TIME FOR MAKING CONTRIBUTIONS.

SEC. 9304. TIME FOR MAKING CONTRIBUTIONS. (a) Period During Which Contributions May Be Made After Close of Year.— (1) Amendment to 1986 Code.— Paragraph (10) of section 412(c) of the 1986 Code (relating to time when certain contributions deemed made) is amended to read as follows: “(10) Time when certain contributions deemed made.— For purposes of this section— “(A) Plans other than multiemployer plans.— In the case of a plan other than a multiemployer plan, any contributions for a plan year made by an employer during the period— 101 STAT. 1330–344 “(i) beginning on the day after the last day of such plan year, and “(ii) ending on the day which is 8½ months after the close of the plan year, shall be deemed to have been made on such last day. “(B) Multiemployer plans.— In the case of a multiemployer plan, any contributions for a plan year made by an employer after the last day of such plan year, but not later than two and one-half months after such day, shall be deemed to have been made on such last day. For purposes of this subparagraph, such two and one-half month period may be extended for not more than six months under regulations prescribed by the Secretary.” (2) Amendment to erisa.— Paragraph (10) of section 302(c) of ERISA (relating to time when certain contributions deemed made) (29 U.S.C. 1082(c)(10)) 9696Copy read “1082(c)(10)”. is amended to read as follows: “(10) For purposes of this section— “(A) In the case of a plan other than a multiemployer plan, any contributions for a plan year made by an employer during the period— “(i) beginning on the day after the last day of such plan year, and “(ii) ending on the date which is 8V2 months after the close of the plan year, shall be deemed to have been made on such last day. “(B) In the case of a multiemployer plan, any contributions for a plan year made by an employer after the last day of such plan year, but not later than two and one-half months after such day, shall be deemed to have been made on such last day. For purposes of this subparagraph, such two and one-half month period may be extended for not more than six months under regulations prescribed by the Secretary of the Treasury.” (3) Effective date.— The amendments made by this subsection shall apply to plan years beginning after December 31, 1987. (b) Quarterly estimated payments required.— (1) Amendment to 1986 code.— Section 412 of the 1986 Code (relating to minimum funding standard) is amended by adding at the end thereof the following new subsection: “(m) Quarterly contributions required.— “(1) In general.— If a plan (other than a multiemployer plan) fails to pay the full amount of a required installment for any plan year, then the rate of interest charged to the funding standard account under subsection (b)(5) with respect to the amount of the underpayment for the period of the underpayment shall be equal to the greater of— “A 175 percent of the Federal mid-term rate (as in effect under section 1274 for the 1st month of such plan year), or “(B) the rate under subsection (b)(5). “(2) Amount of underpayment, period of underpayment.— For purposes of paragraph (1)— “(A) Amount.— The amount of the underpayment shall be the excess of— “(i) the required installment, over 101 STAT. 1330–345 “(ii) the amount (if any) of the installment contributed to or under the plan on or before the due date for the installment. “(B) Period of underpayment.— The period for which interest is charged under this subsection with regard to any portion of the underpayment shall run from the due date for the installment to the date on which such portion is contributed to or under the plan (determined without regard to subsection (c)(10)). “(C) Order of crediting contributions.— For purposes of subparagraph (A)(ii), contributions shall be credited against unpaid required installments in the order in which such installments are required to be paid. “(3) Number of required installments; due dates.— For purposes of this subsection— “(A) Payable in 4 installments.— There shall be 4 required installments for each plan year. “(B) Time for payment of installments.— “In the case of the following required installments: The due date is: 1st .......................... April 15 2nd .......................... July 15 3rd .......................... October 15 4th .......................... January 15 of the following year. “(4) Amount of required installment.— For purposes of this subsection— “(A) In general.— The amount of any required installment shall be the applicable percentage of the required annual payment. “(B) Required annual payment.— For purposes of subparagraph (A), the term ‘required annual payment’ means the lesser of— “(i) 90 percent of the amount required to be contributed to or under the plan by the employer for the plan year under section 412 (without regard to any waiver under subsection (c) thereof), or “(ii) 100 percent of the amount so required for the preceding plan year. Clause (ii) shall not apply if the preceding plan year was not a year of 12 months. “(C) Applicable percentage.