefits and applicable life insurance benefits provided during such taxable year if—
I.R.C. § 420(e)(1)(A)(i)
such benefits were provided directly by the employer, and
I.R.C. § 420(e)(1)(A)(ii)
the employer used the cash receipts and disbursements method of accounting.
For purposes of the preceding sentence, the rule of section 419(c)(3)(B) shall apply.
I.R.C. § 420(e)(1)(B) Reductions For Amounts Previously Set Aside
The amount determined under subparagraph (A) shall be reduced by the amount (determined separately for applicable health benefits and applicable life insurance benefits) which bears the same ratio to such amount as—
I.R.C. § 420(e)(1)(B)(i)
the value (as of the close of the plan year preceding the year of the qualified transfer) of the assets in all health benefits accounts or applicable life insurance accounts or welfare benefit funds (as defined in section 419(e)(1)) set aside to pay for the qualified current retiree liability, bears to
I.R.C. § 420(e)(1)(B)(ii)
the present value of the qualified current retiree liabilities for all plan years (determined without regard to this subparagraph).
I.R.C. § 420(e)(1)(C) Applicable Health Benefits
The term “applicable health benefits” means health benefits or coverage which are provided to—
I.R.C. § 420(e)(1)(C)(i)
retired employees who, immediately before the qualified transfer, are entitled to receive such benefits by reason of retirement and who are entitled to pension benefits under the plan, and
I.R.C. § 420(e)(1)(C)(ii)
their spouses and dependents.
I.R.C. § 420(e)(1)(D) Applicable Life Insurance Benefits
The term “applicable life insurance benefits” means group-term life insurance coverage provided to retired employees who, immediately before the qualified transfer, are entitled to receive such coverage by reason of retirement and who are entitled to pension benefits under the plan, but only to the extent that such coverage is provided under a policy for retired employees and the cost of such coverage is excludable from the retired employee's gross income under section 79.
I.R.C. § 420(e)(1)(E) Key Employees Excluded
If an employee is a key employee (within the meaning of section 416(i)(1)) with respect to any plan year ending in a taxable year, such employee shall not be taken into account in computing qualified current retiree liabilities for such taxable year or in calculating applicable employer cost under subsection (c)(3)(B).
I.R.C. § 420(e)(2) Excess Pension Assets
The term “excess pension assets" means the excess (if any) of—
I.R.C. § 420(e)(2)(A)
the lesser of—
I.R.C. § 420(e)(2)(A)(i)
the fair market value of the plan's assets (reduced by the prefunding balance and funding standard carryover balance determined under section 430(f)), or
I.R.C. § 420(e)(2)(A)(ii)
the value of plan assets as determined under section 430(g)(3) after reduction under section 430(f), over
I.R.C. § 420(e)(2)(B)
125 percent of the sum of the funding target and the target normal cost determined under section 430 for such plan year.
I.R.C. § 420(e)(3) Health Benefits Account
The term “health benefits account” means an account established and maintained under section 401(h).
I.R.C. § 420(e)(4) Applicable Life Insurance Account
The term “applicable life insurance account” means a separate account established and maintained for amounts transferred under this section for qualified current retiree liabilities based on premiums for applicable life insurance benefits.
I.R.C. § 420(e)(5) Coordination With Sections 430 and 433
In the case of a qualified transfer, any assets so transferred shall not, for purposes of this section and sections 430 and 433, be treated as assets in the plan.
I.R.C. § 420(e)(6) Application To Multiemployer Plans
In the case of a multiemployer plan, this section shall be applied to any such plan—
I.R.C. § 420(e)(6)(A)
by treating any reference in this section to an employer as a reference to all employers maintaining the plan (or, if appropriate, the plan sponsor), and
I.R.C. § 420(e)(6)(B)
in accordance with such modifications of this section (and the provisions of this title relating to this section) as the Secretary determines appropriate to reflect the fact the plan is not maintained by a single employer.
I.R.C. § 420(f) Qualified Transfers To Cover Future Retiree Costs And Collectively Bargained Retiree Benefits
I.R.C. § 420(f)(1) In General
An employer maintaining a defined benefit plan (other than a multiemployer plan) may, in lieu of a qualified transfer, elect for any taxable year to have the plan make—
I.R.C. § 420(f)(1)(A)
a qualified future transfer, or
I.R.C. § 420(f)(1)(B)
a collectively bargained transfer. Except as provided in this subsection, a qualified future transfer and a collectively bargained transfer shall be treated for purposes of this title and the Employee Retirement Income Security Act of 1974 as if it were a qualified transfer.
I.R.C. § 420(f)(2) Qualified Future And Collectively Bargained Transfers
For purposes of this subsection—
I.R.C. § 420(f)(2)(A) In General
The terms “qualified future transfer” and “collectively bargained transfer” mean a transfer which meets all of the requirements for a qualified transfer, except that—
I.R.C. § 420(f)(2)(A)(i)
the determination of excess pension assets shall be made under subparagraph (B),
I.R.C. § 420(f)(2)(A)(ii)
the limitation on the amount transferred shall be determined under subparagraph (C),
I.R.C. § 420(f)(2)(A)(iii)
the minimum cost requirements of subsection (c)(3) shall be modified as provided under subparagraph (D), and
I.R.C. § 420(f)(2)(A)(iv)
in the case of a collectively bargained transfer, the requirements of subparagraph (E) shall be met with respect to the transfer.
I.R.C. § 420(f)(2)(B) Excess Pension Assets
I.R.C. § 420(f)(2)(B)(i) In General
In determining excess pension assets for purposes of this subsection, subsection (e)(2) shall be applied by substituting “120 percent” for “125 percent”.
