In the Senate of the United States, 

June 18, 2010. 

Resolved, That the bill from the House of Representatives (H.R. 3962) entitled ‘‘An Act to provide affordable, 

quality health care for all Americans and reduce the growth 

in health care spending, and for other purposes.’’, do pass 

with the following 

AMENDMENTS: 

Strike all after the enacting clause and insert the 

following: 

1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Preservation of Access 

3 to Care for Medicare Beneficiaries and Pension Relief Act 

4 of 2010’’. 

5 TITLE I—HEALTH PROVISIONS 

6 SEC. 101. PHYSICIAN PAYMENT UPDATE. 

7 (a) IN GENERAL.—Section 1848(d) of the Social Secu8 rity Act (42 U.S.C. 1395w–4(d)) is amended— 
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1 (1) in paragraph (10), in the heading, by strik2 ing ‘‘PORTION’’ and inserting ‘‘JANUARY THROUGH

3 MAY ’’; and 

4 (2) by adding at the end the following new para5 graph: 

6 ‘‘(11) UPDATE FOR JUNE THROUGH NOVEMBER

7 OF 2010.— 

8 ‘‘(A) IN GENERAL.—Subject to paragraphs 

9 (7)(B), (8)(B), (9)(B), and (10)(B), in lieu of the 

10 update to the single conversion factor established 

11 in paragraph (1)(C) that would otherwise apply 

12 for 2010 for the period beginning on June 1, 

13 2010, and ending on November 30, 2010, the up14 date to the single conversion factor shall be 2.2 

15 percent. 

16 ‘‘(B) NO EFFECT ON COMPUTATION OF CON17 VERSION FACTOR FOR REMAINING PORTION OF

18 2010 AND SUBSEQUENT YEARS.—The conversion 

19 factor under this subsection shall be computed 

20 under paragraph (1)(A) for the period beginning 

21 on December 1, 2010, and ending on December 

22 31, 2010, and for 2011 and subsequent years as 

23 if subparagraph (A) had never applied.’’. 

24 (b) STATUTORY PAYGO.—The budgetary effects of this 

25 Act, for the purpose of complying with the Statutory Pay- 
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1 As-You-Go Act of 2010, shall be determined by reference to 

2 the latest statement titled ‘‘Budgetary Effects of PAYGO 

3 Legislation’’ for this Act, jointly submitted for printing in 

4 the Congressional Record by the Chairmen of the House and 

5 Senate Budget Committees, provided that such statement 

6 has been submitted prior to the vote on passage in the House 

7 acting first on this conference report or amendment between 

8 the Houses. 

9 SEC. 102. CLARIFICATION OF 3-DAY PAYMENT WINDOW. 

10 (a) IN GENERAL.—Section 1886 of the Social Security 

11 Act (42 U.S.C. 1395ww) is amended— 

12 (1) by adding at the end of subsection (a)(4) the 

13 following new sentence: ‘‘In applying the first sen14 tence of this paragraph, the term ‘other services re15 lated to the admission’ includes all services that are 

16 not diagnostic services (other than ambulance and 

17 maintenance renal dialysis services) for which pay18 ment may be made under this title that are provided 

19 by a hospital (or an entity wholly owned or operated 

20 by the hospital) to a patient— 

21 ‘‘(A) on the date of the patient’s inpatient 

22 admission; or 

23 ‘‘(B) during the 3 days (or, in the case of 

24 a hospital that is not a subsection (d) hospital, 

25 during the 1 day) immediately preceding the 
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1 date of such admission unless the hospital dem2 onstrates (in a form and manner, and at a time, 

3 specified by the Secretary) that such services are 

4 not related (as determined by the Secretary) to 

5 such admission.’’; and 

6 (2) in subsection (d)(7)— 

7 (A) in subparagraph (A), by striking ‘‘and’’ 

8 at the end; 

9 (B) in subparagraph (B), by striking the 

10 period and inserting ‘‘, and’’; and 

11 (C) by adding at the end the following new 

12 subparagraph: 

13 ‘‘(C) the determination of whether services 

14 provided prior to a patient’s inpatient admis15 sion are related to the admission (as described in 

16 subsection (a)(4)).’’. 

17 (b) EFFECTIVE DATE.—The amendments made by sub18 section (a) shall apply to services furnished on or after the 

19 date of the enactment of this Act. 

20 (c) NO REOPENING OF PREVIOUSLY BUNDLED

21 CLAIMS.— 

22 (1) IN GENERAL.—The Secretary of Health and 

23 Human Services may not reopen a claim, adjust a 

24 claim, or make a payment pursuant to any request 

25 for payment under title XVIII of the Social Security 
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1 Act, submitted by an entity (including a hospital or 

2 an entity wholly owned or operated by the hospital) 

3 for services described in paragraph (2) for purposes of 

4 treating, as unrelated to a patient’s inpatient admis5 sion, services provided during the 3 days (or, in the 

6 case of a hospital that is not a subsection (d) hospital, 

7 during the 1 day) immediately preceding the date of 

8 the patient’s inpatient admission. 

9 (2) SERVICES DESCRIBED.—For purposes of 

10 paragraph (1), the services described in this para11 graph are other services related to the admission (as 

12 described in section 1886(a)(4) of the Social Security 

13 Act (42 U.S.C. 1395ww(a)(4)), as amended by sub14 section (a)) which were previously included on a 

15 claim or request for payment submitted under part A 

16 of title XVIII of such Act for which a reopening, ad17 justment, or request for payment under part B of 

18 such title, was not submitted prior to the date of the 

19 enactment of this Act. 

20 (d) IMPLEMENTATION.—Notwithstanding any other 

21 provision of law, the Secretary of Health and Human Serv22 ices may implement the provisions of this section (and 

23 amendments made by this section) by program instruction 

24 or otherwise. 
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1 (e) RULE OF CONSTRUCTION.—Nothing in the amend2 ments made by this section shall be construed as changing 

3 the policy described in section 1886(a)(4) of the Social Se4 curity Act (42 U.S.C. 1395ww(a)(4)), as applied by the 

5 Secretary of Health and Human Services before the date 

6 of the enactment of this Act, with respect to diagnostic serv7 ices. 

8 SEC. 103. ESTABLISH A CMS–IRS DATA MATCH TO IDENTIFY 

9 FRAUDULENT PROVIDERS. 

10 (a) AUTHORITY TO DISCLOSE RETURN INFORMATION

11 CONCERNING OUTSTANDING TAX DEBTS FOR PURPOSES OF

12 ENHANCING MEDICARE PROGRAM INTEGRITY.— 

13 (1) IN GENERAL.—Section 6103(l) of the Inter14 nal Revenue Code of 1986 is amended by adding at 

15 the end the following new paragraph: 

16 ‘‘(22) DISCLOSURE OF RETURN INFORMATION TO

17 DEPARTMENT OF HEALTH AND HUMAN SERVICES FOR

18 PURPOSES OF ENHANCING MEDICARE PROGRAM IN19 TEGRITY.— 

20 ‘‘(A) IN GENERAL.—The Secretary shall, 

21 upon written request from the Secretary of 

22 Health and Human Services, disclose to officers 

23 and employees of the Department of Health and 

24 Human Services return information with respect 

25 to a taxpayer who has applied to enroll, or re-
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1 enroll, as a provider of services or supplier under 

2 the Medicare program under title XVIII of the 

3 Social Security Act. Such return information 

4 shall be limited to— 

5 ‘‘(i) the taxpayer identity information 

6 with respect to such taxpayer; 

7 ‘‘(ii) the amount of the delinquent tax 

8 debt owed by that taxpayer; and 

9 ‘‘(iii) the taxable year to which the de10 linquent tax debt pertains. 

11 ‘‘(B) RESTRICTION ON DISCLOSURE.—Re12 turn information disclosed under subparagraph 

13 (A) may be used by officers and employees of the 

14 Department of Health and Human Services for 

15 the purposes of, and to the extent necessary in, 

16 establishing the taxpayer’s eligibility for enroll17 ment or reenrollment in the Medicare program, 

18 or in any administrative or judicial proceeding 

19 relating to, or arising from, a denial of such en20 rollment or reenrollment, or in determining the 

21 level of enhanced oversight to be applied with re22 spect to such taxpayer pursuant to section 

23 1866(j)(3) of the Social Security Act. 

24 ‘‘(C) DELINQUENT TAX DEBT.—For pur25 poses of this paragraph, the term ‘delinquent tax 
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1 debt’ means an outstanding debt under this title 

2 for which a notice of lien has been filed pursuant 

3 to section 6323, but the term does not include a 

4 debt that is being paid in a timely manner pur5 suant to an agreement under section 6159 or 

6 7122, or a debt with respect to which a collection 

7 due process hearing under section 6330 is re8 quested, pending, or completed and no payment 

9 is required.’’. 

10 (2) CONFORMING AMENDMENTS.—Section 

11 6103(p)(4) of such Code, as amended by sections 1414 

12 and 3308 of Public Law 111–148, in the matter pre13 ceding subparagraph (A) and in subparagraph 

14 (F)(ii), is amended by striking ‘‘or (17)’’ and insert15 ing ‘‘(17), or (22)’’ each place it appears. 

16 (b) SECRETARY’S AUTHORITY TO USE INFORMATION

17 FROM THE DEPARTMENT OF TREASURY IN MEDICARE EN18 ROLLMENTS AND REENROLLMENTS.—Section 1866(j)(2) of 

19 the Social Security Act (42 U.S.C. 1395cc(j)), as inserted 

20 by section 6401(a) of Public Law 111–148, is further 

21 amended— 

22 (1) by redesignating subparagraph (E) as sub23 paragraph (F); and 

24 (2) by inserting after subparagraph (D) the fol25 lowing new subparagraph: 
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1 ‘‘(E) USE OF INFORMATION FROM THE DE2 PARTMENT OF TREASURY CONCERNING TAX

3 DEBTS.—In reviewing the application of a pro4 vider of services or supplier to enroll or reenroll 

5 under the program under this title, the Secretary 

6 shall take into account the information supplied 

7 by the Secretary of the Treasury pursuant to sec8 tion 6103(l)(22) of the Internal Revenue Code of 

9 1986, in determining whether to deny such ap10 plication or to apply enhanced oversight to such 

11 provider of services or supplier pursuant to 

12 paragraph (3) if the Secretary determines such 

13 provider of services or supplier owes such a 

14 debt.’’. 

