I.R.C. § 4980(a) Imposition Of Tax —
There is hereby imposed a tax of 20 percent of the amount of any employer reversion
from a qualified plan.
I.R.C. § 4980(b) Liability For Tax —
The tax imposed by subsection (a) shall be paid by the employer maintaining the
plan.
I.R.C. § 4980(c) Definitions And Special Rules —
For purposes of this section—
I.R.C. § 4980(c)(1) Qualified Plan —
The term “qualified plan” means any plan meeting the requirements of section 401(a) or 403(a), other than—
I.R.C. § 4980(c)(1)(A) —
a plan maintained by an employer if such employer has, at all times, been exempt
from tax under subtitle A, or
I.R.C. § 4980(c)(1)(B) —
a governmental plan (within the meaning of section 414(d)).
Such term shall include any plan which, at any time, has been determined by the Secretary
to be a qualified plan.
I.R.C. § 4980(c)(2) Employer Reversion
I.R.C. § 4980(c)(2)(A) In General —
The term “employer reversion” means the amount of cash and the fair market value
of other property received (directly or indirectly) by an employer from the qualified
plan.
I.R.C. § 4980(c)(2)(B) Exceptions —
The term “employer reversion” shall not include—
I.R.C. § 4980(c)(2)(B)(i) —
except as provided in regulations, any amount distributed to or on behalf of any
employee (or his beneficiaries)
if such amount could have been so distributed before termination of such plan without
violating any provision of section 401,
I.R.C. § 4980(c)(2)(B)(ii) —
any distribution to the employer which is allowable under section 401(a)(2)—
I.R.C. § 4980(c)(2)(B)(ii)(I) —
in the case of a multiemployer plan, by reason of mistakes of law or fact or the
return of any withdrawal liability payment,
I.R.C. § 4980(c)(2)(B)(ii)(II) —
in the case of a plan other than a multiemployer plan, by reason of mistake of fact,
or
I.R.C. § 4980(c)(2)(B)(ii)(III) —
in the case of any plan, by reason of the failure of the plan to initially qualify
or the failure of contributions to be deductible, or
I.R.C. § 4980(c)(2)(B)(iii) —
any transfer described in section 420(f)(2)(B)(ii)(II).
I.R.C. § 4980(c)(3) Exception For Employee Stock Ownership Plans
I.R.C. § 4980(c)(3)(A) In General —
If, upon an employer reversion from a qualified plan, any applicable amount is transferred
from such plan to an employee stock ownership plan described in section 4975(e)(7) or a tax credit employee stock ownership plan (as described in section 409), such amount shall not be treated as an employer reversion for purposes of this
section (or
includible in the gross income of the employer) if the requirements of subparagraphs
(B), (C), and (D) are met.
I.R.C. § 4980(c)(3)(B) Investment In Employer Securities —
The requirements of this subparagraph are met if, within 90 days after the transfer
(or such longer period as the Secretary may prescribe), the amount transferred is
invested in employer securities
(as defined in section 409(l))
or used to repay loans used to purchase such securities.
I.R.C. § 4980(c)(3)(C) Allocation Requirements —
The requirements of this subparagraph are met if the portion of the amount transferred
which is not allocated under the plan to accounts of participants in the plan year
in which the transfer occurs—
I.R.C. § 4980(c)(3)(C)(i) —
is credited to a suspense account and allocated from such account to accounts of
participants no less rapidly than ratably over a period not to exceed 7 years, and
I.R.C. § 4980(c)(3)(C)(ii) —
when allocated to accounts of participants under the plan, is treated as an employer
contribution for purposes of section 415(c), except that—
I.R.C. § 4980(c)(3)(C)(ii)(I) —
the annual addition (as determined under section 415(c))
attributable to each such allocation shall not exceed the value of such securities
as of the time such securities were credited to such suspense account, and
I.R.C. § 4980(c)(3)(C)(ii)(II) —
no additional employer contributions shall be permitted to an employee stock ownership
plan described in subparagraph (A) of the employer before the allocation of such
amount.
The amount allocated in the year of transfer shall not
be less than the lesser of the maximum amount allowable under section 415 or 1/8 of the amount attributable to the securities acquired. In the case of dividends
on securities held in the suspense account, the requirements of this subparagraph
are met only if the dividends are allocated to accounts of participants or paid to
participants in proportion to their accounts, or used to repay loans used to purchase
employer securities.
