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Union Calendar No. 123 

116TH CONGRESS 

1ST SESSION H. R. 397 

[Report No. 116–159, Parts I and II] 

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. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 9, 2019 

Mr. NEAL (for himself, Mr. KING of New York, Mr. SCOTT of Virginia, Mr. 

YOUNG, Mrs. DINGELL, Mr. SMITH of New Jersey, Mr. NORCROSS, Mr. 

KATKO, Ms. KAPTUR, and Mr. FORTENBERRY) introduced the following 

bill; which was referred to the Committee on Education and Labor, and 

in addition to the Committees on Ways and Means, and Appropriations, 

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 

JULY 18, 2019 

Reported from the Committee on Ways and Means with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

JULY 19, 2019 

Reported from the Committee on Education and Labor with an amendment 

[Strike out all after the enacting clause and insert the part printed in boldface roman] 

JULY 19, 2019 

Additional sponsors: Ms. MOORE, Mr. CLEAVER, Mr. LYNCH, Ms. SCHAKOWSKY, Mr. HUIZENGA, Mr. RYAN, Mr. SEAN PATRICK MALONEY of 

New York, Mr. FITZPATRICK, Ms. KELLY of Illinois, Ms. MCCOLLUM, 

Ms. BROWNLEY of California, Mr. KHANNA, Ms. WILSON of Florida, Mr. 

HASTINGS, Mr. LOEBSACK, Mrs. BEATTY, Ms. PINGREE, Mr. SIRES, Mr. 

STAUBER, Mr. HIGGINS of New York, Ms. SEWELL of Alabama, Mr. 

LAMB, Ms. VELA ́ZQUEZ, Miss RICE of New York, Mrs. BUSTOS, Mr. 

COHEN, Mr. ESPAILLAT, Mr. LIPINSKI, Mr. SABLAN, Mr. KILDEE, Mr. 


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BRINDISI, Ms. TITUS, Ms. CRAIG, Mr. PALLONE, Mr. SCHIFF, Mr. 

SMITH of Washington, Ms. DELAURO, Mr. SERRANO, Ms. NORTON, Mr. 

KRISHNAMOORTHI, Ms. ROYBAL-ALLARD, Mr. GALLEGO, Mrs. NAPOLITANO, Mr. TED LIEU of California, Mr. VISCLOSKY, Mr. MCGOVERN, Mr. 

LEVIN of Michigan, Mr. PRICE of North Carolina, Ms. FUDGE, Ms. 

BONAMICI, Mr. SUOZZI, Ms. HILL of California, Mr. KIND, Mr. POCAN, 

Mr. MORELLE, Ms. OMAR, Mr. FOSTER, Ms. LEE of California, Mr. 

SCHRADER, Mr. GARAMENDI, Ms. WASSERMAN SCHULTZ, Ms. STEVENS, 

Mr. BLUMENAUER, Mr. COURTNEY, Mr. KIM, Mr. GARCI ́A of Illinois, Ms. 

WILD, Ms. OCASIO-CORTEZ, Mrs. TRAHAN, Ms. LOFGREN, Mr. ROSE of 

New York, Ms. HAALAND, Mr. GONZALEZ of Texas, Mr. RASKIN, Mr. 

DEFAZIO, Mr. NEGUSE, Mr. DAVID SCOTT of Georgia, Mr. PHILLIPS, 

Ms. JAYAPAL, Ms. DEGETTE, Mr. RUPPERSBERGER, Mr. WELCH, Ms. 

KUSTER of New Hampshire, Mrs. WATSON COLEMAN, Mr. QUIGLEY, Mr. 

TONKO, Mr. DESAULNIER, Mr. SWALWELL of California, Mr. VEASEY, 

Ms. SLOTKIN, Mr. MICHAEL F. DOYLE of Pennsylvania, Mr. CONNOLLY, 

Mr. DELGADO, Ms. KENDRA S. HORN of Oklahoma, Ms. CASTOR of Florida, Mr. CICILLINE, Mr. CARTWRIGHT, Mr. MCEACHIN, Mr. LUJA ́N, Mr. 

YARMUTH, Mr. PETERS, Ms. FINKENAUER, Mr. AGUILAR, Mr. GRIJALVA, 

Ms. ESHOO, Mr. CRIST, Mr. DANNY K. DAVIS of Illinois, Mr. CASTRO

of Texas, Mr. PERLMUTTER, Mr. PASCRELL, Mrs. AXNE, Ms. JACKSON

LEE, Mr. EVANS, Mrs. DAVIS of California, Ms. ADAMS, Mr. LANGEVIN, 

Mr. LARSON of Connecticut, Ms. SCHRIER, Mr. RUIZ, Mr. GREEN of 

Texas, Mr. MCNERNEY, Mr. KENNEDY, Mrs. LURIA, Ms. MENG, Mr. 

MOULTON, Ms. BLUNT ROCHESTER, Mrs. MCBATH, Mr. JEFFRIES, Mr. 

LOWENTHAL, Mr. BUTTERFIELD, Ms. SPANBERGER, Ms. SPEIER, Mr. 

SCHNEIDER, Mr. THOMPSON of Mississippi, Ms. JOHNSON of Texas, Mr. 

CARBAJAL, Mrs. DEMINGS, Mr. PANETTA, Mr. TAKANO, Ms. DEAN, Ms. 

SCANLON, Mr. STANTON, Mr. GOLDEN, Ms. SA ́NCHEZ, Mr. LAWSON of 

Florida, Mr. BISHOP of Georgia, Mr. O’HALLERAN, Mrs. KIRKPATRICK, 

Mr. NADLER, Mr. CA ́RDENAS, Mr. VAN DREW, Mr. HIMES, Mr. SHERMAN, Mr. HARDER of California, Ms. TLAIB, Mr. ROUDA, Mr. TRONE, 

Ms. SHALALA, Mrs. HAYES, Mr. PAPPAS, Mrs. LEE of Nevada, Ms. 

CLARK of Massachusetts, Mrs. LAWRENCE, Mr. HORSFORD, Mr. PETERSON, Ms. JUDY CHU of California, Ms. HOULAHAN, Mr. CLAY, Ms. 

DELBENE, Mr. SOTO, Mr. MALINOWSKI, Ms. BARRAGA ́N, Mr. BRENDAN

F. BOYLE of Pennsylvania, Mr. CROW, Mr. VARGAS, Mr. LARSEN of 

Washington, Mr. DOGGETT, Mr. PAYNE, Mr. COOK, Mr. MEEKS, Mr. 

GOMEZ, Mr. BEYER, Mr. LEWIS, Mr. KEATING, Mr. KILMER, Mr. CARSON of Indiana, Mrs. MURPHY, Mr. THOMPSON of California, Mr. LEVIN

of California, Mr. BROWN of Maryland, Ms. GARCIA of Texas, Ms. 

SHERRILL, Mr. HUFFMAN, Mrs. TORRES of California, Mr. HOYER, Ms. 

WEXTON, Mr. GOTTHEIMER, Ms. FRANKEL, Mrs. CAROLYN B. MALONEY

of New York, and Mr. ENGEL


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JULY 19, 2019 

The Committee on Appropriations discharged; committed to the Committee of 

the Whole House on the State of the Union and ordered to be printed 

[For text of introduced bill, see copy of bill as introduced on January 9, 2019] 


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A BILL 

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. 


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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 ‘‘Rehabilitation for Multi5 employer Pensions Act of 2019’’. 

6 SEC. 2. PENSION REHABILITATION ADMINISTRATION; ES7 TABLISHMENT; POWERS. 

8 (a) ESTABLISHMENT.—There is established in the De9 partment of the Treasury an agency to be known as the 

10 ‘‘Pension Rehabilitation Administration’’. 

11 (b) DIRECTOR.— 

12 (1) ESTABLISHMENT OF POSITION.—There shall 

13 be at the head of the Pension Rehabilitation Adminis14 tration a Director, who shall be appointed by the 

15 President. 

16 (2) TERM.— 

17 (A) IN GENERAL.—The term of office of the 

18 Director shall be 5 years. 

19 (B) SERVICE UNTIL APPOINTMENT OF SUC20 CESSOR.—An individual serving as Director at 

21 the expiration of a term may continue to serve 

22 until a successor is appointed. 

23 (3) POWERS.— 

24 (A) APPOINTMENT OF DEPUTY DIRECTORS, 

25 OFFICERS, AND EMPLOYEES.—The Director may 


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1 appoint Deputy Directors, officers, and employ2 ees, including attorneys, in accordance with 

3 chapter 51 and subchapter III of chapter 53 of 

4 title 5, United States Code. 

5 (B) CONTRACTING.— 

6 (i) IN GENERAL.—The Director may 

7 contract for financial and administrative 

8 services (including those related to budget 

9 and accounting, financial reporting, per10 sonnel, and procurement) with the General 

11 Services Administration, or such other Fed12 eral agency as the Director determines ap13 propriate, for which payment shall be made 

14 in advance, or by reimbursement, from 

15 funds of the Pension Rehabilitation Admin16 istration in such amounts as may be agreed 

17 upon by the Director and the head of the 

18 Federal agency providing the services. 

19 (ii) SUBJECT TO APPROPRIATIONS.— 

20 Contract authority under clause (i) shall be 

21 effective for any fiscal year only to the ex22 tent that appropriations are available for 

23 that purpose. 

24 (c) TRANSFER OF FUNDS.—The Secretary of the Treas25 ury may transfer for any fiscal year, from unobligated 


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1 amounts appropriated to the Department of the Treasury, 

2 to the Pension Rehabilitation Administration such sums as 

3 may be reasonably necessary for the administrative and op4 erating expenses of the Pension Rehabilitation Administra5 tion. 

6 SEC. 3. PENSION REHABILITATION TRUST FUND. 

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

8 Internal Revenue Code of 1986 is amended by adding at 

9 the end the following new section: 

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

11 ‘‘(a) CREATION OF TRUST FUND.—There is established 

12 in the Treasury of the United States a trust fund to be 

13 known as the ‘Pension Rehabilitation Trust Fund’ (here14 after in this section referred to as the ‘Fund’), consisting 

15 of such amounts as may be appropriated or credited to the 

16 Fund as provided in this section and section 9602(b). 

17 ‘‘(b) TRANSFERS TO FUND.— 

18 ‘‘(1) AMOUNTS ATTRIBUTABLE TO TREASURY

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

20 amounts transferred under section 6 of the Rehabili21 tation for Multiemployer Pensions Act of 2019. 

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

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

24 Pension Rehabilitation Administration estab25 lished under section 2 of the Rehabilitation for 


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1 Multiemployer Pensions Act of 2019 shall deposit 

2 in the Fund any amounts received from a plan 

3 as payment of interest or principal on a loan 

4 under section 4 of such Act. 

5 ‘‘(B) INTEREST.—For purposes of subpara6 graph (A), the term ‘interest’ includes points and 

7 other similar amounts. 

