Preserve Benefits and Jobs Act of 2009 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code to: (1) allow a sponsor of a single-employer defined benefit pension plan to elect in 2009 or 2010 extended amortization periods (9 or 15 years) for investment losses incurred in prior years; (2) allow an increase in the valuation range of plan assets; (3) use the funded status of a plan in 2008 to determine benefit restrictions in 2009 and 2010 and prohibit the use of credit balances by pension plans that are under 80% funded in the prior year; (4) exclude plan-related administrative expenses (including investment expenses) from normal cost targets; (5) delay until 2012 the application of certain benefit restrictions to collectively bargained plans; and (6) require a 120% funding target for plans adopting ad hoc amendments that allow lump sum benefits payments and increased plan liabilities.
Revises rules relating to information reporting and reportable events.
Calculates the amount of any pension plan guarantee by the Pension Benefit Guaranty Corporation (PBGC) using the date of plan termination rather than the date of a plan bankruptcy filing.
Amends ERISA provisions relating to multiemployer pension plans to: (1) allow such plans to elect alternative amortization plans and valuation methods in 2009 and 2010 for investment losses; (2) extend by five years the funding improvement period for plans in endangered or critical status; (3) permit multiemployer plans to merge or form alliances with other plans; and (4) increase PBGC guarantees for insolvent plans to increase participant benefits.
[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3936 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 3936
To amend the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code of 1986 to allow time for pensions to fund
benefit obligations in light of economic circumstances in the financial
markets of 2008, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 27, 2009
Mr. Pomeroy (for himself and Mr. Tiberi) introduced the following bill;
which was referred to the Committee on Education and Labor, and in
addition to the Committee on Ways and Means, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To amend the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code of 1986 to allow time for pensions to fund
benefit obligations in light of economic circumstances in the financial
markets of 2008, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE, ETC.
(a) Short Title.--This Act may be cited as the ``Preserve Benefits
and Jobs Act of 2009''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title, etc.
TITLE I--SINGLE EMPLOYER PLANS
Sec. 101. Extended period for single-employer defined benefit plans to
amortize certain shortfall amortization
bases.
Sec. 102. Expansion of corridor within which single-employer defined
benefit plans are allowed to average asset
values.
Sec. 103. Lookback for benefit accrual restriction.
Sec. 104. Lookback for credit balance rule.
Sec. 105. Clarification of treatment of expenses.
Sec. 106. Information reporting.
Sec. 107. Benefit restriction effective date for collectively bargained
plans.
Sec. 108. Social Security level-income options.
Sec. 109. PBGC guarantee.
Sec. 110. Application of extended amortization period to plans subject
to prior law funding rules.
Sec. 111. Additions to funding-based limits on benefits and benefits
accruals under single-employer plans.
Sec. 112. Reportable events.
TITLE II--MULTIEMPLOYER PLANS
Sec. 201. Adjustments to funding standard account rules; reporting
clarification.
Sec. 202. Multiemployer plans in endangered or critical status.
Sec. 203. Multiemployer plan mergers and alliances.
Sec. 204. Strengthening participants' benefit protections.
TITLE I--SINGLE EMPLOYER PLANS
SEC. 101. EXTENDED PERIOD FOR SINGLE-EMPLOYER DEFINED BENEFIT PLANS TO
AMORTIZE CERTAIN SHORTFALL AMORTIZATION BASES.
(a) Amendments to ERISA.--
(1) In general.--Paragraph (2) of section 303(c) of the
Employee Retirement Income Security Act of 1974 is amended by
adding at the end the following subparagraphs:
``(D) Special rule.--
``(i) In general.--In the case of the
shortfall amortization base of an active plan
for any applicable plan year, the shortfall
amortization installments are the amounts
described in clause (ii) or clause (iii), as
applicable, determined pursuant to clause (iv).
``(ii) 7-year amortization.--
``(I) In general.--The shortfall
amortization installments described in
this clause are--
``(aa) in the case of the
last 7 plan years in the 9-
plan-year period beginning with
the applicable plan year, the
amounts necessary to amortize
the shortfall amortization base
of the plan for the applicable
plan year in level annual
installments over such last 7
plan years, and
``(bb) in the case of the
first 2 plan years in such 9-
plan-year period, interest on
such shortfall amortization
base (determined using the
effective rate of interest for
the plan for the plan year).
``(II) Shortfall amortization
installment.--The shortfall
amortization installment for any plan
year in the 9-plan-year period under
this clause with respect to such
shortfall amortization base is the
annual installment determined under
this clause for that year for that
base.
``(III) Minimum required
contribution for first 2 years.--
Notwithstanding the preceding
provisions of this clause, the minimum
required contribution for the two plan
years described in subclause (I)(bb)
shall be increased to the extent
necessary so that the minimum required
contribution for such plan year is at
least equal to the applicable
percentage of the minimum required
contribution for the plan year
preceding the first applicable plan
year. If the minimum required
contribution is increased by reason of
the preceding sentence, the shortfall
amortization installments with respect
to the shortfall amortization base for
any applicable plan year shall be
reduced to take such increase into
account, pursuant to rules issued by
the Secretary of the Treasury, but only
if the shortfall amortization
installments with respect to the
shortfall amortization base for such
applicable plan year are determined
under this clause. For purposes of this
subclause, any reference to the minimum
required contribution for any plan year
shall be a reference to the minimum
required contribution for such plan
year prior to any reduction under
subsection (f) and without taking into
account any waiver under section
302(c). For purposes of this clause,
the applicable percentage shall be
determined as follows:
The applicable
``For the: percentage is:
First applicable plan year................... 105
Second applicable plan year.................. 110
Plan year following the second applicable 115
plan year.
``(iii) 15-year amortization.--The
shortfall amortization installments described
in this clause are the amounts necessary to
amortize the shortfall amortization base of the
plan for the applicable plan year in level
annual installments over 15 years. The
shortfall amortization installments for any
plan year in the 15-plan-year period under this
clause is the annual installment determined
under this clause for that year for that base.
``(iv) Election.--The plan sponsor may,
with respect to a plan, elect whether to
determine shortfall amortization installments
under clause (ii), clause (iii), or without
regard to this subparagraph. Such election
shall be made at such times, and in such form
and manner, as shall be prescribed by the
Secretary of the Treasury, and may be revoked
only with the consent of the Secretary of the
Treasury. In the absence of a timely election
to determine shortfall amortization
installments under such clause (ii) or clause
(iii), such installments shall be determined
without regard to this subparagraph.
``(E) Failure to maintain active plan.--
``(i) 2 and 7 rule.--If the shortfall
amortization installments with respect to a
shortfall amortization base for an applicable
plan year are determined under subparagraph
(D)(ii), the plan must remain an active plan
for the subsequent plan year. If such plan
fails to be an active plan in such plan year,
the minimum required contribution for the plan
year with respect to which a failure occurs
shall be increased by all amounts by which the
minimum required contribution for the current
plan year or any prior plan year has been
reduced by the application of subparagraph (D),
plus interest on such amounts at the effective
rate of interest for the plan for the plan year
for which the increase applies. However, any
such increase in the minimum required
contribution shall not require a contribution
to the extent that the contribution would cause
the value of plan assets for the plan year to
exceed the funding target of the plan for the
plan year (determined without regard to
subsection (i)(1)). If the minimum required
contribution is increased by reason of this
clause, the shortfall amortization installments
with respect to the shortfall amortization base
for any applicable plan year shall be reduced
to take such increase into account, pursuant to
rules issued by the Secretary of the Treasury,
but only if the shortfall amortization
installments with respect to the shortfall
amortization base for such applicable plan year
are determined under subparagraph (D)(ii). For
purposes of this clause, any reference to the
minimum required contribution for any plan year
shall be a reference to the minimum required
contribution for such plan year prior to any
reduction under subsection (f) and without
taking into account any waiver under section
302(c).
``(ii) 15-year rule.--If the shortfall
amortization installments with respect to a
shortfall amortization base for an applicable
plan year are determined under subparagraph
(D)(iii), the plan must remain an active plan
for the 7 subsequent plan years. If such plan
fails to be an active plan in any such plan
year, the shortfall amortization base, reduced
by the principal portion of prior shortfall
amortization installments relating to that
base, shall be amortized over 7 years.
``(iii) Special rule.--In the case of an
applicable plan year that ends before July 1,
2009, the plan sponsor may elect not to have
the active plan requirement apply for such plan
year. If such election is made--
``(I) clause (i) shall be applied
so as to require the plan to remain an
active plan for the 2 subsequent plan
years (instead of 1 subsequent plan
year) under rules prescribed by the
Secretary of the Treasury, and
``(II) clause (ii) shall be applied
by substituting `8' for `7' the first
place it appears and by substituting
`6' for `7' the second place it
appears.
Such election shall be made at such times, and
in such form and manner, as shall be prescribed
by the Secretary of the Treasury, and may be
revoked only with consent of the Secretary of
the Treasury.
``(F) Applicable plan year.--For purposes of this
paragraph, the term `applicable plan year' means--
``(i) except as provided in clauses (ii)
and (iii), any plan year beginning in 2009 or
2010,
``(ii) in the case of a plan with a plan
year beginning after October 31 and before
January 1, any plan year beginning in 2008 or
2009, and
``(iii) in the case of a plan for which the
valuation date is not the first day of the plan
year, any plan year beginning in 2008 or 2009.
``(G) Active plan.--
``(i) In general.--For purposes of this
paragraph, the term `active plan' means a
defined benefit plan that is described in
clause (ii), (iii), or (iv). A defined benefit
plan may satisfy different clauses in different
years. Notwithstanding clause (ii), (iii), or
(iv), a defined benefit plan is not an active
plan if an election under section 402(a)(1) of
the Pension Protection Act of 2006 is in effect
with respect to such plan, or if the plan is
described under rules prescribed by the
Secretary of the Treasury designed to prevent
evasion of the purposes of this subparagraph.
``(ii) Defined benefit plan.--
``(I) In general.--A defined
benefit plan is described in this
clause if minimum benefit accruals are
provided on behalf of all employees who
have satisfied the plan's age and
service requirements and who would, but
for any prior amendment ceasing
accruals, be eligible for an accrual
under the plan.
``(II) Special rule regarding
minimum benefit accruals.--For purposes
of this clause, the employees described
in this clause shall be treated as
receiving minimum benefit accruals for
a plan year if all such employees are
accruing a benefit and--
``(aa) the rate of benefit
accrual for any such employee
is not less than the greater
of--
``(AA) the rate of
benefit accrual that
would have been applied
to the employee under
the benefit formula in
effect on July 1, 2009,
disregarding any
amendments to the plan
adopted after June 30,
2009, or
``(BB) the rate of
benefit accrual that
would have applied to
the employee under the
benefit formula in
effect as of the last
date prior to the
effective date of any
plan amendment adopted
prior to July 1, 2009
that ceased providing
benefit accruals based
on additional service
credit with respect to
such employee, or
``(bb) the target normal
cost (without regard to plan
administrative expenses) for
such plan year with respect to
such employees is at least 3
percent of the aggregate
compensation (as defined in
section 415(c)(3) of the
Internal Revenue Code of 1986)
of such employees for such plan
year. Solely for purposes of
this paragraph, target normal
cost shall be determined by
using 5 percent in lieu of the
interest rate applicable under
subsection (h) and by using the
mortality tables described in
subsection (h)(3)(A).