I.R.C. § 4980(c)(3)(D) Participants —
The requirements of this subparagraph are met if at least half of the participants
in the qualified plan are participants in the employee stock ownership plan (as of
the close of the 1st plan year for which an allocation of the securities is required).
I.R.C. § 4980(c)(3)(E) Applicable Amount —
For purposes of this paragraph, the term “applicable amount” means any amount which—
I.R.C. § 4980(c)(3)(E)(i) —
is transferred after March 31, 1985, and before January 1, 1989, or
I.R.C. § 4980(c)(3)(E)(ii) —
is transferred after December 31, 1988, pursuant to a termination which occurs after
March 31, 1985, and before January 1, 1989.
I.R.C. § 4980(c)(3)(F) No Credit Or Deduction Allowed —
No credit or deduction shall be allowed under chapter 1 for any amount transferred
to an employee stock ownership plan in a transfer to which this paragraph applies.
I.R.C. § 4980(c)(3)(G) Amount Transferred To Include Income Thereon, Etc. —
The amount transferred shall not be treated as meeting the requirements of subparagraphs
(B) and (C) unless amounts attributable to such amount also meet such requirements.
I.R.C. § 4980(c)(4) Time For Payment Of Tax —
For purposes of subtitle F, the time for payment of the tax imposed by subsection
(a) shall be the last day of the month following the month in which the employer
reversion occurs.
I.R.C. § 4980(d) Increase In Tax For Failure To Establish Replacement Plan Or Increase Benefits
I.R.C. § 4980(d)(1) In General —
Subsection (a) shall be applied by substituting “50 percent” for “20 percent” with
respect to any employer reversion from a qualified plan unless—
I.R.C. § 4980(d)(1)(A) —
the employer establishes or maintains a qualified replacement plan, or
I.R.C. § 4980(d)(1)(B) —
the plan provides benefit increases meeting the requirements of paragraph (3).
I.R.C. § 4980(d)(2) Qualified Replacement Plan —
For purposes of this subsection, the term “qualified replacement plan” means a qualified
plan established or maintained by the employer in connection with a qualified plan
termination (hereinafter referred to as the “replacement plan”) with respect to which
the following requirements are met:
I.R.C. § 4980(d)(2)(A) Participation Requirement —
At least 95 percent of the active participants in the terminated plan who remain
as employees of the employer after the termination are active participants in the
replacement plan.
I.R.C. § 4980(d)(2)(B) Asset Transfer Requirement
I.R.C. § 4980(d)(2)(B)(i) 25 Percent Cushion —
A direct transfer from the terminated plan to the replacement plan is made before
any employer reversion, and the transfer is in an amount equal to the excess (if
any) of—
I.R.C. § 4980(d)(2)(B)(i)(I) —
25 percent of the maximum amount which the employer could receive as an employer
reversion without regard to this subsection, over
I.R.C. § 4980(d)(2)(B)(i)(II) —
the amount determined under clause
(ii).
I.R.C. § 4980(d)(2)(B)(ii) Reduction For Increase In Benefits —
The amount determined under this clause is an amount equal to the present value
of the aggregate increases in the accrued benefits under the terminated plan of any
participants or beneficiaries pursuant to a plan amendment which—
I.R.C. § 4980(d)(2)(B)(ii)(I) —
is adopted during the 60-day period ending on the date of termination of the qualified
plan, and
I.R.C. § 4980(d)(2)(B)(ii)(II) —
takes effect immediately on the termination date.
I.R.C. § 4980(d)(2)(B)(iii) Treatment Of Amount Transferred —
In the case of the transfer of any amount under clause
(i)—
I.R.C. § 4980(d)(2)(B)(iii)(I) —
such amount shall not be includible in the gross income of the employer,
I.R.C. § 4980(d)(2)(B)(iii)(II) —
no deduction shall be allowable with respect to such transfer, and
I.R.C. § 4980(d)(2)(B)(iii)(III) —
such transfer shall not be treated as an employer reversion for purposes of this
section.
I.R.C. § 4980(d)(2)(C) Allocation Requirements
I.R.C. § 4980(d)(2)(C)(i) In General —
In the case of any defined contribution plan, the portion of the amount transferred
to the replacement plan under subparagraph
(B)(i) is—
I.R.C. § 4980(d)(2)(C)(i)(I) —
allocated under the plan to the accounts of participants in the plan year in which
the transfer occurs, or
I.R.C. § 4980(d)(2)(C)(i)(II) —
credited to a suspense account and allocated from such account to accounts of participants
no less rapidly than ratably over the 7-plan-year period beginning with the year
of the transfer.
