II

105TH CONGRESS

1ST SESSION S. 1501

To amend the Employee Retirement Income Security Act of 1974 to improve

protection for workers in multiemployer pension plans.

IN THE SENATE OF THE UNITED STATES

NOVEMBER 9, 1997

Mr. JEFFORDS introduced the following bill; which was read twice and

referred to the Committee on Labor and Human Resources

A BILL

To amend the Employee Retirement Income Security Act

of 1974 to improve protection for workers in multiemployer pension plans.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Workers’ Pension Pro5 tection Act’’.
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1 TITLE I—MINIMUM

2 GUARANTEED BENEFITS

3 SEC. 101. MULTIEMPLOYER PLAN BENEFITS GUARANTEE.

4 (a) IN GENERAL.—Section 4022A(c) of the Employee

5 Retirement Income Security Act of 1974 (29 U.S.C.

6 1322A(c)) is amended—

7 (1) by striking ‘‘$5’’ each place it appears in

8 paragraph (1) and inserting ‘‘$11’’,

9 (2) by striking ‘‘$15’’ in paragraph (1) and in10 serting ‘‘$33’’, and

11 (3) by striking paragraphs (2), (5), and (6) and

12 by redesignating paragraphs (3) and (4) as para13 graphs (2) and (3), respectively.

14 (b) CONFORMING AMENDMENT.—Section 4244(e)(4)

15 of such Act (29 U.S.C. 1424(e)(4)) is amended by striking

16 ‘‘and without regard to section 4022A(c)(2)’’.

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

18 this section shall apply to benefits payable after the date

19 of the enactment of this Act, except that such amendments

20 shall not apply to any multiemployer plan that has re21 ceived financial assistance (within the meaning of section

22 4261 of the Employee Retirement Income Security Act of

23 1974) within the 1-year period ending on the date of the

24 enactment of this Act.
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1 TITLE II—TREATMENT OF ASSET

2 DEFICIENT MULTIEMPLOYER

3 PENSION PLANS

4 SEC. 201. FUNDING REQUIREMENTS FOR ASSET DEFICIENT

5 MULTIEMPLOYER PLANS.

6 (a) IN GENERAL.—Part 3 of subtitle B of title I of

7 the Employee Retirement Income Security Act of 1974

8 (29 U.S.C. 301 et seq.) is amended by redesignating sec9 tion 308 as section 309 and by adding after section 307

10 the following:

11 ‘‘SEC. 308. RESTRICTIONS ON ASSET DEFICIENT MULTIEM12 PLOYER PLANS.

13 ‘‘(a) LIMITATION ON BENEFIT INCREASES FOR

14 ASSET DEFICIENT PLANS.—The trustees of a multiem15 ployer plan shall not increase benefits for a plan year if

16 the plan is an asset deficient plan (as defined in subsection

17 (e)(5)) on the last day of the plan year immediately pre18 ceding the plan year in which the increase in benefits

19 would take effect.

20 ‘‘(b) LIMITATION ON AMOUNT OF BENEFIT IN21 CREASE FOR OTHER MULTIEMPLOYER PLANS.—The

22 trustees of a multiemployer plan to which subsection (a)

23 does not apply shall not increase benefits for a plan year

24 to the extent the increase in benefits would result in a

25 funded current liability percentage of less than 90 percent
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1 for the plan year in which the benefit increase takes effect

2 (determined by taking into account the amount of the un3 funded current liability under the plan attributable to the

4 benefit increase).

5 ‘‘(c) TREATMENT OF INTEREST RATES.—

6 ‘‘(1) IN GENERAL.—The rate of interest used to

7 determine current liabilities of a multiemployer plan

8 for purposes of this section shall be the rate of inter9 est used under section 302(b)(5)(B), except that the

10 highest rate in the permissible range under clause

11 (ii) thereof shall not exceed the specified percentage

12 under paragraph (2) of the weighted average re13 ferred to in such clause.

14 ‘‘(2) SPECIFIED PERCENTAGE.—For purposes

15 of paragraph (1), the specified percentage shall be

16 determined as follows:

‘‘In the case of plan years The specified

beginning in calendar year: percentage is:

1999 ......................................................................................... 109

2000 ......................................................................................... 108

2001 ......................................................................................... 107

2002 ......................................................................................... 106

2003 ......................................................................................... 105.

