H. R. 5110—190
Subtitle B—Provisions Relating to Esti-
mated Taxes and Payments and Deposits
of Taxes
SEC. 711. TREATMENT OF SUBPART F AND SECTION 936 INCOME OF
TAXPAYERS USING ANNUALIZED METHOD FOR ESTIMATED
TAX.
(a) CORPORATIONS.—Section 6655(e) (relating to lower required
installment where annualized income installment is less) is amend-
ed by adding at the end the following new paragraph:
‘‘(4) TREATMENT OF SUBPART F AND SECTION 936 INCOME.—
‘‘(A) IN
GENERAL.—Any amounts required to be
included in gross income under section 936(h) or 951(a)
(and credits properly allocable thereto) shall be taken into
account in computing any annualized income installment
under paragraph (2) in a manner similar to the manner
under which partnership income inclusions (and credits
properly allocable thereto) are taken into account.
‘‘(B) PRIOR YEAR SAFE HARBOR.—
‘‘(i) IN GENERAL.—If a taxpayer elects to have this
subparagraph apply for any taxable year—
‘‘(I) subparagraph (A) shall not apply, and
‘‘(II) for purposes of computing any annualized
income installment for such taxable year, the tax-
payer shall be treated as having received ratably
during such taxable year items of income and
credit described in subparagraph (A) in an amount
equal to 115 percent of the amount of such items
shown on the return of the taxpayer for the preced-
ing taxable year (the second preceding taxable year
in the case of the first and second required install-
ments for such taxable year).
‘‘(ii) 
SPECIAL
RULE
FOR
NONCONTROLLING
SHAREHOLDER.—
‘‘(I) IN GENERAL.—If a taxpayer making the
election under clause (i) is a noncontrolling share-
holder of a corporation, clause (i)(II) shall be
applied with respect to items of such corporation
by substituting ‘100 percent’ for ‘115 percent’.
‘‘(II) 
NONCONTROLLING
SHAREHOLDER.—For
purposes of subclause (I), the term ‘noncontrolling
shareholder’ means, with respect to any corpora-
tion, a shareholder which (as of the beginning
of the taxable year for which the installment is
being made) does not own (within the meaning
of section 958(a)), and is not treated as owning
(within the meaning of section 958(b)), more than
50 percent (by vote or value) of the stock in the
corporation.’’
(b) INDIVIDUALS.—Section 6654(d)(2) (relating to lower required
installment where annualized income installment is less) is
amended by adding at the end the following new subparagraph:
‘‘(D) TREATMENT
OF
SUBPART
F
AND
SECTION
936
INCOME.—
H. R. 5110—191
‘‘(i) IN
GENERAL.—Any amounts required to be
included in gross income under section 936(h) or 951(a)
(and credits properly allocable thereto) shall be taken
into account in computing any annualized income
installment under subparagraph (B) in a manner simi-
lar to the manner under which partnership income
inclusions (and credits properly allocable thereto) are
taken into account.
‘‘(ii) PRIOR YEAR SAFE HARBOR.—If a taxpayer elects
to have this clause apply to any taxable year—
‘‘(I) clause (i) shall not apply, and
‘‘(II) for purposes of computing any annualized
income installment for such taxable year, the tax-
payer shall be treated as having received ratably
during such taxable year items of income and
credit described in clause (i) in an amount equal
to the amount of such items shown on the return
of the taxpayer for the preceding taxable year (the
second preceding taxable year in the case of the
first and second required installments for such
taxable year).’’
(c) EFFECTIVE DATE.—The amendments made by this section
shall apply for purposes of determining underpayments of estimated
tax for taxable years beginning after December 31, 1994.
SEC. 712. TIME FOR PAYMENTS AND DEPOSITS OF CERTAIN TAXES.
(a) DEPOSITS REQUIRED
FOR SEMIMONTHLY PERIODS.—Sub-
section (f) of section 6302 (relating to collection authority) is
amended to read as follows:
‘‘(f) TIME FOR DEPOSIT OF CERTAIN EXCISE TAXES.—
‘‘(1) GENERAL RULE.—Except as otherwise provided in this
subsection and subsection (e), if any person is required under
regulations to make deposits of taxes under subtitle D with
respect to semimonthly periods, such person shall make
deposits of such taxes for the period beginning on September
16 and ending on September 26 not later than September
29. In the case of taxes imposed by sections 4261 and 4271,
this paragraph shall not apply to periods before January 1,
1997.
‘‘(2) TAXES ON OZONE DEPLETING CHEMICALS.—If any person
is required under regulations to make deposits of taxes under
subchapter D of chapter 38 with respect to semimonthly peri-
ods, in lieu of paragraph (1), such person shall make deposits
of such taxes for—
‘‘(A) the second semimonthly period in August, and
‘‘(B) the period beginning on September 1 and ending
on September 11,
not later than September 29.
‘‘(3) TAXPAYERS NOT REQUIRED TO USE ELECTRONIC FUNDS
TRANSFER.—In the case of deposits not required to be made
by electronic funds transfer, paragraphs (1) and (2) shall be
applied by substituting ‘September 25’ for ‘September 26’,
‘September 10’ for ‘September 11’, and ‘September 28’ for
‘September 29’.
‘‘(4) SPECIAL RULE WHERE DUE DATE ON SATURDAY OR SUN-
DAY.—If, but for this paragraph, the due date under paragraph
H. R. 5110—192
(1), (2), or (3) would fall on a Saturday or Sunday, such due
date shall be deemed to be—
‘‘(A) in the case of Saturday, the preceding day, and
‘‘(B) in the case of Sunday, the following day.’’
(b) TAXES ON DISTILLED SPIRITS, WINES, AND BEER.—
(1) Subsection (d) of section 5061 is amended by redesignat-
ing paragraph (4) as paragraph (5) and by inserting after
paragraph (3) the following new paragraph:
‘‘(4) SPECIAL RULE FOR TAX DUE IN SEPTEMBER.—
‘‘(A) IN
GENERAL.—Notwithstanding the preceding
provisions of this subsection, the taxes on distilled spirits,
wines, and beer for the period beginning on September
16 and ending on September 26 shall be paid not later
than September 29.
‘‘(B) SAFE HARBOR.—The requirement of subparagraph
(A) shall be treated as met if the amount paid not later
than September 29 is not less than 11⁄15 of the taxes on
distilled spirits, wines, and beer for the period beginning
on September 1 and ending on September 15.
‘‘(C) TAXPAYERS
NOT
REQUIRED
TO
USE
ELECTRONIC
FUNDS TRANSFER.—In the case of payments not required
to be made by electronic funds transfer, subparagraphs
(A) and (B) shall be applied by substituting ‘September
25’ for ‘September 26’, ‘September 28’ for ‘September 29’,
and ‘2⁄3’ for ‘11⁄15’.’’
(2) Section 5061(d)(5), as redesignated by paragraph (1),
is amended—
(A) by inserting ‘‘(or the immediately following day
where the due date described in paragraph (4) falls on
a Sunday)’’ before the period at the end, and
(B) by striking ‘‘14TH DAY’’ in the heading and inserting
‘‘DUE DATE’’.
(c) TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES.—
(1) Paragraph (2) of section 5703(b) is amended by
redesignating subparagraph (D) as subparagraph (E) and by
inserting 
after 
subparagraph 
(C) 
the 
following 
new
subparagraph:
‘‘(D) SPECIAL RULE FOR TAX DUE IN SEPTEMBER.—
‘‘(i) IN GENERAL.—Notwithstanding the preceding
provisions of this paragraph, the taxes on tobacco prod-
ucts and cigarette papers and tubes for the period
beginning on September 16 and ending on September
26 shall be paid not later than September 29.
‘‘(ii) SAFE HARBOR.—The requirement of clause (i)
shall be treated as met if the amount paid not later
than September 29 is not less than 11⁄15 of the taxes
on tobacco products and cigarette papers and tubes
for the period beginning on September 1 and ending
on September 15.
‘‘(iii) TAXPAYERS NOT REQUIRED TO USE ELECTRONIC
FUNDS
TRANSFER.—In the case of payments not
required to be made by electronic funds transfer,
clauses (i) and (ii) shall be applied by substituting
‘September 25’ for ‘September 26’, ‘September 28’ for
‘September 29’, and ‘2⁄3’ for ‘11⁄15’.’’
(2) Section 5703(b)(2)(E), as redesignated by paragraph
(1), is amended—
H. R. 5110—193
(A) by inserting ‘‘(or the immediately following day
where the due date described in subparagraph (D) falls
on a Sunday)’’ before the period at the end, and
(B) by striking ‘‘14TH DAY’’ in the heading and inserting
‘‘DUE DATE’’.
(d) COMMUNICATION SERVICES
AND AIRLINE TICKETS.—Sub-
section (e) of section 6302 is amended to read as follows:
‘‘(e) TIME FOR DEPOSIT OF TAXES ON COMMUNICATIONS SERVICES
AND AIRLINE TICKETS.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
if, under regulations prescribed by the Secretary, a person
is required to make deposits of any tax imposed by section
4251 or subsection (a) or (b) of section 4261 with respect to
amounts considered collected by such person during any semi-
monthly period, such deposit shall be made not later than
the 3rd day (not including Saturdays, Sundays, or legal holi-
days) after the close of the 1st week of the 2nd semimonthly
period following the period to which such amounts relate.
‘‘(2) SPECIAL RULE FOR TAX DUE IN SEPTEMBER.—
‘‘(A) AMOUNTS CONSIDERED COLLECTED.—In the case
of a person required to make deposits of the tax imposed
by—
‘‘(i) section 4251, or
‘‘(ii) effective on January 1, 1997, section 4261
or 4271,
with respect to amounts considered collected by such person
during any semimonthly period, the amount of such tax
included in bills rendered or tickets sold during the period
beginning on September 1 and ending on September 11
shall be deposited not later than September 29.
‘‘(B) SPECIAL RULE WHERE SEPTEMBER 29 IS ON SATUR-
DAY
OR
SUNDAY.—If September 29 falls on a Saturday
or Sunday, the due date under subparagraph (A) shall
be—
‘‘(i) in the case of Saturday, the preceding day,
and
‘‘(ii) in the case of Sunday, the following day.
‘‘(C) TAXPAYERS
NOT
REQUIRED
TO
USE
ELECTRONIC
FUNDS
TRANSFER.—In the case of deposits not required
to be made by electronic funds transfer, subparagraphs
(A) and (B) shall be applied by substituting ‘September
10’ for ‘September 11’ and ‘September 28’ for ‘September
29’.’’
(e) EFFECTIVE DATE.—The amendments made by this section
shall take effect on January 1, 1995.
SEC. 713. REDUCTION IN RATE OF INTEREST PAID ON CERTAIN COR-
PORATE OVERPAYMENTS.
(a) IN GENERAL.—Paragraph (1) of section 6621(a) (defining
overpayment rate) is amended by adding at the end the following
new flush sentence:
‘‘To the extent that an overpayment of tax by a corporation
for any taxable period (as defined in subsection (c)(3)) exceeds
$10,000, subparagraph (B) shall be applied by substituting
‘0.5 percentage point’ for ‘2 percentage points’.’’
H. R. 5110—194
(b) EFFECTIVE DATE.—The amendment made by this section
shall apply for purposes of determining interest for periods after
December 31, 1994.
Subtitle C—Earned Income Tax Credit
SEC. 721. EXTENSION OF EARNED INCOME TAX CREDIT TO MILITARY
PERSONNEL STATIONED OUTSIDE THE UNITED STATES.
(a) IN GENERAL.—Subsection (c) of section 32 (relating to earned
income credit) is amended by adding at the end the following
new paragraph:
‘‘(4) TREATMENT OF MILITARY PERSONNEL STATIONED OUT-
SIDE
THE
UNITED
STATES.—For purposes of paragraphs
(1)(A)(ii)(I) and (3)(E), the principal place of abode of a member
of the Armed Forces of the United States shall be treated
as in the United States during any period during which such
member is stationed outside the United States while serving
on extended active duty (as defined in section 1034(h)(3)) with
the Armed Forces of the United States.’’
(b) REPORTING OF MILITARY EARNED INCOME.—Subsection (a)
of section 6051 (relating to receipts for employees) is amended
by striking ‘‘and’’ at the end of paragraph (8), by striking the
period at the end of paragraph (9) and by inserting ‘‘, and’’, and
by inserting after paragraph (9) the following new paragraph:
‘‘(10) in the case of an employee who is a member of
the Armed Forces of the United States, such employee’s earned
income as determined for purposes of section 32 (relating to
earned income credit).’’
(c) ADVANCE PAYMENT OF EARNED INCOME CREDIT BASED ON
MILITARY EARNED INCOME.—Paragraph (1) of section 3507(c) (defin-
ing earned income advance amount) is amended by adding at the
end the following new sentence:
‘‘In the case of an employee who is a member of the Armed
Forces of the United States, the earned income advance amount
shall be determined by taking into account such employee’s
earned income as determined for purposes of section 32.’’
(d) EFFECTIVE DATES.—
(1) SUBSECTION (a).—The amendment made by subsection
(a) shall apply to taxable years beginning after December 31,
1994.
(2) SUBSECTIONS (b) AND (c).—The amendments made by
subsections (b) and (c) shall apply to remuneration paid after
December 31, 1994.
SEC. 722. CERTAIN NONRESIDENT ALIENS INELIGIBLE FOR EARNED
INCOME TAX CREDIT.
(a) IN GENERAL.—Paragraph (1) of section 32(c) (defining
eligible individual) is amended by adding at the end the following
new subparagraph:
‘‘(E) LIMITATION
ON
ELIGIBILITY
OF
NONRESIDENT
ALIENS.—The term ‘eligible individual’ shall not include
any individual who is a nonresident alien individual for
any portion of the taxable year unless such individual
is treated for such taxable year as a resident of the United
States for purposes of this chapter by reason of an election
under subsection (g) or (h) of section 6013.’’
H. R. 5110—195
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall apply to taxable years beginning after December 31, 1994.
SEC. 723. INCOME OF PRISONERS DISREGARDED IN DETERMINING
EARNED INCOME TAX CREDIT.
(a) IN GENERAL.—Subparagraph (B) of section 32(c)(2) (defining
earned income) is amended by striking ‘‘and’’ at the end of clause
(ii), by striking the period at the end of clause (iii) and inserting
‘‘, and’’, and by adding at the end the following new clause:
‘‘(iv) no amount received for services provided by
an individual while the individual is an inmate at
a penal institution shall be taken into account.’’
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall apply to taxable years beginning after December 31, 1993.
Subtitle D—Provisions Relating To
Retirement Benefits
SEC. 731. TREATMENT OF EXCESS PENSION ASSETS USED FOR
RETIREE HEALTH BENEFITS.
(a) 5-YEAR EXTENSION.—Paragraph (5) of section 420(b) (defin-
ing qualified transfer) is amended by striking ‘‘1995’’ and inserting
‘‘2000’’.
(b) MINIMUM BENEFIT REQUIREMENTS.—Paragraph (3) of section
420(c) (relating to requirements of plans transferring assets) is
amended to read as follows:
‘‘(3) MAINTENANCE OF BENEFIT REQUIREMENTS.—
‘‘(A) IN GENERAL.—The requirements of this paragraph
are met if each group health plan or arrangement under
which applicable health benefits are provided provides that
the applicable health benefits provided by the employer
during each taxable year during the benefit maintenance
period are substantially the same as the applicable health
benefits provided by the employer during the taxable year
immediately preceding the taxable year of the qualified
transfer.
‘‘(B) ELECTION
TO
APPLY
SEPARATELY.—An employer
may elect to have this paragraph applied separately with
respect to individuals eligible for benefits under title XVIII
of the Social Security Act at any time during the taxable
year and with respect to individuals not so eligible.
‘‘(C) BENEFIT MAINTENANCE PERIOD.—For purposes of
this paragraph, the term ‘benefit maintenance period’
means the period of 5 taxable years beginning with the
taxable year in which the qualified transfer occurs. If a
taxable year is in 2 or more benefit maintenance periods,
this paragraph shall be applied by taking into account
the highest level of benefits required to be provided under
subparagraph (A) for such taxable year.’’
(c) CONFORMING AMENDMENTS.—
(1) Clause (iii) of section 420(b)(1)(C) is amended by striking
‘‘cost’’ and inserting ‘‘benefits’’.
(2) Subparagraph (B) of section 420(e)(1) is amended to
read as follows:
‘‘(B) REDUCTIONS
FOR
AMOUNTS
PREVIOUSLY
SET
ASIDE.—The amount determined under subparagraph (A)
H. R. 5110—196
shall be reduced by the amount which bears the same
ratio to such amount as—
‘‘(i) the value (as of the close of the plan year
preceding the year of the qualified transfer) of the
assets in all health benefits accounts or welfare benefit
funds (as defined in section 419(e)(1)) set aside to
pay for the qualified current retiree health liability,
bears to
‘‘(ii) the present value of the qualified current
retiree health liabilities for all plan years (determined
without regard to this subparagraph).’’
(3) Subparagraph (D) of section 420(e)(1) is amended by
striking ‘‘or in calculating applicable employer cost under sub-
section (c)(3)(B)’’ and inserting ‘‘and shall not be subject to
the minimum benefit requirements of subsection (c)(3)’’.
(4)(A) Section 101(e)(3) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1021(e)(3)) is amended by
striking ‘‘1991’’ and inserting ‘‘1995’’.
(B) Section 403(c)(1) of such Act (29 U.S.C. 1103(c)(1))
is amended by striking ‘‘1991’’ and inserting ‘‘1995’’.
(C) Paragraph (13) of section 408(b) of such Act (29 U.S.C.
1108(b)(13)) is amended—
(i) by striking ‘‘1996’’ and inserting ‘‘2001’’, and
(ii) by striking ‘‘1991’’ and inserting ‘‘1995’’.
(d) EFFECTIVE DATES.—
(1) EXTENSION.—The amendments made by subsections (a)
and (c)(3) shall apply to taxable years beginning after December
31, 1995.