I.R.C. § 4980(d)(2)(C)(ii) Coordination With Section 415 Limitation —
If, by reason of any limitation under section 415, any amount credited to a
suspense account under clause (i)(II) may not be allocated to a participant before
the close of the 7-year period under such clause—
I.R.C. § 4980(d)(2)(C)(ii)(I) —
such amount shall be allocated to the accounts of other participants, and
I.R.C. § 4980(d)(2)(C)(ii)(II) —
if any portion of such amount may not be allocated to other participants by reason
of any such limitation, shall be allocated to the participant as provided in section
415.
I.R.C. § 4980(d)(2)(C)(iii) Treatment Of Income —
Any income on any amount credited to a suspense account under clause (i)(II) shall
be allocated to accounts of participants no less rapidly than ratably over the remainder
of the period determined under such clause (after application of clause (ii)).
I.R.C. § 4980(d)(2)(C)(iv) Unallocated Amounts At Termination —
If any amount credited to a suspense account under clause (i)(II) is not allocated
as of the termination date of the replacement plan—
I.R.C. § 4980(d)(2)(C)(iv)(I) —
such amount shall be allocated to the accounts of participants as of such date, except
that any amount which may not be allocated by reason of any limitation under section
415 shall be allocated to the accounts of other participants, and
I.R.C. § 4980(d)(2)(C)(iv)(II) —
if any portion of such amount may not be allocated to other participants under subclause
(I) by reason of such limitation, such portion shall be treated as an employer reversion
to which this section applies.
I.R.C. § 4980(d)(3) Pro Rata Benefit Increases
I.R.C. § 4980(d)(3)(A) In General —
The requirements of this paragraph are met if a plan amendment to the terminated
plan is adopted in connection with the termination of the plan which provides pro
rata increases in the accrued benefits of all qualified participants which—
I.R.C. § 4980(d)(3)(A)(i) —
have an aggregate present value not less than 20 percent of the maximum amount which
the employer could receive as an employer reversion without regard to this subsection,
and
I.R.C. § 4980(d)(3)(A)(ii) —
take effect immediately on the termination
date.
I.R.C. § 4980(d)(3)(B) Pro Rata Increase —
For purposes of subparagraph (A), a pro rata increase is an increase in the present
value of the accrued benefit of each qualified participant in an amount which bears
the same ratio to the aggregate amount determined under subparagraph (A)(i) as—
I.R.C. § 4980(d)(3)(B)(i) —
the present value of such participant's accrued benefit (determined without regard
to this subsection), bears to
I.R.C. § 4980(d)(3)(B)(ii) —
the aggregate present value of accrued benefits of the terminated plan (as so determined).
Notwithstanding the preceding sentence, the aggregate
increases in the present value of the accrued benefits of qualified
participants who are not active participants shall not exceed 40 percent of the aggregate
amount determined under subparagraph (A)(i)
by substituting “equal to” for “not less than”.
I.R.C. § 4980(d)(4) Coordination With Other Provisions
I.R.C. § 4980(d)(4)(A) Limitations —
A benefit may not be increased under paragraph (2)(B)(ii)
or (3)(A), and an amount may not be allocated to a participant under paragraph (2)(C),
if such increase or allocation would result in a failure to meet any requirement
under section 401(a)(4) or 415.
I.R.C. § 4980(d)(4)(B) Treatment As Employer Contributions —
Any increase in benefits under paragraph (2)(B)(ii)
or (3)(A), or any allocation of any amount (or income allocable thereto)
to any account under paragraph (2)(C), shall be treated as an annual benefit or annual
addition for purposes of section 415.
I.R.C. § 4980(d)(4)(C) 10-Year Participation Requirement —
Except as provided by the Secretary, section 415(b)(5)(D) shall not apply to any increase in benefits by reason of this subsection to the
extent that the application of this subparagraph does not discriminate in favor of
highly compensated employees (as defined in section 414(q)).