``(iii) Defined contribution plan.--
``(I) In general.--A defined
benefit plan is described in this
clause if--
``(aa) the defined benefit
plan satisfies clause (ii)
except with respect to
employees whose failure to
accrue a minimum benefit is
attributable to a plan
amendment adopted prior to July
1, 2009, and
``(bb) the plan sponsor (or
any member of such sponsor's
controlled group) maintains a
defined contribution plan under
which allocations are made on
behalf of each employee whose
failure to accrue a benefit
under the defined benefit plan
causes the defined benefit plan
not to be described in clause
(ii).
``(II) Minimum allocations.--Such
allocations shall not be less than 3
percent of an employee's compensation
(as determined in accordance with
section 414(s) of the Internal Revenue
Code of 1986). A defined contribution
plan shall not fail to satisfy the
requirements of this clause solely by
reason of the failure to make
allocations on behalf of one or more
highly compensated employees (as
defined in section 414(q) of the
Internal Revenue Code of 1986).
``(III) Allocations taken into
account.--For purposes of this clause,
only the following types of allocations
may be taken into account:
``(aa) Employer
contributions or forfeitures
allocated without regard to
whether an employee makes an
elective contribution or an
employee contribution.
``(bb) In the case of the
first plan year ending after
June 30, 2009, matching
contributions (as defined in
section 401(m)(4)(A) of the
Internal Revenue Code of 1986).
``(iv) Nonqualified plan.--
``(I) In general.--A defined
benefit plan is described in this
clause if no key employee (as defined
in section 416(i) of the Internal
Revenue Code of 1986 without regard to
paragraph (5) thereof) accrues any new
benefits for the plan year under any
nonqualified deferred compensation plan
(as defined in section 409A(d) of the
Internal Revenue Code of 1986)
maintained by the sponsor of the
defined benefit plan or by any member
of such sponsor's controlled group.
``(II) Revocation of certain
elections.--The Secretary of the
Treasury shall provide rules under
section 409A of the Internal Revenue
Code of 1986 under which elections to
defer compensation made prior to the
date of enactment of this clause may be
revoked by an employee within 180 days
after the date of enactment of this
clause, but only to the extent that,
pursuant to this clause, such elections
could otherwise cause a failure of the
employee to--
``(aa) earn compensation
under an arrangement that, but
for the election, is not a
nonqualified deferred
compensation plan (as defined
in section 409A(d) of the
Internal Revenue Code of 1986),
and
``(bb) earn compensation
that is not payable to the
employee in another form or
under a different arrangement.
``(v) Multiple employer plans.--In the case
of a defined benefit plan described in section
413(c)(4)(B) of the Internal Revenue Code of
1986, such plan shall be treated as an active
plan if such plan satisfies clause (ii), (iii),
or (iv) with respect to at least 85 percent of
the employers participating in such plan. In
applying the 85 percent requirement, different
employers may satisfy different clauses.
``(vi) Controlled group.--For purposes of
this paragraph, the term `controlled group'
means all employers treated as a single
employer pursuant to subsections (b) and (c) of
section 414 of the Internal Revenue Code of
1986.''.
(2) Conforming amendment.--Paragraph (1) of section 303(c)
of such Act is amended by striking ``the shortfall amortization
bases for such plan year and each of the 6 preceding plan
years'' and inserting ``any shortfall amortization base which
has not been fully amortized under this subsection''.
(b) Amendments to INTERNAL REVENUE CODE OF 1986.--
(1) In general.--Paragraph (2) of section 430(c) of the
Internal Revenue Code of 1986 is amended by adding at the end
the following subparagraphs:
``(D) Special rule.--
``(i) In general.--In the case of the
shortfall amortization base of an active plan
for any applicable plan year, the shortfall
amortization installments are the amounts
described in clause (ii) or clause (iii), as
applicable, determined pursuant to clause (iv).
``(ii) 7-year amortization.--
``(I) In general.--The shortfall
amortization installments described in
this clause are--
``(aa) in the case of the
last 7 plan years in the 9-
plan-year period beginning with
the applicable plan year, the
amounts necessary to amortize
the shortfall amortization base
of the plan for the applicable
plan year in level annual
installments over such last 7
plan years, and
``(bb) in the case of the
first 2 plan years in such 9-
plan-year period, interest on
such shortfall amortization
base (determined using the
effective rate of interest for
the plan for the plan year).
``(II) Shortfall amortization
installment.--The shortfall
amortization installment for any plan
year in the 9-plan-year period under
this clause with respect to such
shortfall amortization base is the
annual installment determined under
this clause for that year for that
base.
``(III) Minimum required
contribution for first 2 years.--
Notwithstanding the preceding
provisions of this clause, the minimum
required contribution for the two plan
years described in subclause (I)(bb)
shall be increased to the extent
necessary so that the minimum required
contribution for such plan year is at
least equal to the applicable
percentage of the minimum required
contribution for the plan year
preceding the first applicable plan
year. If the minimum required
contribution is increased by reason of
the preceding sentence, the shortfall
amortization installments with respect
to the shortfall amortization base for
any applicable plan year shall be
reduced to take such increase into
account, pursuant to rules issued by
the Secretary, but only if the
shortfall amortization installments
with respect to the shortfall
amortization base for such applicable
plan year are determined under this
clause. For purposes of this subclause,
any reference to the minimum required
contribution for any plan year shall be
a reference to the minimum required
contribution for such plan year prior
to any reduction under subsection (f)
and without taking into account any
waiver under section 412(c). For
purposes of this clause, the applicable
percentage shall be determined as
follows:
The applicable
``For the: percentage is:
First applicable plan year................... 105
Second applicable plan year.................. 110
Plan year following the second applicable 115
plan year.
``(iii) 15-year amortization.--The
shortfall amortization installments described
in this clause are the amounts necessary to
amortize the shortfall amortization base of the
plan for the applicable plan year in level
annual installments over 15 years. The
shortfall amortization installments for any
plan year in the 15-plan-year period under this
clause is the annual installment determined
under this clause for that year for that base.
``(iv) Election.--The plan sponsor may,
with respect to a plan, elect whether to
determine shortfall amortization installments
under clause (ii), clause (iii), or without
regard to this subparagraph. Such election
shall be made at such times, and in such form
and manner, as shall be prescribed by the
Secretary, and may be revoked only with the
consent of the Secretary. In the absence of a
timely election to determine shortfall
amortization installments under such clause
(ii) or clause (iii), such installments shall
be determined without regard to this
subparagraph.
``(E) Failure to maintain active plan.--
``(i) 2 and 7 rule.--If the shortfall
amortization installments with respect to a
shortfall amortization base for an applicable
plan year are determined under subparagraph
(D)(ii), the plan must remain an active plan
for the subsequent plan year. If such plan
fails to be an active plan in such plan year,
the minimum required contribution for the plan
year with respect to which a failure occurs
shall be increased by all amounts by which the
minimum required contribution for the current
plan year or any prior plan year has been
reduced by the application of subparagraph (D),
plus interest on such amounts at the effective
rate of interest for the plan for the plan year
for which the increase applies. However, any
such increase in the minimum required
contribution shall not require a contribution
to the extent that the contribution would cause
the value of plan assets for the plan year to
exceed the funding target of the plan for the
plan year (determined without regard to
subsection (i)(1)). If the minimum required
contribution is increased by reason of this
clause, the shortfall amortization installments
with respect to the shortfall amortization base
for any applicable plan year shall be reduced
to take such increase into account, pursuant to
rules issued by the Secretary, but only if the
shortfall amortization installments with
respect to the shortfall amortization base for
such applicable plan year are determined under
subparagraph (D)(ii). For purposes of this
clause, any reference to the minimum required
contribution for any plan year shall be a
reference to the minimum required contribution
for such plan year prior to any reduction under
subsection (f) and without taking into account
any waiver under section 412(c).
``(ii) 15-year rule.--If the shortfall
amortization installments with respect to a
shortfall amortization base for an applicable
plan year are determined under subparagraph
(D)(iii), the plan must remain an active plan
for the 7 subsequent plan years. If such plan
fails to be an active plan in any such plan
year, the shortfall amortization base, reduced
by the principal portion of prior shortfall
amortization installments relating to that
base, shall be amortized over 7 years.
``(iii) Special rule.--In the case of an
applicable plan year that ends before July 1,
2009, the plan sponsor may elect not to have
the active plan requirement apply for such plan
year. If such election is made--
``(I) clause (i) shall be applied
so as to require the plan to remain an
active plan for the 2 subsequent plan
years (instead of 1 subsequent plan
year) under rules prescribed by the
Secretary, and
``(II) clause (ii) shall be applied
by substituting `8' for `7' the first
place it appears and by substituting
`6' for `7' the second place it
appears.
Such election shall be made at such times, and
in such form and manner, as shall be prescribed
by the Secretary, and may be revoked only with
consent of the Secretary.
``(F) Applicable plan year.--For purposes of this
paragraph, the term `applicable plan year' shall mean--
``(i) except as provided in clauses (ii)
and (iii), any plan year beginning in 2009 or
2010,
``(ii) in the case of a plan with a plan
year beginning after October 31 and before
January 1, any plan year beginning in 2008 or
2009, and
``(iii) in the case of a plan for which the
valuation date is not the first day of the plan
year, any plan year beginning in 2008 or 2009.
``(G) Active plan.--
``(i) In general.--For purposes of this
paragraph, the term `active plan' means a
defined benefit plan that is described in
clause (ii), (iii), or (iv). A defined benefit
plan may satisfy different clauses in different
years. Notwithstanding clause (ii), (iii), or
(iv), a defined benefit plan is not an active
plan if an election under section 402(a)(1) of
the Pension Protection Act of 2006 is in effect
with respect to such plan, or if the plan is
described under rules prescribed by the
Secretary designed to prevent evasion of the
purposes of this subparagraph.
``(ii) Defined benefit plan.--
``(I) In general.--A defined
benefit plan is described in this
clause if minimum benefit accruals are
provided on behalf of all employees who
have satisfied the plan's age and
service requirements and who would, but
for any prior amendment ceasing
accruals, be eligible for an accrual
under the plan.
``(II) Special rule regarding
minimum benefit accruals.--For purposes
of this clause, the employees described
in this clause shall be treated as
receiving minimum benefit accruals for
a plan year if all such employees are
accruing a benefit and--
``(aa) the rate of benefit
accrual for any such employee
is not less than the greater
of--
``(AA) the rate of
benefit accrual that
would have been applied
to the employee under
the benefit formula in
effect on July 1, 2009,
disregarding any
amendments to the plan
adopted after June 30,
2009, or
``(BB) the rate of
benefit accrual that
would have applied to
the employee under the
benefit formula in
effect as of the last
date prior to the
effective date of any
plan amendment adopted
prior to July 1, 2009,
that ceased providing
benefit accruals based
on additional service
credit with respect to
such employee, or
``(bb) the target normal
cost (without regard to plan
administrative expenses) for
such plan year with respect to
such employees is at least 3
percent of the aggregate
compensation (as defined in
section 415(c)(3)) of such
employees for such plan year.
Solely for purposes of this paragraph,
target normal cost shall be determined
by using 5 percent in lieu of the
interest rate applicable under
subsection (h) and by using the
mortality tables described in
subsection (h)(3)(A).
