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‘‘(C) a list of the employers that contributed
more than 5 percent of the total contributions to
the plan during such plan year;
‘‘(D) the number of participants under the
plan on whose behalf no employer contributions
(which, for purposes of this paragraph, means,
in connection with a participant, a contribution
made by an employer as an employer of such
participant) have been made to the plan for such
plan year and for each of the 2 preceding plan
years;
‘‘(E) whether the plan was in critical or en-
dangered status under section 305 for such plan
year and, if so, include—
‘‘(i) a list of the actions taken by the
plan to improve its funding status; and
‘‘(ii) a statement describing how a per-
son may obtain a copy of the plan’s im-
provement or rehabilitation plan, as appro-
priate, adopted under section 305 and the
actuarial and financial data that dem-
onstrate any action taken by the plan to-
ward fiscal improvement;
‘‘(H) the number of employers that with-
drew from the plan during the preceding plan
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year and the aggregate amount of withdrawal li-
ability assessed, or estimated to be assessed,
against such withdrawn employers, as reported
on the annual report for the plan year to which
the report under this subsection relates;
‘‘(I) in the case of a multiemployer plan
that has merged with another plan or to which
assets and liabilities have been transferred, the
actuarial valuation of the assets and liabilities of
each affected plan during the year preceding the
effective date of the merger or transfer, based
upon the most recent data available as of the day
before the first day of the plan year, or other
valuation method performed under standards
and procedures as the Secretary may prescribe
by regulation;
‘‘(J) a description as to whether the plan—
‘‘(i) sought or received an amortization
extension under section 304(d) or section
431(d) of the Internal Revenue Code of 1986
for such plan year;
‘‘(ii) used the shortfall funding method
(as such term is used in section 305) for
such plan year; or
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‘‘(iii) was in critical or endangered
status under section 305 for such plan year;
and
‘‘(K) notification of the right under this sec-
tion of the recipient to a copy of the annual re-
port filed with the Secretary under subsection
(a), summary annual report, summary plan de-
scription, summary of any material modifica-
tion of the plan, upon written request, but
that—
‘‘(i) in no case shall a recipient be en-
titled to receive more than one copy of any
such report described during any one 12-
month period; and
‘‘(ii) the administrator may make a
reasonable charge to cover copying, mailing,
and other costs of furnishing copies of infor-
mation pursuant to this subparagraph.
‘‘(2) EFFECT OF SECTION.—Nothing in this sec-
tion waives any other provision under this title re-
quiring plan administrators to provide, upon request,
information to employers that have an obligation to
contribution under the plan.’’.
(e) MODEL FORM.—Not later than 270 days after the
date of the enactment of this Act, the Secretary of Labor
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shall publish a model form for providing the statements,
schedules, and other material required to be provided under
section 104(b)(3) of the Employee Retirement Income Secu-
rity Act of 1974, as amended by this section. The Secretary
of Labor may promulgate any interim final rules as the
Secretary determines appropriate to carry out the provi-
sions of this subsection.
(f) FIVE-YEAR REPORT WITH RESPECT TO MULTIEM-
PLOYER PLANS.—Section 4022A(f) of such Act (29 U.S.C.
1322a(f)) is amended by adding at the end the following:
‘‘(6) Not later than 5 years after the date of the
enactment of the Pension Security and Transparency
Act of 2005, and at least every fifth year thereafter,
the corporation shall submit to Congress a report that
contains a description of the fiscal conditions of the
multiemployer pension plan system as of the date of
such report based on the information submitted to the
corporation under section 104(d).’’.
(g) CONFORMING AMENDMENT.—Title IV of such Act
(29 U.S.C. 1301 et seq.) is amended by striking section
4011.
(h) EFFECTIVE DATES.—
(1) IN
GENERAL.—The amendments made by
this section shall apply to plan years beginning after
December 31, 2005.
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(2) SPECIAL RULE.—Notwithstanding the provi-
sions of paragraph (1), the requirement under section
103(f)(2)(D) of the Employee Retirement Income Se-
curity Act (as added by this section) shall apply to
plan years beginning after December 31, 2007.
SEC. 504. TIMING OF ANNUAL REPORTING REQUIREMENTS.
(a) FILING AFTER 285 DAYS AFTER PLAN YEAR ONLY
IN CASES OF HARDSHIP.—Section 104(a)(1) of such Act
(29 U.S.C. 1024(a)(1)) is amended by inserting after the
first sentence the following new sentence: ‘‘In the case of
a pension plan, the Secretary may extend the deadline for
filing the annual report for any plan year past 285 days
after the close of the plan year only on a case by case basis
and only in cases of hardship, in accordance with regula-
tions which shall be prescribed by the Secretary.’’.
