Reg. § 31.3221-4 Exception from supplemental tax.
(a) General rule Section provides an exception from the excise tax imposed by section . Under this exception, the excise tax imposed by section does not apply to an employer with respect to employees who are covered by a supplemental pension plan, as defined in of this section, that is established pursuant to an agreement reached through collective bargaining between the employer and employees, within the meaning of of this section.
(b) Definition of supplemental pension plan
(1) In general A plan is a supplemental pension plan covered by the section exception described in of this section only if it meets the requirements of through of this section.
(2) Pension benefit requirement A plan is a supplemental pension plan within the meaning of this section only if the plan is a pension plan within the meaning of . Thus, a plan is a supplemental pension plan only if the plan provides for the payment of definitely determinable benefits to employees over a period of years, usually for life, after retirement. A plan need not be funded through a qualified trust that meets the requirements of section or an annuity contract that meets the requirements of section in order to meet the requirements of this . A plan that is a profit-sharing plan within the meaning of or a stock bonus plan within the meaning of is not a supplemental pension plan within the meaning of this .
(3) Railroad Retirement Board determination with respect to the plan A plan is a supplemental pension plan within the meaning of this with respect to an employee only during any period for which the Railroad Retirement Board has made a determination under 20 CFR 216.42(d) that the plan is a private pension, the payments from which will result in a reduction in the employee's supplemental annuity payable under 45 U.S.C. 231a(b). A plan is not a supplemental pension plan for any time period before the Railroad Retirement Board has made such a determination, or after that determination is no longer in force.
(4) Other requirements [Reserved]
(c) Collective bargaining agreement A plan is established pursuant to a collective bargaining agreement with respect to an employee only if, in accordance with the rules of , the employee is included in a unit of employees covered by an agreement that the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and one or more employers, provided that there is evidence that retirement benefits were the subject of good faith bargaining between employee representatives and the employer or employers.
(d) Substitute section 3221(d) excise tax Section imposes an excise tax on any employer who has been excepted from the excise tax imposed under section by the application of section and of this section with respect to an employee. The excise tax is equal to the amount of the supplemental annuity paid to that employee under 45 U.S.C. 231a(b), plus a percentage thereof determined by the Railroad Retirement Board to be sufficient to cover the administrative costs attributable to such payments under 45 U.S.C. 231a(b).
(e) Effective date
(1) In general Except as provided in of this section, this section applies beginning on October 1, 1998.
(2) Delayed effective date for collective bargaining agreement provisions of this section applies beginning on January 1, 2000.
[T.D. 8832, 64 FR 42833, Aug. 6, 1999]