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U.S. Code as of:
01/19/04
Section 1002. Definitions
For purposes of this subchapter:
(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 186(c) of this title (other than pensions on
retirement or death, and insurance to provide such pensions).
(2)(A) Except as provided in subparagraph (B), 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 -
(i) provides retirement income to employees, or
(ii) 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.
(B) The Secretary may by regulation prescribe rules consistent
with the standards and purposes of this chapter providing one or
more exempt categories under which -
(i) severance pay arrangements, and
(ii) supplemental retirement income payments, under which the
pension benefits of retirees or their beneficiaries are
supplemented to take into account some portion or all of the
increases in the cost of living (as determined by the Secretary
of Labor) since retirement,
shall, for purposes of this subchapter, be treated as welfare plans
rather than pension plans. In the case of any arrangement or
payment a principal effect of which is the evasion of the standards
or purposes of this chapter applicable to pension plans, such
arrangement or payment shall be treated as a pension 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 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 Rico, 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 [29 U.S.C. 141 et seq.], or the Railway Labor Act [45 U.S.C.
151 et seq.].
(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.(!1)
(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);
(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 of which (or
in which) 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 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), or (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), or (G), or of the employee benefit plan; or
(I) a 10 percent or more (directly or indirectly in capital or
profits) partner or joint venturer of a person described in
subparagraph (B), (C), (D), (E), or (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. Any person who is a party in
interest with respect to a plan to which a trust described in
section 501(c)(22) of title 26 is permitted to make payments under
section 1403 of this title shall be treated as a party in interest
with respect to such trust.
(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 of this subchapter means (A) in the case of a security
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 78f of title 15, or (ii) if the
security is not traded on such a national securities exchange, a
price not less 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 1053(a)(3) of this title.
(20) The term "security" has the same meaning as such term has
under section 77b(1) (!2) of title 15.
(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 1105(c)(1)(B) of this title.
(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 [15 U.S.C. 80a-1 et seq.],
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 subchapter, 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 1054(b)(1)(G) of this title.
(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
in section 1054(c)(3) of this title, 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.
The accrued benefit of an employee shall not be less than the
amount determined under section 1054(c)(2)(B) of this title with
respect to the employee's accumulated contribution.
(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 5th 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 1102(a)(2)
of this title) 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 [45 U.S.C. 231
et seq.] applies, and which is financed by contributions required
under that Act and any plan of an international organization which
is exempt from taxation under the provisions of the International
Organizations Immunities Act [22 U.S.C. 288 et seq.].
(33)(A) The term "church plan" means a plan established and
maintained (to the extent required in clause (ii) of subparagraph
(B)) for its employees (or their beneficiaries) by a church or by a
convention or association of churches which is exempt from tax
under section 501 of title 26.
(B) The term "church plan" 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 title 26), or
(ii) if less than substantially all of the individuals included
in the plan are individuals described in subparagraph (A) or in
clause (ii) of subparagraph (C) (or their beneficiaries).
(C) For purposes of this paragraph -
(i) A plan established and maintained for its employees (or
their beneficiaries) by a church or by a convention or
association of churches includes a plan maintained by an
organization, whether a civil law corporation or otherwise, the
principal purpose or function of which is the administration or
funding of a plan or program for the provision of retirement
benefits or welfare benefits, or both, for the employees of a
church or a convention or association of churches, if such
organization is controlled by or associated with a church or a
convention or association of churches.
(ii) The term employee of a church or a convention or
association of churches includes -
(I) a duly ordained, commissioned, or licensed minister of a
church in the exercise of his ministry, regardless of the
source of his compensation;
(II) an employee of an organization, whether a civil law
corporation or otherwise, which is exempt from tax under
section 501 of title 26 and which is controlled by or
associated with a church or a convention or association of
churches; and
(III) an individual described in clause (v).
(iii) A church or a convention or association of churches which
is exempt from tax under section 501 of title 26 shall be deemed
the employer of any individual included as an employee under
clause (ii).
(iv) An organization, whether a civil law corporation or
otherwise, is associated with a church or a convention or
association of churches if it shares common religious bonds and
convictions with that church or convention or association of
churches.
(v) If an employee who is included in a church plan separates
from the service of a church or a convention or association of
churches or an organization, whether a civil law corporation or
otherwise, which is exempt from tax under section 501 of title 26
and which is controlled by or associated with a church or a
convention or association of churches, the church plan shall not
fail to meet the requirements of this paragraph merely because
the plan -
(I) retains the employee's accrued benefit or account for the
payment of benefits to the employee or his beneficiaries
pursuant to the terms of the plan; or
(II) receives contributions on the employee's behalf after
the employee's separation from such service, but only for a
period of 5 years after such separation, unless the employee is
disabled (within the meaning of the disability provisions of
the church plan or, if there are no such provisions in the
church plan, within the meaning of section 72(m)(7) of title
26) at the time of such separation from service.
(D)(i) If a plan established and maintained for its employees (or
their beneficiaries) by a church or by a convention or association
of churches which is exempt from tax under section 501 of title 26
fails to meet one or more of the requirements of this paragraph and
corrects its failure to meet such requirements within the
correction period, the plan shall be deemed to meet the
requirements of this paragraph for the year in which the correction
was made and for all prior years.
(ii) If a correction is not made within the correction period,
the plan shall be deemed not to meet the requirements of this
paragraph beginning with the date on which the earliest failure to
meet one or more of such requirements occurred.
(iii) For purposes of this subparagraph, the term "correction
period" means -
(I) the period ending 270 days after the date of mailing by the
Secretary of the Treasury of a notice of default with respect to
the plan's failure to meet one or more of the requirements of
this paragraph; or
(II) any period set by a court of competent jurisdiction after
a final determination that the plan fails to meet such
requirements, or, if the court does not specify such period, any
reasonable period determined by the Secretary of the Treasury on
the basis of all the facts and circumstances, but in any event
not less than 270 days after the determination has become final;
or
(III) any additional period which the Secretary of the Treasury
determines is reasonable or necessary for the correction of the
default,
whichever has the latest ending date.
