I 

111TH CONGRESS 

1ST SESSION H. R. 3936 

To amend the Employee Retirement Income Security Act of 1974 and the 

Internal Revenue Code of 1986 to allow time for pensions to fund 

benefit obligations in light of economic circumstances in the financial 

markets of 2008, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 27, 2009 

Mr. POMEROY (for himself and Mr. TIBERI) introduced the following bill; 

which was referred to the Committee on Education and Labor, and in 

addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such 

provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Employee Retirement Income Security Act 

of 1974 and the Internal Revenue Code of 1986 to 

allow time for pensions to fund benefit obligations in 

light of economic circumstances in the financial markets 

of 2008, 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, ETC. 

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

5 ‘‘Preserve Benefits and Jobs Act of 2009’’. 


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

2 this Act is as follows: 

Sec. 1. Short title, etc. 

TITLE I—SINGLE EMPLOYER PLANS 

Sec. 101. Extended period for single-employer defined benefit plans to amortize 

certain shortfall amortization bases. 

Sec. 102. Expansion of corridor within which single-employer defined benefit 

plans are allowed to average asset values. 

Sec. 103. Lookback for benefit accrual restriction. 

Sec. 104. Lookback for credit balance rule. 

Sec. 105. Clarification of treatment of expenses. 

Sec. 106. Information reporting. 

Sec. 107. Benefit restriction effective date for collectively bargained plans. 

Sec. 108. Social Security level-income options. 

Sec. 109. PBGC guarantee. 

Sec. 110. Application of extended amortization period to plans subject to prior 

law funding rules. 

Sec. 111. Additions to funding-based limits on benefits and benefits accruals 

under single-employer plans. 

Sec. 112. Reportable events. 

TITLE II—MULTIEMPLOYER PLANS 

Sec. 201. Adjustments to funding standard account rules; reporting clarification. 

Sec. 202. Multiemployer plans in endangered or critical status. 

Sec. 203. Multiemployer plan mergers and alliances. 

Sec. 204. Strengthening participants’ benefit protections. 

3 TITLE I—SINGLE EMPLOYER 

4 PLANS 

5 SEC. 101. EXTENDED PERIOD FOR SINGLE-EMPLOYER DE6 FINED BENEFIT PLANS TO AMORTIZE CER7 TAIN SHORTFALL AMORTIZATION BASES. 

8 (a) AMENDMENTS TO ERISA.— 

9 (1) IN GENERAL.—Paragraph (2) of section 

10 303(c) of the Employee Retirement Income Security 

11 Act of 1974 is amended by adding at the end the 

12 following subparagraphs: 

13 ‘‘(D) SPECIAL RULE.— 


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1 ‘‘(i) IN GENERAL.—In the case of the 

2 shortfall amortization base of an active 

3 plan for any applicable plan year, the 

4 shortfall amortization installments are the 

5 amounts described in clause (ii) or clause 

6 (iii), as applicable, determined pursuant to 

7 clause (iv). 

8 ‘‘(ii) 7-YEAR AMORTIZATION.— 

9 ‘‘(I) IN GENERAL.—The shortfall 

10 amortization installments described in 

11 this clause are— 

12 ‘‘(aa) in the case of the last 

13 7 plan years in the 9-plan-year 

14 period beginning with the appli15 cable plan year, the amounts nec16 essary to amortize the shortfall 

17 amortization base of the plan for 

18 the applicable plan year in level 

19 annual installments over such 

20 last 7 plan years, and 

21 ‘‘(bb) in the case of the first 

22 2 plan years in such 9-plan-year 

23 period, interest on such shortfall 

24 amortization base (determined 

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1 est for the plan for the plan 

2 year). 

3 ‘‘(II) SHORTFALL AMORTIZATION

4 INSTALLMENT.—The shortfall amorti5 zation installment for any plan year in 

6 the 9-plan-year period under this 

7 clause with respect to such shortfall 

8 amortization base is the annual in9 stallment determined under this 

10 clause for that year for that base. 

11 ‘‘(III) MINIMUM REQUIRED CON12 TRIBUTION FOR FIRST 2 YEARS.— 

13 Notwithstanding the preceding provi14 sions of this clause, the minimum re15 quired contribution for the two plan 

16 years described in subclause (I)(bb) 

17 shall be increased to the extent nec18 essary so that the minimum required 

19 contribution for such plan year is at 

20 least equal to the applicable percent21 age of the minimum required con22 tribution for the plan year preceding 

23 the first applicable plan year. If the 

24 minimum required contribution is in25 creased by reason of the preceding 


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1 sentence, the shortfall amortization 

2 installments with respect to the short3 fall amortization base for any applica4 ble plan year shall be reduced to take 

5 such increase into account, pursuant 

6 to rules issued by the Secretary of the 

7 Treasury, but only if the shortfall am8 ortization installments with respect to 

9 the shortfall amortization base for 

10 such applicable plan year are deter11 mined under this clause. For purposes 

12 of this subclause, any reference to the 

13 minimum required contribution for 

14 any plan year shall be a reference to 

15 the minimum required contribution 

16 for such plan year prior to any reduc17 tion under subsection (f) and without 

18 taking into account any waiver under 

19 section 302(c). For purposes of this 

20 clause, the applicable percentage shall 

21 be determined as follows: 

The applicable 

‘‘For the: percentage is: 

First applicable plan year ................................................. 105 

Second applicable plan year .............................................. 110 

Plan year following the second applicable plan year ........ 115 

22 ‘‘(iii) 15-YEAR AMORTIZATION.—The 

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1 scribed in this clause are the amounts nec2 essary to amortize the shortfall amortiza3 tion base of the plan for the applicable 

4 plan year in level annual installments over 

5 15 years. The shortfall amortization in6 stallments for any plan year in the 15- 

7 plan-year period under this clause is the 

8 annual installment determined under this 

9 clause for that year for that base. 

10 ‘‘(iv) ELECTION.—The plan sponsor 

11 may, with respect to a plan, elect whether 

12 to determine shortfall amortization install13 ments under clause (ii), clause (iii), or 

14 without regard to this subparagraph. Such 

15 election shall be made at such times, and 

16 in such form and manner, as shall be pre17 scribed by the Secretary of the Treasury, 

18 and may be revoked only with the consent 

19 of the Secretary of the Treasury. In the 

20 absence of a timely election to determine 

21 shortfall amortization installments under 

22 such clause (ii) or clause (iii), such install23 ments shall be determined without regard 

24 to this subparagraph. 


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1 ‘‘(E) FAILURE TO MAINTAIN ACTIVE

2 PLAN.— 

3 ‘‘(i) 2 AND 7 RULE.—If the shortfall 

4 amortization installments with respect to a 

5 shortfall amortization base for an applica6 ble plan year are determined under sub7 paragraph (D)(ii), the plan must remain 

8 an active plan for the subsequent plan 

9 year. If such plan fails to be an active plan 

10 in such plan year, the minimum required 

11 contribution for the plan year with respect 

12 to which a failure occurs shall be increased 

13 by all amounts by which the minimum re14 quired contribution for the current plan 

15 year or any prior plan year has been re16 duced by the application of subparagraph 

17 (D), plus interest on such amounts at the 

18 effective rate of interest for the plan for 

19 the plan year for which the increase ap20 plies. However, any such increase in the 

21 minimum required contribution shall not 

22 require a contribution to the extent that 

23 the contribution would cause the value of 

24 plan assets for the plan year to exceed the 

25 funding target of the plan for the plan 


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1 year (determined without regard to sub2 section (i)(1)). If the minimum required 

3 contribution is increased by reason of this 

4 clause, the shortfall amortization install5 ments with respect to the shortfall amorti6 zation base for any applicable plan year 

7 shall be reduced to take such increase into 

8 account, pursuant to rules issued by the 

9 Secretary of the Treasury, but only if the 

10 shortfall amortization installments with re11 spect to the shortfall amortization base for 

12 such applicable plan year are determined 

13 under subparagraph (D)(ii). For purposes 

14 of this clause, any reference to the min15 imum required contribution for any plan 

16 year shall be a reference to the minimum 

17 required contribution for such plan year 

18 prior to any reduction under subsection (f) 

19 and without taking into account any waiv20 er under section 302(c). 

21 ‘‘(ii) 15-YEAR RULE.—If the shortfall 

22 amortization installments with respect to a 

23 shortfall amortization base for an applica24 ble plan year are determined under sub25 paragraph (D)(iii), the plan must remain 


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1 an active plan for the 7 subsequent plan 

2 years. If such plan fails to be an active 

3 plan in any such plan year, the shortfall 

4 amortization base, reduced by the principal 

5 portion of prior shortfall amortization in6 stallments relating to that base, shall be 

7 amortized over 7 years. 

8 ‘‘(iii) SPECIAL RULE.—In the case of 

9 an applicable plan year that ends before 

10 July 1, 2009, the plan sponsor may elect 

11 not to have the active plan requirement 

12 apply for such plan year. If such election 

13 is made— 

14 ‘‘(I) clause (i) shall be applied so 

15 as to require the plan to remain an 

16 active plan for the 2 subsequent plan 

17 years (instead of 1 subsequent plan 

18 year) under rules prescribed by the 

19 Secretary of the Treasury, and 

20 ‘‘(II) clause (ii) shall be applied 

21 by substituting ‘8’ for ‘7’ the first 

22 place it appears and by substituting 

23 ‘6’ for ‘7’ the second place it appears. 

24 Such election shall be made at such times, 

25 and in such form and manner, as shall be 


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1 prescribed by the Secretary of the Treas2 ury, and may be revoked only with consent 

3 of the Secretary of the Treasury. 

4 ‘‘(F) APPLICABLE PLAN YEAR.—For pur5 poses of this paragraph, the term ‘applicable 

6 plan year’ means— 

7 ‘‘(i) except as provided in clauses (ii) 

8 and (iii), any plan year beginning in 2009 

9 or 2010, 

10 ‘‘(ii) in the case of a plan with a plan 

11 year beginning after October 31 and before 

12 January 1, any plan year beginning in 

13 2008 or 2009, and 

14 ‘‘(iii) in the case of a plan for which 

15 the valuation date is not the first day of 

16 the plan year, any plan year beginning in 

17 2008 or 2009. 

18 ‘‘(G) ACTIVE PLAN.— 

19 ‘‘(i) IN GENERAL.—For purposes of 

20 this paragraph, the term ‘active plan’ 

21 means a defined benefit plan that is de22 scribed in clause (ii), (iii), or (iv). A de23 fined benefit plan may satisfy different 

24 clauses in different years. Notwithstanding 

25 clause (ii), (iii), or (iv), a defined benefit 


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1 plan is not an active plan if an election 

2 under section 402(a)(1) of the Pension 

3 Protection Act of 2006 is in effect with re4 spect to such plan, or if the plan is de5 scribed under rules prescribed by the Sec6 retary of the Treasury designed to prevent 

7 evasion of the purposes of this subpara8 graph. 

9 ‘‘(ii) DEFINED BENEFIT PLAN.— 

10 ‘‘(I) IN GENERAL.—A defined 

11 benefit plan is described in this clause 

12 if minimum benefit accruals are pro13 vided on behalf of all employees who 

14 have satisfied the plan’s age and serv15 ice requirements and who would, but 

16 for any prior amendment ceasing ac17 cruals, be eligible for an accrual under 

18 the plan. 

19 ‘‘(II) SPECIAL RULE REGARDING

20 MINIMUM BENEFIT ACCRUALS.—For 

21 purposes of this clause, the employees 

22 described in this clause shall be treat23 ed as receiving minimum benefit ac24 cruals for a plan year if all such em25 ployees are accruing a benefit and— 


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1 ‘‘(aa) the rate of benefit ac2 crual for any such employee is 

3 not less than the greater of— 

4 ‘‘(AA) the rate of ben5 efit accrual that would have 

6 been applied to the employee 

7 under the benefit formula in 

8 effect on July 1, 2009, dis9 regarding any amendments 

10 to the plan adopted after 

11 June 30, 2009, or 

12 ‘‘(BB) the rate of ben13 efit accrual that would have 

14 applied to the employee 

15 under the benefit formula in 

16 effect as of the last date 

17 prior to the effective date of 

18 any plan amendment adopt19 ed prior to July 1, 2009 

20 that ceased providing benefit 

21 accruals based on additional 

22 service credit with respect to 

23 such employee, or 

24 ‘‘(bb) the target normal cost 

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1 trative expenses) for such plan 

2 year with respect to such employ3 ees is at least 3 percent of the 

4 aggregate compensation (as de5 fined in section 415(c)(3) of the 

6 Internal Revenue Code of 1986) 

7 of such employees for such plan 

8 year. Solely for purposes of this 

9 paragraph, target normal cost 

10 shall be determined by using 5 

11 percent in lieu of the interest 

12 rate applicable under subsection 

13 (h) and by using the mortality 

14 tables described in subsection 

15 (h)(3)(A). 

16 ‘‘(iii) DEFINED CONTRIBUTION

17 PLAN.— 

18 ‘‘(I) IN GENERAL.—A defined 

19 benefit plan is described in this clause 

20 if— 

21 ‘‘(aa) the defined benefit 

22 plan satisfies clause (ii) except 

23 with respect to employees whose 

24 failure to accrue a minimum ben25 efit is attributable to a plan 


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1 amendment adopted prior to July 

2 1, 2009, and 

3 ‘‘(bb) the plan sponsor (or 

4 any member of such sponsor’s 

5 controlled group) maintains a de6 fined contribution plan under 

7 which allocations are made on be8 half of each employee whose fail9 ure to accrue a benefit under the 

10 defined benefit plan causes the 

11 defined benefit plan not to be de12 scribed in clause (ii). 

13 ‘‘(II) MINIMUM ALLOCATIONS.— 

14 Such allocations shall not be less than 

15 3 percent of an employee’s compensa16 tion (as determined in accordance 

17 with section 414(s) of the Internal 

18 Revenue Code of 1986). A defined 

19 contribution plan shall not fail to sat20 isfy the requirements of this clause 

21 solely by reason of the failure to make 

22 allocations on behalf of one or more 

23 highly compensated employees (as de24 fined in section 414(q) of the Internal 

25 Revenue Code of 1986). 


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1 ‘‘(III) ALLOCATIONS TAKEN INTO

2 ACCOUNT.—For purposes of this 

3 clause, only the following types of al4 locations may be taken into account: 

5 ‘‘(aa) Employer contribu6 tions or forfeitures allocated 

7 without regard to whether an em8 ployee makes an elective con9 tribution or an employee con10 tribution. 

11 ‘‘(bb) In the case of the first 

12 plan year ending after June 30, 

13 2009, matching contributions (as 

14 defined in section 401(m)(4)(A) 

15 of the Internal Revenue Code of 

16 1986). 