``(iii) Defined contribution plan.--
``(I) In general.--A defined
benefit plan is described in this
clause if--
``(aa) the defined benefit
plan satisfies clause (ii)
except with respect to
employees whose failure to
accrue a minimum benefit is
attributable to a plan
amendment adopted prior to July
1, 2009, and
``(bb) the plan sponsor (or
any member of such sponsor's
controlled group) maintains a
defined contribution plan under
which allocations are made on
behalf of each employee whose
failure to accrue a benefit
under the defined benefit plan
causes the defined benefit plan
not to be described in clause
(ii).
``(II) Minimum allocations.--Such
allocations shall not be less than 3
percent of an employee's compensation
(as determined in accordance with
section 414(s)). A defined contribution
plan shall not fail to satisfy the
requirements of this clause solely by
reason of the failure to make
allocations on behalf of one or more
highly compensated employees (as
defined in section 414(q)).
``(III) Allocations taken into
account.--For purposes of this clause,
only the following types of allocations
may be taken into account:
``(aa) Employer
contributions or forfeitures
allocated without regard to
whether an employee makes an
elective contribution or an
employee contribution.
``(bb) In the case of the
first plan year ending after
June 30, 2009, matching
contributions (as defined in
section 401(m)(4)(A)).
``(iv) Nonqualified plan.--
``(I) In general.--A defined
benefit plan is described in this
clause if no key employee (as defined
in section 416(i) without regard to
paragraph (5) thereof) accrues any new
benefits for the plan year under any
nonqualified deferred compensation plan
(as defined in section 409A(d))
maintained by the sponsor of the
defined benefit plan or by any member
of such sponsor's controlled group.
``(II) Revocation of certain
elections.--The Secretary shall provide
rules under section 409A under which
elections to defer compensation made
prior to the date of enactment of this
clause may be revoked by an employee
within 180 days after the date of
enactment of this clause, but only to
the extent that, pursuant to this
clause, such elections could otherwise
cause a failure of the employee to--
``(aa) earn compensation
under an arrangement that, but
for the election, is not a
nonqualified deferred
compensation plan (as defined
in section 409A(d)), and
``(bb) earn compensation
that is not payable to the
employee in another form or
under a different arrangement.
``(v) Multiple employer plans.--In the case
of a defined benefit plan described in section
413(c)(4)(B), such plan shall be treated as an
active plan if such plan satisfies clause (ii),
(iii), or (iv) with respect to at least 85
percent of the employers participating in such
plan. In applying the 85 percent requirement,
different employers may satisfy different
clauses.
``(vi) Controlled group.--For purposes of
this paragraph, the term `controlled group'
means all employers treated as a single
employer pursuant to subsections (b) and (c) of
section 414.''.
(2) Conforming amendment.--Paragraph (1) of section 430(c)
of such Code is amended by striking ``the shortfall
amortization bases for such plan year and each of the 6
preceding plan years'' and inserting ``any shortfall
amortization base which has not been fully amortized under this
subsection''.
(3) Amendment to section 409a.--Paragraph (3) of section
409A(a) of the Internal Revenue Code of 1986 is amended to read
as follows:
``(3) Acceleration of benefits.--
``(A) In general.--The requirements of this
paragraph are met if the plan does not permit the
acceleration of the time or schedule of any payment
under the plan, except as provided in regulations by
the Secretary. The requirements of this paragraph shall
not be treated as satisfied if the plan makes any
payment described in subparagraph (B) or (C).
``(B) Excess payments for certain adjusted funding
target attainment percentages by active plan.--A
payment is described in this subparagraph if--
``(i) such payment is made during a year in
which a defined benefit plan maintained by the
employer sponsoring a nonqualified deferred
compensation plan is required to be an active
plan under section 430(c)(2)(E) or section
107(e) of the Pension Protection Act of 2006,
and such defined benefit plan has not otherwise
failed to be an active plan in such plan year
or any prior plan year,
``(ii) such defined benefit plan is not
described in clause (ii) or (iii) of section
430(c)(2)(G) (modified, if applicable by
section 107(f)(5) of the Pension Protection Act
of 2006),
``(iii) such defined benefit plan is
described in paragraph (1) or (3) of section
436(d)(or would be if section 430(g)(3)(C) did
not apply), and
``(iv) the nonqualified deferred
compensation plan makes any payment in excess
of the amounts that would be permitted if the
requirements of such paragraph (1) or (3), as
applicable, applied to such plan.
In the case of a defined benefit plan to which section
107 of the Pension Protection Act of 2006 applies,
clauses (iii) and (iv) shall apply based on rules
similar to the rules of section 436, as prescribed by
the Secretary, except that the parenthetical regarding
section 430(g)(3)(C) shall not apply. Under rules
prescribed by the Secretary, a plan shall not fail to
satisfy the requirements of this subsection solely by
reason of a modification with respect to the time and
form of distribution that is consistent with the
requirements of this subparagraph.
``(C) Excess payments by reason of certain interest
rates and mortality assumptions.--A payment is
described in this subparagraph if--
``(i) the requirements of clauses (i) and
(ii) of subparagraph (B) are satisfied, and
``(ii) the nonqualified deferred
compensation plan makes any payment in excess
of the amount that would be payable if such
plan used the interest rate and mortality
assumptions from the defined benefit plan
described in section 401(a) that would create
the smallest payments, determined on a present
value basis using the interest rate and
mortality assumptions described in section
430(h).
For purposes of this subparagraph, all defined benefit
plans maintained by the employer shall be taken into
account.''.
(c) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2007.
SEC. 102. EXPANSION OF CORRIDOR WITHIN WHICH SINGLE-EMPLOYER DEFINED
BENEFIT PLANS ARE ALLOWED TO AVERAGE ASSET VALUES.
(a) Amendment to ERISA.--Paragraph (3) of section 303(g) of the
Employee Retirement Income Security Act of 1974 is amended by adding at
the end the following new subparagraphs:
``(C) Special rule.--In the case of any applicable
plan year, subparagraph (B)(iii) shall be applied--
``(i) by substituting `80 percent' for `90
percent', and
``(ii) by substituting `120 percent' for
`110 percent'.
``(D) Applicable plan year.--For purposes of this
paragraph, the term `applicable plan year' means--
``(i) except as provided in clauses (ii)
and (iii), any plan year beginning in 2009 or
2010,
``(ii) in the case of a plan with a plan
year beginning after October 31 and before
January 1, any plan year beginning in 2008 or
2009, and
``(iii) in the case of a plan for which the
valuation date is not the first day of the plan
year, any plan year beginning in 2008 or
2009.''.
(b) Amendment to INTERNAL REVENUE CODE OF 1986.--Paragraph (3) of
section 430(g) of the Internal Revenue Code of 1986 is amended by
adding at the end the following new subparagraphs:
``(C) Special rule.--In the case of any applicable
plan year, subparagraph (B)(iii) shall be applied--
``(i) by substituting `80 percent' for `90
percent', and
``(ii) by substituting `120 percent' for
`110 percent'.
``(D) Applicable plan year.--For purposes of this
paragraph, the term `applicable plan year' means--
``(i) except as provided in clauses (ii)
and (iii), any plan year beginning in 2009 or
2010,
``(ii) in the case of a plan with a plan
year beginning after October 31 and before
January 1, any plan year beginning in 2008 or
2009, and
``(iii) in the case of a plan for which the
valuation date is not the first day of the plan
year, any plan year beginning in 2008 or
2009.''.
(c) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2007.
SEC. 103. LOOKBACK FOR BENEFIT ACCRUAL RESTRICTION.
(a) Amendment to ERISA.--Subsection (g) of section 206 of the
Employee Retirement Income Security Act of 1974 is amended by adding at
the end thereof the following:
``(12) Special rule for certain years.--For purposes of
paragraph (4) only--
``(A) In general.--For plan years beginning after
October 31, 2008, and before November 1, 2010, the
adjusted funding target attainment percentage of a plan
for purposes of paragraph (4) shall be the greater of--
``(i) such percentage, as determined
without regard to this paragraph, or
``(ii) the adjusted funding target
attainment percentage for such plan for the
plan year beginning after October 31, 2007, and
before November 1, 2008, as determined under
rules prescribed by the Secretary of the
Treasury.
``(B) Special rule.--In the case of a plan for
which the valuation date is not the first day of the
plan year--
``(i) subparagraph (A) shall apply to plan
years beginning after December 31, 2007, and
before January 1, 2010, and
``(ii) subparagraph (A)(ii) shall apply
based on the last plan year beginning before
November 1, 2007, as determined under rules
prescribed by the Secretary of the Treasury.''.
(b) Amendment to INTERNAL REVENUE CODE OF 1986.--Section 436 of the
Internal Revenue Code of 1986 is amended by adding the following at the
end thereof:
``(n) Special Rule for Certain Years.--For purposes of subsection
(e) only--
``(1) In general.--For plan years beginning after October
31, 2008, and before November 1, 2010, the adjusted funding
target attainment percentage of a plan for purposes of
subsection (e) shall be the greater of--
``(A) such percentage, as determined without regard
to this subsection, or
``(B) the adjusted funding target attainment
percentage for such plan for the plan year beginning
after October 31, 2007, and before November 1, 2008, as
determined under rules prescribed by the Secretary.
``(2) Special rule.--In the case of a plan for which the
valuation date is not the first day of the plan year--
``(A) paragraph (1) shall apply to plan years
beginning after December 31, 2007, and before January
1, 2010, and
``(B) paragraph (1)(B) shall apply based on the
last plan year beginning before November 1, 2007, as
determined under rules prescribed by the Secretary.''.
(c) Interaction With WRERA Rule.--Section 203 or the Worker,
Retiree, and Employer Recovery Act of 2008 shall apply to a plan for
any plan year in lieu of the amendments made by this section only to
the extent that such section produces a higher adjusted funding target
attainment percentage for such plan for such year. In all other cases,
such section shall not be applicable to any plan.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to plan years
beginning after October 31, 2008.
(2) Special rule.--In the case of a plan for which the
valuation date is not the first day of the plan year, the
amendments made by this section shall apply to plan years
beginning after December 31, 2007.
SEC. 104. LOOKBACK FOR CREDIT BALANCE RULE.
(a) Amendment to ERISA.--Paragraph (3) of section 303(f) of the
Employee Retirement Income Security Act of 1974 is amended by adding
the following at the end thereof:
``(D) Special rule for certain years.--
``(i) In general.--For purposes of applying
subparagraph (C) for plan years beginning after
October 31, 2009, and before November 1, 2011,
the ratio determined under such subparagraph
for the preceding plan year shall be the
greater of--
``(I) such ratio, as determined
without regard to this subparagraph, or
``(II) the ratio for such plan for
the plan year beginning after October
31, 2007, and before November 1, 2008,
as determined under rules prescribed by
the Secretary of the Treasury.
``(ii) Special rule.--In the case of a plan
for which the valuation date is not the first
day of the plan year--
``(I) clause (i) shall apply to
plan years beginning after December 31,
2008, and before January 1, 2011, and
``(II) clause (i)(II) shall apply
based on the last plan year beginning
before November 1, 2007, as determined
under rules prescribed by the Secretary
of the Treasury.''.