I.R.C. § 4980(d)(5) Definitions And Special Rules —
For purposes of this subsection—
I.R.C. § 4980(d)(5)(A) Qualified Participant —
The term “qualified participant” means an individual who—
I.R.C. § 4980(d)(5)(A)(i) —
is an active participant,
I.R.C. § 4980(d)(5)(A)(ii) —
is a participant or beneficiary in pay status as of the termination date,
I.R.C. § 4980(d)(5)(A)(iii) —
is a participant not described in clause (i) or (ii)—
I.R.C. § 4980(d)(5)(A)(iii)(I) —
who has a nonforfeitable right to an accrued benefit under the terminated plan as
of the termination date, and
I.R.C. § 4980(d)(5)(A)(iii)(II) —
whose service, which was creditable under the terminated plan, terminated during
the period beginning 3 years before the termination date and ending with the date
on which the final distribution of assets occurs, or
I.R.C. § 4980(d)(5)(A)(iv) —
is a beneficiary of a participant described in clause (iii)(II) and has a nonforfeitable
right to an accrued benefit under the terminated plan as of the termination date.
I.R.C. § 4980(d)(5)(B) Present Value —
Present value shall be determined as of the termination date and on the same basis
as liabilities of the plan are determined on termination.
I.R.C. § 4980(d)(5)(C) Reallocation Of Increase —
Except as provided in paragraph (2)(C), if any benefit increase is reduced by reason
of the last sentence of paragraph (3)(A)(ii)
or paragraph (4), the amount of such reduction shall be allocated to the remaining
participants on the same basis as other increases
(and shall be treated as meeting any allocation requirement of this subsection).
I.R.C. § 4980(d)(5)(D) Plans Taken Into Account —
For purposes of determining whether there is a qualified replacement plan under
paragraph (2), the Secretary may provide that—
I.R.C. § 4980(d)(5)(D)(i) —
2 or more plans may be treated as 1 plan, or
I.R.C. § 4980(d)(5)(D)(ii) —
a plan of a successor employer may be taken into account.
I.R.C. § 4980(d)(5)(E) Special Rule For Participation Requirement —
For purposes of paragraph (2)(A), all employers treated as 1 employer under section
414(b),
(c), (m), or (o) shall be treated as 1 employer.
I.R.C. § 4980(d)(6) Subsection Not To Apply To Employer In Bankruptcy —
This subsection shall not apply to an employer who, as of the termination date of
the qualified plan, is in bankruptcy liquidation under chapter 7 of title 11 of the
United States
Code or in similar proceedings under State law.
(Added Pub. L. 99-514, title XI, Sec. 1132(a), Oct. 22, 1986, 100 Stat. 2478, and amended Pub. L. 100-647, title I, Sec. 1011A(f)(1)-(3),
(6), (7), title V, Sec. 5072(a), title VI, Sec. 6069(a), Nov. 10, 1988, 102 Stat.
3478, 3479, 3681, 3704; Pub. L. 101-508, title XII, Sec. 12001, 12002(a), Nov. 5, 1990, 104 Stat. 1388-562; Pub. L. 109-280, title IX, Sec. 901(a)(2)(C), Aug. 17, 2006, 120 Stat. 780; Pub. L. 110-458, title I, Sec. 108(i)(3), Dec. 23, 2008, 122 Stat. 5092.)
BACKGROUND NOTES
AMENDMENTS
2008 - Subsec. (c)(2)(B)(i)-(iii). Pub. L. 110-458, Sec. 108(i)(3), amended subpar. (B) by striking “or” at the end of clause
(i), by substituting “, or” for the period at the end of clause (ii), and by adding
clause (iii).
2006 - Subsec. (c)(3)(A). Pub. L. 109-280, Sec. 901(a)(2)(C), amended subpar. (A) by substituting “if the requirements of subparagraphs
(B), (C), and (D) are met.” for “if--
“(i) the requirements of subparagraphs (B), (C), and (D) are met, and
“(ii) under the plan, employer securities to which subparagraph (B) applies must,
except to the extent necessary to meet the requirements of section 401(a)(28), remain
in the plan until distribution to participants in accordance with the provisions of
such plan.”
1990 - Subsec. (a). Pub. L. 101-508, Sec. 12001, which directed the substitution of ‘20 percent’ for ‘15 percent’ in ‘section 4980(a)’
without specifying the Internal Revenue Code of 1986, was executed to subsec. (a)
of this section to reflect the probable intent of Congress.
Subsec. (d). Pub. L. 101-508, Sec. 12002(a), which directed the addition of subsec. (d) to ‘section 4980(a)’ without specifying
the Internal Revenue Code of 1986, was executed to this section to reflect the probable
intent of Congress.
1988 - Subsec. (a). Pub. L. 100-647, Sec. 6069(a), substituted ‘15’ for ‘10’.
