To amend the Internal Revenue Code of 1986 to increase the permissible range for the interest rate used in determining the additional funding requirements for defined benefit plans which are not multiemployer plans, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Pension Interest Rate Relief Act of 
2002''.

SEC. 2. INTEREST RATE RANGE FOR ADDITIONAL FUNDING REQUIREMENTS.

    (a) Amendments to the Internal Revenue Code of 1986.--
            (1) Special rule.--Clause (i) of section 412(l)(7)(C) of 
        the Internal Revenue Code of 1986 (relating to interest rate) 
        is amended by adding at the end the following new subclause:
                                    ``(III) Special rule for 2001 
                                through 2004.--For a plan year 
                                beginning in 2001, 2002, 2003 or 2004, 
                                notwithstanding subclause (I), in the 
                                case that the rate of interest used 
                                under subsection (b)(5) exceeds the 
                                highest rate permitted under subclause 
                                (I), the rate of interest used to 
                                determine current liability under this 
                                subsection may exceed the rate of 
                                interest otherwise permitted under 
                                subclause (I); except that such rate of 
                                interest shall not exceed 120 percent 
                                of the weighted average referred to in 
                                subsection (b)(5)(B)(ii).''
            (2) Quarterly contributions.--Subsection (m) of section 412 
        of such Code is amended by adding at the end the following new 
        paragraph:
            ``(7) Special rule for 2005.--In any case in which the 
        interest rate used to determine current liability is determined 
        under subsection (l)(7)(C)(i)(III) for purposes of applying 
        paragraphs (1) and (4)(B)(ii) for plan years beginning in 2005, 
        the current liability for the preceding plan year shall be 
        redetermined using 105 percent as the specified percentage 
        determined under subsection (l)(7)(C)(i)(II).''
    (b) Amendments to the Employee Retirement Income Security Act of 
1974.--
            (1) Special rule.--Clause (i) of section 302(d)(7)(C) of 
        the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1082(d)(7)(C)) is amended by adding at the end the following 
        new subclause:
                                    ``(III) Special rule for 2001 
                                through 2004.--For a plan year 
                                beginning in 2001, 2002, 2003 or 2004, 
                                notwithstanding subclause (I), in the 
                                case that the rate of interest used 
                                under subsection (b)(5) exceeds the 
                                highest rate permitted under subclause 
                                (I), the rate of interest used to 
                                determine current liability under this 
                                subsection may exceed the rate of 
                                interest otherwise permitted under 
                                subclause (I); except that such rate of 
                                interest shall not exceed 120 percent 
                                of the weighted average referred to in 
                                subsection (b)(5)(B)(ii).''
            (2) Quarterly contributions.--Subsection (e) of section 302 
        of such Act (29 U.S.C. 1082) is amended by adding at the end 
        the following new paragraph:
            ``(7) Special rule for 2005.--In any case in which the 
        interest rate used to determine current liability is determined 
        under subsection (d)(7)(C)(i)(III) for purposes of applying 
        paragraphs (1) and (4)(B)(ii) for plan years beginning in 2005, 
        the current liability for the preceding plan year shall be 
        redetermined using 105 percent as the specified percentage 
        determined under subsection (d)(7)(C)(i)(II).''
    (c) PBGC.--Clause (iii) of section 4006(a)(3)(E) of the Employee 
Retirement Income Security of Act 1974 (29 U.S.C. 1306(a)(3)(E)) is 
amended by adding at the end the following new subclause:
    ``(IV) In the case of plan years beginning after December 31, 2001, 
and before January 1, 2005, subclause (II) shall be applied by 
substituting `100 percent' for `85 percent' and by substituting `115 
percent' for `100 percent'. Subclause (III) shall be applied for such 
years without regard to the preceding sentence. Any reference to this 
clause by any other sections or subsections (other than sections 4010, 
4011 and 4043) shall be treated as a reference to this clause without 
regard to this subclause.''
    (d) Amendments to Retirement Protection Act of 1994.--
            (1) Transition rule made permanent.--Paragraph (1) of 
        section 769(c) of the Retirement Protection Act of 1994 is 
        amended--
                    (A) by striking ``transition'' each place it 
                appears in the heading and the text, and
                    (B) by striking ``for any plan year beginning after 
                1996 and before 2010''.
            (2) Special rules.--Paragraph (2) of section 769(c) of the 
        Retirement Protection Act of 1994 is amended to read as 
        follows:
            ``(2) Special rules.--The rules described in this paragraph 
        are as follows:
                    ``(A) For purposes of section 412(l)(9)(A) of the 
                Internal Revenue Code of 1986 and section 302(d)(9)(A) 
                of the Employee Retirement Income Security Act of 1974, 
                the funded current liability percentage for any plan 
                year shall be treated as not less than 90 percent.
                    ``(B) For purposes of section 412(m) of the 
                Internal Revenue Code of 1986 and section 302(e)(9) of 
                the Employee Retirement Income Security Act of 1974, 
                the funded current liability percentage for any plan 
                year shall be treated as not less than 100 percent.
                    ``(C) For purposes of determining unfunded vested 
                benefits under section 4006(a)(3)(E)(iii) of the 
                Employee Retirement Income Security Act of 1974, the 
                mortality table shall be the mortality table used by 
                the plan.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to plan years beginning after December 31, 2001.

Summary: Pension Interest Rate Relief Act of 2002 - Amends the Internal Revenue Code and Employee Retirement Income Security Act of 1974 by increasing, for plan years beginning 2001 through 2004, the permissible interest rate range used to determine additional funding requirements for certain benefit plans which are not multiemployer plans. Sets forth a special rule regarding the interest rate used to determine liability for plan years beginning in 2005. Amends the Retirement Protection Act of 1994 to establish special rules relating to funding liability percentages and the mortality table to be used for purposes of determining unfunded vested benefits.