(2) BENEFITS.—The amendments made by subsections (b)
and (c)(1) and (2) shall apply to qualified transfers occurring
after the date of the enactment of this Act.
SEC. 732. ROUNDING RULES FOR COST-OF-LIVING ADJUSTMENTS.
(a) COST-OF-LIVING ADJUSTMENT FOR COMPENSATION LIMIT.—
Section 401(a)(17)(B) is amended to read as follows:
‘‘(B) COST-OF-LIVING ADJUSTMENT.—The Secretary shall
adjust annually the $150,000 amount in subparagraph (A)
for increases in the cost-of-living at the same time and
in the same manner as adjustments under section 415(d);
except that the base period shall be the calendar quarter
beginning October 1, 1993, and any increase which is not
a multiple of $10,000 shall be rounded to the next lowest
multiple of $10,000.’’
(b) COST-OF-LIVING ADJUSTMENT FOR MAXIMUM DEFINED BENE-
FIT AMOUNT AND MAXIMUM ANNUAL ADDITION.—
(1) IN GENERAL.—Section 415(d) is amended to read as
follows:
‘‘(d) COST-OF-LIVING ADJUSTMENTS.—
‘‘(1) IN GENERAL.—The Secretary shall adjust annually—
‘‘(A) the $90,000 amount in subsection (b)(1)(A),
‘‘(B) in the case of a participant who separated from
service, the amount taken into account under subsection
(b)(1)(B), and
‘‘(C) the $30,000 amount in subsection (c)(1)(A),
for increases in the cost-of-living in accordance with regulations
prescribed by the Secretary.
H. R. 5110—197
‘‘(2) METHOD.—The regulations prescribed under paragraph
(1) shall provide for—
‘‘(A) an adjustment with respect to any calendar year
based on the increase in the applicable index for the cal-
endar quarter ending September 30 of the preceding cal-
endar year over such index for the base period, and
‘‘(B) adjustment procedures which are similar to the
procedures used to adjust benefit amounts under section
215(i)(2)(A) of the Social Security Act.
‘‘(3) BASE PERIOD.—For purposes of paragraph (2)—
‘‘(A) $90,000 AMOUNT.—The base period taken into
account for purposes of paragraph (1)(A) is the calendar
quarter beginning October 1, 1986.
‘‘(B) SEPARATIONS AFTER DECEMBER 31, 1994.—The base
period taken into account for purposes of paragraph (1)(B)
with respect to individuals separating from service with
the employer after December 31, 1994, is the calendar
quarter beginning July 1 of the calendar year preceding
the calendar year in which such separation occurs.
‘‘(C) SEPARATIONS BEFORE JANUARY 1, 1995.—The base
period taken into account for purposes of paragraph (1)(B)
with respect to individuals separating from service with
the employer before January 1, 1995, is the calendar quar-
ter beginning October 1 of the calendar year preceding
the calendar year in which such separation occurs.
‘‘(D) $30,000 AMOUNT.—The base period taken into
account for purposes of paragraph (1)(C) is the calendar
quarter beginning October 1, 1993.
‘‘(4) ROUNDING.—Any increase under subparagraph (A) or
(C) of paragraph (1) which is not a multiple of $5,000 shall
be rounded to the next lowest multiple of $5,000.’’
(2) CONFORMING
AMENDMENT.—Section 415(c)(1)(A) is
amended by striking ‘‘(or, if greater, 1⁄4 of the dollar limitation
in effect under subsection (b)(1)(A))’’.
(c) COST-OF-LIVING ADJUSTMENT FOR MAXIMUM SALARY DEFER-
RAL.—Section 402(g)(5) is amended by inserting before the period
‘‘; except that any increase under this paragraph which is not
a multiple of $500 shall be rounded to the next lowest multiple
of $500’’.
(d) COST-OF-LIVING ADJUSTMENT
FOR ELIGIBILITY
FOR SIM-
PLIFIED EMPLOYEE PENSIONS.—Section 408(k)(8) is amended by
inserting before the period ‘‘; except that any increase in the $300
amount which is not a multiple of $50 shall be rounded to the
next lowest multiple of $50’’.
(e) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in paragraph (2), the
amendments made by this section shall apply to years begin-
ning after December 31, 1994.
(2) ROUNDING NOT TO RESULT IN DECREASES.—The amend-
ments made by this section providing for the rounding of
indexed amounts shall not apply to any year to the extent
the rounding would require the indexed amount to be reduced
below the amount in effect for years beginning in 1994.
H. R. 5110—198
SEC. 733. INCREASE IN INCLUSION OF SOCIAL SECURITY BENEFITS
PAID TO NONRESIDENTS.
(a) IN GENERAL.—Subparagraph (A) of section 871(a)(3) (relat-
ing to taxation of Social Security benefits) is amended by striking
‘‘one-half’’ and inserting ‘‘85 percent’’.
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall apply to benefits paid after December 31, 1994, in taxable
years ending after such date.
Subtitle E—Other Provisions
SEC. 741. PARTNERSHIP DISTRIBUTIONS OF MARKETABLE SECURI-
TIES.
(a) IN GENERAL.—Section 731 (relating to extent of recognition
of gain or loss on distribution) is amended by redesignating sub-
section (c) as subsection (d) and by inserting after subsection (b)
the following new subsection:
‘‘(c) TREATMENT OF MARKETABLE SECURITIES.—
‘‘(1) IN GENERAL.—For purposes of subsection (a)(1) and
section 737—
‘‘(A) the term ‘money’ includes marketable securities,
and
‘‘(B) such securities shall be taken into account at
their fair market value as of the date of the distribution.
‘‘(2) MARKETABLE SECURITIES.—For purposes of this sub-
section:
‘‘(A) IN
GENERAL.—The term ‘marketable securities’
means financial instruments and foreign currencies which
are, as of the date of the distribution, actively traded
(within the meaning of section 1092(d)(1)).
‘‘(B) OTHER PROPERTY.—Such term includes—
‘‘(i) any interest in—
‘‘(I) a common trust fund, or
‘‘(II) a regulated investment company which
is offering for sale or has outstanding any redeem-
able security (as defined in section 2(a)(32) of the
Investment Company Act of 1940) of which it is
the issuer,
‘‘(ii) any financial instrument which, pursuant to
its terms or any other arrangement, is readily convert-
ible into, or exchangeable for, money or marketable
securities,
‘‘(iii) any financial instrument the value of which
is determined substantially by reference to marketable
securities,
‘‘(iv) except to the extent provided in regulations
prescribed by the Secretary, any interest in a precious
metal which, as of the date of the distribution, is
actively traded (within the meaning of section
1092(d)(1)) unless such metal was produced, used, or
held in the active conduct of a trade or business by
the partnership,
‘‘(v) except as otherwise provided in regulations
prescribed by the Secretary, interests in any entity
if substantially all of the assets of such entity consist
H. R. 5110—199
(directly or indirectly) of marketable securities, money,
or both, and
‘‘(vi) to the extent provided in regulations pre-
scribed by the Secretary, any interest in an entity
not described in clause (v) but only to the extent of
the value of such interest which is attributable to
marketable securities, money, or both.
‘‘(C) FINANCIAL
INSTRUMENT.—The term ‘financial
instrument’ includes stocks and other equity interests, evi-
dences of indebtedness, options, forward or futures con-
tracts, notional principal contracts, and derivatives.
‘‘(3) EXCEPTIONS.—
‘‘(A) IN GENERAL.—Paragraph (1) shall not apply to
the distribution from a partnership of a marketable security
to a partner if—
‘‘(i) the security was contributed to the partnership
by such partner, except to the extent that the value
of the distributed security is attributable to marketable
securities or money contributed (directly or indirectly)
to the entity to which the distributed security relates,
‘‘(ii) to the extent provided in regulations pre-
scribed by the Secretary, the property was not a
marketable security when acquired by such partner-
ship, or
‘‘(iii) such partnership is an investment partner-
ship and such partner is an eligible partner thereof.
‘‘(B) LIMITATION
ON
GAIN
RECOGNIZED.—In the case
of a distribution of marketable securities to a partner,
the amount taken into account under paragraph (1) shall
be reduced (but not below zero) by the excess (if any)
of—
‘‘(i) such partner’s distributive share of the net
gain which would be recognized if all of the marketable
securities of the same class and issuer as the distrib-
uted securities held by the partnership were sold
(immediately before the transaction to which the dis-
tribution relates) by the partnership for fair market
value, over
‘‘(ii) such partner’s distributive share of the net
gain which is attributable to the marketable securities
of the same class and issuer as the distributed securi-
ties held by the partnership immediately after the
transaction, determined by using the same fair market
value as used under clause (i).
Under regulations prescribed by the Secretary, all market-
able securities held by the partnership may be treated
as marketable securities of the same class and issuer as
the distributed securities.
‘‘(C) DEFINITIONS RELATING TO INVESTMENT PARTNER-
SHIPS.—For purposes of subparagraph (A)(iii):
‘‘(i) INVESTMENT PARTNERSHIP.—The term ‘invest-
ment partnership’ means any partnership which has
never been engaged in a trade or business and substan-
tially all of the assets (by value) of which have always
consisted of—
‘‘(I) money,
‘‘(II) stock in a corporation,
H. R. 5110—200
‘‘(III) notes, bonds, debentures, or other evi-
dences of indebtedness,
‘‘(IV) interest rate, currency, or equity notional
principal contracts,
‘‘(V) foreign currencies,
‘‘(VI) interests in or derivative financial
instruments (including options, forward or futures
contracts, short positions, and similar financial
instruments) in any asset described in any other
subclause of this clause or in any commodity
traded on or subject to the rules of a board of
trade or commodity exchange,
‘‘(VII) other assets specified in regulations pre-
scribed by the Secretary, or
‘‘(VIII) any combination of the foregoing.
‘‘(ii) EXCEPTION FOR CERTAIN ACTIVITIES.—A part-
nership shall not be treated as engaged in a trade
or business by reason of—
‘‘(I) any activity undertaken as an investor,
trader, or dealer in any asset described in clause
(i), or
‘‘(II) any other activity specified in regulations
prescribed by the Secretary.
‘‘(iii) ELIGIBLE PARTNER.—
‘‘(I) IN GENERAL.—The term ‘eligible partner’
means any partner who, before the date of the
distribution, did not contribute to the partnership
any property other than assets described in clause
(i).
‘‘(II) EXCEPTION FOR CERTAIN NONRECOGNITION
TRANSACTIONS.—The term ‘eligible partner’ shall
not include the transferor or transferee in a non-
recognition transaction involving a transfer of any
portion of an interest in a partnership with respect
to which the transferor was not an eligible partner.
‘‘(iv) LOOK-THRU OF PARTNERSHIP TIERS.—Except
as otherwise provided in regulations prescribed by the
Secretary—
‘‘(I) a partnership shall be treated as engaged
in any trade or business engaged in by, and as
holding (instead of a partnership interest) a
proportionate share of the assets of, any other
partnership in which the partnership holds a part-
nership interest, and
‘‘(II) a partner who contributes to a partner-
ship an interest in another partnership shall be
treated as contributing a proportionate share of
the assets of the other partnership.
If the preceding sentence does not apply under such
regulations with respect to any interest held by a part-
nership in another partnership, the interest in such
other partnership shall be treated as if it were specified
in a subclause of clause (i).
‘‘(4) BASIS OF SECURITIES DISTRIBUTED.—
‘‘(A) IN GENERAL.—The basis of marketable securities
with respect to which gain is recognized by reason of this
subsection shall be—
H. R. 5110—201
‘‘(i) their basis determined under section 732,
increased by
‘‘(ii) the amount of such gain.
‘‘(B) ALLOCATION OF BASIS INCREASE.—Any increase in
basis attributable to the gain described in subparagraph
(A)(ii) shall be allocated to marketable securities in propor-
tion to their respective amounts of unrealized appreciation
before such increase.
‘‘(5) SUBSECTION DISREGARDED IN DETERMINING BASIS OF
PARTNER’S INTEREST IN PARTNERSHIP AND OF BASIS OF PARTNER-
SHIP PROPERTY.—Sections 733 and 734 shall be applied as if
no gain were recognized, and no adjustment were made to
the basis of property, under this subsection.
‘‘(6) CHARACTER OF GAIN RECOGNIZED.—In the case of a
distribution of a marketable security which is an unrealized
receivable (as defined in section 751(c)) or an inventory item
(as defined in section 751(d)(2)), any gain recognized under
this subsection shall be treated as ordinary income to the
extent of any increase in the basis of such security attributable
to the gain described in paragraph (4)(A)(ii).
‘‘(7) REGULATIONS.—The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
the purposes of this subsection, including regulations to prevent
the avoidance of such purposes.’’
(b) CONFORMING AMENDMENTS.—
(1) The last sentence of section 737(c)(1) is amended to
read as follows: ‘‘For purposes of determining the basis of
the distributed property (other than money), such increase shall
be treated as occurring immediately before the distribution.’’
(2) Section 737 is amended by adding at the end the follow-
ing new subsection:
‘‘(e) MARKETABLE SECURITIES TREATED AS MONEY.—
‘‘For treatment of marketable securities as money for purposes of
this section, see section 731(c).’’
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as otherwise provided in this sub-
section, the amendments made by this section shall apply to
distributions after the date of the enactment of this Act.
(2) CERTAIN DISTRIBUTIONS BEFORE JANUARY 1, 1995.—The
amendments made by this section shall not apply to any
marketable security distributed before January 1, 1995, by
the partnership which held such security on July 27, 1994.
(3) 
DISTRIBUTIONS
IN
LIQUIDATION
OF
PARTNER’S
INTEREST.—The amendments made by this section shall not
apply to the distribution of a marketable security in liquidation
of a partner’s interest in a partnership if—
(A) such liquidation is pursuant to a written contract
which was binding on July 15, 1994, and at all times
thereafter before the distribution, and
(B) such contract provides for the purchase of such
interest not later than a date certain for—
(i) a fixed value of marketable securities that are
specified in the contract, or
(ii) other property.
The preceding sentence shall not apply if the partner has
the right to elect that such distribution be made other than
in marketable securities.
H. R. 5110—202
(4) DISTRIBUTIONS IN COMPLETE LIQUIDATION OF PUBLICLY
TRADED PARTNERSHIPS.—
(A) IN GENERAL.—The amendments made by this sec-
tion shall not apply to the distribution of a marketable
security in a qualified partnership liquidation if—
(i) the marketable securities were received by the
partnership 
in 
a 
nonrecognition 
transaction 
in
exchange for substantially all of the assets of the part-
nership,
(ii) the marketable securities are distributed by
the partnership within 90 days after their receipt by
the partnership, and
(iii) the partnership is liquidated before the begin-
ning of the 1st taxable year of the partnership begin-
ning after December 31, 1997.
(B) QUALIFIED
PARTNERSHIP
LIQUIDATION.—For pur-
poses of subparagraph (A), the term ‘‘qualified partnership
liquidation’’ means—
(i) a complete liquidation of a publicly traded part-
nership (as defined in section 7704(b) of the Internal
Revenue Code of 1986) which is an existing partnership
(as defined in section 10211(c)(2) of the Revenue Act
of 1987), and
(ii) a complete liquidation of a partnership which
is related to a partnership described in clause (i) if
such liquidation is related to a complete liquidation
of the partnership described in clause (i).
(5) MARKETABLE SECURITIES.—For purposes of this sub-
section, the term ‘‘marketable securities’’ has the meaning given
such term by section 731(c) of the Internal Revenue Code
of 1986, as added by this section.
SEC. 742. TAXPAYER IDENTIFICATION NUMBERS REQUIRED AT BIRTH.
(a) EARNED INCOME CREDIT.—Clause (i) of section 32(c)(3)(D)
is amended to read as follows:
‘‘(i) IN
GENERAL.—The requirements of this
subparagraph are met if the taxpayer includes the
name, age, and TIN of each qualifying child (without
regard to this subparagraph) on the return of tax for
the taxable year.’’
(b) DEPENDENCY EXEMPTION.—Subsection (e) of section 6109
is amended to read as follows:
‘‘(e) FURNISHING NUMBER FOR DEPENDENTS.—Any taxpayer who
claims an exemption under section 151 for any dependent on a
return for any taxable year shall include on such return the identify-
ing number (for purposes of this title) of such dependent.’’
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in paragraph (2), the
amendments made by this section shall apply to returns for
taxable years beginning after December 31, 1994.
(2) EXCEPTION.—The amendments made by this section
shall not apply to—
(A) returns for taxable years beginning in 1995 with
respect to individuals who are born after October 31, 1995,
and
H. R. 5110—203
(B) returns for taxable years beginning in 1996 with
respect to individuals who are born after November 30,
1996.
SEC. 743. EXTENSION OF INTERNAL REVENUE SERVICE USER FEES.
Subsection (c) of section 10511 of the Revenue Act of 1987
(relating to fees for requests for ruling, determination, and similar
letters) is amended by striking ‘‘October 1, 1995’’ and inserting
‘‘October 1, 2000’’.
SEC. 744. MODIFICATION OF SUBSTANTIAL UNDERSTATEMENT PEN-
ALTY FOR CORPORATIONS PARTICIPATING IN TAX SHEL-
TERS.
(a) IN GENERAL.—Subparagraph (C) of section 6662(d)(2) (relat-
ing to special rules in cases involving tax shelters) is amended
by redesignating clause (ii) as clause (iii) and by inserting after
clause (i) the following new clause:
‘‘(ii) SUBPARAGRAPH (B) NOT TO APPLY TO CORPORA-
TIONS.—Subparagraph (B) shall not apply to any item
of a corporation which is attributable to a tax shelter.’’
(b) TECHNICAL AMENDMENTS.—
(1) Clause (i) of section 6662(d)(2)(C) is amended by striking
‘‘In the case of any item’’ and inserting ‘‘In the case of any
item of a taxpayer other than a corporation which is’’.
