II 

111TH CONGRESS 

2D SESSION S. 3006 

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

Internal Revenue Code of 1986 to allow multiemployer plans to amortize 

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

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 9 (legislative day, FEBRUARY 8), 2010 

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

to the Committee on Finance 

A BILL 

To amend the Employee Retirement Income Security Act 

of 1974 and the Internal Revenue Code of 1986 to 

allow multiemployer plans to amortize losses from certain 

fraudulent investment schemes over a 40-year period. 

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

3 SECTION 1. AMORTIZATION OF LOSSES FROM QUALIFIED 

4 FRAUDULENT INVESTMENT SCHEMES. 

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

6 Employee Retirement Income Security Act of 1974 is 

7 amended by adding at the end the following new para8 graph: 


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1 ‘‘(8) AMORTIZATION OF LOSSES FROM QUALI2 FIED FRAUDULENT INVESTMENT SCHEMES.— 

3 ‘‘(A) PLAN SPONSOR ELECTION.—Notwith4 standing any other provision of this subsection, 

5 the plan sponsor of a multiemployer plan may 

6 elect to charge the total amount of the net in7 vestment losses (if any) which are incurred in 

8 either or both of the first two plan years ending 

9 after August 31, 2008, and which are attrib10 utable to losses from qualified fraudulent in11 vestment schemes as an item separate from 

12 other experience losses, to be amortized in equal 

13 annual installments (until fully amortized) over 

14 a period of 40 plan years. 

15 ‘‘(B) LOSSES FROM QUALIFIED FRAUDU16 LENT INVESTMENT SCHEMES.—For purposes of 

17 this paragraph, the determination as to whether 

18 losses are from qualified fraudulent investment 

19 schemes shall be determined under rules pre20 scribed by the Secretary that are substantially 

21 similar to the rules prescribed by the Secretary 

22 for purposes of determining whether a loss from 

23 such an arrangement is a theft loss for pur24 poses of section 165 of the Internal Revenue 

25 Code of 1986.’’. 


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1 (b) AMENDMENT TO INTERNAL REVENUE CODE OF

2 1986.—Section 431(b) of the Internal Revenue Code of 

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

4 paragraph: 

5 ‘‘(8) AMORTIZATION OF LOSSES FROM QUALI6 FIED FRAUDULENT INVESTMENT SCHEMES.— 

7 ‘‘(A) PLAN SPONSOR ELECTION.—Notwith8 standing any other provision of this subsection, 

9 the plan sponsor of a multiemployer plan may 

10 elect to charge the total amount of the net in11 vestment losses (if any) which are incurred in 

12 either or both of the first two plan years ending 

13 after August 31, 2008, and which are attrib14 utable to losses from qualified fraudulent in15 vestment schemes as an item separate from 

16 other experience losses, to be amortized in equal 

17 annual installments (until fully amortized) over 

18 a period of 40 plan years. 

19 ‘‘(B) LOSSES FROM QUALIFIED FRAUDU20 LENT INVESTMENT SCHEMES.—For purposes of 

21 this paragraph, the determination as to whether 

22 losses are from qualified fraudulent investment 

23 schemes shall be determined under rules pre24 scribed by the Secretary that are substantially 

25 similar to the rules prescribed by the Secretary 


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•S 3006 IS

1 for purposes of determining whether a loss from 

2 such an arrangement is a theft loss for pur3 poses of section 165 of the Internal Revenue 

4 Code of 1986.’’. 

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

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

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

8 any election a plan makes pursuant to this section that 

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

10 plan year beginning after August 31, 2008, shall be dis11 regarded for purposes of applying the provisions of section 

12 305 of the Employee Retirement Income Security Act of 

13 1974 and section 432 of the Internal Revenue Code of 

14 1986 to such plan year. 

Æ 


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