H. R. 4—104
‘‘(iii) any new direct or indirect exclusion of 
younger or newly hired employees from plan participa-
tion, and 
‘‘(B) no amendment of the plan which increases the 
liabilities of the plan by reason of any increase in benefits, 
any change in the accrual of benefits, or any change in 
the rate at which benefits become nonforfeitable under 
the plan may be adopted unless the amendment is required 
as a condition of qualification under part I of subchapter 
D of chapter 1 of the Internal Revenue Code of 1986 or 
to comply with other applicable law. 
‘‘(g) EXPEDITED RESOLUTION OF PLAN SPONSOR DECISIONS.—
If, within 60 days of the due date for adoption of a funding improve-
ment plan or a rehabilitation plan under subsection (e), the plan 
sponsor of a plan in endangered status or a plan in critical status 
has not agreed on a funding improvement plan or rehabilitation 
plan, then any member of the board or group that constitutes 
the plan sponsor may require that the plan sponsor enter into 
an expedited dispute resolution procedure for the development and 
adoption of a funding improvement plan or rehabilitation plan. 
‘‘(h) NONBARGAINED PARTICIPATION.—
‘‘(1) BOTH
BARGAINED
AND
NONBARGAINED
EMPLOYEE-
PARTICIPANTS.—In the case of an employer that contributes 
to a multiemployer plan with respect to both employees who 
are covered by one or more collective bargaining agreements 
and employees who are not so covered, if the plan is in endan-
gered status or in critical status, benefits of and contributions 
for the nonbargained employees, including surcharges on those 
contributions, shall be determined as if those nonbargained 
employees were covered under the first to expire of the 
employer’s collective bargaining agreements in effect when the 
plan entered endangered or critical status. 
‘‘(2) NONBARGAINED EMPLOYEES ONLY.—In the case of an 
employer that contributes to a multiemployer plan only with 
respect to employees who are not covered by a collective bar-
gaining agreement, this section shall be applied as if the 
employer were the bargaining party, and its participation agree-
ment with the plan were a collective bargaining agreement 
with a term ending on the first day of the plan year beginning 
after the employer is provided the schedule or schedules 
described in subsections (c) and (e). 
‘‘(i) DEFINITIONS; ACTUARIAL METHOD.—For purposes of this 
section—
‘‘(1) BARGAINING
PARTY.—The term ‘bargaining party’ 
means—
‘‘(A)(i) except as provided in clause (ii), an employer 
who has an obligation to contribute under the plan; or 
‘‘(ii) in the case of a plan described under section 
404(c) of the Internal Revenue Code of 1986, or a continu-
ation of such a plan, the association of employers that 
is the employer settlor of the plan; and 
‘‘(B) an employee organization which, for purposes of 
collective 
bargaining, 
represents 
plan 
participants 
employed by an employer who has an obligation to con-
tribute under the plan. 
‘‘(2) FUNDED PERCENTAGE.—The term ‘funded percentage’ 
means the percentage equal to a fraction—
H. R. 4—105
‘‘(A) the numerator of which is the value of the plan’s 
assets, as determined under section 304(c)(2), and 
‘‘(B) the denominator of which is the accrued liability 
of the plan, determined using actuarial assumptions 
described in section 304(c)(3). 
‘‘(3) 
ACCUMULATED
FUNDING
DEFICIENCY.—The 
term 
‘accumulated funding deficiency’ has the meaning given such 
term in section 304(a). 
‘‘(4) ACTIVE
PARTICIPANT.—The term ‘active participant’ 
means, in connection with a multiemployer plan, a participant 
who is in covered service under the plan. 
‘‘(5) INACTIVE PARTICIPANT.—The term ‘inactive participant’ 
means, in connection with a multiemployer plan, a participant, 
or the beneficiary or alternate payee of a participant, who—
‘‘(A) is not in covered service under the plan, and 
‘‘(B) is in pay status under the plan or has a nonforfeit-
able right to benefits under the plan. 