8 ‘‘(3) TRANSFERS FROM SECRETARY.—The Direc9 tor of the Pension Rehabilitation Administration 

10 shall deposit in the Fund any amounts received from 

11 the Secretary under section 2(c) of such Act. 

12 ‘‘(4) AVAILABILITY OF FUNDS.—Amounts cred13 ited to or deposited in the Fund shall remain avail14 able until expended. 

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

16 Fund are available without further appropriation to the 

17 Pension Rehabilitation Administration— 

18 ‘‘(1) for the purpose of making the loans de19 scribed in section 4 of the Rehabilitation for Multiem20 ployer Pensions Act of 2019, 

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

22 on obligations issued under section 6 of such Act, and 

23 ‘‘(3) for administrative and operating expenses 

24 of such Administration.’’. 


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1 (b) CLERICAL AMENDMENT.—The table of sections for 

2 subchapter A of chapter 98 of the Internal Revenue Code 

3 of 1986 is amended by adding at the end the following new 

4 item: 

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

5 SEC. 4. LOAN PROGRAM FOR MULTIEMPLOYER DEFINED 

6 BENEFIT PLANS. 

7 (a) LOAN AUTHORITY.— 

8 (1) IN GENERAL.—The Pension Rehabilitation 

9 Administration established under section 2 is author10 ized— 

11 (A) to make loans to multiemployer plans 

12 (as defined in section 414(f) of the Internal Rev13 enue Code of 1986) which are defined benefit 

14 plans (as defined in section 414(j) of such Code) 

15 and which— 

16 (i) are in critical and declining status 

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

18 such Code and section 305(b)(6) of the Em19 ployee Retirement and Income Security 

20 Act) as of the date of the enactment of this 

21 section, or with respect to which a suspen22 sion of benefits has been approved under 

23 section 432(e)(9) of such Code and section 

24 305(e)(9) of such Act as of such date; 


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

2 in critical status (within the meaning of 

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

4 305(b)(2) of such Act), have a modified 

5 funded percentage of less than 40 percent, 

6 and have a ratio of active to inactive par7 ticipants which is less than 2 to 5; or 

8 (iii) are insolvent for purposes of sec9 tion 418E of such Code as of such date of 

10 enactment, if they became insolvent after 

11 December 16, 2014, and have not been ter12 minated; and 

13 (B) subject to subsection (b), to establish ap14 propriate terms for such loans. 

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

16 ‘‘modified funded percentage’’ means the percentage 

17 equal to a fraction the numerator of which is current 

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

19 such Act) and the denominator of which is current li20 abilities (as defined in section 431(c)(6)(D) of such 

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

22 (2) CONSULTATION.—The Director of the Pension 

23 Rehabilitation Administration shall consult with the 

24 Secretary of the Treasury, the Secretary of Labor, 

25 and the Director of the Pension Benefit Guaranty 


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1 Corporation before making any loan under paragraph 

2 (1), and shall share with such persons the application 

3 and plan information with respect to each such loan. 

4 (3) ESTABLISHMENT OF LOAN PROGRAM.— 

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

6 loans authorized under this section shall be es7 tablished not later than September 30, 2019, 

8 with guidance regarding such program to be pro9 mulgated by the Director of the Pension Reha10 bilitation Administration, in consultation with 

11 the Director of the Pension Benefit Guaranty 

12 Corporation, the Secretary of the Treasury, and 

13 the Secretary of Labor, not later than December 

14 31, 2019. 

15 (B) LOANS AUTHORIZED BEFORE PROGRAM

16 DATE.—Without regard to whether the program 

17 under subparagraph (A) has been established, a 

18 plan may apply for a loan under this section be19 fore either date described in such subparagraph, 

20 and the Pension Rehabilitation Administration 

21 shall approve the application and make the loan 

22 before establishment of the program if necessary 

23 to avoid any suspension of the accrued benefits 

24 of participants. 

25 (b) LOAN TERMS.— 


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

2 under subsection (a) shall state that— 

3 (A) the plan shall make payments of inter4 est on the loan for a period of 29 years begin5 ning on the date of the loan (or 19 years in the 

6 case of a plan making the election under sub7 section (c)(5)); 

8 (B) final payment of interest and principal 

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

10 loan (except as provided in an election under 

11 subsection (c)(5)); and 

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

13 sponsor stipulates that— 

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

15 the plan will not increase benefits, allow 

16 any employer participating in the plan to 

17 reduce its contributions, or accept any col18 lective bargaining agreement which provides 

19 for reduced contribution rates, during the 

20 30-year period described in subparagraphs 

21 (A) and (B); 

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

23 to which a suspension of benefits has been 

24 approved under section 432(e)(9) of the In25 ternal Revenue Code of 1986 and section 


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1 305(e)(9) of the Employee Retirement In2 come Security Act of 1974, or under section 

3 418E of such Code, before the loan, the plan 

4 will reinstate the suspended benefits (or will 

5 not carry out any suspension which has 

6 been approved but not yet implemented); 

7 (iii) the plan sponsor will comply with 

8 the requirements of section 6059A of the In9 ternal Revenue Code of 1986; 

10 (iv) the plan will continue to pay all 

11 premiums due under section 4007 of the 

12 Employee Retirement Income Security Act 

13 of 1974; and 

14 (v) the plan and plan administrator 

15 will meet such other requirements as the Di16 rector of the Pension Rehabilitation Admin17 istration provides in the loan terms. 

18 The terms of the loan shall not make reference to 

19 whether the plan is receiving financial assistance 

20 under section 4261(d) of the Employee Retire21 ment Income Security Act of 1974 (29 U.S.C. 

22 1431(d)) or to any adjustment of the loan 

23 amount under subsection (d)(2)(A)(ii). 

24 (2) INTEREST RATE.—Except as provided in the 

25 second sentence of this paragraph and subsection 


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1 (c)(5), loans made under subsection (a) shall have as 

2 low an interest rate as is feasible. Such rate shall be 

3 determined by the Pension Rehabilitation Adminis4 tration and shall— 

5 (A) not be lower than the rate of interest on 

6 30-year Treasury securities on the first day of 

7 the calendar year in which the loan is issued, 

8 and 

9 (B) not exceed the greater of— 

10 (i) a rate .2 percent higher than such 

11 rate of interest on such date, or 

12 (ii) the rate necessary to collect reve13 nues sufficient to administer the program 

14 under this section. 

15 (c) LOAN APPLICATION.— 

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

17 subsection (a), the plan sponsor shall— 

18 (A) demonstrate that, except as provided in 

19 subparagraph (C)— 

20 (i) the loan will enable the plan to 

21 avoid insolvency for at least the 30-year pe22 riod described in subparagraphs (A) and 

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

24 plan which is already insolvent, to emerge 


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1 from insolvency within and avoid insol2 vency for the remainder of such period; and 

3 (ii) the plan is reasonably expected to 

4 be able to pay benefits and the interest on 

5 the loan during such period and to accumu6 late sufficient funds to repay the principal 

7 when due; 

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

9 Form 5500 as of the date of application and any 

10 other information necessary to determine the 

11 loan amount under subsection (d); 

12 (C) stipulate whether the plan is also ap13 plying for financial assistance under section 

14 4261(d) of the Employee Retirement Income Se15 curity Act of 1974 (29 U.S.C. 1431(d)) in com16 bination with the loan to enable the plan to 

17 avoid insolvency and to pay benefits, or is al18 ready receiving such financial assistance as a re19 sult of a previous application; 

20 (D) state in what manner the loan proceeds 

21 will be invested pursuant to subsection (d), the 

22 person from whom any annuity contracts under 

23 such subsection will be purchased, and the person 

24 who will be the investment manager for any 

25 portfolio implemented under such subsection; and 


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1 (E) include such other information and cer2 tifications as the Director of the Pension Reha3 bilitation Administration shall require. 

4 (2) STANDARD FOR ACCEPTING ACTUARIAL AND

5 PLAN SPONSOR DETERMINATIONS AND DEMONSTRA6 TIONS IN THE APPLICATION.—In evaluating the plan 

7 sponsor’s application, the Director of the Pension Re8 habilitation Administration shall accept the deter9 minations and demonstrations in the application un10 less the Director, in consultation with the Director of 

11 the Pension Benefit Guaranty Corporation, the Sec12 retary of the Treasury, and the Secretary of Labor, 

13 concludes that any such determinations or demonstra14 tions in the application (or any underlying assump15 tions) are unreasonable or are inconsistent with any 

16 rules issued by the Director pursuant to subsection 

17 (g). 

18 (3) REQUIRED ACTIONS; DEEMED APPROVAL.— 

19 The Director of the Pension Rehabilitation Adminis20 tration shall approve or deny any application under 

21 this subsection within 90 days after the submission of 

22 such application. An application shall be deemed ap23 proved unless, within such 90 days, the Director noti24 fies the plan sponsor of the denial of such application 

25 and the reasons for such denial. Any approval or deVerDate Sep 11 2014 18:22 Jul 22, 2019 Jkt 089200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6203 E:\BILLS\H397.RH H397

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1 nial of an application by the Director of the Pension 

2 Rehabilitation Administration shall be treated as a 

3 final agency action for purposes of section 704 of title 

4 5, United States Code. The Pension Rehabilitation 

5 Administration shall make the loan pursuant to any 

6 application promptly after the approval of such ap7 plication. 

8 (4) CERTAIN PLANS REQUIRED TO APPLY.—The 

9 plan sponsor of any plan with respect to which a sus10 pension of benefits has been approved under section 

11 432(e)(9) of the Internal Revenue Code of 1986 and 

12 section 305(e)(9) of the Employee Retirement Income 

13 Security Act of 1974 or under section 418E of such 

14 Code, before the date of the enactment of this Act shall 

15 apply for a loan under this section. The Director of 

16 the Pension Rehabilitation Administration shall pro17 vide for such plan sponsors to use the simplified ap18 plication under subsection (d)(2)(B). 

19 (5) INCENTIVE FOR EARLY REPAYMENT.—The 

20 plan sponsor may elect at the time of the application 

21 to repay the loan principal, along with the remaining 

22 interest, at least as rapidly as equal installments over 

23 the 10-year period beginning with the 21st year after 

24 the date of the loan. In the case of a plan making this 


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1 election, the interest on the loan shall be reduced by 

2 0.5 percent. 

3 (d) LOAN AMOUNT AND USE.— 

4 (1) AMOUNT OF LOAN.— 

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

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

7 amount of any loan under subsection (a) shall 

8 be, as demonstrated by the plan sponsor on the 

9 application under subsection (c), the amount 

10 needed to purchase annuity contracts or to im11 plement a portfolio described in paragraph 

12 (3)(C) (or a combination of the two) sufficient to 

13 provide benefits of participants and beneficiaries 

14 of the plan in pay status, and terminated vested 

15 benefits, at the time the loan is made. 

