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PUBLIC LAW 93-405-AUG. 31, 1974

[88 STAT.

fund, $2,219,000 from the water fund, $1,747,400 from the sanitary sewage works fund, and $133,400 from the metropolitan area sanitary sewage works fund. CAPITAL OUTLAY

For reimbursement to the United States of funds loaned in com72 Stat. 1 5. pliance with the Act of August 7, 1946 (60 Stat. 896), as amended, and payments under the Act of July 2, 1954 (68 Stat. 443), construction D. C. Code 4 3 projects as authorized by the Acts of April 22, 1904 (33 Stat. 244), 1510, 43-1604, 7.73"3.T22"o74o- May 18, 1954 (68 Stat. 105, 110), June 6, 1958 (72 Stat. 183), August 804, 1-1441 note. 20, 1958 (72 Stat. 686), and the Act of December 9, 1969 (83 Stat. 321); including acquisition of sites; preparation of plans and specifications; conducting preliminary surveys; erection of structures, including building improvement and alteration and treatment of grounds; to remain available until expended, $204,918,000, of which $3,100,000 may be used for (1) the construction of a fully enclosed swimming pool at the south end of the existing structures comprising the Woodrow Wilson High School, including appropriate landscaping of the structure enclosing such pool, (2) the construction of a single entrance to such pool from Fort Drive, and (3) the closing of the existing access road between Nebraska Avenue and Fort Drive at the south end of such high school, including appropriate landscaping at the present access road entrance to be closed; the use of such pool during periods other than regular school hours on regular school days and on days when school is not in regular session to be in accordance with the terms of a joint agreement between the District of Columbia Board of Education and the District of Columbia Department of Recreation, and on no day may the use of such pool extend beyond 9 p.m. and $9,345,000 shall be payable from the highway fund, $2,605,000 from the water fund, and $1,405,000 from the sanitary sewage works fund: Provided, That $7,178,200 shall be available for construction services by the Director of the Department of General Services or by contract for architectural engineering services, as may be determined by the Commissioner, and the funds for the use of the Director of the Department of General Services shall be advanced to the appropriation account, "Construction Services, Department of General Services": Provided further, That the amount appropriated to the Construction Services Fund, Department of General Services, be limited, during the current fiscal year, to ten per centum of appropriations for all construction projects: Provided further, Notwithstanding the foregoing, all authorizations for capital outlay projects, except those projects covered by the first sentence of section 23(a) of the Federal-Aid D.C. Code 7-135 Highway Act of 1968 (Public Law 90-495, approved August 23, 1968), for which funds are provided by this paragraph, shall expire on June note. 30, 1976, except authorizations for projects as to which funds have been olaligated in whole or in part prior to such date. Upon expiration of any such project authorization the funds provided herein for such project shall lapse.

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827

PUBLIC LAW 93-405-AUG. 31, 1974 GENERAL PROVISIONS

SEC. 1. Except as otherwise provided herein, all vouchers covering expenditures of appropriations contained in this Act shall be audited before payment by the designated certifying official and the vouchers as approved shall be paid by checks issued by the designated disbursing official. SEC. 2. Whenever in this Act an amount is specified within an appropriation for particular purposes or object of expenditure, such amount, unless otherwise specified, shall be considered as the maximum amount which may be expended for said purpose or object rather than an amount set apart exclusively therefor. SEC. 3. Appropriations in this Act shall be available, when authorized or approved by the Commissioner, for allowances for privately owned automobiles used for the performance of official duties at 13 cents per mile but not to exceed $45 a month for each automobile, unless otherwise therein specifically provided, except that one hundred and thirteen (eighteen for venereal disease investigators in the Department of Human Resources) such allowances at not more than $715 each per annum may be authorized or approved by the Commissioner. SEC. 4. Appropriations in this Act shall be available for expenses of travel and for the payment of dues of organizations concerned with the work of the District of Columbia government, when authorized by the Commissioner. SEC. 5. Appropriations in this Act shall not be used for or in connection with the preparation, issuance, publication, or enforcement of any regulation or order of the Public Service Commission requiring the installation of meters in taxicabs, or for or in connection with the licensing of any vehicle to be operated as a taxicab except for operation in accordance with such system of uniform zones and rates and regulations applicable thereto as shall have been prescribed by the Public Service Commission. SEC. 6. Appropriations in this Act shall not be available for the payment of rates for electric current for street lighting in excess of 2 cents per kilowatt-hour for current consumed. SEC. 7. There are hereby appropriated from the applicable funds of the District of Columbia such sums as may be necessary for making refunds and for the payment of judgments which have been entered against the government of the District of Columbia: Provided, That nothing contained in this section shall be construed as modifying or affecting the provisions of paragraph 3, subsection (c) of section 11 of title X II of the District of Columbia Income and Franchise Tax Act of 1947, as amended. SEC. 8. Appropriations in this Act shall be available for the payment of public assistance without reference to the requirement of subsection (b) of section 5 of the District of Columbia Public Assistance Act of 1962 and for the non-Federal share of filnds necessary to qualify for Federal assistance under the Act of July 31, 1968 (Public Law 90-445).

Vouchers, audit.

Maximum allowances.

Automobile allowances.

Travel exp e n s e s; organiza^ tion d u e s.

T a x i c a b s, restrictions.

Street lighting. D. C. Code 7-701 note. Judgment payments.

D. C. Code 4 7 1586J. D. C. Code 3-2 04 note. D. C. Code 3 204. 42 USC 3801 note.

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license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


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 828 Fiscal year

PUBLIC LAW 93-405-AUG. 31, 1974

[88 STAT.

gj;Q_ 9 -^Q part of any appropriation contained in this Act shall remain available for obligation beyond the current fiscal year unless expressly so provided herein. ensauon"'^''°™" ^^^' ^^' ^^ P^^^ °^ ^^^ fuuds appropriated by this Act shall be D.c. Code 40- uscd to pay the compensation (whether by contract or otherwise) of 501a note. any individual for performing services as a chauffeur or driver for any designated officer or employee of the District of Columbia government (other than the Commissioner of the District of Columbia, Chief of Police and Fire Chief), or for performing services as a chauffeur or driver of a motor vehicle assigned for the personal or individual use of any such officer or employee (other than the Commissioner of the District of Columbia. Chief of Police and Fire Chief). No part of any funds appropriated by this Act, in excess of $12,000 in the aggregate, shall, in any fiscal year, be used to pay the compensation (whether by contract or otherwise) of individuals for performing services as a chauffeur or driver for the Commissioner of the District of Columbia, or for performing services as a chauffeur or driver of a motor vehicle assigned for the personal or individual use of the Commissioner of the District of Columbia. Overtime or ^ SEC. 11. Not to exceed 414 per centum of the total of all funds approtemporary ^ o s i p tiorTs, cosriimi- priated by this Act for personal compensation may be used to pay the cost of overtime or temporary positions. uJe^lil-^atiT'^^' ^^^' ^^' "^^^ total expenditure of funds appropriated by this Act for "D.C."code'""216 authorized travel and per diem costs outside the District of Columbia, "°teMaryland, and Virginia shall not exceed $210,000. Number of emSEC. L3. Appropriations in this Act shall not be available, during the ployees fiscal year ending June SO, 1975, for the compensation of any person appointed— (1) as full-time employee to a permanent, authorized position in the government of the District of Columbia during any month when the number of such employees is greater than 39,619; or (2) as a temporary or part-time employee in the government of the District of Columbia during any month in which the number of such employees exceeds the number of such employees for the same month of the preceding fiscal year. icrra'ctiv'itL°i!*" SEC. 14. No funds appropriated herein for the government of the District of Columbia for the operation of educational institutions, the compensation of personnel, or for other educational purposes may be used to permit, encourage, facilitate, or further partisian political activities. Nothing herein is intended to prohibit the availability of school buildings for the use of any community group during nonschool hours. SEC. 15. Appropriations in this Act shall be available for services as authorized by 5 U. S. C 3109, at lates to be fixed by the Commissioner. Space and SEC. 16. No part of any appropriation contained in this Act shall be services. available for paying to the Administrator of the General Services Administration in excess of 90 per centum of the standard level user charge established pursuant to section 210(j) of the Federal Property 40 USC 490. j^j^(j Administrative Services Act of 1949, as amended, for space and services. Short title. This Act may be cited as the "District of Columbia Appropriation Act, 1975". Approved August 31, 1974.

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PUBLIC LAW 93-406-SEPT. 2, 1974

829

Public Law 93-406 AN ACT

September 2, 1974

To provide for pension reform,

I^H. R. 2 ]

Be it enacted by the Senate and House of Representatives United States of America in Congress assembled, SHORT TITLE A N D

TABLE OF

of the

CONTENTS

1. This Act may be cited as the "Employee Eetirement Income Security Act of 1974". SECTION

TABLE

OF

CONTENTS

Sec. 1. Short title and table of contents. TITLE I—PROTECTION OF EMPLOYEE B E N E F I T

RIGHTS

Subtitle A—General Provisions Sec. 2. Findings and declaration of policy. Sec. 3. Definitions. Sec. 4. Coverage. Subtitle B—Regulatory Provisions PART 1—REPORTING AND DISCLOSURE

Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec.

101. 102. 103. 104. 105. 106. 107. 108. 109. 110. 111.

Duty of disclosure and reporting. P l a n description and summary plan description. Annual reports. Filing with Secretary and furnishing information to participants. Reporting of participant's benefit rights. Reports made public information. Retention of records. Reliance on administrative interpretations. Forms. Alternative methods of compliance. Repeal and effective date. PART 2—PARTICIPATION AND VESTING

Sec. Sec. Sec. Sec. Sec. Sec. Sec, Sec, Sec. Sec.

