II 

116TH CONGRESS 

1ST SESSION H. R. 397 

IN THE SENATE OF THE UNITED STATES 

JULY 25, 2019 

Received 

AN ACT 

To amend the Internal Revenue Code of 1986 to create 

a Pension Rehabilitation Trust Fund, to establish a Pension Rehabilitation Administration within the Department of the Treasury to make loans to multiemployer 

defined benefit plans, and for other purposes. 

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


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Rehabilitation for Mul3 tiemployer Pensions Act of 2019’’. 

4 SEC. 2. PENSION REHABILITATION ADMINISTRATION; ES5 TABLISHMENT; POWERS. 

6 (a) ESTABLISHMENT.—There is established in the 

7 Department of the Treasury an agency to be known as 

8 the ‘‘Pension Rehabilitation Administration’’. 

9 (b) DIRECTOR.— 

10 (1) ESTABLISHMENT OF POSITION.—There 

11 shall be at the head of the Pension Rehabilitation 

12 Administration a Director, who shall be appointed 

13 by the President. 

14 (2) TERM.— 

15 (A) IN GENERAL.—The term of office of 

16 the Director shall be 5 years. 

17 (B) SERVICE UNTIL APPOINTMENT OF

18 SUCCESSOR.—An individual serving as Director 

19 at the expiration of a term may continue to 

20 serve until a successor is appointed. 

21 (3) POWERS.— 

22 (A) APPOINTMENT OF DEPUTY DIREC23 TORS, OFFICERS, AND EMPLOYEES.—The Di24 rector may appoint Deputy Directors, officers, 

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1 ance with chapter 51 and subchapter III of 

2 chapter 53 of title 5, United States Code. 

3 (B) CONTRACTING.— 

4 (i) IN GENERAL.—The Director may 

5 contract for financial and administrative 

6 services (including those related to budget 

7 and accounting, financial reporting, per8 sonnel, and procurement) with the General 

9 Services Administration, or such other 

10 Federal agency as the Director determines 

11 appropriate, for which payment shall be 

12 made in advance, or by reimbursement, 

13 from funds of the Pension Rehabilitation 

14 Administration in such amounts as may be 

15 agreed upon by the Director and the head 

16 of the Federal agency providing the serv17 ices. 

18 (ii) SUBJECT TO APPROPRIATIONS.— 

19 Contract authority under clause (i) shall be 

20 effective for any fiscal year only to the ex21 tent that appropriations are available for 

22 that purpose. 


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1 SEC. 3. PENSION REHABILITATION TRUST FUND. 

2 (a) IN GENERAL.—Subchapter A of chapter 98 of the 

3 Internal Revenue Code of 1986 is amended by adding at 

4 the end the following new section: 

5 ‘‘SEC. 9512. PENSION REHABILITATION TRUST FUND. 

6 ‘‘(a) CREATION OF TRUST FUND.—There is estab7 lished in the Treasury of the United States a trust fund 

8 to be known as the ‘Pension Rehabilitation Trust Fund’ 

9 (hereafter in this section referred to as the ‘Fund’), con10 sisting of such amounts as may be appropriated or cred11 ited to the Fund as provided in this section and section 

12 9602(b). 

13 ‘‘(b) TRANSFERS TO FUND.— 

14 ‘‘(1) AMOUNTS ATTRIBUTABLE TO TREASURY

15 BONDS.—There shall be credited to the Fund the 

16 amounts transferred under section 6 of the Rehabili17 tation for Multiemployer Pensions Act of 2019. 

18 ‘‘(2) LOAN INTEREST AND PRINCIPAL.— 

19 ‘‘(A) IN GENERAL.—The Director of the 

20 Pension Rehabilitation Administration estab21 lished under section 2 of the Rehabilitation for 

22 Multiemployer Pensions Act of 2019 shall de23 posit in the Fund any amounts received from a 

24 plan as payment of interest or principal on a 

25 loan under section 4 of such Act. 


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1 ‘‘(B) INTEREST.—For purposes of sub2 paragraph (A), the term ‘interest’ includes 

3 points and other similar amounts. 

4 ‘‘(3) AVAILABILITY OF FUNDS.—Amounts cred5 ited to or deposited in the Fund shall remain avail6 able until expended. 

7 ‘‘(c) EXPENDITURES FROM FUND.—Amounts in the 

8 Fund are available without further appropriation to the 

9 Pension Rehabilitation Administration— 

10 ‘‘(1) for the purpose of making the loans de11 scribed in section 4 of the Rehabilitation for Multi12 employer Pensions Act of 2019, 

13 ‘‘(2) for the payment of principal and interest 

14 on obligations issued under section 6 of such Act, 

15 and 

16 ‘‘(3) for administrative and operating expenses 

17 of such Administration.’’. 

18 (b) CLERICAL AMENDMENT.—The table of sections 

19 for subchapter A of chapter 98 of the Internal Revenue 

20 Code of 1986 is amended by adding at the end the fol21 lowing new item: 

‘‘Sec. 9512. Pension Rehabilitation Trust Fund.’’. 

22 SEC. 4. LOAN PROGRAM FOR MULTIEMPLOYER DEFINED 

23 BENEFIT PLANS. 

24 (a) LOAN AUTHORITY.— 


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1 (1) IN GENERAL.—The Pension Rehabilitation 

2 Administration established under section 2 is au3 thorized— 

4 (A) to make loans to multiemployer plans 

5 (as defined in section 414(f) of the Internal 

6 Revenue Code of 1986) which are defined ben7 efit plans (as defined in section 414(j) of such 

8 Code) and which— 

9 (i) are in critical and declining status 

10 (within the meaning of section 432(b)(6) 

11 of such Code and section 305(b)(6) of the 

12 Employee Retirement and Income Security 

13 Act) as of the date of the enactment of 

14 this section, or with respect to which a sus15 pension of benefits has been approved 

16 under section 432(e)(9) of such Code and 

17 section 305(e)(9) of such Act as of such 

18 date; 

19 (ii) as of such date of enactment, are 

20 in critical status (within the meaning of 

21 section 432(b)(2) of such Code and section 

22 305(b)(2) of such Act), have a modified 

23 funded percentage of less than 40 percent, 

24 and have a ratio of active to inactive par25 ticipants which is less than 2 to 5; or 


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1 (iii) are insolvent for purposes of sec2 tion 418E of such Code as of such date of 

3 enactment, if they became insolvent after 

4 December 16, 2014, and have not been 

5 terminated; and 

6 (B) subject to subsection (b), to establish 

7 appropriate terms for such loans. 

8 For purposes of subparagraph (A)(ii), the term 

9 ‘‘modified funded percentage’’ means the percentage 

10 equal to a fraction the numerator of which is current 

11 value of plan assets (as defined in section 3(26) of 

12 such Act) and the denominator of which is current 

13 liabilities (as defined in section 431(c)(6)(D) of such 

14 Code and section 304(c)(6)(D) of such Act). 

15 (2) CONSULTATION.—The Director of the Pen16 sion Rehabilitation Administration shall consult with 

17 the Secretary of the Treasury, the Secretary of 

18 Labor, and the Director of the Pension Benefit 

19 Guaranty Corporation before making any loan under 

20 paragraph (1), and shall share with such persons the 

21 application and plan information with respect to 

22 each such loan. 

23 (3) ESTABLISHMENT OF LOAN PROGRAM.— 

24 (A) IN GENERAL.—A program to make the 

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1 tablished not later than September 30, 2019, 

2 with guidance regarding such program to be 

3 promulgated by the Director of the Pension Re4 habilitation Administration, in consultation with 

5 the Director of the Pension Benefit Guaranty 

6 Corporation, the Secretary of the Treasury, and 

7 the Secretary of Labor, not later than Decem8 ber 31, 2019. 