‘‘(6) PAY STATUS.—A person is in pay status under a multi-
employer plan if—
‘‘(A) at any time during the current plan year, such 
person is a participant or beneficiary under the plan and 
is paid an early, late, normal, or disability retirement ben-
efit under the plan (or a death benefit under the plan 
related to a retirement benefit), or 
‘‘(B) to the extent provided in regulations of the Sec-
retary of the Treasury, such person is entitled to such 
a benefit under the plan. 
‘‘(7) OBLIGATION TO CONTRIBUTE.—The term ‘obligation to 
contribute’ has the meaning given such term under section 
4212(a). 
‘‘(8) ACTUARIAL
METHOD.—Notwithstanding any other 
provision of this section, the actuary’s determinations with 
respect to a plan’s normal cost, actuarial accrued liability, and 
improvements in a plan’s funded percentage under this section 
shall be based upon the unit credit funding method (whether 
or not that method is used for the plan’s actuarial valuation). 
‘‘(9) PLAN SPONSOR.—In the case of a plan described under 
section 404(c) of the Internal Revenue Code of 1986, or a 
continuation of such a plan, the term ‘plan sponsor’ means 
the bargaining parties described under paragraph (1). 
‘‘(10) BENEFIT COMMENCEMENT DATE.—The term ‘benefit 
commencement date’ means the annuity starting date (or in 
the case of a retroactive annuity starting date, the date on 
which benefit payments begin).’’. 
(b) ENFORCEMENT.—Section 502 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1132) is amended—
(1) in subsection (a)(6) by striking ‘‘(6), or (7)’’ and inserting 
‘‘(6), (7), or (8)’’; 
(2) by redesignating subsection (c)(8) as subsection (c)(9); 
and 
(3) by inserting after subsection (c)(7) the following new 
paragraph: 
‘‘(8) The Secretary may assess against any plan sponsor 
of a multiemployer plan a civil penalty of not more than $1,100 
per day—
‘‘(A) for each violation by such sponsor of the require-
ment under section 305 to adopt by the deadline established
H. R. 4—106
in that section a funding improvement plan or rehabilita-
tion plan with respect to a multiemployer which is in 
endangered or critical status, or 
‘‘(B) in the case of a plan in endangered status which 
is not in seriously endangered status, for failure by the 
plan to meet the applicable benchmarks under section 305 
by the end of the funding improvement period with respect 
to the plan.’’. 
(c) CAUSE OF ACTION TO COMPEL ADOPTION OR IMPLEMENTA-
TION OF FUNDING IMPROVEMENT OR REHABILITATION PLAN.—Section 
502(a) of the Employee Retirement Income Security Act of 1974 
is amended by striking ‘‘or’’ at the end of paragraph (8), by striking 
the period at the end of paragraph (9) and inserting ‘‘; or’’ and 
by adding at the end the following: 
‘‘(10) in the case of a multiemployer plan that has been 
certified by the actuary to be in endangered or critical status 
under section 305, if the plan sponsor—
‘‘(A) has not adopted a funding improvement or 
rehabilitation plan under that section by the deadline 
established in such section, or 
‘‘(B) fails to update or comply with the terms of the 
funding improvement or rehabilitation plan in accordance 
with the requirements of such section, 
by an employer that has an obligation to contribute with respect 
to the multiemployer plan or an employee organization that 
represents active participants in the multiemployer plan, for 
an order compelling the plan sponsor to adopt a funding 
improvement or rehabilitation plan or to update or comply 
with the terms of the funding improvement or rehabilitation 
plan in accordance with the requirements of such section and 
the funding improvement or rehabilitation plan.’’. 
