I 

108TH CONGRESS 

2D SESSION H. R. 5292

To amend title I of the Employee Retirement Income Security Act of 1974 

and the Internal Revenue Code of 1986 to limit the availability of 

benefits under an employer’s nonqualified deferred compensation plans 

in the event that any of the employer’s defined pension plans are subjected to a distress or PBGC termination in connection with bankruptcy 

reorganization or a conversion to a cash balance plan. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 8, 2004

Mr. GEORGE MILLER of California (for himself, Mr. HOEFFEL, Mr. PAYNE, 

Mr. GRIJALVA, Mr. OWENS, Mrs. MCCARTHY of New York, Mr. 

DOGGETT, Mr. BISHOP of New York, Mr. DAVIS of Illinois, Mr. VAN

HOLLEN, Mr. ANDREWS, Mr. KUCINICH, and Mr. TIERNEY) introduced 

the following bill; which was referred to the Committee on Education and 

the Workforce, and in addition to the Committee on Ways and Means, 

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 

A BILL

To amend title I of the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 

1986 to limit the availability of benefits under an employer’s nonqualified deferred compensation plans in the 

event that any of the employer’s defined pension plans 

are subjected to a distress or PBGC termination in connection with bankruptcy reorganization or a conversion 

to a cash balance plan.
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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 ‘‘Pension Fairness Act 

5 of 2004’’. 

6 SEC. 1. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—The Congress finds as follows: 

8 (1) The pension system sponsored by private 

9 employers is in a weakened state due to economic re10 cession and heightened global competition. 

11 (2) Employers increasingly are terminating or 

12 reducing the benefits provided under traditional de13 fined benefit pension plans. 

14 (3) Over 44,000,000 workers, retirees, and 

15 their families depend on defined benefit pension 

16 plans as a critical component of their retirement se17 curity in addition to Social Security. 

18 (4) Defined benefit pension plans are currently 

19 estimated to be underfunded up to a total of 

20 $400,000,000,000, and the Pension Benefit Guar21 anty Corporation, the agency that insures traditional 

22 pensions, had a 2003 deficit of over 

23 $10,000,000,000. 

24 (5) The Congress in enacting the Employee Re25 tirement Income Security Act of 1974 intended em-
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1 ployers to adequately fund their pension plans and 

2 did not intend for the Pension Benefit Guaranty 

3 Corporation to be used as a means for restructuring 

4 companies to escape their unfunded pension liabil5 ities. 

6 (6) Cash balance pension plans were created to 

7 reduce traditional defined benefit pension obligations 

8 without statutory authorization, and adequate stand9 ards do not exist to adequately protect the pensions 

10 of pension plan participants, particularly older par11 ticipants. 

12 (7) Corporate executives often preserve or en13 hance executive pension and other employee benefits 

14 at the same time the benefits of non-highly paid em15 ployees are reduced. 

16 (b) PURPOSE.—It is the purpose of this Act to better 

17 protect the retirement benefits afforded to workers and 

18 retirees by protecting the solvency of the Pension Benefit 

19 Guaranty Corporation and ensuring equitable treatment 

20 of corporate executives as compared to treatment provided 

21 to other employees when restructuring employers shift un22 funded pension liabilities onto the Pension Benefit Guar23 anty Corporation or convert to cash balance pension plans 

24 without adequately protecting the retirement security of 

25 older workers. 
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1 SEC. 2. TERMINATION FAIRNESS STANDARD FOR NON2 QUALIFIED DEFERRED COMPENSATION 

3 PLANS IN CONNECTION WITH A PENSION 

4 PLAN TERMINATION BASED ON BANKRUPTCY 

5 REORGANIZATION OR IN CONNECTION WITH 

6 A CONVERSION OF A PLAN TO A CASH BAL7 ANCE PLAN. 

8 Section 206 of the Employee Retirement Income Se9 curity Act of 1974 (29 U.S.C. 1056) is amended by adding 

10 at the end the following new subsection: 

11 ‘‘(g) TERMINATION FAIRNESS STANDARD FOR NON12 QUALIFIED DEFERRED COMPENSATION PLANS IN CON13 NECTION WITH A PENSION PLAN TERMINATION BASED

14 ON BANKRUPTCY REORGANIZATION OR IN CONNECTION

15 WITH A CONVERSION OF A PENSION PLAN TO A CASH

16 BALANCE PLAN.—

17 ‘‘(1) IN GENERAL.—In any case in which a cor18 poration is a plan sponsor of a defined benefit plan 