201, 202, 203. 204. 205. 206. 207, 208. 209. 210.

Coverage. Minimum participation standard s. Minimum vesting standard s. Benefit accrual requirements. Joint and survivor annuity requirement. Other provisions relating to form and payment of benefits. Temporary variances from certain vesting requirements. Mergers and consolidations of plans or transfers of plan assets. Recordkeeping and reporting requirements. P l a n s maintained by more than one employer, predecessor plans, and employer groups. Sec, 211. Effective dates. PART 3—^FUNDING

Sec. Sec. Sec. Sec. Sec. Sec,

301. 302. 303. 304. 305. 306.

Coverage. Minimum funding standard s. "Variance from minimum funding standard. Extension of amortization periods. Alternative minimum funding standard. Effective dates. PART 4—FIDUCIARY R E S P O N S I B I U T Y

Sec. Sec, Sec, Sec. Sec. Sec. Sec.

401. 402, 403, 404. 405. 406. 407.

Coverage. Establishment of plan. Establishment of t r u s t. Fiduciary duties. Liability for breach by co-fiduciary. Prohibited transactions. 10 percent limitation with respect to acquisition and holding of employer securities and employer real property by certain plans.

tJ^eniincfll Security Act of ^^7"^29 USC 1001 note.

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PUBLIC LAW 93-406-SEPT. 2, 1974

[88 STAT.

T A B L E O F CONTENTS—Continued TITLE I—PROTECTION O F EMPLOYEE B E N E F I T

RIGHTS—Continued

P A B T 4—FiDCiABY R E S P O N S I B I U T T — C o n t i n u e d

Sec. Sec. Sec. Sec. Sec. Sec. Sec.

408. 409. 410. 411. 412. 413. 414.

Exemptions from prohibited transactions. Liability for breach of fiduciary duty. Exculpatory provisions; insurance. Prohibition against certain persons holding certain positions. Bonding. Limitation on actions. Effective date. P A B T 5—^ADMINISTRATION AND ENFORCEMENT

Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec.

501. Criminal penalties. 502. Civil enforcement. 503. Claims procedure. 504. Investigative authority. 505. Regulations. 506. Other agencies and departments. 507. Administration. 508. Appropriations. 509. Separability provisions. 510. Interference with rights protected under Act. 511. Coercive interference. 512. Advisory Council. 513. Research, studies, and annual report. 514. Effect on other laws.

,

,,^j ..^^ ''••'• *' ^ *

TITLE II — AMENDMENTS TO THE I N T E R N A L R E V E N U E CODE RELATING TO RETIREMENT PLANS Sec. 1001. Amendment of I n t e r n a l Revenue Code of 1954. Subtitle A—Participation, Vesting, Funding, Administration, E t c. P A B T 1—PARTICIPATION, VESTING, AND F U N D I N G

Sec. Sec. Sec. Sec. Sec. Sec. Sec.

1011. Minimum participation standard s. 1012. Minimum vesting standard s. 1013. Minimum funding standard s. 1014. Collectively bargained plans. 1015. Definitions and special rules. 1016. Conforming and clerical amendments. 1017. Effective dates and t r a n s i t i o n a l rules.

PAjiT 2 — CERTAIN OTHER PROVISIONS RELATING TO QUALIFIED RETIREMENT PLANS

Sec. Sec. Sec. Sec.

1021. Additional plan requirements. 1022, Miscellaneous provisions. 1023. Retroactive changes in plan. 1024. Effective dates. P A B T 3—REGISTBATION AND INFORMATION

Sec. Sec. Sec. Sec.

1031. Registration and information. 1032. Duties of Secretary of Health, Education, and Welfare. 1033. Reports by actuaries. 1034. Effective dates. P A B T 4—DECLABATOBY JUDGMENTS RELATING TO QUALIFICATION OF CERTAIN RETIREMENT P L A N S

Sec. 1041. T a x Court procedure. PART 5—INTERNAL REVENUE SERVICE

Sec. 1051. Establishment of Office. Sec. 1052. Authorization of appropriations.

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831

T A B L E O F CONTENTS—Continued TITLE II — AMENDMENTS TO THE I N T E R N A L R E V E N U E R E L A T I N G TO RETIREMENT PLANS—Continued

CODE

Subtitle B—Other Amendments to the I n t e r n a l Revenue Code Relating to Retirement Plans Sec. 2001. Contributions on behalf of self-employed individuals and shareholderemployees. Sec. 2002. Deduction for retirement savings. Sec. 2003. Prohibited transactions. Sec. 2004. Limitations on benefits and contributions. Sec. 2005. Taxation of certain lump sum distributions. Sec. 2006. Salary reduction regulations. Sec. 2007. Rules for certain negotiated plans. Sec. 2008. Certain armed forces survivor annuities. TITLE III — JURISDICTION, ADMINISTRATION, ENFORCEMENT; JOINT P E N S I O N TASK FORCE, ETC. Subtitle A—Jurisdiction, Administration, and

Enforcement

Sec. 3001. Procedures in connection with the issuance of certain determination letters by the Secretary of the Treasury. Sec. 3002. Procedures with respect to continued compliance with requirements relating to participation, vesting, and funding standard s. Sec. 3003. Procedures in connection with prohibited transactions. Sec. 3004. Coordination between the Department of the Treasury and the Department of Labor. Subtitle B—Joint Pension Task For c e; Studies PART

1—JOINT

PENSION

TASK

FORCE

Sec. 3021. Establishment. Sec. 3022. Duties. PART 2 — OTHER STUDIES

Sec. 3031. Congressional study. Sec. 3032. Protection for employees under Federal procurement, construction, and research contracts and grants. Subtitle C—Enrollment of Actuaries Sec. 3041. Establishment of Joint Board for the enrollment of actuaries. Sec. 3042. Enrollment by Joint Board. Sec. 3043. Amendment of I n t e r n a l Revenue Code. TITLE IV—PLAN TERMINATION INSURANCE Subtitle A—Pension Benefit Guaranty Corporation Sec. 4001. Definitions. Sec. 4002. Pension Benefit Guaranty Corporation. Sec. 4003. Investigatory authority; cooperation with other actions. Sec. 4004. Temporary authority for initial period. Sec. 4005. Establishment of pension benefit g u a r a n t y funds. Sec. 4006. Premium rates. Sec. 4007. Payment of premiums. Sec. 4008. Report by the corporation. Sec. 4009. Portability assistance. Subtitle B—Coverage Sec. 4021. Plans covered. Sec. 4022. Benefits guaranteed. Sec. 4023. Contingent liability coverage.

agencies;

civil

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[88 STAT.

T A B L E O F CONTENTS—Continued TITLE IV—PLAN TERMINATION INSURANCE—Continued Subtitle Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec.

4041. 4042. 4043. 4044. 4045. 4046. 4047. 4048.

C—Terminations

Termination by plan administrator. Termination by corporation. Reportable events. Allocation of assets. Recapture of certain iiayments. Reports to trustee. Restoration of plans. Date of termination. Subtitle D—Liability

Sec. Sec. See. Sec.

4061. 4062. 4063. 4064.

Sec. Sec. Sec. Sec.

4065. 4066. 4067. 4068.

Amounts payable by the corporation. Liability of employer. Liability of substantial employer for withdrawal. Liability of employers on termination of plan maintained by more than one employer. Annual report of plan administrator. Annual notification to substantial employers. Recovery of employer liability for plan termination. Lien for liability of employer.

Subtitle E—Amendments to I n t e r n a l Revenue Code of 1954; Effective Dates Sec. 4081. Amendments to I n t e r n a l Revenue Code of 1954. Sec. 4082. Effective date; special rules.

TITLE I—PROTECTION OF EMPLOYEE BENEFIT RIGHTS SUBTITLE A—GENERAL ' PROVISIONS F I N D I N G S AND DECLARATION OF POLICY

29 USC 1001.

SEC. 2. (a) The Congress finds that the growth m size, scope, and numbers of employee benefit plans in recent years has been rapid and substantial; that the operational scope and economic impact of such plans is increasingly interstate; that the continued well-being and security of millions of employees and their dependents are directly a fleeted by these plans; that they are affected with a national public interest; that they have become an important factor affecting the stability of employment and the successful development of industrial relations; that they have become an important factor in commerce because of the interstate character of their activities, and of the activities of their participants, and the employers, employee organizations, and other entities by which they are established or maintained; that a large volume of the activities of such plans is carried on by means of the mails and instrumentalities of interstate commerce; that owing to the lack of employee information and adequate safeguards concerning their operation, it is desirable in the interests of employees and their beneficiaries, and to provide for the general welfare and the free flow of commerce, that disclosure be made and safeguards be provided with respect to the establishment, operation, and administration of such plans; that they substantially affect the revenues of the United States because they are afforded preferential Federal tax treatment; that despite the enormous growth in such plans many employees with long years of employment are losing anticipated retirement benefits owing to the lack of vesting provisions in such plans; that owing to the inadequacy of current minimum standards, the soundness and stability of plans with respect to adequate funds to pay promised benefits may be endangered; that owing to the termination of plans before

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PUBLIC LAW 93-406-SEPT. 2, 1974