17 ‘‘(iv) NONQUALIFIED PLAN.— 

18 ‘‘(I) IN GENERAL.—A defined 

19 benefit plan is described in this clause 

20 if no key employee (as defined in sec21 tion 416(i) of the Internal Revenue 

22 Code of 1986 without regard to para23 graph (5) thereof) accrues any new 

24 benefits for the plan year under any 

25 nonqualified deferred compensation 


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1 plan (as defined in section 409A(d) of 

2 the Internal Revenue Code of 1986) 

3 maintained by the sponsor of the de4 fined benefit plan or by any member 

5 of such sponsor’s controlled group. 

6 ‘‘(II) REVOCATION OF CERTAIN

7 ELECTIONS.—The Secretary of the 

8 Treasury shall provide rules under 

9 section 409A of the Internal Revenue 

10 Code of 1986 under which elections to 

11 defer compensation made prior to the 

12 date of enactment of this clause may 

13 be revoked by an employee within 180 

14 days after the date of enactment of 

15 this clause, but only to the extent 

16 that, pursuant to this clause, such 

17 elections could otherwise cause a fail18 ure of the employee to— 

19 ‘‘(aa) earn compensation 

20 under an arrangement that, but 

21 for the election, is not a non22 qualified deferred compensation 

23 plan (as defined in section 

24 409A(d) of the Internal Revenue 

25 Code of 1986), and 


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1 ‘‘(bb) earn compensation 

2 that is not payable to the em3 ployee in another form or under 

4 a different arrangement. 

5 ‘‘(v) MULTIPLE EMPLOYER PLANS.— 

6 In the case of a defined benefit plan de7 scribed in section 413(c)(4)(B) of the In8 ternal Revenue Code of 1986, such plan 

9 shall be treated as an active plan if such 

10 plan satisfies clause (ii), (iii), or (iv) with 

11 respect to at least 85 percent of the em12 ployers participating in such plan. In ap13 plying the 85 percent requirement, dif14 ferent employers may satisfy different 

15 clauses. 

16 ‘‘(vi) CONTROLLED GROUP.—For pur17 poses of this paragraph, the term ‘con18 trolled group’ means all employers treated 

19 as a single employer pursuant to sub20 sections (b) and (c) of section 414 of the 

21 Internal Revenue Code of 1986.’’. 

22 (2) CONFORMING AMENDMENT.—Paragraph (1) 

23 of section 303(c) of such Act is amended by striking 

24 ‘‘the shortfall amortization bases for such plan year 

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1 ing ‘‘any shortfall amortization base which has not 

2 been fully amortized under this subsection’’. 

3 (b) AMENDMENTS TO INTERNAL REVENUE 

4 CODE OF 1986.— 

5 (1) IN GENERAL.—Paragraph (2) of section 

6 430(c) of the Internal Revenue Code of 1986 is 

7 amended by adding at the end the following sub8 paragraphs: 

9 ‘‘(D) SPECIAL RULE.— 

10 ‘‘(i) IN GENERAL.—In the case of the 

11 shortfall amortization base of an active 

12 plan for any applicable plan year, the 

13 shortfall amortization installments are the 

14 amounts described in clause (ii) or clause 

15 (iii), as applicable, determined pursuant to 

16 clause (iv). 

17 ‘‘(ii) 7-YEAR AMORTIZATION.— 

18 ‘‘(I) IN GENERAL.—The shortfall 

19 amortization installments described in 

20 this clause are— 

21 ‘‘(aa) in the case of the last 

22 7 plan years in the 9-plan-year 

23 period beginning with the appli24 cable plan year, the amounts nec25 essary to amortize the shortfall 


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1 amortization base of the plan for 

2 the applicable plan year in level 

3 annual installments over such 

4 last 7 plan years, and 

5 ‘‘(bb) in the case of the first 

6 2 plan years in such 9-plan-year 

7 period, interest on such shortfall 

8 amortization base (determined 

9 using the effective rate of inter10 est for the plan for the plan 

11 year). 

12 ‘‘(II) SHORTFALL AMORTIZATION

13 INSTALLMENT.—The shortfall amorti14 zation installment for any plan year in 

15 the 9-plan-year period under this 

16 clause with respect to such shortfall 

17 amortization base is the annual in18 stallment determined under this 

19 clause for that year for that base. 

20 ‘‘(III) MINIMUM REQUIRED CON21 TRIBUTION FOR FIRST 2 YEARS.— 

22 Notwithstanding the preceding provi23 sions of this clause, the minimum re24 quired contribution for the two plan 

25 years described in subclause (I)(bb) 


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1 shall be increased to the extent nec2 essary so that the minimum required 

3 contribution for such plan year is at 

4 least equal to the applicable percent5 age of the minimum required con6 tribution for the plan year preceding 

7 the first applicable plan year. If the 

8 minimum required contribution is in9 creased by reason of the preceding 

10 sentence, the shortfall amortization 

11 installments with respect to the short12 fall amortization base for any applica13 ble plan year shall be reduced to take 

14 such increase into account, pursuant 

15 to rules issued by the Secretary, but 

16 only if the shortfall amortization in17 stallments with respect to the shortfall 

18 amortization base for such applicable 

19 plan year are determined under this 

20 clause. For purposes of this subclause, 

21 any reference to the minimum re22 quired contribution for any plan year 

23 shall be a reference to the minimum 

24 required contribution for such plan 

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1 section (f) and without taking into ac2 count any waiver under section 

3 412(c). For purposes of this clause, 

4 the applicable percentage shall be de5 termined as follows: 

The applicable 

‘‘For the: percentage is: 

First applicable plan year ................................................. 105 

Second applicable plan year .............................................. 110 

Plan year following the second applicable plan year ........ 115 

6 ‘‘(iii) 15-YEAR AMORTIZATION.—The 

7 shortfall amortization installments de8 scribed in this clause are the amounts nec9 essary to amortize the shortfall amortiza10 tion base of the plan for the applicable 

11 plan year in level annual installments over 

12 15 years. The shortfall amortization in13 stallments for any plan year in the 15- 

14 plan-year period under this clause is the 

15 annual installment determined under this 

16 clause for that year for that base. 

17 ‘‘(iv) ELECTION.—The plan sponsor 

18 may, with respect to a plan, elect whether 

19 to determine shortfall amortization install20 ments under clause (ii), clause (iii), or 

21 without regard to this subparagraph. Such 

22 election shall be made at such times, and 

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1 scribed by the Secretary, and may be re2 voked only with the consent of the Sec3 retary. In the absence of a timely election 

4 to determine shortfall amortization install5 ments under such clause (ii) or clause (iii), 

6 such installments shall be determined with7 out regard to this subparagraph. 

8 ‘‘(E) FAILURE TO MAINTAIN ACTIVE

9 PLAN.— 

10 ‘‘(i) 2 AND 7 RULE.—If the shortfall 

11 amortization installments with respect to a 

12 shortfall amortization base for an applica13 ble plan year are determined under sub14 paragraph (D)(ii), the plan must remain 

15 an active plan for the subsequent plan 

16 year. If such plan fails to be an active plan 

17 in such plan year, the minimum required 

18 contribution for the plan year with respect 

19 to which a failure occurs shall be increased 

20 by all amounts by which the minimum re21 quired contribution for the current plan 

22 year or any prior plan year has been re23 duced by the application of subparagraph 

24 (D), plus interest on such amounts at the 

25 effective rate of interest for the plan for 


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1 the plan year for which the increase ap2 plies. However, any such increase in the 

3 minimum required contribution shall not 

4 require a contribution to the extent that 

5 the contribution would cause the value of 

6 plan assets for the plan year to exceed the 

7 funding target of the plan for the plan 

8 year (determined without regard to sub9 section (i)(1)). If the minimum required 

10 contribution is increased by reason of this 

11 clause, the shortfall amortization install12 ments with respect to the shortfall amorti13 zation base for any applicable plan year 

14 shall be reduced to take such increase into 

15 account, pursuant to rules issued by the 

16 Secretary, but only if the shortfall amorti17 zation installments with respect to the 

18 shortfall amortization base for such appli19 cable plan year are determined under sub20 paragraph (D)(ii). For purposes of this 

21 clause, any reference to the minimum re22 quired contribution for any plan year shall 

23 be a reference to the minimum required 

24 contribution for such plan year prior to 

25 any reduction under subsection (f) and 


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1 without taking into account any waiver 

2 under section 412(c). 

3 ‘‘(ii) 15-YEAR RULE.—If the shortfall 

4 amortization installments with respect to a 

5 shortfall amortization base for an applica6 ble plan year are determined under sub7 paragraph (D)(iii), the plan must remain 

8 an active plan for the 7 subsequent plan 

9 years. If such plan fails to be an active 

10 plan in any such plan year, the shortfall 

11 amortization base, reduced by the principal 

12 portion of prior shortfall amortization in13 stallments relating to that base, shall be 

14 amortized over 7 years. 

15 ‘‘(iii) SPECIAL RULE.—In the case of 

16 an applicable plan year that ends before 

17 July 1, 2009, the plan sponsor may elect 

18 not to have the active plan requirement 

19 apply for such plan year. If such election 

20 is made— 

21 ‘‘(I) clause (i) shall be applied so 

22 as to require the plan to remain an 

23 active plan for the 2 subsequent plan 

24 years (instead of 1 subsequent plan 


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1 year) under rules prescribed by the 

2 Secretary, and 

3 ‘‘(II) clause (ii) shall be applied 

4 by substituting ‘8’ for ‘7’ the first 

5 place it appears and by substituting 

6 ‘6’ for ‘7’ the second place it appears. 

7 Such election shall be made at such times, 

8 and in such form and manner, as shall be 

9 prescribed by the Secretary, and may be 

10 revoked only with consent of the Secretary. 

11 ‘‘(F) APPLICABLE PLAN YEAR.—For pur12 poses of this paragraph, the term ‘applicable 

13 plan year’ shall mean— 

14 ‘‘(i) except as provided in clauses (ii) 

15 and (iii), any plan year beginning in 2009 

16 or 2010, 

17 ‘‘(ii) in the case of a plan with a plan 

18 year beginning after October 31 and before 

19 January 1, any plan year beginning in 

20 2008 or 2009, and 

21 ‘‘(iii) in the case of a plan for which 

22 the valuation date is not the first day of 

23 the plan year, any plan year beginning in 

24 2008 or 2009. 

25 ‘‘(G) ACTIVE PLAN.— 


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1 ‘‘(i) IN GENERAL.—For purposes of 

2 this paragraph, the term ‘active plan’ 

3 means a defined benefit plan that is de4 scribed in clause (ii), (iii), or (iv). A de5 fined benefit plan may satisfy different 

6 clauses in different years. Notwithstanding 

7 clause (ii), (iii), or (iv), a defined benefit 

8 plan is not an active plan if an election 

9 under section 402(a)(1) of the Pension 

10 Protection Act of 2006 is in effect with re11 spect to such plan, or if the plan is de12 scribed under rules prescribed by the Sec13 retary designed to prevent evasion of the 

14 purposes of this subparagraph. 

15 ‘‘(ii) DEFINED BENEFIT PLAN.— 

16 ‘‘(I) IN GENERAL.—A defined 

17 benefit plan is described in this clause 

18 if minimum benefit accruals are pro19 vided on behalf of all employees who 

20 have satisfied the plan’s age and serv21 ice requirements and who would, but 

22 for any prior amendment ceasing ac23 cruals, be eligible for an accrual under 

24 the plan. 


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1 ‘‘(II) SPECIAL RULE REGARDING

2 MINIMUM BENEFIT ACCRUALS.—For 

3 purposes of this clause, the employees 

4 described in this clause shall be treat5 ed as receiving minimum benefit ac6 cruals for a plan year if all such em7 ployees are accruing a benefit and— 

8 ‘‘(aa) the rate of benefit ac9 crual for any such employee is 

10 not less than the greater of— 

11 ‘‘(AA) the rate of ben12 efit accrual that would have 

13 been applied to the employee 

14 under the benefit formula in 

15 effect on July 1, 2009, dis16 regarding any amendments 

17 to the plan adopted after 

18 June 30, 2009, or 

19 ‘‘(BB) the rate of ben20 efit accrual that would have 

21 applied to the employee 

22 under the benefit formula in 

23 effect as of the last date 

24 prior to the effective date of 

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1 ed prior to July 1, 2009, 

2 that ceased providing benefit 

3 accruals based on additional 

4 service credit with respect to 

5 such employee, or 

6 ‘‘(bb) the target normal cost 

7 (without regard to plan adminis8 trative expenses) for such plan 

9 year with respect to such employ10 ees is at least 3 percent of the 

11 aggregate compensation (as de12 fined in section 415(c)(3)) of 

13 such employees for such plan 

14 year. 

15 Solely for purposes of this paragraph, 

16 target normal cost shall be determined 

17 by using 5 percent in lieu of the inter18 est rate applicable under subsection 

19 (h) and by using the mortality tables 

20 described in subsection (h)(3)(A). 

21 ‘‘(iii) DEFINED CONTRIBUTION

22 PLAN.— 

23 ‘‘(I) IN GENERAL.—A defined 

24 benefit plan is described in this clause 

25 if— 


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1 ‘‘(aa) the defined benefit 

2 plan satisfies clause (ii) except 

3 with respect to employees whose 

4 failure to accrue a minimum ben5 efit is attributable to a plan 

6 amendment adopted prior to July 

7 1, 2009, and 

8 ‘‘(bb) the plan sponsor (or 

9 any member of such sponsor’s 

10 controlled group) maintains a de11 fined contribution plan under 

12 which allocations are made on be13 half of each employee whose fail14 ure to accrue a benefit under the 

15 defined benefit plan causes the 

16 defined benefit plan not to be de17 scribed in clause (ii). 

18 ‘‘(II) MINIMUM ALLOCATIONS.— 

19 Such allocations shall not be less than 

20 3 percent of an employee’s compensa21 tion (as determined in accordance 

22 with section 414(s)). A defined con23 tribution plan shall not fail to satisfy 

24 the requirements of this clause solely 

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1 cations on behalf of one or more high2 ly compensated employees (as defined 

3 in section 414(q)). 

4 ‘‘(III) ALLOCATIONS TAKEN INTO

5 ACCOUNT.—For purposes of this 

6 clause, only the following types of al7 locations may be taken into account: 

8 ‘‘(aa) Employer contribu9 tions or forfeitures allocated 

10 without regard to whether an em11 ployee makes an elective con12 tribution or an employee con13 tribution. 

14 ‘‘(bb) In the case of the first 

15 plan year ending after June 30, 

16 2009, matching contributions (as 

17 defined in section 401(m)(4)(A)). 

18 ‘‘(iv) NONQUALIFIED PLAN.— 

19 ‘‘(I) IN GENERAL.—A defined 

20 benefit plan is described in this clause 

21 if no key employee (as defined in sec22 tion 416(i) without regard to para23 graph (5) thereof) accrues any new 

24 benefits for the plan year under any 

25 nonqualified deferred compensation 


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1 plan (as defined in section 409A(d)) 

2 maintained by the sponsor of the de3 fined benefit plan or by any member 

4 of such sponsor’s controlled group. 

