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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3936 Introduced in House (IH)]

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.

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

SECTION 1. SHORT TITLE, ETC.

    (a) Short Title.--This Act may be cited as the ``Preserve Benefits 
and Jobs Act of 2009''.
    (b) Table of Contents.--The table of contents for 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.

                     TITLE I--SINGLE EMPLOYER PLANS

SEC. 101. EXTENDED PERIOD FOR SINGLE-EMPLOYER DEFINED BENEFIT PLANS TO 
              AMORTIZE CERTAIN SHORTFALL AMORTIZATION BASES.

    (a) Amendments to ERISA.--
            (1) In general.--Paragraph (2) of section 303(c) of the 
        Employee Retirement Income Security Act of 1974 is amended by 
        adding at the end the following subparagraphs:
                    ``(D) Special rule.--
                            ``(i) In general.--In the case of the 
                        shortfall amortization base of an active plan 
                        for any applicable plan year, the shortfall 
                        amortization installments are the amounts 
                        described in clause (ii) or clause (iii), as 
                        applicable, determined pursuant to clause (iv).
                            ``(ii) 7-year amortization.--
                                    ``(I) In general.--The shortfall 
                                amortization installments described in 
                                this clause are--
                                            ``(aa) in the case of the 
                                        last 7 plan years in the 9-
                                        plan-year period beginning with 
                                        the applicable plan year, the 
                                        amounts necessary to amortize 
                                        the shortfall amortization base 
                                        of the plan for the applicable 
                                        plan year in level annual 
                                        installments over such last 7 
                                        plan years, and
                                            ``(bb) in the case of the 
                                        first 2 plan years in such 9-
                                        plan-year period, interest on 
                                        such shortfall amortization 
                                        base (determined using the 
                                        effective rate of interest for 
                                        the plan for the plan year).
                                    ``(II) Shortfall amortization 
                                installment.--The shortfall 
                                amortization installment for any plan 
                                year in the 9-plan-year period under 
                                this clause with respect to such 
                                shortfall amortization base is the 
                                annual installment determined under 
                                this clause for that year for that 
                                base.
                                    ``(III) Minimum required 
                                contribution for first 2 years.--
                                Notwithstanding the preceding 
                                provisions of this clause, the minimum 
                                required contribution for the two plan 
                                years described in subclause (I)(bb) 
                                shall be increased to the extent 
                                necessary so that the minimum required 
                                contribution for such plan year is at 
                                least equal to the applicable 
                                percentage of the minimum required 
                                contribution for the plan year 
                                preceding the first applicable plan 
                                year. If the minimum required 
                                contribution is increased by reason of 
                                the preceding sentence, the shortfall 
                                amortization installments with respect 
                                to the shortfall amortization base for 
                                any applicable plan year shall be 
                                reduced to take such increase into 
                                account, pursuant to rules issued by 
                                the Secretary of the Treasury, but only 
                                if the shortfall amortization 
                                installments with respect to the 
                                shortfall amortization base for such 
                                applicable plan year are determined 
                                under this clause. For purposes of this 
                                subclause, any reference to the minimum 
                                required contribution for any plan year 
                                shall be a reference to the minimum 
                                required contribution for such plan 
                                year prior to any reduction under 
                                subsection (f) and without taking into 
                                account any waiver under section 
                                302(c). For purposes of this clause, 
                                the applicable percentage shall 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                   115
            plan year.
                            ``(iii) 15-year amortization.--The 
                        shortfall amortization installments described 
                        in this clause are the amounts necessary to 
                        amortize the shortfall amortization base of the 
                        plan for the applicable plan year in level 
                        annual installments over 15 years. The 
                        shortfall amortization installments for any 
                        plan year in the 15-plan-year period under this 
                        clause is the annual installment determined 
                        under this clause for that year for that base.
                            ``(iv) Election.--The plan sponsor may, 
                        with respect to a plan, elect whether to 
                        determine shortfall amortization installments 
                        under clause (ii), clause (iii), or without 
                        regard to this subparagraph. Such election 
                        shall be made at such times, and in such form 
                        and manner, as shall be prescribed by the 
                        Secretary of the Treasury, and may be revoked 
                        only with the consent of the Secretary of the 
                        Treasury. In the absence of a timely election 
                        to determine shortfall amortization 
                        installments under such clause (ii) or clause 
                        (iii), such installments shall be determined 
                        without regard to this subparagraph.
                    ``(E) Failure to maintain active plan.--
                            ``(i) 2 and 7 rule.--If the shortfall 
                        amortization installments with respect to a 
                        shortfall amortization base for an applicable 
                        plan year are determined under subparagraph 
                        (D)(ii), the plan must remain an active plan 
                        for the subsequent plan year. If such plan 
                        fails to be an active plan in such plan year, 
                        the minimum required contribution for the plan 
                        year with respect to which a failure occurs 
                        shall be increased by all amounts by which the 
                        minimum required contribution for the current 
                        plan year or any prior plan year has been 
                        reduced by the application of subparagraph (D), 
                        plus interest on such amounts at the effective 
                        rate of interest for the plan for the plan year 
                        for which the increase applies. However, any 
                        such increase in the minimum required 
                        contribution shall not require a contribution 
                        to the extent that the contribution would cause 
                        the value of plan assets for the plan year to 
                        exceed the funding target of the plan for the 
                        plan year (determined without regard to 
                        subsection (i)(1)). If the minimum required 
                        contribution is increased by reason of this 
                        clause, the shortfall amortization installments 
                        with respect to the shortfall amortization base 
                        for any applicable plan year shall be reduced 
                        to take such increase into account, pursuant to 
                        rules issued by the Secretary of the Treasury, 
                        but only if the shortfall amortization 
                        installments with respect to the shortfall 
                        amortization base for such applicable plan year 
                        are determined under subparagraph (D)(ii). For 
                        purposes of this clause, any reference to the 
                        minimum required contribution for any plan year 
                        shall be a reference to the minimum required 
                        contribution for such plan year prior to any 
                        reduction under subsection (f) and without 
                        taking into account any waiver under section 
                        302(c).
                            ``(ii) 15-year rule.--If the shortfall 
                        amortization installments with respect to a 
                        shortfall amortization base for an applicable 
                        plan year are determined under subparagraph 
                        (D)(iii), the plan must remain an active plan 
                        for the 7 subsequent plan years. If such plan 
                        fails to be an active plan in any such plan 
                        year, the shortfall amortization base, reduced 
                        by the principal portion of prior shortfall 
                        amortization installments relating to that 
                        base, shall be amortized over 7 years.
                            ``(iii) Special rule.--In the case of an 
                        applicable plan year that ends before July 1, 
                        2009, the plan sponsor may elect not to have 
                        the active plan requirement apply for such plan 
                        year. If such election is made--
                                    ``(I) clause (i) shall be applied 
                                so as to require the plan to remain an 
                                active plan for the 2 subsequent plan 
                                years (instead of 1 subsequent plan 
                                year) under rules prescribed by the 
                                Secretary of the Treasury, and
                                    ``(II) clause (ii) shall be applied 
                                by substituting `8' for `7' the first 
                                place it appears and by substituting 
                                `6' for `7' the second place it 
                                appears.
                        Such election shall be made at such times, and 
                        in such form and manner, as shall be prescribed 
                        by the Secretary of the Treasury, and may be 
                        revoked only with consent of the Secretary of 
                        the Treasury.
                    ``(F) Applicable plan year.--For purposes of this 
                paragraph, the term `applicable plan year' means--
                            ``(i) except as provided in clauses (ii) 
                        and (iii), any plan year beginning in 2009 or 
                        2010,
                            ``(ii) in the case of a plan with a plan 
                        year beginning after October 31 and before 
                        January 1, any plan year beginning in 2008 or 
                        2009, and
                            ``(iii) in the case of a plan for which the 
                        valuation date is not the first day of the plan 
                        year, any plan year beginning in 2008 or 2009.
                    ``(G) Active plan.--
                            ``(i) In general.--For purposes of this 
                        paragraph, the term `active plan' means a 
                        defined benefit plan that is described in 
                        clause (ii), (iii), or (iv). A defined benefit 
                        plan may satisfy different clauses in different 
                        years. Notwithstanding clause (ii), (iii), or 
                        (iv), a defined benefit plan is not an active 
                        plan if an election under section 402(a)(1) of 
                        the Pension Protection Act of 2006 is in effect 
                        with respect to such plan, or if the plan is 
                        described under rules prescribed by the 
                        Secretary of the Treasury designed to prevent 
                        evasion of the purposes of this subparagraph.
                            ``(ii) Defined benefit plan.--
                                    ``(I) In general.--A defined 
                                benefit plan is described in this 
                                clause if minimum benefit accruals are 
                                provided on behalf of all employees who 
                                have satisfied the plan's age and 
                                service requirements and who would, but 
                                for any prior amendment ceasing 
                                accruals, be eligible for an accrual 
                                under the plan.
                                    ``(II) Special rule regarding 
                                minimum benefit accruals.--For purposes 
                                of this clause, the employees described 
                                in this clause shall be treated as 
                                receiving minimum benefit accruals for 
                                a plan year if all such employees are 
                                accruing a benefit and--
                                            ``(aa) the rate of benefit 
                                        accrual for any such employee 
                                        is not less than the greater 
                                        of--

                                                    ``(AA) the rate of 
                                                benefit accrual that 
                                                would have been applied 
                                                to the employee under 
                                                the benefit formula in 
                                                effect on July 1, 2009, 
                                                disregarding any 
                                                amendments to the plan 
                                                adopted after June 30, 
                                                2009, or

                                                    ``(BB) the rate of 
                                                benefit accrual that 
                                                would have applied to 
                                                the employee under the 
                                                benefit formula in 
                                                effect as of the last 
                                                date prior to the 
                                                effective date of any 
                                                plan amendment adopted 
                                                prior to July 1, 2009 
                                                that ceased providing 
                                                benefit accruals based 
                                                on additional service 
                                                credit with respect to 
                                                such employee, or

