§ 1083. Minimum funding standards for single-employer defined benefit pension plans

(C) Controlled group The term “controlled group” means any group treated as a single employer under subsections (b), (c), (m), and (o) of section 414 of title 26.

(l) Qualified transfers to health benefit accounts In the case of a qualified transfer (as defined in section 420 of title 26), any assets so transferred shall not, for purposes of this section, be treated as assets in the plan.

(m) Special rules for community newspaper plans

(1) In general An eligible newspaper plan sponsor of a plan under which no participant has had the participant’s accrued benefit increased (whether because of service or compensation) after April 2, 2019, may elect to have the alternative standards described in paragraph (4) apply to such plan.

(2) Eligible newspaper plan sponsor The term “eligible newspaper plan sponsor” means the plan sponsor of—

(A) any community newspaper plan, or

(B) any other plan sponsored, as of April 2, 2019, by a member of the same controlled group of a plan sponsor of a community newspaper plan if such member is in the trade or business of publishing 1 or more newspapers.

(3) Election An election under paragraph (1) shall be made at such time and in such manner as prescribed by the Secretary of the Treasury. Such election, once made with respect to a plan year, shall apply to all subsequent plan years unless revoked with the consent of the Secretary of the Treasury.

(4) Alternative minimum funding standards The alternative standards described in this paragraph are the following:

(A) Interest rates

(i) In general Notwithstanding subsection (h)(2)(C) and except as provided in clause (ii), the first, second, and third segment rates in effect for any month for purposes of this section shall be 8 percent.

(ii) New benefit accruals Notwithstanding subsection (h)(2), for purposes of determining the funding target and normal cost of a plan for any plan year, the present value of any benefits accrued or earned under the plan for a plan year with respect to which an election under paragraph (1) is in effect shall be determined on the basis of the United States Treasury obligation yield curve for the day that is the valuation date of such plan for such plan year.

(iii) United States Treasury obligation yield curve For purposes of this subsection, the term “United States Treasury obligation yield curve” means, with respect to any day, a yield curve which shall be prescribed by the Secretary of the Treasury for such day on interest-bearing obligations of the United States.

(B) Shortfall amortization base

(i) Previous shortfall amortization bases The shortfall amortization bases determined under subsection (c)(3) for all plan years preceding the first plan year to which the election under paragraph (1) applies (and all shortfall amortization installments determined with respect to such bases) shall be reduced to zero under rules similar to the rules of subsection (c)(6).

(ii) New shortfall amortization base Notwithstanding subsection (c)(3), the shortfall amortization base for the first plan year to which the election under paragraph (1) applies shall be the funding shortfall of such plan for such plan year (determined using the interest rates as modified under subparagraph (A)).

(C) Determination of shortfall amortization installments

(i) 30-year period Subparagraphs (A) and (B) of subsection (c)(2) shall be applied by substituting “30-plan-year” for “7-plan-year” each place it appears.

(ii) No special election The election under subparagraph (D) of subsection (c)(2) shall not apply to any plan year to which the election under paragraph (1) applies.

(D) Exemption from at-risk treatment Subsection (i) shall not apply.

(5) Community newspaper plan For purposes of this subsection—

(A) In general The term “community newspaper plan” means a plan to which this section applies maintained as of December 31, 2018, by an employer which—

(i) maintains the plan on behalf of participants and beneficiaries with respect to employment in the trade or business of publishing 1 or more newspapers which were published by the employer at any time during the 11-year period ending on December 20, 2019,

(ii)

(I) is not a company the stock of which is publicly traded (on a stock exchange or in an over-the-counter market), and is not controlled, directly or indirectly, by such a company, or

(II) is controlled, directly, or indirectly, during the entire 30-year period ending on December 20, 2019, by individuals who are members of the same family, and does not publish or distribute a daily newspaper that is carrier-distributed in printed form in more than 5 States, and

(iii) is controlled, directly, or indirectly—

(I) by 1 or more persons residing primarily in a State in which the community newspaper has been published on newsprint or carrier-distributed,

(II) during the entire 30-year period ending on December 20, 2019, by individuals who are members of the same family,

(III) by 1 or more trusts, the sole trustees of which are persons described in subclause (I) or (II), or

(IV) by a combination of persons described in subclause (I), (II), or (III).