5 ‘‘(II) REVOCATION OF CERTAIN

6 ELECTIONS.—The Secretary shall pro7 vide rules under section 409A under 

8 which elections to defer compensation 

9 made prior to the date of enactment 

10 of this clause may be revoked by an 

11 employee within 180 days after the 

12 date of enactment of this clause, but 

13 only to the extent that, pursuant to 

14 this clause, such elections could other15 wise cause a failure of the employee 

16 to— 

17 ‘‘(aa) earn compensation 

18 under an arrangement that, but 

19 for the election, is not a non20 qualified deferred compensation 

21 plan (as defined in section 

22 409A(d)), and 

23 ‘‘(bb) earn compensation 

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1 ployee in another form or under 

2 a different arrangement. 

3 ‘‘(v) MULTIPLE EMPLOYER PLANS.— 

4 In the case of a defined benefit plan de5 scribed in section 413(c)(4)(B), such plan 

6 shall be treated as an active plan if such 

7 plan satisfies clause (ii), (iii), or (iv) with 

8 respect to at least 85 percent of the em9 ployers participating in such plan. In ap10 plying the 85 percent requirement, dif11 ferent employers may satisfy different 

12 clauses. 

13 ‘‘(vi) CONTROLLED GROUP.—For pur14 poses of this paragraph, the term ‘con15 trolled group’ means all employers treated 

16 as a single employer pursuant to sub17 sections (b) and (c) of section 414.’’. 

18 (2) CONFORMING AMENDMENT.—Paragraph (1) 

19 of section 430(c) of such Code is amended by strik20 ing ‘‘the shortfall amortization bases for such plan 

21 year and each of the 6 preceding plan years’’ and in22 serting ‘‘any shortfall amortization base which has 

23 not been fully amortized under this subsection’’. 


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1 (3) AMENDMENT TO SECTION 409A.—Paragraph 

2 (3) of section 409A(a) of the Internal Revenue Code 

3 of 1986 is amended to read as follows: 

4 ‘‘(3) ACCELERATION OF BENEFITS.— 

5 ‘‘(A) IN GENERAL.—The requirements of 

6 this paragraph are met if the plan does not per7 mit the acceleration of the time or schedule of 

8 any payment under the plan, except as provided 

9 in regulations by the Secretary. The require10 ments of this paragraph shall not be treated as 

11 satisfied if the plan makes any payment de12 scribed in subparagraph (B) or (C). 

13 ‘‘(B) EXCESS PAYMENTS FOR CERTAIN AD14 JUSTED FUNDING TARGET ATTAINMENT PER15 CENTAGES BY ACTIVE PLAN.—A payment is de16 scribed in this subparagraph if— 

17 ‘‘(i) such payment is made during a 

18 year in which a defined benefit plan main19 tained by the employer sponsoring a non20 qualified deferred compensation plan is re21 quired to be an active plan under section 

22 430(c)(2)(E) or section 107(e) of the Pen23 sion Protection Act of 2006, and such de24 fined benefit plan has not otherwise failed 


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1 to be an active plan in such plan year or 

2 any prior plan year, 

3 ‘‘(ii) such defined benefit plan is not 

4 described in clause (ii) or (iii) of section 

5 430(c)(2)(G) (modified, if applicable by 

6 section 107(f)(5) of the Pension Protection 

7 Act of 2006), 

8 ‘‘(iii) such defined benefit plan is de9 scribed in paragraph (1) or (3) of section 

10 436(d)(or would be if section 430(g)(3)(C) 

11 did not apply), and 

12 ‘‘(iv) the nonqualified deferred com13 pensation plan makes any payment in ex14 cess of the amounts that would be per15 mitted if the requirements of such para16 graph (1) or (3), as applicable, applied to 

17 such plan. 

18 In the case of a defined benefit plan to which 

19 section 107 of the Pension Protection Act of 

20 2006 applies, clauses (iii) and (iv) shall apply 

21 based on rules similar to the rules of section 

22 436, as prescribed by the Secretary, except that 

23 the parenthetical regarding section 

24 430(g)(3)(C) shall not apply. Under rules pre25 scribed by the Secretary, a plan shall not fail to 


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1 satisfy the requirements of this subsection sole2 ly by reason of a modification with respect to 

3 the time and form of distribution that is con4 sistent with the requirements of this subpara5 graph. 

6 ‘‘(C) EXCESS PAYMENTS BY REASON OF

7 CERTAIN INTEREST RATES AND MORTALITY AS8 SUMPTIONS.—A payment is described in this 

9 subparagraph if— 

10 ‘‘(i) the requirements of clauses (i) 

11 and (ii) of subparagraph (B) are satisfied, 

12 and 

13 ‘‘(ii) the nonqualified deferred com14 pensation plan makes any payment in ex15 cess of the amount that would be payable 

16 if such plan used the interest rate and 

17 mortality assumptions from the defined 

18 benefit plan described in section 401(a) 

19 that would create the smallest payments, 

20 determined on a present value basis using 

21 the interest rate and mortality assump22 tions described in section 430(h). 

23 For purposes of this subparagraph, all defined 

24 benefit plans maintained by the employer shall 

25 be taken into account.’’. 


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

2 this section shall apply to plan years beginning after De3 cember 31, 2007. 

4 SEC. 102. EXPANSION OF CORRIDOR WITHIN WHICH SIN5 GLE-EMPLOYER DEFINED BENEFIT PLANS 

6 ARE ALLOWED TO AVERAGE ASSET VALUES. 

7 (a) AMENDMENT TO ERISA.—Paragraph (3) of sec8 tion 303(g) of the Employee Retirement Income Security 

9 Act of 1974 is amended by adding at the end the following 

10 new subparagraphs: 

11 ‘‘(C) SPECIAL RULE.—In the case of any 

12 applicable plan year, subparagraph (B)(iii) shall 

13 be applied— 

14 ‘‘(i) by substituting ‘80 percent’ for 

15 ‘90 percent’, and 

16 ‘‘(ii) by substituting ‘120 percent’ for 

17 ‘110 percent’. 

18 ‘‘(D) APPLICABLE PLAN YEAR.—For pur19 poses of this paragraph, the term ‘applicable 

20 plan year’ means— 

21 ‘‘(i) except as provided in clauses (ii) 

22 and (iii), any plan year beginning in 2009 

23 or 2010, 

24 ‘‘(ii) in the case of a plan with a plan 

25 year beginning after October 31 and before 


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1 January 1, any plan year beginning in 

2 2008 or 2009, and 

3 ‘‘(iii) in the case of a plan for which 

4 the valuation date is not the first day of 

5 the plan year, any plan year beginning in 

6 2008 or 2009.’’. 

7 (b) AMENDMENT TO INTERNAL REVENUE 

8 CODE OF 1986.—Paragraph (3) of section 430(g) of the 

9 Internal Revenue Code of 1986 is amended by adding at 

10 the end the following new subparagraphs: 

11 ‘‘(C) SPECIAL RULE.—In the case of any 

12 applicable plan year, subparagraph (B)(iii) shall 

13 be applied— 

14 ‘‘(i) by substituting ‘80 percent’ for 

15 ‘90 percent’, and 

16 ‘‘(ii) by substituting ‘120 percent’ for 

17 ‘110 percent’. 

18 ‘‘(D) APPLICABLE PLAN YEAR.—For pur19 poses of this paragraph, the term ‘applicable 

20 plan year’ means— 

21 ‘‘(i) except as provided in clauses (ii) 

22 and (iii), any plan year beginning in 2009 

23 or 2010, 

24 ‘‘(ii) in the case of a plan with a plan 

25 year beginning after October 31 and before 


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1 January 1, any plan year beginning in 

2 2008 or 2009, and 

3 ‘‘(iii) in the case of a plan for which 

4 the valuation date is not the first day of 

5 the plan year, any plan year beginning in 

6 2008 or 2009.’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to plan years beginning after De9 cember 31, 2007. 

10 SEC. 103. LOOKBACK FOR BENEFIT ACCRUAL RESTRIC11 TION. 

12 (a) AMENDMENT TO ERISA.—Subsection (g) of sec13 tion 206 of the Employee Retirement Income Security Act 

14 of 1974 is amended by adding at the end thereof the fol15 lowing: 

16 ‘‘(12) SPECIAL RULE FOR CERTAIN YEARS.— 

17 For purposes of paragraph (4) only— 

18 ‘‘(A) IN GENERAL.—For plan years begin19 ning after October 31, 2008, and before No20 vember 1, 2010, the adjusted funding target at21 tainment percentage of a plan for purposes of 

22 paragraph (4) shall be the greater of— 

23 ‘‘(i) such percentage, as determined 

24 without regard to this paragraph, or 


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1 ‘‘(ii) the adjusted funding target at2 tainment percentage for such plan for the 

3 plan year beginning after October 31, 

4 2007, and before November 1, 2008, as 

5 determined under rules prescribed by the 

6 Secretary of the Treasury. 

7 ‘‘(B) SPECIAL RULE.—In the case of a 

8 plan for which the valuation date is not the 

9 first day of the plan year— 

10 ‘‘(i) subparagraph (A) shall apply to 

11 plan years beginning after December 31, 

12 2007, and before January 1, 2010, and 

13 ‘‘(ii) subparagraph (A)(ii) shall apply 

14 based on the last plan year beginning be15 fore November 1, 2007, as determined 

16 under rules prescribed by the Secretary of 

17 the Treasury.’’. 

18 (b) AMENDMENT TO INTERNAL REVENUE 

19 CODE OF 1986.—Section 436 of the Internal Revenue 

20 Code of 1986 is amended by adding the following at the 

21 end thereof: 

22 ‘‘(n) SPECIAL RULE FOR CERTAIN YEARS.—For pur23 poses of subsection (e) only— 

24 ‘‘(1) IN GENERAL.—For plan years beginning 

25 after October 31, 2008, and before November 1, 


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1 2010, the adjusted funding target attainment per2 centage of a plan for purposes of subsection (e) shall 

3 be the greater of— 

4 ‘‘(A) such percentage, as determined with5 out regard to this subsection, or 

6 ‘‘(B) the adjusted funding target attain7 ment percentage for such plan for the plan year 

8 beginning after October 31, 2007, and before 

9 November 1, 2008, as determined under rules 

10 prescribed by the Secretary. 

11 ‘‘(2) SPECIAL RULE.—In the case of a plan for 

12 which the valuation date is not the first day of the 

13 plan year— 

14 ‘‘(A) paragraph (1) shall apply to plan 

15 years beginning after December 31, 2007, and 

16 before January 1, 2010, and 

17 ‘‘(B) paragraph (1)(B) shall apply based 

18 on the last plan year beginning before Novem19 ber 1, 2007, as determined under rules pre20 scribed by the Secretary.’’. 

21 (c) INTERACTION WITH WRERA RULE.—Section 

22 203 or the Worker, Retiree, and Employer Recovery Act 

23 of 2008 shall apply to a plan for any plan year in lieu 

24 of the amendments made by this section only to the extent 

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1 get attainment percentage for such plan for such year. In 

2 all other cases, such section shall not be applicable to any 

3 plan. 

4 (d) EFFECTIVE DATE.— 

5 (1) IN GENERAL.—Except as provided in para6 graph (2), the amendments made by this section 

7 shall apply to plan years beginning after October 31, 

8 2008. 

9 (2) SPECIAL RULE.—In the case of a plan for 

10 which the valuation date is not the first day of the 

11 plan year, the amendments made by this section 

12 shall apply to plan years beginning after December 

13 31, 2007. 

14 SEC. 104. LOOKBACK FOR CREDIT BALANCE RULE. 

15 (a) AMENDMENT TO ERISA.—Paragraph (3) of sec16 tion 303(f) of the Employee Retirement Income Security 

17 Act of 1974 is amended by adding the following at the 

18 end thereof: 

19 ‘‘(D) SPECIAL RULE FOR CERTAIN

20 YEARS.— 

21 ‘‘(i) IN GENERAL.—For purposes of 

22 applying subparagraph (C) for plan years 

23 beginning after October 31, 2009, and be24 fore November 1, 2011, the ratio deter25 mined under such subparagraph for the 


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1 preceding plan year shall be the greater 

2 of— 

3 ‘‘(I) such ratio, as determined 

4 without regard to this subparagraph, 

5 or 

6 ‘‘(II) the ratio for such plan for 

7 the plan year beginning after October 

8 31, 2007, and before November 1, 

9 2008, as determined under rules pre10 scribed by the Secretary of the Treas11 ury. 

12 ‘‘(ii) SPECIAL RULE.—In the case of a 

13 plan for which the valuation date is not the 

14 first day of the plan year— 

15 ‘‘(I) clause (i) shall apply to plan 

16 years beginning after December 31, 

17 2008, and before January 1, 2011, 

18 and 

19 ‘‘(II) clause (i)(II) shall apply 

20 based on the last plan year beginning 

21 before November 1, 2007, as deter22 mined under rules prescribed by the 

23 Secretary of the Treasury.’’. 

24 (b) AMENDMENT TO INTERNAL REVENUE 

25 CODE OF 1986.—Paragraph (3) of section 430(f) of the 


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1 Internal Revenue Code of 1986 is amended by adding the 

2 following at the end thereof: 

3 ‘‘(D) SPECIAL RULE FOR CERTAIN

4 YEARS.— 

5 ‘‘(i) IN GENERAL.—For purposes of 

6 applying subparagraph (C) for plan years 

7 beginning after October 31, 2009, and be8 fore November 1, 2011, the ratio deter9 mined under such subparagraph for the 

10 preceding plan year of a plan shall be the 

11 greater of— 

12 ‘‘(I) such ratio, as determined 

13 without regard to this subsection, or 

14 ‘‘(II) the ratio for such plan for 

15 the plan year beginning after October 

16 31, 2007 and before November 1, 

17 2008, as determined under rules pre18 scribed by the Secretary. 

19 ‘‘(ii) SPECIAL RULE.—In the case of a 

20 plan for which the valuation date is not the 

21 first day of the plan year— 

22 ‘‘(I) clause (i) shall apply to plan 

23 years beginning after December 31, 

24 2007, and before January 1, 2010, 

25 and 


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1 ‘‘(II) clause (i)(II) shall apply 

2 based on the last plan year beginning 

3 before November 1, 2007, as deter4 mined under rules prescribed by the 

5 Secretary.’’. 

6 (c) EFFECTIVE DATE.— 

7 (1) IN GENERAL.—Except as provided in para8 graph (2), the amendments made by this section 

9 shall apply to plan years beginning after October 31, 

10 2009. 

