To amend title I of the Employee Retirement Income Security Act of 1974 to require equitable funding of pension plans maintained by corporations which also maintain executive pension plans.

Summary: Employees' Pension Equity Act of 2003 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) to require the funding of all other employees' non-executive pension plans to be within a certain range in relation to the funding for executive pension plans for highly compensated employees, if both types of pension plans are maintained by the same employer.

Sets a five-percent limit on the excess executive plan funding percentage for a plan year (by prohibiting the funded current liability percentage for the executive plan from exceeding that for the non-executive plan by more than five percent).

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Employees' Pension Equity Act of 
2003''.

SEC. 2. FINDINGS.

    The Congress finds as follows:
            (1) Some large companies are setting aside millions of 
        dollars to protect pensions of highly compensated executives at 
        the same time as they forgo contributions to financially 
        strained and underfunded pension plans for non-executive 
        workers. Underfunding of pension plans for non-executives has 
        been increasing.
            (2) There are a variety of pension-type ``supplemental 
        executive retirement plans'' for highly compensated executives, 
        including: unfunded executive pension plans; executive plan 
        ``rabbi trusts,'' which are not taxable when established but 
        are subject to creditors' claims; executive plan ``secular 
        trusts,'' where company contributions are taxable but not 
        subject to creditors' claims; and, corporate-owned, trust-
        owned, or split-dollar life insurance.
            (3) It is difficult to compare the funding levels of 
        regular pension plans and executive pensions. Under current 
        law, companies must disclose pension assets and liabilities, 
        company contributions, and other details of employee pension 
        plans in their annual reports. But, for executive pensions, 
        companies are only required by the Securities and Exchange 
        Commission to disclose the existence of trusts they establish 
        for their Chief Executive Officer and their four other highest-
        paid executive officers, and not the amount of money in them or 
        other details.

SEC. 3. EQUITABLE FUNDING REQUIREMENT FOR EMPLOYERS MAINTAINING AN 
              EXECUTIVE PENSION PLAN.

    Section 302 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1082) is amended--
            (1) by redesignating subsection (h) as subsection (i); and
            (2) by inserting after subsection (g) the following new 
        subsection:
    ``(h) Equitable Funding Requirement for Employers Maintaining an 
Executive Pension Plan.--
            ``(1) Definitions.--For purposes of this subsection--
                    ``(A) Executive pension plan.--The term `executive 
                pension plan' means, with respect to an employer, any 
                pension plan maintained by such employer primarily for 
                the purpose of providing for the deferral of 
                compensation of one or more highly compensated 
                employees of such employer.
                    ``(B) Non-executive pension plan.--The term `non-
                executive pension plan' means, with respect to an 
                employer, a pension plan maintained by such employer 
                other than an executive pension plan maintained by such 
                employer.
                    ``(C) Highly compensated employee.--The term 
                `highly compensated employee' has the meaning provided 
                such term in section 414(q) of the Internal Revenue 
                Code of 1986.
                    ``(D) Funded current liability percentage.--The 
                term `funded current liability percentage' has the 
                meaning provided such term in subsection (d)(8)(B).
            ``(2) Requirement.--In any case in which--
                    ``(A) an employer maintains a non-executive pension 
                plan to which this part applies, and
                    ``(B) the employer also maintains an executive 
                pension plan for any plan year ending with or during a 
                plan year of such non-executive pension plan,
        the employer shall meet the equitable funding requirement of 
        this subsection for such plan year of such non-executive 
        pension plan.
            ``(3) Equitable funding requirement.--The equitable funding 
        requirement of this subsection is met by an employer for a plan 
        year if--
                    ``(A) the excess executive plan funding percentage 
                of the employer for such plan year is not more than 5 
                percent, or
                    ``(B) the employer has applied to the plan the 
                additional contributions necessary to correct such 
                excess executive funding percentage by a reduction of 
                not less than 5 percentage points.
            ``(4) Excess executive plan funding percentage.--For 
        purposes of this subsection, the excess executive plan funding 
        percentage of an employer for a plan year of a non-executive 
        pension plan is the difference between--
                    ``(A) the funded current liability percentage of 
                the executive pension plan maintained by the employer 
                with respect to the plan year of such executive pension 
                plan ending with or during such plan year of such non-
                executive pension plan, and
                    ``(B) the funded current liability percentage of 
                the non-executive pension plan maintained by the 
                employer with respect to such plan year of such non-
                executive pension plan.
            ``(5) Treatment of 2 or more executive pension plans.--In 
        any case in which an employer maintains 2 or more executive 
        pension plans for plan years ending with or during a plan year 
        of a non-executive plan maintained by such employer, the 
        reference in paragraph (4)(A) to the funded current liability 
        percentage of an executive pension plan shall be deemed a 
        reference to the average of the funded current liability 
        percentages for such plan years of such executive pension plans 
        maintained by such employer. ''.

SEC. 4. EFFECTIVE DATE.

    The amendment made by this Act shall apply with respect to plan 
years (of non-executive pension plans) beginning after the date of the 
enactment of this Act.