I.R.C. § 420(f)(2)(B)(ii) Requirement To Maintain Funded Status
If, as of any valuation date of any plan year in the transfer period, the amount determined under subsection (e)(2)(B) (after application of clause (i)) exceeds the amount determined under subsection (e)(2)(A), either—
I.R.C. § 420(f)(2)(B)(ii)(I)
the employer maintaining the plan shall make contributions to the plan in an amount not less than the amount required to reduce such excess to zero as of such date, or
I.R.C. § 420(f)(2)(B)(ii)(II)
there is transferred from the health benefits account or applicable life insurance account, as the case may be, to the plan an amount not less than the amount required to reduce such excess to zero as of such date.
I.R.C. § 420(f)(2)(C) Limitation On Amount Transferred
Notwithstanding subsection (b)(3), the amount of the excess pension assets which may be transferred—
I.R.C. § 420(f)(2)(C)(i)
in the case of a qualified future transfer shall be equal to the sum of—
I.R.C. § 420(f)(2)(C)(i)(I)
if the transfer period includes the taxable year of the transfer, the amount determined under subsection (b)(3) for such taxable year, plus
I.R.C. § 420(f)(2)(C)(i)(II)
in the case of all other taxable years in the transfer period, the sum of the qualified current retiree liabilities which the plan reasonably estimates, in accordance with guidance issued by the Secretary, will be incurred for each of such years, and
I.R.C. § 420(f)(2)(C)(ii)
in the case of a collectively bargained transfer, shall not exceed the amount which is reasonably estimated, in accordance with the provisions of the collective bargaining agreement and generally accepted accounting principles, to be the amount the employer maintaining the plan will pay (whether directly or through reimbursement) out of such account during the collectively bargained cost maintenance period for collectively bargained retiree liabilities.
I.R.C. § 420(f)(2)(D) Minimum Cost Requirements
I.R.C. § 420(f)(2)(D)(i) In General
The requirements of subsection (c)(3) shall be treated as met if—
I.R.C. § 420(f)(2)(D)(i)(I)
in the case of a qualified future transfer, each group health plan or arrangement under which applicable health benefits are provided, and each group-term life insurance plan or arrangement under which applicable life insurance benefits are provided, provides applicable health benefits or applicable life insurance benefits, as the case may be, during the period beginning with the first year of the transfer period and ending with the last day of the 4th year following the transfer period such that the annual average amount of the applicable employer cost during such period is not less than the applicable employer cost determined under subsection (c)(3)(A) with respect to the transfer, and
I.R.C. § 420(f)(2)(D)(i)(II)
in the case of a collectively bargained transfer, each collectively bargained plan under which collectively bargained health benefits or collectively bargained life insurance benefits are provided provides that the collectively bargained employer cost for each taxable year during the collectively bargained cost maintenance period shall not be less than the amount specified by the collective bargaining agreement.
I.R.C. § 420(f)(2)(D)(ii) Election To Maintain Benefits For Future Transfers
An employer may elect, in lieu of the requirements of clause (i)(I), to meet the requirements of subsection (c)(3) with respect to applicable health benefits or applicable life insurance benefits by meeting the requirements of such subsection (as in effect before the amendments made by section 535 of the Tax Relief Extension Act of 1999) for each of the years described in the period under clause (i)(I). Such election may be made separately with respect to applicable health benefits and applicable life insurance benefits. In the case of an election with respect to applicable life insurance benefits, the first sentence of this clause shall be applied as if subsection (c)(3) as in effect before the amendments made by such Act applied to such benefits.
I.R.C. § 420(f)(2)(D)(iii) Collectively Bargained Employer Cost
For purposes of this subparagraph, the term “collectively bargained employer cost” means the average cost per covered individual of providing collectively bargained health benefits, collectively bargained life insurance benefits, or both, as the case may be, as determined in accordance with the applicable collective bargaining agreement. Such agreement may provide for an appropriate reduction in the collectively bargained employer cost to take into account any portion of the collectively bargained health benefits, collectively bargained life insurance benefits, or both, as the case may be, that is provided or financed by a government program or other source.
I.R.C. § 420(f)(2)(E) Special Rules For Collectively Bargained Transfers
I.R.C. § 420(f)(2)(E)(i) In General
A collectively bargained transfer shall only include a transfer which—
I.R.C. § 420(f)(2)(E)(i)(I)
is made in accordance with a collective bargaining agreement,
I.R.C. § 420(f)(2)(E)(i)(II)
before the transfer, the employer designates, in a written notice delivered to each employee organization that is a party to the collective bargaining agreement, as a collectively bargained transfer in accordance with this section, and
I.R.C. § 420(f)(2)(E)(i)(III)
involves a defined benefit plan maintained by an employer which, in its taxable year ending in 2005, provided health benefits or coverage to retirees and their spouses and dependents under all of the health benefit plans maintained by the employer, but only if the aggregate cost (including administrative expenses) of such benefits or coverage which would have been allowable as a deduction to the employer (if such benefits or coverage had been provided directly by the employer and the employer used the cash receipts and disbursements method of accounting) is at least 5 percent of the gross receipts of the employer (determined in accordance with the last sentence of subsection (c)(3)(E)(ii)(II)) for such taxable year, or a plan maintained by a successor to such employer.
I.R.C. § 420(f)(2)(E)(ii) Use Of Assets
Any assets transferred to a health benefits account, or an applicable life insurance account, in a collectively bargained transfer (and any income allocable thereto) shall be used only to pay collectively bargained retiree liabilities (other than liabilities of key employees not taken into account under paragraph (6)(B)(iii)) for the taxable year of the transfer or for any subsequent taxable year during the collectively bargained cost maintenance period (whether directly or through reimbursement).
I.R.C. § 420(f)(3) Coordination With Other Transfers
In applying subsection (b)(3) to any subsequent transfer during a taxable year in a transfer period or collectively bargained cost maintenance period, qualified current retiree liabilities shall be reduced by any such liabilities taken into account with respect to the qualified future transfer or collectively bargained transfer to which such period relates.