833

requisite funds have been accumulated, employees and their beneficiaries have been deprived of anticipated benefits; and that it is therefore desirable in the interests of employees and their beneficiaries, for the protection of the revenue of the United States, and to provide for the free flow of commerce, that minimum standards be provided assuring the equitable character of such plans and their financial soundness. (b) I t is hereby declared to be the policy of this Act to protect interstate commerce and the interests of participants in employee benefit plans and their beneficiaries, by requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto, by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the Federal courts. (c) I t is hereby further declared to be the policy of this Act to protect interstate commerce, the Federal taxing power, and the interests of participants in private pension plans and their beneficiaries by improving the equitable character and the soundness of such plans by requiring them to vest the accrued benefits of employees with significant periods of service, to meet minimum standards of funding, and b}' requiring plan termination insurance. DEFINITIONS

SEC. 3. For purposes of this title: 29 USC 1002. (1) The terms "employee welfare benefit plan" and "welfare plan" mean any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment, or vacation benefits, apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legal services, or (B) any benefit described in section 302(c) of the Labor Management Relations Act, 1947 (other than pensions on retirement 29 USC ise. or death, and insurance to provide such pensions). (2) The terms "employee pension benefit plan" and "pension plan" mean any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that by its express terms or as a result of surrounding circumstances such plan, fund, or program— (A) provides retirement income to employees, or (B) results in a deferral of income by employees for periods extending to the termination of covered employment or beyond, regardless of the method of calculating the contributions made to the plan, the method of calculating the benefits under the plan or the method of distributing benefits from the plan. (3) The term "employee benefit plan" or "plan" means an employee welfare benefit plan or an employee pension benefit plan or a plan which is both an employee welfare benefit plan and an employee pension benefit plan. (4) The term "employee organization" means any labor union or any organization of any kind, or any agency or employee representation committee, association, group, or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning an employee benefit plan, or other

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29 USC 141. 45 USC 151.

PUBLIC LAW 93-406-SEPT. 2, 1974

[88 STAT.

matters incidental to employment relationships; or any employees' beneficiary association organized for the purpose in whole or in part, of establishing such a plan. (5) The term "employer" means any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan; and includes a group or association of employers acting for an employer in such capacity. (6) The term "employee" means any individual employed by an employer. (7) The term "participant" means any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer or members of such organization, or whose beneficiaries may be eligible to receive any such benefit. (8) The term "beneficiary" means a person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder. (9) The term "person" means an individual, partnership, joint venture, corporation, mutual company, joint-stock company, trust, estate, unincorporated organization, association, or employee organization. (10) The term "State" includes any State of the United States, the District of Columbia, Puerto Eico, the Virgin Islands, American Samoa, Guam, Wake Island, and the Canal Zone, The term "United States" when used in the geographic sense means the States and the Outer Continental Shelf lands defined in the Outer Continental Shelf Lands Act (43 U.S.C. 1331-1343). (11) The term "commerce" means trade, traffic, commerce, transportation, or communication between any State and any place outside thereof. (12) The term "industry or activity affecting commerce" means any activity, business, or industry in commerce or in which a labor dispute would hinder or obstruct commerce or the free flow of commerce, and includes any activity or industry "affecting commerce" within the meaning of the Labor Management Relations Act, 1947, or the Railway Labor Act. (13) The term "Secretary" means the Secretary of Labor. (14) The term "party in interest" means, as to an employee benefit plan— (A) any fiduciary (including, but not limited to, any administrator, officer, trustee, or custodian), counsel, or employee of such employee benefit plan; (B) a person providing services to such plan; (C) an employer any of whose employees are covered by such plan; (D) an employee organization any of whose members are covered by such plan; (E) an owner, direct or indirect, of 50 percent or more of— (i) the combined voting power of all classes of stock entitled to vote or the total value of shares of all classes of stock of a corporation. (ii) the capital interest or the profits interest of a partnership, or (iii) the beneficial interest of a trust or unincorporated enterprise, which is an employer or an employee organization described in subparagraph (C) or (D);

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PUBLIC LAW 93-406-SEPT. 2, 1974

(F) a relative (as defined in paragraph (15)) of any individual described in subparagraph (A), (B), (C), or (E); (G) a corporation, partnership, or trust or estate oi which (or in which) 60 percent or more of— (i) the combined voting power of all classes of stock entitled to vote or the total value of shares of all classes of stock of such corporation, (ii) the capital interest or profits interest of such partnership, or (iii) the beneficial interest of such trust or estate, is owned directly or indirectly, or held by persons described in subparagraph (A), (B), (C), (D), o r (E); (H) an employee, officer, director (or an individual having powers or responsibilities similar to those of officers or directors), or a 10 percent or more shareholder directly or indirectly, of a person described in subparagraph (B), (C), (D), (E), o r (Gr),or of the employee benefit plan; or (I) a 10 percent or more (directly or indirectly in capital or profits) partner or joint venturer oi a person described in subparagraph (B), (C), (D)j (E), o r (G). The Secretary, after consultation and coordination with the Secretary of the Treasury, may by regulation prescribe a percentage lower than 50 percent for subparagraph (E) and (G) and lower than 10 percent for subparagraph (H) or (I). The Secretary may prescribe regulations for determining the ownership (direct or indirect) of profits and beneficial interests, and the manner in which indirect stockholdings are taken into account. (15) The term "relative" means a spouse, ancestor, lineal descendant, or spouse of a lineal descendant. (16)(A) The term "administrator" means— (i) the person specifically so designated by the terms of the instrument under which the plan is operated; (ii) if an administrator is not so designated, the plan sponsor; or (iii) in the case of a plan for which an administrator is not designated and a plan sponsor cannot be identified, such other person as the Secretary may by regulation prescribe. (B) The term "plan sponsor" means (i) the employer in the case of an employee benefit plan established or maintained by a single employer, (ii) the employee organization in the case of a plan established or maintained by an employee organization, or (iii) in the case of a plan established or maintained by two or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan. (17) The term "separate account" means an account established or maintained by an insurance company under which income, gains, and losses, whether or not realized, from assets allocated to such account, are, in accordance with the applicable contract, credited to or charged against such account without regard to other income, gains, or losses of the insurance company. (18) The term "adequate consideration" when used in part 4 of subtitle B means (A) in the case of a securitj for which there is a generally recognized market, either (i) the price of the security prevailing on a national securities exchange which is registered under section 6 of the Securities Exchange Act of 1934, or (ii) if the security is not traded on such a national securities exchange, a price not less

835

-

^s use 78f.

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PUBLIC LAW 93-406-SEPT. 2, 1974

posf, p. 854.

Post,

p. 878.

15 USC 80a-51.

Posf, p. 858.

[88 STAT.

favorable to the plan than the offering price for the security as established by the current bid and asked prices quoted by persons independent of the issuer and of any party in interest; and (B) in the case of an asset other than a security for which there is a generally recognized market, the fair market value of the asset as determined in good faith by the trustee or named fiduciary pursuant to the terms of the plan and in accordance with regulations promulgated by the Secretary. (19) The term "nonforfeitable" when used with respect to a pension benefit or right means a claim obtained by a participant or his beneficiary to that part of an immediate or deferred benefit under a pension plan which arises from the participant's service, which is unconditional, and which is legally enforceable against the plan. For purposes of this paragraph, a right to an accrued benefit derived from employer contributions shall not be treated as forfeitable merely because the plan contains a provision described in section 203(a)(3). (20) The term "security" has the same meaning as such term has under section 2(1) of the Securities Act of 1933 (15 U.S.C. 7 7 b (l)). (21)(A) Except as otherwise provided in subparagraph (B), a person is a fiduciary with respect to a plan to the extent (i) he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets, (ii) he renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or (iii) he has any discretionary authority or discretionary responsibility in the administration of such plan. Such term includes any person designated under section 405(c)(1)(B). (B) If any money or other property of an employee benefit plan is invested in securities issued by an investment company registered under the Investment Company Act of 1940, such investment shall not by itself cause such investment company or such investment company's investment adviser or principal underwriter to be deemed to be a fiduciary or a party in interest as those terms are defined in this title, except insofar as such investment company or its investment adviser or principal underwriter acts in connection with an employee benefit plan covering employees of the investment company, the investment adviser, or its principal underwriter. Nothing contained in this subparagraph shall limit the duties imposed on such investment company, investment adviser, or principal underwriter by any other law. (22) The term "normal retirement benefit" means the greater of the early retirement benefit under the plan, or the benefit under the plan commencing at normal retirement age. The normal retirement benefit shall be determined without regard to— (A) medical benefits, and (B) disability benefits not in excess of the qualified disability benefit. For purposes of this paragraph, a qualified disability benefit is a disability benefit provided by a plan which does not exceed the benefit which would be provided for the participant if he separated from the service at normal retirement age. For purposes of this paragraph, the early retirement benefit under a plan shall be determined without regard to any benefit under the plan which the Secretary of the Treasury finds to be a benefit described in section 204(b)(1)(G). (23) The term "accrued benefit" means— (A) in the case of a defined benefit plan, the individual's accrued benefit determined under the plan and, except as provided

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 88 STAT.]