11 (2) SPECIAL RULE.—In the case of a plan for 

12 which the valuation date is not the first day of the 

13 plan year, the amendments made by this section 

14 shall apply to plan years beginning after December 

15 31, 2008. 

16 SEC. 105. CLARIFICATION OF TREATMENT OF EXPENSES. 

17 (a) AMENDMENTS TO ERISA.— 

18 (1) IN GENERAL.—Clause (ii) of section 

19 303(b)(1)(A) of the Employee Retirement Income 

20 Security Act of 1974 is amended by striking ‘‘plan21 related expenses’’ and inserting ‘‘plan-related admin22 istrative expenses’’. 

23 (2) CONFORMING AMENDMENT.—Subclause (II) 

24 of section 303(i)(2)(A)(i) of such Act is amended by 


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1 striking ‘‘plan-related expenses’’ and inserting 

2 ‘‘plan-related administrative expenses’’. 

3 (b) AMENDMENTS TO INTERNAL REVENUE 

4 CODE OF 1986.— 

5 (1) IN GENERAL.—Clause (ii) of section 

6 430(b)(1)(A) of the Internal Revenue Code of 1986 

7 is amended by striking ‘‘plan-related expenses’’ and 

8 inserting ‘‘plan-related administrative expenses’’. 

9 (2) CONFORMING AMENDMENT.—Subclause (II) 

10 of section 430(i)(2)(A)(i) of such Code is amended 

11 by striking ‘‘plan-related expenses’’ and inserting 

12 ‘‘plan-related administrative expenses’’. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall take effect as if included in paragraphs 

15 (1)(A), (1)(F)(i), (2)(A), and (2)(F)(i) of section 101(b) 

16 of the Worker, Retiree, and Employer Recovery Act of 

17 2008. 

18 SEC. 106. INFORMATION REPORTING. 

19 (a) IN GENERAL.—Paragraph (1) of section 4010(b) 

20 of the Employee Retirement Security Act of 1974 is 

21 amended by striking ‘‘80’’ and inserting ‘‘90’’. 

22 (b) FUNDING TARGET ATTAINMENT PERCENTAGE.— 

23 Subparagraph (B) of section 4010(d)(2) of such Act is 

24 amended by striking ‘‘303(d)(2).’’ and inserting 


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1 ‘‘303(d)(2), without regard to the reduction under section 

2 303(f)(4)(B).’’. 

3 (c) CONFIDENTIALITY.—Subsection (c) of section 

4 4010 of such Act is amended— 

5 (1) by striking ‘‘and no such information or 

6 documentary material may be made public,’’, and 

7 (2) by adding at the end the following: ‘‘All 

8 parties, governmental or otherwise, receiving the in9 formation (or summary report of such information) 

10 required to be provided under this section shall be 

11 required to— 

12 ‘‘(1) ensure that the information received will 

13 be kept confidential, 

14 ‘‘(2) use the information only for the purpose 

15 for which it was requested, and 

16 ‘‘(3) not further disclose the information except 

17 to accomplish that purpose, unless a separate con18 sent from the taxpayer is obtained. 

19 Such requirements shall not apply to information provided 

20 under this section that is otherwise publicly available. The 

21 corporation shall notify each person providing information 

22 under this section of any public disclosure of such infor23 mation not permitted by this subsection within a reason24 able time of such disclosure becoming known to the cor25 poration. If any party, governmental or otherwise, makes 


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1 an unauthorized disclosure, the person required to provide 

2 such information under this section may bring suit against 

3 such party in Federal district court. No liability results 

4 from a disclosure based upon a good faith, but erroneous, 

5 interpretation of this section. Upon a finding of a liability, 

6 such person can recover an amount not to exceed 

7 $100,000 per act of unauthorized disclosure plus reason8 able attorney fees. The person shall have two years from 

9 the date of discovery of the unauthorized disclosure to 

10 bring suit.’’. 

11 (d) EFFECTIVE DATE.— 

12 (1) IN GENERAL.—Except as provided in para13 graph (2), the amendments made by this section 

14 shall apply to plan years beginning after December 

15 31, 2009. 

16 (2) CONFIDENTIALITY.—The amendment made 

17 by subsection (c) shall take effect on the date of the 

18 enactment of this Act. 

19 SEC. 107. BENEFIT RESTRICTION EFFECTIVE DATE FOR 

20 COLLECTIVELY BARGAINED PLANS. 

21 (a) AMENDMENTS WITH RESPECT TO ERISA.— 

22 (1) PLAN AMENDMENTS.—Paragraph (2) of 

23 section 103(c) of the Pension Protection Act of 2006 

24 is amended— 


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1 (A) by striking ‘‘In the case’’ and inserting 

2 ‘‘Except as provided in paragraph (3), in the 

3 case’’, and 

4 (B) by striking ‘‘the amendments made by 

5 this section’’ and inserting ‘‘section 206(g)(2) 

6 of the Employee Retirement Income Security 

7 Act of 1974 (and other provisions of such sec8 tion 206(g) to the extent that they apply to 

9 such section 206(g)(2)), as added by this sec10 tion,’’. 

11 (2) OTHER BENEFIT RESTRICTIONS.— 

12 (A) IN GENERAL.—Subsection (c) of sec13 tion 103 of the Pension Protection Act of 2006 

14 is amended by adding at the end thereof the 

15 following: 

16 ‘‘(3) COLLECTIVE BARGAINING DELAY EXCEPT

17 REGARDING CERTAIN PLAN AMENDMENTS.— 

18 ‘‘(A) IN GENERAL.—In the case of a plan 

19 maintained pursuant to 1 or more collective 

20 bargaining agreements between employee rep21 resentatives and 1 or more employers, the 

22 amendments made by this section shall apply to 

23 plan years beginning after December 31, 2011, 

24 except that paragraph (2) shall apply to plan 

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1 gaining agreement ratified after the date of in2 troduction of the Preserve Benefits and Jobs 

3 Act of 2009. 

4 ‘‘(B) TRANSITION RULE.— 

5 ‘‘(i) In the case of a plan described in 

6 clause (ii), such plan shall not be required 

7 to comply with this section and the amend8 ments made by this section until the date 

9 that is 60 days after the date of the enact10 ment of this paragraph, but such a plan 

11 may comply on any otherwise permitted 

12 earlier date. 

13 ‘‘(ii) A plan is described in this clause 

14 if a limit on benefits or benefit accruals 

15 has been or is, pursuant to section 206(g) 

16 of the Employee Retirement Income Secu17 rity Act of 1974 and section 436 of the In18 ternal Revenue Code of 1986, in effect 

19 with respect to such plan as of the date of 

20 the enactment of this paragraph.’’. 

21 (3) CONFORMING AMENDMENT.—The heading 

22 of paragraph (2) of section 103(c) of the Pension 

23 Protection Act of 2006 is amended to read as fol24 lows: ‘‘COLLECTIVE BARGAINING EXCEPTION RE25 GARDING CERTAIN PLAN AMENDMENTS’’. 


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1 (b) AMENDMENTS WITH RESPECT TO INTERNAL 

2 REVENUE CODE OF 1986.— 

3 (1) PLAN AMENDMENTS.—Paragraph (2) of 

4 section 113(b) of the Pension Protection Act of 

5 2006 is amended by— 

6 (A) striking ‘‘In the case’’ and inserting 

7 ‘‘Except as provided in paragraph (3), in the 

8 case’’, and 

9 (B) striking ‘‘the amendments made by 

10 this section’’ and inserting ‘‘section 436(c) of 

11 the Internal Revenue Code of 1986 (and other 

12 provisions such section 436 to the extent that 

13 they apply to such section 436(c)), as added by 

14 this section,’’. 

15 (2) OTHER BENEFIT RESTRICTIONS.— 

16 (A) IN GENERAL.—Subsection (b) of sec17 tion 113 of the Pension Protection Act of 2006 

18 is amended by adding at the end thereof the 

19 following: 

20 ‘‘(3) COLLECTIVE BARGAINING DELAY EXCEPT

21 REGARDING CERTAIN PLAN AMENDMENTS.— 

22 ‘‘(A) IN GENERAL.—In the case of a plan 

23 maintained pursuant to 1 or more collective 

24 bargaining agreements between employee rep25 resentatives and 1 or more employers, the 


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1 amendments made by this section shall apply to 

2 plan years beginning after December 31, 2011, 

3 except that paragraph (2) shall apply to plan 

4 amendments made pursuant to a collective bar5 gaining agreement ratified after the date of in6 troduction of the Preserve Benefits and Jobs 

7 Act of 2009. 

8 ‘‘(B) TRANSITION RULE.— 

9 ‘‘(i) In the case of a plan described in 

10 clause (ii), a plan shall not be required to 

11 comply with this section and the amend12 ments made by this section until the date 

13 that is 60 days after the date of the enact14 ment of this paragraph, but such a plan 

15 may comply on any otherwise permitted 

16 earlier date. 

17 ‘‘(ii) A plan is described in this clause 

18 if a limit on benefits or benefit accruals 

19 has been or is, pursuant to section 206(g) 

20 of the Employee Retirement Income Secu21 rity Act of 1974 and section 436 of the In22 ternal Revenue Code of 1986, in effect 

23 with respect to such plan as of the date of 

24 the enactment of this paragraph.’’. 


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1 (3) CONFORMING AMENDMENT.—The heading 

2 of paragraph (2) of section 103(b) of the Pension 

3 Protection Act of 2006 is amended to read as fol4 lows: ‘‘COLLECTIVE BARGAINING EXCEPTION RE5 GARDING CERTAIN PLAN AMENDMENTS’’. 

6 (c) EFFECTIVE DATE.—Except as provided in the 

7 amendments made by this section, the amendments made 

8 by this section shall apply as if included in sections 103(c) 

9 and 113(b) of such Act. 

10 SEC. 108. SOCIAL SECURITY LEVEL-INCOME OPTIONS. 

11 (a) AMENDMENT TO ERISA.—Subparagraph (E) of 

12 section 206(g)(3) of the Employee Retirement Income Se13 curity Act of 1974 is amended by adding at the end there14 of the following: 

15 ‘‘For purposes of this paragraph, any stream of pay16 ments that is structured to be similar in amount and 

17 duration to social security supplements described in 

18 the last sentence of section 204(b)(1)(G) shall be 

19 treated in the same manner as such supplements.’’. 

20 (b) AMENDMENT TO INTERNAL REVENUE 

21 CODE OF 1986.—Paragraph (5) of section 436(d) of the 

22 Internal Revenue Code of 1986 is amended by adding at 

23 the end thereof the following: 

24 ‘‘For purposes of this subsection, any stream of payments 

25 that is structured to be similar in amount and duration 


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1 to social security supplements described in the last sen2 tence of section 411(a)(9) shall be treated in the same 

3 manner as such supplements.’’. 

4 (c) EFFECTIVE DATE.— 

5 (1) IN GENERAL.—Except as provided in para6 graph (2), the amendments made by this section 

7 shall apply as if included in sections 103(a) and 

8 113(a)(1) of the Pension Protection Act of 2006. 

9 (2) TRANSITION RULE.— 

10 (A) In the case of a plan described in sub11 paragraph (B), a plan shall not be required to 

12 comply with the amendments made by this sec13 tion until the date that is 60 days after the 

14 date of enactment of this Act, but such a plan 

15 may comply on any otherwise permitted earlier 

16 date. 

17 (B) A plan is described in this subpara18 graph (B) if a limit on prohibited payments is 

19 or has been, pursuant to section 206(g) of the 

20 Employee Retirement Income Security Act of 

21 1974 and section 436 of the Internal Revenue 

22 Code of 1986, in effect with respect to such 

23 plan as of the date of enactment of this Act. 


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1 SEC. 109. PBGC GUARANTEE. 

2 (a) GUARANTEE.—Section 4022 of the Employee re3 tirement Income Security Act of 1974 is amended by 

4 striking subsection (g). 

5 (b) ALLOCATION OF ASSETS AMONG PRIORITY

6 GROUPS.—Section 4044 of such Act is amended by strik7 ing subsection (e). 

8 (c) EFFECTIVE DATE.—The amendments made by 

9 this section shall be as if included in section 404 of the 

10 Pension Protection Act of 2006, except that such amend11 ments shall not apply to proceedings initiated under title 

12 11, United States Code, or under any similar Federal law 

13 or law of a State or political subdivision, on or before the 

14 date of enactment of this Act. 

15 SEC. 110. APPLICATION OF EXTENDED AMORTIZATION PE16 RIOD TO PLANS SUBJECT TO PRIOR LAW 

17 FUNDING RULES. 

18 (a) IN GENERAL.—Title I of the Pension Protection 

19 Act of 2006 is amended by redesignating section 107 as 

20 section 108 and by inserting the following after section 

21 106: 

22 ‘‘SEC. 107. APPLICATION OF EXTENDED AMORTIZATION PE23 RIODS TO PLANS WITH DELAYED EFFECTIVE 

24 DATE. 

25 ‘‘(a) IN GENERAL.—In the case of plans to which sec26 tion 104, 105, or 106 of this Act apply, section 302 of 


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1 the Employee Retirement Income Security Act of 1974 

2 and section 412 of the Internal Revenue Code of 1986 

3 (as in effect before the amendments made by this subtitle 

4 and subtitle B) shall apply in the manner described in this 

5 section. All references in this section to ‘such Act’ or ‘such 

6 Code’ shall be to such Act or such Code as in effect before 

7 the amendments made by this subtitle and subtitle B. 

8 ‘‘(b) APPLICATION OF 2 AND 7 RULE.— 

9 ‘‘(1) IN GENERAL.—In the case of an active 

10 plan to which this subsection applies, section 302 of 

11 such Act and section 412 of such Code shall apply 

12 in the manner described in this subsection. 

13 ‘‘(2) TWO YEAR SUSPENSION OF DEFICIT RE14 DUCTION CONTRIBUTIONS FOR CERTAIN PLANS.— 

15 For purposes of applying section 302(d)(9) of such 

16 Act and section 412(l)(9) of such Code to a plan de17 scribed in paragraph (1), the funded current liability 

18 percentage for such plan for any applicable plan 

19 year shall be the funded current liability percentage 

20 of such plan for the pre-applicable plan year. 

21 ‘‘(3) CALCULATION OF DEFICIT REDUCTION

22 CONTRIBUTION.—For purposes of applying section 

23 302(d) of such Act and section 412(l) of such Code 

24 to a plan to which such subsections apply (after tak25 ing into account paragraph (2)), the applicable perVerDate Nov 24 2008 03:12 Oct 28, 2009 Jkt 089200 PO 00000 Frm 00055 Fmt 6652 Sfmt 6201 E:\BILLS\H3936.IH H3936

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1 centage described in section 302(d)(4)(C) of such 

2 Act and section 412(l)(4)(C) of such Code shall be 

3 the third segment rate described in sections 104(b), 

4 105(b), and 106(b) of this Act, provided that such 

5 applicable percentage shall only apply to the in6 creased unfunded new liability. The applicable per7 centage determined without regard to this section 

8 shall apply to the excess of the unfunded new liabil9 ity over the increased unfunded new liability. 