I.R.C. § 420(f)(4) Special Deduction Rules For Collectively Bargained Transfers
In the case of a collectively bargained transfer—
I.R.C. § 420(f)(4)(A)
the limitation under subsection (d)(1)(C) shall not apply, and
I.R.C. § 420(f)(4)(B)
notwithstanding subsection (d)(2), an employer may contribute an amount to a health benefits account or welfare benefit fund (as defined in section 419(e)(1)) with respect to collectively bargained retiree liabilities for which transferred assets are required to be used under subsection (c)(1)(B), and the deductibility of any such contribution shall be governed by the limits applicable to the deductibility of contributions to a welfare benefit fund under a collective bargaining agreement (as determined under section 419A(f)(5)(A)) without regard to whether such contributions are made to a health benefits account or welfare benefit fund and without regard to the provisions of section 404 or the other provisions of this section.
The Secretary shall provide rules to ensure that the application of this paragraph does not result in a deduction being allowed more than once for the same contribution or for 2 or more contributions or expenditures relating to the same collectively bargained retiree liabilities.
I.R.C. § 420(f)(5) Transfer Period
For purposes of this subsection, the term “transfer period” means, with respect to any transfer, a period of consecutive taxable years (not less than 2) specified in the election under paragraph (1) which begins and ends during the 10-taxable-year period beginning with the taxable year of the transfer.
I.R.C. § 420(f)(6) Terms Relating To Collectively Bargained Transfers
For purposes of this subsection—
I.R.C. § 420(f)(6)(A) Collectively Bargained Cost Maintenance Period
The term “collectively bargained cost maintenance period” means, with respect to each covered retiree and his covered spouse and dependents, the shorter of—
I.R.C. § 420(f)(6)(A)(i)
the remaining lifetime of such covered retiree and, in the case of a transfer to a health benefits account, his covered spouse and dependents, or
I.R.C. § 420(f)(6)(A)(ii)
the period of coverage provided by the collectively bargained plan (determined as of the date of the collectively bargained transfer) with respect to such covered retiree and, in the case of a transfer to a health benefits account, his covered spouse and dependents.
I.R.C. § 420(f)(6)(B) Collectively Bargained Retiree Liabilities
I.R.C. § 420(f)(6)(B)(i) In General
The term “collectively bargained retiree liabilities" means the present value, as of the beginning of a taxable year and determined in accordance with the applicable collective bargaining agreement, of all collectively bargained health benefits, and collectively bargained life insurance benefits, (including administrative expenses) for such taxable year and all subsequent taxable years during the collectively bargained cost maintenance period.
I.R.C. § 420(f)(6)(B)(ii) Reduction For Amounts Previously Set Aside
The amount determined under clause (i) shall be reduced by the value (as of the close of the plan year preceding the year of the collectively bargained transfer) of the assets in all health benefits accounts, applicable life insurance accounts, or welfare benefit funds (as defined in section 419(e)(1)) set aside to pay for the collectively bargained retiree liabilities. The preceding sentence shall be applied separately for collectively bargained health benefits and collectively bargained life insurance benefits.
I.R.C. § 420(f)(6)(B)(iii) Key Employees Excluded
If an employee is a key employee (within the meaning of section 416(i)(1)) with respect to any plan year ending in a taxable year, such employee shall not be taken into account in computing collectively bargained retiree liabilities for such taxable year or in calculating collectively bargained employer cost under subsection (c)(3)(C).
I.R.C. § 420(f)(6)(C) Collectively Bargained Health Benefits
The term “collectively bargained health benefits” means health benefits or coverage—
I.R.C. § 420(f)(6)(C)(i)
which are provided to retired employees who, immediately before the collectively bargained transfer, are entitled to receive such benefits by reason of retirement and who are entitled to pension benefits under the plan, and their spouses and dependents, and
I.R.C. § 420(f)(6)(C)(ii)
if specified by the provisions of the collective bargaining agreement governing the collectively bargained transfer, which will be provided at retirement to employees who are not retired employees at the time of the transfer and who are entitled to receive such benefits and who are entitled to pension benefits under the plan, and their spouses and dependents.
I.R.C. § 420(f)(6)(D) Collectively Bargained Life Insurance Benefits
The term “collectively bargained life insurance benefits” means, with respect to any collectively bargained transfer—
I.R.C. § 420(f)(6)(D)(i)
applicable life insurance benefits which are provided to retired employees who, immediately before the transfer, are entitled to receive such benefits by reason of retirement, and
I.R.C. § 420(f)(6)(D)(ii)
if specified by the provisions of the collective bargaining agreement governing the transfer, applicable life insurance benefits which will be provided at retirement to employees who are not retired employees at the time of the transfer.
I.R.C. § 420(f)(6)(E) Collectively Bargained Plan
The term “collectively bargained plan” means a group health plan or arrangement for retired employees and their spouses and dependents, or a group-term life insurance plan or arrangement for retired employees, that is maintained pursuant to 1 or more collective bargaining agreements.
I.R.C. § 420(g) Segment Rates Determined Without Pension Stabilization
For purposes of this section, section 430 shall be applied without regard to subsection (h)(2)(C)(iv) thereof.