(b) Amendment to INTERNAL REVENUE CODE OF 1986.--Paragraph (3) of
section 430(f) of the Internal Revenue Code of 1986 is amended by
adding the following at the end thereof:
``(D) Special rule for certain years.--
``(i) In general.--For purposes of applying
subparagraph (C) for plan years beginning after
October 31, 2009, and before November 1, 2011,
the ratio determined under such subparagraph
for the preceding plan year of a plan shall be
the greater of--
``(I) such ratio, as determined
without regard to this subsection, or
``(II) the ratio for such plan for
the plan year beginning after October
31, 2007 and before November 1, 2008,
as determined under rules prescribed by
the Secretary.
``(ii) Special rule.--In the case of a plan
for which the valuation date is not the first
day of the plan year--
``(I) clause (i) shall apply to
plan years beginning after December 31,
2007, and before January 1, 2010, and
``(II) clause (i)(II) shall apply
based on the last plan year beginning
before November 1, 2007, as determined
under rules prescribed by the
Secretary.''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to plan years
beginning after October 31, 2009.
(2) Special rule.--In the case of a plan for which the
valuation date is not the first day of the plan year, the
amendments made by this section shall apply to plan years
beginning after December 31, 2008.
SEC. 105. CLARIFICATION OF TREATMENT OF EXPENSES.
(a) Amendments to ERISA.--
(1) In general.--Clause (ii) of section 303(b)(1)(A) of the
Employee Retirement Income Security Act of 1974 is amended by
striking ``plan-related expenses'' and inserting ``plan-related
administrative expenses''.
(2) Conforming amendment.--Subclause (II) of section
303(i)(2)(A)(i) of such Act is amended by striking ``plan-
related expenses'' and inserting ``plan-related administrative
expenses''.
(b) Amendments to INTERNAL REVENUE CODE OF 1986.--
(1) In general.--Clause (ii) of section 430(b)(1)(A) of the
Internal Revenue Code of 1986 is amended by striking ``plan-
related expenses'' and inserting ``plan-related administrative
expenses''.
(2) Conforming amendment.--Subclause (II) of section
430(i)(2)(A)(i) of such Code is amended by striking ``plan-
related expenses'' and inserting ``plan-related administrative
expenses''.
(c) Effective Date.--The amendments made by this section shall take
effect as if included in paragraphs (1)(A), (1)(F)(i), (2)(A), and
(2)(F)(i) of section 101(b) of the Worker, Retiree, and Employer
Recovery Act of 2008.
SEC. 106. INFORMATION REPORTING.
(a) In General.--Paragraph (1) of section 4010(b) of the Employee
Retirement Security Act of 1974 is amended by striking ``80'' and
inserting ``90''.
(b) Funding Target Attainment Percentage.--Subparagraph (B) of
section 4010(d)(2) of such Act is amended by striking ``303(d)(2).''
and inserting ``303(d)(2), without regard to the reduction under
section 303(f)(4)(B).''.
(c) Confidentiality.--Subsection (c) of section 4010 of such Act is
amended--
(1) by striking ``and no such information or documentary
material may be made public,'', and
(2) by adding at the end the following: ``All parties,
governmental or otherwise, receiving the information (or
summary report of such information) required to be provided
under this section shall be required to--
``(1) ensure that the information received will be kept
confidential,
``(2) use the information only for the purpose for which it
was requested, and
``(3) not further disclose the information except to
accomplish that purpose, unless a separate consent from the
taxpayer is obtained.
Such requirements shall not apply to information provided under this
section that is otherwise publicly available. The corporation shall
notify each person providing information under this section of any
public disclosure of such information not permitted by this subsection
within a reasonable time of such disclosure becoming known to the
corporation. If any party, governmental or otherwise, makes an
unauthorized disclosure, the person required to provide such
information under this section may bring suit against such party in
Federal district court. No liability results from a disclosure based
upon a good faith, but erroneous, interpretation of this section. Upon
a finding of a liability, such person can recover an amount not to
exceed $100,000 per act of unauthorized disclosure plus reasonable
attorney fees. The person shall have two years from the date of
discovery of the unauthorized disclosure to bring suit.''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to plan years
beginning after December 31, 2009.
(2) Confidentiality.--The amendment made by subsection (c)
shall take effect on the date of the enactment of this Act.
SEC. 107. BENEFIT RESTRICTION EFFECTIVE DATE FOR COLLECTIVELY BARGAINED
PLANS.
(a) Amendments With Respect to ERISA.--
(1) Plan amendments.--Paragraph (2) of section 103(c) of
the Pension Protection Act of 2006 is amended--
(A) by striking ``In the case'' and inserting
``Except as provided in paragraph (3), in the case'',
and
(B) by striking ``the amendments made by this
section'' and inserting ``section 206(g)(2) of the
Employee Retirement Income Security Act of 1974 (and
other provisions of such section 206(g) to the extent
that they apply to such section 206(g)(2)), as added by
this section,''.
(2) Other benefit restrictions.--
(A) In general.--Subsection (c) of section 103 of
the Pension Protection Act of 2006 is amended by adding
at the end thereof the following:
``(3) Collective bargaining delay except regarding certain
plan amendments.--
``(A) In general.--In the case of a plan maintained
pursuant to 1 or more collective bargaining agreements
between employee representatives and 1 or more
employers, the amendments made by this section shall
apply to plan years beginning after December 31, 2011,
except that paragraph (2) shall apply to plan
amendments made pursuant to a collective bargaining
agreement ratified after the date of introduction of
the Preserve Benefits and Jobs Act of 2009.
``(B) Transition rule.--
``(i) In the case of a plan described in
clause (ii), such plan shall not be required to
comply with this section and the amendments
made by this section until the date that is 60
days after the date of the enactment of this
paragraph, but such a plan may comply on any
otherwise permitted earlier date.
``(ii) A plan is described in this clause
if a limit on benefits or benefit accruals has
been or is, pursuant to section 206(g) of the
Employee Retirement Income Security Act of 1974
and section 436 of the Internal Revenue Code of
1986, in effect with respect to such plan as of
the date of the enactment of this paragraph.''.
(3) Conforming amendment.--The heading of paragraph (2) of
section 103(c) of the Pension Protection Act of 2006 is amended
to read as follows: ``Collective bargaining exception regarding
certain plan amendments''.
(b) Amendments With Respect to INTERNAL REVENUE CODE OF 1986.--
(1) Plan amendments.--Paragraph (2) of section 113(b) of
the Pension Protection Act of 2006 is amended by--
(A) striking ``In the case'' and inserting ``Except
as provided in paragraph (3), in the case'', and
(B) striking ``the amendments made by this
section'' and inserting ``section 436(c) of the
Internal Revenue Code of 1986 (and other provisions
such section 436 to the extent that they apply to such
section 436(c)), as added by this section,''.
(2) Other benefit restrictions.--
(A) In general.--Subsection (b) of section 113 of
the Pension Protection Act of 2006 is amended by adding
at the end thereof the following:
``(3) Collective bargaining delay except regarding certain
plan amendments.--
``(A) In general.--In the case of a plan maintained
pursuant to 1 or more collective bargaining agreements
between employee representatives and 1 or more
employers, the amendments made by this section shall
apply to plan years beginning after December 31, 2011,
except that paragraph (2) shall apply to plan
amendments made pursuant to a collective bargaining
agreement ratified after the date of introduction of
the Preserve Benefits and Jobs Act of 2009.
``(B) Transition rule.--
``(i) In the case of a plan described in
clause (ii), a plan shall not be required to
comply with this section and the amendments
made by this section until the date that is 60
days after the date of the enactment of this
paragraph, but such a plan may comply on any
otherwise permitted earlier date.
``(ii) A plan is described in this clause
if a limit on benefits or benefit accruals has
been or is, pursuant to section 206(g) of the
Employee Retirement Income Security Act of 1974
and section 436 of the Internal Revenue Code of
1986, in effect with respect to such plan as of
the date of the enactment of this paragraph.''.
(3) Conforming amendment.--The heading of paragraph (2) of
section 103(b) of the Pension Protection Act of 2006 is amended
to read as follows: ``Collective bargaining exception regarding
certain plan amendments''.
(c) Effective Date.--Except as provided in the amendments made by
this section, the amendments made by this section shall apply as if
included in sections 103(c) and 113(b) of such Act.
SEC. 108. SOCIAL SECURITY LEVEL-INCOME OPTIONS.
(a) Amendment to ERISA.--Subparagraph (E) of section 206(g)(3) of
the Employee Retirement Income Security Act of 1974 is amended by
adding at the end thereof the following:
``For purposes of this paragraph, any stream of payments that
is structured to be similar in amount and duration to social
security supplements described in the last sentence of section
204(b)(1)(G) shall be treated in the same manner as such
supplements.''.
(b) Amendment to INTERNAL REVENUE CODE OF 1986.--Paragraph (5) of
section 436(d) of the Internal Revenue Code of 1986 is amended by
adding at the end thereof the following:
``For purposes of this subsection, any stream of payments that is
structured to be similar in amount and duration to social security
supplements described in the last sentence of section 411(a)(9) shall
be treated in the same manner as such supplements.''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply as if included in
sections 103(a) and 113(a)(1) of the Pension Protection Act of
2006.
(2) Transition rule.--
(A) In the case of a plan described in subparagraph
(B), a plan shall not be required to comply with the
amendments made by this section until the date that is
60 days after the date of enactment of this Act, but
such a plan may comply on any otherwise permitted
earlier date.
(B) A plan is described in this subparagraph (B) if
a limit on prohibited payments is or has been, pursuant
to section 206(g) of the Employee Retirement Income
Security Act of 1974 and section 436 of the Internal
Revenue Code of 1986, in effect with respect to such
plan as of the date of enactment of this Act.
SEC. 109. PBGC GUARANTEE.
(a) Guarantee.--Section 4022 of the Employee retirement Income
Security Act of 1974 is amended by striking subsection (g).
(b) Allocation of Assets Among Priority Groups.--Section 4044 of
such Act is amended by striking subsection (e).
(c) Effective Date.--The amendments made by this section shall be
as if included in section 404 of the Pension Protection Act of 2006,
except that such amendments shall not apply to proceedings initiated
under title 11, United States Code, or under any similar Federal law or
law of a State or political subdivision, on or before the date of
enactment of this Act.
SEC. 110. APPLICATION OF EXTENDED AMORTIZATION PERIOD TO PLANS SUBJECT
TO PRIOR LAW FUNDING RULES.
(a) In General.--Title I of the Pension Protection Act of 2006 is
amended by redesignating section 107 as section 108 and by inserting
the following after section 106:
``SEC. 107. APPLICATION OF EXTENDED AMORTIZATION PERIODS TO PLANS WITH
DELAYED EFFECTIVE DATE.
``(a) In General.--In the case of plans to which section 104, 105,
or 106 of this Act apply, section 302 of the Employee Retirement Income
Security Act of 1974 and section 412 of the Internal Revenue Code of
1986 (as in effect before the amendments made by this subtitle and
subtitle B) shall apply in the manner described in this section. All
references in this section to `such Act' or `such Code' shall be to
such Act or such Code as in effect before the amendments made by this
subtitle and subtitle B.
``(b) Application of 2 and 7 Rule.--
``(1) In general.--In the case of an active plan to which
this subsection applies, section 302 of such Act and section
412 of such Code shall apply in the manner described in this
subsection.