9 (B) LOANS AUTHORIZED BEFORE PRO10 GRAM DATE.—Without regard to whether the 

11 program under subparagraph (A) has been es12 tablished, a plan may apply for a loan under 

13 this section before either date described in such 

14 subparagraph, and the Pension Rehabilitation 

15 Administration shall approve the application 

16 and make the loan before establishment of the 

17 program if necessary to avoid any suspension of 

18 the accrued benefits of participants. 

19 (b) LOAN TERMS.— 

20 (1) IN GENERAL.—The terms of any loan made 

21 under subsection (a) shall state that— 

22 (A) the plan shall make payments of inter23 est on the loan for a period of 29 years begin24 ning on the date of the loan (or 19 years in the 


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1 case of a plan making the election under sub2 section (c)(5)); 

3 (B) final payment of interest and principal 

4 shall be due in the 30th year after the date of 

5 the loan (except as provided in an election 

6 under subsection (c)(5)); and 

7 (C) as a condition of the loan, the plan 

8 sponsor stipulates that— 

9 (i) except as provided in clause (ii), 

10 the plan will not increase benefits, allow 

11 any employer participating in the plan to 

12 reduce its contributions, or accept any col13 lective bargaining agreement which pro14 vides for reduced contribution rates, dur15 ing the 30-year period described in sub16 paragraphs (A) and (B); 

17 (ii) in the case of a plan with respect 

18 to which a suspension of benefits has been 

19 approved under section 432(e)(9) of the 

20 Internal Revenue Code of 1986 and section 

21 305(e)(9) of the Employee Retirement In22 come Security Act of 1974, or under sec23 tion 418E of such Code, before the loan, 

24 the plan will reinstate the suspended bene25 fits (or will not carry out any suspension 


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1 which has been approved but not yet im2 plemented); 

3 (iii) the plan sponsor will comply with 

4 the requirements of section 6059A of the 

5 Internal Revenue Code of 1986; 

6 (iv) the plan will continue to pay all 

7 premiums due under section 4007 of the 

8 Employee Retirement Income Security Act 

9 of 1974; and 

10 (v) the plan and plan administrator 

11 will meet such other requirements as the 

12 Director of the Pension Rehabilitation Ad13 ministration provides in the loan terms. 

14 The terms of the loan shall not make reference 

15 to whether the plan is receiving financial assist16 ance under section 4261(d) of the Employee 

17 Retirement Income Security Act of 1974 (29 

18 U.S.C. 1431(d)) or to any adjustment of the 

19 loan amount under subsection (d)(2)(A)(ii). 

20 (2) INTEREST RATE.—Except as provided in 

21 the second sentence of this paragraph and sub22 section (c)(5), loans made under subsection (a) shall 

23 have as low an interest rate as is feasible. Such rate 

24 shall be determined by the Pension Rehabilitation 

25 Administration and shall— 


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1 (A) not be lower than the rate of interest 

2 on 30-year Treasury securities on the first day 

3 of the calendar year in which the loan is issued; 

4 and 

5 (B) not exceed the greater of— 

6 (i) a rate 0.2 percentage points higher 

7 than such rate of interest on such date; or 

8 (ii) the rate necessary to collect reve9 nues sufficient to administer the program 

10 under this section. 

11 (c) LOAN APPLICATION.— 

12 (1) IN GENERAL.—In applying for a loan under 

13 subsection (a), the plan sponsor shall— 

14 (A) demonstrate that, except as provided 

15 in subparagraph (C)— 

16 (i) the loan will enable the plan to 

17 avoid insolvency for at least the 30-year 

18 period described in subparagraphs (A) and 

19 (B) of subsection (b)(1) or, in the case of 

20 a plan which is already insolvent, to 

21 emerge from insolvency within and avoid 

22 insolvency for the remainder of such pe23 riod; and 

24 (ii) the plan is reasonably expected to 

25 be able to pay benefits and the interest on 


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1 the loan during such period and to accu2 mulate sufficient funds to repay the prin3 cipal when due; 

4 (B) provide the plan’s most recently filed 

5 Form 5500 as of the date of application and 

6 any other information necessary to determine 

7 the loan amount under subsection (d); 

8 (C) stipulate whether the plan is also ap9 plying for financial assistance under section 

10 4261(d) of the Employee Retirement Income 

11 Security Act of 1974 (29 U.S.C. 1431(d)) in 

12 combination with the loan to enable the plan to 

13 avoid insolvency and to pay benefits, or is al14 ready receiving such financial assistance as a 

15 result of a previous application; 

16 (D) state in what manner the loan pro17 ceeds will be invested pursuant to subsection 

18 (d), the person from whom any annuity con19 tracts under such subsection will be purchased, 

20 and the person who will be the investment man21 ager for any portfolio implemented under such 

22 subsection; and 

23 (E) include such other information and 

24 certifications as the Director of the Pension Re25 habilitation Administration shall require. 


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1 (2) STANDARD FOR ACCEPTING ACTUARIAL AND

2 PLAN SPONSOR DETERMINATIONS AND DEMONSTRA3 TIONS IN THE APPLICATION.—In evaluating the plan 

4 sponsor’s application, the Director of the Pension 

5 Rehabilitation Administration shall accept the deter6 minations and demonstrations in the application un7 less the Director, in consultation with the Director 

8 of the Pension Benefit Guaranty Corporation, the 

9 Secretary of the Treasury, and the Secretary of 

10 Labor, concludes that any such determinations or 

11 demonstrations in the application (or any underlying 

12 assumptions) are unreasonable or are inconsistent 

13 with any rules issued by the Director pursuant to 

14 subsection (g). 

15 (3) REQUIRED ACTIONS; DEEMED APPROVAL.— 

16 The Director of the Pension Rehabilitation Adminis17 tration shall approve or deny any application under 

18 this subsection within 90 days after the submission 

19 of such application. An application shall be deemed 

20 approved unless, within such 90 days, the Director 

21 notifies the plan sponsor of the denial of such appli22 cation and the reasons for such denial. Any approval 

23 or denial of an application by the Director of the 

24 Pension Rehabilitation Administration shall be treat25 ed as a final agency action for purposes of section 


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1 704 of title 5, United States Code. The Pension Re2 habilitation Administration shall make the loan pur3 suant to any application promptly after the approval 

4 of such application. 

5 (4) CERTAIN PLANS REQUIRED TO APPLY.— 

6 The plan sponsor of any plan with respect to which 

7 a suspension of benefits has been approved under 

8 section 432(e)(9) of the Internal Revenue Code of 

9 1986 and section 305(e)(9) of the Employee Retire10 ment Income Security Act of 1974 or under section 

11 418E of such Code, before the date of the enactment 

12 of this Act shall apply for a loan under this section. 

13 The Director of the Pension Rehabilitation Adminis14 tration shall provide for such plan sponsors to use 

15 the simplified application under subsection 

16 (d)(2)(B). 

17 (5) INCENTIVE FOR EARLY REPAYMENT.—The 

18 plan sponsor may elect at the time of the application 

19 to repay the loan principal, along with the remaining 

20 interest, at least as rapidly as equal installments 

21 over the 10-year period beginning with the 21st year 

22 after the date of the loan. In the case of a plan mak23 ing this election, the interest on the loan shall be re24 duced by 0.5 percentage points. 