837

PUBLIC LAW 93-406-SEPT. 2, 1974

in section 204(c)(3), expressed in the form of an annual benefit commencing at normal retirement age, or (B) in the case of a plan which is an individual account plan, the balance of the individual's account. (24) The term "normal retirement age" means the earlier of— (A) the time a plan participant attains normal retirement age under the plan, or (B) the later of— ^i) the time a plan participant attains age 65, or (ii) the 10th anniversary of the time a plan participant commenced participation in the plan. (25) The term "vested liabilities" means the present value of the immediate or deferred benefits available at normal retirement age for participants and their beneficiaries which are nonforfeitable. (26) The term "current value" means fair market value where available and otherwise the fair value as determined in good faith by a trustee or a named fiduciary (as defined in section 402(a)(2)) pursuant to the terms of the plan and in accordance with regulations of the Secretary, assuming an orderly liquidation at the time of such determination. (27) The term "present value", with respect to a liability, means the value adjusted to reflect anticipated events. Such adjustments shall conform to such regulations as the Secretary of the Treasury may prescribe. (28) The term "normal service cost" or "normal cost" means the annual cost of future pension benefits and administrative expenses assigned, under an actuarial cost method, to years subsequent to a particular valuation date of a pension plan. The Secretary of the Treasury may prescribe regulations to carry out this paragraph, (29) The term "accrued liability" means the excess of the present value, as of a particular valuation date of a pension plan, of the projected future benefit costs and administrative expenses for all plan participants and beneficiaries over the present value of future contributions for the normal cost of all applicable plan participants and beneficiaries. The Secretary of the Treasury may prescribe regulations to carry out this paragraph. (30) The term "unfunded accrued liability" means the excess of the accrued liability, under an actuarial cost method which so provides, over the present value of the assets of a pension plan. The Secretary of the Treasury may prescribe regulations to carry out this paragraph. (31) The term "advance funding actuarial cost method" or "actuarial cost method" means a recognized actuarial technique utilized for establishing the amount and incidence of the annual actuarial cost of pension plan benefits and expenses. Acceptable actuarial cost methods shall include the accrued benefit cost method (unit credit method), the entry age normal cost method, the individual level premium cost method, the aggregate cost method, the attained age normal cost method, and the frozen initial liability cost method. The terminal funding cost method and the current funding (pay-as-you-go) cost method are not acceptable actuarial cost methods. The Secretary of the Treasury shall issue regulations to further define acceptable actuarial cost methods. (32) The term "governmental plan" means a plan established or maintained for its employees by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing. The term "governmental plan" also includes any plan to which the Railroad Retirement Act of 1935 or 1937 applies, and which is financed by contributions required under that Act and any plan of an international

38-194 O - 76 - 56 Pt. 1

Post,

p. 858.

Post,

p. 875.

Regulations.

Regulations.

Regulations.

Regulations.

45 USC 215 note, 228a.

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Page:United States Statutes at Large Volume 88 Part 1.djvu/882

 838 22 USC 288 note.

26 USC 501.

26 USC 513.

Post, p. 853.

Post, p. 85S

Post, p. 979.

PUBLIC LAW 93-406-SEPT. 2, 1974

[88 STAT.

organization which is exempt from taxation under the provisions of the International Organizations Immunities Act (59 Stat. 669). (33)(A) The term "church plan"' means (i) a plan established and maintained for its employees by a church or by a convention or association of churches which is exempt from tax under section 501 of the Internal Revenue Code of 1954, or (ii) a plan described in subparagraph (C). (B) The term "church plan" (notwithstanding the provisions of subparagraph (A)) does not include a plan— (i) which is established and maintained primarily for the benefit of employees (or their beneficiaries) of such church or convention or association of churches who are employed in connection with one or more unrelated trades or businesses (within the meaning of section 513 of the Internal Revenue Code of 1954), or (ii) which is a plan maintained by more than one employer, if one or more of the employers in the plan is not a church (or a convention or association of chuiches) which is exempt from tax under section 501 of the Internal Revenue Code of 1954. (C) Notwithstanding the provisions of subparagraph (B) (ii), a plan in existence on January 1, 1974, shall be treated as a "church plan" if it is established and maintained by a church or convention or association of churches for its employees and employees of one or more agencies of such church (or convention or association) for the employees of such church (or convention or association) and the employees of one or more agencies of such church (or convention or association), and if such church (or convention or association) and each such agency is exempt from tax under section 501 of the Internal Revenue Code of 1954. The first sentence of this subparagraph shall not apply to any plan maintained for employees of an agency with respect to which the plan Avas not maintained on January 1, 1974. The first sentence of this subparagraph shall not apply with respect to any plan for any plan year beginning after December 31, 1982. (34) The term "individual account plan" or "defined contribution plan" means a pension plan which provides for an individual account for each participant and for benefits based solely upon the amount contributed to the participant's account, and any income, expenses, gains and losses, and any forfeitures of accounts of other participants which may be allocated to such participant's account, (35) The term "defined benefit plan" means a pension plan other than an individual account plan; except that a pension plan which is not an individual account plan and which provides a benefit derived from employer contributions which is based partly on the balance of the separate account of a participant— (A) for the purposes of section 202, shall be treated as an individual account plan, and (B) for the purposes of paragraph (23) of this section and section 204, shall be treated as an individual account plan to the extent benefits are based upon the separate account of a participant and as a defined benefit plan with respect to the remaining portion of benefits under the plan. (36) The term "excess benefit plan" means a plan maintained by an employer solely for the purpose of providing benefits for certain employees in excess of the limitations on contributions and benefits imposed by section 415 of the Internal Revenue Code of 1954 on plans to which that section applies, without regard to whether the plan is funded. To the extent that a separable part of a plan (as determined by the Secretary of Labor) maintained by an employer is maintained for such purpose, that part shall be treated as a separate plan which is an excess benefit plan.

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 88 STAT. ]

PUBLIC LAW 93-406-SEPT. 2, 1974

(37)(A) The term "multiemployer plan'" means a plan— (i) to which more than one employer is required to contribute, (ii) which is maintained pursuant to one or more collectivebargaining agreements between an employee organization and more than one employer, (iii) under which the amount of contributions made under the plan for a plan year by each employer making such contributions is less than 50 percent of the aggregate amount of contributions made under the plan for that plan year by all employers making such contributions, (iv) under which benefits are payable with respect to each participant without regard to the cessation of contributions,by the employer who had employed that participant except to the extent that such benefits accrued as a result of service with the employer before such employer was required to contribute to such plan, and (v) which satisfies such other requirements as the Secretary may by regulations prescribe. (B) For purposes of this paragraph— (i) if a plan is a multiemployer plan within the meaning of subparagraph (A) for any plan year, clause (iii) of subparagraph (A) shall be applied by substituting "75 percent" for "50 percent" for each subsequent plan year until the first plan year following a plan year in which the plan had one employer who made contributions of 75 percent or more of the aggregate amount of contributions made under the plan for that plan year by all employers making such contributions, and (ii) all corporations which are members of a controlled group of corporations (within the meaning of section 1563(a) of the Internal Revenue Code of 1954, determined without regard to section 1563(e)(3)(C) of such Code) shall be deemed to be one employer. (38) The term "investment manager" means any fiduciary (other than a trustee or named fiduciary, as defined in section 402(a)(2)) — (A) who has the power to manage, acquire, or dispose of any asset of a plan; (B) who is (i) registered as an investment adviser under the Investment Advisers Act of 1940; (ii) is a bank, as defined in that Act; or (iii) is an insurance company qualified to perform services described in subparagraph (A) under the laws of more than one State; and (C) has acknowledged in writing that he is a fiduciary with respect to the plan. (39) The terms "plan year" and "fiscal year of the plan" mean with respect to a plan, calendar, policy, or fiscal year on which the records of the plan are kept.

839

^^ "^"^ ^^63.

Post,

p. 875.

15 USC 80b-20.

COVERAGE

SEC. 4. (a) Except as provided in subsection (b) and in sections ^^ ^^^ ^°°^201, 301, and 401, this title shall apply to any employee benefit plan ggg"^?/^' *^^' if it is established or maintained— (1) by any employer engaged in commerce or in any industry or activity affecting commerce; or (2) by any employee organization or organizations representing employees engaged in commerce or in any industry or activity affecting commerce; or (3) by both. (b) The provisions of this title shall not apply to any employee benefit plan if—

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840

Post, p. 898.

[88 STAT.

(1) such plan is a governmental plan (as defined in section 3(32)); . . ^ ^^ (2) such plan is a church plan (as defined in section 3(33)) with respect to which no election has been made under section 410(d) of the Internal Revenue Code of 1954; (3) such plan is maintained solely for the purpose of complying with applicable workmen's compensation laws or unemployment compensation or disability insurance laws; (4) such plan is maintained outside of the United States primarily for the benefit of persons substantially all of whom are nonresident aliens; or (5) such plan is an excess benefit plan (as defined in section 3 (36)) and is unfunded. SUBTITLE B—REGULATORY PROVISIONS

Part I—Reporting and Disclosure DUTY OF DISCLOSURE AND 29 USC 1021.

Terminal reports.

REPORTING

SEC. 101. (a) The administrator of each emplo;^ee benefit plan shall cause to be furnished in accordance with section 104(b) to each participant covered under the plan and to each beneficiary who is receiving benefits under the plan— (1) a summary plan description described in section 102 (a)(1); and (2) the information described in section 104(b)(3) and 105 (a) and (c). (b) The administrator shall, in accordance with section 104(a), file with the Secretary— (1) the summary plan description described in section 102 (a)(1); (2) a plan description containing the matter required in section 102(b); (3) modifications and changes referred to in section 102(a) (2); (4) the annual report containing the information required by section 103; and (5) terminal and supplementary reports as required by subsection (c) of this section. (c)(1) Each administrator of an employee pension benefit plan which is winding up its affairs (without regard to the number of participants remaining in the plan) shall, in accordance with regulations prescribed by the Secretary, file such terminal reports as the Secretary may consider necessary. A copy of such report shall also be filed with the Pension Benefit Guaranty Corporation. (2) The Secretary may require terminal reports to be filed with regard to any employee welfare benefit plan which is winding up its affairs in accordance with regulations promulgated by the Secretary. (3) The Secretary may require that a plan described in paragraph (1) or (2) file a supplementary or terminal report with the annual report in the year such plan is terminated and that a copy of such supplementary or terminal report in the case of a plan described in paragraph (1) be also filed with the Pension Benefit Guaranty Corporation. (d)

CROSS REFERENCE.—

For regulations relating to coordination of reports to the Secretaries of Labor and the Treasury, see section 3004.