10 ‘‘(c) APPLICATION OF 15-YEAR AMORTIZATION.— 

11 ‘‘(1) IN GENERAL.—In the case of an active 

12 plan to which this subsection applies, section 302 of 

13 such Act and section 412 of such Code shall apply 

14 in the manner described in this subsection. 

15 ‘‘(2) CALCULATION OF DEFICIT REDUCTION

16 CONTRIBUTION.—For purposes of applying section 

17 302(d) of such Act and section 412(l) of such Code 

18 to a plan described in paragraph (1), the applicable 

19 percentage described in section 302(d)(4)(C) of such 

20 Act and section 412(l)(4)(C) of such Code for any 

21 pre-effective date plan year shall be the ratio of— 

22 ‘‘(A) the annual installments payable in 

23 each year if the increased unfunded new liabil24 ity for such plan year were amortized over 15 

25 years, using an interest rate equal to the third 


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1 segment rate described in sections 104(b), 

2 105(b), and 106(b) of this Act, to 

3 ‘‘(B) the increased unfunded new liability 

4 for such plan year. 

5 However, such applicable percentage shall only apply 

6 to the increased unfunded new liability. The applica7 ble percentage determined without regard to this 

8 section shall apply to the excess of the unfunded new 

9 liability over the increased unfunded new liability. 

10 ‘‘(d) ELECTION.—The plan sponsor may, with re11 spect to a plan, elect whether to apply subsection (b) or 

12 subsection (c) or whether neither subsection shall apply. 

13 Such election shall be made at such times, and in such 

14 form and manner, as shall be prescribed by the Secretary 

15 of the Treasury, and may be revoked only with the consent 

16 of the Secretary of the Treasury. In the absence of a time17 ly election regarding which subsection shall apply to a 

18 plan, neither subsection shall apply to such plan. 

19 ‘‘(e) FAILURE TO MAINTAIN ACTIVE PLAN.—If the 

20 minimum contribution required for a plan to avoid an ac21 cumulated funding deficiency under section 302 of such 

22 Act and section 412 of such Code is determined under 

23 subsection (b) or (c) for a plan year, the plan must remain 

24 an active plan for the subsequent plan year. If such plan 

25 fails to be an active plan in such plan year, the minimum 


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1 contribution requirement to avoid an accumulated funding 

2 deficiency shall be increased by all amounts by which such 

3 minimum contribution was reduced by the application of 

4 subsection (b) or (c), plus interest on such amounts at 

5 the third segment rate described in sections 104(b), 

6 105(b), and 106(b) of this Act. However, any such in7 crease in such minimum contribution shall not require a 

8 contribution to the extent that the contribution would 

9 cause the value of plan assets (determined under section 

10 302(c)(2) of such Act and section 412(c)(2) of such Code) 

11 to exceed the current liability of such plan for such year. 

12 ‘‘(f) DEFINITIONS.— 

13 ‘‘(1) APPLICABLE PLAN YEAR.—For purposes 

14 of this section, the term ‘applicable plan year’ 

15 means— 

16 ‘‘(A) except as provided in subparagraphs 

17 (B), (C), and (D), any plan year beginning in 

18 2010 or 2011, 

19 ‘‘(B) in the case of a plan with a plan year 

20 beginning after June 30 and before January 1, 

21 any plan year beginning in 2009 or 2010, 

22 ‘‘(C) in the case of a plan for which the 

23 valuation date is not the first day of the plan 

24 year, any plan year beginning in 2009 or 2010, 

25 and 


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1 ‘‘(D) in the case of a plan to which section 

2 106 of the Pension Protection Act of 2006 ap3 plies, subparagraphs (A), (B), and (C) shall be 

4 applied by inserting ‘2008’, ‘2009’, or ‘2010’ 

5 for ‘2009’, ‘2010’, or ‘2011’, respectively, each 

6 place such year is referenced. 

7 ‘‘(2) PRE-APPLICABLE PLAN YEAR.—For pur8 poses of this section, the term ‘pre-applicable plan 

9 year’ means, with respect to a plan, the second plan 

10 year preceding the first applicable plan year of such 

11 plan, except that in the case of a plan described in 

12 paragraph (1)(D), such term means the first plan 

13 year preceding the first applicable plan year of such 

14 plan. 

15 ‘‘(3) PRE-EFFECTIVE DATE PLAN YEAR.—For 

16 purposes of this section, the term ‘pre-effective date 

17 plan year’ means, with respect to a plan, any plan 

18 year prior to the first year in which the amendments 

19 made by this subtitle and subtitle B apply to the 

20 plan, provided that the first pre-effective date plan 

21 year shall be the first applicable plan year with re22 spect to the plan. 

23 ‘‘(4) INCREASED UNFUNDED NEW LIABILITY.— 

24 For purposes of this section, the term ‘increased un25 funded new liability’ means, with respect to a year, 


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1 the excess (if any) of the unfunded new liability over 

2 the amount of unfunded new liability determined as 

3 if the value of the plan’s assets determined under 

4 subsection 302(c)(2) of such Act and section 

5 412(c)(2) of such Code equaled the product of the 

6 current liability of the plan for the year multiplied 

7 by the funded current liability percentage of the plan 

8 for the pre-applicable plan year. 

9 ‘‘(5) ACTIVE PLAN.—For purposes of this sec10 tion, the term ‘active plan’ shall have the meaning 

11 given such term by section 303(c)(2)(G) of the Em12 ployee Retirement Income Security Act of 1974 and 

13 in section 430(c)(2)(G) of the Internal Revenue 

14 Code of 1986, except that ‘target normal cost’ (with15 out regard to plan administrative expenses) shall be 

16 determined as if section 303 of the Employee Retire17 ment Income Security Act of 1974 and section 430 

18 of the Internal Revenue Code of 1986 applied to 

19 such plan with the modification regarding the inter20 est rate used, as set forth in section 303(c)(2)(G) of 

21 the Employee Retirement Income Security Act of 

22 1974 and in section 430(c)(2)(G) of the Internal 

23 Revenue Code of 1986. 

24 ‘‘(6) OTHER DEFINITIONS.—For purposes of 

25 this section, the terms ‘funded current liability perVerDate Nov 24 2008 03:12 Oct 28, 2009 Jkt 089200 PO 00000 Frm 00060 Fmt 6652 Sfmt 6201 E:\BILLS\H3936.IH H3936

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1 centage’, ‘unfunded new liability’, and ‘current liabil2 ity’ shall have the meanings set forth in section 

3 302(d) of such Act and section 412(l) of such 

4 Code.’’. 

5 (b) ELIGIBLE CHARITY PLANS.—Section 104 of the 

6 Pension Protection Act of 2006 is amended by— 

7 (1) striking ‘‘eligible cooperative plan’’ wherever 

8 it appears in subsections (a) and (b) and inserting 

9 ‘‘eligible cooperative plan or an eligible charity 

10 plan’’, and 

11 (2) adding at the end the following new sub12 section: 

13 ‘‘(d) ELIGIBLE CHARITY PLAN DEFINED.—For pur14 poses of this section, a plan shall be treated as an eligible 

15 charity plan for a plan year if the plan is maintained by 

16 more than one employer and 100 percent of the employers 

17 are described in section 501(c)(3) of such Code.’’. 

18 (c) EFFECTIVE DATE.— 

19 (1) IN GENERAL.—The amendment made by 

20 subsection (a) shall take effect as if included in the 

21 Pension Protection Act of 2006. 

22 (2) ELIGIBLE CHARITY PLAN.—The amend23 ments made by subsection (b) shall apply to plan 

24 years beginning after December 31, 2008. 


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1 SEC. 111. ADDITIONS TO FUNDING-BASED LIMITS ON BENE2 FITS AND BENEFITS ACCRUALS UNDER SIN3 GLE-EMPLOYER PLANS. 

4 (a) AMENDMENTS TO INTERNAL REVENUE 

5 CODE OF 1986.— 

6 (1) Subsection (c) of section 436 of the Internal 

7 Revenue Code of 1986 is amended by redesignating 

8 paragraph (3) as paragraph (4) and by inserting 

9 after paragraph (2) the following: 

10 ‘‘(3) SPECIAL LIMITATIONS ON AD HOC AMEND11 MENTS.— 

12 ‘‘(A) IN GENERAL.—No ad hoc amendment 

13 to a defined benefit plan which is a single em14 ployer plan which has the effect of increasing li15 abilities of the plan by reason of increases in 

16 benefits, establishment of new benefits, chang17 ing the rate of benefit accrual, or changing the 

18 rate of which benefits become nonforfeitable 

19 may take effect during the plan year if the ad20 justed funding target attainment percentage for 

21 such plan year is— 

22 ‘‘(i) less than 120 percent, or 

23 ‘‘(ii) would be less than 120 percent 

24 taking into account such amendment. 

25 ‘‘(B) EXEMPTION.—Subparagraph (A) 

26 shall cease to apply with respect to any plan 


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1 year, effective as of the first day of the plan 

2 year (or if later, the effective date of the 

3 amendment), upon payment by the plan sponsor 

4 of a contribution (in addition to any minimum 

5 required contribution under section 430) equal 

6 to— 

7 ‘‘(i) in the case of subparagraph 

8 (A)(i), the amount of the increase in the 

9 funding target of the plan (under section 

10 430) for the plan year attributable to the 

11 amendment, and 

12 ‘‘(ii) in the case of subparagraph 

13 (A)(ii), the amount sufficient to result in 

14 an adjusted funding target attainment per15 centage of 120 percent. 

16 ‘‘(C) SPECIAL RULE.—An ad hoc amend17 ment that is otherwise permitted to take effect 

18 under this subsection may not take effect unless 

19 the plan provides that the accrued pension ben20 efits of any participant or beneficiary under the 

21 plan become nonforfeitable in the same manner 

22 which would be required if the plan had termi23 nated as of the effective date of such ad hoc 

24 amendment. This subparagraph shall not apply 


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1 to an ad hoc amendment that takes effect by 

2 reason of subparagraph (B)(i). 

3 ‘‘(D) AD HOC AMENDMENT.—For purposes 

4 of this paragraph, the term ‘ad hoc amendment’ 

5 means an amendment to a plan which— 

6 ‘‘(i) increases the nonforfeitable bene7 fits payable to one or more participants, 

8 ‘‘(ii) applies only to a subset of the 

9 employees otherwise eligible to accrue ben10 efits under the plan, 

11 ‘‘(iii) applies by its terms only to em12 ployees who, during a limited period of 

13 time, terminate employment, and 

14 ‘‘(iv) provides that the increase de15 scribed in clause (i) is payable in the form 

16 of a prohibited payment (as defined in sub17 section (d)(5)).’’. 

18 (2) Paragraph (4) of section 436(c) of such 

19 Code, as redesignated by paragraph (1), is amend20 ed— 

21 (A) by inserting ‘‘(A)’’ before ‘‘Paragraph 

22 (1)’’ and moving the text thereof 2 ems to the 

23 right, and 

24 (B) by adding at the end the following: 


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1 ‘‘(B) Paragraph (3) shall not apply to any 

2 amendment of a plan maintained pursuant to 1 

3 or more collective bargaining agreements be4 tween employee representatives and 1 or more 

5 employers.’’. 

6 (b) AMENDMENTS TO ERISA.— 

7 (1) Paragraph (2) of section 206(g) of the Em8 ployee Retirement Income Security Act of 1974 is 

9 amended by redesignating subparagraph (C) as sub10 paragraph (D) and by inserting after subparagraph 

11 (B) the following: 

12 ‘‘(C) SPECIAL LIMITATIONS ON AD HOC

13 AMENDMENTS.— 

14 ‘‘(i) IN GENERAL.—No ad hoc amend15 ment to a defined benefit plan which is a 

16 single employer plan which has the effect 

17 of increasing liabilities of the plan by rea18 son of increases in benefits, establishment 

19 of new benefits, changing the rate of ben20 efit accrual, or changing the rate of which 

21 benefits become nonforfeitable may take ef22 fect during the plan year if the adjusted 

23 funding target attainment percentage for 

24 such plan year is— 

25 ‘‘(I) less than 120 percent, or 


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1 ‘‘(II) would be less than 120 per2 cent taking into account such amend3 ment. 

4 ‘‘(ii) EXEMPTION.—Clause (i) shall 

5 cease to apply with respect to any plan 

6 year, effective as of the first day of the 

7 plan year (or if later, the effective date of 

8 the amendment), upon payment by the 

9 plan sponsor of a contribution (in addition 

10 to any minimum required contribution 

11 under section 303) equal to— 

12 ‘‘(I) in the case of clause (i)(I), 

13 the amount of the increase in the 

14 funding target of the plan (under sec15 tion 303) for the plan year attrib16 utable to the amendment, and 

17 ‘‘(II) in the case of clause (i)(II), 

18 the amount sufficient to result in an 

19 adjusted funding target attainment 

20 percentage of 120 percent. 

21 ‘‘(iii) SPECIAL RULE.—An ad hoc 

22 amendment that is otherwise permitted to 

23 take effect under this paragraph may not 

24 take effect unless the plan provides that 

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1 pant or beneficiary under the plan become 

2 nonforfeitable in the same manner which 

3 would be required if the plan had termi4 nated as of the effective date of such ad 

5 hoc amendment. This subparagraph shall 

6 not apply to an ad hoc amendment that 

7 takes effect by reason of clause (ii)(I). 

8 ‘‘(iv) AD HOC AMENDMENT.—For 

9 purposes of this subparagraph, the term 

10 ‘ad hoc amendment’ means an amendment 

11 to a plan which— 

12 ‘‘(I) increases the nonforfeitable 

13 benefits payable to one or more par14 ticipants, 

15 ‘‘(II) applies only to a subset of 

16 the employees otherwise eligible to ac17 crue benefits under the plan, 

18 ‘‘(III) applies by its terms only to 

19 employees who, during a limited pe20 riod of time, terminate employment, 

21 and 

22 ‘‘(IV) provides that the increase 

23 described in subclause (I) is payable 

24 in the form of a prohibited payment 

25 (as defined in paragraph (3)(E)).’’. 


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1 (2) Subparagraph (D) of section 202(g)(2) of 

2 such Act, as redesignated by paragraph (1), is 

3 amended— 

4 (A) by inserting ‘‘(i)’’ before ‘‘Subpara5 graph (A)’’ and moving the text thereof 2 ems 

6 to the right, and 

7 (B) by adding at the end the following: 

8 ‘‘(ii) Subparagraph (C) shall not 

9 apply to any amendment of a plan main10 tained pursuant to 1 or more collective 

11 bargaining agreements between employee 

12 representatives and 1 or more employers.’’. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to plan amendments adopted more 

15 than 180 days after the date of the enactment of this Act. 