(Added by Pub. L. 101-508, title XII, Sec. 12011(a), Nov. 5, 1990, 104 Stat. 1388-567; amended: Dec. 8, 1994, Pub. L. 103-465, title VII, Sec. 731(c)(3), (c)(2), (c)(1), (b), (a); Aug. 20, 1996, Pub. L. 104-188, title I, Sec. 1704(t)(32), 110 Stat. 1755; Dec. 17, 1999, Pub. L. 106-170, title V, Sec. 535, 113 Stat. 1860; April 10, 2004, Pub. L. 108-218, Sec. 204, 118 Stat. 596; Oct. 22, 2004, Pub. L. 108-357, title VII, Sec. 709(b), 118 Stat. 1418; Aug. 17, 2006, Pub. L. 109-280, title I, VIII, Sec. 114(d), 841(a), 842(a), 120 Stat. 780; May 25, 2007, Pub. L 110-28, title VI, Sec. 6612(b), 6613(a), 121 Stat. 112; Pub. L. 110-458, title I, Sec. 108(i), Dec. 23, 2008, 122 Stat. 5092; Pub. L. 112-141, Sec. 40211(a)(2)(D), 40241(a), 40242, July 6, 2012, 126 Stat. 405; Pub. L. 113-97, title II, Sec. 202(c)(7), Apr. 7, 2014, 128 Stat. 1101; Pub. L. 114-41, title II, Sec. 2007(a), July 31, 2015, 129 Stat. 443; Pub. L. 115-141, Div. U, title IV, Sec. 401(a)(97), Mar. 23, 2018, 132 Stat. 348.)
BACKGROUND NOTES
AMENDMENTS
2018--Subsec. (c)(1)(A). Pub. L. 115-141, Div. U, Sec. 401(a)(97), amended subpar (A) by substituting “subsection (e)(1)(E)’’ for “subsection (e)(1)(D)’’.
2015--Subsec. (b)(4). Pub. L. 114-41, Sec. 2007(a), amended par. (4) by substituting “December 31, 2025” for “December 31, 2021”.
2014--Subsec. (e)(5). Pub. L. 113-97, Sec. 202(c)(7), amended par. (5) by substituting “sections 430 and 433” for “section 430” each place it appeared.
2012--Sec. 420. Pub. L. 112-141, Sec. 40242(e)(1), amended Sec. 420 by substituting “qualified current retiree liabilities” for “qualified current retiree health liabilities” each place it appeared.
Subsec. (a). Pub. L. 112-141, Sec. 40242(a), amended subsec. (a) by inserting “, or an applicable life insurance account,” after “health benefits account”.
Subsec. (b)(1)(A). Pub. L. 112-141, Sec. 40242(e)(2), amended subpar. (A) by inserting “, or an applicable life insurance account,” after “a health benefits account”.
Subsec. (b)(1)(A). Pub. L. 112-141, Sec. 40242(g)(1), amended subpar. (A) by striking ‘’in a taxable year beginning after December 31, 1990”.
Subsec. (b)(2)(A). Pub. L. 112-141, Sec. 40242(e)(3)(A), amended subpar. (A) by adding the following at the end “If there is a transfer from a defined benefit plan to both a health benefits account and an applicable life insurance account during any taxable year, such transfers shall be treated as 1 transfer for purposes of this paragraph.”.
Subsec. (b)(2). Pub. L. 112-141, Sec. 40242(g)(3), amended par. (2) by striking subpar. (B) and by striking “Per Year.—(A) In General.—No more than” and inserting “Per Year.—No more than”. Before being struck, subpar. (B) read as follows:
“(B) Exception.—A transfer described in paragraph (4) shall not be taken into account for purposes of subparagraph (A).”
Subsec. (b)(3). Pub. L. 112-141, Sec. 40242(e)(3)(B), amended par. (3) by inserting “to an account” after “may be transferred”.
Subsec. (b)(5). Pub. L. 112-141, Sec. 40241(a), amended par. (5) by substituting “December 31, 2021” for “December 31, 2013”.
Subsec. (b)(4)-(5). Pub. L. 112-141, Sec. 40242(g)(2), amended subsec. (b) by striking par. (4) and redesignating par. (5) as par. (4). Before being struck, it read as follows:
“(4) Special Rule For 1990
“(A) In General.— Subject to the provisions of subsection (c), a transfer shall be treated as a qualified transfer if such transfer—
“(i) is made after the close of the taxable year preceding the employer's first taxable year beginning after December 31, 1990, and before the earlier of—
“(I) the due date (including extensions) for the filing of the return of tax for such preceding taxable year, or
“(II) the date such return is filed, and
“(ii) does not exceed the expenditures of the employer for qualified current retiree health liabilities for such preceding taxable year.
“(B) Deduction Reduced.— The amount of the deductions otherwise allowable under this chapter to an employer for the taxable year preceding the employer's first taxable year beginning after December 31, 1990, shall be reduced by the amount of any qualified transfer to which this paragraph applies.
“(C) Coordination With Reduction Rule.— Subsection (e)(1)(B) shall not apply to a transfer described in subparagraph (A).”
Subsec. (c)(1)(A). Pub. L. 112-141, Sec. 40242(e)(2), amended subpar. (A) by inserting “, or an applicable life insurance account,” after “a health benefits account”.
Subsec. (c)(1)(B). Pub. L. 112-141, Sec. 40242(e)(4), amended the heading of subpar. (B) by inserting “Or Life Insurance” after “Health Benefits”.
Subsec. (c)(1)(B)(i). Pub. L. 112-141, Sec. 40242(e)(2), amended clause (i) by inserting “, or an applicable life insurance account,” after “a health benefits account”.
Subsec. (c)(1)(C). Pub. L. 112-141, Sec. 40242(e)(2), amended subpar. (C) by inserting “, or an applicable life insurance account,” after “a health benefits account”.
Subsec. (c)(2). Pub. L. 112-141, Sec. 40242(g)(4), amended par. (2) by striking subpar. (B) and by moving subpar. (A) two ems to the left, and by substituting “Before Transfer.—The requirements of this paragraph” for “Before Transfer.—(A) In General.—The requirements of this paragraph”. Before being struck, subpar. (B) read as follows:
“(B) Special Rule For 1990.— In the case of a qualified transfer described in subsection (b)(4), the requirements of this paragraph are met with respect to any participant who separated from service during the taxable year to which such transfer relates by recomputing such participant's benefits as if subparagraph (A) had applied immediately before such separation.”