15 (c) AUTHORITY TO ADJUST PAYMENTS OF PROVIDERS

16 OF SERVICES AND SUPPLIERS WITH THE SAME TAX IDEN17 TIFICATION NUMBER FOR MEDICARE OBLIGATIONS.—Sec18 tion 1866(j)(6) of the Social Security Act (42 U.S.C. 

19 1395cc(j)(6)), as inserted by section 6401(a) of Public Law 

20 111–148 and as redesignated by section 1304 of Public Law 

21 111–152, is amended— 

22 (1) in the paragraph heading, by striking ‘‘PAST23 DUE’’ and inserting ‘‘MEDICARE’’; 

24 (2) in subparagraph (A), by striking ‘‘past-due 

25 obligations described in subparagraph (B)(ii) of an’’ 
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1 and inserting ‘‘amount described in subparagraph 

2 (B)(ii) due from such’’; and 

3 (3) in subparagraph (B)(ii), by striking ‘‘a past4 due obligation’’ and inserting ‘‘an amount that is 

5 more than the amount required to be paid’’. 

6 TITLE II—PENSION FUNDING 

7 RELIEF 

8 Subtitle A—Single Employer Plans 

9 SEC. 201. EXTENDED PERIOD FOR SINGLE-EMPLOYER DE10 FINED BENEFIT PLANS TO AMORTIZE CER11 TAIN SHORTFALL AMORTIZATION BASES. 

12 (a) AMENDMENTS TO ERISA.— 

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

14 303(c) of the Employee Retirement Income Security 

15 Act of 1974 (29 U.S.C. 1083(c)) is amended by add16 ing at the end the following subparagraph: 

17 ‘‘(D) SPECIAL ELECTION FOR ELIGIBLE

18 PLAN YEARS.— 

19 ‘‘(i) IN GENERAL.—If a plan sponsor 

20 elects to apply this subparagraph with re21 spect to the shortfall amortization base of a 

22 plan for any eligible plan year (in this sub23 paragraph and paragraph (7) referred to as 

24 an ‘election year’), then, notwithstanding 

25 subparagraphs (A) and (B)— 
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1 ‘‘(I) the shortfall amortization in2 stallments with respect to such base 

3 shall be determined under clause (ii) or 

4 (iii), whichever is specified in the elec5 tion, and 

6 ‘‘(II) the shortfall amortization 

7 installment for any plan year in the 9- 

8 plan-year period described in clause 

9 (ii) or the 15-plan-year period de10 scribed in clause (iii), respectively, 

11 with respect to such shortfall amortiza12 tion base is the annual installment de13 termined under the applicable clause 

14 for that year for that base. 

15 ‘‘(ii) 2 PLUS 7 AMORTIZATION SCHED16 ULE.—The shortfall amortization install17 ments determined under this clause are— 

18 ‘‘(I) in the case of the first 2 plan 

19 years in the 9-plan-year period begin20 ning with the election year, interest on 

21 the shortfall amortization base of the 

22 plan for the election year (determined 

23 using the effective interest rate for the 

24 plan for the election year), and 
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1 ‘‘(II) in the case of the last 7 plan 

2 years in such 9-plan-year period, the 

3 amounts necessary to amortize the re4 maining balance of the shortfall amor5 tization base of the plan for the elec6 tion year in level annual installments 

7 over such last 7 plan years (using the 

8 segment rates under subparagraph (C) 

9 for the election year). 

10 ‘‘(iii) 15-YEAR AMORTIZATION.—The 

11 shortfall amortization installments deter12 mined under this subparagraph are the 

13 amounts necessary to amortize the shortfall 

14 amortization base of the plan for the elec15 tion year in level annual installments over 

16 the 15-plan-year period beginning with the 

17 election year (using the segment rates under 

18 subparagraph (C) for the election year). 

19 ‘‘(iv) ELECTION.— 

20 ‘‘(I) IN GENERAL.—The plan 

21 sponsor of a plan may elect to have 

22 this subparagraph apply to not more 

23 than 2 eligible plan years with respect 

24 to the plan, except that in the case of 

25 a plan described in section 106 of the 
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1 Pension Protection Act of 2006, the 

2 plan sponsor may only elect to have 

3 this subparagraph apply to a plan 

4 year beginning in 2011. 

5 ‘‘(II) AMORTIZATION SCHED6 ULE.—Such election shall specify 

7 whether the amortization schedule 

8 under clause (ii) or (iii) shall apply to 

9 an election year, except that if a plan 

10 sponsor elects to have this subpara11 graph apply to 2 eligible plan years, 

12 the plan sponsor must elect the same 

13 schedule for both years. 

14 ‘‘(III) OTHER RULES.—Such elec15 tion shall be made at such time, and in 

16 such form and manner, as shall be pre17 scribed by the Secretary of the Treas18 ury, and may be revoked only with the 

19 consent of the Secretary of the Treas20 ury. The Secretary of the Treasury 

21 shall, before granting a revocation re22 quest, provide the Pension Benefit 

23 Guaranty Corporation an opportunity 

24 to comment on the conditions applica25 ble to the treatment of any portion of 
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1 the election year shortfall amortization 

2 base that remains unamortized as of 

3 the revocation date. 

4 ‘‘(v) ELIGIBLE PLAN YEAR.—For pur5 poses of this subparagraph, the term ‘eligi6 ble plan year’ means any plan year begin7 ning in 2008, 2009, 2010, or 2011, except 

8 that a plan year shall only be treated as an 

9 eligible plan year if the due date under sub10 section (j)(1) for the payment of the min11 imum required contribution for such plan 

12 year occurs on or after the date of the enact13 ment of this subparagraph. 

14 ‘‘(vi) REPORTING.—A plan sponsor of 

15 a plan who makes an election under clause 

16 (i) shall— 

17 ‘‘(I) give notice of the election to 

18 participants and beneficiaries of the 

19 plan, and 

20 ‘‘(II) inform the Pension Benefit 

21 Guaranty Corporation of such election 

22 in such form and manner as the Direc23 tor of the Pension Benefit Guaranty 

24 Corporation may prescribe. 
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1 ‘‘(vii) INCREASES IN REQUIRED IN2 STALLMENTS IN CERTAIN CASES.—For in3 creases in required contributions in cases of 

4 excess compensation or extraordinary divi5 dends or stock redemptions, see paragraph 

6 (7).’’. 

7 (2) INCREASES IN REQUIRED INSTALLMENTS IN

8 CERTAIN CASES.—Section 303(c) of the Employee Re9 tirement Income Security Act of 1974 (29 U.S.C. 

10 1083(c)) is amended by adding at the end the fol11 lowing paragraph: 

12 ‘‘(7) INCREASES IN ALTERNATE REQUIRED IN13 STALLMENTS IN CASES OF EXCESS COMPENSATION OR

14 EXTRAORDINARY DIVIDENDS OR STOCK REDEMP15 TIONS.— 

16 ‘‘(A) IN GENERAL.—If there is an install17 ment acceleration amount with respect to a plan 

18 for any plan year in the restriction period with 

19 respect to an election year under paragraph 

20 (2)(D), then the shortfall amortization install21 ment otherwise determined and payable under 

22 such paragraph for such plan year shall, subject 

23 to the limitation under subparagraph (B), be in24 creased by such amount. 
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1 ‘‘(B) TOTAL INSTALLMENTS LIMITED TO

2 SHORTFALL BASE.—Subject to rules prescribed 

3 by the Secretary of the Treasury, if a shortfall 

4 amortization installment with respect to any 

5 shortfall amortization base for an election year 

6 is required to be increased for any plan year 

7 under subparagraph (A)— 

8 ‘‘(i) such increase shall not result in 

9 the amount of such installment exceeding 

10 the present value of such installment and all 

11 succeeding installments with respect to such 

12 base (determined without regard to such in13 crease but after application of clause (ii)), 

14 and 

15 ‘‘(ii) subsequent shortfall amortization 

16 installments with respect to such base shall, 

17 in reverse order of the otherwise required in18 stallments, be reduced to the extent nec19 essary to limit the present value of such 

20 subsequent shortfall amortization install21 ments (after application of this paragraph) 

22 to the present value of the remaining 

23 unamortized shortfall amortization base. 

24 ‘‘(C) INSTALLMENT ACCELERATION

25 AMOUNT.—For purposes of this paragraph— 
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1 ‘‘(i) IN GENERAL.—The term ‘install2 ment acceleration amount’ means, with re3 spect to any plan year in a restriction pe4 riod with respect to an election year, the 

5 sum of— 

6 ‘‘(I) the aggregate amount of ex7 cess employee compensation determined 

8 under subparagraph (D) with respect 

9 to all employees for the plan year, plus 

10 ‘‘(II) the aggregate amount of ex11 traordinary dividends and redemp12 tions determined under subparagraph 

13 (E) for the plan year. 

14 ‘‘(ii) ANNUAL LIMITATION.—The in15 stallment acceleration amount for any plan 

16 year shall not exceed the excess (if any) of— 

17 ‘‘(I) the sum of the shortfall amor18 tization installments for the plan year 

19 and all preceding plan years in the 

20 amortization period elected under 

21 paragraph (2)(D) with respect to the 

22 shortfall amortization base with respect 

23 to an election year, determined without 

24 regard to paragraph (2)(D) and this 

25 paragraph, over 
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1 ‘‘(II) the sum of the shortfall am2 ortization installments for such plan 

3 year and all such preceding plan 

4 years, determined after application of 

5 paragraph (2)(D) (and in the case of 

6 any preceding plan year, after appli7 cation of this paragraph). 

8 ‘‘(iii) CARRYOVER OF EXCESS INSTALL9 MENT ACCELERATION AMOUNTS.— 

10 ‘‘(I) IN GENERAL.—If the install11 ment acceleration amount for any plan 

12 year (determined without regard to 

13 clause (ii)) exceeds the limitation 

14 under clause (ii), then, subject to sub15 clause (II), such excess shall be treated 

16 as an installment acceleration amount 

17 with respect to the succeeding plan 

18 year. 