16 SEC. 112. REPORTABLE EVENTS. 

17 (a) IN GENERAL.—Section 4043 of the Employee Re18 tirement Income Security Act of 1974 is amended by re19 designating subsection (f) as subsection (g) and by insert20 ing after subsection (e) the following: 

21 ‘‘(f) SPECIAL RULE.— 

22 ‘‘(1) IN GENERAL.—A reportable event de23 scribed in paragraph (3) of subsection (c) (without 

24 regard to this subsection) shall not be treated as ocVerDate Nov 24 2008 03:12 Oct 28, 2009 Jkt 089200 PO 00000 Frm 00068 Fmt 6652 Sfmt 6201 E:\BILLS\H3936.IH H3936

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1 curring with respect to a plan for an applicable plan 

2 year if— 

3 ‘‘(A) the number of employees of the con4 tributing sponsor is at least 80 percent of the 

5 number of employees of the contributing spon6 sor at the beginning of the plan year, and is at 

7 least 75 percent of the number of employees of 

8 the contributing sponsor at the beginning of the 

9 previous plan year, 

10 ‘‘(B) the funded vested benefit percentage 

11 (as defined for purposes of subsection 

12 (b)(1)(B)) for the pre-applicable plan year was 

13 at least 80 percent, and 

14 ‘‘(C) the contributing sponsor notifies the 

15 corporation of the use of the rule described in 

16 this subsection by the date that such contrib17 uting sponsor would (but for this subsection) be 

18 required to notify the corporation of an event 

19 described in subsection (c)(3). 

20 ‘‘(2) DEFINITIONS.—For purposes of this sub21 section— 

22 ‘‘(A) EMPLOYEE.—The term ‘employee’ 

23 means, in connection with a contributing spon24 sor, an employee of the contributing sponsor or 


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1 of any member of such sponsor’s controlled 

2 group. 

3 ‘‘(B) APPLICABLE PLAN YEAR.—The term 

4 ‘applicable plan year’ means— 

5 ‘‘(i) except as provided in this sub6 paragraph, any plan year beginning in 

7 2010 or 2011, 

8 ‘‘(ii) in the case of a plan with a plan 

9 year beginning after October 31 and before 

10 January 1, any plan year beginning in 

11 2009 or 2010, and 

12 ‘‘(iii) in the case of a plan for which 

13 the valuation date is not the first day of 

14 the plan year, any plan year beginning in 

15 2009 or 2010. 

16 ‘‘(C) PRE-APPLICABLE PLAN YEAR.—The 

17 term ‘pre-applicable plan year’ means, in con18 nection with a plan, the second plan year pre19 ceding the first applicable plan year of such 

20 plan.’’. 

21 (b) EFFECTIVE DATE.—The amendments made by 

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

23 of this Act. 


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1 TITLE II—MULTIEMPLOYER 

2 PLANS 

3 SEC. 201. ADJUSTMENTS TO FUNDING STANDARD ACCOUNT 

4 RULES; REPORTING CLARIFICATION. 

5 (a) AMORTIZATION PERIODS.— 

6 (1) AMENDMENT TO ERISA.—Section 304(b) of 

7 the Employee Retirement Income Security Act of 

8 1974 is amended by adding at the end the following 

9 new paragraph: 

10 ‘‘(8) ELECTIVE SPECIAL RELIEF RULES.— 

11 ‘‘(A) PLAN SPONSOR ELECTION.— 

12 ‘‘(i) IN GENERAL.—Notwithstanding 

13 any other provision of this subsection, ef14 fective with the actuarial valuation for ei15 ther of the first two plan years beginning 

16 after August 31, 2008, the plan sponsor of 

17 a multiemployer plan that meets the sol18 vency test in subparagraph (B) may elect 

19 to use either the rule in clause (ii) or the 

20 rule in clause (iii) in maintaining its fund21 ing standard account. 

22 ‘‘(ii) COMBINED OUTSTANDING BAL23 ANCE.—Under this clause, the outstanding 

24 balances of all amounts required to be am25 ortized under both paragraph (2) and 


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1 paragraph (3) may be combined into one 

2 amount under each such paragraph, to be 

3 amortized in equal annual installments 

4 (until fully amortized) over a period of 30 

5 plan years. 

6 ‘‘(iii) CERTAIN INVESTMENT

7 LOSSES.—Under this clause, the total 

8 amount of the net investment losses, if 

9 any, incurred in either or both of the first 

10 two plan years ending after August 31, 

11 2008, may be charged as an item separate 

12 from other experience losses and amortized 

13 in equal annual installments (until fully 

14 amortized) over a period of 30 plan years. 

15 ‘‘(B) SOLVENCY TEST.—An election may 

16 be made under this paragraph if the plan actu17 ary certifies that the plan is projected to have 

18 sufficient assets to timely pay expected benefits 

19 and anticipated expenditures over the amortiza20 tion period as extended. 

21 ‘‘(C) RESTRICTION ON BENEFIT IN22 CREASES.—In the case of a plan for which a 

23 rule described in subparagraph (A) is elected, in 

24 addition to any other applicable restrictions on 

25 benefit increases, an amendment increasing 


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1 benefits may not go into effect during the pe2 riod of two plan years immediately following the 

3 plan year for which the rule is first effective, 

4 unless— 

5 ‘‘(i) the plan actuary certifies that 

6 such increase is paid for out of additional 

7 contributions not allocated to the plan at 

8 the time the election was made and the 

9 plan’s funded percentage and projected 

10 credit balances for those two plan years 

11 are reasonably expected to be generally at 

12 the same levels as they would have been if 

13 the benefit increase had not been adopted, 

14 or 

15 ‘‘(ii) the amendment is required as a 

16 condition of qualification under part I of 

17 subchapter D of chapter 1 of the Internal 

18 Revenue Code of 1986 or to comply with 

19 other applicable law.’’. 

20 (2) AMENDMENT TO INTERNAL REVENUE CODE

21 OF 1986.—Section 431(b) of the Internal Revenue 

22 Code of 1986 is amended by adding at the end the 

23 following new paragraph: 

24 ‘‘(8) ELECTIVE SPECIAL RELIEF RULES.— 

25 ‘‘(A) PLAN SPONSOR ELECTION.— 


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1 ‘‘(i) IN GENERAL.—Notwithstanding 

2 any other provision of this subsection, ef3 fective starting with the actuarial valuation 

4 for either of the first two plan years begin5 ning after August 31, 2008, the plan spon6 sor of a multiemployer plan that meets the 

7 solvency test in subparagraph (B) may 

8 elect to use either the rule in clause (ii) or 

9 the rule in clause (iii) in maintaining its 

10 funding standard account. 

11 ‘‘(ii) COMBINED OUTSTANDING BAL12 ANCE.—Under this clause, the outstanding 

13 balances of all amounts required to be am14 ortized under both paragraph (2) and 

15 paragraph (3) may be combined into one 

16 amount under each such paragraph, to be 

17 amortized in equal annual installments 

18 (until fully amortized) over a period of 30 

19 plan years. 

20 ‘‘(iii) CERTAIN INVESTMENT

21 LOSSES.—Under this clause, the total 

22 amount of the net investment losses, if 

23 any, incurred in either or both of the first 

24 two plan years ending after August 31, 

25 2008, may be charged as an item separate 


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1 from other experience losses and amortized 

2 in equal annual installments (until fully 

3 amortized) over a period of 30 plan years. 

4 ‘‘(B) SOLVENCY TEST.—An election may 

5 be made under this paragraph if the plan actu6 ary certifies that the plan is projected to have 

7 sufficient assets to timely pay expected benefits 

8 and anticipated expenditures over the amortiza9 tion period as extended. 

10 ‘‘(C) RESTRICTION ON BENEFIT IN11 CREASES.—In the case of a plan for which a 

12 rule described in subparagraph (A) is elected, in 

13 addition to any other applicable restrictions on 

14 benefit increases, an amendment increasing 

15 benefits may not go into effect during the pe16 riod of two plan years immediately following the 

17 plan year for which the rule is first effective, 

18 unless— 

19 ‘‘(i) the plan actuary certifies that 

20 such increase is paid for out of additional 

21 contributions not allocated to the plan 

22 when the election was made and the plan’s 

23 funded percentage and projected credit bal24 ances for those two plan years are reason25 ably expected to be generally at the same 


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1 levels as they would have been if the ben2 efit increase had not been adopted, or 

3 ‘‘(ii) the amendment is required as a 

4 condition of qualification under part I of 

5 subchapter D of chapter 1 or to comply 

6 with other applicable law.’’. 

7 (b) AUTOMATIC AMORTIZATION EXTENSIONS.— 

8 (1) AMENDMENT TO ERISA.—Section 

9 304(d)(1)(A) of the Employee Retirement Income 

10 Security Act of 1974 is amended— 

11 (A) by striking ‘‘(not in excess of 5 years)’’ 

12 and inserting ‘‘(not in excess of 10 years)’’, and 

13 (B) by redesignating subparagraph (C) as 

14 subparagraph (D) and inserting after subpara15 graph (B) the following new subparagraph: 

16 ‘‘(C) DEEMED APPROVAL.— 

17 ‘‘(i) IN GENERAL.—An application 

18 under this paragraph shall be deemed ap19 proved unless, within 45 days after it is 

20 submitted, the Secretary notifies the plan 

21 sponsor that the actuary has failed to cer22 tify to one or more of the criteria listed in 

23 subparagraph (B). 

24 ‘‘(ii) CORRECTIONS.—If, within 30 

25 days after receiving a notice under this 


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1 subparagraph, the plan sponsor corrects 

2 any omissions identified in the notice 

3 under this subparagraph or otherwise dem4 onstrates that the actuary’s certification 

5 satisfies subparagraph (B), the application 

6 shall be deemed approved.’’. 

7 (2) AMENDMENT TO INTERNAL REVENUE CODE

8 OF 1986.—Section 431(d)(1)(A) of the Internal Rev9 enue Code of 1986 is amended— 

10 (A) by striking ‘‘(not in excess of 5 years)’’ 

11 and inserting ‘‘(not in excess of 10 years)’’, and 

12 (B) by redesignating subparagraph (C) as 

13 subparagraph (D) and inserting after subpara14 graph (B) the following new subparagraph: 

15 ‘‘(C) DEEMED APPROVAL.— 

16 ‘‘(i) IN GENERAL.—An application 

17 under this paragraph shall be deemed ap18 proved unless, within 45 days after it is 

19 submitted, the Secretary notifies the plan 

20 sponsor that the actuary has failed to cer21 tify to one or more of the criteria listed in 

22 subparagraph (B). 

23 ‘‘(ii) CORRECTIONS.—If, within 30 

24 days after receiving a notice under this 

25 subparagraph, the plan sponsor corrects 


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1 any omissions identified in the notice 

2 under this subparagraph or otherwise dem3 onstrates that the actuary’s certification 

4 satisfies subparagraph (B), the application 

5 shall be deemed approved.’’. 

6 (c) EXTENDED SMOOTHING PERIOD AND WIDER

7 ASSET VALUATION CORRIDOR FOR CERTAIN LOSSES.— 

8 (1) IN GENERAL.— 

9 (A) The Secretary of the Treasury shall 

10 not treat the asset valuation method of a multi11 employer plan as unreasonable solely because 

12 the plan elects to use either or both of the op13 tions described in subparagraph (B) or (C). A 

14 plan may elect to use any or all of such options. 

15 The election of such options shall apply for pur16 poses of sections 431 and 432 of the Internal 

17 Revenue Code of 1986. 

18 (B) With respect to net investment losses 

19 incurred in either or both of the first two plan 

20 years ending after August 31, 2008, the plan 

21 may utilize a smoothing period of not more 

22 than ten years. 

23 (C) For either or both of the first two plan 

24 years beginning after August 31, 2008, the 

25 asset value reflected by the method may not be 


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1 more than 130 percent of the current fair mar2 ket value. 

3 (2) DEEMED APPROVAL.—The election by a 

4 plan of either or both of the options described in 

5 paragraph (1) shall be deemed approved by the Sec6 retary of the Treasury under section 412(d)(1) of 

7 the Internal Revenue Code of 1986. 

8 (d) MODIFICATION OF CERTAIN AMORTIZATION EX9 TENSIONS UNDER PRIOR LAW.—Any amortization exten10 sions under the terms of section 412(e) of the Internal 

11 Revenue Code of 1986 (prior to enactment of the Pension 

12 Protection Act of 2006) that were granted to multiem13 ployer plans shall remain in effect notwithstanding the im14 pact of investment losses incurred by the plans in 2008, 

15 2009 or 2010, unless the plan sponsor elects otherwise. 

16 (e) CLARIFICATION OF MULTIEMPLOYER REPORTING

17 AND DISCLOSURE REQUIREMENTS.—Sections 

18 103(f)(2)(C) and 104(d)(1)(D) of the Employee Retire19 ment Income Security Act of 1974 are both amended by 

20 striking ‘‘as an employer of the participant’’. 

21 (f) EFFECTIVE DATE.— 

22 (1) The amendments made by this section shall 

23 take effect as of the first day of the first plan year 

24 beginning after August 31, 2008, provided however 

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1 tion that affects the plan’s funding standard account 

2 for the first plan year beginning after August 31, 

3 2008 shall be disregarded for purposes of applying 

4 the provisions of section 305 of the Employee Re5 tirement Income Security Act of 1974 and section 

6 432 of the Internal Revenue Code of 1986 to that 

7 plan year. 

8 (2) Notwithstanding paragraph (1), the restric9 tions on plan amendments increasing benefits in sec10 tions 304(b)(8)(C) of the ERISA and 431(b)(8)(C) 

11 of the Internal Revenue Code, as added by this sec12 tion, shall be effective 30 days after the date of en13 actment of this Act. 

14 SEC. 202. MULTIEMPLOYER PLANS IN ENDANGERED OR 

15 CRITICAL STATUS. 

16 (a) OPTIONAL LONGER CORRECTION PERIODS.— 

17 (1) AMENDMENT TO ERISA.— 

18 (A) FUNDING IMPROVEMENT PERIOD.— 

19 Section 305(c)(4) of the Employee Retirement 

20 Income Security Act of 1974 is amended by re21 designating subparagraphs (C) and (D) as sub22 paragraphs (D) and (E), respectively, and by 

23 inserting after subparagraph (B) the following 

24 new subparagraph: 


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1 ‘‘(C) ELECTION TO EXTEND PERIOD.—The 

2 plan sponsor of an endangered or seriously en3 dangered plan may elect to extend the applica4 ble funding improvement period by up to 5 

5 years, including any extension of the period pre6 viously elected pursuant to section 205 of the 

7 Worker, Retiree and Employer Relief Act of 

8 2008.’’. 

