TITLE III-JURISDICTION, ADMINISTRA- Subtitle A-Jurisdiction, Administration, and Enforcement PROCEDURES IN CONNECTION WITH THE ISSUANCE OF CERTAIN DETERMINA- SEC. 3001. (a) Before issuing an advance determination of whether 29 USC 1201. a pension, profit-sharing, or stock bonus plan, a trust which is a part of such a plan, or an annuity or bond purchase plan meets the requirements of part I of subchapter D of chapter 1 of the Internal Revenue Code of 1954, the Secretary of the Treasury shall require the person 26 USC 401. applying for the determination to provide, in addition to any material and information necessary for such determination, such other material and information as may reasonably be made available at the time such application is made as the Secretary of Labor may require under title I of this Act for the administration of that title. The Secretary of Ante, p. 832. the Treasury shall also require that the applicant provide evidence satisfactory to the Secretary that the applicant has notified each employee who qualifies as an interested party (within the meaning of regulations prescribed under section 7476 (b) (1) of such Code (relat- Ante, p. 949. ing to declaratory judgments in connection with the qualification of certain retirement plans)) of the application for a determination. (b) (1) Whenever an application is made to the Secretary of the Treasury for a determination of whether a pension, profit-sharing, or stock bonus plan, a trust which is a part of such a plan, or an annuity or bond purchase plan meets the requirements of part I of subchapter D of chapter 1 of the Internal Revenue Code of 1954, the Secretary shall upon request afford an opportunity to comment on the application at any time within 45 days after receipt thereof to— (A) any employee or class of employee qualifying as an interested party within the meaning of the regulations referred to in subsection (a). (B) the Secretary of Labor, and (C) the Pension Benefit Guaranty Corporation. (2) The Secretary of Labor may not request an opportunity to comment upon such an application unless he has been requested in writing to do so by the Pension Benefit Guaranty Corporation or by the lesser of (A) 10 employees, or (B) 10 percent of the employees who qualify as interested parties within the meaning of the regulations referred to in subsection (a). Upon receiving such a request, the Secretary of Labor shall furnish a copy of the request to the Secretary of the Treasury within 5 days (excluding Saturdays, Sundays, and legal public holidays (as set forth in section 6103 of title 5, United States Code)). 80 Stat. 515; (3) Upon receiving such a request from the Secretary of Labor, 82 Stat. 250. the Secretary of the Treasury shall furnish to the Secretary of Labor such information held by the Secretary of the Treasury relating to the application as the Secretary of Labor may request. (4) The Secretary of Labor shall, within 30 days after receiving a request from the Pension Benefit Guaranty Corporation or from the 88 STAT. 996 necessary number of employees who qualify as interested parties, notify the Secretary of the Treasury, the Pension Benefit Guaranty Corporation, and such employees with respect to whether he is going to comment on the application to which the request relates and with respect to any matters raised in such request on which he is not going to comment. If the Secretary of Labor indicates in the notice required under the preceding sentence that he is not going to comment on all or part of the matters raised in such request, the Secretary of the Treasury shall afford the corporation, and such employees, an opportunity to comment on the application with respect to any matter on which the Secretary of Labor has declined to comment. (c) The Pension Benefit Guaranty Corporation and, upon petition of a group of employees referred to in subsection (b) (2), the Secretary of Labor, may intervene in any action brought for declaratory judgAnte, p. 949. ment under section 7476 of the Internal Revenue Code of 1954 in accordance with the provisions of such section. The Pension Benefit Guaranty Corporation is permitted to bring an action under such section 7476 under such rules as may be prescribed by the United States Tax Court. 26 USC 401. Ante, p. 832. Ante, p. 898. 29 USC 1202. (d) If the Secretary of the Treasury determines that a plan or trust to which this section applies meets the applicable requirements of part I of subchapter D of chapter 1 of the Internal Revenue Code of 1954 and issues a determination letter to the applicant, the Secretary shall notify the Secretary of Labor of his determination and furnish such information and material relating to the application and determination held by the Secretary of the Treasury as the Secretary of Labor may request for the proper administration of title I of this Act. The Secretary of Labor shall accept the determination of the Secretary of the Treasury as prima facie evidence of initial compliance by the plan with the standards of parts 2, 3, and 4 of subtitle B of title I of this Act. If an application for such a determination is withdrawn, or if the Secretary of the Treasury issues a determination that the plan or trust does not meet the requirements of such part I, the Secretary shall notify the Secretary of Labor of the withdrawal or determination. (e) This section does not apply with respect to an application for any plan received by the Secretary of the Treasury before the date on which section 410 of the Internal Revenue Code of 1954 applies to the plan, or on which such section will apply if the plan is determined by the Secretary to be a qualified plan. PROCEDURES WITH RESPECT TO CONTINUED COMPLIANCE WITH REQUIRE- Src. 3002. (a) In carrying out the provisions of part I of subchapter D of chapter 1 of the Internal Revenue Code of 1954 with respect to whether a plan or a trust meets the requirements of section 410 (a) or Ante, p. 901. 