(B) Newspaper The term “newspaper” does not include any newspaper (determined without regard to this subparagraph) to which any of the following apply:

(i) Is not in general circulation.

(ii) Is published (on newsprint or electronically) less frequently than 3 times per week.

(iii) Has not ever been regularly published on newsprint.

(iv) Does not have a bona fide list of paid subscribers.

(C) Control A person shall be treated as controlled by another person if such other person possesses, directly or indirectly, the power to direct or cause the direction and management of such person (including the power to elect a majority of the members of the board of directors of such person) through the ownership of voting securities.

(6) Controlled group For purposes of this subsection, the term “controlled group” means all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of title 26 as of December 20, 2019.

(7) Effect on premium rate calculation In the case of a plan for which an election is made to apply the alternative standards described in paragraph (3), the additional premium under section 1306(a)(3)(E) of this title shall be determined as if such election had not been made.

(Pub. L. 93–406, title I, § 303, as added Pub. L. 109–280, title I, § 102(a), Aug. 17, 2006, 120 Stat. 789; amended Pub. L. 110–458, title I, §§ 101(b)(1), 121(a), title II, § 202(a), Dec. 23, 2008, 122 Stat. 5093, 5113, 5117; Pub. L. 111–192, title II, §§ 201(a), 204(a), June 25, 2010, 124 Stat. 1283, 1300; Pub. L. 112–141, div. D, title II, § 40211(b)(1), (3)(A), July 6, 2012, 126 Stat. 847, 849; Pub. L. 113–159, title II, § 2003(b)(1), (d)(2), Aug. 8, 2014, 128 Stat. 1849, 1851; Pub. L. 113–295, div. A, title II, § 221(a)(57)(C)(ii), (D)(ii), Dec. 19, 2014, 128 Stat. 4046; Pub. L. 114–74, title V, § 504(b)(1), Nov. 2, 2015, 129 Stat. 593; Pub. L. 116–94, div. O, title I, § 115(b), Dec. 20, 2019, 133 Stat. 3158; Pub. L. 117–2, title IX, §§ 9705(b), 9706(b)(1), (2), 9707(b), Mar. 11, 2021, 135 Stat. 200, 201, 204; Pub. L. 117–58, div. H, title VI, § 80602(b)(1), Nov. 15, 2021, 135 Stat. 1339.)

Editorial Notes

References in Text

Section 106 of the Pension Protection Act of 2006, referred to in subsec. (c)(2)(D)(iv)(I), is section 106 of Pub. L. 109–280, which is set out as a note under section 401 of Title 26, Internal Revenue Code.

Section 1055(g)(3)(B)(iii)(I) of this title, referred to in subsec. (h)(2)(F), was redesignated section 1055(g)(3)(B)(iii) of this title by Pub. L. 113–295, div. A, title II, § 221(a)(57)(B)(ii), Dec. 19, 2014, 128 Stat. 4046.

The Social Security Act, referred to in subsec. (h)(3)(D)(ii), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Title II of the Act is classified generally to subchapter II (§ 401 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see section 1305 of Title 42 and Tables.

Prior Provisions

A prior section 1083, Pub. L. 93–406, title I, § 303, Sept. 2, 1974, 88 Stat. 872; Pub. L. 99–272, title XI, §§ 11015(b)(1)(A), 11016(c)(2), Apr. 7, 1986, 100 Stat. 267, 273; Pub. L. 100–203, title IX, § 9306(a)(2), (b)(2), (c)(2)(A), (d)(2), Dec. 22, 1987, 101 Stat. 1330–353 to 1330–355; Pub. L. 101–239, title VII, §§ 7881(b)(6)(B)(ii), (7), (8), (c)(2), 7891(a)(1), Dec. 19, 1989, 103 Stat. 2438, 2439, 2445, related to variance from minimum funding standard, prior to repeal by Pub. L. 109–280, title I, § 101(a), (d), Aug. 17, 2006, 120 Stat. 784, 789, applicable to plan years beginning after 2007.