(2) Clause (iii) of section 6662(d)(2)(C), as redesignated
by subsection (a), is amended by striking ‘‘clause (i)’’ and insert-
ing ‘‘this subparagraph’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall apply to items related to transactions occurring after the
date of the enactment of this Act.
SEC. 745. MODIFICATION OF AUTHORITY TO SET TERMS AND CONDI-
TIONS FOR SAVINGS BONDS.
(a) IN GENERAL.—Subsection (b) of section 3105 of title 31,
United States Code, is amended to read as follows:
‘‘(b)(1) The Secretary may—
‘‘(A) fix the investment yield for savings bonds; and
‘‘(B) change the investment yield on an outstanding savings
bond, except that the yield on a bond for the period held
may not be decreased below the minimum yield for the period
guaranteed on the date of issue.
‘‘(2) The Secretary may prescribe regulations providing that—
‘‘(A) owners of savings bonds may keep the bonds after
maturity or after a period beyond maturity during which the
bonds have earned interest and continue to earn interest at
rates consistent with paragraph (1) of this subsection; and
‘‘(B) savings bonds earning a different rate of interest before
the regulations are prescribed shall earn a rate of interest
consistent with paragraph (1).’’
(b) EFFECTIVE DATE.—The amendment made by this section
shall apply to bonds issued after October 31, 1994.
H. R. 5110—204
Subtitle F—Pension Plan Funding and
Premiums
SEC. 750. SHORT TITLE.
This subtitle may be cited as the ‘‘Retirement Protection Act
of 1994’’.
PART I—PENSION PLAN FUNDING
Subpart A—Amendments to the Internal Revenue
Code of 1986
SEC. 751. MINIMUM FUNDING REQUIREMENTS.
(a) AMENDMENTS TO ADDITIONAL FUNDING REQUIREMENTS FOR
SINGLE-EMPLOYER PLANS.—
(1) LIMITATIONS ON ADDITIONAL FUNDING REQUIREMENT FOR
CERTAIN PLANS.—
(A) IN GENERAL.—Paragraph (1) of section 412(l) (relat-
ing to additional funding requirements for plans which
are not multiemployer plans) is amended by striking ‘‘which
has an unfunded current liability’’ and inserting ‘‘to which
this subsection applies under paragraph (9)’’.
(B) PLANS TO WHICH REQUIREMENT APPLIES.—Section
412(l) is amended by adding at the end the following new
paragraph:
‘‘(9) APPLICABILITY OF SUBSECTION.—
‘‘(A) IN GENERAL.—Except as provided in paragraph
(6)(A), this subsection shall apply to a plan for any plan
year if its funded current liability percentage for such
year is less than 90 percent.
‘‘(B) EXCEPTION FOR CERTAIN PLANS AT LEAST 80 PER-
CENT FUNDED.—Subparagraph (A) shall not apply to a plan
for a plan year if—
‘‘(i) the funded current liability percentage for the
plan year is at least 80 percent, and
‘‘(ii) such percentage for each of the 2 immediately
preceding plan years (or each of the 2d and 3d imme-
diately preceding plan years) is at least 90 percent.
‘‘(C) FUNDED
CURRENT
LIABILITY
PERCENTAGE.—For
purposes of subparagraphs (A) and (B), the term ‘funded
current liability percentage’ has the meaning given such
term by paragraph (8)(B), except that such percentage shall
be determined for any plan year—
‘‘(i) without regard to paragraph (8)(E), and
‘‘(ii) by using the rate of interest which is the
highest rate allowable for the plan year under para-
graph (7)(C).
‘‘(D) 
TRANSITION
RULES.—For 
purposes 
of 
this
paragraph:
‘‘(i) FUNDED PERCENTAGE FOR YEARS BEFORE 1995.—
The funded current liability percentage for any plan
year beginning before January 1, 1995, shall be treated
as not less than 90 percent only if for such plan year
the plan met one of the following requirements (as
in effect for such year):
H. R. 5110—205
‘‘(I) The full-funding limitation under sub-
section (c)(7) for the plan was zero.
‘‘(II) The plan had no additional funding
requirement under this subsection (or would have
had no such requirement if its funded current
liability percentage had been determined under
subparagraph (C)).
‘‘(III) The plan’s additional funding require-
ment under this subsection did not exceed the
lesser of 0.5 percent of current liability or
$5,000,000.
‘‘(ii) SPECIAL RULE FOR 1995 AND 1996.—For pur-
poses of determining whether subparagraph (B) applies
to any plan year beginning in 1995 or 1996, a plan
shall be treated as meeting the requirements of
subparagraph (B)(ii) if the plan met the requirements
of clause (i) of this subparagraph for any two of the
plan years beginning in 1992, 1993, and 1994 (whether
or not consecutive).’’
(2) RELATIONSHIP OF ADDITIONAL FUNDING REQUIREMENT
TO FUNDING STANDARD ACCOUNT CHARGES AND CREDITS.—
(A) Clause (ii) of section 412(l)(1)(A) is amended to
read as follows:
‘‘(ii) the sum of the charges for such plan year
under subsection (b)(2), reduced by the sum of the
credits for such plan year under subparagraph (B)
of subsection (b)(3), plus’’.
(B) The last sentence in section 412(l)(1) of such Code
is amended to read as follows:
‘‘Such increase shall not exceed the amount which, after taking
into account charges (other than the additional charge under
this subsection) and credits under subsection (b), is necessary
to increase the funded current liability percentage (taking into
account the expected increase in current liability due to benefits
accruing during the plan year) to 100 percent.’’
(3) AMENDMENT TO DEFICIT REDUCTION CONTRIBUTION.—
Paragraph (2) of section 412(l) is amended—
(A) by striking ‘‘plus’’ at the end of subparagraph (A);
(B) by striking the period at the end of subparagraph
(B) and inserting ‘‘, plus’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(C) the expected increase in current liability due to
benefits accruing during the plan year.’’
(4) INCREASE
IN
CURRENT
LIABILITY
DUE
TO
CHANGE
IN
REQUIRED ASSUMPTIONS.—
(A) Paragraph (3) of section 412(l) is amended by add-
ing at the end the following new subparagraphs:
‘‘(D) SPECIAL RULE FOR REQUIRED CHANGES IN ACTUAR-
IAL ASSUMPTIONS.—
‘‘(i) IN
GENERAL.—The unfunded old liability
amount with respect to any plan for any plan year
shall be increased by the amount necessary to amortize
the amount of additional unfunded old liability under
the plan in equal annual installments over a period
of 12 plan years (beginning with the first plan year
beginning after December 31, 1994).
H. R. 5110—206
‘‘(ii) ADDITIONAL
UNFUNDED
OLD
LIABILITY.—For
purposes of clause (i), the term ‘additional unfunded
old liability’ means the amount (if any) by which—
‘‘(I) the current liability of the plan as of the
beginning of the first plan year beginning after
December 31, 1994, valued using the assumptions
required by paragraph (7)(C) as in effect for plan
years beginning after December 31, 1994, exceeds
‘‘(II) the current liability of the plan as of
the beginning of such first plan year, valued using
the same assumptions used under subclause (I)
(other than the assumptions required by para-
graph (7)(C)), using the prior interest rate, and
using such mortality assumptions as were used
to determine current liability for the first plan
year beginning after December 31, 1992.
‘‘(iii) PRIOR INTEREST RATE.—For purposes of clause
(ii), the term ‘prior interest rate’ means the rate of
interest that is the same percentage of the weighted
average under subsection (b)(5)(B)(ii)(I) for the first
plan year beginning after December 31, 1994, as the
rate of interest used by the plan to determine current
liability for the first plan year beginning after Decem-
ber 31, 1992, is of the weighted average under sub-
section (b)(5)(B)(ii)(I) for such first plan year beginning
after December 31, 1992.
‘‘(E) OPTIONAL RULE FOR ADDITIONAL UNFUNDED OLD
LIABILITY.—
‘‘(i) IN GENERAL.—If an employer makes an election
under clause (ii), the additional unfunded old liability
for purposes of subparagraph (D) shall be the amount
(if any) by which—
‘‘(I) the unfunded current liability of the plan
as of the beginning of the first plan year beginning
after December 31, 1994, valued using the assump-
tions required by paragraph (7)(C) as in effect
for plan years beginning after December 31, 1994,
exceeds
‘‘(II) the unamortized portion of the unfunded
old liability under the plan as of the beginning
of the first plan year beginning after December
31, 1994.
‘‘(ii) ELECTION.—
‘‘(I) An employer may irrevocably elect to apply
the provisions of this subparagraph as of the begin-
ning of the first plan year beginning after Decem-
ber 31, 1994.
‘‘(II) If an election is made under this clause,
the increase under paragraph (1) for any plan
year beginning after December 31, 1994, and
before January 1, 2002, to which this subsection
applies (without regard to this subclause) shall
not be less than the increase that would be
required under paragraph (1) if the provisions of
this title as in effect for the last plan year begin-
ning before January 1, 1995, had remained in
effect.’’
H. R. 5110—207
(B) Clause (i) of section 412(l)(4)(B) is amended by
inserting ‘‘, the unamortized portion of the additional
unfunded old liability,’’ after ‘‘old liability’’.
(5) APPLICABLE PERCENTAGE FOR DETERMINING UNFUNDED
NEW LIABILITY AMOUNT.—Subparagraph (C) of section 412(l)(4)
is amended—
(A) by striking ‘‘.25’’ and inserting ‘‘.40’’, and
(B) by striking ‘‘35’’ and inserting ‘‘60’’.
(6) UNPREDICTABLE CONTINGENT EVENT AMOUNT.—
(A) Subparagraph (A) of section 412(l)(5) is amended—
(i) by striking ‘‘greater of’’ and inserting ‘‘greatest
of’’ before clause (i);
(ii) by striking ‘‘or’’ at the end of clause (i);
(iii) by striking the period at the end of clause
(ii) and inserting ‘‘, or’’; and
(iv) by adding after clause (ii) the following new
clause:
‘‘(iii) the additional amount that would be deter-
mined under paragraph (4)(A) if the unpredictable
contingent event benefit liabilities were included in
unfunded new liability notwithstanding paragraph
(4)(B)(ii).’’
(B) Paragraph (5) of section 412(l) is amended by add-
ing at the end the following new subparagraph:
‘‘(E) LIMITATION.—The present value of the amounts
described in subparagraph (A) with respect to any one
event shall not exceed the unpredictable contingent event
benefit liabilities attributable to that event.’’
(C) Clause (ii) of section 412(m)(4)(D) is amended—
(i) by striking ‘‘greater of’’ and inserting ‘‘greatest
of’’ before subclause (I);
(ii) by striking ‘‘or’’ at the end of subclause (I);
(iii) by striking the period at the end of subclause
(II) and inserting ‘‘, or’’; and
(iv) by adding after subclause (II) the following
new clause:
‘‘(III) 25 percent of the amount determined
under subsection (l)(5)(A)(iii) for the plan year.’’
(7) REQUIRED INTEREST RATE AND MORTALITY ASSUMPTIONS
FOR DETERMINING CURRENT LIABILITY.—
(A) IN GENERAL.—Subparagraph (C) of section 412(l)(7)
is amended to read as follows:
‘‘(C) INTEREST
RATE
AND
MORTALITY
ASSUMPTIONS
USED.—Effective for plan years beginning after December
31, 1994—
‘‘(i) INTEREST RATE.—
‘‘(I) IN GENERAL.—The rate of interest used
to determine current liability under this subsection
shall be the rate of interest used under subsection
(b)(5), except that the highest rate in the permis-
sible range under subparagraph (B)(ii) thereof
shall not exceed the specified percentage under
subclause (II) of the weighted average referred
to in such subparagraph.
‘‘(II) SPECIFIED PERCENTAGE.—For purposes of
subclause (I), the specified percentage shall be
determined as follows:
H. R. 5110—208
‘‘In the case of
plan years beginning
The specified
in calendar year:
percentage is:
1995 ...................................................................
109
1996 ...................................................................
108
1997 ...................................................................
107
1998 ...................................................................
106
1999 and thereafter .........................................
105.
‘‘(ii) MORTALITY TABLES.—
‘‘(I) COMMISSIONERS’ STANDARD TABLE.—In the
case of plan years beginning before the first plan
year to which the first tables prescribed under
subclause (II) apply, the mortality table used in
determining current liability under this subsection
shall be the table prescribed by the Secretary
which is based on the prevailing commissioners’
standard table (described in section 807(d)(5)(A))
used to determine reserves for group annuity con-
tracts issued on January 1, 1993.
‘‘(II) SECRETARIAL AUTHORITY.—The Secretary
may by regulation prescribe for plan years begin-
ning after December 31, 1999, mortality tables
to be used in determining current liability under
this subsection. Such tables shall be based upon
the actual experience of pension plans and pro-
jected trends in such experience. In prescribing
such tables, the Secretary shall take into account
results of available independent studies of mortal-
ity of individuals covered by pension plans.
‘‘(III) PERIODIC REVIEW.—The Secretary shall
periodically (at least every 5 years) review any
tables in effect under this subsection and shall,
to the extent the Secretary determines necessary,
by regulation update the tables to reflect the actual
experience of pension plans and projected trends
in such experience.
‘‘(iii) SEPARATE MORTALITY TABLES FOR THE DIS-
ABLED.—Notwithstanding clause (ii)—
‘‘(I) IN GENERAL.—In the case of plan years
beginning after December 31, 1995, the Secretary
shall establish mortality tables which may be used
(in lieu of the tables under clause (ii)) to determine
current liability under this subsection for individ-
uals who are entitled to benefits under the plan
on account of disability. The Secretary shall estab-
lish separate tables for individuals whose disabil-
ities occur in plan years beginning before January
1, 1995, and for individuals whose disabilities
occur in plan years beginning on or after such
date.
‘‘(II) SPECIAL RULE FOR DISABILITIES OCCUR-
RING AFTER 1994.—In the case of disabilities occur-
ring in plan years beginning after December 31,
1994, the tables under subclause (I) shall apply
only with respect to individuals described in such
subclause who are disabled within the meaning
of title II of the Social Security Act and the regula-
tions thereunder.
H. R. 5110—209
‘‘(III) PLAN YEARS BEGINNING IN 1995.—In the
case of any plan year beginning in 1995, a plan
may use its own mortality assumptions for individ-
uals who are entitled to benefits under the plan
on account of disability.’’
(B) AMORTIZATION OF UNFUNDED MORTALITY INCREASE
AMOUNT.—
(i) IN GENERAL.—Paragraph (2) of section 412(l),
as amended by paragraph (3), is amended by striking
‘‘plus’’ at the end of subparagraph (B), by striking
the period at the end of subparagraph (C) and inserting
‘‘, and’’, and by adding at the end the following new
subparagraph:
‘‘(D) the aggregate of the unfunded mortality increase
amounts.’’
(ii) UNFUNDED
MORTALITY
INCREASE
AMOUNT.—
Section 412(l), as amended by paragraph (1), is
amended by adding at the end the following new para-
graph:
‘‘(10) UNFUNDED MORTALITY INCREASE AMOUNT.—
‘‘(A) IN
GENERAL.—The unfunded mortality increase
amount with respect to each unfunded mortality increase
is the amount necessary to amortize such increase in equal
annual installments over a period of 10 plan years (begin-
ning with the first plan year for which a plan uses any
new mortality table issued under paragraph (7)(C)(ii)(II)
or (III)).
‘‘(B) UNFUNDED MORTALITY INCREASE.—For purposes
of subparagraph (A), the term ‘unfunded mortality increase’
means an amount equal to the excess of—
‘‘(i) the current liability of the plan for the first
plan year for which a plan uses any new mortality
table issued under paragraph (7)(C)(ii)(II) or (III), over
‘‘(ii) the current liability of the plan for such plan
year which would have been determined if the mortal-
ity table in effect for the preceding plan year had
been used.’’
(iii) CONFORMING AMENDMENT.—Clause (i) of sec-
tion 412(l)(4)(B), as amended by paragraph (4)(B), is
amended by inserting ‘‘the unamortized portion of each
unfunded 
mortality 
increase,’’ 
after 
‘‘additional
unfunded old liability,’’.
(8) TRANSITION RULE.—Section 412(l), as amended by para-
graph (7), is amended by adding at the end the following
new paragraph:
‘‘(11) PHASE-IN
OF
INCREASES
IN
FUNDING
REQUIRED
BY
RETIREMENT PROTECTION ACT OF 1994.—
‘‘(A) IN GENERAL.—For any applicable plan year, at
the election of the employer, the increase under paragraph
(1) shall not exceed the greater of—
‘‘(i) the increase that would be required under
paragraph (1) if the provisions of this title as in effect
for plan years beginning before January 1, 1995, had
remained in effect, or
‘‘(ii) the amount which, after taking into account
charges (other than the additional charge under this
subsection) and credits under subsection (b), is nec-
H. R. 5110—210
essary to increase the funded current liability percent-
age (taking into account the expected increase in cur-
rent liability due to benefits accruing during the plan
year) for the applicable plan year to a percentage equal
to the sum of the initial funded current liability
percentage of the plan plus the applicable number
of percentage points for such applicable plan year.
‘‘(B) APPLICABLE
NUMBER
OF
PERCENTAGE
POINTS.—
‘‘(i) INITIAL FUNDED CURRENT LIABILITY PERCENT-
AGE OF 75 PERCENT OR LESS.—Except as provided in
clause (ii), for plans with an initial funded current
liability percentage of 75 percent or less, the applicable
number of percentage points for the applicable plan
year is:
‘‘In the case
The applicable
of applicable
number of
plan years
percentage
beginning in:
points is:
1995 ......................................................................
1996 ......................................................................
1997 ......................................................................
1998 ......................................................................
1999 ......................................................................
2000 ......................................................................
2001 ......................................................................
24.