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 88 STAT. ]

PUBLIC LAW 93-406-SEPT. 2, 1974

P L A N DESCRIPTION A N D S U M M A R Y P L A N

DESCRIPTION

SEC. 102. (a)(1) A summary plan description of any employee benefit plan shall be furnished to participants and beneficiaries as provided in section 104(b). The summary plan description shall include the information described in subsection (b), shall be written in a manner calculated to be understood by the average plan participant, and shall be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan. A summary of any material modification in the terms of the plan and any change in the information required under subsection (b) shall be written in a manner calculated to be understood by the average plan participant and shall be furnished in accordance with section 104(b)(1). (2) A plan description (containing the information required by subsection (b)) of any employee benefit plan shall be prepared on forms prescribed by the Secretary, and shall be filed with the Secretary as required by section 104(a)(1). Any material modification in the terms of the plan and any change in the information described in subsection (b) shall be filed in accordance with section 104(a)(1)(D). (b) The plan description and summary plan description shall contain the following information: The name and type of administration of the plan; the name and address of the person designated as agent for the service of legal process, if such person is not the administrator; the name and address of the administrator; names, titles, and addresses of any trustee or trustees (if they are persons different from the administrator); a description of the relevant provisions of any applicable collective bargaining agreement; the plan's requirements respecting eligibility for participation and benefits; a description of the provisions providing for nonforfeitable pension benefits; circumstances which may result in disqualification, ineligibility, or denial or loss of benefits; the source of financing of the plan and the identity of any organization through which benefits are provided; the date of the end of the plan year and whether the records of the plan are kept on a calendar, policy, or fiscal year basis; the procedures to be followed in presenting claims for benefits under the plan and the remedies available under the plan for the redress of claims which are denied in whole or in part (including procedures required under section 503 of this Act). ANNUAL

841

^^ "^^ ^°^^"

REPORTS

SEC. 103. (a)(1)(A) An annual report shall be published with respect to every employee benefit plan to which this part applies. Such report shall be filed with the Secretary in accordance with section 104(a), and shall be made available and furnished to participants in accordance with section 104(b). (B) The annual report shall include the information described in subsections (b) and (c) and where applicable subsections (d) and (e) and shall also include— (i) a financial statement and opinion, as required by paragraph (3) of this subsection, and (ii) an actuarial statement and opinion, as required by paragraph (4) of this subsection. (2) If some or all of the information necessary to enable the administrator to comply with the requirements of this title is maintained by. . (A) an insurance carrier or other organization which provides some or all of the benefits under the plan, or holds assets of the plan in a separate account,

29 USC 1023.

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Page:United States Statutes at Large Volume 88 Part 1.djvu/886

 842

Financial statement s, examination.

Waiver.

"Qualified public accountant."

Enrolled actuary.

PUBLIC LAW 93-406-SEPT. 2, 1974

[88 STAT.

(B) a bank or similar institution which holds some or all of the assets of the plan in a common or collective trust or a separate trust, or custodial account, or (C) a plan sponsor as defined in section 3(16)(B), such carrier, organization, bank, institution, or plan sponsor shall transmit and certify the accuracy of such information to the administrator within 120 days after the end of the plan year (or such other date as may be prescribed under regulations of the Secretary). (3)(A) Except as provided in subparagraph (C), the administrator of an employee benefit plan shall engage, on behalf of all plan participants, an independent qualified public accountant, who shall conduct such an examination of any financial statements of the plan, and of other books and records of the plan, as the accountant may deem necessary to enable the accountant to form an opinion as to whether the financial statements and schedules required to be included in the annual report by subsection (b) of this section are presented fairly in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Such examination shall be conducted in accordance with generally accepted auditing standards, and shall involve such tests of the books and records of the plan as are considered necessary by the independent qualified public accountant. The independent qualified public accountant shall also offer his opinion as to whether the separate schedules specified in subsection (b)(3) of this section and the summary material required under section 104(b)(3) present fairly, and in all material respects the information contained therein when considered in conjunction with the financial statements taken as a whole. The opinion by the independent qualified public accountant shall be made a part of the annual report. In a case where a plan is not required to file an annual report, the requirements of this paragraph shall not apply. I n a case where by reason of section 104(a)(2) a plan is required only to file a simplified annual report, the Secretary may waive the requirements of this paragraph. (B) In offering his opinion under this section the accountant may rely on the correctness of any actuarial matter certified to by an enrolled actuary, if he so states his reliance. (C) The opinion required by subparagraph (A) need not be expressed as to any statements required by subsection (b)(3)(G) prepared by a bank or similar institution or insurance carrier regulated and supervised and subject to periodic examination by a State or Federal agency if such statements are certified by the bank, similar institution, or insurance carrier as accurate and are made a part of the annual report. (D) For purposes of this title, the term "qualified public accountant" means— (i) a person who is a certified public accountant, certified by a regulatory authority of a State; (ii) a person who is a licensed public accountant, licensed by a regulatory authority of a State; or (iii) a person certified by the Secretary as a qualified public accountant in accordance with regulations published by him for a person who practices in States where there is no certification or licensing procedure for accountants. (4)(A) The administrator of an employee pension benefit plan subject to the reporting requirement of subsection (d) of this section shall engage, on behalf of all plan participants, an enrolled actuary who shall be responsible for the preparation of the materials comprising the actuarial statement required under subsection (d) of this section. I n a case where a plan is not required to file an annual report the

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STAT.]

843

PUBLIC LAW 93-406-SEPT. 2, 1974

requirement of this paragraph shall not apply, and, in a case where by reason of section 104(a)(2), a plan is required only to file a simplified report, the Secretary may waive the requirement of this paragraph. (B) The enrolled actuary shall utilize such assumptions and techniques as are necessary to enable him to form an opinion as to whether the contents of the matters reported under subsection (d) of this section— (i) are in the aggregate reasonably related to the experience of the ^lan and to reasonable expectations; and (li) represent his best estimate of anticipated experience under the plan. The opinion by the enrolled actuary shall be made with respect to, and shall be made a part of, each annual report. (C) For purposes of this title, the term "enrolled actuary" means an actuary enrolled under subtitle C of title III of this Act. (D) In making a certification under this section the enrolled actuary may rely on the correctness of any accounting matter under section 103(b) as to which any qualified public accountant has expressed an opinion, if he so states his reliance. (b) An annual report under this section shall include a financial statement containing the following information: (1) With respect to an employee welfare benefit plan: a statement of assets and liabilities; a statement of changes in fund balance; and a statement of changes in financial position. In the notes to financial statements, disclosures concerning the following items shall be considered by the accountant: a description of the plan including any significant changes in the plan made during the period and the impact of such changes on benefits; a description of material lease commitments, other commitments, and contingent liabilities; a description of agreements and transactions with persons known to be parties in interest; a general description of priorities upon termination of the plan; information concerning whether or not a tax ruling or determination letter has been obtained; and any other matters necessary to fully and fairly present the financial statements of the plan. (2) With respect to an employee pension benefit plan: a statement of assets and liabilities, and a statement of changes in net assets available for plan benefits which shall include details of revenues and expenses and other changes aggregated by general source and application. I n the notes to financial statements, disclosures concerning the following items shall be considered by the accountant: a description of the plan including any significant changes in the plan made during the period and the impact of such changes on benefits; the funding policy (including policy with respect to prior service cost), and any changes in such policies during the year; a description of any significant changes in plan benefits made during the period; a description of material lease commitments, other commitments, and contingent liabilities; a description of agreements and transactions with persons known to be parties in interest; a general description of priorities upon termination of the plan; information concerning whether or not a tax ruling or determination letter has been obtained; and any other matters necessary to fully and fairly present the financial statements of such pension plan. (3) With respect to all employee benefit plans, the statement required under paragraph (1) or (2) shall have attached the following information in separate schedules: (A) a statement of the assets and liabilities of the plan aggregated by categories and valued at their current value, and the same data displayed in comparative form for the end of the previous fiscal year of the plan;

" E n r o l l e d actuary." Post, p. 1002.

Financial statement.

A s s e t s and liabilities.

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Page:United States Statutes at Large Volume 88 Part 1.djvu/888

 844 R e c e i p t s and disbursements.

A s s e t s for investment.

Part i e s in interest, transactions.

Loans or fixed income obligations in default.

L e a s e s in default.

A s s e t s and liabilities.

Reportable transactions.

PUBLIC LAW 93-406-SEPT. 2, 1974

[88 STAT.