                                            ``(bb) the target normal 
                                        cost (without regard to plan 
                                        administrative expenses) for 
                                        such plan year with respect to 
                                        such employees is at least 3 
                                        percent of the aggregate 
                                        compensation (as defined in 
                                        section 415(c)(3) of the 
                                        Internal Revenue Code of 1986) 
                                        of such employees for such plan 
                                        year. Solely for purposes of 
                                        this paragraph, target normal 
                                        cost shall be determined by 
                                        using 5 percent in lieu of the 
                                        interest rate applicable under 
                                        subsection (h) and by using the 
                                        mortality tables described in 
                                        subsection (h)(3)(A).
                            ``(iii) Defined contribution plan.--
                                    ``(I) In general.--A defined 
                                benefit plan is described in this 
                                clause if--
                                            ``(aa) the defined benefit 
                                        plan satisfies clause (ii) 
                                        except with respect to 
                                        employees whose failure to 
                                        accrue a minimum benefit is 
                                        attributable to a plan 
                                        amendment adopted prior to July 
                                        1, 2009, and
                                            ``(bb) the plan sponsor (or 
                                        any member of such sponsor's 
                                        controlled group) maintains a 
                                        defined contribution plan under 
                                        which allocations are made on 
                                        behalf of each employee whose 
                                        failure to accrue a benefit 
                                        under the defined benefit plan 
                                        causes the defined benefit plan 
                                        not to be described in clause 
                                        (ii).
                                    ``(II) Minimum allocations.--Such 
                                allocations shall not be less than 3 
                                percent of an employee's compensation 
                                (as determined in accordance with 
                                section 414(s) of the Internal Revenue 
                                Code of 1986). A defined contribution 
                                plan shall not fail to satisfy the 
                                requirements of this clause solely by 
                                reason of the failure to make 
                                allocations on behalf of one or more 
                                highly compensated employees (as 
                                defined in section 414(q) of the 
                                Internal Revenue Code of 1986).
                                    ``(III) Allocations taken into 
                                account.--For purposes of this clause, 
                                only the following types of allocations 
                                may be taken into account:
                                            ``(aa) Employer 
                                        contributions or forfeitures 
                                        allocated without regard to 
                                        whether an employee makes an 
                                        elective contribution or an 
                                        employee contribution.
                                            ``(bb) In the case of the 
                                        first plan year ending after 
                                        June 30, 2009, matching 
                                        contributions (as defined in 
                                        section 401(m)(4)(A) of the 
                                        Internal Revenue Code of 1986).
                            ``(iv) Nonqualified plan.--
                                    ``(I) In general.--A defined 
                                benefit plan is described in this 
                                clause if no key employee (as defined 
                                in section 416(i) of the Internal 
                                Revenue Code of 1986 without regard to 
                                paragraph (5) thereof) accrues any new 
                                benefits for the plan year under any 
                                nonqualified deferred compensation plan 
                                (as defined in section 409A(d) of the 
                                Internal Revenue Code of 1986) 
                                maintained by the sponsor of the 
                                defined benefit plan or by any member 
                                of such sponsor's controlled group.
                                    ``(II) Revocation of certain 
                                elections.--The Secretary of the 
                                Treasury shall provide rules under 
                                section 409A of the Internal Revenue 
                                Code of 1986 under which elections to 
                                defer compensation made prior to the 
                                date of enactment of this clause may be 
                                revoked by an employee within 180 days 
                                after the date of enactment of this 
                                clause, but only to the extent that, 
                                pursuant to this clause, such elections 
                                could otherwise cause a failure of the 
                                employee to--
                                            ``(aa) earn compensation 
                                        under an arrangement that, but 
                                        for the election, is not a 
                                        nonqualified deferred 
                                        compensation plan (as defined 
                                        in section 409A(d) of the 
                                        Internal Revenue Code of 1986), 
                                        and
                                            ``(bb) earn compensation 
                                        that is not payable to the 
                                        employee in another form or 
                                        under a different arrangement.
                            ``(v) Multiple employer plans.--In the case 
                        of a defined benefit plan described in section 
                        413(c)(4)(B) of the Internal Revenue Code of 
                        1986, such plan shall be treated as an active 
                        plan if such plan satisfies clause (ii), (iii), 
                        or (iv) with respect to at least 85 percent of 
                        the employers participating in such plan. In 
                        applying the 85 percent requirement, different 
                        employers may satisfy different clauses.
                            ``(vi) Controlled group.--For purposes of 
                        this paragraph, the term `controlled group' 
                        means all employers treated as a single 
                        employer pursuant to subsections (b) and (c) of 
                        section 414 of the Internal Revenue Code of 
                        1986.''.
            (2) Conforming amendment.--Paragraph (1) of section 303(c) 
        of such Act is amended by striking ``the shortfall amortization 
        bases for such plan year and each of the 6 preceding plan 
        years'' and inserting ``any shortfall amortization base which 
        has not been fully amortized under this subsection''.
    (b) Amendments to INTERNAL REVENUE CODE OF 1986.--
            (1) In general.--Paragraph (2) of section 430(c) of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following subparagraphs:
                    ``(D) Special rule.--
                            ``(i) In general.--In the case of the 
                        shortfall amortization base of an active plan 
                        for any applicable plan year, the shortfall 
                        amortization installments are the amounts 
                        described in clause (ii) or clause (iii), as 
                        applicable, determined pursuant to clause (iv).
                            ``(ii) 7-year amortization.--
                                    ``(I) In general.--The shortfall 
                                amortization installments described in 
                                this clause are--
                                            ``(aa) in the case of the 
                                        last 7 plan years in the 9-
                                        plan-year period beginning with 
                                        the applicable plan year, the 
                                        amounts necessary to amortize 
                                        the shortfall amortization base 
                                        of the plan for the applicable 
                                        plan year in level annual 
                                        installments over such last 7 
                                        plan years, and
                                            ``(bb) in the case of the 
                                        first 2 plan years in such 9-
                                        plan-year period, interest on 
                                        such shortfall amortization 
                                        base (determined using the 
                                        effective rate of interest for 
                                        the plan for the plan year).
                                    ``(II) Shortfall amortization 
                                installment.--The shortfall 
                                amortization installment for any plan 
                                year in the 9-plan-year period under 
                                this clause with respect to such 
                                shortfall amortization base is the 
                                annual installment determined under 
                                this clause for that year for that 
                                base.
                                    ``(III) Minimum required 
                                contribution for first 2 years.--
                                Notwithstanding the preceding 
                                provisions of this clause, the minimum 
                                required contribution for the two plan 
                                years described in subclause (I)(bb) 
                                shall be increased to the extent 
                                necessary so that the minimum required 
                                contribution for such plan year is at 
                                least equal to the applicable 
                                percentage of the minimum required 
                                contribution for the plan year 
                                preceding the first applicable plan 
                                year. If the minimum required 
                                contribution is increased by reason of 
                                the preceding sentence, the shortfall 
                                amortization installments with respect 
                                to the shortfall amortization base for 
                                any applicable plan year shall be 
                                reduced to take such increase into 
                                account, pursuant to rules issued by 
                                the Secretary, but only if the 
                                shortfall amortization installments 
                                with respect to the shortfall 
                                amortization base for such applicable 
                                plan year are determined under this 
                                clause. For purposes of this subclause, 
                                any reference to the minimum required 
                                contribution for any plan year shall be 
                                a reference to the minimum required 
                                contribution for such plan year prior 
                                to any reduction under subsection (f) 
                                and without taking into account any 
                                waiver under section 412(c). For 
                                purposes of this clause, the applicable 
                                percentage shall 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                   115
            plan year.
                            ``(iii) 15-year amortization.--The 
                        shortfall amortization installments described 
                        in this clause are the amounts necessary to 
                        amortize the shortfall amortization base of the 
                        plan for the applicable plan year in level 
                        annual installments over 15 years. The 
                        shortfall amortization installments for any 
                        plan year in the 15-plan-year period under this 
                        clause is the annual installment determined 
                        under this clause for that year for that base.
                            ``(iv) Election.--The plan sponsor may, 
                        with respect to a plan, elect whether to 
                        determine shortfall amortization installments 
                        under clause (ii), clause (iii), or without 
                        regard to this subparagraph. Such election 
                        shall be made at such times, and in such form 
                        and manner, as shall be prescribed by the 
                        Secretary, and may be revoked only with the 
                        consent of the Secretary. In the absence of a 
                        timely election to determine shortfall 
                        amortization installments under such clause 
                        (ii) or clause (iii), such installments shall 
                        be determined without regard to this 
                        subparagraph.
                    ``(E) Failure to maintain active plan.--
                            ``(i) 2 and 7 rule.--If the shortfall 
                        amortization installments with respect to a 
                        shortfall amortization base for an applicable 
                        plan year are determined under subparagraph 
                        (D)(ii), the plan must remain an active plan 
                        for the subsequent plan year. If such plan 
                        fails to be an active plan in such plan year, 
                        the minimum required contribution for the plan 
                        year with respect to which a failure occurs 
                        shall be increased by all amounts by which the 
                        minimum required contribution for the current 
                        plan year or any prior plan year has been 
                        reduced by the application of subparagraph (D), 
                        plus interest on such amounts at the effective 
                        rate of interest for the plan for the plan year 
                        for which the increase applies. However, any 
                        such increase in the minimum required 
                        contribution shall not require a contribution 
                        to the extent that the contribution would cause 
                        the value of plan assets for the plan year to 
                        exceed the funding target of the plan for the 
                        plan year (determined without regard to 
                        subsection (i)(1)). If the minimum required 
                        contribution is increased by reason of this 
                        clause, the shortfall amortization installments 
                        with respect to the shortfall amortization base 
                        for any applicable plan year shall be reduced 
                        to take such increase into account, pursuant to 
                        rules issued by the Secretary, but only if the 
                        shortfall amortization installments with 
                        respect to the shortfall amortization base for 
                        such applicable plan year are determined under 
                        subparagraph (D)(ii). For purposes of this 
                        clause, any reference to the minimum required 
                        contribution for any plan year shall be a 
                        reference to the minimum required contribution 
                        for such plan year prior to any reduction under 
                        subsection (f) and without taking into account 
                        any waiver under section 412(c).
                            ``(ii) 15-year rule.--If the shortfall 
                        amortization installments with respect to a 
                        shortfall amortization base for an applicable 
                        plan year are determined under subparagraph 
                        (D)(iii), the plan must remain an active plan 
                        for the 7 subsequent plan years. If such plan 
                        fails to be an active plan in any such plan 
                        year, the shortfall amortization base, reduced 
                        by the principal portion of prior shortfall 
                        amortization installments relating to that 
                        base, shall be amortized over 7 years.
                            ``(iii) Special rule.--In the case of an 
                        applicable plan year that ends before July 1, 
                        2009, the plan sponsor may elect not to have 
                        the active plan requirement apply for such plan 
                        year. If such election is made--
                                    ``(I) clause (i) shall be applied 
                                so as to require the plan to remain an 
                                active plan for the 2 subsequent plan 
                                years (instead of 1 subsequent plan 
                                year) under rules prescribed by the 
                                Secretary, and
                                    ``(II) clause (ii) shall be applied 
                                by substituting `8' for `7' the first 
                                place it appears and by substituting 
                                `6' for `7' the second place it 
                                appears.
                        Such election shall be made at such times, and 
                        in such form and manner, as shall be prescribed 
                        by the Secretary, and may be revoked only with 
                        consent of the Secretary.
                    ``(F) Applicable plan year.--For purposes of this 
                paragraph, the term `applicable plan year' shall mean--
                            ``(i) except as provided in clauses (ii) 
                        and (iii), any plan year beginning in 2009 or 
                        2010,
                            ``(ii) in the case of a plan with a plan 
                        year beginning after October 31 and before 
                        January 1, any plan year beginning in 2008 or 
                        2009, and
                            ``(iii) in the case of a plan for which the 
                        valuation date is not the first day of the plan 
                        year, any plan year beginning in 2008 or 2009.
                    ``(G) Active plan.--
                            ``(i) In general.--For purposes of this 
                        paragraph, the term `active plan' means a 
                        defined benefit plan that is described in 
                        clause (ii), (iii), or (iv). A defined benefit 
                        plan may satisfy different clauses in different 
                        years. Notwithstanding clause (ii), (iii), or 
                        (iv), a defined benefit plan is not an active 
                        plan if an election under section 402(a)(1) of 
                        the Pension Protection Act of 2006 is in effect 
                        with respect to such plan, or if the plan is 
                        described under rules prescribed by the 
                        Secretary designed to prevent evasion of the 
                        purposes of this subparagraph.
                            ``(ii) Defined benefit plan.--
                                    ``(I) In general.--A defined 
                                benefit plan is described in this 
                                clause if minimum benefit accruals are 
                                provided on behalf of all employees who 
                                have satisfied the plan's age and 
                                service requirements and who would, but 
                                for any prior amendment ceasing 
                                accruals, be eligible for an accrual 
                                under the plan.
                                    ``(II) Special rule regarding 
                                minimum benefit accruals.--For purposes 
                                of this clause, the employees described 
                                in this clause shall be treated as 
                                receiving minimum benefit accruals for 
                                a plan year if all such employees are 
                                accruing a benefit and--
                                            ``(aa) the rate of benefit 
                                        accrual for any such employee 
                                        is not less than the greater 
                                        of--

                                                    ``(AA) the rate of 
                                                benefit accrual that 
                                                would have been applied 
                                                to the employee under 
                                                the benefit formula in 
                                                effect on July 1, 2009, 
                                                disregarding any 
                                                amendments to the plan 
                                                adopted after June 30, 
                                                2009, or

                                                    ``(BB) the rate of 
                                                benefit accrual that 
                                                would have applied to 
                                                the employee under the 
                                                benefit formula in 
                                                effect as of the last 
                                                date prior to the 
                                                effective date of any 
                                                plan amendment adopted 
                                                prior to July 1, 2009, 
                                                that ceased providing 
                                                benefit accruals based 
                                                on additional service 
                                                credit with respect to 
                                                such employee, or