Amendments

2021—Subsec. (c)(8). Pub. L. 117–2, § 9705(b), added par. (8).

Subsec. (h)(2)(C)(iv)(I). Pub. L. 117–2, § 9706(b)(2), inserted at end “Notwithstanding anything in this subclause, if the average of the first, second, or third segment rate for any 25-year period is less than 5 percent, such average shall be deemed to be 5 percent.”

Subsec. (h)(2)(C)(iv)(II). Pub. L. 117–58 amended table generally. Prior to amendment, table related to applicable minimum and maximum percentages for each calendar year from 2020 to 2029 and for calendar years after 2029.

Pub. L. 117–2, § 9706(b)(1), amended table generally. Prior to amendment, table related to applicable minimum and maximum percentages for each calendar year from 2012 to 2023 and for calendar years after 2023.

Subsec. (m). Pub. L. 117–2, § 9707(b), amended subsec. (m) generally. Prior to amendment, subsec. (m) set out special rules for community newspaper plans under which no participant has had the participant’s accrued benefit increased after December 31, 2017.

2019—Subsec. (m). Pub. L. 116–94 added subsec. (m).

2015—Subsec. (h)(2)(C)(iv)(II). Pub. L. 114–74 amended table generally. Prior to amendment, table related to applicable minimum and maximum percentages for each calendar year from 2012 to 2020 and for calendar years after 2020.

2014—Subsec. (c)(5). Pub. L. 113–295, § 221(a)(57)(C)(ii), struck out subpar. (A) designation and heading and struck out subpar. (B) which related to transition rule and availability of transition relief.

Subsec. (h)(2)(B)(i). Pub. L. 113–159, § 2003(d)(2), substituted “the valuation date for the plan year” for “the first day of the plan year”.

Subsec. (h)(2)(C)(iv)(II). Pub. L. 113–159, § 2003(b)(1), amended table generally. Prior to amendment, table related to applicable minimum and maximum percentages for each calendar year from 2012 to 2015 and for calendar years after 2015.

Subsec. (h)(2)(G). Pub. L. 113–295, § 221(a)(57)(D)(ii), struck out subpar. (G) which related to transition rule for plan years beginning in 2008 or 2009.

2012—Subsec. (h)(2)(C)(iv). Pub. L. 112–141, § 40211(b)(1), added cl. (iv).

Subsec. (h)(2)(F). Pub. L. 112–141, § 40211(b)(3)(A), inserted “and the averages determined under subparagraph (C)(iv)” after “subparagraph (C)”.

2010—Subsec. (c)(1). Pub. L. 111–192, § 201(a)(3)(A), substituted “any shortfall amortization base which has not been fully amortized under this subsection” for “the shortfall amortization bases for such plan year and each of the 6 preceding plan years”.

Subsec. (c)(2)(D). Pub. L. 111–192, § 201(a)(1), added subpar. (D).

Subsec. (c)(7). Pub. L. 111–192, § 201(a)(2), added par. (7).

Subsec. (f)(3)(D). Pub. L. 111–192, § 204(a), added subpar. (D).

Subsec. (j)(3)(F). Pub. L. 111–192, § 201(a)(3)(B), added subpar. (F).

2008—Subsec. (b). Pub. L. 110–458, § 101(b)(1)(A), amended subsec. (b) generally. Prior to amendment, text read as follows: “For purposes of this section, except as provided in subsection (i)(2) with respect to plans in at-risk status, the term ‘target normal cost’ means, for any plan year, the present value of all benefits which are expected to accrue or to be earned under the plan during the plan year. For purposes of this subsection, if any benefit attributable to services performed in a preceding plan year is increased by reason of any increase in compensation during the current plan year, the increase in such benefit shall be treated as having accrued during the current plan year.”