(B) a statement of receipts and disbursements during the preceding twelve-month period aggregated by general sources and applications; (C) a schedule of all assets held for investment purposes aggregated and identified by issuer, borrower, or lessor, or similar party to the transaction (including a notation as to whether such party is known to be a party in interest), maturity date, rate of mterest, collateral, par or maturity value, cost, and current value; (D) a schedule of each transaction involving a person known to be party in interest, the identity of such party in interest and his relationship or that of any other party in interest to the plan, a description of each asset to which the transaction relates; the purchase or selling price in case of a sale or purchase, the rental in case of a lease, or the interest rate and maturity date in case of a loan; expenses incurred in connection with the transaction; the cost of the asset, the current value of the asset, and the net gain (or loss) on each transaction; (E) a schedule of all loans or fixed income obligations which were in default as of the close of the plan's fiscal year or were classified during the year as uncoUectable and the following information with respect to each loan on such schedule (including a notation as to whether parties involved are known to be parties in interest): the original principal amount of the loan, the amount of principal and interest received during the reporting year, the unpaid balance, the identity and address of the obligor, a detailed description of the loan (including date of making and maturity, interest rate, the type and value of collateral, and other material terms), the amount of principal and interest overdue (if any) and an explanation thereof; (F) a list of all leases which were in default or were classified during the year as uncoUectable; and the following information with respect to each lease on such schedule (including a notation as to whether parties involved are known to be parties in interest): the type of property leased (and, in the case of fixed assets such as land, buildings, leasehold, and so forth, the location of the property), the identity of the lessor or lessee from or to whom the plan is leasing, the relationship of such lessors and lessees, if any, to the plan, the employer, employee organization, or any other party in interest, the terms of the lease regarding rent, taxes, insurance, repairs, expenses, and renewal options; the date the leased property was purchased and its cost, the date the property was leased and its approximate value at such date, the gross rental receipts during the reporting period, expenses paid for the leased property during the reporting period, the net receipts from the lease, the amounts in arrears, and a statement as to what steps have been taken to collect amounts due or otherwise remedy the default; (G) if some or all of the assets of a plan or plans are held in a common or collective trust maintained by a bank or similar institution or in a separate account maintained by an insurance carrier or a separate trust maintained by a bank as trustee, the report shall include the most recent annual statement of assets and liabilities of such common or collective trust, and in the case of a separate account or a separate trust, such other information as is required by the administrator in order to comply with this subsection; and (H) a schedule of each reportable transaction, the name of each party to the transaction (except that, in the case of an acquisition or sale of a security on the market, the report need not identify

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PUBLIC LAW 93-406-SEPT. 2, 1974

845

the person from whom the security was acquired or to whom it was sold) and a description of each asset to which the transaction applies; the purchase or selling price in case of a sale or purchase, the rental in case of a lease, or the interest rate and maturity date in case of a loan; expenses incurred in connection with the transaction; the cost of the asset, the current value of the asset, and the net gain (or loss) on each transaction. For purposes of the pre- tral^acuon^''^ ceding sentence, the term "reportable transaction" means a transaction to which the plan is a party if such transaction is— (i) a transaction involving an amount in excess of 3 percent of the current value of the assets of the plan; (ii) any transaction (other than a transaction respecting a security) which is part of a series of transactions with or in conjunction with a person in a plan year, if the aggregate amount of such transactions exceeds 3 percent of the current value of the assets of the plan; (iii) a transaction which is part of a series of transactions respecting one or more securities of the same issuer, if the aggregate amount of such transactions in the plan year exceeds 3 percent of the current value of the assets of the plan; or (iv) a transaction with or in conjunction with a person respecting a security, if any other transaction with or in conjunction with such person m the plan year respecting a security is required to be reported by reason of clause (i). (4) The Secretary may, by regulation, relieve any plan from filing a copy of a statement of assets and liabilities (or other information) described in paragraph (3)(G) if such statement and other information is filed with the Secretary by the bank or insurance carrier which maintains the common or collective trust or separate account. (c) The administrator shall furnish as a part of a report under this section the following information: (1) The number of employees covered by the plan. (2) The name and address of each fiduciary. (3) Except in the case of a person whose compensation is minimal (determined under regulations of the Secretary) and who performs solely ministerial duties (determined under such regulations), the name of each person (including but not limited to, any consultant, broker, trustee, accountant, insurance carrier, actuary, administrator, investment manager, or custodian who rendeied services to the plan or who had transactions with the plan) who received directly or indirectly compensation from the plan during the preceding year for services rendered to the plan or its participants, the amount of such compensation, the nature of his services to the plan or its participants, his relationship to the employer of the employees covered by the plan, or the employee organization, and any other office, position, or employment he holds with any party in interest. (4) An explanation of the reason for any change in appointment of trustee, accountant, insurance carrier, enrolled actuary, administrator, investment manager, or custodian. (5) Such financial and actuarial information including but not limited to the material described in subsections (b) and (d) of this section as the Secretary may find necessary or appropriate. Actuarial s t a t e (d) With respect to an employee pension benefit plan (other than ment. (A) a profit sharing, savings, or other plan, which is an individual account plan, (B) a plan described in section 301(b), or (C) a plan ^°^ P 868. described both in section 4021(b) and in paragraph (1), (2), (3), ^°^ P- 1014 (4), (5), (6), or (7) of section 301(a)) an annual report under this

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 846

PUBLIC LAW 93-406-SEPT. 2, 1974

[88 STAT.

section for a plan year shall include a complete actuarial statement applicable to the plan year which shall include the following: (1) The. date of the plan year, and the date of the actuarial valuation applicable to the plan year for which the report is filed. (2) The date and amount of the contribution' (or contributions) received by the plan for the plan year for which the report is filed and contributions for prior plan years not previously reported. (3) The following information applicable to the plan year for which the report is filed: the normal costs, the accrued liabilities, an identification of benefits not included in the calculation; a statement of the other facts and actuarial assumptions and methods used to determine costs, and a justification for any change in actuarial assumptions or cost methods; and the minimum contripOSf, p. 869. bution required under section 302. (4) The number of participants and beneficiaries, both retired and nonretired, covered by the plan. (5) The current value of the assets accumulated in the plan, and the present value of the assets of the plan used by the actuary in any computation of the amount of contributions to the plan required under section 302 and a statement explaining the basis of such valuation of present value of assets. (6) The present value of all of the plan's liabilities for nonforfeitable pension benefits allocated by the termination priority Post. p. 1025. categories as set forth in section 4044 of this Act, and the actuarial Regulations. assumptious used in these computations. The Secretary shall establish regulations defining (for purposes of this section) "termination priority categories" and acceptable methods, including approximate methods, for allocating the plan's liabilities to such termination priority categories. (7) A certification of the contribution necessary to reduce the accumulated funding deficiency to zero. (8) A statement by the enrolled actuary— (A) that to the best of his knowledge the report is complete and accurate, and (B) the requirements of section 302(c)(3) (relating to reasonable actuarial assumptions and methods) have been complied with. (9) A copy of the opinion required b^ subsection (a)(4). (10) Such other information regarding the plan as the Secretary may by regulation require. (11) Such other information as may be necessary to fully and fairly disclose the actuarial position of the plan. Such actuary shall make an actuarial valuation of the plan for every third plan year, unless he determines that a more frequent valuation is necessary to support his opinion under subsection (a)(4) of this section. pa^ny " ta"ement™ (^) ^^ somc or all of the benefits under the plan are purchased from and guaranteed by an insurance company, insurance service, or other similar organization, a report under this section shall include a statement from such insurance company, service, or other similar organization covering the plan year and enumerating— (1) the premium rate or subscription charge and the total premium or subscription charges paid to each such carrier, insurance service, or other similar organization and the approximate number of persons covered by each class of such benefits; and (2) the total amount of premiums received, the approximate number of persons covered by each class of benefits, and the total claims paid by such company, service, or other organization; dividends or retroactive rate adjustments, commissions, and adminis-

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Page:The Eurypterida of New York Volume 1.pdf/85

 Some light seems also to be shed on their probable mode of life by a consideration of the separate faunules to which they pertain. Thus the Otisville fauna is composed of notably slender forms, such as  and , which indicate that a large element of the fauna consisted of agile, swimming as Pterygotus and Hughmilleria. We have, however, been impressed from another consideration with the possibility of their having been able to swim on their backs. In casting about for living water animals of a shape similar to the general expression of the eurypterids, we could find no better analogy than the well known "water-boatmen" or "boat-flies" (Notonecta) of our ponds with their elongate elliptic bodies, anteriorly rounded carapace with large marginal eyes, and long natatorial feet in the middle of the body. We have again and again been struck with this analogy in looking over the young specimens of  with their outstretched swimming feet, or in wondering at the long and powerful oarlike feet of Dolichopterus. The species of Notonecta swim on their backs, but those of Corisa, a closely related genus of associated waterbugs (the "oar-feet bugs") of like outline as seen from above, swim like all other water insects on their ventral surface. It appears that the peculiar attitude of Notonecta is principally adapted to the easy accumulation and storage of air in the hairy covering of the upper (ventral) side and that the body is distinctly boat-shaped, the dorsal side being keeled, to facilitate the inverted mode of locomotion, while in Corisa as in the other swimming waterbugs the body is distinctly flat.

From analogy with Notonecta and Corisa we consider it possible that Pterygotus and other types of eurypterids could have assumed an inverted position in swimming, but there are several reasons why it is unlikely. The most important of these is that the inverted attitude is not the normal one for nektonic organisms, but distinctly an adaptation to special conditions. It is not apparent that any of these conditions existed in the adult eurypterids, and the marginal eyes of the Hughmilleria and Pterygotus group would permit, by analogy with Notonecta and Corisa, either attitude in swimming.

In regard to the probable swimming attitude of the long-legged eurypterid types, Drepanopterus and Stylonurus, we know no better analogy than the water spider of the middle European ponds. Any one who has watched the ease with which this interesting arachnid swims by means of its long spider legs and even overtakes its prey of water insects, can not fail to appreciate the swimming possibilities of even the awkward looking Stylonurus. This water spider also differs from other spiders by having the median eyes raised on a round mound, and the lateral ones on oblique nodes, just as in the eurypterids and especially in Stylonurus. The water spider swims with its right (dorsal) side up, and by analogy we infer that the similar Stylonurus group did the same.