(d) NO ADDITIONAL CONTRIBUTIONS REQUIRED.—Section 302(b) 
of the Employee Retirement Income Security Act of 1974, as 
amended by this Act, is amended by adding at the end the following 
new paragraph: 
‘‘(3) MULTIEMPLOYER
PLANS
IN
CRITICAL
STATUS.—Para-
graph (1) shall not apply in the case of a multiemployer plan 
for any plan year in which the plan is in critical status pursuant 
to section 305. This paragraph shall only apply if the plan 
adopts a rehabilitation plan in accordance with section 305(e) 
and complies with the terms of such rehabilitation plan (and 
any updates or modifications of the plan).’’. 
(e) CONFORMING AMENDMENT.—The table of contents in section 
1 of such Act (as amended by the preceding provisions of this 
Act) is amended by inserting after the item relating to section 
304 the following new item:
‘‘Sec. 305. Additional funding rules for multiemployer plans in endangered status 
or critical status.’’.
(f) EFFECTIVE DATES.—
(1) IN GENERAL.—The amendments made by this section 
shall apply with respect to plan years beginning after 2007. 
(2) SPECIAL RULE FOR CERTAIN NOTICES.—In any case in 
which a plan’s actuary certifies that it is reasonably expected 
that a multiemployer plan will be in critical status under 
section 305(b)(3) of the Employee Retirement Income Security 
Act of 1974, as added by this section, with respect to the 
first plan year beginning after 2007, the notice required under
H. R. 4—107
subparagraph (D) of such section may be provided at any time 
after the date of enactment, so long as it is provided on or 
before the last date for providing the notice under such subpara-
graph. 
(3) SPECIAL RULE FOR CERTAIN RESTORED BENEFITS.—In 
the case of a multiemployer plan—
(A) with respect to which benefits were reduced pursu-
ant to a plan amendment adopted on or after January 
1, 2002, and before June 30, 2005, and 
(B) which, pursuant to the plan document, the trust 
agreement, or a formal written communication from the 
plan sponsor to participants provided before June 30, 2005, 
provided for the restoration of such benefits, 
the amendments made by this section shall not apply to such 
benefit restorations to the extent that any restriction on the 
providing or accrual of such benefits would otherwise apply 
by reason of such amendments. 
SEC. 203. MEASURES TO FORESTALL INSOLVENCY OF MULTIEM-
PLOYER PLANS. 
(a) ADVANCE DETERMINATION OF IMPENDING INSOLVENCY OVER 
5 YEARS.—Section 4245(d)(1) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1426(d)(1)) is amended—
(1) by striking ‘‘3 plan years’’ the second place it appears 
and inserting ‘‘5 plan years’’; and 
(2) by adding at the end the following new sentence: ‘‘If 
the plan sponsor makes such a determination that the plan 
will be insolvent in any of the next 5 plan years, the plan 
sponsor shall make the comparison under this paragraph at 
least annually until the plan sponsor makes a determination 
that the plan will not be insolvent in any of the next 5 plan 
years.’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply with respect to determinations made in plan years 
beginning after 2007. 
SEC. 204. WITHDRAWAL LIABILITY REFORMS. 
(a) UPDATE
OF RULES RELATING
TO LIMITATIONS
ON WITH-
DRAWAL LIABILITY.—
(1) INCREASE IN LIMITS.—Section 4225(a)(2) of such Act 
(29 U.S.C. 1405(a)(2)) is amended by striking the table con-
tained therein and inserting the following new table:
‘‘If the liquidation or distribution value of the em-
ployer after the sale or exchange is—
The portion is—
Not more than $5,000,000 .......................................................
30 percent of the amount. 
More than $5,000,000, but not more than $10,000,000 ........
$1,500,000, plus 35 percent of 
the amount in excess of 
$5,000,000. 
More than $10,000,000, but not more than $15,000,000 ......
$3,250,000, plus 40 percent of 
the amount in excess of 
$10,000,000. 
More than $15,000,000, but not more than $17,500,000 ......
$5,250,000, plus 45 percent of 
the amount in excess of 
$15,000,000. 
More than $17,500,000, but not more than $20,000,000 ......
$6,375,000, plus 50 percent of 
the amount in excess of 
$17,500,000.