Subsec. (c)(3)(A). Pub. L. 112-141, Sec. 40242(c)(1)., amended subpar. (A) by inserting “, and each group-term life insurance plan under which applicable life insurance benefits are provided,” after “health benefits are provided”.
Subsec. (c)(3)(B)(i). Pub. L. 112-141, Sec. 40242(c)(2)(A)(i), amended clause (i) by redesignating subclauses (I)-(II) as subclauses (II)-(III), respectively, and by adding a new subclause (I).
Subsec. (c)(3)(B)(ii). Pub. L. 112-141, Sec. 40242(c)(2)(A)(ii), amended clause (ii) by substituting “was provided during such taxable year for the benefits with respect to which the determination under clause (i) is made.” for “for applicable health benefits was provided during such taxable year.”
Subsec. (c)(3)(C). Pub. L. 112-141, Sec. 40242(c)(2)(B), amended subpar. (C) by inserting “for applicable health benefits” after “applied separately”, and by inserting “, and separately for applicable life insurance benefits with respect to individuals age 65 or older at any time during the taxable year and with respect to individuals under age 65 during the taxable year” before the period.
Subsec. (c)(3)(E)(i). Pub. L. 112-141, Sec. 40242(c)(2)(C)(i), amended clause (i) by inserting “or retiree life insurance coverage, as the case may be,” after “retiree health coverage”.
Subsec. (c)(3)(E)(ii). Pub. L. 112-141, Sec. 40242(c)(2)(C)(ii), amended the heading of clause (ii) by inserting “For Retiree Health Coverage” after “Cost Reductions”.
Subsec. (c)(3)(ii)(II). Pub. L. 112-141, Sec. 40242(c)(2)(C)(iii), amended subclause (II) by inserting “with respect to applicable health benefits” after “liabilities of the employer”.
Subsec. (d)(1)(A). Pub. L. 112-141, Sec. 40242(e)(2), amended subpar. (A) by inserting “, or an applicable life insurance account,” after “a health benefits account”
Subsec. (d)(2). Pub. L. 112-141, Sec. 40242(g)(5), amended par. (2) by striking “after December 31, 1990”.
Subsec. (e)(1). Pub. L. 112-141, Sec. 40242(e)(5)(B), amended the heading for par. (1) by striking “Health”.
Subsec. (e)(1)(A). Pub. L. 112-141, Sec. 40242(e)(5)(A), amended subpar. (A) by inserting “and applicable life insurance benefits” after “applicable health benefits”
Subsec. (e)(1)(B). Pub. L. 112-141, Sec. 40242(e)(6)(A), amended subpar. (B) by inserting “(determined separately for applicable health benefits and applicable life insurance benefits)” after “shall be reduced by the amount” in the matter preceding clause (i).
Subsec. (e)(1)(B)(i). Pub. L. 112-141, Sec. 40242(e)(6)(B)-(C), amended clause (i) by inserting “or applicable life insurance accounts” after “health benefit accounts”, and by substituting “qualified current retiree liability” for “qualified current retiree health liability”.
Subsec. (e)(1)(C)(i). Pub. L. 112-141, Sec. 40242(b)(3)(B)(i), amended clause (i) by substituting “by reason of retirement” for “upon retirement”.
Subsec. (e)(1)(D)-(E). Pub. L. 112-141, Sec. 40242(b)(2), amended par. (1) by redesignating subpar. (D) as subpar. (E) and by adding a new subpar. (D).
Subsec. (e)(4)-(5). Pub. L. 112-141, Sec. 40242(b)(1), amended subsec. (e) by redesignating par. (4) as par. (5) and by adding a new par. (4).
Subsec. (f). Pub. L. 112-141, Sec. 40242(e)(7), amended the heading for subsec. (f) by striking “Health” each place it appeared.
Subsec. (f)(2). Pub. L. 112-141, Sec. 40242(c)(2)(D), amended par. (2) by substituting “collectively bargained retiree liabilities” for “collectively bargained retiree liabilities” each place it appeared.
Subsec. (f)(2)(B)(ii)(II). Pub. L. 112-141, Sec. 40242(e)(8), amended subclause (II) by inserting “or applicable life insurance account, as the case may be,” after “health benefits account”.
Subsec. (f)(2)(D)(i)(I). Pub. L. 112-141, Sec. 40242(c)(2)(E)(i)-(ii), amended subclause (I) by inserting “, and each group-term life insurance plan or arrangement under which applicable life insurance benefits are provided,” after “applicable health benefits are provided” and by inserting “or applicable life insurance benefits, as the case may be,” after “provides applicable health benefits”.
Subsec. (f)(2)(D)(i)(II). Pub. L. 112-141, Sec. 40242(c)(2)(E)(iii)-(iv), amended subclause (II) by striking “group health” and by inserting “or collectively bargained life insurance benefits” after “collectively bargained health benefits”.
Subsec. (f)(2)(D)(ii). Pub. L. 112-141, Sec. 40242(c)(2)(F), amended clause (ii) by inserting “with respect to applicable health benefits or applicable life insurance benefits” after “requirements of subsection (c)(3)” and by adding at the end the following: “Such election may be made separately with respect to applicable health benefits and applicable life insurance benefits. In the case of an election with respect to applicable life insurance benefits, the first sentence of this clause shall be applied as if subsection (c)(3) as in effect before the amendments made by such Act applied to such benefits.”.
Subsec. (f)(2)(D)(iii). Pub. L. 112-141, Sec. 40242(c)(2)(G), amended clause (iii) by striking “retiree” each place it appeared, and by inserting “, collectively bargained life insurance benefits, or both, as the case may be,” after “health benefits” each place it appeared.