                                            ``(bb) the target normal 
                                        cost (without regard to plan 
                                        administrative expenses) for 
                                        such plan year with respect to 
                                        such employees is at least 3 
                                        percent of the aggregate 
                                        compensation (as defined in 
                                        section 415(c)(3)) of such 
                                        employees for such plan year.
                                Solely for purposes of this paragraph, 
                                target normal cost shall be determined 
                                by using 5 percent in lieu of the 
                                interest rate applicable under 
                                subsection (h) and by using the 
                                mortality tables described in 
                                subsection (h)(3)(A).
                            ``(iii) Defined contribution plan.--
                                    ``(I) In general.--A defined 
                                benefit plan is described in this 
                                clause if--
                                            ``(aa) the defined benefit 
                                        plan satisfies clause (ii) 
                                        except with respect to 
                                        employees whose failure to 
                                        accrue a minimum benefit is 
                                        attributable to a plan 
                                        amendment adopted prior to July 
                                        1, 2009, and
                                            ``(bb) the plan sponsor (or 
                                        any member of such sponsor's 
                                        controlled group) maintains a 
                                        defined contribution plan under 
                                        which allocations are made on 
                                        behalf of each employee whose 
                                        failure to accrue a benefit 
                                        under the defined benefit plan 
                                        causes the defined benefit plan 
                                        not to be described in clause 
                                        (ii).
                                    ``(II) Minimum allocations.--Such 
                                allocations shall not be less than 3 
                                percent of an employee's compensation 
                                (as determined in accordance with 
                                section 414(s)). A defined contribution 
                                plan shall not fail to satisfy the 
                                requirements of this clause solely by 
                                reason of the failure to make 
                                allocations on behalf of one or more 
                                highly compensated employees (as 
                                defined in section 414(q)).
                                    ``(III) Allocations taken into 
                                account.--For purposes of this clause, 
                                only the following types of allocations 
                                may be taken into account:
                                            ``(aa) Employer 
                                        contributions or forfeitures 
                                        allocated without regard to 
                                        whether an employee makes an 
                                        elective contribution or an 
                                        employee contribution.
                                            ``(bb) In the case of the 
                                        first plan year ending after 
                                        June 30, 2009, matching 
                                        contributions (as defined in 
                                        section 401(m)(4)(A)).
                            ``(iv) Nonqualified plan.--
                                    ``(I) In general.--A defined 
                                benefit plan is described in this 
                                clause if no key employee (as defined 
                                in section 416(i) without regard to 
                                paragraph (5) thereof) accrues any new 
                                benefits for the plan year under any 
                                nonqualified deferred compensation plan 
                                (as defined in section 409A(d)) 
                                maintained by the sponsor of the 
                                defined benefit plan or by any member 
                                of such sponsor's controlled group.
                                    ``(II) Revocation of certain 
                                elections.--The Secretary shall provide 
                                rules under section 409A under which 
                                elections to defer compensation made 
                                prior to the date of enactment of this 
                                clause may be revoked by an employee 
                                within 180 days after the date of 
                                enactment of this clause, but only to 
                                the extent that, pursuant to this 
                                clause, such elections could otherwise 
                                cause a failure of the employee to--
                                            ``(aa) earn compensation 
                                        under an arrangement that, but 
                                        for the election, is not a 
                                        nonqualified deferred 
                                        compensation plan (as defined 
                                        in section 409A(d)), and
                                            ``(bb) earn compensation 
                                        that is not payable to the 
                                        employee in another form or 
                                        under a different arrangement.
                            ``(v) Multiple employer plans.--In the case 
                        of a defined benefit plan described in section 
                        413(c)(4)(B), such plan shall be treated as an 
                        active plan if such plan satisfies clause (ii), 
                        (iii), or (iv) with respect to at least 85 
                        percent of the employers participating in such 
                        plan. In applying the 85 percent requirement, 
                        different employers may satisfy different 
                        clauses.
                            ``(vi) Controlled group.--For purposes of 
                        this paragraph, the term `controlled group' 
                        means all employers treated as a single 
                        employer pursuant to subsections (b) and (c) of 
                        section 414.''.
            (2) Conforming amendment.--Paragraph (1) of section 430(c) 
        of such Code is amended by striking ``the shortfall 
        amortization bases for such plan year and each of the 6 
        preceding plan years'' and inserting ``any shortfall 
        amortization base which has not been fully amortized under this 
        subsection''.
            (3) Amendment to section 409a.--Paragraph (3) of section 
        409A(a) of the Internal Revenue Code of 1986 is amended to read 
        as follows:
            ``(3) Acceleration of benefits.--
                    ``(A) In general.--The requirements of this 
                paragraph are met if the plan does not permit the 
                acceleration of the time or schedule of any payment 
                under the plan, except as provided in regulations by 
                the Secretary. The requirements of this paragraph shall 
                not be treated as satisfied if the plan makes any 
                payment described in subparagraph (B) or (C).
                    ``(B) Excess payments for certain adjusted funding 
                target attainment percentages by active plan.--A 
                payment is described in this subparagraph if--
                            ``(i) such payment is made during a year in 
                        which a defined benefit plan maintained by the 
                        employer sponsoring a nonqualified deferred 
                        compensation plan is required to be an active 
                        plan under section 430(c)(2)(E) or section 
                        107(e) of the Pension Protection Act of 2006, 
                        and such defined benefit plan has not otherwise 
                        failed to be an active plan in such plan year 
                        or any prior plan year,
                            ``(ii) such defined benefit plan is not 
                        described in clause (ii) or (iii) of section 
                        430(c)(2)(G) (modified, if applicable by 
                        section 107(f)(5) of the Pension Protection Act 
                        of 2006),
                            ``(iii) such defined benefit plan is 
                        described in paragraph (1) or (3) of section 
                        436(d)(or would be if section 430(g)(3)(C) did 
                        not apply), and
                            ``(iv) the nonqualified deferred 
                        compensation plan makes any payment in excess 
                        of the amounts that would be permitted if the 
                        requirements of such paragraph (1) or (3), as 
                        applicable, applied to such plan.
                In the case of a defined benefit plan to which section 
                107 of the Pension Protection Act of 2006 applies, 
                clauses (iii) and (iv) shall apply based on rules 
                similar to the rules of section 436, as prescribed by 
                the Secretary, except that the parenthetical regarding 
                section 430(g)(3)(C) shall not apply. Under rules 
                prescribed by the Secretary, a plan shall not fail to 
                satisfy the requirements of this subsection solely by 
                reason of a modification with respect to the time and 
                form of distribution that is consistent with the 
                requirements of this subparagraph.
                    ``(C) Excess payments by reason of certain interest 
                rates and mortality assumptions.--A payment is 
                described in this subparagraph if--
                            ``(i) the requirements of clauses (i) and 
                        (ii) of subparagraph (B) are satisfied, and
                            ``(ii) the nonqualified deferred 
                        compensation plan makes any payment in excess 
                        of the amount that would be payable if such 
                        plan used the interest rate and mortality 
                        assumptions from the defined benefit plan 
                        described in section 401(a) that would create 
                        the smallest payments, determined on a present 
                        value basis using the interest rate and 
                        mortality assumptions described in section 
                        430(h).
                For purposes of this subparagraph, all defined benefit 
                plans maintained by the employer shall be taken into 
                account.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2007.

SEC. 102. EXPANSION OF CORRIDOR WITHIN WHICH SINGLE-EMPLOYER DEFINED 
              BENEFIT PLANS ARE ALLOWED TO AVERAGE ASSET VALUES.

    (a) Amendment to ERISA.--Paragraph (3) of section 303(g) of the 
Employee Retirement Income Security Act of 1974 is amended by adding at 
the end the following new subparagraphs:
                    ``(C) Special rule.--In the case of any applicable 
                plan year, subparagraph (B)(iii) shall be applied--
                            ``(i) by substituting `80 percent' for `90 
                        percent', and
                            ``(ii) by substituting `120 percent' for 
                        `110 percent'.
                    ``(D) Applicable plan year.--For purposes of this 
                paragraph, the term `applicable plan year' means--
                            ``(i) except as provided in clauses (ii) 
                        and (iii), any plan year beginning in 2009 or 
                        2010,
                            ``(ii) in the case of a plan with a plan 
                        year beginning after October 31 and before 
                        January 1, any plan year beginning in 2008 or 
                        2009, and
                            ``(iii) in the case of a plan for which the 
                        valuation date is not the first day of the plan 
                        year, any plan year beginning in 2008 or 
                        2009.''.
    (b) Amendment to INTERNAL REVENUE CODE OF 1986.--Paragraph (3) of 
section 430(g) of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new subparagraphs:
                    ``(C) Special rule.--In the case of any applicable 
                plan year, subparagraph (B)(iii) shall be applied--
                            ``(i) by substituting `80 percent' for `90 
                        percent', and
                            ``(ii) by substituting `120 percent' for 
                        `110 percent'.
                    ``(D) Applicable plan year.--For purposes of this 
                paragraph, the term `applicable plan year' means--
                            ``(i) except as provided in clauses (ii) 
                        and (iii), any plan year beginning in 2009 or 
                        2010,
                            ``(ii) in the case of a plan with a plan 
                        year beginning after October 31 and before 
                        January 1, any plan year beginning in 2008 or 
                        2009, and
                            ``(iii) in the case of a plan for which the 
                        valuation date is not the first day of the plan 
                        year, any plan year beginning in 2008 or 
                        2009.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2007.

SEC. 103. LOOKBACK FOR BENEFIT ACCRUAL RESTRICTION.

    (a) Amendment to ERISA.--Subsection (g) of section 206 of the 
Employee Retirement Income Security Act of 1974 is amended by adding at 
the end thereof the following:
            ``(12) Special rule for certain years.--For purposes of 
        paragraph (4) only--
                    ``(A) In general.--For plan years beginning after 
                October 31, 2008, and before November 1, 2010, the 
                adjusted funding target attainment percentage of a plan 
                for purposes of paragraph (4) shall be the greater of--
                            ``(i) such percentage, as determined 
                        without regard to this paragraph, or
                            ``(ii) the adjusted funding target 
                        attainment percentage for such plan for the 
                        plan year beginning after October 31, 2007, and 
                        before November 1, 2008, as determined under 
                        rules prescribed by the Secretary of the 
                        Treasury.
                    ``(B) Special rule.--In the case of a plan for 
                which the valuation date is not the first day of the 
                plan year--
                            ``(i) subparagraph (A) shall apply to plan 
                        years beginning after December 31, 2007, and 
                        before January 1, 2010, and
                            ``(ii) subparagraph (A)(ii) shall apply 
                        based on the last plan year beginning before 
                        November 1, 2007, as determined under rules 
                        prescribed by the Secretary of the Treasury.''.
    (b) Amendment to INTERNAL REVENUE CODE OF 1986.--Section 436 of the 
Internal Revenue Code of 1986 is amended by adding the following at the 
end thereof:
    ``(n) Special Rule for Certain Years.--For purposes of subsection 
(e) only--
            ``(1) In general.--For plan years beginning after October 
        31, 2008, and before November 1, 2010, the adjusted funding 
        target attainment percentage of a plan for purposes of 
        subsection (e) shall be the greater of--
                    ``(A) such percentage, as determined without regard 
                to this subsection, or
                    ``(B) the adjusted funding target attainment 
                percentage for such plan for the plan year beginning 
                after October 31, 2007, and before November 1, 2008, as 
                determined under rules prescribed by the Secretary.
            ``(2) Special rule.--In the case of a plan for which the 
        valuation date is not the first day of the plan year--
                    ``(A) paragraph (1) shall apply to plan years 
                beginning after December 31, 2007, and before January 
                1, 2010, and
                    ``(B) paragraph (1)(B) shall apply based on the 
                last plan year beginning before November 1, 2007, as 
                determined under rules prescribed by the Secretary.''.
    (c) Interaction With WRERA Rule.--Section 203 or the Worker, 
Retiree, and Employer Recovery Act of 2008 shall apply to a plan for 
any plan year in lieu of the amendments made by this section only to 
the extent that such section produces a higher adjusted funding target 
attainment percentage for such plan for such year. In all other cases, 
such section shall not be applicable to any plan.
    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to plan years 
        beginning after October 31, 2008.
            (2) Special rule.--In the case of a plan for which the 
        valuation date is not the first day of the plan year, the 
        amendments made by this section shall apply to plan years 
        beginning after December 31, 2007.

SEC. 104. LOOKBACK FOR CREDIT BALANCE RULE.

    (a) Amendment to ERISA.--Paragraph (3) of section 303(f) of the 
Employee Retirement Income Security Act of 1974 is amended by adding 
the following at the end thereof:
                    ``(D) Special rule for certain years.--
                            ``(i) In general.--For purposes of applying 
                        subparagraph (C) for plan years beginning after 
                        October 31, 2009, and before November 1, 2011, 
                        the ratio determined under such subparagraph 
                        for the preceding plan year shall be the 
                        greater of--
                                    ``(I) such ratio, as determined 
                                without regard to this subparagraph, or
                                    ``(II) the ratio for such plan for 
                                the plan year beginning after October 
                                31, 2007, and before November 1, 2008, 
                                as determined under rules prescribed by 
                                the Secretary of the Treasury.
                            ``(ii) Special rule.--In the case of a plan 
                        for which the valuation date is not the first 
                        day of the plan year--
                                    ``(I) clause (i) shall apply to 
                                plan years beginning after December 31, 
                                2008, and before January 1, 2011, and
                                    ``(II) clause (i)(II) shall apply 
                                based on the last plan year beginning 
                                before November 1, 2007, as determined 
                                under rules prescribed by the Secretary 
                                of the Treasury.''.
    (b) Amendment to INTERNAL REVENUE CODE OF 1986.--Paragraph (3) of 
section 430(f) of the Internal Revenue Code of 1986 is amended by 
adding the following at the end thereof:
                    ``(D) Special rule for certain years.--
                            ``(i) In general.--For purposes of applying 
                        subparagraph (C) for plan years beginning after 
                        October 31, 2009, and before November 1, 2011, 
                        the ratio determined under such subparagraph 
                        for the preceding plan year of a plan shall be 
                        the greater of--
                                    ``(I) such ratio, as determined 
                                without regard to this subsection, or
                                    ``(II) the ratio for such plan for 
                                the plan year beginning after October 
                                31, 2007 and before November 1, 2008, 
                                as determined under rules prescribed by 
                                the Secretary.
                            ``(ii) Special rule.--In the case of a plan 
                        for which the valuation date is not the first 
                        day of the plan year--
                                    ``(I) clause (i) shall apply to 
                                plan years beginning after December 31, 
                                2007, and before January 1, 2010, and
                                    ``(II) clause (i)(II) shall apply 
                                based on the last plan year beginning 
                                before November 1, 2007, as determined 
                                under rules prescribed by the 
                                Secretary.''.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to plan years 
        beginning after October 31, 2009.
            (2) Special rule.--In the case of a plan for which the 
        valuation date is not the first day of the plan year, the 
        amendments made by this section shall apply to plan years 
        beginning after December 31, 2008.