‘‘(ii) OTHER CASES.—In the case of a plan to which
this clause applies, the applicable number of percent-
age points for any such applicable plan year is the
sum of—
‘‘(I) 2 percentage points;
‘‘(II) the applicable number of percentage
points (if any) under this clause for the preceding
applicable plan year;
‘‘(III) the product of .10 multiplied by the
excess (if any) of (a) 85 percentage points over
(b) the sum of the initial funded current liability
percentage and the number determined under
subclause (II);
‘‘(IV) for applicable plan years beginning in
2000, 1 percentage point; and
‘‘(V) for applicable plan years beginning in
2001, 2 percentage points.
‘‘(iii) PLANS TO WHICH CLAUSE (ii) APPLIES.—
‘‘(I) IN GENERAL.—Clause (ii) shall apply to
a plan for an applicable plan year if the initial
funded current liability percentage of such plan
is more than 75 percent.
‘‘(II) PLANS INITIALLY UNDER CLAUSE (i).—In
the case of a plan which (but for this subclause)
has an initial funded current liability percentage
of 75 percent or less, clause (ii) (and not clause
(i)) shall apply to such plan with respect to
applicable plan years beginning after the first
applicable plan year for which the sum of the
initial funded current liability percentage and the
applicable number of percentage points (deter-
mined under clause (i)) exceeds 75 percent. For
purposes of applying clause (ii) to such a plan,
H. R. 5110—211
the initial funded current liability percentage of
such plan shall be treated as being the sum
referred to in the preceding sentence.
‘‘(C) DEFINITIONS.—For purposes of this paragraph:
‘‘(i) The term ‘applicable plan year’ means a plan
year beginning after December 31, 1994, and before
January 1, 2002.
‘‘(ii) The term ‘initial funded current liability
percentage’ means the funded current liability percent-
age as of the first day of the first plan year beginning
after December 31, 1994.’’
(9) LIQUIDITY REQUIREMENT.—
(A) IN
GENERAL.—Section 412(m) is amended by
redesignating paragraph (5) as paragraph (6) and by insert-
ing after paragraph (4) the following new paragraph:
‘‘(5) LIQUIDITY REQUIREMENT.—
‘‘(A) IN
GENERAL.—A plan to which this paragraph
applies shall be treated as failing to pay the full amount
of any required installment to the extent that the value
of the liquid assets paid in such installment is less than
the liquidity shortfall (whether or not such liquidity short-
fall exceeds the amount of such installment required to
be paid but for this paragraph).
‘‘(B) PLANS TO WHICH PARAGRAPH APPLIES.—This para-
graph shall apply to a defined benefit plan (other than
a multiemployer plan or a plan described in subsection
(l)(6)(A)) which—
‘‘(i) is required to pay installments under this sub-
section for a plan year, and
‘‘(ii) has a liquidity shortfall for any quarter during
such plan year.
‘‘(C) PERIOD OF UNDERPAYMENT.—For purposes of para-
graph (1), any portion of an installment that is treated
as not paid under subparagraph (A) shall continue to be
treated as unpaid until the close of the quarter in which
the due date for such installment occurs.
‘‘(D) LIMITATION ON INCREASE.—If the amount of any
required installment is increased by reason of subpara-
graph (A), in no event shall such increase exceed the
amount which, when added to prior installments for the
plan year, is necessary to increase the funded current
liability percentage (taking into account the expected
increase in current liability due to benefits accruing during
the plan year) to 100 percent.
‘‘(E) DEFINITIONS.—For purposes of this paragraph:
‘‘(i) LIQUIDITY
SHORTFALL.—The term ‘liquidity
shortfall’ means, with respect to any required install-
ment, an amount equal to the excess (as of the last
day of the quarter for which such installment is made)
of the base amount with respect to such quarter over
the value (as of such last day) of the plan’s liquid
assets.
‘‘(ii) BASE AMOUNT.—
‘‘(I) IN
GENERAL.—The term ‘base amount’
means, with respect to any quarter, an amount
equal to 3 times the sum of the adjusted disburse-
H. R. 5110—212
ments from the plan for the 12 months ending
on the last day of such quarter.
‘‘(II) SPECIAL RULE.—If the amount determined
under clause (i) exceeds an amount equal to 2
times the sum of the adjusted disbursements from
the plan for the 36 months ending on the last
day of the quarter and an enrolled actuary certifies
to the satisfaction of the Secretary that such excess
is the result of nonrecurring circumstances, the
base amount with respect to such quarter shall
be determined without regard to amounts related
to those nonrecurring circumstances.
‘‘(iii) DISBURSEMENTS FROM THE PLAN.—The term
‘disbursements from the plan’ means all disbursements
from the trust, including purchases of annuities, pay-
ments of single sums and other benefits, and adminis-
trative expenses.
‘‘(iv) 
ADJUSTED
DISBURSEMENTS.—The 
term
‘adjusted disbursements’ means disbursements from
the plan reduced by the product of—
‘‘(I) the plan’s funded current liability percent-
age (as defined in subsection (l)(8)) for the plan
year, and
‘‘(II) the sum of the purchases of annuities,
payments of single sums, and such other disburse-
ments as the Secretary shall provide in regula-
tions.
‘‘(v) LIQUID
ASSETS.—The term ‘liquid assets’
means cash, marketable securities and such other
assets as specified by the Secretary in regulations.
‘‘(vi) QUARTER.—The term ‘quarter’ means, with
respect to any required installment, the 3-month period
preceding the month in which the due date for such
installment occurs.
‘‘(F) REGULATIONS.—The Secretary may prescribe such
regulations as are necessary to carry out this paragraph.’’
(B) EXCISE TAX ON UNPAID LIQUIDITY SHORTFALL.—
(i) Subsection (e) of section 4971 is amended by
striking ‘‘(a) or (b)’’ wherever it appears and inserting
‘‘(a), (b), or (f)’’.
(ii) Section 4971 is amended by redesignating sub-
section (f) as subsection (g) and adding a new sub-
section (f) to read as follows:
‘‘(f) FAILURE TO PAY LIQUIDITY SHORTFALL.—
‘‘(1) IN GENERAL.—In the case of a plan to which section
412(m)(5) applies, there is hereby imposed a tax of 10 percent
of the excess (if any) of—
‘‘(A) the amount of the liquidity shortfall for any quar-
ter, over
‘‘(B) the amount of such shortfall which is paid by
the required installment under section 412(m) for such
quarter (but only if such installment is paid on or before
the due date for such installment).
‘‘(2) ADDITIONAL TAX.—If the plan has a liquidity shortfall
as of the close of any quarter and as of the close of each
of the following 4 quarters, there is hereby imposed a tax
H. R. 5110—213
equal to 100 percent of the amount on which tax was imposed
by paragraph (1) for such first quarter.
‘‘(3) DEFINITIONS AND SPECIAL RULE.—
‘‘(A) LIQUIDITY SHORTFALL; QUARTER.—For purposes of
this subsection, the terms ‘liquidity shortfall’ and ‘quarter’
have the respective meanings given such terms by section
412(m)(5).
‘‘(B) SPECIAL RULE.—If the tax imposed by paragraph
(2) is paid with respect to any liquidity shortfall for any
quarter, no further tax shall be imposed by this subsection
on such shortfall for such quarter.’’
(C) TREATMENT
OF
FAILURE
TO
MAKE
CERTAIN
PAY-
MENTS IF PLAN HAS LIQUIDITY SHORTFALL.—Section 401(a)
is amended by adding at the end the following new para-
graph:
‘‘(32) TREATMENT OF FAILURE TO MAKE CERTAIN PAYMENTS
IF PLAN HAS LIQUIDITY SHORTFALL.—
‘‘(A) IN GENERAL.—A trust forming part of a pension
plan to which section 412(m)(5) applies shall not be treated
as failing to constitute a qualified trust under this section
merely because such plan ceases to make any payment
described in subparagraph (B) during any period that such
plan has a liquidity shortfall (as defined in section
412(m)(5)).
‘‘(B) PAYMENTS DESCRIBED.—A payment is described
in this subparagraph if such payment is—
‘‘(i) any payment, in excess of the monthly amount
paid under a single life annuity (plus any social secu-
rity supplements described in the last sentence of sec-
tion 411(a)(9)), to a participant or beneficiary whose
annuity starting date (as defined in section 417(f)(2))
occurs during the period referred to in subparagraph
(A),
‘‘(ii) any payment for the purchase of an irrevocable
commitment from an insurer to pay benefits, and
‘‘(iii) any other payment specified by the Secretary
by regulations.
‘‘(C) PERIOD OF SHORTFALL.—For purposes of this para-
graph, a plan has a liquidity shortfall during the period
that there is an underpayment of an installment under
section 412(m) by reason of paragraph (5)(A) thereof.’’
(10) 
AMENDMENT
TO
DEFINITION
OF
FULL-FUNDING
LIMITATION.—
(A) Subparagraph (A) of section 412(c)(7) is amended
by inserting ‘‘(including the expected increase in current
liability due to benefits accruing during the plan year)’’
after ‘‘current liability’’ in clause (i).
(B) Section 412(c)(7) is amended by adding at the end
the following new subparagraph:
‘‘(E) MINIMUM AMOUNT.—
‘‘(i) IN GENERAL.—In no event shall the full-funding
limitation determined under subparagraph (A) be less
than the excess (if any) of—
‘‘(I) 90 percent of the current liability of the
plan (including the expected increase in current
liability due to benefits accruing during the plan
year), over
H. R. 5110—214
‘‘(II) the value of the plan’s assets determined
under paragraph (2).
‘‘(ii) CURRENT LIABILITY; ASSETS.—For purposes of
clause (i)—
‘‘(I) the term ‘current liability’ has the meaning
given such term by subsection (l)(7) (without
regard to subparagraph (D) thereof), and
‘‘(II) assets shall not be reduced by any credit
balance in the funding standard account.’’
(C) Subparagraph (B) of section 412(c)(7) is amended
to read as follows:
‘‘(B) CURRENT
LIABILITY.—For purposes of subpara-
graph (D) and subclause (I) of subparagraph (A)(i), the
term ‘current liability’ has the meaning given such term
by subsection (l)(7) (without regard to subparagraphs (C)
and (D) thereof) and using the rate of interest used under
subsection (b)(5)(B).’’
(11) REFERENCE TO ACT.—Section 404(g)(4) is amended by
striking ‘‘the Single-Employer Pension Plan Amendments Act
of 1986’’ and inserting ‘‘the Retirement Protection Act of 1994’’.
(b) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in paragraph (2), the
amendments made by this section shall apply to plan years
beginning after December 31, 1994.
(2) REFERENCE.—The amendment made by subsection
(a)(11) shall take effect on the date of the enactment of this
Act.
SEC. 752. LIMITATION 
ON 
CHANGES 
IN 
CURRENT 
LIABILITY
ASSUMPTIONS.
(a) IN GENERAL.—Paragraph (5) of section 412(c) is amended—
(1) by striking ‘‘If the funding method’’ and inserting the
following:
‘‘(A) IN GENERAL.—If the funding method’’, and
(2) by adding at the end the following new subparagraph:
‘‘(B) APPROVAL
REQUIRED
FOR
CERTAIN
CHANGES
IN
ASSUMPTIONS BY CERTAIN SINGLE-EMPLOYER PLANS SUBJECT
TO ADDITIONAL FUNDING REQUIREMENT.—
‘‘(i) IN GENERAL.—No actuarial assumption (other
than the assumptions described in subsection (l)(7)(C))
used to determine the current liability for a plan to
which this subparagraph applies may be changed with-
out the approval of the Secretary.
‘‘(ii) PLANS
TO
WHICH
SUBPARAGRAPH
APPLIES.—
This subparagraph shall apply to a plan only if—
‘‘(I) the plan is a defined benefit plan (other
than a multiemployer plan) to which title IV of
the Employee Retirement Income Security Act of
1974 applies;
‘‘(II) the aggregate unfunded vested benefits
as of the close of the preceding plan year (as deter-
mined under section 4006(a)(3)(E)(iii) of the
Employee Retirement Income Security Act of 1974)
of such plan and all other plans maintained by
the contributing sponsors (as defined in section
4001(a)(13) of such Act) and members of such spon-
sors’ controlled groups (as defined in section
H. R. 5110—215
4001(a)(14) of such Act) which are covered by title
IV of such Act (disregarding plans with no
unfunded vested benefits) exceed $50,000,000; and
‘‘(III) the change in assumptions (determined
after taking into account any changes in interest
rate and mortality table) results in a decrease
in the unfunded current liability of the plan for
the current plan year that exceeds $50,000,000,
or that exceeds $5,000,000 and that is 5 percent
or more of the current liability of the plan before
such change.’’
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendment made by this section
shall apply to changes in assumptions for plan years beginning
after October 28, 1993.
(2) CERTAIN CHANGES CEASE TO BE EFFECTIVE.—In the case
of changes in assumptions for plan years beginning after
December 31, 1992, and on or before October 28, 1993, such
changes shall cease to be effective for plan years beginning
after December 31, 1994, if—
(A) such change would have required the approval
of the Secretary of the Treasury had such amendment
applied to such change, and
(B) such change is not so approved.
SEC. 753. ANTICIPATION OF BARGAINED BENEFIT INCREASES.
(a) IN GENERAL.—Section 412(c) is amended by adding at the
end the following new paragraph:
‘‘(12) ANTICIPATION OF BENEFIT INCREASES EFFECTIVE IN
THE FUTURE.—In determining projected benefits, the funding
method of a collectively bargained plan described in section
413(a) (other than a multiemployer plan) shall anticipate bene-
fit increases scheduled to take effect during the term of the
collective bargaining agreement applicable to the plan.’’
(b) EFFECTIVE DATE.—The amendment made by this section
shall apply to plan years beginning after December 31, 1994, with
respect to collective bargaining agreements in effect on or after
January 1, 1995.
SEC. 754. MODIFICATION 
OF 
QUARTERLY 
CONTRIBUTION
REQUIREMENT.
(a) IN GENERAL.—Paragraph (1) of section 412(m) is amended—
(1) by inserting ‘‘which has a funded current liability
percentage (as defined in subsection (l)(8)) for the preceding
plan year of less than 100 percent’’ before ‘‘fails’’, and
(2) by striking ‘‘any plan year’’ and inserting ‘‘the plan
year’’.
(b) EFFECTIVE DATE.—The amendment made by this section
shall apply to plan years beginning after the date of enactment
of this Act.
SEC. 755. EXCEPTIONS 
TO 
EXCISE 
TAX 
ON 
NONDEDUCTIBLE
CONTRIBUTIONS.
(a) IN GENERAL.—Section 4972(c) is amended by adding at
the end the following new paragraph:
‘‘(6) EXCEPTIONS.—In determining the amount of non-
deductible contributions for any taxable year, there shall not
be taken into account—
H. R. 5110—216
‘‘(A) contributions that would be deductible under sec-
tion 404(a)(1)(D) if the plan had more than 100 participants
if—
‘‘(i) the plan is covered under section 4021 of the
Employee Retirement Income Security Act of 1974,
and
‘‘(ii) the plan is terminated under section 4041(b)
of such Act on or before the last day of the taxable
year, and
‘‘(B) contributions to 1 or more defined contribution
plans which are not deductible when contributed solely
because of section 404(a)(7), but only to the extent such
contributions do not exceed 6 percent of compensation
(within the meaning of section 404(a)) paid or accrued
(during the taxable year for which the contributions were
made) to beneficiaries under the plans.
If 1 or more defined benefit plans were taken into account
in determining the amount allowable as a deduction under
section 404 for contributions to any defined contribution plan,
subparagraph (B) shall apply only if such defined benefit plans
are described in section 404(a)(1)(D). For purposes of subpara-
graph (B), the deductible limits under section 404(a)(7) shall
first be applied to amounts contributed to a defined benefit
plan and then to amounts described in subparagraph (B).’’
(b) EFFECTIVE DATE.—
(1) SECTION
4972(c)(6)(A).—Section 4972(c)(6)(A) of the
Internal Revenue Code of 1986 (as added by this section) shall
apply to taxable years ending on or after the date of enactment
of this Act.
(2) SECTION 4972(c)(6)(B).—Section 4972(c)(6)(B) of such Code
(as added by this section) shall apply to taxable years ending
on or after December 31, 1992.
Subpart B—Amendments to the Employee
Retirement Income Security Act of 1974
SEC. 761. MINIMUM FUNDING REQUIREMENTS.
(a) AMENDMENTS TO ADDITIONAL FUNDING REQUIREMENTS FOR
SINGLE-EMPLOYER PLANS.—
(1) LIMITATIONS ON ADDITIONAL FUNDING REQUIREMENT FOR
CERTAIN PLANS.—
(A) IN GENERAL.—Paragraph (1) of section 302(d) of
the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1082(d)) is amended by striking ‘‘which has an
unfunded current liability’’ and inserting ‘‘to which this
subsection applies under paragraph (9)’’.
(B) PLANS TO WHICH REQUIREMENT APPLIES.—Section
302(d) of such Act is amended by adding at the end the
following new paragraph:
‘‘(9) APPLICABILITY OF SUBSECTION.—
‘‘(A) IN GENERAL.—Except as provided in paragraph
(6)(A), this subsection shall apply to a plan for any plan
year if its funded current liability percentage for such
year is less than 90 percent.
‘‘(B) EXCEPTION FOR CERTAIN PLANS AT LEAST 80 PER-
CENT FUNDED.—Subparagraph (A) shall not apply to a plan
for a plan year if—
H. R. 5110—217
‘‘(i) the funded current liability percentage for the
plan year is at least 80 percent, and
‘‘(ii) such percentage for each of the 2 immediately
preceding plan years (or each of the 2d and 3d imme-
diately preceding plan years) is at least 90 percent.
‘‘(C) FUNDED
CURRENT
LIABILITY
PERCENTAGE.—For
purposes of subparagraphs (A) and (B), the term ‘funded
current liability percentage’ has the meaning given such
term by paragraph (8)(B), except that such percentage shall
be determined for any plan year—
‘‘(i) without regard to paragraph (8)(E), and
‘‘(ii) by using the rate of interest which is the
highest rate allowable for the plan year under para-
graph (7)(C).
