II 

116TH CONGRESS 

2D SESSION S. 5045 

To amend the Internal Revenue Code of 1986 and the Employee Retirement 

Income Security Act of 1974 to reform the treatment of multiemployer 

plans, to ensure the ability of the Pension Benefit Guaranty Corporation 

to provide guaranteed benefits of retirees, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 17, 2020 

Mr. GRASSLEY (for himself and Mr. ALEXANDER) introduced the following 

bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 to reform 

the treatment of multiemployer plans, to ensure the ability of the Pension Benefit Guaranty Corporation to provide guaranteed benefits of retirees, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Chris Allen Multiemployer Pension Recapitalization and 

6 Reform Act of 2020’’. 


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1 (b) TABLE OF CONTENTS.—The table of contents for 

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—RESTRUCTURING PENSION INSURANCE FOR 

MULTIEMPLOYER DEFINED BENEFIT PENSION PLANS 

Subtitle A—Special Partitions of Eligible Multiemployer Plans 

Sec. 101. Special partitions of eligible multiemployer plans. 

Subtitle B—PBGC Reforms 

Sec. 111. Guarantee rate increase for plans receiving financial assistance. 

Sec. 112. Amendment to definition of insolvency. 

Sec. 113. Termination of multiemployer plans. 

Sec. 114. Benefits under certain terminated plans. 

Subtitle C—Pension Insurance Modeling 

Sec. 121. Pension insurance modeling. 

TITLE II—FUNDING RULES, WITHDRAWAL LIABILITY, AND 

OTHER REFORMS 

Subtitle A—Minimum Funding Standard for Multiemployer Plans 

Sec. 201. Valuation of plan liabilities. 

Subtitle B—Additional Funding Rules for Multiemployer Plans 

PART I—PLAN STATUS AMENDMENTS

Sec. 211. Amendments to Internal Revenue Code of 1986. 

Sec. 212. Amendments to Employee Retirement Income Security Act of 1974. 

Sec. 213. Transition rules. 

PART II—PROVISIONS RELATING TO PLAN MERGERS

Sec. 221. Provisions relating to plan mergers and consolidations. 

Sec. 222. Clarification of PBGC financial assistance for plan mergers and partitions. 

Sec. 223. Restoration not required for certain mergers. 

PART III—WITHDRAWAL LIABILITY REFORM

Sec. 231. Withdrawal liability reform. 

TITLE III—PLAN GOVERNANCE, DISCLOSURE, AND OTHER REFORMS FOR MULTIEMPLOYER DEFINED BENEFIT PENSION 

PLANS 

Subtitle A—Plan Governance and Operations for Multiemployer Plans 

Sec. 301. Independent trustees. 

Sec. 302. Investigatory authority. 

Sec. 303. Conditions on financial assistance. 


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Sec. 304. Excise tax on excess compensation of covered employees of partitioned multiemployer plans. 

Subtitle B—Reportable Events for Multiemployer Plans 

Sec. 311. Reportable events. 

Subtitle C—Funding Notices to Participants in Multiemployer Plans 

Sec. 321. Improved multiemployer plan disclosure. 

Sec. 322. Penalties for failure to provide notices. 

Subtitle D—Consistency of Criminal Penalties 

Sec. 331. Consistency of criminal penalties. 

TITLE IV—OTHER MULTIEMPLOYER PLAN REFORMS 

Sec. 401. Clarification of fiduciary duty of retiree representative who is a trustee. 

Sec. 402. Safe harbors. 

Sec. 403. Clarification of notice and comment process. 

Sec. 404. Protection of participants receiving disability benefits. 

Sec. 405. Model notice. 

TITLE V—ALTERNATIVE PLAN STRUCTURES 

Sec. 501. Composite plans. 

Sec. 502. Application of certain requirements to composite plans. 

Sec. 503. Treatment of composite plans under title IV. 

Sec. 504. Conforming changes. 

Sec. 505. Effective date. 

TITLE VI—FINANCIAL PROVISIONS 

Sec. 601. Additional premiums. 

Sec. 602. Funding. 

Sec. 603. Composite plan transition fee. 


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1 TITLE I—RESTRUCTURING PEN2 SION INSURANCE FOR MULTI3 EMPLOYER DEFINED BEN4 EFIT PENSION PLANS 

5 Subtitle A—Special Partitions of 

6 Eligible Multiemployer Plans 

7 SEC. 101. SPECIAL PARTITIONS OF ELIGIBLE MULTIEM8 PLOYER PLANS. 

9 (a) IN GENERAL.—Title IV of the Employee Retire10 ment Income Security Act of 1974 (29 U.S.C. 1301 et 

11 seq.) is amended by inserting after section 4233 the fol12 lowing: 

13 ‘‘SEC. 4233A. SPECIAL PARTITIONS OF ELIGIBLE MULTIEM14 PLOYER PLANS. 

15 ‘‘(a) IN GENERAL.— 

16 ‘‘(1) REQUIREMENT TO ORDER PARTITION.— 

17 Upon the application by the plan sponsor of an eligi18 ble multiemployer plan described in subsection (b) 

19 for a partition of the plan, the corporation shall 

20 order a partition of the plan in accordance with this 

21 section, provided the other requirements in this sec22 tion are met. The corporation shall make a deter23 mination regarding the application not later than 

24 150 days after the date such application was filed 

25 (or, if later, the date such application was comVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 pleted) in accordance with regulations that shall be 

2 issued by the corporation under subsection (h). 

3 ‘‘(2) NOTIFICATION OF PARTICIPANTS.—Not 

4 later than 30 days after submitting an application 

5 for partition of a plan under paragraph (1), the plan 

6 sponsor of the plan shall notify the participants and 

7 beneficiaries of such application, in the form and 

8 manner prescribed by the corporation. 

9 ‘‘(3) IMPLEMENTATION OF TRANSFER.—The 

10 corporation shall implement the partition order 

11 issued under this section not later than 60 days 

12 after the completion of the corporation’s determina13 tion under paragraph (1). 

14 ‘‘(4) FILING DATE OF APPLICATION.—Parti15 tions under this section shall apply only with respect 

16 to any eligible multiemployer plan whose plan spon17 sor files an application that is determined by the 

18 corporation to be complete pursuant to regulations 

19 issued by the corporation under subsection (h)(1) 

20 and that is filed by the later of the time specified 

21 in such regulations or 1 year after the corporation 

22 issues such regulations. 

23 ‘‘(b) ELIGIBLE MULTIEMPLOYER PLAN.—For pur24 poses of this section— 


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1 ‘‘(1) IN GENERAL.—The term ‘eligible multiem2 ployer plan’ means a multiemployer plan that meets 

3 any of the following conditions: 

4 ‘‘(A) The plan became insolvent (as de5 scribed in section 4245(b), as in effect the day 

6 before the date of enactment of this section) on 

7 or after December 16, 2014, and prior to the 

8 date of enactment of this section and has not 

9 terminated. 

10 ‘‘(B) The plan— 

11 ‘‘(i)(I) was certified, in the most re12 cent annual certification filed pursuant to 

13 section 305(b)(3) (as in effect on the day 

14 before the date of enactment of this sec15 tion) before the date of enactment of this 

16 section, to be in critical and declining sta17 tus (as defined in section 305(b)(6), as so 

18 in effect), and has not terminated as of 

19 such date; 

20 ‘‘(II) implemented a suspension of 

21 benefits under section 305(e)(9) (as in ef22 fect on the day before the date of enact23 ment of this section) prior to the date of 

24 enactment of this section; 


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1 ‘‘(III)(aa) was certified, in the most 

2 recent annual certification filed pursuant 

3 to section 305(b)(3) (as so in effect) before 

4 the date of enactment of this section, to be 

5 in critical status (as defined in section 

6 305(b)(2), as so in effect), and has not ter7 minated as of such date; 

8 ‘‘(bb) has a funded percentage that is 

9 less than 40 percent on a current liability 

10 basis, based on the most recent Form 

11 5500, Schedule MB, line 1b(1) for current 

12 value of assets and line 1d(2)(a) for cur13 rent liability, filed before the date of enact14 ment of this section; and 

15 ‘‘(cc) has an active to inactive partici16 pant ratio that is below 40 percent as of 

17 the most recent Form 5500 filed before the 

18 date of enactment of this section; or 

19 ‘‘(IV)(aa) was certified, in the most 

20 recent annual certification filed pursuant 

21 to section 305(b)(3) (as so in effect) before 

22 the date of enactment of this section, to be 

23 in critical status (as defined in section 

24 305(b)(2), as so in effect) and has not ter25 minated before such date, 


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1 ‘‘(bb) has an active to total partici2 pant ratio that is below 20 percent as of 

3 the most recent Form 5500 filed before the 

4 date of enactment of the section; and 

5 ‘‘(cc) has more than 100,000 partici6 pants as of the most recent Form 5500 

7 filed before the date of enactment of the 

8 section; and 

9 ‘‘(ii) is not the plan described in sec10 tion 9701(a)(3) of the Internal Revenue 

11 Code of 1986, determined without regard 

12 to the limitation on participation to indi13 viduals who retired in 1976 and thereafter. 

14 ‘‘(2) ELIGIBLE PLANS REQUIRED TO FILE FOR

15 PARTITION.— 

16 ‘‘(A) IN GENERAL.—An eligible multiem17 ployer plan (other than a plan eligible under 

18 paragraph (1)(B)(i)(II)) shall file with the cor19 poration for partition under this section. If an 

20 eligible plan required under the preceding sen21 tence to file for partition does not so file in a 

22 timely manner, the plan is subject to termi23 nation under section 4042. 


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1 ‘‘(B) EXCEPTION.—If a plan is reasonably 

2 determined to be ineligible for future adjust3 ments under subsection (j)(3)(C)(iii)— 

4 ‘‘(i) subparagraph (A) shall not apply 

5 to such plan, and 

6 ‘‘(ii) such plan may withdraw the par7 tition application (or, as provided by the 

8 corporation in regulations, not submit such 

9 application at all). 

10 ‘‘(c) CONDITIONS FOR PARTITION.— 

11 ‘‘(1) RATE OF ACCRUALS.— 

12 ‘‘(A) IN GENERAL.—As a condition of any 

13 partition under this section, the rate of future 

14 accruals, during the period beginning on the 

15 date of the partition order and ending 15 years 

16 after the effective date of the partition, shall 

17 not exceed the lesser of— 

18 ‘‘(i) a monthly benefit (payable as a 

19 single life annuity commencing at the par20 ticipant’s normal retirement age) equal or 

21 equivalent to 1 percent of the annual con22 tributions required to be made with respect 

23 to a participant as of the first day of the 

24 first plan year that begins after the date of 

25 enactment of this section; or 


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1 ‘‘(ii) the accrual rate under the plan 

2 on such first day. 

3 ‘‘(B) DETERMINATION OF EQUIVALENT

4 RATE.—The plan sponsor may determine the 

5 equivalent rate of future accruals based on the 

6 standard or average contribution base units 

7 which the plan sponsor determines to be rep8 resentative for active participants and such 

9 other factors as the plan sponsor determines to 

10 be relevant. Such determinations by the plan 

11 sponsor may be made on the basis of individual 

12 active participants, groups of active partici13 pants, or all active participants in total. 

14 ‘‘(C) SPECIAL RULE FOR FUTURE ACCRU15 ALS.—To the extent that the rate of future ac16 cruals exceeds the limitation determined under 

17 this paragraph, the plan sponsor shall adjust 

18 the rate of future accruals in accordance with 

19 this paragraph effective as of the date of the 

20 partition order. 

21 ‘‘(2) ELIMINATION OF ADJUSTABLE BENE22 FITS.—As a condition of any partition under this 

23 section, the plan sponsor of an eligible multiem24 ployer plan shall eliminate all adjustable benefits in 

25 the nature of an early retirement subsidy (including 


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1 a subsidized early retirement actuarial reduction fac2 tor) for all participants not in pay status as of the 

3 date of the partition application. Nothing in this 

4 paragraph shall affect the right of a participant to 

5 receive an unsubsidized early retirement benefit. 

6 ‘‘(d) SUCCESSOR PLANS AND ORIGINAL PLANS.— 

7 ‘‘(1) IN GENERAL.—The plan created by the 

8 partition order is a successor plan to which section 

9 4022A applies. 

10 ‘‘(2) PLAN SPONSOR AND PLAN ADMINIS11 TRATOR.—The plan sponsor of an eligible multiem12 ployer plan prior to partition and the administrator 

13 of such plan shall be the plan sponsor and the ad14 ministrator, respectively, of the original plan and the 

15 successor plan created by the partition order. 

16 ‘‘(3) ORIGINAL PLAN.—The remaining plan 

17 after benefits have been transferred to the successor 

18 plan pursuant to the partition order is the original 

19 plan. Benefit payments made by the successor plan 

20 shall not constitute a reduction in benefits with re21 spect to the original plan. 

22 ‘‘(e) FINANCIAL ASSISTANCE TO SUCCESSOR PLANS

23 FROM THE CORPORATION.— 

24 ‘‘(1) IN GENERAL.—Upon approval of an appli25 cation filed pursuant to subsection (i), the corporaVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 tion shall provide financial assistance to each suc2 cessor plan of an eligible multiemployer plan. 

3 ‘‘(2) NONAPPLICABILITY OF REPAYMENT

4 RULE.—Financial assistance provided to a successor 

5 plan pursuant to this subsection shall not be subject 

6 to the requirements of section 4261(b)(2), except 

7 that the corporation may condition receipt of finan8 cial assistance under this subsection on reasonable 

9 terms consistent with regulations prescribed by the 

10 corporation to prevent abuse of the multiemployer 

11 plan program or prevent unreasonable risk of loss to 

12 the corporation. 

13 ‘‘(f) PAYMENT REQUIREMENTS OF ORIGINAL

14 PLAN.—For each participant or beneficiary of the plan 

15 whose benefit or portion thereof was transferred to the 

16 successor plan, the original plan shall pay a monthly ben17 efit to such participant or beneficiary for each month in 

18 which such benefit is in pay status following the effective 

19 date of such partition in an amount equal to the excess 

20 of— 

21 ‘‘(1) the monthly benefit that would be paid to 

22 the participant or beneficiary under the terms of the 

23 original plan had the transfer of benefits not oc24 curred (taking into account any applicable benefit 


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1 reductions or plan amendments following the effec2 tive date of the partition); over 

3 ‘‘(2) the monthly benefit for such participant or 

4 beneficiary that is paid by the successor plan. 

5 ‘‘(g) TRANSFER OF BENEFITS.— 

6 ‘‘(1) IN GENERAL.—A partition order under 

7 subsection (a) shall provide for a transfer of benefits 

8 from the original plan to the successor plan in the 

9 amount necessary for the original plan to be pro10 jected to remain solvent indefinitely, as defined in 

11 section 1.432(e)(9)–1(d)(5)(ii) of title 26, Code of 

12 Federal Regulations (excluding subparagraph 

13 (A)(2)), as in effect on the date on which such regu14 lations were issued, using actuarial and other as15 sumptions to be promulgated by the corporation in 

16 the regulations described in subsection (h)(4). Such 

17 transfer amounts shall be determined without re18 spect to the amount guaranteed under section 

19 4022A. 

20 ‘‘(2) CONSIDERATIONS.— 

21 ‘‘(A) IN GENERAL.—In determining the 

22 transfer amount under paragraph (1), the cor23 poration shall take into account all obligations 

24 of the original plan, including the payment of 

25 benefits required under subsection (f) in excess 


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1 of the amount paid by the successor plan and 

2 all plan expenses and premium amounts. 

3 ‘‘(B) PROJECTION OF ASSETS AND LIABIL4 ITIES.—The amount of the transfer of benefits 

5 shall be based on a projection of plan assets 

6 and liabilities to the projected partition date, as 

7 specified in the partition application, and— 

8 ‘‘(i) the projection of plan assets shall 

9 be based on the fair market value of plan 

10 assets as of the end of the last plan year 

11 preceding the date of the application, with 

12 appropriate adjustments for actual or an13 ticipated plan experience through the pro14 jected partition date; and 

15 ‘‘(ii) the projection of plan liabilities 

16 shall be based on the participant data used 

17 in the most recently completed actuarial 

18 valuation. 

19 ‘‘(3) SPECIAL RULE FOR INSOLVENT PLANS.— 

20 With respect to an insolvent plan described in sub21 section (b)(1)(A), the corporation shall provide fi22 nancial assistance to the original plan, as needed for 

23 the plan to pay to each participant and beneficiary 

24 in the successor plan the excess, if any, of— 


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1 ‘‘(A) the monthly benefit that would be 

2 paid to the participant or beneficiary under the 

3 terms of the original plan, prior to insolvency, 

4 had the transfer of benefits not occurred (tak5 ing into account any applicable benefit reduc6 tions or plan amendments following the effec7 tive date of the partition); over 

8 ‘‘(B) the monthly benefit for such partici9 pant or beneficiary that is paid by the successor 

10 plan. 

11 ‘‘(h) REGULATIONS.— 

12 ‘‘(1) IN GENERAL.—The corporation shall issue 

13 regulations on the requirements for partition appli14 cations not later than 180 days after the date of en15 actment of this section. By regulation, the corpora16 tion may assign eligible multiemployer plans into 

17 groups, based on plan size (prioritizing larger plans), 

18 projected date of plan insolvency (prioritizing plans 

19 expected to become insolvent within 5 years), or 

20 such other factors as the corporation deems appro21 priate, for determining when an application for par22 tition under this section may be filed. Any regula23 tions issued under this section shall be interim final 

24 or final regulations. 


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1 ‘‘(2) EFFECT OF NO REGULATION.—If the cor2 poration does not issue regulations within 180 days 

3 after the date of enactment of this section, any ap4 plications for partition under this section filed after 

5 the date that is 180 days after such date of enact6 ment (and prior to the date regulations are issued) 

7 shall be deemed to be approved. 

8 ‘‘(3) RULES FOR DETERMINING PARTICIPANTS

9 AND BENEFICIARIES.—The regulations under this 

10 subsection shall include rules for determining which 

11 participants and beneficiaries are included in the 

12 transfer of benefits. 

13 ‘‘(4) ACTUARIAL ASSUMPTIONS.—The regula14 tions under this subsection shall prescribe acceptable 

15 actuarial assumptions, for purposes of an applica16 tion, relating to the following: 

17 ‘‘(A) Future investment returns which 

18 must be consistent with the applicable discount 

19 rate under section 304, except that— 

20 ‘‘(i) in no case shall the assumption 

21 for future returns be less than 5.5 percent 

22 for purposes of determining the initial par23 tition amount; and 

24 ‘‘(ii) in no case, while the partition 

25 amount is being determined or while the 


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1 partition is in effect, shall the assumption 

2 used for determining adjustments under 

3 subsection (j) be less than the lesser of— 

4 ‘‘(I) the rate equal to the 24- 

5 month average of the third segment 

6 rate (as defined in section 

7 303(h)(2)(C)(iii)), as of the date the 

8 determination is made, without regard 

9 to section 303(h)(2)(C)(iv), increased 

10 by 2 percent; or 

11 ‘‘(II) 5.5 percent. 

12 ‘‘(B) Future contribution base units. 

13 ‘‘(C) Future contribution rate increases, 

14 taking into account the adopted rehabilitation 

15 plan. 

16 ‘‘(D) Future withdrawal liability payments. 

17 ‘‘(E) Future administrative expenses. 

18 ‘‘(F) Mortality. 

19 ‘‘(G) Any other assumptions deemed by 

20 the corporation to be material. 

21 ‘‘(5) RULES RELATING TO ASSUMPTIONS.— 

22 ‘‘(A) INFORMATION REQUIRED.—For pur23 poses of paragraph (4), when prescribing ac24 ceptable actuarial assumptions, the corporation 

25 shall not require a plan sponsor to obtain data 


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1 or other information that a plan sponsor should 

2 not reasonably be expected to have in its pos3 session, unless it can be obtained with reason4 able effort and expense. 

5 ‘‘(B) ECONOMIC ACTIVITY ASSUMPTION.— 

6 For purposes of paragraph (4)(B), an assump7 tion related to future contribution base units 

8 shall be considered reasonable and appropriate 

9 for purposes of the application under this sec10 tion, provided that— 

11 ‘‘(i) if the recent experience of the 

12 plan has been declining contribution base 

13 units, the plan actuary may assume future 

14 contribution base units will continue to de15 cline at the same annualized trend as over 

16 the 5 immediately preceding plan years un17 less such assumption is unreasonable based 

18 on criteria which may be prescribed by the 

19 corporation by regulation, and 

20 ‘‘(ii) if the recent experience of the 

21 plan has been increasing, or neither in22 creasing nor decreasing, contribution base 

23 units, the plan actuary may assume future 

24 contribution base units will remain un25 changed indefinitely, unless such assumpVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 tion is unreasonable based on criteria the 

2 corporation may prescribe. 

3 ‘‘(6) DETERMINATION OF BENEFITS GUARAN4 TEES.—The regulations under this subsection shall 

5 include rules for determining the amounts of bene6 fits guaranteed under section 4022A, including ac7 ceptable methods to approximate credited service for 

8 participants and beneficiaries in pay status where 

9 records cannot reasonably be obtained by the plan 

10 administrator. 

11 ‘‘(i) PARTITION APPLICATIONS.— 

12 ‘‘(1) IN GENERAL.—An application for partition 

13 under this section submitted by a plan sponsor shall 

14 be filed electronically and contain the required infor15 mation set forth in regulations promulgated by the 

16 corporation. 

17 ‘‘(2) APPROVAL STANDARDS.—The corporation 

18 shall approve a partition application if the applying 

19 plan meets the requirements for a partition under 

20 this section. 

21 ‘‘(3) EVALUATION OF INITIAL TRANSFER.—In 

22 reviewing an application under this section, the plan 

23 shall propose the initial amount of the transfer of 

24 benefits under the partition order that is required 

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1 view and modify the amount, if applicable, pursuant 

2 to its regulations. 

3 ‘‘(4) DETERMINATIONS BY THE CORPORA4 TION.— 

5 ‘‘(A) DETERMINATION OF INELIGI6 BILITY.—If the corporation determines the plan 

7 to be ineligible under subsection (b) for a parti8 tion under this section, the corporation shall 

9 notify the plan sponsor in writing of such deter10 mination not later than 30 days after the appli11 cation is filed. Such notice shall specify the rea12 sons the plan is ineligible for a special partition. 

13 The applicant plan will have a period of at least 

14 60 days, or longer if specified by the Corpora15 tion through regulations, to modify its applica16 tion, which shall be subject to expedited review 

17 by the corporation and, for purposes of satis18 fying the 1-year filing requirement for special 

19 partition, will relate back to the date the appli20 cation was initially filed. 

21 ‘‘(B) INCOMPLETE APPLICATIONS.—If the 

22 corporation determines the application by the 

23 plan sponsor lacks information necessary for 

24 the corporation to approve or deny the applica25 tion, the corporation shall notify the plan sponVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 sor in writing, detailing which components are 

2 missing, not later than 30 days after the appli3 cation is filed. Nothing in the preceding sen4 tence shall prevent the corporation from asking 

5 the plan sponsor at a later date for additional 

6 information necessary to determine the parti7 tion amount. 

8 ‘‘(C) FACTUAL SUBMISSIONS BY PLAN

9 SPONSOR.—The factual submissions made by a 

10 plan sponsor in a partition application, includ11 ing participant data and benefit calculations, 

12 shall be presumed to be correct, unless clearly 

13 erroneous. 

14 ‘‘(j) POST-PARTITION ADJUSTMENTS.— 

15 ‘‘(1) PROCESS FOR ADJUSTMENTS.— 

16 ‘‘(A) IN GENERAL.—After benefits have 

17 been transferred under the partition order, the 

18 corporation shall, at least every third year 

19 thereafter, adjust the transfer of benefits, as 

20 necessary to enable the original plan to be pro21 jected to remain solvent indefinitely, consistent 

22 with limitations on guaranteed benefits (if ap23 plicable under paragraph (3)(C)). The adjust24 ments shall be made based on such procedures 

25 as the corporation shall prescribe by regulation. 


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1 ‘‘(B) PLANS PROJECTED TO BE INSOL2 VENT.—If the original plan is not projected to 

3 be solvent 30 years after any adjustment review 

4 date (without regard to whether or not an ad5 justment takes place in connection with such 

6 date), taking into account the adjustments per7 mitted by this paragraph, such plan shall elec8 tronically file a report with the corporation, as 

9 the corporation shall require by regulation. If 

10 the plan subsequently reports for 3 consecutive 

11 years for which an adjustment review is con12 ducted that the plan is not projected to be sol13 vent 30 years after the date of each such ad14 justment review, the plan shall be terminated. 

15 ‘‘(2) BASIS FOR ADJUSTMENT.—The adjust16 ment shall be based solely on, as applicable, updated 

17 participant data, calculations of guaranteed benefits 

18 for participants and beneficiaries covered under the 

19 successor plan, contribution experience, current ac20 tuarial assumptions (if changed since the initial 

21 transfer of benefits), and changes in the market 

22 value of the original plan’s assets. 

23 ‘‘(3) LIMITATIONS ON ADJUSTMENT.— 

24 ‘‘(A) IN GENERAL.—The corporation shall 

25 not adjust under paragraph (1) the transfer of 


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1 benefits to provide additional financial assist2 ance if the corporation determines that the 

3 original plan or the bargaining parties com4 mitted an abuse of the multiemployer program 

5 with respect to the original plan or otherwise 

6 unreasonably took actions (or avoided taking 

7 actions) with the result that there is an in8 creased risk of loss to the corporation with re9 spect to the successor plan or the original plan. 

10 ‘‘(B) END OF ADJUSTMENT AUTHORITY.— 

11 No adjustments under paragraph (1) to the 

12 transfer of benefits shall be allowed with re13 spect to any plan year beginning 30 or more 

14 years after the date of the partition. 

15 ‘‘(C) AGGREGATE LIMITS.—If the initial 

16 transfer of benefits from the plan under sub17 section (g)— 

18 ‘‘(i) was less than 100 percent of the 

19 amount of benefits under the plan guaran20 teed under section 4022A for each partici21 pant, any adjustment under paragraph (1) 

22 shall not result in a benefit for any partici23 pant in the successor plan in excess of 100 

24 percent of the participant’s guaranteed 


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1 benefit, determined as of the date of the 

2 initial transfer; 

3 ‘‘(ii) was equal to or greater than 100 

4 percent of the amount of benefits so guar5 anteed, any adjustment under paragraph 

6 (1) shall not result in a benefit for any 

7 participant in the successor plan in excess 

8 of the amount of the participant’s benefit 

9 subject to the initial transfer; and 

10 ‘‘(iii) was less than 5 percent of the 

11 amount of benefits so guaranteed, there 

12 shall be no adjustment under paragraph 

13 (1). 

14 ‘‘(4) TERMINATED AND INSOLVENT PLANS.— 

15 With respect to an original plan partitioned under 

16 this section that subsequently is terminated or be17 comes insolvent, the benefits transferred under the 

18 partition order shall revert to the original plan, the 

19 partition shall be reversed, and financial assistance 

20 provided pursuant to the partition order shall cease. 

21 ‘‘(5) REGULATIONS.—The corporation shall 

22 promulgate regulations describing the process and 

23 requirements for reporting and the circumstances 

24 under which plans will be terminated in accordance 


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•S 5045 IS

1 with the provisions of section 4041A pursuant to 

2 this subsection. 

3 ‘‘(k) PLANS THAT IMPLEMENTED SUSPENSION OF

4 BENEFITS.— 

5 ‘‘(1) IN GENERAL.—An eligible multiemployer 

6 plan described in subsection (b)(1)(B)(i)(II) may be 

7 approved for a partition under this section only if it 

8 unwinds the suspension, and, if applicable, the pre9 vious partition described in such subsection in ac10 cordance with regulations to be issued by the cor11 poration, in consultation with the Secretary of the 

12 Treasury. The unwinding of a suspension or parti13 tion described in such subsection must be contingent 

14 upon the corporation’s approval of the application 

15 for partition under this section. 

16 ‘‘(2) TIMING OF UNWINDING OF SUSPENSION

17 OF BENEFITS.—In the case of a partition described 

18 in paragraph (1), the suspension of benefits shall be 

19 unwound retroactively. Benefits shall be restored to 

20 pre-suspension levels as of the effective date of the 

21 partition under this section and participants who are 

22 receiving benefits on the date of enactment of this 

23 section shall, beginning not later than 180 days 

24 after the approval of a partition order under this 

25 section, receive a special payment, payable over a peVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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•S 5045 IS

1 riod not to exceed 2 years, equal to the amount of 

2 benefits previously suspended as prescribed in regu3 lations. Such plans are subject to the requirements 

4 of subsection (c). 

5 ‘‘(l) FIDUCIARY PROTECTION.—Plan participants 

6 and beneficiaries shall not have a claim under section 409 

7 or section 502 of this Act against plan fiduciaries with 

8 respect to an application for partition assistance made in 

9 good faith or the allocation of benefit liabilities between 

10 the successor plan and the original plan. 

11 ‘‘(m) EFFECT OF PARTITION ON WITHDRAWAL LI12 ABILITY.— 

13 ‘‘(1) IN GENERAL.—A partition order under 

14 this section is taken into account in determining 

15 withdrawal liability under section 4201 of an em16 ployer that contributes to the original plan, provided 

17 that the employer remains a contributing employer 

18 to the original plan (and in compliance with any ap19 plicable funding improvement or rehabilitation plan) 

20 for a period of 15 years following the effective date 

21 of the liability transfer. 

22 ‘‘(2) WITHDRAWALS AFTER LESS THAN 15

23 YEARS.— 

24 ‘‘(A) IN GENERAL.—If an employer com25 pletely withdraws or partially withdraws from a 


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•S 5045 IS

1 plan that was partitioned under this section at 

2 any time within the 15-year period described in 

3 paragraph (1), the transfer of benefits under 

4 subsection (g) shall not be taken into account 

5 in computing the employer’s complete or partial 

6 withdrawal liability, and the amount of the an7 nual withdrawal liability payment amount oth8 erwise determined shall be increased by 10 per9 cent. 

10 ‘‘(B) EXCEPTION.—Subparagraph (A) 

11 shall not apply— 

12 ‘‘(i) if the complete or partial with13 drawal is due to a decertification, a change 

14 in bargaining representatives, disclaimer of 

15 interest, or because of an event described 

16 in section 4218; or 

17 ‘‘(ii) in the case of a partial with18 drawal due to a bargaining unit or facility 

19 take-out if the contribution base units for 

20 the plan year immediately following the 

21 year of the partial withdrawal are at least 

22 97 percent of the contribution base units 

23 for the plan year immediately preceding 

24 the year of the partial withdrawal. 


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•S 5045 IS

1 ‘‘(3) EXCEPTION.—Paragraphs (1) and (2) 

2 shall not apply to an employer that first had an obli3 gation to contribute to the plan partitioned under 

4 this section after the date of enactment of this sec5 tion. 

6 ‘‘(n) RESTRICTIONS ON BENEFIT IMPROVEMENTS.— 

7 ‘‘(1) INCREASE IN PLAN LIABILITIES.— 

8 ‘‘(A) IN GENERAL.—If the plan sponsor 

9 adopts a plan amendment that increases plan li10 abilities (due to any increase in benefits, any 

11 change in the accrual of benefits, or any change 

12 in the rate at which benefits become nonforfeit13 able) that takes effect after the effective date of 

14 the partition, the original plan shall make pay15 ments to the corporation for each year during 

16 the 20-year period following the effective date 

17 of the benefit increase. For purposes of this 

18 paragraph, an increase in benefits due to an in19 crease in the contribution rate or compensation 

20 shall be considered a prohibited increase in ben21 efits. 

22 ‘‘(B) EXCEPTION FOR CERTAIN ACCRU23 ALS.—Subparagraph (A) shall not apply to any 

24 change in future accruals after the end of the 


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•S 5045 IS

1 15-year period during which such accruals are 

2 limited under subsection (c). 

3 ‘‘(2) AMOUNT PAYABLE TO CORPORATION.— 

4 The amount paid by the original plan to the cor5 poration under paragraph (1) each year shall be 

6 equal to the lesser of— 

7 ‘‘(A) the total value of the increase in ben8 efit payments for the year that is attributable 

9 to the benefit improvement; or 

10 ‘‘(B) the total benefit payments from the 

11 successor plan for such year. 

12 ‘‘(3) TIMING OF PAYMENT.—Payments under 

13 paragraph (2) shall be made by the original plan at 

14 the time of, and in addition to, any premium im15 posed by the corporation on the plan. 

16 ‘‘(4) PBGC AUTHORITY.—The corporation is 

17 authorized to bring an action against the original 

18 plan to prevent or correct any and all actions by 

19 plan sponsors, a principal purpose of which is to 

20 evade or avoid payments due to the corporation 

21 under paragraph (2), or that may have the effect of 

22 evading or avoiding such payments. Payments under 

23 paragraph (2) shall be determined without regard to 

24 such actions by plan sponsors. 


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•S 5045 IS

1 ‘‘(5) EXCEPTION FOR CERTAIN CHANGES.—The 

2 requirements of this subsection do not apply to an 

3 increase or change in benefits that is required by law 

4 or that is a de minimis change, as determined by the 

5 corporation. 

6 ‘‘(o) POST-PARTITION DISCLOSURES.—Not later 

7 than 90 days after the first day of each plan year begin8 ning after the effective date of a partition under this sec9 tion, the plan sponsor of the original plan shall electroni10 cally file with the corporation a report including the fol11 lowing information: 

12 ‘‘(1) The estimated funded percentage (as de13 fined in section 305(k)(2)) as of the first day of 

14 such plan year, and the underlying actuarial value of 

15 assets and liabilities taken into account in deter16 mining such percentage. 

17 ‘‘(2) The estimated amount of all investment 

18 returns for the original plan during the preceding 

19 plan year. 

20 ‘‘(3) The market value of the assets of the plan 

21 (determined as provided in paragraph (1)) as of the 

22 last day of the plan year preceding such plan year. 

23 ‘‘(4) The total value of all contributions made 

24 by employers and employees during the plan year 

25 preceding such plan year. 


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•S 5045 IS

1 ‘‘(5) The total value of all benefits paid during 

2 the plan year preceding such plan year. 

3 ‘‘(6) Cash flow projections for such plan year 

4 and the 29 succeeding plan years, and the assump5 tions used in making such projections. 

6 ‘‘(7) Funding standard account projections for 

7 such plan year and the 9 succeeding plan years, and 

8 the assumptions used in making such projections. 

9 ‘‘(8) Any significant reduction in the number of 

10 active participants during the plan year preceding 

11 such plan year, and the reason for such reduction. 

12 ‘‘(9) A list of employers that withdrew from the 

13 plan in the plan year preceding such plan year, and 

14 the resulting reduction in contributions. 

15 ‘‘(10) A list of employers that paid withdrawal 

16 liability to the plan during the plan year preceding 

17 such plan year and, for each employer, a total as18 sessment of the withdrawal liability paid, the annual 

19 payment amount, and the number of years remain20 ing in the payment schedule with respect to such 

21 withdrawal liability. 

22 ‘‘(11) Any material changes to benefits, accrual 

23 rates, or contribution rates during the plan year pre24 ceding such plan year, and whether such changes re25 late to the conditions of the partition assistance. 


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•S 5045 IS

1 ‘‘(12) Details regarding any funding improve2 ment plan or rehabilitation plan and updates to such 

3 plan. 

4 ‘‘(13) The number of participants and bene5 ficiaries during the plan year preceding such plan 

6 year who are active participants, the number of par7 ticipants and beneficiaries in pay status, and the 

8 number of terminated vested participants and bene9 ficiaries. 

10 ‘‘(14) For— 

11 ‘‘(A) the first plan year after the effective 

12 date of the partition, a list of all employers that 

13 contributed to the plan during the plan year; 

14 and 

15 ‘‘(B) subsequent plan years, changes to the 

16 list of contributing employers. 

17 ‘‘(15) The information contained on the most 

18 recent annual return under section 6058 of the In19 ternal Revenue Code of 1986 and actuarial report 

20 under section 6059 of such Code of the plan. 

21 ‘‘(16) Copies of the plan document and amend22 ments, other retirement benefit or ancillary benefit 

23 plans relating to the plan and contribution obliga24 tions under such plans, a breakdown of administra25 tive expenses of the plan, participant census data 


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•S 5045 IS

1 and distribution of benefits, the most recent actu2 arial valuation report as of the plan year, financial 

3 reports, and copies of the portions of collective bar4 gaining agreements relating to plan contributions, 

5 funding coverage, or benefits, and such other infor6 mation as the corporation may reasonably require. 

7 ‘‘(17) A list of the employers that contributed 

8 more than 5 percent of total contributions to the 

9 plan during the preceding plan year, and the amount 

10 contributed by each such employer. 

11 Any information or documentary material submitted to 

12 the corporation pursuant to this subsection that could 

13 identify individual employers, if clearly designated by the 

14 person making the submission as confidential (on each 

15 page in the case of a document, and in the file name in 

16 the case of a digital file), shall be exempt from disclosure 

17 under section 552 of title 5, United States Code, and no 

18 such information or documentary material may be made 

19 public except as may be relevant to any administrative or 

20 judicial action or proceeding, including an informal rule21 making. 

22 ‘‘(p) RESTRICTIONS ON CONTRIBUTION DE23 CREASES.— 

24 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

25 except in any plan year in which the plan is certified 


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•S 5045 IS

1 by the plan actuary as in unrestricted status pursu2 ant to section 305(b)(1)(B), the plan sponsor of an 

3 original plan may not accept a collective bargaining 

4 agreement with respect to such original plan that in5 cludes a reduction in employer contribution rates. 

6 ‘‘(2) EXCEPTION.—Under a process to be pro7 mulgated by regulation by the corporation, a plan 

8 sponsor of an original plan may petition the corpora9 tion for the authority to approve a collective bar10 gaining agreement that contemplates a reduction in 

11 employer contribution rates. Such regulation shall 

12 include a requirement that a plan petitioning for 

13 such authority demonstrate that its existing con14 tribution rates are higher than contribution rates 

15 paid on behalf of other workers covered by collective 

16 bargaining agreements in the same industry in near17 by localities. The corporation shall approve the peti18 tion if the plan sponsor demonstrates that the reduc19 tion in contribution rates improves the long-term 

20 funding or solvency of the plan, and does not in21 crease the corporation’s expected loss with respect to 

22 the plan. 

23 ‘‘(q) EFFECT ON ACCUMULATED FUNDING DEFI24 CIENCY.—Any accumulated funding deficiency (as defined 

25 in section 304(a)) of a plan shall be reduced to zero as 


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•S 5045 IS

1 of the first day of the plan year during which the partition 

2 under this section is effective. 

3 ‘‘(r) COORDINATION OF REPORTING AND DISCLO4 SURE REQUIREMENTS.—The corporation, the Secretary, 

5 and the Secretary of the Treasury may, individually or col6 lectively, promulgate regulations to reduce reporting and 

7 disclosure obligations for successor plans, including co8 ordinating with reporting and disclosure by original 

9 plans.’’. 

10 (b) CONFORMING AMENDMENT.—Section 4233 of the 

11 Employee Retirement Income Security Act of 1974 (29 

12 U.S.C. 1413) is amended by adding at the end the fol13 lowing: 

14 ‘‘(g) This section shall not apply to an eligible multi15 employer plan described in section 4233A(b) that receives 

16 a special partition under that section.’’. 

17 (c) CLERICAL AMENDMENT.—The table of contents 

18 in section 1 of the Employee Retirement Income Security 

19 Act of 1974 (29 U.S.C. 1001 et seq.) is amended by in20 serting after the item relating to section 4233 the fol21 lowing: 

‘‘4233A. Special partitions of eligible multiemployer plans.’’. 


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•S 5045 IS

1 Subtitle B—PBGC Reforms 

2 SEC. 111. GUARANTEE RATE INCREASE FOR PLANS RECEIV3 ING FINANCIAL ASSISTANCE. 

4 (a) IN GENERAL.—Section 4022A(c)(1) of the Em5 ployee Retirement Income Security Act of 1974 (29 

6 U.S.C. 1322(c)(1)) is amended by striking subparagraph 

7 (A) and inserting the following: 

8 ‘‘(A) 100 percent of the accrual rate up to $15, 

9 plus 75 percent of the lesser of— 

10 ‘‘(i) $54.67, or 

11 ‘‘(ii) the accrual rate, if any, in excess of 

12 $15, and’’. 

13 (b) EFFECTIVE DATES.— 

14 (1) IN GENERAL.—The amendments made by 

15 this section shall apply to financial assistance pro16 vided by the Pension Benefit Guaranty Corpora17 tion— 

18 (A) to plans that become insolvent after 

19 the date of the enactment of this Act; or 

20 (B) pursuant to a special partition under 

21 section 4233A of the Employee Retirement In22 come Security Act of 1974, as added by this 

23 Act. 

24 (2) EXCEPTION FOR PARTITIONS ON OR BE25 FORE DATE OF ENACTMENT.—The amendments 


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•S 5045 IS

1 made by this section shall not apply to financial as2 sistance provided by the Pension Benefit Guaranty 

3 Corporation pursuant to a partition of a multiem4 ployer plan occurring on or before the date of the 

5 enactment of this Act. 

6 SEC. 112. AMENDMENT TO DEFINITION OF INSOLVENCY. 

7 (a) AMENDMENTS TO EMPLOYEE RETIREMENT IN8 COME SECURITY ACT OF 1974.—Section 4245 of the Em9 ployee Retirement Income Security Act of 1974 (29 

10 U.S.C. 1426) is amended— 

11 (1) by amending subsection (a) to read as fol12 lows: 

13 ‘‘(a) Notwithstanding sections 203 and 204, an insol14 vent multiemployer plan shall suspend the payments of 

15 benefits which are not basic benefits, in accordance with 

16 this section, and terminate the plan under section 

17 4041A(a)(4).’’; 

18 (2) in subsection (b)— 

19 (A) by striking paragraphs (1) and (2) and 

20 inserting the following: 

21 ‘‘(1) a multiemployer plan is insolvent if the 

22 plan’s available resources in any of the next 5 plan 

23 years are projected not to be sufficient to pay bene24 fits under the plan when due for the plan year;’’; 


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•S 5045 IS

1 (B) by redesignating paragraphs (3) and 

2 (4) as paragraphs (2) and (3), respectively; and 

3 (C) in paragraph (2), as so redesignated, 

4 by inserting ‘‘expected’’ before ‘‘contributions’’; 

5 (3) by striking subsection (c); 

6 (4) by redesignating subsections (d) through (g) 

7 as subsections (c) through (f), respectively; 

8 (5) in subsection (c), as so redesignated— 

9 (A) in paragraph (1)— 

10 (i) by striking ‘‘critical status, as de11 scribed in subsection 305(b)(2),)’’ and in12 serting ‘‘such critical status)’’; 

13 (ii) by striking ‘‘3 times’’ and insert14 ing ‘‘10 times’’; and 

15 (iii) by striking ‘‘5 plan years’’ each 

16 place such term appears and inserting ‘‘8 

17 plan years’’; 

18 (B) in paragraph (2)— 

19 (i) by striking ‘‘plan’s available re20 sources are not sufficient to pay benefits 

21 under the plan when due for the next plan 

22 year’’ and inserting ‘‘plan will be insolvent 

23 in any of the next 10 plan years’’; and 

24 (ii) by inserting ‘‘and the corporation’’ 

25 before the period at the end; 


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•S 5045 IS

1 (C) by striking paragraph (3); and 

2 (D) by redesignating paragraph (4) as 

3 paragraph (3); 

4 (6) in subsection (d), as so redesignated— 

5 (A) in paragraph (1)— 

6 (i) by striking ‘‘subsection (d)(1) or 

7 (2)’’ and inserting ‘‘subsection (c)(1) or 

8 (2)’’; and 

9 (ii) by striking ‘‘Treasury,’’ in sub10 paragraph (A) and inserting ‘‘Treasury 

11 and’’; 

12 (B) in paragraph (2)— 

13 (i) by striking ‘‘resource benefit level 

14 determined in writing for that insolvency 

15 year’’ and inserting ‘‘reduction of benefit 

16 payments to the level of basic benefits and 

17 the termination of the plan under section 

18 4041A(a)(4) as of the first day of the sev19 enth full plan month of the plan’s first in20 solvency year under subsection (b)(3)’’; 

21 and 

22 (ii) by striking ‘‘each insolvency year’’ 

23 and inserting ‘‘the first insolvency year’’; 

24 (C) by striking paragraph (3); and 


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•S 5045 IS

1 (D) by redesignating paragraphs (4) and 

2 (5) as paragraphs (3) and (4), respectively; 

3 (7) in subsection (e), as so redesignated— 

4 (A) in paragraph (1) by striking ‘‘, for 

5 which the resource benefit level is above the 

6 level of basic benefits,’’; and 

7 (B) by striking paragraph (2) and insert8 ing after paragraph (1) the following new para9 graph: 

10 ‘‘(2) A plan sponsor who has determined that 

11 the plan’s available resources for an insolvency year 

12 are below the level of basic benefits shall apply for 

13 financial assistance from the corporation under sec14 tion 4261.’’; and 

15 (8) in subsection (f), as so redesignated, by 

16 striking ‘‘Subsections (a) and (c)’’ and inserting 

17 ‘‘Subsection (a)’’. 

18 (b) AMENDMENTS TO INTERNAL REVENUE CODE OF

19 1986.—Section 418E of the Internal Revenue Code of 

20 1986 is amended— 

21 (1) by amending subsection (a) to read as fol22 lows: 

23 ‘‘(a) SUSPENSION OF CERTAIN BENEFIT PAYMENTS; 

24 TERMINATION.—Notwithstanding section 411, an insol25 vent multiemployer plan shall suspend the payments of 


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•S 5045 IS

1 benefits which are not basic benefits, in accordance with 

2 this section, and terminate the plan under section 

3 4041A(a)(4) of the Employee Retirement Income Security 

4 Act of 1974.’’; 

5 (2) in subsection (b)— 

6 (A) by striking paragraphs (1) and (2) and 

7 inserting the following: 

8 ‘‘(1) INSOLVENT MULTIEMPLOYER PLAN.—A 

9 multiemployer plan is insolvent if the plan’s avail10 able resources in any of the next 5 plan years are 

11 projected not to be sufficient to pay benefits under 

12 the plan when due for the plan year.’’; 

13 (B) by redesignating paragraphs (3) and 

14 (4) as paragraphs (2) and (3), respectively; and 

15 (C) in paragraph (2), as so redesignated, 

16 by inserting ‘‘expected’’ before ‘‘contributions’’; 

17 (3) by striking subsection (c); 

18 (4) by redesignating subsections (d) through (h) 

19 as subsections (c) through (g), respectively; 

20 (5) in subsection (c), as so redesignated— 

21 (A) in paragraph (1)— 

22 (i) by striking ‘‘critical status, as de23 scribed in subsection 432(b)(2))’’ and in24 serting ‘‘such critical status)’’; 


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•S 5045 IS

1 (ii) by striking ‘‘3 times’’ and insert2 ing ‘‘10 times’’; and 

3 (iii) by striking ‘‘5 plan years’’ each 

4 place such term appears and inserting ‘‘8 

5 plan years’’; 

6 (B) in paragraph (2)— 

7 (i) by striking ‘‘plan’s available re8 sources are not sufficient to pay benefits 

9 under the plan when due for the next plan 

10 year’’ and inserting ‘‘plan will be insolvent 

11 in any of the next 10 plan years’’; and 

12 (ii) by inserting ‘‘and the corporation’’ 

13 before the period at the end; 

14 (C) by striking paragraph (3); and 

15 (D) by redesignating paragraph (4) as 

16 paragraph (3); 

17 (6) in subsection (d), as so redesignated— 

18 (A) in paragraph (1), by striking ‘‘sub19 section (d)(1) or (2)’’ and inserting ‘‘subsection 

20 (c)(1) or (2)’’; 

21 (B) in paragraph (2)— 

22 (i) by striking ‘‘resource benefit level 

23 determined in writing for that insolvency 

24 year’’ and inserting ‘‘reduction of benefit 

25 payments to the level of basic benefits and 


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•S 5045 IS

1 the termination of the plan under section 

2 4041A(a)(4) of the Employee Retirement 

3 Income Security Act of 1974 as of the first 

4 day of the seventh full plan month of the 

5 plan’s first insolvency year under sub6 section (b)(3)’’; 

7 (ii) by striking ‘‘each insolvency year’’ 

8 and inserting ‘‘the first insolvency year’’; 

9 and 

10 (iii) by striking ‘‘RESOURCE BENEFIT

11 LEVEL’’ in the heading and inserting ‘‘NO12 TICE OF INSOLVENCY’’; 

13 (C) by striking paragraph (3); and 

14 (D) by redesignating paragraphs (4) and 

15 (5) as paragraphs (3) and (4), respectively; 

16 (7) in subsection (e), as so redesignated— 

17 (A) in paragraph (1) by striking ‘‘, for 

18 which the resource benefit level is above the 

19 level of basic benefits,’’; and 

20 (B) by striking paragraph (2) and insert21 ing after paragraph (1) the following new para22 graph: 

23 ‘‘(2) PLANS WITHOUT AVAILABLE RE24 SOURCES.—A plan sponsor who has determined that 

25 the plan’s available resources for an insolvency year 


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•S 5045 IS

1 are below the level of basic benefits shall apply for 

2 financial assistance from the Pension Benefit Guar3 anty Corporation under section 4261 of the Em4 ployee Retirement Income Security Act of 1974.’’; 

5 and 

6 (8) in subsection (g), as so redesignated, by 

7 striking ‘‘Subsections (a) and (c)’’ and inserting 

8 ‘‘Subsection (a)’’. 

9 (c) REGULATIONS.—The Pension Benefit Guaranty 

10 Corporation shall issue regulations implementing the 

11 amendments made by this section. Such regulations shall 

12 address the assumptions a plan may use in projecting 

13 whether a plan’s available resources in any of the next 

14 5 plan years are projected not to be sufficient to pay bene15 fits under the plan when due. 

16 SEC. 113. TERMINATION OF MULTIEMPLOYER PLANS. 

17 (a) TERMINATION BY COURT ORDER.—Section 

18 4041A of the Employee Retirement Income Security Act 

19 of 1974 (29 U.S.C. 1341a) is amended by adding at the 

20 end the following: 

21 ‘‘(g) EFFECT OF TERMINATION ORDER.—If a court 

22 orders the termination of a multiemployer plan under sec23 tion 4042— 

24 ‘‘(1) the corporation shall determine whether 

25 the termination of such plan shall be carried out in 


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•S 5045 IS

1 accordance with paragraph (1) or (2) of subsection 

2 (a) (and such termination shall be treated as de3 scribed in whichever of such paragraphs is applicable 

4 under the determination), and 

5 ‘‘(2) the plan shall take such actions as the cor6 poration determines necessary to implement the cor7 poration’s determination under paragraph (1) by 

8 such date as the corporation specifies in such deter9 mination.’’. 

10 (b) TERMINATION BY REASON OF INSOLVENCY.— 

11 (1) IN GENERAL.—Section 4041A(a) of the 

12 Employee Retirement Income Security Act of 1974 

13 (29 U.S.C. 1341a(a)) is amended— 

14 (A) in paragraph (2), by striking ‘‘or’’ at 

15 the end; 

16 (B) in paragraph (3)— 

17 (i) by striking ‘‘section 4203(b)(1)’’ 

18 and inserting ‘‘section 4021(b)(1)’’; and 

19 (ii) by striking the period and insert20 ing ‘‘; or’’; and 

21 (C) by adding at the end the following: 

22 ‘‘(4) becoming insolvent (within the meaning of 

23 section 4245(b)(1)).’’. 

24 (2) TIME OF TERMINATION.—Section 4041A(b) 

25 of the Employee Retirement Income Security Act of 


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•S 5045 IS

1 1974 (29 U.S.C. 1341a(b)) is amended by adding at 

2 the end the following new paragraphs: 

3 ‘‘(3) Except as provided in paragraph (4), the date 

4 on which a plan terminates under paragraph (4) of sub5 section (a) is the first day of the seventh full plan month 

6 of the plan’s first insolvency year under section 

7 4245(b)(3). 

8 ‘‘(4)(A) In the case of a multiemployer plan which 

9 is an insolvent plan on the date of enactment of this para10 graph— 

11 ‘‘(i) paragraph (4) of subsection (a) shall apply 

12 to such plan unless such plan applies for, and re13 ceives, a special partition under section 4233A, and 

14 ‘‘(ii) the date on which plan terminates shall be 

15 determined under subparagraph (B). 

16 ‘‘(B) In the case of a plan described in subparagraph 

17 (A), the date on which a plan terminates under paragraph 

18 (4) of subsection (a) is— 

19 ‘‘(i) if the plan is not eligible for a special parti20 tion under section 4233A, the first day of the sev21 enth full plan month following such date of enact22 ment, except that such plan may, notwithstanding 

23 the amendment required to be adopted by the plan 

24 under section 4245(a), continue to provide service 

25 credit solely for purposes of vesting under the plan 


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•S 5045 IS

1 until such time as the plan’s available resources are 

2 not sufficient to pay benefits under the plan, and 

3 ‘‘(ii) if the plan applies for such special parti4 tion but the corporation does not approve it, the 

5 first day of the seventh full plan month following the 

6 final determination of the corporation disallowing 

7 such special partition.’’. 

8 (3) ADOPTION OF AMENDMENT PROVIDING FOR

9 NO SERVICE CREDIT.—Section 4245(a) of such Act 

10 (29 U.S.C. 1426(a)), as amended by this Act, is 

11 amended by adding at the end the following: ‘‘The 

12 insolvent multiemployer plan shall also, at the time 

13 of becoming insolvent, adopt an amendment which 

14 provides that participants will receive no credit for 

15 any purpose under the plan for service with any em16 ployer after the date specified in 4041A(b)(3) or (4), 

17 whichever is applicable.’’. 

18 (4) OTHER AMENDMENTS.—Section 4041A of 

19 such Act of 1974 (29 U.S.C. 1341a) is amended— 

20 (A) in subsection (c)— 

21 (i) in the matter preceding paragraph 

22 (1)— 

23 (I) by striking ‘‘Except’’ and in24 serting ‘‘Consistent with the proviVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 sions of section 4281, and except’’; 

2 and 

3 (II) by striking ‘‘paragraph (2)’’ 

4 and inserting ‘‘paragraph (1), (2), or 

5 (4)’’; 

6 (ii) in paragraph (1), by striking 

7 ‘‘and’’ at the end; 

8 (iii) by redesignating paragraph (2) as 

9 paragraph (3); and 

10 (iv) by inserting after paragraph (1) 

11 the following: 

12 ‘‘(2) suspend the payment of benefits in excess 

13 of the level of basic benefits, and’’; 

14 (B) by striking subsection (d) and redesig15 nating subsections (e) and (f) as subsections (d) 

16 and (e), respectively; and 

17 (C) in subsection (d), as so redesignated— 

18 (i) by striking ‘‘paragraph (1) or (3)’’ 

19 and inserting ‘‘paragraph (1), (3), or (4)’’; 

20 (ii) by striking ‘‘termination date, un21 less’’ and inserting ‘‘termination date and 

22 the total contribution amount shall be not 

23 less than the average amount of the high24 est 3 contributions in the previous 10 

25 years, unless’’; and 


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1 (iii) by adding at the end the fol2 lowing new sentence: ‘‘Any liability under 

3 section 4201 due by an employer that 

4 withdraws from the plan after the plan ter5 mination date shall be offset by the con6 tributions made under this subsection sub7 sequent to the plan termination.’’. 

8 (c) POOLING OF ASSETS.—Section 4041A of the Em9 ployee Retirement Income Security Act of 1974 (29 

10 U.S.C. 1341a), as amended by this section, is further 

11 amended by adding at the end the following: 

12 ‘‘(g) POOLING OF ASSETS.—Notwithstanding any 

13 other provision of this title, the corporation is authorized 

14 to pool assets of terminated or insolvent multiemployer 

15 plans with fewer than 5,000 participants or to consolidate 

16 such plans by merger, for purposes of administration, in17 vestment, payment of liabilities of all such plans, and such 

18 other purposes as it determinates to be appropriate in the 

19 administration of this title, if it determines that such ac20 tion would reduce administrative expenses or avoid an in21 creased risk of loss. The corporation may exercise this con22 solidation authority by administrative action without peti23 tioning a court for an order to replace the plan’s governing 

24 board of trustees, including receivership by the corpora25 tion, or to consolidate or merge any plans.’’. 


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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall take effect on the date of enactment of 

3 this section, except that the amendments made by sub4 section (b) shall also apply to multiemployer plans that 

5 are insolvent on such date. 

6 SEC. 114. BENEFITS UNDER CERTAIN TERMINATED PLANS. 

7 Section 4281 of the Employee Retirement Income Se8 curity Act of 1974 (29 U.S.C. 1441) is amended— 

9 (1) in subsection (a), by striking ‘‘section 

10 4041A(d)’’ and inserting ‘‘Section 4041A(c)’’; 

11 (2) by striking subsections (b), (c), and (d); and 

12 (3) by inserting after subsection (a) the fol13 lowing: 

14 ‘‘(b)(1) If a plan has been terminated pursuant to 

15 paragraph (1), (2), or (4) of section 4041A(a), the plan 

16 sponsor shall amend the plan to suspend benefits in excess 

17 of the level of basic benefits. 

18 ‘‘(2) Any plan amendment required by this subsection 

19 shall, in accordance with regulations prescribed by the cor20 poration, take effect not later than 6 months after the 

21 date on which the plan is terminated. 

22 ‘‘(c)(1) The value of nonforfeitable benefits under a 

23 terminated plan described in subsection (a), and the value 

24 of the plan’s assets, shall be determined in writing, in ac25 cordance with regulations prescribed by the corporation, 


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1 as of the end of the plan year during which section 

2 4041A(c) becomes applicable to such plan. 

3 ‘‘(2) For purposes of this subsection, plan assets in4 clude outstanding claims for withdrawal liability (within 

5 the meaning of section 4001(a)(12). 

6 ‘‘(3) If, according to the determination made under 

7 paragraph (1), the value of plan assets is sufficient to pay 

8 nonforfeitable benefits, the plan sponsor shall use the plan 

9 assets to purchase irrevocable commitments to provide 

10 such benefits from an insurer or otherwise distribute plan 

11 assets in satisfaction of the plan’s obligations with respect 

12 to nonforfeitable benefits, in accordance with all applicable 

13 regulations. 

14 ‘‘(d)(1) If, according to the determination made 

15 under subsection (c)(1), the value of nonforfeitable bene16 fits exceeds the value of the plan’s assets, the plan sponsor 

17 shall amend the plan to reduce benefits under the plan 

18 as provided in paragraph (2). 

19 ‘‘(2) Any plan amendment required by paragraph (1) 

20 shall, in accordance with regulations prescribed by the cor21 poration— 

22 ‘‘(A) reduce benefits to the extent necessary to 

23 eliminate any benefits that are not nonforfeitable; 


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1 ‘‘(B) reduce accrued benefits to the extent that 

2 those benefits are not eligible for the corporation’s 

3 guarantee under section 4022A(b); and 

4 ‘‘(C) suspend payment of benefits which are not 

5 basic benefits under section 4022A(c). 

6 ‘‘(e) The powers and duties under this section of a 

7 sponsor of a plan that is terminated as described in section 

8 4041A, before or after the plan begins receiving financial 

9 assistance under section 4261, shall be prescribed by the 

10 corporation, and the corporation shall prescribe by regula11 tion the requirements which assure that plan participants 

12 and beneficiaries receive adequate notice of any suspension 

13 of benefits.’’. 

14 Subtitle C—Pension Insurance 

15 Modeling 

16 SEC. 121. PENSION INSURANCE MODELING. 

17 Section 40233(a) of the Moving Ahead for Progress 

18 in the 21st Century Act (126 Stat. 857; Public Law 112– 

19 141) is amended— 

20 (1) in the subsection heading, by striking ‘‘AN21 NUAL’’; 

22 (2) by striking ‘‘The Pension’’ and inserting 

23 ‘‘Not later than January 1, 2025, and not less fre24 quently than once every 5 years thereafter, the Pen25 sion’’; 


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1 (3) by striking ‘‘an annual peer review’’ and in2 serting ‘‘a peer review’’; and 

3 (4) by striking the third sentence. 

4 TITLE II—FUNDING RULES, 

5 WITHDRAWAL LIABILITY, AND 

6 OTHER REFORMS 

7 Subtitle A—Minimum Funding 

8 Standard for Multiemployer Plans 

9 SEC. 201. VALUATION OF PLAN LIABILITIES. 

10 (a) AMENDMENTS TO INTERNAL REVENUE CODE OF

11 1986.— 

12 (1) CHARGES TO FUNDING STANDARD AC13 COUNT.—Subparagraph (B) of section 431(b)(2) of 

14 the Internal Revenue Code of 1986 is amended— 

15 (A) by striking ‘‘and’’ at the end of clause 

16 (iii), 

17 (B) by redesignating clause (iv) as clause 

18 (v), 

19 (C) by striking ‘‘actuarial assumptions’’ in 

20 clause (v), as so redesignated, and inserting 

21 ‘‘actuarial assumptions not described in clause 

22 (iv)’’, and 

23 (D) by inserting after clause (iii) the fol24 lowing new clause: 


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1 ‘‘(iv) separately, with respect to each 

2 plan year, an amount equal to the excess, 

3 if any, of— 

4 ‘‘(I) the net increase (if any) in 

5 the unfunded past service liability re6 sulting from a reduction in the inter7 est rate under paragraph (6)(A) from 

8 the rate which applied for the pre9 ceding year, over 

10 ‘‘(II) the amount in the invest11 ment risk reduction subaccount under 

12 paragraph (9), 

13 over a period of 30 years, and’’. 