411 of such Code (relating to minimum participation standards and 26 USC 1 et seg. minimum vesting standards, respectively), the Secretary of the Treasury shall notify the Secretary of Labor when the Secretary of the Treasury issues a preliminary notice of intent to disqualify related to the plan or trust or, if earlier, at the time of commencing any proceeding to determine whether the plan or trust satisfies such requirements. Unless the Secretary of the Treasury finds that the collection of a tax imposed under the Internal Revenue Code of 1954 is in jeopardy, the Secretary of the Treasury shall not issue a determination that the plan or trust does not satisfy the requirements of such section until the expiration of a period of 60 days after the date on which he notifies the Secretary of Labor of such review. The Secretary of the Treasury, in his discretion, may extend the 60-day period referred to in the preceding sentence if he determines that such an extension would enable the Secretary of Labor to obtain compliance with such requirements by the plan within the extension period. Except as otherwise provided in this Act, the Secretary of Labor shall not generally apply part 2 of title I of this Act to any plan or trust subject to sections 410 (a) and 411 of such Code, but shall refer alleged general violations of the vesting or participation standards to the Secretary of the Treasury. (The preceding sentence shall not apply to matters relating to individuals benefits.) Notice of deficiency. Ante, p. 920. (b) Unless the Secretary of the Treasury finds that the collection of a tax is in jeopardy, in carrying out the provisions of section 4971 of the Internal Revenue Code of 1954 (relating to taxes on the failure to meet minimum funding standards), the Secretary of the Treasury shall notify the Secretary of Labor before sending a notice of deficiency with respect to any tax imposed under that section on an employer. and, in accordance with the provisions of subsection (d) of that section, afford the Secretary of Labor an opportunity to comment on the imposition of the tax in the case. The Secretary of the Treasury may Waiver. waive the imposition of the tax imposed under section 4971(b) of such Code in appropriate cases. Upon receiving a written request from the Secretary of Labor or from the Pension Benefit Guaranty Corporation, the Secretary of the Treasury shall cause an investigation to be commenced expeditiously with respect to whether the tax imposed under section 4971 of such Code should be applied with respect to any employer to which the request relates. The Secretary of the Treasury and the Secretary of Labor shall consult with each other from time to time with respect to the provisions of section 412 of the Internal Revenue Code of 1954 (relating to minimum funding standards) and Ante, p. 914. with respect to the funding standards applicable under title I of this Act in order to coordinate the rules applicable under such standards. (c) Regulations prescribed by the Secretary of the Treasury ander sections 410(a), 411, and 412 of the Internal Revenue Code of 1954 (relating to minimum participation standards, minimum vesting standards, and minimum funding standards, respectively) shall also apply to the minimum participation, vesting, and funding standards 868. set forth in parts 2 and 3 of subtitle B of title I of this Act. Except Ante, p. 852, as otherwise expressly provided in this Act, the Secretary of Labor shall not prescribe other regulations under such parts, or apply the regulations prescribed by the Secretary of the Treasury under sections 410(a), 411, 412 of the Internal Revenue Code of 1954 and applicable to the minimum participation, vesting, and funding standards under such parts in a manner inconsistent with the way such regulations apply under sections 410 (a), 411, and 412 of such Code. (d) The Secretary of Labor and the Pension Benefit Guaranty Review of Corporation, before filing briefs in any case involving the construction or application of minimum participation standards, minimum vesting standards, or minimum funding standards under title I of this Act, shall afford the Secretary of the Treasury a reasonable opportunity to review any such brief. The Secretary of the Treasury shall have the right to intervene in any such case. briefs. 39-860 O 74 - 12 88 STAT. 980 Ante, p. 969. Ante, p. 959. 