‘‘(D) TRANSITION RULES.—For purposes of this para-
graph:
‘‘(i) FUNDED PERCENTAGE FOR YEARS BEFORE 1995.—
The funded current liability percentage for any plan
year beginning before January 1, 1995, shall be treated
as not less than 90 percent only if for such plan year
the plan met one of the following requirements (as
in effect for such year):
‘‘(I) The full-funding limitation under sub-
section (c)(7) for the plan was zero.
‘‘(II) The plan had no additional funding
requirement under this subsection (or would have
had no such requirement if its funded current
liability percentage had been determined under
subparagraph (C)).
‘‘(III) The plan’s additional funding require-
ment under this subsection did not exceed the
lesser of 0.5 percent of current liability or
$5,000,000.
‘‘(ii) SPECIAL RULE FOR 1995 AND 1996.—For pur-
poses of determining whether subparagraph (B) applies
to any plan year beginning in 1995 or 1996, a plan
shall be treated as meeting the requirements of
subparagraph (B)(ii) if the plan met the requirements
of clause (i) of this subparagraph for any two of the
plan years beginning in 1992, 1993, and 1994 (whether
or not consecutive).’’
(2) RELATIONSHIP OF ADDITIONAL FUNDING REQUIREMENT
TO FUNDING STANDARD ACCOUNT CHARGES AND CREDITS.—
(A) Clause (ii) of section 302(d)(1)(A) of such Act is
amended to read as follows:
‘‘(ii) the sum of the charges for such plan year
under subsection (b)(2), reduced by the sum of the
credits for such plan year under subparagraph (B)
of subsection (b)(3), plus’’.
(B) The last sentence in section 302(d)(1) of such Act
is amended to read as follows:
‘‘Such increase shall not exceed the amount which, after taking
into account charges (other than the additional charge under
this subsection) and credits under subsection (b), is necessary
to increase the funded current liability percentage (taking into
account the expected increase in current liability due to benefits
accruing during the plan year) to 100 percent.’’
H. R. 5110—218
(3) AMENDMENT TO DEFICIT REDUCTION CONTRIBUTION.—
Paragraph (2) of section 302(d) of such Act is amended—
(A) by striking ‘‘plus’’ at the end of subparagraph (A);
(B) by striking the period at the end of subparagraph
(B) and inserting ‘‘, plus’’; and
(C) by adding at the end the following new subpara-
graph:
‘‘(C) the expected increase in current liability due to
benefits accruing during the plan year.’’
(4) INCREASE
IN
CURRENT
LIABILITY
DUE
TO
CHANGE
IN
REQUIRED ASSUMPTIONS.—
(A) Paragraph (3) of section 302(d) of such Act is
amended by adding at the end the following new
subparagraphs:
‘‘(D) SPECIAL RULE FOR REQUIRED CHANGES IN ACTUAR-
IAL ASSUMPTIONS.—
‘‘(i) IN
GENERAL.—The unfunded old liability
amount with respect to any plan for any plan year
shall be increased by the amount necessary to amortize
the amount of additional unfunded old liability under
the plan in equal annual installments over a period
of 12 plan years (beginning with the first plan year
beginning after December 31, 1994).
‘‘(ii) ADDITIONAL
UNFUNDED
OLD
LIABILITY.—For
purposes of clause (i), the term ‘additional unfunded
old liability’ means the amount (if any) by which—
‘‘(I) the current liability of the plan as of the
beginning of the first plan year beginning after
December 31, 1994, valued using the assumptions
required by paragraph (7)(C) as in effect for plan
years beginning after December 31, 1994, exceeds
‘‘(II) the current liability of the plan as of
the beginning of such first plan year, valued using
the same assumptions used under subclause (I)
(other than the assumptions required by para-
graph (7)(C)), using the prior interest rate, and
using such mortality assumptions as were used
to determine current liability for the first plan
year beginning after December 31, 1992.
‘‘(iii) PRIOR INTEREST RATE.—For purposes of clause
(ii), the term ‘prior interest rate’ means the rate of
interest that is the same percentage of the weighted
average under subsection (b)(5)(B)(ii)(I) for the first
plan year beginning after December 31, 1994, as the
rate of interest used by the plan to determine current
liability for the first plan year beginning after Decem-
ber 31, 1992, is of the weighted average under sub-
section (b)(5)(B)(ii)(I) for such first plan year beginning
after December 31, 1992.
‘‘(E) OPTIONAL RULE FOR ADDITIONAL UNFUNDED OLD
LIABILITY.—
‘‘(i) IN GENERAL.—If an employer makes an election
under clause (ii), the additional unfunded old liability
for purposes of subparagraph (D) shall be the amount
(if any) by which—
‘‘(I) the unfunded current liability of the plan
as of the beginning of the first plan year beginning
H. R. 5110—219
after December 31, 1994, valued using the assump-
tions required by paragraph (7)(C) as in effect
for plan years beginning after December 31, 1994,
exceeds
‘‘(II) the unamortized portion of the unfunded
old liability under the plan as of the beginning
of the first plan year beginning after December
31, 1994.
‘‘(ii) ELECTION.—
‘‘(I) An employer may irrevocably elect to apply
the provisions of this subparagraph as of the begin-
ning of the first plan year beginning after Decem-
ber 31, 1994.
‘‘(II) If an election is made under this clause,
the increase under paragraph (1) for any plan
year beginning after December 31, 1994, and
before January 1, 2002, to which this subsection
applies (without regard to this subclause) shall
not be less than the increase that would be
required under paragraph (1) if the provisions of
this title as in effect for the last plan year begin-
ning before January 1, 1995, had remained in
effect.’’
(B) Clause (i) of section 302(d)(4)(B) of such Act is
amended by inserting ‘‘, the unamortized portion of the
additional unfunded old liability,’’ after ‘‘old liability’’.
(5) APPLICABLE PERCENTAGE FOR DETERMINING UNFUNDED
NEW LIABILITY AMOUNT.—Subparagraph (C) of section 302(d)(4)
of such Act is amended—
(A) by striking ‘‘.25’’ and inserting ‘‘.40’’, and
(B) by striking ‘‘35’’ and inserting ‘‘60’’.
(6) UNPREDICTABLE CONTINGENT EVENT AMOUNT.—
(A) Subparagraph (A) of section 302(d)(5) of such Act
is amended—
(i) by striking ‘‘greater of’’ and inserting ‘‘greatest
of’’ before clause (i);
(ii) by striking ‘‘or’’ at the end of clause (i);
(iii) by striking the period at the end of clause
(ii) and inserting ‘‘, or’’; and
(iv) by adding after clause (ii) the following new
clause:
‘‘(iii) the additional amount that would be deter-
mined under paragraph (4)(A) if the unpredictable
contingent event benefit liabilities were included in
unfunded new liability notwithstanding paragraph
(4)(B)(ii).’’
(B) Paragraph (5) of section 302(d) of such Act is
amended by adding at the end the following new
subparagraph:
‘‘(E) LIMITATION.—The present value of the amounts
described in subparagraph (A) with respect to any one
event shall not exceed the unpredictable contingent event
benefit liabilities attributable to that event.’’
(C) Clause (ii) of section 302(e)(4)(D) of such Act is
amended—
(i) by striking ‘‘greater of’’ and inserting ‘‘greatest
of’’ before subclause (I);
H. R. 5110—220
(ii) by striking ‘‘or’’ at the end of subclause (I);
(iii) by striking the period at the end of subclause
(II) and inserting ‘‘, or’’; and
(iv) by adding after subclause (II) the following
new clause:
‘‘(III) 25 percent of the amount determined
under subsection (d)(5)(A)(iii) for the plan year.’’
(7) REQUIRED INTEREST RATE AND MORTALITY ASSUMPTIONS
FOR DETERMINING CURRENT LIABILITY.—
(A) IN GENERAL.—Subparagraph (C) of section 302(d)(7)
of such Act is amended to read as follows:
‘‘(C) INTEREST
RATE
AND
MORTALITY
ASSUMPTIONS
USED.—Effective for plan years beginning after December
31, 1994—
‘‘(i) INTEREST RATE.—
‘‘(I) IN GENERAL.—The rate of interest used
to determine current liability under this subsection
shall be the rate of interest used under subsection
(b)(5), except that the highest rate in the permis-
sible range under subparagraph (B)(ii) thereof
shall not exceed the specified percentage under
subclause (II) of the weighted average referred
to in such subparagraph.
‘‘(II) SPECIFIED PERCENTAGE.—For purposes of
subclause (I), the specified percentage shall be
determined as follows:
‘‘In the case of
plan years beginning
The specified
in calendar year:
percentage is:
1995 ...................................................................
109
1996 ...................................................................
108
1997 ...................................................................
107
1998 ...................................................................
106
1999 and thereafter .........................................
105.
‘‘(ii) MORTALITY TABLES.—
‘‘(I) COMMISSIONERS’ STANDARD TABLE.—In the
case of plan years beginning before the first plan
year to which the first tables prescribed under
subclause (II) apply, the mortality table used in
determining current liability under this subsection
shall be the table prescribed by the Secretary of
the Treasury which is based on the prevailing
commissioners’ standard table (described in section
807(d)(5)(A) of the Internal Revenue Code of 1986)
used to determine reserves for group annuity con-
tracts issued on January 1, 1993.
‘‘(II) SECRETARIAL AUTHORITY.—The Secretary
of the Treasury may by regulation prescribe for
plan years beginning after December 31, 1999,
mortality tables to be used in determining current
liability under this subsection. Such tables shall
be based upon the actual experience of pension
plans and projected trends in such experience. In
prescribing such tables, the Secretary of the Treas-
ury shall take into account results of available
independent studies of mortality of individuals cov-
ered by pension plans.
H. R. 5110—221
‘‘(III) PERIODIC REVIEW.—The Secretary of the
Treasury shall periodically (at least every 5 years)
review any tables in effect under this subsection
and shall, to the extent the Secretary determines
necessary, by regulation update the tables to
reflect the actual experience of pension plans and
projected trends in such experience.
‘‘(iii) SEPARATE MORTALITY TABLES FOR THE DIS-
ABLED.—Notwithstanding clause (ii)—
‘‘(I) IN GENERAL.—In the case of plan years
beginning after December 31, 1995, the Secretary
of the Treasury shall establish mortality tables
which may be used (in lieu of the tables under
clause (ii)) to determine current liability under
this subsection for individuals who are entitled
to benefits under the plan on account of disability.
Such Secretary shall establish separate tables for
individuals whose disabilities occur in plan years
beginning before January 1, 1995, and for individ-
uals whose disabilities occur in plan years begin-
ning on or after such date.
‘‘(II) SPECIAL RULE FOR DISABILITIES OCCUR-
RING AFTER 1994.—In the case of disabilities occur-
ring in plan years beginning after December 31,
1994, the tables under subclause (I) shall apply
only with respect to individuals described in such
subclause who are disabled within the meaning
of title II of the Social Security Act and the regula-
tions thereunder.
‘‘(III) PLAN YEARS BEGINNING IN 1995.—In the
case of any plan year beginning in 1995, a plan
may use its own mortality assumptions for individ-
uals who are entitled to benefits under the plan
on account of disability.’’
(B) AMORTIZATION OF UNFUNDED MORTALITY INCREASE
AMOUNT.—
(i) IN GENERAL.—Paragraph (2) of section 302(d)
of such Act, as amended by paragraph (3), is amended
by striking ‘‘plus’’ at the end of subparagraph (B),
by striking the period at the end of subparagraph
(C) and inserting ‘‘, and’’, and by adding at the end
the following new subparagraph:
‘‘(D) the aggregate of the unfunded mortality increase
amounts.’’
(ii) UNFUNDED
MORTALITY
INCREASE
AMOUNT.—
Section 302(d) of such Act, as amended by paragraph
(1), is amended by adding at the end the following
new paragraph:
‘‘(10) UNFUNDED MORTALITY INCREASE AMOUNT.—
‘‘(A) IN
GENERAL.—The unfunded mortality increase
amount with respect to each unfunded mortality increase
is the amount necessary to amortize such increase in equal
annual installments over a period of 10 plan years (begin-
ning with the first plan year for which a plan uses any
new mortality table issued under paragraph (7)(C)(ii)(II)
or (III)).
H. R. 5110—222
‘‘(B) UNFUNDED MORTALITY INCREASE.—For purposes
of subparagraph (A), the term ‘unfunded mortality increase’
means an amount equal to the excess of—
‘‘(i) the current liability of the plan for the first
plan year for which a plan uses any new mortality
table issued under paragraph (7)(C)(ii)(II) or (III), over
‘‘(ii) the current liability of the plan for such plan
year which would have been determined if the mortal-
ity table in effect for the preceding plan year had
been used.’’
(iii) CONFORMING AMENDMENT.—Clause (i) of sec-
tion 302(d)(4)(B) of such Act, as amended by paragraph
(4)(B), is amended by inserting ‘‘the unamortized por-
tion of each unfunded mortality increase,’’ after ‘‘addi-
tional unfunded old liability,’’.
(8) TRANSITION
RULE.—Section 302(d) of such Act, as
amended by paragraph (7), is amended by adding at the end
the following new paragraph:
‘‘(11) PHASE-IN
OF
INCREASES
IN
FUNDING
REQUIRED
BY
RETIREMENT PROTECTION ACT OF 1994.—
‘‘(A) IN GENERAL.—For any applicable plan year, at
the election of the employer, the increase under paragraph
(1) shall not exceed the greater of—
‘‘(i) the increase that would be required under
paragraph (1) if the provisions of this title as in effect
for plan years beginning before January 1, 1995, had
remained in effect, or
‘‘(ii) the amount which, after taking into account
charges (other than the additional charge under this
subsection) and credits under subsection (b), is nec-
essary to increase the funded current liability percent-
age (taking into account the expected increase
in current liability due to benefits accruing during
the plan year) for the applicable plan year to a percent-
age equal to the sum of the initial funded current
liability percentage of the plan plus the applicable
number of percentage points for such applicable plan
year.
‘‘(B) APPLICABLE
NUMBER
OF
PERCENTAGE
POINTS.—
‘‘(i) INITIAL FUNDED CURRENT LIABILITY PERCENT-
AGE OF 75 PERCENT OR LESS.—Except as provided in
clause (ii), for plans with an initial funded current
liability percentage of 75 percent or less, the applicable
number of percentage points for the applicable plan
year is:
‘‘In the case
The applicable
of applicable
number of
plan years
percentage
beginning in:
points is:
1995 ......................................................................
1996 ......................................................................
1997 ......................................................................
1998 ......................................................................
1999 ......................................................................
2000 ......................................................................
2001 ......................................................................
24.
‘‘(ii) OTHER CASES.—In the case of a plan to which
this clause applies, the applicable number of percent-
H. R. 5110—223
age points for any such applicable plan year is the
sum of—
‘‘(I) 2 percentage points;
‘‘(II) the applicable number of percentage
points (if any) under this clause for the preceding
applicable plan year;
‘‘(III) the product of .10 multiplied by the
excess (if any) of (a) 85 percentage points over
(b) the sum of the initial funded current liability
percentage and the number determined under
subclause (II);
‘‘(IV) for applicable plan years beginning in
2000, 1 percentage point; and
‘‘(V) for applicable plan years beginning in
2001, 2 percentage points.
‘‘(iii) PLANS TO WHICH CLAUSE (ii) APPLIES.—
‘‘(I) IN GENERAL.—Clause (ii) shall apply to
a plan for an applicable plan year if the initial
funded current liability percentage of such plan
is more than 75 percent.
‘‘(II) PLANS INITIALLY UNDER CLAUSE (i).—In
the case of a plan which (but for this subclause)
has an initial funded current liability percentage
of 75 percent or less, clause (ii) (and not clause
(i)) shall apply to such plan with respect to
applicable plan years beginning after the first
applicable plan year for which the sum of the
initial funded current liability percentage and the
applicable number of percentage points (deter-
mined under clause (i)) exceeds 75 percent. For
purposes of applying clause (ii) to such a plan,
the initial funded current liability percentage of
such plan shall be treated as being the sum
referred to in the preceding sentence.
‘‘(C) DEFINITIONS.—For purposes of this paragraph—
‘‘(i) The term ‘applicable plan year’ means a plan
year beginning after December 31, 1994, and before
January 1, 2002.
‘‘(ii) The term ‘initial funded current liability
percentage’ means the funded current liability percent-
age as of the first day of the first plan year beginning
after December 31, 1994.’’
(9) LIQUIDITY REQUIREMENT.—
(A) IN GENERAL.—Section 302(e) of such Act is amended
by redesignating paragraph (5) as paragraph (6) and by
inserting after paragraph (4) the following new paragraph:
‘‘(5) LIQUIDITY REQUIREMENT.—
‘‘(A) IN
GENERAL.—A plan to which this paragraph
applies shall be treated as failing to pay the full amount
of any required installment to the extent that the value
of the liquid assets paid in such installment is less than
the liquidity shortfall (whether or not such liquidity short-
fall exceeds the amount of such installment required to
be paid but for this paragraph).
‘‘(B) PLANS TO WHICH PARAGRAPH APPLIES.—This para-
graph shall apply to a defined benefit plan (other than
H. R. 5110—224
a multiemployer plan or a plan described in subsection
(d)(6)(A)) which—
‘‘(i) is required to pay installments under this sub-
section for a plan year, and
‘‘(ii) has a liquidity shortfall for any quarter during
such plan year.
‘‘(C) PERIOD OF UNDERPAYMENT.—For purposes of para-
graph (1), any portion of an installment that is treated
as not paid under subparagraph (A) shall continue to be
treated as unpaid until the close of the quarter in which
the due date for such installment occurs.
‘‘(D) LIMITATION ON INCREASE.—If the amount of any
required installment is increased by reason of subpara-
graph (A), in no event shall such increase exceed the
amount which, when added to prior installments for the
plan year, is necessary to increase the funded current
liability percentage (taking into account the expected
increase in current liability due to benefits accruing during
the plan year) to 100 percent.
