(a)

General rule

For purposes of determining the contribution under section 418B (before the application of section 418B(b)(2) or (d)), the plan sponsor of a plan which is overburdened for the plan year shall apply an overburden credit against the plan's minimum contribution requirement for the plan year (determined without regard to section 418B(b)(2) or (d) and without regard to this section).

(b)

Definition of overburdened plan

A plan is overburdened for a plan year if -

(1)

the average number of pay status participants under the plan in the base plan year exceeds the average of the number of active participants in the base plan year and the 2 plan years preceding the base plan year, and

(2)

the rate of employer contributions under the plan equals or exceeds the greater of -

(A)

such rate for the preceding plan year, or

(B)

such rate for the plan year preceding the first year in which the plan is in reorganization.

(c)

Amount of overburden credit

The amount of the overburden credit for a plan year is the product of -

(1)

one-half of the average guaranteed benefit paid for the base plan year, and

(2)

the overburden factor for the plan year.

The amount of the overburden credit for a plan year shall not exceed the amount of the minimum contribution requirement for such year (determined without regard to this section).

(d)

Overburden factor

For purposes of this section, the overburden factor of a plan for the plan year is an amount equal to -

(1)

the average number of pay status participants for the base plan year, reduced by

(2)

the average of the number of active participants for the base plan year and for each of the 2 plan years preceding the base plan year.

(e)

Definitions

For purposes of this section -

(1)

Pay status participant

The term "pay status participant" means, with respect to a plan, a participant receiving retirement benefits under the plan.

(2)

Number of active participants

The number of active participants for a plan year shall be the sum of -

(A)

the number of active employees who are participants in the plan and on whose behalf contributions are required to be made during the plan year;

(B)

the number of active employees who are not participants in the plan but who are in an employment unit covered by a collective bargaining agreement which requires the employees' employer to contribute to the plan unless service in such employment unit was never covered under the plan or a predecessor thereof, and

(C)

the total number of active employees attributed to employers who made payments to the plan for the plan year of withdrawal liability pursuant to part 1 of subtitle E of title IV of the Employee Retirement Income Security Act of 1974, determined by dividing -

(i)

the total amount of such payments, by

(ii)

the amount equal to the total contributions received by the plan during the plan year divided by the average number of active employees who were participants in the plan during the plan year.

The Secretary shall by regulations provide alternative methods of determining active participants where (by reason of irregular employment, contributions on a unit basis, or otherwise) this paragraph does not yield a representative basis for determining the credit.

(3)

Average number

The term "average number" means, with respect to pay status participants for a plan year, a number equal to one-half the sum of -

(A)

the number with respect to the plan as of the beginning of the plan year, and

(B)

the number with respect to the plan as of the end of the plan year.

(4)

Average guaranteed benefit

The average guaranteed benefit paid is 12 times the average monthly pension payment guaranteed under section 4022A(c)(1) of the Employee Retirement Income Security Act of 1974 determined under the provisions of the plan in effect at the beginning of the first plan year in which the plan is in reorganization and without regard to section 4022A(c)(2).

(5)

First year in reorganization

The first year in which the plan is in reorganization is the first of a period of 1 or more consecutive plan years in which the plan has been in reorganization not taking into account any plan years the plan was in reorganization prior to any period of 3 or more consecutive plan years in which the plan was not in reorganization.

(f)

No overburden credit in case of certain reductions in contributions

(1)

In general

Notwithstanding any other provision of this section, a plan is not eligible for an overburden credit for a plan year if the Secretary finds that the plan's current contribution base for any plan year was reduced, without a corresponding reduction in the plan's unfunded vested benefits attributable to pay status participants, as a result of a change in an agreement providing for employer contributions under the plan.

(2)

Treatment of certain withdrawals

For purposes of paragraph (1), a complete or partial withdrawal of an employer (within the meaning of part 1 of subtitle E of title IV of the Employee Retirement Income Security Act of 1974) does not impair a plan's eligibility for an overburden credit, unless the Secretary finds that a contribution base reduction described in paragraph (1) resulted from a transfer of liabilities to another plan in connection with the withdrawal.

(g)

Mergers

Notwithstanding any other provision of this section, if 2 or more multiemployer plans merge, the amount of the overburden credit which may be applied under this section with respect to the plan resulting from the merger for any of the 3 plan years ending after the effective date of the merger shall not exceed the sum of the used overburden credit for each of the merging plans for its last plan year ending before the effective date of the merger. For purposes of the preceding sentence, the used overburden credit is that portion of the credit which does not exceed the excess of the minimum contribution requirement determined without regard to any overburden credit under this section over the employer contributions required under the plan.