Subsec. (f)(2)(E)(i)(III). Pub. L. 112-141, Sec. 40242(e)(9)(A), amended subclause (III) by inserting “defined benefit” before “plan maintained by an employer”, and by inserting “health” before “benefit plans maintained by the employer”.
Subsec. (f)(2)(E)(ii). Pub. L. 112-141, Sec. 40242(e)(2), amended clause (ii) by inserting “, or an applicable life insurance account,” after “a health benefits account”
Subsec. (f)(4). Pub. L. 112-141, Sec. 40242(e)(10), amended par. (4) by substituting “collectively bargained retiree liabilities” for “collectively bargained retiree health liabilities”.
Subsec. (f)(6). Pub. L. 112-141, Sec. 40242(e)(10), amended par. (6) by substituting “collectively bargained retiree liabilities” for “collectively bargained retiree health liabilities”.
Subsec. (f)(6)(A)(i). Pub. L. 112-141, Sec. 40242(e)(11)(A), amended clause (i) by inserting “, in the case of a transfer to a health benefits account,” before “his covered spouse and dependents”.
Subsec. (f)(6)(A)(ii). Pub. L. 112-141, Sec. 40242(e)(11)(A)-(B), amended clause (ii) by inserting “, in the case of a transfer to a health benefits account,” before “his covered spouse and dependents” and by substituting “plan” for “health plan”.
Subsec. (f)(6)(B). Pub. L. 112-141, Sec. 40242(e)(12)(C), amended the heading of subpar. (B) by striking “Health”.
Subsec. (f)(6)(B)(i). Pub. L. 112-141, Sec. 40242(e)(12)(A), amended clause (i) by inserting “, and collectively bargained life insurance benefits,” after “collectively bargained health benefits”.
Subsec. (f)(6)(B)(ii). Pub. L. 112-141, Sec. 40242(e)(12)(B), amended clause (ii) by adding at the end “The preceding sentence shall be applied separately for collectively bargained health benefits and collectively bargained life insurance benefits.”, and by inserting “, applicable life insurance accounts,” after “health benefit accounts”.
Subsec. (f)(6)(B)(iii). Pub. L. 112-141, Sec. 40242(f), amended clause (iii) by substituting “416(i)(1)” for “416(I)(1)”.
Subsec. (f)(6)(C). Pub. L. 112-141, Sec. 40242(b)(3)(B)(ii)(I), (IV), amended subpar. (C) by striking “which are provided to” in the matter preceding clause (i), and by substituting “which will be provided at retirement to employees who are not retired employees at the time of the transfer and who” for “active employees who, following their retirement,”.
Subsec. (f)(6)(C)(i). Pub. L. 112-141, Sec. 40242(b)(3)(B)(ii)(II)-(III), amended clause (i) by inserting “which are provided to” before “retired employees” and by substituting “by reason of retirement” for “upon retirement”.
Subsec. (f)(6)(D)-(E). Pub. L. 112-141, Sec. 40242(b)(3)(A), amended par. (6) by redesignating subpar. (D) and subpar. (E) and added a new subpar. (D).
Subsec. (f)(6)(E). Pub. L. 112-141, Sec. 40242(e)(13)(C), amended the heading for subpar. (E), as redesignated, by striking “Health”.
Subsec. (f)(6)(E). Pub. L. 112-141, Sec. 40242(e)(13)(A)-(B), amended subpar. (E), as redesignated, by substituting “bargained” for “bargained health” and by inserting “, or a group-term life insurance plan or arrangement for retired employees,” after “dependents”.
Subsec. (g). Pub. L. 112-141, sec. 40211(a)(2)(D), added subsec. (g).
2008--Subsec. (c)(1)(A). Pub. L. 110-458, Sec. 108(i)(1), amended subpar. (A) by adding the sentence at the end.
Subsec. (f)(2)(D)(i)(I). Pub. L. 110-458, Sec. 108(i)(2), amended subclause (I) by striking “such” before “the applicable”.
2007--Subsec. (c)(3)(A). Pub. 110-28, Sec. 6613(a), amended subpar. (A) by substituting “transfer or, in the case of a transfer which involves a plan maintained by an employer described in subsection (f)(2)(E)(i)(III), if the plan meets the requirements of subsection (f)(2)(D)(i)(II)” for “transfer.”.
Subsec. (e)(2)(B). Pub. L. 110-28, Sec. 6612(a), amended subpar. (B) by substituting “funding target” for “funding shortfall”.
Subsec. (f)(2)(E)(i)(III). Pub. L. 110-28, Sec. 6612(b), amended subclause (III) by substituting “subsection (c)(3)(E)(ii)(II)" for “subsection (c)(2)(E)(ii)(II)”.
2006--Subsec. (a). Pub. L. 109-280, Sec. 842(a)(1), amended subsec. (a) by striking “(other than a multiemployer plan)" after “defined benefit plan”.
Subsec. (e)(2). Pub. L. 109-280, Sec. 114(d)(1), amended par. (2). Before amendment it read as follows:
“(2) EXCESS PENSION ASSETS. --
“The term ‘excess pension assets’ means the excess [if any] of --
“(A) the amount determined under section 412(c)(7)(A)(ii), over
“(B) the greater of --
“(i) the amount determined under section 412(c)(7)(A)(i), or
“(ii) 125 percent of current liability (as defined in section 412(c)(7)(B)).
The determination under this paragraph shall be made as of the most recent valuation date of the plan preceding the qualified transfer.”