19 with respect to which a plan amendment is adopted 

20 that has the effect of—

21 ‘‘(A) implementing a distress termination 

22 of the plan under section 4041(c) based on 

23 bankruptcy reorganization or a termination of 

24 the plan initiated by the Pension Benefit Guar25 anty Corporation under section 4042 based on 

26 bankruptcy reorganization, in any case in which 
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1 the plan is not sufficient for guaranteed bene2 fits (within the meaning of section 4041(d)(2)) 

3 as of the proposed termination date, or 

4 ‘‘(B) converting such plan to a cash bal5 ance plan, in any case in which the amend6 ment—

7 ‘‘(i) results in a significant reduction 

8 in the rate of future benefit accruals (with9 in the meaning of section 204(h)(1)) of 

10 participants with at least 10 years of serv11 ice under the plan, or 

12 ‘‘(ii) does not provide for an election 

13 by affected participants with at least 10 

14 years of service under the plan (and their 

15 beneficiaries) to retain coverage under the 

16 terms of the plan as in effect immediately 

17 prior to the amendment, 

18 any covered deferred compensation plan established 

19 or maintained by such plan sponsor after the date 

20 of the adoption of such plan amendment shall meet 

21 the termination fairness standard of this subsection 

22 with respect to such plan amendment. 

23 ‘‘(2) TERMINATION FAIRNESS STANDARD.—A 

24 covered deferred compensation plan established or 

25 maintained by a plan sponsor described in para-
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1 graph (1) meets the termination fairness standard of 

2 this subsection with respect to a plan amendment 

3 described in paragraph (1) if, during the 5-year pe4 riod beginning on the date of the adoption of such 

5 plan amendment—

6 ‘‘(A) no amount of deferred compensation 

7 accrues to a disqualified individual under the 

8 terms of such covered deferred compensation 

9 plan (irrespective of whether the accrual in de10 ferred compensation is expressed in the form of 

11 a promise, a guarantee, or any other represen12 tation), and 

13 ‘‘(B) in the case of a covered deferred com14 pensation plan established during or after the 

15 1-year period preceding the notice date (or any 

16 amendment to a covered deferred compensation 

17 plan if such amendment is adopted during or 

18 after such 1-year period), no distribution of ac19 crued deferred compensation is made under 

20 such plan (or such amendment) to a disquali21 fied individual. 

22 ‘‘(3) DEFINITIONS.—For purposes of this sub23 section—

24 ‘‘(A) CASH BALANCE PLAN.—
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1 ‘‘(i) IN GENERAL.—The term ‘cash 

2 balance plan’ means a defined benefit plan 

3 under which the accrued benefit is ex4 pressed to participants and beneficiaries as 

5 an amount other than an annual benefit 

6 commencing at normal retirement age. 

7 ‘‘(ii) REGULATIONS TO INCLUDE SIMI8 LAR OR OTHER HYBRID PLANS.—The Sec9 retary shall issue regulations which provide 

10 that a defined benefit plan (or any portion 

11 of such a plan) which has an effect similar 

12 to a plan described in clause (i) shall be 

13 treated as a cash balance plan. Such regu14 lations may provide that if a plan sponsor 

15 represents in communications to partici16 pants and beneficiaries that a plan amend17 ment results in a plan being described in 

18 the preceding sentence, such plan shall be 

19 treated as a cash balance plan. 

20 ‘‘(B) NOTICE DATE.—The term ‘notice 

21 date’ means, with respect to an amendment de22 scribed in paragraph (1)—

23 ‘‘(i) in the case of a distress termi24 nation under section 4041(d), the date of 
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1 the advance notice of intent to terminate 

2 provided pursuant to section 4041(a)(2), 

3 ‘‘(ii) in the case of a termination initi4 ated by the Pension Benefit Guaranty Cor5 poration under section 4042, the date of 

6 the application to the court under section 

7 4042(c), and 

8 ‘‘(iii) in the case of a conversion to a 

9 cash balance plan, the date of the adoption 

10 of the amendment. 