‘‘(E) DEFINITIONS.—For purposes of this paragraph—
‘‘(i) LIQUIDITY
SHORTFALL.—The term ‘liquidity
shortfall’ means, with respect to any required install-
ment, an amount equal to the excess (as of the last
day of the quarter for which such installment is made)
of the base amount with respect to such quarter over
the value (as of such last day) of the plan’s liquid
assets.
‘‘(ii) BASE AMOUNT.—
‘‘(I) IN
GENERAL.—The term ‘base amount’
means, with respect to any quarter, an amount
equal to 3 times the sum of the adjusted disburse-
ments from the plan for the 12 months ending
on the last day of such quarter.
‘‘(II) SPECIAL RULE.—If the amount determined
under clause (i) exceeds an amount equal to 2
times the sum of the adjusted disbursements from
the plan for the 36 months ending on the last
day of the quarter and an enrolled actuary certifies
to the satisfaction of the Secretary of the Treasury
that such excess is the result of nonrecurring cir-
cumstances, the base amount with respect to such
quarter shall be determined without regard to
amounts 
related 
to 
those 
nonrecurring 
cir-
cumstances.
‘‘(iii) DISBURSEMENTS FROM THE PLAN.—The term
‘disbursements from the plan’ means all disbursements
from the trust, including purchases of annuities, pay-
ments of single sums and other benefits, and adminis-
trative expenses.
‘‘(iv) 
ADJUSTED
DISBURSEMENTS.—The 
term
‘adjusted disbursements’ means disbursements from
the plan reduced by the product of—
‘‘(I) the plan’s funded current liability percent-
age (as defined in subsection (d)(8)) for the plan
year, and
‘‘(II) the sum of the purchases of annuities,
payments of single sums, and such other disburse-
H. R. 5110—225
ments as the Secretary of the Treasury shall pro-
vide in regulations.
‘‘(v) LIQUID
ASSETS.—The term ‘liquid assets’
means cash, marketable securities and such other
assets as specified by the Secretary of the Treasury
in regulations.
‘‘(vi) QUARTER.—The term ‘quarter’ means, with
respect to any required installment, the 3-month period
preceding the month in which the due date for such
installment occurs.
‘‘(F) REGULATIONS.—The Secretary of the Treasury may
prescribe such regulations as are necessary to carry out
this paragraph.’’
(B) LIMITATION ON DISTRIBUTIONS OTHER THAN LIFE
ANNUITIES PAID BY THE PLAN.—
(i) Section 206 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1056) is amended by
adding at the end the following new subsection:
‘‘(e) LIMITATION ON DISTRIBUTIONS OTHER THAN LIFE ANNUITIES
PAID BY THE PLAN.—
‘‘(1) IN GENERAL.—Notwithstanding any other provision of
this part, the fiduciary of a pension plan that is subject to
the additional funding requirements of section 302(d) shall
not permit a prohibited payment to be made from a plan
during a period in which such plan has a liquidity shortfall
(as defined in section 302(e)(5)).
‘‘(2) PROHIBITED PAYMENT.—For purposes of paragraph (1),
the term ‘prohibited payment’ means—
‘‘(A) any payment, in excess of the monthly amount
paid under a single life annuity (plus any social security
supplements described in the last sentence of section
204(b)(1)(G)), to a participant or beneficiary whose annuity
starting date (as defined in section 205(h)(2)), that occurs
during the period referred to in paragraph (1),
‘‘(B) any payment for the purchase of an irrevocable
commitment from an insurer to pay benefits, and
‘‘(C) any other payment specified by the Secretary of
the Treasury by regulations.
‘‘(3) PERIOD
OF
SHORTFALL.—For purposes of this sub-
section, a plan has a liquidity shortfall during the period that
there is an underpayment of an installment under section 302(e)
by reason of paragraph (5)(A) thereof.
‘‘(4) COORDINATION WITH OTHER PROVISIONS.—Compliance
with this subsection shall not constitute a violation of any
other provision of this Act.’’
(ii) Section 502 of such Act is amended by adding
at the end a new subsection (m) to read as follows:
‘‘(m) In the case of a distribution to a pension plan participant
or beneficiary in violation of section 206(e) by a plan fiduciary,
the Secretary shall assess a penalty against such fiduciary in an
amount equal to the value of the distribution. Such penalty shall
not exceed $10,000 for each such distribution.’’
(10) 
AMENDMENT
TO
DEFINITION
OF
FULL-FUNDING
LIMITATION.—
(A) Subparagraph (A) of section 302(c)(7) of such Act
is amended by inserting ‘‘(including the expected increase
H. R. 5110—226
in current liability due to benefits accruing during the
plan year)’’ after ‘‘current liability’’ in clause (i).
(B) Section 302(c)(7) of such Act is amended by adding
at the end the following new subparagraph:
‘‘(E) MINIMUM AMOUNT.—
‘‘(i) IN GENERAL.—In no event shall the full-funding
limitation determined under subparagraph (A) be less
than the excess (if any) of—
‘‘(I) 90 percent of the current liability of the
plan (including the expected increase in current
liability due to benefits accruing during the plan
year), over
‘‘(II) the value of the plan’s assets determined
under paragraph (2).
‘‘(ii) CURRENT LIABILITY; ASSETS.—For purposes of
clause (i)—
‘‘(I) the term ‘current liability’ has the meaning
given such term by subsection (d)(7) (without
regard to subparagraph (D) thereof), and
‘‘(II) assets shall not be reduced by any credit
balance in the funding standard account.’’
(C) Subparagraph (B) of section 302(c)(7) of such Act
is amended to read as follows:
‘‘(B) CURRENT
LIABILITY.—For purposes of subpara-
graph (D) and subclause (I) of subparagraph (A)(i), the
term ‘current liability’ has the meaning given such term
by subsection (d)(7) (without regard to subparagraphs (C)
and (D) thereof) and using the rate of interest used under
subsection (b)(5)(B).’’
(11) DEFINITION
OF
CONTRIBUTING
SPONSOR.—Paragraph
(13) of section 4001(a) of such Act (29 U.S.C. 1301(a)(13)) is
amended by striking ‘‘means a person—’’ and all that follows
and inserting ‘‘means a person described in section 302(c)(11)(A)
of this Act (without regard to section 302(c)(11)(B) of this Act)
or section 412(c)(11)(A) of the Internal Revenue Code of 1986
(without regard to section 412(c)(11)(B) of such Code).’’
(b) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in paragraph (2), the
amendments made by this section shall apply to plan years
beginning after December 31, 1994.
(2) CONTRIBUTING
SPONSOR.—The amendment made by
subsection (a)(11) shall be effective as if included in the Pension
Protection Act.
SEC. 762. LIMITATION 
ON 
CHANGES 
IN 
CURRENT 
LIABILITY
ASSUMPTIONS.
(a) IN
GENERAL.—Paragraph (5) of section 302(c) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1082(c)(5)) is amended—
(1) by striking ‘‘If the funding method’’ and inserting the
following:
‘‘(A) IN GENERAL.—If the funding method’’, and
(2) by adding at the end the following new subparagraph:
‘‘(B) APPROVAL
REQUIRED
FOR
CERTAIN
CHANGES
IN
ASSUMPTIONS BY CERTAIN SINGLE-EMPLOYER PLANS SUBJECT
TO ADDITIONAL FUNDING REQUIREMENT.—
H. R. 5110—227
‘‘(i) IN GENERAL.—No actuarial assumption (other
than the assumptions described in subsection (d)(7)(C))
used to determine the current liability for a plan to
which this subparagraph applies may be changed with-
out the approval of the Secretary of the Treasury.
‘‘(ii) PLANS
TO
WHICH
SUBPARAGRAPH
APPLIES.—
This subparagraph shall apply to a plan only if—
‘‘(I) the plan is a defined benefit plan (other
than a multiemployer plan) to which title IV
applies;
‘‘(II) the aggregate unfunded vested benefits
as of the close of the preceding plan year (as deter-
mined under section 4006(a)(3)(E)(iii)) of such plan
and all other plans maintained by the contributing
sponsors (as defined in section 4001(a)(13)) and
members of such sponsors’ controlled groups (as
defined in section 4001(a)(14)) which are covered
by title IV (disregarding plans with no unfunded
vested benefits) exceed $50,000,000; and
‘‘(III) the change in assumptions (determined
after taking into account any changes in interest
rate and mortality table) results in a decrease
in the unfunded current liability of the plan for
the current plan year that exceeds $50,000,000,
or that exceeds $5,000,000 and that is 5 percent
or more of the current liability of the plan before
such change.’’
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendment made by this section
shall apply to changes in assumptions for plan years beginning
after October 28, 1993.
(2) CERTAIN CHANGES CEASE TO BE EFFECTIVE.—In the case
of changes in assumptions for plan years beginning after
December 31, 1992, and on or before October 28, 1993, such
changes shall cease to be effective for plan years beginning
after December 31, 1994, if—
(A) such change would have required the approval
of the Secretary of the Treasury had such amendment
applied to such change, and
(B) such change is not so approved.
SEC. 763. ANTICIPATION OF BARGAINED BENEFIT INCREASES.
(a) IN GENERAL.—Section 302(c) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1082(c)) is amended by
adding at the end the following new paragraph:
‘‘(12) ANTICIPATION OF BENEFIT INCREASES EFFECTIVE IN
THE FUTURE.—In determining projected benefits, the funding
method of a collectively bargained plan described in section
413(a) of the Internal Revenue Code of 1986 (other than a
multiemployer plan) shall anticipate benefit increases sched-
uled to take effect during the term of the collective bargaining
agreement applicable to the plan.’’
(b) EFFECTIVE DATE.—The amendment made by this section
shall apply to plan years beginning after December 31, 1994 with
respect to collective bargaining agreements in effect on or after
January 1, 1995.
H. R. 5110—228
SEC. 764. MODIFICATION 
OF 
QUARTERLY 
CONTRIBUTION
REQUIREMENT.
(a) IN
GENERAL.—Paragraph (1) of section 302(e) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1082(e)) is amended—
(1) by inserting ‘‘which has a funded current liability
percentage (as defined in subsection (d)(8)) for the preceding
plan year of less than 100 percent’’ before ‘‘fails’’, and
(2) by striking ‘‘any plan year’’ and inserting ‘‘the plan
year’’.
(b) EFFECTIVE DATE.—The amendment made by this section
shall apply to plan years beginning after the date of enactment
of this Act.
Subpart C—Other Funding Provisions
SEC. 766. PROHIBITION ON BENEFIT INCREASES WHERE PLAN SPON-
SOR IS IN BANKRUPTCY.
(a) AMENDMENT TO THE EMPLOYEE RETIREMENT INCOME SECU-
RITY ACT OF 1974.—Section 204 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1054) is amended by redesignating
subsection (i) as (j) and inserting after subsection (h) the following
new subsection:
‘‘(i)(1) In the case of a plan described in paragraph (3) which
is maintained by an employer that is a debtor in a case under
title 11, United States Code, or similar Federal or State law, no
amendment of the plan which increases the liabilities of the plan
by reason of—
‘‘(A) any increase in benefits,
‘‘(B) any change in the accrual of benefits, or
‘‘(C) any change in the rate at which benefits become non-
forfeitable under the plan,
with respect to employees of the debtor, shall be effective prior
to the effective date of such employer’s plan of reorganization.
‘‘(2) Paragraph (1) shall not apply to any plan amendment
that—
‘‘(A) the Secretary of the Treasury determines to be reason-
able and that provides for only de minimis increases in the
liabilities of the plan with respect to employees of the debtor,
‘‘(B) only repeals an amendment described in section
302(c)(8),
‘‘(C) is required as a condition of qualification under part
I of subchapter D of chapter 1 of the Internal Revenue Code
of 1986, or
‘‘(D) was adopted prior to, or pursuant to a collective
bargaining agreement entered into prior to, the date on which
the employer became a debtor in a case under title 11, United
States Code, or similar Federal or State law.
‘‘(3) This subsection shall apply only to plans (other than multi-
employer plans) covered under section 4021 of this Act for which
the funded current liability percentage (within the meaning of sec-
tion 302(d)(8) of this Act) is less than 100 percent after taking
into account the effect of the amendment.
‘‘(4) For purposes of this subsection, the term ‘employer’ has
the meaning set forth in section 302(c)(11)(A), without regard to
section 302(c)(11)(B).’’
H. R. 5110—229
(b) AMENDMENT TO INTERNAL REVENUE CODE OF 1986.—Section
401(a), as amended by section 751 of this Act, is further amended
by adding at the end the following new paragraph:
‘‘(33) PROHIBITION ON BENEFIT INCREASES WHILE SPONSOR
IS IN BANKRUPTCY.—
‘‘(A) IN GENERAL.—A trust which is part of a plan
to which this paragraph applies shall not constitute a quali-
fied trust under this section if an amendment to such
plan is adopted while the employer is a debtor in a case
under title 11, United States Code, or similar Federal
or State law, if such amendment increases liabilities of
the plan by reason of—
‘‘(i) any increase in benefits,
‘‘(ii) any change in the accrual of benefits, or
‘‘(iii) any change in the rate at which benefits
become nonforfeitable under the plan,
with respect to employees of the debtor, and such amend-
ment is effective prior to the effective date of such employ-
er’s plan of reorganization.
‘‘(B) EXCEPTIONS.—This paragraph shall not apply to
any plan amendment if—
‘‘(i) the plan, were such amendment to take effect,
would have a funded current liability percentage (as
defined in section 412(l)(8)) of 100 percent or more,
‘‘(ii) the Secretary determines that such amend-
ment is reasonable and provides for only de minimis
increases in the liabilities of the plan with respect
to employees of the debtor,
‘‘(iii) such amendment only repeals an amendment
described in subsection 412(c)(8), or
‘‘(iv) such amendment is required as a condition
of qualification under this part.
‘‘(C) PLANS TO WHICH THIS PARAGRAPH APPLIES.—This
paragraph shall apply only to plans (other than multiem-
ployer plans) covered under section 4021 of the Employee
Retirement Income Security Act of 1974.
‘‘(D) EMPLOYER.—For purposes of this paragraph, the
term ‘employer’ means the employer referred to in section
412(c)(11) (without regard to subparagraph (B) thereof).’’
(c) EFFECTIVE DATE OF PLAN AMENDMENT.—Section 4022 of
the Employee Retirement Income Security Act of 1974 (29 U.S.C.
1322) is amended by inserting at the end the following new sub-
section:
‘‘(f) For purposes of this section, the effective date of a plan
amendment described in section 204(i)(1) shall be the effective
date of the plan of reorganization of the employer described in
section 204(i)(1) or, if later, the effective date stated in such amend-
ment.’’
(d) EFFECTIVE DATE.—The amendments made by this section
shall apply to plan amendments adopted on or after the date
of enactment of this Act.
SEC. 767. SINGLE SUM DISTRIBUTIONS.
(a) AMENDMENTS TO INTERNAL REVENUE CODE OF 1986 RELAT-
ING TO MINIMUM BENEFITS.—
H. R. 5110—230
(1) DETERMINATION OF PRESENT VALUE FOR PURPOSES OF
RESTRICTIONS
ON
MANDATORY
DISTRIBUTIONS.—Subparagraph
(B) of section 411(a)(11) is amended to read as follows:
‘‘(B) DETERMINATION OF PRESENT VALUE.—For purposes
of subparagraph (A), the present value shall be calculated
in accordance with section 417(e)(3).’’
(2) DETERMINATION OF PRESENT VALUE FOR PURPOSES OF
RESTRICTIONS ON CASH-OUTS.—Paragraph (3) of section 417(e)
is amended to read as follows:
‘‘(3) DETERMINATION OF PRESENT VALUE.—
‘‘(A) IN GENERAL.—
‘‘(i) PRESENT
VALUE.—Except as provided in
subparagraph (B), for purposes of paragraphs (1) and
(2), the present value shall not be less than the present
value calculated by using the applicable mortality table
and the applicable interest rate.
‘‘(ii) DEFINITIONS.—For purposes of clause (i)—
‘‘(I) APPLICABLE MORTALITY TABLE.—The term
‘applicable mortality table’ means the table pre-
scribed by the Secretary. Such table shall be based
on the prevailing commissioners’ standard table
(described in section 807(d)(5)(A)) used to deter-
mine reserves for group annuity contracts issued
on the date as of which present value is being
determined (without regard to any other subpara-
graph of section 807(d)(5)).
‘‘(II) APPLICABLE
INTEREST
RATE.—The term
‘applicable interest rate’ means the annual rate
of interest on 30-year Treasury securities for the
month before the date of distribution or such other
time as the Secretary may by regulations pre-
scribe.
‘‘(B) EXCEPTION.—In the case of a distribution from
a plan that was adopted and in effect before the date
of the enactment of the Retirement Protection Act of 1994,
the present value of any distribution made before the ear-
lier of—
‘‘(i) the later of the date a plan amendment apply-
ing subparagraph (A) is adopted or made effective,
or
‘‘(ii) the first day of the first plan year beginning
after December 31, 1999,
shall be calculated, for purposes of paragraphs (1) and
(2), using the interest rate determined under the regula-
tions of the Pension Benefit Guaranty Corporation for
determining the present value of a lump sum distribution
on plan termination that were in effect on September 1,
1993, and using the provisions of the plan as in effect
on the day before such date of enactment; but only if
such provisions of the plan met the requirements of section
417(e)(3) as in effect on the day before such date of enact-
ment.’’
(b) AMENDMENTS TO INTERNAL REVENUE CODE OF 1986 RELAT-
ING TO MAXIMUM BENEFITS.—Subparagraph (E) of section 415(b)(2)
is amended—
(1) by redesignating clauses (ii) and (iii) as clauses (iii)
and (iv), respectively,
H. R. 5110—231
(2) by striking clause (i) and inserting the following new
clauses:
‘‘(i) Except as provided in clause (ii), for purposes
of adjusting any benefit or limitation under subpara-
graph (B) or (C), the interest rate assumption shall
not be less than the greater of 5 percent or the rate
specified in the plan.