17 ‘‘(d) TREATMENT OF MORTALITY TABLES.—

18 ‘‘(1) STANDARD TABLE.—In the case of plan

19 years beginning before the first plan year to which

20 the first tables prescribed under paragraph (2)

21 apply, the mortality table used in determining cur22 rent liability of a multiemployer plan for purposes of
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1 this subsection shall be the table prescribed by the

2 Secretary of Labor which must be based on the pre3 vailing standard table (described in section 807 of

4 the Internal Revenue Code of 1986) used by the

5 Commissioner of Internal Revenue to determine re6 serves for group annuity contracts issued on Janu7 ary 1, 1993.

8 ‘‘(2) SECRETARIAL AUTHORITY.—The Secretary

9 of Labor shall by regulation prescribe mortality ta10 bles to be used in determining current liability under

11 this subsection for plan years beginning after De12 cember 31, 2000. Such tables shall be identical to

13 those prescribed by the Secretary of the Treasury

14 under section 412(l)(7)(C)(ii)(II) of the Internal

15 Revenue Code of 1986.

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

17 ‘‘(1) BENEFITS.—The term ‘benefits’ means all

18 benefits to participants and their beneficiaries under

19 a multiemployer plan.

20 ‘‘(2) CURRENT LIABILITY.—The term ‘current

21 liability’ means all liabilities to participants and

22 their beneficiaries under a multiemployer plan.

23 ‘‘(3) UNFUNDED CURRENT LIABILITY.—The

24 term ‘unfunded current liability’ means, with respect

25 to any plan year, the excess (if any) of—
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1 ‘‘(A) the current liability under a multiem2 ployer plan, over

3 ‘‘(B) the value of the assets of the plan de4 termined under section 302(c)(2), reduced by

5 any credit balance in the funding standard ac6 count.

7 The Secretary of Labor may provide for such reduc8 tion for purposes of any other provision which ref9 erences this paragraph.

10 ‘‘(4) FUNDED CURRENT LIABILITY PERCENT11 AGE.—The term ‘funded current liability percentage’

12 means, with respect to any plan year, the percentage

13 which—

14 ‘‘(A) the amount determined under para15 graph (3)(B), is of

16 ‘‘(B) the current liability under the multi17 employer plan.

18 ‘‘(5) ASSET DEFICIENT PLAN.—The term ‘asset

19 deficient plan’ means, with respect to any plan year,

20 a multiemployer plan with a funded current liability

21 percentage of 95 percent or less.’’

22 (b) CONFORMING AMENDMENT.—The table of sec23 tions for part 3 of subtitle B of title I of the Employee

24 Retirement Income Security Act of 1974 is amended by

25 striking the item relating to section 308 and inserting the
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1 following:

‘‘Sec. 308. Restrictions on asset deficient multiemployer plans.

‘‘Sec. 309. Effective dates.’’

2 SEC. 202. EXCEPTION TO RULE PROHIBITING DECREASE OF

3 ACCRUED BENEFITS.

4 Section 204(g)(1) of the Employee Retirement In5 come Security Act of 1974 (29 U.S.C. 1054(g)(1)) is

6 amended by inserting ‘‘or an amendment which reduces

7 an increase in accrued benefits resulting from an increase

8 in benefits prohibited by section 308 (a) or (b)’’ after

9 ‘‘4281’’.

10 SEC. 203. NOTICE TO PARTICIPANTS AND OTHERS OF MUL11 TIEMPLOYER PLAN FUNDING STATUS.

12 Section 105 of the Employee Retirement Income Se13 curity Act of 1974 (29 U.S.C. 1025) is amended by adding

14 at the end the following:

15 ‘‘(e) Not later than 180 days after the close of each

16 plan year, the trustees of a multiemployer plan shall pro17 vide to plan participants, beneficiaries, and employers con18 tributing to the plan—

19 ‘‘(1) notice of the plan’s funded current liability

20 percentage on the last day of the preceding plan

21 year, and

22 ‘‘(2) notice of the limits on the Pension Benefit

23 Guaranty Corporation’s guarantee should the plan

24 become insolvent.
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1 Such notice shall be written in a manner so as to be under2 stood by the average plan participant.’’

3 SEC. 204. EFFECTIVE DATE.

4 The amendments made by this title shall apply to

5 plan years beginning after December 31, 1998.