25 (d) LOAN AMOUNT AND USE.— 


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1 (1) AMOUNT OF LOAN.— 

2 (A) IN GENERAL.—Except as provided in 

3 subparagraph (B) and paragraph (2), the 

4 amount of any loan under subsection (a) shall 

5 be, as demonstrated by the plan sponsor on the 

6 application under subsection (c), the amount 

7 needed to purchase annuity contracts or to im8 plement a portfolio described in paragraph 

9 (3)(C) (or a combination of the two) sufficient 

10 to provide benefits of participants and bene11 ficiaries of the plan in pay status, and termi12 nated vested benefits, at the time the loan is 

13 made. 

14 (B) PLANS WITH SUSPENDED BENE15 FITS.—In the case of a plan with respect to 

16 which a suspension of benefits has been ap17 proved under section 432(e)(9) of the Internal 

18 Revenue Code of 1986 and section 305(e)(9) of 

19 the Employee Retirement Income Security Act 

20 of 1974 (29 U.S.C. 1085(e)(9)) or under sec21 tion 418E of such Code— 

22 (i) the suspension of benefits shall not 

23 be taken into account in applying subpara24 graph (A); and 


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1 (ii) the loan amount shall be the 

2 amount sufficient to provide benefits of 

3 participants and beneficiaries of the plan 

4 in pay status and terminated vested bene5 fits at the time the loan is made, deter6 mined without regard to the suspension, 

7 including retroactive payment of benefits 

8 which would otherwise have been payable 

9 during the period of the suspension. 

10 (2) COORDINATION WITH PBGC FINANCIAL AS11 SISTANCE.— 

12 (A) IN GENERAL.—In the case of a plan 

13 which is also applying for financial assistance 

14 under section 4261(d) of the Employee Retire15 ment Income Security Act of 1974 (29 U.S.C. 

16 1431(d))— 

17 (i) the plan sponsor shall submit the 

18 loan application and the application for fi19 nancial assistance jointly to the Pension 

20 Rehabilitation Administration and the Pen21 sion Benefit Guaranty Corporation with 

22 the information necessary to determine the 

23 eligibility for and amount of the loan under 

24 this section and the financial assistance 

25 under section 4261(d) of such Act; and 


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1 (ii) if such financial assistance is 

2 granted, the amount of the loan under sub3 section (a) shall not exceed an amount 

4 equal to the excess of— 

5 (I) the amount determined under 

6 paragraph (1)(A) or (1)(B)(ii) (which7 ever is applicable); over 

8 (II) the amount of such financial 

9 assistance. 

10 (B) PLANS ALREADY RECEIVING PBGC AS11 SISTANCE.—The Director of the Pension Reha12 bilitation Administration shall provide for a 

13 simplified application for the loan under this 

14 section which may be used by an insolvent plan 

15 which has not been terminated and which is al16 ready receiving financial assistance (other than 

17 under section 4261(d) of such Act) from the 

18 Pension Benefit Guaranty Corporation at the 

19 time of the application for the loan under this 

20 section. 

21 (3) USE OF LOAN FUNDS.— 

22 (A) IN GENERAL.—Notwithstanding sec23 tion 432(f)(2)(A)(ii) of the Internal Revenue 

24 Code of 1986 and section 305(f)(2)(A)(ii) of 

25 such Act, the loan received under subsection (a) 


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1 shall only be used to purchase annuity contracts 

2 which meet the requirements of subparagraph 

3 (B) or to implement a portfolio described in 

4 subparagraph (C) (or a combination of the two) 

5 to provide the benefits described in paragraph 

6 (1). 

7 (B) ANNUITY CONTRACT REQUIRE8 MENTS.—The annuity contracts purchased 

9 under subparagraph (A) shall be issued by an 

10 insurance company which is licensed to do busi11 ness under the laws of any State and which is 

12 rated A or better by a nationally recognized sta13 tistical rating organization, and the purchase of 

14 such contracts shall meet all applicable fidu15 ciary standards under the Employee Retirement 

16 Income Security Act of 1974. 

17 (C) PORTFOLIO.— 

18 (i) IN GENERAL.—A portfolio de19 scribed in this subparagraph is— 

20 (I) a cash matching portfolio or 

21 duration matching portfolio consisting 

22 of investment grade (as rated by a na23 tionally recognized statistical rating 

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1 denominated public or private debt 

2 obligations issued or guaranteed by 

3 the United States or a foreign issuer, 

4 which are tradeable in United States 

5 currency and are issued at fixed or 

6 zero coupon rates; or 

7 (II) any other portfolio pre8 scribed by the Secretary of the Treas9 ury in regulations which has a similar 

10 risk profile to the portfolios described 

11 in subclause (I) and is equally protec12 tive of the interests of participants 

13 and beneficiaries. 

14 Once implemented, such a portfolio shall 

15 be maintained until all liabilities to partici16 pants and beneficiaries in pay status, and 

17 terminated vested participants, at the time 

18 of the loan are satisfied. 

19 (ii) FIDUCIARY DUTY.—Any invest20 ment manager of a portfolio under this 

21 subparagraph shall acknowledge in writing 

22 that such person is a fiduciary under the 

23 Employee Retirement Income Security Act 

24 of 1974 with respect to the plan. 


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1 (iii) TREATMENT OF PARTICIPANTS

2 AND BENEFICIARIES.—Participants and 

3 beneficiaries covered by a portfolio under 

4 this subparagraph shall continue to be 

5 treated as participants and beneficiaries of 

6 the plan, including for purposes of title IV 

7 of the Employee Retirement Income Secu8 rity Act of 1974. 

9 (D) ACCOUNTING.— 

10 (i) IN GENERAL.—Annuity contracts 

11 purchased and portfolios implemented 

12 under this paragraph shall be used solely 

13 to provide the benefits described in para14 graph (1) until all such benefits have been 

15 paid and shall be accounted for separately 

16 from the other assets of the plan. 

17 (ii) OVERSIGHT OF NON-ANNUITY IN18 VESTMENTS.— 

19 (I) IN GENERAL.—Any portfolio 

20 implemented under this paragraph 

21 shall be subject to oversight by the 

22 Pension Rehabilitation Administra23 tion, including a mandatory triennial 

24 review of the adequacy of the portfolio 

25 to provide the benefits described in 


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1 paragraph (1) and approval (to be 

2 provided within a reasonable period of 

3 time) of any decision by the plan 

4 sponsor to change the investment 

5 manager of the portfolio. 

6 (II) REMEDIAL ACTION.—If the 

7 oversight under subclause (I) deter8 mines an inadequacy, the plan spon9 sor shall take remedial action to en10 sure that the inadequacy will be cured 

11 within 2 years of such determination. 

12 (E) OMBUDSPERSON.—The Participant 

13 and Plan Sponsor Advocate established under 

14 section 4004 of the Employee Retirement In15 come Security Act of 1974 shall act as 

16 ombudsperson for participants and beneficiaries 

17 on behalf of whom annuity contracts are pur18 chased or who are covered by a portfolio under 

19 this paragraph. 

20 (e) COLLECTION OF REPAYMENT.—Except as pro21 vided in subsection (f), the Pension Rehabilitation Admin22 istration shall make every effort to collect repayment of 

23 loans under this section in accordance with section 3711 

24 of title 31, United States Code. 


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1 (f) LOAN DEFAULT.—If a plan is unable to make any 

2 payment on a loan under this section when due, the Pen3 sion Rehabilitation Administration shall negotiate with the 

4 plan sponsor revised terms for repayment (including in5 stallment payments over a reasonable period or forgive6 ness of a portion of the loan principal), but only to the 

7 extent necessary to avoid insolvency in the subsequent 18 

8 months. 