Subsec. (e)(4). Pub. L. 109-280, Sec. 114(d)(2), amended par. (4). Before amendment, it read as follows:
“(4) COORDINATION WITH SECTION 412. --
“In the case of a qualified transfer to a health benefits account --
“(A) any assets transferred in a plan year on or before the valuation date for such year (and any income allocable thereto) shall, for purposes of section 412, be treated as assets in the plan as of the valuation date for such year, and
“(B) the plan shall be treated as having a net experience loss under section 412(b)(2)(B)(iv) in an amount equal to the amount of such transfer (reduced by any amounts transferred back to the pension plan under subsection (c)(1)(B)) and for which amortization charges begin for the first plan year after the plan year in which such transfer occurs, except that such section shall be applied to such amount by substituting ‘10 plan years’ for ‘5 plan years’.”
Subsec. (e)(5). Pub. L. 109-280, Sec. 842(a)(2), added par. (5).
Subsec. (f). Pub. L. 109-280, Sec. 841(a), added subsec. (f).
2004--Subsec. (c)(3)(E). Pub. L. 108-357, Sec. 709(b), amended subpar. (E) by substituting “(i) IN GENERAL.-The Secretary” for “The Secretary” and by adding clause (ii).
Subsec. (b)(5). Pub. L. 108-218, Sec. 204(a), amended par. (5) by substituting “December 31, 2013” for “December 31, 2005”.
1999--Subsec. (b)(1)(C)(iii). Pub. L. 106-170, Sec. 535(b)(2)(A), by substituting “cost” for “benefits”.
Subsec. (b)(5). Pub. L. 106-170, Sec. 535(a)(1), substituted “made after December 31, 2005” for “in any taxable year beginning after December 31, 2000”.
Subsec. (c)(3). Pub. L. 106-170, Sec. 535(b)(1), amended par. (3). Before amendment it read as follows:
“(3) Maintenance of benefit requirements
“(A) In general
The requirements of this paragraph are met if each group health plan or arrangement under which applicable health benefits are provided provides that the applicable health benefits provided by the employer during each taxable year during the benefit maintenance period are substantially the same as the applicable health benefits provided by the employer during the taxable year immediately preceding the taxable year of the qualified transfer.
“(B) Election to apply separately
An employer may elect to have this paragraph applied separately with respect to individuals eligible for benefits under title XVIII of the Social Security Act at any time during the taxable year and with respect to individuals not so eligible.
“(C) Benefit maintenance period
“For purposes of this paragraph, the term ‘benefit maintenance period’ means the period of 5 taxable years beginning with the taxable year in which the qualified transfer occurs. If a taxable year is in 2 or more benefit maintenance periods, this paragraph shall be applied by taking into account the highest level of benefits required to be provided under subparagraph (A) for such taxable year. “
Subsec. (e)(1)(D). Pub. L. 106-170, Sec. 535(b)(2)(B), substituted “or in calculating applicable employer cost under subsection (c)(3)(B)” for “shall not be subject to the minimum benefit requirements of subsection (c)(3)”.
1996--Subsec. (e)(1)(C). Pub. L. 104-188, Sec. 1704(t)(32), substituted “means” for “mean”.
1994--Subsec. (e)(1)(D). Pub. L. 103-465, Sec. 731(c)(3), amended (e)(1)(D) by striking “or in calculating applicable employer cost under subsection (c)(3)(B)” and inserting “and shall not be subject to the minimum benefit requirements of subsection (c)(3)”, effective for taxable years beginning after December 31, 1995.
Subsec. (e)(1)(B). Pub. L. 103-465, Sec. 731(c)(2), amended (e)(1)(B) to read as above, effective after the date of enactment of this Act. Prior to amendment, subsec. (e)(1)(B) read as follows:
(B) REDUCTIONS FOR AMOUNTS PREVIOUSLY SET ASIDE. --The amount determined under subparagraph (A) shall be reduced by any amount previously contributed to a health benefits account or welfare benefit fund (as defined in section 419(e)(1)) to pay for the qualified current retiree health liabilities. The portion of any reserves remaining as of the close of December 31, 1990, shall be allocated on a pro rata basis to qualified current retiree health liabilities.
Subsec. (b)(1)(C)(iii). Pub. L. 103-465, Sec. 731(c)(1), amended (iii) by striking out “cost” and inserting “benefits”, effective for qualified transfers occurring after the date of the enactment of this Act.
Subsec. (c)(3). Pub. L. 103-465, Sec. 731(b), amended all (c)(3) to read as above, effective for qualified transfers occurring after the date of the enactment of this Act. Prior to amendment, subsec. (c)(3) read as follows:
(3) MINIMUM COST REQUIREMENTS. --
(A) IN GENERAL. --The requirements of this paragraph are met if each group health plan or arrangement under which applicable health benefits are provided provides that the applicable employer cost for each taxable year during the cost maintenance period shall not be less than the higher of the applicable employer costs for each of the 2 taxable years immediately preceding the taxable year of the qualified transfer.
(B) APPLICABLE EMPLOYER COST. --For purposes of this paragraph, the term ‘applicable employer cost’ means, with respect to any taxable year, the amount determined by dividing --
(i) the qualified current retiree health liabilities of the employer for such taxable year determined --
(I) without regard to any reduction under subsection (e)(1)(B), and
(II) in the case of a taxable year in which there was no qualified transfer, in the same manner as if there had been such a transfer at the end of the taxable year, by
(ii) the number of individuals to whom coverage for applicable health benefits was provided during such taxable year.
(C) ELECTION TO COMPUTE COST SEPARATELY. --An employer may elect to have this paragraph applied separately with respect to individuals eligible for benefits under title XVIII of the Social Security Act at any time during the taxable year and with respect to individuals not so eligible.
(D) COST MAINTENANCE PERIOD. --For purposes of this paragraph, the term ‘cost maintenance period’ means the period of 5 taxable years beginning with the taxable year in which the qualified transfer occurs. If a taxable year is in 2 or more overlapping cost maintenance periods, this paragraph shall be applied by taking into account the highest applicable employer cost required to be provided under subparagraph (A) for such taxable year.