6 TITLE III—ACTUARIAL

7 ASSUMPTIONS

8 SEC. 301. INTEREST RATE AND MORTALITY ASSUMPTIONS

9 USED IN DETERMINING WITHDRAWAL LI10 ABILITY.

11 (a) IN GENERAL.—Section 4213(b) of the Employee

12 Retirement Income Security Act of 1974 (29 U.S.C.

13 1393(b)) is amended by redesignating paragraphs (1) and

14 (2) as subparagraphs (A) and (B), respectively, by insert15 ing ‘‘(1)’’ before ‘‘In determining’’, and by adding at the

16 end the following new paragraph:

17 ‘‘(2) Effective for plan years beginning after

18 December 31, 1998—

19 ‘‘(A) INTEREST RATE.—The rate of inter20 est used to determine an employer’s withdrawal

21 liability under this part shall be the rate of in22 terest determined under section 308(c).

23 ‘‘(B) MORTALITY TABLES.—The mortality

24 table used in determining an employer’s with25 drawal liability under this part shall be the
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1 mortality table determined under section 308(d)

2 for determining current liability.’’

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

4 this section shall apply to plan years beginning after De5 cember 31, 1998.

6 TITLE IV—ADMINISTRATION

7 AND ENFORCEMENT

8 SEC. 401. ADMINISTRATION AND ENFORCEMENT

9 REQUIREMENTS.

10 Section 502(a) of the Employee Retirement Income

11 Security Act of 1974 (29 U.S.C. 1132(a)) is amended by

12 striking ‘‘or’’ at the end of paragraph (8), by striking the

13 period at the end of paragraph (9) and inserting ‘‘, or’’,

14 and by adding at the end the following:

15 ‘‘(10) by an employer which contributes to a

16 multiemployer plan—

17 ‘‘(A) to enjoin any act or practice which

18 violates any provision of section 308, 204(g)(1),

19 or 105(e), or

20 ‘‘(B) to obtain other appropriate equitable

21 relief—

22 ‘‘(i) to redress such violations of such

23 sections, or

24 ‘‘(ii) to enforce any provision of such

25 sections.’’
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1 SEC. 402. ATTORNEY’S FEES AND COSTS.

2 Section 502(g) of the Employee Retirement Income

3 Security Act of 1974 (29 U.S.C. 1132(g)) is amended by

4 adding at the end the following:

5 ‘‘(3) In any action under subsection (a)(10) by

6 an employer, the court in its discretion may allow a

7 reasonable attorney’s fee and costs of action to ei8 ther party.’’

9 SEC. 403. CIVIL ACTIONS BY CORPORATION.

10 Section 4003(e)(1) of the Employee Retirement In11 come Security Act of 1974 (29 U.S.C. 1303(e)(1)) is

12 amended by striking ‘‘and’’ before subparagraph (B) and

13 by adding before the period at the end the following: ‘‘,

14 and (C) in the case of a multiemployer plan, sections 308,

15 204(g)(1), 105(e), and 4213(b)(2).’’

16 SEC. 404. EFFECTIVE DATE.

17 The amendments made by this title shall apply to ac18 tions relating to acts or practices involving plan years be19 ginning after December 31, 1998.
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1 TITLE V—INCREASE IN MULTI2 EMPLOYER PLAN INSURANCE

3 PREMIUMS

4 SEC. 501. INCREASE IN MULTIEMPLOYER PLAN INSURANCE

5 PREMIUMS.

6 (a) IN GENERAL.—Section 4006(a)(3)(A) of the Em7 ployee Retirement Income Security Act of 1974 (29

8 U.S.C. 1306(a)(3)(A)) is amended—

9 (1) in clause (iii)—

10 (A) by inserting ‘‘and before January 1,

11 1999,’’ before ‘‘an amount’’, and

12 (B) by striking the period at the end of

13 subclause (IV) and inserting ‘‘, and’’, and

14 (2) by adding at the end the following:

15 ‘‘(iv) in the case of a multiemployer

16 plan, for plan years beginning after De17 cember 31, 1998, an amount equal to—

18 ‘‘(I) $3.50 for each participant

19 for plan years beginning in 1999,

20 ‘‘(II) $4.35 for each participant

21 for plan years beginning in 2000, and

22 ‘‘(III) $5.20 for each participant

23 for plan years beginning after Decem24 ber 31, 2000.’’
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1 (b) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to plan years beginning after De3 cember 31, 1998.

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