SEC. 105. CLARIFICATION OF TREATMENT OF EXPENSES.

    (a) Amendments to ERISA.--
            (1) In general.--Clause (ii) of section 303(b)(1)(A) of the 
        Employee Retirement Income Security Act of 1974 is amended by 
        striking ``plan-related expenses'' and inserting ``plan-related 
        administrative expenses''.
            (2) Conforming amendment.--Subclause (II) of section 
        303(i)(2)(A)(i) of such Act is amended by striking ``plan-
        related expenses'' and inserting ``plan-related administrative 
        expenses''.
    (b) Amendments to INTERNAL REVENUE CODE OF 1986.--
            (1) In general.--Clause (ii) of section 430(b)(1)(A) of the 
        Internal Revenue Code of 1986 is amended by striking ``plan-
        related expenses'' and inserting ``plan-related administrative 
        expenses''.
            (2) Conforming amendment.--Subclause (II) of section 
        430(i)(2)(A)(i) of such Code is amended by striking ``plan-
        related expenses'' and inserting ``plan-related administrative 
        expenses''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in paragraphs (1)(A), (1)(F)(i), (2)(A), and 
(2)(F)(i) of section 101(b) of the Worker, Retiree, and Employer 
Recovery Act of 2008.

SEC. 106. INFORMATION REPORTING.

    (a) In General.--Paragraph (1) of section 4010(b) of the Employee 
Retirement Security Act of 1974 is amended by striking ``80'' and 
inserting ``90''.
    (b) Funding Target Attainment Percentage.--Subparagraph (B) of 
section 4010(d)(2) of such Act is amended by striking ``303(d)(2).'' 
and inserting ``303(d)(2), without regard to the reduction under 
section 303(f)(4)(B).''.
    (c) Confidentiality.--Subsection (c) of section 4010 of such Act is 
amended--
            (1) by striking ``and no such information or documentary 
        material may be made public,'', and
            (2) by adding at the end the following: ``All parties, 
        governmental or otherwise, receiving the information (or 
        summary report of such information) required to be provided 
        under this section shall be required to--
            ``(1) ensure that the information received will be kept 
        confidential,
            ``(2) use the information only for the purpose for which it 
        was requested, and
            ``(3) not further disclose the information except to 
        accomplish that purpose, unless a separate consent from the 
        taxpayer is obtained.
Such requirements shall not apply to information provided under this 
section that is otherwise publicly available. The corporation shall 
notify each person providing information under this section of any 
public disclosure of such information not permitted by this subsection 
within a reasonable time of such disclosure becoming known to the 
corporation. If any party, governmental or otherwise, makes an 
unauthorized disclosure, the person required to provide such 
information under this section may bring suit against such party in 
Federal district court. No liability results from a disclosure based 
upon a good faith, but erroneous, interpretation of this section. Upon 
a finding of a liability, such person can recover an amount not to 
exceed $100,000 per act of unauthorized disclosure plus reasonable 
attorney fees. The person shall have two years from the date of 
discovery of the unauthorized disclosure to bring suit.''.
    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to plan years 
        beginning after December 31, 2009.
            (2) Confidentiality.--The amendment made by subsection (c) 
        shall take effect on the date of the enactment of this Act.

SEC. 107. BENEFIT RESTRICTION EFFECTIVE DATE FOR COLLECTIVELY BARGAINED 
              PLANS.

    (a) Amendments With Respect to ERISA.--
            (1) Plan amendments.--Paragraph (2) of section 103(c) of 
        the Pension Protection Act of 2006 is amended--
                    (A) by striking ``In the case'' and inserting 
                ``Except as provided in paragraph (3), in the case'', 
                and
                    (B) by striking ``the amendments made by this 
                section'' and inserting ``section 206(g)(2) of the 
                Employee Retirement Income Security Act of 1974 (and 
                other provisions of such section 206(g) to the extent 
                that they apply to such section 206(g)(2)), as added by 
                this section,''.
            (2) Other benefit restrictions.--
                    (A) In general.--Subsection (c) of section 103 of 
                the Pension Protection Act of 2006 is amended by adding 
                at the end thereof the following:
            ``(3) Collective bargaining delay except regarding certain 
        plan amendments.--
                    ``(A) In general.--In the case of a plan maintained 
                pursuant to 1 or more collective bargaining agreements 
                between employee representatives and 1 or more 
                employers, the amendments made by this section shall 
                apply to plan years beginning after December 31, 2011, 
                except that paragraph (2) shall apply to plan 
                amendments made pursuant to a collective bargaining 
                agreement ratified after the date of introduction of 
                the Preserve Benefits and Jobs Act of 2009.
                    ``(B) Transition rule.--
                            ``(i) In the case of a plan described in 
                        clause (ii), such plan shall not be required to 
                        comply with this section and the amendments 
                        made by this section until the date that is 60 
                        days after the date of the enactment of this 
                        paragraph, but such a plan may comply on any 
                        otherwise permitted earlier date.
                            ``(ii) A plan is described in this clause 
                        if a limit on benefits or benefit accruals has 
                        been or is, pursuant to section 206(g) of the 
                        Employee Retirement Income Security Act of 1974 
                        and section 436 of the Internal Revenue Code of 
                        1986, in effect with respect to such plan as of 
                        the date of the enactment of this paragraph.''.
            (3) Conforming amendment.--The heading of paragraph (2) of 
        section 103(c) of the Pension Protection Act of 2006 is amended 
        to read as follows: ``Collective bargaining exception regarding 
        certain plan amendments''.
    (b) Amendments With Respect to INTERNAL REVENUE CODE OF 1986.--
            (1) Plan amendments.--Paragraph (2) of section 113(b) of 
        the Pension Protection Act of 2006 is amended by--
                    (A) striking ``In the case'' and inserting ``Except 
                as provided in paragraph (3), in the case'', and
                    (B) striking ``the amendments made by this 
                section'' and inserting ``section 436(c) of the 
                Internal Revenue Code of 1986 (and other provisions 
                such section 436 to the extent that they apply to such 
                section 436(c)), as added by this section,''.
            (2) Other benefit restrictions.--
                    (A) In general.--Subsection (b) of section 113 of 
                the Pension Protection Act of 2006 is amended by adding 
                at the end thereof the following:
            ``(3) Collective bargaining delay except regarding certain 
        plan amendments.--
                    ``(A) In general.--In the case of a plan maintained 
                pursuant to 1 or more collective bargaining agreements 
                between employee representatives and 1 or more 
                employers, the amendments made by this section shall 
                apply to plan years beginning after December 31, 2011, 
                except that paragraph (2) shall apply to plan 
                amendments made pursuant to a collective bargaining 
                agreement ratified after the date of introduction of 
                the Preserve Benefits and Jobs Act of 2009.
                    ``(B) Transition rule.--
                            ``(i) In the case of a plan described in 
                        clause (ii), a plan shall not be required to 
                        comply with this section and the amendments 
                        made by this section until the date that is 60 
                        days after the date of the enactment of this 
                        paragraph, but such a plan may comply on any 
                        otherwise permitted earlier date.
                            ``(ii) A plan is described in this clause 
                        if a limit on benefits or benefit accruals has 
                        been or is, pursuant to section 206(g) of the 
                        Employee Retirement Income Security Act of 1974 
                        and section 436 of the Internal Revenue Code of 
                        1986, in effect with respect to such plan as of 
                        the date of the enactment of this paragraph.''.
            (3) Conforming amendment.--The heading of paragraph (2) of 
        section 103(b) of the Pension Protection Act of 2006 is amended 
        to read as follows: ``Collective bargaining exception regarding 
        certain plan amendments''.
    (c) Effective Date.--Except as provided in the amendments made by 
this section, the amendments made by this section shall apply as if 
included in sections 103(c) and 113(b) of such Act.

SEC. 108. SOCIAL SECURITY LEVEL-INCOME OPTIONS.

    (a) Amendment to ERISA.--Subparagraph (E) of section 206(g)(3) of 
the Employee Retirement Income Security Act of 1974 is amended by 
adding at the end thereof the following:
        ``For purposes of this paragraph, any stream of payments that 
        is structured to be similar in amount and duration to social 
        security supplements described in the last sentence of section 
        204(b)(1)(G) shall be treated in the same manner as such 
        supplements.''.
    (b) Amendment to INTERNAL REVENUE CODE OF 1986.--Paragraph (5) of 
section 436(d) of the Internal Revenue Code of 1986 is amended by 
adding at the end thereof the following:
``For purposes of this subsection, any stream of payments that is 
structured to be similar in amount and duration to social security 
supplements described in the last sentence of section 411(a)(9) shall 
be treated in the same manner as such supplements.''.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply as if included in 
        sections 103(a) and 113(a)(1) of the Pension Protection Act of 
        2006.
            (2) Transition rule.--
                    (A) In the case of a plan described in subparagraph 
                (B), a plan shall not be required to comply with the 
                amendments made by this section until the date that is 
                60 days after the date of enactment of this Act, but 
                such a plan may comply on any otherwise permitted 
                earlier date.
                    (B) A plan is described in this subparagraph (B) if 
                a limit on prohibited payments is or has been, pursuant 
                to section 206(g) of the Employee Retirement Income 
                Security Act of 1974 and section 436 of the Internal 
                Revenue Code of 1986, in effect with respect to such 
                plan as of the date of enactment of this Act.

SEC. 109. PBGC GUARANTEE.

    (a) Guarantee.--Section 4022 of the Employee retirement Income 
Security Act of 1974 is amended by striking subsection (g).
    (b) Allocation of Assets Among Priority Groups.--Section 4044 of 
such Act is amended by striking subsection (e).
    (c) Effective Date.--The amendments made by this section shall be 
as if included in section 404 of the Pension Protection Act of 2006, 
except that such amendments shall not apply to proceedings initiated 
under title 11, United States Code, or under any similar Federal law or 
law of a State or political subdivision, on or before the date of 
enactment of this Act.

SEC. 110. APPLICATION OF EXTENDED AMORTIZATION PERIOD TO PLANS SUBJECT 
              TO PRIOR LAW FUNDING RULES.

    (a) In General.--Title I of the Pension Protection Act of 2006 is 
amended by redesignating section 107 as section 108 and by inserting 
the following after section 106:

``SEC. 107. APPLICATION OF EXTENDED AMORTIZATION PERIODS TO PLANS WITH 
              DELAYED EFFECTIVE DATE.

