Workers' Pension Protection Act of 1996

Summary: TABLE OF CONTENTS: 
     Title I:  Pension Plan Funding 
     Title II:  Actuarial Assumptions 
     Title III:  Administration and Enforcement 
     Title IV:  Miscellaneous Provisions 
Workers' Pension Protection Act of 1996 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) to revise protections for workers in multiemployer pension plans.  Extends certain protections previously established for workers in single-employer pension plans to workers in multiemployer pension plans. 
Title I:  Pension Plan Funding
 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) to prohibit multiemployer pension plan trustees from increasing benefits unless the plan is operating with at least 95 percent funding.  Allows a plan that satisfies such requirement to choose to increase benefits if the benefit increase would not reduce the funding levels to below 90 percent.  Requires such a plan to reach 95 percent funding again before increasing benefits. 
Requires multiemployer plans to use specified interest rate assumptions and mortality tables. 
Modifies a rule which prohibits decrease of accrued benefits to make an exception for plan amendments which reduce an increase resulting from an increase in benefits prohibited under this title. 
Requires multiemployer plan administrators to notify plan participants, beneficiaries, and contributing employers of the plan's funding status and the limits of the guarantee by the Pension Benefit Guaranty Corporation (PBGC) if the plan becomes insolvent. 
Title II:  Actuarial Assumptions
 - Requires multiemployer plans to adopt the interest rate and mortality tables of title I. 
Title III:  Administration and Enforcement
 - Grants employers that contribute to multiemployer plans the right to seek an injunction against a plan to prevent an impermissible benefit increase or any other violation of title I or II of this Act, or obtain other appropriate relief to redress such violations or enforce such provisions. 
Authorizes a court, in its discretion, to award reasonable attorney's fees and costs to either party in such actions. 
Title IV:  Miscellaneous Provisions
 - Eliminates a special vesting rule for multiemployer plans.  Conforms vesting rules for multiemployer plans to those applicable to other qualified (single- employer) plans (thus requiring that a worker's accrued benefits be 100-percent vested after five years of service rather than the current ten years).

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Workers' Pension Protection Act of 
1996''.

                     TITLE I--PENSION PLAN FUNDING

SEC. 101. AMENDMENTS TO PENSION PLAN FUNDING REQUIREMENTS.

    Part 3 of subtitle B of title I of the Employee Retirement Income 
Security Act of 1974 is amended--
            (1) by redesignating section 308 (29 U.S.C. 1086) as 
        section 309; and
            (2) by inserting after section 307 the following new 
        section:

``SEC. 308. TREATMENT OF MULTIEMPLOYER PLANS.

    ``(a) Limitation on Benefit Increases for Underfunded Plans.--The 
trustees of a plan described in section 3(37) shall not increase 
benefits for a plan year if the plan had a funded current liability 
percentage of 95 percent or less on the last day of the plan year 
immediately preceding the plan year in which the increase in benefits 
would take effect.
    ``(b) Limitation on Amount of Benefit Increase for Other 
Multiemployer Plans.--
            ``(1) In general.--A plan described in section 3(37) with a 
        funded current liability percentage of 95 percent or more shall 
        not increase benefits if such increase would result in a funded 
        current liability percentage of less than 90 percent for the 
        plan year in which the benefit increase takes effect, including 
        the amount of the unfunded current liability under the plan 
        attributable to the benefit increase.
            ``(2) Special Rule for Certain Plans.--A plan described in 
        section 3(37) that increases benefits in accordance with 
        paragraph (1) shall not increase benefits until the plan has 
        reachieved a funded current liability percentage of 95 percent 
        or more on the last day of the plan year immediately preceding 
        the plan year in which the benefit increase would take effect.
    ``(c) Treatment of Interest Rates.--
            ``(1) In general.--The rate of interest used to determine 
        current liabilities under this section for a plan described in 
        section 3(37) shall be the rate of interest used under section 
        302(b)(5)(B)(ii), except that the highest rate in the 
        permissible range under subparagraph (B)(ii) of such section 
        shall not exceed the specified percentage under paragraph (2) 
        of the weighted average referred to in such subparagraph.
            ``(2) Specified percentage.--For purposes of paragraph (1) 
        the specified percentage shall be:

``In the case of plan years                               the specified
beginning in calendar year:                              percentage is:
    1996..........................................                 109 
    1997..........................................                 108 
    1998..........................................                 107 
    1999..........................................                 106 
    2000..........................................                 105.
    ``(d) Treatment of Mortality Tables.--
            ``(1) Standard table.--In the case of plan years beginning 
        prior to the first plan year to which the tables described in 
        paragraph (2) apply, the mortality table used in determining 
        current liability under this subsection shall be the table 
        prescribed by the Secretary of Labor which must be based on the 
        prevailing standard table (as described in section 807 of the 
        Internal Revenue Code of 1986) used by the Commissioner of the 
        Internal Revenue Service to determine reserves for group 
        annuity contracts issued on January 1, 1993.
            ``(2) Secretarial authority.--The Secretary of Labor shall 
        by regulation prescribe, for plan years beginning after 
        December 31, 1999, mortality tables to be used in determining 
        current liability under this subsection. Such tables shall be 
        identical to those prescribed by the Secretary of Treasury 
        under section 412(l)(7)(C)(ii)(II) of the Internal Revenue Code 
        of 1986.
    ``(e) Definitions.--For purposes of this section:
            ``(1) Benefits.--The term `benefits' for a plan described 
        in section 3(37) means all benefits to participants and their 
        beneficiaries under the plan.
            ``(2) Current liability.--The term `current liability' for 
        a plan described in section 3(37) means all liabilities to 
        participants and their beneficiaries under the plan.
            ``(3) Unfunded current liability.--For a plan described in 
        section 3(37), the term `unfunded current liability' means, 
        with respect to any plan year, the excess (if any) of--
                    ``(A) the current liability under the plan, over
                    ``(B) the value of the plan assets determined under 
                section 302(c)(2) (29 U.S.C. 1082(c)(2)), reduced by 
                any credit balance in the funding standard account.
        The Secretary of Labor may provide for such reduction for 
        purposes of any other provision which references this 
        subsection.
            ``(4) Funded current liability percentage.--For a plan 
        described in section 3(37), the term `funded current liability 
        percentage' means, with respect to any plan year, the 
        percentage which--
                    ``(A) the amount determined under paragraph (3)(B), 
                is of
                    ``(B) the current liability under the plan.''.

