I 

111TH CONGRESS 

2D SESSION H. R. 4608 

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

Internal Revenue Code of 1986 to allow multiemployer plans to amortize 

losses from certain fraudulent investment schemes over a 40-year period. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 4, 2010 

Mr. MAFFEI 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 multiemployer plans to amortize losses from certain 

fraudulent investment schemes over a 40-year period. 

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

3 SECTION 1. AMORTIZATION OF LOSSES FROM QUALIFIED 

4 FRAUDULENT INVESTMENT SCHEMES. 

5 (a) AMENDMENT TO ERISA.—Section 304(b) of the 

6 Employee Retirement Income Security Act of 1974 is 


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1 amended by adding at the end the following new para2 graph: 

3 ‘‘(8) AMORTIZATION OF LOSSES FROM QUALI4 FIED FRAUDULENT INVESTMENT SCHEMES.— 

5 ‘‘(A) PLAN SPONSOR ELECTION.—Notwith6 standing any other provision of this subsection, 

7 the plan sponsor of a multiemployer plan may 

8 elect to charge the total amount of the net in9 vestment losses (if any) which are incurred in 

10 either or both of the first two plan years ending 

11 after August 31, 2008, and which are attrib12 utable to losses from qualified fraudulent in13 vestment schemes as an item separate from 

14 other experience losses, to be amortized in equal 

15 annual installments (until fully amortized) over 

16 a period of 40 plan years. 

17 ‘‘(B) LOSSES FROM QUALIFIED FRAUDU18 LENT INVESTMENT SCHEMES.—For purposes of 

19 this paragraph, the determination as to whether 

20 losses are from qualified fraudulent investment 

21 schemes shall be determined under rules pre22 scribed by the Secretary that are substantially 

23 similar to the rules prescribed by the Secretary 

24 for purposes of determining whether a loss from 

25 such an arrangement is a theft loss for purVerDate Nov 24 2008 03:42 Feb 05, 2010 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4608.IH H4608

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1 poses of section 165 of the Internal Revenue 

2 Code of 1986.’’. 

3 (b) AMENDMENT TO INTERNAL REVENUE CODE OF

4 1986.—Section 431(b) of the Internal Revenue Code of 

5 1986 is amended by adding at the end the following new 

6 paragraph: 

7 ‘‘(8) AMORTIZATION OF LOSSES FROM QUALI8 FIED FRAUDULENT INVESTMENT SCHEMES.— 

9 ‘‘(A) PLAN SPONSOR ELECTION.—Notwith10 standing any other provision of this subsection, 

11 the plan sponsor of a multiemployer plan may 

12 elect to charge the total amount of the net in13 vestment losses (if any) which are incurred in 

14 either or both of the first two plan years ending 

15 after August 31, 2008, and which are attrib16 utable to losses from qualified fraudulent in17 vestment schemes as an item separate from 

18 other experience losses, to be amortized in equal 

19 annual installments (until fully amortized) over 

20 a period of 40 plan years. 

21 ‘‘(B) LOSSES FROM QUALIFIED FRAUDU22 LENT INVESTMENT SCHEMES.—For purposes of 

23 this paragraph, the determination as to whether 

24 losses are from qualified fraudulent investment 

25 schemes shall be determined under rules preVerDate Nov 24 2008 03:42 Feb 05, 2010 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4608.IH H4608

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1 scribed by the Secretary that are substantially 

2 similar to the rules prescribed by the Secretary 

3 for purposes of determining whether a loss from 

4 such an arrangement is a theft loss for pur5 poses of section 165 of the Internal Revenue 

6 Code of 1986.’’. 

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

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

9 plan year beginning after August 31, 2008, except that 

10 any election a plan makes pursuant to this section that 

11 affects the plan’s funding standard account for the first 

12 plan year beginning after August 31, 2008, shall be dis13 regarded for purposes of applying the provisions of section 

14 305 of the Employee Retirement Income Security Act of 

15 1974 and section 432 of the Internal Revenue Code of 

16 1986 to such plan year. 

Æ 


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