(b) INTERNET DISPLAY
OF INFORMATION.—Section
104(b) of such Act (29 U.S.C. 1024(b)) is amended by add-
ing at the end the following:
‘‘(5) Identification and basic plan information and ac-
tuarial information included in the annual report for any
plan year shall be filed with the Secretary in an electronic
format which accommodates display on the Internet, in ac-
cordance with regulations which shall be prescribed by the
Secretary. The Secretary shall provide for display of such
information included in the annual report, within 90 days
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after the date of the filing of the annual report, on an Inter-
net website maintained by the Secretary and other appro-
priate media. Such information shall also be displayed on
any Internet website maintained by the plan sponsor (or
by the plan administrator on behalf of the plan sponsor),
in accordance with regulations which shall be prescribed by
the Secretary.’’.
(c) SUMMARY ANNUAL REPORT FILED WITHIN 30
DAYS AFTER DEADLINE
FOR FILING
OF ANNUAL RE-
PORT.—Section 
104(b)(3) 
of 
such 
Act 
(29 
U.S.C.
1024(b)(3)), as amended by section 503, is amended by—
(1) striking ‘‘(3)(A) Within 210 days after the
close of the fiscal year,’’ and inserting ‘‘(3)(A) Within
30 days after the due date under subsection (a)(1) for
the filing of the annual report for the fiscal year of
the plan’’;
(2) striking ‘‘the latest’’ and inserting ‘‘such’’;
and
(3) adding at the end the following
‘‘(C) DATE
OF
INTERNET
DISPLAY.—Dis-
play of the summary annual report on the Inter-
net website maintained by the plan sponsor (or
by the plan administrator on behalf of the plan
sponsor) by the date required under subpara-
graph (A) shall be treated as furnishing such re-
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port to each participant and beneficiary receiv-
ing benefits under the plan by such date, except
that such report shall be furnished to each such
participant and beneficiary as soon as prac-
ticable thereafter, and in no event later the 30
days after such date.’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to plan years beginning after December
31, 2005.
SEC. 505. SECTION 4010 FILINGS WITH THE PBGC.
(a) CHANGE IN CRITERIA FOR PERSONS REQUIRED TO
PROVIDE INFORMATION TO PBGC.—Section 4010(b) of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1310(b)) is amended—
(1) in paragraph (1)—
(A) by striking ’’(1) the aggregate’’ and in-
serting ‘‘(1)(A) the aggregate’’;
(B) by striking the semicolon and inserting
‘‘; and’’;
(C) by inserting after subparagraph (A) the
following:
‘‘(B)(i) the aggregate funding targets attainment
percentage of the plan (as defined in subsection (d))
is less than 90 percent; or
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‘‘(ii) any debt instrument of the plan sponsor or
the plan sponsor has received a rating described in
subclause (I) or (II) of section 303(i)(5)(A)(i);’’; and
(2) by redesignating paragraphs (2) and (3) as
paragraphs (4) and (5), respectively, and by inserting
before paragraph (4) (as so redesignated) the fol-
lowing new paragraphs:
‘‘(2) the aggregate funding targets attainment
percentage of the plan (as defined in subsection (d))
is less than 60 percent;
‘‘(3)(A) the aggregate funding targets attainment
percentage of the plan (as defined in subsection (d))
is less than 75 percent, and
‘‘(B) the plan sponsor is in an industry with re-
spect to which the corporation determines that there
is substantial unemployment or underemployment
and the sales and profits are depressed or declining;’’.
(b) ADDITIONAL INFORMATION REQUIRED.—Section
4010 of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1310) is amended by adding at the end
the following new subsection:
‘‘(d) ADDITIONAL INFORMATION REQUIRED.—
‘‘(1) IN GENERAL.—The information submitted
to the corporation under subsection (a) shall
include—
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‘‘(A) the amount of benefit liabilities under
the plan determined using the assumptions used
by the corporation in determining liabilities;
‘‘(B) the funding target of the plan deter-
mined as if the plan has been in at-risk status
for at least 5 plan years; and
‘‘(C) the funding target attainment percent-
age of the plan.
‘‘(2) DEFINITIONS.—For purposes of this sub-
section:
‘‘(A) VALUE OF PLAN ASSETS.—The term
‘value of plan assets’ means the value of plan as-
sets, as determined under section 303(g)(3).
‘‘(B) FUNDING TARGET.—The term ‘funding
target’ has the meaning provided under section
303(d)(1).
‘‘(C) FUNDING TARGET ATTAINMENT PER-
CENTAGE.—The term ‘funding target attainment
percentage’ has the meaning provided in section
303(d)(2).
‘‘(D) AGGREGATE
FUNDING
TARGETS
AT-
TAINMENT
PERCENTAGE.—The term ‘aggregate
funding targets attainment percentage’ means,
with respect to a contributing sponsor for a plan
year, the percentage, taking into account all
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plans maintained by the contributing sponsor
and the members of its controlled group as of the
end of such plan year, which—
‘‘(i) the aggregate total of the values of
plan assets, as of the end of such plan year,
of such plans, is of
‘‘(ii) the aggregate total of the funding
targets of such plans, as of the end of such
plan year, taking into account only benefits
to which participants and beneficiaries have
a nonforfeitable right.