19 ‘‘(II) CAP TO APPLY.—If any 

20 amount treated as an installment ac21 celeration amount under subclause (I) 

22 or this subclause with respect any suc23 ceeding plan year, when added to other 

24 installment acceleration amounts (de25 termined without regard to clause (ii)) 
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1 with respect to the plan year, exceeds 

2 the limitation under clause (ii), the 

3 portion of such amount representing 

4 such excess shall be treated as an in5 stallment acceleration amount with re6 spect to the next succeeding plan year. 

7 ‘‘(III) LIMITATION ON YEARS TO

8 WHICH AMOUNTS CARRIED FOR.—No 

9 amount shall be carried under sub10 clause (I) or (II) to a plan year which 

11 begins after the first plan year fol12 lowing the last plan year in the re13 striction period (or after the second 

14 plan year following such last plan year 

15 in the case of an election year with re16 spect to which 15-year amortization 

17 was elected under paragraph (2)(D)). 

18 ‘‘(IV) ORDERING RULES.—For 

19 purposes of applying subclause (II), 

20 installment acceleration amounts for 

21 the plan year (determined without re22 gard to any carryover under this 

23 clause) shall be applied first against 

24 the limitation under clause (ii) and 

25 then carryovers to such plan year shall 
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1 be applied against such limitation on 

2 a first-in, first-out basis. 

3 ‘‘(D) EXCESS EMPLOYEE COMPENSATION.— 

4 For purposes of this paragraph— 

5 ‘‘(i) IN GENERAL.—The term ‘excess 

6 employee compensation’ means, with respect 

7 to any employee for any plan year, the ex8 cess (if any) of— 

9 ‘‘(I) the aggregate amount includ10 ible in income under chapter 1 of the 

11 Internal Revenue Code of 1986 for re12 muneration during the calendar year 

13 in which such plan year begins for 

14 services performed by the employee for 

15 the plan sponsor (whether or not per16 formed during such calendar year), 

17 over 

18 ‘‘(II) $1,000,000. 

19 ‘‘(ii) AMOUNTS SET ASIDE FOR NON20 QUALIFIED DEFERRED COMPENSATION.—If 

21 during any calendar year assets are set 

22 aside or reserved (directly or indirectly) in 

23 a trust (or other arrangement as determined 

24 by the Secretary of the Treasury), or trans25 ferred to such a trust or other arrangement, 
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1 by a plan sponsor for purposes of paying 

2 deferred compensation of an employee under 

3 a nonqualified deferred compensation plan 

4 (as defined in section 409A of such Code) of 

5 the plan sponsor, then, for purposes of 

6 clause (i), the amount of such assets shall be 

7 treated as remuneration of the employee in8 cludible in income for the calendar year un9 less such amount is otherwise includible in 

10 income for such year. An amount to which 

11 the preceding sentence applies shall not be 

12 taken into account under this paragraph for 

13 any subsequent calendar year. 

14 ‘‘(iii) ONLY REMUNERATION FOR CER15 TAIN POST-2009 SERVICES COUNTED.—Re16 muneration shall be taken into account 

17 under clause (i) only to the extent attrib18 utable to services performed by the employee 

19 for the plan sponsor after February 28, 

20 2010. 

21 ‘‘(iv) EXCEPTION FOR CERTAIN EQUITY

22 PAYMENTS.— 

23 ‘‘(I) IN GENERAL.—There shall 

24 not be taken into account under clause 

25 (i)(I) any amount includible in income 
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1 with respect to the granting after Feb2 ruary 28, 2010, of service recipient 

3 stock (within the meaning of section 

4 409A of the Internal Revenue Code of 

5 1986) that, upon such grant, is subject 

6 to a substantial risk of forfeiture (as 

7 defined under section 83(c)(1) of such 

8 Code) for at least 5 years from the date 

9 of such grant. 

10 ‘‘(II) SECRETARIAL AUTHOR11 ITY.—The Secretary of the Treasury 

12 may by regulation provide for the ap13 plication of this clause in the case of a 

14 person other than a corporation. 

15 ‘‘(v) OTHER EXCEPTIONS.—The fol16 lowing amounts includible in income shall 

17 not be taken into account under clause 

18 (i)(I): 

19 ‘‘(I) COMMISSIONS.—Any remu20 neration payable on a commission 

21 basis solely on account of income di22 rectly generated by the individual per23 formance of the individual to whom 

24 such remuneration is payable. 
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1 ‘‘(II) CERTAIN PAYMENTS UNDER

2 EXISTING CONTRACTS.—Any remu3 neration consisting of nonqualified de4 ferred compensation, restricted stock, 

5 stock options, or stock appreciation 

6 rights payable or granted under a 

7 written binding contract that was in 

8 effect on March 1, 2010, and which 

9 was not modified in any material re10 spect before such remuneration is paid. 

11 ‘‘(vi) SELF-EMPLOYED INDIVIDUAL

12 TREATED AS EMPLOYEE.—The term ‘em13 ployee’ includes, with respect to a calendar 

14 year, a self-employed individual who is 

15 treated as an employee under section 401(c) 

16 of such Code for the taxable year ending 

17 during such calendar year, and the term 

18 ‘compensation’ shall include earned income 

19 of such individual with respect to such self20 employment. 

21 ‘‘(vii) INDEXING OF AMOUNT.—In the 

22 case of any calendar year beginning after 

23 2010, the dollar amount under clause (i)(II) 

24 shall be increased by an amount equal to— 
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1 ‘‘(I) such dollar amount, multi2 plied by 

3 ‘‘(II) the cost-of-living adjustment 

4 determined under section 1(f)(3) of 

5 such Code for the calendar year, deter6 mined by substituting ‘calendar year 

7 2009’ for ‘calendar year 1992’ in sub8 paragraph (B) thereof. 

9 If the amount of any increase under clause 

10 (i) is not a multiple of $1,000, such in11 crease shall be rounded to the next lowest 

12 multiple of $1,000. 

13 ‘‘(E) EXTRAORDINARY DIVIDENDS AND RE14 DEMPTIONS.— 

15 ‘‘(i) IN GENERAL.—The amount deter16 mined under this subparagraph for any 

17 plan year is the excess (if any) of the sum 

18 of the dividends declared during the plan 

19 year by the plan sponsor plus the aggregate 

20 amount paid for the redemption of stock of 

21 the plan sponsor redeemed during the plan 

22 year over the greater of— 

23 ‘‘(I) the adjusted net income 

24 (within the meaning of section 4043) of 

25 the plan sponsor for the preceding plan 
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1 year, determined without regard to 

2 any reduction by reason of interest, 

3 taxes, depreciation, or amortization, or 

4 ‘‘(II) in the case of a plan sponsor 

5 that determined and declared dividends 

6 in the same manner for at least 5 con7 secutive years immediately preceding 

8 such plan year, the aggregate amount 

9 of dividends determined and declared 

10 for such plan year using such manner. 

11 ‘‘(ii) ONLY CERTAIN POST-2009 DIVI12 DENDS AND REDEMPTIONS COUNTED.—For 

13 purposes of clause (i), there shall only be 

14 taken into account dividends declared, and 

15 redemptions occurring, after February 28, 

16 2010. 

17 ‘‘(iii) EXCEPTION FOR INTRA-GROUP

18 DIVIDENDS.—Dividends paid by one mem19 ber of a controlled group (as defined in sec20 tion 302(d)(3)) to another member of such 

21 group shall not be taken into account under 

22 clause (i). 

23 ‘‘(iv) EXCEPTION FOR CERTAIN RE24 DEMPTIONS.—Redemptions that are made 

25 pursuant to a plan maintained with respect 
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1 to employees, or that are made on account 

2 of the death, disability, or termination of 

3 employment of an employee or shareholder, 

4 shall not be taken into account under clause 

5 (i). 

6 ‘‘(v) EXCEPTION FOR CERTAIN PRE7 FERRED STOCK.— 

8 ‘‘(I) IN GENERAL.—Dividends 

9 and redemptions with respect to appli10 cable preferred stock shall not be taken 

11 into account under clause (i) to the ex12 tent that dividends accrue with respect 

13 to such stock at a specified rate in all 

14 events and without regard to the plan 

15 sponsor’s income, and interest accrues 

16 on any unpaid dividends with respect 

17 to such stock. 

18 ‘‘(II) APPLICABLE PREFERRED

19 STOCK.—For purposes of subclause (I), 

20 the term ‘applicable preferred stock’ 

21 means preferred stock which was issued 

22 before March 1, 2010 (or which was 

23 issued after such date and is held by 

24 an employee benefit plan subject to the 

25 provisions of this title). 
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1 ‘‘(F) OTHER DEFINITIONS AND RULES.— 

2 For purposes of this paragraph— 

3 ‘‘(i) PLAN SPONSOR.—The term ‘ plan 

4 sponsor’ includes any member of the plan 

5 sponsor’s controlled group (as defined in 

6 section 302(d)(3)). 

7 ‘‘(ii) RESTRICTION PERIOD.—The term 

8 ‘restriction period’ means, with respect to 

9 any election year— 

10 ‘‘(I) except as provided in sub11 clause (II), the 3-year period beginning 

12 with the election year (or, if later, the 

13 first plan year beginning after Decem14 ber 31, 2009), and 

15 ‘‘(II) if the plan sponsor elects 15- 

16 year amortization for the shortfall am17 ortization base for the election year, the 

18 5-year period beginning with the elec19 tion year (or, if later, the first plan 

20 year beginning after December 31, 

21 2009). 

22 ‘‘(iii) ELECTIONS FOR MULTIPLE

23 PLANS.—If a plan sponsor makes elections 

24 under paragraph (2)(D) with respect to 2 

25 or more plans, the Secretary of the Treas-
28 

† HR 3962 EAS 

1 ury shall provide rules for the application 

2 of this paragraph to such plans, including 

3 rules for the ratable allocation of any in4 stallment acceleration amount among such 

5 plans on the basis of each plan’s relative re6 duction in the plan’s shortfall amortization 

7 installment for the first plan year in the 

8 amortization period described in subpara9 graph (A) (determined without regard to 

10 this paragraph). 

11 ‘‘(iv) MERGERS AND ACQUISITIONS.— 

12 The Secretary of the Treasury shall pre13 scribe rules for the application of paragraph 

14 (2)(D) and this paragraph in any case 

15 where there is a merger or acquisition in16 volving a plan sponsor making the election 

17 under paragraph (2)(D).’’. 