``(2) Two year suspension of deficit reduction
contributions for certain plans.--For purposes of applying
section 302(d)(9) of such Act and section 412(l)(9) of such
Code to a plan described in paragraph (1), the funded current
liability percentage for such plan for any applicable plan year
shall be the funded current liability percentage of such plan
for the pre-applicable plan year.
``(3) Calculation of deficit reduction contribution.--For
purposes of applying section 302(d) of such Act and section
412(l) of such Code to a plan to which such subsections apply
(after taking into account paragraph (2)), the applicable
percentage described in section 302(d)(4)(C) of such Act and
section 412(l)(4)(C) of such Code shall be the third segment
rate described in sections 104(b), 105(b), and 106(b) of this
Act, provided that such applicable percentage shall only apply
to the increased unfunded new liability. The applicable
percentage determined without regard to this section shall
apply to the excess of the unfunded new liability over the
increased unfunded new liability.
``(c) Application of 15-Year Amortization.--
``(1) In general.--In the case of an active plan to which
this subsection applies, section 302 of such Act and section
412 of such Code shall apply in the manner described in this
subsection.
``(2) Calculation of deficit reduction contribution.--For
purposes of applying section 302(d) of such Act and section
412(l) of such Code to a plan described in paragraph (1), the
applicable percentage described in section 302(d)(4)(C) of such
Act and section 412(l)(4)(C) of such Code for any pre-effective
date plan year shall be the ratio of--
``(A) the annual installments payable in each year
if the increased unfunded new liability for such plan
year were amortized over 15 years, using an interest
rate equal to the third segment rate described in
sections 104(b), 105(b), and 106(b) of this Act, to
``(B) the increased unfunded new liability for such
plan year.
However, such applicable percentage shall only apply to the
increased unfunded new liability. The applicable percentage
determined without regard to this section shall apply to the
excess of the unfunded new liability over the increased
unfunded new liability.
``(d) Election.--The plan sponsor may, with respect to a plan,
elect whether to apply subsection (b) or subsection (c) or whether
neither subsection shall apply. Such election shall be made at such
times, and in such form and manner, as shall be prescribed by the
Secretary of the Treasury, and may be revoked only with the consent of
the Secretary of the Treasury. In the absence of a timely election
regarding which subsection shall apply to a plan, neither subsection
shall apply to such plan.
``(e) Failure To Maintain Active Plan.--If the minimum contribution
required for a plan to avoid an accumulated funding deficiency under
section 302 of such Act and section 412 of such Code is determined
under subsection (b) or (c) for a plan year, the plan must remain an
active plan for the subsequent plan year. If such plan fails to be an
active plan in such plan year, the minimum contribution requirement to
avoid an accumulated funding deficiency shall be increased by all
amounts by which such minimum contribution was reduced by the
application of subsection (b) or (c), plus interest on such amounts at
the third segment rate described in sections 104(b), 105(b), and 106(b)
of this Act. However, any such increase in such minimum contribution
shall not require a contribution to the extent that the contribution
would cause the value of plan assets (determined under section
302(c)(2) of such Act and section 412(c)(2) of such Code) to exceed the
current liability of such plan for such year.
``(f) Definitions.--
``(1) Applicable plan year.--For purposes of this section,
the term `applicable plan year' means--
``(A) except as provided in subparagraphs (B), (C),
and (D), any plan year beginning in 2010 or 2011,
``(B) in the case of a plan with a plan year
beginning after June 30 and before January 1, any plan
year beginning in 2009 or 2010,
``(C) in the case of a plan for which the valuation
date is not the first day of the plan year, any plan
year beginning in 2009 or 2010, and
``(D) in the case of a plan to which section 106 of
the Pension Protection Act of 2006 applies,
subparagraphs (A), (B), and (C) shall be applied by
inserting `2008', `2009', or `2010' for `2009', `2010',
or `2011', respectively, each place such year is
referenced.
``(2) Pre-applicable plan year.--For purposes of this
section, the term `pre-applicable plan year' means, with
respect to a plan, the second plan year preceding the first
applicable plan year of such plan, except that in the case of a
plan described in paragraph (1)(D), such term means the first
plan year preceding the first applicable plan year of such
plan.
``(3) Pre-effective date plan year.--For purposes of this
section, the term `pre-effective date plan year' means, with
respect to a plan, any plan year prior to the first year in
which the amendments made by this subtitle and subtitle B apply
to the plan, provided that the first pre-effective date plan
year shall be the first applicable plan year with respect to
the plan.
``(4) Increased unfunded new liability.--For purposes of
this section, the term `increased unfunded new liability'
means, with respect to a year, the excess (if any) of the
unfunded new liability over the amount of unfunded new
liability determined as if the value of the plan's assets
determined under subsection 302(c)(2) of such Act and section
412(c)(2) of such Code equaled the product of the current
liability of the plan for the year multiplied by the funded
current liability percentage of the plan for the pre-applicable
plan year.
``(5) Active plan.--For purposes of this section, the term
`active plan' shall have the meaning given such term by section
303(c)(2)(G) of the Employee Retirement Income Security Act of
1974 and in section 430(c)(2)(G) of the Internal Revenue Code
of 1986, except that `target normal cost' (without regard to
plan administrative expenses) shall be determined as if section
303 of the Employee Retirement Income Security Act of 1974 and
section 430 of the Internal Revenue Code of 1986 applied to
such plan with the modification regarding the interest rate
used, as set forth in section 303(c)(2)(G) of the Employee
Retirement Income Security Act of 1974 and in section
430(c)(2)(G) of the Internal Revenue Code of 1986.
``(6) Other definitions.--For purposes of this section, the
terms `funded current liability percentage', `unfunded new
liability', and `current liability' shall have the meanings set
forth in section 302(d) of such Act and section 412(l) of such
Code.''.
(b) Eligible Charity Plans.--Section 104 of the Pension Protection
Act of 2006 is amended by--
(1) striking ``eligible cooperative plan'' wherever it
appears in subsections (a) and (b) and inserting ``eligible
cooperative plan or an eligible charity plan'', and
(2) adding at the end the following new subsection:
``(d) Eligible Charity Plan Defined.--For purposes of this section,
a plan shall be treated as an eligible charity plan for a plan year if
the plan is maintained by more than one employer and 100 percent of the
employers are described in section 501(c)(3) of such Code.''.
(c) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
take effect as if included in the Pension Protection Act of
2006.
(2) Eligible charity plan.--The amendments made by
subsection (b) shall apply to plan years beginning after
December 31, 2008.
SEC. 111. ADDITIONS TO FUNDING-BASED LIMITS ON BENEFITS AND BENEFITS
ACCRUALS UNDER SINGLE-EMPLOYER PLANS.
(a) Amendments to INTERNAL REVENUE CODE OF 1986.--
(1) Subsection (c) of section 436 of the Internal Revenue
Code of 1986 is amended by redesignating paragraph (3) as
paragraph (4) and by inserting after paragraph (2) the
following:
``(3) Special limitations on ad hoc amendments.--
``(A) In general.--No ad hoc amendment to a defined
benefit plan which is a single employer plan which has
the effect of increasing liabilities of the plan by
reason of increases in benefits, establishment of new
benefits, changing the rate of benefit accrual, or
changing the rate of which benefits become
nonforfeitable may take effect during the plan year if
the adjusted funding target attainment percentage for
such plan year is--
``(i) less than 120 percent, or
``(ii) would be less than 120 percent
taking into account such amendment.
``(B) Exemption.--Subparagraph (A) shall cease to
apply with respect to any plan year, effective as of
the first day of the plan year (or if later, the
effective date of the amendment), upon payment by the
plan sponsor of a contribution (in addition to any
minimum required contribution under section 430) equal
to--
``(i) in the case of subparagraph (A)(i),
the amount of the increase in the funding
target of the plan (under section 430) for the
plan year attributable to the amendment, and
``(ii) in the case of subparagraph (A)(ii),
the amount sufficient to result in an adjusted
funding target attainment percentage of 120
percent.
``(C) Special rule.--An ad hoc amendment that is
otherwise permitted to take effect under this
subsection may not take effect unless the plan provides
that the accrued pension benefits of any participant or
beneficiary under the plan become nonforfeitable in the
same manner which would be required if the plan had
terminated as of the effective date of such ad hoc
amendment. This subparagraph shall not apply to an ad
hoc amendment that takes effect by reason of
subparagraph (B)(i).
``(D) Ad hoc amendment.--For purposes of this
paragraph, the term `ad hoc amendment' means an
amendment to a plan which--
``(i) increases the nonforfeitable benefits
payable to one or more participants,
``(ii) applies only to a subset of the
employees otherwise eligible to accrue benefits
under the plan,
``(iii) applies by its terms only to
employees who, during a limited period of time,
terminate employment, and
``(iv) provides that the increase described
in clause (i) is payable in the form of a
prohibited payment (as defined in subsection
(d)(5)).''.
(2) Paragraph (4) of section 436(c) of such Code, as
redesignated by paragraph (1), is amended--
(A) by inserting ``(A)'' before ``Paragraph (1)''
and moving the text thereof 2 ems to the right, and
(B) by adding at the end the following:
``(B) Paragraph (3) shall not apply to any
amendment of a plan maintained pursuant to 1 or more
collective bargaining agreements between employee
representatives and 1 or more employers.''.
(b) Amendments to ERISA.--
(1) Paragraph (2) of section 206(g) of the Employee
Retirement Income Security Act of 1974 is amended by
redesignating subparagraph (C) as subparagraph (D) and by
inserting after subparagraph (B) the following:
``(C) Special limitations on ad hoc amendments.--
``(i) In general.--No ad hoc amendment to a
defined benefit plan which is a single employer
plan which has the effect of increasing
liabilities of the plan by reason of increases
in benefits, establishment of new benefits,
changing the rate of benefit accrual, or
changing the rate of which benefits become
nonforfeitable may take effect during the plan
year if the adjusted funding target attainment
percentage for such plan year is--
``(I) less than 120 percent, or
``(II) would be less than 120
percent taking into account such
amendment.
``(ii) Exemption.--Clause (i) shall cease
to apply with respect to any plan year,
effective as of the first day of the plan year
(or if later, the effective date of the
amendment), upon payment by the plan sponsor of
a contribution (in addition to any minimum
required contribution under section 303) equal
to--
``(I) in the case of clause (i)(I),
the amount of the increase in the
funding target of the plan (under
section 303) for the plan year
attributable to the amendment, and
``(II) in the case of clause
(i)(II), the amount sufficient to
result in an adjusted funding target
attainment percentage of 120 percent.
``(iii) Special rule.--An ad hoc amendment
that is otherwise permitted to take effect
under this paragraph may not take effect unless
the plan provides that the accrued pension
benefits of any participant or beneficiary
under the plan become nonforfeitable in the
same manner which would be required if the plan
had terminated as of the effective date of such
ad hoc amendment. This subparagraph shall not
apply to an ad hoc amendment that takes effect
by reason of clause (ii)(I).
``(iv) Ad hoc amendment.--For purposes of
this subparagraph, the term `ad hoc amendment'
means an amendment to a plan which--
``(I) increases the nonforfeitable
benefits payable to one or more
participants,
``(II) applies only to a subset of
the employees otherwise eligible to
accrue benefits under the plan,
``(III) applies by its terms only
to employees who, during a limited
period of time, terminate employment,
and
``(IV) provides that the increase
described in subclause (I) is payable
in the form of a prohibited payment (as
defined in paragraph (3)(E)).''.