14 (2) CREDITS TO FUNDING STANDARD AC15 COUNT.—Clause (iii) of section 431(b)(3)(B) of such 

16 Code is amended by inserting ‘‘, except that any 

17 amount of net gain resulting from an increase in the 

18 interest rate from the rate which applied for the pre19 ceding year shall first be offset against any 

20 unamortized amounts charged under paragraph 

21 (2)(B)(iv)’’ after ‘‘15 plan years’’. 

22 (3) INTEREST.—Paragraph (6) of section 

23 431(b) of such Code is amended to read as follows: 

24 ‘‘(6) INTEREST.— 


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1 ‘‘(A) IN GENERAL.—The funding standard 

2 account (and items therein) shall be charged or 

3 credited (as determined under regulations pre4 scribed by the Secretary) with interest at the 

5 appropriate rate consistent with the rate or 

6 rates of interest used under the plan to deter7 mine the unfunded past service liability. Not8 withstanding any other provision of this section, 

9 the interest rate used shall not exceed— 

10 ‘‘(i) 7.5 percent for actuarial valu11 ations for plan years beginning after De12 cember 31, 2020, and before January 1, 

13 2024, 

14 ‘‘(ii) 7.25 percent for actuarial valu15 ations for plan years beginning after De16 cember 31, 2023, and before January 1, 

17 2028, 

18 ‘‘(iii) 7.0 percent for actuarial valu19 ations for plan years beginning after De20 cember 31, 2027, and before January 1, 

21 2032, 

22 ‘‘(iv) 6.75 percent for actuarial valu23 ations for plan years beginning after De24 cember 31, 2031, and before January 1, 

25 2036, and 


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1 ‘‘(v) 6.5 percent for actuarial valu2 ations for plan years beginning after De3 cember 31, 2035. 

4 Notwithstanding subsection (c), the plan spon5 sor may direct the plan actuary to use any rate 

6 which is not lower than the rate determined 

7 under subparagraph (B) (without regard to this 

8 sentence) and not greater than the rate deter9 mined under the preceding sentence for the 

10 plan year. Nothing in this subparagraph shall 

11 require a plan to take into account the interest 

12 rate limitation for subsequent years under the 

13 preceding sentence in determining actuarial 

14 valuations as of any given year. 

15 ‘‘(B) INTEREST RATE FOR DETERMINING

16 NORMAL COST.—Notwithstanding any other 

17 provision of this section, the interest rate used 

18 for determining the normal cost to be charged 

19 under paragraph (2) for the plan year shall be 

20 equal to the least of— 

21 ‘‘(i) the interest rate applicable under 

22 subparagraph (A) for the plan year, 

23 ‘‘(ii) a rate equal to the 24-month av24 erage of the third segment rate (as defined 

25 in section 430(h)(2)(C)(iii)), as of the date 


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1 the determination is made, without regard 

2 to section 430(h)(2)(C)(iv), increased by 2 

3 percent, or 

4 ‘‘(iii) 5.5 percent. 

5 ‘‘(C) EXCEPTION FOR CERTAIN PARTI6 TIONED PLANS.—Notwithstanding subpara7 graph (A), in the case of a plan which has been 

8 partitioned under section 4233A of the Em9 ployee Retirement Income Security Act of 1974, 

10 the rate of interest used to determine normal 

11 cost under subparagraph (B) shall also be used 

12 to determine the unfunded past service liability 

13 of the plan. 

14 ‘‘(D) EXCEPTION FOR PLANS USING A

15 SPREAD-GAIN METHOD.—Notwithstanding sub16 paragraph (B), and except as noted in subpara17 graph (C), in the case of a plan which uses a 

18 funding method other than the unit credit 

19 method or entry-age normal method— 

20 ‘‘(i) the normal cost and past service 

21 liability shall be calculated using interest 

22 rates under subparagraph (A), 

23 ‘‘(ii) an additional normal cost compo24 nent shall be calculated in the same manVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 ner as under paragraph (9)(B)(i) based on 

2 the unit credit method, and 

3 ‘‘(iii) the amount determined under 

4 clause (ii) shall be added to the otherwise 

5 calculated normal cost under the funding 

6 method in lieu of the credit under para7 graph (9)(B)(i).’’. 

8 (4) INVESTMENT RISK REDUCTION SUB9 ACCOUNT.—Subsection (b) of section 431 of such 

10 Code is amended by adding at the end the following 

11 new paragraph: 

12 ‘‘(9) INVESTMENT RISK REDUCTION SUB13 ACCOUNT.—For purposes of this part— 

14 ‘‘(A) IN GENERAL.—The funding standard 

15 account shall include an investment risk reduc16 tion subaccount used solely to offset losses at17 tributable to reductions in the rate of interest 

18 used to determine the unfunded past service li19 ability of the plan over time. 

20 ‘‘(B) ANNUAL ADJUSTMENTS.—For a plan 

21 year, the investment risk reduction subaccount 

22 shall be— 

23 ‘‘(i) credited with the net change (if 

24 any) in the normal cost for the imme25 diately preceding plan year due to recalVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00058 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 culation to reflect the difference in interest 

2 rates under paragraphs (6)(A) and (6)(B), 

3 ‘‘(ii) charged with the amount of any 

4 reduction applied under paragraph 

5 (2)(B)(iv)(II), or, in the case of a plan 

6 using a spread-gain method, an amount 

7 equal to the lesser of— 

8 ‘‘(I) the entire remaining balance 

9 of such subaccount immediately before 

10 the charge, or 

11 ‘‘(II) the amount of the increase 

12 in the present value of benefits result13 ing from a decrease in the interest 

14 rate from the rate which applied for 

15 the preceding year, 

16 ‘‘(iii) at the election of the plan spon17 sor, and pursuant to regulations to be 

18 issued by the Secretary, credited with the 

19 net decrease in the unfunded past service 

20 liability (or present value of benefits, in the 

21 case of a plan using a spread-gain method) 

22 resulting from an increase in the interest 

23 rate under paragraph (6)(A), not to exceed 

24 the amount of any previous charges to the 


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1 account under clause (ii), reduced by any 

2 previous credits under this clause, and 

3 ‘‘(iv) adjusted with interest at the rate 

4 under paragraph (6)(A), as applicable.’’. 

5 (5) DETERMINATIONS TO BE MADE UNDER

6 FUNDING METHOD.—Paragraph (1) of section 

7 431(c) of such Code is amended to read as follows: 

8 ‘‘(1) DETERMINATIONS TO BE MADE UNDER

9 FUNDING METHOD.— 

10 ‘‘(A) IN GENERAL.—For purposes of this 

11 part, normal costs, accrued liability, and experi12 ence gains and losses used to determine the un13 funded past service liability for the plan shall be 

14 determined under the funding method used to 

15 determine costs under the plan and based on 

16 the interest rate under subparagraph (A) (or 

17 subparagraph (C), if applicable) of subsection 

18 (b)(6). 

19 ‘‘(B) ADJUSTMENTS FOR FUNDING STAND20 ARD ACCOUNT NORMAL COST.—Notwith21 standing subparagraph (A), in the case of a 

22 plan using the unit credit funding method or 

23 the entry-age normal funding method, the nor24 mal cost for a plan year to be charged to the 

25 funding standard account under subsection 


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1 (b)(2) shall be determined under the funding 

2 method used to determine costs under the plan 

3 and based on the interest rate under subsection 

4 (b)(6)(B).’’. 

5 (b) AMENDMENTS TO EMPLOYEE RETIREMENT IN6 COME SECURITY ACT OF 1974.— 

7 (1) CHARGES TO FUNDING STANDARD AC8 COUNT.—Subparagraph (B) of section 304(b)(2) of 

9 the Employee Retirement Income Security Act of 

10 1974 (29 U.S.C. 1084(b)(2)) is amended— 

11 (A) by striking ‘‘and’’ at the end of clause 

12 (iii), 

13 (B) by redesignating clause (iv) as clause 

14 (v), 

15 (C) by striking ‘‘actuarial assumptions’’ in 

16 clause (v), as so redesignated, and inserting 

17 ‘‘actuarial assumptions not described in clause 

18 (iv)’’, and 

19 (D) by inserting after clause (iii) the fol20 lowing new clause: 

21 ‘‘(iv) separately, with respect to each 

22 plan year, an amount equal to the excess, 

23 if any, of— 

24 ‘‘(I) the net increase (if any) in 

25 the unfunded past service liability reVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00061 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 sulting from a reduction in the inter2 est rate under paragraph (6)(A) from 

3 the rate which applied for the pre4 ceding year, over 

5 ‘‘(II) the amount in the invest6 ment risk reduction subaccount under 

7 paragraph (9), 

8 over a period of 30 years, and’’. 

9 (2) CREDITS TO FUNDING STANDARD AC10 COUNT.—Clause (iii) of section 304(b)(3)(B) of such 

11 Act (29 U.S.C. 1084(b)(3)(B)) is amended by in12 serting ‘‘, except that any amount of net gain result13 ing from an increase in the interest rate from the 

14 rate which applied for the preceding year shall first 

15 be offset against any unamortized amounts charged 

16 under paragraph (2)(B)(iv)’’ after ‘‘15 plan years’’. 

17 (3) INTEREST.— 

18 (A) IN GENERAL.—Paragraph (6) of sec19 tion 304(b) of such Act (29 U.S.C. 1084(b)) is 

20 amended to read as follows: 

21 ‘‘(6) INTEREST.— 

22 ‘‘(A) IN GENERAL.—The funding standard 

23 account (and items therein) shall be charged or 

24 credited (as determined under regulations pre25 scribed by the Secretary) with interest at the 


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1 appropriate rate consistent with the rate or 

2 rates of interest used under the plan to deter3 mine the unfunded past service liability. Not4 withstanding any other provision of this section, 

5 this interest rate shall not exceed— 

6 ‘‘(i) 7.5 percent for actuarial valu7 ations for plan years beginning after De8 cember 31, 2020, and before January 1, 

9 2024, 

10 ‘‘(ii) 7.25 percent for actuarial valu11 ations for plan years beginning after De12 cember 31, 2023, and before January 1, 

13 2028, 

14 ‘‘(iii) 7.0 percent for actuarial valu15 ations for plan years beginning after De16 cember 31, 2027, and before January 1, 

17 2032, 

18 ‘‘(iv) 6.75 percent for actuarial valu19 ations for plan years beginning after De20 cember 31, 2031, and before January 1, 

21 2036, and 

22 ‘‘(v) 6.5 percent for actuarial valu23 ations for plan years beginning after De24 cember 31, 2035. 


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1 Notwithstanding subsection (c), the plan spon2 sor may direct the plan actuary to use any rate 

3 which is not lower than the rate determined 

4 under subparagraph (B) (without regard to this 

5 sentence) and not greater than the rate deter6 mined under the preceding sentence for the 

7 plan year. Nothing in this subparagraph shall 

8 require a plan to take into account the interest 

9 rate limitation for subsequent years under the 

10 preceding sentence in determining actuarial 

11 valuations as of any given year. 

12 ‘‘(B) INTEREST RATE FOR DETERMINING

13 NORMAL COST.—Notwithstanding any other 

14 provision of this section, the interest rate used 

15 for determining the normal cost to be charged 

16 under paragraph (2) for the plan year shall be 

17 equal to the least of— 

18 ‘‘(i) the interest rate applicable under 

19 subparagraph (A) for the plan year, 

20 ‘‘(ii) a rate equal to the 24-month av21 erage of the third segment rate (as defined 

22 in section 303(h)(2)(C)(iii)), as of the date 

23 the determination is made, without regard 

24 to section 303(h)(2)(C)(iv), increased by 2 

25 percent, or 


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1 ‘‘(iii) 5.5 percent. 

2 ‘‘(C) EXCEPTION FOR CERTAIN PARTI3 TIONED PLANS.—Notwithstanding subpara4 graph (A), in the case of a plan which has been 

5 partitioned under section 4233A, the rate of in6 terest used to determine normal cost under sub7 paragraph (B) shall also be used to determine 

8 the unfunded past service liability of the plan. 

9 ‘‘(D) EXCEPTION FOR PLANS USING A

10 SPREAD-GAIN METHOD.—Notwithstanding sub11 paragraph (B), and except as noted in subpara12 graph (C), in the case of a plan which uses a 

13 funding method other than the unit credit 

14 method or entry-age normal method— 

15 ‘‘(i) the normal cost and past service 

16 liability shall be calculated using interest 

17 rates under subparagraph (A), 

18 ‘‘(ii) an additional normal cost compo19 nent shall be calculated in the same man20 ner as under paragraph (9)(B)(i) based on 

21 the unit credit method, and 

22 ‘‘(iii) the amount determined under 

23 clause (ii) shall be added to the otherwise 

24 calculated normal cost under the funding 


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1 method in lieu of the credit under para2 graph (9)(B)(i).’’. 

3 (B) CONFORMING AMENDMENT.—Subpara4 graph (A) of section 4233A(h)(4) of such Act, 

5 as added by this Act, is amended by inserting 

6 ‘‘, consistent with section 304(b)(6)(C)’’ before 

7 the period. 

8 (4) INVESTMENT RISK REDUCTION SUB9 ACCOUNT.—Subsection (b) of section 304 of such 

10 Act (29 U.S.C. 1084) is amended by adding at the 

11 end the following new paragraph: 

12 ‘‘(9) INVESTMENT RISK REDUCTION SUB13 ACCOUNT.—For purposes of this part— 

14 ‘‘(A) IN GENERAL.—The funding standard 

15 account shall include an investment risk reduc16 tion subaccount used solely to offset losses at17 tributable to reductions in the rate of interest 

18 used to determine the unfunded past service li19 ability of the plan over time. 

20 ‘‘(B) ANNUAL ADJUSTMENTS.—For a plan 

21 year, the investment risk reduction subaccount 

22 shall be— 

23 ‘‘(i) credited with the net change (if 

24 any) in the normal cost for the imme25 diately preceding plan year due to recalVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00066 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 culation to reflect the difference in interest 

2 rates under paragraphs (6)(A) and (6)(B), 

3 ‘‘(ii) charged with the amount of any 

4 reduction applied under paragraph 

5 (2)(B)(iv)(II), or, in the case of a plan 

6 using a spread-gain method, an amount 

7 equal to the lesser of— 

8 ‘‘(I) the entire remaining balance 

9 of such subaccount immediately before 

10 the charge, or 

11 ‘‘(II) the amount of the increase 

12 in the present value of benefits result13 ing from a decrease in the interest 

14 rate from the rate which applied for 

15 the preceding year, 

16 ‘‘(iii) at the election of the plan spon17 sor, and pursuant to regulations to be 

18 issued by the Secretary of the Treasury, 

19 credited with the net decrease in the un20 funded past service liability (or present 

21 value of benefits, in the case of a plan 

22 using a spread-gain method) resulting 

23 from an increase in the interest rate under 

24 paragraph (6)(A), not to exceed the 

25 amount of any previous charges to the acVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00067 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 count under clause (ii), reduced by any 

2 previous credits under this clause, and 

3 ‘‘(iv) adjusted with interest at the rate 

4 under paragraph (6)(A), as applicable.’’. 

5 (5) DETERMINATIONS TO BE MADE UNDER

6 FUNDING METHOD.—Paragraph (1) of section 

7 304(c) of such Act (29 U.S.C. 1084(c)) is amended 

8 to read as follows: 

9 ‘‘(1) DETERMINATIONS TO BE MADE UNDER

10 FUNDING METHOD.— 

11 ‘‘(A) IN GENERAL.—For purposes of this 

12 part, normal costs, accrued liability, and experi13 ence gains and losses used to determine the un14 funded past service liability for the plan shall be 

15 determined under the funding method used to 

16 determine costs under the plan and based on 

17 the interest rate under subparagraph (A) (or 

18 subparagraph (C), if applicable) of subsection 

19 (b)(6). 

20 ‘‘(B) ADJUSTMENTS FOR FUNDING STAND21 ARD ACCOUNT NORMAL COST.—Notwith22 standing subparagraph (A), in the case of a 

23 plan using the unit credit funding method or 

24 the entry-age normal funding method, the nor25 mal cost for a plan year to be charged to the 


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1 funding standard account under subsection 

2 (b)(2) shall be determined under the funding 

3 method used to determine costs under the plan 

4 and based on the interest rate under subsection 

5 (b)(6)(B).’’. 

6 (c) PLAN PETITIONS TO INCREASE INTEREST AS7 SUMPTIONS.— 

8 (1) IN GENERAL.—Pursuant to regulations to 

9 be issued by the Secretary of the Treasury (or such 

10 Secretary’s delegate), a multiemployer plan must pe11 tition the Secretary of the Treasury (or delegate) for 

12 any increase in the interest assumption made after 

13 a 30-year amortization base is established in accord14 ance with section 431(b)(2)(B)(iv) of the Internal 

15 Revenue Code of 1986 and section 304(b)(2)(B)(iv) 

16 of the Employee Retirement Income Security Act of 

17 1974 (as added by this Act). The Secretary of the 

18 Treasury (or delegate) shall approve such request 

19 upon a determination that the change is reasonably 

20 supported by changes in the financial markets or 

21 changes in the plan’s asset allocation, and is con22 sistent with the manner in which prior changes in 

23 interest rate assumptions were determined since the 

24 date of the enactment of this Act. 


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1 (2) APPROVAL.—If the Secretary of the Treas2 ury (or such Secretary’s delegate) does not approve 

3 or deny any petition submitted pursuant to para4 graph (1) within 180 days of receiving such petition, 

5 such petition shall be deemed to have been approved. 

6 (d) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to plan years beginning after De8 cember 31, 2020. 

9 Subtitle B—Additional Funding 

10 Rules for Multiemployer Plans 

11 PART I—PLAN STATUS AMENDMENTS 

12 SEC. 211. AMENDMENTS TO INTERNAL REVENUE CODE OF 

13 1986. 

14 (a) RULES APPLYING TO ALL MULTIEMPLOYER

15 PLANS.— 

16 (1) IN GENERAL.—Subsection (a) of section 

17 432 of the Internal Revenue Code of 1986 is amend18 ed— 

19 (A) by striking ‘‘a multiemployer plan in 

20 effect on July 16, 2006—’’ and inserting ‘‘any 

21 multiemployer plan—’’, 

22 (B) by redesignating paragraphs (1), (2), 

23 and (3) as paragraphs (2), (3), and (4), respec24 tively, 


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1 (C) by inserting before paragraph (2), as 

2 so redesignated, the following new paragraph: 

3 ‘‘(1) the rules of subsection (c) shall apply,’’, 

4 (D) by striking ‘‘subsection (c)’’ in para5 graph (2)(A), as so redesignated, and inserting 

6 ‘‘subsection (d)’’, 

7 (E) by striking ‘‘subsection (d)’’ in para8 graph (2)(B), as so redesignated, and inserting 

9 ‘‘subsection (e)’’, 

10 (F) by striking ‘‘subsection (e)’’ in para11 graph (3)(A), as so redesignated, and inserting 

12 ‘‘subsection (f)’’, 

13 (G) by striking ‘‘subsection (f)’’ in para14 graph (3)(B), as so redesignated, and inserting 

15 ‘‘subsection (g)’’, and 

16 (H) by striking ‘‘subsection (e)(9)’’ in 

17 paragraph (4)(B), as so redesignated, and in18 serting ‘‘subsection (f)(9)’’. 

19 (2) RULES OF IMMEDIATE APPLICATION.—Sec20 tion 432 of such Code is amended— 

21 (A) by redesignating subsections (c), (d), 

22 (e), (f), (g), (h), (i), and (j) as subsections (d), 

23 (e), (f), (g), (h), (i), (j), and (k), respectively, 

24 and 


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1 (B) by inserting after subsection (b) the 

2 following new subsection: 

3 ‘‘(c) RULES APPLYING TO ALL MULTIEMPLOYER

4 PLANS.— 

5 ‘‘(1) BENEFIT INCREASES.— 

6 ‘‘(A) INCREASES BY PLAN AMENDMENT.— 

7 The plan sponsor of any multiemployer plan 

8 shall not adopt a plan amendment which in9 creases plan liabilities (as determined as of the 

10 date of the adoption of the amendment) due to 

11 any increase in benefits, any change in the ac12 crual rate of benefits, or any change in the rate 

13 at which benefits become nonforfeitable, un14 less— 

15 ‘‘(i) if the plan is in unrestricted sta16 tus as of the adoption of such amendment, 

17 the plan actuary certifies in accordance 

18 with subsection (b)(4) that the increase in 

19 liabilities will not cause the plan to no 

20 longer be in unrestricted status, 

21 ‘‘(ii) if the plan is in stable status as 

22 of the adoption of such amendment, the 

23 plan actuary certifies in accordance with 

24 subsection (b)(4) that any such increase or 

25 change in benefits will be paid from addiVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00072 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 tional contributions not required by any 

2 collective bargaining agreement in effect as 

3 of the adoption of the amendment, 

4 ‘‘(iii) if the plan is in endangered sta5 tus as of the adoption of such amendment, 

6 the plan actuary certifies in accordance 

7 with subsection (b)(4) that any such in8 crease or change in benefits will be paid 

9 from additional contributions not con10 templated in any current funding improve11 ment plan, or 

12 ‘‘(iv) the increase or change in bene13 fits is required by law or is a de minimis 

14 change. 

15 ‘‘(B) INCREASES UNDER CRITICAL OR

16 CRITICAL AND DECLINING STATUS.—Unless re17 quired as a condition of qualification under part 

18 I of this subchapter or to comply with other ap19 plicable law, in the case of a plan which is in 

20 critical or critical and declining status, no in21 crease in benefits, change in the accrual rate of 

22 benefits, or change in the rate at which benefits 

23 become nonforfeitable which increases plan li24 abilities shall take effect while the plan is in 

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1 crease or change would otherwise occur under 

2 the provisions of the plan, unless the increase 

3 in plan liabilities due to the change is de mini4 mis. 

5 ‘‘(2) CONTRIBUTION REDUCTIONS.—The plan 

6 sponsor of any multiemployer plan shall not accept 

7 any collective bargaining agreement or participation 

8 agreement which reduces the rate of contributions 

9 under the plan for any participants, suspends con10 tributions with respect to any period of service, or 

11 directly or indirectly excludes younger, probationary, 

12 or newly hired employees from participation in the 

13 plan, unless— 

14 ‘‘(A) the plan is in unrestricted status as 

15 of the adoption of such agreement and the plan 

16 actuary certifies in accordance with subsection 

17 (b)(4) that the reduction in contributions will 

18 not cause the plan to no longer be in unre19 stricted status, 

20 ‘‘(B) the reduction in contributions is ac21 companied by a reduction in future accruals for 

22 the affected participants, and the plan actuary 

23 certifies in accordance with subsection (b)(4) 

24 that the combined effect of the changes in con25 tributions and benefits is not projected to reVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00074 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 duce the funded percentage of the plan in any 

2 year, or 

3 ‘‘(C) subject to regulations issued by the 

4 Secretary, the plan sponsor reasonably deter5 mines that the acceptance of such an agreement 

6 is in the best interests of plan participants and 

7 beneficiaries and that rejection of the agree8 ment would have an adverse financial effect on 

9 the plan.’’. 

10 (3) STABLE AND UNRESTRICTED PLANS.—Sub11 section (b) of section 432 of such Code is amend12 ed— 

13 (A) by striking ‘‘ENDANGERED AND CRIT14 ICAL’’ in the heading, 

15 (B) by redesignating paragraphs (1), (2), 

16 (3), (4), (5), and (6) as paragraphs (2), (3), 

17 (4), (5), (6), and (7), respectively, and 

18 (C) by inserting before paragraph (2) the 

19 following new paragraph: 

20 ‘‘(1) STABLE AND UNRESTRICTED STATUS.— 

21 ‘‘(A) STABLE.—A multiemployer plan is in 

22 stable status for a plan year if, as determined 

23 by the plan actuary under paragraph (4), the 

24 plan is not in unrestricted status for the plan 

25 year, is not in endangered, critical, or critical 


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1 and declining status for the plan year, and is 

2 not described in paragraph (6). 

3 ‘‘(B) UNRESTRICTED.—A multiemployer 

4 plan is in unrestricted status for a plan year if, 

5 as determined by the plan actuary under para6 graph (4)— 

7 ‘‘(i) the plan is not in endangered, 

8 critical, or critical and declining status for 

9 the plan year, 

10 ‘‘(ii) the plan is not described in para11 graph (6), and 

12 ‘‘(iii) as of the beginning of the plan 

13 year— 

14 ‘‘(I) the plan’s current liability 

15 funded percentage for such plan year 

16 is at least 70 percent and the plan’s 

17 projected funded percentage as of the 

18 first day of the 15th succeeding plan 

19 year is at least 115 percent, or 

20 ‘‘(II) the plan’s current liability 

21 funded percentage for such plan year 

22 is at least 80 percent. 

23 ‘‘(C) CURRENT LIABILITY FUNDED PER24 CENTAGE.—For purposes of this section, the 

25 term ‘current liability funded percentage’ means 


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1 the percentage equal to a fraction the numer2 ator of which is the value of plan assets (as de3 termined for purposes of section 

4 431(c)(6)(A)(ii)(II)) and the denominator of 

5 which is the current liabilities of the plan (as 

6 defined in section 431(c)(6)(D)).’’. 

7 (4) AMENDMENT TO ANNUAL CERTIFICATION

8 BY PLAN ACTUARY.—Subparagraph (A) of para9 graph (4) (as redesignated by paragraph (3)) of sec10 tion 432(b) of such Code is amended by inserting 

11 ‘‘whether or not the plan is in unrestricted or stable 

12 status for such plan year,’’ in clause (i) before 

13 ‘‘whether or not the plan is in endangered status’’. 

14 (5) CONFORMING AMENDMENTS.— 

15 (A) Paragraphs (2) and (3) of section 

16 432(b) of such Code, as redesignated by para17 graph (3), are each amended by striking ‘‘para18 graph (3)’’ and inserting ‘‘paragraph (4)’’. 

19 (B) Section 432(b)(2) of such Code, as so 

20 redesignated and amended, is further amended 

21 by striking ‘‘paragraph (5)’’ and inserting 

22 ‘‘paragraph (6)’’. 

23 (C) Section 432(b)(4) of such Code, as so 

24 redesignated, is amended— 


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1 (i) by striking ‘‘paragraph (4)’’ in 

2 subparagraph (B)(iv) thereof and inserting 

3 ‘‘paragraph (5)’’, 

4 (ii) by striking ‘‘subsection (e)(9)’’ 

5 both places it appears in subparagraph 

6 (B)(v) and inserting ‘‘subsection (f)(9)’’, 

7 (iii) by striking ‘‘subsection 

8 (e)(3)(A)(ii)’’ in subparagraph (B)(v) and 

9 inserting ‘‘subsection (f)(3)(A)(ii)’’, 

10 (iv) by striking ‘‘subsection (e)’’ in 

11 subparagraph (B)(v) and inserting ‘‘sub12 section (f)’’, 

13 (v) by striking ‘‘paragraph (4)’’ each 

14 place it appears in subparagraphs (D)(i) 

15 and (D)(v) thereof and inserting ‘‘para16 graph (5)’’, 

17 (vi) by striking ‘‘subsection (e)(8)’’ in 

18 subparagraph (D)(ii)(I) thereof and insert19 ing ‘‘subsection (f)(8)’’, 

20 (vii) by striking ‘‘paragraph (5)’’ in 

21 subparagraph (D)(iii) thereof and inserting 

22 ‘‘paragraph (6)’’, and 

23 (viii) by striking ‘‘(iii) In the case of’’ 

24 in subparagraph (D)(iii) thereof and in25 serting ‘‘(iii) SPECIAL RULE.—’’. 


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1 (D) Section 432(b)(5) of such Code, as re2 designated by paragraph (3), is amended— 

3 (i) by striking ‘‘paragraph (2)’’ and 

4 inserting ‘‘paragraph (3)’’, 

5 (ii) by striking ‘‘paragraph 

6 (3)(B)(iv)’’ and inserting ‘‘paragraph 

7 (4)(B)(iv)’’, 

8 (iii) by striking ‘‘paragraph (3)’’ in 

9 subparagraph (A) thereof and inserting 

10 ‘‘paragraph (4)’’, 

11 (iv) by striking ‘‘paragraph (3)(A)’’ in 

12 subparagraph (A) thereof and inserting 

13 ‘‘paragraph (4)(A)’’, 

14 (v) by striking ‘‘paragraph (2)’’ in 

15 subparagraph (B) thereof and inserting 

16 ‘‘paragraph (3)’’, and 

17 (vi) by striking ‘‘subsection (e)(4)(B)’’ 

18 in subparagraph (C) thereof and inserting 

19 ‘‘subsection (f)(4)(B)’’. 

20 (E) Section 432(b)(6)(A) of such Code, as 

21 so redesignated, is amended— 

22 (i) by striking ‘‘paragraph (3)(A)’’ 

23 and inserting ‘‘paragraph (4)(A)’’, 

24 (ii) by striking ‘‘paragraph (1)(A)’’ 

25 and inserting ‘‘paragraph (2)(A)’’, and 


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1 (iii) by striking ‘‘paragraph (1)(B)’’ 

2 and inserting ‘‘paragraph (2)(B)’’. 

3 (F) Section 432(b)(7) of such Code, as so 

4 redesignated, is amended by striking ‘‘para5 graph (2)’’ and inserting ‘‘paragraph (3)’’. 

6 (G) Paragraphs (1)(A), (4)(A)(ii), 

7 (4)(C)(i), (4)(C)(ii), (4)(D), (5)(A)(i), (5)(B), 

8 and (8) of subsection (d), and subsections 

9 (e)(2), (f)(1)(A), (f)(4)(B)(i), (f)(4)(B)(ii)(I), 

10 (f)(5), and (g)(3) of section 432 of such Code, 

11 as respectively redesignated by paragraph (2), 

12 are each amended by striking ‘‘subsection 

13 (b)(3)(A)’’ and inserting ‘‘subsection 

14 (b)(4)(A)’’. 

15 (H) Section 432(d)(3)(A)(i)(I) of such 

16 Code, as so redesignated, is amended by strik17 ing ‘‘paragraph (b)(3)’’ and inserting ‘‘sub18 section (b)(4)’’. 

19 (I) Section 432(d)(4)(D) of such Code, as 

20 so redesignated, is amended by striking ‘‘sub21 section (d)’’ and inserting ‘‘subsection (e)’’. 

22 (J) Section 432(e) of such Code, as so re23 designated, is amended to read as follows: 

24 ‘‘(e) RULES FOR OPERATION OF PLAN DURING

25 ADOPTION AND IMPROVEMENT PERIODS.—A plan may 


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1 not be amended after the date of the adoption of a funding 

2 improvement plan under subsection (d) so as to be incon3 sistent with the funding improvement plan or the require4 ments of subsection (c).’’. 

5 (K) Clauses (i)(I) and (ii)(I) of section 

6 432(f)(4)(B) of such Code, as so redesignated, 

7 are each amended by striking ‘‘subsection 

8 (b)(2)’’ and inserting ‘‘subsection (b)(3)’’. 

9 (L) Subsections (f)(8)(A)(ii) and (g)(2)(A) 

10 of section 432 of such Code, as so redesignated, 

11 are each amended by striking ‘‘subsection 

12 (b)(3)(D)’’ and inserting ‘‘subsection 

13 (b)(4)(D)’’. 

14 (M) Section 432(f)(9)(J) of such Code, as 

15 so redesignated, is amended— 

16 (i) by striking ‘‘subsection (b)(3)’’ and 

17 inserting ‘‘subsection (b)(4)’’, and 

18 (ii) by striking ‘‘paragraphs (1) and 

19 (2)’’ in clause (i) thereof and inserting 

20 ‘‘paragraphs (2) and (3)’’. 

21 (N) Subparagraphs (A) and (B) of section 

22 432(g)(1) of such Code, as so redesignated, are 

23 each amended by striking ‘‘subsection (e)’’ and 

24 inserting ‘‘subsection (f)’’. 


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1 (O) Paragraph (2)(A) of section 432(g) of 

2 such Code, as so redesignated, is amended by 

3 striking ‘‘(b)(3)(D)’’ and inserting ‘‘(b)(4)(D)’’. 

4 (P) Section 432(h) of such Code, as so re5 designated, is amended— 

6 (i) by striking ‘‘subsection (e)(8) or 

7 (f)’’ in paragraph (1) thereof and inserting 

8 ‘‘subsection (f)(8) or (g)’’, 

9 (ii) by striking ‘‘subsection (e)(9)’’ in 

10 paragraph (1) thereof and inserting ‘‘sub11 section (f)(9)’’, 

12 (iii) by striking ‘‘subsection (e)(7)’’ in 

13 paragraph (2) thereof and inserting ‘‘sub14 section (f)(7)’’, and 

15 (iv) by striking ‘‘rehabilitation plan’’ 

16 and all that follows in paragraph (3)(B) 

17 thereof and inserting ‘‘rehabilitation plan. 

18 The preceding sentence shall not apply to 

19 any increase in contribution requirements 

20 due to increased levels of work, employ21 ment, or periods for which compensation is 

22 provided, except to the extent such an in23 crease is used to provide an increased ac24 crual rate of benefits or change in the rate 


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1 at which benefits become nonforfeitable 

2 which increases plan liabilities.’’. 

3 (Q) Section 432(i) of such Code, as so re4 designated, is amended— 

5 (i) by striking ‘‘subsection (c)’’ and 

6 inserting ‘‘subsection (d)’’, and 

7 (ii) by striking ‘‘subsection (e)’’ and 

8 inserting ‘‘subsection (f)’’. 

9 (R) Section 432(j)(2) of such Code, as so 

10 redesignated, is amended by striking ‘‘sub11 sections (c) and (e)’’ and inserting ‘‘subsections 

12 (d) and (f)’’. 

13 (S) Section 412(b)(3) of such Code is 

14 amended by striking ‘‘section 432(e)’’ and in15 serting ‘‘section 432(f)’’. 

16 (T) Section 418E of such Code, as amend17 ed by this Act, is further amended— 

18 (i) by striking ‘‘432(b)(2)’’ each place 

19 it appears in subsections (c)(1), (c)(2), 

20 (d)(1), and (d)(2), as redesignated by sec21 tion 112, and inserting ‘‘432(b)(3)’’, and 

22 (ii) by striking ‘‘432(e)(9)’’ in sub23 section (g), as so redesignated, and insert24 ing ‘‘432(f)(9)’’. 


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1 (U) Section 4971(g) of such Code is 

2 amended— 

3 (i) by striking ‘‘432(e)’’ in paragraph 

4 (3)(B)(i) and inserting ‘‘432(f)’’, 

5 (ii) by striking ‘‘432(b)(3)(A)(ii)’’ in 

6 paragraph (3)(B)(ii) and inserting 

7 ‘‘432(b)(4)(A)(i)(II)’’, 

8 (iii) by striking ‘‘432(e)(1)(A)’’ in 

9 paragraph (4)(B)(ii) and inserting 

10 ‘‘432(f)(1)(A)’’, and 

11 (iv) by striking ‘‘432(j)(9)’’ in para12 graph (4)(C)(ii) and inserting ‘‘432(k)(9)’’. 

13 (V) Subsection (c)(1) of section 4980I of 

14 such Code, as added by this Act, is amended by 

15 adding at the end the following: ‘‘Such term 

16 shall not include such an original plan for any 

17 plan year in which the plan is in unrestricted 

18 status (as defined in section 432(b)(1)(B)).’’. 

19 (W) The heading of section 432 of such 

20 Code is amended by striking ‘‘IN ENDAN21 GERED STATUS OR CRITICAL STATUS’’. 

22 (6) WITHDRAWAL LIABILITY DETERMINATION

23 FOR PLANS EMERGING FROM ENDANGERED OR CRIT24 ICAL STATUS.—Section 432(h) of such Code, as re25 designated by paragraph (2) and as amended by 


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1 paragraph (5), is further amended by striking para2 graph (4) and by inserting after paragraph (3) the 

3 following new paragraph: 

4 ‘‘(4) EMERGENCE FROM ENDANGERED OR CRIT5 ICAL STATUS.— 

6 ‘‘(A) IN GENERAL.—In the case of in7 creases in the contribution rate (or other in8 creases in contribution requirements unless due 

9 to increased levels of work, employment, or pe10 riods for which compensation is provided) dis11 regarded pursuant to paragraph (3), this sub12 section shall cease to apply as of the later of— 

13 ‘‘(i) the end of the first plan year fol14 lowing the plan year in which the plan is 

15 no longer in endangered or critical status, 

16 or 

17 ‘‘(ii) the end of the plan year which 

18 includes the expiration date of the first col19 lective bargaining agreement requiring 

20 plan contributions which expires after the 

21 plan is no longer in endangered or critical 

22 status. 

23 ‘‘(B) HIGHEST CONTRIBUTION RATE.— 

24 Notwithstanding subparagraph (A), once the 


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1 plan emerges from endangered or critical sta2 tus— 

3 ‘‘(i) increases in the contribution rate 

4 disregarded pursuant to paragraph (3) 

5 shall continue to be disregarded in deter6 mining the highest contribution rate under 

7 section 4219(c) of such Act for plan years 

8 during which the plan was in endangered 

9 or critical status, and 

10 ‘‘(ii) the highest contribution rate for 

11 purposes of such section shall be the great12 er of— 

13 ‘‘(I) the sum of— 

14 ‘‘(aa) the employer’s con15 tribution rate as of the later of 

16 the last day of the last plan year 

17 ending before December 31, 

18 2014, and the last day of the 

19 plan year for which the employer 

20 first had an obligation to con21 tribute to the plan, and 

22 ‘‘(bb) any contribution in23 creases determined in accordance 

24 with this section after such later 

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1 ployer withdraws from the plan, 

2 or 

3 ‘‘(II) the highest contribution 

4 rate for any plan year after the plan 

5 year which includes the earlier of— 

6 ‘‘(aa) the expiration date of 

7 the first collective bargaining 

8 agreement applicable to the with9 drawing employer requiring plan 

10 contributions which expires after 

11 the plan is no longer in endan12 gered or critical status, or 

13 ‘‘(bb) the date as of which 

14 the withdrawing employer nego15 tiated a contribution rate effec16 tive after the plan year in which 

17 the plan is no longer in endan18 gered or critical status.’’. 

19 (7) EFFECTIVE DATE.—The amendments made 

20 by this subsection shall take effect on the date of the 

21 enactment of this Act. 

22 (b) DETERMINATION OF ENDANGERED STATUS.— 

23 Paragraph (2) of section 432(b) of the Internal Revenue 

24 Code of 1986, as redesignated by subsection (a)(3), is 

25 amended to read as follows: 


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1 ‘‘(2) ENDANGERED STATUS.—A multiemployer 

2 plan is in endangered status for a plan year if, as 

3 determined by the plan actuary under paragraph 

4 (5), the plan is not in critical or declining status for 

5 the plan year and is not described in paragraph (7), 

6 and, as of the beginning of the plan year— 

7 ‘‘(A) the plan’s funded percentage for such 

8 plan year is less than 80 percent, 

9 ‘‘(B) the plan is projected to have an accu10 mulated funding deficiency for any of the 9 suc11 ceeding plan years, taking into account any ex12 tension of amortization periods under section 

13 431(d), or 

14 ‘‘(C) the plan’s projected funded percent15 age as of the first day of the 15th succeeding 

16 plan year is less than 100 percent.’’. 

17 (c) DETERMINATION OF CRITICAL STATUS.—Para18 graph (3) of section 432(b) of the Internal Revenue Code 

19 of 1986, as redesignated by subsection (a)(3), is amended 

20 to read as follows: 

21 ‘‘(3) CRITICAL STATUS.— 

22 ‘‘(A) IN GENERAL.—A multiemployer plan 

23 is in critical status for a plan year if, as deter24 mined by the plan actuary under paragraph (5), 


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1 the plan is not in declining status for the plan 

2 year and, as of the beginning of the plan year— 

3 ‘‘(i) the plan’s funded percentage is 

4 less than 65 percent, 

5 ‘‘(ii) the plan has an accumulated 

6 funding deficiency for the plan year, or is 

7 projected to have such an accumulated 

8 funding deficiency for any of the 6 suc9 ceeding plan years, taking into account any 

10 extension of amortization periods under 

11 section 431(d), or 

12 ‘‘(iii) the plan’s projected funded per13 centage as of the first day of the 15th suc14 ceeding plan year is less than 80 percent. 

15 ‘‘(B) ORIGINAL PLANS.—Notwithstanding 

16 subparagraph (A), a multiemployer plan which 

17 is an original plan pursuant to section 

18 4233A(d)(3) of the Employee Retirement In19 come Security Act of 1974 shall be treated as 

20 being in critical status for the period of 15 con21 secutive plan years beginning with the plan year 

22 that includes the date of the partition under 

23 such section 4233A.’’. 

24 (d) DECLINING STATUS.— 

25 (1) IN GENERAL.— 


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1 (A) The following provisions of section 432 

2 of the Internal Revenue Code of 1986 are each 

3 amended by striking ‘‘critical and declining’’ 

4 each place it appears and inserting ‘‘declining’’: 

5 (i) Subsection (a)(4) (as redesignated 

6 by subsection (a)(1)). 

7 (ii) Subparagraphs (A) and (B)(i) of 

8 subsection (b)(1), as added by subsection 

9 (a)(3). 

10 (iii) Subsection (b)(4)(B)(v) (as redes11 ignated by subsection (a)(3)), and the 

12 heading thereof. 

13 (iv) Paragraph (1)(B), and the head14 ing of such paragraph (1)(B), of sub15 section (c), as added by subsection (a)(2). 

16 (v) The heading of paragraph (9) of 

17 subsection (f) (as redesignated by sub18 section (a)(2)). 

19 (vi) Subparagraphs (A), (C), (G)(i), 

20 and (J) of subsection (f)(9) (as so redesig21 nated). 

22 (vii) Subsection (h)(1) (as so redesig23 nated). 

24 (B) Section 418E(g) of such Code, as 

25 amended by section 112 and subsection (a), is 


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1 further amended by striking ‘‘critical and de2 clining status’’ and inserting ‘‘declining status’’. 

3 (2) DETERMINATION OF DECLINING STATUS.— 

4 (A) IN GENERAL.—Subsection (b) of sec5 tion 432 of such Code is amended— 

6 (i) by striking paragraph (7), as re7 designated by subsection (a)(3), 

8 (ii) by redesignating paragraphs (4), 

9 (5), and (6), as so redesignated, as para10 graphs (5), (6), and (7), respectively, and 

11 (iii) by inserting after paragraph (3), 

12 as so redesignated, the following new para13 graph: 

14 ‘‘(4) DECLINING STATUS.—A multiemployer 

15 plan is in declining status for a plan year if— 

16 ‘‘(A) as determined by the plan actuary 

17 under paragraph (5), as of the beginning of the 

18 plan year the plan is projected to become insol19 vent within the plan year or any of the 29 suc20 ceeding plan years, 

21 ‘‘(B) the plan is otherwise in critical status 

22 for the plan year as determined by the plan ac23 tuary under paragraph (5), and the plan spon24 sor determines that, based on reasonable actu25 arial assumptions and upon exhaustion of all 


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1 reasonable measures, the plan cannot reason2 ably be expected to emerge from critical status 

3 within the next 30 plan years, or 

4 ‘‘(C) the plan has a funded percentage for 

5 the plan year which is greater than the pro6 jected funded percentage as of the first day of 

7 the 15th succeeding plan year, unless the fund8 ed percentage for the plan year is 100 percent 

9 or greater and the projected funded percentage 

10 as of the first day of such 15th succeeding plan 

11 year is less than 100 percent.’’. 

12 (B) CONFORMING AMENDMENTS.— 

13 (i) Paragraph (1) of section 432(b) of 

14 such Code, as added by subsection (a)(3), 

15 is amended— 

16 (I) by striking ‘‘paragraph (4)’’ 

17 each place it appears in subpara18 graphs (A) and (B) and inserting 

19 ‘‘paragraph (5)’’, and 

20 (II) by striking ‘‘paragraph (6)’’ 

21 each place it appears in subpara22 graphs (A) and (B) and inserting 

23 ‘‘paragraph (7)’’. 

24 (ii) Subsection (c) of section 432 of 

25 such Code, as added by subsection (a)(2), 


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1 is amended by striking ‘‘(b)(4)’’ each place 

2 it appears in paragraphs (1)(A)(i), 

3 (1)(A)(ii), (1)(A)(iii), (2)(A), and (2)(B) 

4 and inserting ‘‘(b)(5)’’. 

5 (iii) Section 432(b)(5) of such Code, 

6 as further redesignated by subparagraph 

7 (A) and as amended by section 321 and 

8 subsection (a), is further amended— 

9 (I) by striking ‘‘paragraph (5)’’ 

10 in subparagraph (B)(iv) thereof and 

11 inserting ‘‘paragraph (6)’’, 

12 (II) by striking ‘‘paragraph (5)’’ 

13 each place it appears in subpara14 graphs (D)(i) and (D)(vi) thereof and 

15 inserting ‘‘paragraph (6)’’, and 

16 (III) by striking ‘‘paragraph (6)’’ 

17 in subparagraph (D)(iv) thereof and 

18 inserting ‘‘paragraph (7)’’. 

19 (iv) Section 432(b)(6) of such Code, 

20 as so further redesignated and amended, is 

21 further amended— 

22 (I) by striking ‘‘paragraph 

23 (4)(B)(iv)’’ and inserting ‘‘paragraph 

24 (5)(B)(iv)’’, 


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1 (II) by striking ‘‘paragraph (4)’’ 

2 in subparagraph (A) thereof and in3 serting ‘‘paragraph (5)’’, and 

4 (III) by striking ‘‘paragraph 

5 (4)(A)’’ in subparagraph (A) thereof 

6 and inserting ‘‘paragraph (5)(A)’’. 

7 (v) Section 432(b)(7)(A) of such 

8 Code, as so further redesignated and 

9 amended, is further amended— 

10 (I) by striking ‘‘paragraph 

11 (4)(A)’’ and inserting ‘‘paragraph 

12 (5)(A)’’, and 

13 (II) by striking ‘‘either para14 graph (2)(A) or paragraph (2)(B)’’ 

15 and inserting ‘‘any subparagraph of 

16 paragraph (2)’’. 

17 (vi) Section 432(b)(7)(B) of such 

18 Code, as so further redesignated, is amend19 ed by striking ‘‘critical or endangered’’ and 

20 inserting ‘‘endangered, critical, or declin21 ing’’. 

22 (vii) Paragraphs (1)(A), (4)(A)(ii), 

23 (4)(C)(i), (4)(C)(ii), (4)(D), and (8) of 

24 subsection (d), and subsections (f)(1)(A), 

25 (f)(4)(B)(i), (f)(4)(B)(ii)(I), (f)(5), and 


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1 (g)(3) of section 432 of such Code, as re2 designated and amended by subsection (a), 

3 are each further amended by striking 

4 ‘‘subsection (b)(4)(A)’’ and inserting ‘‘sub5 section (b)(5)(A)’’. 

6 (viii) Section 432(d)(3)(A)(i)(I) of 

7 such Code, as so redesignated and amend8 ed, is further amended by striking ‘‘sub9 section (b)(4)’’ and inserting ‘‘subsection 

10 (b)(5)’’. 

11 (ix) Subsections (f)(8)(A)(ii) and 

12 (g)(2)(A) of section 432 of such Code, as 

13 so redesignated and amended, are each 

14 further amended by striking ‘‘subsection 

15 (b)(4)(D)’’ and inserting ‘‘subsection 

16 (b)(5)(D)’’. 

17 (x) Section 432(f)(9)(J) of such Code, 

18 as so redesignated and amended, is further 

19 amended by striking ‘‘subsection (b)(4)’’ 

20 and inserting ‘‘subsection (b)(5)’’. 

21 (3) SOLVENCY PLAN.— 

22 (A) IN GENERAL.—Paragraph (4) (as re23 designated by subsection (a)(1) and amended 

24 by paragraph (1)) of section 432(a) of such 

25 Code is amended— 


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1 (i) by redesignating subparagraph (B) 

2 as subparagraph (D), and 

3 (ii) by striking subparagraph (A) and 

4 inserting before subparagraph (D) (as so 

5 redesignated) the following new subpara6 graphs: 

7 ‘‘(A) the plan sponsor shall adopt and im8 plement a solvency plan in accordance with the 

9 requirements of subsection (h), 

10 ‘‘(B) any rehabilitation plan in place as of 

11 the date the plan enters declining status shall 

12 continue to apply throughout the solvency plan 

13 adoption period, 

14 ‘‘(C) the requirements of subsection (i) and 

15 paragraphs (6) and (7) of subsection (f) shall 

16 apply during the solvency plan adoption period 

17 and the solvency attainment period, and’’. 

18 (B) ADOPTION OF PLAN.—Section 432 of 

19 such Code, as amended by this section, is fur20 ther amended— 

21 (i) by redesignating subsection (l), as 

22 added by title V of this Act, as subsection 

23 (n), and by further redesignating sub24 sections (h), (i), (j), and (k), as redesigVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00096 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 nated by subsection (a)(2), as subsections 

2 (j), (k), (l), and (m), respectively, and 

3 (ii) by inserting after subsection (g), 

4 as redesignated by subsection (a)(2), the 

5 following new subsections: 

6 ‘‘(h) SOLVENCY PLAN MUST BE ADOPTED FOR MUL7 TIEMPLOYER PLANS IN DECLINING STATUS.— 

8 ‘‘(1) IN GENERAL.—In any case in which a 

9 multiemployer plan is in declining status for a plan 

10 year, the plan sponsor, in accordance with this sub11 section— 

12 ‘‘(A) shall adopt a solvency plan not later 

13 than 240 days following the required date for 

14 the actuarial certification of declining status 

15 under subsection (b)(5)(A), and 

16 ‘‘(B) within 30 days after the adoption of 

17 the solvency plan shall provide to the bar18 gaining parties 1 or more schedules showing re19 vised benefit structures, revised contribution 

20 structures, or both, which, if adopted, may rea21 sonably be expected to enable the multiemployer 

22 plan to meet the requirements of paragraph (3), 

23 including— 

24 ‘‘(i) one default proposal under 

25 which— 


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1 ‘‘(I) all adjustable benefits in the 

2 form of early retirement subsidies (in3 cluding early reduction factors which 

4 are not provided on an actuarially 

5 equivalent basis) under the plan are 

6 eliminated, and 

7 ‘‘(II) the future monthly benefit 

8 accrual rate under the plan is reduced 

9 to the equivalent of 1 percent of an10 nual contributions (or, if lower, the 

11 current accrual rate) based on the 

12 contribution rate in effect as of the 

13 later of the first day of the plan year 

14 in which the plan enters declining sta15 tus or the date of a partition under 

16 section 4233A of the Employee Re17 tirement Income Security Act of 

18 1974, and 

19 which may also include reduction or elimi20 nation of any other adjustable benefits 

21 under the plan, and 

22 ‘‘(ii) any additional schedules which 

23 reduce or eliminate adjustable benefits 

24 under the plan which the plan sponsor 


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1 deems appropriate to provide as an alter2 native to the default proposal. 

3 No schedule provided to or adopted by the bar4 gaining parties shall provide for a monthly benefit 

5 accrual rate in excess of the rate described in sub6 paragraph (B)(i)(II). 

7 ‘‘(2) EXCEPTION FOR YEARS AFTER PROCESS

8 BEGINS.—Paragraph (1) shall not apply to a plan 

9 year if such year is in a solvency plan adoption pe10 riod or solvency attainment period by reason of the 

11 plan being in declining status for a preceding plan 

12 year, except that the next update of the solvency 

13 plan shall fulfill the requirement of paragraph 

14 (1)(B)(i). For purposes of this section, such pre15 ceding plan year shall be the initial determination 

16 year with respect to the solvency plan to which it re17 lates. 

18 ‘‘(3) SOLVENCY PLAN.—For purposes of this 

19 section, a solvency plan is a plan which consists of 

20 the actions, including options or a range of options 

21 to be proposed to the bargaining parties, formulated, 

22 based on reasonably anticipated experience and rea23 sonable actuarial assumptions, to enable the plan to 

24 delay or avoid the projected insolvency. 


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1 ‘‘(4) SOLVENCY ATTAINMENT PERIOD.—For 

2 purposes of this section— 

3 ‘‘(A) IN GENERAL.—Except as provided in 

4 subparagraph (B), the solvency attainment pe5 riod for any solvency plan adopted pursuant to 

6 this subsection is the period— 

7 ‘‘(i) beginning on the first day of the 

8 first plan year of the multiemployer plan 

9 beginning after the earlier of— 

10 ‘‘(I) the second anniversary of 

11 the date of the adoption of the sol12 vency plan, or 

13 ‘‘(II) the expiration of the collec14 tive bargaining agreements in effect 

15 on the due date for the actuarial cer16 tification of declining status for the 

17 initial determination year under sub18 section (b)(5)(A) and covering, as of 

19 such due date, at least 75 percent of 

20 the active participants in such plan, 

21 and 

22 ‘‘(ii) ending on the date the plan ei23 ther emerges from declining status or be24 comes insolvent. 


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1 ‘‘(B) COORDINATION WITH CHANGES IN

2 STATUS.— 

3 ‘‘(i) PLANS NO LONGER IN DECLINING

4 STATUS.—If the plan’s actuary certifies in 

5 accordance with subparagraph (C) for a 

6 plan year in any solvency plan adoption pe7 riod or solvency attainment period that the 

8 plan is no longer in declining status, the 

9 solvency plan adoption period or solvency 

10 attainment period, whichever is applicable, 

11 shall end as of the date of such certifi12 cation. 

13 ‘‘(ii) PLANS IN CRITICAL OR ENDAN14 GERED STATUS.—If the plan’s actuary cer15 tifies under subsection (b)(5)(A) for the 

16 plan year described in clause (i) that the 

17 plan is in critical or endangered rather 

18 than declining status, the provisions of 

19 subsections (d) and (e), or subsections (f) 

20 and (g), whichever are applicable, shall be 

21 applied as if such plan year were an initial 

22 determination year, except that the plan 

23 may not be amended in a manner incon24 sistent with the solvency plan in effect for 

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1 ing improvement plan or rehabilitation 

2 plan, whichever is applicable, is adopted. 

3 ‘‘(C) EMERGENCE.—A plan in declining 

4 status shall remain in such status until a plan 

5 year for which the plan actuary certifies, in ac6 cordance with subsection (b)(5)(A), that the 

7 plan is not described in one or more of the sub8 paragraphs in subsection (b)(4) as of the begin9 ning of the plan year. 

10 ‘‘(5) UPDATES TO SOLVENCY PLANS AND

11 SCHEDULES.— 

12 ‘‘(A) SOLVENCY PLAN.—The plan sponsor 

13 shall annually update the solvency plan and 

14 shall file the update with the plan’s annual re15 port under section 104 of the Employee Retire16 ment Income Security Act of 1974. 

17 ‘‘(B) SCHEDULES.—The plan sponsor shall 

18 annually update any schedule of contribution 

19 rates provided under this subsection to reflect 

20 the experience of the plan. 

21 ‘‘(C) DURATION OF SCHEDULE.—A sched22 ule of contribution rates provided by the plan 

23 sponsor and relied upon by bargaining parties 

24 in negotiating a collective bargaining agreement 


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1 shall remain in effect for the duration of that 

2 collective bargaining agreement. 

3 ‘‘(6) IMPOSITION OF SCHEDULE WHERE FAIL4 URE TO ADOPT SOLVENCY PLAN.— 

5 ‘‘(A) INITIAL CONTRIBUTION SCHEDULE.— 

6 If— 

7 ‘‘(i) a collective bargaining agreement 

8 providing for contributions under a multi9 employer plan that was in effect at the 

10 time the plan entered declining status ex11 pires, and 

12 ‘‘(ii) after receiving one or more 

13 schedules from the plan sponsor under 

14 paragraph (1)(B), the bargaining parties 

15 with respect to such agreement fail to 

16 adopt a contribution schedule with terms 

17 consistent with the solvency plan and a 

18 schedule from the plan sponsor, 

19 the plan sponsor shall implement the schedule 

20 described in paragraph (1)(B)(i) beginning on 

21 the date specified in subparagraph (C). 

22 ‘‘(B) SUBSEQUENT CONTRIBUTION SCHED23 ULE.—If— 

24 ‘‘(i) a collective bargaining agreement 

25 providing for contributions under a multiVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00103 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 employer plan in accordance with a sched2 ule provided by the plan sponsor pursuant 

3 to a solvency plan (or imposed under sub4 paragraph (A)) expires while the plan is 

5 still in declining status, and 

6 ‘‘(ii) after receiving one or more up7 dated schedules from the plan sponsor 

8 under paragraph (5)(B), the bargaining 

9 parties with respect to such agreement fail 

10 to adopt a contribution schedule with 

11 terms consistent with the updated solvency 

12 plan and a schedule from the plan sponsor, 

13 then the contribution schedule applicable under 

14 the expired collective bargaining agreement, as 

15 updated and in effect on the date the collective 

16 bargaining agreement expires, shall be imple17 mented by the plan sponsor beginning on the 

18 date specified in subparagraph (C). 

19 ‘‘(C) DATE OF IMPLEMENTATION.—The 

20 date specified in this subparagraph is the date 

21 which is 180 days after the date on which the 

22 collective bargaining agreement described in 

23 subparagraph (A) or (B) expires. 

24 ‘‘(7) SOLVENCY PLAN ADOPTION PERIOD.—For 

25 purposes of this section, the term ‘solvency plan 


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1 adoption period’ means the period beginning on the 

2 date of the certification under subsection (b)(5)(A) 

3 for the initial determination year and ending on the 

4 day before the first day of the solvency attainment 

5 period. 

6 ‘‘(i) RULES FOR OPERATION OF PLAN DURING

7 ADOPTION AND ATTAINMENT PERIODS.— 

8 ‘‘(1) COMPLIANCE WITH SOLVENCY PLAN.— 

9 ‘‘(A) IN GENERAL.—A plan may not be 

10 amended after the date of the adoption of a sol11 vency plan under subsection (h) so as to be in12 consistent with the solvency plan. 

13 ‘‘(B) SPECIAL RULES FOR BENEFIT IN14 CREASES.—A plan may not be amended after 

15 the date of the adoption of a solvency plan 

16 under subsection (h) so as to increase benefits, 

17 including future benefit accruals, unless the in18 crease is required by law or is a de minimis 

19 change. 

20 ‘‘(C) SPECIAL RULES FOR INCREASES IN

21 COMPENSATION OR CONTRIBUTION RATE.—Any 

22 increase in employee compensation or contribu23 tion rates which takes effect after the first day 

24 of the plan year in which the plan enters declin25 ing status shall not give rise to an increase in 


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1 benefits or future benefit accruals under the 

2 plan. 

3 ‘‘(2) RESTRICTION ON LUMP SUMS AND SIMI4 LAR BENEFITS.— 

5 ‘‘(A) IN GENERAL.—Effective on the date 

6 the notice of certification of the plan’s declining 

7 status for the initial determination year under 

8 subsection (b)(5)(D) is sent, and notwith9 standing section 411(d)(6), the plan shall not 

10 pay— 

11 ‘‘(i) any payment, in excess of the 

12 monthly amount paid under a single life 

13 annuity (plus any social security supple14 ments described in the last sentence of sec15 tion 411(a)(9)), to a participant or bene16 ficiary whose annuity starting date (as de17 fined in section 417(f)(2)) occurs after the 

18 date such notice is sent, 

19 ‘‘(ii) any payment for the purchase of 

20 an irrevocable commitment from an insurer 

21 to pay benefits, or 

22 ‘‘(iii) any other payment specified by 

23 the Secretary by regulations, 

24 unless it is a de minimis amount. 


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1 ‘‘(B) EXCEPTION.—Subparagraph (A) 

2 shall not apply to a benefit which under section 

3 411(a)(11) may be immediately distributed 

4 without the consent of the participant or to any 

5 makeup payment in the case of a retroactive 

6 annuity starting date or any similar payment of 

7 benefits owed with respect to a prior period. 

8 ‘‘(3) SPECIAL RULES FOR PLAN ADOPTION PE9 RIOD.—During the period beginning on the date of 

10 the certification under subsection (b)(5)(A) for the 

11 initial determination year and ending on the date of 

12 the adoption of a solvency plan— 

13 ‘‘(A) the plan sponsor may not accept a 

14 collective bargaining agreement or participation 

15 agreement with respect to the multiemployer 

16 plan that provides for— 

17 ‘‘(i) a reduction in the level of con18 tributions for any participants, 

19 ‘‘(ii) a suspension of contributions 

20 with respect to any period of service, or 

21 ‘‘(iii) any new direct or indirect exclu22 sion of younger or newly hired employees 

23 from plan participation, 

24 unless the plan sponsor reasonably determines 

25 that the acceptance of such an agreement is in 


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1 the best interests of participants and bene2 ficiaries and that rejection of such agreement 

3 would adversely affect the plan, and 

4 ‘‘(B) no amendment of the plan which in5 creases the liabilities of the plan by reason of 

6 any increase in benefits, any change in the ac7 crual of benefits, or any change in the rate at 

8 which benefits become nonforfeitable under the 

9 plan may be adopted unless the amendment is 

10 required as a condition of qualification under 

11 part I of subchapter D of chapter 1 or to com12 ply with other applicable law.’’. 