    ``(a) In General.--In the case of plans to which section 104, 105, 
or 106 of this Act apply, section 302 of the Employee Retirement Income 
Security Act of 1974 and section 412 of the Internal Revenue Code of 
1986 (as in effect before the amendments made by this subtitle and 
subtitle B) shall apply in the manner described in this section. All 
references in this section to `such Act' or `such Code' shall be to 
such Act or such Code as in effect before the amendments made by this 
subtitle and subtitle B.
    ``(b) Application of 2 and 7 Rule.--
            ``(1) In general.--In the case of an active plan to which 
        this subsection applies, section 302 of such Act and section 
        412 of such Code shall apply in the manner described in this 
        subsection.
            ``(2) Two year suspension of deficit reduction 
        contributions for certain plans.--For purposes of applying 
        section 302(d)(9) of such Act and section 412(l)(9) of such 
        Code to a plan described in paragraph (1), the funded current 
        liability percentage for such plan for any applicable plan year 
        shall be the funded current liability percentage of such plan 
        for the pre-applicable plan year.
            ``(3) Calculation of deficit reduction contribution.--For 
        purposes of applying section 302(d) of such Act and section 
        412(l) of such Code to a plan to which such subsections apply 
        (after taking into account paragraph (2)), the applicable 
        percentage described in section 302(d)(4)(C) of such Act and 
        section 412(l)(4)(C) of such Code shall be the third segment 
        rate described in sections 104(b), 105(b), and 106(b) of this 
        Act, provided that such applicable percentage shall only apply 
        to the increased unfunded new liability. The applicable 
        percentage determined without regard to this section shall 
        apply to the excess of the unfunded new liability over the 
        increased unfunded new liability.
    ``(c) Application of 15-Year Amortization.--
            ``(1) In general.--In the case of an active plan to which 
        this subsection applies, section 302 of such Act and section 
        412 of such Code shall apply in the manner described in this 
        subsection.
            ``(2) Calculation of deficit reduction contribution.--For 
        purposes of applying section 302(d) of such Act and section 
        412(l) of such Code to a plan described in paragraph (1), the 
        applicable percentage described in section 302(d)(4)(C) of such 
        Act and section 412(l)(4)(C) of such Code for any pre-effective 
        date plan year shall be the ratio of--
                    ``(A) the annual installments payable in each year 
                if the increased unfunded new liability for such plan 
                year were amortized over 15 years, using an interest 
                rate equal to the third segment rate described in 
                sections 104(b), 105(b), and 106(b) of this Act, to
                    ``(B) the increased unfunded new liability for such 
                plan year.
        However, such applicable percentage shall only apply to the 
        increased unfunded new liability. The applicable percentage 
        determined without regard to this section shall apply to the 
        excess of the unfunded new liability over the increased 
        unfunded new liability.
    ``(d) Election.--The plan sponsor may, with respect to a plan, 
elect whether to apply subsection (b) or subsection (c) or whether 
neither subsection shall apply. Such election shall be made at such 
times, and in such form and manner, as shall be prescribed by the 
Secretary of the Treasury, and may be revoked only with the consent of 
the Secretary of the Treasury. In the absence of a timely election 
regarding which subsection shall apply to a plan, neither subsection 
shall apply to such plan.
    ``(e) Failure To Maintain Active Plan.--If the minimum contribution 
required for a plan to avoid an accumulated funding deficiency under 
section 302 of such Act and section 412 of such Code is determined 
under subsection (b) or (c) for a plan year, the plan must remain an 
active plan for the subsequent plan year. If such plan fails to be an 
active plan in such plan year, the minimum contribution requirement to 
avoid an accumulated funding deficiency shall be increased by all 
amounts by which such minimum contribution was reduced by the 
application of subsection (b) or (c), plus interest on such amounts at 
the third segment rate described in sections 104(b), 105(b), and 106(b) 
of this Act. However, any such increase in such minimum contribution 
shall not require a contribution to the extent that the contribution 
would cause the value of plan assets (determined under section 
302(c)(2) of such Act and section 412(c)(2) of such Code) to exceed the 
current liability of such plan for such year.
    ``(f) Definitions.--
            ``(1) Applicable plan year.--For purposes of this section, 
        the term `applicable plan year' means--
                    ``(A) except as provided in subparagraphs (B), (C), 
                and (D), any plan year beginning in 2010 or 2011,
                    ``(B) in the case of a plan with a plan year 
                beginning after June 30 and before January 1, any plan 
                year beginning in 2009 or 2010,
                    ``(C) in the case of a plan for which the valuation 
                date is not the first day of the plan year, any plan 
                year beginning in 2009 or 2010, and
                    ``(D) in the case of a plan to which section 106 of 
                the Pension Protection Act of 2006 applies, 
                subparagraphs (A), (B), and (C) shall be applied by 
                inserting `2008', `2009', or `2010' for `2009', `2010', 
                or `2011', respectively, each place such year is 
                referenced.
            ``(2) Pre-applicable plan year.--For purposes of this 
        section, the term `pre-applicable plan year' means, with 
        respect to a plan, the second plan year preceding the first 
        applicable plan year of such plan, except that in the case of a 
        plan described in paragraph (1)(D), such term means the first 
        plan year preceding the first applicable plan year of such 
        plan.
            ``(3) Pre-effective date plan year.--For purposes of this 
        section, the term `pre-effective date plan year' means, with 
        respect to a plan, any plan year prior to the first year in 
        which the amendments made by this subtitle and subtitle B apply 
        to the plan, provided that the first pre-effective date plan 
        year shall be the first applicable plan year with respect to 
        the plan.
            ``(4) Increased unfunded new liability.--For purposes of 
        this section, the term `increased unfunded new liability' 
        means, with respect to a year, the excess (if any) of the 
        unfunded new liability over the amount of unfunded new 
        liability determined as if the value of the plan's assets 
        determined under subsection 302(c)(2) of such Act and section 
        412(c)(2) of such Code equaled the product of the current 
        liability of the plan for the year multiplied by the funded 
        current liability percentage of the plan for the pre-applicable 
        plan year.
            ``(5) Active plan.--For purposes of this section, the term 
        `active plan' shall have the meaning given such term by section 
        303(c)(2)(G) of the Employee Retirement Income Security Act of 
        1974 and in section 430(c)(2)(G) of the Internal Revenue Code 
        of 1986, except that `target normal cost' (without regard to 
        plan administrative expenses) shall be determined as if section 
        303 of the Employee Retirement Income Security Act of 1974 and 
        section 430 of the Internal Revenue Code of 1986 applied to 
        such plan with the modification regarding the interest rate 
        used, as set forth in section 303(c)(2)(G) of the Employee 
        Retirement Income Security Act of 1974 and in section 
        430(c)(2)(G) of the Internal Revenue Code of 1986.
            ``(6) Other definitions.--For purposes of this section, the 
        terms `funded current liability percentage', `unfunded new 
        liability', and `current liability' shall have the meanings set 
        forth in section 302(d) of such Act and section 412(l) of such 
        Code.''.
    (b) Eligible Charity Plans.--Section 104 of the Pension Protection 
Act of 2006 is amended by--
            (1) striking ``eligible cooperative plan'' wherever it 
        appears in subsections (a) and (b) and inserting ``eligible 
        cooperative plan or an eligible charity plan'', and
            (2) adding at the end the following new subsection:
    ``(d) Eligible Charity Plan Defined.--For purposes of this section, 
a plan shall be treated as an eligible charity plan for a plan year if 
the plan is maintained by more than one employer and 100 percent of the 
employers are described in section 501(c)(3) of such Code.''.
    (c) Effective Date.--
            (1) In general.--The amendment made by subsection (a) shall 
        take effect as if included in the Pension Protection Act of 
        2006.
            (2) Eligible charity plan.--The amendments made by 
        subsection (b) shall apply to plan years beginning after 
        December 31, 2008.

SEC. 111. ADDITIONS TO FUNDING-BASED LIMITS ON BENEFITS AND BENEFITS 
              ACCRUALS UNDER SINGLE-EMPLOYER PLANS.

    (a) Amendments to INTERNAL REVENUE CODE OF 1986.--
            (1) Subsection (c) of section 436 of the Internal Revenue 
        Code of 1986 is amended by redesignating paragraph (3) as 
        paragraph (4) and by inserting after paragraph (2) the 
        following:
            ``(3) Special limitations on ad hoc amendments.--
                    ``(A) In general.--No ad hoc amendment to a defined 
                benefit plan which is a single employer plan which has 
                the effect of increasing liabilities of the plan by 
                reason of increases in benefits, establishment of new 
                benefits, changing the rate of benefit accrual, or 
                changing the rate of which benefits become 
                nonforfeitable may take effect during the plan year if 
                the adjusted funding target attainment percentage for 
                such plan year is--
                            ``(i) less than 120 percent, or
                            ``(ii) would be less than 120 percent 
                        taking into account such amendment.
                    ``(B) Exemption.--Subparagraph (A) shall cease to 
                apply with respect to any plan year, effective as of 
                the first day of the plan year (or if later, the 
                effective date of the amendment), upon payment by the 
                plan sponsor of a contribution (in addition to any 
                minimum required contribution under section 430) equal 
                to--
                            ``(i) in the case of subparagraph (A)(i), 
                        the amount of the increase in the funding 
                        target of the plan (under section 430) for the 
                        plan year attributable to the amendment, and
                            ``(ii) in the case of subparagraph (A)(ii), 
                        the amount sufficient to result in an adjusted 
                        funding target attainment percentage of 120 
                        percent.
                    ``(C) Special rule.--An ad hoc amendment that is 
                otherwise permitted to take effect under this 
                subsection may not take effect unless the plan provides 
                that the accrued pension benefits of any participant or 
                beneficiary under the plan become nonforfeitable in the 
                same manner which would be required if the plan had 
                terminated as of the effective date of such ad hoc 
                amendment. This subparagraph shall not apply to an ad 
                hoc amendment that takes effect by reason of 
                subparagraph (B)(i).
                    ``(D) Ad hoc amendment.--For purposes of this 
                paragraph, the term `ad hoc amendment' means an 
                amendment to a plan which--
                            ``(i) increases the nonforfeitable benefits 
                        payable to one or more participants,
                            ``(ii) applies only to a subset of the 
                        employees otherwise eligible to accrue benefits 
                        under the plan,
                            ``(iii) applies by its terms only to 
                        employees who, during a limited period of time, 
                        terminate employment, and
                            ``(iv) provides that the increase described 
                        in clause (i) is payable in the form of a 
                        prohibited payment (as defined in subsection 
                        (d)(5)).''.
            (2) Paragraph (4) of section 436(c) of such Code, as 
        redesignated by paragraph (1), is amended--
                    (A) by inserting ``(A)'' before ``Paragraph (1)'' 
                and moving the text thereof 2 ems to the right, and
                    (B) by adding at the end the following:
                    ``(B) Paragraph (3) shall not apply to any 
                amendment of a plan maintained pursuant to 1 or more 
                collective bargaining agreements between employee 
                representatives and 1 or more employers.''.
    (b) Amendments to ERISA.--
            (1) Paragraph (2) of section 206(g) of the Employee 
        Retirement Income Security Act of 1974 is amended by 
        redesignating subparagraph (C) as subparagraph (D) and by 
        inserting after subparagraph (B) the following:
                    ``(C) Special limitations on ad hoc amendments.--
                            ``(i) In general.--No ad hoc amendment to a 
                        defined benefit plan which is a single employer 
                        plan which has the effect of increasing 
                        liabilities of the plan by reason of increases 
                        in benefits, establishment of new benefits, 
                        changing the rate of benefit accrual, or 
                        changing the rate of which benefits become 
                        nonforfeitable may take effect during the plan 
                        year if the adjusted funding target attainment 
                        percentage for such plan year is--
                                    ``(I) less than 120 percent, or
                                    ``(II) would be less than 120 
                                percent taking into account such 
                                amendment.
                            ``(ii) Exemption.--Clause (i) shall cease 
                        to apply with respect to any plan year, 
                        effective as of the first day of the plan year 
                        (or if later, the effective date of the 
                        amendment), upon payment by the plan sponsor of 
                        a contribution (in addition to any minimum 
                        required contribution under section 303) equal 
                        to--
                                    ``(I) in the case of clause (i)(I), 
                                the amount of the increase in the 
                                funding target of the plan (under 
                                section 303) for the plan year 
                                attributable to the amendment, and
                                    ``(II) in the case of clause 
                                (i)(II), the amount sufficient to 
                                result in an adjusted funding target 
                                attainment percentage of 120 percent.
                            ``(iii) Special rule.--An ad hoc amendment 
                        that is otherwise permitted to take effect 
                        under this paragraph may not take effect unless 
                        the plan provides that the accrued pension 
                        benefits of any participant or beneficiary 
                        under the plan become nonforfeitable in the 
                        same manner which would be required if the plan 
                        had terminated as of the effective date of such 
                        ad hoc amendment. This subparagraph shall not 
                        apply to an ad hoc amendment that takes effect 
                        by reason of clause (ii)(I).
                            ``(iv) Ad hoc amendment.--For purposes of 
                        this subparagraph, the term `ad hoc amendment' 
                        means an amendment to a plan which--
                                    ``(I) increases the nonforfeitable 
                                benefits payable to one or more 
                                participants,
                                    ``(II) applies only to a subset of 
                                the employees otherwise eligible to 
                                accrue benefits under the plan,
                                    ``(III) applies by its terms only 
                                to employees who, during a limited 
                                period of time, terminate employment, 
                                and
                                    ``(IV) provides that the increase 
                                described in subclause (I) is payable 
                                in the form of a prohibited payment (as 
                                defined in paragraph (3)(E)).''.
            (2) Subparagraph (D) of section 202(g)(2) of such Act, as 
        redesignated by paragraph (1), is amended--
                    (A) by inserting ``(i)'' before ``Subparagraph 
                (A)'' and moving the text thereof 2 ems to the right, 
                and
                    (B) by adding at the end the following:
                            ``(ii) Subparagraph (C) shall not apply to 
                        any amendment of a plan maintained pursuant to 
                        1 or more collective bargaining agreements 
                        between employee representatives and 1 or more 
                        employers.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan amendments adopted more than 180 days after the date of 
the enactment of this Act.