‘‘(E) AT-RISK STATUS.—The term ‘at-risk
status’ has the meaning provided in section
303(i)(4).
‘‘(e) NOTICE TO CONGRESS.—The Corporation shall,
on an annual basis, submit to the Committee on Health,
Education, Labor, and Pensions of the Senate and the Com-
mittee on Education and the Workforce of the House of Rep-
resentatives, a summary report of the information sub-
mitted to the Corporation under this section.’’.
(c) EFFECTIVE DATE.—The amendment made by this
section shall apply with respect to plan years beginning
after 2006.
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SEC. 506. DISCLOSURE OF TERMINATION INFORMATION TO
PLAN PARTICIPANTS.
(a) DISTRESS TERMINATIONS.—
(1) IN GENERAL.—Section 4041(c)(2) of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1341(c)(2)) is amended by adding at the end
the following:
‘‘(D) DISCLOSURE OF TERMINATION INFOR-
MATION.—
‘‘(i) IN
GENERAL.—A plan adminis-
trator that has filed a notice of intent to
terminate under subsection (a)(2) shall pro-
vide to an affected party any information
provided to the corporation under para-
graph (2) not later than 15 days after—
‘‘(I) receipt of a request from the
affected party for the information; or
‘‘(II) the provision of new infor-
mation to the corporation relating to
the previous request.
‘‘(ii) CONFIDENTIALITY.—
‘‘(I) IN GENERAL.—The plan ad-
ministrator shall not provide informa-
tion under clause (i) in a form that in-
cludes any information that may di-
rectly or indirectly be associated with,
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or otherwise identify, an individual
participant or beneficiary.
‘‘(II) LIMITATION.—A court may
limit disclosure under this subpara-
graph of confidential information de-
scribed in section 552(b) of title 5,
United States Code, to any authorized
representative of the participants or
beneficiaries that agrees to ensure the
confidentiality of such information.
‘‘(iii) FORM AND MANNER OF INFORMA-
TION; CHARGES.—
‘‘(I) FORM
AND
MANNER.—The
corporation may prescribe the form
and manner of the provision of infor-
mation 
under 
this 
subparagraph,
which shall include delivery in written,
electronic, or other appropriate form to
the extent that such form is reasonably
accessible to individuals to whom the
information is required to be provided.
‘‘(II) REASONABLE CHARGES.—A
plan sponsor may charge a reasonable
fee for any information provided under
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this subparagraph in other than elec-
tronic form.
‘‘(iv) 
AUTHORIZED
REPRESENTA-
TIVE.—For purposes of this subparagraph,
the term ‘authorized representative’ means
any employee organization representing
participants in the pension plan.’’.
(2) 
CONFORMING
AMENDMENT.—Section
4041(c)(1) of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1341(c)(1)) is amended
in subparagraph (C) by striking ‘‘subparagraph (B)’’
and inserting ‘‘subparagraphs (B) and (D)’’.
(b) INVOLUNTARY TERMINATIONS.—
(1) IN GENERAL.—Section 4042(c) of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1342(c)) is amended by—
(A) striking ‘‘(c) If the’’ and inserting
‘‘(c)(1) If the’’;
(B) redesignating paragraph (3) as para-
graph (2); and
(C) adding at the end the following:
‘‘(3) DISCLOSURE
OF
TERMINATION
INFORMA-
TION.—
‘‘(A) IN GENERAL.—
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‘‘(i) INFORMATION FROM PLAN SPON-
SOR OR ADMINISTRATOR.—A plan sponsor
or plan administrator of a single-employer
plan that has received a notice from the cor-
poration of a determination that the plan
should be terminated under this section
shall provide to an affected party any infor-
mation provided to the corporation in con-
junction with the plan termination.
‘‘(ii) INFORMATION
FROM
CORPORA-
TION.—The corporation shall provide a
copy of the administrative record, including
the trusteeship decision record of a termi-
nation of a plan described under clause (i).
‘‘(B) TIMING
OF
DISCLOSURE.—The plan
sponsor, plan administrator, or the corporation,
as applicable, shall provide the information de-
scribed in subparagraph (A) not later than 15
days after—
‘‘(i) receipt of a request from an af-
fected party for such information; or
‘‘(ii) in the case of information de-
scribed under subparagraph (A)(i), the pro-
vision of any new information to the cor-
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poration relating to a previous request by
an affected party.
‘‘(C) CONFIDENTIALITY.—
‘‘(i) IN GENERAL.—The plan adminis-
trator and plan sponsor shall not provide
information under subparagraph (A)(i) in
a form which includes any information that
may directly or indirectly be associated
with, or otherwise identify, an individual
participant or beneficiary.
‘‘(ii) LIMITATION.—A court may limit
disclosure under this paragraph of confiden-
tial information described in section 552(b)
of title 5, United States Code, to authorized
representatives (within the meaning of sec-
tion 4041(c)(2)(D)(iv)) of the participants
or beneficiaries that agree to ensure the con-
fidentiality of such information.