(2) Subparagraph (D) of section 202(g)(2) of such Act, as
redesignated by paragraph (1), is amended--
(A) by inserting ``(i)'' before ``Subparagraph
(A)'' and moving the text thereof 2 ems to the right,
and
(B) by adding at the end the following:
``(ii) Subparagraph (C) shall not apply to
any amendment of a plan maintained pursuant to
1 or more collective bargaining agreements
between employee representatives and 1 or more
employers.''.
(c) Effective Date.--The amendments made by this section shall
apply to plan amendments adopted more than 180 days after the date of
the enactment of this Act.
SEC. 112. REPORTABLE EVENTS.
(a) In General.--Section 4043 of the Employee Retirement Income
Security Act of 1974 is amended by redesignating subsection (f) as
subsection (g) and by inserting after subsection (e) the following:
``(f) Special Rule.--
``(1) In general.--A reportable event described in
paragraph (3) of subsection (c) (without regard to this
subsection) shall not be treated as occurring with respect to a
plan for an applicable plan year if--
``(A) the number of employees of the contributing
sponsor is at least 80 percent of the number of
employees of the contributing sponsor at the beginning
of the plan year, and is at least 75 percent of the
number of employees of the contributing sponsor at the
beginning of the previous plan year,
``(B) the funded vested benefit percentage (as
defined for purposes of subsection (b)(1)(B)) for the
pre-applicable plan year was at least 80 percent, and
``(C) the contributing sponsor notifies the
corporation of the use of the rule described in this
subsection by the date that such contributing sponsor
would (but for this subsection) be required to notify
the corporation of an event described in subsection
(c)(3).
``(2) Definitions.--For purposes of this subsection--
``(A) Employee.--The term `employee' means, in
connection with a contributing sponsor, an employee of
the contributing sponsor or of any member of such
sponsor's controlled group.
``(B) Applicable plan year.--The term `applicable
plan year' means--
``(i) except as provided in this
subparagraph, any plan year beginning in 2010
or 2011,
``(ii) in the case of a plan with a plan
year beginning after October 31 and before
January 1, any plan year beginning in 2009 or
2010, and
``(iii) in the case of a plan for which the
valuation date is not the first day of the plan
year, any plan year beginning in 2009 or 2010.
``(C) Pre-applicable plan year.--The term `pre-
applicable plan year' means, in connection with a plan,
the second plan year preceding the first applicable
plan year of such plan.''.
(b) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
TITLE II--MULTIEMPLOYER PLANS
SEC. 201. ADJUSTMENTS TO FUNDING STANDARD ACCOUNT RULES; REPORTING
CLARIFICATION.
(a) Amortization Periods.--
(1) Amendment to erisa.--Section 304(b) of the Employee
Retirement Income Security Act of 1974 is amended by adding at
the end the following new paragraph:
``(8) Elective special relief rules.--
``(A) Plan sponsor election.--
``(i) In general.--Notwithstanding any
other provision of this subsection, effective
with the actuarial valuation for either of the
first two plan years beginning after August 31,
2008, the plan sponsor of a multiemployer plan
that meets the solvency test in subparagraph
(B) may elect to use either the rule in clause
(ii) or the rule in clause (iii) in maintaining
its funding standard account.
``(ii) Combined outstanding balance.--Under
this clause, the outstanding balances of all
amounts required to be amortized under both
paragraph (2) and paragraph (3) may be combined
into one amount under each such paragraph, to
be amortized in equal annual installments
(until fully amortized) over a period of 30
plan years.
``(iii) Certain investment losses.--Under
this clause, the total amount of the net
investment losses, if any, incurred in either
or both of the first two plan years ending
after August 31, 2008, may be charged as an
item separate from other experience losses and
amortized in equal annual installments (until
fully amortized) over a period of 30 plan
years.
``(B) Solvency test.--An election may be made under
this paragraph if the plan actuary certifies that the
plan is projected to have sufficient assets to timely
pay expected benefits and anticipated expenditures over
the amortization period as extended.
``(C) Restriction on benefit increases.--In the
case of a plan for which a rule described in
subparagraph (A) is elected, in addition to any other
applicable restrictions on benefit increases, an
amendment increasing benefits may not go into effect
during the period of two plan years immediately
following the plan year for which the rule is first
effective, unless--
``(i) the plan actuary certifies that such
increase is paid for out of additional
contributions not allocated to the plan at the
time the election was made and the plan's
funded percentage and projected credit balances
for those two plan years are reasonably
expected to be generally at the same levels as
they would have been if the benefit increase
had not been adopted, or
``(ii) the amendment is required as a
condition of qualification under part I of
subchapter D of chapter 1 of the Internal
Revenue Code of 1986 or to comply with other
applicable law.''.
(2) Amendment to internal revenue code of 1986.--Section
431(b) of the Internal Revenue Code of 1986 is amended by
adding at the end the following new paragraph:
``(8) Elective special relief rules.--
``(A) Plan sponsor election.--
``(i) In general.--Notwithstanding any
other provision of this subsection, effective
starting with the actuarial valuation for
either of the first two plan years beginning
after August 31, 2008, the plan sponsor of a
multiemployer plan that meets the solvency test
in subparagraph (B) may elect to use either the
rule in clause (ii) or the rule in clause (iii)
in maintaining its funding standard account.
``(ii) Combined outstanding balance.--Under
this clause, the outstanding balances of all
amounts required to be amortized under both
paragraph (2) and paragraph (3) may be combined
into one amount under each such paragraph, to
be amortized in equal annual installments
(until fully amortized) over a period of 30
plan years.
``(iii) Certain investment losses.--Under
this clause, the total amount of the net
investment losses, if any, incurred in either
or both of the first two plan years ending
after August 31, 2008, may be charged as an
item separate from other experience losses and
amortized in equal annual installments (until
fully amortized) over a period of 30 plan
years.
``(B) Solvency test.--An election may be made under
this paragraph if the plan actuary certifies that the
plan is projected to have sufficient assets to timely
pay expected benefits and anticipated expenditures over
the amortization period as extended.
``(C) Restriction on benefit increases.--In the
case of a plan for which a rule described in
subparagraph (A) is elected, in addition to any other
applicable restrictions on benefit increases, an
amendment increasing benefits may not go into effect
during the period of two plan years immediately
following the plan year for which the rule is first
effective, unless--
``(i) the plan actuary certifies that such
increase is paid for out of additional
contributions not allocated to the plan when
the election was made and the plan's funded
percentage and projected credit balances for
those two plan years are reasonably expected to
be generally at the same levels as they would
have been if the benefit increase had not been
adopted, or
``(ii) the amendment is required as a
condition of qualification under part I of
subchapter D of chapter 1 or to comply with
other applicable law.''.
(b) Automatic Amortization Extensions.--
(1) Amendment to erisa.--Section 304(d)(1)(A) of the
Employee Retirement Income Security Act of 1974 is amended--
(A) by striking ``(not in excess of 5 years)'' and
inserting ``(not in excess of 10 years)'', and
(B) by redesignating subparagraph (C) as
subparagraph (D) and inserting after subparagraph (B)
the following new subparagraph:
``(C) Deemed approval.--
``(i) In general.--An application under
this paragraph shall be deemed approved unless,
within 45 days after it is submitted, the
Secretary notifies the plan sponsor that the
actuary has failed to certify to one or more of
the criteria listed in subparagraph (B).
``(ii) Corrections.--If, within 30 days
after receiving a notice under this
subparagraph, the plan sponsor corrects any
omissions identified in the notice under this
subparagraph or otherwise demonstrates that the
actuary's certification satisfies subparagraph
(B), the application shall be deemed
approved.''.
(2) Amendment to internal revenue code of 1986.--Section
431(d)(1)(A) of the Internal Revenue Code of 1986 is amended--
(A) by striking ``(not in excess of 5 years)'' and
inserting ``(not in excess of 10 years)'', and
(B) by redesignating subparagraph (C) as
subparagraph (D) and inserting after subparagraph (B)
the following new subparagraph:
``(C) Deemed approval.--
``(i) In general.--An application under
this paragraph shall be deemed approved unless,
within 45 days after it is submitted, the
Secretary notifies the plan sponsor that the
actuary has failed to certify to one or more of
the criteria listed in subparagraph (B).
``(ii) Corrections.--If, within 30 days
after receiving a notice under this
subparagraph, the plan sponsor corrects any
omissions identified in the notice under this
subparagraph or otherwise demonstrates that the
actuary's certification satisfies subparagraph
(B), the application shall be deemed
approved.''.
(c) Extended Smoothing Period and Wider Asset Valuation Corridor
for Certain Losses.--
(1) In general.--
(A) The Secretary of the Treasury shall not treat
the asset valuation method of a multiemployer plan as
unreasonable solely because the plan elects to use
either or both of the options described in subparagraph
(B) or (C). A plan may elect to use any or all of such
options. The election of such options shall apply for
purposes of sections 431 and 432 of the Internal
Revenue Code of 1986.
(B) With respect to net investment losses incurred
in either or both of the first two plan years ending
after August 31, 2008, the plan may utilize a smoothing
period of not more than ten years.
(C) For either or both of the first two plan years
beginning after August 31, 2008, the asset value
reflected by the method may not be more than 130
percent of the current fair market value.
(2) Deemed approval.--The election by a plan of either or
both of the options described in paragraph (1) shall be deemed
approved by the Secretary of the Treasury under section
412(d)(1) of the Internal Revenue Code of 1986.
(d) Modification of Certain Amortization Extensions Under Prior
Law.--Any amortization extensions under the terms of section 412(e) of
the Internal Revenue Code of 1986 (prior to enactment of the Pension
Protection Act of 2006) that were granted to multiemployer plans shall
remain in effect notwithstanding the impact of investment losses
incurred by the plans in 2008, 2009 or 2010, unless the plan sponsor
elects otherwise.
(e) Clarification of Multiemployer Reporting and Disclosure
Requirements.--Sections 103(f)(2)(C) and 104(d)(1)(D) of the Employee
Retirement Income Security Act of 1974 are both amended by striking
``as an employer of the participant''.
(f) Effective Date.--
(1) The amendments made by this section shall take effect
as of the first day of the first plan year beginning after
August 31, 2008, provided however that any election a plan
makes pursuant to this section that affects the plan's funding
standard account for the first plan year beginning after August
31, 2008 shall be disregarded for purposes of applying the
provisions of section 305 of the Employee Retirement Income
Security Act of 1974 and section 432 of the Internal Revenue
Code of 1986 to that plan year.
(2) Notwithstanding paragraph (1), the restrictions on plan
amendments increasing benefits in sections 304(b)(8)(C) of the
ERISA and 431(b)(8)(C) of the Internal Revenue Code, as added
by this section, shall be effective 30 days after the date of
enactment of this Act.
SEC. 202. MULTIEMPLOYER PLANS IN ENDANGERED OR CRITICAL STATUS.
(a) Optional Longer Correction Periods.--
(1) Amendment to erisa.--
(A) Funding improvement period.--Section 305(c)(4)
of the Employee Retirement Income Security Act of 1974
is amended by redesignating subparagraphs (C) and (D)
as subparagraphs (D) and (E), respectively, and by
inserting after subparagraph (B) the following new
subparagraph:
``(C) Election to extend period.--The plan sponsor
of an endangered or seriously endangered plan may elect
to extend the applicable funding improvement period by
up to 5 years, including any extension of the period
previously elected pursuant to section 205 of the
Worker, Retiree and Employer Relief Act of 2008.''.