16 (B) PLANS WITH SUSPENDED BENEFITS.— 

17 In the case of a plan with respect to which a sus18 pension of benefits has been approved under sec19 tion 432(e)(9) of the Internal Revenue Code of 

20 1986 and section 305(e)(9) of the Employee Re21 tirement Income Security Act of 1974 (29 U.S.C. 

22 1085(e)(9)) or under section 418E of such 

23 Code— 


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1 (i) the suspension of benefits shall not 

2 be taken into account in applying subpara3 graph (A); and 

4 (ii) the loan amount shall be the 

5 amount sufficient to provide benefits of par6 ticipants and beneficiaries of the plan in 

7 pay status and terminated vested benefits at 

8 the time the loan is made, determined with9 out regard to the suspension, including ret10 roactive payment of benefits which would 

11 otherwise have been payable during the pe12 riod of the suspension. 

13 (2) COORDINATION WITH PBGC FINANCIAL AS14 SISTANCE.— 

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

16 which is also applying for financial assistance 

17 under section 4261(d) of the Employee Retire18 ment Income Security Act of 1974 (29 U.S.C. 

19 1431(d))— 

20 (i) the plan sponsor shall submit the 

21 loan application and the application for fi22 nancial assistance jointly to the Pension 

23 Rehabilitation Administration and the Pen24 sion Benefit Guaranty Corporation with the 

25 information necessary to determine the eliVerDate Sep 11 2014 18:22 Jul 22, 2019 Jkt 089200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6203 E:\BILLS\H397.RH H397

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1 gibility for and amount of the loan under 

2 this section and the financial assistance 

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

4 (ii) if such financial assistance is 

5 granted, the amount of the loan under sub6 section (a) shall not exceed an amount equal 

7 to the excess of— 

8 (I) the amount determined under 

9 paragraph (1)(A) or (1)(B)(ii) (which10 ever is applicable); over 

11 (II) the amount of such financial 

12 assistance. 

13 (B) PLANS ALREADY RECEIVING PBGC AS14 SISTANCE.—The Director of the Pension Reha15 bilitation Administration shall provide for a 

16 simplified application for the loan under this 

17 section which may be used by an insolvent plan 

18 which has not been terminated and which is al19 ready receiving financial assistance (other than 

20 under section 4261(d) of such Act) from the Pen21 sion Benefit Guaranty Corporation at the time 

22 of the application for the loan under this section. 

23 (3) USE OF LOAN FUNDS.— 

24 (A) IN GENERAL.—Notwithstanding section 

25 432(f)(2)(A)(ii) of the Internal Revenue Code of 


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1 1986 and section 305(f)(2)(A)(ii) of such Act, the 

2 loan received under subsection (a) shall only be 

3 used to purchase annuity contracts which meet 

4 the requirements of subparagraph (B) or to im5 plement a portfolio described in subparagraph 

6 (C) (or a combination of the two) to provide the 

7 benefits described in paragraph (1). 

8 (B) ANNUITY CONTRACT REQUIREMENTS.— 

9 The annuity contracts purchased under subpara10 graph (A) shall be issued by an insurance com11 pany which is licensed to do business under the 

12 laws of any State and which is rated A or better 

13 by a nationally recognized statistical rating or14 ganization, and the purchase of such contracts 

15 shall meet all applicable fiduciary standards 

16 under the Employee Retirement Income Security 

17 Act of 1974. 

18 (C) PORTFOLIO.— 

19 (i) IN GENERAL.—A portfolio described 

20 in this subparagraph is— 

21 (I) a cash matching portfolio or 

22 duration matching portfolio consisting 

23 of investment grade (as rated by a na24 tionally recognized statistical rating 

25 organization) fixed income investVerDate Sep 11 2014 18:22 Jul 22, 2019 Jkt 089200 PO 00000 Frm 00021 Fmt 6652 Sfmt 6203 E:\BILLS\H397.RH H397

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1 ments, including United States dollar2 denominated public or private debt ob3 ligations issued or guaranteed by the 

4 United States or a foreign issuer, 

5 which are tradeable in United States 

6 currency and are issued at fixed or 

7 zero coupon rates; or 

8 (II) any other portfolio prescribed 

9 by the Secretary of the Treasury in 

10 regulations which has a similar risk 

11 profile to the portfolios described in 

12 subclause (I) and is equally protective 

13 of the interests of participants and 

14 beneficiaries. 

15 Once implemented, such a portfolio shall be 

16 maintained until all liabilities to partici17 pants and beneficiaries in pay status, and 

18 terminated vested participants, at the time 

19 of the loan are satisfied. 

20 (ii) FIDUCIARY DUTY.—Any invest21 ment manager of a portfolio under this sub22 paragraph shall acknowledge in writing 

23 that such person is a fiduciary under the 

24 Employee Retirement Income Security Act 

25 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 to 

13 provide the benefits described in paragraph 

14 (1) until all such benefits have been paid 

15 and shall be accounted for separately from 

16 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 Pen22 sion Rehabilitation Administration, 

23 including a mandatory triennial re24 view of the adequacy of the portfolio to 

25 provide the benefits described in paraVerDate Sep 11 2014 18:22 Jul 22, 2019 Jkt 089200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6203 E:\BILLS\H397.RH H397

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1 graph (1) and approval (to be provided 

2 within a reasonable period of time) of 

3 any decision by the plan sponsor to 

4 change the investment manager of the 

5 portfolio. 

6 (II) REMEDIAL ACTION.—If the 

7 oversight under subclause (I) deter8 mines an inadequacy, the plan sponsor 

9 shall take remedial action to ensure 

10 that the inadequacy will be cured with11 in 2 years of such determination. 

12 (E) OMBUDSPERSON.—The Participant and 

13 Plan Sponsor Advocate established under section 

14 4004 of the Employee Retirement Income Secu15 rity Act of 1974 shall act as ombudsperson for 

16 participants and beneficiaries on behalf of whom 

17 annuity contracts are purchased or who are cov18 ered by a portfolio under this paragraph. 

19 (e) COLLECTION OF REPAYMENT.—Except as provided 

20 in subsection (f), the Pension Rehabilitation Administra21 tion shall make every effort to collect repayment of loans 

22 under this section in accordance with section 3711 of title 

23 31, United States Code. 

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

25 payment on a loan under this section when due, the Pension 


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1 Rehabilitation Administration shall negotiate with the plan 

2 sponsor revised terms for repayment (including installment 

3 payments over a reasonable period or forgiveness of a por4 tion of the loan principal), but only to the extent necessary 

5 to avoid insolvency in the subsequent 18 months. 

6 (g) AUTHORITY TO ISSUE RULES, ETC.—The Director 

7 of the Pension Rehabilitation Administration, in consulta8 tion with the Director of the Pension Benefit Guaranty Cor9 poration, the Secretary of the Treasury, and the Secretary 

10 of Labor, is authorized to issue rules regarding the form, 

11 content, and process of applications for loans under this 

12 section, actuarial standards and assumptions to be used in 

13 making estimates and projections for purposes of such ap14 plications, and assumptions regarding interest rates, mor15 tality, and distributions with respect to a portfolio de16 scribed in subsection (d)(3)(C). 

17 (h) 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 PENSION

13 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-year 

21 period beginning on the date of the loan, the 

22 withdrawal liability of such employer shall be 

23 determined under the Employee Retirement In24 come 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 the 

9 interest assumptions prescribed for purposes 

10 of section 4044 of the Employee Retirement 

11 Income Security Act of 1974, as prescribed 

12 in the regulations under section 4281 of the 

13 Employee Retirement Income Security Act 

14 of 1974 in the case of such a mass with15 drawal. 

16 ‘‘(B) ANNUITY CONTRACTS AND INVESTMENT

17 PORTFOLIOS PURCHASED WITH LOAN FUNDS.— 

18 Annuity contracts purchased and portfolios im19 plemented under section 4(d)(3) of the Rehabili20 tation for Multiemployer Pensions Act of 2019 

21 shall not be taken into account as plan assets in 

22 determining the withdrawal liability of any em23 ployer under subparagraph (A), but the amount 

24 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 port14 folios implemented under section 4(d)(3) of such 

15 Act, and the benefits provided to participants 

16 and beneficiaries under such contracts or port17 folios, shall not be taken into account in deter18 mining minimum required contributions under 

19 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 or 

23 portfolios, shall be taken into account as liabil24 ities 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 INCOME

8 SECURITY ACT OF 1974.—Section 305 of the Employee Re9 tirement Income Security Act of 1974 (29 U.S.C. 1085) is 

10 amended by adding at the end the following new subsection: 

11 ‘‘(k) SPECIAL RULES FOR PLANS RECEIVING PENSION

12 REHABILITATION LOANS.— 

13 ‘‘(1) DETERMINATION OF WITHDRAWAL LIABIL14 ITY.— 

15 ‘‘(A) IN GENERAL.—If any employer par16 ticipating in a plan at the time the plan receives 

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

18 for Multiemployer Pensions Act withdraws from 

19 the plan before the end of the 30-year period be20 ginning on the date of the loan, the withdrawal 

21 liability of such employer shall be determined— 

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

23 as if the plan were terminating by the with24 drawal of every employer from the plan, 

25 and 


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1 ‘‘(ii) by determining the value of non2 forfeitable benefits under the plan at the 

3 time of the deemed termination by using the 

4 interest assumptions prescribed for purposes 

5 of section 4044, as prescribed in the regula6 tions under section 4281 in the case of such 

7 a mass withdrawal. 

8 ‘‘(B) ANNUITY CONTRACTS AND INVESTMENT

9 PORTFOLIOS PURCHASED WITH LOAN FUNDS.— 

10 Annuity contracts purchased and portfolios im11 plemented under section 4(d)(3) of the Rehabili12 tation for Multiemployer Pensions Act shall not 

13 be taken into account in determining the with14 drawal liability of any employer under subpara15 graph (A), but the amount equal to the greater 

16 of— 

17 ‘‘(i) the benefits provided under such 

18 contracts or portfolios to participants and 

19 beneficiaries, or 

20 ‘‘(ii) the remaining payments due on 

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

22 shall be so taken into account. 

23 ‘‘(2) COORDINATION WITH FUNDING REQUIRE24 MENTS.—In the case of a plan which receives a loan 


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1 under section 4(a) of the Rehabilitation for Multiem2 ployer Pensions Act— 

3 ‘‘(A) annuity contracts purchased and port4 folios implemented under section 4(d)(3) of such 

5 Act, and the benefits provided to participants 

6 and beneficiaries under such contracts or port7 folios, shall not be taken into account in deter8 mining minimum required contributions under 

9 section 302, 

10 ‘‘(B) payments on the interest and prin11 cipal under the loan, and any benefits owed in 

12 excess of those provided under such contracts or 

13 portfolios, shall be taken into account as liabil14 ities for purposes of such section, and 

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

16 unfavorable investment or actuarial experience 

17 to be unable to fully satisfy the liabilities which 

18 it covers, the amount of the liabilities projected 

19 to be unsatisfied shall be taken into account as 

20 liabilities for purposes of such section.’’. 