9 (g) AUTHORITY TO ISSUE RULES, ETC.—The Direc10 tor of the Pension Rehabilitation Administration, in con11 sultation with the Director of the Pension Benefit Guar12 anty Corporation, the Secretary of the Treasury, and the 

13 Secretary of Labor, is authorized to issue rules regarding 

14 the form, content, and process of applications for loans 

15 under this section, actuarial standards and assumptions 

16 to be used in making estimates and projections for pur17 poses of such applications, and assumptions regarding in18 terest rates, mortality, and distributions with respect to 

19 a portfolio described in subsection (d)(3)(C). 

20 (h) REPORT TO CONGRESS ON STATUS OF CERTAIN

21 PLANS WITH LOANS.—Not later than 1 year after the 

22 date of the enactment of this Act, and annually thereafter, 

23 the Director of the Pension Rehabilitation Administration 

24 shall submit to the Committee on Ways and Means and 

25 the Committee on Education and Labor of the House of 


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1 Representatives, and the Committee on Finance and the 

2 Committee on Health, Education, Labor and Pensions of 

3 the Senate, a report identifying any plan that— 

4 (1) has failed to make any scheduled payment 

5 on a loan under this section; 

6 (2) has negotiated revised terms for repayment 

7 of such loan (including any installment payments or 

8 forgiveness of a portion of the loan principal); or 

9 (3) the Director has determined is no longer 

10 reasonably expected to be able to— 

11 (A) pay benefits and the interest on the 

12 loan; or 

13 (B) accumulate sufficient funds to repay 

14 the principal when due. 

15 Such report shall include the details of any such failure, 

16 revised terms, or determination, as the case may be. 

17 (i) COORDINATION WITH TAXATION OF UNRELATED

18 BUSINESS INCOME.—Subparagraph (A) of section 

19 514(c)(6) of the Internal Revenue Code of 1986 is amend20 ed— 

21 (1) by striking ‘‘or’’ at the end of clause (i); 

22 (2) by striking the period at the end of clause 

23 (ii)(II) and inserting ‘‘, or’’; and 

24 (3) by adding at the end the following new 

25 clause: 


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1 ‘‘(iii) indebtedness with respect to a 

2 multiemployer plan under a loan made by 

3 the Pension Rehabilitation Administration 

4 pursuant to section 4 of the Rehabilitation 

5 for Multiemployer Pensions Act of 2019.’’. 

6 SEC. 5. COORDINATION WITH WITHDRAWAL LIABILITY AND 

7 FUNDING RULES. 

8 (a) AMENDMENT TO INTERNAL REVENUE CODE OF

9 1986.—Section 432 of the Internal Revenue Code of 1986 

10 is amended by adding at the end the following new sub11 section: 

12 ‘‘(k) SPECIAL RULES FOR PLANS RECEIVING PEN13 SION REHABILITATION LOANS.— 

14 ‘‘(1) DETERMINATION OF WITHDRAWAL LIABIL15 ITY.— 

16 ‘‘(A) IN GENERAL.—If any employer par17 ticipating in a plan at the time the plan receives 

18 a loan under section 4(a) of the Rehabilitation 

19 for Multiemployer Pensions Act of 2019 with20 draws from the plan before the end of the 30- 

21 year period beginning on the date of the loan, 

22 the withdrawal liability of such employer shall 

23 be determined under the Employee Retirement 

24 Income Security Act of 1974— 


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1 ‘‘(i) by applying section 4219(c)(1)(D) 

2 of the Employee Retirement Income Secu3 rity Act of 1974 as if the plan were termi4 nating by the withdrawal of every employer 

5 from the plan, and 

6 ‘‘(ii) by determining the value of non7 forfeitable benefits under the plan at the 

8 time of the deemed termination by using 

9 the interest assumptions prescribed for 

10 purposes of section 4044 of the Employee 

11 Retirement Income Security Act of 1974, 

12 as prescribed in the regulations under sec13 tion 4281 of the Employee Retirement In14 come Security Act of 1974 in the case of 

15 such a mass withdrawal. 

16 ‘‘(B) ANNUITY CONTRACTS AND INVEST17 MENT PORTFOLIOS PURCHASED WITH LOAN

18 FUNDS.—Annuity contracts purchased and 

19 portfolios implemented under section 4(d)(3) of 

20 the Rehabilitation for Multiemployer Pensions 

21 Act of 2019 shall not be taken into account as 

22 plan assets in determining the withdrawal liabil23 ity of any employer under subparagraph (A), 

24 but the amount equal to the greater of— 


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1 ‘‘(i) the benefits provided under such 

2 contracts or portfolios to participants and 

3 beneficiaries, or 

4 ‘‘(ii) the remaining payments due on 

5 the loan under section 4(a) of such Act, 

6 shall be taken into account as unfunded vested 

7 benefits in determining such withdrawal liabil8 ity. 

9 ‘‘(2) COORDINATION WITH FUNDING REQUIRE10 MENTS.—In the case of a plan which receives a loan 

11 under section 4(a) of the Rehabilitation for Multiem12 ployer Pensions Act of 2019— 

13 ‘‘(A) annuity contracts purchased and 

14 portfolios implemented under section 4(d)(3) of 

15 such Act, and the benefits provided to partici16 pants and beneficiaries under such contracts or 

17 portfolios, shall not be taken into account in de18 termining minimum required contributions 

19 under section 412, 

20 ‘‘(B) payments on the interest and prin21 cipal under the loan, and any benefits owed in 

22 excess of those provided under such contracts 

23 or portfolios, shall be taken into account as li24 abilities for purposes of such section, and 


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1 ‘‘(C) if such a portfolio is projected due to 

2 unfavorable investment or actuarial experience 

3 to be unable to fully satisfy the liabilities which 

4 it covers, the amount of the liabilities projected 

5 to be unsatisfied shall be taken into account as 

6 liabilities for purposes of such section.’’. 

7 (b) AMENDMENT TO EMPLOYEE RETIREMENT IN8 COME SECURITY ACT OF 1974.—Section 305 of the Em9 ployee Retirement Income Security Act of 1974 (29 

10 U.S.C. 1085) is amended by adding at the end the fol11 lowing new subsection: 

12 ‘‘(k) SPECIAL RULES FOR PLANS RECEIVING PEN13 SION REHABILITATION LOANS.— 

14 ‘‘(1) DETERMINATION OF WITHDRAWAL LIABIL15 ITY.— 

16 ‘‘(A) IN GENERAL.—If any employer par17 ticipating in a plan at the time the plan receives 

18 a loan under section 4(a) of the Rehabilitation 

19 for Multiemployer Pensions Act of 2019 with20 draws from the plan before the end of the 30- 

21 year period beginning on the date of the loan, 

22 the withdrawal liability of such employer shall 

23 be determined— 

24 ‘‘(i) by applying section 4219(c)(1)(D) 

25 as if the plan were terminating by the 


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1 withdrawal of every employer from the 

2 plan, and 

3 ‘‘(ii) by determining the value of non4 forfeitable benefits under the plan at the 

5 time of the deemed termination by using 

6 the interest assumptions prescribed for 

7 purposes of section 4044, as prescribed in 

8 the regulations under section 4281 in the 

9 case of such a mass withdrawal. 