(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 1052 of this title, shall be
treated as an individual account plan, and
(B) for the purposes of paragraph (23) of this section and
section 1054 of this title, 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 title 26 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.
(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 collective
bargaining agreements between one or more employee organizations
and more than one employer, and
(iii) which satisfies such other requirements as the Secretary
may prescribe by regulation.
(B) For purposes of this paragraph, all trades or businesses
(whether or not incorporated) which are under common control within
the meaning of section 1301(b)(1) of this title are considered a
single employer.
(C) Notwithstanding subparagraph (A), a plan is a multiemployer
plan on and after its termination date if the plan was a
multiemployer plan under this paragraph for the plan year preceding
its termination date.
(D) For purposes of this subchapter, notwithstanding the
preceding provisions of this paragraph, for any plan year which
began before September 26, 1980, the term "multiemployer plan"
means a plan described in this paragraph (37) as in effect
immediately before such date.
(E) Within one year after September 26, 1980, a multiemployer
plan may irrevocably elect, pursuant to procedures established by
the corporation and subject to the provisions of sections 1453(b)
and (c) of this title, that the plan shall not be treated as a
multiemployer plan for all purposes under this chapter or the
Internal Revenue Code of 1954 if for each of the last 3 plan years
ending prior to the effective date of the Multiemployer Pension
Plan Amendments Act of 1980 -
(i) the plan was not a multiemployer plan because the plan was
not a plan described in subparagraph (A)(iii) of this paragraph
and section 414(f)(1)(C) of title 26 (as such provisions were in
effect on the day before September 26, 1980); and
(ii) the plan had been identified as a plan that was not a
multiemployer plan in substantially all its filings with the
corporation, the Secretary of Labor and the Secretary of the
Treasury.
(F)(i) For purposes of this subchapter a qualified football
coaches plan -
(I) shall be treated as a multiemployer plan to the extent not
inconsistent with the purposes of this subparagraph; and
(II) notwithstanding section 401(k)(4)(B) of title 26, may
include a qualified cash and deferred arrangement.
(ii) For purposes of this subparagraph, the term "qualified
football coaches plan" means any defined contribution plan which is
established and maintained by an organization -
(I) which is described in section 501(c) of title 26;
(II) the membership of which consists entirely of individuals
who primarily coach football as full-time employees of 4-year
colleges or universities described in section 170(b)(1)(A)(ii) of
title 26; and
(III) which was in existence on September 18, 1986.
(38) The term "investment manager" means any fiduciary (other
than a trustee or named fiduciary, as defined in section 1102(a)(2)
of this title) -
(A) who has the power to manage, acquire, or dispose of any
asset of a plan;
(B) who (i) is registered as an investment adviser under the
Investment Advisers Act of 1940 [15 U.S.C. 80b-1 et seq.]; (ii)
is not registered as an investment adviser under such Act by
reason of paragraph (1) of section 203A(a) of such Act [15 U.S.C.
80b-3a(a)], is registered as an investment adviser under the laws
of the State (referred to in such paragraph (1)) in which it
maintains its principal office and place of business, and, at the
time the fiduciary last filed the registration form most recently
filed by the fiduciary with such State in order to maintain the
fiduciary's registration under the laws of such State, also filed
a copy of such form with the Secretary; (iii) is a bank, as
defined in that Act; or (iv) 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, the calendar, policy, or fiscal year on
which the records of the plan are kept.
(40)(A) The term "multiple employer welfare arrangement" means an
employee welfare benefit plan, or any other arrangement (other than
an employee welfare benefit plan), which is established or
maintained for the purpose of offering or providing any benefit
described in paragraph (1) to the employees of two or more
employers (including one or more self-employed individuals), or to
their beneficiaries, except that such term does not include any
such plan or other arrangement which is established or maintained -
(i) under or pursuant to one or more agreements which the
Secretary finds to be collective bargaining agreements,
(ii) by a rural electric cooperative, or
(iii) by a rural telephone cooperative association.
(B) For purposes of this paragraph -
(i) two or more trades or businesses, whether or not
incorporated, shall be deemed a single employer if such trades or
businesses are within the same control group,
(ii) the term "control group" means a group of trades or
businesses under common control,
(iii) the determination of whether a trade or business is under
"common control" with another trade or business shall be
determined under regulations of the Secretary applying principles
similar to the principles applied in determining whether
employees of two or more trades or businesses are treated as
employed by a single employer under section 1301(b) of this
title, except that, for purposes of this paragraph, common
control shall not be based on an interest of less than 25
percent,
(iv) the term "rural electric cooperative" means -
(I) any organization which is exempt from tax under section
501(a) of title 26 and which is engaged primarily in providing
electric service on a mutual or cooperative basis, and
(II) any organization described in paragraph (4) or (6) of
section 501(c) of title 26 which is exempt from tax under
section 501(a) of title 26 and at least 80 percent of the
members of which are organizations described in subclause (I),
and
(v) the term "rural telephone cooperative association" means an
organization described in paragraph (4) or (6) of section 501(c)
of title 26 which is exempt from tax under section 501(a) of
title 26 and at least 80 percent of the members of which are
organizations engaged primarily in providing telephone service to
rural areas of the United States on a mutual, cooperative, or
other basis.
(41) (!3) Single-employer plan. - The term "single-employer plan"
means an employee benefit plan other than a multiemployer plan.
(41) (!3) The term "single-employer plan" means a plan which is
not a multiemployer plan.
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