21 SEC. 6. ISSUANCE OF TREASURY BONDS. 

22 The Secretary of the Treasury shall from time to time 

23 transfer from the general fund of the Treasury to the Pen24 sion Rehabilitation Trust Fund established under section 

25 9512 of the Internal Revenue Code of 1986 such amounts 


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1 as are necessary to fund the loan program under section 

2 4 of this Act, including from proceeds from the Secretary’s 

3 issuance of obligations under chapter 31 of title 31, United 

4 States Code. 

5 SEC. 7. REPORTS OF PLANS RECEIVING PENSION REHABILI6 TATION LOANS. 

7 (a) IN GENERAL.—Subpart E of part III of subchapter 

8 A of chapter 61 of the Internal Revenue Code of 1986 is 

9 amended by adding at the end the following new section: 

10 ‘‘SEC. 6059A. REPORTS OF PLANS RECEIVING PENSION RE11 HABILITATION LOANS. 

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

13 loan under section 4(a) of the Rehabilitation for Multiem14 ployer Pensions Act of 2019, with respect to the first plan 

15 year beginning after the date of the loan and each of the 

16 29 succeeding plan years, not later than the 90th day of 

17 each such plan year the plan sponsor shall file with the 

18 Secretary a report (including appropriate documentation 

19 and actuarial certifications from the plan actuary, as re20 quired by the Secretary) that contains— 

21 ‘‘(1) the funded percentage (as defined in section 

22 432(j)(2)) as of the first day of such plan year, and 

23 the underlying actuarial value of assets (determined 

24 with regard, and without regard, to annuity contracts 

25 purchased and portfolios implemented with proceeds 


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1 of such loan) and liabilities (including any amounts 

2 due with respect to such loan) taken into account in 

3 determining such percentage, 

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

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

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

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

8 employers and employees during the plan year pre9 ceding such plan year, 

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

11 the plan year preceding such plan year, 

12 ‘‘(5) cash flow projections for such plan year and 

13 the 9 succeeding plan years, and the assumptions 

14 used in making such projections, 

15 ‘‘(6) funding standard account projections for 

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

17 the assumptions relied upon in making such projec18 tions, 

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

20 losses during the plan year preceding such plan year, 

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

22 active participants during the plan year preceding 

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


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

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

3 the resulting reduction in contributions, 

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

5 liability to the plan during the plan year preceding 

6 such plan year and, for each employer, a total assess7 ment of the withdrawal liability paid, the annual 

8 payment amount, and the number of years remaining 

9 in the payment schedule with respect to such with10 drawal liability, 

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

12 rates, or contribution rates during the plan year pre13 ceding such plan year, and whether such changes re14 late to the terms of the loan, 

15 ‘‘(12) details regarding any funding improve16 ment plan or rehabilitation plan and updates to such 

17 plan, 

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

19 plan year preceding such plan year who are active 

20 participants, the number of participants and bene21 ficiaries in pay status, and the number of terminated 

22 vested participants and beneficiaries, 

23 ‘‘(14) the amount of any financial assistance re24 ceived under section 4261 of the Employee Retirement 

25 Income Security Act of 1974 to pay benefits during 


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1 the preceding plan year, and the total amount of such 

2 financial assistance received for all preceding years, 

3 ‘‘(15) the information contained on the most re4 cent annual funding notice submitted by the plan 

5 under section 101(f) of the Employee Retirement In6 come Security Act of 1974, 

7 ‘‘(16) the information contained on the most re8 cent annual return under section 6058 and actuarial 

9 report under section 6059 of the plan, and 

10 ‘‘(17) copies of the plan document and amend11 ments, other retirement benefit or ancillary benefit 

12 plans relating to the plan and contribution obliga13 tions under such plans, a breakdown of administra14 tive expenses of the plan, participant census data and 

15 distribution of benefits, the most recent actuarial 

16 valuation report as of the plan year, copies of collec17 tive bargaining agreements, and financial reports, 

18 and such other information as the Secretary, in con19 sultation with the Director of the Pension Rehabilita20 tion Administration, may require. 

21 ‘‘(b) ELECTRONIC SUBMISSION.—The report required 

22 under subsection (a) shall be submitted electronically. 

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

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


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1 with the Secretary of Labor and the Director of the Pension 

2 Benefit Guaranty Corporation. 

3 ‘‘(d) REPORT TO PARTICIPANTS, BENEFICIARIES, AND

4 EMPLOYERS.—Each plan sponsor required to file a report 

5 under subsection (a) shall, before the expiration of the time 

6 prescribed for the filing of such report, also provide a sum7 mary (written in a manner so as to be understood by the 

8 average plan participant) of the information in such report 

9 to participants and beneficiaries in the plan and to each 

10 employer with an obligation to contribute to the plan.’’. 

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

12 Internal Revenue Code of 1986 is amended— 

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

14 plans receiving pension rehabilitation loans)’’ after 

15 ‘‘deferred compensation)’’; 

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

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

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

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

20 amount imposed under this subsection shall not be 

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

22 (c) CLERICAL AMENDMENT.—The table of sections for 

23 subpart E of part III of subchapter A of chapter 61 of the 

24 Internal Revenue Code of 1986 is amended by adding at 

25 the end the following new item: 

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


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1 SEC. 8. PBGC FINANCIAL ASSISTANCE. 

2 (a) IN GENERAL.—Section 4261 of the Employee Re3 tirement Income Security Act of 1974 (29 U.S.C. 1431) is 

4 amended by adding at the end the following new subsection: 

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

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

7 (within the meaning of section 305(b)(6)), or 

8 ‘‘(B) which is insolvent but has not been termi9 nated and is receiving assistance from the corporation 

10 (other than assistance under this subsection), 

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

12 Rehabilitation for Multiemployer Pensions Act may also 

13 apply to the corporation for financial assistance under this 

14 subsection, by jointly submitting such applications in ac15 cordance with section 4(d)(2) of such Act. The application 

16 for financial assistance under this subsection shall dem17 onstrate, based on projections by the plan actuary, that 

18 after the receipt of the anticipated loan amount under sec19 tion 4(a) of such Act, the plan will still become (or remain) 

20 insolvent within the 30-year period beginning on the date 

21 of the loan. 

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

23 (1)(A), the financial assistance provided pursuant to such 

24 application under this subsection shall be the amount (de25 termined by the plan actuary and submitted on the applica26 tion) equal to the sum of— 


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1 ‘‘(A) the percentage of benefits of participants 

2 and beneficiaries of the plan in pay status at the time 

3 of the application, and 

4 ‘‘(B) the percentage of future benefits to which 

5 participants who have separated from service but are 

6 not yet in pay status are entitled, 

7 which, if such percentage were paid by the corporation in 

8 combination with the loan, would allow the plan to avoid 

9 the projected insolvency and be projected to have increasing 

10 assets over any 5-year period following the repayment of 

11 the loan. Such amount shall not exceed the maximum guar12 anteed benefit with respect to all participants and bene13 ficiaries of the plan under sections 4022A and 4022B. For 

14 this purpose, the maximum guaranteed benefit amount 

15 shall be determined by disregarding any loan available 

16 from the Pension Rehabilitation Administration and shall 

17 be determined as if the plan were insolvent on the date of 

18 the application. Further, the present value of the maximum 

19 guaranteed benefit amount with respect to such partici20 pants and beneficiaries may be calculated in the aggregate, 

21 rather than by reference to the benefit of each such partici22 pant or beneficiary. 

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

24 (1)(B), the financial assistance provided pursuant to such 

25 application under this subsection shall be the amount (deVerDate Sep 11 2014 18:22 Jul 22, 2019 Jkt 089200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6203 E:\BILLS\H397.RH H397

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1 termined by the plan actuary and submitted on the applica2 tion) which, if such amount were paid by the corporation 

3 in combination with the loan and any other assistance 

4 being provided to the plan by the corporation at the time 

5 of the application, would enable the plan to emerge from 

6 insolvency. 

7 ‘‘(4) Subsections (b) and (c) shall apply to financial 

8 assistance under this subsection as if it were provided under 

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

10 subsection (b)(2) shall not require the financial assistance 

11 to be repaid before the date on which the loan under section 

12 4(a) of the Rehabilitation for Multiemployer Pensions Act 

13 is repaid in full. 

14 ‘‘(5) The corporation may forgo repayment of the fi15 nancial assistance provided under this subsection if nec16 essary to avoid any suspension of the accrued benefits of 

17 participants.’’. 

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

19 Director of the Pension Benefit Guaranty Corporation such 

20 sums as may be necessary for each fiscal year to provide 

21 the financial assistance described in section 4261(d) of the 

22 Employee Retirement Income Security Act of 1974 (29 

23 U.S.C. 1431(d)) (as added by this section) (including nec24 essary administrative and operating expenses relating to 

25 such assistance). 


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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 ‘‘Rehabilita5 tion for Multiemployer Pensions Act of 2019’’. 

6 SEC. 2. PENSION REHABILITATION ADMINISTRATION; ES7 TABLISHMENT; POWERS. 

8 (a) ESTABLISHMENT.—There is established 

9 in the Department of the Treasury an agency 

10 to be known as the ‘‘Pension Rehabilitation 

11 Administration’’. 

12 (b) DIRECTOR.— 

13 (1) ESTABLISHMENT OF POSITION.— 

14 There shall be at the head of the Pension 

15 Rehabilitation Administration a Director, 

16 who shall be appointed by the President. 

17 (2) TERM.— 

18 (A) IN GENERAL.—The term of of19 fice of the Director shall be 5 years. 

20 (B) SERVICE UNTIL APPOINTMENT OF

21 SUCCESSOR.—An individual serving as 

22 Director at the expiration of a term 

23 may continue to serve until a suc24 cessor is appointed. 

25 (3) POWERS.— 


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1 (A) APPOINTMENT OF DEPUTY DIREC2 TORS, OFFICERS, AND EMPLOYEES.—The 

3 Director may appoint Deputy Direc4 tors, officers, and employees, includ5 ing attorneys, in accordance with 

6 chapter 51 and subchapter III of 

7 chapter 53 of title 5, United States 

8 Code. 

9 (B) CONTRACTING.— 

10 (i) IN GENERAL.—The Director 

11 may contract for financial and ad12 ministrative services (including 

13 those related to budget and ac14 counting, financial reporting, per15 sonnel, and procurement) with 

16 the General Services Administra17 tion, or such other Federal agen18 cy as the Director determines ap19 propriate, for which payment 

20 shall be made in advance, or by 

21 reimbursement, from funds of the 

22 Pension Rehabilitation Adminis23 tration in such amounts as may 

24 be agreed upon by the Director 


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1 and the head of the Federal agen2 cy providing the services. 