10 ‘‘(B) ANNUITY CONTRACTS AND INVEST11 MENT PORTFOLIOS PURCHASED WITH LOAN

12 FUNDS.—Annuity contracts purchased and 

13 portfolios implemented under section 4(d)(3) of 

14 the Rehabilitation for Multiemployer Pensions 

15 Act of 2019 shall not be taken into account in 

16 determining the withdrawal liability of any em17 ployer under subparagraph (A), but the amount 

18 equal to the greater of— 

19 ‘‘(i) the benefits provided under such 

20 contracts or portfolios to participants and 

21 beneficiaries, or 

22 ‘‘(ii) the remaining payments due on 

23 the loan under section 4(a) of such Act, 


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1 shall be taken into account as unfunded vested 

2 benefits in determining such withdrawal liabil3 ity. 

4 ‘‘(2) COORDINATION WITH FUNDING REQUIRE5 MENTS.—In the case of a plan which receives a loan 

6 under section 4(a) of the Rehabilitation for Multiem7 ployer Pensions Act of 2019— 

8 ‘‘(A) annuity contracts purchased and 

9 portfolios implemented under section 4(d)(3) of 

10 such Act, and the benefits provided to partici11 pants and beneficiaries under such contracts or 

12 portfolios, shall not be taken into account in de13 termining minimum required contributions 

14 under section 302, 

15 ‘‘(B) payments on the interest and prin16 cipal under the loan, and any benefits owed in 

17 excess of those provided under such contracts 

18 or portfolios, shall be taken into account as li19 abilities for purposes of such section, and 

20 ‘‘(C) if such a portfolio is projected due to 

21 unfavorable investment or actuarial experience 

22 to be unable to fully satisfy the liabilities which 

23 it covers, the amount of the liabilities projected 

24 to be unsatisfied shall be taken into account as 

25 liabilities for purposes of such section.’’. 


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1 SEC. 6. ISSUANCE OF TREASURY BONDS. 

2 The Secretary of the Treasury shall from time to time 

3 transfer from the general fund of the Treasury to the Pen4 sion Rehabilitation Trust Fund established under section 

5 9512 of the Internal Revenue Code of 1986 such amounts 

6 as are necessary to fund the loan program under section 

7 4 of this Act, including from proceeds from the Secretary’s 

8 issuance of obligations under chapter 31 of title 31, 

9 United States Code. 

10 SEC. 7. REPORTS OF PLANS RECEIVING PENSION REHA11 BILITATION LOANS. 

12 (a) IN GENERAL.—Subpart E of part III of sub13 chapter A of chapter 61 of the Internal Revenue Code of 

14 1986 is amended by adding at the end the following new 

15 section: 

16 ‘‘SEC. 6059A. REPORTS OF PLANS RECEIVING PENSION RE17 HABILITATION LOANS. 

18 ‘‘(a) IN GENERAL.—In the case of a plan receiving 

19 a loan under section 4(a) of the Rehabilitation for Multi20 employer Pensions Act of 2019, with respect to the first 

21 plan year beginning after the date of the loan and each 

22 of the 29 succeeding plan years, not later than the 90th 

23 day of each such plan year the plan sponsor shall file with 

24 the Secretary a report (including appropriate documenta25 tion and actuarial certifications from the plan actuary, as 

26 required by the Secretary) that contains— 


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1 ‘‘(1) the funded percentage (as defined in sec2 tion 432(j)(2)) as of the first day of such plan year, 

3 and the underlying actuarial value of assets (deter4 mined with regard, and without regard, to annuity 

5 contracts purchased and portfolios implemented with 

6 proceeds of such loan) and liabilities (including any 

7 amounts due with respect to such loan) taken into 

8 account in determining such percentage, 

9 ‘‘(2) the market value of the assets of the plan 

10 (determined as provided in paragraph (1)) as of the 

11 last day of the plan year preceding such plan year, 

12 ‘‘(3) the total value of all contributions made by 

13 employers and employees during the plan year pre14 ceding such plan year, 

15 ‘‘(4) the total value of all benefits paid during 

16 the plan year preceding such plan year, 

17 ‘‘(5) cash flow projections for such plan year 

18 and the 9 succeeding plan years, and the assump19 tions used in making such projections, 

20 ‘‘(6) funding standard account projections for 

21 such plan year and the 9 succeeding plan years, and 

22 the assumptions relied upon in making such projec23 tions, 

24 ‘‘(7) the total value of all investment gains or 

25 losses during the plan year preceding such plan year, 


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1 ‘‘(8) any significant reduction in the number of 

2 active participants during the plan year preceding 

3 such plan year, and the reason for such reduction, 

4 ‘‘(9) a list of employers that withdrew from the 

5 plan in the plan year preceding such plan year, and 

6 the resulting reduction in contributions, 

7 ‘‘(10) a list of employers that paid withdrawal 

8 liability to the plan during the plan year preceding 

9 such plan year and, for each employer, a total as10 sessment of the withdrawal liability paid, the annual 

11 payment amount, and the number of years remain12 ing in the payment schedule with respect to such 

13 withdrawal liability, 

14 ‘‘(11) any material changes to benefits, accrual 

15 rates, or contribution rates during the plan year pre16 ceding such plan year, and whether such changes re17 late to the terms of the loan, 

18 ‘‘(12) details regarding any funding improve19 ment plan or rehabilitation plan and updates to such 

20 plan, 

21 ‘‘(13) the number of participants during the 

22 plan year preceding such plan year who are active 

23 participants, the number of participants and bene24 ficiaries in pay status, and the number of terminated 

25 vested participants and beneficiaries, 


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1 ‘‘(14) the amount of any financial assistance re2 ceived under section 4261 of the Employee Retire3 ment Income Security Act of 1974 to pay benefits 

4 during the preceding plan year, and the total 

5 amount of such financial assistance received for all 

6 preceding years, 

7 ‘‘(15) the information contained on the most re8 cent annual funding notice submitted by the plan 

9 under section 101(f) of the Employee Retirement In10 come Security Act of 1974, 

11 ‘‘(16) the information contained on the most re12 cent annual return under section 6058 and actuarial 

13 report under section 6059 of the plan, and 

14 ‘‘(17) copies of the plan document and amend15 ments, other retirement benefit or ancillary benefit 

16 plans relating to the plan and contribution obliga17 tions under such plans, a breakdown of administra18 tive expenses of the plan, participant census data 

19 and distribution of benefits, the most recent actu20 arial valuation report as of the plan year, copies of 

21 collective bargaining agreements, and financial re22 ports, and such other information as the Secretary, 

23 in consultation with the Director of the Pension Re24 habilitation Administration, may require. 


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1 ‘‘(b) ELECTRONIC SUBMISSION.—The report re2 quired under subsection (a) shall be submitted electroni3 cally. 

4 ‘‘(c) INFORMATION SHARING.—The Secretary shall 

5 share the information in the report under subsection (a) 

6 with the Secretary of Labor and the Director of the Pen7 sion Benefit Guaranty Corporation. 

8 ‘‘(d) REPORT TO PARTICIPANTS, BENEFICIARIES, 

9 AND EMPLOYERS.—Each plan sponsor required to file a 

10 report under subsection (a) shall, before the expiration of 

11 the time prescribed for the filing of such report, also pro12 vide a summary (written in a manner so as to be under13 stood by the average plan participant) of the information 

14 in such report to participants and beneficiaries in the plan 

15 and to each employer with an obligation to contribute to 

16 the plan.’’. 