11 ‘‘(C) COVERED DEFERRED COMPENSATION

12 PLAN.—

13 ‘‘(i) IN GENERAL.—The term ‘covered 

14 deferred compensation plan’ means any 

15 plan providing for the deferral of com16 pensation of a disqualified individual, 

17 whether or not—

18 ‘‘(I) compensation of the dis19 qualified individual which is deferred 

20 under such plan is subject to substan21 tial risk of forfeiture, 

22 ‘‘(II) the disqualified individual’s 

23 rights to the compensation deferred 

24 under the plan are no greater than 
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1 the rights of a general creditor of the 

2 plan sponsor, 

3 ‘‘(III) all amounts set aside (di4 rectly or indirectly) for purposes of 

5 paying the deferred compensation (in6 cluding income), and all income at7 tributable to such amounts, remain 

8 (until made available to the disquali9 fied individual or other beneficiary) 

10 solely the property of the plan sponsor 

11 (without being restricted to the provi12 sion of benefits under the plan), 

13 ‘‘(IV) the amounts referred to in 

14 subclause (III) are available to satisfy 

15 the claims of the plan sponsor’s gen16 eral creditors at all times (not merely 

17 after bankruptcy or insolvency), and 

18 ‘‘(V) some or all of the com19 pensation of the disqualified individual 

20 which is deferred under such plan is 

21 guaranteed by an insurance company, 

22 insurance service, or other similar or23 ganization. 
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1 ‘‘(ii) EXCEPTION FOR QUALIFIED

2 PLANS.—Such term shall not include a 

3 plan that is—

4 ‘‘(I) described in section 

5 219(g)(5)(A) of the Internal Revenue 

6 Code of 1986, or 

7 ‘‘(II) an eligible deferred com8 pensation plan (as defined in section 

9 457(b) of such Code) of an eligible 

10 employer described in section 

11 457(e)(1)(A) of such Code. 

12 ‘‘(iii) PLAN INCLUDES ARRANGE13 MENTS, ETC.—For purposes of this sub14 paragraph, the term ‘plan’ includes any 

15 agreement or arrangement. 

16 ‘‘(D) DISQUALIFIED INDIVIDUAL.—The 

17 term ‘disqualified individual’ means a director 

18 or executive officer of the plan sponsor. 

19 ‘‘(E) TERMINATION BASED ON BANK20 RUPTCY REORGANIZATION.—A termination of a 

21 plan which is a distress termination under sec22 tion 4041(c) or a termination instituted by the 

23 Pension Benefit Guaranty Corporation under 

24 section 4042 is ‘based on bankruptcy reorga25 nization’ if such termination is based in whole 
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1 or in part on the filing, by or against any per2 son who is a contributing sponsor of such plan 

3 or a member of such sponsor’s controlled group, 

4 of a petition seeking reorganization in a case 

5 under title 11, United States Code, or under 

6 any similar law of a State or political subdivi7 sion of a State (or such a case in which liquida8 tion is sought has been converted to a case in 

9 which reorganization is sought). 

10 ‘‘(F) TITLE IV TERMINOLOGY.—Any term 

11 used in this subsection which is defined in sec12 tion 4001(a) shall have the meaning provided 

13 such term in section 4001(a). 

14 ‘‘(4) SPECIAL RULES.—

15 ‘‘(A) COORDINATED BENEFITS.—If the 

16 benefits of 2 or more defined benefit plans es17 tablished or maintained by an employer are co18 ordinated in such a manner as to have the ef19 fect of the adoption of an amendment described 

20 in paragraph (1), the sponsor of the defined 

21 benefit plan or plans providing for such coordi22 nation shall be treated as having adopted such 

23 a plan amendment as of the date such coordina24 tion begins. 
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1 ‘‘(B) MULTIPLE AMENDMENTS.—The Sec2 retary shall issue regulations to prevent the 

3 avoidance of the purposes of this subsection 

4 through the use of 2 or more plan amendments 

5 rather than a single amendment. 

6 ‘‘(C) CONTROLLED GROUPS, ETC.—For 

7 purposes of this subsection, all persons treated 

8 as a single employer under subsection (b), (c), 

9 (m), or (o) of section 414 of the Internal Rev10 enue Code of 1986 shall be treated as 1 em11 ployer. 

12 ‘‘(D) TREATMENT OF EARNINGS.—Ref13 erences to deferred compensation shall be treat14 ed as including references to income attrib15 utable to such compensation or such income. 