3 (ii) SUBJECT TO APPROPRIA4 TIONS.—Contract authority under 

5 clause (i) shall be effective for 

6 any fiscal year only to the extent 

7 that appropriations are available 

8 for that purpose. 

9 (c) TRANSFER OF FUNDS.—The Secretary of 

10 the Treasury may transfer for any fiscal year, 

11 from unobligated amounts appropriated to 

12 the Department of the Treasury, to the Pen13 sion Rehabilitation Administration such sums 

14 as may be reasonably necessary for the ad15 ministrative and operating expenses of the 

16 Pension Rehabilitation Administration. 

17 SEC. 3. PENSION REHABILITATION TRUST FUND. 

18 (a) IN GENERAL.—Subchapter A of chapter 

19 98 of the Internal Revenue Code of 1986 is 

20 amended by adding at the end the following 

21 new section: 

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

23 ‘‘(a) CREATION OF TRUST FUND.—There is 

24 established in the Treasury of the United 

25 States a trust fund to be known as the ‘PenVerDate Sep 11 2014 18:22 Jul 22, 2019 Jkt 089200 PO 00000 Frm 00042 Fmt 6652 Sfmt 6202 E:\BILLS\H397.RH H397

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1 sion Rehabilitation Trust Fund’ (hereafter in 

2 this section referred to as the ‘Fund’), con3 sisting of such amounts as may be appro4 priated or credited to the Fund as provided 

5 in this section and section 9602(b). 

6 ‘‘(b) TRANSFERS TO FUND.— 

7 ‘‘(1) AMOUNTS ATTRIBUTABLE TO TREAS8 URY BONDS.—There shall be credited to 

9 the Fund the amounts transferred under 

10 section 6 of the Rehabilitation for Multi11 employer Pensions Act of 2019. 

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

13 ‘‘(A) IN GENERAL.—The Director of 

14 the Pension Rehabilitation Adminis15 tration established under section 2 of 

16 the Rehabilitation for Multiemployer 

17 Pensions Act of 2019 shall deposit in 

18 the Fund any amounts received from 

19 a plan as payment of interest or prin20 cipal on a loan under section 4 of 

21 such Act. 

22 ‘‘(B) INTEREST.—For purposes of 

23 subparagraph (A), the term ‘interest’ 

24 includes points and other similar 

25 amounts. 


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1 ‘‘(3) TRANSFERS FROM SECRETARY.—The 

2 Director of the Pension Rehabilitation 

3 Administration shall deposit in the Fund 

4 any amounts received from the Secretary 

5 under section 2(c) of such Act. 

6 ‘‘(4) AVAILABILITY OF FUNDS.—Amounts 

7 credited to or deposited in the Fund shall 

8 remain available until expended. 

9 ‘‘(c) EXPENDITURES FROM FUND.—Amounts 

10 in the Fund are available without further ap11 propriation to the Pension Rehabilitation Ad12 ministration— 

13 ‘‘(1) for the purpose of making the 

14 loans described in section 4 of the Reha15 bilitation for Multiemployer Pensions Act 

16 of 2019, 

17 ‘‘(2) for the payment of principal and 

18 interest on obligations issued under sec19 tion 6 of such Act, and 

20 ‘‘(3) for administrative and operating 

21 expenses of such Administration.’’. 

22 (b) CLERICAL AMENDMENT.—The table of 

23 sections for subchapter A of chapter 98 of the 

24 Internal Revenue Code of 1986 is amended by 

25 adding at the end the following new item: 

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


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1 SEC. 4. LOAN PROGRAM FOR MULTIEMPLOYER DEFINED 

2 BENEFIT PLANS. 

3 (a) LOAN AUTHORITY.— 

4 (1) IN GENERAL.—The Pension Reha5 bilitation Administration established 

6 under section 2 is authorized— 

7 (A) to make loans to multiem8 ployer plans (as defined in section 

9 414(f) of the Internal Revenue Code of 

10 1986) which are defined benefit plans 

11 (as defined in section 414(j) of such 

12 Code) and which— 

13 (i) are in critical and declin14 ing status (within the meaning of 

15 section 432(b)(6) of such Code and 

16 section 305(b)(6) of such Act) as of 

17 the date of the enactment of this 

18 Act, or with respect to which a 

19 suspension of benefits has been 

20 approved under section 432(e)(9) 

21 of such Code and section 305(e)(9) 

22 of such Act as of such date; 

23 (ii) as of such date of enact24 ment, are in critical status (with25 in the meaning of section 

26 432(b)(2) of such Code and section 


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1 305(b)(2) of such Act), have a 

2 funded percentage of less than 40 

3 percent (as determined for pur4 poses of section 432 of such Code 

5 and section 305 of such Act), and 

6 have a ratio of active to inactive 

7 participants which is less than 2 

8 to 3; or 

9 (iii) are insolvent for purposes 

10 of section 418E of such Code as of 

11 such date of enactment, if they 

12 became insolvent after December 

13 16, 2014, and have not been termi14 nated; and 

15 (B) subject to subsection (b), to 

16 establish appropriate terms for such 

17 loans. 

18 (2) CONSULTATION.—The Director of 

19 the Pension Rehabilitation Administra20 tion shall consult with the Secretary of 

21 the Treasury, the Secretary of Labor, and 

22 the Director of the Pension Benefit Guar23 anty Corporation before making any loan 

24 under paragraph (1), and shall share with 


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1 such persons the application and plan in2 formation with respect to each such loan. 

3 (3) ESTABLISHMENT OF LOAN PRO4 GRAM.— 

5 (A) IN GENERAL.—A program to 

6 make the loans authorized under this 

7 section shall be established not later 

8 than September 30, 2019, with guid9 ance regarding such program to be 

10 promulgated by the Director of the 

11 Pension Rehabilitation Administra12 tion, in consultation with the Pension 

13 Benefit Guaranty Corporation and 

14 the Department of Labor, not later 

15 than December 31, 2019. 

16 (B) LOANS AUTHORIZED BEFORE

17 PROGRAM DATE.—Without regard to 

18 whether the program under subpara19 graph (A) has been established, a plan 

20 may apply for a loan under this sec21 tion before either date described in 

22 such subparagraph, and the Pension 

23 Rehabilitation Administration shall 

24 approve the application and make the 

25 loan before establishment of the proVerDate Sep 11 2014 18:22 Jul 22, 2019 Jkt 089200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6202 E:\BILLS\H397.RH H397

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1 gram if necessary to avoid any sus2 pension of the accrued benefits of 

3 participants. 

4 (b) LOAN TERMS.— 

5 (1) IN GENERAL.—The terms of any 

6 loan made under subsection (a) shall 

7 state that— 

8 (A) the plan shall make payments 

9 of interest on the loan for a period of 

10 29 years beginning on the date of the 

11 loan (or 19 years in the case of a plan 

12 making the election under subsection 

13 (c)(5)); 

14 (B) final payment of interest and 

15 principal shall be due in the 30th 

16 year after the date of the loan (except 

17 as provided in an election under sub18 section (c)(5)); and 

19 (C) as a condition of the loan, the 

20 plan sponsor stipulates that— 

21 (i) except as provided in 

22 clause (ii), the plan will not in23 crease benefits, allow any em24 ployer participating in the plan to 

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1 cept any collective bargaining 

2 agreement which provides for re3 duced contribution rates, during 

4 the 30-year period described in 

5 subparagraphs (A) and (B); 

6 (ii) in the case of a plan with 

7 respect to which a suspension of 

8 benefits has been approved under 

9 section 432(e)(9) of the Internal 

10 Revenue Code of 1986 and section 

11 305(e)(9) of the Employee Retire12 ment Income Security Act of 1974, 

13 or under section 418E of such 

14 Code, before the loan, the plan 

15 will reinstate the suspended bene16 fits (or will not carry out any sus17 pension which has been approved 

18 but not yet implemented); 

19 (iii) the plan sponsor will 

20 comply with the requirements of 

21 section 6059A of the Internal Rev22 enue Code of 1986; 

23 (iv) the plan will continue to 

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1 ment Income Security Act of 1974; 

2 and 

3 (v) the plan and plan adminis4 trator will meet such other re5 quirements as the Director of the 

6 Pension Rehabilitation Adminis7 tration provides in the loan 

8 terms. 

9 The terms of the loan shall not make 

10 reference to whether the plan is re11 ceiving financial assistance under 

12 section 4261(d) of the Employee Re13 tirement Income Security Act of 1974 

14 (29 U.S.C. 1431(d)) or to any adjust15 ment of the loan amount under sub16 section (d)(2)(A)(ii). 

17 (2) INTEREST RATE.—Except as pro18 vided in the second sentence of this para19 graph and subsection (c)(5), loans made 

20 under subsection (a) shall have as low an 

21 interest rate as is feasible. Such rate 

22 shall be determined by the Pension Reha23 bilitation Administration and shall— 

24 (A) not be lower than the rate of 

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1 ties on the first day of the calendar 

2 year in which the loan is issued, and 

3 (B) not exceed the greater of— 

4 (i) a rate .2 percent higher 

5 than such rate of interest on such 

6 date, or 

7 (ii) the rate necessary to col8 lect revenues sufficient to admin9 ister the program under this sec10 tion. 

11 (c) LOAN APPLICATION.— 

12 (1) IN GENERAL.—In applying for a 

13 loan under subsection (a), the plan spon14 sor shall— 

15 (A) demonstrate that, except as 

16 provided in subparagraph (C)— 

17 (i) the loan will enable the 

18 plan to avoid insolvency for at 

19 least the 30-year period described 

20 in subparagraphs (A) and (B) of 

21 subsection (b)(1) or, in the case of 

22 a plan which is already insolvent, 

23 to emerge from insolvency within 

24 and avoid insolvency for the re25 mainder of such period; and 


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1 (ii) the plan is reasonably ex2 pected to be able to pay benefits 

3 and the interest on the loan dur4 ing such period and to accumu5 late sufficient funds to repay the 

6 principal when due; 

7 (B) provide the plan’s most re8 cently filed Form 5500 as of the date 

9 of application and any other informa10 tion necessary to determine the loan 

11 amount under subsection (d); 

12 (C) stipulate whether the plan is 

13 also applying for financial assistance 

14 under section 4261(d) of the Em15 ployee Retirement Income Security 

16 Act of 1974 (29 U.S.C. 1431(d)) in com17 bination with the loan to enable the 

18 plan to avoid insolvency and to pay 

19 benefits, or is already receiving such 

20 financial assistance as a result of a 

21 previous application; 

22 (D) state in what manner the loan 

23 proceeds will be invested pursuant to 

24 subsection (d), the person from whom 

25 any annuity contracts under such 


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1 subsection will be purchased, and the 

2 person who will be the investment 

3 manager for any portfolio imple4 mented under such subsection; and 

5 (E) include such other informa6 tion and certifications as the Director 

7 of the Pension Rehabilitation Admin8 istration shall require. 