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PUBLIC LAW 93-406-SEPT. 2, 1974

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trative service or other fees or other specific acquisition costs paid by such company, service, or other organization; any amounts held to provide benefits after retirement; the remainder of such premiums; and the names and addresses of the brokers, agents, or other persons to whom commissions or fees were paid, the amount paid to each, and for what purpose. If any such company, service, or other organization does not maintain separate experience records covering the specific groups it serves, the report shall include in lieu of the information required by the foregoing provisions of this paragraph (A) a statement as to the basis of its premium rate or subscription charge, the total amount of premiums or subscription charges received from the plan, and a copy of the financial report of the company, service, or other organization and (B) if such company, service, or organization incurs specific costs in connection with the acquisition or retention of any particular plan or plans, a detailed statement of such costs. FILING WITH SECRETARY AND FURNISHING INFORMATION TO PARTICIPANTS

SEC. 104. (a)(1) The administrator of any employee benefit plan subject to this part shall file with the Secretary— (A) the annual report for a plan year within 210 days after the close of such year (or within such time as may be required by regulations promulgated by the Secretary in order to reduce duplicative filing); (B) the plan description within 120 days after such plan becomes subject to this part and an updated plan description, no more frequently than once every 5 years, as the Secretary may require; (C) a copy of the summary plan description at the time such summary plan description is required to be furnished to participants and beneficiaries pursuant to subsection (b)(1)(B) of this section; and (D) modifications and changes referred to in section 102(a)(2) within 60 days after such modification or change is adopted or occurs, as the case may be. The Secretary shall make copies of such plan descriptions, summary plan descriptions, and annual reports available for inspection in the public document room of the Department of Labor. The administrator shall also furnish to the Secretary, upon request, any documents relating to the employee benefit plan, including but not limited to the bargaining agreement, trust agreement, contract, or other instrument under which the plan is established or operated. (2)(A) With respect to annual reports required to be filed with the Secretary under this part, he may by regulation prescribe simplified annual reports for any pension plan which covers less than 100 participants. I n addition, and without limiting the foregoing sentence, the Secretary may waive or modify the requirements of section 103(d)(6) in such cases or categories of cases as to which he finds that (i) the interests of the plan participants are not harmed thereby and (ii) the expense of compliance with the specific requirements of section 103(d)(6) is not justified by the needs of the participants, the Pension Benefit Guaranty Corporation, and the Department of Labor for some portion or all of the information otherwise required under section 103(d)(6). (B) Nothing contained in this paragraph shall preclude the Secretary from requiring any information or data from any such plan to which this part applies where he finds such data or information is necessary to carry out the purposes of this title nor shall the Secretary

29 USC 1024.

Annual report,

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Page:United States Statutes at Large Volume 88 Part 1.djvu/892

 848

Reporting requirements, exemption.

Civil action.

Summary plan d e s c r i p t i o n s and annual report s, publication.

PUBLIC LAW 93-406-SEPT. 2, 1974

rSB STAT.

be precluded from revoking provisions for simplified reports for any such plan if he finds it necessary to do so in order to carry out the objectives of this title. (3) The Secretary may by regulation exempt any welfare benefit plan from all or part of the reporting and disclosure requirements of this title, or may provide for simplified reporting and disclosure if he finds that such requirements are inappropriate as applied to welfare benefit plans. (4) The Secretary may reject any filing under this section— (A) if he determines that such filing is incomplete for purposes of this part; or (B) if he determines that there is any material qualification by an accountant or actuary contained in an opinion submitted pursuant to section 1 0 3 (a)(3)(A) or section 1 0 3 (a)(4)(B). (5) If the Secretary rejects a filing of a report under paragraph (4) and if a revised filing satisfactory to the Secretary is not submitted within 45 days after the Secretary makes his determination under paragraph (4) to reject the filing, and if the Secretary deems it in the best interest of the participants, he may take any one or more of the following actions— (A) retain an independent qualified public accountant (as defined in section 103(a)(3)(D)) on behalf of the participants to perform an audit, (B) retain an enrolled actuary (as defined in section 103(a) (4)(C) of this Act) on behalf of the plan participants, to prepare an actuarial statement. (C) brin^ a civil action for such legal or equitable relief as may be appropriate to enforce the provisions of this part, or (D) take any other action authorized by this title. The administrator shall permit such accountant or actuary to inspect whatever books and records of the plan are necessary for such audit. The plan shall be liable to the Secretary for the expenses for such audit or report, and the Secretary may bring an action against the plan in any court of competent jurisdiction to recover such expenses. (b) Publication of the summary plan descriptions and annual reports shall be made to participants and beneficiaries of the particular plan as follows: (1) The administrator shall furnish to each participant, and each beneficiary receiving benefits under the p^an, a copy of the summary^ plan description, and all modifications and changes referred to in section 102(a)(1) — (A) within 90 days after he becomes a participant, or (in the case of a beneficiary) within 90 days after he first receives benefits, or (B) if later, within 120 days after the plan becomes subject to this part. The administrator shall furnish to each participant, and each beneficiary receiving benefits under the p^an, every fifth year after the plan becomes subject to this part an updated summary plan description described in section 102 which integrates all plan amendments made within such five-year period, except that in a case where no amendments have been made to a plan during such five-year period this sentence shall not apply. Notwithstanding the foregoing, the administrator shall furnish to each participant, and to each beneficiary receiving benefits under the plan, the summary plan description described in section 102 every tenth year after the plan becomes subject to this part. I f there is a modification or change described in section 102(a) (1), a summary description of such modification or change shall be

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furnished not later than 210 days after the end of the plan year in which the change is adopted to each participant, and to each beneficiary who is receiving benefits under the plan. (2) The administrator shall make copies of the plan description and the latest annual report and the bargaining agreement, trust agreement, contract, or other instruments under which the plan was established or is operated available for examination by any plan participant or beneficiary in the principal office of the administrator and in such other places as may be necessary to make available all pertinent information to all participants (including such places as the Secretary may prescribe by regulations). (3) Within 210 days after the close of the fiscal year of the plan, the administrator shall furnish to each participant, and to each beneficiary receiving benefits under the plan, a copy of the statements and schedules, for such fiscal year, described in subparagraphs (A) and (B) of section 103(b)(3) and such other material as is necessary to fairly summarize the latest annual report. (4) The administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated summary plan description, plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated. The administrator may make a reasonable charge to cover the cost of furnishing such complete copies. The Secretary may by regulation prescribe the maximum amount which will constitute a reasonable change under the preceding sentence. (c) The Secretary may by regulation require that the administrator of any employee benefit plan furnish to each participant and to each beneficiary receiving benefits under the plan a statement of the rights of participants and beneficiaries under this title. (d)

CROSS REFERENCE—

For regulations respecting coordination of reports to the Secretaries of Labor and the Treasury, see section 3004. REPORTING

OF P A R T I C I P A N T ' S

BENEFIT

RIGHTS

SEC. 105. (a) Each administrator of an employee pension benefit plan shall furnish to any plan participant or beneficiary who so requests in M^-itin^, a statement indicating, on the basis of the latest available information— (1) the total benefits accrued, and (2) the nonforfeitable pension benefits, if any, which have accrued, or the earliest date on which benefits will become nonforfeitable. (b) I n no case shall a participant or beneficiary be entitled under this section to receive more than one report described in subsection (a) during any one 12 month period. (c) Each administrator required to register under section 6057 of the Internal Revenue Code of 1954 shall, before the expiration of the time prescribed for such registration, furnish to each participant described in subsection (a)(2)(C) of such section, an individual statement setting forth the information with respect to such participant required to be contained in the registration statement required by section 6057(a)(2) of such Code. (d) Subsection (a) of this section shall apply to a plan to which more than one unaffiliated employer is required to contribute only to the extent provided in regulations prescribed by the Secretary in coordination with the Secretary of the Treasury.

^^ use 1025.

^°«'' P- 943.

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[88 STAT.

REPORTS MADE PUBLIC INFORMATION 29 USC 1026.

42 USC 401.

gj,^ iQQ^ (^g^-j Except as provided in subsection (b), the contents of the descriptions, annual reports, statements, and other documents filed with the Secretary pursuant to this part shall be public information and the Secretary shall make any such information and data available for inspection in the public document room of the Department of Labor. The Secretary may use the information and data for statistical and research purposes, and compile and publish such studies, analyses, reports, and surveys based thereon as he may deem appropriate. (b) Information described in section i05(a) and 105(c) with respect to a participant may be disclosed only to the extent that information respecting that participant's benefits under title II of the Social Security Act may be disclosed under such Act. RETENTION OF RECORDS

29 USC 1027.

SEC. 107. Every person subject to a requirement to file any description or report or to certify any information therefor under this title or who would be subject to such a requirement but for an exemption or simplified reporting requirement under section 104(a)(2) or (3) of this title shall maintain records on the matters of which disclosure is required which will provide in sufficient detail the necessary basic information and data from which the documents thus required may be verified, explained, or clarified, and checked for accuracy and completeness, and shall include vouchers, worksheets, receipts, and applicable resolutions, and shall keep such records available for examination for a period of not less than six years after the filing date of the documents based on the information which they contain, or six years after the date on which such documents would have been filed but for an exemption or simplified reporting requirement under section 104(a)(2) or (3). R E L I A N C E O N ADMINISTRATIVE INTERPRETATIONS

p^o^t^^ ^ggf' Post!p!sss'.