13 (C) SUSPENSION OF BENEFITS.—Section 

14 432 of such Code, as amended by this section, 

15 is further amended— 

16 (i) by redesignating paragraph (9) of 

17 subsection (f) (as redesignated by sub18 section (a)(2)) as paragraph (8) of sub19 section (h) (as added by subparagraph 

20 (B)), and 

21 (ii) by moving such paragraph to the 

22 position immediately after paragraph (7) 

23 of such subsection (h). 

24 (4) CONFORMING AMENDMENTS.— 


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1 (A) Subsection (a)(4)(D) of section 432 of 

2 such Code, as redesignated and amended by the 

3 preceding provisions of this section, is further 

4 amended by striking ‘‘subsection (f)(9)’’ and in5 serting ‘‘subsection (h)(8)’’. 

6 (B) Paragraph (5) of section 432(b) of 

7 such Code, as so redesignated and as amended 

8 by section 321 and the preceding provisions of 

9 this section, is further amended— 

10 (i) by striking ‘‘critical’’ in subpara11 graph (A)(i)(I) and inserting ‘‘critical or 

12 declining’’, 

13 (ii) by striking ‘‘funding improvement 

14 or rehabilitation period’’ in subparagraph 

15 (A)(i)(II) and inserting ‘‘funding improve16 ment, rehabilitation, or solvency attain17 ment period’’, 

18 (iii) by striking ‘‘funding improvement 

19 or rehabilitation plan’’ in subparagraph 

20 (A)(i)(II) and inserting ‘‘funding improve21 ment, rehabilitation, or solvency plan’’, 

22 (iv) by striking ‘‘endangered or crit23 ical’’ in subparagraph (A)(i)(V)(bb) and 

24 inserting ‘‘endangered, critical, or declin25 ing’’, 


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1 (v) by striking ‘‘funding improvement 

2 plan or rehabilitation’’ in subparagraph 

3 (A)(iv) and inserting ‘‘funding improve4 ment, rehabilitation, or solvency’’, 

5 (vi) by striking ‘‘critical’’ each place it 

6 appears in subparagraph (A)(vi) and in7 serting ‘‘critical or declining’’, 

8 (vii) by striking ‘‘rehabilitation pe9 riod’’ in subparagraph (A)(vi) and insert10 ing ‘‘rehabilitation or solvency attainment 

11 period’’, 

12 (viii) by striking ‘‘as described in sub13 section (f)(9)’’ in subparagraph (B)(v), 

14 (ix) by inserting ‘‘if the plan is al15 ready in a rehabilitation period, and’’ be16 fore ‘‘if reasonable’’ in subparagraph 

17 (B)(v)(I), 

18 (x) by striking ‘‘subsection (f)(9)’’ in 

19 subparagraph (B)(v)(II) and inserting 

20 ‘‘subsection (h)(8)’’, 

21 (xi) by striking ‘‘endangered or crit22 ical’’ both places it appears in subpara23 graph (D)(i) and inserting ‘‘endangered, 

24 critical, or declining’’, 


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1 (xii) by striking ‘‘ENDANGERED OR

2 CRITICAL’’ in the heading of subparagraph 

3 (D)(ii) and inserting ‘‘ENDANGERED, CRIT4 ICAL, OR DECLINING’’, 

5 (xiii) by striking ‘‘endangered or crit6 ical’’ in subparagraph (D)(ii) and inserting 

7 ‘‘endangered, critical, or declining’’, 

8 (xiv) by striking ‘‘funding improve9 ment or rehabilitation plan’’ both places it 

10 appears in subclauses (I) and (II) of sub11 paragraph (D)(ii) and inserting ‘‘funding 

12 improvement, rehabilitation, or solvency 

13 plan’’, and 

14 (xv) by adding at the end of subpara15 graph (D) the following new clause: 

16 ‘‘(vii) NOTICE OF PROJECTION TO BE

17 IN DECLINING STATUS IN A FUTURE PLAN

18 YEAR.—In any case in which it is certified 

19 under subparagraph (A)(i) that a multiem20 ployer plan will be in declining status for 

21 any of 5 succeeding plan years (but not for 

22 the current plan year), the plan sponsor 

23 shall, not later than 30 days after the date 

24 of the certification, provide notification of 


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•S 5045 IS

1 the projected declining status to the Pen2 sion Benefit Guaranty Corporation.’’. 

3 (C) Subparagraph (J) of section 432(h)(8) 

4 of such Code, as so redesignated and amended, 

5 is further amended— 

6 (i) by striking ‘‘CRITICAL’’ in the 

7 heading and inserting ‘‘DECLINING’’, and 

8 (ii) by striking ‘‘shall not emerge from 

9 critical status under paragraph (4)(B),’’ 

10 and inserting ‘‘shall not emerge from de11 clining status’’. 

12 (D) Subsection (j) of section 432 of such 

13 Code, as so redesignated and amended, is fur14 ther amended— 

15 (i) by striking ‘‘(f)(8) or (g)’’ in para16 graph (1) and inserting ‘‘(f)(8), (g), or 

17 (i)’’, 

18 (ii) by striking ‘‘subsection (f)(9)’’ in 

19 paragraph (1) and inserting ‘‘subsection 

20 (h)(8)’’, 

21 (iii) by striking ‘‘FUNDING IMPROVE22 MENT OR REHABILITATION PLAN’’ in the 

23 heading of paragraph (3) and inserting 

24 ‘‘FUNDING IMPROVEMENT, REHABILITA25 TION, OR SOLVENCY’’, 


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1 (iv) by striking ‘‘funding improvement 

2 plan or rehabilitation plan’’ both places it 

3 appears in subparagraphs (A) and (B) of 

4 paragraph (3) and inserting ‘‘funding im5 provement, rehabilitation, or solvency 

6 plan’’, 

7 (v) by striking ‘‘ENDANGERED OR

8 CRITICAL’’ in the heading of paragraph 

9 (4), as amended by subsection (a), and in10 serting ‘‘ENDANGERED, CRITICAL, OR DE11 CLINING’’, 

12 (vi) by striking ‘‘endangered or crit13 ical’’ each place it appears in paragraph 

14 (4), as so amended, and inserting ‘‘endan15 gered, critical, or declining’’, and 

16 (vii) by striking ‘‘critical or endan17 gered’’ in paragraph (4) and inserting ‘‘en18 dangered, critical, or declining’’. 

19 (E) Subsection (k) of section 432 of such 

20 Code, as so redesignated and amended, is fur21 ther amended— 

22 (i) by striking ‘‘or a rehabilitation 

23 plan under subsection (f)’’ and inserting ‘‘, 

24 a rehabilitation plan under subsection (f), 

25 or a solvency plan under subsection (h)’’, 


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1 (ii) by striking ‘‘endangered status or 

2 a plan in critical status’’ and inserting 

3 ‘‘endangered, critical, or declining status’’, 

4 (iii) by striking ‘‘has not agreed on a 

5 funding improvement plan or rehabilitation 

6 plan’’ and inserting ‘‘has not agreed on a 

7 funding improvement, rehabilitation, or 

8 solvency plan (whichever is applicable)’’, 

9 and 

10 (iv) by striking ‘‘adoption of a funding 

11 improvement plan or rehabilitation plan’’ 

12 and inserting ‘‘adoption of a funding im13 provement, rehabilitation, or solvency 

14 plan’’. 

15 (F) Subsection (l) of section 432 of such 

16 Code, as so redesignated and amended, is fur17 ther amended— 

18 (i) by striking ‘‘endangered status or 

19 in critical status’’ in paragraph (1) and in20 serting ‘‘endangered, critical, or declining 

21 status’’, 

22 (ii) by striking ‘‘endangered or crit23 ical’’ in paragraph (1) and inserting ‘‘en24 dangered, critical, or declining’’, and 


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1 (iii) by striking ‘‘(d) and (f)’’ in para2 graph (2) and inserting ‘‘(d), (f), and (h)’’. 

3 (G) Section 418E of such Code, as amend4 ed by section 112 and this section, is further 

5 amended— 

6 (i) by striking ‘‘432(b)(3)’’ each place 

7 it appears in subsections (c)(1), (c)(2), 

8 (d)(1), and (d)(2) and inserting 

9 ‘‘432(b)(3), or a plan in declining status, 

10 as described in section 432(b)(4)’’, and 

11 (ii) by striking ‘‘432(f)(9)’’ in sub12 section (g) and inserting ‘‘432(h)(8)’’. 

13 (H) Section 4971(g) of such Code, as 

14 amended by this section, is further amended— 

15 (i) by striking ‘‘ENDANGERED OR

16 CRITICAL’’ in the heading and inserting 

17 ‘‘ENDANGERED, CRITICAL, OR DECLIN18 ING’’, 

19 (ii) by striking ‘‘critical status’’ in 

20 paragraph (1)(A) and inserting ‘‘critical or 

21 declining status’’, 

22 (iii) by striking ‘‘OR REHABILITATION

23 PLAN’’ in the heading of paragraph (2) 

24 and inserting ‘‘, REHABILITATION, OR SOL25 VENCY PLAN’’, 


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1 (iv) by striking ‘‘plan or rehabilitation 

2 plan’’ in paragraph (2)(A) and inserting ‘‘, 

3 rehabilitation, or solvency plan’’, 

4 (v) by striking ‘‘rehabilitation plan’’ in 

5 paragraph (2)(C) and inserting ‘‘funding 

6 improvement, rehabilitation, or solvency 

7 plan’’, 

8 (vi) by striking paragraph (3) and re9 designating paragraphs (4), (5), and (6) as 

10 paragraphs (3), (4), and (5), respectively, 

11 (vii) by striking ‘‘REHABILITATION

12 PLAN’’ in the heading of paragraph (3), as 

13 so redesignated, and inserting ‘‘REHABILI14 TATION OR SOLVENCY PLAN’’, 

15 (viii) by striking ‘‘critical status’’ in 

16 paragraph (3)(A), as so redesignated, and 

17 inserting ‘‘critical or declining status’’, 

18 (ix) by striking ‘‘rehabilitation plan’’ 

19 in paragraph (3)(A), as so redesignated, 

20 and inserting ‘‘rehabilitation or solvency 

21 plan’’, 

22 (x) by striking ‘‘described in section 

23 432(f)(1)(A) and ending on the day on 

24 which the rehabilitation plan is adopted’’ 

25 in paragraph (3)(B)(ii), as so redesignated, 


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•S 5045 IS

1 and inserting ‘‘described in section 

2 432(f)(1)(A) or 432(h)(1)(A), whichever is 

3 applicable, and ending on the day on which 

4 the rehabilitation plan or solvency plan is 

5 adopted’’, 

6 (xi) by striking ‘‘432(k)(9)’’ in para7 graph (3)(C)(ii), as so redesignated, and 

8 inserting ‘‘432(n)(9)’’, and 

9 (xii) by striking ‘‘or (3)’’ in paragraph 

10 (4), as so redesignated. 

11 (e) ADJUSTMENT OF BENEFITS.— 

12 (1) IN GENERAL.—Section 432 of the Internal 

13 Revenue Code of 1986, as amended by this section, 

14 is further amended— 

15 (A) by further redesignating subsections 

16 (m) and (n), as redesignated by subsection (d), 

17 as subsections (n) and (o), respectively, 

18 (B) by redesignating paragraph (8) of sub19 section (f), as redesignated by subsection 

20 (a)(2), as subsection (m), and 

21 (C) by moving such subsection to the posi22 tion immediately after subsection (l). 

23 (2) CLERICAL AND CONFORMING AMEND24 MENTS.— 


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1 (A) The heading of subsection (m) of sec2 tion 432 of such Code, as redesignated by para3 graph (1), is amended to read as follows: 

4 ‘‘(m) ADJUSTMENT OF BENEFITS.—’’. 

5 (B) The following provisions of such sub6 section (m) are amended as follows: 

7 (i) Subparagraphs (A), (B), and (C) 

8 are redesignated as paragraphs (1), (2), 

9 and (4), respectively, and moved 2 ems to 

10 the left. 

11 (ii) Clauses (i), (ii), (iii), and (iv) of 

12 paragraph (1) (as so redesignated) are re13 designated as subparagraphs (A), (B), (C), 

14 and (D), respectively, and moved 2 ems to 

15 the left. 

16 (iii) Subclauses (I), (II), and (III) of 

17 paragraph (1)(D) (as so redesignated) are 

18 redesignated as clauses (i), (ii), and (iii), 

19 respectively, and moved 2 ems to the left. 

20 (iv) Clauses (i), (ii), and (iii) of para21 graph (4) (as so redesignated) are redesig22 nated as subparagraphs (A), (B), and (C), 

23 respectively, and moved 2 ems to the left, 

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1 paragraph (C) (as so redesignated) is 

2 moved 2 ems to the left. 

3 (v) Subclauses (I), (II), and (III) of 

4 paragraph (4)(A) (as so redesignated) are 

5 redesignated as clauses (i), (ii), and (iii), 

6 respectively, and moved 2 ems to the left. 

7 (vi) Subclauses (I) and (II) of para8 graph (4)(B) (as so redesignated) are re9 designated as clauses (i) and (ii), respec10 tively, and moved 2 ems to the left. 

11 (vii) Subclauses (I), (II), and (III) of 

12 paragraph (4)(C) (as so redesignated) are 

13 redesignated as clauses (i), (ii), and (iii), 

14 respectively, and moved 2 ems to the left. 

15 (viii) Paragraph (1)(A), as so redesig16 nated, is amended by striking ‘‘subpara17 graph (C)’’ and inserting ‘‘paragraph (4)’’. 

18 (ix) Paragraph (1)(B), as so redesig19 nated, is amended by striking ‘‘clause 

20 (iv)(III)’’ and inserting ‘‘subparagraph 

21 (D)(iii)’’. 

22 (x) Paragraph (1)(D), as so redesig23 nated, is amended by striking ‘‘this para24 graph’’ and inserting ‘‘this subsection’’. 


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1 (xi) Paragraph (2), as so redesig2 nated, is amended— 

3 (I) by striking ‘‘subparagraph 

4 (A)(iv)(III)’’ and inserting ‘‘para5 graph (1)(D)(iii)’’, and 

6 (II) by striking ‘‘this paragraph’’ 

7 and inserting ‘‘this subsection’’. 

8 (xii) Paragraph (4)(A), as so redesig9 nated, is amended by striking ‘‘subpara10 graph (A)’’ and inserting ‘‘paragraph (1)’’. 

11 (xiii) Paragraphs (4)(B) and (4)(C), 

12 as so redesignated, are each amended by 

13 striking ‘‘clause (i)’’ each place it appears 

14 and inserting ‘‘subparagraph (A)’’. 

15 (xiv) The last sentence of paragraph 

16 (4)(C), as so redesignated, is amended— 

17 (I) by striking ‘‘subclause (I)’’ 

18 and inserting ‘‘clause (i)’’, and 

19 (II) by striking ‘‘this subpara20 graph’’ and inserting ‘‘this para21 graph’’. 

22 (3) APPLICATION TO ALL PLANS IN ENDAN23 GERED, CRITICAL, OR DECLINING STATUS.— 

24 (A) IN GENERAL.—Subparagraph (A) of 

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1 nated and amended by this section, is further 

2 amended— 

3 (i) by striking ‘‘the plan sponsor 

4 shall’’ and inserting ‘‘the plan sponsor of a 

5 multiemployer plan in endangered, critical, 

6 or declining status may’’, and 

7 (ii) by striking ‘‘paragraph (1)(B)(i)’’ 

8 and inserting ‘‘subsection (d)(1)(B), 

9 (f)(1)(B), or (h)(1)(B), whichever is appli10 cable’’. 

11 (B) CONFORMING AMENDMENT.—Subpara12 graph (B) of section 432(m)(1) of such Code, 

13 as redesignated and amended by this section, is 

14 further amended by striking ‘‘critical’’ both 

15 places it appears and inserting ‘‘endangered, 

16 critical, or declining’’. 

17 (4) ADDITIONAL ADJUSTABLE BENEFITS.— 

18 (A) IN GENERAL.—Subparagraph (D) of 

19 section 432(m)(1) of such Code, as redesig20 nated by this section, is amended— 

21 (i) by inserting ‘‘, including early re22 duction factors which are not provided on 

23 an actuarially equivalent basis,’’ after 

24 ‘‘(i))’’ in clause (ii), as so redesignated, 


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1 (ii) by striking ‘‘and’’ at the end of 

2 clause (ii) (as so redesignated), 

3 (iii) by striking ‘‘that would not be eli4 gible’’ and all that follows through the pe5 riod in clause (iii) (as so redesignated) and 

6 inserting ‘‘which were adopted (or, if later, 

7 took effect) less than 120 months before 

8 the first day of the first plan year in which 

9 the plan was in endangered, critical, or de10 clining status,’’, and 

11 (iv) by adding at the end the following 

12 new clauses: 

13 ‘‘(iv) any one-time bonus payment or 

14 ‘thirteenth check’ provision, and 

15 ‘‘(v) benefits granted for periods of 

16 service prior to participation in the plan.’’. 

17 (B) CONFORMING AMENDMENTS.— 

18 (i) Subparagraph (B) of section 

19 432(m)(1) of such Code, as redesignated 

20 and amended by this section, is further 

21 amended by striking ‘‘subparagraph 

22 (D)(iii)’’ and inserting ‘‘clause (iii), (iv), or 

23 (v) of subparagraph (D)’’. 

24 (ii) Paragraph (2) of section 432(m) 

25 of such Code, as amended by paragraph 


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•S 5045 IS

1 (2)(B), is further amended by striking 

2 ‘‘paragraph (1)(D)(iii)’’ and inserting 

3 ‘‘clause (iii), (iv), or (v) of paragraph 

4 (1)(D)’’. 

5 (5) RULES RELATING TO SUSPENSION OF BEN6 EFITS UPON RETURN TO WORK.—Subsection (m) of 

7 section 432 of such Code, as redesignated and 

8 amended by this section, is further amended by in9 serting after paragraph (2) the following new para10 graph: 

11 ‘‘(3) RULES RELATING TO SUSPENSION OF

12 BENEFITS UPON RETURN TO WORK.—The plan 

13 sponsor of a multiemployer plan in endangered, crit14 ical, or declining status may amend rules regarding 

15 the suspension of a participant’s benefits upon a re16 turn to work after commencement of benefits, or the 

17 commencement of benefits after normal retirement 

18 age (including in the case of continued employment 

19 after normal retirement age). Any such changes 

20 shall apply only to future payments of benefits.’’. 

21 (6) ADDITIONAL CONFORMING AMENDMENTS.— 

22 (A) Clause (iii) of section 432(b)(5)(D) of 

23 such Code, as redesignated and amended by 

24 this section, is further amended— 


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1 (i) by striking ‘‘CRITICAL’’ in the 

2 heading and inserting ‘‘ENDANGERED, 

3 CRITICAL, OR DECLINING’’, 

4 (ii) by striking ‘‘critical status’’ both 

5 places it appears and inserting ‘‘endan6 gered, critical, or declining status’’, and 

7 (iii) by striking ‘‘subsection (f)(8)’’ in 

8 subclause (I) and inserting ‘‘subsection 

9 (m)(1)(D)’’. 

10 (B) Subsection (j) of section 432 of such 

11 Code, as amended by subsection (d), is further 

12 amended by striking ‘‘(f)(8), (g), or (i)’’ and in13 serting ‘‘(e), (g), (i), or (m)’’. 

14 (f) ELECTIONS TO BE IN CRITICAL OR ENDANGERED

15 STATUS.— 

16 (1) IN GENERAL.—Paragraph (6) of section 

17 432(b) of the Internal Revenue Code of 1986, as re18 designated and amended by this section, is further 

19 amended— 

20 (A) by striking ‘‘is not in critical status’’ 

21 in subparagraph (A) and inserting ‘‘is not in 

22 critical or declining status’’, 

23 (B) by striking ‘‘but that is projected’’ in 

24 subparagraph (A) and inserting ‘‘but— 

25 ‘‘(i) that is projected’’, 


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1 (C) by striking ‘‘5 plan years may, not 

2 later than’’ in subparagraph (A) and inserting 

3 ‘‘5 plan years, or 

4 ‘‘(ii) that is in endangered status and 

5 is not reasonably projected to be able to 

6 emerge from endangered status within the 

7 funding improvement period under the 

8 funding improvement plan in effect, 

9 may, not later than’’, and 

10 (D) by striking ‘‘under paragraph (3)’’ in 

11 subparagraph (B) and inserting ‘‘under para12 graph (3) or for endangered status under para13 graph (2)’’. 

14 (2) ELECTION TO BE IN ENDANGERED STA15 TUS.—Subsection (b) of section 432 of such Code, 

16 as so redesignated and amended, is further amended 

17 by adding at the end the following new paragraph: 

18 ‘‘(8) ELECTION TO BE IN ENDANGERED STA19 TUS.—Notwithstanding paragraph (2)— 

20 ‘‘(A) the plan sponsor of a multiemployer 

21 plan that is not in endangered, critical, or de22 clining status for a plan year but that is pro23 jected by the plan actuary, pursuant to the de24 termination under paragraph (5), to be in en25 dangered status in any of the 5 succeeding plan 


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•S 5045 IS

1 years, may, not later than 30 days after the 

2 date of the certification under paragraph 

3 (5)(A), elect to be in endangered status effec4 tive for the current plan year, 

5 ‘‘(B) the plan year in which the plan spon6 sor elects to be in endangered status under sub7 paragraph (A) shall be treated for purposes of 

8 this section as the first year in which the plan 

9 is in endangered status, regardless of the date 

10 on which the plan first satisfies the criteria for 

11 endangered status under paragraph (2), and 

12 ‘‘(C) a plan that is in endangered status 

13 under this paragraph shall not emerge from en14 dangered status unless the plan’s actuary cer15 tifies under paragraph (5)(A) that the plan is 

16 no longer in endangered status and is not in 

17 critical or declining status.’’. 

18 (g) AMENDMENTS RELATING TO FUNDING IMPROVE19 MENT PLAN.— 

20 (1) IN GENERAL.—Paragraph (1) of section 

21 432(d) of the Internal Revenue Code of 1986, as re22 designated and amended by this section, is further 

23 amended— 

24 (A) by striking the last sentence, and 


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1 (B) in subparagraph (B), by striking 

2 ‘‘funding improvement plan—’’ and all that fol3 lows and inserting ‘‘funding improvement plan, 

4 shall provide to the bargaining parties 1 or 

5 more schedules showing revised benefit struc6 tures, revised contribution structures, or both, 

7 which, if adopted, may reasonably be expected 

8 to enable the multiemployer plan to meet the 

9 requirements of paragraph (3), including— 

10 ‘‘(i) one default proposal under 

11 which— 

12 ‘‘(I) all adjustable benefits in the 

13 form of early retirement subsidies (in14 cluding early reduction factors which 

15 are not provided on an actuarially 

16 equivalent basis) under the plan are 

17 eliminated, and 

18 ‘‘(II) the future monthly benefit 

19 accrual rate under the plan is reduced 

20 to the equivalent of 1 percent of an21 nual contributions (or, if lower, the 

22 accrual rate as of the date of the en23 actment of the Chris Allen Multiem24 ployer Pension Recapitalization and 

25 Reform Act of 2020) based on the 


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1 contribution rate in effect as of the 

2 first day of the plan year in which the 

3 plan enters endangered status, and 

4 which may also include reduction or elimi5 nation of any other adjustable benefits 

6 under the plan, and 

7 ‘‘(ii) any additional schedules which 

8 reduce or eliminate adjustable benefits 

9 under the plan which the plan sponsor 

10 deems appropriate to provide as an alter11 native to the default proposal.’’. 

12 (2) FUNDING IMPROVEMENT PLAN.—Paragraph 

13 (3) of section 432(d) of such Code, as so redesig14 nated and amended, is further amended— 

15 (A) by striking ‘‘For purposes of this sec16 tion—’’ and all that follows through ‘‘which 

17 consists of’’ in subparagraph (A) and inserting 

18 ‘‘For purposes of this section, a funding im19 provement plan is a plan which consists of’’, 

20 and 

21 (B) by striking ‘‘formulated to provide’’ 

22 and all that follows and inserting ‘‘formulated, 

23 based on reasonably anticipated experience and 

24 reasonable actuarial assumptions, to— 


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1 ‘‘(A) enable the plan to no longer be in en2 dangered status (as certified by the plan actu3 ary) by the end of the funding improvement pe4 riod, and 

5 ‘‘(B) avoid any accumulated funding defi6 ciencies during the funding improvement period 

7 (taking into account any extension of amortiza8 tion periods under section 431(d)).’’. 

9 (3) FUNDING IMPROVEMENT PERIOD.—Para10 graph (4) of section 432(d) of such Code, as so re11 designated and amended, is further amended by 

12 striking subparagraph (B) and inserting after sub13 paragraph (A) the following new subparagraph: 

14 ‘‘(B) NEW PERIOD BASED ON ADVERSE

15 EXPERIENCE.— 

16 ‘‘(i) IN GENERAL.—If the plan’s actu17 ary determines necessary based on adverse 

18 plan experience, the plan sponsor may pro19 vide for a new 10-year period as of the 

20 first day of any plan year in the original 

21 funding improvement period, but only if 

22 the plan is still projected to meet the re23 quirements of the funding improvement 

24 plan and emerge from endangered status 


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1 at the end of the new funding improvement 

2 period. 

3 ‘‘(ii) LIMITATION.—A plan sponsor 

4 may provide a new 10-year period under 

5 clause (i) not more than 1 time in any 20- 

6 consecutive-year period, unless the plan 

7 sponsor submits to the Secretary an appli8 cation for an additional new period. Such 

9 application shall include a certification that 

10 the plan is projected to emerge from en11 dangered status in the proposed new 10- 

12 year period and a description of key as13 sumptions, to be specified in regulations 

14 promulgated by the Secretary in consulta15 tion with the Pension Benefit Guaranty 

16 Corporation.’’. 

17 (4) CONFORMING AMENDMENTS.— 

18 (A) Subparagraph (C) of section 432(d)(4) 

19 of such Code, as so redesignated and amended, 

20 is further amended— 

21 (i) by striking ‘‘critical status’’ both 

22 places it appears in clauses (i) and (ii) and 

23 inserting ‘‘critical or declining status’’, 


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1 (ii) by striking ‘‘rehabilitation period’’ 

2 in clause (ii) and inserting ‘‘rehabilitation 

3 or solvency attainment period’’, and 

4 (iii) by striking ‘‘CRITICAL STATUS’’ in 

5 the heading of clause (ii) and inserting 

6 ‘‘CRITICAL OR DECLINING STATUS’’. 

7 (B) Subsection (d) of section 432 of such 

8 Code, as so redesignated and amended, is fur9 ther amended by striking paragraph (5) and by 

10 redesignating paragraphs (6), (7), and (8) as 

11 paragraphs (5), (6), and (7), respectively. 

12 (C) Paragraph (6) of section 432(d) of 

13 such Code, as so redesignated, is amended— 

14 (i) by striking ‘‘(1)(B)(i)(I)’’ in sub15 paragraph (A) and inserting ‘‘(1)(B)(i)’’, 

16 and 

17 (ii) by striking ‘‘paragraph (6)(B)’’ in 

18 subparagraph (B)(ii) and inserting ‘‘para19 graph (5)(B)’’. 

20 (D) Paragraph (2) of section 432(d) of 

21 such Code, as so redesignated, is amended by 

22 inserting ‘‘, except that the next update of the 

23 funding improvement plan shall fulfill the re24 quirement of paragraph (1)(B)(i)’’ after ‘‘for a 

25 preceding plan year’’. 


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1 (h) AMENDMENTS RELATING TO REHABILITATION

2 PLAN.— 

3 (1) IN GENERAL.—Paragraph (1) of section 

4 432(f) of the Internal Revenue Code of 1986, as re5 designated and amended by this section, is further 

6 amended— 

7 (A) by striking the last 2 sentences, and 

8 (B) in subparagraph (B), by striking ‘‘re9 habilitation plan—’’ and all that follows and in10 serting ‘‘rehabilitation plan, shall provide to the 

11 bargaining parties 1 or more schedules showing 

12 revised benefit structures, revised contribution 

13 structures, or both, which, if adopted, may rea14 sonably be expected to enable the multiemployer 

15 plan to meet the requirements of paragraph (3), 

16 including— 

17 ‘‘(i) one default proposal under 

18 which— 

19 ‘‘(I) all adjustable benefits in the 

20 form of early retirement subsidies (in21 cluding early reduction factors which 

22 are not provided on an actuarially 

23 equivalent basis) under the plan are 

24 eliminated, and 


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1 ‘‘(II) the future monthly benefit 

2 accrual rate under the plan is reduced 

3 to the equivalent of 1 percent of an4 nual contributions (or, if lower, the 

5 accrual rate as of the date of the en6 actment of the Chris Allen Multiem7 ployer Pension Recapitalization and 

8 Reform Act of 2020) based on the 

9 contribution rate in effect as of the 

10 first day of the plan year in which the 

11 plan enters critical status, and 

12 which may also include reduction or elimi13 nation of any other adjustable benefits 

14 under the plan, and 

15 ‘‘(ii) any additional schedules which 

16 reduce or eliminate adjustable benefits 

17 under the plan which the plan sponsor 

18 deems appropriate to provide as an alter19 native to the default proposal. 

20 In the case of a plan adopting a rehabilitation 

21 plan described in paragraph (3)(A)(ii), no 

22 schedule provided to or adopted by the bar23 gaining parties shall provide for a monthly ben24 efit accrual rate in excess of the rate described 

25 in subparagraph (B)(i)(II).’’. 


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1 (2) REHABILITATION PLAN.— 

2 (A) IN GENERAL.—Subparagraph (A) of 

3 section 432(f)(3) of such Code, as so redesig4 nated, is amended— 

5 (i) by striking ‘‘and may include’’ and 

6 all that follows through ‘‘such actions’’ in 

7 clause (i), 

8 (ii) by inserting ‘‘, while delaying in9 solvency for as long as possible and maxi10 mizing the income of the plan, including 

11 income after insolvency’’ before the period 

12 in clause (ii), and 

13 (iii) by striking ‘‘(1)(B)(i)’’ in the last 

14 sentence and inserting ‘‘(1)(B)’’. 

15 (B) CONFORMING AMENDMENTS.—Clause 

16 (i) of section 432(f)(3)(C) of such Code, as so 

17 redesignated, is amended— 

18 (i) by striking ‘‘(1)(B)(i)’’ in sub19 clause (II) and inserting ‘‘(1)(B)’’, and 

20 (ii) by striking ‘‘the last sentence of 

21 paragraph (1)’’ and inserting ‘‘paragraph 

22 (1)(B)(i)’’. 

23 (3) REHABILITATION PERIOD.— 


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1 (A) IN GENERAL.—Subparagraph (A) of 

2 section 432(f)(4) of such Code, as so redesig3 nated and amended, is further amended— 

4 (i) by striking ‘‘The rehabilitation pe5 riod’’ and inserting ‘‘Except as otherwise 

6 provided in this subparagraph, the reha7 bilitation period’’, and 

8 (ii) by adding at the end the fol9 lowing: ‘‘If, upon exhaustion of all reason10 able measures, the plan is not reasonably 

11 expected to emerge from critical status by 

12 the end of such 10-year period, the reha13 bilitation period shall be extended to take 

14 into account the projected date of emer15 gence from critical status (if the rehabilita16 tion plan remained in effect until such 

17 date) or the projected date of insolvency (if 

18 applicable) (unless the plan enters declin19 ing status).’’. 

20 (B) EMERGENCE FROM CRITICAL STA21 TUS.—Subparagraph (B) of section 432(f)(4) of 

22 such Code, as so redesignated and amended, is 

23 further amended— 


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1 (i) by inserting ‘‘and is not in declin2 ing status,’’ after the comma in clause 

3 (i)(I), 

4 (ii) by striking subclause (III) of 

5 clause (i) and inserting the following: 

6 ‘‘(III) the plan’s projected funded 

7 percentage as of the first day of the 

8 15th succeeding plan year is at least 

9 100 percent and is projected to in10 crease after such date.’’, 

11 (iii) by striking ‘‘that—’’ and all that 

12 follows through ‘‘regardless of whether’’ in 

13 clause (ii)(I) and inserting ‘‘that the plan 

14 meets the requirements of subclauses (II) 

15 and (III) of clause (i), regardless of wheth16 er’’, and 

17 (iv) by striking ‘‘unless—’’ and all 

18 that follows in clause (ii)(II) and inserting 

19 ‘‘unless, as of such plan year, the plan fails 

20 to meet the requirements of subclause (II) 

21 or (III) of clause (i).’’. 

22 (4) RULES RELATING TO BENEFIT INCREASES

23 DURING REHABILITATION PERIOD.—Subparagraph 

24 (B) of section 432(g)(1) of such Code, as so redesig25 nated and amended, is further amended by striking 


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•S 5045 IS

1 ‘‘unless’’ and all that follows and inserting ‘‘unless 

2 the amendment is required as a condition of quali3 fication under part I of subchapter D of chapter 1 

4 or to comply with other applicable law, or the 

5 amendment provides for only a de minimis increase 

6 in the liabilities of the plan.’’. 

7 (5) CONFORMING AMENDMENTS.— 

8 (A) Paragraph (6) of section 432(f) of 

9 such Code, as so redesignated, is amended by 

10 striking ‘‘the last sentence of paragraph (1)’’ 

11 and inserting ‘‘paragraph (1)(B)(i)’’. 

12 (B) Paragraph (2) of section 432(f) of 

13 such Code, as so redesignated, is amended by 

14 inserting ‘‘, except that the next update of the 

15 rehabilitation plan shall fulfill the requirement 

16 of paragraph (1)(B)(i)’’ after ‘‘for a preceding 

17 plan year’’. 

18 (i) ACTUARIAL ASSUMPTIONS.— 

19 (1) IN GENERAL.—Subsection (n) of section 

20 432 of the Internal Revenue Code of 1986, as redes21 ignated by subsections (a), (d), and (e), is amend22 ed— 

23 (A) by striking ‘‘METHOD’’ in the heading 

24 and inserting ‘‘METHOD AND ASSUMPTIONS’’, 

25 and 


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•S 5045 IS

1 (B) by adding at the end the following new 

2 paragraph: 

3 ‘‘(11) ACTUARIAL ASSUMPTIONS.— 

4 ‘‘(A) IN GENERAL.—The actuarial assump5 tions relied upon for purposes of this section by 

6 a plan actuary shall be individually reasonable 

7 and, in the aggregate, shall be reasonable and 

8 (with the exception of assumptions regarding 

9 future contributions) represent the actuary’s 

10 best estimate of future plan experience, within 

11 limitations prescribed by the Secretary. A plan 

12 actuary shall avoid conservatism or optimism in 

13 individual assumptions to the extent that they 

14 would result in a set of assumptions that is un15 reasonable in the aggregate. 

16 ‘‘(B) INVESTMENT RETURNS.—The invest17 ment return assumption for projecting plan as18 sets may differ from the actuarial valuation in19 terest rate. In selecting the investment return 

20 assumption for projecting plan assets, the plan 

21 actuary shall estimate the expected return of 

22 the plan’s investments as currently invested and 

23 as expected to be invested in the future, con24 sistent with the plan’s adopted investment pol25 icy, if applicable. It is reasonable for an actuary 


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•S 5045 IS

1 to expect that the plan’s investment decisions 

2 will consider risk, expected returns over time, 

3 and expected future benefit payments. The in4 vestment return assumption shall not exceed 

5 the interest rate used to determine past service 

6 liability under section 431(b)(6). 

7 ‘‘(C) CONTRIBUTIONS.— 

8 ‘‘(i) IN GENERAL.—The plan actuary 

9 shall develop assumptions for the projec10 tion of future contributions, including as11 sumptions regarding industry activity 

12 among contributing employers and con13 tribution rates, based on information pro14 vided by the plan sponsor, which must act 

15 reasonably and in good faith. The plan ac16 tuary shall certify the reasonableness of all 

17 assumptions. 

18 ‘‘(ii) PROJECTED INDUSTRY ACTIV19 ITY.—Any projection of activity in the in20 dustry or industries covered by the plan, 

21 including future covered employment and 

22 contribution levels, shall be based on infor23 mation provided by the plan sponsor acting 

24 reasonably and in good faith. 


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1 ‘‘(iii) FUTURE CONTRIBUTION BASE

2 UNITS.— 

3 ‘‘(I) DECLINING CONTRIBUTION

4 BASE UNITS.—If recent experience of 

5 the plan has been declining contribu6 tion base units, the plan actuary may 

7 assume future contribution base units 

8 will continue to decline at the same 

9 annualized trend as over the 5 imme10 diately preceding plan years, unless 

11 the actuary determines that there 

12 have been significant changes that 

13 would make such assumption unrea14 sonable. 

15 ‘‘(II) FLAT OR INCREASING CON16 TRIBUTION BASE UNITS.—If recent 

17 experience of the plan has been in18 creasing, or neither increasing nor de19 creasing, contribution base units, the 

20 plan actuary may assume future con21 tribution base units will remain un22 changed indefinitely, unless the actu23 ary determines that there have been 

24 significant changes that would make 

25 such assumption unreasonable. 


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•S 5045 IS

1 ‘‘(iv) FUTURE CONTRIBUTION

2 RATES.— 

3 ‘‘(I) IN GENERAL.—Projections 

4 of contributions shall be based on the 

5 contribution rates consistent with the 

6 terms of collective bargaining and 

7 participation agreements currently in 

8 effect. 

9 ‘‘(II) FUTURE INCREASES IN AC10 CORDANCE WITH CORRECTION

11 PLANS.—If reasonable and applicable, 

12 the plan actuary may assume future 

13 increases in contribution rates con14 sistent with the adopted funding im15 provement plan, rehabilitation plan, or 

16 solvency plan. 

17 ‘‘(III) ADDITIONAL FACTORS.— 

18 Information provided by the plan 

19 sponsor to the plan actuary in setting 

20 the assumption regarding future in21 creases in contribution rates shall 

22 take into account the ability of the 

23 participating employers to make con24 tributions at the scheduled rates over 

25 time, considering relevant factors such 


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•S 5045 IS

1 as projected industry activity, the fi2 nancial strength of participating em3 ployers, market competition, and the 

4 scheduled contribution rate to the 

5 plan relative to the overall wage pack6 age. 

7 ‘‘(D) ASSUMPTIONS FOR DEVELOPING

8 SCHEDULES.—All schedules under any funding 

9 improvement plan, rehabilitation plan, or sol10 vency plan must be developed based on the 

11 same set of actuarial assumptions unless it 

12 would be unreasonable to do so, taking into ac13 count the anticipated impact of the schedules 

14 on participant behavior and employer participa15 tion.’’. 

16 (2) ADDITIONS TO FORM 5500 SCHEDULE MB.— 

17 Subparagraph (B) of section 432(b)(5) of such 

18 Code, as redesignated and amended by this section, 

19 is further amended by adding at the end the fol20 lowing new clause: 

21 ‘‘(vi) ADDITIONAL ATTACHMENTS.— 

22 The plan actuary shall attach to the cer23 tification required under subparagraph 

24 (A)— 


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•S 5045 IS

1 ‘‘(I) documentation supporting 

2 the certification of status under sub3 paragraph (A), including projections 

4 of the funding standard account, 

5 funded percentage, and solvency of 

6 the plan, 

7 ‘‘(II) a clear description of the 

8 key assumptions used in performing 

9 the projections, including investment 

10 returns, contribution base units, and 

11 contribution rates, 

12 ‘‘(III) a 5-year history of con13 tributions, including contribution base 

14 units, average contribution rates, and 

15 withdrawal liability payments, and a 

16 comparison of such contribution base 

17 units, rates, and payments to projec18 tions made by the plan, and 

19 ‘‘(IV) an alternate projection of 

20 the funding standard account, funded 

21 percentage, and solvency, based on the 

22 following assumptions: 

23 ‘‘(aa) Annual future invest24 ment returns on plan assets 


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•S 5045 IS

1 equal the actuarial interest rate 

2 assumption minus 1 percent. 

3 ‘‘(bb) Future contribution 

4 base units projected using a 

5 trend equal to the lesser of— 

6 ‘‘(AA) the annualized 

7 trend of actual contribution 

8 base units over the 5 pre9 ceding plan years, and 

10 ‘‘(BB) no change in fu11 ture contribution base units. 

12 ‘‘(cc) No increases in future 

13 contribution rates beyond those 

14 consistent with the collective bar15 gaining agreements and partici16 pation agreements in effect for 

17 the plan year. 

18 ‘‘(dd) The withdrawal from 

19 the plan of the employer which 

20 has contributed the greatest total 

21 amount of contributions over the 

22 5 preceding plan years, if such 

23 employer has contributed at least 

24 10 percent of the total contribu25 tions to the plan over such 5 plan 


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•S 5045 IS

1 years and such employer has a 

2 below investment grade credit 

3 rating (but only if obtaining the 

4 credit rating of such employer is 

5 not an undue burden). 

6 ‘‘(ee) If such credit rating 

7 cannot be obtained without 

8 undue burden, the withdrawal of 

9 the employer which has contrib10 uted the greatest total amount of 

11 contributions over the 5 pre12 ceding plan years, if such em13 ployer has contributed at least 10 

14 percent of the total contributions 

15 to the plan over such 5 plan 

16 years without regard to collection 

17 of any withdrawal liability. 

18 ‘‘(ff) If no employer has con19 tributed at least 10 percent of 

20 the total contributions to the 

21 plan over the 5 preceding plan 

22 years, the withdrawal of the em23 ployer which contributed the 

24 greatest total amount of con25 tributions for the current plan 


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•S 5045 IS

1 year, without regard to collection 

2 of any withdrawal liability, unless 

3 the employer contributed less 

4 than 1 percent of the total con5 tributions to the plan for such 

6 plan year. 

7 ‘‘(gg) Other assumptions 

8 consistent with the projection 

9 based on the actuary’s best esti10 mate assumptions.’’. 

11 (3) CONFORMING AMENDMENTS.— 

12 (A) Section 432(b)(5)(B)(i) of such Code, 

13 as redesignated by this section, is amended by 

14 striking ‘‘assumptions’’ and inserting ‘‘assump15 tions meeting the requirements of subsection 

16 (n)(11)’’. 

17 (B) Section 432(b)(5)(A)(vi) of such Code, 

18 as amended by this section and section 321, is 

19 further amended by striking ‘‘reasonable actu20 arial assumptions’’ and inserting ‘‘assumptions 

21 meeting the requirements of subsection 

22 (n)(11)’’. 

23 (C) Paragraph (3) of section 432(d) of 

24 such Code, as amended by subsection (g), is 

25 further amended by striking ‘‘reasonable actuVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00146 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 arial assumptions’’ and inserting ‘‘assumptions 

2 meeting the requirements of subsection 

3 (n)(11)’’. 

4 (D) Clause (i) of section 432(f)(3)(A) of 

5 such Code, as amended by subsection (h), is 

6 further amended by striking ‘‘reasonable actu7 arial assumptions’’ and inserting ‘‘assumptions 

8 meeting the requirements of subsection 

9 (n)(11)’’. 

10 (E) Section 432(h)(3) of such Code, as 

11 added by subsection (d), is amended by striking 

12 ‘‘reasonable actuarial assumptions’’ and insert13 ing ‘‘assumptions meeting the requirements of 

14 subsection (n)(11)’’. 

15 (j) CONFORMING AMENDMENTS RELATING TO LEG16 ACY PLANS.— 

17 (1) Subsections (a)(3)(F), (b)(1)(B)(i), 

18 (b)(1)(H)(iv), and (d)(6)(A) of section 411 of the 

19 Internal Revenue Code of 1986, as amended by title 

20 V, are each further amended by striking ‘‘432(f)’’ 

21 each place it appears and inserting ‘‘432(h)(8)’’. 

22 (2) Sections 431(b)(10), 440A(d)(2)(D), and 

23 440A(d)(4) of such Code, as added by title V, are 

24 each amended by striking ‘‘endangered or critical’’ 

25 and inserting ‘‘endangered, critical, or declining’’. 


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1 (3) Section 437(b)(1) of such Act, as so added, 

2 is amended by striking ‘‘endangered or critical’’ both 

3 places it appears and inserting ‘‘endangered, critical, 

4 or declining’’. 

5 (4) Sections 437(b)(5)(B) and 440A(b)(1)(A) 

6 of such Code, as so added, are each amended by 

7 striking ‘‘endangered or critical’’ and inserting ‘‘en8 dangered, critical, or declining’’. 

9 (5) Sections 437(b)(1), 437(b)(5)(B), 

10 440A(b)(1)(A), and 440A(e)(3) of such Code, as so 

11 added, are each amended by striking ‘‘432(b)(4)’’ 

12 and inserting ‘‘432(b)(5)’’. 

13 (6) Sections 438(b)(5) and 440A(d)(2)(A) of 

14 such Code, as so added, are each amended by strik15 ing ‘‘432(b)(4)(B)’’ and inserting ‘‘432(b)(5)(B)’’. 

16 (7) Section 438(b)(1) of such Code, as so 

17 added, is amended by striking ‘‘and’’ at the end of 

18 subparagraph (B), by striking the period at the end 

19 of subparagraph (C) and inserting ‘‘, and’’, and by 

20 adding at the end the following new subparagraph: 

21 ‘‘(D) consistent with the principles of sub22 paragraphs (B), (C), and (D) of section 

23 432(n)(11).’’. 


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1 (8) Section 439(a)(2)(D) of such Code, as so 

2 added, is amended by striking ‘‘432(f)(9)(D)(vi)’’ 

3 and inserting ‘‘432(h)(8)(D)(vi)’’. 

4 (9) Section 439(a)(3) of such Code, as so 

5 added, is amended by striking ‘‘432(f)(8)’’ and in6 serting ‘‘432(m)(1)(D)’’. 

7 (10) Section 440A(d)(2)(D) of such Code, as so 

8 added and amended, is further amended by striking 

9 ‘‘funding improvement or rehabilitation plan’’ and 

10 inserting ‘‘funding improvement, rehabilitation, or 

11 solvency plan’’. 

12 (k) EFFECTIVE DATE.—Except as otherwise pro13 vided in subsection (a)(7), the amendments made by this 

14 section shall apply to plan years beginning after December 

15 31, 2020. 

16 (l) CREDIT RATINGS.—No requirement of section 

17 939 or 939A of the Dodd-Frank Wall Street Reform and 

18 Consumer Protection Act (124 Stat. 1887; 15 U.S.C. 

19 78o–7 note) shall apply with respect to the amendment 

20 made by subsection (i)(2). 

21 SEC. 212. AMENDMENTS TO EMPLOYEE RETIREMENT IN22 COME SECURITY ACT OF 1974. 

23 (a) RULES APPLYING TO ALL MULTIEMPLOYER

24 PLANS.— 


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1 (1) IN GENERAL.—Subsection (a) of section 

2 305 of the Employee Retirement Income Security 

3 Act of 1974 (29 U.S.C. 1085) is amended— 

4 (A) by striking ‘‘a multiemployer plan in 

5 effect on July 16, 2006—’’ and inserting ‘‘any 

6 multiemployer plan—’’, 

7 (B) by redesignating paragraphs (1), (2), 

8 and (3) as paragraphs (2), (3), and (4), respec9 tively, 

10 (C) by inserting before paragraph (2), as 

11 so redesignated, the following new paragraph: 

12 ‘‘(1) the rules of subsection (c) shall apply,’’, 

13 (D) by striking ‘‘subsection (c)’’ in para14 graph (2)(A), as so redesignated, and inserting 

15 ‘‘subsection (d)’’, 

16 (E) by striking ‘‘subsection (d)’’ in para17 graph (2)(B), as so redesignated, and inserting 

18 ‘‘subsection (e)’’, 

19 (F) by striking ‘‘subsection (e)’’ in para20 graph (3)(A), as so redesignated, and inserting 

21 ‘‘subsection (f)’’, 

22 (G) by striking ‘‘subsection (f)’’ in para23 graph (3)(B), as so redesignated, and inserting 

24 ‘‘subsection (g)’’, and 


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1 (H) by striking ‘‘subsection (e)(9)’’ in 

2 paragraph (4)(B), as so redesignated, and in3 serting ‘‘subsection (f)(9)’’. 

4 (2) RULES OF IMMEDIATE APPLICATION.—Sec5 tion 305 of such Act (29 U.S.C. 1085) is amend6 ed— 

7 (A) by redesignating subsections (c), (d), 

8 (e), (f), (g), (h), (i), and (j) as subsections (d), 

9 (e), (f), (g), (h), (i), (j), and (k), respectively, 

10 and 

11 (B) by inserting after subsection (b) the 

12 following new subsection: 

13 ‘‘(c) RULES APPLYING TO ALL MULTIEMPLOYER

14 PLANS.— 

15 ‘‘(1) BENEFIT INCREASES.— 

16 ‘‘(A) INCREASES BY PLAN AMENDMENT.— 

17 The plan sponsor of any multiemployer plan 

18 shall not adopt a plan amendment which in19 creases plan liabilities (as determined as of the 

20 date of the adoption of the amendment) due to 

21 any increase in benefits, any change in the ac22 crual rate of benefits, or any change in the rate 

23 at which benefits become nonforfeitable, un24 less— 


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1 ‘‘(i) if the plan is in unrestricted sta2 tus as of the adoption of such amendment, 

3 the plan actuary certifies in accordance 

4 with subsection (b)(4) that the increase in 

5 liabilities will not cause the plan to no 

6 longer be in unrestricted status, 

7 ‘‘(ii) if the plan is in stable status as 

8 of the adoption of such amendment, the 

9 plan actuary certifies in accordance with 

10 subsection (b)(4) that any such increase or 

11 change in benefits will be paid from addi12 tional contributions not required by any 

13 collective bargaining agreement in effect as 

14 of the adoption of the amendment, 

15 ‘‘(iii) if the plan is in endangered sta16 tus as of the adoption of such amendment, 

17 the plan actuary certifies in accordance 

18 with subsection (b)(4) that any such in19 crease or change in benefits will be paid 

20 from additional contributions not con21 templated in any current funding improve22 ment plan, or 

23 ‘‘(iv) the increase or change in bene24 fits is required by law or is a de minimis 

25 change. 


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1 ‘‘(B) INCREASES UNDER CRITICAL OR

2 CRITICAL AND DECLINING STATUS.—Unless re3 quired as a condition of qualification under part 

4 I of subchapter D of chapter 1 of the Internal 

5 Revenue Code of 1986 or to comply with other 

6 applicable law, in the case of a plan which is in 

7 critical or critical and declining status, no in8 crease in benefits, change in the accrual rate of 

9 benefits, or change in the rate at which benefits 

10 become nonforfeitable which increases plan li11 abilities shall take effect while the plan is in 

12 such status, without regard to whether such in13 crease or change would otherwise occur under 

14 the provisions of the plan, unless the increase 

15 in plan liabilities due to the change is de mini16 mis. 

17 ‘‘(2) CONTRIBUTION REDUCTIONS.—The plan 

18 sponsor of any multiemployer plan shall not accept 

19 any collective bargaining agreement or participation 

20 agreement which reduces the rate of contributions 

21 under the plan for any participants, suspends con22 tributions with respect to any period of service, or 

23 directly or indirectly excludes younger, probationary, 

24 or newly hired employees from participation in the 

25 plan, unless— 


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1 ‘‘(A) the plan is in unrestricted status as 

2 of the adoption of such agreement and the plan 

3 actuary certifies in accordance with subsection 

4 (b)(4) that the reduction in contributions will 

5 not cause the plan to no longer be in unre6 stricted status, 

7 ‘‘(B) the reduction in contributions is ac8 companied by a reduction in future accruals for 

9 the affected participants, and the plan actuary 

10 certifies in accordance with subsection (b)(4) 

11 that the combined effect of the changes in con12 tributions and benefits is not projected to re13 duce the funded percentage of the plan in any 

14 year, or 

15 ‘‘(C) subject to regulations issued by the 

16 Secretary of the Treasury, the plan sponsor 

17 reasonably determines that the acceptance of 

18 such an agreement is in the best interests of 

19 plan participants and beneficiaries and that re20 jection of the agreement would have an adverse 

21 financial effect on the plan.’’. 

22 (3) STABLE AND UNRESTRICTED PLANS.—Sub23 section (b) of section 305 of such Act (29 U.S.C. 

24 1085) is amended— 


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1 (A) by striking ‘‘ENDANGERED AND CRIT2 ICAL’’ in the heading, 

3 (B) by redesignating paragraphs (1), (2), 

4 (3), (4), (5), and (6) as paragraphs (2), (3), 

5 (4), (5), (6), and (7), respectively, and 

6 (C) by inserting before paragraph (2) the 

7 following new paragraph: 

8 ‘‘(1) STABLE AND UNRESTRICTED STATUS.— 

9 ‘‘(A) STABLE.—A multiemployer plan is in 

10 stable status for a plan year if, as determined 

11 by the plan actuary under paragraph (4), the 

12 plan is not in unrestricted status for the plan 

13 year, is not in endangered, critical, or critical 

14 and declining status for the plan year, and is 

15 not described in paragraph (6). 

16 ‘‘(B) UNRESTRICTED.—A multiemployer 

17 plan is in unrestricted status for a plan year if, 

18 as determined by the plan actuary under para19 graph (4)— 

20 ‘‘(i) the plan is not in endangered, 

21 critical, or critical and declining status for 

22 the plan year, 

23 ‘‘(ii) the plan is not described in para24 graph (6), and 


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•S 5045 IS

1 ‘‘(iii) as of the beginning of the plan 

2 year— 

3 ‘‘(I) the plan’s current liability 

4 funded percentage for such plan year 

5 is at least 70 percent and the plan’s 

6 projected funded percentage as of the 

7 first day of the 15th succeeding plan 

8 year is at least 115 percent, or 

9 ‘‘(II) the plan’s current liability 

10 funded percentage for such plan year 

11 is at least 80 percent. 

12 ‘‘(C) CURRENT LIABILITY FUNDED PER13 CENTAGE.—For purposes of this section, the 

14 term ‘current liability funded percentage’ means 

15 the percentage equal to a fraction the numer16 ator of which is the value of plan assets (as de17 termined for purposes of section 

18 304(c)(6)(A)(ii)(II)) and the denominator of 

19 which is the current liabilities of the plan (as 

20 defined in section 304(c)(6)(D)).’’. 

21 (4) AMENDMENT TO ANNUAL CERTIFICATION

22 BY PLAN ACTUARY.—Subparagraph (A) of para23 graph (4) (as redesignated by paragraph (3)) of sec24 tion 305(b) of such Act (29 U.S.C. 1085(b)) is 

25 amended by inserting ‘‘whether or not the plan is in 


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•S 5045 IS

1 unrestricted or stable status for such plan year,’’ in 

2 clause (i) before ‘‘whether or not the plan is in en3 dangered status’’. 

4 (5) CONFORMING AND TECHNICAL AMEND5 MENTS.— 

6 (A) TECHNICAL CORRECTION.—Section 

7 305(b)(3)(B) of such Act (29 U.S.C. 

8 1085(b)(3)(B)) is amended by redesignating the 

9 clause (iv) relating to projections of critical and 

10 declining status, as added by section 201(a)(5) 

11 of the Consolidated and Further Continuing 

12 Appropriations Act, 2015, as clause (v), and by 

13 moving such clause to the position immediately 

14 after clause (iv). 

15 (B) CONFORMING AMENDMENTS.— 

16 (i) Paragraphs (2) and (3) of section 

17 305(b) of such Act (29 U.S.C. 1085(b)), 

18 as redesignated by paragraph (3), are each 

19 amended by striking ‘‘paragraph (3)’’ and 

20 inserting ‘‘paragraph (4)’’. 

21 (ii) Section 305(b)(2) of such Act (29 

22 U.S.C. 1085(b)(2)), as so redesignated and 

23 amended, is further amended by striking 

24 ‘‘paragraph (5)’’ and inserting ‘‘paragraph 

25 (6)’’. 


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1 (iii) Section 305(b)(4) of such Act (29 

2 U.S.C. 1085(b)(4)), as so redesignated, is 

3 amended— 

4 (I) by striking ‘‘paragraph (4)’’ 

5 in subparagraph (B)(iv) thereof and 

6 inserting ‘‘paragraph (5)’’, 

7 (II) by striking ‘‘subsection 

8 (e)(9)’’ both places it appears in sub9 paragraph (B)(v), as redesignated by 

10 subparagraph (A), and inserting ‘‘sub11 section (f)(9)’’, 

12 (III) by striking ‘‘subsection 

13 (e)(3)(A)(ii)’’ in subparagraph (B)(v), 

14 as so redesignated, and inserting 

15 ‘‘subsection (f)(3)(A)(ii)’’, 

16 (IV) by striking ‘‘subsection (e)’’ 

17 in subparagraph (B)(v), as so redesig18 nated, and inserting ‘‘subsection (f)’’, 

19 (V) by striking ‘‘paragraph (4)’’ 

20 each place it appears in subpara21 graphs (D)(i) and (D)(v) thereof and 

22 inserting ‘‘paragraph (5)’’, 

23 (VI) by striking ‘‘subsection 

24 (e)(8)’’ in subparagraph (D)(iii)(I) 


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1 thereof and inserting ‘‘subsection 

2 (f)(8)’’, 

3 (VII) by striking ‘‘paragraph 

4 (5)’’ in subparagraph (D)(iii) thereof 

5 and inserting ‘‘paragraph (6)’’, and 

6 (VIII) by striking ‘‘(iii) In the 

7 case of’’ in subparagraph (D)(iii) 

8 thereof and inserting ‘‘(iii) SPECIAL

9 RULE.—’’. 

10 (iv) Section 305(b)(5) of such Act (29 

11 U.S.C. 1085(b)(5)), as redesignated by 

12 paragraph (3), is amended— 

13 (I) by striking ‘‘paragraph (2)’’ 

14 and inserting ‘‘paragraph (3)’’, 

15 (II) by striking ‘‘paragraph 

16 (3)(B)(iv)’’ and inserting ‘‘paragraph 

17 (4)(B)(iv)’’, 

18 (III) by striking ‘‘paragraph (3)’’ 

19 in subparagraph (A) thereof and in20 serting ‘‘paragraph (4)’’, 

21 (IV) by striking ‘‘paragraph 

22 (3)(A)’’ in subparagraph (A) thereof 

23 and inserting ‘‘paragraph (4)(A)’’, 


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1 (V) by striking ‘‘paragraph (2)’’ 

2 in subparagraph (B) thereof and in3 serting ‘‘paragraph (3)’’, and 

4 (VI) by striking ‘‘subsection 

5 (e)(4)(B)’’ in subparagraph (C) there6 of and inserting ‘‘subsection 

7 (f)(4)(B)’’. 

8 (v) Section 305(b)(6)(A) of such Act 

9 (29 U.S.C. 1085(b)(6)(A)), as so redesig10 nated, is amended— 

11 (I) by striking ‘‘paragraph 

12 (3)(A)’’ and inserting ‘‘paragraph 

13 (4)(A)’’, 

14 (II) by striking ‘‘paragraph 

15 (1)(A)’’ and inserting ‘‘paragraph 

16 (2)(A)’’, and 

17 (III) by striking ‘‘paragraph 

18 (1)(B)’’ and inserting ‘‘paragraph 

19 (2)(B)’’. 

20 (vi) Section 305(b)(7) of such Act (29 

21 U.S.C. 1085(b)(7)), as so redesignated, is 

22 amended by striking ‘‘paragraph (2)’’ and 

23 inserting ‘‘paragraph (3)’’. 

24 (vii) Paragraphs (1)(A), (4)(A)(ii), 

25 (4)(C)(i), (4)(C)(ii), (4)(D), (5)(A)(i), 


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1 (5)(B), and (8) of subsection (d), and sub2 sections (e)(2), (f)(1)(A), (f)(4)(B)(i), 

3 (f)(4)(B)(ii)(I), (f)(5), and (g)(3) of sec4 tion 305 of such Act (29 U.S.C. 1085), as 

5 respectively redesignated by paragraph (2), 

6 are each amended by striking ‘‘subsection 

7 (b)(3)(A)’’ and inserting ‘‘subsection 

8 (b)(4)(A)’’. 

9 (viii) Section 305(d)(3)(A)(i)(I) of 

10 such Act (29 U.S.C. 1085(d)(3)(A)(i)(I)), 

11 as so redesignated, is amended by striking 

12 ‘‘paragraph (b)(3)’’ and inserting ‘‘sub13 section (b)(4)’’. 

14 (ix) Section 305(d)(4)(D) of such Act 

15 (29 U.S.C. 1085(d)(4)(D)), as so redesig16 nated, is amended by striking ‘‘subsection 

17 (d)’’ and inserting ‘‘subsection (e)’’. 

18 (x) Section 305(e) of such Act (29 

19 U.S.C. 1085(e)), as so redesignated, is 

20 amended to read as follows: 

21 ‘‘(e) RULES FOR OPERATION OF PLAN DURING

22 ADOPTION AND IMPROVEMENT PERIODS.—A plan may 

23 not be amended after the date of the adoption of a funding 

24 improvement plan under subsection (d) so as to be inconVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00161 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 sistent with the funding improvement plan or the require2 ments of subsection (c).’’. 

3 (xi) Clauses (i)(I) and (ii)(I) of sec4 tion 305(f)(4)(B) of such Act (29 U.S.C. 

5 1085(f)(4)(B)), as so redesignated, are 

6 each amended by striking ‘‘subsection 

7 (b)(2)’’ and inserting ‘‘subsection (b)(3)’’. 