9 (2) STANDARD FOR ACCEPTING ACTU10 ARIAL AND PLAN SPONSOR DETERMINATIONS

11 AND DEMONSTRATIONS IN THE APPLICA12 TION.—In evaluating the plan sponsor’s 

13 application, the Director of the Pension 

14 Rehabilitation Administration shall ac15 cept the determinations and demonstra16 tions in the application unless the Direc17 tor, in consultation with the Director of 

18 the Pension Benefit Guaranty Corpora19 tion and the Secretary of Labor, con20 cludes that the determinations and dem21 onstrations in the application are unrea22 sonable or are inconsistent with any 

23 rules issued by the Director pursuant to 

24 subsection (g). 


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1 (3) REQUIRED ACTIONS; DEEMED AP2 PROVAL.—The Director of the Pension Re3 habilitation Administration shall approve 

4 or deny any application under this sub5 section within 90 days after the submis6 sion of such application. An application 

7 shall be deemed approved unless, within 

8 such 90 days, the Director notifies the 

9 plan sponsor of the denial of such appli10 cation and the reasons for such denial. 

11 Any approval or denial of an application 

12 by the Director of the Pension Rehabilita13 tion Administration shall be treated as a 

14 final agency action for purposes of sec15 tion 704 of title 5, United States Code. 

16 The Pension Rehabilitation Administra17 tion shall make the loan pursuant to any 

18 application promptly after the approval 

19 of such application. 

20 (4) CERTAIN PLANS REQUIRED TO

21 APPLY.—The plan sponsor of any plan 

22 with respect to which a suspension of 

23 benefits has been approved under section 

24 432(e)(9) of the Internal Revenue Code of 

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1 ployee Retirement Income Security Act of 

2 1974 or under section 418E of such Code, 

3 before the date of the enactment of this 

4 Act shall apply for a loan under this sec5 tion. The Director of the Pension Reha6 bilitation Administration shall provide 

7 for such plan sponsors to use the sim8 plified application under subsection 

9 (d)(2)(B). 

10 (5) INCENTIVE FOR EARLY REPAYMENT.— 

11 The plan sponsor may elect at the time of 

12 the application to repay the loan prin13 cipal, along with the remaining interest, 

14 over the 10-year period beginning with 

15 the 21st year after the date of the loan. In 

16 the case of a plan making this election, 

17 the interest on the loan shall be reduced 

18 by 0.5 percent. 

19 (d) LOAN AMOUNT AND USE.— 

20 (1) AMOUNT OF LOAN.— 

21 (A) IN GENERAL.—Except as pro22 vided in subparagraphs (B) and (C) 

23 and paragraph (2), the amount of any 

24 loan under subsection (a) shall be, as 

25 demonstrated by the plan sponsor on 


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1 the application under subsection (c), 

2 the amount needed to purchase annu3 ity contracts or to implement a port4 folio described in paragraph (3)(C) 

5 (or a combination of the two) suffi6 cient to provide benefits of partici7 pants and beneficiaries of the plan in 

8 pay status, and terminated vested 

9 benefits, at the time the loan is made. 

10 (B) LIMITATION BASED ON ABILITY

11 TO REPAY.—If at the time of the appli12 cation under subsection (c) the plan 

13 sponsor determines that, based on a 

14 repayment schedule that would pro15 vide for repayment of the full amount 

16 determined under subparagraph (A) 

17 or (C)(ii) within the 30 year period 

18 described in subsection (b)(1), making 

19 payments would cause the plan to be 

20 within 18 months of becoming insol21 vent at any point during such period, 

22 the loan amount shall be such lesser 

23 amount as the plan sponsor deter24 mines the plan will be able to repay 


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1 without becoming within 18 months 

2 of insolvency. 

3 (C) PLANS WITH SUSPENDED BENE4 FITS.—In the case of a plan with re5 spect to which a suspended benefits 

6 has been approved under section 

7 432(e)(9) of the Internal Revenue 

8 Code of 1986 and section 305(e)(9) of 

9 the Employee Retirement Income Se10 curity Act of 1974 (29 U.S.C. 

11 1085(e)(9)) or under section 418E of 

12 such Code— 

13 (i) the suspension of benefits 

14 shall not be taken into account in 

15 applying subparagraph (A); and 

16 (ii) except as provided in sub17 paragraph (B), the loan amount 

18 shall be the amount sufficient to 

19 provide benefits of participants 

20 and beneficiaries of the plan in 

21 pay status and terminated vested 

22 benefits at the time the loan is 

23 made, determined without regard 

24 to the suspension, including ret25 roactive payment of benefits 


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1 which would otherwise have been 

2 payable during the period of the 

3 suspension. 

4 (2) COORDINATION WITH PBGC FINANCIAL

5 ASSISTANCE.— 

6 (A) IN GENERAL.—In the case of a 

7 plan which is also applying for finan8 cial assistance under section 4261(d) 

9 of the Employee Retirement Income 

10 Security Act of 1974 (29 U.S.C. 

11 1431(d))— 

12 (i) the plan sponsor shall sub13 mit the loan application and the 

14 application for financial assist15 ance jointly to the Pension Reha16 bilitation Administration and the 

17 Pension Benefit Guaranty Cor18 poration with the information 

19 necessary to determine the eligi20 bility for and amount of the loan 

21 under this section and the finan22 cial assistance under section 

23 4261(d) of such Act; and 

24 (ii) if such financial assistance 

25 is granted, the amount of the loan 


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1 under subsection (a) shall not ex2 ceed an amount equal to the ex3 cess of— 

4 (I) the amount determined 

5 under paragraph (1)(A) or 

6 (1)(C)(ii) (whichever is appli7 cable), without regard to 

8 paragraph (1)(B); over 

9 (II) the amount of such fi10 nancial assistance. 

11 (B) PLANS ALREADY RECEIVING PBGC

12 ASSISTANCE.—The Director of the Pen13 sion Rehabilitation Administration 

14 shall provide for a simplified applica15 tion for the loan under this section 

16 which may be used by an insolvent 

17 plan which has not been terminated 

18 and which is already receiving finan19 cial assistance (other than under sec20 tion 4261(d) of such Act) from the 

21 Pension Benefit Guaranty Corpora22 tion at the time of the application for 

23 the loan under this section. 

24 (3) USE OF LOAN FUNDS.— 


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1 (A) IN GENERAL.—The loan re2 ceived under subsection (a) shall be 

3 used to purchase annuity contracts 

4 which meet the requirements of sub5 paragraph (B) or to implement a port6 folio described in subparagraph (C) 

7 (or a combination of the two) to pro8 vide the benefits described in para9 graph (1). 

10 (B) ANNUITY CONTRACT REQUIRE11 MENTS.—The annuity contracts pur12 chased under subparagraph (A) shall 

13 be issued by an insurance company 

14 which is licensed to do business 

15 under the laws of any State and 

16 which is rated A or better by a na17 tionally recognized statistical rating 

18 organization, and the purchase of 

19 such contracts shall meet all applica20 ble fiduciary standards under the 

21 Employee Retirement Income Secu22 rity Act of 1974. 

23 (C) PORTFOLIO.— 


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1 (i) IN GENERAL.—A portfolio 

2 described in this subparagraph 

3 is— 

4 (I) a cash matching port5 folio or duration matching 

6 portfolio consisting of invest7 ment grade (as rated by a na8 tionally recognized statistical 

9 rating organization) fixed in10 come investments, including 

11 United States dollar-denomi12 nated public or private debt 

13 obligations issued or guaran14 teed by the United States or a 

15 foreign issuer, which are 

16 tradeable in United States 

17 currency and are issued at 

18 fixed or zero coupon rates; or 

19 (II) any other portfolio 

20 prescribed by the Secretary of 

21 the Treasury in regulations 

22 which has a similar risk pro23 file to the portfolios described 

24 in subclause (I) and is equally 

25 protective of the interests of 


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1 participants and bene2 ficiaries. 

3 Once implemented, such a port4 folio shall be maintained until all 

5 liabilities to participants and 

6 beneficiaries in pay status at the 

7 time of the loan are satisfied. 

8 (ii) FIDUCIARY DUTY.—Any in9 vestment manager of a portfolio 

10 under this subparagraph shall ac11 knowledge in writing that such 

12 person is a fiduciary under the 

13 Employee Retirement Income Se14 curity Act of 1974 with respect to 

15 the plan. 

16 (iii) TREATMENT OF PARTICI17 PANTS AND BENEFICIARIES.—Partici18 pants and beneficiaries covered 

19 by a portfolio under this subpara20 graph shall continue to be treated 

21 as participants and beneficiaries 

22 of the plan, including for pur23 poses of title IV of the Employee 

24 Retirement Income Security Act 

25 of 1974. 


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1 (D) ACCOUNTING.— 

2 (i) IN GENERAL.—Annuity con3 tracts purchased and portfolios 

4 implemented under this para5 graph shall be used solely to pro6 vide the benefits described in 

7 paragraph (1) until all such bene8 fits have been paid and shall be 

9 accounted for separately from the 

10 other assets of the plan. 

11 (ii) OVERSIGHT OF NON-ANNUITY

12 INVESTMENTS.— 

13 (I) IN GENERAL.—Any port14 folio implemented under this 

15 paragraph shall be subject to 

16 oversight by the Pension Re17 habilitation Administration, 

18 including a mandatory tri19 ennial review of the adequacy 

20 of the portfolio to provide the 

21 benefits described in para22 graph (1) and approval (to be 

23 provided within a reasonable 

24 period of time) of any deci25 sion by the plan sponsor to 


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1 change the investment man2 ager of the portfolio. 

3 (II) REMEDIAL ACTION.—If 

4 the triennial review under 

5 subclause (I) determines an 

6 inadequacy, the plan sponsor 

7 shall take remedial action to 

8 ensure that the inadequacy 

9 will be cured within 5 years of 

10 the review. 

11 (E) OMBUDSPERSON.—The Partici12 pant and Plan Sponsor Advocate es13 tablished under section 4004 of the 

14 Employee Retirement Income Secu15 rity Act of 1974 shall act as 

16 ombudsperson for participants and 

17 beneficiaries on behalf of whom an18 nuity contracts are purchased or who 

19 are covered by a portfolio under this 

20 paragraph. 

21 (e) COLLECTION OF REPAYMENT.—Except as 

22 provided in subsection (f), the Pension Reha23 bilitation Administration shall make every ef24 fort to collect repayment of loans under this 


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1 section in accordance with section 3711 of 

2 title 31, United States Code. 

3 (f) LOAN DEFAULT.—If a plan is unable to 

4 make any payment on a loan under this sec5 tion when due, the Pension Rehabilitation Ad6 ministration shall negotiate with the plan 

7 sponsor revised terms for repayment (includ8 ing installment payments over a reasonable 

9 period or forgiveness of a portion of the loan 

10 principal), but only to the extent necessary to 

11 avoid insolvency in the subsequent 18 

12 months. 