9 (B) REHABILITATION PERIOD.—Section 

10 305(e)(4) of such Act is amended by redesig11 nating subparagraph (B) as subparagraph (C) 

12 and by inserting after subparagraph (A) the fol13 lowing new subparagraph: 

14 ‘‘(B) ELECTION TO EXTEND PERIOD.—The 

15 plan sponsor of a plan in critical status may 

16 elect to extend the rehabilitation period by up 

17 to five years, including any extension of the pe18 riod previously elected pursuant to section 205 

19 of the Worker, Retiree and Employer Relief Act 

20 of 2008.’’. 

21 (2) AMENDMENT TO INTERNAL REVENUE CODE

22 OF 1986.— 

23 (A) FUNDING IMPROVEMENT PERIOD.— 

24 Section 432(c)(4) of the Internal Revenue Code 

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1 graphs (C) and (D) as subparagraphs (D) and 

2 (E), respectively, and by inserting after sub3 paragraph (B) the following new subparagraph: 

4 ‘‘(C) ELECTION TO EXTEND PERIOD.—The 

5 plan sponsor of an endangered or seriously en6 dangered plan may elect to extend the applica7 ble funding improvement period by up to 5 

8 years, including any extension of the period pre9 viously elected pursuant to section 205 of the 

10 Worker, Retiree and Employer Relief Act of 

11 2008.’’. 

12 (B) REHABILITATION PERIOD.—Section 

13 432(e)(4) of such Code is amended by redesig14 nating subparagraph (B) as subparagraph (C) 

15 and by inserting after subparagraph (A) the fol16 lowing new subparagraph: 

17 ‘‘(B) ELECTION TO EXTEND PERIOD.—The 

18 plan sponsor of a plan in critical status may 

19 elect to extend the rehabilitation period by up 

20 to five years, including any extension of the pe21 riod previously elected pursuant to section 205 

22 of the Worker, Retiree and Employer Relief Act 

23 of 2008.’’. 


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1 (b) SIMPLIFICATION OF THE FUNDING IMPROVE2 MENT PERIOD FOR CERTAIN SERIOUSLY ENDANGERED

3 PLANS.— 

4 (1) AMENDMENT TO ERISA.—Section 305(c) of 

5 the Employee Retirement Income Security Act of 

6 1974 is amended— 

7 (A) by striking paragraph (5) and redesig8 nating paragraph (6) as paragraph (5), and 

9 (B) in paragraph (1) by striking ‘‘(as 

10 modified by paragraph (5))’’. 

11 (2) AMENDMENT TO INTERNAL REVENUE CODE

12 OF 1986.—Section 432(c) of the Internal Revenue 

13 Code of 1986 is amended— 

14 (A) by striking paragraph (5) and redesig15 nating paragraph (6) as paragraph (5), and 

16 (B) in paragraph (1) by striking ‘‘(as 

17 modified by paragraph (5))’’. 

18 (c) SOCIAL SECURITY LEVEL INCOME OPTION.— 

19 (1) AMENDMENT TO ERISA.—Subparagraph 

20 (B)(i) of section 305(f)(2) of the Employee Retire21 ment Income Security Act of 1974 is amended by 

22 striking ‘‘204(b)(1)(G)),’’ and inserting 

23 ‘‘204(b)(1)(G) or any stream of payments that is 

24 structured to be similar in amount and duration to 

25 such supplements),’’. 


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1 (2) AMENDMENT TO INTERNAL REVENUE CODE

2 OF 1986.—Subparagraph (A)(i) of section 432(f)(2) 

3 of the Internal Revenue Code of 1986 is amended by 

4 striking ‘‘411(b)(1)(A)),’’ and inserting 

5 ‘‘411(b)(1)(A) or any stream of payments that is 

6 structured to be similar in amount and duration to 

7 such supplements),’’. 

8 (3) EFFECTIVE DATE.— 

9 (A) IN GENERAL.—Except as provided in 

10 paragraph (2), the amendments made by this 

11 subsection shall apply as if included in sections 

12 202(a) and 212(a) of the Pension Protection 

13 Act of 2006. 

14 (B) TRANSITION RULE.— 

15 (i) In the case of a plan described in 

16 clause (ii), a plan shall not be required to 

17 comply with the amendments made by this 

18 section until the date that is 60 days after 

19 the date of enactment of this Act, but such 

20 a plan may comply on any otherwise per21 mitted earlier date. 

22 (ii) A plan is described in this clause 

23 if a restriction on benefit payments is or 

24 has been imposed, pursuant to section 

25 305(f) of the Employee Retirement Income 


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1 security Act of 1974 and section 432(f) of 

2 the Internal Revenue Code of 1986, in ef3 fect with respect to such plan as of the 

4 date of enactment of this Act. 

5 (d) TECHNICAL CORRECTIONS.— 

6 (1) AMENDMENTS TO ERISA.—Section 305(c) of 

7 the Employee Retirement Income Security Act of 

8 1974 is amended— 

9 (A) in paragraph (1)(B)(i)— 

10 (i) by striking ‘‘plan, including—’’ 

11 and all that follows through ‘‘one proposal 

12 for reductions’’ and inserting ‘‘plan, in13 cluding one proposal for reductions’’, 

14 (ii) by striking ‘‘, and’’ at the end of 

15 subclause (I) and inserting a period, and 

16 (iii) by striking subclause (II), 

17 (B) in paragraph (7)(A), by striking 

18 ‘‘(1)(B)(i)(I)’’ and inserting ‘‘(1)(B)(i)’’, 

19 (C) in paragraph (4) by adding at the end 

20 the following: 

21 ‘‘(E) PLANS THAT ACHIEVE FUNDING IM22 PROVEMENT BENCHMARKS WHILE IN ENDAN23 GERED OR SERIOUSLY ENDANGERED STATUS.— 

24 If the plan’s actuary certifies under subsection 

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1 cable increase in the funding percentage de2 scribed in paragraph (3) of this subsection and 

3 that the plan is nevertheless still in endangered 

4 status, the provisions of this subsection and 

5 subsection (d) shall remain in effect until the 

6 earlier of the expiration of the funding improve7 ment period or the last day preceding the plan 

8 year for which the actuary certifies that the 

9 plan is no longer in endangered status.’’, and 

10 (D) in paragraph (4)(C)(ii) by striking all 

11 that follows ‘‘whichever is applicable,’’ and in12 serting the following: ‘‘shall end as of the close 

13 of the preceding plan year, except that, until 

14 the start of the rehabilitation plan adoption pe15 riod— 

16 ‘‘(I) the rules of subparagraphs 

17 (A) and (B) of subsection (d)(1) shall 

18 apply if, prior to the date the of the 

19 critical-status certification, the plan 

20 was in the funding improvement plan 

21 adoption period for the plan year, and 

22 ‘‘(II) the rules of subsection 

23 (d)(2) shall apply if, prior to the date 

24 of the critical-status certification, the 


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1 plan was in the funding improvement 

2 period for the plan year.’’. 

3 (2) AMENDMENTS TO INTERNAL REVENUE

4 CODE OF 1986.—Section 432(c) of the Internal Rev5 enue Code of 1986 is amended— 

6 (A) in paragraph (1)(B)(i)— 

7 (i) by striking ‘‘plan, including—’’ 

8 and all that follows through ‘‘one proposal 

9 for reductions’’ and inserting ‘‘plan, in10 cluding one proposal for reductions’’, 

11 (ii) by striking ‘‘, and’’ at the end of 

12 subclause (I) and inserting a period, and 

13 (iii) by striking subclause (II), 

14 (B) in paragraph (7)(A), by striking 

15 ‘‘(1)(B)(i)(I)’’ and inserting ‘‘(1)(B)(i)’’, 

16 (C) in paragraph (4) by adding at the end 

17 the following: 

18 ‘‘(E) PLANS THAT ACHIEVE FUNDING IM19 PROVEMENT BENCHMARKS WHILE IN ENDAN20 GERED OR SERIOUSLY ENDANGERED STATUS.— 

21 If the plan’s actuary certifies under subsection 

22 (b)(3)(A) that the plan has achieved the appli23 cable increase in the funding percentage de24 scribed in paragraph (3) of this subsection and 

25 that the plan is nevertheless still in endangered 


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1 status, the provisions of this subsection and 

2 subsection (d) shall remain in effect until the 

3 earlier of the expiration of the funding improve4 ment period or the last day preceding the plan 

5 year for which the actuary certifies that the 

6 plan is no longer in endangered status.’’, and 

7 (D) in paragraph (4)(C)(ii) by striking all 

8 that follows ‘‘whichever is applicable,’’ and in9 serting the following: ‘‘shall end as of the close 

10 of the preceding plan year, except that, until 

11 the start of the rehabilitation plan adoption pe12 riod— 

13 ‘‘(I) the rules of subparagraphs 

14 (A) and (B) of subsection (d)(1) shall 

15 apply if, prior to the date the of the 

16 critical-status certification, the plan 

17 was in the funding improvement plan 

18 adoption period for the plan year, and 

19 ‘‘(II) the rules of subsection 

20 (d)(2) shall apply if, prior to the date 

21 of the critical-status certification, the 

22 plan was in the funding improvement 

23 period for the plan year.’’. 


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1 SEC. 203. MULTIEMPLOYER PLAN MERGERS AND ALLI2 ANCES. 

3 (a) MULTIEMPLOYER PLAN ALLIANCES.— 

4 (1) AMENDMENTS TO ERISA.— 

5 (A) Section 4231 of the Employee Retire6 ment Income Security Act of 1974 is amended 

7 by adding at the end the following new sub8 section: 

9 ‘‘(e) MULTIEMPLOYER PLAN ALLIANCES.— 

10 ‘‘(1) IN GENERAL.—The plan sponsor of a mul11 tiemployer plan into which another multiemployer 

12 plan has been merged may designate the merger as 

13 an alliance to which the rules of this subsection 

14 apply by amending the plan— 

15 ‘‘(A) to identify the allied plan, and 

16 ‘‘(B) to delineate the terms of operation of 

17 the alliance, including the allocation of em18 ployer contributions and experience gains and 

19 losses between the merged plan and the par20 tially separate frozen allied plan described in 

21 paragraphs (2) and (3). 

22 ‘‘(2) APPLICABLE PROVISIONS.—Except to the 

23 extent otherwise provided in the plan amendment 

24 under paragraph (1), sections 302, 304 and 305 

25 (minimum funding), Part 1 of Subtitle E (with26 drawal liability), sections 4244A and 4281 (plan terVerDate Nov 24 2008 03:12 Oct 28, 2009 Jkt 089200 PO 00000 Frm 00089 Fmt 6652 Sfmt 6201 E:\BILLS\H3936.IH H3936

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1 mination), part 3 of subtitle E (plan reorganization 

2 and insolvency) and section 4261 (financial assist3 ance from the corporation) shall apply to the frozen 

4 allied plan and the plan into which the allied plan 

5 was merged as if they were separate plans. 

6 ‘‘(3) FROZEN ALLIED PLAN TREATED AS SEPA7 RATE PLAN.— 

8 ‘‘(A) ASSETS AND LIABILITIES.—The fro9 zen allied plan that is treated in part as a sepa10 rate plan pursuant to this paragraph comprises 

11 the assets and liabilities of the allied plan as if 

12 it had been amended, effective immediately be13 fore the effective date of the merger, to cease 

14 all benefit accruals. 

15 ‘‘(B) EMPLOYERS MAINTAINING PLAN.— 

16 The employers that were obligated to contribute 

17 to the allied plan immediately before the effec18 tive date of the merger, and any successors 

19 thereto whether by sale, reorganization or oth20 erwise, shall be considered to be the employers 

21 maintaining the partially separate frozen allied 

22 plan, to the extent they continue to have an ob23 ligation to contribute with respect to partici24 pants or facilities covered by the allied plan. 


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1 ‘‘(C) PARTICIPANTS AND BENE2 FICIARIES.—The participants and beneficiaries 

3 of the allied plan immediately before the effec4 tive date of the merger shall be considered to 

5 be the participants and beneficiaries of the par6 tially separate frozen allied plan thereafter. 

7 ‘‘(4) TREATMENT OF MERGED PLAN AS SINGLE

8 PLAN.—Except as provided in paragraphs (2) and 

9 (3), the allied plan and the plan into which it has 

10 been merged shall be treated as a single plan. 

11 ‘‘(5) OTHER RULES.— 

12 ‘‘(A) ADOPTION OF INITIAL PLAN AMEND13 MENT.—The plan amendment initially desig14 nating a merger as an alliance, identifying the 

15 allied plan and delineating the terms of the alli16 ance must be adopted by no later than the last 

17 day of the plan year in which the merger takes 

18 effect. 

19 ‘‘(B) SUBSEQUENT AMENDMENTS.—That 

20 initial plan amendment may subsequently be 

21 modified or repealed, except that the plan gives 

22 notice of the change to the employers and par23 ticipants of the allied plan at least 15 days be24 fore the subsequent amendment takes effect. 


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1 ‘‘(C) DISCRETION TO TREAT MERGERS

2 DIFFERENTLY.—The plan sponsor of a multi3 employer plan may, in its discretion, treat some 

4 mergers as alliances and others as full mergers, 

5 and may prescribe different terms of operation 

6 for different alliances, if the basis for the dis7 tinctions is not unreasonable.’’. 

8 (B) Subsection (b) of section 4231 of such 

9 Act is amended by striking ‘‘and’’ at the end of 

10 paragraph (3), by striking the period at the end 

11 of paragraph (4) and inserting ‘‘, and’’, and by 

12 inserting after paragraph (4) adding at the end 

13 the following: 

14 ‘‘(5) a merger that is designated as an alliance 

15 under subsection (e) shall not be treated as failing 

16 to meet any of the criteria of this subsection solely 

17 because benefits under the allied plan are, or are ex18 pected to be, reduced or eliminated pursuant to sec19 tion 305 as a result of the endangered or critical 

20 status of the frozen allied plan.’’. 

21 (C) Section 404(a) of the Employee Retire22 ment Income Security Act of 1974 is amended 

23 by adding at the end the following new para24 graph: 


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1 ‘‘(3) With respect to a merger of multiemployer 

2 plans, including a merger that is designated as an 

3 alliance under section 4231(e), the plan sponsors of 

4 the merging plans shall be considered to meet the 

5 requirements of paragraph (1)(A) if the plan spon6 sors determine that the merger is not reasonably 

7 likely to be adverse to the long-term interests of the 

8 participants and beneficiaries of the plan for which 

9 the plan sponsors are responsible prior to the merg10 er.’’. 

11 (i) Section 4231(c) of the Employee 

12 Retirement Income Security Act of 1974 is 

13 amended by striking ‘‘The merger of multi14 employer plans or the transfer’’ and insert15 ing ‘‘The merger of multiemployer plans, 

16 including a merger that is designated as an 

17 alliance, or the transfer’’. 

