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Message: <blockquote data-quote="OffRoutesPay" data-source="post: 1169270" data-attributes="member: 47531">804 is no longer in the Critical Status we ae now in the Endangered StatusCritical StatusA plan is in critical status if it meets one of the following criteria:The plan is less than 65% funded and (1) will have a projected funding deficiency within five years,or (2) it is projected to be unable to pay benefits within seven years; orThe plan’s normal cost for the current plan year, plus interest for the current plan year on unfundedbenefit liabilities exceeds the present value of the reasonably anticipated employer contributions forhe current plan year, plus the present value of nonforfeitable benefits of active participants and theplan (1) has an accumulated funding deficiency for the current plan year, or (2) is projected to havean accumulated funding deficiency for any of the next four succeeding plan years; orThe sum of the market value of plan assets plus the present value of the reasonably anticipatedemployer contributions for the current plan year and each of the four succeeding plan years is lessthan the present value of all benefits projected to be payable under the plan during the current planyear and each of the four succeeding plan years.A plan in critical status must implement a rehabilitation plan, which allows the plan to emerge from criticalstatus within a 10-year period. The rehabilitation plan must be adopted no later than 240 days after the duedate of the enrolled actuary’s certification that it is in critical status. The rehabilitation plan may includereductions in plan expenditures, reduction in future benefit accruals, and increases in contributions.Plans in critical status are subject to certain restrictions on:Paying lump sum benefits; orAdopting amendments that reduce contributions or increase benefits or future benefit accruals.To encourage employers to negotiate with bargaining units to adopt a schedule of benefits and contributionsconsistent with the rehabilitation plan, employers with collective bargaining agreements that are inconsistentwith the rehabilitation plan must pay a surcharge that is equal to:5% of the required contribution for the first year that a plan is in critical status; and10% of the required contribution for each subsequent year that the plan is in critical status. A contributing employer that does not make the contributions required by the rehabilitation plan is subject toan excise tax equal to 100% of those contributions.Under PPA, the funding rules for plans in endangered or critical status will sunset after December 31, 2014.However, funding improvement plans and rehabilitation plans in effect on that date will remain in effect.Endangered StatusA multiemployer plan is in “endangered status” if the plan is not in critical status and the: Plan’s funded percentage is less than 80%; orPlan has an accumulated funding deficiency for the current plan year or a projected accumulatedfunding deficiency for any of the next six plan years.A plan is in “seriously endangered status” if both of the above situations exist.An endangered plan must adopt a funding improvement plan (FIP) within 240 days after the due date of theenrolled actuary’s certification that it is endangered. The FIP must:Reduce the plan’s unfunded percentage by at least 33% before the end of a 10-year fundingimprovement period; andEliminate any accumulated funding deficiency for any plan year during the FIP.Seriously endangered plans must satisfy more stringent requirements.Sponsors of affected plans must update the FIP every year and file the update with the plan’s Form 5500.While in endangered status, plan sponsors cannot accept any collective bargaining agreements that:Lower contributions for any participants;Suspend contributions for any period of service; orExclude younger or newly hired employees from plan participation;In addition, the sponsor cannot amend the plan to increase plan liabilities by increasing benefits, changingaccruals or changing the vesting rate unless the amendment is necessary to maintain the plan’s qualifiedstatus or is required by law, and is consistent with the terms of the funding improvement plan.A contributing employer that does not make the contributions required by the FIP, is subject to an excise taxequal to 100% of those contributions.</blockquote>

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