17 (b) PENALTY.—Subsection (e) of section 6652 of the 

18 Internal Revenue Code of 1986 is amended— 

19 (1) by inserting ‘‘, 6059A (relating to reports of 

20 plans receiving pension rehabilitation loans)’’ after 

21 ‘‘deferred compensation)’’; 

22 (2) by inserting ‘‘($100 in the case of failures 

23 under section 6059A)’’ after ‘‘$25’’; and 

24 (3) by adding at the end the following: ‘‘In the 

25 case of a failure with respect to section 6059A, the 


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1 amount imposed under this subsection shall not be 

2 paid from the assets of the plan.’’. 

3 (c) CLERICAL AMENDMENT.—The table of sections 

4 for subpart E of part III of subchapter A of chapter 61 

5 of the Internal Revenue Code of 1986 is amended by add6 ing at the end the following new item: 

‘‘Sec. 6059A. Reports of plans receiving pension rehabilitation loans.’’. 

7 SEC. 8. PBGC FINANCIAL ASSISTANCE. 

8 (a) IN GENERAL.—Section 4261 of the Employee Re9 tirement Income Security Act of 1974 (29 U.S.C. 1431) 

10 is amended by adding at the end the following new sub11 section: 

12 ‘‘(d)(1) The plan sponsor of a multiemployer plan— 

13 ‘‘(A) which is in critical and declining status 

14 (within the meaning of section 305(b)(6)) as of the 

15 date of the enactment of this subsection, or with re16 spect to which a suspension of benefits has been ap17 proved under section 305(e)(9) as of such date; 

18 ‘‘(B) which, as of such date of enactment, is in 

19 critical status (within the meaning of section 

20 305(b)(2)), has a modified funded percentage of less 

21 than 40 percent (as defined in section 4(a)(1) of the 

22 Rehabilitation for Multiemployer Pensions Act of 

23 2019), and has a ratio of active to inactive partici24 pants which is less than 2 to 5; or 


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1 ‘‘(C) which is insolvent for purposes of section 

2 418E of the Internal Revenue Code of 1986 as of 

3 such date of enactment, if the plan became insolvent 

4 after December 16, 2014, and has not been termi5 nated; 

6 and which is applying for a loan under section 4(a) of the 

7 Rehabilitation for Multiemployer Pensions Act of 2019 

8 may also apply to the corporation for financial assistance 

9 under this subsection, by jointly submitting such applica10 tions in accordance with section 4(d)(2) of such Act. The 

11 application for financial assistance under this subsection 

12 shall demonstrate, based on projections by the plan actu13 ary, that after the receipt of the anticipated loan amount 

14 under section 4(a) of such Act, the plan will still become 

15 (or remain) insolvent within the 30-year period beginning 

16 on the date of the loan. 

17 ‘‘(2) In reviewing an application under paragraph 

18 (1), the corporation shall review the determinations and 

19 demonstrations submitted with the loan application under 

20 section 4(c) of the Rehabilitation for Multiemployer Pen21 sions Act of 2019 and provide guidance regarding such 

22 determinations and demonstrations prior to approving any 

23 application for financial assistance under this subsection. 

24 The corporation may deny any application if any such de25 terminations or demonstrations (or any underlying asVerDate Sep 11 2014 00:22 Aug 02, 2019 Jkt 089200 PO 00000 Frm 00036 Fmt 6652 Sfmt 6201 E:\BILLS\H397.RDS H397

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1 sumptions) are unreasonable, or inconsistent with rules 

2 issued by the corporation, and the plan and the corpora3 tion are unable to reach agreement on such determinations 

4 or demonstrations. The corporation shall prescribe any 

5 such rules or guidance not later than December 31, 2019. 

6 ‘‘(3)(A) In the case of a plan described in paragraph 

7 (1)(A) or (1)(B), the total financial assistance provided 

8 under this subsection shall be an amount equal to the 

9 smallest portion of the loan amount with respect to the 

10 plan under paragraph (1)(A) or (1)(B)(ii) of section 4(d) 

11 of the Rehabilitation for Multiemployer Pensions Act of 

12 2019 (determined without regard to paragraph (2) there13 of) that, if provided as financial assistance under this sub14 section instead of a loan, would allow the plan to avoid 

15 the projected insolvency. 

16 ‘‘(B) Such amount shall not exceed the present value 

17 of the maximum guaranteed benefit with respect to all 

18 participants and beneficiaries of the plan under sections 

19 4022A and 4022B. For purposes of the preceding sen20 tence, the present value of the maximum guaranteed ben21 efit amount shall be determined by disregarding any loan 

22 available from the Pension Rehabilitation Administration 

23 and shall be determined as if the plan were insolvent on 

24 the date of the application, and the present value of the 

25 maximum guaranteed benefit amount with respect to such 


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1 participants and beneficiaries may be calculated in the ag2 gregate, rather than by reference to the benefit of each 

3 such participant or beneficiary. 

4 ‘‘(4) In the case of a plan described in paragraph 

5 (1)(C), the financial assistance provided pursuant to such 

6 application under this subsection shall be the present value 

7 of the amount (determined by the plan actuary and sub8 mitted on the application) that, if such amount were paid 

9 by the corporation in combination with the loan and any 

10 other assistance being provided to the plan by the corpora11 tion at the time of the application, would enable the plan 

12 to emerge from insolvency and avoid any other insolvency 

13 projected under paragraph (1). 

14 ‘‘(5)(A)(i) Except as provided in subparagraph (B), 

15 if the corporation determines at the time of approval, or 

16 at the beginning of any plan year beginning thereafter, 

17 that the plan’s 5-year expenditure projection (determined 

18 without regard to loan payments described in clause 

19 (iii)(III)) exceeds the fair market value of the plan’s as20 sets, the corporation shall (subject to the total amount of 

21 financial assistance approved under this subsection) pro22 vide such assistance in an amount equal to the lesser of— 

23 ‘‘(I) the amount by which the plan’s 5-year 

24 expenditure projection exceeds such fair market 

25 value; or 


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1 ‘‘(II) the plan’s expected expenditures for 

2 the plan year. 

3 ‘‘(ii) For purposes of this subparagraph, the term ‘5- 

4 year expenditure projection’ means, with respect to any 

5 plan for a plan year, an amount equal to 500 percent of 

6 the plan’s expected expenditures for the plan year. 

7 ‘‘(iii) For purposes of this subparagraph, the term 

8 ‘expected expenditures’ means, with respect to any plan 

9 for a plan year, an amount equal to the sum of— 

10 ‘‘(I) expected benefit payments for the plan 

11 year; 

12 ‘‘(II) expected administrative expense payments 

13 for the plan year; plus 

14 ‘‘(III) payments on the loan scheduled during 

15 the plan year pursuant to the terms of the loan 

16 under section 4(b) of the Rehabilitation for Multiem17 ployer Pensions Act of 2019. 

18 ‘‘(iv) For purposes of this subparagraph, in the case 

19 of any plan year during which a plan is approved for a 

20 loan under section 4 of such Act, but has not yet received 

21 the proceeds, such proceeds shall be included in deter22 mining the fair market value of the plan’s assets for the 

23 plan year. The preceding sentence shall not apply in the 

24 case of any plan that for the plan year beginning in 2015 

25 was certified pursuant to section 305(b)(3) as being in 


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1 critical and declining status, and had more than 300,000 

2 participants. 

3 ‘‘(B) The financial assistance under this subsection 

4 shall be provided in a lump sum if the plan sponsor dem5 onstrates in the application, and the corporation deter6 mines, that such a lump sum payment is necessary for 

7 the plan to avoid the insolvency to which the application 

8 relates. In the case of a plan described in paragraph 

9 (1)(C), such lump sum shall be provided not later than 

10 December 31, 2020. 

11 ‘‘(6) Subsections (b) and (c) shall apply to financial 

12 assistance under this subsection as if it were provided 

13 under subsection (a), except that the terms for repayment 

14 under subsection (b)(2) shall not require the financial as15 sistance to be repaid before the date on which the loan 

16 under section 4(a) of the Rehabilitation for Multiemployer 

17 Pensions Act of 2019 is repaid in full. 

18 ‘‘(7) The corporation may forgo repayment of the fi19 nancial assistance provided under this subsection if nec20 essary to avoid any suspension of the accrued benefits of 

21 participants.’’. 

