(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after the 
date of the enactment of this Act. 
SEC. 4. AGE DISCRIMINATION PROTECTIONS FOR PENSION 
PLAN PARTICIPANTS FROM CASH BALANCE 
CONVERSIONS. 
(a) AMENDMENT TO INTERNAL REVENUE CODE OF 
1986.—Section 411 of the Internal Revenue Code of 1986 
(relating to special rules) is amended by adding at the end 
the following new subsection: 
‘‘(f) AGE DISCRIMINATION SAFE HARBOR RULES 
FOR CERTAIN PLAN CONVERSIONS.— 
‘‘(1) AGE DISCRIMINATION.—An applicable plan 
amendment adopted by a defined benefit plan shall 
not be treated as satisfying the requirements of this 
section unless the opening account balance of each 
participant under the plan after the adoption of the 
amendment is equal to at least the present value of 
the participant’s retirement benefit at age 65 before 
the effective date of the amendment, determined 
under the terms of the plan as in effect immediately 
before the effective date. 
‘‘(2) APPLICABLE
PLAN
AMENDMENT.—For 
purposes of this subsection, the term ‘applicable plan 
amendment’ means a plan amendment which has the
effect of converting a defined benefit plan to a plan 
under which the accrued benefit is expressed to par-
ticipants and beneficiaries as an amount other than 
an annual benefit commencing at normal retirement 
age (or which has a similar effect as determined 
under regulations of the Secretary under subsection 
(b)(1)(I)(iv)). 
‘‘(3) SPECIAL TRANSITION RULES.— 
‘‘(A) IN
GENERAL.—Paragraph (1) shall 
not apply with respect to an applicable plan 
amendment adopted on or after January 1, 
1997, and before November 9, 2005, until the 
date which is 2 years after the date of the en-
actment of this subsection. 
‘‘(B) PARTICIPANTS
SEPARATED
FROM 
SERVICE BEFORE ENACTMENT.—A participant 
who is separated from service before November 
9, 2005, need not be taken into account for 
purposes of applying paragraph (1) until the 
date which is 3 years after the date of the en-
actment of this subsection.’’. 
(b) EMPLOYEE RETIREMENT INCOME SECURITY ACT 
OF 1974.—Section 203 of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1053) is amended 
by adding at the end the following new subsection:
‘‘(f)(1) An applicable plan amendment adopted by a 
defined benefit plan shall not be treated as satisfying the 
requirements of this section unless the opening account 
balance of each participant under the plan after the adop-
tion of the amendment is equal to at least the present 
value of the participant’s retirement benefit at age 65 be-
fore the effective date of the amendment, determined 
under the terms of the plan as in effect immediately before 
the effective date. 
‘‘(2) For purposes of this subsection, the term ‘appli-
cable plan amendment’ means a plan amendment which 
has the effect of converting a defined benefit plan to a 
plan under which the accrued benefit is expressed to par-
ticipants and beneficiaries as an amount other than an 
annual benefit commencing at normal retirement age (or 
which has a similar effect as determined under regulations 
of the Secretary of the Treasury under subsection 
(b)(1)(I)(iv)). 
‘‘(3)(A) Paragraph (1) shall not apply with respect 
to an applicable plan amendment adopted on or after Jan-
uary 1, 1997, and before November 9, 2005, until the date 
which is 2 years after the date of the enactment of this 
subsection. 
‘‘(B) A participant who is separated from service be-
fore November 9, 2005, need not be taken into account
for purposes of applying paragraph (1) until the date 
which is 3 years after the date of the enactment of this 
subsection.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 5. WEAR AWAY PROTECTIONS IN PENSION PLAN CASH 
BALANCE CONVERSIONS. 
(a) AMENDMENT TO INTERNAL REVENUE CODE OF 
1986.—Section 411 of the Internal Revenue Code of 1986 
(relating to special rules), as amended by section 4, is 
amended by adding at the end the following new sub-
section: 
‘‘(g) TREATMENT OF PLAN AMENDMENTS WEARING 
AWAY ACCRUED BENEFIT.— 
‘‘(1) IN GENERAL.—An applicable plan amend-
ment adopted by a defined benefit plan shall not be 
treated as satisfying the requirements of this section 
unless the applicable plan amendment meets the re-
quirements of paragraphs (2) and (3). 
‘‘(2) WEAR AWAY PREVENTED.—For purposes 
of paragraph (1), an applicable plan amendment 
meets the requirements of this paragraph if, under 
the terms of the plan after the adoption of the
amendment, the accrued benefit of the participant at 
any time is not less than the sum of— 
‘‘(A) the participant’s accrued benefit for 
years of service before the effective date of the 
amendment, determined under the terms of the 
plan as in effect immediately before the effec-
tive date, plus 
‘‘(B) the participant’s accrued benefit de-
termined under the formula applicable to ben-
efit accruals under the current plan as applied 
to years of service after such effective date. 