18 (3) CONFORMING AMENDMENTS.—Section 303 of 

19 such Act (29 U.S.C. 1083) is amended— 

20 (A) in subsection (c)(1), by striking ‘‘the 

21 shortfall amortization bases for such plan year 

22 and each of the 6 preceding plan years’’ and in23 serting ‘‘any shortfall amortization base which 

24 has not been fully amortized under this sub25 section’’, and 
29 

† HR 3962 EAS 

1 (B) in subsection (j)(3), by adding at the 

2 end the following: 

3 ‘‘(F) QUARTERLY CONTRIBUTIONS NOT TO

4 INCLUDE CERTAIN INCREASED CONTRIBU5 TIONS.—Subparagraph (D) shall be applied 

6 without regard to any increase under subsection 

7 (c)(7).’’. 

8 (b) AMENDMENTS TO INTERNAL REVENUE CODE OF

9 1986.— 

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

11 430(c) is amended by adding at the end the following 

12 subparagraph: 

13 ‘‘(D) SPECIAL ELECTION FOR ELIGIBLE

14 PLAN YEARS.— 

15 ‘‘(i) IN GENERAL.—If a plan sponsor 

16 elects to apply this subparagraph with re17 spect to the shortfall amortization base of a 

18 plan for any eligible plan year (in this sub19 paragraph and paragraph (7) referred to as 

20 an ‘election year’), then, notwithstanding 

21 subparagraphs (A) and (B)— 

22 ‘‘(I) the shortfall amortization in23 stallments with respect to such base 

24 shall be determined under clause (ii) or 
30 

† HR 3962 EAS 

1 (iii), whichever is specified in the elec2 tion, and 

3 ‘‘(II) the shortfall amortization 

4 installment for any plan year in the 9- 

5 plan-year period described in clause 

6 (ii) or the 15-plan-year period de7 scribed in clause (iii), respectively, 

8 with respect to such shortfall amortiza9 tion base is the annual installment de10 termined under the applicable clause 

11 for that year for that base. 

12 ‘‘(ii) 2 PLUS 7 AMORTIZATION SCHED13 ULE.—The shortfall amortization install14 ments determined under this clause are— 

15 ‘‘(I) in the case of the first 2 plan 

16 years in the 9-plan-year period begin17 ning with the election year, interest on 

18 the shortfall amortization base of the 

19 plan for the election year (determined 

20 using the effective interest rate for the 

21 plan for the election year), and 

22 ‘‘(II) in the case of the last 7 plan 

23 years in such 9-plan-year period, the 

24 amounts necessary to amortize the re25 maining balance of the shortfall amor-
31 

† HR 3962 EAS 

1 tization base of the plan for the elec2 tion year in level annual installments 

3 over such last 7 plan years (using the 

4 segment rates under subparagraph (C) 

5 for the election year). 

6 ‘‘(iii) 15-YEAR AMORTIZATION.—The 

7 shortfall amortization installments deter8 mined under this subparagraph are the 

9 amounts necessary to amortize the shortfall 

10 amortization base of the plan for the elec11 tion year in level annual installments over 

12 the 15-plan-year period beginning with the 

13 election year (using the segment rates under 

14 subparagraph (C) for the election year). 

15 ‘‘(iv) ELECTION.— 

16 ‘‘(I) IN GENERAL.—The plan 

17 sponsor of a plan may elect to have 

18 this subparagraph apply to not more 

19 than 2 eligible plan years with respect 

20 to the plan, except that in the case of 

21 a plan described in section 106 of the 

22 Pension Protection Act of 2006, the 

23 plan sponsor may only elect to have 

24 this subparagraph apply to a plan 

25 year beginning in 2011. 
32 

† HR 3962 EAS 

1 ‘‘(II) AMORTIZATION SCHED2 ULE.—Such election shall specify 

3 whether the amortization schedule 

4 under clause (ii) or (iii) shall apply to 

5 an election year, except that if a plan 

6 sponsor elects to have this subpara7 graph apply to 2 eligible plan years, 

8 the plan sponsor must elect the same 

9 schedule for both years. 

10 ‘‘(III) OTHER RULES.—Such elec11 tion shall be made at such time, and in 

12 such form and manner, as shall be pre13 scribed by the Secretary, and may be 

14 revoked only with the consent of the 

15 Secretary. The Secretary shall, before 

16 granting a revocation request, provide 

17 the Pension Benefit Guaranty Cor18 poration an opportunity to comment 

19 on the conditions applicable to the 

20 treatment of any portion of the election 

21 year shortfall amortization base that 

22 remains unamortized as of the revoca23 tion date. 

24 ‘‘(v) ELIGIBLE PLAN YEAR.—For pur25 poses of this subparagraph, the term ‘eligi-
33 

† HR 3962 EAS 

1 ble plan year’ means any plan year begin2 ning in 2008, 2009, 2010, or 2011, except 

3 that a plan year shall only be treated as an 

4 eligible plan year if the due date under sub5 section (j)(1) for the payment of the min6 imum required contribution for such plan 

7 year occurs on or after the date of the enact8 ment of this subparagraph. 

9 ‘‘(vi) REPORTING.—A plan sponsor of 

10 a plan who makes an election under clause 

11 (i) shall— 

12 ‘‘(I) give notice of the election to 

13 participants and beneficiaries of the 

14 plan, and 

15 ‘‘(II) inform the Pension Benefit 

16 Guaranty Corporation of such election 

17 in such form and manner as the Direc18 tor of the Pension Benefit Guaranty 

19 Corporation may prescribe. 

20 ‘‘(vii) INCREASES IN REQUIRED IN21 STALLMENTS IN CERTAIN CASES.—For in22 creases in required contributions in cases of 

23 excess compensation or extraordinary divi24 dends or stock redemptions, see paragraph 

25 (7).’’. 
34 

† HR 3962 EAS 

1 (2) INCREASES IN REQUIRED CONTRIBUTIONS IF

2 EXCESS COMPENSATION PAID.—Section 430(c) is 

3 amended by adding at the end the following para4 graph: 

5 ‘‘(7) INCREASES IN ALTERNATE REQUIRED IN6 STALLMENTS IN CASES OF EXCESS COMPENSATION OR

7 EXTRAORDINARY DIVIDENDS OR STOCK REDEMP8 TIONS.— 

9 ‘‘(A) IN GENERAL.—If there is an install10 ment acceleration amount with respect to a plan 

11 for any plan year in the restriction period with 

12 respect to an election year under paragraph 

13 (2)(D), then the shortfall amortization install14 ment otherwise determined and payable under 

15 such paragraph for such plan year shall, subject 

16 to the limitation under subparagraph (B), be in17 creased by such amount. 

18 ‘‘(B) TOTAL INSTALLMENTS LIMITED TO

19 SHORTFALL BASE.—Subject to rules prescribed 

20 by the Secretary, if a shortfall amortization in21 stallment with respect to any shortfall amortiza22 tion base for an election year is required to be 

23 increased for any plan year under subparagraph 

24 (A)— 
35 

† HR 3962 EAS 

1 ‘‘(i) such increase shall not result in 

2 the amount of such installment exceeding 

3 the present value of such installment and all 

4 succeeding installments with respect to such 

5 base (determined without regard to such in6 crease but after application of clause (ii)), 

7 and 

8 ‘‘(ii) subsequent shortfall amortization 

9 installments with respect to such base shall, 

10 in reverse order of the otherwise required in11 stallments, be reduced to the extent nec12 essary to limit the present value of such 

13 subsequent shortfall amortization install14 ments (after application of this paragraph) 

15 to the present value of the remaining 

16 unamortized shortfall amortization base. 

17 ‘‘(C) INSTALLMENT ACCELERATION

18 AMOUNT.—For purposes of this paragraph— 

19 ‘‘(i) IN GENERAL.—The term ‘install20 ment acceleration amount’ means, with re21 spect to any plan year in a restriction pe22 riod with respect to an election year, the 

23 sum of— 

24 ‘‘(I) the aggregate amount of ex25 cess employee compensation determined 
36 

† HR 3962 EAS 

1 under subparagraph (D) with respect 

2 to all employees for the plan year, plus 

3 ‘‘(II) the aggregate amount of ex4 traordinary dividends and redemp5 tions determined under subparagraph 

6 (E) for the plan year. 

7 ‘‘(ii) ANNUAL LIMITATION.—The in8 stallment acceleration amount for any plan 

9 year shall not exceed the excess (if any) of— 

10 ‘‘(I) the sum of the shortfall amor11 tization installments for the plan year 

12 and all preceding plan years in the 

13 amortization period elected under 

14 paragraph (2)(D) with respect to the 

15 shortfall amortization base with respect 

16 to an election year, determined without 

17 regard to paragraph (2)(D) and this 

18 paragraph, over 

19 ‘‘(II) the sum of the shortfall am20 ortization installments for such plan 

21 year and all such preceding plan 

22 years, determined after application of 

23 paragraph (2)(D) (and in the case of 

24 any preceding plan year, after appli25 cation of this paragraph). 
37 

† HR 3962 EAS 

1 ‘‘(iii) CARRYOVER OF EXCESS INSTALL2 MENT ACCELERATION AMOUNTS.— 

3 ‘‘(I) IN GENERAL.—If the install4 ment acceleration amount for any plan 

5 year (determined without regard to 

6 clause (ii)) exceeds the limitation 

7 under clause (ii), then, subject to sub8 clause (II), such excess shall be treated 

9 as an installment acceleration amount 

10 with respect to the succeeding plan 

11 year. 

12 ‘‘(II) CAP TO APPLY.—If any 

13 amount treated as an installment ac14 celeration amount under subclause (I) 

15 or this subclause with respect any suc16 ceeding plan year, when added to other 

17 installment acceleration amounts (de18 termined without regard to clause (ii)) 

19 with respect to the plan year, exceeds 

20 the limitation under clause (ii), the 

21 portion of such amount representing 

22 such excess shall be treated as an in23 stallment acceleration amount with re24 spect to the next succeeding plan year. 
38 

† HR 3962 EAS 

1 ‘‘(III) LIMITATION ON YEARS TO

2 WHICH AMOUNTS CARRIED FOR.—No 

3 amount shall be carried under sub4 clause (I) or (II) to a plan year which 

5 begins after the first plan year fol6 lowing the last plan year in the re7 striction period (or after the second 

8 plan year following such last plan year 

9 in the case of an election year with re10 spect to which 15-year amortization 

11 was elected under paragraph (2)(D)). 