Subsec. (c)(1)(A). Pub. L. 100-647, Sec. 1011A(f)(1), substituted ‘subtitle A’ for ‘this subtitle’.
Subsec. (c)(3)(A). Pub. L. 100-647, Sec. 1011A(f)(2), inserted ‘or a tax credit employee stock ownership plan (as described in section
409)’ after ‘section 4975(e)(7)’ in introductory text, and ‘, except to the extent
necessary to meet the requirements of section 401(a)(28),’ after ‘must’ in cl. (ii).
Subsec. (c)(3)(C). Pub. L. 100-647, Sec. 1011A(f)(3), struck out ‘(by reason of the limitations of section 415)’ after ‘not allocated’
in introductory text, and inserted sentence at end relating to minimum amount allocated
in year of transfer.
Pub. L. 100-647, Sec. 1011A(f)(7), inserted sentence at end relating to dividends on securities held in suspense account.
Subsec. (c)(3)(F), (G). Pub. L. 100-647, Sec. 1011A(f)(6), added subpars. (F) and (G).
Subsec. (c)(4). Pub. L. 100-647, Sec. 5072(a), added par. (4).
EFFECTIVE DATE OF 2008 AMENDMENTS
Amendments by Section 108(i)(3) of Pub. L. 110-458 effective as if included in the provisions of the Pension Protection Act of 2006
[Pub. L. 109-280, Sec. 841] to which they relate.
EFFECTIVE DATE OF 2006 AMENDMENT
Amendment by Section 901 of Pub. L. 109-280 effective for plan years beginning after December 31, 2006.
EFFECTIVE DATE OF 1990 AMENDMENT
Section 12003 of Pub. L. 101-508 provided that:
‘(a) In General. - Except as provided in subsection
(b), the amendments made by this subtitle (subtitle A (Sec. 12001-12003)
of title XII of Pub. L. 101-508, amending this section and sections 1002, 1104, and 1344 of Title 29, Labor) shall
apply to reversions occurring after September 30, 1990.
‘(b) Exception. - The amendments made by this subtitle shall not apply to any reversion
after September 30, 1990, if -
‘(1) in the case of plans subject to title IV of the Employee Retirement Income Security
Act of 1974
(29 U.S.C. 1301 et seq.), a notice of intent to terminate under such title was provided to participants
(or if no participants, to the Pension Benefit Guaranty Corporation) before October
1, 1990,
‘(2) in the case of plans subject to title I (29 U.S.C. 1001 et seq.) (and not to title IV) of such Act, a notice of intent to reduce future accruals
under section 204(h) of such Act (29 U.S.C. 1054(h)) was provided to participants in connection with the termination before October 1,
1990,
‘(3) in the case of plans not subject to title I or IV of such Act, a request for
a determination letter with respect to the termination was filed with the Secretary
of the Treasury or the Secretary's delegate before October 1, 1990, or
‘(4) in the case of plans not subject to title I or IV of such Act and having only
1 participant, a resolution terminating the plan was adopted by the employer before
October 1, 1990.’
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by section 1011A(f)(1)-(3), (6), (7)
of Pub. L. 100-647 effective, except as otherwise provided, as if included in the provision of the Tax
Reform Act of 1986, Pub. L. 99-514, to which such amendment relates, see section 1019(a) of Pub. L. 100-647, set out as a note under section 1 of this title.
Section 5072(b) of Pub. L. 100-647 provided that: ‘The amendment made by subsection
(a) (amending this section) shall apply to reversions after December 31, 1988.’
Section 6069(b) of Pub. L. 100-647 provided that:
‘(1) In general. - The amendment made by subsection
(a) (amending this section) shall apply to reversions occurring on or after October
21, 1988.
‘(2) Exception. - The amendment made by subsection
(a) shall not apply to any reversion on or after October 21, 1988, pursuant to a plan
termination if -
‘(A) with respect to plans subject to title IV of the Employee Retirement Income Security
Act of 1974
(29 U.S.C. 1301 et seq.), a notice of intent to terminate required under such title was provided
to participants (or if no participants, to the Pension Benefit Guaranty Corporation)
before October 21, 1988,
‘(B) with respect to plans subject to title I of such Act (29 U.S.C. 1001 et seq.), a notice of intent to reduce future accruals required under section 204(h)
of such Act (29 U.S.C. 1054(h)) was provided to participants in connection with the termination before October 21,
1988,
‘(C) with respect to plans not subject to title I or IV of such Act, the Board of
Directors of the employer approved the termination or the employer took other binding
action before October 21, 1988, or
‘(D) such plan termination was directed by a final order of a court of competent jurisdiction
entered before October 21, 1988, and notice of such order was provided to participants
before such date.’