SEC. 112. REPORTABLE EVENTS.

    (a) In General.--Section 4043 of the Employee Retirement Income 
Security Act of 1974 is amended by redesignating subsection (f) as 
subsection (g) and by inserting after subsection (e) the following:
    ``(f) Special Rule.--
            ``(1) In general.--A reportable event described in 
        paragraph (3) of subsection (c) (without regard to this 
        subsection) shall not be treated as occurring with respect to a 
        plan for an applicable plan year if--
                    ``(A) the number of employees of the contributing 
                sponsor is at least 80 percent of the number of 
                employees of the contributing sponsor at the beginning 
                of the plan year, and is at least 75 percent of the 
                number of employees of the contributing sponsor at the 
                beginning of the previous plan year,
                    ``(B) the funded vested benefit percentage (as 
                defined for purposes of subsection (b)(1)(B)) for the 
                pre-applicable plan year was at least 80 percent, and
                    ``(C) the contributing sponsor notifies the 
                corporation of the use of the rule described in this 
                subsection by the date that such contributing sponsor 
                would (but for this subsection) be required to notify 
                the corporation of an event described in subsection 
                (c)(3).
            ``(2) Definitions.--For purposes of this subsection--
                    ``(A) Employee.--The term `employee' means, in 
                connection with a contributing sponsor, an employee of 
                the contributing sponsor or of any member of such 
                sponsor's controlled group.
                    ``(B) Applicable plan year.--The term `applicable 
                plan year' means--
                            ``(i) except as provided in this 
                        subparagraph, any plan year beginning in 2010 
                        or 2011,
                            ``(ii) in the case of a plan with a plan 
                        year beginning after October 31 and before 
                        January 1, any plan year beginning in 2009 or 
                        2010, and
                            ``(iii) in the case of a plan for which the 
                        valuation date is not the first day of the plan 
                        year, any plan year beginning in 2009 or 2010.
                    ``(C) Pre-applicable plan year.--The term `pre-
                applicable plan year' means, in connection with a plan, 
                the second plan year preceding the first applicable 
                plan year of such plan.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

                     TITLE II--MULTIEMPLOYER PLANS

SEC. 201. ADJUSTMENTS TO FUNDING STANDARD ACCOUNT RULES; REPORTING 
              CLARIFICATION.

    (a) Amortization Periods.--
            (1) Amendment to erisa.--Section 304(b) of the Employee 
        Retirement Income Security Act of 1974 is amended by adding at 
        the end the following new paragraph:
            ``(8) Elective special relief rules.--
                    ``(A) Plan sponsor election.--
                            ``(i) In general.--Notwithstanding any 
                        other provision of this subsection, effective 
                        with the actuarial valuation for either of the 
                        first two plan years beginning after August 31, 
                        2008, the plan sponsor of a multiemployer plan 
                        that meets the solvency test in subparagraph 
                        (B) may elect to use either the rule in clause 
                        (ii) or the rule in clause (iii) in maintaining 
                        its funding standard account.
                            ``(ii) Combined outstanding balance.--Under 
                        this clause, the outstanding balances of all 
                        amounts required to be amortized under both 
                        paragraph (2) and paragraph (3) may be combined 
                        into one amount under each such paragraph, to 
                        be amortized in equal annual installments 
                        (until fully amortized) over a period of 30 
                        plan years.
                            ``(iii) Certain investment losses.--Under 
                        this clause, the total amount of the net 
                        investment losses, if any, incurred in either 
                        or both of the first two plan years ending 
                        after August 31, 2008, may be charged as an 
                        item separate from other experience losses and 
                        amortized in equal annual installments (until 
                        fully amortized) over a period of 30 plan 
                        years.
                    ``(B) Solvency test.--An election may be made under 
                this paragraph if the plan actuary certifies that the 
                plan is projected to have sufficient assets to timely 
                pay expected benefits and anticipated expenditures over 
                the amortization period as extended.
                    ``(C) Restriction on benefit increases.--In the 
                case of a plan for which a rule described in 
                subparagraph (A) is elected, in addition to any other 
                applicable restrictions on benefit increases, an 
                amendment increasing benefits may not go into effect 
                during the period of two plan years immediately 
                following the plan year for which the rule is first 
                effective, unless--
                            ``(i) the plan actuary certifies that such 
                        increase is paid for out of additional 
                        contributions not allocated to the plan at the 
                        time the election was made and the plan's 
                        funded percentage and projected credit balances 
                        for those two plan years are reasonably 
                        expected to be generally at the same levels as 
                        they would have been if the benefit increase 
                        had not been adopted, or
                            ``(ii) the amendment is required as a 
                        condition of qualification under part I of 
                        subchapter D of chapter 1 of the Internal 
                        Revenue Code of 1986 or to comply with other 
                        applicable law.''.
            (2) Amendment to internal revenue code of 1986.--Section 
        431(b) of the Internal Revenue Code of 1986 is amended by 
        adding at the end the following new paragraph:
            ``(8) Elective special relief rules.--
                    ``(A) Plan sponsor election.--
                            ``(i) In general.--Notwithstanding any 
                        other provision of this subsection, effective 
                        starting with the actuarial valuation for 
                        either of the first two plan years beginning 
                        after August 31, 2008, the plan sponsor of a 
                        multiemployer plan that meets the solvency test 
                        in subparagraph (B) may elect to use either the 
                        rule in clause (ii) or the rule in clause (iii) 
                        in maintaining its funding standard account.
                            ``(ii) Combined outstanding balance.--Under 
                        this clause, the outstanding balances of all 
                        amounts required to be amortized under both 
                        paragraph (2) and paragraph (3) may be combined 
                        into one amount under each such paragraph, to 
                        be amortized in equal annual installments 
                        (until fully amortized) over a period of 30 
                        plan years.
                            ``(iii) Certain investment losses.--Under 
                        this clause, the total amount of the net 
                        investment losses, if any, incurred in either 
                        or both of the first two plan years ending 
                        after August 31, 2008, may be charged as an 
                        item separate from other experience losses and 
                        amortized in equal annual installments (until 
                        fully amortized) over a period of 30 plan 
                        years.
                    ``(B) Solvency test.--An election may be made under 
                this paragraph if the plan actuary certifies that the 
                plan is projected to have sufficient assets to timely 
                pay expected benefits and anticipated expenditures over 
                the amortization period as extended.
                    ``(C) Restriction on benefit increases.--In the 
                case of a plan for which a rule described in 
                subparagraph (A) is elected, in addition to any other 
                applicable restrictions on benefit increases, an 
                amendment increasing benefits may not go into effect 
                during the period of two plan years immediately 
                following the plan year for which the rule is first 
                effective, unless--
                            ``(i) the plan actuary certifies that such 
                        increase is paid for out of additional 
                        contributions not allocated to the plan when 
                        the election was made and the plan's funded 
                        percentage and projected credit balances for 
                        those two plan years are reasonably expected to 
                        be generally at the same levels as they would 
                        have been if the benefit increase had not been 
                        adopted, or
                            ``(ii) the amendment is required as a 
                        condition of qualification under part I of 
                        subchapter D of chapter 1 or to comply with 
                        other applicable law.''.
    (b) Automatic Amortization Extensions.--
            (1) Amendment to erisa.--Section 304(d)(1)(A) of the 
        Employee Retirement Income Security Act of 1974 is amended--
                    (A) by striking ``(not in excess of 5 years)'' and 
                inserting ``(not in excess of 10 years)'', and
                    (B) by redesignating subparagraph (C) as 
                subparagraph (D) and inserting after subparagraph (B) 
                the following new subparagraph:
                    ``(C) Deemed approval.--
                            ``(i) In general.--An application under 
                        this paragraph shall be deemed approved unless, 
                        within 45 days after it is submitted, the 
                        Secretary notifies the plan sponsor that the 
                        actuary has failed to certify to one or more of 
                        the criteria listed in subparagraph (B).
                            ``(ii) Corrections.--If, within 30 days 
                        after receiving a notice under this 
                        subparagraph, the plan sponsor corrects any 
                        omissions identified in the notice under this 
                        subparagraph or otherwise demonstrates that the 
                        actuary's certification satisfies subparagraph 
                        (B), the application shall be deemed 
                        approved.''.
            (2) Amendment to internal revenue code of 1986.--Section 
        431(d)(1)(A) of the Internal Revenue Code of 1986 is amended--
                    (A) by striking ``(not in excess of 5 years)'' and 
                inserting ``(not in excess of 10 years)'', and
                    (B) by redesignating subparagraph (C) as 
                subparagraph (D) and inserting after subparagraph (B) 
                the following new subparagraph:
                    ``(C) Deemed approval.--
                            ``(i) In general.--An application under 
                        this paragraph shall be deemed approved unless, 
                        within 45 days after it is submitted, the 
                        Secretary notifies the plan sponsor that the 
                        actuary has failed to certify to one or more of 
                        the criteria listed in subparagraph (B).
                            ``(ii) Corrections.--If, within 30 days 
                        after receiving a notice under this 
                        subparagraph, the plan sponsor corrects any 
                        omissions identified in the notice under this 
                        subparagraph or otherwise demonstrates that the 
                        actuary's certification satisfies subparagraph 
                        (B), the application shall be deemed 
                        approved.''.
    (c) Extended Smoothing Period and Wider Asset Valuation Corridor 
for Certain Losses.--
            (1) In general.--
                    (A) The Secretary of the Treasury shall not treat 
                the asset valuation method of a multiemployer plan as 
                unreasonable solely because the plan elects to use 
                either or both of the options described in subparagraph 
                (B) or (C). A plan may elect to use any or all of such 
                options. The election of such options shall apply for 
                purposes of sections 431 and 432 of the Internal 
                Revenue Code of 1986.
                    (B) With respect to net investment losses incurred 
                in either or both of the first two plan years ending 
                after August 31, 2008, the plan may utilize a smoothing 
                period of not more than ten years.
                    (C) For either or both of the first two plan years 
                beginning after August 31, 2008, the asset value 
                reflected by the method may not be more than 130 
                percent of the current fair market value.
            (2) Deemed approval.--The election by a plan of either or 
        both of the options described in paragraph (1) shall be deemed 
        approved by the Secretary of the Treasury under section 
        412(d)(1) of the Internal Revenue Code of 1986.
    (d) Modification of Certain Amortization Extensions Under Prior 
Law.--Any amortization extensions under the terms of section 412(e) of 
the Internal Revenue Code of 1986 (prior to enactment of the Pension 
Protection Act of 2006) that were granted to multiemployer plans shall 
remain in effect notwithstanding the impact of investment losses 
incurred by the plans in 2008, 2009 or 2010, unless the plan sponsor 
elects otherwise.
    (e) Clarification of Multiemployer Reporting and Disclosure 
Requirements.--Sections 103(f)(2)(C) and 104(d)(1)(D) of the Employee 
Retirement Income Security Act of 1974 are both amended by striking 
``as an employer of the participant''.
    (f) Effective Date.--
            (1) The amendments made by this section shall take effect 
        as of the first day of the first plan year beginning after 
        August 31, 2008, provided however that any election a plan 
        makes pursuant to this section that affects the plan's funding 
        standard account for the first plan year beginning after August 
        31, 2008 shall be disregarded for purposes of applying the 
        provisions of section 305 of the Employee Retirement Income 
        Security Act of 1974 and section 432 of the Internal Revenue 
        Code of 1986 to that plan year.
            (2) Notwithstanding paragraph (1), the restrictions on plan 
        amendments increasing benefits in sections 304(b)(8)(C) of the 
        ERISA and 431(b)(8)(C) of the Internal Revenue Code, as added 
        by this section, shall be effective 30 days after the date of 
        enactment of this Act.

SEC. 202. MULTIEMPLOYER PLANS IN ENDANGERED OR CRITICAL STATUS.