16 ‘‘(5) COORDINATION.—The Secretary and the 

17 Secretary of the Treasury shall ensure, through the 

18 execution of an interagency memorandum of under19 standing among such Secretaries, that regulations, 

20 rulings, and interpretations issued by such Secre21 taries relating to the same matter over which both 

22 such Secretaries have responsibility under this sub23 section and section 4980H of the Internal Revenue 

24 Code of 1986 are administered so as to have the 

25 same effect at all times. 
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1 ‘‘(6) EFFECT OF WAIVER GRANTED BY SEC2 RETARY OF THE TREASURY.—To the extent that any 

3 requirement of the termination fairness standard of 

4 section 4980H(b) of the Internal Revenue Code of 

5 1986 is waived by the Secretary of the Treasury 

6 with respect to any disqualified individual under sec7 tion 4980H(h) of such Code in the case of any plan 

8 amendment having the effect of a termination de9 scribed in paragraph (1)(A) of this subsection, such 

10 requirement under the termination fairness standard 

11 of paragraph (2) of this subsection shall not apply 

12 with respect to such individual in the case of such 

13 plan amendment.’’. 

14 SEC. 3. EXCISE TAX ON FUNDING NONQUALIFIED DE15 FERRED COMPENSATION PLANS IN THE 

16 EVENT OF A PENSION PLAN TERMINATION 

17 BASED ON BANKRUPTCY REORGANIZATION 

18 OR A CONVERSION OF A PENSION PLAN TO A 

19 CASH BALANCE PLAN. 

20 (a) IN GENERAL.—Chapter 43 of the Internal Rev21 enue Code of 1986 (relating to qualified pension, etc., 

22 plans) is amended by adding at the end the following new 

23 section: 
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1 ‘‘SEC. 4980H. FUNDING NONQUALIFIED DEFERRED COM2 PENSATION PLANS IN THE EVENT OF A PEN3 SION PLAN TERMINATION BASED ON BANK4 RUPTCY REORGANIZATION OR A CONVER5 SION OF A PENSION PLAN TO A CASH BAL6 ANCE PLAN. 

7 ‘‘(a) IMPOSITION OF TAX.—In any case in which a 

8 corporation is a plan sponsor of a defined benefit plan with 

9 respect to which an plan amendment is adopted that has 

10 the effect of—

11 ‘‘(1) implementing a distress termination of the 

12 plan under section 4041(c) of the Employee Retire13 ment Income Security Act of 1974 based on bank14 ruptcy reorganization or a termination of the plan 

15 initiated by the Pension Benefit Guaranty Corpora16 tion under section 4042 of such Act based on bank17 ruptcy reorganization, in any case in which the plan 

18 is not sufficient for guaranteed benefits (within the 

19 meaning of section 4041(d)(2) of such Act) as of the 

20 proposed termination date, or 

21 ‘‘(2) converting such plan to a cash balance 

22 plan, in any case in which the amendment—

23 ‘‘(A) results in a significant reduction in 

24 the rate of future benefit accruals (within the 

25 meaning of section 4980F(e)(1)) of participants 
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1 with at least 10 years of service under the plan, 

2 or 

3 ‘‘(B) does not provide for an election by af4 fected participants with at least 10 years of 

5 service under the plan (and their beneficiaries) 

6 to retain coverage under the terms of the plan 

7 as in effect immediately prior to the amend8 ment, 

9 there is hereby imposed a tax on any failure to meet the 

10 termination fairness standard of subsection (b) with re11 spect to such plan amendment. 

12 ‘‘(b) TERMINATION FAIRNESS STANDARD.—A cov13 ered deferred compensation plan established or maintained 

14 by a plan sponsor described in subsection (a) meets the 

15 termination fairness standard of this subsection with re16 spect to a plan amendment described in subsection (a) if, 

17 during the 5-year period beginning on the date of the 

18 adoption of such plan amendment—

19 ‘‘(1) no amount of deferred compensation ac20 crues to a disqualified individual under the terms of 

21 such covered deferred compensation plan (irrespec22 tive of whether the accrual in deferred compensation 

23 is expressed in the form of a promise, a guarantee, 

24 or any other representation), and 
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1 ‘‘(2) in the case of a covered deferred com2 pensation plan established during or after the 1-year 

3 period preceding the notice date (or any amendment 

4 to a covered deferred compensation plan if such 

5 amendment is adopted during or after such 1-year 

6 period), no distribution of accrued deferred com7 pensation is made under such plan (or such amend8 ment) to a disqualified individual. 

