SECTION 1. TREATMENT OF LIABILITY FOR CERTAIN MULTIPLE EMPLOYER PLANS.

    (a) In General.--In the case of an applicable pension plan--
            (1) if an eligible employer elects the application of 
        subsection (b), any liability of the employer with respect to 
        the applicable pension plan shall be determined under 
        subsection (b), and
            (2) if an eligible employer does not make such election, 
        any liability of the employer with respect to the applicable 
        pension plan shall be determined under subsection (c).
    (b) Election to Spin Off Liability.--
            (1) In general.--If an eligible employer elects, within 180 
        days after the date of the enactment of this Act, to have this 
        subsection apply, the applicable pension plan shall be treated 
        as having, effective January 1, 2006, spun off such employer's 
        allocable portion of the plan's assets and liabilities to an 
        eligible spunoff plan and the employer's liability with respect 
        to the applicable pension plan shall be determined by reference 
        to the eligible spunoff plan in the manner provided under 
        paragraph (2). The employer's liability, as so determined, 
        shall be in lieu of any other liability to the Pension Benefit 
        Guaranty Corporation or to the applicable pension plan with 
        respect to the applicable pension plan.
            (2) Liability of employers electing spinoff.--
                    (A) Ongoing funding liability.--
                            (i) In general.--In the case of an eligible 
                        spunoff plan, the amendments made by section 
                        401, and subtitles A and B of title I, of the 
                        Pension Protection Act of 2006 shall not apply 
                        to plan years beginning before the first plan 
                        year for which the plan ceases to be an 
                        eligible spunoff plan (or, if earlier, January 
                        1, 2017), and except as provided in clause 
                        (ii), the employer maintaining such plan shall 
                        be liable for ongoing contributions to the 
                        eligible spunoff plan on the same terms and 
                        subject to the same conditions as under the 
                        provisions of the Employee Retirement Income 
                        Security Act of 1974 and the Internal Revenue 
                        Code of 1986 as in effect before such 
                        amendments. Such liability shall be in lieu of 
                        any other liability to the Pension Benefit 
                        Guaranty Corporation or to the applicable 
                        pension plan with respect to the applicable 
                        pension plan.
                            (ii) Interest rate.--In applying section 
                        302(b)(5)(B) of the Employee Retirement Income 
                        Security Act of 1974 and section 412(b)(5)(B) 
                        of the Internal Revenue Code of 1986 (as in 
                        effect before the amendments made by subtitles 
                        A and B of title I of the Pension Protection 
                        Act of 2006) and in applying section 
                        4006(a)(3)(E)(iii) of such Act (as in effect 
                        before the amendments made by section 401 of 
                        such Act) to an eligible spunoff plan for plan 
                        years beginning after December 31, 2007, and 
                        before the first plan year to which such 
                        amendments apply, the third segment rate 
                        determined under section 303(h)(2)(C)(iii) of 
                        such Act and section 430(h)(2)(C)(iii) of such 
                        Code (as added by such amendments) shall be 
                        used in lieu of the interest rate otherwise 
                        used.
                    (B) Termination liability.--If an eligible spunoff 
                plan terminates under title IV of the Employee 
                Retirement Income Security Act of 1974 on or before 
                December 31, 2010, the liability of the employer 
                maintaining such plan resulting from such termination 
                under section 4062 of the Employee Retirement Income 
                Security Act of 1974 shall be determined in accordance 
                with the assumptions and methods described in 
                subsection (c)(2)(A). The employer's liability, as so 
                determined, shall be in lien of any other liability to 
                the Pension Benefit Guaranty Corporation or to the 
                applicable pension plan with respect to the applicable 
                pension plan.
    (c) Liability of Employers Not Electing Spinoff.--
            (1) In general.--If an applicable pension plan is 
        terminated under the Employee Retirement Income Security Act of 