13 (g) AUTHORITY TO ISSUE RULES, ETC.—The 

14 Director of the Pension Rehabilitation Admin15 istration, in consultation with the Pension 

16 Benefit Guaranty Corporation and the De17 partment of Labor, is authorized to issue 

18 rules regarding the form, content, and proc19 ess of applications for loans under this sec20 tion, actuarial standards and assumptions to 

21 be used in making estimates and projections 

22 for purposes of such applications, and as23 sumptions regarding interest rates, mortality, 

24 and distributions with respect to a portfolio 

25 described in subsection (d)(3)(C). 


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1 (h) COORDINATION WITH TAXATION OF UNRE2 LATED BUSINESS INCOME.—Subparagraph (A) of 

3 section 514(c)(6) of the Internal Revenue Code 

4 of 1986 is amended— 

5 (1) by striking ‘‘or’’ at the end of 

6 clause (i); 

7 (2) by striking the period at the end 

8 of clause (ii)(II) and inserting ‘‘, or’’; and 

9 (3) by adding at the end the following 

10 new clause: 

11 ‘‘(iii) indebtedness with re12 spect to a multiemployer plan 

13 under a loan made by the Pension 

14 Rehabilitation Administration 

15 pursuant to section 4 of the Reha16 bilitation for Multiemployer Pen17 sions Act of 2019.’’. 

18 SEC. 5. COORDINATION WITH WITHDRAWAL LIABILITY AND 

19 FUNDING RULES. 

20 (a) AMENDMENT TO INTERNAL REVENUE

21 CODE OF 1986.—Section 432 of the Internal 

22 Revenue Code of 1986 is amended by adding 

23 at the end the following new subsection: 

24 ‘‘(k) SPECIAL RULES FOR PLANS RECEIVING

25 PENSION REHABILITATION LOANS.— 


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1 ‘‘(1) DETERMINATION OF WITHDRAWAL LI2 ABILITY.— 

3 ‘‘(A) IN GENERAL.—If any employer 

4 participating in a plan at the time the 

5 plan receives a loan under section 

6 4(a) of the Rehabilitation for Multi7 employer Pensions Act of 2019 with8 draws from the plan before the end of 

9 the 30-year period beginning on the 

10 date of the loan, the withdrawal li11 ability of such employer shall be de12 termined under the Employee Retire13 ment Income Security Act of 1974— 

14 ‘‘(i) by applying section 

15 4219(c)(1)(D) of the Employee Re16 tirement Income Security Act of 

17 1974 as if the plan were termi18 nating by the withdrawal of every 

19 employer from the plan, and 

20 ‘‘(ii) by determining the value 

21 of nonforfeitable benefits under 

22 the plan at the time of the 

23 deemed termination by using the 

24 interest assumptions prescribed 

25 for purposes of section 4044 of the 


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1 Employee Retirement Income Se2 curity Act of 1974, as prescribed 

3 in the regulations under section 

4 4281 of the Employee Retirement 

5 Income Security Act of 1974 in the 

6 case of such a mass withdrawal. 

7 ‘‘(B) ANNUITY CONTRACTS AND IN8 VESTMENT PORTFOLIOS PURCHASED WITH

9 LOAN FUNDS.—Annuity contracts pur10 chased and portfolios implemented 

11 under section 4(d)(3) of the Rehabili12 tation for Multiemployer Pensions 

13 Act of 2019 shall not be taken into ac14 count in determining the withdrawal 

15 liability of any employer under sub16 paragraph (A), but the amount equal 

17 to the greater of— 

18 ‘‘(i) the benefits provided 

19 under such contracts or portfolios 

20 to participants and beneficiaries, 

21 or 

22 ‘‘(ii) the remaining payments 

23 due on the loan under section 4(a) 

24 of such Act, 

25 shall be so taken into account. 


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1 ‘‘(2) COORDINATION WITH FUNDING RE2 QUIREMENTS.—In the case of a plan which 

3 receives a loan under section 4(a) of the 

4 Rehabilitation for Multiemployer Pen5 sions Act of 2019— 

6 ‘‘(A) annuity contracts purchased 

7 and portfolios implemented under 

8 section 4(d)(3) of such Act, and the 

9 benefits provided to participants and 

10 beneficiaries under such contracts or 

11 portfolios, shall not be taken into ac12 count in determining minimum re13 quired contributions under section 

14 412, 

15 ‘‘(B) payments on the interest and 

16 principal under the loan, and any 

17 benefits owed in excess of those pro18 vided under such contracts or port19 folios, shall be taken into account as 

20 liabilities for purposes of such sec21 tion, and 

22 ‘‘(C) if such a portfolio is pro23 jected due to unfavorable investment 

24 or actuarial experience to be unable 

25 to fully satisfy the liabilities which it 


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1 covers, the amount of the liabilities 

2 projected to be unsatisfied shall be 

3 taken into account as liabilities for 

4 purposes of such section.’’. 

5 (b) AMENDMENT TO EMPLOYEE RETIREMENT

6 INCOME SECURITY ACT OF 1974.—Section 305 of 

7 the Employee Retirement Income Security 

8 Act of 1974 (29 U.S.C. 1085) is amended by add9 ing at the end the following new subsection: 

10 ‘‘(k) SPECIAL RULES FOR PLANS RECEIVING

11 PENSION REHABILITATION LOANS.— 

12 ‘‘(1) DETERMINATION OF WITHDRAWAL LI13 ABILITY.— 

14 ‘‘(A) IN GENERAL.—If any employer 

15 participating in a plan at the time the 

16 plan receives a loan under section 

17 4(a) of the Rehabilitation for Multi18 employer Pensions Act of 2019 with19 draws from the plan before the end of 

20 the 30-year period beginning on the 

21 date of the loan, the withdrawal li22 ability of such employer shall be de23 termined— 

24 ‘‘(i) by applying section 

25 4219(c)(1)(D) as if the plan were 


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1 terminating by the withdrawal of 

2 every employer from the plan, 

3 and 

4 ‘‘(ii) by determining the value 

5 of nonforfeitable benefits under 

6 the plan at the time of the 

7 deemed termination by using the 

8 interest assumptions prescribed 

9 for purposes of section 4044, as 

10 prescribed in the regulations 

11 under section 4281 in the case of 

12 such a mass withdrawal. 

13 ‘‘(B) ANNUITY CONTRACTS AND IN14 VESTMENT PORTFOLIOS PURCHASED WITH

15 LOAN FUNDS.—Annuity contracts pur16 chased and portfolios implemented 

17 under section 4(d)(3) of the Rehabili18 tation for Multiemployer Pensions 

19 Act of 2019 shall not be taken into ac20 count in determining the withdrawal 

21 liability of any employer under sub22 paragraph (A), but the amount equal 

23 to the greater of— 

24 ‘‘(i) the benefits provided 

25 under such contracts or portfolios 


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1 to participants and beneficiaries, 

2 or 

3 ‘‘(ii) the remaining payments 

4 due on the loan under section 4(a) 

5 of such Act, 

6 shall be so taken into account. 

7 ‘‘(2) COORDINATION WITH FUNDING RE8 QUIREMENTS.—In the case of a plan which 

9 receives a loan under section 4(a) of the 

10 Rehabilitation for Multiemployer Pen11 sions Act of 2019— 

12 ‘‘(A) annuity contracts purchased 

13 and portfolios implemented under 

14 section 4(d)(3) of such Act, and the 

15 benefits provided to participants and 

16 beneficiaries under such contracts or 

17 portfolios, shall not be taken into ac18 count in determining minimum re19 quired contributions under section 

20 302, 

21 ‘‘(B) payments on the interest and 

22 principal under the loan, and any 

23 benefits owed in excess of those pro24 vided under such contracts or port25 folios, shall be taken into account as 


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1 liabilities for purposes of such sec2 tion, and 

3 ‘‘(C) if such a portfolio is pro4 jected due to unfavorable investment 

5 or actuarial experience to be unable 

6 to fully satisfy the liabilities which it 

7 covers, the amount of the liabilities 

8 projected to be unsatisfied shall be 

9 taken into account as liabilities for 

10 purposes of such section.’’. 

11 SEC. 6. ISSUANCE OF TREASURY BONDS. 

12 The Secretary of the Treasury (in con13 sultation with the Director of the Pension Re14 habilitation Administration established under 

15 section 2) shall from time to time transfer 

16 from the general fund of the Treasury to the 

17 Pension Rehabilitation Trust Fund estab18 lished under section 9512 of the Internal Rev19 enue Code of 1986 such amounts as are nec20 essary to fund the loan program under section 

21 4 of this Act, including from proceeds from 

22 the Secretary’s issuance of obligations under 

23 chapter 31 of title 31, United States Code. 


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1 SEC. 7. REPORTS OF PLANS RECEIVING PENSION REHA2 BILITATION LOANS. 

3 (a) IN GENERAL.—Subpart E of part III of 

4 subchapter A of chapter 61 of the Internal 

5 Revenue Code of 1986 is amended by adding 

6 at the end the following new section: 

7 ‘‘SEC. 6059A. REPORTS OF PLANS RECEIVING PENSION RE8 HABILITATION LOANS. 

9 ‘‘(a) IN GENERAL.—In the case of a plan re10 ceiving a loan under section 4(a) of the Reha11 bilitation for Multiemployer Pensions Act of 

12 2019, with respect to the first plan year begin13 ning after the date of the loan and each of the 

14 29 succeeding plan years, not later than the 

15 90th day of each such plan year the plan spon16 sor shall file with the Secretary a report (in17 cluding appropriate documentation and actu18 arial certifications from the plan actuary, as 

19 required by the Secretary) that contains— 

20 ‘‘(1) the funded percentage (as de21 fined in section 432(i)(2)) as of the first 

22 day of such plan year, and the underlying 

23 actuarial value of assets (determined 

24 with regard, and without regard, to annu25 ity contracts purchased and portfolios 

26 implemented with proceeds of such loan) 


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1 and liabilities (including any amounts 

2 due with respect to such loan) taken into 

3 account in determining such percentage, 

4 ‘‘(2) the market value of the assets of 

5 the plan (determined as provided in para6 graph (1)) as of the last day of the plan 

7 year preceding such plan year, 

8 ‘‘(3) the total value of all contribu9 tions made by employers and employees 

10 during the plan year preceding such plan 

11 year, 

12 ‘‘(4) the total value of all benefits paid 

13 during the plan year preceding such plan 

14 year, 

15 ‘‘(5) cash flow projections for such 

16 plan year and the 9 succeeding plan 

17 years, and the assumptions used in mak18 ing such projections, 

19 ‘‘(6) funding standard account projec20 tions for such plan year and the 9 suc21 ceeding plan years, and the assumptions 

22 relied upon in making such projections, 

23 ‘‘(7) the total value of all investment 

24 gains or losses during the plan year pre25 ceding such plan year, 


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1 ‘‘(8) any significant reduction in the 