9 ‘‘(c) AMOUNT OF TAX.—The amount of the tax im10 posed by subsection (a) shall be equal to the amount of 

11 the accrual described in subsection (b)(1) comprising the 

12 failure or the distribution described in subsection (b)(2) 

13 comprising the failure. 

14 ‘‘(d) LIABILITY FOR TAX.—The plan sponsor shall be 

15 liable for the tax imposed by this section. 

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

17 ‘‘(1) CASH BALANCE PLAN.—

18 ‘‘(A) IN GENERAL.—The term ‘cash bal19 ance plan’ means a defined benefit plan under 

20 which the accrued benefit is expressed to par21 ticipants and beneficiaries as an amount other 

22 than an annual benefit commencing at normal 

23 retirement age. 

24 ‘‘(B) REGULATIONS TO INCLUDE SIMILAR

25 OR OTHER HYBRID PLANS.—The Secretary 
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1 shall issue regulations which provide that a de2 fined benefit plan (or any portion of such a 

3 plan) which has an effect similar to a plan de4 scribed in subparagraph (A) shall be treated as 

5 a cash balance plan. Such regulations may pro6 vide that if a plan sponsor represents in com7 munications to participants and beneficiaries 

8 that a plan amendment results in a plan being 

9 described in the preceding sentence, such plan 

10 shall be treated as a cash balance plan. 

11 ‘‘(2) NOTICE DATE.—The term ‘notice date’ 

12 means with respect to an amendment described in 

13 subsection (a)—

14 ‘‘(A) in the case of a distress termination 

15 under section 4041(d) of the Employee Retire16 ment Income Security Act of 1974, the date of 

17 the advance notice of intent to terminate pro18 vided pursuant to section 4041(a)(2) of such 

19 Act, 

20 ‘‘(B) in the case of a termination initiated 

21 by the Pension Benefit Guaranty Corporation 

22 under section 4042 of such Act, the date of the 

23 application to the court under section 4042(c) 

24 of such Act, and 
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1 ‘‘(C) in the case of a conversion to a cash 

2 balance plan, the date of the adoption of the 

3 amendment. 

4 ‘‘(3) COVERED DEFERRED COMPENSATION

5 PLAN.—

6 ‘‘(A) IN GENERAL.—The term ‘covered de7 ferred compensation plan’ means any plan pro8 viding for the deferral of compensation of a dis9 qualified individual, whether or not—

10 ‘‘(i) compensation of the disqualified 

11 individual which is deferred under such 

12 plan is subject to substantial risk of for13 feiture, 

14 ‘‘(ii) the disqualified individual’s 

15 rights to the compensation deferred under 

16 the plan are no greater than the rights of 

17 a general creditor of the plan sponsor, 

18 ‘‘(iii) all amounts set aside (directly or 

19 indirectly) for purposes of paying the de20 ferred compensation, and all income attrib21 utable to such amounts, remain (until 

22 made available to the participant or other 

23 beneficiary) solely the property of the 

24 (without being restricted to the provision 

25 of benefits under the plan), 
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1 ‘‘(iv) the amounts referred to in 

2 clause (iii) are available to satisfy the 

3 claims of the plan sponsor’s general credi4 tors at all times (not merely after bank5 ruptcy or insolvency), and 

6 ‘‘(v) some or all of the compensation 

7 of the disqualified individual which is de8 ferred under such plan is guaranteed by an 

9 insurance company, insurance service, or 

10 other similar organization. 

11 ‘‘(B) EXCEPTION FOR QUALIFIED

12 PLANS.—Such term shall not include a plan 

13 that is—

14 ‘‘(i) described in section 219(g)(5)(A), 

15 or 

16 ‘‘(ii) an eligible deferred compensation 

17 plan (as defined in section 457(b)) of an 

18 eligible described in section 457(e)(1)(A). 

19 ‘‘(C) PLAN INCLUDES ARRANGEMENTS, 

20 ETC.—For purposes of this paragraph, the term 

21 ‘plan’ includes any agreement or arrangement. 