^^^- ^^^' ^^^ *^y criminal proceeding under section 501 based on any a,ct or omission m alleged violation of this part or section 412, no person shall be subject to any liability or punishment for or on account of the failure of such person to (1) comply with this part or section 412, if he pleads and proves that the act of omission complained of was in good faith, in conformity with, and in reliance on any regulation or written ruling of the Secretary, or (2) publish and file any information required by any provision of this part if he pleads and proves that he published and filed such information in good faith, and in conformity with any regulation or written ruling of the Secretary issued under this part regarding the filing of such reports. Such a defense, if established, shall be a bar to the action or proceeding, notwithstanding that (A) after such act or omission, such interpretation or opinion is modified or rescinded or is determined by judicial authority to be invalid or of no legal effect, or (B) after publishing or filing the plan description, annual reports, and other reports required by this title, such publication or filing is determined by judicial authority not to be in conformity with the requirements of this part. FORMS

29 USC 1029.

SEC. 109. (a) Except as provided in subsection (b) of this section, the Secretary may require that any information required under this title to be submitted to him, including but not limited to the information required to be filed by the administrator pursuant to section

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851

103(b)(3) and (c), must be submitted on such forms as he may prescribe. (b) The financial statement and opinion required to be prepared by an independent qualified public accountant pursuant to section 103(a) (3)(A), the actuarial statement required to be prepared by an enrolled actuary pursuant to section 1 0 3 (a)(4)(A) and the summary plan description required by section 102(a) shall not be required to be submitted on forms. (c) The Secretary may prescribe the format and content of the summary plan description, the summary of the annual report described in section 104(b)(3) and any other report, statements or documents (other than the bargaining agreement, trust agreement, contract, or other instrument under which the plan is established or operated), which are required to be furnished or made available to plan participants and beneficiaries receiving benefits under the plan. ALTERNATIVE METHODS OF COMPLIANCE

SEC. 110. (a) The Secretar;^ on his own motion or after having received the petition of an administrator may prescribe an alternative method for satisfying any requirement of this part with respect to any pension plan, or class of pension plans, subject to such requirement if he determines— (1) that the use of such alternative method is consistent with the purposes of this title and that it provides adequate disclosure to the participants and beneficiaries in the plan, and adequate reporting to the Secretary, (2) that the application of such requirement of this part would— (A) increase the costs to the plan, or (B) impose unreasonable administrative burdens with respect to the operation of the plan, having regard to the particular characteristics of the plan or the type of plan involved; and (3) that the application of this part would be adverse to the interests of plan participants in the aggregate. (b) An alternative method may be prescribed under subsection (a) by regulation or otherwise. If an alternative method is prescribed other than by regulation, the Secretary shall provide notice and an opportunity for interested persons to present their views, and shall publish in the Federal Register the provisions of such alternative method.

29 USC 1030.

Notice and opiportunity to present views. Publication in Federal Register.

REPEAL AND EFFECTIVE DATE

SEC. 111. (a)(1) The Welfare and Pension Plans Disclosure Act is repealed except that such Act shall continue to apply to any conduct and events which occurred before the effective date of this part. (2)(A) Section 664 of title 18, United States Code, is amended by striking out "any such plan subject to the provisions of the Welfare and Pension Plans Disclosure Act" and inserting in lieu thereof "any employee benefit plan subject to any provision of title I of the Employee Retirement Income Security Act of 1974". (B)(i) Section 1027 of such title 18 is amended by striking out "Welfare and Pension Plans Disclosure Act" and inserting in lieu thereof "title I o | the Employee Retirement Income Security Act of 1974", and by striking out "Act" each place it appears and inserting in lieu thereof "title". (ii) The heading for such section is amended by striking out "WELFARE AND PENSION PLANS DISCLOSURE ACT" and inserting in lieu thereof "EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974".

29 USC 1031. 29 USC 301 note.

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PUBLIC LAW 93-406-SEPT. 2, 1974

[88 STAT.

(iii) The table of sections of chapter 47 of such title 18 is amended by striking out "Welfare and Pension Plans Disclosure Act" in the item relating to section 1027 and inserting in lieu thereof "Employee Ante, p. 829. Ketirement Income Security Act of 1974". (C) Section 1954 of such title 18 is amended by striking out "any plan subject to the provisions of the Welfare and Pension Plans Disclosure Act as amended" and inserting in lieu thereof "any employee welfare benefit plan or employee pension benefit plan, respectively, subject to any provision of title I of the Employee Retirement Income Security Act of 1974"; and by striking out "sections 3(3) and 5(b) (1) and (2) of the Welfare and Pension Plans Disclosure Act, as amended" and inserting in lieu thereof "sections 3(4) and (3) (16) of the Employee Retirement Income Security Act of 1974". (D) Section 211 of the Labor-Management Reporting?ind Disclosure Act of 1959 (29 U.S.C. 441) is amended by striking out "Welfare and Pension Plans Disclosure Act" and inserting in lieu thereof "Employee Retirement Income Security Act of 1974". Effective date. (b)(1) Except as provided in paragraph (2), this part (including the amendments and repeals made by subsection (a)) shall take effect on January 1, 1975. (2) I n the case of a plan which has a plan year which begins before January 1, 1975, and ends after December 31, 1974, the Secretary may postpone by regulation the effective date of the repeal of any provision of the Welfare and Pension Plans Disclosure Act (and of any amendment made by subsection (a)(2)) and the effective date of any provision of this part, until the beginning of the first plan year of such plan which begins after January 1, 1975. (c) The provisions of this title authorizing the Secretary to promulgate regulations shall take effect on the date of enactment of this Act. PART 2—PARTICIPATION AND VESTING COVERAGE 29 USC 1051.

26 USC 501.

26 USC 736. Post, p. 959. Post, p. 964.

S E C 201. This part shall apply to any employee benefit plan described in section 4(a) (and not exempted under section 4(b)) other than— (1) an employee welfare benefit plan; (2) a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees; (3)(A) a plan established and maintained by a society, order, or association described in section 501(c)(8) or (9) of the Internal Revenue Code of 1954, if no part of the contributions to or under such plan are made by employers of participants in such plan, or (B) a trust described in section 501(c) (18) of such Code; (4) a plan which is established and maintained by a labor organization described in section 501(c)(5) of the Internal Revenue Code of 1954 and which does not at any time after the date of enactment of this Act provide for employer contributions; (5) any agreement providing payments to a retired partner or a deceased partner's successor in interest, as described in section 736 of the Internal jRevenue Code of 1954; (6) an individual retirement account or annuity described in section 408 of the Internal Revenue Code of 1954, or a retirement bond described in section 409 of such Code; or (7) an excess benefit plan.

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Page:United States Statutes at Large Volume 88 Part 1.djvu/897

 88 STAT. ]

PUBLIC LAW 93-406-SEPT. 2, 1974 MINIMUM

PARTICIPATION

853

STANDARDS

SEC. 202. (a)(1)(A) No pension plan may require, as a condition of participation in the plan, that an employee complete a period of service with the employer or employers maintaining the plan extending beyond the later of the following dates— (i) the date on which the employee attains the age of 25; or >. /.,,.

i - i i

i j - <

J!

•

(11) the date on which he completes 1 year ot service. (B)(i) I n the case of any plan which provides that after not more than 3 years of service each participant has a right to 100 percent of his accrued benefit under the plan which is nonforfeitable at the time such benefit accrues, clause (ii) of subparagraph (A) shall be applied by substituting "3 years of service" for "1 year of service". (ii) I n the case of any plan maintained exclusively for employees of an educational institution (as defined in section 170(b)(1)(A) (ii) of the Internal Revenue Code of 1954) by an employer which is exempt from tax under section 501(a) of such Code, which provides that each participant having at least 1 year of service has a right to 100 percent of his accrued benefit under the plan which is nonforfeitable at the time such benefit accrues, clause (i) of subparagraph (A) shall be applied by substituting "30" for "25". This clause shall not apply to any plan to which clause (i) applies. (2) No pension plan may exclude from participation (on the basis of age) employees who have attained a specified age, unless— (A) the plan is a— (i) defined benefit plan, or (ii) target benefit plan (as defined under regulations prescribed by the Secretary of the Treasury), and (B) such employees begin employment with the employer after they have attained a specified age which is not more than 5 years before the normal retirement age under the plan. (3)(A) For purposes of this section, the term "year of service" means a 12-month period during which the employee has not less than 1,000 hours of service. For purposes of this paragraph, computation of any 12-month period shall be made with reference to the date on which the employee's employment commenced, except that, in accordance with regulations prescribed by the Secretary, such computation may be made by reference to the first day of a plan year in the case of an employee who does not complete 1,000 hours of service during the 12-month period beginning on the date his employment commenced. (B) I n the case of any seasonal industry where the customary period of employment is less than 1,000 hours during a calendar year, the term "year of service" shall be such period as may be determined under regulations prescribed by the Secretary. (C) For purposes of this section, the term "hour of service" means a time of service determined under regulations prescribed by the Secretary. (D) For purposes of this section, in the case of any maritime industry, 125 days of service shall be treated as 1,000 hours of service. The Secretary may prescribe regulations to carry out the purposes of this subparagraph. (4) A plan shall be treated as not meeting the requirements of paragraph (1) unless it provides that any employee who has satisfied the minimum age and service requirements specified in such paragraph, and who is otherwise entitled to participate in the plan, commences participation in the plan no later than the earlier of— (A) the first day of the first plan year beginning after the date on which such employee satisfied such requirements, or (B) the date 6 months after the date on which he satisfied such requirements,

38-194 O - 76 - 57 Pt. 1

29 USC 1052.

Age and service requirements,.

26 USC 170. ^^ "^<^ ^°^-

. "year of serv-

"Hour of serv'''^•" R<^g"i^tions.

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