12 ‘‘(IV) ORDERING RULES.—For 

13 purposes of applying subclause (II), 

14 installment acceleration amounts for 

15 the plan year (determined without re16 gard to any carryover under this 

17 clause) shall be applied first against 

18 the limitation under clause (ii) and 

19 then carryovers to such plan year shall 

20 be applied against such limitation on 

21 a first-in, first-out basis. 

22 ‘‘(D) EXCESS EMPLOYEE COMPENSATION.— 

23 For purposes of this paragraph— 

24 ‘‘(i) IN GENERAL.—The term ‘excess 

25 employee compensation’ means, with respect 
39 

† HR 3962 EAS 

1 to any employee for any plan year, the ex2 cess (if any) of— 

3 ‘‘(I) the aggregate amount includ4 ible in income under this chapter for 

5 remuneration during the calendar year 

6 in which such plan year begins for 

7 services performed by the employee for 

8 the plan sponsor (whether or not per9 formed during such calendar year), 

10 over 

11 ‘‘(II) $1,000,000. 

12 ‘‘(ii) AMOUNTS SET ASIDE FOR NON13 QUALIFIED DEFERRED COMPENSATION.—If 

14 during any calendar year assets are set 

15 aside or reserved (directly or indirectly) in 

16 a trust (or other arrangement as determined 

17 by the Secretary), or transferred to such a 

18 trust or other arrangement, by a plan spon19 sor for purposes of paying deferred com20 pensation of an employee under a non21 qualified deferred compensation plan (as de22 fined in section 409A) of the plan sponsor, 

23 then, for purposes of clause (i), the amount 

24 of such assets shall be treated as remunera25 tion of the employee includible in income 
40 

† HR 3962 EAS 

1 for the calendar year unless such amount is 

2 otherwise includible in income for such 

3 year. An amount to which the preceding 

4 sentence applies shall not be taken into ac5 count under this paragraph for any subse6 quent calendar year. 

7 ‘‘(iii) ONLY REMUNERATION FOR CER8 TAIN POST-2009 SERVICES COUNTED.—Re9 muneration shall be taken into account 

10 under clause (i) only to the extent attrib11 utable to services performed by the employee 

12 for the plan sponsor after February 28, 

13 2010. 

14 ‘‘(iv) EXCEPTION FOR CERTAIN EQUITY

15 PAYMENTS.— 

16 ‘‘(I) IN GENERAL.—There shall 

17 not be taken into account under clause 

18 (i)(I) any amount includible in income 

19 with respect to the granting after Feb20 ruary 28, 2010, of service recipient 

21 stock (within the meaning of section 

22 409A) that, upon such grant, is subject 

23 to a substantial risk of forfeiture (as 

24 defined under section 83(c)(1)) for at 
41 

† HR 3962 EAS 

1 least 5 years from the date of such 

2 grant. 

3 ‘‘(II) SECRETARIAL AUTHOR4 ITY.—The Secretary may by regulation 

5 provide for the application of this 

6 clause in the case of a person other 

7 than a corporation. 

8 ‘‘(v) OTHER EXCEPTIONS.—The fol9 lowing amounts includible in income shall 

10 not be taken into account under clause 

11 (i)(I): 

12 ‘‘(I) COMMISSIONS.—Any remu13 neration payable on a commission 

14 basis solely on account of income di15 rectly generated by the individual per16 formance of the individual to whom 

17 such remuneration is payable. 

18 ‘‘(II) CERTAIN PAYMENTS UNDER

19 EXISTING CONTRACTS.—Any remu20 neration consisting of nonqualified de21 ferred compensation, restricted stock, 

22 stock options, or stock appreciation 

23 rights payable or granted under a 

24 written binding contract that was in 

25 effect on March 1, 2010, and which 
42 

† HR 3962 EAS 

1 was not modified in any material re2 spect before such remuneration is paid. 

3 ‘‘(vi) SELF-EMPLOYED INDIVIDUAL

4 TREATED AS EMPLOYEE.—The term ‘em5 ployee’ includes, with respect to a calendar 

6 year, a self-employed individual who is 

7 treated as an employee under section 401(c) 

8 for the taxable year ending during such cal9 endar year, and the term ‘compensation’ 

10 shall include earned income of such indi11 vidual with respect to such self-employment. 

12 ‘‘(vii) INDEXING OF AMOUNT.—In the 

13 case of any calendar year beginning after 

14 2010, the dollar amount under clause (i)(II) 

15 shall be increased by an amount equal to— 

16 ‘‘(I) such dollar amount, multi17 plied by 

18 ‘‘(II) the cost-of-living adjustment 

19 determined under section 1(f)(3) for 

20 the calendar year, determined by sub21 stituting ‘calendar year 2009’ for ‘cal22 endar year 1992’ in subparagraph (B) 

23 thereof. 

24 If the amount of any increase under clause 

25 (i) is not a multiple of $1,000, such in-
43 

† HR 3962 EAS 

1 crease shall be rounded to the next lowest 

2 multiple of $1,000. 

3 ‘‘(E) EXTRAORDINARY DIVIDENDS AND RE4 DEMPTIONS.— 

5 ‘‘(i) IN GENERAL.—The amount deter6 mined under this subparagraph for any 

7 plan year is the excess (if any) of the sum 

8 of the dividends declared during the plan 

9 year by the plan sponsor plus the aggregate 

10 amount paid for the redemption of stock of 

11 the plan sponsor redeemed during the plan 

12 year over the greater of— 

13 ‘‘(I) the adjusted net income 

14 (within the meaning of section 4043 of 

15 the Employee Retirement Income Secu16 rity Act of 1974) of the plan sponsor 

17 for the preceding plan year, deter18 mined without regard to any reduction 

19 by reason of interest, taxes, deprecia20 tion, or amortization, or 

21 ‘‘(II) in the case of a plan sponsor 

22 that determined and declared dividends 

23 in the same manner for at least 5 con24 secutive years immediately preceding 

25 such plan year, the aggregate amount 
44 

† HR 3962 EAS 

1 of dividends determined and declared 

2 for such plan year using such manner. 

3 ‘‘(ii) ONLY CERTAIN POST-2009 DIVI4 DENDS AND REDEMPTIONS COUNTED.—For 

5 purposes of clause (i), there shall only be 

6 taken into account dividends declared, and 

7 redemptions occurring, after February 28, 

8 2010. 

9 ‘‘(iii) EXCEPTION FOR INTRA-GROUP

10 DIVIDENDS.—Dividends paid by one mem11 ber of a controlled group (as defined in sec12 tion 412(d)(3)) to another member of such 

13 group shall not be taken into account under 

14 clause (i). 

15 ‘‘(iv) EXCEPTION FOR CERTAIN RE16 DEMPTIONS.—Redemptions that are made 

17 pursuant to a plan maintained with respect 

18 to employees, or that are made on account 

19 of the death, disability, or termination of 

20 employment of an employee or shareholder, 

21 shall not be taken into account under clause 

22 (i). 

23 ‘‘(v) EXCEPTION FOR CERTAIN PRE24 FERRED STOCK.— 
45 

† HR 3962 EAS 

1 ‘‘(I) IN GENERAL.—Dividends 

2 and redemptions with respect to appli3 cable preferred stock shall not be taken 

4 into account under clause (i) to the ex5 tent that dividends accrue with respect 

6 to such stock at a specified rate in all 

7 events and without regard to the plan 

8 sponsor’s income, and interest accrues 

9 on any unpaid dividends with respect 

10 to such stock. 

11 ‘‘(II) APPLICABLE PREFERRED

12 STOCK.—For purposes of subclause (I), 

13 the term ‘applicable preferred stock’ 

14 means preferred stock which was issued 

15 before March 1, 2010 (or which was 

16 issued after such date and is held by 

17 an employee benefit plan subject to the 

18 provisions of title I of Employee Re19 tirement Income Security Act of 1974). 

20 ‘‘(F) OTHER DEFINITIONS AND RULES.— 

21 For purposes of this paragraph— 

22 ‘‘(i) PLAN SPONSOR.—The term ‘ plan 

23 sponsor’ includes any member of the plan 

24 sponsor’s controlled group (as defined in 

25 section 412(d)(3)). 
46 

† HR 3962 EAS 

1 ‘‘(ii) RESTRICTION PERIOD.—The term 

2 ‘restriction period’ means, with respect to 

3 any election year— 

4 ‘‘(I) except as provided in sub5 clause (II), the 3-year period beginning 

6 with the election year (or, if later, the 

7 first plan year beginning after Decem8 ber 31, 2009), and 

9 ‘‘(II) if the plan sponsor elects 15- 

10 year amortization for the shortfall am11 ortization base for the election year, the 

12 5-year period beginning with the elec13 tion year (or, if later, the first plan 

14 year beginning after December 31, 

15 2009). 

16 ‘‘(iii) ELECTIONS FOR MULTIPLE

17 PLANS.—If a plan sponsor makes elections 

18 under paragraph (2)(D) with respect to 2 

19 or more plans, the Secretary shall provide 

20 rules for the application of this paragraph 

21 to such plans, including rules for the ratable 

22 allocation of any installment acceleration 

23 amount among such plans on the basis of 

24 each plan’s relative reduction in the plan’s 

25 shortfall amortization installment for the 
47 

† HR 3962 EAS 

1 first plan year in the amortization period 

2 described in subparagraph (A) (determined 

3 without regard to this paragraph). 

4 ‘‘(iv) MERGERS AND ACQUISITIONS.— 

5 The Secretary shall prescribe rules for the 

6 application of paragraph (2)(D) and this 

7 paragraph in any case where there is a 

8 merger or acquisition involving a plan 

9 sponsor making the election under para10 graph (2)(D).’’. 