‘‘(ii) For purposes of adjusting the benefit or limita-
tion of any form of benefit subject to section 417(e)(3),
the applicable interest rate (as defined in section
417(e)(3)) shall be substituted for ‘5 percent’ in clause
(i).’’, and
(3) by adding at the end the following new clause:
‘‘(v) For purposes of adjusting any benefit or limita-
tion under subparagraph (B), (C), or (D), the mortality
table used shall be the table prescribed by the Sec-
retary. Such table shall be based on the prevailing
commissioners’ standard table (described in section
807(d)(5)(A)) used to determine reserves for group
annuity contracts issued on the date the adjustment
is being made (without regard to any other subpara-
graph of section 807(d)(5)).’’
(c) AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974.—
(1) DETERMINATION OF PRESENT VALUE FOR PURPOSES OF
RESTRICTIONS ON MANDATORY DISTRIBUTIONS.—Section 203(e)(2)
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1053(e)(2)) is amended to read as follows:
‘‘(2) For purposes of paragraph (1), the present value shall
be calculated in accordance with section 205(g)(3).’’
(2) DETERMINATION OF PRESENT VALUE FOR PURPOSES OF
RESTRICTIONS ON CASH-OUTS.—Section 205(g)(3) of such Act (29
U.S.C. 1055(g)(3)) is amended to read as follows:
‘‘(3) DETERMINATION OF PRESENT VALUE.—
‘‘(A) IN GENERAL.—
‘‘(i) PRESENT
VALUE.—Except as provided in
subparagraph (B), for purposes of paragraphs (1) and
(2), the present value shall not be less than the present
value calculated by using the applicable mortality table
and the applicable interest rate.
‘‘(ii) DEFINITIONS.—For purposes of clause (i)—
‘‘(I) APPLICABLE MORTALITY TABLE.—The term
‘applicable mortality table’ means the table pre-
scribed by the Secretary of the Treasury. Such
table shall be based on the prevailing commis-
sioners’ standard table (described in section
807(d)(5)(A) of the Internal Revenue Code of 1986)
used to determine reserves for group annuity con-
tracts issued on the date as of which present value
is being determined (without regard to any other
subparagraph of section 807(d)(5) of such Code).
‘‘(II) APPLICABLE
INTEREST
RATE.—The term
‘applicable interest rate’ means the annual rate
of interest on 30-year Treasury securities for the
month before the date of distribution or such other
time as the Secretary of the Treasury may by
regulations prescribe.
H. R. 5110—232
‘‘(B) EXCEPTION.—In the case of a distribution from
a plan that was adopted and in effect prior to the date
of the enactment of the Retirement Protection Act of 1994,
the present value of any distribution made before the ear-
lier of—
‘‘(i) the later of when a plan amendment applying
subparagraph (A) is adopted or made effective, or
‘‘(ii) the first day of the first plan year beginning
after December 31, 1999,
shall be calculated, for purposes of paragraphs (1) and
(2), using the interest rate determined under the regula-
tions of the Pension Benefit Guaranty Corporation for
determining the present value of a lump sum distribution
on plan termination that were in effect on September 1,
1993, and using the provisions of the plan as in effect
on the day before such date of enactment; but only if
such provisions of the plan met the requirements of section
205(g)(3) as in effect on the day before such date of
enactment.’’
(d) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by this section
shall apply to plan years and limitation years beginning after
December 31, 1994; except that an employer may elect to treat
the amendments made by this section as being effective on
or after the date of the enactment of this Act.
(2) NO REDUCTION IN ACCRUED BENEFITS.—A participant’s
accrued benefit shall not be considered to be reduced in viola-
tion of section 411(d)(6) of the Internal Revenue Code of 1986
or section 204(g) of the Employee Retirement Income Security
Act of 1974 merely because (A) the benefit is determined in
accordance with section 417(e)(3)(A) of such Code, as amended
by this Act, or section 205(g)(3) of the Employee Retirement
Income Security Act of 1974, as amended by this Act, or (B)
the plan applies section 415(b)(2)(E) of such Code, as amended
by this Act.
(3) SECTION 415.—
(A) NO REDUCTION REQUIRED.—An accrued benefit shall
not be required to be reduced below the accrued benefit
as of the last day of the last plan year beginning before
January 1, 1995, merely because of the amendments made
by subsection (b).
(B) TIMING OF PLAN AMENDMENT.—A plan that operates
in accordance with the amendments made by subsection
(b) shall not be treated as failing to satisfy section 401(a)
of the Internal Revenue Code of 1986 or as not being
operated in accordance with the provisions of the plan
until such date as the Secretary of the Treasury provides
merely because the plan has not been amended to include
the amendments made by subsection (b).
SEC. 768. ADJUSTMENTS TO LIEN FOR MISSED MINIMUM FUNDING
CONTRIBUTIONS.
(a) AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.—
(1) CLARIFICATION OF APPLICABILITY OF PROVISION.—Para-
graph (2) of section 412(n) is amended by adding at the end
the following new sentence: ‘‘This subsection shall not apply
to any plan to which section 4021 of the Employee Retirement
H. R. 5110—233
Income Security Act of 1974 does not apply (as such section
is in effect on the date of the enactment of the Retirement
Protection Act of 1994).’’.
(2) REPEAL OF $1,000,000 OFFSET.—Paragraph (3) of section
412(n) is amended to read as follows:
‘‘(3) AMOUNT OF LIEN.—For purposes of paragraph (1), the
amount of the lien shall be equal to the aggregate unpaid
balance of required installments and other payments required
under this section (including interest)—
‘‘(A) for plan years beginning after 1987, and
‘‘(B) for which payment has not been made before
the due date.’’
(3) REPEAL
OF
60-DAY
DELAY.—Section 412(n)(4)(B) is
amended by striking ‘‘60th day following the’’.
(b) AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECU-
RITY ACT OF 1974.—
(1) CLARIFICATION OF APPLICABILITY OF PROVISION.—Section
302(f)(1) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1082(f)(1)) is amended by striking ‘‘to which
this section applies’’ and inserting ‘‘covered under section 4021
of this Act’’.
(2) REPEAL OF $1,000,000 OFFSET.—Paragraph (3) of section
302(f) of such Act is amended to read as follows:
‘‘(3) AMOUNT OF LIEN.—For purposes of paragraph (1), the
amount of the lien shall be equal to the aggregate unpaid
balance of required installments and other payments required
under this section (including interest)—
‘‘(A) for plan years beginning after 1987, and
‘‘(B) for which payment has not been made before
the due date.’’
(3) REPEAL OF 60-DAY DELAY.—Section 302(f)(4)(B) of such
Act is amended by striking ‘‘60th day following the’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall be effective for installments and other payments required
under section 412 of the Internal Revenue Code of 1986 or under
part 3 of subtitle B of the Employee Retirement Income Security
Act of 1974 that become due on or after the date of enactment.
SEC. 769. SPECIAL FUNDING RULES FOR CERTAIN PLANS.
(a) FUNDING RULES NOT TO APPLY TO CERTAIN PLANS.—Any
changes made by this Act to section 412 of the Internal Revenue
Code of 1986 or to part 3 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 shall not apply to—
(1) a plan which is, on the date of enactment of this
Act, subject to a restoration payment schedule order issued
by the Pension Benefit Guaranty Corporation that meets the
requirements of section 1.412(c)(1)–3 of the Treasury Regula-
tions, or
(2) a plan established by an affected air carrier (as defined
under section 4001(a)(14)(C)(ii)(I) of such Act) and assumed
by a new plan sponsor pursuant to the terms of a written
agreement with the Pension Benefit Guaranty Corporation
dated January 5, 1993, and approved by the United States
Bankruptcy Court for the District of Delaware on December
30, 1992.
(b) CHANGE IN ACTUARIAL METHOD.—Any amortization install-
ments for bases established under section 412(b) of the Internal
H. R. 5110—234
Revenue Code of 1986 and section 302(b) of the Employee Retire-
ment Income Security Act of 1974 for plan years beginning after
December 31, 1987, and before January 1, 1993, by reason of
nonelective changes under the frozen entry age actuarial cost
method shall not be included in the calculation of offsets under
section 412(l)(1)(A)(ii) of such Code and section 302(d)(1)(A)(ii) of
such Act for the 1st 5 plan years beginning after December 31,
1994.
PART II—AMENDMENTS RELATED TO TITLE IV
OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974
SEC. 771. REPORTABLE EVENTS.
(a) RESPONSIBILITY FOR REPORTABLE EVENTS REPORTING.—Sec-
tion 4043(a) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1343(a)) is amended—
(1) in the first sentence, by inserting ‘‘or the contributing
sponsor’’ before ‘‘knows or has reason to know’’;
(2) in the first sentence, by inserting ‘‘, unless a notice
otherwise required under this subsection has already been pro-
vided with respect to such event’’ before the period at the
end; and
(3) by striking the last sentence.
(b) NOTIFICATION THAT EVENT IS ABOUT TO OCCUR.—Section
4043 of such Act is amended by redesignating subsections (b),
(c), and (d) as (c), (d), and (e), respectively, and by inserting after
subsection (a) the following new subsection:
‘‘(b)(1) The requirements of this subsection shall be applicable
to a contributing sponsor if, as of the close of the preceding plan
year—
‘‘(A) the aggregate unfunded vested benefits (as determined
under section 4006(a)(3)(E)(iii)) of plans subject to this title
which are maintained by such sponsor and members of such
sponsor’s controlled groups (disregarding plans with no
unfunded vested benefits) exceed $50,000,000, and
‘‘(B) the funded vested benefit percentage for such plans
is less than 90 percent.
For purposes of subparagraph (B), the funded vested benefit
percentage means the percentage which the aggregate value of
the assets of such plans bears to the aggregate vested benefits
of 
such 
plans 
(determined 
in 
accordance 
with 
section
4006(a)(3)(E)(iii)).
‘‘(2) This subsection shall not apply to an event if the contribut-
ing sponsor, or the member of the contributing sponsor’s controlled
group to which the event relates, is—
‘‘(A) a person subject to the reporting requirements of sec-
tion 13 or 15(d) of the Securities Exchange Act of 1934, or
‘‘(B) a subsidiary (as defined for purposes of such Act)
of a person subject to such reporting requirements.
‘‘(3) No later than 30 days prior to the effective date of an
event described in paragraph (9), (10), (11), (12), or (13) of subsection
(c), a contributing sponsor to which the requirements of this sub-
section apply shall notify the corporation that the event is about
to occur.
H. R. 5110—235
‘‘(4) The corporation may waive the requirement of this sub-
section with respect to any or all reportable events with respect
to any contributing sponsor.’’
(c) NEW REPORTABLE EVENTS.—Subsection (c) of section 4043
of such Act (as redesignated by subsection (b)) is amended—
(1) by striking the ‘‘or’’ at the end of paragraph (8);
(2) by striking paragraph (9); and
(3) by inserting after paragraph (8) the following new
paragraphs:
‘‘(9) when, as a result of an event, a person ceases to
be a member of the controlled group;
‘‘(10) when a contributing sponsor or a member of a contrib-
uting sponsor’s controlled group liquidates in a case under
title 11, United States Code, or under any similar Federal
law or law of a State or political subdivision of a State;
‘‘(11) when a contributing sponsor or a member of a contrib-
uting sponsor’s controlled group declares an extraordinary divi-
dend (as defined in section 1059(c) of the Internal Revenue
Code of 1986) or redeems, in any 12-month period, an aggregate
of 10 percent or more of the total combined voting power
of all classes of stock entitled to vote, or an aggregate of
10 percent or more of the total value of shares of all classes
of stock, of a contributing sponsor and all members of its
controlled group;
‘‘(12) when, in any 12-month period, an aggregate of 3
percent or more of the benefit liabilities of a plan covered
by this title and maintained by a contributing sponsor or a
member of its controlled group are transferred to a person
that is not a member of the controlled group or to a plan
or plans maintained by a person or persons that are not such
a contributing sponsor or a member of its controlled group;
or
‘‘(13) when any other event occurs that may be indicative
of a need to terminate the plan and that is prescribed by
the corporation in regulations.’’
(d) DISCLOSURE EXEMPTION.—Section 4043 of such Act is
amended by adding at the end the following new subsection:
‘‘(f) Any information or documentary material submitted to
the corporation pursuant to this section shall be exempt from disclo-
sure under section 552 of title 5, United States Code, and no
such information or documentary material may be made public,
except as may be relevant to any administrative or judicial action
or proceeding. Nothing in this section is intended to prevent disclo-
sure to either body of Congress or to any duly authorized committee
or subcommittee of the Congress.’’
(e) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Subsection (a) of section 4043 of such Act, and sub-
sections (d) and (e) of such section 4043 (as redesignated by
subsection (b)), are each amended by striking ‘‘subsection (b)’’
each place it appears and inserting ‘‘subsection (c)’’.
(2) Section 4042(a)(3) of such Act is amended by striking
‘‘4043(b)(7)’’ and inserting ‘‘4043(c)(7)’’.
(f) EFFECTIVE DATE.—The amendments made by this section
shall be effective for events occurring 60 days or more after the
date of enactment of this Act.
H. R. 5110—236
SEC. 772. CERTAIN INFORMATION REQUIRED TO BE FURNISHED TO
PBGC.
(a) GENERAL RULE.—Subtitle A of title IV of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1301 et seq.)
is amended by adding at the end the following new section:
‘‘SEC. 4010. AUTHORITY TO REQUIRE CERTAIN INFORMATION.
‘‘(a) INFORMATION REQUIRED.—Each person described in sub-
section (b) shall provide the corporation annually, on or before
a date specified by the corporation in regulations, with—
‘‘(1) such records, documents, or other information that
the corporation specifies in regulations as necessary to deter-
mine the liabilities and assets of plans covered by this title;
and
‘‘(2) copies of such person’s audited (or, if unavailable,
unaudited) financial statements, and such other financial
information as the corporation may prescribe in regulations.
‘‘(b) PERSONS REQUIRED TO PROVIDE INFORMATION.—The per-
sons covered by subsection (a) are each contributing sponsor, and
each member of a contributing sponsor’s controlled group, of a
single-employer plan covered by this title, if—
‘‘(1) the aggregate unfunded vested benefits at the end
of the preceding plan year (as determined under section
4006(a)(3)(E)(iii)) of plans maintained by the contributing spon-
sor and the members of its controlled group exceed $50,000,000
(disregarding plans with no unfunded vested benefits);
‘‘(2) the conditions for imposition of a lien described in
section 302(f)(1)(A) and (B) of this Act or section 412(n)(1)(A)
and (B) of the Internal Revenue Code of 1986 have been met
with respect to any plan maintained by the contributing sponsor
or any member of its controlled group; or
‘‘(3) minimum funding waivers in excess of $1,000,000 have
been granted with respect to any plan maintained by the
contributing sponsor or any member of its controlled group,
and any portion thereof is still outstanding.
‘‘(c) INFORMATION EXEMPT FROM DISCLOSURE REQUIREMENTS.—
Any information or documentary material submitted to the corpora-
tion pursuant to this section shall be exempt from disclosure under
section 552 of title 5, United States Code, and no such information
or documentary material may be made public, except as may be
relevant to any administrative or judicial action or proceeding.
Nothing in this section is intended to prevent disclosure to either
body of Congress or to any duly authorized committee or subcommit-
tee of the Congress.’’
(b) CLERICAL AMENDMENT.—The table of contents contained
in section 1 of such Act is amended by inserting after the item
relating to section 4009 the following new item:
‘‘Sec. 4010. Authority to require certain information.’’
(c) EFFECTIVE DATE.—The amendments made by this section
shall be effective on the date of enactment of this Act.
SEC. 773. ENFORCEMENT OF MINIMUM FUNDING REQUIREMENTS.
(a) IN GENERAL.—Paragraph (1) of section 4003(e) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1303(e)(1)) is amended—
(1) by inserting ‘‘(A)’’ after ‘‘enforce’’; and
H. R. 5110—237
(2) by striking the period after ‘‘title’’ and inserting ‘‘,
and (B) in the case of a plan which is covered under this
title (other than a multiemployer plan) and for which the condi-
tions for imposition of a lien described in section 302(f)(1)(A)
and (B) of this Act or section 412(n)(1)(A) and (B) of the Internal
Revenue Code of 1986 have been met, section 302 of this
Act and section 412 of such Code.’’
(b) EFFECTIVE DATE.—The amendments made by this section
shall be effective for installments and other payments required
under section 302 of the Employee Retirement Income Security
Act of 1974 or section 412 of the Internal Revenue Code of 1986
that become due on or after the date of the enactment of this
Act.
SEC. 774. COMPUTATION OF ADDITIONAL PBGC PREMIUM.
(a) PHASE-OUT OF VARIABLE RATE PREMIUM CAP.—
(1) IN GENERAL.—Subparagraph (E) of section 4006(a)(3)
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1306(a)(3)(E)) is amended by striking clause (iv), and
by redesignating clause (v) as clause (iv).
(2) EFFECTIVE DATE.—
(A) IN GENERAL.—The amendments made by this sub-
section shall be effective for plan years beginning on or
after July 1, 1994.
(B) TRANSITION RULE.—In the case of plan years begin-
ning on or after July 1, 1994, and before July 1, 1996,
the additional premium payable with respect to any partici-
pant by reason of the amendments made by this section
shall not exceed the sum of—
(i) $53, and
(ii) the product derived by multiplying—
(I) the excess (if any) of the amount deter-
mined under clause (i) of section 4006(a)(3)(E) of
the Employee Retirement Income Security Act of
1974, over $53, by
(II) the applicable percentage.
For purposes of this subparagraph, the applicable percent-
age shall be the percentage specified in the following table:
For the plan year beginning:
The applica-
ble percent-
age is:
on or after
but before
July 1, 1994 ...................................
July 1, 1995 ..................................