8 (xii) Subsections (f)(8)(A)(ii) and 

9 (g)(2)(A) of section 305 of such Act (29 

10 U.S.C. 1085), as so redesignated, are each 

11 amended by striking ‘‘subsection 

12 (b)(3)(D)’’ and inserting ‘‘subsection 

13 (b)(4)(D)’’. 

14 (xiii) Section 305(f)(9)(J) of such Act 

15 (29 U.S.C. 1085(f)(9)(J)), as so redesig16 nated, is amended— 

17 (I) by striking ‘‘subsection 

18 (b)(3)’’ and inserting ‘‘subsection 

19 (b)(4)’’, and 

20 (II) by striking ‘‘paragraphs (1) 

21 and (2)’’ in clause (i) thereof and in22 serting ‘‘paragraphs (2) and (3)’’. 

23 (xiv) Subparagraphs (A) and (B) of 

24 section 305(g)(1) of such Act (29 U.S.C. 

25 1085(g)(1)), as so redesignated, are each 


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1 amended by striking ‘‘subsection (e)’’ and 

2 inserting ‘‘subsection (f)’’. 

3 (xv) Paragraph (2)(A) of section 

4 305(g) of such Act (29 U.S.C. 1085(g)), 

5 as so redesignated, is amended by striking 

6 ‘‘(b)(3)(D)’’ and inserting ‘‘(b)(4)(D)’’. 

7 (xvi) Section 305(h) of such Act (29 

8 U.S.C. 1085(h)), as so redesignated, is 

9 amended— 

10 (I) by striking ‘‘subsection (e)(8) 

11 or (f)’’ in paragraph (1) thereof and 

12 inserting ‘‘subsection (f)(8) or (g)’’, 

13 (II) by striking ‘‘subsection 

14 (e)(9)’’ in paragraph (1) thereof and 

15 inserting ‘‘subsection (f)(9)’’, 

16 (III) by striking ‘‘subsection 

17 (e)(7)’’ in paragraph (2) thereof and 

18 inserting ‘‘subsection (f)(7)’’, and 

19 (IV) by striking ‘‘rehabilitation 

20 plan’’ and all that follows in para21 graph (3)(B) thereof and inserting 

22 ‘‘rehabilitation plan. The preceding 

23 sentence shall not apply to any in24 crease in contribution requirements 

25 due to increased levels of work, emVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00163 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 ployment, or periods for which com2 pensation is provided, except to the 

3 extent such an increase is used to pro4 vide an increased accrual rate of bene5 fits or change in the rate at which 

6 benefits become nonforfeitable which 

7 increases plan liabilities.’’. 

8 (xvii) Section 305(i) of such Act (29 

9 U.S.C. 1085(i)), as so redesignated, is 

10 amended— 

11 (I) by striking ‘‘subsection (c)’’ 

12 and inserting ‘‘subsection (d)’’, and 

13 (II) by striking ‘‘subsection (e)’’ 

14 and inserting ‘‘subsection (f)’’. 

15 (xviii) Section 305(j)(2) of such Act 

16 (29 U.S.C. 1085(j)(2)), as so redesignated, 

17 is amended by striking ‘‘subsections (c) 

18 and (e)’’ and inserting ‘‘subsections (d) 

19 and (f)’’. 

20 (xix) Section 101(f)(2)(B) of such Act 

21 (29 U.S.C. 1021(f)(2)(B)) is amended— 

22 (I) by striking ‘‘305(i)’’ in clause 

23 (i)(II) and inserting ‘‘305(k)’’, and 


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1 (II) by striking ‘‘305(i)(8)’’ in 

2 clause (ii)(II) and inserting 

3 ‘‘305(k)(8)’’. 

4 (xx) Section 103(f)(1)(B)(ii) of such 

5 Act (29 U.S.C. 1023(f)(1)(B)(ii)) is 

6 amended by striking ‘‘305(i)(2)’’ and in7 serting ‘‘305(k)(2)’’. 

8 (xxi) Section 302(b)(3) of such Act 

9 (29 U.S.C. 1082) is amended by striking 

10 ‘‘section 305(e)’’ and inserting ‘‘section 

11 305(f)’’. 

12 (xxii) Section 4231(e)(2)(A) of such 

13 Act (29 U.S.C. 1411(e)(2)(A)) is amended 

14 by striking ‘‘section 305(b)(4)’’ and insert15 ing ‘‘305(b)(7)’’. 

16 (xxiii) Section 4233 of such Act (29 

17 U.S.C. 1413) is amended— 

18 (I) by striking ‘‘305(e)(9)’’ each 

19 place it appears in subsections (b)(2) 

20 and (e)(1)(A) and inserting 

21 ‘‘305(f)(9)’’, and 

22 (II) by striking 

23 ‘‘305(e)(9)(E)(vi)’’ in subsection 

24 (e)(2) and inserting 

25 ‘‘305(f)(9)(E)(vi)’’. 


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1 (xxiv) Section 4245 of such Act (29 

2 U.S.C. 1426), as amended by this Act, is 

3 amended— 

4 (I) by striking ‘‘305(b)(2),,’’ in 

5 subsection (c)(1), as redesignated by 

6 section 112, and inserting 

7 ‘‘305(b)(3),’’, 

8 (II) by striking ‘‘305(b)(2)’’ each 

9 place it appears in subsections (c)(2), 

10 (d)(1), and (d)(2), as so redesignated, 

11 and inserting ‘‘305(b)(3)’’, and 

12 (III) by striking ‘‘305(e)(9)’’ in 

13 subsection (f), as so redesignated, and 

14 inserting ‘‘305(f)(9)’’. 

15 (xxv) The heading of section 305 of 

16 such Act (29 U.S.C. 1085) is amended by 

17 striking ‘‘IN ENDANGERED STATUS OR

18 CRITICAL STATUS’’. 

19 (6) WITHDRAWAL LIABILITY DETERMINATION

20 FOR PLANS EMERGING FROM ENDANGERED OR CRIT21 ICAL STATUS.—Section 305(h) of such Act (29 

22 U.S.C. 1085(h)), as redesignated by paragraph (2) 

23 and as amended by paragraph (5), is further amend24 ed by striking paragraph (4) and by inserting after 

25 paragraph (3) the following new paragraph: 


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1 ‘‘(4) EMERGENCE FROM ENDANGERED OR CRIT2 ICAL STATUS.— 

3 ‘‘(A) IN GENERAL.—In the case of in4 creases in the contribution rate (or other in5 creases in contribution requirements unless due 

6 to increased levels of work, employment, or pe7 riods for which compensation is provided) dis8 regarded pursuant to paragraph (3), this sub9 section shall cease to apply as of the later of— 

10 ‘‘(i) the end of the first plan year fol11 lowing the plan year in which the plan is 

12 no longer in endangered or critical status, 

13 or 

14 ‘‘(ii) the end of the plan year which 

15 includes the expiration date of the first col16 lective bargaining agreement requiring 

17 plan contributions which expires after the 

18 plan is no longer in endangered or critical 

19 status. 

20 ‘‘(B) HIGHEST CONTRIBUTION RATE.— 

21 Notwithstanding subparagraph (A), once the 

22 plan emerges from endangered or critical sta23 tus— 

24 ‘‘(i) increases in the contribution rate 

25 disregarded pursuant to paragraph (3) 


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1 shall continue to be disregarded in deter2 mining the highest contribution rate under 

3 section 4219(c) for plan years during 

4 which the plan was in endangered or crit5 ical status, and 

6 ‘‘(ii) the highest contribution rate for 

7 purposes of such section shall be the great8 er of— 

9 ‘‘(I) the sum of— 

10 ‘‘(aa) the employer’s con11 tribution rate as of the later of 

12 the last day of the last plan year 

13 ending before December 31, 

14 2014, and the last day of the 

15 plan year for which the employer 

16 first had an obligation to con17 tribute to the plan, and 

18 ‘‘(bb) any contribution in19 creases determined in accordance 

20 with this section after such later 

21 date and before the date the em22 ployer withdraws from the plan, 

23 or 


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1 ‘‘(II) the highest contribution 

2 rate for any plan year after the plan 

3 year which includes the earlier of— 

4 ‘‘(aa) the expiration date of 

5 the first collective bargaining 

6 agreement applicable to the with7 drawing employer requiring plan 

8 contributions which expires after 

9 the plan is no longer in endan10 gered or critical status, or 

11 ‘‘(bb) the date as of which 

12 the withdrawing employer nego13 tiated a contribution rate effec14 tive after the plan year in which 

15 the plan is no longer in endan16 gered or critical status.’’. 

17 (7) EFFECTIVE DATE.—The amendments made 

18 by this subsection shall take effect on the date of the 

19 enactment of this Act. 

20 (b) DETERMINATION OF ENDANGERED STATUS.— 

21 Paragraph (2) of section 305(b) of the Employee Retire22 ment Income Security Act of 1974 (29 U.S.C. 1085(b)), 

23 as redesignated by subsection (a)(3), is amended to read 

24 as follows: 


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1 ‘‘(2) ENDANGERED STATUS.—A multiemployer 

2 plan is in endangered status for a plan year if, as 

3 determined by the plan actuary under paragraph 

4 (5), the plan is not in critical or declining status for 

5 the plan year and is not described in paragraph (7), 

6 and, as of the beginning of the plan year— 

7 ‘‘(A) the plan’s funded percentage for such 

8 plan year is less than 80 percent, 

9 ‘‘(B) the plan is projected to have an accu10 mulated funding deficiency for any of the 9 suc11 ceeding plan years, taking into account any ex12 tension of amortization periods under section 

13 304(d), or 

14 ‘‘(C) the plan’s projected funded percent15 age as of the first day of the 15th succeeding 

16 plan year is less than 100 percent.’’. 

17 (c) DETERMINATION OF CRITICAL STATUS.—Para18 graph (3) of section 305(b) of the Employee Retirement 

19 Income Security Act of 1974 (29 U.S.C. 1085(b)), as re20 designated by subsection (a)(3), is amended to read as fol21 lows: 

22 ‘‘(3) CRITICAL STATUS.— 

23 ‘‘(A) IN GENERAL.—A multiemployer plan 

24 is in critical status for a plan year if, as deter25 mined by the plan actuary under paragraph (5), 


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1 the plan is not in declining status for the plan 

2 year and, as of the beginning of the plan year— 

3 ‘‘(i) the plan’s funded percentage is 

4 less than 65 percent, 

5 ‘‘(ii) the plan has an accumulated 

6 funding deficiency for the plan year, or is 

7 projected to have such an accumulated 

8 funding deficiency for any of the 6 suc9 ceeding plan years, taking into account any 

10 extension of amortization periods under 

11 section 304(d), or 

12 ‘‘(iii) the plan’s projected funded per13 centage as of the first day of the 15th suc14 ceeding plan year is less than 80 percent. 

15 ‘‘(B) ORIGINAL PLANS.—Notwithstanding 

16 subparagraph (A), a multiemployer plan which 

17 is an original plan pursuant to section 

18 4233A(d)(3) shall be treated as being in critical 

19 status for the period of 15 consecutive plan 

20 years beginning with the plan year that includes 

21 the date of the partition under section 4233A.’’. 

22 (d) DECLINING STATUS.— 

23 (1) IN GENERAL.— 

24 (A) The following provisions of section 305 

25 of the Employee Retirement Income Security 


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1 Act of 1974 (29 U.S.C. 1085) are each amend2 ed by striking ‘‘critical and declining’’ each 

3 place it appears and inserting ‘‘declining’’: 

4 (i) Subsection (a)(4) (as redesignated 

5 by subsection (a)(1)). 

6 (ii) Subparagraphs (A) and (B)(i) of 

7 subsection (b)(1), as added by subsection 

8 (a)(3). 

9 (iii) Subsection (b)(4)(B)(v) (as redes10 ignated by subsection (a)(3)). 

11 (iv) The heading of clause (v) of sub12 section (b)(4)(B), as redesignated by sub13 section (a)(3). 

14 (v) Paragraph (1)(B), and the head15 ing of such paragraph (1)(B), of sub16 section (c), as added by subsection (a)(2). 

17 (vi) The heading of paragraph (9) of 

18 subsection (f) (as redesignated by sub19 section (a)(2)). 

20 (vii) Subparagraphs (A), (C), (G)(i), 

21 and (J) of subsection (f)(9) (as so redesig22 nated). 

23 (viii) Subsection (h)(1) (as so redesig24 nated). 


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1 (B) Subsections (c), as amended by section 

2 221, and (e)(2)(A), as amended by this section, 

3 of section 4231 of such Act (29 U.S.C. 

4 1411(e)(2)(A)) are each further amended by 

5 striking ‘‘critical and declining status’’ and in6 serting ‘‘declining status’’. 

7 (C) Section 4233(b)(1) of such Act (29 

8 U.S.C. 1413(b)(1)) is amended by striking 

9 ‘‘critical and declining status’’ and inserting 

10 ‘‘declining status’’. 

11 (D) Section 4245(f) of such Act (29 

12 U.S.C. 1426), as amended by section 112 and 

13 subsection (a), is further amended by striking 

14 ‘‘critical and declining status’’ and inserting 

15 ‘‘declining status’’. 

16 (2) DETERMINATION OF DECLINING STATUS.— 

17 (A) IN GENERAL.—Subsection (b) of sec18 tion 305 of such Act (29 U.S.C. 1085) is 

19 amended— 

20 (i) by striking paragraph (7), as re21 designated by subsection (a)(3), 

22 (ii) by redesignating paragraphs (4), 

23 (5), and (6), as so redesignated, as para24 graphs (5), (6), and (7), respectively, and 


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1 (iii) by inserting after paragraph (3), 

2 as so redesignated, the following new para3 graph: 

4 ‘‘(4) DECLINING STATUS.—A multiemployer 

5 plan is in declining status for a plan year if— 

6 ‘‘(A) as determined by the plan actuary 

7 under paragraph (5), as of the beginning of the 

8 plan year the plan is projected to become insol9 vent within the plan year or any of the 29 suc10 ceeding plan years, 

11 ‘‘(B) the plan is otherwise in critical status 

12 for the plan year as determined by the plan ac13 tuary under paragraph (5), and the plan spon14 sor determines that, based on reasonable actu15 arial assumptions and upon exhaustion of all 

16 reasonable measures, the plan cannot reason17 ably be expected to emerge from critical status 

18 within the next 30 plan years, or 

19 ‘‘(C) the plan has a funded percentage for 

20 the plan year which is greater than the pro21 jected funded percentage as of the first day of 

22 the 15th succeeding plan year, unless the fund23 ed percentage for the plan year is 100 percent 

24 or greater and the projected funded percentage 


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1 as of the first day of such 15th succeeding plan 

2 year is less than 100 percent.’’. 

3 (B) CONFORMING AMENDMENTS.— 

4 (i) Paragraph (1) of section 305(b) of 

5 such Act (29 U.S.C. 1085), as added by 

6 subsection (a)(3), is amended— 

7 (I) by striking ‘‘paragraph (4)’’ 

8 each place it appears in subpara9 graphs (A) and (B) and inserting 

10 ‘‘paragraph (5)’’, and 

11 (II) by striking ‘‘paragraph (6)’’ 

12 each place it appears in subpara13 graphs (A) and (B) and inserting 

14 ‘‘paragraph (7)’’. 

15 (ii) Subsection (c) of section 305 of 

16 such Act (29 U.S.C. 1085), as added by 

17 subsection (a)(2), is amended by striking 

18 ‘‘(b)(4)’’ each place it appears in para19 graphs (1)(A)(i), (1)(A)(ii), (1)(A)(iii), 

20 (2)(A), and (2)(B) and inserting ‘‘(b)(5)’’. 

21 (iii) Section 305(b)(5) of such Act (29 

22 U.S.C. 1085(b)(5)), as further redesig23 nated by subparagraph (A) and as amend24 ed by section 321 and subsection (a), is 

25 further amended— 


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1 (I) by striking ‘‘paragraph (5)’’ 

2 in subparagraph (B)(iv) thereof and 

3 inserting ‘‘paragraph (6)’’, 

4 (II) by striking ‘‘paragraph (5)’’ 

5 each place it appears in subpara6 graphs (D)(i) and (D)(vi) thereof and 

7 inserting ‘‘paragraph (6)’’, and 

8 (III) by striking ‘‘paragraph (6)’’ 

9 in subparagraph (D)(iv) thereof and 

10 inserting ‘‘paragraph (7)’’. 

11 (iv) Section 305(b)(6) of such Act (29 

12 U.S.C. 1085(b)(6)), as so further redesig13 nated and amended, is further amended— 

14 (I) by striking ‘‘paragraph 

15 (4)(B)(iv)’’ and inserting ‘‘paragraph 

16 (5)(B)(iv)’’, 

17 (II) by striking ‘‘paragraph (4)’’ 

18 in subparagraph (A) thereof and in19 serting ‘‘paragraph (5)’’, and 

20 (III) by striking ‘‘paragraph 

21 (4)(A)’’ in subparagraph (A) thereof 

22 and inserting ‘‘paragraph (5)(A)’’. 

23 (v) Section 305(b)(7)(A) of such Act 

24 (29 U.S.C. 1085(b)(7)(A)), as so further 


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1 redesignated and amended, is further 

2 amended— 

3 (I) by striking ‘‘paragraph 

4 (4)(A)’’ and inserting ‘‘paragraph 

5 (5)(A)’’, and 

6 (II) by striking ‘‘either para7 graph (2)(A) or paragraph (2)(B)’’ 

8 and inserting ‘‘any subparagraph of 

9 paragraph (2)’’. 

10 (vi) Section 305(b)(7)(B) of such Act 

11 (29 U.S.C. 1085(b)(7)(B)), as so further 

12 redesignated, is amended by striking ‘‘crit13 ical or endangered’’ and inserting ‘‘endan14 gered, critical, or declining’’. 

15 (vii) Paragraphs (1)(A), (4)(A)(ii), 

16 (4)(C)(i), (4)(C)(ii), (4)(D), and (8) of 

17 subsection (d), and subsections (f)(1)(A), 

18 (f)(4)(B)(i), (f)(4)(B)(ii)(I), (f)(5), and 

19 (g)(3) of section 305 of such Act (29 

20 U.S.C. 1085), as redesignated and amend21 ed by subsection (a), are each further 

22 amended by striking ‘‘subsection 

23 (b)(4)(A)’’ and inserting ‘‘subsection 

24 (b)(5)(A)’’. 


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1 (viii) Section 305(d)(3)(A)(i)(I) of 

2 such Act (29 U.S.C. 1085(d)(3)(A)(i)(I)), 

3 as so redesignated and amended, is further 

4 amended by striking ‘‘subsection (b)(4)’’ 

5 and inserting ‘‘subsection (b)(5)’’. 

6 (ix) Subsections (f)(8)(A)(ii) and 

7 (g)(2)(A) of section 305 of such Act (29 

8 U.S.C. 1085), as so redesignated and 

9 amended, are each further amended by 

10 striking ‘‘subsection (b)(4)(D)’’ and insert11 ing ‘‘subsection (b)(5)(D)’’. 

12 (x) Section 305(f)(9)(J) of such Act 

13 (29 U.S.C. 1085(f)(9)(J)), as so redesig14 nated and amended, is further amended by 

15 striking ‘‘subsection (b)(4)’’ and inserting 

16 ‘‘subsection (b)(5)’’. 

17 (xi) Section 4231(e)(2)(A) of such Act 

18 (29 U.S.C. 1411(e)(2)(A)), as amended by 

19 this section, is further amended by striking 

20 ‘‘305(b)(7)’’ and inserting ‘‘305(b)(4)’’. 

21 (3) SOLVENCY PLAN.— 

22 (A) IN GENERAL.—Paragraph (4) (as re23 designated by subsection (a)(1) and amended 

24 by paragraph (1)) of section 305(a) of such Act 

25 (29 U.S.C. 1085(a)) is amended— 


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1 (i) by redesignating subparagraph (B) 

2 as subparagraph (D), and 

3 (ii) by striking subparagraph (A) and 

4 inserting before subparagraph (D) (as so 

5 redesignated) the following new subpara6 graphs: 

7 ‘‘(A) the plan sponsor shall adopt and im8 plement a solvency plan in accordance with the 

9 requirements of subsection (h), 

10 ‘‘(B) any rehabilitation plan in place as of 

11 the date the plan enters declining status shall 

12 continue to apply throughout the solvency plan 

13 adoption period, 

14 ‘‘(C) the requirements of subsection (i) and 

15 paragraphs (6) and (7) of subsection (f) shall 

16 apply during the solvency plan adoption period 

17 and the solvency attainment period, and’’. 

18 (B) ADOPTION OF PLAN.—Section 305 of 

19 such Act (29 U.S.C. 1085), as amended by this 

20 section, is further amended— 

21 (i) by redesignating subsection (l), as 

22 added by title V of this Act, as subsection 

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1 nated by subsection (a)(2), as subsections 

2 (j), (k), (l), and (m), respectively, and 

3 (ii) by inserting after subsection (g), 

4 as redesignated by subsection (a)(2), the 

5 following new subsections: 

6 ‘‘(h) SOLVENCY PLAN MUST BE ADOPTED FOR MUL7 TIEMPLOYER PLANS IN DECLINING STATUS.— 

8 ‘‘(1) IN GENERAL.—In any case in which a 

9 multiemployer plan is in declining status for a plan 

10 year, the plan sponsor, in accordance with this sub11 section— 

12 ‘‘(A) shall adopt a solvency plan not later 

13 than 240 days following the required date for 

14 the actuarial certification of declining status 

15 under subsection (b)(5)(A), and 

16 ‘‘(B) within 30 days after the adoption of 

17 the solvency plan shall provide to the bar18 gaining parties 1 or more schedules showing re19 vised benefit structures, revised contribution 

20 structures, or both, which, if adopted, may rea21 sonably be expected to enable the multiemployer 

22 plan to meet the requirements of paragraph (3), 

23 including— 

24 ‘‘(i) one default proposal under 

25 which— 


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1 ‘‘(I) all adjustable benefits in the 

2 form of early retirement subsidies (in3 cluding early reduction factors which 

4 are not provided on an actuarially 

5 equivalent basis) under the plan are 

6 eliminated, and 

7 ‘‘(II) the future monthly benefit 

8 accrual rate under the plan is reduced 

9 to the equivalent of 1 percent of an10 nual contributions (or, if lower, the 

11 current accrual rate) based on the 

12 contribution rate in effect as of the 

13 later of the first day of the plan year 

14 in which the plan enters declining sta15 tus or the date of a partition under 

16 section 4233A, and 

17 which may also include reduction or elimi18 nation of any other adjustable benefits 

19 under the plan, and 

20 ‘‘(ii) any additional schedules which 

21 reduce or eliminate adjustable benefits 

22 under the plan which the plan sponsor 

23 deems appropriate to provide as an alter24 native to the default proposal. 


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1 No schedule provided to or adopted by the bar2 gaining parties shall provide for a monthly benefit 

3 accrual rate in excess of the rate described in sub4 paragraph (B)(i)(II). 

5 ‘‘(2) EXCEPTION FOR YEARS AFTER PROCESS

6 BEGINS.—Paragraph (1) shall not apply to a plan 

7 year if such year is in a solvency plan adoption pe8 riod or solvency attainment period by reason of the 

9 plan being in declining status for a preceding plan 

10 year, except that the next update of the solvency 

11 plan shall fulfill the requirement of paragraph 

12 (1)(B)(i). For purposes of this section, such pre13 ceding plan year shall be the initial determination 

14 year with respect to the solvency plan to which it re15 lates. 

16 ‘‘(3) SOLVENCY PLAN.—For purposes of this 

17 section, a solvency plan is a plan which consists of 

18 the actions, including options or a range of options 

19 to be proposed to the bargaining parties, formulated, 

20 based on reasonably anticipated experience and rea21 sonable actuarial assumptions, to enable the plan to 

22 delay or avoid the projected insolvency. 

23 ‘‘(4) SOLVENCY ATTAINMENT PERIOD.—For 

24 purposes of this section— 


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1 ‘‘(A) IN GENERAL.—Except as provided in 

2 subparagraph (B), the solvency attainment pe3 riod for any solvency plan adopted pursuant to 

4 this subsection is the period— 

5 ‘‘(i) beginning on the first day of the 

6 first plan year of the multiemployer plan 

7 beginning after the earlier of— 

8 ‘‘(I) the second anniversary of 

9 the date of the adoption of the sol10 vency plan, or 

11 ‘‘(II) the expiration of the collec12 tive bargaining agreements in effect 

13 on the due date for the actuarial cer14 tification of declining status for the 

15 initial determination year under sub16 section (b)(5)(A) and covering, as of 

17 such due date, at least 75 percent of 

18 the active participants in such plan, 

19 and 

20 ‘‘(ii) ending on the date the plan ei21 ther emerges from declining status or be22 comes insolvent. 

23 ‘‘(B) COORDINATION WITH CHANGES IN

24 STATUS.— 


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1 ‘‘(i) PLANS NO LONGER IN DECLINING

2 STATUS.—If the plan’s actuary certifies in 

3 accordance with subparagraph (C) for a 

4 plan year in any solvency plan adoption pe5 riod or solvency attainment period that the 

6 plan is no longer in declining status, the 

7 solvency plan adoption period or solvency 

8 attainment period, whichever is applicable, 

9 shall end as of the date of such certifi10 cation. 

11 ‘‘(ii) PLANS IN CRITICAL OR ENDAN12 GERED STATUS.—If the plan’s actuary cer13 tifies under subsection (b)(5)(A) for the 

14 plan year described in clause (i) that the 

15 plan is in critical or endangered rather 

16 than declining status, the provisions of 

17 subsections (d) and (e), or subsections (f) 

18 and (g), whichever are applicable, shall be 

19 applied as if such plan year were an initial 

20 determination year, except that the plan 

21 may not be amended in a manner incon22 sistent with the solvency plan in effect for 

23 the preceding plan year until a new fund24 ing improvement plan or rehabilitation 

25 plan, whichever is applicable, is adopted. 


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1 ‘‘(C) EMERGENCE.—A plan in declining 

2 status shall remain in such status until a plan 

3 year for which the plan actuary certifies, in ac4 cordance with subsection (b)(5)(A), that the 

5 plan is not described in one or more of the sub6 paragraphs in subsection (b)(4) as of the begin7 ning of the plan year. 

8 ‘‘(5) UPDATES TO SOLVENCY PLANS AND

9 SCHEDULES.— 

10 ‘‘(A) SOLVENCY PLAN.—The plan sponsor 

11 shall annually update the solvency plan and 

12 shall file the update with the plan’s annual re13 port under section 104. 

14 ‘‘(B) SCHEDULES.—The plan sponsor shall 

15 annually update any schedule of contribution 

16 rates provided under this subsection to reflect 

17 the experience of the plan. 

18 ‘‘(C) DURATION OF SCHEDULE.—A sched19 ule of contribution rates provided by the plan 

20 sponsor and relied upon by bargaining parties 

21 in negotiating a collective bargaining agreement 

22 shall remain in effect for the duration of that 

23 collective bargaining agreement. 

24 ‘‘(6) IMPOSITION OF SCHEDULE WHERE FAIL25 URE TO ADOPT SOLVENCY PLAN.— 


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1 ‘‘(A) INITIAL CONTRIBUTION SCHEDULE.— 

2 If— 

3 ‘‘(i) a collective bargaining agreement 

4 providing for contributions under a multi5 employer plan that was in effect at the 

6 time the plan entered declining status ex7 pires, and 

8 ‘‘(ii) after receiving one or more 

9 schedules from the plan sponsor under 

10 paragraph (1)(B), the bargaining parties 

11 with respect to such agreement fail to 

12 adopt a contribution schedule with terms 

13 consistent with the solvency plan and a 

14 schedule from the plan sponsor, 

15 the plan sponsor shall implement the schedule 

16 described in paragraph (1)(B)(i) beginning on 

17 the date specified in subparagraph (C). 

18 ‘‘(B) SUBSEQUENT CONTRIBUTION SCHED19 ULE.—If— 

20 ‘‘(i) a collective bargaining agreement 

21 providing for contributions under a multi22 employer plan in accordance with a sched23 ule provided by the plan sponsor pursuant 

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1 paragraph (A)) expires while the plan is 

2 still in declining status, and 

3 ‘‘(ii) after receiving one or more up4 dated schedules from the plan sponsor 

5 under paragraph (5)(B), the bargaining 

6 parties with respect to such agreement fail 

7 to adopt a contribution schedule with 

8 terms consistent with the updated solvency 

9 plan and a schedule from the plan sponsor, 

10 then the contribution schedule applicable under 

11 the expired collective bargaining agreement, as 

12 updated and in effect on the date the collective 

13 bargaining agreement expires, shall be imple14 mented by the plan sponsor beginning on the 

15 date specified in subparagraph (C). 

16 ‘‘(C) DATE OF IMPLEMENTATION.—The 

17 date specified in this subparagraph is the date 

18 which is 180 days after the date on which the 

19 collective bargaining agreement described in 

20 subparagraph (A) or (B) expires. 

21 ‘‘(7) SOLVENCY PLAN ADOPTION PERIOD.—For 

22 purposes of this section, the term ‘solvency plan 

23 adoption period’ means the period beginning on the 

24 date of the certification under subsection (b)(5)(A) 

25 for the initial determination year and ending on the 


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1 day before the first day of the solvency attainment 

2 period. 

3 ‘‘(i) RULES FOR OPERATION OF PLAN DURING

4 ADOPTION AND ATTAINMENT PERIODS.— 

5 ‘‘(1) COMPLIANCE WITH SOLVENCY PLAN.— 

6 ‘‘(A) IN GENERAL.—A plan may not be 

7 amended after the date of the adoption of a sol8 vency plan under subsection (h) so as to be in9 consistent with the solvency plan. 

10 ‘‘(B) SPECIAL RULES FOR BENEFIT IN11 CREASES.—A plan may not be amended after 

12 the date of the adoption of a solvency plan 

13 under subsection (h) so as to increase benefits, 

14 including future benefit accruals, unless the in15 crease is required by law or is a de minimis 

16 change. 

17 ‘‘(C) SPECIAL RULES FOR INCREASES IN

18 COMPENSATION OR CONTRIBUTION RATE.—Any 

19 increase in employee compensation or contribu20 tion rates which takes effect after the first day 

21 of the plan year in which the plan enters declin22 ing status shall not give rise to an increase in 

23 benefits or future benefit accruals under the 

24 plan. 


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1 ‘‘(2) RESTRICTION ON LUMP SUMS AND SIMI2 LAR BENEFITS.— 

3 ‘‘(A) IN GENERAL.—Effective on the date 

4 the notice of certification of the plan’s declining 

5 status for the initial determination year under 

6 subsection (b)(5)(D) is sent, and notwith7 standing section 204(g), the plan shall not 

8 pay— 

9 ‘‘(i) any payment, in excess of the 

10 monthly amount paid under a single life 

11 annuity (plus any social security supple12 ments described in the last sentence of sec13 tion 204(b)(1)(G)), to a participant or ben14 eficiary whose annuity starting date (as de15 fined in section 205(h)(2)) occurs after the 

16 date such notice is sent, 

17 ‘‘(ii) any payment for the purchase of 

18 an irrevocable commitment from an insurer 

19 to pay benefits, or 

20 ‘‘(iii) any other payment specified by 

21 the Secretary of the Treasury by regula22 tions, 

23 unless it is a de minimis amount. 

24 ‘‘(B) EXCEPTION.—Subparagraph (A) 

25 shall not apply to a benefit which under section 


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1 203(e) may be immediately distributed without 

2 the consent of the participant or to any makeup 

3 payment in the case of a retroactive annuity 

4 starting date or any similar payment of benefits 

5 owed with respect to a prior period. 

6 ‘‘(3) SPECIAL RULES FOR PLAN ADOPTION PE7 RIOD.—During the period beginning on the date of 

8 the certification under subsection (b)(5)(A) for the 

9 initial determination year and ending on the date of 

10 the adoption of a solvency plan— 

11 ‘‘(A) the plan sponsor may not accept a 

12 collective bargaining agreement or participation 

13 agreement with respect to the multiemployer 

14 plan that provides for— 

15 ‘‘(i) a reduction in the level of con16 tributions for any participants, 

17 ‘‘(ii) a suspension of contributions 

18 with respect to any period of service, or 

19 ‘‘(iii) any new direct or indirect exclu20 sion of younger or newly hired employees 

21 from plan participation, 

22 unless the plan sponsor reasonably determines 

23 that the acceptance of such an agreement is in 

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1 ficiaries and that rejection of such agreement 

2 would adversely affect the plan, and 

3 ‘‘(B) no amendment of the plan which in4 creases the liabilities of the plan by reason of 

5 any increase in benefits, any change in the ac6 crual of benefits, or any change in the rate at 

7 which benefits become nonforfeitable under the 

8 plan may be adopted unless the amendment is 

9 required as a condition of qualification under 

10 part I of subchapter D of chapter 1 of the In11 ternal Revenue Code of 1986 or to comply with 

12 other applicable law.’’. 

13 (C) SUSPENSION OF BENEFITS.—Section 

14 305 of such Act (29 U.S.C. 1085), as amended 

15 by this section, is further amended— 

16 (i) by redesignating paragraph (9) of 

17 subsection (f) (as redesignated by sub18 section (a)(2)) as paragraph (8) of sub19 section (h) (as added by subparagraph 

20 (B)), and 

21 (ii) by moving such paragraph to the 

22 position immediately after paragraph (7) 

23 of such subsection (h). 

24 (4) CONFORMING AMENDMENTS.— 


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1 (A) Subsection (a)(4)(D) of section 305 of 

2 such Act (29 U.S.C. 1085), as redesignated and 

3 amended by the preceding provisions of this 

4 section, is further amended by striking ‘‘sub5 section (f)(9)’’ and inserting ‘‘subsection 

6 (h)(8)’’. 

7 (B) Paragraph (5) of section 305(b) of 

8 such Act (29 U.S.C. 1085(b)), as so redesig9 nated and as amended by section 321 and the 

10 preceding provisions of this section, is further 

11 amended— 

12 (i) by striking ‘‘critical’’ in subpara13 graph (A)(i)(I) and inserting ‘‘critical or 

14 declining’’, 

15 (ii) by striking ‘‘funding improvement 

16 or rehabilitation period’’ in subparagraph 

17 (A)(i)(II) and inserting ‘‘funding improve18 ment, rehabilitation, or solvency attain19 ment period’’, 

20 (iii) by striking ‘‘funding improvement 

21 or rehabilitation plan’’ in subparagraph 

22 (A)(i)(II) and inserting ‘‘funding improve23 ment, rehabilitation, or solvency plan’’, 

24 (iv) by striking ‘‘endangered or crit25 ical’’ in subparagraph (A)(i)(V)(bb) and 


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1 inserting ‘‘endangered, critical, or declin2 ing’’, 

3 (v) by striking ‘‘funding improvement 

4 plan or rehabilitation’’ in subparagraph 

5 (A)(iv) and inserting ‘‘funding improve6 ment, rehabilitation, or solvency’’, 

7 (vi) by striking ‘‘critical’’ each place it 

8 appears in subparagraph (A)(vi) and in9 serting ‘‘critical or declining’’, 

10 (vii) by striking ‘‘rehabilitation pe11 riod’’ in subparagraph (A)(vi) and insert12 ing ‘‘rehabilitation or solvency attainment 

13 period’’, 

14 (viii) by striking ‘‘as described in sub15 section (f)(9)’’ in subparagraph (B)(v), 

16 (ix) by inserting ‘‘if the plan is al17 ready in a rehabilitation period, and’’ be18 fore ‘‘if reasonable’’ in subparagraph 

19 (B)(v)(I), 

20 (x) by striking ‘‘subsection (f)(9)’’ in 

21 subparagraph (B)(v)(II) and inserting 

22 ‘‘subsection (h)(8)’’, 

23 (xi) by striking ‘‘endangered or crit24 ical’’ both places it appears in subparaVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00193 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 graph (D)(i) and inserting ‘‘endangered, 

2 critical, or declining’’, 

3 (xii) by striking ‘‘ENDANGERED OR

4 CRITICAL’’ in the heading of subparagraph 

5 (D)(ii) and inserting ‘‘ENDANGERED, CRIT6 ICAL, OR DECLINING’’, 

7 (xiii) by striking ‘‘endangered or crit8 ical’’ in subparagraph (D)(ii) and inserting 

9 ‘‘endangered, critical, or declining’’, 

10 (xiv) by striking ‘‘funding improve11 ment or rehabilitation plan’’ both places it 

12 appears in subclauses (I) and (II) of sub13 paragraph (D)(ii) and inserting ‘‘funding 

14 improvement, rehabilitation, or solvency 

15 plan’’, and 

16 (xv) by adding at the end of subpara17 graph (D) the following new clause: 

18 ‘‘(vii) NOTICE OF PROJECTION TO BE

19 IN DECLINING STATUS IN A FUTURE PLAN

20 YEAR.—In any case in which it is certified 

21 under subparagraph (A)(i) that a multiem22 ployer plan will be in declining status for 

23 any of 5 succeeding plan years (but not for 

24 the current plan year), the plan sponsor 

25 shall, not later than 30 days after the date 


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1 of the certification, provide notification of 

2 the projected declining status to the Pen3 sion Benefit Guaranty Corporation.’’. 

4 (C) Subparagraph (J) of section 305(h)(8) 

5 of such Act (29 U.S.C. 1085(h)(8)), as so re6 designated and amended, is further amended— 

7 (i) by striking ‘‘CRITICAL’’ in the 

8 heading and inserting ‘‘DECLINING’’, and 

9 (ii) by striking ‘‘shall not emerge from 

10 critical status under paragraph (4)(B),’’ 

11 and inserting ‘‘shall not emerge from de12 clining status’’. 

13 (D) Subsection (j) of section 305 of such 

14 Act (29 U.S.C. 1085), as so redesignated and 

15 amended, is further amended— 

16 (i) by striking ‘‘(f)(8) or (g)’’ in para17 graph (1) and inserting ‘‘(f)(8), (g), or 

18 (i)’’, 

19 (ii) by striking ‘‘subsection (f)(9)’’ in 

20 paragraph (1) and inserting ‘‘subsection 

21 (h)(8)’’, 

22 (iii) by striking ‘‘FUNDING IMPROVE23 MENT OR REHABILITATION PLAN’’ in the 

24 heading of paragraph (3) and inserting 


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1 ‘‘FUNDING IMPROVEMENT, REHABILITA2 TION, OR SOLVENCY’’, 

3 (iv) by striking ‘‘funding improvement 

4 plan or rehabilitation plan’’ both places it 

5 appears in subparagraphs (A) and (B) of 

6 paragraph (3) and inserting ‘‘funding im7 provement, rehabilitation, or solvency 

8 plan’’, 

9 (v) by striking ‘‘ENDANGERED OR

10 CRITICAL’’ in the heading of paragraph 

11 (4), as amended by subsection (a), and in12 serting ‘‘ENDANGERED, CRITICAL, OR DE13 CLINING’’, 

14 (vi) by striking ‘‘endangered or crit15 ical’’ each place it appears in paragraph 

16 (4), as so amended, and inserting ‘‘endan17 gered, critical, or declining’’, and 

18 (vii) by striking ‘‘critical or endan19 gered’’ in paragraph (4) and inserting ‘‘en20 dangered, critical, or declining’’. 

21 (E) Subsection (k) of section 305 of such 

22 Act (29 U.S.C. 1085), as so redesignated and 

23 amended, is further amended— 

24 (i) by striking ‘‘or a rehabilitation 

25 plan under subsection (f)’’ and inserting ‘‘, 


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1 a rehabilitation plan under subsection (f), 

2 or a solvency plan under subsection (h)’’, 

3 (ii) by striking ‘‘endangered status or 

4 a plan in critical status’’ and inserting 

5 ‘‘endangered, critical, or declining status’’, 

6 (iii) by striking ‘‘has not agreed on a 

7 funding improvement plan or rehabilitation 

8 plan’’ and inserting ‘‘has not agreed on a 

9 funding improvement, rehabilitation, or 

10 solvency plan (whichever is applicable)’’, 

11 and 

12 (iv) by striking ‘‘adoption of a funding 

13 improvement plan or rehabilitation plan’’ 

14 and inserting ‘‘adoption of a funding im15 provement, rehabilitation, or solvency 

16 plan’’. 

17 (F) Subsection (l) of section 305 of such 

18 Act (29 U.S.C. 1085), as so redesignated and 

19 amended, is further amended— 

20 (i) by striking ‘‘endangered status or 

21 in critical status’’ in paragraph (1) and in22 serting ‘‘endangered, critical, or declining 

23 status’’, 


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1 (ii) by striking ‘‘endangered or crit2 ical’’ in paragraph (1) and inserting ‘‘en3 dangered, critical, or declining’’, and 

4 (iii) by striking ‘‘(d) and (f)’’ in para5 graph (2) and inserting ‘‘(d), (f), and (h)’’. 

6 (G) Section 101(f)(2)(B) of such Act (29 

7 U.S.C. 1021(f)(2)(B)), as amended by this sec8 tion, is amended— 

9 (i) by striking ‘‘305(k)’’ in clause 

10 (i)(II) and inserting ‘‘305(m)’’, and 

11 (ii) by striking ‘‘305(k)(8)’’ in clause 

12 (ii)(II) and inserting ‘‘305(m)(8)’’. 

13 (H) Section 101(k)(1)(K) of such Act (29 

14 U.S.C. 1021(k)(1)(K)) is amended— 

15 (i) by striking ‘‘critical or endan16 gered’’ and inserting ‘‘endangered, critical, 

17 or declining’’, and 

18 (ii) by striking ‘‘funding improvement 

19 or rehabilitation’’ both places it appears 

20 and inserting ‘‘funding improvement, reha21 bilitation, or solvency’’. 

22 (I) Section 103(f)(1)(B)(ii) of such Act 

23 (29 U.S.C. 1023(f)(1)(B)(ii)), as amended by 

24 this section, is amended by striking 

25 ‘‘305(k)(2)’’ and inserting ‘‘305(m)(2)’’. 


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1 (J) Section 103(f)(2)(G) of such Act (29 

2 U.S.C. 1023(f)(2)(G)) is amended— 

3 (i) by striking ‘‘critical or endan4 gered’’ and inserting ‘‘endangered, critical, 

5 or declining’’, and 

6 (ii) by striking ‘‘funding improvement 

7 or rehabilitation’’ and inserting ‘‘funding 

8 improvement, rehabilitation, or solvency’’. 

9 (K) Section 104(d)(1)(E) of such Act (29 

10 U.S.C. 1024(d)(1)(E)) is amended— 

11 (i) by striking ‘‘critical or endan12 gered’’ and inserting ‘‘endangered, critical, 

13 or declining’’, and 

14 (ii) by striking ‘‘funding improvement 

15 or rehabilitation’’ and inserting ‘‘funding 

16 improvement, rehabilitation, or solvency’’. 

17 (L) Section 502(a)(10) of such Act (29 

18 U.S.C. 1132(a)(10)) is amended— 

19 (i) by striking ‘‘endangered or crit20 ical’’ and inserting ‘‘endangered, critical, 

21 or declining’’, and 

22 (ii) by striking ‘‘funding improvement 

23 or rehabilitation’’ each place it appears 

24 and inserting ‘‘funding improvement, reha25 bilitation, or solvency’’. 


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1 (M) Section 502(c)(8) of such Act (29 

2 U.S.C. 1132(c)(8)) is amended— 

3 (i) by striking ‘‘funding improvement 

4 plan or rehabilitation’’ in subparagraph 

5 (A) and inserting ‘‘funding improvement, 

6 rehabilitation, or solvency’’, 

7 (ii) by striking ‘‘endangered or crit8 ical’’ in subparagraph (A) and inserting 

9 ‘‘endangered, critical, or declining’’, 

10 (iii) by striking ‘‘which is not in seri11 ously endangered status’’ in subparagraph 

12 (B), and 

13 (iv) by striking ‘‘meet the applicable 

14 benchmarks’’ in subparagraph (B) and in15 serting ‘‘emerge from endangered status’’. 

16 (N) Section 4233 of such Act (29 U.S.C. 

17 1413), as amended by this section, is further 

18 amended— 

19 (i) by striking ‘‘305(f)(9)’’ each place 

20 it appears in subsections (b)(2) and 

21 (e)(1)(A) and inserting ‘‘305(h)(8)’’, and 

22 (ii) by striking ‘‘305(f)(9)(E)(vi)’’ in 

23 subsection (e)(2) and inserting 

24 ‘‘305(h)(8)(E)(vi)’’. 


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1 (O) Section 4233(m)(1) of such Act, as 

2 added by this Act, is amended by striking 

3 ‘‘funding improvement or rehabilitation’’ and 

4 inserting ‘‘funding improvement, rehabilitation, 

5 or solvency’’. 

6 (P) Section 4233A(h)(4)(C) of such Act, 

7 as added by this Act, is amended by striking 

8 ‘‘rehabilitation plan’’ and inserting ‘‘rehabilita9 tion or solvency plan’’. 

10 (Q) Section 4233A(m)(1) of such Act, as 

11 added by this Act, is amended by striking 

12 ‘‘funding improvement or rehabilitation’’ and 

13 inserting ‘‘funding improvement, rehabilitation, 

14 or solvency’’. 

15 (R) Section 4233A(o)(1) of such Act, as 

16 added by this Act, is amended by striking 

17 ‘‘305(k)(2)’’ and inserting ‘‘305(m)(2)’’. 

18 (S) Section 4233A(o)(12) of such Act, as 

19 added by this Act, is amended by striking 

20 ‘‘funding improvement plan or rehabilitation’’ 

21 and inserting ‘‘funding improvement, rehabilita22 tion, or solvency’’. 

23 (T) Section 4245 of such Act (29 U.S.C. 

24 1426), as amended by section 112 and this sec25 tion, is further amended— 


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1 (i) by striking ‘‘305(b)(3)’’ each place 

2 it appears in subsections (c)(1), (c)(2), 

3 (d)(1), and (d)(2) and inserting 

4 ‘‘305(b)(3), or a plan in declining status, 

5 as described in section 305(b)(4)’’, and 

6 (ii) by striking ‘‘305(f)(9)’’ in sub7 section (f) and inserting ‘‘305(h)(8)’’. 

8 (e) ADJUSTMENT OF BENEFITS.— 

9 (1) IN GENERAL.—Section 305 of the Employee 

10 Retirement Income Security Act of 1974 (29 U.S.C. 

11 1085), as amended by this section, is further amend12 ed— 

13 (A) by further redesignating subsections 

14 (m) and (n), as redesignated by subsection (d), 

15 as subsections (n) and (o), respectively, 

16 (B) by redesignating paragraph (8) of sub17 section (f), as redesignated by subsection 

18 (a)(2), as subsection (m), and 

19 (C) by moving such subsection to the posi20 tion immediately after subsection (l). 

21 (2) CLERICAL AND CONFORMING AMEND22 MENTS.— 

23 (A) The heading of subsection (m) of sec24 tion 305 of such Act (29 U.S.C. 1085), as reVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00202 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 designated by paragraph (1), is amended to 

2 read as follows: 

3 ‘‘(m) ADJUSTMENT OF BENEFITS.—’’. 

4 (B) The following provisions of such sub5 section (m) are amended as follows: 

6 (i) Subparagraphs (A), (B), and (C) 

7 are redesignated as paragraphs (1), (2), 

8 and (4), respectively, and moved 2 ems to 

9 the left. 

10 (ii) Clauses (i), (ii), (iii), and (iv) of 

11 paragraph (1) (as so redesignated) are re12 designated as subparagraphs (A), (B), (C), 

13 and (D), respectively, and moved 2 ems to 

14 the left. 

15 (iii) Subclauses (I), (II), and (III) of 

16 paragraph (1)(D) (as so redesignated) are 

17 redesignated as clauses (i), (ii), and (iii), 

18 respectively, and moved 2 ems to the left. 

19 (iv) Clauses (i), (ii), and (iii) of para20 graph (4) (as so redesignated) are redesig21 nated as subparagraphs (A), (B), and (C), 

22 respectively, and moved 2 ems to the left, 

23 and the flush sentence at the end of sub24 paragraph (C) (as so redesignated) is 

25 moved 2 ems to the left. 


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1 (v) Subclauses (I), (II), and (III) of 

2 paragraph (4)(A) (as so redesignated) are 

3 redesignated as clauses (i), (ii), and (iii), 

4 respectively, and moved 2 ems to the left. 

5 (vi) Subclauses (I) and (II) of para6 graph (4)(B) (as so redesignated) are re7 designated as clauses (i) and (ii), respec8 tively, and moved 2 ems to the left. 

9 (vii) Subclauses (I), (II), and (III) of 

10 paragraph (4)(C) (as so redesignated) are 

11 redesignated as clauses (i), (ii), and (iii), 

12 respectively, and moved 2 ems to the left. 

13 (viii) Paragraph (1)(A), as so redesig14 nated, is amended by striking ‘‘subpara15 graph (C)’’ and inserting ‘‘paragraph (4)’’. 

16 (ix) Paragraph (1)(B), as so redesig17 nated, is amended by striking ‘‘clause 

18 (iv)(III)’’ and inserting ‘‘subparagraph 

19 (D)(iii)’’. 

20 (x) Paragraph (1)(D), as so redesig21 nated, is amended by striking ‘‘this para22 graph’’ and inserting ‘‘this subsection’’. 

23 (xi) Paragraph (2), as so redesig24 nated, is amended— 


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1 (I) by striking ‘‘subparagraph 

2 (A)(iv)(III)’’ and inserting ‘‘para3 graph (1)(D)(iii)’’, and 

4 (II) by striking ‘‘this paragraph’’ 

5 and inserting ‘‘this subsection’’. 

6 (xii) Paragraph (4)(A), as so redesig7 nated, is amended by striking ‘‘subpara8 graph (A)’’ and inserting ‘‘paragraph (1)’’. 

9 (xiii) Paragraphs (4)(B) and (4)(C), 

10 as so redesignated, are each amended by 

11 striking ‘‘clause (i)’’ each place it appears 

12 and inserting ‘‘subparagraph (A)’’. 

13 (xiv) The last sentence of paragraph 

14 (4)(C), as so redesignated, is amended— 

15 (I) by striking ‘‘subclause (I)’’ 

16 and inserting ‘‘clause (i)’’, and 

17 (II) by striking ‘‘this subpara18 graph’’ and inserting ‘‘this para19 graph’’. 

20 (3) APPLICATION TO ALL PLANS IN ENDAN21 GERED, CRITICAL, OR DECLINING STATUS.— 

22 (A) IN GENERAL.—Subparagraph (A) of 

23 section 305(m)(1) of such Act (29 U.S.C. 

24 1085(m)(1)), as redesignated and amended by 

25 this section, is further amended— 


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1 (i) by striking ‘‘the plan sponsor 

2 shall’’ and inserting ‘‘the plan sponsor of a 

3 multiemployer plan in endangered, critical, 

4 or declining status may’’, and 

5 (ii) by striking ‘‘paragraph (1)(B)(i)’’ 

6 and inserting ‘‘subsection (d)(1)(B), 

7 (f)(1)(B), or (h)(1)(B), whichever is appli8 cable’’. 

9 (B) CONFORMING AMENDMENTS.—Sub10 paragraph (B) of section 305(m)(1) of such Act 

11 (29 U.S.C. 1085(m)(1)), as redesignated and 

12 amended by this section, is further amended by 

13 striking ‘‘critical’’ both places it appears and in14 serting ‘‘endangered, critical, or declining’’. 

15 (4) ADDITIONAL ADJUSTABLE BENEFITS.— 

16 (A) IN GENERAL.—Subparagraph (D) of 

17 section 305(m)(1) of such Act (29 U.S.C. 

18 1085(m)(1)), as redesignated by this section, is 

19 amended— 

20 (i) by inserting ‘‘, including early re21 duction factors which are not provided on 

22 an actuarially equivalent basis,’’ after 

23 ‘‘(i))’’ in clause (ii), as so redesignated, 

24 (ii) by striking ‘‘and’’ at the end of 

25 clause (ii) (as so redesignated), 


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1 (iii) by striking ‘‘that would not be eli2 gible’’ and all that follows through the pe3 riod in clause (iii) (as so redesignated) and 

4 inserting ‘‘which were adopted (or, if later, 

5 took effect) less than 120 months before 

6 the first day of the first plan year in which 

7 the plan was in endangered, critical, or de8 clining status,’’, and 

9 (iv) by adding at the end the following 

10 new clauses: 

11 ‘‘(iv) any one-time bonus payment or 

12 ‘thirteenth check’ provision, and 

13 ‘‘(v) benefits granted for periods of 

14 service prior to participation in the plan.’’. 

15 (B) CONFORMING AMENDMENTS.— 

16 (i) Subparagraph (B) of section 

17 305(m)(1) of such Act (29 U.S.C. 1085), 

18 as redesignated and amended by this sec19 tion, is further amended by striking ‘‘sub20 paragraph (D)(iii)’’ and inserting ‘‘clause 

21 (iii), (iv), or (v) of subparagraph (D)’’. 

22 (ii) Paragraph (2) of section 305(m) 

23 of such Act (29 U.S.C. 1085), as amended 

24 by paragraph (2)(B), is further amended 

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1 serting ‘‘clause (iii), (iv), or (v) of para2 graph (1)(D)’’. 

3 (iii) Section 4233A(o)(1) of such Act, 

4 as added by this Act and as amended by 

5 this section, is further amended by striking 

6 ‘‘305(m)(2)’’ and inserting ‘‘305(n)(2)’’. 

7 (5) RULES RELATING TO SUSPENSION OF BEN8 EFITS UPON RETURN TO WORK.—Subsection (m) of 

9 section 305 of such Act (29 U.S.C. 1085), as redes10 ignated and amended by this section, is further 

11 amended by inserting after paragraph (2) the fol12 lowing new paragraph: 

13 ‘‘(3) RULES RELATING TO SUSPENSION OF

14 BENEFITS UPON RETURN TO WORK.—The plan 

15 sponsor of a multiemployer plan in endangered, crit16 ical, or declining status may amend rules regarding 

17 the suspension of a participant’s benefits upon a re18 turn to work after commencement of benefits, or the 

19 commencement of benefits after normal retirement 

20 age (including in the case of continued employment 

21 after normal retirement age). Any such changes 

22 shall apply only to future payments of benefits.’’. 

23 (6) ADDITIONAL CONFORMING AMENDMENTS.— 

24 (A) Clause (iii) of section 305(b)(5)(D) of 

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1 ignated and amended by this section, is further 

2 amended— 

3 (i) by striking ‘‘CRITICAL’’ in the 

4 heading and inserting ‘‘ENDANGERED, 

5 CRITICAL, OR DECLINING’’, 

6 (ii) by striking ‘‘critical status’’ both 

7 places it appears and inserting ‘‘endan8 gered, critical, or declining status’’, and 

9 (iii) by striking ‘‘subsection (f)(8)’’ in 

10 subclause (I) and inserting ‘‘subsection 

11 (m)(1)(D)’’. 

12 (B) Subsection (j) of section 305 of such 

13 Act (29 U.S.C. 1085), as amended by sub14 section (d), is further amended by striking 

15 ‘‘(f)(8), (g), or (i)’’ and inserting ‘‘(e), (g), (i), 

16 or (m)’’. 

17 (C) Section 101(f)(2)(B) of such Act (29 

18 U.S.C. 1021(f)(2)(B)), as amended by this sec19 tion, is amended— 

20 (i) by striking ‘‘305(m)’’ in clause 

21 (i)(II) and inserting ‘‘305(n)’’, and 

22 (ii) by striking ‘‘305(m)(8)’’ in clause 

23 (ii)(II) and inserting ‘‘305(n)(8)’’. 

24 (D) Section 103(f)(1)(B)(ii) of such Act 

25 (29 U.S.C. 1023(f)(1)(B)(ii)), as amended by 


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1 this section, is amended by striking 

2 ‘‘305(m)(2)’’ and inserting ‘‘305(n)(2)’’. 

3 (f) ELECTIONS TO BE IN CRITICAL OR ENDANGERED

4 STATUS.— 

5 (1) IN GENERAL.—Paragraph (6) of section 

6 305(b) of the Employee Retirement Income Security 

7 Act of 1974 (29 U.S.C. 1085(b)), as redesignated 

8 and amended by this section, is further amended— 

9 (A) by striking ‘‘is not in critical status’’ 

10 in subparagraph (A) and inserting ‘‘is not in 

11 critical or declining status’’, 

12 (B) by striking ‘‘but that is projected’’ in 

13 subparagraph (A) and inserting ‘‘but— 

14 ‘‘(i) that is projected’’, 

15 (C) by striking ‘‘5 plan years may, not 

16 later than’’ in subparagraph (A) and inserting 

17 ‘‘5 plan years, or 

18 ‘‘(ii) that is in endangered status and 

19 is not reasonably projected to be able to 

20 emerge from endangered status within the 

21 funding improvement period under the 

22 funding improvement plan in effect, 

23 may, not later than’’, and 

24 (D) by striking ‘‘under paragraph (3)’’ in 

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1 graph (3) or for endangered status under para2 graph (2)’’. 

3 (2) ELECTION TO BE IN ENDANGERED STA4 TUS.—Subsection (b) of section 305 of such Act (29 

5 U.S.C. 1085), as so redesignated and amended, is 

6 further amended by adding at the end the following 

7 new paragraph: 

8 ‘‘(8) ELECTION TO BE IN ENDANGERED STA9 TUS.—Notwithstanding paragraph (2)— 

10 ‘‘(A) the plan sponsor of a multiemployer 

11 plan that is not in endangered, critical, or de12 clining status for a plan year but that is pro13 jected by the plan actuary, pursuant to the de14 termination under paragraph (5), to be in en15 dangered status in any of the 5 succeeding plan 

16 years, may, not later than 30 days after the 

17 date of the certification under paragraph 

18 (5)(A), elect to be in endangered status effec19 tive for the current plan year, 

20 ‘‘(B) the plan year in which the plan spon21 sor elects to be in endangered status under sub22 paragraph (A) shall be treated for purposes of 

23 this section as the first year in which the plan 

24 is in endangered status, regardless of the date 


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1 on which the plan first satisfies the criteria for 

2 endangered status under paragraph (2), and 

3 ‘‘(C) a plan that is in endangered status 

4 under this paragraph shall not emerge from en5 dangered status unless the plan’s actuary cer6 tifies under paragraph (5)(A) that the plan is 

7 no longer in endangered status and is not in 

8 critical or declining status.’’. 

9 (g) AMENDMENTS RELATING TO FUNDING IMPROVE10 MENT PLAN.— 

11 (1) IN GENERAL.—Paragraph (1) of section 

12 305(d) of the Employee Retirement Income Security 

13 Act of 1974 (29 U.S.C. 1085(d)), as redesignated 

14 and amended by this section, is further amended— 

15 (A) by striking the last sentence, and 

16 (B) in subparagraph (B), by striking 

17 ‘‘funding improvement plan—’’ and all that fol18 lows and inserting ‘‘funding improvement plan, 

19 shall provide to the bargaining parties 1 or 

20 more schedules showing revised benefit struc21 tures, revised contribution structures, or both, 

22 which, if adopted, may reasonably be expected 

23 to enable the multiemployer plan to meet the 

24 requirements of paragraph (3), including— 


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1 ‘‘(i) one default proposal under 

2 which— 

3 ‘‘(I) all adjustable benefits in the 

4 form of early retirement subsidies (in5 cluding early reduction factors which 

6 are not provided on an actuarially 

7 equivalent basis) under the plan are 

8 eliminated, and 

9 ‘‘(II) the future monthly benefit 

10 accrual rate under the plan is reduced 

11 to the equivalent of 1 percent of an12 nual contributions (or, if lower, the 

13 accrual rate as of the date of the en14 actment of the Chris Allen Multiem15 ployer Pension Recapitalization and 

16 Reform Act of 2020) based on the 

17 contribution rate in effect as of the 

18 first day of the plan year in which the 

19 plan enters endangered status, and 

20 which may also include reduction or elimi21 nation of any other adjustable benefits 

22 under the plan, and 

23 ‘‘(ii) any additional schedules which 

24 reduce or eliminate adjustable benefits 

25 under the plan which the plan sponsor 


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1 deems appropriate to provide as an alter2 native to the default proposal.’’. 

3 (2) FUNDING IMPROVEMENT PLAN.—Paragraph 

4 (3) of section 305(d) of such Act (29 U.S.C. 

5 1085(d)), as so redesignated and amended, is fur6 ther amended— 

7 (A) by striking ‘‘For purposes of this sec8 tion—’’ and all that follows through ‘‘which 

9 consists of’’ in subparagraph (A) and inserting 

10 ‘‘For purposes of this section, a funding im11 provement plan is a plan which consists of’’, 

12 and 

13 (B) by striking ‘‘formulated to provide’’ 

14 and all that follows and inserting ‘‘formulated, 

15 based on reasonably anticipated experience and 

16 reasonable actuarial assumptions, to— 

17 ‘‘(A) enable the plan to emerge from en18 dangered status by the end of the funding im19 provement period, and 

20 ‘‘(B) avoid any accumulated funding defi21 ciencies during the funding improvement period 

22 (taking into account any extension of amortiza23 tion periods under section 304(d)).’’. 

24 (3) FUNDING IMPROVEMENT PERIOD.—Para25 graph (4) of section 305(d) of such Act (29 U.S.C. 


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1 1085(d)(4)), as so redesignated and amended, is fur2 ther amended by striking subparagraph (B) and in3 serting after subparagraph (A) the following new 

4 subparagraph: 

5 ‘‘(B) NEW PERIOD BASED ON ADVERSE

6 EXPERIENCE.— 

7 ‘‘(i) IN GENERAL.—If the plan’s actu8 ary determines necessary based on adverse 

9 plan experience, the plan sponsor may pro10 vide for a new 10-year period as of the 

11 first day of any plan year in the original 

12 funding improvement period, but only if 

13 the plan is still projected to meet the re14 quirements of the funding improvement 

15 plan and emerge from endangered status 

16 at the end of the new funding improvement 

17 period. 