11 (3) CONFORMING AMENDMENTS.—Section 430 is 

12 amended— 

13 (A) in subsection (c)(1), by striking ‘‘the 

14 shortfall amortization bases for such plan year 

15 and each of the 6 preceding plan years’’ and in16 serting ‘‘any shortfall amortization base which 

17 has not been fully amortized under this sub18 section’’, and 

19 (B) in subsection (j)(3), by adding at the 

20 end the following: 

21 ‘‘(F) QUARTERLY CONTRIBUTIONS NOT TO

22 INCLUDE CERTAIN INCREASED CONTRIBU23 TIONS.—Subparagraph (D) shall be applied 

24 without regard to any increase under subsection 

25 (c)(7).’’. 
48 

† HR 3962 EAS 

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

2 section shall apply to plan years beginning after December 

3 31, 2007. 

4 SEC. 202. APPLICATION OF EXTENDED AMORTIZATION PE5 RIOD TO PLANS SUBJECT TO PRIOR LAW 

6 FUNDING RULES. 

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

8 Act of 2006 is amended by redesignating section 107 as sec9 tion 108 and by inserting the following after section 106: 

10 ‘‘SEC. 107. APPLICATION OF EXTENDED AMORTIZATION PE11 RIODS TO PLANS WITH DELAYED EFFECTIVE 

12 DATE. 

13 ‘‘(a) IN GENERAL.—If the plan sponsor of a plan to 

14 which section 104, 105, or 106 of this Act applies elects 

15 to have this section apply for any eligible plan year (in 

16 this section referred to as an ‘election year’), section 302 

17 of the Employee Retirement Income Security Act of 1974 

18 and section 412 of the Internal Revenue Code of 1986 (as 

19 in effect before the amendments made by this subtitle and 

20 subtitle B) shall apply to such year in the manner described 

21 in subsection (b) or (c), whichever is specified in the elec22 tion. All references in this section to ‘such Act’ or ‘such 

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

24 the amendments made by this subtitle and subtitle B. 
49 

† HR 3962 EAS 

1 ‘‘(b) APPLICATION OF 2 AND 7 RULE.—In the case of 

2 an election year to which this subsection applies— 

3 ‘‘(1) 2-YEAR LOOKBACK FOR DETERMINING DEF4 ICIT REDUCTION CONTRIBUTIONS FOR CERTAIN

5 PLANS.—For purposes of applying section 302(d)(9) 

6 of such Act and section 412(l)(9) of such Code, the 

7 funded current liability percentage (as defined in sub8 paragraph (C) thereof) for such plan for such plan 

9 year shall be such funded current liability percentage 

10 of such plan for the second plan year preceding the 

11 first election year of such plan. 

12 ‘‘(2) CALCULATION OF DEFICIT REDUCTION CON13 TRIBUTION.—For purposes of applying section 302(d) 

14 of such Act and section 412(l) of such Code to a plan 

15 to which such sections apply (after taking into ac16 count paragraph (1))— 

17 ‘‘(A) in the case of the increased unfunded 

18 new liability of the plan, the applicable percent19 age described in section 302(d)(4)(C) of such Act 

20 and section 412(l)(4)(C) of such Code shall be the 

21 third segment rate described in sections 104(b), 

22 105(b), and 106(b) of this Act, and 

23 ‘‘(B) in the case of the excess of the un24 funded new liability over the increased unfunded 
50 

† HR 3962 EAS 

1 new liability, such applicable percentage shall be 

2 determined without regard to this section. 

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

4 the case of an election year to which this subsection applies, 

5 for purposes of applying section 302(d) of such Act and sec6 tion 412(l) of such Code— 

7 ‘‘(1) in the case of the increased unfunded new 

8 liability of the plan, the applicable percentage de9 scribed in section 302(d)(4)(C) of such Act and sec10 tion 412(l)(4)(C) of such Code for any pre-effective 

11 date plan year beginning with or after the first elec12 tion year shall be the ratio of— 

13 ‘‘(A) the annual installments payable in 

14 each year if the increased unfunded new liability 

15 for such plan year were amortized over 15 years, 

16 using an interest rate equal to the third segment 

17 rate described in sections 104(b), 105(b), and 

18 106(b) of this Act, to 

19 ‘‘(B) the increased unfunded new liability 

20 for such plan year, and 

21 ‘‘(2) in the case of the excess of the unfunded new 

22 liability over the increased unfunded new liability, 

23 such applicable percentage shall be determined with24 out regard to this section. 

25 ‘‘(d) ELECTION.— 
51 

† HR 3962 EAS 

1 ‘‘(1) IN GENERAL.—The plan sponsor of a plan 

2 may elect to have this section apply to not more than 

3 2 eligible plan years with respect to the plan, except 

4 that in the case of a plan to which section 106 of this 

5 Act applies, the plan sponsor may only elect to have 

6 this section apply to 1 eligible plan year. 

7 ‘‘(2) AMORTIZATION SCHEDULE.—Such election 

8 shall specify whether the rules under subsection (b) or 

9 (c) shall apply to an election year, except that if a 

10 plan sponsor elects to have this section apply to 2 eli11 gible plan years, the plan sponsor must elect the same 

12 rule for both years. 

13 ‘‘(3) OTHER RULES.—Such election shall be 

14 made at such time, and in such form and manner, 

15 as shall be prescribed by the Secretary of the Treas16 ury, and may be revoked only with the consent of the 

17 Secretary of the Treasury. 

18 ‘‘(e) DEFINITIONS.—For purposes of this section— 

19 ‘‘(1) ELIGIBLE PLAN YEAR.—For purposes of this 

20 subparagraph, the term ‘eligible plan year’ means 

21 any plan year beginning in 2008, 2009, 2010, or 

22 2011, except that a plan year beginning in 2008 shall 

23 only be treated as an eligible plan year if the due 

24 date for the payment of the minimum required con-
52 

† HR 3962 EAS 

1 tribution for such plan year occurs on or after the 

2 date of the enactment of this clause. 

3 ‘‘(2) PRE-EFFECTIVE DATE PLAN YEAR.—The 

4 term ‘pre-effective date plan year’ means, with respect 

5 to a plan, any plan year prior to the first year in 

6 which the amendments made by this subtitle and sub7 title B apply to the plan. 

8 ‘‘(3) INCREASED UNFUNDED NEW LIABILITY.— 

9 The term ‘increased unfunded new liability’ means, 

10 with respect to a year, the excess (if any) of the un11 funded new liability over the amount of unfunded 

12 new liability determined as if the value of the plan’s 

13 assets determined under subsection 302(c)(2) of such 

14 Act and section 412(c)(2) of such Code equaled the 

15 product of the current liability of the plan for the 

16 year multiplied by the funded current liability per17 centage (as defined in section 302(d)(8)(B) of such 

18 Act and 412(l)(8)(B) of such Code) of the plan for the 

19 second plan year preceding the first election year of 

20 such plan. 

21 ‘‘(4) OTHER DEFINITIONS.—The terms ‘unfunded 

22 new liability’ and ‘current liability’ shall have the 

23 meanings set forth in section 302(d) of such Act and 

24 section 412(l) of such Code.’’. 
53 

† HR 3962 EAS 

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

2 Pension Protection Act of 2006 is amended— 

3 (1) by striking ‘‘eligible cooperative plan’’ wher4 ever it appears in subsections (a) and (b) and insert5 ing ‘‘eligible cooperative plan or an eligible charity 

6 plan’’, and 

7 (2) by adding at the end the following new sub8 section: 

9 ‘‘(d) ELIGIBLE CHARITY PLAN DEFINED.—For pur10 poses of this section, a plan shall be treated as an eligible 

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

12 more than one employer (determined without regard to sec13 tion 414(c) of the Internal Revenue Code) and 100 percent 

14 of the employers are described in section 501(c)(3) of such 

15 Code.’’. 

16 (c) EFFECTIVE DATE.— 

17 (1) IN GENERAL.—The amendment made by sub18 section (a) shall take effect as if included in the Pen19 sion Protection Act of 2006. 

20 (2) ELIGIBLE CHARITY PLAN.—The amendments 

21 made by subsection (b) shall apply to plan years be22 ginning after December 31, 2007, except that a plan 

23 sponsor may elect to apply such amendments to plan 

24 years beginning after December 31, 2008. Any such 

25 election shall be made at such time, and in such form 
54 

† HR 3962 EAS 

1 and manner, as shall be prescribed by the Secretary 

2 of the Treasury, and may be revoked only with the 

3 consent of the Secretary of the Treasury. 

4 SEC. 203. LOOKBACK FOR CERTAIN BENEFIT RESTRIC5 TIONS. 

6 (a) IN GENERAL.— 

7 (1) AMENDMENT TO ERISA.—Section 206(g)(9) of 

8 the Employee Retirement Income Security Act of 

9 1974 is amended by adding at the end the following: 

10 ‘‘(D) SPECIAL RULE FOR CERTAIN YEARS.— 

11 Solely for purposes of any applicable provi12 sion— 

13 ‘‘(i) IN GENERAL.—For plan years be14 ginning on or after October 1, 2008, and be15 fore October 1, 2010, the adjusted funding 

16 target attainment percentage of a plan shall 

17 be the greater of— 

18 ‘‘(I) such percentage, as deter19 mined without regard to this subpara20 graph, or 

21 ‘‘(II) the adjusted funding target 

22 attainment percentage for such plan 

23 for the plan year beginning after Octo24 ber 1, 2007, and before October 1, 

25 2008, as determined under rules pre-
55 

† HR 3962 EAS 

1 scribed by the Secretary of the Treas2 ury. 

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

4 plan for which the valuation date is not the 

5 first day of the plan year— 

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

7 years beginning after December 31, 

8 2007, and before January 1, 2010, and 

9 ‘‘(II) clause (i)(II) shall apply 

10 based on the last plan year beginning 

11 before November 1, 2007, as determined 

12 under rules prescribed by the Secretary 

13 of the Treasury. 

14 ‘‘(iii) APPLICABLE PROVISION.—For 

15 purposes of this subparagraph, the term 

16 ‘applicable provision’ means— 

17 ‘‘(I) paragraph (3), but only for 

18 purposes of applying such paragraph 

19 to a payment which, as determined 

20 under rules prescribed by the Secretary 

21 of the Treasury, is a payment under a 

22 social security leveling option which 

23 accelerates payments under the plan 

24 before, and reduces payments after, a 

25 participant starts receiving social secu-
56 

† HR 3962 EAS 

1 rity benefits in order to provide sub2 stantially similar aggregate payments 

3 both before and after such benefits are 

4 received, and 

5 ‘‘(II) paragraph (4).’’. 