— For purposes of subparagraph (A), the applicable percentage shall be determined in accordance with the following table: “For plan years beginning in: The applicable percentage is: 1989 6.25 1990 12.5 1991 18.75 1992 and thereafter 25. “(D) Special rules for unpredictable contingent event benefits.— In the case of a plan with any unpredictable contingent event benefit liabilities— “(i) such liabilities shall not be taken into account in computing the required annual payment under subparagraph (B), and 101 STAT. 1330–346 “(ii) each required installment shall be increased by the greater of— “(I) the amount of benefits described in subsection (1)(5)(A)(i) paid during the 3-month period preceding the month in which the due date for such installment occurs, or “(II) 25 percent of the amount determined under subsection (1)(5)(A)(ii) for the plan year. “(5) Fiscal years and short years.— “(A) Fiscal years.— In applying this subsection to a plan year beginning on any date other than January 1, there shall be substituted for the months specified in this subsection, the months which correspond thereto. “(B) Short plan year.— This subsection shall be applied to plan years of less than 12 months in accordance with regulations prescribed by the Secretary.” (2) Amendment to erisa.— Section 302 of ERISA (29 U.S.C. 1082) is amended by redesignating subsection (e) as subsection (f) and by inserting after subsection (d) the following new subsection: “(e) Quarterly Contributions Required.— “(1) In general.— If a plan (other than a multiemployer plan) fails to pay the full amount of a required installment for any plan year, then the rate of interest charged to the funding standard account under subsection (b)(5) with respect to the amount of the underpayment for the period of the underpayment shall be equal to the greater of— “(A) 175 percent of the Federal mid-term rate (as in effect under section 1274 of the Internal Revenue Code of 1986 for the 1st month of such plan year), or “(B) the rate under subsection (b)(5). “(2) Amount of underpayment, period of underpayment.— For purposes of paragraph (1)— “(A) Amount.— The amount of the underpa3rment shall be the excess of— “(i) the required instalment, over “(ii) the amount (if any) of the installment contributed to or under the plan on or before the due date for the installment. “(B) Period of underpayment.— The period for which any interest is charged under this subsection with respect to any portion of the underpayment shall run from the due date for the installment to the date on which such portion is contributed to or under the plan (determined without regard to subsection (c)(10)). “(C) Order of crediting contributions.— For purposes of subparagraph (A)(ii), contributions shall be credited against unpaid required installments in the order in which such installments are required to be paid. “(3) Number of required installments; due dates.— For purposes of this subsection— “(A) Payable in 4 installments.— There shall be 4 required installments for each plan year. “(B) Time for payment of installments.— 101 STAT. 1330–347 “In the case of the following required installments: The due date is: 1st .................................... April 15 2nd .................................... July 15 3rd .................................... October 15 4th .................................... January 15 of the following year. “(4) Amount of required installment.— For purposes of this subsection— “(A) In general.— The amount of any required installment shall be the applicable percentage of the required annual payment. “(B) Required annual payment.— For purposes of subparagraph (A), the term ‘required annual payment’ means the lesser of— “(i) 90 percent of the amount required to be contributed to or under the plan by the employer for the plan year under section 412 of the Internal Revenue Code of 1986 (without regard to any waiver under subsection (c) thereof), or “(ii) 100 percent of the amount so required for the preceding plan year. Clause (ii) shall not apply if the preceding plan year was not a year of 12 months. “(C) Applicable percentage.— For purposes of subparagraph (A), the applicable percentage shall be determined in accordance with the following table: “For plan years beginning in: The applicable percentage is: 1989 6.25 1990 12.5 1991 18.75 1992 and thereafter 25 “(D) Special rules for unpredictable contingent event benefits.— In the case of a plan with any unpredictable contingent event benefit liabilities— “(i) such liabilities shall not be taken into account in computing the required annual payment under subparagraph (B), and “(ii) each required installment shall be increased by the greater of— “(I) the amount of benefits described in subsection (d)(5)(A)(i) paid during the 3-month period preceding the month in which the due date for such installment occurs, or “(II) 25 percent of the amount determined under subsection (d)(5)(A)(ii) for the plan year. “(5) Fiscal years and short years.