18 ‘‘(ii) LIMITATION.—A plan sponsor 

19 may provide a new 10-year period under 

20 clause (i) not more than 1 time in any 20- 

21 consecutive-year period, unless the plan 

22 sponsor submits to the Secretary an appli23 cation for an additional new period. Such 

24 application shall include a certification that 

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1 dangered status in the proposed new 10- 

2 year period and a description of key as3 sumptions, to be specified in regulations 

4 promulgated by the Secretary in consulta5 tion with the Pension Benefit Guaranty 

6 Corporation.’’. 

7 (4) CONFORMING AMENDMENTS.— 

8 (A) Subparagraph (C) of section 305(d)(4) 

9 of such Act (29 U.S.C. 1085(d)(4)), as so re10 designated and amended, is further amended— 

11 (i) by striking ‘‘critical status’’ both 

12 places it appears in clauses (i) and (ii) and 

13 inserting ‘‘critical or declining status’’, 

14 (ii) by striking ‘‘rehabilitation period’’ 

15 in clause (ii) and inserting ‘‘rehabilitation 

16 or solvency attainment period’’, and 

17 (iii) by striking ‘‘CRITICAL STATUS’’ in 

18 the heading of clause (ii) and inserting 

19 ‘‘CRITICAL OR DECLINING STATUS’’. 

20 (B) Subsection (d) of section 305 of such 

21 Act (29 U.S.C. 1085), as so redesignated and 

22 amended, is further amended by striking para23 graph (5) and by redesignating paragraphs (6), 

24 (7), and (8) as paragraphs (5), (6), and (7), re25 spectively. 


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1 (C) Paragraph (6) of section 305(d) of 

2 such Act (29 U.S.C. 1085(d)), as so redesig3 nated, is amended— 

4 (i) by striking ‘‘(1)(B)(i)(I)’’ in sub5 paragraph (A) and inserting ‘‘(1)(B)(i)’’, 

6 and 

7 (ii) by striking ‘‘paragraph (6)(B)’’ in 

8 subparagraph (B)(ii) and inserting ‘‘para9 graph (5)(B)’’. 

10 (D) Paragraph (2) of section 305(d) of 

11 such Act (29 U.S.C. 1085(d)), as so redesig12 nated, is amended by inserting ‘‘, except that 

13 the next update of the funding improvement 

14 plan shall fulfill the requirement of paragraph 

15 (1)(B)(i)’’ after ‘‘for a preceding plan year’’. 

16 (h) AMENDMENTS RELATING TO REHABILITATION

17 PLAN.— 

18 (1) IN GENERAL.—Paragraph (1) of section 

19 305(f) of the Employee Retirement Income Security 

20 Act of 1974 (29 U.S.C. 1085(f)), as redesignated 

21 and amended by this section, is further amended— 

22 (A) by striking the last 2 sentences, and 

23 (B) in subparagraph (B), by striking ‘‘re24 habilitation plan—’’ and all that follows and in25 serting ‘‘rehabilitation plan, shall provide to the 


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1 bargaining parties 1 or more schedules showing 

2 revised benefit structures, revised contribution 

3 structures, or both, which, if adopted, may rea4 sonably be expected to enable the multiemployer 

5 plan to meet the requirements of paragraph (3), 

6 including— 

7 ‘‘(i) one default proposal under 

8 which— 

9 ‘‘(I) all adjustable benefits in the 

10 form of early retirement subsidies (in11 cluding early reduction factors which 

12 are not provided on an actuarially 

13 equivalent basis) under the plan are 

14 eliminated, and 

15 ‘‘(II) the future monthly benefit 

16 accrual rate under the plan is reduced 

17 to the equivalent of 1 percent of an18 nual contributions (or, if lower, the 

19 accrual rate as of the date of the en20 actment of the Chris Allen Multiem21 ployer Pension Recapitalization and 

22 Reform Act of 2020) based on the 

23 contribution rate in effect as of the 

24 first day of the plan year in which the 

25 plan enters critical status, and 


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1 which may also include reduction or elimi2 nation of any other adjustable benefits 

3 under the plan, and 

4 ‘‘(ii) any additional schedules which 

5 reduce or eliminate adjustable benefits 

6 under the plan which the plan sponsor 

7 deems appropriate to provide as an alter8 native to the default proposal. 

9 In the case of a plan adopting a rehabilitation 

10 plan described in paragraph (3)(A)(ii), no 

11 schedule provided to or adopted by the bar12 gaining parties shall provide for a monthly ben13 efit accrual rate in excess of the rate described 

14 in subparagraph (B)(i)(II).’’. 

15 (2) REHABILITATION PLAN.— 

16 (A) IN GENERAL.—Subparagraph (A) of 

17 section 305(f)(3) of such Act (29 U.S.C. 

18 1085(f)(3)), as so redesignated, is amended— 

19 (i) by striking ‘‘and may include’’ and 

20 all that follows through ‘‘such actions’’ in 

21 clause (i), 

22 (ii) by inserting ‘‘, while delaying in23 solvency for as long as possible and maxi24 mizing the income of the plan, including 


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1 income after insolvency’’ before the period 

2 in clause (ii), and 

3 (iii) by striking ‘‘(1)(B)(i)’’ in the last 

4 sentence and inserting ‘‘(1)(B)’’. 

5 (B) CONFORMING AMENDMENTS.—Clause 

6 (i) of section 305(f)(3)(C) of such Act (29 

7 U.S.C. 1085(f)(3)(C)), as so redesignated, is 

8 amended— 

9 (i) by striking ‘‘(1)(B)(i)’’ in sub10 clause (II) and inserting ‘‘(1)(B)’’, and 

11 (ii) by striking ‘‘the last sentence of 

12 paragraph (1)’’ and inserting ‘‘paragraph 

13 (1)(B)(i)’’. 

14 (3) REHABILITATION PERIOD.— 

15 (A) IN GENERAL.—Subparagraph (A) of 

16 section 305(f)(4) of such Act (29 U.S.C. 

17 1085(f)(4)), as so redesignated and amended, is 

18 further amended— 

19 (i) by striking ‘‘The rehabilitation pe20 riod’’ and inserting ‘‘Except as otherwise 

21 provided in this subparagraph, the reha22 bilitation period’’, and 

23 (ii) by adding at the end the fol24 lowing: ‘‘If, upon exhaustion of all reason25 able measures, the plan is not reasonably 


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1 expected to emerge from critical status by 

2 the end of such 10-year period, the reha3 bilitation period shall be extended to take 

4 into account the projected date of emer5 gence from critical status (if the rehabilita6 tion plan remained in effect until such 

7 date) or the projected date of insolvency (if 

8 applicable) (unless the plan enters declin9 ing status).’’. 

10 (B) EMERGENCE FROM CRITICAL STA11 TUS.—Subparagraph (B) of section 305(f)(4) of 

12 such Act (29 U.S.C. 1085(f)(4)), as so redesig13 nated and amended, is further amended— 

14 (i) by inserting ‘‘and is not in declin15 ing status,’’ after the comma in clause 

16 (i)(I), 

17 (ii) by striking subclause (III) of 

18 clause (i) and inserting the following: 

19 ‘‘(III) the plan’s projected funded 

20 percentage as of the first day of the 

21 15th succeeding plan year is at least 

22 100 percent and is projected to in23 crease after such date.’’, 

24 (iii) by striking ‘‘that—’’ and all that 

25 follows through ‘‘regardless of whether’’ in 


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1 clause (ii)(I) and inserting ‘‘that the plan 

2 meets the requirements of subclauses (II) 

3 and (III) of clause (i), regardless of wheth4 er’’, and 

5 (iv) by striking ‘‘unless—’’ and all 

6 that follows in clause (ii)(II) and inserting 

7 ‘‘unless, as of such plan year, the plan fails 

8 to meet the requirements of subclause (II) 

9 or (III) of clause (i).’’. 

10 (4) RULES RELATING TO BENEFIT INCREASES

11 DURING REHABILITATION PERIOD.—Subparagraph 

12 (B) of section 305(g)(1) of such Act (29 U.S.C. 

13 1085(g)(1)), as so redesignated and amended, is fur14 ther amended by striking ‘‘unless’’ and all that fol15 lows and inserting ‘‘unless the amendment is re16 quired as a condition of qualification under part I of 

17 subchapter D of chapter 1 of the Internal Revenue 

18 Code of 1986 or to comply with other applicable law, 

19 or the amendment provides for only a de minimis in20 crease in the liabilities of the plan.’’. 

21 (5) CONFORMING AMENDMENTS.— 

22 (A) Paragraph (6) of section 305(f) of 

23 such Act (29 U.S.C. 1085(f)), as so redesig24 nated, is amended by striking ‘‘the last sentence 


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•S 5045 IS

1 of paragraph (1)’’ and inserting ‘‘paragraph 

2 (1)(B)(i)’’. 

3 (B) Paragraph (2) of section 305(f) of 

4 such Act (29 U.S.C. 1085(f)), as so redesig5 nated, is amended by inserting ‘‘, except that 

6 the next update of the rehabilitation plan shall 

7 fulfill the requirement of paragraph (1)(B)(i)’’ 

8 after ‘‘for a preceding plan year’’. 

9 (i) ACTUARIAL ASSUMPTIONS.— 

10 (1) IN GENERAL.—Subsection (n) of section 

11 305 of the Employee Retirement Income Security 

12 Act of 1974 (29 U.S.C. 1085), as redesignated by 

13 subsections (a), (d), and (e), is amended— 

14 (A) by striking ‘‘METHOD’’ in the heading 

15 and inserting ‘‘METHOD AND ASSUMPTIONS’’, 

16 and 

17 (B) by adding at the end the following new 

18 paragraph: 

19 ‘‘(11) ACTUARIAL ASSUMPTIONS.— 

20 ‘‘(A) IN GENERAL.—The actuarial assump21 tions relied upon for purposes of this section by 

22 a plan actuary shall be individually reasonable 

23 and, in the aggregate, shall be reasonable and 

24 (with the exception of assumptions regarding 

25 future contributions) represent the actuary’s 


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•S 5045 IS

1 best estimate of future plan experience, within 

2 limitations prescribed by the Secretary of the 

3 Treasury. A plan actuary shall avoid conserv4 atism or optimism in individual assumptions to 

5 the extent that they would result in a set of as6 sumptions that is unreasonable in the aggre7 gate. 

8 ‘‘(B) INVESTMENT RETURNS.—The invest9 ment return assumption for projecting plan as10 sets may differ from the actuarial valuation in11 terest rate. In selecting the investment return 

12 assumption for projecting plan assets, the plan 

13 actuary shall estimate the expected return of 

14 the plan’s investments as currently invested and 

15 as expected to be invested in the future, con16 sistent with the plan’s adopted investment pol17 icy, if applicable. It is reasonable for an actuary 

18 to expect that the plan’s investment decisions 

19 will consider risk, expected returns over time, 

20 and expected future benefit payments. The in21 vestment return assumption shall not exceed 

22 the interest rate used to determine past service 

23 liability under section 431(b)(6). 

24 ‘‘(C) CONTRIBUTIONS.— 


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1 ‘‘(i) IN GENERAL.—The plan actuary 

2 shall develop assumptions for the projec3 tion of future contributions, including as4 sumptions regarding industry activity 

5 among contributing employers and con6 tribution rates, based on information pro7 vided by the plan sponsor, which must act 

8 reasonably and in good faith. The plan ac9 tuary shall certify the reasonableness of all 

10 assumptions. 

11 ‘‘(ii) PROJECTED INDUSTRY ACTIV12 ITY.—Any projection of activity in the in13 dustry or industries covered by the plan, 

14 including future covered employment and 

15 contribution levels, shall be based on infor16 mation provided by the plan sponsor acting 

17 reasonably and in good faith. 

18 ‘‘(iii) FUTURE CONTRIBUTION BASE

19 UNITS.— 

20 ‘‘(I) DECLINING CONTRIBUTION

21 BASE UNITS.—If recent experience of 

22 the plan has been declining contribu23 tion base units, the plan actuary may 

24 assume future contribution base units 

25 will continue to decline at the same 


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•S 5045 IS

1 annualized trend as over the 5 imme2 diately preceding plan years, unless 

3 the actuary determines that there 

4 have been significant changes that 

5 would make such assumption unrea6 sonable. 

7 ‘‘(II) FLAT OR INCREASING CON8 TRIBUTION BASE UNITS.—If recent 

9 experience of the plan has been in10 creasing, or neither increasing nor de11 creasing, contribution base units, the 

12 plan actuary may assume future con13 tribution base units will remain un14 changed indefinitely, unless the actu15 ary determines that there have been 

16 significant changes that would make 

17 such assumption unreasonable. 

18 ‘‘(iv) FUTURE CONTRIBUTION

19 RATES.— 

20 ‘‘(I) IN GENERAL.—Projections 

21 of contributions shall be based on the 

22 contribution rates consistent with the 

23 terms of collective bargaining and 

24 participation agreements currently in 

25 effect. 


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•S 5045 IS

1 ‘‘(II) FUTURE INCREASES IN AC2 CORDANCE WITH CORRECTION

3 PLANS.—If reasonable and applicable, 

4 the plan actuary may assume future 

5 increases in contribution rates con6 sistent with the adopted funding im7 provement plan, rehabilitation plan, or 

8 solvency plan. 

9 ‘‘(III) ADDITIONAL FACTORS.— 

10 Information provided by the plan 

11 sponsor to the plan actuary in setting 

12 the assumption regarding future in13 creases in contribution rates shall 

14 take into account the ability of the 

15 participating employers to make con16 tributions at the scheduled rates over 

17 time, considering relevant factors such 

18 as projected industry activity, the fi19 nancial strength of participating em20 ployers, market competition, and the 

21 scheduled contribution rate to the 

22 plan relative to the overall wage pack23 age. 

24 ‘‘(D) ASSUMPTIONS FOR DEVELOPING

25 SCHEDULES.—All schedules under any funding 


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•S 5045 IS

1 improvement plan, rehabilitation plan, or sol2 vency plan must be developed based on the 

3 same set of actuarial assumptions unless it 

4 would be unreasonable to do so, taking into ac5 count the anticipated impact of the schedules 

6 on participant behavior and employer participa7 tion.’’. 

8 (2) ADDITIONS TO FORM 5500 SCHEDULE MB.— 

9 Subparagraph (B) of section 305(b)(5) of such Act 

10 (29 U.S.C. 1085(b)(5)), as redesignated and amend11 ed by this section, is further amended by adding at 

12 the end the following new clause: 

13 ‘‘(vi) ADDITIONAL ATTACHMENTS.— 

14 The plan actuary shall attach to the cer15 tification required under subparagraph 

16 (A)— 

17 ‘‘(I) documentation supporting 

18 the certification of status under sub19 paragraph (A)(i), including projec20 tions of the funding standard account, 

21 funded percentage, and solvency of 

22 the plan, 

23 ‘‘(II) a clear description of the 

24 key assumptions used in performing 

25 the projections, including investment 


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•S 5045 IS

1 returns, contribution base units, and 

2 contribution rates, 

3 ‘‘(III) a 5-year history of con4 tributions, including contribution base 

5 units, average contribution rates, and 

6 withdrawal liability payments, and a 

7 comparison of such contribution base 

8 units, rates, and payments to projec9 tions made by the plan, and 

10 ‘‘(IV) an alternate projection of 

11 the funding standard account, funded 

12 percentage, and solvency, based on the 

13 following assumptions: 

14 ‘‘(aa) Annual future invest15 ment returns on plan assets 

16 equal the actuarial interest rate 

17 assumption minus 1 percent. 

18 ‘‘(bb) Future contribution 

19 base units projected using a 

20 trend equal to the lesser of— 

21 ‘‘(AA) the annualized 

22 trend of actual contribution 

23 base units over the 5 pre24 ceding plan years, and 


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•S 5045 IS

1 ‘‘(BB) no change in fu2 ture contribution base units. 

3 ‘‘(cc) No increases in future 

4 contribution rates beyond those 

5 consistent with the collective bar6 gaining agreements and partici7 pation agreements in effect for 

8 the plan year. 

9 ‘‘(dd) The withdrawal from 

10 the plan of the employer which 

11 has contributed the greatest total 

12 amount of contributions over the 

13 5 preceding plan years, if such 

14 employer has contributed at least 

15 10 percent of the total contribu16 tions to the plan over such 5 plan 

17 years and such employer has a 

18 below investment grade credit 

19 rating (but only if obtaining the 

20 credit rating of such employer is 

21 not an undue burden). 

22 ‘‘(ee) If such credit rating 

23 cannot be obtained without 

24 undue burden, the withdrawal of 

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1 uted the greatest total amount of 

2 contributions over the 5 pre3 ceding plan years, if such em4 ployer has contributed at least 10 

5 percent of the total contributions 

6 to the plan over such 5 plan 

7 years without regard to collection 

8 of any withdrawal liability. 

9 ‘‘(ff) If no employer has con10 tributed at least 10 percent of 

11 the total contributions to the 

12 plan over the 5 preceding plan 

13 years, the withdrawal of the em14 ployer which contributed the 

15 greatest total amount of con16 tributions for the current plan 

17 year, without regard to collection 

18 of any withdrawal liability, unless 

19 the employer contributed less 

20 than 1 percent of the total con21 tributions to the plan for such 

22 plan year. 

23 ‘‘(gg) Other assumptions 

24 consistent with the projection 


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•S 5045 IS

1 based on the actuary’s best esti2 mate assumptions.’’. 

3 (3) CONFORMING AMENDMENTS.— 

4 (A) Section 305(b)(5)(B)(i) of such Act 

5 (29 U.S.C. 1085(b)(5)(B)(i)), as redesignated 

6 by this section, is amended by striking ‘‘as7 sumptions’’ and inserting ‘‘assumptions meeting 

8 the requirements of subsection (n)(11)’’. 

9 (B) Section 305(b)(5)(A)(vi) of such Act 

10 (29 U.S.C. 1085(b)(5)(A)(vi), as amended by 

11 this section and section 321, is further amended 

12 by striking ‘‘reasonable actuarial assumptions’’ 

13 and inserting ‘‘assumptions meeting the re14 quirements of subsection (n)(11)’’. 

15 (C) Paragraph (3) of section 305(d) of 

16 such Act (29 U.S.C. 1085(d)), as amended by 

17 subsection (g), is further amended by striking 

18 ‘‘reasonable actuarial assumptions’’ and insert19 ing ‘‘assumptions meeting the requirements of 

20 subsection (n)(11)’’. 

21 (D) Clause (i) of section 305(f)(3)(A) of 

22 such Act (29 U.S.C. 1085(f)(3)(A)), as amend23 ed by subsection (h), is further amended by 

24 striking ‘‘reasonable actuarial assumptions’’ 


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1 and inserting ‘‘assumptions meeting the re2 quirements of subsection (n)(11)’’. 

3 (E) Section 305(h)(3) of such Act (29 

4 U.S.C. 1085(h)(3)), as added by subsection (d), 

5 is amended by striking ‘‘reasonable actuarial 

6 assumptions’’ and inserting ‘‘assumptions meet7 ing the requirements of subsection (n)(11)’’. 

8 (j) CONFORMING AMENDMENTS RELATING TO PRE9 MIUMS.—Paragraph (10) of section 4006(a) of such Act 

10 (29 U.S.C. 1306(a)), as added by this Act, is amended— 

11 (1) by striking ‘‘305(b)(7)’’ in subparagraph 

12 (B)(iii) thereof and inserting ‘‘305(b)(4)’’, 

13 (2) by striking ‘‘critical and declining’’ in sub14 paragraph (B)(iii) thereof and inserting ‘‘declining’’, 

15 and 

16 (3) by striking ‘‘305(f)(9)’’ in subparagraph (C) 

17 and inserting ‘‘305(h)(8)’’. 

18 (k) CONFORMING AMENDMENTS RELATING TO COM19 POSITE AND LEGACY PLANS.— 

20 (1) Sections 203(a)(3)(E)(ii), 204(b)(1)(B)(i), 

21 204(b)(1)(H)(v), and 204(g)(1) of the Employee Re22 tirement Income Security Act of 1974 (29 U.S.C. 

23 1053(a)(3)(E)(ii), 1054(b)(1)(B)(i), 

24 1054(b)(1)(H)(v), and 1054(g)(1)), as amended by 

25 title V, are each further amended by striking 


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1 ‘‘305(f)’’ each place it appears and inserting 

2 ‘‘305(h)(8)’’. 

3 (2) Sections 304(b)(10), 805(d)(2)(D), and 

4 805(d)(4) of such Act, as added by title V, are each 

5 amended by striking ‘‘endangered or critical’’ and 

6 inserting ‘‘endangered, critical, or declining’’. 

7 (3) Section 801(b)(1) of such Act, as so added, 

8 is amended by striking ‘‘endangered or critical’’ both 

9 places it appears and inserting ‘‘endangered, critical, 

10 or declining’’. 

11 (4) Sections 801(b)(1), 801(b)(5)(B), 

12 805(b)(1)(A), and 805(e)(3) of such Act, as so 

13 added, are each amended by striking ‘‘305(b)(4)’’ 

14 and inserting ‘‘305(b)(5)’’. 

15 (5) Sections 801(b)(5)(B) and 805(b)(1)(A) of 

16 such Act, as so added, are each amended by striking 

17 ‘‘endangered or critical’’ and inserting ‘‘endangered, 

18 critical, or declining’’. 

19 (6) Section 802(b)(1) of such Act, as so added, 

20 is amended by striking ‘‘and’’ at the end of subpara21 graph (B), by striking the period at the end of sub22 paragraph (C) and inserting ‘‘; and’’, and by adding 

23 at the end the following new subparagraph: 


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1 ‘‘(D) consistent with the principles of sub2 paragraphs (B), (C), and (D) of section 

3 305(n)(11).’’. 

4 (7) Sections 802(b)(5) and 805(d)(2)(A) of 

5 such Act, as so added, are each amended by striking 

6 ‘‘305(b)(4)(B)’’ and inserting ‘‘305(b)(5)(B)’’. 

7 (8) Section 803(a)(2)(D) of such Act, as so 

8 added, is amended by striking ‘‘305(f)(9)(D)(vi)’’ 

9 and inserting ‘‘305(h)(8)(D)(vi)’’. 

10 (9) Section 803(a)(3) of such Act, as so added, 

11 is amended by striking ‘‘305(f)(8)’’ and inserting 

12 ‘‘305(m)(1)(D)’’. 

13 (10) Section 805(d)(2)(D) of such Act, as so 

14 added and amended, is further amended by striking 

15 ‘‘funding improvement or rehabilitation plan’’ and 

16 inserting ‘‘funding improvement, rehabilitation, or 

17 solvency plan’’. 

18 (l) ADDITIONAL CONFORMING AMENDMENTS.— 

19 (1) Section 502(c) of the Employee Retirement 

20 Income Security Act of 1974 (29 U.S.C. 1132(c)) is 

21 amended— 

22 (A) in paragraph (7)(B), as added by sec23 tion 322, by striking ‘‘305(b)(4)(D)’’ and in24 serting ‘‘305(b)(5)(D)’’, and 


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1 (B) in paragraph (14), as so added and as 

2 redesignated by section 501— 

3 (i) by striking ‘‘305(b)(4)(D)’’ in sub4 paragraph (A) and inserting 

5 ‘‘305(b)(5)(D)’’, and 

6 (ii) by striking ‘‘305(b)(4)’’ in sub7 paragraph (B) and inserting ‘‘305(b)(5)’’. 

8 (2) Section 4003(g) of such Act (29 U.S.C. 

9 1303(g)), as added by section 321, is amended by 

10 striking ‘‘section 305(b)(4)(A)’’ and inserting ‘‘sec11 tion 305(b)(5)(A)’’. 

12 (3) Section 4042(b)(2)(B)(i) of such Act (29 

13 U.S.C. 1342(b)(2)(B)), as added by section 301, is 

14 amended— 

15 (A) by striking ‘‘critical and declining’’ and 

16 inserting ‘‘declining’’, and 

17 (B) by striking ‘‘(7)’’ and inserting ‘‘(4)’’. 

18 (m) EFFECTIVE DATE.—Except as otherwise pro19 vided in subsection (a)(7), the amendments made by this 

20 section shall apply to plan years beginning after December 

21 31, 2020. 

22 (n) CREDIT RATINGS.—No requirement of section 

23 939 or 939A of the Dodd-Frank Wall Street Reform and 

24 Consumer Protection Act (124 Stat. 1887; 15 U.S.C. 


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1 78o–7 note) shall apply with respect to the amendment 

2 made by subsection (i)(2). 

3 SEC. 213. TRANSITION RULES. 

4 (a) PLANS IN ENDANGERED STATUS.— 

5 (1) IN GENERAL.—In the case of a multiem6 ployer plan which is in endangered status as of the 

7 date of the enactment of this Act, and is on schedule 

8 as of such date to meet the applicable benchmarks 

9 in accordance with the plan’s funding improvement 

10 plan— 

11 (A) ELECTION TO APPLY LAW BEFORE

12 AMENDMENT.—The plan sponsor may elect to 

13 remain in endangered status and to apply sec14 tion 432 of the Internal Revenue Code of 1986 

15 and section 305 of the Employee Retirement 

16 Income Security Act of 1974 (29 U.S.C. 1085) 

17 as in effect before January 1, 2021, to the 

18 plan, but only if the plan continues to meet 

19 such applicable benchmarks. 

20 (B) TRANSITIONAL EFFECTIVE DATE.—If 

21 the plan sponsor does not make the election 

22 under paragraph (1)— 

23 (i) section 432 of such Code and sec24 tion 305 of such Act as in effect on Janu25 ary 1, 2021, shall apply to such plan as of 


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1 the first day of the first plan year begin2 ning after December 31, 2020, and 

3 (ii) section 432(d)(1)(B)(i)(II) of such 

4 Code and section 305(d)(1)(B)(i)(II) of 

5 such Act, as amended by sections 211(g) 

6 and 212(g), respectively, shall each apply 

7 to such plan by substituting ‘‘the date of 

8 the enactment of the Chris Allen Multiem9 ployer Pension Recapitalization and Re10 form Act of 2020’’ for ‘‘the first day of the 

11 plan year in which the plan enters endan12 gered status’’. 

13 In the case of any plan with respect to which 

14 the plan sponsor makes the election under sub15 paragraph (A) but which fails to continue to 

16 meet the applicable benchmarks under the 

17 funding improvement plan, this subparagraph 

18 shall apply to such plan by substituting ‘‘the 

19 plan year after the first plan year for which the 

20 plan fails to meet the applicable benchmarks’’ 

21 for ‘‘the first plan year beginning after Decem22 ber 31, 2020’’. 

23 (2) PLANS ENTERING ENDANGERED STATUS

24 BETWEEN ENACTMENT AND JANUARY 1, 2021.—In 

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1 dangered status after the date of the enactment of 

2 this Act and before January 1, 2021— 

3 (A) section 432 of such Code and section 

4 305 of such Act as in effect on January 1, 

5 2021, shall apply to such plan as if already in 

6 effect, and 

7 (i) section 432(d)(1)(B)(i)(II) of such 

8 Code and section 305(d)(1)(B)(i)(II) of 

9 such Act, as amended by sections 211(g) 

10 and 212(g), respectively, shall each apply 

11 to such plan by substituting ‘‘the date of 

12 the enactment of the Chris Allen Multiem13 ployer Pension Recapitalization and Re14 form Act of 2020’’ for ‘‘the first day of the 

15 plan year in which the plan enters endan16 gered status’’. 

17 (b) PLANS IN CRITICAL OR CRITICAL AND DECLIN18 ING STATUS.— 

19 (1) IN GENERAL.—In the case of a qualified 

20 critical multiemployer plan— 

21 (A) ELECTION TO APPLY LAW BEFORE

22 AMENDMENT.—The plan sponsor may elect to 

23 remain in critical or critical and declining sta24 tus and to apply section 432 of the Internal 

25 Revenue Code of 1986 and section 305 of the 


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1 Employee Retirement Income Security Act of 

2 1974 (29 U.S.C. 1085) as in effect before Jan3 uary 1, 2021, to the plan, but only if the plan 

4 continues to make scheduled progress under the 

5 plan’s rehabilitation plan. 

6 (B) TRANSITIONAL EFFECTIVE DATE.—If 

7 the plan sponsor does not make the election 

8 under paragraph (1)— 

9 (i) section 432 of such Code and sec10 tion 305 of such Act as in effect on Janu11 ary 1, 2021, shall apply to such plan as of 

12 the first day of the first plan year begin13 ning after December 31, 2020, 

14 (ii) section 432(f)(1)(B)(i)(II) of such 

15 Code and section 305(f)(1)(B)(i)(II) of 

16 such Act, as amended by sections 211(h) 

17 and 212(h), respectively, shall each apply 

18 to such plan by substituting ‘‘the date of 

19 the enactment of the Chris Allen Multiem20 ployer Pension Recapitalization and Re21 form Act of 2020’’ for ‘‘the first day of the 

22 plan year in which the plan enters critical 

23 status’’, and 

24 (iii) section 432(h)(1)(B)(i)(II) of 

25 such Code and section 305(h)(1)(B)(i)(II) 


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1 of such Act, as amended by sections 

2 211(d)(3) and 212(d)(3), respectively, shall 

3 each apply to such plan by substituting 

4 ‘‘the date of the enactment of the Chris 

5 Allen Multiemployer Pension Recapitaliza6 tion and Reform Act of 2020’’ for ‘‘the 

7 first day of the plan year in which the plan 

8 enters declining status’’. 

9 In the case of any plan with respect to which 

10 the plan sponsor makes the election under sub11 paragraph (A) but which fails to continue to 

12 make scheduled progress under the rehabilita13 tion plan, this subparagraph shall apply to such 

14 plan by substituting ‘‘the plan year after the 

15 first plan year for which the plan fails to make 

16 scheduled progress under the rehabilitation 

17 plan’’ for ‘‘the first plan year beginning after 

18 December 31, 2020’’. 

19 (C) APPLICATION OF PREMIUM AMEND20 MENTS.—A plan with respect to which the plan 

21 sponsor makes the election under subparagraph 

22 (A) shall be treated as described in clause (iii) 

23 of section 4006(a)(10)(B) of the Employee Re24 tirement Income Security Act of 1974 until 

25 such time as the plan emerges from critical and 


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1 declining status pursuant to section 432 of such 

2 Code and section 305 of such Act as in effect 

3 before January 1, 2021. 

4 (2) PLANS ENTERING CRITICAL OR CRITICAL

5 AND DECLINING STATUS BETWEEN ENACTMENT AND

6 JANUARY 1, 2021.—In the case of a multiemployer 

7 plan which enters critical or critical and declining 

8 status after the date of the enactment of this Act 

9 and before January 1, 2021— 

10 (A) section 432 of such Code and section 

11 305 of such Act as in effect on January 1, 

12 2021, shall apply to such plan as if already in 

13 effect, 

14 (B) section 432(f)(1)(B)(i)(II) of such 

15 Code and section 305(f)(1)(B)(i)(II) of such 

16 Act, as amended by sections 211(h) and 212(h), 

17 respectively, shall each apply to such plan by 

18 substituting ‘‘the date of the enactment of the 

19 Chris Allen Multiemployer Pension Recapital20 ization and Reform Act of 2020’’ for ‘‘the first 

21 day of the plan year in which the plan enters 

22 critical status’’, and 

23 (C) section 432(h)(1)(B)(i)(II) of such 

24 Code and section 305(h)(1)(B)(i)(II) of such 

25 Act, as amended by sections 211(d)(3) and 


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1 212(d)(3), respectively, shall each apply to such 

2 plan by substituting ‘‘the date of the enactment 

3 of the Chris Allen Multiemployer Pension Re4 capitalization and Reform Act of 2020’’ for 

5 ‘‘the first day of the plan year in which the 

6 plan enters declining status’’. 

7 (3) QUALIFIED CRITICAL MULTIEMPLOYER

8 PLAN.—For purposes of this subsection, the term 

9 ‘‘qualified critical multiemployer plan’’ means a mul10 tiemployer plan which is in critical or critical and 

11 declining status as of the date of the enactment of 

12 this Act, and is making scheduled progress under 

13 the plan’s rehabilitation plan, but only if the reha14 bilitation plan (as in effect without regard to the 

15 amendments made by this Act) targets emergence 

16 from critical status not later than 3 years after the 

17 end of the rehabilitation period as in effect with re18 spect to such plan on the date of the enactment of 

19 this Act. 

20 (c) ELECTION.— 

21 (1) IN GENERAL.—An election under subsection 

22 (a)(1)(A) or (b)(1)(A) shall be made— 

23 (A) by notice to the Secretary of the 

24 Treasury and the Pension Benefit Guaranty 


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1 Corporation, in such manner as the Secretary 

2 of the Treasury may prescribe, and 

3 (B) not later than the due date for the no4 tice of endangered status or critical status for 

5 the first plan year beginning after December 

6 31, 2020. 

7 (2) PERIODS AFTER ELECTION.—After making 

8 a timely election under paragraph (1)— 

9 (A) the plan sponsor shall annually review 

10 and update (if necessary) the plan’s funding 

11 improvement plan or rehabilitation plan, and 

12 (B) the plan actuary shall certify annually 

13 whether the plan is making scheduled progress 

14 under the funding improvement plan or reha15 bilitation plan. 

16 (d) DEFINITIONS.—Any term used in this section 

17 which is also used in section 432 of the Internal Revenue 

18 Code of 1986 or section 305 of the Employee Retirement 

19 Income Security Act of 1974 (before or after the amend20 ments made by this Act) shall have the same meaning as 

21 when used in such sections. 


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1 PART II—PROVISIONS RELATING TO PLAN 

2 MERGERS 

3 SEC. 221. PROVISIONS RELATING TO PLAN MERGERS AND 

4 CONSOLIDATIONS. 

5 (a) IN GENERAL.—Section 4231(c) of the Employee 

6 Retirement Income Security Act of 1974 (29 U.S.C. 

7 1411(c)) is amended— 

8 (1) by striking ‘‘section 406(a) or section 

9 406(b)(2)’’ and inserting ‘‘section 404, 406(a), or 

10 406(b)(2)’’, and 

11 (2) by adding at the end the following: ‘‘The 

12 corporation shall prescribe safe harbor provisions 

13 whereby a merger of multiemployer plans or the 

14 transfer of assets or liabilities between multiem15 ployer plans, where one of the plans is in critical and 

16 declining status pursuant to section 305 and one is 

17 in stable or unrestricted status pursuant to such sec18 tion, shall be deemed to satisfy the requirements of 

19 this section. Notwithstanding the preceding sen20 tences, the implementation of such merger or trans21 fer shall be subject to the rules of section 404.’’. 

22 (b) CALCULATION OF WITHDRAWAL LIABILITY.— 

23 (1) IN GENERAL.—Section 4231 of the Em24 ployee Retirement Income Security Act of 1974 (29 

25 U.S.C. 1411) is amended by adding at the end the 

26 following new subsection: 


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1 ‘‘(f) CALCULATION OF WITHDRAWAL LIABILITY

2 POST-MERGER.—The corporation shall prescribe the 

3 methods and conditions under which employers contrib4 uting to plans which are in stable or unrestricted status 

5 under section 305 when such plan merges with a plan in 

6 declining status under such section will not be allocated 

7 the unfunded vested benefits of the plan in declining sta8 tus (as determined immediately before the merger).’’. 

9 (2) EFFECTIVE DATE.—The amendment made 

10 by this section shall apply to plan mergers after De11 cember 31, 2020. 

12 SEC. 222. CLARIFICATION OF PBGC FINANCIAL ASSISTANCE 

13 FOR PLAN MERGERS AND PARTITIONS. 

14 (a) IN GENERAL.—Paragraph (2) of section 4231(e) 

15 of the Employee Retirement Income Security Act of 1974 

16 (29 U.S.C. 1411(e)) is amended— 

17 (1) by striking the semicolon in subparagraph 

18 (B)(ii) and inserting ‘‘, determined solely with re19 spect to the liabilities and assets of the plan which 

20 was in critical and declining status prior to the 

21 merger; and’’; and 

22 (2) by striking subparagraph (C) and redesig23 nating subparagraph (D) as subparagraph (C). 

24 (b) PARTITIONS.—Section 4233(b) of the Employee 

25 Retirement Income Security Act of 1974 (29 U.S.C. 


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1 1413(b)) is amended by striking paragraph (4), by adding 

2 ‘‘and’’ at the end of paragraph (3)(B), and by redesig3 nating paragraph (5) as paragraph (4). 

4 (c) CONFORMING AMENDMENT RELATING TO STA5 TUS CHANGES.—Section 4231(e)(2)(B)(ii) of the Em6 ployee Retirement Income Security Act of 1974 (29 

7 U.S.C. 1411(e)(2)(B)(ii)), as amended by subsection (a), 

8 is further amended by striking ‘‘critical and declining’’ 

9 and inserting ‘‘declining’’. 

10 (d) EFFECTIVE DATES.— 

11 (1) IN GENERAL.—The amendments made by 

12 subsections (a) and (b) shall apply to plan mergers 

13 and partitions taking effect after the date of the en14 actment of this Act. 

15 (2) CONFORMING AMENDMENT.—The amend16 ment made by subsection (c) shall apply to plan 

17 mergers taking effect in plan years beginning after 

18 December 31, 2020. 

19 SEC. 223. RESTORATION NOT REQUIRED FOR CERTAIN 

20 MERGERS. 

21 (a) AMENDMENT OF INTERNAL REVENUE CODE OF

22 1986.—Clause (ii) of section 432(f)(9)(C) of the Internal 

23 Revenue Code of 1986, as redesignated by section 211(a) 

24 and as in effect before the amendments made by section 


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1 211 other than subsection (a) thereof, is amended by add2 ing at the end the following flush language: 

3 ‘‘If, during the period of the benefit sus4 pension, the plan merges with a plan which 

5 is in stable or unrestricted status, nothing 

6 in this clause shall be construed to require 

7 the plan formed by the merger to restore 

8 the suspension of benefits.’’. 

9 (b) AMENDMENT OF ERISA.—Clause (ii) of section 

10 305(f)(9)(C) of the Employee Retirement Income Security 

11 Act of 1974 (29 U.S.C. 1085(f)(9)(C)), as redesignated 

12 by section 212(a) and as in effect before the amendments 

13 made by section 212 other than subsection (a) thereof, 

14 is amended by adding at the end the following flush lan15 guage: 

16 ‘‘If, during the period of the benefit sus17 pension, the plan merges with a plan which 

18 is in stable or unrestricted status, nothing 

19 in this clause shall be construed to require 

20 the plan formed by the merger to restore 

21 the suspension of benefits.’’. 

22 (c) EFFECTIVE DATE.—The amendments made by 

23 subsections (a) and (b) shall apply to plan mergers taking 

24 effect after the date of the enactment of this Act. 


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1 PART III—WITHDRAWAL LIABILITY REFORM 

2 SEC. 231. WITHDRAWAL LIABILITY REFORM. 

3 (a) WITHDRAWAL LIABILITY DEFINITION.—Section 

4 4201(b)(1) of the Employee Retirement Income Security 

5 Act of 1974 (29 U.S.C. 1381(b)(1)) is amended to read 

6 as follows: 

7 ‘‘(1) DETERMINATION OF WITHDRAWAL LIABIL8 ITY.— 

9 ‘‘(A) IN GENERAL.—The withdrawal liabil10 ity of an employer to a plan is the applicable 

11 amount determined under subparagraph (B), 

12 adjusted— 

13 ‘‘(i) first, in the case of a partial with14 drawal, in accordance with section 4206; 

15 ‘‘(ii) second, by any de minimis reduc16 tion applicable under section 4209; and 

17 ‘‘(iii) third, in accordance with section 

18 4225. 

19 ‘‘(B) APPLICABLE AMOUNT.—The applica20 ble amount determined under this subpara21 graph is the lesser of— 

22 ‘‘(i) the amount determined under 

23 section 4211 to be the allocable amount of 

24 unfunded vested benefits; or 

25 ‘‘(ii) the present value of a series of 

26 20 equal annual payments in the amount 


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1 determined with respect to the employer 

2 under section 4219(c)(1)(C). 

3 In the case of an employer withdrawing from a 

4 multiemployer plan described in subparagraph 

5 (C), clause (i) shall be applied by substituting 

6 ‘25’ for ‘20’. 

7 ‘‘(C) PLANS FOR WHICH 25 PAYMENTS RE8 QUIRED.— 

9 ‘‘(i) IN GENERAL.—A multiemployer 

10 plan is described in this subparagraph if 

11 the plan— 

12 ‘‘(I) is certified to be in declining 

13 status (or, for plan years prior to 

14 2021, in critical or declining status) 

15 for the plan year in which the employ16 er’s withdrawal occurs; or 

17 ‘‘(II) terminates as described in 

18 section 4041A(a) or 4042. 

19 ‘‘(ii) SPECIAL RULE FOR TERMI20 NATIONS.—Clause (i)(II) shall apply to 

21 each employer who withdraws from a plan 

22 during a period of 3 consecutive plan years 

23 that includes the withdrawal of every em24 ployer from the plan, or the cessation of 

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1 tribute under the plan, as described in sec2 tion 4041A(a)(2). For purposes of this 

3 clause, withdrawal by an employer from a 

4 plan, during a period of 3 consecutive plan 

5 years within which substantially all the em6 ployers who have an obligation to con7 tribute under the plan withdraw, shall be 

8 presumed to be a withdrawal pursuant to 

9 an agreement or arrangement, unless the 

10 employer proves otherwise by a preponder11 ance of the evidence. 

12 ‘‘(D) PRESENT VALUE.—For purposes of 

13 subparagraph (B)(ii), the present value of the 

14 annual payments shall be determined based on 

15 the assumptions used for the most recent actu16 arial valuation for the plan used to determine 

17 unfunded past service liability for funding pur18 poses.’’. 

19 (b) DE MINIMIS RULE.—Section 4209 of the Em20 ployee Retirement Income Security Act of 1974 (29 

21 U.S.C. 1389) is amended— 

22 (1) in subsection (a)— 

23 (A) in the matter preceding paragraph (1), 

24 by striking ‘‘unfunded vested benefits allocable 

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1 ble amount determined under section 

2 4201(b)(1)(B) with respect to’’; 

3 (B) in paragraph (2), by striking 

4 ‘‘$50,000’’ and inserting ‘‘$100,000’’; and 

5 (C) in the flush text following paragraph 

6 (2)— 

7 (i) by striking ‘‘the unfunded vested 

8 benefits’’ and inserting ‘‘such applicable 

9 amount’’; and 

10 (ii) by striking ‘‘$100,000’’ and in11 serting ‘‘$200,000’’; 

12 (2) in subsection (b)— 

13 (A) in the matter preceding paragraph (1), 

14 by striking ‘‘amount determined under section 

15 4211’’ and inserting ‘‘applicable amount deter16 mined under section 4201(b)(1)(B) with respect 

17 to an employer’’; 

18 (B) in paragraph (2)(B), by striking 

19 ‘‘$100,000’’ and inserting ‘‘$250,000’’; and 

20 (C) in the flush text at the end— 

21 (i) by striking ‘‘the amount deter22 mined under section 4211 for’’ and insert23 ing ‘‘such applicable amount with respect 

24 to’’; and 


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1 (ii) by striking ‘‘$150,000’’ and in2 serting ‘‘$500,000’’. 

3 (c) PAYMENT OF WITHDRAWAL LIABILITY.—Section 

4 4219(c)(1) of the Employee Retirement Income Security 

5 Act of 1974 (29 U.S.C. 1399(c)(1)) is amended— 

6 (1) by striking so much of paragraph (1) as 

7 precedes subparagraph (C) and inserting: 

8 ‘‘(1)(A)(i) Subject to subparagraph (B), an employer 

9 shall pay its liability determined under section 4201(b)(1) 

10 in level annual payments determined under subparagraph 

11 (C) over the applicable period of years determined under 

12 clause (ii), calculated as if the first payment were made 

13 on the first day of the plan year following the plan year 

14 in which the withdrawal occurs and as if each subsequent 

15 payment were made on the first day of each subsequent 

16 plan year. Actual payment shall commence in accordance 

17 with paragraph (2). 

18 ‘‘(ii) For purposes of clause (i), if the applicable 

19 amount used under section 4201(b)(1)(A) is the amount 

20 determined— 

21 ‘‘(I) under section 4201(b)(1)(B)(i), the appli22 cable period of years is the period of years necessary 

23 to amortize such amount in level annual payments 

24 determined under subparagraph (C), or 


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1 ‘‘(II) under section 4201(b)(1)(B)(ii), the appli2 cable period of years is 20 years (25 years if the 

3 plan is described in section 4201(b)(1)(C)). 

4 ‘‘(iii) For purposes of clause (ii)(I), the determination 

5 of the amortization period described in clause (i) shall be 

6 based on the assumptions used for the most recent actu7 arial valuation for the plan to determine unfunded past 

8 service liability for funding purposes. 

9 ‘‘(B)(i) If any adjustment is required to the with10 drawal liability amount by reason of clause (i), (ii), or (iii) 

11 of section 4210(b)(1)(A), modifications shall be made 

12 under subparagraph (A) to reflect such adjustments in ac13 cordance with this subparagraph and in such manner as 

14 the corporation shall provide. 

15 ‘‘(ii) In the case of a partial withdrawal described in 

16 section 4205(a), the amount of each annual payment shall 

17 be the product of— 

18 ‘‘(I) the amount determined under subpara19 graph (C) (determined without regard to this sub20 paragraph), multiplied by 

21 ‘‘(II) the fraction determined under section 

22 4206(a)(2). 

23 ‘‘(iii) In the case of a de minimis reduction under 

24 section 4209, the period of years described in subpara25 graph (A)(ii)(I) shall be adjusted so that the withdrawal 


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•S 5045 IS

1 liability amount, as reduced under such section, is amor2 tized in level annual payments determined under subpara3 graph (C).’’; 

4 (2) in subparagraph (C)— 

5 (A) in clause (i)(I)— 

6 (i) by striking ‘‘3’’ and inserting ‘‘5’’; 

7 and 

8 (ii) by striking ‘‘10’’ and inserting 

9 ‘‘20’’; and 

10 (B) by striking clause (iii); and 

11 (3) by striking subparagraphs (D) and (E) and 

12 inserting the following: 

13 ‘‘(D)(i) In the case of a subsequent partial with14 drawal or a complete withdrawal that was preceded by one 

15 or more partial withdrawals, the amount of the annual 

16 payment with respect to the subsequent partial withdrawal 

17 or complete withdrawal shall be reduced by the amounts 

18 of the payments determined under subparagraph (B)(ii) 

19 with respect to each of the preceding partial withdrawals. 

20 ‘‘(ii) The amount of any reductions described in 

21 clause (i) shall be phased out consistent with the method 

22 and period of time being used by the plan to allocate un23 funded vested benefits under section 4211. 

24 ‘‘(iii) The corporation may prescribe regulations as 

25 may be necessary to provide for proper adjustments in the 


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1 reduction in the payment amount under clauses (i) and 

2 (ii).’’. 

3 (d) AMENDMENT OF PLAN.—Section 4211(c)(1) of 

4 the Employee Retirement Income Security Act of 1974 

5 (29 U.S.C. 1391(c)(1)) is amended— 

6 (1) by inserting ‘‘(A)’’ after ‘‘(c)(1)’’, 

7 (2) by striking ‘‘(b) or (d). A plan’’ and insert8 ing ‘‘(b) or (d). 

9 ‘‘(B) A multiemployer plan’’, and 

10 (3) by striking ‘‘, to the extent provided’’ and 

11 all that follows and inserting ‘‘to provide— 

12 ‘‘(i) that the amount of the unfunded vested 

13 benefits allocable to an employer that withdraws 

14 from the plan is an amount determined under para15 graph (5) of this subsection, rather than under sub16 section (b), or 

17 ‘‘(ii) to the extent provided in regulations pre18 scribed by the corporation, that the amount of the 

19 unfunded vested benefits allocable to an employer 

20 not described in section 4203(b)(1)(A) shall be de21 termined in a manner different from that provided 

22 in subsection (b).’’. 


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1 TITLE III—PLAN GOVERNANCE, 

2 DISCLOSURE, AND OTHER RE3 FORMS FOR MULTIEMPLOYER 

4 DEFINED BENEFIT PENSION 

5 PLANS 

6 Subtitle A—Plan Governance and 

7 Operations for Multiemployer 

8 Plans 

9 SEC. 301. INDEPENDENT TRUSTEES. 

10 Section 4042 of the Employee Retirement Income Se11 curity Act of 1974 (29 U.S.C. 1342) is amended— 

12 (1) in subsection (a)— 

13 (A) in the matter preceding paragraph (1), 

14 by striking ‘‘a plan’’ and inserting ‘‘a single-em15 ployer or multiemployer plan’’; 

16 (B) in paragraph (3)— 

17 (i) by inserting ‘‘with respect to a sin18 gle-employer plan’’ before the comma; and 

19 (ii) by striking ‘‘or’’; 

20 (C) in paragraph (4), by striking the pe21 riod at the end and inserting ‘‘, or’’; and 

22 (D) by inserting after paragraph (4) the 

23 following: 

24 ‘‘(5) in the case of a multiemployer plan— 


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1 ‘‘(A) such plan is an eligible multiemployer 

2 plan as defined in section 4233A which fails to 

3 apply for a special partition under such section, 

4 or 

5 ‘‘(B) termination of the plan would protect 

6 the interests of participants and beneficiaries.’’; 

7 (2) in subsection (b)— 

8 (A) in paragraph (2)— 

9 (i) in subparagraph (A)— 

10 (I) by inserting ‘‘or remove’’ 

11 after ‘‘appoint’’, 

12 (II) by inserting ‘‘or removal’’ 

13 after ‘‘appointment’’, and 

14 (III) by striking ‘‘and’’ at the 

15 end; 

16 (ii) by striking subparagraph (B) and 

17 inserting the following: 

18 ‘‘(B) upon the petition of the corporation, 

19 the appropriate United States district court 

20 shall appoint a trustee proposed by the corpora21 tion for— 

22 ‘‘(i) any multiemployer plan which is 

23 in critical status or critical and declining 

24 status (as defined in paragraph (3) or (7), 

25 respectively, of section 305(b)), if the court 


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1 finds the appointment of the trustee would 

2 help prevent an abuse of the multiemployer 

3 insurance program or any unreasonable in4 crease in the liability of the fund, and 

5 ‘‘(ii) any multiemployer plan which 

6 has terminated under section 4041A(a), 

7 unless a party opposing appointment of a 

8 trustee shows that such appointment would 

9 be materially adverse to the interests of 

10 the plan participants and beneficiaries in 

11 the aggregate, and’’; and 

12 (iii) by adding at the end the fol13 lowing: 

14 ‘‘(C) in the case of a special partition of a 

15 plan under section 4233A, the corporation may 

16 remove and appoint trustees subject to the pro17 visions of paragraph (5).’’; and 

18 (B) by adding at the end the following: 

19 ‘‘(4)(A) A trustee appointed to a multiemployer plan 

20 under paragraph (2)(B), (2)(C), or (3) shall report plan 

21 activity to the corporation, in the form and manner pro22 vided for in the judicial or administrative order or agree23 ment appointing the trustee. A trustee so appointed may 

24 remain a trustee engaged in the ongoing governance of 


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1 a multiemployer plan whether or not the corporation initi2 ates plan termination proceedings under subsection (c). 

3 ‘‘(B) Notwithstanding plan or trust documents to the 

4 contrary, in addition to any powers described in subsection 

5 (d), the order or agreement appointing a trustee under 

6 paragraph (2)(B), (2)(C), or (3) may include authority for 

7 the corporation to monitor and oversee plan activity and 

8 to review and approve trustee decisions related to funding 

9 or financial activities of the plan. 

10 ‘‘(5)(A) The corporation may remove any trustees of 

11 an original plan that received a special partition under sec12 tion 4233A if the corporation determines that the actions 

13 of such trustees unreasonably increased the risk of loss 

14 to participants in the plan or to the corporation, and may 

15 appoint 1 or more new trustees as replacements. 

16 ‘‘(B) The corporation may appoint a special master, 

17 which may be an employee of the corporation, the duties 

18 of whom shall be disclosed to participants and contrib19 uting employers in accordance with regulations to be 

20 issued by the corporation, with respect to each original 

21 plan, as defined in section 4233A. Such special master 

22 shall be invited to every meeting of the plan’s board of 

23 trustees or any committees thereof; shall be furnished any 

24 requested actuarial or financial information by the plan 

25 or agents thereof; shall receive all creditable complaints 


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1 or other information from participants, beneficiaries, em2 ployers, plan employees and contractors, and any other 

3 person regarding the plan’s operations; and shall furnish 

4 the corporation with semiannual reports of the board’s ac5 tivities, the plan’s performance, and the potential liabil6 ities of the corporation with respect to the plan. The trust7 ees shall provide the special master with not less than 30 

8 days notice prior to taking any action that could increase 

9 the risk of loss to the corporation, and the special master 

10 shall report such potential action to the corporation within 

11 5 days of receiving such notice from the trustees.’’; 

12 (3) in subsection (c)(1)— 

13 (A) in the second sentence, by striking 

14 ‘‘subsection (b)’’ and inserting ‘‘subsection 

15 (b)(1)’’; and 

16 (B) in the third sentence, by inserting ‘‘, 

17 including, in the case of a multiemployer plan, 

18 by requiring the withdrawal of employers’’ be19 fore the period; and 

20 (4) in subsection (d)(1)— 

21 (A) in subparagraph (A), by striking ‘‘sub22 section (b)’’ in the second sentence and insert23 ing ‘‘subsection (b)(1)’’; and 


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1 (B) in subparagraph (B), by striking ‘‘If’’ 

2 and inserting ‘‘If a trustee is appointed under 

3 paragraph (2) or (3) of subsection (b), or if’’. 

4 SEC. 302. INVESTIGATORY AUTHORITY. 

5 Section 4003(a) of the Employee Retirement Income 

6 Security Act of 1974 (29 U.S.C. 1303(a)) is amended to 

7 read as follows: 

8 ‘‘(a)(1) The corporation may, in its discretion, inves9 tigate any facts, conditions, practices, or matters as the 

10 corporation determines necessary or proper to aid in— 

11 ‘‘(A) the enforcement of any provision of this 

12 title or any rule or regulation thereunder; 

13 ‘‘(B) the prescribing of rules and regulations 

14 under this title; or 

15 ‘‘(C) evaluating the corporation’s liability or po16 tential liability with respect to a plan. 

17 ‘‘(2) Any information or documentary material sub18 mitted to the corporation pursuant to this section, if clear19 ly designated by the person making the submission as con20 fidential (on each page in the case of a document, and 

21 in the file name in the case of a digital file), shall be ex22 empt from disclosure under section 552 of title 5, United 

23 States Code, and no such information or documentary ma24 terial may be made public, except as may be relevant to 


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1 any administrative or judicial action or proceeding, includ2 ing an informal rulemaking. 

3 ‘‘(3) The corporation may require or permit any per4 son to submit a statement in writing, under oath or other5 wise as the corporation determines, as to all facts and cir6 cumstances concerning the matter to be investigated. 

7 ‘‘(4) The corporation shall annually audit a statis8 tically significant number of plans terminating under sec9 tion 4041(b) to determine whether participants and bene10 ficiaries have received their benefit commitments and 

11 whether section 4050(a) has been satisfied. Each audit 

12 shall include a statistically significant number of partici13 pants and beneficiaries.’’. 

14 SEC. 303. CONDITIONS ON FINANCIAL ASSISTANCE. 

15 (a) IN GENERAL.—Section 4261(b) of the Employee 

16 Retirement Income Security Act of 1974 (29 U.S.C. 

17 1431(b)) is amended— 

18 (1) in paragraph (1), by striking the period at 

19 the end and inserting ‘‘, or to prevent an abuse of 

20 the multiemployer insurance program or any unrea21 sonable increase in the liability of the fund. The cor22 poration shall provide the plan sponsor written no23 tice of each condition on financial assistance and a 

24 written explanation of its determination. If the spon25 sor fails to satisfy timely a condition on financial asVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00263 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 sistance, the corporation may withhold financial as2 sistance until the condition is satisfied.’’; and 

3 (2) by adding at the end the following: 

4 ‘‘(3) The conditions described in paragraph (1) may 

5 include an offset for the guaranteed benefits of a partici6 pant whose benefit in excess of the benefit guaranteed 

7 under this title is provided by another plan, or in the case 

8 of a plan that has not yet terminated, the cessation of 

9 future accruals or a requirement that contribution 

10 amounts or annual withdrawal liability payment amounts 

11 under section 4219 be maintained as if the employer had 

12 withdrawn on the date of insolvency.’’. 

13 (b) CONFORMING AMENDMENT.—Section 4261(a) of 

14 the Employee Retirement Income Security Act of 1974 

15 (29 U.S.C. 1431(a)) is amended by striking ‘‘section 

16 4245(f) or section 4281(d)’’ and inserting ‘‘section 

17 4245(e) or 4281’’. 

18 SEC. 304. EXCISE TAX ON EXCESS COMPENSATION OF COV19 ERED EMPLOYEES OF PARTITIONED MULTI20 EMPLOYER PLANS. 

21 (a) IN GENERAL.—Chapter 43 of the Internal Rev22 enue Code of 1986 is amended by adding at the end the 

23 following new section: 


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1 ‘‘SEC. 4980I. TAX ON EXCESS COMPENSATION OF COVERED 

2 EMPLOYEES OF PARTITIONED MULTIEM3 PLOYER PLANS. 

4 ‘‘(a) TAX IMPOSED.—In the case of an applicable 

5 multiemployer plan, there is hereby imposed an excise tax 

6 for each plan year in an amount equal to the product of— 

7 ‘‘(1) the rate of tax under section 11 for tax8 able years beginning in the calendar year in which 

9 such plan year begins, and 

10 ‘‘(2) so much of the remuneration paid by the 

11 applicable multiemployer plan for the plan year with 

12 respect to employment of any covered employee as 

13 exceeds $500,000. 

14 For purposes of the preceding sentence, remuneration 

15 shall be treated as paid when there is no substantial risk 

16 of forfeiture (within the meaning of section 457(f)(3)(B)) 

17 of the rights to such remuneration. 

18 ‘‘(b) LIABILITY FOR TAX.—The applicable multiem19 ployer plan shall be liable for the tax imposed under sub20 section (a). 

21 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur22 poses of this section— 

23 ‘‘(1) APPLICABLE MULTIEMPLOYER PLAN.— 

24 The term ‘applicable multiemployer plan’ means any 

25 multiemployer plan which is an original plan (as de26 fined in section 4233A(d)(3) of the Employee ReVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00265 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 tirement Income Security Act of 1974) with respect 

2 to a multiemployer plan which was partitioned pur3 suant to an order by the Pension Benefit Guaranty 

4 Corporation under section 4233A of such Act. 

5 ‘‘(2) COVERED EMPLOYEE.—The term ‘covered 

6 employee’ means any employee (including any 

7 former employee) of an applicable multiemployer 

8 plan if the employee— 

9 ‘‘(A) is one of the 5 highest compensated 

10 employees of the plan for the plan year, or 

11 ‘‘(B) was a covered employee of the organi12 zation (or any predecessor) for any preceding 

13 plan year beginning after the date of the enact14 ment of this section. 

15 ‘‘(3) REMUNERATION.—The term ‘remunera16 tion’ means wages (as defined in section 3401(a)). 

17 ‘‘(d) REGULATIONS.—The Secretary shall prescribe 

18 such regulations as may be necessary to prevent avoidance 

19 of the tax under this section, including regulations to pre20 vent avoidance of such tax through the performance of 

21 services other than as an employee or by providing com22 pensation through a pass-through or other entity (includ23 ing a related entity) to avoid such tax.’’. 


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1 (b) CONFORMING AMENDMENT.—The table of sec2 tions for chapter 43 of the Internal Revenue Code of 1986 

3 is amended by adding at the end the following new item: 

‘‘Sec. 4980I. Tax on excess compensation of covered employees of partitioned 

multiemployer plans.’’. 

4 (c) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to plan years beginning after the 

6 date of enactment of this Act. 

7 Subtitle B—Reportable Events for 

8 Multiemployer Plans 

9 SEC. 311. REPORTABLE EVENTS. 

10 (a) ADDITIONAL REPORTABLE EVENTS.— 

11 (1) IN GENERAL.—Section 4043(c) of the Em12 ployee Retirement Income Security Act of 1974 (29 

13 U.S.C. 1343(c)) is amended by striking ‘‘or’’ at the 

14 end of paragraph (12), by redesignating paragraph 

15 (13) as paragraph (17), and by inserting after para16 graph (12) the following new paragraphs: 

17 ‘‘(13) when the plan sponsor of a multiemployer 

18 plan, or such sponsor’s delegate, convenes or other19 wise takes action to adopt any amendment (or ac20 cepts any collective bargaining agreement) that 

21 would exclude newly hired employees from participa22 tion in the plan, or any amendment (or agreement) 

23 that would substantially reduce the rate of future 


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1 benefit accruals or the contribution rate for any par2 ticipants under the plan; 

3 ‘‘(14) when— 

4 ‘‘(A) the plan sponsor of a multiemployer 

5 plan, or such sponsor’s delegate, convenes or 

6 otherwise takes action to adopt; or 

7 ‘‘(B) the plan sponsor receives notice 

8 under subsection (f) or otherwise becomes 

9 aware that the bargaining parties have nego10 tiated an agreement to adopt; 

11 a new pension plan, including any plan a trust form12 ing part of which is a qualified trust under section 

13 401(a) of the Internal Revenue Code of 1986 and 

14 any plan treated as a welfare plan by reason of sec15 tion 3(2)(B)(ii), the expected participants of which 

16 are expected to substantially overlap with the active 

17 participants in a preexisting plan; 

18 ‘‘(15) when an event pertaining to a multiem19 ployer plan occurs that is prescribed by the corpora20 tion in regulations, if the event materially jeopard21 izes the security of participant benefits or the finan22 cial condition of the plan, or is likely to increase the 

23 risk of loss to the corporation; 


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1 ‘‘(16) when a multiemployer plan has, or will 

2 foreseeably have, only one trustee or no trustees on 

3 its board; or’’. 