‘‘(D) FORM AND MANNER OF INFORMATION;
CHARGES.—
‘‘(i) FORM
AND
MANNER.—The cor-
poration may prescribe the form and man-
ner of the provision of information under
this paragraph, which shall include delivery
in written, electronic, or other appropriate
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form to the extent that such form is reason-
ably accessible to individuals to whom the
information is required to be provided.
‘‘(ii) REASONABLE CHARGES.—A plan
sponsor may charge a reasonable fee for any
information provided under this paragraph
in other than electronic form.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to any plan termination under title IV
of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1301 et seq.) with respect to which the notice
of intent to terminate (or in the case of a termination by
the Pension Benefit Guaranty Corporation, a notice of de-
termination under section 4042 of such Act (29 U.S.C.
1342)) occurs after the date of enactment of this Act.
SEC. 507. BENEFIT SUSPENSION NOTICE.
(a) MODIFICATION OF REGULATION.—The Secretary of
Labor shall modify the regulation under subparagraph (B)
of section 203(a)(3) of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1053(a)(3)(B)) to provide
that the notification required by such regulation in connec-
tion with any suspension of benefits described in such
subparagraph—
(1) in the case of an employee who returns to
service described in section 203(a)(3)(B) (i) or (ii) of
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such Act after commencement of payment of benefits
under the plan, shall be made during the first cal-
endar month or the first 4- or 5-week payroll period
ending in a calendar month in which the plan with-
holds payments, and
(2) in the case of any employee who is not de-
scribed in paragraph (1)—
(A) may be included in the summary plan
description for the plan furnished in accordance
with section 104(b) of such Act (29 U.S.C.
1024(b)), rather than in a separate notice, and
(B) need not include a copy of the relevant
plan provisions.
(b) EFFECTIVE DATE.—The modification made under
this section shall apply to plan years beginning after De-
cember 31, 2005.
SEC. 508. STUDY AND REPORT BY GOVERNMENT ACCOUNT-
ABILITY OFFICE.
(a) IN GENERAL.—The Comptroller General of the
United States shall conduct a study to determine the effec-
tiveness of the enforcement of provisions in the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1001
et seq.) and in other Federal laws designed to protect pen-
sion plans and the assets and participants of such plan
from fraud and mismanagement, including excessive invest-
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ment management fees, violations of fiduciary duties under
Title I of such Act, and the quality of plan assets.
(b) CONTENT OF STUDY.—The study described in sub-
section (a) shall include:
(1) An identification of which Federal depart-
ments and agencies have responsibility for enforce-
ment of these provisions, including the recovery of lost
plan assets due to fraud and mismanagement.
(2) Identification of all administrative enforce-
ment powers, procedures, and strategies used by the
Securities and Exchange Commission that have the
potential to improve the Department of Labor’s en-
forcement of the fiduciary provisions of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1001 et seq.).
(3) Identification of any statutory or other bar-
riers that restrict the Department of Labor’s author-
ity to use such powers, procedures, and strategies
identified in paragraph (2).
(4) An evaluation of whether giving additional
investigative or enforcement authority to the Pension
Benefit Guaranty Corporation or the Securities and
Exchange Commission would significantly improve
enforcement of those provisions.
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(5) An evaluation of the current authority of the
Pension Benefit Guaranty Corporation to bring ac-
tions to recover any funds lost by pension plans due
to violations of any fiduciary standards under Title
I of such Act or other Federal statutes.
(6) The impact that expanding any such author-
ity by the Pension Benefit Guaranty Corporation to
bring such actions would have on the Corporation’s
solvency.
(c) REPORT.—Not later than 6 months after the enact-
ment of this Act, the Comptroller General shall submit a
report to Congress on the study conducted under subsection
(a) that includes such recommendations for legislation or
administrative action as the Comptroller General deter-
mines are appropriate.
TITLE VI—TREATMENT OF CASH
BALANCE AND OTHER HYBRID
DEFINED BENEFIT PENSION
PLANS
SEC. 601. PROSPECTIVE APPLICATION OF AGE DISCRIMINA-
TION, CONVERSION, AND PRESENT VALUE AS-
SUMPTION RULES.
(a) APPLICATION OF AGE DISCRIMINATION PROHIBI-
TIONS.—
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(1) AMENDMENT OF ERISA.—Section 204(b) of
the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1054(b)) is amended by adding at
the end the following:
‘‘(5) SPECIAL RULES FOR CASH BALANCE AND
OTHER HYBRID DEFINED BENEFIT PLANS.—
‘‘(A) IN GENERAL.—A qualified cash bal-
ance plan shall not be treated as violating the re-
quirements of paragraph (1)(H) merely because
it may reasonably be expected that the period
over which interest credits will be made to a par-
ticipant’s accumulation account (or its equiva-
lent) is longer for a younger participant. This
paragraph shall not apply to any plan if the
rate of any pay credit or interest credit to such
an account under the plan decreases by reason of
the participant’s attainment of any age.