6 (2) AMENDMENT TO INTERNAL REVENUE CODE

7 OF 1986.—Section 436(j) of the Internal Revenue Code 

8 of 1986 is amended by adding at the end the fol9 lowing: 

10 ‘‘(3) SPECIAL RULE FOR CERTAIN YEARS.—Sole11 ly for purposes of any applicable provision— 

12 ‘‘(A) IN GENERAL.—For plan years begin13 ning on or after October 1, 2008, and before Oc14 tober 1, 2010, the adjusted funding target attain15 ment percentage of a plan shall be the greater 

16 of— 

17 ‘‘(i) such percentage, as determined 

18 without regard to this paragraph, or 

19 ‘‘(ii) the adjusted funding target at20 tainment percentage for such plan for the 

21 plan year beginning after October 1, 2007, 

22 and before October 1, 2008, as determined 

23 under rules prescribed by the Secretary. 
57 

† HR 3962 EAS 

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

2 for which the valuation date is not the first day 

3 of the plan year— 

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

5 plan years beginning after December 31, 

6 2007, and before January 1, 2010, and 

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

8 based on the last plan year beginning before 

9 November 1, 2007, as determined under 

10 rules prescribed by the Secretary. 

11 ‘‘(C) APPLICABLE PROVISION.—For pur12 poses of this paragraph, the term ‘applicable 

13 provision’ means— 

14 ‘‘(i) subsection (d), but only for pur15 poses of applying such paragraph to a pay16 ment which, as determined under rules pre17 scribed by the Secretary, is a payment 

18 under a social security leveling option 

19 which accelerates payments under the plan 

20 before, and reduces payments after, a par21 ticipant starts receiving social security ben22 efits in order to provide substantially simi23 lar aggregate payments both before and 

24 after such benefits are received, and 

25 ‘‘(ii) subsection (e).’’. 
58 

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1 (b) INTERACTION WITH WRERA RULE.—Section 203 

2 of the Worker, Retiree, and Employer Recovery Act of 2008 

3 shall apply to a plan for any plan year in lieu of the 

4 amendments made by this section applying to sections 

5 206(g)(4) of the Employee Retirement Income Security Act 

6 of 1974 and 436(e) of the Internal Revenue Code of 1986 

7 only to the extent that such section produces a higher ad8 justed funding target attainment percentage for such plan 

9 for such year. 

10 (c) EFFECTIVE DATE.— 

11 (1) IN GENERAL.—Except as provided in para12 graph (2), the amendments made by this section shall 

13 apply to plan years beginning on or after October 1, 

14 2008. 

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

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

17 plan year, the amendments made by this section shall 

18 apply to plan years beginning after December 31, 

19 2007. 

20 SEC. 204. LOOKBACK FOR CREDIT BALANCE RULE FOR 

21 PLANS MAINTAINED BY CHARITIES. 

22 (a) AMENDMENT TO ERISA.—Paragraph (3) of section 

23 303(f) of the Employee Retirement Income Security Act of 

24 1974 is amended by adding the following at the end thereof: 
59 

† HR 3962 EAS 

1 ‘‘(D) SPECIAL RULE FOR CERTAIN YEARS

2 OF PLANS MAINTAINED BY CHARITIES.— 

3 ‘‘(i) IN GENERAL.—For purposes of ap4 plying subparagraph (C) for plan years be5 ginning after August 31, 2009, and before 

6 September 1, 2011, the ratio determined 

7 under such subparagraph for the preceding 

8 plan year shall be the greater of— 

9 ‘‘(I) such ratio, as determined 

10 without regard to this subparagraph, 

11 or 

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

13 the plan year beginning after August 

14 31, 2007, and before September 1, 

15 2008, as determined under rules pre16 scribed by the Secretary of the Treas17 ury. 

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

19 plan for which the valuation date is not the 

20 first day of the plan year— 

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

22 years beginning after December 31, 

23 2008, and before January 1, 2011, and 

24 ‘‘(II) clause (i)(II) shall apply 

25 based on the last plan year beginning 
60 

† HR 3962 EAS 

1 before September 1, 2007, as deter2 mined under rules prescribed by the 

3 Secretary of the Treasury. 

4 ‘‘(iii) LIMITATION TO CHARITIES.— 

5 This subparagraph shall not apply to any 

6 plan unless such plan is maintained exclu7 sively by one or more organizations de8 scribed in section 501(c)(3) of the Internal 

9 Revenue Code of 1986.’’. 

10 (b) AMENDMENT TO INTERNAL REVENUE CODE OF

11 1986.—Paragraph (3) of section 430(f) of the Internal Rev12 enue Code of 1986 is amended by adding the following at 

13 the end thereof: 

14 ‘‘(D) SPECIAL RULE FOR CERTAIN YEARS

15 OF PLANS MAINTAINED BY CHARITIES.— 

16 ‘‘(i) IN GENERAL.—For purposes of ap17 plying subparagraph (C) for plan years be18 ginning after August 31, 2009, and before 

19 September 1, 2011, the ratio determined 

20 under such subparagraph for the preceding 

21 plan year of a plan shall be the greater of— 

22 ‘‘(I) such ratio, as determined 

23 without regard to this subsection, or 

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

25 the plan year beginning after August 
61 

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1 31, 2007 and before September 1, 2008, 

2 as determined under rules prescribed 

3 by the Secretary. 

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

5 plan for which the valuation date is not the 

6 first day of the plan year— 

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

8 years beginning after December 31, 

9 2007, and before January 1, 2010, and 

10 ‘‘(II) clause (i)(II) shall apply 

11 based on the last plan year beginning 

12 before September 1, 2007, as deter13 mined under rules prescribed by the 

14 Secretary. 

15 ‘‘(iii) LIMITATION TO CHARITIES.— 

16 This subparagraph shall not apply to any 

17 plan unless such plan is maintained exclu18 sively by one or more organizations de19 scribed in section 501(c)(3).’’. 

20 (c) EFFECTIVE DATE.— 

21 (1) IN GENERAL.—Except as provided in para22 graph (2), the amendments made by this section shall 

23 apply to plan years beginning after August 31, 2009. 

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

25 which the valuation date is not the first day of the 
62 

† HR 3962 EAS 

1 plan year, the amendments made by this section shall 

2 apply to plan years beginning after December 31, 

3 2008. 

4 Subtitle B—Multiemployer Plans 

5 SEC. 211. ADJUSTMENTS TO FUNDING STANDARD ACCOUNT 

6 RULES. 

7 (a) ADJUSTMENTS.— 

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

9 the Employee Retirement Income Security Act of 

10 1974 (29 U.S.C. 1084(b)) is amended by adding at 

11 the end the following new paragraph: 

12 ‘‘(8) SPECIAL RELIEF RULES.—Notwithstanding 

13 any other provision of this subsection— 

14 ‘‘(A) AMORTIZATION OF NET INVESTMENT

15 LOSSES.— 

16 ‘‘(i) IN GENERAL.—A multiemployer 

17 plan with respect to which the solvency test 

18 under subparagraph (C) is met may treat 

19 the portion of any experience loss or gain 

20 attributable to net investment losses in21 curred in either or both of the first two plan 

22 years ending after August 31, 2008, as an 

23 item separate from other experience losses, 

24 to be amortized in equal annual install-
63 

† HR 3962 EAS 

1 ments (until fully amortized) over the pe2 riod — 

3 ‘‘(I) beginning with the plan year 

4 in which such portion is first recog5 nized in the actuarial value of assets, 

6 and 

7 ‘‘(II) ending with the last plan 

8 year in the 30-plan year period begin9 ning with the plan year in which such 

10 net investment loss was incurred. 

11 ‘‘(ii) COORDINATION WITH EXTEN12 SIONS.—If this subparagraph applies for 

13 any plan year— 

14 ‘‘(I) no extension of the amortiza15 tion period under clause (i) shall be al16 lowed under subsection (d), and 

17 ‘‘(II) if an extension was granted 

18 under subsection (d) for any plan year 

19 before the election to have this subpara20 graph apply to the plan year, such ex21 tension shall not result in such amorti22 zation period exceeding 30 years. 

23 ‘‘(iii) NET INVESTMENT LOSSES.—For 

24 purposes of this subparagraph— 
64 

† HR 3962 EAS 

1 ‘‘(I) IN GENERAL.—Net invest2 ment losses shall be determined in the 

3 manner prescribed by the Secretary of 

4 the Treasury on the basis of the dif5 ference between actual and expected re6 turns (including any difference attrib7 utable to any criminally fraudulent in8 vestment arrangement). 

9 ‘‘(II) CRIMINALLY FRAUDULENT

10 INVESTMENT ARRANGEMENTS.—The de11 termination as to whether an arrange12 ment is a criminally fraudulent invest13 ment arrangement shall be made under 

14 rules substantially similar to the rules 

15 prescribed by the Secretary of the 

16 Treasury for purposes of section 165 of 

17 the Internal Revenue Code of 1986. 

18 ‘‘(B) EXPANDED SMOOTHING PERIOD.— 

19 ‘‘(i) IN GENERAL.—A multiemployer 

20 plan with respect to which the solvency test 

21 under subparagraph (C) is met may change 

22 its asset valuation method in a manner 

23 which— 

24 ‘‘(I) spreads the difference between 

25 expected and actual returns for either 
65 

† HR 3962 EAS 

1 or both of the first 2 plan years ending 

2 after August 31, 2008, over a period of 

3 not more than 10 years, 

4 ‘‘(II) provides that for either or 

5 both of the first 2 plan years beginning 

6 after August 31, 2008, the value of 

7 plan assets at any time shall not be 

8 less than 80 percent or greater than 

9 130 percent of the fair market value of 

10 such assets at such time, or 

11 ‘‘(III) makes both changes de12 scribed in subclauses (I) and (II) to 

13 such method. 