22 (b) APPROPRIATIONS.—There is appropriated to the 

23 Director of the Pension Benefit Guaranty Corporation 

24 such sums as may be necessary for each fiscal year to pro25 vide the financial assistance described in section 4261(d) 


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1 of the Employee Retirement Income Security Act of 1974 

2 (29 U.S.C. 1431(d)) (as added by this section) (including 

3 necessary administrative and operating expenses relating 

4 to such assistance). 

5 SEC. 9. MODIFICATION OF REQUIRED DISTRIBUTION 

6 RULES FOR DESIGNATED BENEFICIARIES. 

7 (a) MODIFICATION OF RULES WHERE EMPLOYEE

8 DIES BEFORE ENTIRE DISTRIBUTION.— 

9 (1) IN GENERAL.—Section 401(a)(9) of the In10 ternal Revenue Code of 1986 is amended by adding 

11 at the end the following new subparagraph: 

12 ‘‘(H) SPECIAL RULES FOR CERTAIN DE13 FINED CONTRIBUTION PLANS.—In the case of a 

14 defined contribution plan, if an employee dies 

15 before the distribution of the employee’s entire 

16 interest— 

17 ‘‘(i) IN GENERAL.—Except in the case 

18 of a beneficiary who is not a designated 

19 beneficiary, subparagraph (B)(ii)— 

20 ‘‘(I) shall be applied by sub21 stituting ‘10 years’ for ‘5 years’, and 

22 ‘‘(II) shall apply whether or not 

23 distributions of the employee’s inter24 ests have begun in accordance with 

25 subparagraph (A). 


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1 ‘‘(ii) EXCEPTION ONLY FOR ELIGIBLE

2 DESIGNATED BENEFICIARIES.—Subpara3 graph (B)(iii) shall apply only in the case 

4 of an eligible designated beneficiary. 

5 ‘‘(iii) RULES UPON DEATH OF ELIGI6 BLE DESIGNATED BENEFICIARY.—If an el7 igible designated beneficiary dies before the 

8 portion of the employee’s interest to which 

9 this subparagraph applies is entirely dis10 tributed, the exception under clause (iii) 

11 shall not apply to any beneficiary of such 

12 eligible designated beneficiary and the re13 mainder of such portion shall be distrib14 uted within 10 years after the death of 

15 such eligible designated beneficiary. 

16 ‘‘(iv) APPLICATION TO CERTAIN ELI17 GIBLE RETIREMENT PLANS.—For purposes 

18 of applying the provisions of this subpara19 graph in determining amounts required to 

20 be distributed pursuant to this paragraph, 

21 all eligible retirement plans (as defined in 

22 section 402(c)(8)(B), other than a defined 

23 benefit plan described in clause (iv) or (v) 

24 thereof or a qualified trust which is a part 


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1 of a defined benefit plan) shall be treated 

2 as a defined contribution plan.’’. 

3 (2) DEFINITION OF ELIGIBLE DESIGNATED

4 BENEFICIARY.—Section 401(a)(9)(E) of such Code 

5 is amended to read as follows: 

6 ‘‘(E) DEFINITIONS AND RULES RELATING

7 TO DESIGNATED BENEFICIARY.—For purposes 

8 of this paragraph— 

9 ‘‘(i) DESIGNATED BENEFICIARY.—The 

10 term ‘designated beneficiary’ means any 

11 individual designated as a beneficiary by 

12 the employee. 

13 ‘‘(ii) ELIGIBLE DESIGNATED BENE14 FICIARY.—The term ‘eligible designated 

15 beneficiary’ means, with respect to any em16 ployee, any designated beneficiary who is— 

17 ‘‘(I) the surviving spouse of the 

18 employee, 

19 ‘‘(II) subject to clause (iii), a 

20 child of the employee who has not 

21 reached majority (within the meaning 

22 of subparagraph (F)), 

23 ‘‘(III) disabled (within the mean24 ing of section 72(m)(7)), 


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1 ‘‘(IV) a chronically ill individual 

2 (within the meaning of section 

3 7702B(c)(2), except that the require4 ments of subparagraph (A)(i) thereof 

5 shall only be treated as met if there is 

6 a certification that, as of such date, 

7 the period of inability described in 

8 such subparagraph with respect to the 

9 individual is an indefinite one which is 

10 reasonably expected to be lengthy in 

11 nature), or 

12 ‘‘(V) an individual not described 

13 in any of the preceding subclauses 

14 who is not more than 10 years young15 er than the employee. 

16 ‘‘(iii) SPECIAL RULE FOR CHIL17 DREN.—Subject to subparagraph (F), an 

18 individual described in clause (ii)(II) shall 

19 cease to be an eligible designated bene20 ficiary as of the date the individual reaches 

21 majority and any remainder of the portion 

22 of the individual’s interest to which sub23 paragraph (H)(ii) applies shall be distrib24 uted within 10 years after such date. 


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1 ‘‘(iv) TIME FOR DETERMINATION OF

2 ELIGIBLE DESIGNATED BENEFICIARY.— 

3 The determination of whether a designated 

4 beneficiary is an eligible designated bene5 ficiary shall be made as of the date of 

6 death of the employee.’’. 

7 (3) EFFECTIVE DATES.— 

8 (A) IN GENERAL.—Except as provided in 

9 this paragraph and paragraphs (4) and (5), the 

10 amendments made by this subsection shall 

11 apply to distributions with respect to employees 

12 who die after December 31, 2019. 

13 (B) COLLECTIVE BARGAINING EXCEP14 TION.—In the case of a plan maintained pursu15 ant to one or more collective bargaining agree16 ments between employee representatives and 

17 one or more employers ratified before the date 

18 of enactment of this Act, the amendments made 

19 by this subsection shall apply to distributions 

20 with respect to employees who die in calendar 

21 years beginning after the earlier of— 

22 (i) the later of— 

23 (I) the date on which the last of 

24 such collective bargaining agreements 

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1 gard to any extension thereof agreed 

2 to on or after the date of the enact3 ment of this Act); or 

4 (II) December 31, 2019; or 

5 (ii) December 31, 2021. 

6 For purposes of clause (i)(I), any plan amend7 ment made pursuant to a collective bargaining 

8 agreement relating to the plan which amends 

9 the plan solely to conform to any requirement 

10 added by this section shall not be treated as a 

11 termination of such collective bargaining agree12 ment. 

13 (C) GOVERNMENTAL PLANS.—In the case 

14 of a governmental plan (as defined in section 

15 414(d) of the Internal Revenue Code of 1986), 

16 subparagraph (A) shall be applied by sub17 stituting ‘‘December 31, 2021’’ for ‘‘December 

18 31, 2019’’. 

19 (4) EXCEPTION FOR CERTAIN EXISTING ANNU20 ITY CONTRACTS.— 

21 (A) IN GENERAL.—The amendments made 

22 by this subsection shall not apply to a qualified 

23 annuity which is a binding annuity contract in 

24 effect on the date of enactment of this Act and 

25 at all times thereafter. 


