```

[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4884 Introduced in House (IH)]

109th CONGRESS
  2d Session
                                H. R. 4884

 To amend the Internal Revenue Code of 1986 to include in gross income 
 the value of assets set aside under an employer nonqualified deferred 
compensation plan when the employer defined benefit plan has a funding 
         target attainment percentage of less than 80 percent.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 7, 2006

   Mr. Kennedy of Minnesota introduced the following bill; which was 
              referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL

 
 To amend the Internal Revenue Code of 1986 to include in gross income 
 the value of assets set aside under an employer nonqualified deferred 
compensation plan when the employer defined benefit plan has a funding 
         target attainment percentage of less than 80 percent.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``No Special Deals for Executives Act 
of 2006''.

SEC. 2. TREATMENT OF NONQUALIFIED DEFERRED COMPENSATION PLANS WHEN 
              EMPLOYER DEFINED BENEFIT PLAN HAS FUNDING TARGET 
              ATTAINMENT PERCENTAGE OF LESS THAN 80 PERCENT.

    (a) In General.--Subsection (b) of section 409A of the Internal 
Revenue Code of 1986 (providing rules relating to funding) is amended 
by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), 
respectively, and by inserting after paragraph (2) the following new 
paragraph:
            ``(3) When employer's defined benefit plan has funding 
        target attainment percentage of less than 80 percent.--If--
                    ``(A) as of the valuation date of a defined benefit 
                plan to which section 412 applies for the plan year 
                which includes any portion of a period in which the 
                plan has a funding target attainment percentage less 
                than 80 percent--
                            ``(i) assets are set aside (directly or 
                        indirectly) in a trust (or other arrangement 
                        determined by the Secretary), or
                            ``(ii) transferred to such a trust or other 
                        arrangement,
                 for purposes of paying deferred compensation under a 
                nonqualified deferred compensation plan of the employer 
                maintaining the defined benefit plan, or
                    ``(B) a nonqualified deferred compensation plan of 
                the employer provides that assets will become 
                restricted to the provision of benefits under the plan 
                in connection with such funding target attainment 
                percentage of less than 80 percent (or other similar 
                financial measure determined by the Secretary) of the 
                defined benefit plan, or assets are so restricted,
        such assets shall for purposes of section 83 be treated as 
        property transferred in connection with the performance of 
        services whether or not such assets are available to satisfy 
        claims of general creditors. Subparagraph (A) shall not apply 
        with respect to any assets which are so set aside before the 
        defined benefit plan has a funding target attainment percentage 
        of less than 80 percent.''.
    (b) Funding Target Attainment Percentage.--Section 409A(d) of such 
Code is amended by adding at the end the following new paragraph:
            ``(7) Funding target attainment percentage.--
                    ``(A) In general.--The `funding target attainment 
                percentage' of a plan for a plan year is the ratio 
                (expressed as a percentage) which--
                            ``(i) the value of plan assets for the plan 
                        year (determined without regard to accumulated 
                        credits in excess of accumulated charges to the 
                        funding standard account under section 412), 
                        bears to
                            ``(ii) the funding target of the plan for 
                        the plan year.
                    ``(B) Funding target.--Funding target of a plan for 
                a plan year is the present value of all liabilities to 
                participants and their beneficiaries under the plan for 
                the plan year.''.
    (c) Conforming Amendments.--Paragraphs (4) and (5) of section 
409A(b) of such Code, as redesignated by subsection (a) of this 
subsection, are each amended by striking ``paragraph (1) or (2)'' each 
place it appears and inserting ``paragraph (1), (2), or (3)''.
    (d)  Effective Date.--The amendments made by this section shall 
apply to transfers or reservations of assets after December 31, 2005.
    (e) Special Rule for 2006.--For purposes of determining if a plan 
has a funding target attainment percentage of less than 80 percent 
(within the meaning of section 409A of such Code, as added by this 
section) for any plan year beginning in 2006, such section shall be 
applied by substituting the plan's modified funded current liability 
percentage for the plan's funding target attainment percentage. For 
purposes of the preceding sentence, the term ``modified funded current 
liability percentage'' means the funded current liability percentage 
(as defined in section 412(l)(8) of such Code), reduced as described in 
subparagraph (E) thereof.
                                 <all>
```