Subsec. (c)(5)(B)(i). Pub. L. 110–458, § 202(a)(2), added cl. (i) and struck out former cl. (i). Prior to amendment, text read as follows: “Except as provided in clauses (iii) and (iv), in the case of plan years beginning after 2007 and before 2011, only the applicable percentage of the funding target shall be taken into account under paragraph (3)(A) in determining the funding shortfall for the plan year for purposes of subparagraph (A).”

Subsec. (c)(5)(B)(iii). Pub. L. 110–458, § 202(a)(1), redesignated cl. (iv) as (iii) and struck out former cl. (iii). Prior to amendment, text read as follows: “Clause (i) shall not apply with respect to any plan year beginning after 2008 unless the shortfall amortization base for each of the preceding years beginning after 2007 was zero (determined after application of this subparagraph).”

Pub. L. 110–458, § 101(b)(1)(B), inserted “beginning” before “after 2008”.

Subsec. (c)(5)(B)(iv). Pub. L. 110–458, § 202(a)(1), redesignated cl. (iv) as (iii).

Subsec. (c)(5)(B)(iv)(II). Pub. L. 110–458, § 101(b)(1)(C), inserted “for such year” after “beginning in 2007)”.

Subsec. (f)(4)(A). Pub. L. 110–458, § 101(b)(1)(D), substituted “paragraph (3)” for “paragraph (2)”.

Subsec. (g)(3)(B). Pub. L. 110–458, § 121(a), amended concluding provisions generally. Prior to amendment, concluding provisions read as follows: “Any such averaging shall be adjusted for contributions and distributions (as provided by the Secretary of the Treasury).”

Subsec. (h)(2)(F). Pub. L. 110–458, § 101(b)(1)(E), substituted “section 1055(g)(3)(B)(iii)(I) of this title for such month)” for “section 1055(g)(3)(B)(iii)(I) of this title) for such month” and “subparagraph (C)” for “subparagraph (B)”.

Subsec. (i)(2)(A). Pub. L. 110–458, § 101(b)(1)(F)(i)(I), added subpar. (A) and struck out former subpar. (A) which read as follows: “the present value of all benefits which are expected to accrue or be earned under the plan during the plan year, determined using the additional actuarial assumptions described in paragraph (1)(B), plus”.

Subsec. (i)(2)(B). Pub. L. 110–458, § 101(b)(1)(F)(i)(II), substituted “the amount determined under subsection (b)(1)(A)(i) with respect to the plan for the plan year” for “the target normal cost (determined without regard to this paragraph) of the plan for the plan year”.

Subsec. (i)(4)(B). Pub. L. 110–458, § 101(b)(1)(F)(ii), substituted “subparagraph (A)” for “subparagraph (A)(ii)” in concluding provisions.

Subsec. (j)(3)(A). Pub. L. 110–458, § 101(b)(1)(G)(i), inserted last sentence.

Subsec. (j)(3)(E). Pub. L. 110–458, § 101(b)(1)(G)(ii), (iii), substituted “, short years, and years with alternate valuation date” for “and short years” in heading and added cl. (iii).

Subsec. (k)(6)(B). Pub. L. 110–458, § 101(b)(1)(H), struck out “, except that in the case of a payment other than a required installment, the due date shall be the date such payment is required to be made under this section” after “subsection (j)”.

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Amendment by Pub. L. 117–58 applicable to plan years beginning after Dec. 31, 2021, see section 80602(c) of Pub. L. 117–58, set out as a note under section 430 of Title 26, Internal Revenue Code.

Amendment by section 9705(b) of Pub. L. 117–2 applicable to plan years beginning after Dec. 31, 2018, see section 9705(c) of Pub. L. 117–2, set out as a note under section 430 of Title 26, Internal Revenue Code.

Amendment by section 9706(b)(1), (2) of Pub. L. 117–2 applicable with respect to plan years beginning after Dec. 31, 2019, with certain exceptions, see section 9706(c) of Pub. L. 117–2, set out as a note under section 430 of Title 26, Internal Revenue Code.

Amendment by section 9707(b) of Pub. L. 117–2 applicable to plan years ending after Dec. 31, 2017, see section 9707(c) of Pub. L. 117–2, set out as a note under section 430 of Title 26, Internal Revenue Code.