20 percent
July 1, 1995 ...................................
July 1, 1996 ..................................
60 percent
(b) INTEREST RATE AND ASSET VALUATION.—
(1) 
INTEREST
RATE.—Subclause 
(II) 
of 
section
4006(a)(3)(E)(iii) of the Employee Retirement Income Security
Act of 1974 is amended—
(A) by striking ‘‘80 percent’’ and inserting ‘‘the
applicable percentage’’, and
(B) by adding at the end the following new sentence:
‘‘For purposes of this subclause, the applicable percentage
is 80 percent for plan years beginning before July 1, 1997,
85 percent for plan years beginning after June 30, 1997,
and before the 1st plan year to which the first tables
prescribed under section 302(d)(7)(C)(ii)(II) apply, and 100
percent for such 1st plan year and subsequent plan years.’’
H. R. 5110—238
(2) ASSET VALUATION.—Clause (iii) of section 4006(a)(3)(E)
of such Act is amended—
(A) by inserting ‘‘or (III)’’ after ‘‘subclause (II)’’ in
subclause (I), and
(B) by adding at the end the following new subclause:
‘‘(III) In the case of any plan year for which
the applicable percentage under subclause (II) is
100 percent, the value of the plan’s assets used
in determining unfunded current liability under
subclause (I) shall be their fair market value.’’
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to plan years beginning after the date of
the enactment of this Act.
(c) TRANSITION RULE FOR CERTAIN REGULATED PUBLIC UTILI-
TIES.—In the case of a regulated public utility described in section
7701(a)(33)(A)(i) of the Internal Revenue Code of 1986, the amend-
ments made by this section shall not apply to plan years beginning
before the earlier of—
(1) January 1, 1998, or
(2) the date the regulated public utility begins to collect
from utility customers rates that reflect the costs incurred
or projected to be incurred for additional premiums under sec-
tion 4006(a)(3)(E) of the Employee Retirement Income Security
Act of 1974 pursuant to final and nonappealable determinations
by all public utility commissions (or other authorities having
jurisdiction over the rates and terms of service by the regulated
public utility) that the costs are just and reasonable and
recoverable from customers of the regulated public utility.
SEC. 775. DISCLOSURE TO PARTICIPANTS.
(a) PARTICIPANT NOTICE REQUIREMENT.—Subtitle A of title IV
of the Employee Retirement Income Security Act of 1974 (as
amended by section 772 of this Act) is further amended by adding
at the end the following new section:
‘‘SEC. 4011. NOTICE TO PARTICIPANTS.
‘‘(a) IN GENERAL.—The plan administrator of a plan subject
to the additional premium under section 4006(a)(3)(E) shall provide,
in a form and manner and at such time as prescribed in regulations
of the corporation, notice to plan participants and beneficiaries
of the plan’s funding status and the limits on the corporation’s
guaranty should the plan terminate while underfunded. Such notice
shall be written in a manner so as to be understood by the average
plan participant.
‘‘(b) EXCEPTION.—Subsection (a) shall not apply to any plan
to which section 302(d) does not apply for the plan year by reason
of paragraph (9) thereof.’’
(b) CLERICAL AMENDMENT.—The table of contents contained
in section 1 of such Act is amended by inserting after the item
relating to section 4010 (as added by section 772 of this Act)
the following new item:
‘‘Sec. 4011. Notice to participants.’’
(c) EFFECTIVE DATE.—The amendment made by this section
shall be effective for plan years beginning after the date of enact-
ment of this Act.
H. R. 5110—239
SEC. 776. MISSING PARTICIPANTS.
(a) IN GENERAL.—Subtitle C of title IV of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 1341 et seq.) is
amended by adding at the end the following new section:
‘‘SEC. 4050. MISSING PARTICIPANTS.
‘‘(a) GENERAL RULE.—
‘‘(1) PAYMENT TO THE CORPORATION.—A plan administrator
satisfies section 4041(b)(3)(A) in the case of a missing partici-
pant only if the plan administrator—
‘‘(A) transfers the participant’s designated benefit to
the corporation or purchases an irrevocable commitment
from an insurer in accordance with clause (i) of section
4041(b)(3)(A), and
‘‘(B) provides the corporation such information and cer-
tifications with respect to such designated benefits or irrev-
ocable commitments as the corporation shall specify.
‘‘(2) TREATMENT OF TRANSFERRED ASSETS.—A transfer to
the corporation under this section shall be treated as a transfer
of assets from a terminated plan to the corporation as trustee,
and shall be held with assets of terminated plans for which
the corporation is trustee under section 4042, subject to the
rules set forth in that section.
‘‘(3) PAYMENT
BY
THE
CORPORATION.—After a missing
participant whose designated benefit was transferred to the
corporation is located—
‘‘(A) in any case in which the plan could have distrib-
uted the benefit of the missing participant in a single
sum without participant or spousal consent under section
205(g), the corporation shall pay the participant or bene-
ficiary a single sum benefit equal to the designated benefit
paid the corporation plus interest as specified by the cor-
poration, and
‘‘(B) in any other case, the corporation shall pay a
benefit based on the designated benefit and the assump-
tions prescribed by the corporation at the time that the
corporation received the designated benefit.
The corporation shall make payments under subparagraph (B)
available in the same forms and at the same times as a guaran-
teed benefit under section 4022 would be available to be paid,
except that the corporation may make a benefit available in
the form of a single sum if the plan provided a single sum
benefit (other than a single sum described in subsection
(b)(2)(A)).
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) MISSING PARTICIPANT.—The term ‘missing participant’
means a participant or beneficiary under a terminating plan
whom the plan administrator cannot locate after a diligent
search.
‘‘(2) DESIGNATED BENEFIT.—The term ‘designated benefit’
means the single sum benefit the participant would receive—
‘‘(A) under the plan’s assumptions, in the case of a
distribution that can be made without participant or
spousal consent under section 205(g);
‘‘(B) under the assumptions of the corporation in effect
on the date that the designated benefit is transferred to
the corporation, in the case of a plan that does not pay
H. R. 5110—240
any single sums other than those described in subpara-
graph (A); or
‘‘(C) under the assumptions of the corporation or of
the plan, whichever provides the higher single sum, in
the case of a plan that pays a single sum other than
those described in subparagraph (A).
‘‘(c) REGULATORY AUTHORITY.—The corporation shall prescribe
such regulations as are necessary to carry out the purposes of
this section, including rules relating to what will be considered
a diligent search, the amount payable to the corporation, and the
amount to be paid by the corporation.’’
(b) CONFORMING TITLE IV AMENDMENTS.—
(1) AMENDMENT TO SECTION 4003.—Section 4003(a) of such
Act (29 U.S.C. 1303(a)) is amended in the second sentence
by inserting before the period the following: ‘‘and whether sec-
tion 4050(a) has been satisfied’’.
(2) AMENDMENT
TO
SECTION
4005.—Section 4005(b)(2)(A)
of such Act (29 U.S.C. 1305(b)(2)(A)) is amended by inserting
‘‘or benefits payable under section 4050’’ after ‘‘section 4022A’’.
(3) AMENDMENT TO SECTION 4041.—Section 4041(b)(3)(A)(ii)
of such Act (29 U.S.C. 1341(b)(3)(A)(ii)) is amended by adding
at the end the following new sentence: ‘‘A transfer of assets
to the corporation in accordance with section 4050 on behalf
of a missing participant shall satisfy this subparagraph with
respect to such participant.’’
(c) CONFORMING ERISA AMENDMENTS.—
(1) The table of contents contained in section 1 of the
Employee Retirement Income Security Act of 1974 is amended
by inserting after the item related to section 4049 the following
new item:
‘‘Sec. 4050. Missing participants.’’
(2) Section 206 of such Act (29 U.S.C. 1056) is amended
by adding at the end the following new subsection:
‘‘(f) MISSING PARTICIPANTS IN TERMINATED PLANS.—In the case
of a plan covered by title IV, the plan shall provide that, upon
termination of the plan, benefits of missing participants shall be
treated in accordance with section 4050.’’
(d) CONFORMING INTERNAL REVENUE CODE AMENDMENTS.—Sec-
tion 401(a), as amended by section 766 of this Act, is further
amended by inserting after paragraph (33) the following new
paragraph:
‘‘(34) BENEFITS OF MISSING PARTICIPANTS ON PLAN TERMI-
NATION.—In the case of a plan covered by title IV of the
Employee Retirement Income Security Act of 1974, a trust
forming part of such plan shall not be treated as failing to
constitute a qualified trust under this section merely because
the pension plan of which such trust is a part, upon its termi-
nation, transfers benefits of missing participants to the Pension
Benefit Guaranty Corporation in accordance with section 4050
of such Act.’’
(e) EFFECTIVE DATE.—The provisions of this section shall be
effective with respect to distributions that occur in plan years
commencing after final regulations implementing these provisions
are prescribed by the Pension Benefit Guaranty Corporation.
H. R. 5110—241
SEC. 777. MODIFICATION OF MAXIMUM GUARANTEE FOR DISABILITY
BENEFITS.
(a) IN GENERAL.—Section 4022(b)(3) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 1322(b)(3)) is amended
by adding at the end the following new sentences: ‘‘The maximum
guaranteed monthly benefit shall not be reduced solely on account
of the age of a participant in the case of a benefit payable by
reason of disability that occurred on or before the termination
date, if the participant demonstrates to the satisfaction of the
corporation that the Social Security Administration has determined
that the participant satisfies the definition of disability under title
II or XVI of the Social Security Act, and the regulations thereunder.
If a benefit payable by reason of disability is converted to an
early or normal retirement benefit for reasons other than a change
in the health of the participant, such early or normal retirement
benefit shall be treated as a continuation of the benefit payable
by reason of disability and this subparagraph shall continue to
apply.’’
(b) EFFECTIVE DATE.—The amendment made by this section
shall be effective for plan terminations under section 4041(c) of
the Employee Retirement Income Security Act of 1974 with respect
to which notices of intent to terminate are provided under section
4041(a)(2) of such Act, or under section 4042 of such Act with
respect to which proceedings are instituted by the corporation,
on or after the date of enactment of this Act.
SEC. 778. PROCEDURES TO FACILITATE DISTRIBUTION OF TERMI-
NATION BENEFITS.
(a) REMEDIES FOR NONCOMPLIANCE WITH REQUIREMENTS FOR
STANDARD TERMINATION.—
(1) NOTICE
OF
NONCOMPLIANCE.—Section 4041(b)(2)(C)(i)
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1341(b)(2)(C)(i)) is amended—
(A) by striking subclause (I) and inserting the following
new subclause:
‘‘(I) it determines, based on the notice sent
under paragraph (2)(A) of subsection (b), that there
is reason to believe that the plan is not sufficient
for benefit liabilities,’’;
(B) by striking the period at the end of subclause
(II) and inserting ‘‘, or’’; and
(C) by adding at the end the following new subclause:
‘‘(III) it determines that any other requirement
of subparagraph (A) or (B) of this paragraph or
of subsection (a)(2) has not been met, unless it
further determines that the issuance of such notice
would be inconsistent with the interests of partici-
pants and beneficiaries.’’
(2) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to any plan termination under section
4041(b) of the Employee Retirement Income Security Act of
1974 with respect to which the Pension Benefit Guaranty Cor-
poration has not, as of the date of enactment of this Act,
issued a notice of noncompliance that has become final, or
otherwise issued a final determination that the plan termi-
nation is nullified.
H. R. 5110—242
(b) 
DISTRESS
TERMINATION
CRITERIA
FOR
BANKING
INSTITUTIONS.—
(1) CLARIFICATION OF DISTRESS CRITERION.—Subclause (I)
of section 4041(c)(2)(B)(i) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1341(c)(2)(B)(i)) is amended
by inserting after ‘‘under any similar’’ the following: ‘‘Federal
law or’’.
(2) EFFECTIVE DATE.—The amendment made by this sub-
section shall be effective as if included in the Single-Employer
Pension Plan Amendments Act of 1986.
PART III—EFFECTIVE DATES
SEC. 781. EFFECTIVE DATES.
Except as otherwise provided in this subtitle, the amendments
made by this subtitle shall be effective on the date of enactment
of this Act.
TITLE VIII—PIONEER PREFERENCES
SEC. 801. PIONEER PREFERENCES.
Section 309(j) of the Communications Act of 1934 (47 U.S.C.
309(j)) is amended by adding at the end the following new para-
graph:
‘‘(13) RECOVERY OF VALUE OF PUBLIC SPECTRUM IN CONNEC-
TION WITH PIONEER PREFERENCES.—
‘‘(A) IN GENERAL.—Notwithstanding paragraph (6)(G),
the Commission shall not award licenses pursuant to a
preferential treatment accorded by the Commission to per-
sons who make significant contributions to the development
of a new telecommunications service or technology, except
in accordance with the requirements of this paragraph.
‘‘(B) RECOVERY
OF
VALUE.—The Commission shall
recover for the public a portion of the value of the public
spectrum resource made available to such person by requir-
ing such person, as a condition for receipt of the license,
to agree to pay a sum determined by—
‘‘(i) identifying the winning bids for the licenses
that the Commission determines are most reasonably
comparable in terms of bandwidth, scope of service
area, usage restrictions, and other technical character-
istics to the license awarded to such person, and
excluding licenses that the Commission determines are
subject to bidding anomalies due to the award of pref-
erential treatment;
‘‘(ii) dividing each such winning bid by the popu-
lation of its service area (hereinafter referred to as
the per capita bid amount);
‘‘(iii) computing the average of the per capita bid
amounts for the licenses identified under clause (i);
‘‘(iv) reducing such average amount by 15 percent;
and
‘‘(v) multiplying the amount determined under
clause (iv) by the population of the service area of
the license obtained by such person.
H. R. 5110—243
‘‘(C) INSTALLMENTS PERMITTED.—The Commission shall
require such person to pay the sum required by subpara-
graph (B) in a lump sum or in guaranteed installment
payments, with or without royalty payments, over a period
of not more than 5 years.
‘‘(D) RULEMAKING ON PIONEER PREFERENCES.—Except
with respect to pending applications described in clause
(iv) of this subparagraph, the Commission shall prescribe
regulations specifying the procedures and criteria by which
the Commission will evaluate applications for preferential
treatment in its licensing processes (by precluding the filing
of mutually exclusive applications) for persons who make
significant contributions to the development of a new serv-
ice or to the development of new technologies that substan-
tially enhance an existing service. Such regulations shall—
‘‘(i) specify the procedures and criteria by which
the significance of such contributions will be deter-
mined, after an opportunity for review and verification
by experts in the radio sciences drawn from among
persons who are not employees of the Commission
or by any applicant for such preferential treatment;
‘‘(ii) include such other procedures as may be nec-
essary to prevent unjust enrichment by ensuring that
the value of any such contribution justifies any reduc-
tion in the amounts paid for comparable licenses under
this subsection;
‘‘(iii) be prescribed not later than 6 months after
the date of enactment of this paragraph;
‘‘(iv) not apply to applications that have been
accepted for filing on or before September 1, 1994;
and
‘‘(v) cease to be effective on the date of the expira-
tion of the Commission’s authority under subparagraph
(F).
‘‘(E) IMPLEMENTATION
WITH
RESPECT
TO
PENDING
APPLICATIONS.—In 
applying 
this 
paragraph 
to 
any
broadband licenses in the personal communications service
awarded pursuant to the preferential treatment accorded
by the Federal Communications Commission in the Third
Report and Order in General Docket 90–314 (FCC 93–
550, released February 3, 1994)—
‘‘(i) the Commission shall not reconsider the award
of preferences in such Third Report and Order, and
the Commission shall not delay the grant of licenses
based on such awards more than 15 days following
the date of enactment of this paragraph, and the award
of such preferences and licenses shall not be subject
to administrative or judicial review;
‘‘(ii) the Commission shall not alter the bandwidth
or service areas designated for such licenses in such
Third Report and Order;
‘‘(iii) except as provided in clause (v), the Commis-
sion shall use, as the most reasonably comparable
licenses for purposes of subparagraph (B)(i), the
broadband licenses in the personal communications
service for blocks A and B for the 20 largest markets
H. R. 5110—244
(ranked by population) in which no applicant has
obtained preferential treatment;
‘‘(iv) for purposes of subparagraph (C), the
Commission shall permit guaranteed installment pay-
ments over a period of 5 years, subject to—
‘‘(I) the payment only of interest on unpaid
balances during the first 2 years, commencing not
later than 30 days after the award of the license
(including any preferential treatment used in mak-
ing such award) is final and no longer subject
to administrative or judicial review, except that
no such payment shall be required prior to the
date of completion of the auction of the comparable
licenses described in clause (iii); and
‘‘(II) payment of the unpaid balance and
interest thereon after the end of such 2 years
in accordance with the regulations prescribed by
the Commission; and
‘‘(v) the Commission shall recover with respect to
broadband licenses in the personal communications
service an amount under this paragraph that is equal
to not less than $400,000,000, and if such amount
is less than $400,000,000, the Commission shall recover
an amount equal to $400,000,000 by allocating such
amount among the holders of such licenses based on
the population of the license areas held by each
licensee.
The Commission shall not include in any amounts required
to be collected under clause (v) the interest on unpaid
balances required to be collected under clause (iv).
‘‘(F) EXPIRATION.—The authority of the Commission
to provide preferential treatment in licensing procedures
(by precluding the filing of mutually exclusive applications)
to persons who make significant contributions to the devel-
opment of a new service or to the development of new
technologies that substantially enhance an existing service
shall expire on September 30, 1998.
‘‘(G) EFFECTIVE DATE.—This paragraph shall be effec-
tive on the date of its enactment and apply to any licenses
issued on or after August 1, 1994, by the Federal Commu-
nications Commission pursuant to any licensing procedure
H. R. 5110—245
that provides preferential treatment (by precluding the
filing of mutually exclusive applications) to persons who
make significant contributions to the development of a
new service or to the development of new technologies
that substantially enhance an existing service.’’.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.