26 USC 405. Ante, p. 964. participant for any taxable year exceed the limitation of subsection (c), or "(C) in any case in which an individual is a participant in both a defined benefit plan and a defined contribution plan maintained by the employer, the trust has been disqualified under subsection (g). "(2) SECTION APPLIES TO CERTAIN ANNUITIES AND ACCOUNTS. in the case of "(A) an employee annuity plan described in section 403 (a), "(B) an annuity contract described in section 403(b), "(C) an individual retirement account described in section 408(a), "(D) an individual retirement annuity described in section 408 (b), "(E) a plan described in section 405 (a), or "(F) a retirement bond described in section 409, such contract, annuity plan, account, annuity, plan, or bond shall not be considered to be described in section 403 (a), 403 (b), 405 (a), 408 (a), 408(b), or 409, as the case may be, unless it satisfies the requirements of subparagraph (A) or subparagraph (B) of paragraph (1), whichever is appropriate, and has not been disqualified under subsection (g). In the case of an annuity contract described in section 403(b), the preceding sentence shall apply only to the portion of the annuity contract which exceeds the limitation of subsection (b) or the limitation of subsection (c), whichever is appropriate, and the amount of the contribution for such portion shall reduce the exclusion allowance as provided in section 403 (b) (2). "(b) LIMITATION FOR DEFINED BENEFIT PLANS.— Ante, pp. 968, 969. "(1) IN GENERAL.-Benefits with respect to a participant exceed the limitation of this subsection if, when expressed as an annual benefit (within the meaning of paragraph (2)), such annual benefit is greater than the lesser of "(A) $75,000, or "(B) 100 percent of the participant's average compensation for his high 3 years. "(2) ANNUAL BENEFIT.— "(A) IN GENERAL.-For purposes of paragraph (1), the term 'annual benefit' means a benefit payable annually in the form of a straight life annuity (with no ancillary benefits) under a plan to which employees do not contribute and under which no rollover contributions (as defined in sections 402 (a) (5), 403 (a) (4), 408 (d) (3), and 409 (b) (3) (C) are made. "(B) ADJUSTMENT FOR CERTAIN OTHER FORMS OF BENEFIT.— If the benefit under the plan is payable in any form other than the form described in subparagraph (A), or if the employees contribute to the plan or make rollover contributions (as defined in sections 402 (a) (5), 403 (a) (4), 408 (d) (3) and 409 (b) (3)(C)), the determinations as to whether the limitation described in paragraph (1) has been satisfied shal be made, in accordance with regulations prescribed by the Secretary or his delegate, by adjusting such benefit so that it is equivalent to the benefit described in subparagraph (A). For purposes of this subparagraph, any ancillary benefit which is not directly related to retirement income benefits shall not be taken into account; and that portion of any joint and survivor annuity which constitutes a qualified joint and 88 STAT. 981 survivor annuity (as defined in section 401 (a) (11) (H) (iii)) Ante, p. 935. shall not be taken into account. "(C) ADJUSTMENT TO $75,000 LIMIT WHERE BENEFIT BEGINS BEFORE AGE 55.-If the retirement income benefit under the plan begins before age 55, the determination as to whether the $75,000 limitation set forth in paragraph (1)(A) has been satisfied shall be made, in accordance with regulations prescribed by the Secretary or his delegate, by adjusting such benefit so that it is equivalent to such a benefit beginning at age 55. "(3) AVERAGE COMPENSATION FOR HIGH 3 YEARS.-For purposes of paragraph (1), a participant's high 3 years shall be the period of consecutive calendar years (not more than 3) during which the participant both was an active participant in the plan and had the greatest aggregate compensation from the employer. In the case of an employee within the meaning of section 401 (c) (1), the preceding sentence shall be applied by substituting 26 USC 401. for 'compensation from the employer' the following: 'the participant's earned income (within the meaning of section 401(c) (2) but determined without regard to any exclusion under section 911)'. "(4) TOTAL ANNUAL BENEFITS NOT IN EXCESS OF $10,000.-Notwithstanding the preceding provisions of this subsection, the benefits payable with respect to a participant under any defined benefit plan shall be deemed not to exceed the limitation of this subsection if— "(A) the retirement benefits payable with respect to such participant under such plan and under all other defined benefit plans of the employer do not exceed $10,000 for the plan year, or for any prior plan year, and "(B) the employer has not at any time maintained a defined contribution plan in which the participant participated. "(5) REDUCTION FOR SERVICE LESS THAN 10 YEARS.-In the case of an employee who has less than 10 years of service with the employer, the limitation referred to in paragraph (1), and the limitation referred to in paragraph (4), shall be the limitation determined under such paragraph (without regard to this paragraph), multiplied by a fraction, the numerator of which is the number of years (or part thereof) of service with the employer and the denominator of which is 10. (6) COMPUTATION OF BENEFITS AND computation of CONTRIBUTIONS.-The "(A) benefits under a defined contribution plan, for purposes of section 401 (a) (4), Ante, p. 938. "(B) contributions made on behalf of a participant in a defined benefit plan, for purposes of section 401(a)(4), and "(C) contributions and benefits provided for a participant in a plan described in section 414(k), for purposes of this Ante, p. 925. section shall not be made on a basis inconsistent with regulations prescribed by the Secretary or his delegate. "(c) LIMITATION FOR DEFINED CONTRIBUTION PLANS.— "(1) IN GENERAL.-Contributions and other additions with respect to a participant exceed the limitation of this subsection if. when expressed as an annual addition (within the meaning of 39-860 O 74 11 |