4 (2) NOTIFICATION BY BARGAINING PARTIES.— 

5 Section 4043 of such Act (29 U.S.C. 1343) is 

6 amended by redesignating subsection (f) as sub7 section (g), and by inserting after subsection (e) the 

8 following new subsection: 

9 ‘‘(f) NOTIFICATION BY BARGAINING PARTIES.—Not 

10 later than 60 days prior to the adoption of a new pension 

11 plan described in subsection (c)(14), the bargaining par12 ties shall notify the plan sponsor of the negotiation of an 

13 agreement to adopt such plan.’’. 

14 (3) CONFORMING AMENDMENT.—Section 

15 4043(b)(3) of such Act (29 U.S.C. 1343(b)(3)) is 

16 amended by striking ‘‘(13)’’ and inserting ‘‘(17)’’. 

17 (b) APPLICATION TO PLANS.— 

18 (1) IN GENERAL.—Section 4043(a) of the Em19 ployee Retirement Income Security Act of 1974 (29 

20 U.S.C. 1343(a)) is amended by inserting ‘‘, plan 

21 sponsor (in the case of a multiemployer plan),’’ after 

22 ‘‘plan administrator’’. 

23 (2) NOTIFICATION THAT EVENT IS ABOUT TO

24 OCCUR.—Section 4043(b) of such Act (29 U.S.C. 

25 1343(b)) is amended— 


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1 (A) in paragraph (1)— 

2 (i) by redesignating subparagraphs 

3 (A) and (B) as clauses (i) and (ii), respec4 tively, and by moving such clauses 2 ems 

5 to the right; 

6 (ii) by striking ‘‘shall be applicable to 

7 a contributing sponsor’’ and inserting 

8 ‘‘shall be applicable— 

9 ‘‘(A) to any plan sponsor of a multiem10 ployer plan; and 

11 ‘‘(B) to any contributing sponsor’’; and 

12 (iii) in the last sentence, by striking 

13 ‘‘subparagraph (B)’’ and inserting ‘‘clause 

14 (ii)’’; 

15 (B) by striking ‘‘This subsection’’ in para16 graph (2) and inserting ‘‘In the case of a sin17 gle-employer plan, this subsection’’; 

18 (C) by striking ‘‘any contributing sponsor’’ 

19 in paragraph (4) and inserting ‘‘any plan spon20 sor of a multiemployer plan or any contributing 

21 sponsor’’; 

22 (D) by redesignating paragraph (4), as so 

23 amended, as paragraph (5); and 

24 (E) by inserting after paragraph (3) the 

25 following new paragraph: 


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1 ‘‘(4) No later than 60 days prior to an event 

2 described in paragraph (13), (14)(A), (15), or (16) 

3 of subsection (c), the plan sponsor of a multiem4 ployer plan shall notify the corporation that the 

5 event is about to occur.’’. 

6 (c) TECHNICAL CORRECTIONS.— 

7 (1) Section 4045(c)(1) of the Employee Retire8 ment Income Security Act of 1974 (29 U.S.C. 

9 1345(c)(1)) is amended by striking ‘‘4043(b)(7)’’ 

10 and inserting ‘‘4043(c)(7)’’. 

11 (2) Section 4065(2) of such Act (29 U.S.C. 

12 1365(2)) is amended by striking ‘‘4043(b)’’ and in13 serting ‘‘4043(c)’’. 

14 (d) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to reportable events (as defined 

16 in section 4043(c) of the Employee Retirement Income Se17 curity Act of 1974 (29 U.S.C. 1343(c))) occurring after 

18 the date of the enactment of this Act. 

19 Subtitle C—Funding Notices to 

20 Participants in Multiemployer 

21 Plans 

22 SEC. 321. IMPROVED MULTIEMPLOYER PLAN DISCLOSURE. 

23 (a) PLAN FUNDING NOTICES.—Section 101(f) of the 

24 Employee Retirement Income Security Act of 1974 (29 

25 U.S.C. 1021(f)) is amended— 


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1 (1) in paragraph (2)(B)— 

2 (A) in clause (iv), by striking ‘‘setting 

3 forth’’ and inserting ‘‘describing how a person 

4 may obtain information regarding’’; 

5 (B) by striking clauses (v) and (vi); 

6 (C) by redesignating clauses (vii) through 

7 (xi) as clauses (v) through (ix), respectively; 

8 (D) in clause (vi), as so redesignated— 

9 (i) by striking ‘‘(I) in the case of’’ and 

10 inserting ‘‘in the case of’’; 

11 (ii) by striking ‘‘, or’’ and inserting a 

12 comma; and 

13 (iii) by striking subclause (II); and 

14 (E) by amending clause (vii), as so redesig15 nated, to read as follows: 

16 ‘‘(vii)(I) in the case of a single-em17 ployer plan, a general description of the 

18 benefits under the plan which are eligible 

19 to be guaranteed by the Pension Benefit 

20 Guaranty Corporation, and an explanation 

21 of the limitations on the guarantee and the 

22 circumstances under which such limitations 

23 apply, and 

24 ‘‘(II) in the case of a multiemployer 

25 plan, a statement that eligible benefits are 


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•S 5045 IS

1 guaranteed by the Pension Benefit Guar2 anty Corporation, and a statement of how 

3 to obtain both a general description of the 

4 benefits under the plan which are eligible 

5 to be guaranteed by the Pension Benefit 

6 Guaranty Corporation and an explanation 

7 of the limitations on the guarantee and the 

8 circumstances under which such limitations 

9 apply,’’; and 

10 (2) in paragraph (4)(C)— 

11 (A) by striking ‘‘(C) may be provided’’ and 

12 inserting ‘‘(C)(i) subject to clause (ii), may be 

13 provided’’; 

14 (B) by striking the period and inserting ‘‘; 

15 and’’; and 

16 (C) by adding at the end the following: 

17 ‘‘(ii) in the case of such a notice provided 

18 to the Pension Benefit Guaranty Corporation, 

19 shall be in an electronic format in such manner 

20 prescribed in regulations of such Corporation.’’. 

21 (b) DISCLOSURES BY PLANS REGARDING STATUS.— 

22 (1) AMENDMENTS TO EMPLOYEE RETIREMENT

23 INCOME SECURITY ACT OF 1974.—Section 305(b)(4) 

24 of the Employee Retirement Income Security Act of 

25 1974 (29 U.S.C. 1085(b)(4)), as redesignated by 


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1 section 212(a) and as in effect before the amend2 ments made by section 212 other than subsection 

3 (a) thereof, is further amended— 

4 (A) in the paragraph heading, by striking 

5 ‘‘BY PLAN ACTUARY’’ and inserting ‘‘AND RE6 PORT’’; 

7 (B) by amending subparagraph (A) to read 

8 as follows: 

9 ‘‘(A) IN GENERAL.—Not later than the 

10 90th day of each plan year of a multiemployer 

11 plan, the plan sponsor shall file, in accordance 

12 with regulations prescribed by the ERISA agen13 cies, a report that contains— 

14 ‘‘(i) documentation from the plan ac15 tuary certifying to the ERISA agencies 

16 and to the plan sponsor— 

17 ‘‘(I) whether or not the plan is in 

18 unrestricted or stable status for such 

19 plan year, whether or not the plan is 

20 in endangered status for such plan 

21 year and whether or not the plan is or 

22 will be in critical status for such plan 

23 year or any of the 5 succeeding plan 

24 years, 


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1 ‘‘(II) in the case of a plan which 

2 is in a funding improvement or reha3 bilitation period, whether or not the 

4 plan is making the scheduled progress 

5 in meeting the requirements of its 

6 funding improvement or rehabilitation 

7 plan and, if not, a summary of the 

8 primary reasons the plan is not mak9 ing the scheduled progress, 

10 ‘‘(III) the funded percentage of 

11 the plan determined as of the first 

12 day of the current plan year and the 

13 value of assets and liabilities used to 

14 calculate such funded percentage, 

15 ‘‘(IV) a projection of the funding 

16 standard account on a year-by-year 

17 basis for the current plan year and 

18 the 14 succeeding plan years and a 

19 statement of the actuarial assump20 tions for such projections, and 

21 ‘‘(V)(aa) subject to item (bb), a 

22 projection of the cash flow of the plan 

23 and actuarial assumptions for the cur24 rent plan year and 14 succeeding plan 

25 years, and 


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1 ‘‘(bb) in the case in which it is 

2 certified that a multiemployer plan is 

3 or will be in endangered or critical 

4 status for a plan year, the projection 

5 of the cash flow of the plan and actu6 arial assumptions for the current year 

7 and 29 succeeding plan years, 

8 ‘‘(ii) as of the last day of the prior 

9 plan year, a good faith determination of— 

10 ‘‘(I) the fair market value of the 

11 assets of the plan, 

12 ‘‘(II) the number of participants 

13 who are— 

14 ‘‘(aa) retired or separated 

15 from service and are receiving 

16 benefits, 

17 ‘‘(bb) retired or separated 

18 participants entitled to future 

19 benefits, and 

20 ‘‘(cc) active participants 

21 under the plan, 

22 ‘‘(III) the total value of all bene23 fits paid during the prior plan year, 

24 ‘‘(IV) the total value of all con25 tributions and withdrawal liability 


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1 payments made to the plan during the 

2 prior plan year, and 

3 ‘‘(V) the total value of all invest4 ment gains or losses during the prior 

5 plan year, 

6 ‘‘(iii) a description of any material 

7 changes during the previous plan year to 

8 the rates at which participants accrue ben9 efits or the rate at which employers con10 tribute, 

11 ‘‘(iv) a copy of any funding improve12 ment plan or rehabilitation plan, and any 

13 update thereto or modification thereof, 

14 that was adopted under this section prior 

15 to the filing of the report for the current 

16 plan year in accordance with this subpara17 graph and, if applicable, after the filing of 

18 the report required by this subparagraph 

19 for the prior plan year, 

20 ‘‘(v) in the case of any plan amend21 ment, scheduled benefit increase or reduc22 tion, or other known event taking effect in 

23 the current plan year and having a mate24 rial effect on plan liabilities or assets for 

25 the year (as defined in regulations by the 


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•S 5045 IS

1 ERISA agencies), an explanation of the 

2 amendment, scheduled increase or reduc3 tion, or event, and a projection to the end 

4 of such plan year of the effect of the 

5 amendment, scheduled increase or reduc6 tion, or event on plan liabilities, 

7 ‘‘(vi) in the case of a multiemployer 

8 plan certified to be in critical status for 

9 which the plan sponsor has determined 

10 that, based on reasonable actuarial as11 sumptions and upon exhaustion of all rea12 sonable measures, the plan cannot reason13 ably be expected to emerge from critical 

14 status by the end of the rehabilitation pe15 riod, a description of all reasonable meas16 ures, whether or not such measures were 

17 implemented, and a summary of the con18 sideration of such measures, 

19 ‘‘(vii) a statement, containing the in20 formation available to the plan sponsor, 

21 describing— 

22 ‘‘(I) the withdrawal of any em23 ployer during the prior plan year and 

24 the percentage of total contributions 


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•S 5045 IS

1 made by that employer during the 

2 prior plan year, 

3 ‘‘(II) any material reduction in 

4 total contributions or withdrawal li5 ability payments of any employers and 

6 the reason for such reduction, and a 

7 comparison to contributions projected 

8 previously, 

9 ‘‘(III) any material reduction in 

10 the number of active plan participants 

11 and the reason for such reduction, 

12 and 

13 ‘‘(IV) the annual withdrawal li14 ability payment each withdrawn em15 ployer is obligated to pay to the plan 

16 for the plan year, whether that 

17 amount was collected by the plan (and 

18 if not, the amount that was collected), 

19 and the remaining years on the em20 ployer’s obligation to make withdrawal 

21 liability payments, and 

22 ‘‘(viii) such other information as may 

23 be required by the ERISA agencies by reg24 ulation.’’; 


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•S 5045 IS

1 (C) by striking subparagraph (C) and in2 serting the following: 

3 ‘‘(C) FORM AND MANNER.—The report re4 quired by subparagraph (A) shall be filed elec5 tronically in accordance with regulations pre6 scribed by the ERISA agencies.’’; 

7 (D) in subparagraph (D)— 

8 (i) by redesignating clauses (ii), (iii), 

9 (iv), and (v) as clauses (iii), (iv), (v), and 

10 (vi), respectively; 

11 (ii) by inserting after clause (i) the 

12 following: 

13 ‘‘(ii) PLANS IN ENDANGERED OR

14 CRITICAL STATUS.—If it is certified under 

15 subparagraph (A) that a multiemployer 

16 plan is or will be in endangered or critical 

17 status, the plan sponsor shall include in 

18 the notice under clause (i)— 

19 ‘‘(I) a statement describing how 

20 a person may obtain a copy of the 

21 plan’s funding improvement or reha22 bilitation plan, as appropriate, adopt23 ed under this section and the actu24 arial and financial data that demVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00280 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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•S 5045 IS

1 onstrate any action taken by the plan 

2 toward fiscal improvement, 

3 ‘‘(II) a summary of any funding 

4 improvement or rehabilitation plan, 

5 and any update thereto or modifica6 tion thereof, adopted under this sec7 tion prior to the furnishing of such 

8 notice, 

9 ‘‘(III) a summary of the rules 

10 governing insolvency, including the 

11 limitations on benefit payments, and 

12 ‘‘(IV) a general description of the 

13 benefits under the plan which are eli14 gible to be guaranteed by the Pension 

15 Benefit Guaranty Corporation and an 

16 explanation of the limitations on the 

17 guarantee and the circumstances 

18 under which such limitations apply.’’; 

19 and 

20 (iii) in clause (v), as so redesig21 nated— 

22 (I) by striking ‘‘The Secretary of 

23 the Treasury, in consultation with the 

24 Secretary’’ and inserting ‘‘The ERISA 

25 agencies’’; and 


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•S 5045 IS

1 (II) by striking ‘‘(ii) and (iii)’’ 

2 and inserting ‘‘(ii), (iii), and (iv)’’; 

3 and 

4 (E) by adding at the end the following: 

5 ‘‘(E) DESIGNATION AND COORDINATION.— 

6 The ERISA agencies shall— 

7 ‘‘(i) designate one ERISA agency to 

8 receive the report described in subpara9 graph (A) on behalf of all the ERISA 

10 agencies, which shall each have full access 

11 to such report; and 

12 ‘‘(ii) consult with each other and de13 velop rules, regulations, practices, and 

14 forms, which to the extent appropriate for 

15 the efficient administration of the provi16 sions of this paragraph are designed to re17 place duplication of effort, duplication of 

18 reporting, conflicting or overlapping re19 quirements, and the burden of compliance 

20 with such provisions by plan administra21 tors and plan sponsors. 

22 ‘‘(F) ERISA AGENCIES.—In this para23 graph, the term ‘ERISA agencies’ means the 

24 Secretary, the Secretary of the Treasury, and 

25 the Pension Benefit Guaranty Corporation.’’. 


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•S 5045 IS

1 (2) AMENDMENTS TO 1986 CODE.—Section 

2 432(b)(4) of the Internal Revenue Code of 1986, as 

3 redesignated by section 211(a) and as in effect be4 fore the amendments made by section 211 other 

5 than subsection (a) thereof, is further amended— 

6 (A) in the paragraph heading, by striking 

7 ‘‘BY PLAN ACTUARY’’ and inserting ‘‘AND RE8 PORT’’; 

9 (B) by amending subparagraph (A) to read 

10 as follows: 

11 ‘‘(A) IN GENERAL.—Not later than the 

12 90th day of each plan year of a multiemployer 

13 plan, the plan sponsor shall file, in accordance 

14 with regulations prescribed by the ERISA agen15 cies, a report that contains— 

16 ‘‘(i) documentation from the plan ac17 tuary certifying to the ERISA agencies 

18 and to the plan sponsor— 

19 ‘‘(I) whether or not the plan is in 

20 unrestricted or stable status for such 

21 plan year, whether or not the plan is 

22 in endangered status for such plan 

23 year and whether or not the plan is or 

24 will be in critical status for such plan 


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•S 5045 IS

1 year or any of the 5 succeeding plan 

2 years, 

3 ‘‘(II) in the case of a plan which 

4 is in a funding improvement or reha5 bilitation period, whether or not the 

6 plan is making the scheduled progress 

7 in meeting the requirements of its 

8 funding improvement or rehabilitation 

9 plan and, if not, a summary of the 

10 primary reasons the plan is not mak11 ing the scheduled progress, 

12 ‘‘(III) the funded percentage of 

13 the plan determined as of the first 

14 day of the current plan year and the 

15 value of assets and liabilities used to 

16 calculate such funded percentage, 

17 ‘‘(IV) a projection of the funding 

18 standard account on a year-by-year 

19 basis for the current plan year and 

20 the 14 succeeding plan years and a 

21 statement of the actuarial assump22 tions for such projections, and 

23 ‘‘(V)(aa) subject to item (bb), a 

24 projection of the cash flow of the plan 

25 and actuarial assumptions for the curVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00284 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 rent plan year and 14 succeeding plan 

2 years, and 

3 ‘‘(bb) in the case in which it is 

4 certified that a multiemployer plan is 

5 or will be in endangered or critical 

6 status for a plan year, the projection 

7 of the cash flow of the plan and actu8 arial assumptions for the current year 

9 and 29 succeeding plan years, 

10 ‘‘(ii) as of the last day of the prior 

11 plan year, a good faith determination of— 

12 ‘‘(I) the fair market value of the 

13 assets of the plan, 

14 ‘‘(II) the number of participants 

15 who are— 

16 ‘‘(aa) retired or separated 

17 from service and are receiving 

18 benefits, 

19 ‘‘(bb) retired or separated 

20 participants entitled to future 

21 benefits, and 

22 ‘‘(cc) active participants 

23 under the plan, 

24 ‘‘(III) the total value of all bene25 fits paid during the prior plan year, 


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1 ‘‘(IV) the total value of all con2 tributions and withdrawal liability 

3 payments made to the plan during the 

4 prior plan year, and 

5 ‘‘(V) the total value of all invest6 ment gains or losses during the prior 

7 plan year, 

8 ‘‘(iii) a description of any material 

9 changes during the previous plan year to 

10 the rates at which participants accrue ben11 efits or the rate at which employers con12 tribute, 

13 ‘‘(iv) a copy of any funding improve14 ment plan or rehabilitation plan, and any 

15 update thereto or modification thereof, 

16 that was adopted under this section prior 

17 to the filing of the report for the current 

18 plan year in accordance with this subpara19 graph and, if applicable, after the filing of 

20 the report required by this subparagraph 

21 for the prior plan year, 

22 ‘‘(v) in the case of any plan amend23 ment, scheduled benefit increase or reduc24 tion, or other known event taking effect in 

25 the current plan year and having a mateVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00286 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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•S 5045 IS

1 rial effect on plan liabilities or assets for 

2 the year (as defined in regulations by the 

3 ERISA agencies), an explanation of the 

4 amendment, scheduled increase or reduc5 tion, or event, and a projection to the end 

6 of such plan year of the effect of the 

7 amendment, scheduled increase or reduc8 tion, or event on plan liabilities, 

9 ‘‘(vi) in the case of a multiemployer 

10 plan certified to be in critical status for 

11 which the plan sponsor has determined 

12 that, based on reasonable actuarial as13 sumptions and upon exhaustion of all rea14 sonable measures, the plan cannot reason15 ably be expected to emerge from critical 

16 status by the end of the rehabilitation pe17 riod, a description of all reasonable meas18 ures, whether or not such measures were 

19 implemented, and a summary of the con20 sideration of such measures, 

21 ‘‘(vii) a statement, containing the in22 formation available to the plan sponsor, 

23 describing— 

24 ‘‘(I) the withdrawal of any em25 ployer during the prior plan year and 


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•S 5045 IS

1 the percentage of total contributions 

2 made by that employer during the 

3 prior plan year, and a comparison to 

4 contributions projected previously, 

5 ‘‘(II) any material reduction in 

6 total contributions or withdrawal li7 ability payments of any employers and 

8 the reason for such reduction, 

9 ‘‘(III) any material reduction in 

10 the number of active plan participants 

11 and the reason for such reduction, 

12 and 

13 ‘‘(IV) the annual withdrawal li14 ability payment each withdrawn em15 ployer is obligated to pay to the plan 

16 for the plan year, whether that 

17 amount was collected by the plan (and 

18 if not, the amount that was collected), 

19 and the remaining years on the em20 ployer’s obligation to make withdrawal 

21 liability payments, and 

22 ‘‘(viii) such other information as may 

23 be required by the ERISA agencies by reg24 ulation.’’; 


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•S 5045 IS

1 (C) by striking subparagraph (C) and in2 serting the following: 

3 ‘‘(C) FORM AND MANNER.—The report re4 quired by subparagraph (A) shall be filed elec5 tronically in accordance with regulations pre6 scribed by the ERISA agencies.’’; 

7 (D) in subparagraph (D)— 

8 (i) by redesignating clauses (ii), (iii), 

9 (iv), and (v) as clauses (iii), (iv), (v), and 

10 (vi), respectively; 

11 (ii) by inserting after clause (i) the 

12 following: 

13 ‘‘(ii) PLANS IN ENDANGERED OR

14 CRITICAL STATUS.—If it is certified under 

15 subparagraph (A) that a multiemployer 

16 plan is or will be in endangered or critical 

17 status, the plan sponsor shall include in 

18 the notice under clause (i)— 

19 ‘‘(I) a statement describing how 

20 a person may obtain a copy of the 

21 plan’s funding improvement or reha22 bilitation plan, as appropriate, adopt23 ed under this section and the actu24 arial and financial data that demVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00289 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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•S 5045 IS

1 onstrate any action taken by the plan 

2 toward fiscal improvement, 

3 ‘‘(II) a summary of any funding 

4 improvement or rehabilitation plan, 

5 and any update thereto or modifica6 tion thereof, adopted under this sec7 tion prior to the furnishing of such 

8 notice, 

9 ‘‘(III) a summary of the rules 

10 governing insolvency, including the 

11 limitations on benefit payments, and 

12 ‘‘(IV) a general description of the 

13 benefits under the plan which are eli14 gible to be guaranteed by the Pension 

15 Benefit Guaranty Corporation and an 

16 explanation of the limitations on the 

17 guarantee and the circumstances 

18 under which such limitations apply.’’; 

19 and 

20 (iii) in clause (v), as so redesig21 nated— 

22 (I) by striking ‘‘The Secretary of 

23 the Treasury, in consultation with the 

24 Secretary’’ and inserting ‘‘The ERISA 

25 agencies’’; and 


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•S 5045 IS

1 (II) by striking ‘‘(ii) and (iii)’’ 

2 and inserting ‘‘(ii), (iii), and (iv)’’; 

3 and 

4 (E) by adding at the end the following: 

5 ‘‘(E) DESIGNATION AND COORDINATION.— 

6 The ERISA agencies shall— 

7 ‘‘(i) designate one ERISA agency to 

8 receive the report described in subpara9 graph (A) on behalf of all the ERISA 

10 agencies, which shall each have full access 

11 to such report; and 

12 ‘‘(ii) consult with each other and de13 velop rules, regulations, practices, and 

14 forms, which to the extent appropriate for 

15 the efficient administration of the provi16 sions of this paragraph are designed to re17 place duplication of effort, duplication of 

18 reporting, conflicting or overlapping re19 quirements, and the burden of compliance 

20 with such provisions by plan administra21 tors and plan sponsors. 

22 ‘‘(F) ERISA AGENCIES.—In this para23 graph, the term ‘ERISA agencies’ means the 

24 Secretary, the Secretary of Labor, and the Pen25 sion Benefit Guaranty Corporation.’’. 


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•S 5045 IS

1 (3) INVESTIGATIONS.—Section 4003 of the Em2 ployee Retirement Income Security Act of 1974 (29 

3 U.S.C. 1303) is amended by adding at the end the 

4 following: 

5 ‘‘(g) The corporation may investigate or review any 

6 facts, conditions, practices, or other matters it determines 

7 necessary or proper related to the actuarial certification 

8 and report by multiemployer plans under section 

9 305(b)(4)(A), or to obtain such information as any duly 

10 authorized committee or subcommittee of the Congress 

11 may request with respect to such plans. Any information 

12 or documentary material submitted to the corporation 

13 pursuant to this section, if clearly designated by the per14 son making the submission as confidential (on each page 

15 in the case of a document, and in the file name in the 

16 case of a digital file), shall be exempt from disclosure 

17 under section 552 of title 5, United States Code, and no 

18 such information or documentary material may be made 

19 public, except as may be relevant to any administrative 

20 or judicial action or proceeding, including an informal 

21 rulemaking.’’. 

22 SEC. 322. PENALTIES FOR FAILURE TO PROVIDE NOTICES. 

23 (a) IN GENERAL.—Section 502(c) of the Employee 

24 Retirement Income Security Act of 1974 (29 U.S.C. 1132) 

25 is amended— 


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1 (1) in paragraph (7)— 

2 (A) by striking ‘‘(7) The Secretary’’ and 

3 inserting ‘‘(7)(A) The Secretary’’; and 

4 (B) by adding at the end the following: 

5 ‘‘(B) The Secretary may assess a civil penalty against 

6 a plan sponsor of up to $110 per day from the date of 

7 the plan administrator’s or sponsor’s failure or refusal to 

8 provide the relevant notices under section 101(f) or section 

9 305(b)(4)(D) to a recipient other than the Secretary or 

10 the Pension Benefit Guaranty Corporation. For purposes 

11 of this paragraph, each violation with respect to any single 

12 recipient shall be treated as a separate violation.’’; and 

13 (2) by adding at the end the following: 

14 ‘‘(13)(A) The Secretary may assess a civil pen15 alty against any plan sponsor of up to $2,140 per 

16 day from the date of the plan sponsor’s failure to 

17 file with the Secretary or the Pension Benefit Guar18 anty Corporation the notice required under section 

19 305(b)(4)(D) or with the Pension Benefit Guaranty 

20 Corporation the notice required under section 

21 101(f). 

22 ‘‘(B) The Secretary may assess a civil penalty 

23 against any plan sponsor of up to $1,100 per day 

24 from the date of the plan sponsor’s failure to file 

25 with the ERISA agency designated in accordance 


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•S 5045 IS

1 with subparagraph (E) of section 305(b)(4) the re2 port under subparagraph (A) of such section.’’. 

3 (b) CONFORMING AMENDMENT.—Section 502(a)(6) 

4 of such Act is amended by striking ‘‘or (9)’’ and inserting 

5 ‘‘(9), (10), or (13)’’. 

6 Subtitle D—Consistency of 

7 Criminal Penalties 

8 SEC. 331. CONSISTENCY OF CRIMINAL PENALTIES. 

9 Part I of title 18, United States Code, is amended— 

10 (1) in section 664, in the first undesignated 

11 paragraph, by striking ‘‘five years’’ and inserting 

12 ‘‘10 years’’; 

13 (2) in section 1027, by striking ‘‘five years’’ 

14 and inserting ‘‘10 years’’; and 

15 (3) in section 1954, in the undesignated matter 

16 following paragraph (4), by striking ‘‘three years’’ 

17 and inserting ‘‘10 years’’. 

18 TITLE IV—OTHER MULTIEM19 PLOYER PLAN REFORMS 

20 SEC. 401. CLARIFICATION OF FIDUCIARY DUTY OF RETIREE 

21 REPRESENTATIVE WHO IS A TRUSTEE. 

22 (a) AMENDMENT OF INTERNAL REVENUE CODE OF

23 1986.—Subclause (III) of section 432(f)(9)(B)(v) of the 

24 Internal Revenue Code of 1986, as redesignated by section 

25 211(a) and as in effect before the amendments made by 


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1 section 211 other than subsection (a) thereof, is amended 

2 by striking the period and inserting ‘‘, or to any other 

3 duties performed by such person pursuant to such per4 son’s role as a plan trustee.’’. 

5 (b) AMENDMENT OF EMPLOYEE RETIREMENT IN6 COME SECURITY ACT OF 1974.—Subclause (III) of sec7 tion 305(f)(9)(B)(v) of the Employee Retirement Income 

8 Security Act of 1974 (29 U.S.C. 1085(f)(9)(B)(v)), as re9 designated by section 212(a) and as in effect before the 

10 amendments made by section 212 other than subsection 

11 (a) thereof, is amended by striking the period and insert12 ing ‘‘, or to any other duties performed by such person 

13 pursuant to such person’s role as a plan trustee.’’. 

14 (c) EFFECTIVE DATE.—The amendments made by 

15 this section shall take effect on the date of the enactment 

16 of this Act. 

17 SEC. 402. SAFE HARBORS. 

18 (a) AMENDMENTS TO INTERNAL REVENUE CODE OF

19 1986.— 

20 (1) EQUITABLE DISTRIBUTION OF BENEFIT

21 SUSPENSIONS.—Clause (vi) of section 432(f)(9)(D) 

22 of the Internal Revenue Code of 1986, as redesig23 nated by section 211(a) and as in effect before the 

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1 section (a) thereof, is amended by adding at the end 

2 the following flush language: 

3 ‘‘For purposes of the preceding sentence, a 

4 suspension of benefits in the form of a flat 

5 percentage reduction in benefits which is 

6 applied in the same manner to all partici7 pants and beneficiaries (before application 

8 of clauses (ii) and (iii)) shall be treated as 

9 being equitably distributed across the par10 ticipant and beneficiary population.’’. 

11 (2) APPLICATION ASSUMPTIONS.—Clause (v) of 

12 section 432(f)(9)(G) of such Code, as so redesig13 nated and in effect, is amended— 

14 (A) by striking ‘‘STANDARD FOR ACCEPT15 ING’’ in the heading and inserting ‘‘STANDARDS

16 FOR ASSUMPTIONS AND ACCEPTING’’, and 

17 (B) by striking ‘‘In evaluating’’ and insert18 ing ‘‘The Secretary, in consultation with the 

19 Pension Benefit Guaranty Corporation and the 

20 Secretary of Labor, shall promulgate regula21 tions regarding the actuarial assumptions that 

22 plans may use for purposes of the application 

23 under this subparagraph. Such regulations shall 

24 create safe harbors regarding assumptions for 

25 future rate of investment returns, future indusVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00296 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 try activity and contribution base units, mor2 tality, and other assumptions as determined by 

3 the Secretary, and shall describe the situations 

4 in which actuarial assumptions may change 

5 during review of an application without the 

6 withdrawal and resubmission of the application. 

7 In evaluating’’. 

8 (b) AMENDMENTS TO EMPLOYEE RETIREMENT IN9 COME SECURITY ACT OF 1974.— 

10 (1) EQUITABLE DISTRIBUTION OF BENEFIT

11 SUSPENSIONS.—Clause (vi) of section 305(f)(9)(D) 

12 of the Employee Retirement Income Security Act of 

13 1974 (29 U.S.C. 1085(f)(9)(D)), as redesignated by 

14 section 212(a) and as in effect before the amend15 ments made by section 212 other than subsection 

16 (a) thereof, is amended by adding at the end the fol17 lowing flush language: 

18 ‘‘For purposes of the preceding sentence, a 

19 suspension of benefits in the form of a flat 

20 percentage reduction in benefits which is 

21 applied in the same manner to all partici22 pants and beneficiaries (before application 

23 of clauses (ii) and (iii)) shall be treated as 

24 being equitably distributed across the par25 ticipant and beneficiary population.’’. 


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1 (2) APPLICATION ASSUMPTIONS.—Clause (v) of 

2 section 305(f)(9)(G) of such Act (29 U.S.C. 

3 1085(f)(9)(G)), as so redesignated and in effect, is 

4 amended— 

5 (A) by striking ‘‘STANDARD FOR ACCEPT6 ING’’ in the heading and inserting ‘‘STANDARDS

7 FOR ASSUMPTIONS AND ACCEPTING’’, and 

8 (B) by striking ‘‘In evaluating’’ and insert9 ing ‘‘The Secretary of the Treasury, in con10 sultation with the Pension Benefit Guaranty 

11 Corporation and the Secretary of Labor, shall 

12 promulgate regulations regarding the actuarial 

13 assumptions that plans may use for purposes of 

14 the application under this subparagraph. Such 

15 regulations shall create safe harbors regarding 

16 assumptions for future rate of investment re17 turns, future industry activity and contribution 

18 base units, mortality, and other assumptions as 

19 determined by the Secretary, and shall describe 

20 the situations in which actuarial assumptions 

21 may change during review of an application 

22 without the withdrawal and resubmission of the 

23 application. In evaluating’’. 

24 (c) EFFECTIVE DATES.— 


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1 (1) IN GENERAL.—The amendments made by 

2 subsections (a)(1) and (b)(1) shall apply to suspen3 sions of benefits taking effect after the date of the 

4 enactment of this Act. 

5 (2) APPLICATIONS.—The amendments made by 

6 subsections (a)(2) and (b)(2) shall apply to applica7 tions submitted after the date of the enactment of 

8 this Act. 

9 SEC. 403. CLARIFICATION OF NOTICE AND COMMENT PROC10 ESS. 

11 (a) AMENDMENTS TO INTERNAL REVENUE CODE OF

12 1986.— 

13 (1) NOTICE TO PARTICIPANTS.—Subparagraph 

14 (F) of section 432(f)(9) of the Internal Revenue 

15 Code of 1986, as redesignated by section 211(a) and 

16 as in effect before the amendments made by section 

17 211 other than subsection (a) thereof, is amended by 

18 adding at the end the following new clause: 

19 ‘‘(vi) DE MINIMIS CHANGES.—Notice 

20 under clause (i) is not required in the case 

21 of a change to a notice previously issued, 

22 and an application previously submitted 

23 under subparagraph (G), if such change 

24 would have a de minimis effect on the sus25 pension of benefits proposed, such as a 


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1 change of 5 percent or less (whether in2 crease or decrease) of a participant’s post3 suspension benefits.’’. 

4 (2) SOLICITATION OF COMMENTS.— 

5 (A) DE MINIMIS CHANGES.—Clause (ii) of 

6 section 432(f)(9)(G) of such Code, as so redes7 ignated and in effect, is amended by adding at 

8 the end the following: ‘‘The preceding sentences 

9 shall not apply in the case of a resubmission of 

10 an application previously submitted if such 

11 change would have a de minimis effect on the 

12 suspension of benefits proposed.’’. 

13 (B) EXTENSION OF PERIOD FOR CORREC14 TION OF DEFECT.—Clause (iii) of section 

15 432(f)(9)(G) of such Code, as so redesignated 

16 and in effect, is amended by inserting after the 

17 second sentence the following: ‘‘If the only fail18 ure with respect to an application is a failure 

19 to provide adequate notice to participants under 

20 subparagraph (F), the Secretary may extend 

21 the 225-day deadline for consideration of the 

22 application by notice to the plan sponsor.’’. 

23 (b) AMENDMENTS TO EMPLOYEE RETIREMENT IN24 COME SECURITY ACT OF 1974.— 


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1 (1) NOTICE TO PARTICIPANTS.—Subparagraph 

2 (F) of section 305(f)(9) of the Employee Retirement 

3 Income Security Act of 1974 (29 U.S.C. 

4 1085(f)(9)), as redesignated by section 212(a) and 

5 as in effect before the amendments made by section 

6 212 other than subsection (a) thereof, is amended by 

7 adding at the end the following new clause: 

8 ‘‘(vi) DE MINIMIS CHANGES.—Notice 

9 under clause (i) is not required in the case 

10 of a change to a notice previously issued, 

11 and an application previously submitted 

12 under subparagraph (G), if such change 

13 would have a de minimis effect on the sus14 pension of benefits proposed, such as a 

15 change of 5 percent or less (whether in16 crease or decrease) of a participant’s post17 suspension benefits.’’. 

18 (2) SOLICITATION OF COMMENTS.— 

19 (A) DE MINIMIS CHANGES.—Clause (ii) of 

20 section 305(f)(9)(G) of such Act (29 U.S.C. 

21 1085(f)(9)(G)), as so redesignated and in ef22 fect, is amended by adding at the end the fol23 lowing: ‘‘The preceding sentences shall not 

24 apply in the case of a resubmission of an appli25 cation previously submitted if such change 


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1 would have a de minimis effect on the suspen2 sion of benefits proposed.’’. 

3 (B) EXTENSION OF PERIOD FOR CORREC4 TION OF DEFECT.—Clause (iii) of section 

5 305(f)(9)(G) of such Act (29 U.S.C. 

6 1085(f)(9)(G)), as so redesignated and in ef7 fect, is amended by inserting after the second 

8 sentence the following: ‘‘If the only failure with 

9 respect to an application is a failure to provide 

10 adequate notice to participants under subpara11 graph (F), the Secretary may extend the 225- 

12 day deadline for consideration of the application 

13 by notice to the plan sponsor.’’. 

14 (c) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to applications, or changes to ap16 plications, submitted after the date of the enactment of 

17 this Act. 

18 SEC. 404. PROTECTION OF PARTICIPANTS RECEIVING DIS19 ABILITY BENEFITS. 

20 (a) AMENDMENT TO INTERNAL REVENUE CODE OF

21 1986.—Clause (iii) of section 432(f)(9)(D) of the Internal 

22 Revenue Code of 1986, as redesignated by section 211(a) 

23 and as in effect before the amendments made by section 

24 211 other than subsection (a) thereof, is amended to read 

25 as follows: 


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1 ‘‘(iii) No benefits based on disability 

2 (as defined under the plan) may be sus3 pended under this paragraph if the partici4 pant or beneficiary is disabled (as so de5 fined) or receiving disability benefits under 

6 the plan as of the date of the suspension 

7 of benefits. No benefits under the plan 

8 may be suspended under this paragraph of 

9 any participant or beneficiary who is enti10 tled to a benefit under title II of the Social 

11 Security Act on the basis of a disability (as 

12 defined in section 223(d)(2) of such Act) 

13 as of such date.’’. 

14 (b) AMENDMENT TO EMPLOYEE RETIREMENT IN15 COME SECURITY ACT OF 1974.—Clause (iii) of section 

16 305(f)(9)(D) of the Employee Retirement Income Security 

17 Act of 1974 (29 U.S.C. 1085(f)(9)(D)), as redesignated 

18 by section 212(a) and as in effect before the amendments 

19 made by section 212 other than subsection (a) thereof, 

20 is amended to read as follows: 

21 ‘‘(iii) No benefits based on disability 

22 (as defined under the plan) may be sus23 pended under this paragraph if the partici24 pant or beneficiary is disabled (as so de25 fined) or receiving disability benefits under 


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1 the plan as of the date of the suspension 

2 of benefits. No benefits under the plan 

3 may be suspended under this paragraph of 

4 any participant or beneficiary who is enti5 tled to a benefit under title II of the Social 

6 Security Act on the basis of a disability (as 

7 defined in section 223(d)(2) of such Act) 

8 as of such date.’’. 

9 (c) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to suspensions of benefits taking 

11 effect after the date of the enactment of this Act. 

12 SEC. 405. MODEL NOTICE. 

13 Not later than 1 year after the date of the enactment 

14 of this Act, the Secretary of the Treasury, in consultation 

15 with the Secretary of Labor and the Pension Benefit 

16 Guaranty Corporation, shall develop a 1-page, plain-lan17 guage, cover-page format for the model notice under sec18 tion 432(e)(9)(F)(v) of the Internal Revenue Code of 1986 

19 (as in effect on the day before the date of the enactment 

20 of this Act) and section 305(e)(9)(F)(v) of the Employee 

21 Retirement Income Security Act of 1974 (29 U.S.C. 

22 1085(e)(9)(F)(v)), as so in effect. 


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1 TITLE V—ALTERNATIVE PLAN 

2 STRUCTURES 

3 SEC. 501. COMPOSITE PLANS. 

4 (a) AMENDMENT TO THE EMPLOYEE RETIREMENT

5 INCOME SECURITY ACT OF 1974.— 

6 (1) IN GENERAL.—Title I of the Employee Re7 tirement Income Security Act of 1974 (29 U.S.C. 

8 1001 et seq.) is amended by adding at the end the 

9 following: 

10 ‘‘PART 8—COMPOSITE PLANS AND LEGACY 

11 PLANS 

12 ‘‘SEC. 801. COMPOSITE PLAN DEFINED. 

13 ‘‘(a) IN GENERAL.—For purposes of this Act, the 

14 term ‘composite plan’ means a pension plan— 

15 ‘‘(1) which is a multiemployer plan that is nei16 ther a defined benefit plan nor a defined contribu17 tion plan; 

18 ‘‘(2) the terms of which provide that the plan 

19 is a composite plan for purposes of this title with re20 spect to which not more than one multiemployer de21 fined benefit plan is treated as a legacy plan within 

22 the meaning of section 805, unless there is more 

23 than one legacy plan following a merger of composite 

24 plans under section 806; 


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1 ‘‘(3) which provides systematically for the pay2 ment of benefits— 

3 ‘‘(A) objectively calculated pursuant to a 

4 nondiscretionary formula specified in the plan 

5 document with respect to plan participants for 

6 life; and 

7 ‘‘(B) in the form of life annuities, except 

8 for benefits which under section 203(e) may be 

9 immediately distributed without the consent of 

10 the participant; 

11 ‘‘(4) for which the anticipated employer con12 tributions to the plan for the first plan year are at 

13 least 120 percent of the normal cost for the plan 

14 year; 

15 ‘‘(5) which requires— 

16 ‘‘(A) an annual valuation of the liability of 

17 the plan as of a date within the plan year to 

18 which the valuation refers or within one month 

19 prior to the beginning of such year; 

20 ‘‘(B) an annual actuarial determination of 

21 the plan’s current funded ratio and projected 

22 funded ratio under section 802(a); 

23 ‘‘(C) corrective action through a realign24 ment program pursuant to section 803 whenVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00306 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 ever the plan’s projected funded ratio is below 

2 120 percent for the plan year; and 

3 ‘‘(D) an annual notification to each partici4 pant describing benefits under the plan and ex5 plaining that such benefits may be subject to 

6 reduction under a realignment program pursu7 ant to section 803 based on the plan’s funded 

8 status in future plan years; and 

9 ‘‘(6) the board of trustees of which includes at 

10 least one retiree or beneficiary in pay status during 

11 each plan year following the first plan year in which 

12 at least 5 percent of the participants in the plan are 

13 retirees or beneficiaries in pay status. 

14 ‘‘(b) TRANSITION FROM A MULTIEMPLOYER DE15 FINED BENEFIT PLAN.— 

16 ‘‘(1) IN GENERAL.—The plan sponsor of a de17 fined benefit plan that is a multiemployer plan may, 

18 subject to paragraph (2), amend the plan to incor19 porate the features of a composite plan as a compo20 nent of the multiemployer plan separate from the 

21 defined benefit plan component, except in the case of 

22 a defined benefit plan for which the plan actuary has 

23 certified under section 305(b)(4) that the plan is or 

24 will be in endangered or critical status for the plan 

25 year in which such amendment would become effecVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00307 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 tive or in endangered or critical status for any of the 

2 succeeding 5 plan years. 

3 ‘‘(2) REQUIREMENTS.—Any amendment pursu4 ant to paragraph (1) to incorporate the features of 

5 a composite plan as a component of a multiemployer 

6 plan shall— 

7 ‘‘(A) apply with respect to all collective 

8 bargaining agreements providing for contribu9 tions to the multiemployer plan on or after the 

10 effective date of the amendment; 

11 ‘‘(B) apply with respect to all participants 

12 in the multiemployer plan for whom contribu13 tions are made to the multiemployer plan on or 

14 after the effective date of the amendment; 

15 ‘‘(C) specify that the effective date of the 

16 amendment is— 

17 ‘‘(i) the first day of a specified plan 

18 year following the date of the adoption of 

19 the amendment, except that the plan spon20 sor may alternatively provide for a sepa21 rate effective date with respect to each col22 lective bargaining agreement under which 

23 contributions to the multiemployer plan 

24 are required, which shall occur on the first 

25 day of the first plan year beginning after 


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1 the termination, or if earlier, the re-open2 ing, of each such agreement, or such ear3 lier date as the parties to the agreement 

4 and the plan sponsor of the multiemployer 

5 plan shall agree to; and 

6 ‘‘(ii) not later than the first day of the 

7 fifth plan year beginning on or after the 

8 date of the adoption of the amendment; 

9 ‘‘(D) specify that, as of the amendment’s 

10 effective date, no further benefits shall accrue 

11 under the defined benefit component of the 

12 multiemployer plan; and 

13 ‘‘(E) specify that, as of the amendment’s 

14 effective date, the plan sponsor of the multiem15 ployer plan shall be the plan sponsor of both 

16 the composite plan component and the defined 

17 benefit plan component of the plan. 

18 ‘‘(3) SPECIAL RULES.—If a multiemployer plan 

19 is amended pursuant to paragraph (1)— 

20 ‘‘(A) the requirements of this title and title 

21 IV shall be applied to the composite plan com22 ponent and the defined benefit plan component 

23 of the multiemployer plan as if each such com24 ponent were maintained as a separate plan; and 


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1 ‘‘(B) the assets of the composite plan com2 ponent and the defined benefit plan component 

3 of the plan shall be held in a single trust form4 ing part of the plan under which the trust in5 strument expressly provides— 

6 ‘‘(i) for separate accounts (and appro7 priate records) to be maintained to reflect 

8 the interest which each of the plan compo9 nents has in the trust, including separate 

10 accounting for additions to the trust for 

11 the benefit of each plan component, dis12 bursements made from each plan compo13 nent’s account in the trust, investment ex14 perience of the trust allocable to that ac15 count, and administrative expenses (wheth16 er direct expenses or shared expenses allo17 cated proportionally), and permits, but 

18 does not require, the pooling of some or all 

19 of the assets of the two plan components 

20 for investment purposes, subject to the 

21 judgment of the plan fiduciaries; and 

22 ‘‘(ii) that the assets of each of the two 

23 plan components shall be held, invested, 

24 reinvested, managed, administered and dis25 tributed for the exclusive benefit of the 


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1 participants and beneficiaries of each such 

2 plan component, and in no event shall the 

3 assets of one of the plan components be 

4 available to pay benefits due under the 

5 other plan component. 

6 ‘‘(4) NOT A TERMINATION EVENT.—Notwith7 standing section 4041A, an amendment pursuant to 

8 paragraph (1) to incorporate the features of a com9 posite plan as a component of a multiemployer plan 

10 does not constitute termination of the multiemployer 

11 plan. 

12 ‘‘(5) NOTICE TO THE SECRETARY.— 

13 ‘‘(A) NOTICE.—The plan sponsor of a 

14 composite plan shall provide notice to the Sec15 retary of the intent to establish the composite 

16 plan (or, in the case of a composite plan incor17 porated as a component of a multiemployer 

18 plan as described in paragraph (1), the intent 

19 to amend the multiemployer plan to incorporate 

20 such composite plan) at least 30 days prior to 

21 the effective date of such establishment or 

22 amendment. 

23 ‘‘(B) CERTIFICATION.—In the case of a 

24 composite plan incorporated as a component of 

25 a multiemployer plan as described in paragraph 


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1 (1), such notice shall include a certification by 

2 the plan actuary under section 305(b)(4) that 

3 the effective date of the amendment occurs in 

4 a plan year for which the multiemployer plan is 

5 not in endangered or critical status for that 

6 plan year and any of the succeeding 5 plan 

7 years. 

8 ‘‘(6) REFERENCES TO COMPOSITE PLAN COM9 PONENT.—As used in this part, the term ‘composite 

10 plan’ includes a composite plan component added to 

11 a defined benefit plan pursuant to paragraph (1). 

12 ‘‘(7) RULE OF CONSTRUCTION.—Paragraph 

13 (2)(A) shall not be construed as preventing the plan 

14 sponsor of a multiemployer plan from adopting an 

15 amendment pursuant to paragraph (1) because some 

16 collective bargaining agreements are amended to 

17 cease any covered employer’s obligation to contribute 

18 to the multiemployer plan before or after the plan 

19 amendment is effective. Paragraph (2)(B) shall not 

20 be construed as preventing the plan sponsor of a 

21 multiemployer plan from adopting an amendment 

22 pursuant to paragraph (1) because some partici23 pants cease to have contributions made to the multi24 employer plan on their behalf before or after the 

25 plan amendment is effective. 


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1 ‘‘(c) COORDINATION WITH FUNDING RULES.—Ex2 cept as otherwise provided in this part, sections 302, 304, 

3 and 305 shall not apply to a composite plan. 

4 ‘‘(d) TREATMENT OF A COMPOSITE PLAN.—For pur5 poses of this Act (other than sections 302 and 4245), a 

6 composite plan shall be treated as if it were a defined ben7 efit plan unless a different treatment is provided for under 

8 applicable law. 

9 ‘‘SEC. 802. FUNDED RATIOS; ACTUARIAL ASSUMPTIONS. 

10 ‘‘(a) CERTIFICATION OF FUNDED RATIOS.— 

11 ‘‘(1) IN GENERAL.—Not later than the one12 hundred twentieth day of each plan year of a com13 posite plan, the plan actuary of the composite plan 

14 shall certify to the Secretary, the Secretary of the 

15 Treasury, and the plan sponsor the plan’s current 

16 funded ratio and projected funded ratio for the plan 

17 year. 

18 ‘‘(2) DETERMINATION OF CURRENT FUNDED

19 RATIO AND PROJECTED FUNDED RATIO.—For pur20 poses of this section: 

21 ‘‘(A) CURRENT FUNDED RATIO.—The cur22 rent funded ratio is the ratio (expressed as a 

23 percentage) of— 

24 ‘‘(i) the value of the plan’s assets as 

25 of the first day of the plan year; to 


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1 ‘‘(ii) the plan actuary’s calculation of 

2 the present value of the plan liabilities as 

3 of the first day of the plan year. 

4 ‘‘(B) PROJECTED FUNDED RATIO.—The 

5 projected funded ratio is the funded ratio deter6 mined under subparagraph (A), projected as of 

7 the first day of the fifteenth plan year following 

8 the plan year for which the determination is 

9 being made. 

10 ‘‘(3) CONSIDERATION OF CONTRIBUTION RATE

11 INCREASES.—For purposes of projections under this 

12 subsection, the plan actuary may anticipate con13 tribution rate increases beyond the term of the cur14 rent collective bargaining agreement and any agreed15 to supplements, if reasonable, not to exceed 2.5 per16 cent per year, compounded annually. 

17 ‘‘(b) ACTUARIAL ASSUMPTIONS AND METHODS.— 

18 For purposes of this part: 

19 ‘‘(1) IN GENERAL.—All costs, liabilities, rates 

20 of interest, and other factors under the plan shall be 

21 determined for a plan year on the basis of actuarial 

22 assumptions and methods— 

23 ‘‘(A) each of which is reasonable (taking 

24 into account the experience of the plan and rea25 sonable expectations); 


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1 ‘‘(B) which, in combination, offer the actu2 ary’s best estimate of anticipated experience 

3 under the plan; and 

4 ‘‘(C) with respect to which any change 

5 from the actuarial assumptions and methods 

6 used in the previous plan year shall be certified 

7 by the plan actuary and the actuarial rationale 

8 for such change provided in the annual report 

9 required by section 103. 

10 ‘‘(2) FAIR MARKET VALUE OF ASSETS.—The 

11 value of the plan’s assets shall be taken into account 

12 on the basis of their fair market value. 

13 ‘‘(3) DETERMINATION OF NORMAL COST AND

14 PLAN LIABILITIES.—A plan’s normal cost and liabil15 ities shall be based— 

16 ‘‘(A) on the most recent actuarial valuation 

17 required under section 801(a)(5)(A) and the 

18 unit credit funding method; and 

19 ‘‘(B) on rates of interest subject to section 

20 304(b)(6). 

21 ‘‘(4) TIME WHEN CERTAIN CONTRIBUTIONS

22 DEEMED MADE.—Any contributions for a plan year 

23 made by an employer after the last day of such plan 

year, but not later than 21 24 ⁄2 months after such day, 

25 shall be deemed to have been made on such last day. 


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For purposes of this paragraph, such 21 1 ⁄2-month pe2 riod may be extended to a total of not more than 

3 120 days under regulations prescribed by the Sec4 retary of the Treasury. 

5 ‘‘(5) ADDITIONAL ACTUARIAL ASSUMPTIONS.— 

6 Except where otherwise provided in this part, the 

7 provisions of section 305(b)(4)(B) shall apply to any 

8 determination or projection under this part. 

9 ‘‘SEC. 803. REALIGNMENT PROGRAM. 

10 ‘‘(a) REALIGNMENT PROGRAM.— 

11 ‘‘(1) ADOPTION.—In any case in which the plan 

12 actuary certifies under section 802(a) that the plan’s 

13 projected funded ratio is below 120 percent for the 

14 plan year, the plan sponsor shall adopt a realign15 ment program under paragraph (2) not later than 

16 210 days after the due date of the certification re17 quired under such section 802(a). The plan sponsor 

18 shall adopt an updated realignment program for 

19 each succeeding plan year for which a certification 

20 described in the preceding sentence is made. 

21 ‘‘(2) CONTENT OF REALIGNMENT PROGRAM.— 

22 ‘‘(A) IN GENERAL.—A realignment pro23 gram adopted under this paragraph is a written 

24 program which consists of reasonable measures, 

25 including options or a range of options to be 


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1 undertaken by the plan sponsor or proposed to 

2 the bargaining parties, formulated, based on 

3 reasonably anticipated experience and reason4 able actuarial assumptions, to enable the plan 

5 to achieve a projected funded ratio of at least 

6 120 percent for the following plan year. 

7 ‘‘(B) INITIAL PROGRAM ELEMENTS.—Rea8 sonable measures under a realignment program 

9 described in subparagraph (A) may include any 

10 of the following: 

11 ‘‘(i) Proposed contribution increases. 

12 ‘‘(ii) A reduction in the rate of future 

13 benefit accruals, so long as the resulting 

14 rate is not less than 1 percent of the con15 tributions on which benefits are based as 

16 of the start of the plan year (or the equiva17 lent standard accrual rate as described in 

18 section 305(f)(6)). 

19 ‘‘(iii) A modification or elimination of 

20 adjustable benefits of participants that are 

21 not in pay status before the date of the no22 tice required under subsection (b)(1). 

23 ‘‘(iv) Any other lawfully available 

24 measures not specifically described in this 

25 subparagraph or subparagraph (C) or (D) 


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1 that the plan sponsor determines are rea2 sonable. 

3 ‘‘(C) ADDITIONAL PROGRAM ELEMENTS.— 

4 If the plan sponsor has determined that all rea5 sonable measures available under subparagraph 

6 (B) will not enable the plan to achieve a pro7 jected funded ratio of at least 120 percent for 

8 the following plan year, the realignment pro9 gram may also include— 

10 ‘‘(i) a reduction of accrued benefits 

11 that are not in pay status by the date of 

12 the notice required under subsection 

13 (b)(1); or 

14 ‘‘(ii) a reduction of any benefits of 

15 participants that are in pay status before 

16 the date of the notice required under sub17 section (b)(1) other than core benefits as 

18 defined in paragraph (4). 

19 ‘‘(D) ADDITIONAL ELEMENTS.—In the 

20 case of a composite plan for which the plan 

21 sponsor has determined that all reasonable 

22 measures available under subparagraphs (B) 

23 and (C) will not enable the plan to achieve a 

24 projected funded ratio of at least 120 percent 


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1 for the following plan year, the realignment 

2 program may also include— 

3 ‘‘(i) a further reduction in the rate of 

4 future benefit accruals without regard to 

5 the limitation applicable under subpara6 graph (B)(ii); or 

7 ‘‘(ii) a reduction of core benefits, 

8 provided that such reductions shall be equitably 

9 distributed across the participant and bene10 ficiary population, taking into account factors, 

11 with respect to participants and beneficiaries 

12 and their benefits, that may include one or 

13 more of the factors listed in subclauses (I) 

14 through (X) of section 305(f)(9)(D)(vi), to the 

15 extent necessary to enable the plan to achieve 

16 a projected funded ratio of at least 120 percent 

17 for the following plan year. 

18 ‘‘(3) ADJUSTABLE BENEFIT DEFINED.—For 

19 purposes of this part, the term ‘adjustable benefit’ 

20 means— 

21 ‘‘(A) benefits, rights, and features under 

22 the plan, including post-retirement death bene23 fits, disability benefits not yet in pay status, 

24 and similar benefits, 


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1 ‘‘(B) any early retirement benefit or retire2 ment-type subsidy (within the meaning of sec3 tion 204(g)(2)(A)) (including early reduction 

4 factors which are not provided on an actuarially 

5 equivalent basis) and any benefit payment op6 tion (other than the qualified joint and survivor 

7 annuity), 

8 ‘‘(C) benefit increases which were adopted 

9 (or, if later, took effect) less than 120 months 

10 before the first day of the first plan year in 

11 which such realignment program took effect, 

12 ‘‘(D) any one-time bonus payment or ‘thir13 teenth check’ provision, and 

14 ‘‘(E) benefits granted for period of service 

15 prior to participation in the plan. 

16 ‘‘(4) CORE BENEFIT DEFINED.—For purposes 

17 of this part, the term ‘core benefit’ means a partici18 pant’s accrued benefit payable in the normal form of 

19 an annuity commencing at normal retirement age, 

20 determined without regard to— 

21 ‘‘(A) any early retirement benefits, retire22 ment-type subsidies, or other benefits, rights, or 

23 features that may be associated with that ben24 efit; and 


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1 ‘‘(B) any cost-of-living adjustments or ben2 efit increases effective after the date of retire3 ment. 

4 ‘‘(5) COORDINATION WITH CONTRIBUTION IN5 CREASES.— 

6 ‘‘(A) IN GENERAL.—A realignment pro7 gram may provide that some or all of the ben8 efit modifications described in the program will 

9 only take effect if the bargaining parties fail to 

10 agree to specified levels of increases in contribu11 tions to the plan, effective as of specified dates. 

12 ‘‘(B) INDEPENDENT BENEFIT MODIFICA13 TIONS.—If a realignment program adopts any 

14 changes to the benefit formula that are inde15 pendent of potential contribution increases, 

16 such changes shall take effect not later than 

17 180 days after the first day of the first plan 

18 year that begins following the adoption of the 

19 realignment program. 

20 ‘‘(C) CONDITIONAL BENEFIT MODIFICA21 TIONS.—If a realignment program adopts any 

22 changes to the benefit formula that take effect 

23 only if the bargaining parties fail to agree to 

24 contribution increases, such changes shall take 

25 effect not later than the first day of the first 


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1 plan year beginning after the third anniversary 

2 of the date of adoption of the realignment pro3 gram. 

4 ‘‘(D) REVOCATION OF CERTAIN BENEFIT

5 MODIFICATIONS.—Benefit modifications de6 scribed in subparagraph (C) may be revoked, in 

7 whole or in part, and retroactively or prospec8 tively, when contributions to the plan are in9 creased, as specified in the realignment pro10 gram, including any amendments thereto. The 

11 preceding sentence shall not apply unless the 

12 contribution increases are to be effective not 

13 later than the fifth anniversary of the first day 

14 of the first plan year that begins after the 

15 adoption of the realignment program. 

16 ‘‘(b) NOTICE.— 

17 ‘‘(1) IN GENERAL.—In any case in which it is 

18 certified under section 802(a) that the projected 

19 funded ratio is less than 120 percent, the plan spon20 sor shall, not later than 30 days after the date of 

21 the certification, provide notification of the current 

22 and projected funded ratios to the participants and 

23 beneficiaries, the bargaining parties, the Secretary of 

24 the Treasury, and the Secretary. Such notice shall 

25 include— 


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1 ‘‘(A) an explanation that contribution rate 

2 increases or benefit reductions may be nec3 essary; 

4 ‘‘(B) a description of the types of benefits 

5 that might be reduced; and 

6 ‘‘(C) an estimate of the contribution in7 creases and benefit reductions that may be nec8 essary to achieve a projected funded ratio of 

9 120 percent. 

10 ‘‘(2) NOTICE OF BENEFIT MODIFICATIONS.— 

11 ‘‘(A) IN GENERAL.—No modifications may 

12 be made that reduce the rate of future benefit 

13 accrual or that reduce core benefits or adjust14 able benefits unless notice of such reduction has 

15 been given at least 180 days before the general 

16 effective date of such reduction for all partici17 pants and beneficiaries to— 

18 ‘‘(i) plan participants and bene19 ficiaries; 

20 ‘‘(ii) each employer who has an obliga21 tion to contribute to the composite plan; 

22 and 

23 ‘‘(iii) each employee organization 

24 which, for purposes of collective barVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00323 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 gaining, represents plan participants em2 ployed by such employers. 