        1974, an eligible employer which does not make the election 
        described in subsection (b) shall be liable to the corporation 
        with respect to the applicable pension plan (in lieu of any 
        other liability to the Pension Benefit Guaranty Corporation or 
        to the applicable pension plan with respect to the applicable 
        pension plan ) in an amount equal to the fractional portion of 
        the adjusted unfunded benefit liabilities of such plan as of 
        December 31, 2005, determined without regard to any adjusted 
        unfunded benefit liabilities to be transferred to an eligible 
        spunoff plan pursuant to subsection (b).
            (2) Definitions.--For purposes of this subsection--
                    (A) Adjusted unfunded benefit liabilities.--The 
                term ``adjusted unfunded benefit liabilities'' means 
                the amount of unfunded benefit liabilities (as defined 
                in section 4001(a)(18) of the Employee Retirement 
                Income Security Act of 1974), except that the interest 
                assumption shall be the rate of interest under section 
                302(b) of the Employee Retirement Income Security Act 
                of 1974 and section 412(b) of the Internal Revenue Code 
                of 1986, as in effect before the amendments made by the 
                Pension Protection Act of 2006, for the most recent 
                plan year for which such rate exists.
                    (B) Fractional portion.--The term ``fractional 
                portion'' means a fraction, the numerator of which is 
                the amount required to be contributed to the applicable 
                pension plan for the 5 plan years ending before 
                December 31, 2005, by such employer, and the 
                denominator of which is the amount required to be 
                contributed to such plan for such plan years by all 
                employers which do not make the election described in 
                subsection (b).
    (d) Other Definitions.--For purposes of this section--
            (1) Applicable pension plan.--The term ``applicable pension 
        plan'' means a single employer plan which--
                    (A) was established in the State of Alaska on March 
                18, 1967, and
                    (B) as of January 1, 2005, had 2 or more 
                contributing sponsors at least 2 of which were not 
                under common control.
            (2) Allocable portion.--The term ``allocable portion'' 
        means, with respect to any eligible employer making an election 
        under subsection (b), the portion of an applicable pension 
        plan's liabilities and assets which bears the same ratio to all 
        such liabilities and assets as such employer's share 
        (determined under subsection (c) as if no eligible employer 
        made an election under subsection (b)) of the excess (if any) 
        of--
                    (A) the liabilities of the plan, valued in 
                accordance with subsection (c), over
                    (B) the assets of the plan,
        bears to the total amount of such excess.
            (3) Eligible employer.--An ``eligible employer'' is an 
        employer which participated in an eligible multiple employer 
        plan on or after January 1, 2000.
Allows an employer participating in an eligible multiple employer plan to elect to have the pension plan treated as having spun off such employer's allocable portion of the plan's assets and liabilities to an eligible spun off plan.

 Specifies the employer's liability with respect to the spun off plan, which shall be in lieu of any other liability to the Pension Benefit Guaranty Corporation (PBGC) or to the applicable pension plan. Excludes such spun off plan from the funding requirements of the Pension Protection Act of 2006 until at least January 1, 2017. Provides that the employer maintaining such plan is liable for ongoing contributions to the eligible spun off plan as required before amendments made by such Act. Applies the third segment rate (the rate of interest based on the corporate bond yield curve taking into account only bonds maturing after 20 years) to such plan in lieu of the interest rate otherwise used. Provides that the liability of the employer if such plan terminates shall be determined in accordance with the assumptions and methods described under this Act.

Makes employers not making an election under this Act liable to the PBGC in an amount equal to the fractional portion of the adjusted unfunded benefit liabilities of such plan as of December 31, 2005, determined without regard to any adjusted unfunded benefit liabilities to be transferred to an eligible spun off plan.

Applies this Act to a single employer pension plan that: (1) was established in the State of Alaska on March 18, 1967; and (2) as of January 2, 2005, had two or more contributing sponsors, at least two of which were not under common control.
A bill to provide optional funding rules for employers in applicable multiple employer pension plans.