    (a) Optional Longer Correction Periods.--
            (1) Amendment to erisa.--
                    (A) Funding improvement period.--Section 305(c)(4) 
                of the Employee Retirement Income Security Act of 1974 
                is amended by redesignating subparagraphs (C) and (D) 
                as subparagraphs (D) and (E), respectively, and by 
                inserting after subparagraph (B) the following new 
                subparagraph:
                    ``(C) Election to extend period.--The plan sponsor 
                of an endangered or seriously endangered plan may elect 
                to extend the applicable funding improvement period by 
                up to 5 years, including any extension of the period 
                previously elected pursuant to section 205 of the 
                Worker, Retiree and Employer Relief Act of 2008.''.
                    (B) Rehabilitation period.--Section 305(e)(4) of 
                such Act is amended by redesignating subparagraph (B) 
                as subparagraph (C) and by inserting after subparagraph 
                (A) the following new subparagraph:
                    ``(B) Election to extend period.--The plan sponsor 
                of a plan in critical status may elect to extend the 
                rehabilitation period by up to five years, including 
                any extension of the period previously elected pursuant 
                to section 205 of the Worker, Retiree and Employer 
                Relief Act of 2008.''.
            (2) Amendment to internal revenue code of 1986.--
                    (A) Funding improvement period.--Section 432(c)(4) 
                of the Internal Revenue Code of 1986 is amended by 
                redesignating subparagraphs (C) and (D) as 
                subparagraphs (D) and (E), respectively, and by 
                inserting after subparagraph (B) the following new 
                subparagraph:
                    ``(C) Election to extend period.--The plan sponsor 
                of an endangered or seriously endangered plan may elect 
                to extend the applicable funding improvement period by 
                up to 5 years, including any extension of the period 
                previously elected pursuant to section 205 of the 
                Worker, Retiree and Employer Relief Act of 2008.''.
                    (B) Rehabilitation period.--Section 432(e)(4) of 
                such Code is amended by redesignating subparagraph (B) 
                as subparagraph (C) and by inserting after subparagraph 
                (A) the following new subparagraph:
                    ``(B) Election to extend period.--The plan sponsor 
                of a plan in critical status may elect to extend the 
                rehabilitation period by up to five years, including 
                any extension of the period previously elected pursuant 
                to section 205 of the Worker, Retiree and Employer 
                Relief Act of 2008.''.
    (b) Simplification of the Funding Improvement Period for Certain 
Seriously Endangered Plans.--
            (1) Amendment to erisa.--Section 305(c) of the Employee 
        Retirement Income Security Act of 1974 is amended--
                    (A) by striking paragraph (5) and redesignating 
                paragraph (6) as paragraph (5), and
                    (B) in paragraph (1) by striking ``(as modified by 
                paragraph (5))''.
            (2) Amendment to internal revenue code of 1986.--Section 
        432(c) of the Internal Revenue Code of 1986 is amended--
                    (A) by striking paragraph (5) and redesignating 
                paragraph (6) as paragraph (5), and
                    (B) in paragraph (1) by striking ``(as modified by 
                paragraph (5))''.
    (c) Social Security Level Income Option.--
            (1) Amendment to erisa.--Subparagraph (B)(i) of section 
        305(f)(2) of the Employee Retirement Income Security Act of 
        1974 is amended by striking ``204(b)(1)(G)),'' and inserting 
        ``204(b)(1)(G) or any stream of payments that is structured to 
        be similar in amount and duration to such supplements),''.
            (2) Amendment to internal revenue code of 1986.--
        Subparagraph (A)(i) of section 432(f)(2) of the Internal 
        Revenue Code of 1986 is amended by striking ``411(b)(1)(A)),'' 
        and inserting ``411(b)(1)(A) or any stream of payments that is 
        structured to be similar in amount and duration to such 
        supplements),''.
            (3) Effective date.--
                    (A) In general.--Except as provided in paragraph 
                (2), the amendments made by this subsection shall apply 
                as if included in sections 202(a) and 212(a) of the 
                Pension Protection Act of 2006.
                    (B) Transition rule.--
                            (i) In the case of a plan described in 
                        clause (ii), a plan shall not be required to 
                        comply with the amendments made by this section 
                        until the date that is 60 days after the date 
                        of enactment of this Act, but such a plan may 
                        comply on any otherwise permitted earlier date.
                            (ii) A plan is described in this clause if 
                        a restriction on benefit payments is or has 
                        been imposed, pursuant to section 305(f) of the 
                        Employee Retirement Income security Act of 1974 
                        and section 432(f) of the Internal Revenue Code 
                        of 1986, in effect with respect to such plan as 
                        of the date of enactment of this Act.
    (d) Technical Corrections.--
            (1) Amendments to erisa.--Section 305(c) of the Employee 
        Retirement Income Security Act of 1974 is amended--
                    (A) in paragraph (1)(B)(i)--
                            (i) by striking ``plan, including--'' and 
                        all that follows through ``one proposal for 
                        reductions'' and inserting ``plan, including 
                        one proposal for reductions'',
                            (ii) by striking ``, and'' at the end of 
                        subclause (I) and inserting a period, and
                            (iii) by striking subclause (II),
                    (B) in paragraph (7)(A), by striking 
                ``(1)(B)(i)(I)'' and inserting ``(1)(B)(i)'',
                    (C) in paragraph (4) by adding at the end the 
                following:
                    ``(E) Plans that achieve funding improvement 
                benchmarks while in endangered or seriously endangered 
                status.--If the plan's actuary certifies under 
                subsection (b)(3)(A) that the plan has achieved the 
                applicable increase in the funding percentage described 
                in paragraph (3) of this subsection and that the plan 
                is nevertheless still in endangered status, the 
                provisions of this subsection and subsection (d) shall 
                remain in effect until the earlier of the expiration of 
                the funding improvement period or the last day 
                preceding the plan year for which the actuary certifies 
                that the plan is no longer in endangered status.'', and
                    (D) in paragraph (4)(C)(ii) by striking all that 
                follows ``whichever is applicable,'' and inserting the 
                following: ``shall end as of the close of the preceding 
                plan year, except that, until the start of the 
                rehabilitation plan adoption period--
                                    ``(I) the rules of subparagraphs 
                                (A) and (B) of subsection (d)(1) shall 
                                apply if, prior to the date the of the 
                                critical-status certification, the plan 
                                was in the funding improvement plan 
                                adoption period for the plan year, and
                                    ``(II) the rules of subsection 
                                (d)(2) shall apply if, prior to the 
                                date of the critical-status 
                                certification, the plan was in the 
                                funding improvement period for the plan 
                                year.''.
            (2) Amendments to internal revenue code of 1986.--Section 
        432(c) of the Internal Revenue Code of 1986 is amended--
                    (A) in paragraph (1)(B)(i)--
                            (i) by striking ``plan, including--'' and 
                        all that follows through ``one proposal for 
                        reductions'' and inserting ``plan, including 
                        one proposal for reductions'',
                            (ii) by striking ``, and'' at the end of 
                        subclause (I) and inserting a period, and
                            (iii) by striking subclause (II),
                    (B) in paragraph (7)(A), by striking 
                ``(1)(B)(i)(I)'' and inserting ``(1)(B)(i)'',
                    (C) in paragraph (4) by adding at the end the 
                following:
                    ``(E) Plans that achieve funding improvement 
                benchmarks while in endangered or seriously endangered 
                status.--If the plan's actuary certifies under 
                subsection (b)(3)(A) that the plan has achieved the 
                applicable increase in the funding percentage described 
                in paragraph (3) of this subsection and that the plan 
                is nevertheless still in endangered status, the 
                provisions of this subsection and subsection (d) shall 
                remain in effect until the earlier of the expiration of 
                the funding improvement period or the last day 
                preceding the plan year for which the actuary certifies 
                that the plan is no longer in endangered status.'', and
                    (D) in paragraph (4)(C)(ii) by striking all that 
                follows ``whichever is applicable,'' and inserting the 
                following: ``shall end as of the close of the preceding 
                plan year, except that, until the start of the 
                rehabilitation plan adoption period--
                                    ``(I) the rules of subparagraphs 
                                (A) and (B) of subsection (d)(1) shall 
                                apply if, prior to the date the of the 
                                critical-status certification, the plan 
                                was in the funding improvement plan 
                                adoption period for the plan year, and
                                    ``(II) the rules of subsection 
                                (d)(2) shall apply if, prior to the 
                                date of the critical-status 
                                certification, the plan was in the 
                                funding improvement period for the plan 
                                year.''.

SEC. 203. MULTIEMPLOYER PLAN MERGERS AND ALLIANCES.

    (a) Multiemployer Plan Alliances.--
            (1) Amendments to erisa.--
                    (A) Section 4231 of the Employee Retirement Income 
                Security Act of 1974 is amended by adding at the end 
                the following new subsection:
    ``(e) Multiemployer Plan Alliances.--
            ``(1) In general.--The plan sponsor of a multiemployer plan 
        into which another multiemployer plan has been merged may 
        designate the merger as an alliance to which the rules of this 
        subsection apply by amending the plan--
                    ``(A) to identify the allied plan, and
                    ``(B) to delineate the terms of operation of the 
                alliance, including the allocation of employer 
                contributions and experience gains and losses between 
                the merged plan and the partially separate frozen 
                allied plan described in paragraphs (2) and (3).
            ``(2) Applicable provisions.--Except to the extent 
        otherwise provided in the plan amendment under paragraph (1), 
        sections 302, 304 and 305 (minimum funding), Part 1 of Subtitle 
        E (withdrawal liability), sections 4244A and 4281 (plan 
        termination), part 3 of subtitle E (plan reorganization and 
        insolvency) and section 4261 (financial assistance from the 
        corporation) shall apply to the frozen allied plan and the plan 
        into which the allied plan was merged as if they were separate 
        plans.
            ``(3) Frozen allied plan treated as separate plan.--
                    ``(A) Assets and liabilities.--The frozen allied 
                plan that is treated in part as a separate plan 
                pursuant to this paragraph comprises the assets and 
                liabilities of the allied plan as if it had been 
                amended, effective immediately before the effective 
                date of the merger, to cease all benefit accruals.
                    ``(B) Employers maintaining plan.--The employers 
                that were obligated to contribute to the allied plan 
                immediately before the effective date of the merger, 
                and any successors thereto whether by sale, 
                reorganization or otherwise, shall be considered to be 
                the employers maintaining the partially separate frozen 
                allied plan, to the extent they continue to have an 
                obligation to contribute with respect to participants 
                or facilities covered by the allied plan.
                    ``(C) Participants and beneficiaries.--The 
                participants and beneficiaries of the allied plan 
                immediately before the effective date of the merger 
                shall be considered to be the participants and 
                beneficiaries of the partially separate frozen allied 
                plan thereafter.
            ``(4) Treatment of merged plan as single plan.--Except as 
        provided in paragraphs (2) and (3), the allied plan and the 
        plan into which it has been merged shall be treated as a single 
        plan.
            ``(5) Other rules.--
                    ``(A) Adoption of initial plan amendment.--The plan 
                amendment initially designating a merger as an 
                alliance, identifying the allied plan and delineating 
                the terms of the alliance must be adopted by no later 
                than the last day of the plan year in which the merger 
                takes effect.
                    ``(B) Subsequent amendments.--That initial plan 
                amendment may subsequently be modified or repealed, 
                except that the plan gives notice of the change to the 
                employers and participants of the allied plan at least 
                15 days before the subsequent amendment takes effect.
                    ``(C) Discretion to treat mergers differently.--The 
                plan sponsor of a multiemployer plan may, in its 
                discretion, treat some mergers as alliances and others 
                as full mergers, and may prescribe different terms of 
                operation for different alliances, if the basis for the 
                distinctions is not unreasonable.''.
                    (B) Subsection (b) of section 4231 of such Act is 
                amended by striking ``and'' at the end of paragraph 
                (3), by striking the period at the end of paragraph (4) 
                and inserting ``, and'', and by inserting after 
                paragraph (4) adding at the end the following:
            ``(5) a merger that is designated as an alliance under 
        subsection (e) shall not be treated as failing to meet any of 
        the criteria of this subsection solely because benefits under 
        the allied plan are, or are expected to be, reduced or 
        eliminated pursuant to section 305 as a result of the 
        endangered or critical status of the frozen allied plan.''.
                    (C) Section 404(a) of the Employee Retirement 
                Income Security Act of 1974 is amended by adding at the 
                end the following new paragraph:
            ``(3) With respect to a merger of multiemployer plans, 
        including a merger that is designated as an alliance under 
        section 4231(e), the plan sponsors of the merging plans shall 
        be considered to meet the requirements of paragraph (1)(A) if 
        the plan sponsors determine that the merger is not reasonably 
        likely to be adverse to the long-term interests of the 
        participants and beneficiaries of the plan for which the plan 
        sponsors are responsible prior to the merger.''.
                            (i) Section 4231(c) of the Employee 
                        Retirement Income Security Act of 1974 is 
                        amended by striking ``The merger of 
                        multiemployer plans or the transfer'' and 
                        inserting ``The merger of multiemployer plans, 
                        including a merger that is designated as an 
                        alliance, or the transfer''.
            (2) Amendments to internal revenue code of 1986.--Section 
        412 of the Internal Revenue Code of 1986 is amended by adding 
        at the end the following:
    ``(e) Multiemployer Plan Alliances.--
            ``(1) In general.--Except to the extent otherwise provided 
        in the plan amendment under section 4231(e)(1) of the Employee 
        Retirement Income Security Act of 1974 designating a 
        multiemployer plan merger as an alliance, this section and 
        sections 431 and 432 shall apply to the frozen allied plan and 
        the plan into which the allied plan was merged as if they were 
        separate plans.
            ``(2) Employers maintaining plan.--The employers that were 
        obligated to contribute to the allied plan immediately before 
        the effective date of the merger, and any successors thereto 
        whether by sale, reorganization or otherwise, shall be 
        considered to be the employers maintaining the partially 
        separate frozen allied plan to the extent they continue to have 
        an obligation to contribute with respect to participants or 
        facilities covered by the allied plan.
            ``(3) Participants and beneficiaries.--The participants and 
        beneficiaries of the allied plan immediately before the 
        effective date of the merger shall be considered to be the 
        participants and beneficiaries of the partially separate frozen 
        allied plan thereafter.
            ``(4) Treatment of merged plan as single plan.--Except as 
        provided in paragraphs (2) and (3) of section 4231(e) of the 
        Employee Retirement Income Security Act of 1974, the allied 
        plan and the plan into which it has been merged shall be 
        treated as a single plan.
            ``(5) Alliance; allied plan.--For purposes of this 
        subsection, the terms `alliance' and `allied plan' shall have 
        the same meanings as they have under section 4231(e) of the 
        Employee Retirement Income Security Act of 1974.''.
    (b) PBGC Assistance for Multiemployer Plan Mergers.--Section 4231 
of the Employee Retirement Income Security Act of 1974, as amended by 
this Act, is amended by adding at the end the following:
    ``(f) Facilitated Mergers.--
            ``(1) In general.--When requested to do so by the plan 
        sponsors, the corporation shall take reasonable actions to 
        promote and facilitate the merger of two or more multiemployer 
        plans, including a merger that is designated as an alliance, if 
        it determines that the transaction is in the interests of the 
        participants and beneficiaries of at least one of the plans, 
        and is not reasonably expected to be adverse to the long-term 
        interests of the participants and beneficiaries of the other 
        plan or plans. Such facilitation may include training, 
        technical assistance, mediation, communication with 
        stakeholders and support with related requests to other 
        government agencies, among other activities.
            ``(2) Financial assistance.--To facilitate mergers, 
        including mergers designated as alliances, which it determines 
        are reasonably necessary to enable one or more of the plans 
        involved to avoid or postpone insolvency, the corporation may 
        provide financial assistance to the merged plan if it 
        reasonably expects that such financial assistance will reduce 
        the corporation's likely long-term loss with respect to the 
        plans involved.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as of the first day of the first plan year beginning on or after 
January 1, 2009.