18 (2) AMENDMENTS TO INTERNAL REVENUE

19 CODE OF 1986.—Section 412 of the Internal Revenue 

20 Code of 1986 is amended by adding at the end the 

21 following: 

22 ‘‘(e) MULTIEMPLOYER PLAN ALLIANCES.— 

23 ‘‘(1) IN GENERAL.—Except to the extent other24 wise provided in the plan amendment under section 

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1 curity Act of 1974 designating a multiemployer plan 

2 merger as an alliance, this section and sections 431 

3 and 432 shall apply to the frozen allied plan and the 

4 plan into which the allied plan was merged as if they 

5 were separate plans. 

6 ‘‘(2) EMPLOYERS MAINTAINING PLAN.—The 

7 employers that were obligated to contribute to the 

8 allied plan immediately before the effective date of 

9 the merger, and any successors thereto whether by 

10 sale, reorganization or otherwise, shall be considered 

11 to be the employers maintaining the partially sepa12 rate frozen allied plan to the extent they continue to 

13 have an obligation to contribute with respect to par14 ticipants or facilities covered by the allied plan. 

15 ‘‘(3) PARTICIPANTS AND BENEFICIARIES.—The 

16 participants and beneficiaries of the allied plan im17 mediately before the effective date of the merger 

18 shall be considered to be the participants and bene19 ficiaries of the partially separate frozen allied plan 

20 thereafter. 

21 ‘‘(4) TREATMENT OF MERGED PLAN AS SINGLE

22 PLAN.—Except as provided in paragraphs (2) and 

23 (3) of section 4231(e) of the Employee Retirement 

24 Income Security Act of 1974, the allied plan and the 


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1 plan into which it has been merged shall be treated 

2 as a single plan. 

3 ‘‘(5) ALLIANCE; ALLIED PLAN.—For purposes 

4 of this subsection, the terms ‘alliance’ and ‘allied 

5 plan’ shall have the same meanings as they have 

6 under section 4231(e) of the Employee Retirement 

7 Income Security Act of 1974.’’. 

8 (b) PBGC ASSISTANCE FOR MULTIEMPLOYER PLAN

9 MERGERS.—Section 4231 of the Employee Retirement In10 come Security Act of 1974, as amended by this Act, is 

11 amended by adding at the end the following: 

12 ‘‘(f) FACILITATED MERGERS.— 

13 ‘‘(1) IN GENERAL.—When requested to do so 

14 by the plan sponsors, the corporation shall take rea15 sonable actions to promote and facilitate the merger 

16 of two or more multiemployer plans, including a 

17 merger that is designated as an alliance, if it deter18 mines that the transaction is in the interests of the 

19 participants and beneficiaries of at least one of the 

20 plans, and is not reasonably expected to be adverse 

21 to the long-term interests of the participants and 

22 beneficiaries of the other plan or plans. Such facili23 tation may include training, technical assistance, 

24 mediation, communication with stakeholders and 


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1 support with related requests to other government 

2 agencies, among other activities. 

3 ‘‘(2) FINANCIAL ASSISTANCE.—To facilitate 

4 mergers, including mergers designated as alliances, 

5 which it determines are reasonably necessary to en6 able one or more of the plans involved to avoid or 

7 postpone insolvency, the corporation may provide fi8 nancial assistance to the merged plan if it reason9 ably expects that such financial assistance will re10 duce the corporation’s likely long-term loss with re11 spect to the plans involved.’’. 

12 (c) EFFECTIVE DATE.—The amendments made by 

13 this section shall take effect as of the first day of the first 

14 plan year beginning on or after January 1, 2009. 

15 SEC. 204. STRENGTHENING PARTICIPANTS’ BENEFIT PRO16 TECTIONS. 

17 (a) INCREASE IN MULTIEMPLOYER BENEFIT GUAR18 ANTEE.—Paragraph (1) of section 4022A(c) of the Em19 ployee Retirement Income Security Act of 1974 is amend20 ed to read as follows: 

21 ‘‘(1) Except as provided in subsection (g), the 

22 monthly benefit of a participant or a beneficiary 

23 which is guaranteed under this section by the cor24 poration with respect to a plan is the product of the 


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1 number of the participant’s years of credited service 

2 multiplied by the sum of— 

3 ‘‘(A) 100 percent of the accrual rate up to 

4 $11, plus 75 percent of the lesser of— 

5 ‘‘(i) $33, or 

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

7 of $11, and 

8 ‘‘(B) 50 percent of the lesser of— 

9 ‘‘(i) $40 or 

10 ‘‘(ii) the accrual rate, if any, in excess of $44.’’. 

11 (b) QUALIFIED PARTITION OF ELIGIBLE MULTIEM12 PLOYER PLANS.— 

13 (1) QUALIFIED PARTITIONS.—Section 4233 of 

14 the Employee Retirement Income Security Act of 

15 1974 is amended by adding at the end the following 

16 new subsection: 

17 ‘‘(g) QUALIFIED PARTITION OF ELIGIBLE MULTIEM18 PLOYER PLANS.— 

19 ‘‘(1) IN GENERAL.—Notwithstanding sub20 sections (a) through (f), upon the election by the 

21 plan sponsor of an eligible multiemployer plan of a 

22 qualified partition, the corporation shall order a par23 tition of the electing multiemployer plan in accord24 ance with this subsection, effective on the first day 

25 of the first month that begins at least 90 days after 


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1 the date the multiemployer plan made the qualified 

2 partition election. 

3 ‘‘(2) ELIGIBLE MULTIEMPLOYER PLAN.—An el4 igible multiemployer plan is a multiemployer plan as 

5 to which— 

6 ‘‘(A) the plan actuary has certified pursu7 ant to section 305(c) that the plan is currently 

8 in critical status (within the meaning of section 

9 305(b)(2)); 

10 ‘‘(B) a substantial reduction in the amount 

11 of aggregate contributions under the plan has 

12 resulted or will result from— 

13 ‘‘(i) cases or proceedings under title 

14 11, United States Code, with respect to 

15 employers, or 

16 ‘‘(ii) employers’ ceasing to be in busi17 ness, if such employers did not pay the full 

18 amount of withdrawal liability demanded 

19 by the plan under section 4219; 

20 ‘‘(C) the plan sponsor has certified, con21 sistent with projections provided by the plan ac22 tuary, that the plan is likely to become insol23 vent; 

24 ‘‘(D) the plan sponsor has certified, con25 sistent with projections provided by the plan acVerDate Nov 24 2008 03:12 Oct 28, 2009 Jkt 089200 PO 00000 Frm 00098 Fmt 6652 Sfmt 6201 E:\BILLS\H3936.IH H3936

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1 tuary, that contributions will have to be in2 creased significantly to prevent insolvency; 

3 ‘‘(E) the plan sponsor has certified that, as 

4 of the last day of each of the two immediately 

5 preceding plan years— 

6 ‘‘(i) the ratio of the number of the 

7 plan’s retirees, beneficiaries of deceased 

8 participants, and terminated vested partici9 pants to the number of the plan’s active 

10 participants for each such year was at 

11 least 2 to 1; and 

12 ‘‘(ii) the ratio of benefit payments 

13 made by the plan for each such year to 

14 contributions required to be made to the 

15 plan under section 304 or 305(e), as appli16 cable, for each such year was at least 2 to 

17 1; and 

18 ‘‘(F) the plan sponsor has certified, con19 sistent with projections provided by the plan ac20 tuary, that partition would significantly reduce 

21 the likelihood that the plan will become insol22 vent. 

23 ‘‘(3) TRANSFERS UNDER QUALIFIED PARTITION

24 ORDER.—The corporation’s qualified partition order 

25 shall provide for transfers as follows: 


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1 ‘‘(A) An initial transfer of— 

2 ‘‘(i) no more than the nonforfeitable 

3 benefits directly attributable to service with 

4 the employers referred to in paragraph 

5 (2)(ii), and 

6 ‘‘(ii) assets attributable to any with7 drawal liability payments by such employ8 ers and, as adjusted by any gains or losses 

9 thereon, and reduced by any benefit pay10 ments made with regard to service with the 

11 employers. 

12 ‘‘(B) As of the last day of each plan year 

13 following a plan year in which a qualified parti14 tion has occurred, the plan sponsor shall deter15 mine whether during such plan year, the aggre16 gate contributions under the plan declined by 

17 10 percent or more as a result of events de18 scribed in paragraph (2)(ii); and if such decline 

19 has occurred, an additional transfer of— 

20 ‘‘(i) no more than the nonforfeitable 

21 benefits directly attributable to service with 

22 employers that meets the requirements of 

23 paragraph (2)(ii) after the election of a 

24 qualified partition, and 


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1 ‘‘(ii) assets attributable to any with2 drawal liability payments by such employ3 ers, as adjusted by any gains or losses 

4 thereon, and reduced by any benefit pay5 ments made with regard to service with the 

6 employers. 

7 ‘‘(4) PLAN CREATED BY QUALIFIED PARTI8 TION.—The plan created by the qualified partition 

9 is— 

10 ‘‘(A) a successor plan to which section 

11 4022A applies, and 

12 ‘‘(B) a terminated multiemployer plan to 

13 which section 4041A(d) applies, with respect to 

14 which only the employers described in para15 graphs (2)(ii) and (3)(ii) have withdrawal liabil16 ity.’’. 

17 (2) EFFECT OF QUALIFIED PARTITION ON PRE18 MIUMS.— 

19 (A) Clause (i) of section 4006(a)(3)(C) of 

20 the Employee Retirement Income Security Act 

21 of 1974 is amended by adding at the end the 

22 following: 

23 ‘‘For purposes of this subparagraph, the value of as24 sets held by the corporation and the basic benefits guaran25 teed for multiemployer plans shall not include assets and 


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1 liabilities transferred pursuant to a qualified partition 

2 order under section 4233(g).’’. 

3 (B) Section 4022A(f) of the Employee Re4 tirement Income Security Act of 1974 is 

5 amended by adding at the end the following: 

6 ‘‘(5) Basic benefits guaranteed in connection 

7 with assets and liabilities transferred to the corpora8 tion pursuant to a qualified partition order under 

9 section 4233(g) shall be disregarded under subpara10 graphs (1), (2), and (3)’’. 

11 (3) PBGC GUARANTEE OF PARTITIONED BENE12 FITS.— 

13 (A) Section 4022A of the Employee Retire14 ment Income Security Act of 1974 is amended 

15 by adding at the end the following: 

16 ‘‘(i) The monthly benefit of a participant or a bene17 ficiary whose benefit was transferred pursuant to a quali18 fied partition which is guaranteed under this section by 

19 the corporation with respect to a plan is the nonforfeitable 

20 benefits of the participant or beneficiary transferred pur21 suant to the qualified partition.’’. 

22 (B) Section 4022A(c)(1) of the Employee 

23 Retirement Income Security Act of 1974 is 

24 amended by striking ‘‘subsection (g)’’ and in25 serting ‘‘subsections (g) and (i)’’. 


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1 (c) FINANCING FOR QUALIFIED PARTITIONS AND

2 OTHER SPECIAL MATTERS.— 

3 (1) OBLIGATIONS OF THE CORPORATION.—The 

4 second sentence of section 4002(g)(2) of the Em5 ployee Retirement Income Security Act of 1974 is 

6 amended to read as follows: 

7 ‘‘The United States Government is not liable for any 

8 obligation or liability incurred by the corporation, except 

9 with respect to liabilities transferred pursuant to a quali10 fied partition of a multiemployer plan under section 

11 4233(g) and such other special matters as may be des12 ignated in legislation making funding available therefor.’’. 

13 (2) PBGC FUND ESTABLISHED.— 

14 (A) Fund Established. Section 4005 of the 

15 Employee Retirement Income Security Act of 

16 1974 is amended by deleting subsections (d) 

17 and (e), redesignating existing subsections (f) 

18 through (h) as subsections (e) through (g), and 

19 inserting a new subsection (d), as follows: 

20 ‘‘(d) ESTABLISHMENT OF FIFTH FUND; PURPOSE; 

21 AVAILABILITY, ETC.— 

22 ‘‘(1) IN GENERAL.—A fifth fund is hereby es23 tablished on the books of the Treasury of the United 

24 States. Such fund shall be for the support of special 

25 matters undertaken by the corporation to minimize 


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1 its reasonably expected long-term risk of loss with 

2 respect to a plan and protect the reasonable benefit 

3 expectations of plan participants and beneficiaries 

4 pursuant to its responsibilities under section 4002(a) 

5 to encourage the continuation and maintenance of 

6 voluntary private pension plans for the benefit of 

7 their participants while maintaining premiums at the 

8 lowest level consistent with that objective. 

9 ‘‘(2) USE OF FUND.—The fund established by 

10 this subsection shall be used to finance obligations 

11 undertaken by the corporation under section 4233 

12 (partition of multiemployer plans) and such other 

13 matters as may be identified from time to time in 

14 legislation making funding available therefor. 

15 ‘‘(3) CREDITS TO FUND.—The fund established 

16 under this subsection shall be credited with funds 

17 made available to the corporation that are des18 ignated for special matters and the earnings thereon, 

19 including any amounts received in connection with a 

20 qualified partition under section 4233(g), and shall 

21 not include premiums paid under section 4007, em22 ployer liability or withdrawal liability payments, the 

23 assets of terminated plans or repayments of finan24 cial assistance under section 4261 or other amounts 


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1 received in connection with terminated or insolvent 

2 plans. 

3 ‘‘(4) TRANSACTIONS WITH OTHER FUNDS.— 

4 Notwithstanding paragraph (3), this fund may en5 gage in transactions with the other funds established 

6 under this section to the extent reasonable and nec7 essary to meet liquidity demands and maximize the 

8 ability of the corporation to accomplish its mission 

9 under section 4002(a) without increasing the pre10 miums payable under section 4006. 

11 ‘‘(5) INVESTMENTS.—The corporation may in12 vest amounts of the fund in such obligations as the 

13 corporation considers appropriate. 

14 ‘‘(6) OBLIGATIONS OF UNITED STATES.—Not15 withstanding any other provision of this title, obliga16 tions of the corporation that are financed by the 

17 fund created by this subsection shall be obligations 

18 of the United States.’’. 

19 (3) CONFORMING AMENDMENTS.— 

20 (A) Section 4022A(g) of such Act is 

21 amended by striking paragraph (2). 

22 (B) Part 1 of subtitle E of title IV of such 

23 Act is amended by striking section 4222, and 

24 the table of contents for such Act is amended 

25 by striking the item relating to section 4222. 


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1 (d) EFFECTIVE DATE.— 

2 (1) The amendments made by subsection (a) 

3 shall apply with respect to plans that first apply for 

4 financial assistance from the Pension Benefit Guar5 antee Corporation after the date of enactment of 

6 this Act. 

7 (2) The amendments made by subsections (b) 

8 and (c) shall take effect on the date of enactment 

9 of this Act. 

Æ 


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