14 ‘‘(ii) ASSET VALUATION METHODS.—If 

15 this subparagraph applies for any plan 

16 year— 

17 ‘‘(I) the Secretary of the Treasury 

18 shall not treat the asset valuation 

19 method of the plan as unreasonable 

20 solely because of the changes in such 

21 method described in clause (i), and 

22 ‘‘(II) such changes shall be deemed 

23 approved by such Secretary under sec24 tion 302(d)(1) and section 412(d)(1) of 

25 such Code. 
66 

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1 ‘‘(iii) AMORTIZATION OF REDUCTION

2 IN UNFUNDED ACCRUED LIABILITY.—If this 

3 subparagraph and subparagraph (A) both 

4 apply for any plan year, the plan shall 

5 treat any reduction in unfunded accrued li6 ability resulting from the application of 

7 this subparagraph as a separate experience 

8 amortization base, to be amortized in equal 

9 annual installments (until fully amortized) 

10 over a period of 30 plan years rather than 

11 the period such liability would otherwise be 

12 amortized over. 

13 ‘‘(C) SOLVENCY TEST.—The solvency test 

14 under this paragraph is met only if the plan ac15 tuary certifies that the plan is projected to have 

16 sufficient assets to timely pay expected benefits 

17 and anticipated expenditures over the amortiza18 tion period, taking into account the changes in 

19 the funding standard account under this para20 graph. 

21 ‘‘(D) RESTRICTION ON BENEFIT IN22 CREASES.—If subparagraph (A) or (B) apply to 

23 a multiemployer plan for any plan year, then, 

24 in addition to any other applicable restrictions 

25 on benefit increases, a plan amendment increas-
67 

† HR 3962 EAS 

1 ing benefits may not go into effect during either 

2 of the 2 plan years immediately following such 

3 plan year unless— 

4 ‘‘(i) the plan actuary certifies that— 

5 ‘‘(I) any such increase is paid for 

6 out of additional contributions not al7 located to the plan immediately before 

8 the application of this paragraph to 

9 the plan, and 

10 ‘‘(II) the plan’s funded percentage 

11 and projected credit balances for such 2 

12 plan years are reasonably expected to 

13 be at least as high as such percentage 

14 and balances would have been if the 

15 benefit increase had not been adopted, 

16 or 

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

18 condition of qualification under part I of 

19 subchapter D of chapter 1 of the Internal 

20 Revenue Code of 1986 or to comply with 

21 other applicable law. 

22 ‘‘(E) REPORTING.—A plan sponsor of a 

23 plan to which this paragraph applies shall— 
68 

† HR 3962 EAS 

1 ‘‘(i) give notice of such application to 

2 participants and beneficiaries of the plan, 

3 and 

4 ‘‘(ii) inform the Pension Benefit Guar5 anty Corporation of such application in 

6 such form and manner as the Director of 

7 the Pension Benefit Guaranty Corporation 

8 may prescribe.’’. 

9 (2) AMENDMENT TO INTERNAL REVENUE CODE

10 OF 1986.—Section 431(b) is amended by adding at the 

11 end the following new paragraph: 

12 ‘‘(8) SPECIAL RELIEF RULES.—Notwithstanding 

13 any other provision of this subsection— 

14 ‘‘(A) AMORTIZATION OF NET INVESTMENT

15 LOSSES.— 

16 ‘‘(i) IN GENERAL.—A multiemployer 

17 plan with respect to which the solvency test 

18 under subparagraph (C) is met may treat 

19 the portion of any experience loss or gain 

20 attributable to net investment losses in21 curred in either or both of the first two plan 

22 years ending after August 31, 2008, as an 

23 item separate from other experience losses, 

24 to be amortized in equal annual install-
69 

† HR 3962 EAS 

1 ments (until fully amortized) over the pe2 riod — 

3 ‘‘(I) beginning with the plan year 

4 in which such portion is first recog5 nized in the actuarial value of assets, 

6 and 

7 ‘‘(II) ending with the last plan 

8 year in the 30-plan year period begin9 ning with the plan year in which such 

10 net investment loss was incurred. 

11 ‘‘(ii) COORDINATION WITH EXTEN12 SIONS.—If this subparagraph applies for 

13 any plan year— 

14 ‘‘(I) no extension of the amortiza15 tion period under clause (i) shall be al16 lowed under subsection (d), and 

17 ‘‘(II) if an extension was granted 

18 under subsection (d) for any plan year 

19 before the election to have this subpara20 graph apply to the plan year, such ex21 tension shall not result in such amorti22 zation period exceeding 30 years. 

23 ‘‘(iii) NET INVESTMENT LOSSES.—For 

24 purposes of this subparagraph— 
70 

† HR 3962 EAS 

1 ‘‘(I) IN GENERAL.—Net invest2 ment losses shall be determined in the 

3 manner prescribed by the Secretary on 

4 the basis of the difference between ac5 tual and expected returns (including 

6 any difference attributable to any 

7 criminally fraudulent investment ar8 rangement). 

9 ‘‘(II) CRIMINALLY FRAUDULENT

10 INVESTMENT ARRANGEMENTS.—The de11 termination as to whether an arrange12 ment is a criminally fraudulent invest13 ment arrangement shall be made under 

14 rules substantially similar to the rules 

15 prescribed by the Secretary for pur16 poses of section 165. 

17 ‘‘(B) EXPANDED SMOOTHING PERIOD.— 

18 ‘‘(i) IN GENERAL.—A multiemployer 

19 plan with respect to which the solvency test 

20 under subparagraph (C) is met may change 

21 its asset valuation method in a manner 

22 which— 

23 ‘‘(I) spreads the difference between 

24 expected and actual returns for either 

25 or both of the first 2 plan years ending 
71 

† HR 3962 EAS 

1 after August 31, 2008, over a period of 

2 not more than 10 years, 

3 ‘‘(II) provides that for either or 

4 both of the first 2 plan years beginning 

5 after August 31, 2008, the value of 

6 plan assets at any time shall not be 

7 less than 80 percent or greater than 

8 130 percent of the fair market value of 

9 such assets at such time, or 

10 ‘‘(III) makes both changes de11 scribed in subclauses (I) and (II) to 

12 such method. 

13 ‘‘(ii) ASSET VALUATION METHODS.—If 

14 this subparagraph applies for any plan 

15 year— 

16 ‘‘(I) the Secretary shall not treat 

17 the asset valuation method of the plan 

18 as unreasonable solely because of the 

19 changes in such method described in 

20 clause (i), and 

21 ‘‘(II) such changes shall be deemed 

22 approved by the Secretary under sec23 tion 302(d)(1) of the Employee Retire24 ment Income Security Act of 1974 and 

25 section 412(d)(1). 
72 

† HR 3962 EAS 

1 ‘‘(iii) AMORTIZATION OF REDUCTION

2 IN UNFUNDED ACCRUED LIABILITY.—If this 

3 subparagraph and subparagraph (A) both 

4 apply for any plan year, the plan shall 

5 treat any reduction in unfunded accrued li6 ability resulting from the application of 

7 this subparagraph as a separate experience 

8 amortization base, to be amortized in equal 

9 annual installments (until fully amortized) 

10 over a period of 30 plan years rather than 

11 the period such liability would otherwise be 

12 amortized over. 

13 ‘‘(C) SOLVENCY TEST.—The solvency test 

14 under this paragraph is met only if the plan ac15 tuary certifies that the plan is projected to have 

16 sufficient assets to timely pay expected benefits 

17 and anticipated expenditures over the amortiza18 tion period, taking into account the changes in 

19 the funding standard account under this para20 graph. 

21 ‘‘(D) RESTRICTION ON BENEFIT IN22 CREASES.—If subparagraph (A) or (B) apply to 

23 a multiemployer plan for any plan year, then, 

24 in addition to any other applicable restrictions 

25 on benefit increases, a plan amendment increas-
73 

† HR 3962 EAS 

1 ing benefits may not go into effect during either 

2 of the 2 plan years immediately following such 

3 plan year unless— 

4 ‘‘(i) the plan actuary certifies that— 

5 ‘‘(I) any such increase is paid for 

6 out of additional contributions not al7 located to the plan immediately before 

8 the application of this paragraph to 

9 the plan, and 

10 ‘‘(II) the plan’s funded percentage 

11 and projected credit balances for such 2 

12 plan years are reasonably expected to 

13 be at least as high as such percentage 

14 and balances would have been if the 

15 benefit increase had not been adopted, 

16 or 

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

18 condition of qualification under part I of 

19 subchapter D or to comply with other appli20 cable law. 

21 ‘‘(E) REPORTING.—A plan sponsor of a 

22 plan to which this paragraph applies shall— 

23 ‘‘(i) give notice of such application to 

24 participants and beneficiaries of the plan, 

25 and 
74 

† HR 3962 EAS 

1 ‘‘(ii) inform the Pension Benefit Guar2 anty Corporation of such application in 

3 such form and manner as the Director of 

4 the Pension Benefit Guaranty Corporation 

5 may prescribe.’’. 

6 (b) EFFECTIVE DATES.— 

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

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

9 first plan year ending after August 31, 2008, except 

10 that any election a plan makes pursuant to this sec11 tion that affects the plan’s funding standard account 

12 for the first plan year beginning after August 31, 

13 2008, shall be disregarded for purposes of applying 

14 the provisions of section 305 of the Employee Retire15 ment Income Security Act of 1974 and section 432 of 

16 the Internal Revenue Code of 1986 to such plan year. 

17 (2) RESTRICTIONS ON BENEFIT INCREASES.— 

18 Notwithstanding paragraph (1), the restrictions on 

19 plan amendments increasing benefits in sections 

20 304(b)(8)(D) of such Act and 431(b)(8)(D) of such 

21 Code, as added by this section, shall take effect on the 

22 date of enactment of this Act. 
75 

† HR 3962 EAS 

1 TITLE III—BUDGETARY 

2 PROVISIONS 

3 SEC. 301. BUDGETARY PROVISIONS. 

4 The budgetary effects of this Act, for the purpose of 

5 complying with the Statutory Pay-As-You-Go-Act of 2010, 

6 shall be determined by reference to the latest statement titled 

7 ‘‘Budgetary Effects of PAYGO Legislation’’ for this Act, 

8 submitted for printing in the Congressional Record by the 

9 Chairman of the Senate Budget Committee, provided that 

10 such statement has been submitted prior to the vote on pas11 sage. 

Amend the title so as to read: ‘‘An Act to provide 

a physician payment update, to provide pension funding 

relief, and for other purposes.’’. 

Attest: 

Secretary. 
111TH CONGRESS 

2D SESSION H.R. 3962 

AMENDMENTS