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1 (B) QUALIFIED ANNUITY.—For purposes 

2 of this paragraph, the term ‘‘qualified annuity’’ 

3 means, with respect to an employee, an annu4 ity— 

5 (i) which is a commercial annuity (as 

6 defined in section 3405(e)(6) of the Inter7 nal Revenue Code of 1986); 

8 (ii) under which the annuity payments 

9 are made over the life of the employee or 

10 over the joint lives of such employee and a 

11 designated beneficiary (or over a period 

12 not extending beyond the life expectancy of 

13 such employee or the joint life expectancy 

14 of such employee and a designated bene15 ficiary) in accordance with the regulations 

16 described in section 401(a)(9)(A)(ii) of 

17 such Code (as in effect before such amend18 ments) and which meets the other require19 ments of section 401(a)(9) of such Code 

20 (as so in effect) with respect to such pay21 ments; and 

22 (iii) with respect to which— 

23 (I) annuity payments to the em24 ployee have begun before the date of 

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1 ployee has made an irrevocable elec2 tion before such date as to the method 

3 and amount of the annuity payments 

4 to the employee or any designated 

5 beneficiaries; or 

6 (II) if subclause (I) does not 

7 apply, the employee has made an ir8 revocable election before the date of 

9 enactment of this Act as to the meth10 od and amount of the annuity pay11 ments to the employee or any des12 ignated beneficiaries. 

13 (5) EXCEPTION FOR CERTAIN BENE14 FICIARIES.— 

15 (A) IN GENERAL.—If an employee dies be16 fore the effective date, then, in applying the 

17 amendments made by this subsection to such 

18 employee’s designated beneficiary who dies after 

19 such date— 

20 (i) such amendments shall apply to 

21 any beneficiary of such designated bene22 ficiary; and 

23 (ii) the designated beneficiary shall be 

24 treated as an eligible designated bene25 ficiary for purposes of applying section 


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1 401(a)(9)(H)(ii) of the Internal Revenue 

2 Code of 1986 (as in effect after such 

3 amendments). 

4 (B) EFFECTIVE DATE.—For purposes of 

5 this paragraph, the term ‘‘effective date’’ means 

6 the first day of the first calendar year to which 

7 the amendments made by this subsection apply 

8 to a plan with respect to employees dying on or 

9 after such date. 

10 (b) PROVISIONS RELATING TO PLAN AMEND11 MENTS.— 

12 (1) IN GENERAL.—If this subsection applies to 

13 any plan amendment— 

14 (A) such plan shall be treated as being op15 erated in accordance with the terms of the plan 

16 during the period described in paragraph 

17 (2)(B)(i); and 

18 (B) except as provided by the Secretary of 

19 the Treasury, such plan shall not fail to meet 

20 the requirements of section 411(d)(6) of the In21 ternal Revenue Code of 1986 and section 

22 204(g) of the Employee Retirement Income Se23 curity Act of 1974 by reason of such amend24 ment. 


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1 (2) AMENDMENTS TO WHICH SUBSECTION AP2 PLIES.— 

3 (A) IN GENERAL.—This subsection shall 

4 apply to any amendment to any plan or which 

5 is made— 

6 (i) pursuant to any amendment made 

7 by this section or pursuant to any regula8 tion issued by the Secretary of the Treas9 ury under this section or such amend10 ments; and 

11 (ii) on or before the last day of the 

12 first plan year beginning after December 

13 31, 2021, or such later date as the Sec14 retary of the Treasury may prescribe. 

15 In the case of a governmental or collectively 

16 bargained plan to which subparagraph (B) or 

17 (C) of subsection (a)(4) applies, clause (ii) shall 

18 be applied by substituting the date which is 2 

19 years after the date otherwise applied under 

20 such clause. 

21 (B) CONDITIONS.—This subsection shall 

22 not apply to any amendment unless— 

23 (i) during the period— 

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1 scribed in paragraph (1)(A) takes ef2 fect (or in the case of a plan amend3 ment not required by such legislative 

4 or regulatory amendment, the effec5 tive date specified by the plan); and 

6 (II) ending on the date described 

7 in subparagraph (A)(ii) (or, if earlier, 

8 the date the plan amendment is 

9 adopted), 

10 the plan is operated as if such plan amend11 ment were in effect; and 

12 (ii) such plan amendment applies 

13 retroactively for such period. 

14 SEC. 10. INCREASE IN PENALTY FOR FAILURE TO FILE. 

15 (a) IN GENERAL.—The second sentence of section 

16 6651(a) of the Internal Revenue Code of 1986, as amend17 ed by the Taxpayer First Act, is amended by striking 

18 ‘‘$330’’ and inserting ‘‘$435’’. 

19 (b) INFLATION ADJUSTMENT.—Section 6651(j)(1) of 

20 such Code, as amended by such Act, is amended by strik21 ing ‘‘$330’’ and inserting ‘‘$435’’. 

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

23 this section shall apply to returns the due date for which 

24 (including extensions) is after December 31, 2019. 


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1 SEC. 11. INCREASED PENALTIES FOR FAILURE TO FILE RE2 TIREMENT PLAN RETURNS. 

3 (a) IN GENERAL.—Subsection (e) of section 6652 of 

4 the Internal Revenue Code of 1986 is amended— 

5 (1) by striking ‘‘$25’’ and inserting ‘‘$250’’; 

6 and 

7 (2) by striking ‘‘$15,000’’ and inserting 

8 ‘‘$150,000’’. 

9 (b) ANNUAL REGISTRATION STATEMENT AND NOTI10 FICATION OF CHANGES.—Subsection (d) of section 6652 

11 of the Internal Revenue Code of 1986 is amended— 

12 (1) by striking ‘‘$1’’ both places it appears in 

13 paragraphs (1) and (2) and inserting ‘‘$10’’; 

14 (2) by striking ‘‘$5,000’’ in paragraph (1) and 

15 inserting ‘‘$50,000’’; and 

16 (3) by striking ‘‘$1,000’’ in paragraph (2) and 

17 inserting ‘‘$10,000’’. 

18 (c) FAILURE TO PROVIDE NOTICE.—Subsection (h) 

19 of section 6652 of the Internal Revenue Code of 1986 is 

20 amended— 

21 (1) by striking ‘‘$10’’ and inserting ‘‘$100’’; 

22 and 

23 (2) by striking ‘‘$5,000’’ and inserting 

24 ‘‘$50,000’’. 

25 (d) EFFECTIVE DATE.—The amendments made by 

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1 cations required to be filed, and notices required to be pro2 vided, after December 31, 2019. 

3 SEC. 12. INCREASE INFORMATION SHARING TO ADMIN4 ISTER EXCISE TAXES. 

5 (a) IN GENERAL.—Section 6103(o) of the Internal 

6 Revenue Code of 1986 is amended by adding at the end 

7 the following new paragraph: 

8 ‘‘(3) TAXES IMPOSED BY SECTION 4481.—Re9 turns and return information with respect to taxes 

10 imposed by section 4481 shall be open to inspection 

11 by or disclosure to officers and employees of United 

12 States Customs and Border Protection of the De13 partment of Homeland Security whose official duties 

14 require such inspection or disclosure for purposes of 

15 administering such section.’’. 

16 (b) CONFORMING AMENDMENTS.—Paragraph (4) of 

17 section 6103(p) of the Internal Revenue Code of 1986 is 

18 amended by striking ‘‘or (o)(1)(A)’’ each place it appears 

19 and inserting ‘‘, (o)(1)(A), or (o)(3)’’. 

Passed the House of Representatives July 24, 2019. 

Attest: CHERYL L. JOHNSON, 

Clerk. 


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