‘‘(B) QUALIFIED
CASH
BALANCE
PLAN.—
For purposes of this paragraph—
‘‘(i) IN GENERAL.—The term ‘qualified
cash balance plan’ means a cash balance
plan which meets the vesting requirement
under clause (ii) and the interest credit re-
quirement under clause (iii).
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‘‘(ii) 
VESTING
REQUIREMENTS.—A
plan meets the requirements of this clause if
an employee who has completed at least 3
years of service has a nonforfeitable right to
100 percent of the employee’s accrued ben-
efit derived from employer contributions.
‘‘(iii) INTEREST
CREDITS.—A plan
meets the requirements of this clause if the
terms of the plan provide that any interest
credit (or equivalent amount) for any plan
year shall be at a rate which—
‘‘(I) is not less than the applicable
Federal mid-term interest rate (as de-
termined under section 1274(d)(1) of
the Internal Revenue Code of 1986),
and
‘‘(II) is not greater than the
greater of the rate determined under
subclause (I) or a rate equal to the rate
of interest on amounts invested con-
servatively in long-term investment
grade corporate bonds.
‘‘(iv) DETERMINATION OF RATES.—For
purposes of clause (iii)(II), the rate of inter-
est on amounts invested conservatively in
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long-term investment grade corporate bonds
shall be determined by the Secretary of the
Treasury on the basis of 2 or more indices
that are selected periodically by the Sec-
retary of the Treasury. The Secretary of the
Treasury shall make publicly available the
indices and methodology used to determine
the rate.
‘‘(v) VARIABLE RATE OF INTEREST.—If
the interest credit rate under the plan is a
variable rate, the plan shall provide that,
upon the termination of the plan, the rate
of interest used to determine accrued bene-
fits under the plan shall be equal to the av-
erage of the rates of interest used under the
plan during the 5-year period ending on the
termination date.
‘‘(C) CASH BALANCE PLAN.—For purposes
of this paragraph, the term ‘cash balance plan’
means a defined benefit plan under which—
‘‘(i) the accrued benefit is determined
by reference to the balance of a hypothetical
accumulation account, and
‘‘(ii) pay credits and interest credits
are credited to such account.
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‘‘(D) REGULATIONS
TO
INCLUDE
SIMILAR
OR OTHER HYBRID PLANS.—
‘‘(i) CASH BALANCE PLAN.—The Sec-
retary of the Treasury shall issue regula-
tions which include in the definition of cash
balance plan any defined benefit plan (or
any portion of such a plan) which has an
effect similar to a cash balance plan. Such
regulations may provide that if a plan
sponsor represents in communications to
participants and beneficiaries that a plan
amendment results in a plan being de-
scribed in the preceding sentence, such plan
shall be treated as a cash balance plan.
‘‘(ii) 
QUALIFIED
CASH
BALANCE
PLAN.—The Secretary of the Treasury may
in the regulations issued under clause (i)
provide for the treatment of a cash balance
plan as a qualified cash balance plan in
cases where the cash balance plan has an ef-
fect similar to the qualified cash balance
plan.’’.
(2) 
AGE
DISCRIMINATION
IN
EMPLOYMENT
ACT.—Section 4(i)(2) of the Age Discrimination of
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Employment Act of 1967 (29 U.S.C. 623(i)(2)) is
amended—
(A) by inserting ‘‘(A)’’ after ‘‘(2)’’, and
(B) by adding at the end the following new
subparagraph:
‘‘(B) A defined benefit plan which is treated as a
qualified cash balance plan for purposes of section 204(b)(5)
of the Employee Retirement Income Security Act of 1974
shall not be treated as violating the requirements of para-
graph (1)(A) merely because it may reasonably be expected
that the period over which interest credits will be made
under the plan to a participant’s accumulation account (or
its equivalent) is longer for a younger participant. This
subparagraph shall not apply to any plan if the rate of
any pay credit or interest credit to such an account under
the plan decreases by reason of the participant’s attainment
of any age.’’.
(3) 
AMENDMENT
OF
INTERNAL
REVENUE
CODE.—Section 411(b) of the Internal Revenue Code
of 1986 (relating to accrued benefit requirements) is
amended by adding at the end the following:
‘‘(5) SPECIAL RULES FOR CASH BALANCE AND
OTHER HYBRID DEFINED BENEFIT PLANS.—
‘‘(A) IN GENERAL.—A qualified cash bal-
ance plan shall not be treated as violating the re-
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quirements of paragraph (1)(H) merely because
it may reasonably be expected that the period
over which interest credits will be made to a par-
ticipant’s accumulation account (or its equiva-
lent) is longer for a younger participant. This
paragraph shall not apply to any plan if the
rate of any pay credit or interest credit to such
an account under the plan decreases by reason of
the participant’s attainment of any age.