— “(A) Fiscal years.— In applying this subsection to a plan year beginning on any date other than January 1, there shall be substituted for the months specified in this subsection, the months which correspond thereto. “(B) Short plan year.— This section shall be applied to plan years of less than 12 months in accordance with regulations prescribed by the Secretary of the Treasury.” (3) Effective date.— The amendments made by this subsection shall apply with respect to plan years beginning after 1988. (c) Increase in Excise Tax From 5 Percent to 10 Percent.— 101 STAT. 1330–348 (1) In general.— Section 4971(a) of the 1986 Code (relating to initial tax on failure to meet minimum funding standards) is amended by striking out “5 percent” and inserting in lieu thereof “10 percent (5 percent in the case of a multiemployer plan)”. (2) Effective date.— The amendments made by this subsection shall apply to plan years beginning after 1988. (d) Requirement of Notice.— Section 101 of ERISA (relating to duty of disclosure and reporting) (29 U.S.C. 1021) is amended by redesignating subsection (d) as subsection (e) and by inserting after subsection (c) the following new subsection: “(d) Notice of Failure to Meet Minimum Funding Standards.— “(1) In general.— If an employer of a plan other than a multiemployer plan fails to make a required installment or other payment required to meet the minimum funding standard under section 302 to a plan before the 60th day following the due date for such installment or other payment, the employer shall notify each participant and beneficiary (including an alternate payee as defined in section 206(d)(3)(K)) of such plan of such failure. Such notice shall be made at such time and in such manner as the Secretary may prescribe. “(2) Subsection not to apply if waiver pending.— This subsection shall not apply to any failure if the employer has filed a waiver request under section 303 with respect to the plan year to which the required installment relates, except that if the waiver request is denied, notice under paragraph (1) shall be provided within 60 days after the date of such denial. “(3) Definitions.— For purposes of this subsection, the terms ‘required installment’ and ‘due date’ have the same meanings given such terms by section 302(e).” (e) Imposition of Lien Where Failure to Make Required Contributions.— (1) Amendment to 1986 code.— Section 412 of the 1986 Code (as amended by this subtitle) is amended by adding at the end thereof the following new subsection: “(n) Imposition of Lien Where Failure to Make Required Contributions.— “(1) In general.— In the case of a plan to which this section applies, if— “(A) any person fails to make a required installment under subsection (m) or any other payment required under this section before the due date for such installment or other payment, and “(B) the unpaid balance of such installment or other payment (including interest), when added to the aggregate unpaid balance of all preceding such installments or other payments for which payment was not made before the due date (including interest), exceeds $1,000,000, then there shall be a lien in favor of the plan in the amount determined under paragraph (3) upon all property and rights to property, whether real or personal, belonging to such person and any other person who is a member of the same controlled group of which such person is a member. “(2) Plans to which subsection applies.— This subsection shall apply to a defined benefit plan (other than a multiemployer plan) for any plan year for which the funded current liability percentage (within the meaning of subsection (1)(8)(B)) of such plan is less than 100 percent. 101 STAT. 1330–349 “(3) Amount of lien.— For purposes of paragraph (1), the amount of the lien shall be equal to the lesser of— “(A) the amount by which the unpaid balances described in paragraph (1)(B) (including interest) exceed $1,000,000, or “(B) the aggregate unpaid balance of required installments and other payments required under this section (including interest)— “(i) for plan years beginning after 1987, and “(ii) for which payment has not been made before the due date. “(4) Notice of failure; lien.— “(A) Notice of failure.— A person committing a failure described in paragraph (1) shall notify the Pension Benefit Guaranty Corporation of such failure within 10 days of the due date for the required installment or other payment. “(B) Period of lien.— The lien imposed by paragraph (1) shall arise on the 60th day following the due date for the required installment or other payment and shall continue until the last day of the first plan year in which the plan ceases to be described in paragraph (1)(B). Such lien shall continue to run without regard to whether such plan continues to be described in paragraph (2) during the period referred to in the preceding sentence. “(C) Certain rules to apply.