(B) Rehabilitation period.--Section 305(e)(4) of
such Act is amended by redesignating subparagraph (B)
as subparagraph (C) and by inserting after subparagraph
(A) the following new subparagraph:
``(B) Election to extend period.--The plan sponsor
of a plan in critical status may elect to extend the
rehabilitation period by up to five years, including
any extension of the period previously elected pursuant
to section 205 of the Worker, Retiree and Employer
Relief Act of 2008.''.
(2) Amendment to internal revenue code of 1986.--
(A) Funding improvement period.--Section 432(c)(4)
of the Internal Revenue Code of 1986 is amended by
redesignating subparagraphs (C) and (D) as
subparagraphs (D) and (E), respectively, and by
inserting after subparagraph (B) the following new
subparagraph:
``(C) Election to extend period.--The plan sponsor
of an endangered or seriously endangered plan may elect
to extend the applicable funding improvement period by
up to 5 years, including any extension of the period
previously elected pursuant to section 205 of the
Worker, Retiree and Employer Relief Act of 2008.''.
(B) Rehabilitation period.--Section 432(e)(4) of
such Code is amended by redesignating subparagraph (B)
as subparagraph (C) and by inserting after subparagraph
(A) the following new subparagraph:
``(B) Election to extend period.--The plan sponsor
of a plan in critical status may elect to extend the
rehabilitation period by up to five years, including
any extension of the period previously elected pursuant
to section 205 of the Worker, Retiree and Employer
Relief Act of 2008.''.
(b) Simplification of the Funding Improvement Period for Certain
Seriously Endangered Plans.--
(1) Amendment to erisa.--Section 305(c) of the Employee
Retirement Income Security Act of 1974 is amended--
(A) by striking paragraph (5) and redesignating
paragraph (6) as paragraph (5), and
(B) in paragraph (1) by striking ``(as modified by
paragraph (5))''.
(2) Amendment to internal revenue code of 1986.--Section
432(c) of the Internal Revenue Code of 1986 is amended--
(A) by striking paragraph (5) and redesignating
paragraph (6) as paragraph (5), and
(B) in paragraph (1) by striking ``(as modified by
paragraph (5))''.
(c) Social Security Level Income Option.--
(1) Amendment to erisa.--Subparagraph (B)(i) of section
305(f)(2) of the Employee Retirement Income Security Act of
1974 is amended by striking ``204(b)(1)(G)),'' and inserting
``204(b)(1)(G) or any stream of payments that is structured to
be similar in amount and duration to such supplements),''.
(2) Amendment to internal revenue code of 1986.--
Subparagraph (A)(i) of section 432(f)(2) of the Internal
Revenue Code of 1986 is amended by striking ``411(b)(1)(A)),''
and inserting ``411(b)(1)(A) or any stream of payments that is
structured to be similar in amount and duration to such
supplements),''.
(3) Effective date.--
(A) In general.--Except as provided in paragraph
(2), the amendments made by this subsection shall apply
as if included in sections 202(a) and 212(a) of the
Pension Protection Act of 2006.
(B) Transition rule.--
(i) In the case of a plan described in
clause (ii), a plan shall not be required to
comply with the amendments made by this section
until the date that is 60 days after the date
of enactment of this Act, but such a plan may
comply on any otherwise permitted earlier date.
(ii) A plan is described in this clause if
a restriction on benefit payments is or has
been imposed, pursuant to section 305(f) of the
Employee Retirement Income security Act of 1974
and section 432(f) of the Internal Revenue Code
of 1986, in effect with respect to such plan as
of the date of enactment of this Act.
(d) Technical Corrections.--
(1) Amendments to erisa.--Section 305(c) of the Employee
Retirement Income Security Act of 1974 is amended--
(A) in paragraph (1)(B)(i)--
(i) by striking ``plan, including--'' and
all that follows through ``one proposal for
reductions'' and inserting ``plan, including
one proposal for reductions'',
(ii) by striking ``, and'' at the end of
subclause (I) and inserting a period, and
(iii) by striking subclause (II),
(B) in paragraph (7)(A), by striking
``(1)(B)(i)(I)'' and inserting ``(1)(B)(i)'',
(C) in paragraph (4) by adding at the end the
following:
``(E) Plans that achieve funding improvement
benchmarks while in endangered or seriously endangered
status.--If the plan's actuary certifies under
subsection (b)(3)(A) that the plan has achieved the
applicable increase in the funding percentage described
in paragraph (3) of this subsection and that the plan
is nevertheless still in endangered status, the
provisions of this subsection and subsection (d) shall
remain in effect until the earlier of the expiration of
the funding improvement period or the last day
preceding the plan year for which the actuary certifies
that the plan is no longer in endangered status.'', and
(D) in paragraph (4)(C)(ii) by striking all that
follows ``whichever is applicable,'' and inserting the
following: ``shall end as of the close of the preceding
plan year, except that, until the start of the
rehabilitation plan adoption period--
``(I) the rules of subparagraphs
(A) and (B) of subsection (d)(1) shall
apply if, prior to the date the of the
critical-status certification, the plan
was in the funding improvement plan
adoption period for the plan year, and
``(II) the rules of subsection
(d)(2) shall apply if, prior to the
date of the critical-status
certification, the plan was in the
funding improvement period for the plan
year.''.
(2) Amendments to internal revenue code of 1986.--Section
432(c) of the Internal Revenue Code of 1986 is amended--
(A) in paragraph (1)(B)(i)--
(i) by striking ``plan, including--'' and
all that follows through ``one proposal for
reductions'' and inserting ``plan, including
one proposal for reductions'',
(ii) by striking ``, and'' at the end of
subclause (I) and inserting a period, and
(iii) by striking subclause (II),
(B) in paragraph (7)(A), by striking
``(1)(B)(i)(I)'' and inserting ``(1)(B)(i)'',
(C) in paragraph (4) by adding at the end the
following:
``(E) Plans that achieve funding improvement
benchmarks while in endangered or seriously endangered
status.--If the plan's actuary certifies under
subsection (b)(3)(A) that the plan has achieved the
applicable increase in the funding percentage described
in paragraph (3) of this subsection and that the plan
is nevertheless still in endangered status, the
provisions of this subsection and subsection (d) shall
remain in effect until the earlier of the expiration of
the funding improvement period or the last day
preceding the plan year for which the actuary certifies
that the plan is no longer in endangered status.'', and
(D) in paragraph (4)(C)(ii) by striking all that
follows ``whichever is applicable,'' and inserting the
following: ``shall end as of the close of the preceding
plan year, except that, until the start of the
rehabilitation plan adoption period--
``(I) the rules of subparagraphs
(A) and (B) of subsection (d)(1) shall
apply if, prior to the date the of the
critical-status certification, the plan
was in the funding improvement plan
adoption period for the plan year, and
``(II) the rules of subsection
(d)(2) shall apply if, prior to the
date of the critical-status
certification, the plan was in the
funding improvement period for the plan
year.''.
SEC. 203. MULTIEMPLOYER PLAN MERGERS AND ALLIANCES.
(a) Multiemployer Plan Alliances.--
(1) Amendments to erisa.--
(A) Section 4231 of the Employee Retirement Income
Security Act of 1974 is amended by adding at the end
the following new subsection:
``(e) Multiemployer Plan Alliances.--
``(1) In general.--The plan sponsor of a multiemployer plan
into which another multiemployer plan has been merged may
designate the merger as an alliance to which the rules of this
subsection apply by amending the plan--
``(A) to identify the allied plan, and
``(B) to delineate the terms of operation of the
alliance, including the allocation of employer
contributions and experience gains and losses between
the merged plan and the partially separate frozen
allied plan described in paragraphs (2) and (3).
``(2) Applicable provisions.--Except to the extent
otherwise provided in the plan amendment under paragraph (1),
sections 302, 304 and 305 (minimum funding), Part 1 of Subtitle
E (withdrawal liability), sections 4244A and 4281 (plan
termination), part 3 of subtitle E (plan reorganization and
insolvency) and section 4261 (financial assistance from the
corporation) shall apply to the frozen allied plan and the plan
into which the allied plan was merged as if they were separate
plans.
``(3) Frozen allied plan treated as separate plan.--
``(A) Assets and liabilities.--The frozen allied
plan that is treated in part as a separate plan
pursuant to this paragraph comprises the assets and
liabilities of the allied plan as if it had been
amended, effective immediately before the effective
date of the merger, to cease all benefit accruals.
``(B) Employers maintaining plan.--The employers
that were obligated to contribute to the allied plan
immediately before the effective date of the merger,
and any successors thereto whether by sale,
reorganization or otherwise, shall be considered to be
the employers maintaining the partially separate frozen
allied plan, to the extent they continue to have an
obligation to contribute with respect to participants
or facilities covered by the allied plan.
``(C) Participants and beneficiaries.--The
participants and beneficiaries of the allied plan
immediately before the effective date of the merger
shall be considered to be the participants and
beneficiaries of the partially separate frozen allied
plan thereafter.
``(4) Treatment of merged plan as single plan.--Except as
provided in paragraphs (2) and (3), the allied plan and the
plan into which it has been merged shall be treated as a single
plan.
``(5) Other rules.--
``(A) Adoption of initial plan amendment.--The plan
amendment initially designating a merger as an
alliance, identifying the allied plan and delineating
the terms of the alliance must be adopted by no later
than the last day of the plan year in which the merger
takes effect.
``(B) Subsequent amendments.--That initial plan
amendment may subsequently be modified or repealed,
except that the plan gives notice of the change to the
employers and participants of the allied plan at least
15 days before the subsequent amendment takes effect.
``(C) Discretion to treat mergers differently.--The
plan sponsor of a multiemployer plan may, in its
discretion, treat some mergers as alliances and others
as full mergers, and may prescribe different terms of
operation for different alliances, if the basis for the
distinctions is not unreasonable.''.
(B) Subsection (b) of section 4231 of such Act is
amended by striking ``and'' at the end of paragraph
(3), by striking the period at the end of paragraph (4)
and inserting ``, and'', and by inserting after
paragraph (4) adding at the end the following:
``(5) a merger that is designated as an alliance under
subsection (e) shall not be treated as failing to meet any of
the criteria of this subsection solely because benefits under
the allied plan are, or are expected to be, reduced or
eliminated pursuant to section 305 as a result of the
endangered or critical status of the frozen allied plan.''.
(C) Section 404(a) of the Employee Retirement
Income Security Act of 1974 is amended by adding at the
end the following new paragraph:
``(3) With respect to a merger of multiemployer plans,
including a merger that is designated as an alliance under
section 4231(e), the plan sponsors of the merging plans shall
be considered to meet the requirements of paragraph (1)(A) if
the plan sponsors determine that the merger is not reasonably
likely to be adverse to the long-term interests of the
participants and beneficiaries of the plan for which the plan
sponsors are responsible prior to the merger.''.
(i) Section 4231(c) of the Employee
Retirement Income Security Act of 1974 is
amended by striking ``The merger of
multiemployer plans or the transfer'' and
inserting ``The merger of multiemployer plans,
including a merger that is designated as an
alliance, or the transfer''.