‘‘(B) QUALIFIED
CASH
BALANCE
PLAN.—
For purposes of this paragraph—
‘‘(i) IN GENERAL.—The term ‘qualified
cash balance plan’ means a cash balance
plan which meets the vesting requirement
under clause (ii) and the interest credit re-
quirement under clause (iii).
‘‘(ii) 
VESTING
REQUIREMENTS.—A
plan meets the requirements of this clause if
an employee who has completed at least 3
years of service has a nonforfeitable right to
100 percent of the employee’s accrued ben-
efit derived from employer contributions.
‘‘(iii) INTEREST
CREDITS.—A plan
meets the requirements of this clause if the
terms of the plan provide that any interest
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credit (or equivalent amount) for any plan
year shall be at a rate which—
‘‘(I) is not less than the applicable
Federal mid-term interest rate (as de-
termined under section 1274(d)(1)),
and
‘‘(II) is not greater than the
greater of the rate determined under
subclause (I) or a rate equal to the rate
of interest on amounts invested con-
servatively in long-term investment
grade corporate bonds.
‘‘(iv) DETERMINATION OF RATES.—For
purposes of clause (iii)(II), the rate of inter-
est on amounts invested conservatively in
long-term investment grade corporate bonds
shall be determined by the Secretary on the
basis of 2 or more indices that are selected
periodically by the Secretary. The Secretary
shall make publicly available the indices
and methodology used to determine the rate.
‘‘(v) VARIABLE RATE OF INTEREST.—If
the interest credit rate under the plan is a
variable rate, the plan shall provide that,
upon the termination of the plan, the rate
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of interest used to determine accrued bene-
fits under the plan shall be equal to the av-
erage of the rates of interest used under the
plan during the 5-year period ending on the
termination date.
‘‘(C) CASH BALANCE PLAN.—For purposes
of this paragraph, the term ‘cash balance plan’
means a defined benefit plan under which—
‘‘(i) the accrued benefit is determined
by reference to the balance of a hypothetical
accumulation account, and
‘‘(ii) pay credits and interest credits
are credited to such account.
‘‘(D) REGULATIONS
TO
INCLUDE
SIMILAR
OR OTHER HYBRID PLANS.—
‘‘(i) CASH BALANCE PLAN.—The Sec-
retary shall issue regulations which include
in the definition of cash balance plan any
defined benefit plan (or any portion of such
a plan) which has an effect similar to a
cash balance plan. Such regulations may
provide that if a plan sponsor represents in
communications to participants and bene-
ficiaries that a plan amendment results in
a plan being described in the preceding sen-
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tence, such plan shall be treated as a cash
balance plan.
‘‘(ii) 
QUALIFIED
CASH
BALANCE
PLAN.—The Secretary may in the regula-
tions issued under clause (i) provide for the
treatment of a cash balance plan as a quali-
fied cash balance plan in cases where the
cash balance plan has an effect similar to
the qualified cash balance plan.’’.
(b) RULES
APPLICABLE
TO
ACCRUED
BENEFITS
UNDER CONVERTED PLANS.—
(1) AMENDMENT OF ERISA.—Section 204(g) of
the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1054(g)) is amended by adding at
the end the following new paragraph:
‘‘(6) TREATMENT OF CONVERSIONS TO CASH BAL-
ANCE OR OTHER HYBRID PLANS.—
‘‘(A) IN
GENERAL.—For purposes of this
subsection, an applicable plan amendment shall
be treated as reducing the accrued benefit of a
participant if, under the terms of the plan as in
effect after the amendment, the accrued benefit of
any participant who was a participant as of the
effective date of the amendment may at any time
be less than the accrued benefit determined under
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the method under subparagraph (B), (C), or (D)
which is specified in the plan and applies uni-
formly to all participants. An applicable plan
amendment shall in no event be treated as meet-
ing the requirements of any such subparagraph
if the conversion described in subparagraph
(G)(i) is into a cash balance plan other than a
qualified cash balance plan (as defined in sub-
section (b)(5)(B)).
‘‘(B) NO WEARAWAY.—
‘‘(i) IN GENERAL.—The accrued benefit
determined under this subparagraph is the
sum of—
‘‘(I) the participant’s accrued ben-
efit for years of service before the effec-
tive date of the amendment, determined
under the terms of the plan as in effect
before the amendment, plus
‘‘(II) except as provided in clause
(ii), the participant’s accrued benefit
for years of service after the effective
date of the amendment, determined
under the terms of the plan as in effect
after the amendment.
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‘‘(ii) REQUIRED
AMOUNTS
FOR
CER-
TAIN
PERIODS.—Notwithstanding 
clause
(i)(II), the plan shall provide that either—
‘‘(I) the accrued benefit of all par-
ticipants for each of the first 5 plan
years to which the amendment applies
shall be equal to the greater of the ac-
crued benefit determined under the
terms of the plan as in effect both be-
fore and after the amendment, or
‘‘(II) the accrued benefit for peri-
ods after the effective date of the
amendment of all participants who, as
of the effective date of the amendment,
had attained the age of 40 and had a
combined age and years of service
under the plan of not less than 55 shall
be determined under either of the meth-
ods described in clause (iii) which is
selected by the plan and which is speci-
fied in the amendment.