Subsec. (b)(5). Pub. L. 103-465, Sec. 731(a), amended (b)(5) by striking “1995” and substituting “2000), effective for taxable years beginning after December 31, 1995.
EFFECTIVE DATE OF 2018 AMENDMENTS
Amendment by Pub. L. 115-141, Div. U, Sec. 401(a)(97), effective March 23, 2018.
EFFECTIVE DATE OF 2015 AMENDMENTS
Amendment by Sec. 2007(a) of Pub. L. 114-41 effective on the date of the enactment of this Act [Enacted: July 31, 2015].
EFFECTIVE DATE OF 2014 AMENDMENTS
Amendment by Sec. 202(c)(7) of Pub. L. 113-97 effective for years beginning after December 31, 2013.
EFFECTIVE DATE OF 2012 AMENDMENTS
Amendment by Sec. 40211 of Pub. L. 112-141 effective for plan years beginning after December 31, 2011. Sec. 40211(c)(2) of Pub. L. 112-141 provided that:
“(2) RULES WITH RESPECT TO ELECTIONS.—
“(A) ADJUSTED FUNDING TARGET ATTAINMENT PERCENTAGE.—A plan sponsor may elect not to have the amendments made by this section apply to any plan year beginning before January 1, 2013, either (as specified in the election)—
“(i) for all purposes for which such amendments apply, or
“(ii) solely for purposes of determining the adjusted funding target attainment percentage under sections 436 of the Internal Revenue Code of 1986 and 206(g) of the Employee Retirement Income Security Act of 1974 for such plan year.
“A plan shall not be treated as failing to meet the requirements of sections 204(g) of such Act and 411(d)(6) of such Code solely by reason of an election under this paragraph.
“(B) OPT OUT OF EXISTING ELECTIONS.—If, on the date of the enactment of this Act, an election is in effect with respect to any plan under sections 303(h)((2)(D)(ii) of the Employee Retirement Income Security Act of 1974 and 430(h)((2)(D)(ii) of the Internal Revenue Code of 1986, then, notwithstanding the last sentence of each such section, the plan sponsor may revoke such election without the consent of the Secretary of the Treasury. The plan sponsor may make such revocation at any time before the date which is 1 year after such date of enactment and such revocation shall be effective for the 1st plan year to which the amendments made by this section apply and all subsequent plan years. Nothing in this subparagraph shall preclude a plan sponsor from making a subsequent election in accordance with such sections.”
Amendments by Sec. 40241 of Pub. L. 112-141 effective on the date of the enactment of this Act [Enacted: July 6, 2012.
Amendments by Sec. 40242 of Pub. L. 112-141 effective for transfers made after the date of the enactment of this Act [Enacted: July 6, 2012], except the amendments made by subsections (b)(3)(B) and (f) shall take effect as if included in the amendments made by section 841(a) of the Pension Protection Act of 2006 [P.L. 109-280].
EFFECTIVE DATE OF 2008 AMENDMENTS
Amendments by Sec. 108(i) of Pub. L. 110-458 effective as if included in provisions of the Pension Protection Act of 2006 [P.L. 109-280, Sec. 841] to which they relate.
EFFECTIVE DATE OF 2007 AMENDMENTS
Amendment by Sec. 6612 of Pub. L. 110-28 effective as if included in provisions of the Pension Protection Act of 2006 [P.L. 109-280] to which it relates.
Amendment by Sec. 6613(a) of Pub. L. 110-28 effective for transfers after the date of the enactment of this Act [Enacted: May 25, 2007].
EFFECTIVE DATE OF 2006 AMENDMENTS
Amendments by Sec. 114 of Pub. L. 109-280, as amended by Pub. L. 110-458, Sec. 101(d)(3), effective for plan years beginning after 2007.
Amendment by Sec. 841 of Pub. L. 109-280 effective for transfer after the date of the enactment of this Act [Enacted: Aug. 17, 2006].
Amendments by Sec. 842 of Pub. L. 109-280 effective for transfers made in taxable years beginning after December 31, 2006.
EFFECTIVE DATE OF 2004 AMENDMENTS
Amendments by Sec. 709(b) of Pub. L. 108-357 effective for taxable years ending after the date of the enactment of this Act [Enacted: Oct. 22, 2004].
Amendment by Sec. 204(a) of Pub. L. 108-218 effective on the date of the enactment of this Act [April 10, 2004].
EFFECTIVE DATE OF 1999 AMENDMENTS
Amendments by Sec. 535 of Pub. L. 106-170 effective for qualified transfers occurring after the date of the enactment of this Act [Enacted: Dec. 17, 1999].
Sec. 535(c)(2) provided the following transitional rule:
“(2) TRANSITION RULE.--If the cost maintenance period for any qualified transfer after the date of the enactment of this Act [Enacted: Dec. 17, 1999] includes any portion of a benefit maintenance period for any qualified transfer on or before such date, the amendments made by subsection (b) shall not apply to such portion of the cost maintenance period (and such portion shall be treated as a benefit maintenance period).”
EFFECTIVE DATE
Section 12011(c) of Pub. L. 101-508 provided that:
‘(1) In general. - The amendments made by this section (enacting this section and amending section 401 of this title) shall apply to transfers in taxable years beginning after December 31, 1990.
‘(2) Waiver of estimated tax penalties. - No addition to tax shall be made under section 6654 or section 6655 of the Internal Revenue Code of 1986 for the taxable year preceding the taxpayer's 1st taxable year beginning after December 31, 1990, with respect to any underpayment to the extent such underpayment was created or increased by reason of section 420(b)(4)(B) of such Code (as added by subsection (a)).'