(2) Amendments to internal revenue code of 1986.--Section
412 of the Internal Revenue Code of 1986 is amended by adding
at the end the following:
``(e) Multiemployer Plan Alliances.--
``(1) In general.--Except to the extent otherwise provided
in the plan amendment under section 4231(e)(1) of the Employee
Retirement Income Security Act of 1974 designating a
multiemployer plan merger as an alliance, this section and
sections 431 and 432 shall apply to the frozen allied plan and
the plan into which the allied plan was merged as if they were
separate plans.
``(2) Employers maintaining plan.--The employers that were
obligated to contribute to the allied plan immediately before
the effective date of the merger, and any successors thereto
whether by sale, reorganization or otherwise, shall be
considered to be the employers maintaining the partially
separate frozen allied plan to the extent they continue to have
an obligation to contribute with respect to participants or
facilities covered by the allied plan.
``(3) Participants and beneficiaries.--The participants and
beneficiaries of the allied plan immediately before the
effective date of the merger shall be considered to be the
participants and beneficiaries of the partially separate frozen
allied plan thereafter.
``(4) Treatment of merged plan as single plan.--Except as
provided in paragraphs (2) and (3) of section 4231(e) of the
Employee Retirement Income Security Act of 1974, the allied
plan and the plan into which it has been merged shall be
treated as a single plan.
``(5) Alliance; allied plan.--For purposes of this
subsection, the terms `alliance' and `allied plan' shall have
the same meanings as they have under section 4231(e) of the
Employee Retirement Income Security Act of 1974.''.
(b) PBGC Assistance for Multiemployer Plan Mergers.--Section 4231
of the Employee Retirement Income Security Act of 1974, as amended by
this Act, is amended by adding at the end the following:
``(f) Facilitated Mergers.--
``(1) In general.--When requested to do so by the plan
sponsors, the corporation shall take reasonable actions to
promote and facilitate the merger of two or more multiemployer
plans, including a merger that is designated as an alliance, if
it determines that the transaction is in the interests of the
participants and beneficiaries of at least one of the plans,
and is not reasonably expected to be adverse to the long-term
interests of the participants and beneficiaries of the other
plan or plans. Such facilitation may include training,
technical assistance, mediation, communication with
stakeholders and support with related requests to other
government agencies, among other activities.
``(2) Financial assistance.--To facilitate mergers,
including mergers designated as alliances, which it determines
are reasonably necessary to enable one or more of the plans
involved to avoid or postpone insolvency, the corporation may
provide financial assistance to the merged plan if it
reasonably expects that such financial assistance will reduce
the corporation's likely long-term loss with respect to the
plans involved.''.
(c) Effective Date.--The amendments made by this section shall take
effect as of the first day of the first plan year beginning on or after
January 1, 2009.
SEC. 204. STRENGTHENING PARTICIPANTS' BENEFIT PROTECTIONS.
(a) Increase in Multiemployer Benefit Guarantee.--Paragraph (1) of
section 4022A(c) of the Employee Retirement Income Security Act of 1974
is amended to read as follows:
``(1) Except as provided in subsection (g), the monthly
benefit of a participant or a beneficiary which is guaranteed
under this section by the corporation with respect to a plan is
the product of the number of the participant's years of
credited service multiplied by the sum of--
``(A) 100 percent of the accrual rate up to $11,
plus 75 percent of the lesser of--
``(i) $33, or
``(ii) the accrual rate, if any, in excess
of $11, and
``(B) 50 percent of the lesser of--
``(i) $40 or
``(ii) the accrual rate, if any, in excess of $44.''.
(b) Qualified Partition of Eligible Multiemployer Plans.--
(1) Qualified partitions.--Section 4233 of the Employee
Retirement Income Security Act of 1974 is amended by adding at
the end the following new subsection:
``(g) Qualified Partition of Eligible Multiemployer Plans.--
``(1) In general.--Notwithstanding subsections (a) through
(f), upon the election by the plan sponsor of an eligible
multiemployer plan of a qualified partition, the corporation
shall order a partition of the electing multiemployer plan in
accordance with this subsection, effective on the first day of
the first month that begins at least 90 days after the date the
multiemployer plan made the qualified partition election.
``(2) Eligible multiemployer plan.--An eligible
multiemployer plan is a multiemployer plan as to which--
``(A) the plan actuary has certified pursuant to
section 305(c) that the plan is currently in critical
status (within the meaning of section 305(b)(2));
``(B) a substantial reduction in the amount of
aggregate contributions under the plan has resulted or
will result from--
``(i) cases or proceedings under title 11,
United States Code, with respect to employers,
or
``(ii) employers' ceasing to be in
business, if such employers did not pay the
full amount of withdrawal liability demanded by
the plan under section 4219;
``(C) the plan sponsor has certified, consistent
with projections provided by the plan actuary, that the
plan is likely to become insolvent;
``(D) the plan sponsor has certified, consistent
with projections provided by the plan actuary, that
contributions will have to be increased significantly
to prevent insolvency;
``(E) the plan sponsor has certified that, as of
the last day of each of the two immediately preceding
plan years--
``(i) the ratio of the number of the plan's
retirees, beneficiaries of deceased
participants, and terminated vested
participants to the number of the plan's active
participants for each such year was at least 2
to 1; and
``(ii) the ratio of benefit payments made
by the plan for each such year to contributions
required to be made to the plan under section
304 or 305(e), as applicable, for each such
year was at least 2 to 1; and
``(F) the plan sponsor has certified, consistent
with projections provided by the plan actuary, that
partition would significantly reduce the likelihood
that the plan will become insolvent.
``(3) Transfers under qualified partition order.--The
corporation's qualified partition order shall provide for
transfers as follows:
``(A) An initial transfer of--
``(i) no more than the nonforfeitable
benefits directly attributable to service with
the employers referred to in paragraph (2)(ii),
and
``(ii) assets attributable to any
withdrawal liability payments by such employers
and, as adjusted by any gains or losses
thereon, and reduced by any benefit payments
made with regard to service with the employers.
``(B) As of the last day of each plan year
following a plan year in which a qualified partition
has occurred, the plan sponsor shall determine whether
during such plan year, the aggregate contributions
under the plan declined by 10 percent or more as a
result of events described in paragraph (2)(ii); and if
such decline has occurred, an additional transfer of--
``(i) no more than the nonforfeitable
benefits directly attributable to service with
employers that meets the requirements of
paragraph (2)(ii) after the election of a
qualified partition, and
``(ii) assets attributable to any
withdrawal liability payments by such
employers, as adjusted by any gains or losses
thereon, and reduced by any benefit payments
made with regard to service with the employers.
``(4) Plan created by qualified partition.--The plan
created by the qualified partition is--
``(A) a successor plan to which section 4022A
applies, and
``(B) a terminated multiemployer plan to which
section 4041A(d) applies, with respect to which only
the employers described in paragraphs (2)(ii) and
(3)(ii) have withdrawal liability.''.
(2) Effect of qualified partition on premiums.--
(A) Clause (i) of section 4006(a)(3)(C) of the
Employee Retirement Income Security Act of 1974 is
amended by adding at the end the following:
``For purposes of this subparagraph, the value of assets held by
the corporation and the basic benefits guaranteed for multiemployer
plans shall not include assets and liabilities transferred pursuant to
a qualified partition order under section 4233(g).''.
(B) Section 4022A(f) of the Employee Retirement
Income Security Act of 1974 is amended by adding at the
end the following:
``(5) Basic benefits guaranteed in connection with assets
and liabilities transferred to the corporation pursuant to a
qualified partition order under section 4233(g) shall be
disregarded under subparagraphs (1), (2), and (3)''.
(3) PBGC guarantee of partitioned benefits.--
(A) Section 4022A of the Employee Retirement Income
Security Act of 1974 is amended by adding at the end
the following:
``(i) The monthly benefit of a participant or a beneficiary whose
benefit was transferred pursuant to a qualified partition which is
guaranteed under this section by the corporation with respect to a plan
is the nonforfeitable benefits of the participant or beneficiary
transferred pursuant to the qualified partition.''.
(B) Section 4022A(c)(1) of the Employee Retirement
Income Security Act of 1974 is amended by striking
``subsection (g)'' and inserting ``subsections (g) and
(i)''.
(c) Financing for Qualified Partitions and Other Special Matters.--
(1) Obligations of the corporation.--The second sentence of
section 4002(g)(2) of the Employee Retirement Income Security
Act of 1974 is amended to read as follows:
``The United States Government is not liable for any obligation or
liability incurred by the corporation, except with respect to
liabilities transferred pursuant to a qualified partition of a
multiemployer plan under section 4233(g) and such other special matters
as may be designated in legislation making funding available
therefor.''.
(2) PBGC fund established.--
(A) Fund Established. Section 4005 of the Employee
Retirement Income Security Act of 1974 is amended by
deleting subsections (d) and (e), redesignating
existing subsections (f) through (h) as subsections (e)
through (g), and inserting a new subsection (d), as
follows:
``(d) Establishment of Fifth Fund; Purpose; Availability, etc.--
``(1) In general.--A fifth fund is hereby established on
the books of the Treasury of the United States. Such fund shall
be for the support of special matters undertaken by the
corporation to minimize its reasonably expected long-term risk
of loss with respect to a plan and protect the reasonable
benefit expectations of plan participants and beneficiaries
pursuant to its responsibilities under section 4002(a) to
encourage the continuation and maintenance of voluntary private
pension plans for the benefit of their participants while
maintaining premiums at the lowest level consistent with that
objective.
``(2) Use of fund.--The fund established by this subsection
shall be used to finance obligations undertaken by the
corporation under section 4233 (partition of multiemployer
plans) and such other matters as may be identified from time to
time in legislation making funding available therefor.
``(3) Credits to fund.--The fund established under this
subsection shall be credited with funds made available to the
corporation that are designated for special matters and the
earnings thereon, including any amounts received in connection
with a qualified partition under section 4233(g), and shall not
include premiums paid under section 4007, employer liability or
withdrawal liability payments, the assets of terminated plans
or repayments of financial assistance under section 4261 or
other amounts received in connection with terminated or
insolvent plans.
``(4) Transactions with other funds.--Notwithstanding
paragraph (3), this fund may engage in transactions with the
other funds established under this section to the extent
reasonable and necessary to meet liquidity demands and maximize
the ability of the corporation to accomplish its mission under
section 4002(a) without increasing the premiums payable under
section 4006.
``(5) Investments.--The corporation may invest amounts of
the fund in such obligations as the corporation considers
appropriate.
``(6) Obligations of united states.--Notwithstanding any
other provision of this title, obligations of the corporation
that are financed by the fund created by this subsection shall
be obligations of the United States.''.
(3) Conforming amendments.--
(A) Section 4022A(g) of such Act is amended by
striking paragraph (2).
(B) Part 1 of subtitle E of title IV of such Act is
amended by striking section 4222, and the table of
contents for such Act is amended by striking the item
relating to section 4222.
(d) Effective Date.--
(1) The amendments made by subsection (a) shall apply with
respect to plans that first apply for financial assistance from
the Pension Benefit Guarantee Corporation after the date of
enactment of this Act.
(2) The amendments made by subsections (b) and (c) shall
take effect on the date of enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Education and Labor, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to House Education and Labor
Referred to House Ways and Means
Referred to the Subcommittee on Health, Employment, Labor, and Pensions.
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