— Any amount with respect to which a lien is imposed under paragraph (1) shall be treated as taxes due and owing the United States and rules similar to the rules of subsections (c), (d), and (e) of section 4068 of the Employee Retirement Income Security Act of 1974 shall apply with respect to a lien imposed by subsection (a) and the amount with respect to such lien. “(5) Enforcement.— Any lien created under paragraph (1) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Pension Benefit Guaranty Corporation, by the contributing sponsor (or any member of the controlled group of the contributing sponsor). “(6) Definitions.— For purposes of this subsection— “(A) Due date; required installment.— The terms ‘due date’ and ‘required installment’ have the meanings given such terms by subsection (m), 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. 9797Copy read “section.” ”. “(B) Controlled group.— The term ‘controlled group’ means any group treated as a single employer under subsections (b), (c), (m), and (o) of section 414.” (2) Amendment to erisa.— Section 302 of ERISA (as amended by this subtitle) (29 U.S.C. 1082) is amended by redesignating subsection (f) as subsection (g) and by adding after subsection (e) the following new subsection: “(f) Imposition of Lien Where Failure to Make Required Contributions.— “(1) In general.— In the case of a plan to which this section applies, if— 101 STAT. 1330–350 “(A) any person fails to make a required installment under subsection (e) or any other payment required under this section before the due date for such installment or other payment, and “(B) the unpaid balance of such installment or other payment (including interest), when added to the aggregate unpaid balance of all preceding such installments or other payments for which payment was not made before the due date (including interest), exceeds $1,000,000, then there shall be a lien in favor of the plan in the amount determined under paragraph (3) upon all property and rights to property, whether real or personal, belonging to such person and any other person who is a member of the same controlled group of which such person is a member. “(2) Plans to which subsection applies.— This subsection shall apply to a defined benefit plan (other than a multiemployer plan) for any plan year for which the funded current liability percentage (within the meaning of subsection (d)(8)(B)) of such plan is less than 100 percent. “(3) Amount of lien.— For purposes of paragraph (1), the amount of the lien shall be equal to the lesser of— “(A) the amount by which the unpaid balances described in paragraph (1)(B) (including interest) exceed $1,000,000, or “(B) the aggregate unpaid balance of required installments and other payments required under this section (including interest)— “(i) for plan years beginning after 1987, and “(ii) for which payment has not been made before the due date. “(4) Notice of failure; lien.— “(A) Notice of failure.— A person committing a failure described in paragraph (1) shall notify the Pension Benefit Guaranty Corporation of such failure within 10 days of the due date for the required installment or other payment. “(B) Period of lien.— The lien imposed by paragraph (1) shall arise on the 60th day following the due date for the required installment or other payment and shall continue until the last day of the first plan year in which the plan ceases to be described in paragraph (1)(B). Such lien shall continue to run without regard to whether such plan continues to be described in paragraph (2) during the period referred to in the preceding sentence. “(C) Certain rules to apply.— Any amount with respect to which a lien is imposed under paragraph (1) shall be treated as taxes due and owing the United States and rules similar to the rules of subsections (c), (d), and (e) of section 4068 shall apply with respect to a lien imposed by subsection (a) and the amount with respect to such lien. “(5) Enforcement.— Any lien created under paragraph (1) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Pension Benefit Guaranty Corporation, by the contributing sponsor (or any member of the controlled group of the contributing sponsor). “(6) Definitions.— For purposes of this subsection— “(A) Due date; required installment.— The terms ‘due date’ and ‘required installment’ have the meanings given such terms by subsection (e), except that in the case of a101 STAT. 1330–351 payment other than a required installment, the due date shall be the date such payment is required to be made under this section.” “(B) 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 the Internal Revenue Code of 1986.” (3) Effective date.— The amendments made by this subsection shall apply to plan years beginning after December 31, 1987.