SEC. 102. EXCEPTION TO RULE PROHIBITING DECREASE OF ACCRUED BENEFITS.

    Section 204(g)(1) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1054(g)(1)) is amended by adding before the period the 
following: ``, or an amendment which reduces an increase in accrued 
benefits resulting from an increase in benefits prohibited by section 
308 (a) or (b)''.

SEC. 103. NOTICE TO PARTICIPANTS AND OTHERS OF MULTIEMPLOYER PLAN 
              FUNDING STATUS.

    Section 105 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1025) is amended by adding at the end thereof the following 
new subsection:
    ``(e) The trustees of a plan described in section 3(37) shall 
provide to plan participants, beneficiaries and employers contributing 
to the plan, on an annual basis, within 180 days after the last day of 
the plan year, notice of the plan's funded current liability percentage 
on the last day of the immediately preceding plan year, and of the 
limits on the Pension Benefit Guaranty Corporation's guarantee if the 
plan becomes insolvent. Such notice shall be written in a manner so as 
to be understood by the average plan participant.''.

SEC. 104. EFFECTIVE DATE.

    The amendments made by this title shall apply to plans in plan 
years beginning after December 31, 1996.

                    TITLE II--ACTUARIAL ASSUMPTIONS

SEC. 201. INTEREST RATE AND MORTALITY ASSUMPTIONS USED.

    Section 4213(b) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1393(b)) is amended--
            (1) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B), respectively;
            (2) by striking ``In'' and inserting ``(1) In''; and
            (3) by adding at the end thereof the following new 
        paragraph:
    ``(2) Effective for plan years beginning after December 31, 1996--
            ``(A) the rate of interest used to determine an employer's 
        withdrawal liability under this part shall be the rate of 
        interest determined under section 308(c); and
            ``(B) the mortality table used in determining an employer's 
        withdrawal liability under this part shall be the mortality 
        table determined under section 308(d) for determining current 
        liability.''.

SEC. 202. EFFECTIVE DATE.

    The amendments made by this title shall apply to plans in plan 
years beginning after December 31, 1996.

               TITLE III--ADMINISTRATION AND ENFORCEMENT

SEC. 301. ADMINISTRATION AND ENFORCEMENT REQUIREMENTS.

    Section 502(a) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1132(a)) is amended--
            (1) paragraph (8), by striking ``or'' at the end thereof;
            (2) in paragraph (9), by striking the period and inserting 
        ``; or''; and
            (3) by adding at the end thereof the following new 
        paragraph:
            ``(10) by an employer which contributes to a multiemployer 
        plan (A) to enjoin any act or practice which violates any 
        provision of sections 308, 204(g)(1), and 105(e), or (B) to 
        obtain other appropriate equitable relief (i) to redress such 
        violations of such sections or (ii) to enforce any provision of 
        such sections.''.

SEC. 302. ATTORNEY'S FEES AND COSTS.

    Section 502(g) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1132(g)) is amended by adding at the end thereof the 
following new paragraph:
    ``(3) In any action under ``section 502(a)(1) by an employer, the 
court in its discretion may allow a reasonable attorney's fee and costs 
of action to either party.''.

SEC. 303. CIVIL ACTIONS BY CORPORATION.

    Section 4003(e)(1) of the Employee Retirement Income Security Act 
of 1974 (29 U.S.C. 1303(e)(1)) is amended--
            (1) by striking ``, and (B)'' and inserting ``, (B)''; and
            (2) by inserting before the period the following: ``, and 
        (C) in the case of a multiemployer plan, sections 308, 
        204(g)(1), 105(e), and 4213(b)(2)''.

SEC. 304. EFFECTIVE DATE.

    The amendments made by this title shall apply to plans in plan 
years beginning after December 31, 1996.

                   TITLE IV--MISCELLANEOUS PROVISIONS

SEC. 401. ELIMINATION OF SPECIAL VESTING RULE FOR MULTIEMPLOYER PLANS.

    (a) In General.--Paragraph (2) of section 203(a) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1053(a)(2)) is 
amended--
            (1) in the matter preceding subparagraph (A), by striking 
        ``subparagraph (A), (B), or (C)'' and inserting ``subparagraph 
        (A) or (B)''; and
            (2) by striking subparagraph (C).
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to plan years beginning after the earlier of--
            (1) the later of--
                    (A) December 31, 1996; or
                    (B) the date on which the last of the collective 
                bargaining agreements pursuant to which the plan is 
                maintained terminates (determined without regard to any 
                extension thereof after the date of the enactment of 
                this Act); or
            (2) January 1, 1999.
Such amendments shall not apply to any individual who does not have 
more than one hour of service under the plan on or after the first day 
of the first plan year to which such amendments apply.