EFFECTIVE DATE
Section 1132(c) of Pub. L. 99-514, as amended by Pub. L. 100-647, title I, Sec. 1011A(f)(4), (5), Nov. 10, 1988, 102 Stat. 3479, provided that:
‘(1) In general. - The amendments made by this section (enacting this section) shall
apply to reversions occurring after December 31, 1985.
‘(2) Exception where termination date occurred before january 1, 1986. -
‘(A) In general. - Except as provided in subparagraph (B), the amendments made by
this section shall not apply to any reversion after December 31, 1985, which occurs
pursuant to a plan termination where the termination date is before January 1, 1986.
‘(B) Election to have amendments apply. - A corporation may elect to have the amendments
made by this section apply to any reversion after 1985 pursuant to a plan termination
occurring before 1986 if such corporation was incorporated in the State of Delaware
in March, 1978, and became a parent corporation of the consolidated group on September
19, 1978, pursuant to a merger agreement recorded in the State of Nevada on September
19, 1978.
‘(3) Termination date. - For purposes of paragraph
(2), the term ‘termination date’ is the date of the termination (within the meaning
of section 411(d)(3)
of the Internal Revenue Code of 1986) of the plan.
‘(4) Transition rule for certain terminations.
-
‘(A) In general. - In the case of a taxpayer to which this paragraph applies, the
amendments made by this section shall not apply to any termination occurring before
the date which is 1 year after the date of the enactment of this Act
(Oct. 22, 1986).
‘(B) Taxpayers to whom paragraph applies. - This paragraph shall apply to -
‘(i) a corporation incorporated on June 13, 1917, which has its principal place of
business in Bartlesville, Oklahoma,
‘(ii) a corporation incorporated on January 17, 1917, which is located in Coatesville,
Pennsylvania,
‘(iii) a corporation incorporated on January 23, 1928, which has its principal place
of business in New York, New York,
‘(iv) a corporation incorporated on April 23, 1956, which has its principal place
of business in Dallas, Texas, and
‘(v) a corporation incorporated in the State of Nevada, the principal place of business
of which is in Denver, Colorado, and which filed for relief from creditors under the
United States Bankruptcy Code on August 28, 1986.
‘(5) Special rule for employee stock ownership plans. - Section 4980(c)(3) of the Internal Revenue Code of 1986 (as added by subsection (a))
shall apply to reversions occurring after March 31, 1985.'
TRANSFER OF EXCESS ASSETS FROM QUALIFIED PENSION PLAN TO WELFARE BENEFIT PLAN
Pub. L. 101-239, title VII, Sec. 7861(b), Dec. 19, 1989, 103 Stat. 2430, provided that:
‘(1) Notwithstanding any other provision of law, in the case of any qualified pension
plan and welfare benefit plan described in paragraph (2), the assets of such pension
plan in excess of its liabilities may be transferred to such welfare benefit plan
upon the termination of such pension plan if such assets are to be used to provide
retiree health benefits.
‘(2) For purposes of paragraph (1), a qualified pension plan and welfare benefit plan
are described in this paragraph if -
‘(A) both such plans are jointly administered pursuant to a collective bargaining
agreement between the employer maintaining such plans and one or more employee representatives,
‘(B) the welfare benefit plan provides retiree health benefits, and
‘(C) the qualified pension plan has assets in excess of liabilities (determined on
a termination basis)
and the welfare benefit plan has assets which are less than the present value of the
benefits to be provided under the plan (determined as of the time of termination of
the pension plan).
‘(3) For purposes of the Internal Revenue Code of 1986, any transfer of assets to
which paragraph (1) applies shall be treated as a reversion of such assets to the
employer maintaining the plan which is includible in the gross income of such employer
and subject to the tax imposed by section 4980 of such Code.’
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989
For provisions directing that if any amendments made by subtitle A or subtitle C of
title XI (Sec. 1101-1147 and 1171-1177)
or title XVIII (Sec. 1800-1899A) of Pub. L. 99-514 require an amendment to any plan, such plan amendment shall not be required to be
made before the first plan year beginning on or after Jan. 1, 1989, see section 1140
of Pub. L. 99-514, as amended, set out as a note under section 401 of this title.