‘‘(iii) APPLICABLE METHOD.—For pur-
poses of clause (ii)(II), the plan shall select
1 of the following methods:
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‘‘(I) The accrued benefit shall be
equal to the greater of the accrued ben-
efit determined under the terms of the
plan as in effect both before and after
the amendment.
‘‘(II) At the election of the partici-
pant, the accrued benefit shall be deter-
mined under the terms of the plan as
in effect either before or after the
amendment.
‘‘(C) GREATER OF OLD OR NEW OR ELEC-
TION
OF
EITHER.—The accrued benefit deter-
mined under this subparagraph is the accrued
benefit determined under 1 of the following meth-
ods which is selected by the plan and which is
specified in the amendment:
‘‘(i) The accrued benefit shall be equal
to the greater of the accrued benefit deter-
mined under the terms of the plan as in ef-
fect both before and after the amendment.
‘‘(ii) At the election of the participant,
the accrued benefit shall be determined
under the terms of the plan as in effect ei-
ther before or after the amendment.
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HR 2830 EAS
‘‘(D) 
METHOD
PRESCRIBED
BY
SEC-
RETARY.—The accrued benefit determined under
this subparagraph shall be determined under reg-
ulations prescribed by the Secretary which are
consistent with the purposes of this paragraph
and which may require a plan to provide a cred-
it of additional amounts or increases in initial
account balances in amounts substantially equiv-
alent to the benefits that would be required to be
provided to meet the requirements of subpara-
graphs (B) or (C).
‘‘(E) INCLUSION OF PRIOR ACCRUED BEN-
EFIT INTO INITIAL ACCOUNT BALANCE.—
‘‘(i) IN GENERAL.—If, for purposes of
subparagraphs (B), (C), or (D), an applica-
ble plan amendment provides that an
amount will be initially credited to a par-
ticipant’s accumulation account (or its
equivalent) on the effective date of the
amendment with respect to the participant’s
accrued benefit for periods before such date,
the requirements of such subparagraph shall
be treated as met with respect to such ac-
crued benefit if the amount initially cred-
ited is not less than the present value of the
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participant’s accrued benefit determined by
using the applicable mortality table and the
lower of the applicable interest rate under
section 205(g)(3)(A), or the interest rate
used to credit interest under the plan, as of
such date.
‘‘(ii) ADJUSTMENTS FOR CERTAIN SUB-
SIDIZED BENEFITS.—For purposes of sub-
paragraph (B), if any early retirement ben-
efit or retirement-type subsidy (within the
meaning of paragraph (6)(B)(i)) is not in-
cluded in the initial account balance under
clause (i), the plan shall credit the accumu-
lation account with the amount of such ben-
efit or subsidy for the plan year in which
the participant retires if, as of such time,
the participant has met the age, years of
service, and other requirements under the
plan for entitlement to such benefit or sub-
sidy.
‘‘(F) REQUIREMENTS WHERE PARTICIPANT
OFFERED CHOICE.—If a plan provides a partici-
pant with an election described in subparagraph
(B)(iii)(II) or (C)(ii), the following rules shall
apply:
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HR 2830 EAS
‘‘(i) NOTICE.—The plan shall not be
treated as meeting the requirements of either
such subparagraph unless the plan provides
the participant a notice of the right to make
such election which includes information
(meeting such requirements as may be pre-
scribed by the Secretary of the Treasury)—
‘‘(I) by which the participant
may project benefits under the for-
mulas from which the participant may
choose and may model the impact of
any such choice, and
‘‘(II) 
with 
respect 
to 
cir-
cumstances under which a participant
may not receive the projected accrued
benefits by reason of a plan termi-
nation or otherwise.
‘‘(ii) SIGNIFICANT REDUCTION OF RATE
OF ACCRUAL.—The plan shall provide that
if, during any of the first 5 plan years dur-
ing which such an election is in effect, the
plan adopts an amendment which results in
a significant reduction in the rate of future
benefit accrual (within the meaning of sec-
tion 204(h)), the accrued benefit of the par-
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HR 2830 EAS
ticipant shall be determined as if the par-
ticipant had made the election which re-
sulted in the greatest accrued benefit.
‘‘(iii) BENEFITS MUST NOT BE CONTIN-
GENT ON ELECTION.—The plan shall not be
treated as meeting the requirements of either
such subparagraph if any other benefit is
conditioned (directly or indirectly) on such
election.
‘‘(G) APPLICABLE PLAN AMENDMENT.—For
purposes of this paragraph—
‘‘(i) IN GENERAL.—The term ‘applica-
ble plan amendment’ means an amendment
to a defined benefit plan which has the ef-
fect of converting the plan to a cash balance
plan.