Effective Date of 2019 Amendment

Amendment by Pub. L. 116–94 applicable to plan years ending after Dec. 31, 2017, see section 115(c) of Pub. L. 116–94, set out as a note under section 430 of Title 26, Internal Revenue Code.

Effective Date of 2015 Amendment

Amendment by Pub. L. 114–74 applicable with respect to plan years beginning after Dec. 31, 2015, see section 504(c) of Pub. L. 114–74, set out as a note under section 430 of Title 26, Internal Revenue Code.

Effective Date of 2014 Amendment

Amendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of Title 26, Internal Revenue Code.

Amendment by Pub. L. 113–159 applicable with respect to plan years beginning after Dec. 31, 2012, except as otherwise provided, see section 2003(e) of Pub. L. 113–159, set out as a note under section 430 of Title 26, Internal Revenue Code.

Effective Date of 2012 Amendment

Amendment by Pub. L. 112–141 applicable with respect to plan years beginning after Dec. 31, 2011, except as otherwise provided, see section 40211(c) of Pub. L. 112–141, set out as a note under section 404 of Title 26, Internal Revenue Code.

Effective Date of 2010 Amendment

Amendment by section 201(a) of Pub. L. 111–192 applicable to plan years beginning after Dec. 31, 2007, see section 201(c) of Pub. L. 111–192, set out as a note under section 430 of Title 26, Internal Revenue Code.

Amendment by section 204(a) of Pub. L. 111–192 applicable to plan years beginning after Aug. 31, 2009, with certain exceptions, see section 204(c) of Pub. L. 111–192, set out as a note under section 430 of Title 26, Internal Revenue Code.

Effective Date of 2008 Amendment

Amendment by section 101(b)(1)(A), (F)(i) of Pub. L. 110–458 applicable to plan years beginning after Dec. 31, 2008, and applicable to a plan for the first plan year beginning after Dec. 31, 2007, under certain conditions, see section 101(b)(3) of Pub. L. 110–458, set out as a note under section 430 of Title 26, Internal Revenue Code.

Amendment by section 101(b)(1)(B)–(E), (F)(ii)–(H) of Pub. L. 110–458 effective as if included in the provisions of Pub. L. 109–280 to which the amendment relates, except as otherwise provided, see section 112 of Pub. L. 110–458, set out as a note under section 72 of Title 26, Internal Revenue Code.

Amendment by section 121(a) of Pub. L. 110–458 effective as if included in the provisions of Pub. L. 109–280 to which the amendment relates, see section 121(c) of Pub. L. 110–458, set out as a note under section 430 of Title 26, Internal Revenue Code.

Amendment by section 202(a) of Pub. L. 110–458 applicable as if included in the enactment of this section, see section 202(c) of Pub. L. 110–458, set out as a note under section 430 of Title 26, Internal Revenue Code.

Effective Date

Pub. L. 109–280, title I, § 102(c), Aug. 17, 2006, 120 Stat. 809, provided that: “The amendments made by this section [enacting this section] shall apply with respect to plan years beginning after 2007.”

Applicability of Amendments by Subtitles A and B of Title I of Pub. L. 109–280

For special rules on applicability of amendments by subtitles A (§§ 101–108) and B (§§ 111–116) of title I of Pub. L. 109–280 to certain eligible cooperative plans, PBGC settlement plans, and eligible government contractor plans, see sections 104, 105, and 106 of Pub. L. 109–280, set out as notes under section 401 of Title 26, Internal Revenue Code.

Modification of Transition Rule to Pension Funding Requirements

For modification of transition rule to pension funding requirements in the case of a plan that was not required to pay a variable rate premium for the plan year beginning in 1996, has not, in any plan year beginning after 1995, merged with another plan (other than a plan sponsored by an employer that was in 1996 within the controlled group of the plan sponsor), and is sponsored by a company that is engaged primarily in the interurban or interstate passenger bus service, see section 115(a)–(c) of Pub. L. 109–280, set out as a note under section 430 of Title 26, Internal Revenue Code.