3 ‘‘(B) CONTENT OF NOTICE.—The notice 

4 under subparagraph (A) shall contain— 

5 ‘‘(i) sufficient information to enable 

6 participants and beneficiaries to under7 stand the effect of any reduction on their 

8 benefits, including an illustration of any 

9 affected benefit or subsidy, on an annual 

10 or monthly basis that a participant or ben11 eficiary would otherwise have been eligible 

12 for as of the general effective date de13 scribed in subparagraph (A); and 

14 ‘‘(ii) information as to the rights and 

15 remedies of plan participants and bene16 ficiaries as well as how to contact the De17 partment of the Treasury for further infor18 mation and assistance, where appropriate. 

19 ‘‘(C) FORM AND MANNER.—Any notice 

20 under subparagraph (A)— 

21 ‘‘(i) shall be provided in a form and 

22 manner prescribed in regulations of the 

23 Secretary of the Treasury; and 


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1 ‘‘(ii) shall be written in a manner so 

2 as to be understood by the average plan 

3 participant. 

4 ‘‘(3) MODEL NOTICES.—The Secretary of the 

5 Treasury shall— 

6 ‘‘(A) prescribe model notices that the plan 

7 sponsor of a composite plan may use to satisfy 

8 the notice requirements under this subsection; 

9 and 

10 ‘‘(B) by regulation enumerate any details 

11 related to the elements listed in paragraph (1) 

12 that any notice under this subsection must in13 clude. 

14 ‘‘(4) DELIVERY METHOD.—Any notice under 

15 this part shall be provided in writing and may be 

16 provided in electronic form to the extent that the 

17 form is reasonably accessible to persons to whom the 

18 notice is provided. 

19 ‘‘SEC. 804. LIMITATION ON INCREASING BENEFITS. 

20 ‘‘(a) LEVEL OF CURRENT FUNDED RATIOS.—Except 

21 as provided in subsections (c), (d), and (e), no plan 

22 amendment increasing benefits or establishing new bene23 fits under a composite plan may be adopted for a plan 

24 year unless— 


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1 ‘‘(1) the plan’s current funded ratio is at least 

2 110 percent (without regard to the benefit increase 

3 or new benefits); 

4 ‘‘(2) taking the benefit increase or new benefits 

5 into account, the current funded ratio is at least 100 

6 percent and the projected funded ratio for the cur7 rent plan year is at least 120 percent; 

8 ‘‘(3) in any case in which, after taking the ben9 efit increase or new benefits into account, the cur10 rent funded ratio is less than 140 percent and the 

11 projected funded ratio is less than 140 percent, the 

12 benefit increase or new benefits are projected by the 

13 plan actuary to increase the present value of the 

14 plan’s liabilities for the plan year by not more than 

15 3 percent; and 

16 ‘‘(4) expected contributions for the current plan 

17 year are at least 120 percent of normal cost for the 

18 plan year, determined using the unit credit funding 

19 method and treating the benefit increase or new ben20 efits as in effect for the entire plan year. 

21 ‘‘(b) ADDITIONAL REQUIREMENTS WHERE CORE

22 BENEFITS REDUCED.—If a plan has been amended to re23 duce core benefits pursuant to a realignment program 

24 under section 803(a)(2)(D), such plan may not be subseVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00326 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 quently amended to increase core benefits unless the 

2 amendment— 

3 ‘‘(1) increases the level of future benefit pay4 ments only; and 

5 ‘‘(2) provides for an equitable distribution of 

6 benefit increases across the participant and bene7 ficiary population, taking into account the extent to 

8 which the benefits of participants were previously re9 duced pursuant to such realignment program. 

10 ‘‘(c) EXCEPTION TO COMPLY WITH APPLICABLE

11 LAW.—Subsection (a) shall not apply in connection with 

12 a plan amendment if the amendment is required as a con13 dition of qualification under part I of subchapter D of 

14 chapter 1 of the Internal Revenue Code of 1986 or to com15 ply with other applicable law. 

16 ‘‘(d) EXCEPTION WHERE MAXIMUM DEDUCTIBLE

17 LIMIT APPLIES.—Subsection (a) shall not apply in con18 nection with a plan amendment if and to the extent that 

19 contributions to the composite plan would not be deduct20 ible for the plan year under section 404(a)(1)(E) of the 

21 Internal Revenue Code of 1986 if the plan amendment is 

22 not adopted. 

23 ‘‘(e) EXCEPTION FOR CERTAIN BENEFIT MODIFICA24 TIONS.—Subsection (a) shall not apply in connection with 


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1 a plan amendment under section 803(a)(5)(C), regarding 

2 conditional benefit modifications. 

3 ‘‘(f) TREATMENT OF PLAN AMENDMENTS.—For pur4 poses of this section— 

5 ‘‘(1) if two or more plan amendments increas6 ing benefits or establishing new benefits are adopted 

7 in a plan year, such amendments shall be treated as 

8 a single amendment adopted on the last day of the 

9 plan year; 

10 ‘‘(2) all benefit increases and new benefits 

11 adopted in a single amendment are treated as a sin12 gle benefit increase, irrespective of whether the in13 creases and new benefits take effect in more than 

14 one plan year; and 

15 ‘‘(3) increases in contributions or decreases in 

16 plan liabilities which are scheduled to take effect in 

17 future plan years may be taken into account in con18 nection with a plan amendment if they have been 

19 agreed to in writing or otherwise formalized by the 

20 date the plan amendment is adopted. 

21 ‘‘SEC. 805. COMPOSITE PLAN RESTRICTIONS TO PRESERVE 

22 LEGACY PLAN FUNDING. 

23 ‘‘(a) TREATMENT AS A LEGACY PLAN.— 

24 ‘‘(1) IN GENERAL.—For purposes of this part 

25 and parts 2 and 3, a defined benefit plan shall be 


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•S 5045 IS

1 treated as a legacy plan with respect to the com2 posite plan under which employees who were eligible 

3 to accrue a benefit under the defined benefit plan 

4 become eligible to accrue a benefit under such com5 posite plan. 

6 ‘‘(2) COMPONENT PLANS.—In any case in 

7 which a defined benefit plan is amended to add a 

8 composite plan component pursuant to section 

9 801(b), paragraph (1) shall be applied by sub10 stituting ‘defined benefit component’ for ‘defined 

11 benefit plan’ and ‘composite plan component’ for 

12 ‘composite plan’. 

13 ‘‘(3) ELIGIBLE TO ACCRUE A BENEFIT.—For 

14 purposes of paragraph (1), an employee is consid15 ered eligible to accrue a benefit under a composite 

16 plan as of the first day in which the employee com17 pletes an hour of service under a collective bar18 gaining agreement that provides for contributions to 

19 and accruals under the composite plan in lieu of ac20 cruals under the defined benefit plan. 

21 ‘‘(4) COLLECTIVE BARGAINING AGREEMENT.— 

22 As used in this part, the term ‘collective bargaining 

23 agreement’ includes any agreement under which an 

24 employer has an obligation to contribute to a plan. 


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1 ‘‘(5) OTHER TERMS.—Any term used in this 

2 part which is not defined in this part and which is 

3 also used in section 305 shall have the same mean4 ing provided such term in such section. 

5 ‘‘(b) RESTRICTIONS ON ACCEPTANCE BY COMPOSITE

6 PLAN OF AGREEMENTS AND CONTRIBUTIONS.— 

7 ‘‘(1) IN GENERAL.—The plan sponsor of a com8 posite plan shall not accept or recognize a collective 

9 bargaining agreement (or any modification to such 

10 agreement), and no contributions may be accepted 

11 and no benefits may be accrued or otherwise earned 

12 under the agreement— 

13 ‘‘(A) in any case in which the plan actuary 

14 of any defined benefit plan that would be treat15 ed as a legacy plan with respect to such com16 posite plan has certified under section 

17 305(b)(4) that such defined benefit plan is or 

18 will be in endangered or critical status for the 

19 plan year in which such agreement would take 

20 effect or for any of the succeeding 5 plan years; 

21 and 

22 ‘‘(B) unless the agreement requires each 

23 employer who is a party to such agreement, in24 cluding employers whose employees are not par25 ticipants in the legacy plan, to provide contribuVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00330 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 tions to the legacy plan with respect to such 

2 composite plan in a manner that satisfies the 

3 transition contribution requirements of sub4 section (d). 

5 ‘‘(2) NOTICE.—Not later than 30 days after a 

6 determination by a plan sponsor of a composite plan 

7 that an agreement fails to satisfy the requirements 

8 described in paragraph (1), the plan sponsor shall 

9 provide notification of such failure and the reasons 

10 for such determination— 

11 ‘‘(A) to the parties to the agreement; 

12 ‘‘(B) to active participants of the com13 posite plan who have ceased to accrue or other14 wise earn benefits with respect to service with 

15 an employer pursuant to paragraph (1); and 

16 ‘‘(C) to the Secretary, the Secretary of the 

17 Treasury, and the Pension Benefit Guaranty 

18 Corporation. 

19 ‘‘(3) LIMITATION ON RETROACTIVE EFFECT.— 

20 This subsection shall not apply to benefits accrued 

21 before the date on which notice is provided under 

22 paragraph (2). 

23 ‘‘(c) RESTRICTION ON ACCRUAL OF BENEFITS

24 UNDER A COMPOSITE PLAN.— 


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1 ‘‘(1) IN GENERAL.—In any case in which an 

2 employer, under a collective bargaining agreement 

3 entered into after the date of enactment of this part, 

4 ceases to have an obligation to contribute to a multi5 employer defined benefit plan, no employees em6 ployed by the employer may accrue or otherwise earn 

7 benefits under any composite plan, with respect to 

8 service with that employer, for a 60-month period 

9 beginning on the date on which the employer entered 

10 into such collective bargaining agreement. 

11 ‘‘(2) NOTICE OF CESSATION OF OBLIGATION.— 

12 Within 30 days of determining that an employer has 

13 ceased to have an obligation to contribute to a leg14 acy plan with respect to employees employed by an 

15 employer that is or will be contributing to a com16 posite plan with respect to service of such employees, 

17 the plan sponsor of the legacy plan shall notify the 

18 plan sponsor of the composite plan of that cessation. 

19 ‘‘(3) NOTICE OF CESSATION OF ACCRUALS.— 

20 Not later than 30 days after determining that an 

21 employer has ceased to have an obligation to con22 tribute to a legacy plan, the plan sponsor of the 

23 composite plan shall notify the bargaining parties, 

24 the active participants affected by the cessation of 

25 accruals, the Secretary, the Secretary of the TreasVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00332 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 ury, and the Pension Benefit Guaranty Corporation 

2 of the cessation of accruals, the period during which 

3 such cessation is in effect, and the reasons therefor. 

4 ‘‘(4) LIMITATION ON RETROACTIVE EFFECT.— 

5 This subsection shall not apply to benefits accrued 

6 before the date on which notice is provided under 

7 paragraph (3). 

8 ‘‘(d) TRANSITION CONTRIBUTION REQUIREMENTS.— 

9 ‘‘(1) IN GENERAL.—A collective bargaining 

10 agreement satisfies the transition contribution re11 quirements of this subsection if the agreement— 

12 ‘‘(A) authorizes payment of contributions 

13 to a legacy plan at a rate, or multiple rates, as 

14 described in paragraph (2)(B), equal to or 

15 greater than the transition contribution rate es16 tablished by the legacy plan under paragraph 

17 (2); and 

18 ‘‘(B) does not provide for— 

19 ‘‘(i) a suspension of contributions to 

20 the legacy plan with respect to any period 

21 of service; or 

22 ‘‘(ii) any new direct or indirect exclu23 sion of younger or newly hired employees 

24 of the employer from being taken into acVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00333 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 count in determining contributions owed to 

2 the legacy plan. 

3 ‘‘(2) TRANSITION CONTRIBUTION RATE.— 

4 ‘‘(A) IN GENERAL.—The transition con5 tribution rate for a plan year is the contribution 

6 rate that, as certified by the actuary of the leg7 acy plan in accordance with the principles in 

8 section 305(b)(4)(B), is reasonably expected to 

9 be adequate— 

10 ‘‘(i) to fund the normal cost for the 

11 plan year; 

12 ‘‘(ii) to amortize the plan’s unfunded 

13 liabilities in level annual installments over 

14 25 years, beginning with the plan year in 

15 which the transition contribution rate is 

16 first established; and 

17 ‘‘(iii) to amortize any subsequent 

18 changes in the legacy plan’s unfunded li19 ability due to experience gains or losses 

20 (including investment gains or losses, gains 

21 or losses due to contributions greater or 

22 less than the contributions made under the 

23 prior transition contribution rate, and 

24 other actuarial gains or losses), changes in 

25 actuarial assumptions, changes to the legVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00334 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 acy plan’s benefits, or changes in funding 

2 method over a period of 15 plan years be3 ginning with the plan year following the 

4 plan year in which such change in un5 funded liability is incurred, unless other6 wise prescribed. 

7 The transition contribution rate for any plan 

8 year may not be less than the transition con9 tribution rate for the plan year in which such 

10 rate is first established. 

11 ‘‘(B) MULTIPLE RATES.—If different rates 

12 of contribution are payable to the legacy plan 

13 by different employers or for different classes of 

14 employees, the certification by the actuary of 

15 the legacy plan shall specify a transition con16 tribution rate for each such employer or class of 

17 employees. 

18 ‘‘(C) RATE APPLICABLE TO EMPLOYER.— 

19 ‘‘(i) IN GENERAL.—Except as pro20 vided by clause (ii), the transition con21 tribution rate applicable to an employer for 

22 a plan year is the rate in effect for the 

23 plan year of the legacy plan that com24 mences on or after 180 days before the 

25 earlier of— 


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1 ‘‘(I) the effective date of the col2 lective bargaining agreement pursuant 

3 to which the employer contributes to 

4 the legacy plan; or 

5 ‘‘(II) 5 years after the last plan 

6 year for which the transition contribu7 tion rate applicable to the employer 

8 was established or updated. 

9 ‘‘(ii) EXCEPTION.—The transition 

10 contribution rate applicable to an employer 

11 for the first plan year beginning on or 

12 after the commencement of the employer’s 

13 obligation to contribute to the composite 

14 plan is the rate in effect for the plan year 

15 of the legacy plan that commences on or 

16 after 180 days before such first plan year. 

17 ‘‘(D) EFFECT OF LEGACY PLAN FINANCIAL

18 CIRCUMSTANCES.—If the plan actuary of the 

19 legacy plan has certified under section 305 that 

20 the plan is in endangered or critical status for 

21 a plan year, the transition contribution rate for 

22 the following plan year is the rate determined 

23 with respect to the employer under the legacy 

24 plan’s funding improvement or rehabilitation 

25 plan under section 305, if greater than the rate 


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1 otherwise determined, but in no event shall the 

2 transition contribution rate be greater than 75 

3 percent of the sum of the contribution rates ap4 plicable to the legacy plan and the composite 

5 plan for the plan year. Notwithstanding the 

6 preceding sentence, if the transition contribu7 tion rate in the prior year is more than 75 per8 cent of the sum of the contribution rates appli9 cable to the legacy plan and the composite plan 

10 for the prior plan year, the transition contribu11 tion rate applicable to the legacy plan shall not 

12 be subject to the 75-percent limitation, but 

13 shall be neither increased nor reduced as a per14 centage of the sum of the contribution rates ap15 plicable to the legacy plan and the composite 

16 plan for the plan year. 

17 ‘‘(E) OTHER ACTUARIAL ASSUMPTIONS

18 AND METHODS.—Except as provided in sub19 paragraph (A), the determination of the transi20 tion contribution rate for a plan year shall be 

21 based on actuarial assumptions and methods 

22 consistent with the minimum funding deter23 minations made under section 304 (or, if appli24 cable, section 305) with respect to the legacy 

25 plan for the plan year. 


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1 ‘‘(F) ADJUSTMENTS IN RATE.—The plan 

2 sponsor of a legacy plan from time to time may 

3 adjust the transition contribution rate or rates 

4 applicable to an employer under this paragraph 

5 by increasing some rates and decreasing others 

6 if the actuary certifies that such adjusted rates 

7 in combination will produce projected contribu8 tion income for the plan year beginning on or 

9 after the date of certification that is not less 

10 than would be produced by the transition con11 tribution rates in effect at the time of the cer12 tification. 

13 ‘‘(G) NOTICE OF TRANSITION CONTRIBU14 TION RATE.—The plan sponsor of a legacy plan 

15 shall provide notice to the parties to collective 

16 bargaining agreements pursuant to which con17 tributions are made to the legacy plan of 

18 changes to the transition contribution rate re19 quirements at least 30 days before the begin20 ning of the plan year for which the rate is effec21 tive. 

22 ‘‘(H) NOTICE TO COMPOSITE PLAN SPON23 SOR.—Not later than 30 days after a deter24 mination by the plan sponsor of a legacy plan 

25 that a collective bargaining agreement provides 


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1 for a rate of contributions that is below the 

2 transition contribution rate applicable to one or 

3 more employers that are parties to the collective 

4 bargaining agreement, the plan sponsor of the 

5 legacy plan shall notify the plan sponsor of any 

6 composite plan under which employees of such 

7 employer would otherwise be eligible to accrue 

8 a benefit. 

9 ‘‘(3) CORRECTION PROCEDURES.—Pursuant to 

10 standards prescribed by the Secretary, the plan 

11 sponsor of a composite plan shall adopt rules and 

12 procedures that give the parties to the collective bar13 gaining agreement notice of the failure of such 

14 agreement to satisfy the transition contribution re15 quirements of this subsection, and a reasonable op16 portunity to correct such failure, not to exceed 180 

17 days from the date of notice given under subsection 

18 (b)(2). 

19 ‘‘(4) SUPPLEMENTAL CONTRIBUTIONS.—A col20 lective bargaining agreement may provide for supple21 mental contributions to the legacy plan for a plan 

22 year in excess of the transition contribution rate de23 termined under paragraph (2), regardless of whether 

24 the legacy plan is in endangered or critical status for 

25 such plan year. 


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1 ‘‘(e) NONAPPLICATION OF COMPOSITE PLAN RE2 STRICTIONS.— 

3 ‘‘(1) IN GENERAL.—The provisions of sub4 sections (a), (b), and (c) shall not apply with respect 

5 to a collective bargaining agreement, to the extent 

6 the agreement, or a predecessor agreement, provides 

7 or provided for contributions to a defined benefit 

8 plan that is a legacy plan, as of the first day of the 

9 first plan year following a plan year for which the 

10 plan actuary certifies that the plan is fully funded, 

11 has been fully funded for at least three out of the 

12 immediately preceding 5 plan years, and is projected 

13 to remain fully funded for at least the following 4 

14 plan years. 

15 ‘‘(2) DETERMINATION OF FULLY FUNDED.—A 

16 plan is fully funded for purposes of paragraph (1) 

17 if, as of the valuation date of the plan for a plan 

18 year, the value of the plan’s assets equals or exceeds 

19 the present value of the plan’s liabilities, determined 

20 in accordance with the rules prescribed by the Pen21 sion Benefit Guaranty Corporation under sections 

22 4219(c)(1)(D) and 4281 for multiemployer plans 

23 terminating by mass withdrawal, as in effect for the 

24 date of the determination, except the plan’s reasonVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00340 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 able assumption regarding the starting date of bene2 fits may be used. 

3 ‘‘(3) OTHER APPLICABLE RULES.—Except as 

4 provided in paragraph (2), actuarial determinations 

5 and projections under this section shall be based on 

6 the rules in section 802(b). 

7 ‘‘SEC. 806. MERGERS AND ASSET TRANSFERS OF COM8 POSITE PLANS. 

9 ‘‘(a) IN GENERAL.—Assets and liabilities of a com10 posite plan may only be merged with, or transferred to, 

11 another plan if— 

12 ‘‘(1) the other plan is a composite plan; 

13 ‘‘(2) the plan or plans resulting from the merg14 er or transfer is a composite plan; 

15 ‘‘(3) no participant’s accrued benefit or adjust16 able benefit is lower immediately after the trans17 action than it was immediately before the trans18 action; and 

19 ‘‘(4) the value of the assets transferred in the 

20 case of a transfer reasonably reflects the value of the 

21 amounts contributed with respect to the participants 

22 whose benefits are being transferred, adjusted for al23 locable distributions, investment gains and losses, 

24 and administrative expenses. 


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1 A plan which is not a composite plan may not merge with 

2 or transfer assets and liabilities to a composite plan. 

3 ‘‘(b) LEGACY PLAN.— 

4 ‘‘(1) IN GENERAL.—After a merger or transfer 

5 involving a composite plan, the legacy plan with re6 spect to an employer that is obligated to contribute 

7 to the resulting composite plan is the legacy plan 

8 that applied to that employer immediately before the 

9 merger or transfer. 

10 ‘‘(2) MULTIPLE LEGACY PLANS.—If an em11 ployer is obligated to contribute to more than one 

12 legacy plan with respect to employees eligible to ac13 crue benefits under more than one composite plan 

14 and there is a merger or transfer of such legacy 

15 plans, the transition contribution rate applicable to 

16 the legacy plan resulting from the merger or trans17 fer with respect to that employer shall be determined 

18 in accordance with the provisions of section 

19 805(d)(2)(B).’’. 

20 (2) PENALTIES.— 

21 (A) CIVIL ENFORCEMENT OF FAILURE TO

22 COMPLY WITH REALIGNMENT PROGRAM.—Sec23 tion 502(a) of such Act (29 U.S.C. 1132(a)) is 

24 amended— 


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•S 5045 IS

1 (i) in paragraph (10), by striking ‘‘or’’ 

2 at the end; 

3 (ii) in paragraph (11), by striking the 

4 period at the end and inserting ‘‘; or’’; and 

5 (iii) by adding at the end the fol6 lowing: 

7 ‘‘(12) in the case of a composite plan required 

8 to adopt a realignment program under section 803, 

9 if the plan sponsor— 

10 ‘‘(A) has not adopted a realignment pro11 gram under that section by the deadline estab12 lished in such section; or 

13 ‘‘(B) fails to update or comply with the 

14 terms of the realignment program in accordance 

15 with the requirements of such section, 

16 by the Secretary, by an employer that has an obliga17 tion to contribute with respect to the composite plan, 

18 or by an employee organization that represents ac19 tive participants in the composite plan, for an order 

20 compelling the plan sponsor to adopt a realignment 

21 program, or to update or comply with the terms of 

22 the realignment program, in accordance with the re23 quirements of such section and the realignment pro24 gram.’’. 


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1 (B) CIVIL PENALTIES.—Section 502(c) of 

2 such Act (29 U.S.C. 1132(c)), as amended by 

3 this Act, is further amended— 

4 (i) by moving paragraphs (8), (10), 

5 and (12) each 2 ems to the left; 

6 (ii) by redesignating paragraphs (9) 

7 through (13) as paragraphs (12) through 

8 (16), respectively; and 

9 (iii) by inserting after paragraph (8) 

10 the following: 

11 ‘‘(9) The Secretary may assess against any plan 

12 sponsor of a composite plan a civil penalty of not 

13 more than $2,140 per day for each violation by such 

14 sponsor— 

15 ‘‘(A) of the requirement under section 

16 801(a)(5)(D) to furnish an annual notification 

17 to each participant; 

18 ‘‘(B) of the requirement under section 

19 802(a) on the plan actuary to certify the plan’s 

20 current or projected funded ratio by the date 

21 specified in such subsection; or 

22 ‘‘(C) of the requirement under section 803 

23 to adopt a realignment program by the deadline 

24 established in that section and to comply with 

25 its terms. 


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1 ‘‘(10)(A) The Secretary may assess against any 

2 plan sponsor of a composite plan a civil penalty of 

3 not more than $100 per day for each violation by 

4 such sponsor of the requirement under section 

5 803(b) to provide notice as described in such section, 

6 except that no penalty may be assessed in any case 

7 in which the plan sponsor exercised reasonable dili8 gence to meet the requirements of such section 

9 and— 

10 ‘‘(i) the plan sponsor did not know that the 

11 violation existed; or 

12 ‘‘(ii) the plan sponsor provided such notice 

13 during the 30-day period beginning on the first 

14 date on which the plan sponsor knew, or in ex15 ercising reasonable due diligence should have 

16 known, that such violation existed. 

17 ‘‘(B) In any case in which the plan sponsor ex18 ercised reasonable diligence to meet the require19 ments of section 803(b), the Secretary may waive 

20 part or all of such penalty to the extent that the 

21 payment of such penalty would be excessive or other22 wise inequitable relative to the violation involved. 

23 ‘‘(11) The Secretary may assess against any 

24 plan sponsor of a composite plan a civil penalty of 

25 not more than $100 per day for each violation by 


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•S 5045 IS

1 such sponsor of the notice requirements under sec2 tions 801(b)(5) and 805(b)(2).’’. 

3 (3) AUTHORITIES.—Section 101(a) of Reorga4 nization Plan No. 4 of 1978 (29 U.S.C. 1001 note) 

5 is amended by striking ‘‘Parts 2 and 3’’ and insert6 ing ‘‘Parts 2, 3, and 8’’. 

7 (4) CONFORMING AMENDMENT.—The table of 

8 contents in section 1 of such Act (29 U.S.C. 1001 

9 note) is amended by inserting after the item relating 

10 to section 734 the following: 

‘‘PART 8—COMPOSITE PLANS AND LEGACY PLANS

‘‘Sec. 801. Composite plan defined. 

‘‘Sec. 802. Funded ratios; actuarial assumptions. 

‘‘Sec. 803. Realignment program. 

‘‘Sec. 804. Limitation on increasing benefits. 

‘‘Sec. 805. Composite plan restrictions to preserve legacy plan funding. 

‘‘Sec. 806. Mergers and asset transfers of composite plans.’’. 

11 (b) AMENDMENT TO THE INTERNAL REVENUE CODE

12 OF 1986.— 

13 (1) IN GENERAL.—Subchapter D of chapter 1 

14 of the Internal Revenue Code of 1986 is amended by 

15 adding at the end the following: 

16 ‘‘PART IV—COMPOSITE PLANS AND LEGACY 

17 PLANS 

‘‘Sec. 437. Composite plan defined. 

‘‘Sec. 438. Funded ratios; actuarial assumptions. 

‘‘Sec. 439. Realignment program. 

‘‘Sec. 440. Limitation on increasing benefits. 

‘‘Sec. 440A. Composite plan restrictions to preserve legacy plan funding. 

‘‘Sec. 440B. Mergers and asset transfers of composite plans. 


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1 ‘‘SEC. 437. COMPOSITE PLAN DEFINED. 

2 ‘‘(a) IN GENERAL.—For purposes of this title, the 

3 term ‘composite plan’ means a pension plan— 

4 ‘‘(1) which is a multiemployer plan that is nei5 ther a defined benefit plan nor a defined contribu6 tion plan, 

7 ‘‘(2) the terms of which provide that the plan 

8 is a composite plan for purposes of this title with re9 spect to which not more than one multiemployer de10 fined benefit plan is treated as a legacy plan within 

11 the meaning of section 440A, unless there is more 

12 than one legacy plan following a merger of composite 

13 plans under section 440B, 

14 ‘‘(3) which provides systematically for the pay15 ment of benefits— 

16 ‘‘(A) objectively calculated pursuant to a 

17 nondiscretionary formula specified in the plan 

18 document with respect to plan participants for 

19 life, and 

20 ‘‘(B) in the form of life annuities, except 

21 for benefits which under section 411(a)(11) 

22 may be immediately distributed without the 

23 consent of the participant, 

24 ‘‘(4) for which the anticipated employer con25 tributions to the plan for the first plan year are at 


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1 least 120 percent of the normal cost for the plan 

2 year, 

3 ‘‘(5) which requires— 

4 ‘‘(A) an annual valuation of the liability of 

5 the plan as of a date within the plan year to 

6 which the valuation refers or within one month 

7 prior to the beginning of such year, 

8 ‘‘(B) an annual actuarial determination of 

9 the plan’s current funded ratio and projected 

10 funded ratio under section 438(a), 

11 ‘‘(C) corrective action through a realign12 ment program pursuant to section 439 when13 ever the plan’s projected funded ratio is below 

14 120 percent for the plan year, and 

15 ‘‘(D) an annual notification to each partici16 pant describing benefits under the plan and ex17 plaining that such benefits may be subject to 

18 reduction under a realignment program pursu19 ant to section 439 based on the plan’s funded 

20 status in future plan years, and 

21 ‘‘(6) the board of trustees of which includes at 

22 least one retiree or beneficiary in pay status during 

23 each plan year following the first plan year in which 

24 at least 5 percent of the participants in the plan are 

25 retirees or beneficiaries in pay status. 


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1 ‘‘(b) TRANSITION FROM A MULTIEMPLOYER DE2 FINED BENEFIT PLAN.— 

3 ‘‘(1) IN GENERAL.—The plan sponsor of a de4 fined benefit plan that is a multiemployer plan may, 

5 subject to paragraph (2), amend the plan to incor6 porate the features of a composite plan as a compo7 nent of the multiemployer plan separate from the 

8 defined benefit plan component, except in the case of 

9 a defined benefit plan for which the plan actuary has 

10 certified under section 432(b)(4) that the plan is or 

11 will be in endangered or critical status for the plan 

12 year in which such amendment would become effec13 tive or in endangered or critical status for any of the 

14 succeeding 5 plan years. 

15 ‘‘(2) REQUIREMENTS.—Any amendment pursu16 ant to paragraph (1) to incorporate the features of 

17 a composite plan as a component of a multiemployer 

18 plan shall— 

19 ‘‘(A) apply with respect to all collective 

20 bargaining agreements providing for contribu21 tions to the multiemployer plan on or after the 

22 effective date of the amendment, 

23 ‘‘(B) apply with respect to all participants 

24 in the multiemployer plan for whom contribuVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00349 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 tions are made to the multiemployer plan on or 

2 after the effective date of the amendment, 

3 ‘‘(C) specify that the effective date of the 

4 amendment is— 

5 ‘‘(i) the first day of a specified plan 

6 year following the date of the adoption of 

7 the amendment, except that the plan spon8 sor may alternatively provide for a sepa9 rate effective date with respect to each col10 lective bargaining agreement under which 

11 contributions to the multiemployer plan 

12 are required, which shall occur on the first 

13 day of the first plan year beginning after 

14 the termination, or if earlier, the re-open15 ing, of each such agreement, or such ear16 lier date as the parties to the agreement 

17 and the plan sponsor of the multiemployer 

18 plan shall agree to, and 

19 ‘‘(ii) not later than the first day of the 

20 fifth plan year beginning on or after the 

21 date of the adoption of the amendment, 

22 ‘‘(D) specify that, as of the amendment’s 

23 effective date, no further benefits shall accrue 

24 under the defined benefit component of the 

25 multiemployer plan, and 


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1 ‘‘(E) specify that, as of the amendment’s 

2 effective date, the plan sponsor of the multiem3 ployer plan shall be the plan sponsor of both 

4 the composite plan component and the defined 

5 benefit plan component of the plan. 

6 ‘‘(3) SPECIAL RULES.—If a multiemployer plan 

7 is amended pursuant to paragraph (1)— 

8 ‘‘(A) the requirements of this title shall be 

9 applied to the composite plan component and 

10 the defined benefit plan component of the mul11 tiemployer plan as if each such component were 

12 maintained as a separate plan, and 

13 ‘‘(B) the assets of the composite plan com14 ponent and the defined benefit plan component 

15 of the plan shall be held in a single trust form16 ing part of the plan under which the trust in17 strument expressly provides— 

18 ‘‘(i) for separate accounts (and appro19 priate records) to be maintained to reflect 

20 the interest which each of the plan compo21 nents has in the trust, including separate 

22 accounting for additions to the trust for 

23 the benefit of each plan component, dis24 bursements made from each plan compo25 nent’s account in the trust, investment exVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00351 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 perience of the trust allocable to that ac2 count, and administrative expenses (wheth3 er direct expenses or shared expenses allo4 cated proportionally), and permits, but 

5 does not require, the pooling of some or all 

6 of the assets of the two plan components 

7 for investment purposes, subject to the 

8 judgment of the plan fiduciaries, and 

9 ‘‘(ii) that the assets of each of the two 

10 plan components shall be held, invested, 

11 reinvested, managed, administered and dis12 tributed for the exclusive benefit of the 

13 participants and beneficiaries of each such 

14 plan component, and in no event shall the 

15 assets of one of the plan components be 

16 available to pay benefits due under the 

17 other plan component. 

18 ‘‘(4) NOT A TERMINATION EVENT.—Notwith19 standing section 4041A of the Employee Retirement 

20 Income Security Act of 1974, an amendment pursu21 ant to paragraph (1) to incorporate the features of 

22 a composite plan as a component of a multiemployer 

23 plan does not constitute termination of the multiem24 ployer plan. 

25 ‘‘(5) NOTICE TO THE SECRETARY OF LABOR.— 


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1 ‘‘(A) NOTICE.—The plan sponsor of a 

2 composite plan shall provide notice to the Sec3 retary of Labor of the intent to establish the 

4 composite plan (or, in the case of a composite 

5 plan incorporated as a component of a multiem6 ployer plan as described in paragraph (1), the 

7 intent to amend the multiemployer plan to in8 corporate such composite plan) at least 30 days 

9 prior to the effective date of such establishment 

10 or amendment. 

11 ‘‘(B) CERTIFICATION.—In the case of a 

12 composite plan incorporated as a component of 

13 a multiemployer plan as described in paragraph 

14 (1), such notice shall include a certification by 

15 the plan actuary under section 432(b)(4) that 

16 the effective date of the amendment occurs in 

17 a plan year for which the multiemployer plan is 

18 not in endangered or critical status for that 

19 plan year and any of the succeeding 5 plan 

20 years. 

21 ‘‘(6) REFERENCES TO COMPOSITE PLAN COM22 PONENT.—As used in this part, the term ‘composite 

23 plan’ includes a composite plan component added to 

24 a defined benefit plan pursuant to paragraph (1). 


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1 ‘‘(7) RULE OF CONSTRUCTION.—Paragraph 

2 (2)(A) shall not be construed as preventing the plan 

3 sponsor of a multiemployer plan from adopting an 

4 amendment pursuant to paragraph (1) because some 

5 collective bargaining agreements are amended to 

6 cease any covered employer’s obligation to contribute 

7 to the multiemployer plan before or after the plan 

8 amendment is effective. Paragraph (2)(B) shall not 

9 be construed as preventing the plan sponsor of a 

10 multiemployer plan from adopting an amendment 

11 pursuant to paragraph (1) because some partici12 pants cease to have contributions made to the multi13 employer plan on their behalf before or after the 

14 plan amendment is effective. 

15 ‘‘(c) COORDINATION WITH FUNDING RULES.—Ex16 cept as otherwise provided in this part, sections 412, 431, 

17 and 432 shall not apply to a composite plan. 

18 ‘‘(d) TREATMENT OF A COMPOSITE PLAN.—For pur19 poses of this title (other than sections 412 and 418E), 

20 a composite plan shall be treated as if it were a defined 

21 benefit plan unless a different treatment is provided for 

22 under applicable law. 

23 ‘‘SEC. 438. FUNDED RATIOS; ACTUARIAL ASSUMPTIONS. 

24 ‘‘(a) CERTIFICATION OF FUNDED RATIOS.— 


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1 ‘‘(1) IN GENERAL.—Not later than the one2 hundred twentieth day of each plan year of a com3 posite plan, the plan actuary of the composite plan 

4 shall certify to the Secretary, the Secretary of 

5 Labor, and the plan sponsor the plan’s current fund6 ed ratio and projected funded ratio for the plan 

7 year. 

8 ‘‘(2) DETERMINATION OF CURRENT FUNDED

9 RATIO AND PROJECTED FUNDED RATIO.—For pur10 poses of this section— 

11 ‘‘(A) CURRENT FUNDED RATIO.—The cur12 rent funded ratio is the ratio (expressed as a 

13 percentage) of— 

14 ‘‘(i) the value of the plan’s assets as 

15 of the first day of the plan year, to 

16 ‘‘(ii) the plan actuary’s calculation of 

17 the present value of the plan liabilities as 

18 of the first day of the plan year. 

19 ‘‘(B) PROJECTED FUNDED RATIO.—The 

20 projected funded ratio is the funded ratio deter21 mined under subparagraph (A), projected as of 

22 the first day of the fifteenth plan year following 

23 the plan year for which the determination is 

24 being made. 


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1 ‘‘(3) CONSIDERATION OF CONTRIBUTION RATE

2 INCREASES.—For purposes of projections under this 

3 subsection, the plan actuary may anticipate con4 tribution rate increases beyond the term of the cur5 rent collective bargaining agreement and any agreed6 to supplements, if reasonable, not to exceed 2.5 per7 cent per year, compounded annually. 

8 ‘‘(b) ACTUARIAL ASSUMPTIONS AND METHODS.— 

9 For purposes of this part— 

10 ‘‘(1) IN GENERAL.—All costs, liabilities, rates 

11 of interest, and other factors under the plan shall be 

12 determined for a plan year on the basis of actuarial 

13 assumptions and methods— 

14 ‘‘(A) each of which is reasonable (taking 

15 into account the experience of the plan and rea16 sonable expectations), 

17 ‘‘(B) which, in combination, offer the actu18 ary’s best estimate of anticipated experience 

19 under the plan, and 

20 ‘‘(C) with respect to which any change 

21 from the actuarial assumptions and methods 

22 used in the previous plan year shall be certified 

23 by the plan actuary and the actuarial rationale 

24 for such change provided in the annual report 

25 required by section 6058. 


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1 ‘‘(2) FAIR MARKET VALUE OF ASSETS.—The 

2 value of the plan’s assets shall be taken into account 

3 on the basis of their fair market value. 

4 ‘‘(3) DETERMINATION OF NORMAL COST AND

5 PLAN LIABILITIES.—A plan’s normal cost and liabil6 ities shall be based on— 

7 ‘‘(A) the most recent actuarial valuation 

8 required under section 437(a)(5)(A) and the 

9 unit credit funding method, and 

10 ‘‘(B) rates of interest subject to section 

11 431(b)(6). 

12 ‘‘(4) TIME WHEN CERTAIN CONTRIBUTIONS

13 DEEMED MADE.—Any contributions for a plan year 

14 made by an employer after the last day of such plan 

year, but not later than 21 15 ⁄2 months after such day, 

16 shall be deemed to have been made on such last day. 

For purposes of this paragraph, such 21 17 ⁄2-month pe18 riod may be extended to a total of not more than 

19 120 days under regulations prescribed by the Sec20 retary. 

21 ‘‘(5) ADDITIONAL ACTUARIAL ASSUMPTIONS.— 

22 Except where otherwise provided in this part, the 

23 provisions of section 432(b)(4)(B) shall apply to any 

24 determination or projection under this part. 


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1 ‘‘SEC. 439. REALIGNMENT PROGRAM. 

2 ‘‘(a) REALIGNMENT PROGRAM.— 

3 ‘‘(1) ADOPTION.—In any case in which the plan 

4 actuary certifies under section 438(a) that the plan’s 

5 projected funded ratio is below 120 percent for the 

6 plan year, the plan sponsor shall adopt a realign7 ment program under paragraph (2) not later than 

8 210 days after the due date of the certification re9 quired under section 438(a). The plan sponsor shall 

10 adopt an updated realignment program for each suc11 ceeding plan year for which a certification described 

12 in the preceding sentence is made. 

13 ‘‘(2) CONTENT OF REALIGNMENT PROGRAM.— 

14 ‘‘(A) IN GENERAL.—A realignment pro15 gram adopted under this paragraph is a written 

16 program which consists of reasonable measures, 

17 including options or a range of options to be 

18 undertaken by the plan sponsor or proposed to 

19 the bargaining parties, formulated, based on 

20 reasonably anticipated experience and reason21 able actuarial assumptions, to enable the plan 

22 to achieve a projected funded ratio of at least 

23 120 percent for the following plan year. 

24 ‘‘(B) INITIAL PROGRAM ELEMENTS.—Rea25 sonable measures under a realignment program 


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1 described in subparagraph (A) may include any 

2 of the following: 

3 ‘‘(i) Proposed contribution increases. 

4 ‘‘(ii) A reduction in the rate of future 

5 benefit accruals, so long as the resulting 

6 rate shall not be less than 1 percent of the 

7 contributions on which benefits are based 

8 as of the start of the plan year (or the 

9 equivalent standard accrual rate as de10 scribed in section 432(f)(6)). 

11 ‘‘(iii) A modification or elimination of 

12 adjustable benefits of participants that are 

13 not in pay status before the date of the no14 tice required under subsection (b)(1). 

15 ‘‘(iv) Any other legally available meas16 ures not specifically described in this sub17 paragraph or subparagraph (C) or (D) 

18 that the plan sponsor determines are rea19 sonable. 

20 ‘‘(C) ADDITIONAL PROGRAM ELEMENTS.— 

21 If the plan sponsor has determined that all rea22 sonable measures available under subparagraph 

23 (B) will not enable the plan to achieve a pro24 jected funded ratio of at least 120 percent the 


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1 following plan year, such realignment program 

2 may also include— 

3 ‘‘(i) a reduction of accrued benefits 

4 that are not in pay status by the date of 

5 the notice required under subsection 

6 (b)(1), or 

7 ‘‘(ii) a reduction of any benefits of 

8 participants that are in pay status before 

9 the date of the notice required under sub10 section (b)(1) other than core benefits as 

11 defined in paragraph (4). 

12 ‘‘(D) ADDITIONAL REDUCTIONS.—In the 

13 case of a composite plan for which the plan 

14 sponsor has determined that all reasonable 

15 measures available under subparagraphs (B) 

16 and (C) will not enable the plan to achieve a 

17 projected funded ratio of at least 120 percent 

18 for the following plan year, the realignment 

19 program may also include— 

20 ‘‘(i) a further reduction in the rate of 

21 future benefit accruals without regard to 

22 the limitation applicable under subpara23 graph (B)(ii), or 

24 ‘‘(ii) a reduction of core benefits, 


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1 provided that such reductions shall be equitably 

2 distributed across the participant and bene3 ficiary population, taking into account factors, 

4 with respect to participants and beneficiaries 

5 and their benefits, that may include one or 

6 more of the factors listed in subclauses (I) 

7 through (X) of section 432(f)(9)(D)(vi), to the 

8 extent necessary to enable the plan to achieve 

9 a projected funded ratio of at least 120 percent 

10 for the following plan year. 

11 ‘‘(3) ADJUSTABLE BENEFIT DEFINED.—For 

12 purposes of this part, the term ‘adjustable benefit’ 

13 means— 

14 ‘‘(A) benefits, rights, and features under 

15 the plan, including post-retirement death bene16 fits, disability benefits not yet in pay status, 

17 and similar benefits, 

18 ‘‘(B) any early retirement benefit or retire19 ment-type subsidy (within the meaning of sec20 tion 411(d)(6)(B)(i)) (including early reduction 

21 factors which are not provided on an actuarially 

22 equivalent basis) and any benefit payment op23 tion (other than the qualified joint and survivor 

24 annuity), 


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1 ‘‘(C) benefit increases which were adopted 

2 (or, if later, took effect) less than 120 months 

3 before the first day of the first plan year in 

4 which such realignment program took effect, 

5 ‘‘(D) any one-time bonus payment or ‘thir6 teenth check’ provision, and 

7 ‘‘(E) benefits granted for period of service 

8 prior to participation in the plan. 

9 ‘‘(4) CORE BENEFIT DEFINED.—For purposes 

10 of this part, the term ‘core benefit’ means a partici11 pant’s accrued benefit payable in the normal form of 

12 an annuity commencing at normal retirement age, 

13 determined without regard to— 

14 ‘‘(A) any early retirement benefits, retire15 ment-type subsidies, or other benefits, rights, or 

16 features that may be associated with that ben17 efit, and 

18 ‘‘(B) any cost-of-living adjustments or ben19 efit increases effective after the date of retire20 ment. 

21 ‘‘(5) COORDINATION WITH CONTRIBUTION IN22 CREASES.— 

23 ‘‘(A) IN GENERAL.—A realignment pro24 gram may provide that some or all of the ben25 efit modifications described in the program will 


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1 only take effect if the bargaining parties fail to 

2 agree to specified levels of increases in contribu3 tions to the plan, effective as of specified dates. 

4 ‘‘(B) INDEPENDENT BENEFIT MODIFICA5 TIONS.—If a realignment program adopts any 

6 changes to the benefit formula that are inde7 pendent of potential contribution increases, 

8 such changes shall take effect not later than 

9 180 days following the first day of the first 

10 plan year that begins following the adoption of 

11 the realignment program. 

12 ‘‘(C) CONDITIONAL BENEFIT MODIFICA13 TIONS.—If a realignment program adopts any 

14 changes to the benefit formula that take effect 

15 only if the bargaining parties fail to agree to 

16 contribution increases, such changes shall take 

17 effect not later than the first day of the first 

18 plan year beginning after the third anniversary 

19 of the date of adoption of the realignment pro20 gram. 

21 ‘‘(D) REVOCATION OF CERTAIN BENEFIT

22 MODIFICATIONS.—Benefit modifications de23 scribed in paragraph (3) may be revoked, in 

24 whole or in part, and retroactively or prospec25 tively, when contributions to the plan are inVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00363 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 creased, as specified in the realignment pro2 gram, including any amendments thereto. The 

3 preceding sentence shall not apply unless the 

4 contribution increases are to be effective not 

5 later than the fifth anniversary of the first day 

6 of the first plan year that begins after the 

7 adoption of the realignment program. 

8 ‘‘(b) NOTICE.— 

9 ‘‘(1) IN GENERAL.—In any case in which it is 

10 certified under section 438(a) that the projected 

11 funded ratio is less than 120 percent, the plan spon12 sor shall, not later than 30 days after the date of 

13 the certification, provide notification of the current 

14 and projected funded ratios to the participants and 

15 beneficiaries, the bargaining parties, the Secretary of 

16 Labor, and the Secretary. Such notice shall in17 clude— 

18 ‘‘(A) an explanation that contribution rate 

19 increases or benefit reductions may be nec20 essary, 

21 ‘‘(B) a description of the types of benefits 

22 that might be reduced, and 

23 ‘‘(C) an estimate of the contribution in24 creases and benefit reductions that may be necVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00364 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 essary to achieve a projected funded ratio of 

2 120 percent. 

3 ‘‘(2) NOTICE OF BENEFIT MODIFICATIONS.— 

4 ‘‘(A) IN GENERAL.—No modifications may 

5 be made that reduce the rate of future benefit 

6 accrual or that reduce core benefits or adjust7 able benefits unless notice of such reduction has 

8 been given at least 180 days before the general 

9 effective date of such reduction for all partici10 pants and beneficiaries to— 

11 ‘‘(i) plan participants and bene12 ficiaries, 

13 ‘‘(ii) each employer who has an obliga14 tion to contribute to the composite plan, 

15 and 

16 ‘‘(iii) each employee organization 

17 which, for purposes of collective bar18 gaining, represents plan participants em19 ployed by such employers. 

20 ‘‘(B) CONTENT OF NOTICE.—The notice 

21 under subparagraph (A) shall contain— 

22 ‘‘(i) sufficient information to enable 

23 participants and beneficiaries to under24 stand the effect of any reduction on their 

25 benefits, including an illustration of any 


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1 affected benefit or subsidy, on an annual 

2 or monthly basis that a participant or ben3 eficiary would otherwise have been eligible 

4 for as of the general effective date de5 scribed in subparagraph (A), and 

6 ‘‘(ii) information as to the rights and 

7 remedies of plan participants and bene8 ficiaries as well as how to contact the De9 partment of the Treasury for further infor10 mation and assistance, where appropriate. 

11 ‘‘(C) FORM AND MANNER.—Any notice 

12 under subparagraph (A)— 

13 ‘‘(i) shall be provided in a form and 

14 manner prescribed in regulations of the 

15 Secretary, and 

16 ‘‘(ii) shall be written in a manner so 

17 as to be understood by the average plan 

18 participant. 

19 ‘‘(3) MODEL NOTICES.—The Secretary shall— 

20 ‘‘(A) prescribe model notices that the plan 

21 sponsor of a composite plan may use to satisfy 

22 the notice requirements under this subsection, 

23 and 

24 ‘‘(B) by regulation enumerate any details 

25 related to the elements listed in paragraph (1) 


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1 that any notice under this subsection must in2 clude. 

3 ‘‘(4) DELIVERY METHOD.—Any notice under 

4 this part shall be provided in writing and may be 

5 provided in electronic form to the extent that the 

6 form is reasonably accessible to persons to whom the 

7 notice is provided. 

8 ‘‘SEC. 440. LIMITATION ON INCREASING BENEFITS. 

9 ‘‘(a) LEVEL OF CURRENT FUNDED RATIOS.—Except 

10 as provided in subsections (c), (d), and (e), no plan 

11 amendment increasing benefits or establishing new bene12 fits under a composite plan may be adopted for a plan 

13 year unless— 

14 ‘‘(1) the plan’s current funded ratio is at least 

15 110 percent (without regard to the benefit increase 

16 or new benefits), 

17 ‘‘(2) taking the benefit increase or new benefits 

18 into account, the current funded ratio is at least 100 

19 percent and the projected funded ratio for the cur20 rent plan year is at least 120 percent, 

21 ‘‘(3) in any case in which, after taking the ben22 efit increase or new benefits into account, the cur23 rent funded ratio is less than 140 percent or the 

24 projected funded ratio is less than 140 percent, the 

25 benefit increase or new benefits are projected by the 


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1 plan actuary to increase the present value of the 

2 plan’s liabilities for the plan year by not more than 

3 3 percent, and 

4 ‘‘(4) expected contributions for the current plan 

5 year are at least 120 percent of normal cost for the 

6 plan year, determined using the unit credit funding 

7 method and treating the benefit increase or new ben8 efits as in effect for the entire plan year. 

9 ‘‘(b) ADDITIONAL REQUIREMENTS WHERE CORE

10 BENEFITS REDUCED.—If a plan has been amended to re11 duce core benefits pursuant to a realignment program 

12 under section 439(a)(2)(D), such plan may not be subse13 quently amended to increase core benefits unless the 

14 amendment— 

15 ‘‘(1) increases the level of future benefit pay16 ments only, and 

17 ‘‘(2) provides for an equitable distribution of 

18 benefit increases across the participant and bene19 ficiary population, taking into account the extent to 

20 which the benefits of participants were previously re21 duced pursuant to such realignment program. 

22 ‘‘(c) EXCEPTION TO COMPLY WITH APPLICABLE

23 LAW.—Subsection (a) shall not apply in connection with 

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1 dition of qualification under part I of subchapter D of 

2 chapter 1 or to comply with other applicable law. 

3 ‘‘(d) EXCEPTION WHERE MAXIMUM DEDUCTIBLE

4 LIMIT APPLIES.—Subsection (a) shall not apply in con5 nection with a plan amendment if and to the extent that 

6 contributions to the composite plan would not be deduct7 ible for the plan year under section 404(a)(1)(E) if the 

8 plan amendment is not adopted. The Secretary of the 

9 Treasury shall issue regulations to implement this para10 graph. 

11 ‘‘(e) EXCEPTION FOR CERTAIN BENEFIT MODIFICA12 TIONS.—Subsection (a) shall not apply in connection with 

13 a plan amendment under section 439(a)(5)(C), regarding 

14 conditional benefit modifications. 

15 ‘‘(f) TREATMENT OF PLAN AMENDMENTS.—For pur16 poses of this section— 

17 ‘‘(1) if two or more plan amendments increas18 ing benefits or establishing new benefits are adopted 

19 in a plan year, such amendments shall be treated as 

20 a single amendment adopted on the last day of the 

21 plan year, 

22 ‘‘(2) all benefit increases and new benefits 

23 adopted in a single amendment are treated as a sin24 gle benefit increase, irrespective of whether the inVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00369 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 creases and new benefits take effect in more than 

2 one plan year, and 

3 ‘‘(3) increases in contributions or decreases in 

4 plan liabilities which are scheduled to take effect in 

5 future plan years may be taken into account in con6 nection with a plan amendment if they have been 

7 agreed to in writing or otherwise formalized by the 

8 date the plan amendment is adopted. 

9 ‘‘SEC. 440A. COMPOSITE PLAN RESTRICTIONS TO PRE10 SERVE LEGACY PLAN FUNDING. 

11 ‘‘(a) TREATMENT AS A LEGACY PLAN.— 

12 ‘‘(1) IN GENERAL.—For purposes of this sub13 chapter, a defined benefit plan shall be treated as a 

14 legacy plan with respect to the composite plan under 

15 which employees who were eligible to accrue a ben16 efit under the defined benefit plan become eligible to 

17 accrue a benefit under such composite plan. 

18 ‘‘(2) COMPONENT PLANS.—In any case in 

19 which a defined benefit plan is amended to add a 

20 composite plan component pursuant to section 

21 437(b), paragraph (1) shall be applied by sub22 stituting ‘defined benefit component’ for ‘defined 

23 benefit plan’ and ‘composite plan component’ for 

24 ‘composite plan’. 


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1 ‘‘(3) ELIGIBLE TO ACCRUE A BENEFIT.—For 

2 purposes of paragraph (1), an employee is consid3 ered eligible to accrue a benefit under a composite 

4 plan as of the first day in which the employee com5 pletes an hour of service under a collective bar6 gaining agreement that provides for contributions to 

7 and accruals under the composite plan in lieu of ac8 cruals under the defined benefit plan. 

9 ‘‘(4) COLLECTIVE BARGAINING AGREEMENT.— 

10 As used in this part, the term ‘collective bargaining 

11 agreement’ includes any agreement under which an 

12 employer has an obligation to contribute to a plan. 

13 ‘‘(5) OTHER TERMS.—Any term used in this 

14 part which is not defined in this part and which is 

15 also used in section 432 shall have the same mean16 ing provided such term in such section. 

17 ‘‘(b) RESTRICTIONS ON ACCEPTANCE BY COMPOSITE

18 PLAN OF AGREEMENTS AND CONTRIBUTIONS.— 

19 ‘‘(1) IN GENERAL.—The plan sponsor of a com20 posite plan shall not accept or recognize a collective 

21 bargaining agreement (or any modification to such 

22 agreement), and no contributions may be accepted 

23 and no benefits may be accrued or otherwise earned 

24 under the agreement— 


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1 ‘‘(A) in any case in which the plan actuary 

2 of any defined benefit plan that would be treat3 ed as a legacy plan with respect to such com4 posite plan has certified under section 

5 432(b)(4) that such defined benefit plan is or 

6 will be in endangered or critical status for the 

7 plan year in which such agreement would take 

8 effect or for any of the succeeding 5 plan years, 

9 and 

10 ‘‘(B) unless the agreement requires each 

11 employer who is a party to such agreement, in12 cluding employers whose employees are not par13 ticipants in the legacy plan, to provide contribu14 tions to the legacy plan with respect to such 

15 composite plan in a manner that satisfies the 

16 transition contribution requirements of sub17 section (d). 

18 ‘‘(2) NOTICE.—Not later than 30 days after a 

19 determination by a plan sponsor of a composite plan 

20 that an agreement fails to satisfy the requirements 

21 described in paragraph (1), the plan sponsor shall 

22 provide notification of such failure and the reasons 

23 for such determination to— 

24 ‘‘(A) the parties to the agreement, 


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1 ‘‘(B) active participants of the composite 

2 plan who have ceased to accrue or otherwise 

3 earn benefits with respect to service with an 

4 employer pursuant to paragraph (1), and 

5 ‘‘(C) the Secretary of Labor, the Secretary 

6 of the Treasury, and the Pension Benefit Guar7 anty Corporation. 

8 ‘‘(3) LIMITATION ON RETROACTIVE EFFECT.— 

9 This subsection shall not apply to benefits accrued 

10 before the date on which notice is provided under 

11 paragraph (2). 

12 ‘‘(c) RESTRICTION ON ACCRUAL OF BENEFITS

13 UNDER A COMPOSITE PLAN.— 

14 ‘‘(1) IN GENERAL.—In any case in which an 

15 employer, under a collective bargaining agreement 

16 entered into after the date of enactment of the Chris 

17 Allen Multiemployer Pension Recapitalization and 

18 Reform Act of 2020, ceases to have an obligation to 

19 contribute to a multiemployer defined benefit plan, 

20 no employees employed by the employer may accrue 

21 or otherwise earn benefits under any composite plan, 

22 with respect to service with that employer, for a 60- 

23 month period beginning on the date on which the 

24 employer entered into such collective bargaining 

25 agreement. 


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1 ‘‘(2) NOTICE OF CESSATION OF OBLIGATION.— 

2 Within 30 days of determining that an employer has 

3 ceased to have an obligation to contribute to a leg4 acy plan with respect to employees employed by an 

5 employer that is or will be contributing to a com6 posite plan with respect to service of such employees, 

7 the plan sponsor of the legacy plan shall notify the 

8 plan sponsor of the composite plan of that cessation. 

9 ‘‘(3) NOTICE OF CESSATION OF ACCRUALS.— 

10 Not later than 30 days after determining that an 

11 employer has ceased to have an obligation to con12 tribute to a legacy plan, the plan sponsor of the 

13 composite plan shall notify the bargaining parties, 

14 the active participants affected by the cessation of 

15 accruals, the Secretary, the Secretary of Labor, and 

16 the Pension Benefit Guaranty Corporation of the 

17 cessation of accruals, the period during which such 

18 cessation is in effect, and the reasons therefor. 

19 ‘‘(4) LIMITATION ON RETROACTIVE EFFECT.— 

20 This subsection shall not apply to benefits accrued 

21 before the date on which notice is provided under 

22 paragraph (3). 

23 ‘‘(d) TRANSITION CONTRIBUTION REQUIREMENTS.— 


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1 ‘‘(1) IN GENERAL.—A collective bargaining 

2 agreement satisfies the transition contribution re3 quirements of this subsection if the agreement— 

4 ‘‘(A) authorizes for payment of contribu5 tions to a legacy plan at a rate, or multiple 

6 rates, as described in paragraph (2)(B), equal 

7 to or greater than the transition contribution 

8 rate established under paragraph (2), and 

9 ‘‘(B) does not provide for— 

10 ‘‘(i) a suspension of contributions to 

11 the legacy plan with respect to any period 

12 of service, or 

13 ‘‘(ii) any new direct or indirect exclu14 sion of younger or newly hired employees 

15 of the employer from being taken into ac16 count in determining contributions owed to 

17 the legacy plan. 

18 ‘‘(2) TRANSITION CONTRIBUTION RATE.— 

19 ‘‘(A) IN GENERAL.—The transition con20 tribution rate for a plan year is the contribution 

21 rate that, as certified by the actuary of the leg22 acy plan in accordance with the principles in 

23 section 432(b)(4)(B), is reasonably expected to 

24 be adequate— 


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1 ‘‘(i) to fund the normal cost for the 

2 plan year, 

3 ‘‘(ii) to amortize the plan’s unfunded 

4 liabilities in level annual installments over 

5 25 years, beginning with the plan year in 

6 which the transition contribution rate is 

7 first established, and 

8 ‘‘(iii) to amortize any subsequent 

9 changes in the legacy plan’s unfunded li10 ability due to experience gains or losses 

11 (including investment gains or losses, gains 

12 or losses due to contributions greater or 

13 less than the contributions made under the 

14 prior transition contribution rate, and 

15 other actuarial gains or losses), changes in 

16 actuarial assumptions, changes to the leg17 acy plan’s benefits, or changes in funding 

18 method over a period of 15 plan years be19 ginning with the plan year following the 

20 plan year in which such change in un21 funded liability is incurred, unless other22 wise prescribed. 

23 The transition contribution rate for any plan 

24 year may not be less than the transition conVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00376 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 tribution rate for the plan year in which such 

2 rate is first established. 

3 ‘‘(B) MULTIPLE RATES.—If different rates 

4 of contribution are payable to the legacy plan 

5 by different employers or for different classes of 

6 employees, the certification by the actuary of 

7 the legacy plan shall specify a transition con8 tribution rate for each such employer or class of 

9 employees. 

10 ‘‘(C) RATE APPLICABLE TO EMPLOYER.— 

11 ‘‘(i) IN GENERAL.—Except as pro12 vided by clause (ii), the transition con13 tribution rate applicable to an employer for 

14 a plan year is the rate in effect for the 

15 plan year of the legacy plan that com16 mences on or after 180 days before the 

17 earlier of— 

18 ‘‘(I) the effective date of the col19 lective bargaining agreement pursuant 

20 to which the employer contributes to 

21 the legacy plan, or 

22 ‘‘(II) 5 years after the last plan 

23 year for which the transition contribu24 tion rate applicable to the employer 

25 was established or updated. 


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1 ‘‘(ii) EXCEPTION.—The transition 

2 contribution rate applicable to an employer 

3 for the first plan year beginning on or 

4 after the commencement of the employer’s 

5 obligation to contribute to the composite 

6 plan is the rate in effect for the plan year 

7 of the legacy plan that commences on or 

8 after 180 days before such first plan year. 

9 ‘‘(D) EFFECT OF LEGACY PLAN FINANCIAL

10 CIRCUMSTANCES.—If the plan actuary of the 

11 legacy plan has certified under section 432 that 

12 the plan is in endangered or critical status for 

13 a plan year, the transition contribution rate for 

14 the following plan year is the rate determined 

15 with respect to the employer under the legacy 

16 plan’s funding improvement or rehabilitation 

17 plan under section 432, if greater than the rate 

18 otherwise determined, but in no event shall the 

19 transition contribution rate be greater than 75 

20 percent of the sum of the contribution rates ap21 plicable to the legacy plan and the composite 

22 plan for the plan year. Notwithstanding the 

23 preceding sentence, if the transition contribu24 tion rate in the prior year is more than 75 per25 cent of the sum of the contribution rates appliVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00378 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 cable to the legacy plan and the composite plan 

2 for the prior plan year, the transition contribu3 tion rate applicable to the legacy plan shall not 

4 be subject to the 75-percent limitation, but 

5 shall be neither increased nor reduced as a per6 centage of the sum of the contribution rates ap7 plicable to the legacy plan and the composite 

8 plan for the plan year. 