2 number of active participants during the 

3 plan year preceding such plan year, and 

4 the reason for such reduction, 

5 ‘‘(9) a list of employers that withdrew 

6 from the plan in the plan year preceding 

7 such plan year, and the resulting reduc8 tion in contributions, 

9 ‘‘(10) a list of employers that paid 

10 withdrawal liability to the plan during 

11 the plan year preceding such plan year 

12 and, for each employer, a total assess13 ment of the withdrawal liability paid, the 

14 annual payment amount, and the number 

15 of years remaining in the payment sched16 ule with respect to such withdrawal li17 ability, 

18 ‘‘(11) any material changes to bene19 fits, accrual rates, or contribution rates 

20 during the plan year preceding such plan 

21 year, and whether such changes relate to 

22 the terms of the loan, 

23 ‘‘(12) details regarding any funding 

24 improvement plan or rehabilitation plan 

25 and updates to such plan, 


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1 ‘‘(13) the number of participants and 

2 beneficiaries during the plan year pre3 ceding such plan year who are active par4 ticipants, the number of participants and 

5 beneficiaries in pay status, and the num6 ber of terminated vested participants and 

7 beneficiaries, 

8 ‘‘(14) the amount of any financial as9 sistance received under section 4261 of 

10 the Employee Retirement Income Secu11 rity Act of 1974 to pay benefits during the 

12 preceding plan year, and the total 

13 amount of such financial assistance re14 ceived for all preceding years, 

15 ‘‘(15) the information contained on 

16 the most recent annual funding notice 

17 submitted by the plan under section 

18 101(f) of the Employee Retirement In19 come Security Act of 1974, 

20 ‘‘(16) the information contained on 

21 the most recent annual return under sec22 tion 6058 and actuarial report under sec23 tion 6059 of the plan, and 

24 ‘‘(17) copies of the plan document and 

25 amendments, other retirement benefit or 


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1 ancillary benefit plans relating to the 

2 plan and contribution obligations under 

3 such plans, a breakdown of administra4 tive expenses of the plan, participant cen5 sus data and distribution of benefits, the 

6 most recent actuarial valuation report as 

7 of the plan year, copies of collective bar8 gaining agreements, and financial re9 ports, and such other information as the 

10 Secretary, in consultation with the Direc11 tor of the Pension Rehabilitation Admin12 istration, may require. 

13 ‘‘(b) ELECTRONIC SUBMISSION.—The report 

14 required under subsection (a) shall be sub15 mitted electronically. 

16 ‘‘(c) INFORMATION SHARING.—The Secretary 

17 shall share the information in the report 

18 under subsection (a) with the Secretary of 

19 Labor and the Director of the Pension Benefit 

20 Guaranty Corporation. 

21 ‘‘(d) REPORT TO PARTICIPANTS, BENE22 FICIARIES, AND EMPLOYERS.—Each plan spon23 sor required to file a report under subsection 

24 (a) shall, before the expiration of the time pre25 scribed for the filing of such report, also proVerDate Sep 11 2014 18:22 Jul 22, 2019 Jkt 089200 PO 00000 Frm 00078 Fmt 6652 Sfmt 6202 E:\BILLS\H397.RH H397

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1 vide a summary (written in a manner so as to 

2 be understood by the average plan partici3 pant) of the information in such report to par4 ticipants and beneficiaries in the plan and to 

5 each employer with an obligation to con6 tribute to the plan.’’. 

7 (b) PENALTY.—Subsection (e) of section 

8 6652 of the Internal Revenue Code of 1986 is 

9 amended— 

10 (1) by inserting ‘‘, 6059A (relating to 

11 reports of plans receiving pension reha12 bilitation loans)’’ after ‘‘deferred com13 pensation)’’; 

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

15 failures under section 6059A)’’ after ‘‘$25’’; 

16 and 

17 (3) by adding at the end the fol18 lowing: ‘‘In the case of a failure with re19 spect to section 6059A, the amount im20 posed under this subsection shall not be 

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

22 (c) CLERICAL AMENDMENT.—The table of 

23 sections for subpart E of part III of sub24 chapter A of chapter 61 of the Internal RevVerDate Sep 11 2014 18:22 Jul 22, 2019 Jkt 089200 PO 00000 Frm 00079 Fmt 6652 Sfmt 6202 E:\BILLS\H397.RH H397

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1 enue Code of 1986 is amended by adding at 

2 the end the following new item: 

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

loans.’’. 

3 SEC. 8. PBGC FINANCIAL ASSISTANCE. 

4 (a) IN GENERAL.—Section 4261 of the Em5 ployee Retirement Income Security Act of 

6 1974 (29 U.S.C. 1431) is amended by adding at 

7 the end the following new subsection: 

8 ‘‘(d)(1) The plan sponsor of a multiem9 ployer plan— 

10 ‘‘(A) which is in critical and declining 

11 status (within the meaning of section 

12 305(b)(6)) as of the date of the enactment 

13 of this subsection, or with respect to 

14 which a suspension of benefits has been 

15 approved under section 305(e)(9) as of 

16 such date; 

17 ‘‘(B) which, as of such date of enact18 ment, is in critical status (within the 

19 meaning of section 305(b)(2)), has a fund20 ed percentage of less than 40 percent (as 

21 determined for purposes of section 305), 

22 and has a ratio of active to inactive par23 ticipants which is less than 2 to 3; or 


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1 ‘‘(C) which is insolvent for purposes 

2 of section 418E of the Internal Revenue 

3 Code of 1986 as of such date of enact4 ment, if the plan became insolvent after 

5 December 16, 2014, and has not been ter6 minated; 

7 and which is applying for a loan under sec8 tion 4(a) of the Rehabilitation for Multiem9 ployer Pensions Act of 2019 may also apply to 

10 the corporation for financial assistance under 

11 this subsection, by jointly submitting such ap12 plications in accordance with section 4(d)(2) 

13 of such Act. The application for financial as14 sistance under this subsection shall dem15 onstrate, based on projections by the plan ac16 tuary, that after the receipt of the anticipated 

17 loan amount under section 4(a) of such Act, 

18 the plan will still become (or remain) insol19 vent within the 30-year period beginning on 

20 the date of the loan. 

21 ‘‘(2) In reviewing an application under 

22 paragraph (1), the corporation shall review 

23 the demonstrations and assumptions sub24 mitted with the loan application under sec25 tion 4(c) of the Rehabilitation for MultiemVerDate Sep 11 2014 18:22 Jul 22, 2019 Jkt 089200 PO 00000 Frm 00081 Fmt 6652 Sfmt 6202 E:\BILLS\H397.RH H397

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1 ployer Pensions Act of 2019 and provide guid2 ance regarding such assumptions prior to ap3 proving any application for financial assist4 ance under this subsection. The corporation 

5 may deny any application if the assumptions 

6 and determinations are unreasonable, or in7 consistent with rules issued by the corpora8 tion, and the plan and the corporation are un9 able to reach agreement on such assumptions 

10 and determinations. 

11 ‘‘(3) In the case of a plan described in 

12 paragraph (1)(A) or (1)(B), the financial assist13 ance provided pursuant to such application 

14 under this subsection shall be the amount (de15 termined by the plan actuary and submitted 

16 on the application) equal to the sum of— 

17 ‘‘(A) the percentage of benefits of par18 ticipants and beneficiaries of the plan in 

19 pay status at the time of the application, 

20 and 

21 ‘‘(B) the percentage of future benefits 

22 to which participants who have sepa23 rated from service but are not yet in pay 

24 status are entitled, 


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1 which, if such percentage were paid by the 

2 corporation in combination with the loan, 

3 would allow the plan to avoid projected insol4 vency. Such amount shall not exceed the max5 imum guaranteed benefit with respect to all 

6 participants and beneficiaries of the plan 

7 under sections 4022A and 4022B. For this pur8 pose, the maximum guaranteed benefit 

9 amount shall be determined by disregarding 

10 any loan available from the Pension Rehabili11 tation Administration and shall be deter12 mined as if the plan were insolvent on the 

13 date of the application. Further, the present 

14 value of the maximum guaranteed benefit 

15 amount with respect to such participants and 

16 beneficiaries may be calculated in the aggre17 gate, rather than by reference to the benefit 

18 of each such participant or beneficiary. 

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

20 paragraph (1)(C), the financial assistance pro21 vided pursuant to such application under this 

22 subsection shall be the amount (determined 

23 by the plan actuary and submitted on the ap24 plication) which, if such amount were paid by 

25 the corporation in combination with the loan 


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1 and any other assistance being provided to 

2 the plan by the corporation at the time of the 

3 application, would enable the plan to emerge 

4 from the projected insolvency. 

5 ‘‘(5)(A) Except as provided in subpara6 graph (B), the corporation shall provide the 

7 financial assistance under this subsection 

8 only in such amounts as the corporation de9 termines, at the time of approval and at the 

10 beginning of each plan year beginning there11 after during the period of assistance, are nec12 essary for the plan to avoid insolvency during 

13 the 5 plan year period beginning with the cur14 rent plan year. 

15 ‘‘(B) In the case of a plan described in 

16 paragraph (1)(C), the financial assistance 

17 under this subsection shall be provided in a 

18 lump sum if deemed necessary by the cor19 poration, and in no case later than December 

20 31, 2020. 

21 ‘‘(6) Subsections (b) and (c) shall apply to 

22 financial assistance under this subsection as 

23 if it were provided under subsection (a), ex24 cept that the terms for repayment under sub25 section (b)(2) shall not require the financial 


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1 assistance to be repaid before the date on 

2 which the loan under section 4(a) of the Reha3 bilitation for Multiemployer Pensions Act of 

4 2019 is repaid in full. 

5 ‘‘(7) The corporation may forgo repayment 

6 of the financial assistance provided under 

7 this subsection if necessary to avoid any sus8 pension of the accrued benefits of partici9 pants.’’. 

10 (b) APPROPRIATIONS.—There is appro11 priated to the Director of the Pension Benefit 

12 Guaranty Corporation such sums as may be 

13 necessary for each fiscal year to provide the 

14 financial assistance described in section 

15 4261(d) of the Employee Retirement Income 

16 Security Act of 1974 (29 U.S.C. 1431(d)) (as 

17 added by this section) (including necessary 

18 administrative and operating expenses relat19 ing to such assistance). 


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Union Calendar No. 123 

116TH CONGRESS 

1ST SESSION H. R. 397 

[Report No. 116–159, Parts I and II] 

A BILL 

To amend the Internal Revenue Code of 1986 to 

for other purposes. loans to multiemployer defined benefit plans, and within the Department of the Treasury to make establish a Pension Rehabilitation Administration create a Pension Rehabilitation Trust Fund, to 

JULY 19, 2019 

Reported from the Committee on Education and Labor 

with an amendment 

JULY 19, 2019 

The Committee on Appropriations discharged; committed 

the Union and ordered to be printed to the Committee of the Whole House on the State of 


pamtmann on DSKBFK8HB2PROD with BILLS