SEC. 204. STRENGTHENING PARTICIPANTS' BENEFIT PROTECTIONS.

    (a) Increase in Multiemployer Benefit Guarantee.--Paragraph (1) of 
section 4022A(c) of the Employee Retirement Income Security Act of 1974 
is amended to read as follows:
            ``(1) Except as provided in subsection (g), the monthly 
        benefit of a participant or a beneficiary which is guaranteed 
        under this section by the corporation with respect to a plan is 
        the product of the number of the participant's years of 
        credited service multiplied by the sum of--
                    ``(A) 100 percent of the accrual rate up to $11, 
                plus 75 percent of the lesser of--
                            ``(i) $33, or
                            ``(ii) the accrual rate, if any, in excess 
                        of $11, and
            ``(B) 50 percent of the lesser of--
    ``(i) $40 or
    ``(ii) the accrual rate, if any, in excess of $44.''.
    (b) Qualified Partition of Eligible Multiemployer Plans.--
            (1) Qualified partitions.--Section 4233 of the Employee 
        Retirement Income Security Act of 1974 is amended by adding at 
        the end the following new subsection:
    ``(g) Qualified Partition of Eligible Multiemployer Plans.--
            ``(1) In general.--Notwithstanding subsections (a) through 
        (f), upon the election by the plan sponsor of an eligible 
        multiemployer plan of a qualified partition, the corporation 
        shall order a partition of the electing multiemployer plan in 
        accordance with this subsection, effective on the first day of 
        the first month that begins at least 90 days after the date the 
        multiemployer plan made the qualified partition election.
            ``(2) Eligible multiemployer plan.--An eligible 
        multiemployer plan is a multiemployer plan as to which--
                    ``(A) the plan actuary has certified pursuant to 
                section 305(c) that the plan is currently in critical 
                status (within the meaning of section 305(b)(2));
                    ``(B) a substantial reduction in the amount of 
                aggregate contributions under the plan has resulted or 
                will result from--
                            ``(i) cases or proceedings under title 11, 
                        United States Code, with respect to employers, 
                        or
                            ``(ii) employers' ceasing to be in 
                        business, if such employers did not pay the 
                        full amount of withdrawal liability demanded by 
                        the plan under section 4219;
                    ``(C) the plan sponsor has certified, consistent 
                with projections provided by the plan actuary, that the 
                plan is likely to become insolvent;
                    ``(D) the plan sponsor has certified, consistent 
                with projections provided by the plan actuary, that 
                contributions will have to be increased significantly 
                to prevent insolvency;
                    ``(E) the plan sponsor has certified that, as of 
                the last day of each of the two immediately preceding 
                plan years--
                            ``(i) the ratio of the number of the plan's 
                        retirees, beneficiaries of deceased 
                        participants, and terminated vested 
                        participants to the number of the plan's active 
                        participants for each such year was at least 2 
                        to 1; and
                            ``(ii) the ratio of benefit payments made 
                        by the plan for each such year to contributions 
                        required to be made to the plan under section 
                        304 or 305(e), as applicable, for each such 
                        year was at least 2 to 1; and
                    ``(F) the plan sponsor has certified, consistent 
                with projections provided by the plan actuary, that 
                partition would significantly reduce the likelihood 
                that the plan will become insolvent.
            ``(3) Transfers under qualified partition order.--The 
        corporation's qualified partition order shall provide for 
        transfers as follows:
                    ``(A) An initial transfer of--
                            ``(i) no more than the nonforfeitable 
                        benefits directly attributable to service with 
                        the employers referred to in paragraph (2)(ii), 
                        and
                            ``(ii) assets attributable to any 
                        withdrawal liability payments by such employers 
                        and, as adjusted by any gains or losses 
                        thereon, and reduced by any benefit payments 
                        made with regard to service with the employers.
                    ``(B) As of the last day of each plan year 
                following a plan year in which a qualified partition 
                has occurred, the plan sponsor shall determine whether 
                during such plan year, the aggregate contributions 
                under the plan declined by 10 percent or more as a 
                result of events described in paragraph (2)(ii); and if 
                such decline has occurred, an additional transfer of--
                            ``(i) no more than the nonforfeitable 
                        benefits directly attributable to service with 
                        employers that meets the requirements of 
                        paragraph (2)(ii) after the election of a 
                        qualified partition, and
                            ``(ii) assets attributable to any 
                        withdrawal liability payments by such 
                        employers, as adjusted by any gains or losses 
                        thereon, and reduced by any benefit payments 
                        made with regard to service with the employers.
            ``(4) Plan created by qualified partition.--The plan 
        created by the qualified partition is--
                    ``(A) a successor plan to which section 4022A 
                applies, and
                    ``(B) a terminated multiemployer plan to which 
                section 4041A(d) applies, with respect to which only 
                the employers described in paragraphs (2)(ii) and 
                (3)(ii) have withdrawal liability.''.
            (2) Effect of qualified partition on premiums.--
                    (A) Clause (i) of section 4006(a)(3)(C) of the 
                Employee Retirement Income Security Act of 1974 is 
                amended by adding at the end the following:
    ``For purposes of this subparagraph, the value of assets held by 
the corporation and the basic benefits guaranteed for multiemployer 
plans shall not include assets and liabilities transferred pursuant to 
a qualified partition order under section 4233(g).''.
                    (B) Section 4022A(f) of the Employee Retirement 
                Income Security Act of 1974 is amended by adding at the 
                end the following:
            ``(5) Basic benefits guaranteed in connection with assets 
        and liabilities transferred to the corporation pursuant to a 
        qualified partition order under section 4233(g) shall be 
        disregarded under subparagraphs (1), (2), and (3)''.
            (3) PBGC guarantee of partitioned benefits.--
                    (A) Section 4022A of the Employee Retirement Income 
                Security Act of 1974 is amended by adding at the end 
                the following:
    ``(i) The monthly benefit of a participant or a beneficiary whose 
benefit was transferred pursuant to a qualified partition which is 
guaranteed under this section by the corporation with respect to a plan 
is the nonforfeitable benefits of the participant or beneficiary 
transferred pursuant to the qualified partition.''.
                    (B) Section 4022A(c)(1) of the Employee Retirement 
                Income Security Act of 1974 is amended by striking 
                ``subsection (g)'' and inserting ``subsections (g) and 
                (i)''.
    (c) Financing for Qualified Partitions and Other Special Matters.--
            (1) Obligations of the corporation.--The second sentence of 
        section 4002(g)(2) of the Employee Retirement Income Security 
        Act of 1974 is amended to read as follows:
    ``The United States Government is not liable for any obligation or 
liability incurred by the corporation, except with respect to 
liabilities transferred pursuant to a qualified partition of a 
multiemployer plan under section 4233(g) and such other special matters 
as may be designated in legislation making funding available 
therefor.''.
            (2) PBGC fund established.--
                    (A) Fund Established. Section 4005 of the Employee 
                Retirement Income Security Act of 1974 is amended by 
                deleting subsections (d) and (e), redesignating 
                existing subsections (f) through (h) as subsections (e) 
                through (g), and inserting a new subsection (d), as 
                follows:
    ``(d) Establishment of Fifth Fund; Purpose; Availability, etc.--
            ``(1) In general.--A fifth fund is hereby established on 
        the books of the Treasury of the United States. Such fund shall 
        be for the support of special matters undertaken by the 
        corporation to minimize its reasonably expected long-term risk 
        of loss with respect to a plan and protect the reasonable 
        benefit expectations of plan participants and beneficiaries 
        pursuant to its responsibilities under section 4002(a) to 
        encourage the continuation and maintenance of voluntary private 
        pension plans for the benefit of their participants while 
        maintaining premiums at the lowest level consistent with that 
        objective.
            ``(2) Use of fund.--The fund established by this subsection 
        shall be used to finance obligations undertaken by the 
        corporation under section 4233 (partition of multiemployer 
        plans) and such other matters as may be identified from time to 
        time in legislation making funding available therefor.
            ``(3) Credits to fund.--The fund established under this 
        subsection shall be credited with funds made available to the 
        corporation that are designated for special matters and the 
        earnings thereon, including any amounts received in connection 
        with a qualified partition under section 4233(g), and shall not 
        include premiums paid under section 4007, employer liability or 
        withdrawal liability payments, the assets of terminated plans 
        or repayments of financial assistance under section 4261 or 
        other amounts received in connection with terminated or 
        insolvent plans.
            ``(4) Transactions with other funds.--Notwithstanding 
        paragraph (3), this fund may engage in transactions with the 
        other funds established under this section to the extent 
        reasonable and necessary to meet liquidity demands and maximize 
        the ability of the corporation to accomplish its mission under 
        section 4002(a) without increasing the premiums payable under 
        section 4006.
            ``(5) Investments.--The corporation may invest amounts of 
        the fund in such obligations as the corporation considers 
        appropriate.
            ``(6) Obligations of united states.--Notwithstanding any 
        other provision of this title, obligations of the corporation 
        that are financed by the fund created by this subsection shall 
        be obligations of the United States.''.
            (3) Conforming amendments.--
                    (A) Section 4022A(g) of such Act is amended by 
                striking paragraph (2).
                    (B) Part 1 of subtitle E of title IV of such Act is 
                amended by striking section 4222, and the table of 
                contents for such Act is amended by striking the item 
                relating to section 4222.
    (d) Effective Date.--
            (1) The amendments made by subsection (a) shall apply with 
        respect to plans that first apply for financial assistance from 
        the Pension Benefit Guarantee Corporation after the date of 
        enactment of this Act.
            (2) The amendments made by subsections (b) and (c) shall 
        take effect on the date of enactment of this Act.
                                 <all>
```