9 ‘‘(E) OTHER ACTUARIAL ASSUMPTIONS

10 AND METHODS.—Except as provided in sub11 paragraph (A), the determination of the transi12 tion contribution rate for a plan year shall be 

13 based on actuarial assumptions and methods 

14 consistent with the minimum funding deter15 minations made under section 431 (or, if appli16 cable, section 432) with respect to the legacy 

17 plan for the plan year. 

18 ‘‘(F) ADJUSTMENTS IN RATE.—The plan 

19 sponsor of a legacy plan from time to time may 

20 adjust the transition contribution rate or rates 

21 applicable to an employer under this paragraph 

22 by increasing some rates and decreasing others 

23 if the actuary certifies that such adjusted rates 

24 in combination will produce projected contribu25 tion income for the plan year beginning on or 


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1 after the date of certification that is not less 

2 than would be produced by the transition con3 tribution rates in effect at the time of the cer4 tification. 

5 ‘‘(G) NOTICE OF TRANSITION CONTRIBU6 TION RATE.—The plan sponsor of a legacy plan 

7 shall provide notice to the parties to collective 

8 bargaining agreements pursuant to which con9 tributions are made to the legacy plan of 

10 changes to the transition contribution rate re11 quirements at least 30 days before the begin12 ning of the plan year for which the rate is effec13 tive. 

14 ‘‘(H) NOTICE TO COMPOSITE PLAN SPON15 SOR.—Not later than 30 days after a deter16 mination by the plan sponsor of a legacy plan 

17 that a collective bargaining agreement provides 

18 for a rate of contributions that is below the 

19 transition contribution rate applicable to one or 

20 more employers that are parties to the collective 

21 bargaining agreement, the plan sponsor of the 

22 legacy plan shall notify the plan sponsor of any 

23 composite plan under which employees of such 

24 employer would otherwise be eligible to accrue 

25 a benefit. 


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1 ‘‘(3) CORRECTION PROCEDURES.—Pursuant to 

2 standards prescribed by the Secretary of Labor, the 

3 plan sponsor of a composite plan shall adopt rules 

4 and procedures that give the parties to the collective 

5 bargaining agreement notice of the failure of such 

6 agreement to satisfy the transition contribution re7 quirements of this subsection, and a reasonable op8 portunity to correct such failure, not to exceed 180 

9 days from the date of notice given under subsection 

10 (b)(2). 

11 ‘‘(4) SUPPLEMENTAL CONTRIBUTIONS.—A col12 lective bargaining agreement may provide for supple13 mental contributions to the legacy plan for a plan 

14 year in excess of the transition contribution rate de15 termined under paragraph (2), regardless of whether 

16 the legacy plan is in endangered or critical status for 

17 such plan year. 

18 ‘‘(e) NONAPPLICATION OF COMPOSITE PLAN RE19 STRICTIONS.— 

20 ‘‘(1) IN GENERAL.—The provisions of sub21 sections (a), (b), and (c) shall not apply with respect 

22 to a collective bargaining agreement, to the extent 

23 the agreement, or a predecessor agreement, provides 

24 or provided for contributions to a defined benefit 

25 plan that is a legacy plan, as of the first day of the 


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1 first plan year following a plan year for which the 

2 plan actuary certifies that the plan is fully funded, 

3 has been fully funded for at least three out of the 

4 immediately preceding 5 plan years, and is projected 

5 to remain fully funded for at least the following 4 

6 plan years. 

7 ‘‘(2) DETERMINATION OF FULLY FUNDED.—A 

8 plan is fully funded for purposes of paragraph (1) 

9 if, as of the valuation date of the plan for a plan 

10 year, the value of the plan’s assets equals or exceeds 

11 the present value of the plan’s liabilities, determined 

12 in accordance with the rules prescribed by the Pen13 sion Benefit Guaranty Corporation under sections 

14 4219(c)(1)(D) and 4281 of Employee Retirement 

15 Income and Security Act for multiemployer plans 

16 terminating by mass withdrawal, as in effect for the 

17 date of the determination, except the plan’s reason18 able assumption regarding the starting date of bene19 fits may be used. 

20 ‘‘(3) OTHER APPLICABLE RULES.—Except as 

21 provided in paragraph (2), actuarial determinations 

22 and projections under this section shall be based on 

23 the rules in section 438(b). 


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1 ‘‘SEC. 440B. MERGERS AND ASSET TRANSFERS OF COM2 POSITE PLANS. 

3 ‘‘(a) IN GENERAL.—Assets and liabilities of a com4 posite plan may only be merged with, or transferred to, 

5 another plan if— 

6 ‘‘(1) the other plan is a composite plan, 

7 ‘‘(2) the plan or plans resulting from the merg8 er or transfer is a composite plan, 

9 ‘‘(3) no participant’s accrued benefit or adjust10 able benefit is lower immediately after the trans11 action than it was immediately before the trans12 action, and 

13 ‘‘(4) the value of the assets transferred in the 

14 case of a transfer reasonably reflects the value of the 

15 amounts contributed with respect to the participants 

16 whose benefits are being transferred, adjusted for al17 locable distributions, investment gains and losses, 

18 and administrative expenses. 

19 A plan which is not a composite plan may not merge with 

20 or transfer assets and liabilities to a composite plan. 

21 ‘‘(b) LEGACY PLAN.— 

22 ‘‘(1) IN GENERAL.—After a merger or transfer 

23 involving a composite plan, the legacy plan with re24 spect to an employer that is obligated to contribute 

25 to the resulting composite plan is the legacy plan 


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1 that applied to that employer immediately before the 

2 merger or transfer. 

3 ‘‘(2) MULTIPLE LEGACY PLANS.—If an em4 ployer is obligated to contribute to more than one 

5 legacy plan with respect to employees eligible to ac6 crue benefits under more than one composite plan 

7 and there is a merger or transfer of such legacy 

8 plans, the transition contribution rate applicable to 

9 the legacy plan resulting from the merger or trans10 fer with respect to that employer shall be determined 

11 in accordance with the provisions of section 

12 440A(d)(2)(B).’’. 

13 (2) CLERICAL AMENDMENT.—The table of 

14 parts for subchapter D of chapter 1 of the Internal 

15 Revenue Code of 1986 is amended by adding at the 

16 end the following new item: 

‘‘PART IV—COMPOSITE PLANS AND LEGACY PLANS’’. 

17 (c) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to plan years beginning after the 

19 date of the enactment of this Act. 

20 SEC. 502. APPLICATION OF CERTAIN REQUIREMENTS TO 

21 COMPOSITE PLANS. 

22 (a) AMENDMENTS TO THE EMPLOYEE RETIREMENT

23 INCOME SECURITY ACT OF 1974.— 

24 (1) TREATMENT FOR PURPOSES OF FUNDING

25 NOTICES.—Section 101(f) of the Employee RetireVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00384 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 ment Income Security Act of 1974 (29 U.S.C. 

2 1021(f)), as amended by this Act, is further amend3 ed— 

4 (A) in paragraph (1) by striking ‘‘title IV 

5 applies’’ and inserting ‘‘title IV applies or which 

6 is a composite plan’’; and 

7 (B) by adding at the end the following: 

8 ‘‘(5) APPLICATION TO COMPOSITE PLANS.—The 

9 provisions of this subsection shall apply to a com10 posite plan only to the extent prescribed by the Sec11 retary in regulations that take into account the dif12 ferences between a composite plan and a defined 

13 benefit plan that is a multiemployer plan.’’. 

14 (2) TREATMENT FOR PURPOSES OF ANNUAL

15 REPORT.—Section 103 of the Employee Retirement 

16 Income Security Act of 1974 (29 U.S.C. 1023) is 

17 amended— 

18 (A) in subsection (d) by adding at the end 

19 the following sentence: ‘‘The provisions of this 

20 subsection shall apply to a composite plan only 

21 to the extent prescribed by the Secretary in reg22 ulations that take into account the differences 

23 between a composite plan and a defined benefit 

24 plan that is a multiemployer plan.’’; 


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1 (B) in subsection (f) by adding at the end 

2 the following: 

3 ‘‘(3) ADDITIONAL INFORMATION FOR COM4 POSITE PLANS.—With respect to any composite 

5 plan— 

6 ‘‘(A) the provisions of paragraph (1)(A) 

7 shall apply by substituting ‘current funded ratio 

8 and projected funded ratio (as such terms are 

9 defined in section 802(a)(2))’ for ‘funded per10 centage’ each place it appears; and 

11 ‘‘(B) the provisions of paragraph (2) shall 

12 apply only to the extent prescribed by the Sec13 retary in regulations that take into account the 

14 differences between a composite plan and a de15 fined benefit plan that is a multiemployer 

16 plan.’’; and 

17 (C) by adding at the end the following: 

18 ‘‘(h) COMPOSITE PLANS.—A multiemployer plan that 

19 incorporates the features of a composite plan as provided 

20 in section 801(b) shall be treated as a single plan for pur21 poses of the report required by this section, except that 

22 separate financial statements and actuarial statements 

23 shall be provided under paragraphs (3) and (4) of sub24 section (a) for the defined benefit plan component and for 


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1 the composite plan component of the multiemployer 

2 plan.’’. 

3 (3) TREATMENT FOR PURPOSES OF PENSION

4 BENEFIT STATEMENTS.—Section 105(a) of the Em5 ployee Retirement Income Security Act of 1974 (29 

6 U.S.C. 1025(a)) is amended by adding at the end 

7 the following: 

8 ‘‘(4) COMPOSITE PLANS.—For purposes of this 

9 subsection, a composite plan shall be treated as a 

10 defined benefit plan to the extent prescribed by the 

11 Secretary in regulations that take into account the 

12 differences between a composite plan and a defined 

13 benefit plan that is a multiemployer plan.’’. 

14 (b) AMENDMENTS TO THE INTERNAL REVENUE

15 CODE OF 1986.—Section 6058 of the Internal Revenue 

16 Code of 1986 is amended by redesignating subsection (f) 

17 as subsection (g) and by inserting after subsection (e) the 

18 following: 

19 ‘‘(f) COMPOSITE PLANS.—A multiemployer plan that 

20 incorporates the features of a composite plan as provided 

21 in section 437(b) shall be treated as a single plan for pur22 poses of the return required by this section, except that 

23 separate financial statements shall be provided for the de24 fined benefit plan component and for the composite plan 

25 component of the multiemployer plan.’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to plan years beginning after the 

3 date of the enactment of this Act. 

4 SEC. 503. TREATMENT OF COMPOSITE PLANS UNDER TITLE 

5 IV. 

6 (a) DEFINITION.—Section 4001(a) of the Employee 

7 Retirement Income Security Act of 1974 (29 U.S.C. 

8 1301(a)) is amended by striking the period at the end of 

9 paragraph (21) and inserting a semicolon and by adding 

10 at the end the following: 

11 ‘‘(22) COMPOSITE PLAN.—The term ‘composite 

12 plan’ has the meaning set forth in section 801.’’. 

13 (b) COMPOSITE PLANS DISREGARDED FOR CALCU14 LATING PREMIUMS.—Section 4006(a) of the Employee 

15 Retirement Income Security Act of 1974 (29 U.S.C. 

16 1306(a)) is amended by adding at the end the following: 

17 ‘‘(9) The composite plan component of a multi18 employer plan shall be disregarded in determining 

19 the premiums due under this section from the multi20 employer plan.’’. 

21 (c) COMPOSITE PLANS NOT COVERED.—Section 

22 4021(b)(1) of the Employee Retirement Income Security 

23 Act of 1974 (29 U.S.C. 1321(b)(1)) is amended by strik24 ing ‘‘Act’’ and inserting ‘‘Act, or a composite plan, as de25 fined in paragraph (43) of section 3 of this Act’’. 


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1 (d) NO WITHDRAWAL LIABILITY.—Section 4201 of 

2 the Employee Retirement Income Security Act of 1974 

3 (29 U.S.C. 1381) is amended by adding at the end the 

4 following: 

5 ‘‘(c) Contributions by an employer to the composite 

6 plan component of a multiemployer plan shall not be taken 

7 into account for any purpose under this title.’’. 

8 (e) NO WITHDRAWAL LIABILITY FOR CERTAIN

9 PLANS.—Section 4201 of the Employee Retirement In10 come Security Act of 1974 (29 U.S.C. 1381) is further 

11 amended by adding at the end the following: 

12 ‘‘(d) Contributions by an employer to a multiem13 ployer plan described in the except clause of section 3(35) 

14 of this Act pursuant to a collective bargaining agreement 

15 that specifically designates that such contributions shall 

16 be allocated to the separate defined contribution accounts 

17 of participants under the plan shall not be taken into ac18 count with respect to the defined benefit portion of the 

19 plan for any purpose under this title (including the deter20 mination of the employer’s highest contribution rate under 

21 section 4219), even if, under the terms of the plan, partici22 pants have the option to transfer assets in their separate 

23 defined contribution accounts to the defined benefit por24 tion of the plan in return for service credit under the deVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00389 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 fined benefit portion, at rates established by the plan 

2 sponsor. 

3 ‘‘(e) A legacy plan created under section 805 shall 

4 be deemed to have no unfunded vested benefits for pur5 poses of this part, for each plan year following a period 

6 of 5 consecutive plan years for which— 

7 ‘‘(1) the plan was fully funded within the mean8 ing of section 805 for at least 3 of the plan years 

9 during that period, ending with a plan year for 

10 which the plan is fully funded; 

11 ‘‘(2) the plan had no unfunded vested benefits 

12 for at least 3 of the plan years during that period, 

13 ending with a plan year for which the plan is fully 

14 funded; and 

15 ‘‘(3) the plan is projected to be fully funded 

16 and to have no unfunded vested benefits for the fol17 lowing four plan years.’’. 

18 (f) NO WITHDRAWAL LIABILITY FOR EMPLOYERS

19 CONTRIBUTING TO CERTAIN FULLY FUNDED LEGACY

20 PLANS.—Section 4211 of the Employee Retirement In21 come Security Act of 1974 (29 U.S.C. 1382) is amended 

22 by adding at the end the following: 

23 ‘‘(g) LEGACY PLANS.—No amount of unfunded vest24 ed benefits shall be allocated to an employer that has an 

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1 section (e) of section 4201 for each plan year for which 

2 such subsection applies.’’. 

3 (g) NO OBLIGATION TO CONTRIBUTE.—Section 

4 4212 of the Employee Retirement Income Security Act of 

5 1974 (29 U.S.C. 1392) is amended by adding at the end 

6 the following: 

7 ‘‘(d) NO OBLIGATION TO CONTRIBUTE.—An em8 ployer shall not be treated as having an obligation to con9 tribute to a multiemployer defined benefit plan within the 

10 meaning of subsection (a) solely because— 

11 ‘‘(1) in the case of a multiemployer plan that 

12 includes a composite plan component, the employer 

13 has an obligation to contribute to the composite plan 

14 component of the plan; 

15 ‘‘(2) the employer has an obligation to con16 tribute to a composite plan that is maintained pur17 suant to one or more collective bargaining agree18 ments under which the multiemployer defined ben19 efit plan is or previously was maintained; or 

20 ‘‘(3) the employer contributes or has contrib21 uted under section 805(d) to a legacy plan associ22 ated with a composite plan pursuant to a collective 

23 bargaining agreement but employees of that em24 ployer were not eligible to accrue benefits under the 


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1 legacy plan with respect to service with that em2 ployer.’’. 

3 (h) NO INFERENCE.—Nothing in the amendment 

4 made by subsection (e) shall be construed to create an in5 ference with respect to the treatment under title IV of the 

6 Employee Retirement Income Security Act of 1974, as in 

7 effect before such amendment, of contributions by an em8 ployer to a multiemployer plan described in the except 

9 clause of section 3(35) of such Act that are made before 

10 the effective date of subsection (e) specified in subsection 

11 (h)(2). 

12 (i) EFFECTIVE DATE.— 

13 (1) IN GENERAL.—Except as provided in sub14 paragraph (2), the amendments made by this section 

15 shall apply to plan years beginning after the date of 

16 the enactment of this Act. 

17 (2) SPECIAL RULE FOR SECTION 414(k) MULTI18 EMPLOYER PLANS.—The amendment made by sub19 section (e) shall apply only to required contributions 

20 payable for plan years beginning after the date of 

21 the enactment of this Act. 

22 SEC. 504. CONFORMING CHANGES. 

23 (a) DEFINITIONS.— 

24 (1) AMENDMENT TO EMPLOYEE RETIREMENT

25 INCOME SECURITY ACT OF 1974.—Section 3 of the 


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1 Employee Retirement Income Security Act of 1974 

2 (29 U.S.C. 1002) is amended— 

3 (A) in paragraph (35), by inserting ‘‘or a 

4 composite plan’’ after ‘‘other than an individual 

5 account plan’’; and 

6 (B) by adding at the end the following: 

7 ‘‘(43) The term ‘composite plan’ has the mean8 ing given the term in section 801(a).’’. 

9 (2) AMENDMENT TO INTERNAL REVENUE CODE

10 OF 1986.—Section 414(j) of the Internal Revenue 

11 Code of 1986 is amended by inserting ‘‘, other than 

12 a composite plan (as defined in section 437(a)),’’ 

13 after ‘‘any plan’’. 

14 (b) SPECIAL FUNDING RULE FOR CERTAIN LEGACY

15 PLANS.— 

16 (1) AMENDMENT TO EMPLOYEE RETIREMENT

17 INCOME SECURITY ACT OF 1974.—Section 304(b) of 

18 the Employee Retirement Income Security Act of 

19 1974 (29 U.S.C. 1084(b)), as amended by this Act, 

20 is amended by adding at the end the following: 

21 ‘‘(10) SPECIAL FUNDING RULE FOR CERTAIN

22 LEGACY PLANS.—In the case of a multiemployer de23 fined benefit plan that has adopted an amendment 

24 under section 801(b), in accordance with which no 

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1 ployer defined benefit plan, the plan sponsor may 

2 combine the outstanding balance of all charge and 

3 credit bases and amortize that combined base in 

4 level annual installments (until fully amortized) over 

5 a period of 25 plan years beginning with the plan 

6 year following the date all benefit accruals ceased, 

7 but only if the plan is not in endangered or critical 

8 status under section 305.’’. 

9 (2) AMENDMENT TO INTERNAL REVENUE CODE

10 OF 1986.—Section 431(b) of the Internal Revenue 

11 Code of 1986, as amended by this Act, is amended 

12 by adding at the end the following: 

13 ‘‘(10) SPECIAL FUNDING RULE FOR CERTAIN

14 LEGACY PLANS.—In the case of a multiemployer de15 fined benefit plan that has adopted an amendment 

16 under section 437(b), in accordance with which no 

17 further benefits shall accrue under the multiem18 ployer defined benefit plan, the plan sponsor may 

19 combine the outstanding balance of all charge and 

20 credit bases and amortize that combined base in 

21 level annual installments (until fully amortized) over 

22 a period of 25 plan years beginning with the plan 

23 year following the date on which all benefit accruals 

24 ceased, but only if the plan is not in endangered or 

25 critical status under section 432.’’. 


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1 (c) BENEFITS AFTER MERGER, CONSOLIDATION, OR

2 TRANSFER OF ASSETS.— 

3 (1) AMENDMENT TO EMPLOYEE RETIREMENT

4 INCOME SECURITY ACT OF 1974.—Section 208 of the 

5 Employee Retirement Income Security Act of 1974 

6 (29 U.S.C. 1058) is amended— 

7 (A) by striking so much of the first sen8 tence as precedes ‘‘may not merge’’ and insert9 ing the following: 

10 ‘‘(1) IN GENERAL.—Except as provided in para11 graph (2), a pension plan may not merge, and’’; and 

12 (B) by striking the second sentence and 

13 adding at the end the following: 

14 ‘‘(2) SPECIAL REQUIREMENTS FOR MULTIEM15 PLOYER PLANS.—Paragraph (1) shall not apply to 

16 any transaction to the extent that participants either 

17 before or after the transaction are covered under a 

18 multiemployer plan to which title IV of this Act ap19 plies or a composite plan.’’. 

20 (2) AMENDMENTS TO INTERNAL REVENUE

21 CODE OF 1986.— 

22 (A) QUALIFICATION REQUIREMENT.—Sec23 tion 401(a)(12) of the Internal Revenue Code 

24 of 1986 is amended— 


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1 (i) by striking ‘‘(12) A trust’’ and in2 serting the following: 

3 ‘‘(12) BENEFITS AFTER MERGER, CONSOLIDA4 TION, OR TRANSFER OF ASSETS.— 

5 ‘‘(A) IN GENERAL.—Except as provided in 

6 subparagraph (B), a trust’’; 

7 (ii) by striking the second sentence; 

8 and 

9 (iii) by adding at the end the fol10 lowing: 

11 ‘‘(B) SPECIAL REQUIREMENTS FOR MULTI12 EMPLOYER PLANS.—Subparagraph (A) shall 

13 not apply to any multiemployer plan with re14 spect to any transaction to the extent that par15 ticipants either before or after the transaction 

16 are covered under a multiemployer plan to 

17 which title IV of the Employee Retirement In18 come Security Act of 1974 applies or a com19 posite plan.’’. 

20 (B) ADDITIONAL QUALIFICATION REQUIRE21 MENT.—Paragraph (1) of section 414(l) of such 

22 Code is amended— 

23 (i) by striking ‘‘(1) IN GENERAL’’ and 

24 all that follows through ‘‘shall not con25 stitute’’ and inserting the following: 


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•S 5045 IS

1 ‘‘(1) BENEFIT PROTECTIONS: MERGER, CON2 SOLIDATION, TRANSFER.— 

3 ‘‘(A) IN GENERAL.—Except as provided in 

4 subparagraph (B), a trust which forms a part 

5 of a plan shall not constitute’’; 

6 (ii) by striking the second sentence; 

7 and 

8 (iii) by adding at the end the fol9 lowing: 

10 ‘‘(B) SPECIAL REQUIREMENTS FOR MULTI11 EMPLOYER PLANS.—Subparagraph (A) does not 

12 apply to any multiemployer plan with respect to 

13 any transaction to the extent that participants 

14 either before or after the transaction are cov15 ered under a multiemployer plan to which title 

16 IV of the Employee Retirement Income Secu17 rity Act of 1974 applies or a composite plan.’’. 

18 (d) REQUIREMENTS FOR STATUS AS A QUALIFIED

19 PLAN.— 

20 (1) REQUIREMENT THAT ACTUARIAL ASSUMP21 TIONS BE SPECIFIED.—Section 401(a)(25) of the In22 ternal Revenue Code of 1986 is amended by insert23 ing ‘‘(in the case of a composite plan, benefits objec24 tively calculated pursuant to a formula)’’ after ‘‘defi25 nitely determinable benefits’’. 


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1 (2) MISSING PARTICIPANTS IN TERMINATING

2 COMPOSITE PLAN.—Section 401(a)(34) of the Inter3 nal Revenue Code of 1986 is amended by striking ‘‘, 

4 a trust’’ and inserting ‘‘or a composite plan, a 

5 trust’’. 

6 (e) DEDUCTION FOR CONTRIBUTIONS TO A QUALI7 FIED PLAN.—Section 404(a)(1) of the Internal Revenue 

8 Code of 1986 is amended by redesignating subparagraph 

9 (E) as subparagraph (F) and by inserting after subpara10 graph (D) the following: 

11 ‘‘(E) COMPOSITE PLANS.— 

12 ‘‘(i) IN GENERAL.—In the case of a 

13 composite plan, subparagraph (D) shall 

14 not apply and the maximum amount de15 ductible for a plan year shall be the excess 

16 (if any) of— 

17 ‘‘(I) 140 percent of the greater 

18 of— 

19 ‘‘(aa) the current liability of 

20 the plan determined in accord21 ance with the principles of sec22 tion 431(c)(6)(D), or 

23 ‘‘(bb) the present value of 

24 plan liabilities as determined 

25 under section 438, over 


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•S 5045 IS

1 ‘‘(II) the fair market value of the 

2 plan’s assets, projected to the end of 

3 the plan year. 

4 ‘‘(ii) SPECIAL RULES FOR PREDE5 CESSOR MULTIEMPLOYER PLAN TO COM6 POSITE PLAN.— 

7 ‘‘(I) IN GENERAL.—Except as 

8 provided in subclause (II), if an em9 ployer contributes to a composite plan 

10 with respect to its employees, con11 tributions by that employer to a leg12 acy plan with respect to some or all of 

13 the same group of employees shall be 

14 deductible under sections 162 and this 

15 section, subject to the limits in sub16 paragraph (D). 

17 ‘‘(II) TRANSITION CONTRIBU18 TION.—The full amount of a contribu19 tion to satisfy the transition contribu20 tion requirement (as defined in sec21 tion 440A(d)) and allocated to the 

22 legacy defined benefit plan for the 

23 plan year shall be deductible for the 

24 employer’s taxable year ending with or 

25 within the plan year.’’. 


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1 (f) MINIMUM VESTING STANDARDS.— 

2 (1) YEARS OF SERVICE UNDER COMPOSITE

3 PLANS.— 

4 (A) EMPLOYEE RETIREMENT INCOME SE5 CURITY ACT OF 1974.—Section 203 of the Em6 ployee Retirement Income Security Act of 1974 

7 (29 U.S.C. 1053) is amended by inserting after 

8 subsection (f) the following: 

9 ‘‘(g) SPECIAL RULES FOR COMPUTING YEARS OF

10 SERVICE UNDER COMPOSITE PLANS.— 

11 ‘‘(1) IN GENERAL.—In determining a qualified 

12 employee’s years of service under a composite plan 

13 for purposes of this section, the employee’s years of 

14 service under a legacy plan shall be treated as years 

15 of service earned under the composite plan. For pur16 poses of such determination, a composite plan shall 

17 not be treated as a defined benefit plan pursuant to 

18 section 801(d). 

19 ‘‘(2) QUALIFIED EMPLOYEE.—For purposes of 

20 this subsection, an employee is a qualified employee 

21 if the employee first completes an hour of service 

22 under the composite plan (determined without re23 gard to the provisions of this subsection) within the 

24 12-month period immediately preceding or the 24- 

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•S 5045 IS

1 ployee ceased to accrue benefits under the legacy 

2 plan. 

3 ‘‘(3) CERTIFICATION OF YEARS OF SERVICE.— 

4 For purposes of paragraph (1), the plan sponsor of 

5 the composite plan shall rely on a written certifi6 cation by the plan sponsor of the legacy plan of the 

7 years of service the qualified employee completed 

8 under the defined benefit plan as of the date the em9 ployee satisfies the requirements of paragraph (2), 

10 disregarding any years of service that had been for11 feited under the rules of the defined benefit plan be12 fore that date unless contrary to service records pro13 vided by the participant. In the case of a conflict, 

14 the plan sponsor shall evaluate the evidence and 

15 make a reasonable factual determination. 

16 ‘‘(h) SPECIAL RULES FOR COMPUTING YEARS OF

17 SERVICE UNDER LEGACY PLANS.— 

18 ‘‘(1) IN GENERAL.—In determining a qualified 

19 employee’s years of service under a legacy plan for 

20 purposes of this section, and in addition to any serv21 ice under applicable regulations, the employee’s 

22 years of service under a composite plan shall be 

23 treated as years of service earned under the legacy 

24 plan. For purposes of such determination, a comVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00401 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 posite plan shall not be treated as a defined benefit 

2 plan pursuant to section 801(d). 

3 ‘‘(2) QUALIFIED EMPLOYEE.—For purposes of 

4 this subsection, an employee is a qualified employee 

5 if the employee first completes an hour of service 

6 under the composite plan (determined without re7 gard to the provisions of this subsection) within the 

8 12-month period immediately preceding or the 24- 

9 month period immediately following the date the em10 ployee ceased to accrue benefits under the legacy 

11 plan. 

12 ‘‘(3) CERTIFICATION OF YEARS OF SERVICE.— 

13 For purposes of paragraph (1), the plan sponsor of 

14 the legacy plan shall rely on a written certification 

15 by the plan sponsor of the composite plan of the 

16 years of service the qualified employee completed 

17 under the composite plan after the employee satisfies 

18 the requirements of paragraph (2), disregarding any 

19 years of service that has been forfeited under the 

20 rules of the composite plan unless contrary to service 

21 records provided by the participant. In the case of 

22 a conflict, the plan sponsor shall evaluate the evi23 dence and make a reasonable factual determina24 tion.’’. 


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1 (B) INTERNAL REVENUE CODE OF 1986.— 

2 Section 411(a) of the Internal Revenue Code of 

3 1986 is amended by adding at the end the fol4 lowing: 

5 ‘‘(14) SPECIAL RULES FOR DETERMINING

6 YEARS OF SERVICE UNDER COMPOSITE PLANS.— 

7 ‘‘(A) IN GENERAL.—In determining a 

8 qualified employee’s years of service under a 

9 composite plan for purposes of this subsection, 

10 the employee’s years of service under a legacy 

11 plan shall be treated as years of service earned 

12 under the composite plan. For purposes of such 

13 determination, a composite plan shall not be 

14 treated as a defined benefit plan pursuant to 

15 section 437(d). 

16 ‘‘(B) QUALIFIED EMPLOYEE.—For pur17 poses of this paragraph, an employee is a quali18 fied employee if the employee first completes an 

19 hour of service under the composite plan (deter20 mined without regard to the provisions of this 

21 paragraph) within the 12-month period imme22 diately preceding or the 24-month period imme23 diately following the date the employee ceased 

24 to accrue benefits under the legacy plan. 


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1 ‘‘(C) CERTIFICATION OF YEARS OF SERV2 ICE.—For purposes of subparagraph (A), the 

3 plan sponsor of the composite plan shall rely on 

4 a written certification by the plan sponsor of 

5 the legacy plan of the years of service the quali6 fied employee completed under the legacy plan 

7 as of the date the employee satisfies the re8 quirements of subparagraph (B), disregarding 

9 any years of service that had been forfeited 

10 under the rules of the defined benefit plan be11 fore that date unless contrary to service records 

12 provided by the participant. In the case of a 

13 conflict, the plan sponsor shall evaluate the evi14 dence and make a reasonable factual determina15 tion. 

16 ‘‘(15) SPECIAL RULES FOR COMPUTING YEARS

17 OF SERVICE UNDER LEGACY PLANS.— 

18 ‘‘(A) IN GENERAL.—In determining a 

19 qualified employee’s years of service under a 

20 legacy plan for purposes of this section, and in 

21 addition to any service under applicable regula22 tions, the employee’s years of service under a 

23 composite plan shall be treated as years of serv24 ice earned under the legacy plan. For purposes 

25 of such determination, a composite plan shall 


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•S 5045 IS

1 not be treated as a defined benefit plan pursu2 ant to section 437(d). 

3 ‘‘(B) QUALIFIED EMPLOYEE.—For pur4 poses of this paragraph, an employee is a quali5 fied employee if the employee first completes an 

6 hour of service under the composite plan (deter7 mined without regard to the provisions of this 

8 paragraph) within the 12-month period imme9 diately preceding or the 24-month period imme10 diately following the date the employee ceased 

11 to accrue benefits under the legacy plan. 

12 ‘‘(C) CERTIFICATION OF YEARS OF SERV13 ICE.—For purposes of subparagraph (A), the 

14 plan sponsor of the legacy plan shall rely on a 

15 written certification by the plan sponsor of the 

16 composite plan of the years of service the quali17 fied employee completed under the composite 

18 plan after the employee satisfies the require19 ments of subparagraph (B), disregarding any 

20 years of service that has been forfeited under 

21 the rules of the composite plan unless contrary 

22 to service records provided by the participant. 

23 In the case of a conflict, the plan sponsor shall 

24 evaluate the evidence and make a reasonable 

25 factual determination.’’. 


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1 (2) REDUCTION OF BENEFITS.— 

2 (A) EMPLOYEE RETIREMENT INCOME SE3 CURITY ACT OF 1974.—Section 203(a)(3)(E)(ii) 

4 of the Employee Retirement Income Security 

5 Act of 1974 (29 U.S.C. 1053(a)(3)(E)(ii)) is 

6 amended— 

7 (i) in subclause (I) by striking 

8 ‘‘4244A’’ and inserting ‘‘305(f), 803,’’; 

9 and 

10 (ii) in subclause (II) by striking 

11 ‘‘4245’’ and inserting ‘‘305(f), 4245,’’. 

12 (B) INTERNAL REVENUE CODE OF 1986.— 

13 Section 411(a)(3)(F) of the Internal Revenue 

14 Code of 1986 is amended— 

15 (i) in clause (i) by striking ‘‘section 

16 418D or under section 4281 of the Em17 ployee Retirement Income Security Act of 

18 1974’’ and inserting ‘‘section 432(f) or 

19 439 or under section 4281 of the Em20 ployee Retirement Income Security Act of 

21 1974’’; and 

22 (ii) in clause (ii) by inserting ‘‘or 

23 432(f)’’ after ‘‘section 418E’’. 

24 (3) ACCRUED BENEFIT REQUIREMENTS.— 


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1 (A) EMPLOYEE RETIREMENT INCOME SE2 CURITY ACT OF 1974.—Section 204(b)(1)(B)(i) 

3 of the Employee Retirement Income Security 

4 Act of 1974 (29 U.S.C. 1054(b)(1)(B)(i)) is 

5 amended by inserting ‘‘, including an amend6 ment reducing or suspending benefits under 

7 section 305(f), 803, 4245 or 4281,’’ after ‘‘any 

8 amendment to the plan’’. 

9 (B) INTERNAL REVENUE CODE OF 1986.— 

10 Section 411(b)(1)(B)(i) of the Internal Revenue 

11 Code of 1986 is amended by inserting ‘‘, includ12 ing an amendment reducing or suspending ben13 efits under section 418E, 432(f) or 439, or 

14 under section 4281 of the Employee Retirement 

15 Income Security Act of 1974,’’ after ‘‘any 

16 amendment to the plan’’. 

17 (4) ADDITIONAL ACCRUED BENEFIT REQUIRE18 MENTS.— 

19 (A) EMPLOYEE RETIREMENT INCOME SE20 CURITY ACT OF 1974.—Section 204(b)(1)(H)(v) 

21 of the Employee Retirement Income Security 

22 Act of 1974 (29 U.S.C. 1053(b)(1)(H)(v)) is 

23 amended by inserting before the period at the 

24 end the following: ‘‘, or benefits are reduced or 


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•S 5045 IS

1 suspended under section 305(f), 803, 4245, or 

2 4281’’. 

3 (B) INTERNAL REVENUE CODE OF 1986.— 

4 Section 411(b)(1)(H)(iv) of the Internal Rev5 enue Code of 1986 is amended— 

6 (i) in the heading by striking ‘‘BEN7 EFIT’’ and inserting ‘‘BENEFIT AND THE

8 SUSPENSION AND REDUCTION OF CERTAIN

9 BENEFITS’’; and 

10 (ii) in the text by inserting before the 

11 period at the end the following: ‘‘, or bene12 fits are reduced or suspended under sec13 tion 418E, 432(f), or 439, or under section 

14 4281 of the Employee Retirement Income 

15 Security Act of 1974’’. 

16 (5) ACCRUED BENEFIT NOT TO BE DECREASED

17 BY AMENDMENT.— 

18 (A) EMPLOYEE RETIREMENT INCOME SE19 CURITY ACT OF 1974.—Section 204(g)(1) of the 

20 Employee Retirement Income Security Act of 

21 1974 (29 U.S.C. 1053(g)(1)) is amended by in22 serting after ‘‘302(d)(2)’’ the following: ‘‘, 

23 305(f), 803, 4245,’’. 

24 (B) INTERNAL REVENUE CODE OF 1986.— 

25 Section 411(d)(6)(A) of the Internal Revenue 


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•S 5045 IS

1 Code of 1986 is amended by inserting after 

2 ‘‘412(d)(2),’’ the following: ‘‘418E, 432(f), or 

3 439,’’. 

4 (g) CERTAIN FUNDING RULES NOT APPLICABLE.— 

5 (1) EMPLOYEE RETIREMENT INCOME SECURITY

6 ACT OF 1974.—Section 305 of the Employee Retire7 ment Income Security Act of 1974 (29 U.S.C. 

8 1085), as amended by section 212(a) and as in ef9 fect before the amendments made by section 212 

10 other than subsection (a) thereof, is further amend11 ed by adding at the end the following: 

12 ‘‘(l) LEGACY PLANS.—This section and sections 302 

13 and 304 shall not apply to an employer that has an obliga14 tion to contribute to a plan that is a legacy plan within 

15 the meaning of section 805(a) solely because the employer 

16 has an obligation to contribute to a composite plan de17 scribed in section 801 that is associated with that legacy 

18 plan.’’. 

19 (2) INTERNAL REVENUE CODE OF 1986.—Sec20 tion 432 of the Internal Revenue Code of 1986, as 

21 amended by section 211(a) and as in effect before 

22 the amendments made by section 211 other than 

23 subsection (a) thereof, is further amended by adding 

24 at the end the following: 


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1 ‘‘(l) LEGACY PLANS.—This section and sections 412 

2 and 431 shall not apply to an employer that has an obliga3 tion to contribute to a plan that is a legacy plan within 

4 the meaning of section 440A(a) solely because the em5 ployer has an obligation to contribute to a composite plan 

6 described in section 437 that is associated with that legacy 

7 plan.’’. 

8 (h) TERMINATION OF COMPOSITE PLAN.—Section 

9 403(d) of the Employee Retirement Income Security Act 

10 of 1974 (29 U.S.C. 1103(d)) is amended— 

11 (1) in paragraph (1), by striking ‘‘regulations 

12 of the Secretary.’’ and inserting ‘‘regulations of the 

13 Secretary, or as provided in paragraph (3).’’; and 

14 (2) by adding at the end the following: 

15 ‘‘(3) Section 4044(a) of this Act shall be ap16 plied in the case of the termination of a composite 

17 plan by— 

18 ‘‘(A) limiting the benefits subject to para19 graph (3) thereof to benefits as defined in sec20 tion 802(b)(3)(B); and 

21 ‘‘(B) including in the benefits subject to 

22 paragraph (4) all other benefits (if any) of indi23 viduals under the plan that would be guaran24 teed under section 4022A if the plan were sub25 ject to title IV.’’. 


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1 (i) GOOD FAITH COMPLIANCE PRIOR TO GUID2 ANCE.—Where the implementation of any provision of law 

3 added or amended by this Act is subject to issuance of 

4 regulations by the Secretary of Labor, the Secretary of 

5 the Treasury, or the Pension Benefit Guaranty Corpora6 tion, a multiemployer plan shall not be treated as failing 

7 to meet the requirements of any such provision prior to 

8 the issuance of final regulations or other guidance to carry 

9 out such provision if such plan is operated in accordance 

10 with a reasonable, good faith interpretation of such provi11 sion. 

12 SEC. 505. EFFECTIVE DATE. 

13 Unless otherwise specified, the amendments made by 

14 this title shall apply to plan years beginning after the date 

15 of the enactment of this title. 

16 TITLE VI—FINANCIAL 

17 PROVISIONS 

18 SEC. 601. ADDITIONAL PREMIUMS. 

19 (a) INCREASE IN FLAT DOLLAR PREMIUM BEGIN20 NING IN 2021.—Section 4006(a)(3) of the Employee Re21 tirement Income Security Act of 1974 (29 U.S.C. 

22 1306(a)(3)) is amended— 

23 (1) in subparagraph (A)— 

24 (A) in clause (vi)— 


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•S 5045 IS

1 (i) by inserting ‘‘and before January 

2 1, 2021,’’ after ‘‘2014,’’; and 

3 (ii) by striking ‘‘or’’ at the end; 

4 (B) by moving the margins of clause (vii) 

5 2 ems to the left; 

6 (C) by redesignating clause (vii) as clause 

7 (ix); and 

8 (D) by inserting after clause (vi) the fol9 lowing: 

10 ‘‘(vii) in the case of a multiemployer plan, for 

11 plan years beginning in calendar year 2021, for each 

12 individual who is a participant in such plan during 

13 the plan year, the dollar amount in effect under 

14 clause (i) for plan years beginning in 2021,’’. 

15 (b) FLAT AND VARIABLE RATE PREMIUM FOR YEARS

16 AFTER 2021.—Section 4006(a)(3) of the Employee Re17 tirement Income Security Act of 1974 (29 U.S.C. 

18 1306(a)(3)), as amended by subsection (a), is further 

19 amended— 

20 (1) by inserting after clause (vii) of subpara21 graph (A) the following: 

22 ‘‘(viii) in the case of a multiemployer plan, for 

23 any plan year beginning after December 31, 2021, 

24 an amount for each individual who is a participant 


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•S 5045 IS

1 in such plan during the plan year equal to the sum 

2 of— 

3 ‘‘(I) the premium rate applicable under 

4 clause (i)(VIII), plus 

5 ‘‘(II) the additional premium (if any) de6 termined under subparagraph (N) for the plan 

7 year, or’’; and 

8 (2) by adding at the end the following: 

9 ‘‘(N)(i) The additional premium determined under 

10 this subparagraph with respect to any multiemployer plan 

11 for any plan year shall be an amount equal to the least 

12 of— 

13 ‘‘(I) the amount determined under clause (ii) 

14 for the plan year divided by the number of partici15 pants in such plan as of the close of the preceding 

16 plan year; 

17 ‘‘(II) 10 percent of the historic base contribu18 tions divided by the number of participants in such 

19 plan as of the close of the preceding plan year; or 

20 ‘‘(III) $250. 

21 ‘‘(ii) The amount determined under this clause for 

22 any plan year shall be an amount equal to $10 for each 

23 $1,000 (or fraction thereof) of the multiemployer un24 funded vested benefits under the plan as of the close of 

25 the preceding plan year. For purposes of this clause, the 


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1 term ‘multiemployer unfunded vested benefits’ means, for 

2 a plan year, the excess (if any) of— 

3 ‘‘(I) the current liability of the plan as deter4 mined under section 304(c)(6)(D) by taking into ac5 count only vested benefits, over 

6 ‘‘(II) the fair market value (as determined 

7 under section 304(c)(6)(A)(ii)(I)) of the plan assets 

8 for the plan year which are held by the plan as of 

9 the valuation date. 

10 ‘‘(iii) For purposes of clause (i)(II), the term ‘historic 

11 base contributions’ means the average amount of the con12 tributions, excluding any payments of withdrawal liability, 

13 to the plan required to be reported by the plan on Sched14 ule MB of the 3 most recent Forms 5500 required to be 

15 filed before the date of enactment of this subparagraph. 

16 ‘‘(iv) For each plan year beginning after December 

17 31, 2022, there shall be substituted for the dollar amount 

18 of historic base contributions under clause (i)(II) and the 

19 dollar amount specified in clause (i)(III) an amount equal 

20 to the greater of— 

21 ‘‘(I) the product derived by multiplying such 

22 dollar amount for plan years beginning in that cal23 endar year by the ratio of— 

24 ‘‘(aa) the national average wage index (as 

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1 rity Act) for the first of the 2 calendar years 

2 preceding the calendar year in which such plan 

3 year begins, to 

4 ‘‘(bb) the national average wage index (as 

5 so defined) for 2020, or 

6 ‘‘(II) such dollar amount in effect for plan 

7 years beginning in the preceding calendar year. 

8 If any amount determined under this clause is not 

9 a multiple of $1, such product shall be rounded to 

10 the nearest multiple of $1.’’. 

11 (c) ADDITIONAL PREMIUMS.—Section 4006(a) of the 

12 Employee Retirement Income Security Act of 1974 (29 

13 U.S.C. 1306(a)), as amended by this Act, is further 

14 amended by adding at the end the following: 

15 ‘‘(10) ADDITIONAL PREMIUMS PAYABLE BY

16 PARTICIPANTS AND BENEFICIARIES.— 

17 ‘‘(A) IN GENERAL.—In addition to the 

18 amounts payable under paragraph (3), for plan 

19 years beginning after December 31, 2021, with 

20 respect to multiemployer plans, premiums shall 

21 be payable to the corporation with respect to 

22 participants and beneficiaries who are in pay 

23 status in accordance with this paragraph. 

24 ‘‘(B) AMOUNTS PAYABLE.—Subject to sub25 paragraphs (C), (D), and (E), the monthly 


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1 amount payable by each participant or bene2 ficiary who is in pay status is— 

3 ‘‘(i) an amount equal to 3 percent of 

4 the participant’s or beneficiary’s aggregate 

5 monthly benefit, in the case of a plan in 

6 endangered status, as described in section 

7 305(b)(2); 

8 ‘‘(ii) an amount equal to 5 percent of 

9 the participant’s or beneficiary’s aggregate 

10 monthly benefit, in the case of a plan in 

11 critical status, as described in section 

12 305(b)(3); 

13 ‘‘(iii) an amount equal to 7 percent of 

14 the participant’s or beneficiary’s aggregate 

15 monthly benefit, in the case of a plan in 

16 critical and declining status (as described 

17 in section 305(b)(7)), a plan that became 

18 an insolvent plan after the date of enact19 ment of this paragraph, or a plan that has 

20 been terminated under section 4041A or 

21 4042 but is not insolvent, unless that plan 

22 is (or was) an original or successor plan 

23 pursuant to a special partition order under 

24 section 4233A; or 


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1 ‘‘(iv) notwithstanding clauses (i), (ii), 

2 or (iii), an amount equal to 10 percent of 

3 the participant’s or beneficiary’s aggregate 

4 monthly benefit, in the case of a plan 

5 which is (or was) an original or successor 

6 plan pursuant to a special partition order 

7 under section 4233A, regardless of the sta8 tus of the original or successor plan. 

9 ‘‘(C) COORDINATION WITH SUSPENSION OF

10 BENEFITS.—In the case of any participant or 

11 beneficiary whose benefits are suspended under 

12 section 305(f)(9), the percentage of benefits 

13 payable under the applicable clause of subpara14 graph (B) with respect to the participant or 

15 beneficiary shall be reduced (but not below 

16 zero) by the percentage of benefits which were 

17 so suspended. 

18 ‘‘(D) TREATMENT OF BENEFITS BASED ON

19 DISABILITY.—No benefits— 

20 ‘‘(i) based on disability (as defined by 

21 the plan), or 

22 ‘‘(ii) of a participant or beneficiary 

23 who is entitled to a benefit under title II 

24 of the Social Security Act on the basis of 


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•S 5045 IS

1 a disability (as defined in section 223(d)(2) 

2 of such Act), 

3 shall be included in the calculation of the par4 ticipant’s or beneficiary’s aggregate monthly 

5 benefit for purposes of determining the pay6 ment due under subparagraph (B). 

7 ‘‘(E) PHASEOUT OF PREMIUM FOR THOSE

8 AGED 75 AND OLDER.— 

9 ‘‘(i) IN GENERAL.—In the case of a 

10 participant or beneficiary who has attained 

11 or will attain at least 75 years of age in a 

12 plan year, the monthly amount payable by 

13 such participant or beneficiary for months 

14 during such plan year under this para15 graph (determined without regard to this 

16 subparagraph) shall be reduced by the ap17 plicable percentage of such amount. 

18 ‘‘(ii) APPLICABLE PERCENTAGE.—For 

19 purposes of clause (i), the applicable per20 centage for any month shall be determined 

21 in accordance with the following table: 

‘‘If the individual is, or will 

attain during the plan 

year, age: 

The applicable percentage is: 

75 ................................................................................................. 20 percent

76 ................................................................................................. 40 percent

77 ................................................................................................. 60 percent

78 ................................................................................................. 80 percent

79 or older ...................................................................................100 percent. 


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•S 5045 IS

1 ‘‘(F) METHODS OF COLLECTION.—The 

2 premiums payable under subparagraph (B) 

3 shall be collected by the plan from participants 

4 who are receiving benefits under the plan by de5 ducting the amount of the premium from the 

6 benefits as and when paid, and holding such 

7 amounts in a separate account to be remitted to 

8 the corporation annually, as prescribed by regu9 lations of the corporation. Amounts held in a 

10 separate account under this subparagraph shall 

11 not accrue interest, shall not be treated as as12 sets of the plan, and shall not be commingled 

13 with any other assets of the plan. 

14 ‘‘(G) PLAN AMENDMENTS.—The adminis15 trator of each multiemployer plan shall amend 

16 the plan documents to allow for deductions 

17 from benefits pursuant to this paragraph. 

18 ‘‘(H) PREEMPTION.—This paragraph shall 

19 supersede any law of a State which would di20 rectly or indirectly prohibit or restrict an em21 ployer, plan, or labor organization from with22 holding or remitting premium amounts in ac23 cordance with this paragraph. 

24 ‘‘(I) DETERMINATION OF PLAN STATUS.— 


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1 ‘‘(i) IN GENERAL.—Except as other2 wise provided by the regulations issued 

3 pursuant to clause (ii), for purposes of de4 termining premiums due under this para5 graph, the plan’s status shall be the status 

6 certified under section 305 for the first 

7 plan year beginning on or after January 1, 

8 2021. 

9 ‘‘(ii) SUBSEQUENT CHANGES IN STA10 TUS.—The corporation shall issue regula11 tions regarding the timing required for re12 flecting, in the amounts withheld, a revised 

13 plan status certified at a later date. In no 

14 event shall such regulations allow a delay 

15 of more than 90 days. 

16 ‘‘(11) ADDITIONAL PREMIUMS PAYABLE BY EM17 PLOYERS AND LABOR ORGANIZATIONS.— 

18 ‘‘(A) IN GENERAL.—In addition to the 

19 amounts payable under paragraph (3), for plan 

20 years beginning after December 31, 2021, with 

21 respect to multiemployer plans, premiums shall 

22 be payable to the corporation with respect to 

23 employers and labor organizations in accord24 ance with this paragraph. 


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1 ‘‘(B) EMPLOYERS.—The monthly amount 

2 payable by employers, for each employee par3 ticipating in the plan (as determined under sub4 paragraph (D)) during that month is— 

5 ‘‘(i) $1 in the case of a plan in unre6 stricted status pursuant to section 

7 305(b)(1)(B), or $1.50 in the case of a 

8 plan in stable status pursuant to section 

9 305(b)(1)(A), but only if the plan is not an 

10 original plan or a successor plan within the 

11 meaning of section 4233A; and 

12 ‘‘(ii) $2.50 in any other case. 

13 ‘‘(C) LABOR ORGANIZATIONS.—The 

14 monthly amount payable by labor organizations, 

15 for each member paying dues and participating 

16 in the plan (as determined under subparagraph 

17 (D)) during that month is— 

18 ‘‘(i) $1 in the case of a plan in unre19 stricted status pursuant to section 

20 305(b)(1)(B), or $1.50 in the case of a 

21 plan in stable status pursuant to section 

22 305(b)(1)(A), but only if the plan is not an 

23 original plan or a successor plan within the 

24 meaning of section 4233A; and 

25 ‘‘(ii) $2.50 in any other case. 


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1 ‘‘(D) PERSONS PARTICIPATING IN THE

2 PLAN.—For purposes of subparagraphs (B) and 

3 (C), an employee or member participating in 

4 the plan during any month is a person with re5 spect to whom the employer had an obligation 

6 to contribute to the plan under the terms of a 

7 collective bargaining agreement or other partici8 pation agreement for that month. 

9 ‘‘(E) REMITTANCE.—Premiums required 

10 under subparagraph (B) or (C) shall be remit11 ted to the plan monthly and held in a separate 

12 account until remittance, as prescribed in sub13 paragraph (F). In the case of a participant or 

14 beneficiary on whose behalf more than one em15 ployer contributed during a month, the plan 

16 may elect to apportion the monthly amount to 

17 the employers on a proportional basis. Amounts 

18 held in a separate account under this subpara19 graph shall not accrue interest, shall not be 

20 treated as assets of the plan, and shall not be 

21 commingled with any other assets of the plan. 

22 ‘‘(F) SUBMISSION TO THE CORPORA23 TION.—Each plan shall submit the premiums 

24 under subparagraph (E) to the corporation, on 


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1 an annual basis, as prescribed by regulations of 

2 the corporation. 

3 ‘‘(G) DETERMINATION OF PLAN STATUS.— 

4 ‘‘(i) IN GENERAL.—Except as other5 wise provided by the regulations issued 

6 pursuant to clause (ii), for purposes of de7 termining premiums due under this para8 graph, the plan’s status shall be the status 

9 certified under section 305 for the first 

10 plan year beginning on or after January 1, 

11 2021. 

12 ‘‘(ii) SUBSEQUENT CHANGES IN STA13 TUS.—The corporation shall issue regula14 tions regarding the timing required for re15 flecting, in the amounts due, a revised plan 

16 status certified at a later date. In no event 

17 shall such regulations allow a delay of 

18 more than 90 days.’’. 

19 (d) PAYMENT OF PREMIUMS.— 

20 (1) APPLICABILITY OF PREMIUMS.—Section 

21 4007(b) of the Employee Retirement Income Secu22 rity Act of 1974 (29 U.S.C. 1307(b)) is amended by 

23 adding at the end the following: 


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1 ‘‘(3)(A)(i) The following plans shall not owe a vari2 able rate premium determined under section 

3 4006(a)(3)(N): 

4 ‘‘(I) An insolvent plan that has commenced re5 ceiving financial assistance. 

6 ‘‘(II) A plan which is certified by the plan actu7 ary under section 305 as being in unrestricted status 

8 pursuant to section 305(b)(1)(B), and which is not 

9 an original plan within the meaning of section 

10 4233A. 

11 ‘‘(III) With respect to plan years beginning be12 fore January 1, 2025, a plan which is certified by 

13 the plan actuary under section 305 as being in sta14 ble status pursuant to section 305(b)(1)(A), and 

15 which is not an original plan within the meaning of 

16 section 4233A. 

17 ‘‘(ii) An insolvent plan that has commenced receiving 

18 financial assistance shall not owe the flat rate premium 

19 under section 4006(a)(3)(A)(viii)(I). 

20 ‘‘(B) In the case of a special partition under section 

21 4233A, the original plan shall calculate and remit pre22 miums under section 4006 as if the original plan and suc23 cessor plan were one plan and the successor plan shall not 

24 be required to remit any such premiums. 


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1 ‘‘(4) Paragraph (1) shall apply to the additional pre2 miums required by section 4006(a)(10) and (11).’’. 

3 (2) AUTHORIZED CIVIL ACTIONS.—Section 

4 4007(c) of the Employee Retirement Income Secu5 rity Act of 1974 (29 U.S.C. 1307(c)) is amended by 

6 inserting after the first sentence the following: ‘‘The 

7 corporation is authorized to bring a civil action to 

8 prevent or correct any action by a designated payor, 

9 if a principal purpose of the action by the designated 

10 payor is to evade or avoid the payment of premiums, 

11 and the corporation shall be authorized to recover 

12 the amount of premium that should have been paid 

13 by such payor, plus a late payment penalty and in14 terest.’’. 

15 (e) REPORTING ON PREMIUM INCREASES AND GUAR16 ANTEE REDUCTIONS.—Section 4008 of the Employee Re17 tirement Income Security Act of 1974 (29 U.S.C. 1308) 

18 is amended by adding at the end the following: 

19 ‘‘(c) Beginning with the report for fiscal year 2025, 

20 if the corporation projects in its reporting under this sec21 tion that the corporation’s multiemployer plan program 

22 will not remain solvent for at least 10 years after the date 

23 of the report, the corporation shall include in the report 

24 a recommendation for a balanced combination of premium 

25 increases and guarantee reductions needed to ensure solVerDate Sep 11 2014 19:52 Dec 30, 2020 Jkt 019200 PO 00000 Frm 00425 Fmt 6652 Sfmt 6201 E:\BILLS\S5045.IS S5045

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1 vency for the next 20 years without respect to any loans 

2 under section 4005. Such recommendations shall be auto3 matically adopted at the beginning of the next fiscal year 

4 unless Congress takes other action.’’. 

5 (f) DELINQUENT CONTRIBUTIONS.— 

6 (1) IN GENERAL.—Section 515 of the Employee 

7 Retirement Income Security Act of 1974 (29 U.S.C. 

8 1145) is amended— 

9 (A) by striking ‘‘CONTRIBUTIONS.— 

10 Every’’, and inserting ‘‘CONTRIBUTIONS AND

11 PREMIUMS.— 

12 ‘‘(a) IN GENERAL.—Every’’, and 

13 (B) by adding at the end the following new 

14 subsection: 

15 ‘‘(b) PREMIUMS.—Every employer or labor organiza16 tion which is obligated to remit premiums with respect to 

17 a multiemployer plan under section 4006 shall remit such 

18 premiums to the plan in accordance with the terms of the 

19 plan and regulations issued by the corporation.’’. 

20 (2) CIVIL ENFORCEMENT.—Section 

21 502(g)(2)(A) of such Act (29 U.S.C. 1132(g)(2)(A)) 

22 is amended by striking ‘‘contributions,’’ and insert23 ing ‘‘contributions or premiums,’’. 


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1 SEC. 602. FUNDING. 

2 (a) LOANS TO THE CORPORATION FOR THE FUND TO

3 PAY BASIC BENEFITS.—Section 4005 of the Employee 

4 Retirement Income Security Act of 1974 (29 U.S.C. 1305) 

5 is amended by adding at the end the following: 

6 ‘‘(i)(1) The corporation may borrow from the Sec7 retary of the Treasury such funds as are necessary to pay 

8 basic benefits guaranteed under section 4022A or ex9 penses related to the corporation’s multiemployer plan 

10 program if the balance of assets in the revolving fund es11 tablished under subsection (a) for purposes of paying such 

12 benefits is $500,000,000 or less within that year. The cor13 poration may invest amounts so borrowed in accordance 

14 with subsection (b)(3)(A). 

15 ‘‘(2) Amounts borrowed under this subsection shall 

16 be— 

17 ‘‘(A) issued at an annual interest rate of 0 per18 cent; and 

19 ‘‘(B) repaid by the corporation— 

20 ‘‘(i) beginning 20 years after the date on 

21 which the loan is issued; 

22 ‘‘(ii) over a period of not more than 20 

23 years from commencement of repayment; and 

24 ‘‘(iii) out of the fund established under 

25 subsection (a) to pay basic benefits guaranteed 

26 under section 4022A. 


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1 ‘‘(3) The corporation shall notify the Committee on 

2 Health, Education, Labor, and Pensions and the Com3 mittee on Finance of the Senate and the Committee on 

4 Education and Labor and the Committee on Ways and 

5 Means of the House of Representatives within 14 days of 

6 requesting a loan under this subsection. 

7 ‘‘(4) Beginning on January 1, 2021, if, as of the close 

8 of any calendar year the outstanding balance of the loans 

9 provided to the corporation during the previous year under 

10 this subsection exceeded $2,000,000,000, the multiem11 ployer flat-rate premium rates applicable under section 

12 4006(a) solely for plan years beginning in the immediately 

13 succeeding calendar year shall be increased by 20 per14 cent.’’. 

15 (b) STUDY ON FUNDING FOR BASIC BENEFIT GUAR16 ANTEE.—Section 4022A(f) of the Employee Retirement 

17 Income Security Act of 1974 (29 U.S.C. 1322a(f)) is 

18 amended— 

19 (1) by striking ‘‘Committee on Labor and 

20 Human Resources’’ each place such term appears 

21 and inserting ‘‘Committee on Health, Education, 

22 Labor, and Pensions’’; 

23 (2) in paragraph (1)(A)— 

24 (A) in clause (i), by striking ‘‘, and’’ and 

25 inserting a semicolon; and 


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1 (B) by inserting after clause (ii) the fol2 lowing: 

3 ‘‘(iii) whether the Corporation projects 

4 that the loans issued under section 4005(i) will 

5 be repaid in accordance with the schedule set 

6 forth in paragraph (2)(B) of such section; 

7 and’’; 

8 (3) in paragraph (2)— 

9 (A) in subparagraph (A)— 

10 (i) in the matter preceding clause (i), 

11 by inserting ‘‘and repayment of loans 

12 under section 4005(i)’’ after ‘‘multiem13 ployer plans’’; and 

14 (ii) in clause (ii), by inserting ‘‘, and 

15 repayment of any loans issued under sec16 tion 4005(i)’’ before the comma at the end; 

17 and 

18 (B) in subparagraph (C), by striking ‘‘sec19 ond’’; and 

20 (4) in paragraph (3)(A)(ii), by inserting ‘‘and 

21 repayment of loans issued under section 4005(i)’’ 

22 before the period. 

23 SEC. 603. COMPOSITE PLAN TRANSITION FEE. 

24 (a) IN GENERAL.—Section 4006(a) of the Employee 

25 Retirement Income Security Act of 1974 (29 U.S.C. 


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1 1306(a)), as amended by this Act, is further is amended 

2 by adding at the end the following: 

3 ‘‘(12) COMPOSITE PLAN TRANSITION FEE.— 

4 Notwithstanding paragraph (9), in any year after 

5 2024, a composite plan (as defined in section 

6 801(a)) shall remit to the legacy plan (within the 

7 meaning of section 805) $15 per participant that is 

8 not also a participant in the legacy plan. The legacy 

9 plan shall remit such amount to the corporation in 

10 addition to its premiums otherwise required under 

11 this section.’’. 

12 (b) CONFORMING AMENDMENT.—Section 4007(b)(4) 

13 of the Employee Retirement Income Security Act of 1974 

14 (29 U.S.C. 1307(b)(4)), as added by section 601, is 

15 amended by inserting ‘‘, and the transition fees required 

16 by section 4006(a)(12)’’ before the period. 

Æ 


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