‘‘(3) EMPLOYER CHOICE OF METHOD TO PRO-
TECT
CERTAIN
PARTICIPANTS.—For purposes of 
paragraph (1), an applicable plan amendment meets 
the requirements of this paragraph if the plan to be 
amended provides each participant who has at least 
10 years of service (as determined under subsection 
(a)) under the plan at the time such amendment 
takes effect and is within 5 years of eligibility for re-
tirement under the plan with one of the following: 
‘‘(A) PARTICIPANT
ELECTION
TO
MAIN-
TAIN RATE OF ACCRUAL IN EFFECT BEFORE 
PLAN AMENDMENT.—Each such participant— 
‘‘(i) is provided with notice of the plan 
amendment, including a comparison of the
present and projected values of the accrued 
benefit determined both with and without 
regard to the plan amendment, and 
‘‘(ii) may elect upon retirement to ei-
ther receive benefits under the terms of the 
plan as in effect at the time of retirement 
or to receive benefits under the terms of 
the plan as in effect immediately before the 
effective date of such plan amendment 
(taking into account all benefit accruals 
under such terms since such date). 
‘‘(B) BENEFITS
OF
AMENDED
PLAN
DO 
NOT
DECREASE.—For each such participant, 
the benefits after the plan amendment takes ef-
fect are not less than the greatest benefits the 
participant would have received by reason of the 
election described in subparagraph (A)(ii). 
‘‘(C) MAINTENANCE
OF
EFFORT.—For 
each such participant, for at least the first 5 
years after the plan amendment takes effect, 
benefits under the terms of the plan as in effect 
immediately before the effective date of such 
plan amendment (taking into account all benefit 
accruals under such terms since such date).
‘‘(4) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) APPLICABLE
PLAN
AMENDMENT.— 
The term ‘applicable plan amendment’ has the 
meaning given such term by subsection (f). 
‘‘(B) PROTECTED ACCRUED BENEFIT.—An 
accrued benefit shall include any early retire-
ment benefit or retirement-type subsidy (within 
the meaning of subsection (d)(6)(B)(i)), but 
only with respect to a participant who satisfies 
(either before or after the effective date of the 
amendment) the conditions for the benefit or 
subsidy under the terms of the plan as in effect 
immediately before such date.’’. 
(b) EMPLOYEE RETIREMENT INCOME SECURITY ACT 
OF 1974.—Section 203 of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1053), as amended 
by section 4, is amended by adding at the end the fol-
lowing new subsection: 
‘‘(g)(1) An applicable plan amendment adopted by a 
defined benefit plan shall not be treated as satisfying the 
requirements of this section unless the applicable plan 
amendment meets the requirements of paragraphs (2) and 
(3).
‘‘(2) For purposes of paragraph (1), an applicable 
plan amendment meets the requirements of this paragraph 
if, under the terms of the plan after the adoption of the 
amendment, the accrued benefit of the participant at any 
time is not less than the sum of— 
‘‘(A) the participant’s accrued benefit for years 
of service before the effective date of the amend-
ment, determined under the terms of the plan as in 
effect immediately before the effective date, plus 
‘‘(B) the participant’s accrued benefit deter-
mined under the formula applicable to benefit accru-
als under the current plan as applied to years of 
service after such effective date. 
‘‘(3) For purposes of paragraph (1), an applicable 
plan amendment meets the requirements of this paragraph 
if the plan to be amended provides each participant who 
has at least 10 years of service (as determined under sub-
section (a)) under the plan at the time such amendment 
takes effect and is within 5 years of eligibility for retire-
ment under the plan with one of the following: 
‘‘(A) Each such participant— 
‘‘(i) is provided with notice of the plan 
amendment, including a comparison of the 
present and projected values of the accrued
benefit determined both with and without re-
gard to the plan amendment, and 
‘‘(ii) may elect upon retirement to either 
receive benefits under the terms of the plan as 
in effect at the time of retirement or to receive 
benefits under the terms of the plan as in effect 
immediately before the effective date of such 
plan amendment (taking into account all benefit 
accruals under such terms since such date). 
‘‘(B) For each such participant, the benefits 
after the plan amendment takes effect are not less 
than the greatest benefits the participant would have 
received by reason of the election described in sub-
paragraph (A)(ii). 
‘‘(C) For each such participant, for at least the 
first 5 years after the plan amendment takes effect, 
benefits under the terms of the plan as in effect im-
mediately before the effective date of such plan 
amendment (taking into account all benefit accruals 
under such terms since such date). 
‘‘(4) For purposes of this subsection— 
‘‘(A) The term ‘applicable plan amendment’ has 
the meaning given such term by subsection (f). 
‘‘(B) An accrued benefit shall include any early 
retirement benefit or retirement-type subsidy (within
the meaning of subsection (d)(6)(B)(i)), but only 
with respect to a participant who satisfies (either be-
fore or after the effective date of the amendment) 
the conditions for the benefit or subsidy under the 
terms of the plan as in effect immediately before 
such date.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to any amendment 
to a plan adopted after the date of the enactment of this 
Act. 
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