22 ‘‘(4) DISQUALIFIED INDIVIDUAL.—The term 

23 ‘disqualified individual’ means a director or executive 

24 officer of the plan sponsor. 
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1 ‘‘(5) TERMINATION BASED ON BANKRUPTCY

2 REORGANIZATION.—A termination of a plan which is 

3 a distress termination under section 4041(c) or a 

4 termination instituted by the Pension Benefit Guar5 anty Corporation under section 4042 is ‘based on 

6 bankruptcy reorganization’ if such termination is 

7 based in whole or in part on the filing, by or against 

8 any person who is a contributing sponsor of such 

9 plan or a member of such sponsor’s controlled 

10 group, of a petition seeking reorganization in a case 

11 under title 11, United States Code, or under any 

12 similar law of a State or political subdivision of a 

13 State (or such a case in which liquidation is sought 

14 has been converted to a case in which reorganization 

15 is sought). 

16 ‘‘(6) TITLE IV TERMINOLOGY.—Any term used 

17 in this section which is defined in section 4001(a) of 

18 the Employee Retirement Income Security Act of 

19 1974 shall have the meaning provided such term in 

20 such section 4001(a). 

21 ‘‘(f) SPECIAL RULES.—

22 ‘‘(1) COORDINATED BENEFITS.—If the benefits 

23 of 2 or more defined benefit plans established or 

24 maintained by an are coordinated in such a manner 

25 as to have the effect of the adoption of an amend-
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1 ment described in subsection (a), the sponsor of the 

2 defined benefit plan or plans providing for such co3 ordination shall be treated as having adopted such 

4 a plan amendment as of the date such coordination 

5 begins. 

6 ‘‘(2) MULTIPLE AMENDMENTS.—The Secretary 

7 shall issue regulations to prevent the avoidance of 

8 the purposes of this section through the use of 2 or 

9 more plan amendments rather than a single amend10 ment. 

11 ‘‘(3) CONTROLLED GROUPS, ETC.—For pur12 poses of this section, all persons treated as a single 

13 employer under subsection (b), (c), (m), or (o) of 

14 section 414 shall be treated as 1 employer. 

15 ‘‘(4) TREATMENT OF EARNINGS.—References to 

16 deferred compensation shall be treated as including 

17 references to income attributable to such compensa18 tion or such income. 

19 ‘‘(g) COORDINATION.—The Secretary and the Sec20 retary of Labor shall ensure, through the execution of an 

21 interagency memorandum of understanding among such 

22 Secretaries, that regulations, rulings, and interpretations 

23 issued by such Secretaries relating to the same matter 

24 over which both such Secretaries have responsibility under 

25 this section and section 206(g) of the Employee Retire-
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1 ment Income Security Act of 1974 are administered so 

2 as to have the same effect at all times. 

3 ‘‘(h) WAIVER.—

4 ‘‘(1) IN GENERAL.—In the case of any plan 

5 amendment having the effect of a termination de6 scribed in subsection (a)(1), the Secretary may 

7 waive the application of any requirement of the ter8 mination fairness standard of subsection (b) with re9 spect to any disqualified individual who first com10 mences service for the plan sponsor after the notice 

11 date with respect to such plan amendment. The Sec12 retary may grant any such waiver in the case of any 

13 such plan amendment with respect to any such dis14 qualified individual only after consultation with the 

15 Pension Benefit Guaranty Corporation. The Sec16 retary shall promptly notify the Secretary of Labor 

17 of any such waiver granted by the Secretary. 

18 ‘‘(2) REQUIREMENTS FOR WAIVER.—A waiver 

19 may be granted under paragraph (1) only—

20 ‘‘(A) upon the filing with the Secretary by 

21 the plan sponsor of an application for such 

22 waiver, in such form and manner as shall be 

23 prescribed in regulations of the Secretary, 

24 ‘‘(B) upon a showing, to the satisfaction of 

25 the Secretary, that such waiver is a business 
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1 necessity for the plan sponsor, as determined 

2 under such regulations, and is in the best inter3 est of plan participants and beneficiaries, as de4 termined under such regulations, and 

5 ‘‘(C) after the participants, in such form 

6 and manner as shall be provided in such regula7 tions, have been notified of the filing of the ap8 plication for the waiver and have been provided 

9 a reasonable opportunity to provide in advance 

10 comments to the Secretary regarding the pro11 posed waiver.’’. 

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

13 for chapter 43 of such Code is amended by adding at the 

14 end the following new item:

‘‘4980H. Funding nonqualified deferred compensation plans in the event of a 

pension plan termination based on bankruptcy reorganization 

or a conversion of a pension plan to a cash balance plan.’’.

15 SEC. 4. EFFECTIVE DATE. 

16 The amendments made by this Act shall apply to plan 

17 amendments adopted on or after October 8, 2004.

Æ