‘‘(ii) SPECIAL RULE FOR COORDINATED
BENEFITS.—If the benefits of 2 or more de-
fined benefit plans established or main-
tained by an employer are coordinated in
such a manner as to have the effect of the
adoption of an amendment described in
clause (i), the sponsor of the defined benefit
plan or plans providing for such coordina-
tion shall be treated as having adopted such
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HR 2830 EAS
a plan amendment as of the date such co-
ordination begins.
‘‘(iii) MULTIPLE
AMENDMENTS.—The
Secretary of the Treasury shall issue regula-
tions to prevent the avoidance of the pur-
poses of this paragraph through the use of
2 or more plan amendments rather than a
single amendment.
‘‘(iv) CASH BALANCE PLAN.—For pur-
poses of this paragraph, the term ‘cash bal-
ance plan’ has the meaning given such term
by subsection (b)(5)(C).
‘‘(v) COORDINATION
WITH
ACCRUAL
RULES.—If a plan amendment is treated as
meeting the requirements of this paragraph
with respect to any participant because
such participant is eligible to continue to
accrue benefits in the same manner as
under the terms of the plan in effect before
the amendment, the Secretary of the Treas-
ury shall prescribe regulations under which
the plan shall not be treated as failing to
meet the requirements of subparagraph (A),
(B), or (C) of section 204(b)(1) if the re-
quirements of this paragraph are met.
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HR 2830 EAS
‘‘(H) APPLICATION OF CERTAIN RULES TO
EARLY-RETIREMENT
BENEFITS.—Rules similar
to the rules of clauses (i), (ii), and (iii) of sub-
paragraph (B) and subparagraph (C) shall
apply in the case of any early retirement benefit
or retirement-type subsidy (within the meaning
of section 204(g)(2)(A)).’’.
(2) 
AMENDMENT
OF
INTERNAL
REVENUE
CODE.—Section 411(d) of the Internal Revenue Code
of 1986 (relating to special rules) is amended by add-
ing at the end the following new paragraph:
‘‘(7) TREATMENT OF CONVERSIONS TO CASH BAL-
ANCE OR OTHER HYBRID PLANS.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (6), an applicable plan amendment shall
be treated as reducing the accrued benefit of a
participant if, under the terms of the plan as in
effect after the amendment, the accrued benefit of
any participant who was a participant as of the
effective date of the amendment may at any time
be less than the accrued benefit determined under
the method under subparagraph (B), (C), or (D)
which is specified in the plan and applies uni-
formly to all participants. An applicable plan
amendment shall in no event be treated as meet-
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HR 2830 EAS
ing the requirements of any such subparagraph
if the conversion described in subparagraph
(G)(i) is into a cash balance plan other than a
qualified cash balance plan (as defined in sub-
section (b)(5)(B)).
‘‘(B) NO WEARAWAY.—
‘‘(i) IN GENERAL.—The accrued benefit
determined under this subparagraph is the
sum of—
‘‘(I) the participant’s accrued ben-
efit for years of service before the effec-
tive date of the amendment, determined
under the terms of the plan as in effect
before the amendment, plus
‘‘(II) except as provided in clause
(ii), the participant’s accrued benefit
for years of service after the effective
date of the amendment, determined
under the terms of the plan as in effect
after the amendment.
A similar rule shall apply in the case of
any early retirement benefit or retirement-
type subsidy (within the meaning of section
411(d)(6)(B)(i)).
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HR 2830 EAS
‘‘(ii) REQUIRED
AMOUNTS
FOR
CER-
TAIN
PERIODS.—Notwithstanding 
clause
(i)(II), the plan shall provide that either—
‘‘(I) the accrued benefit of all par-
ticipants for each of the first 5 plan
years to which the amendment applies
shall be equal to the greater of the ac-
crued benefit determined under the
terms of the plan as in effect both be-
fore and after the amendment, or
‘‘(II) the accrued benefit for peri-
ods after the effective date of the
amendment of all participants who, as
of the effective date of the amendment,
had attained the age of 40 and had a
combined age and years of service
under the plan of not less than 55 shall
be determined under either of the meth-
ods described in clause (iii) which is
selected by the plan and which is speci-
fied in the amendment.
‘‘(iii) APPLICABLE METHOD.—For pur-
poses of clause (ii)(II), the plan shall select
1 of the following methods:
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HR 2830 EAS
‘‘(I) The accrued benefit shall be
equal to the greater of the accrued ben-
efit determined under the terms of the
plan as in effect both before and after
the amendment.
‘‘(II) At the election of the partici-
pant, the accrued benefit shall be deter-
mined under the terms of the plan as
in effect either before or after the
amendment.
‘‘(C) GREATER OF OLD OR NEW OR ELEC-
TION
OF
EITHER.—The accrued benefit deter-
mined under this subparagraph is the accrued
benefit determined under 1 of the following meth-
ods which is selected by the plan and which is
specified in the amendment:
‘‘(i) The accrued benefit shall be equal
to the greater of the accrued benefit deter-
mined under the terms of the plan as in ef-
fect both before and after the amendment.
‘‘(ii) At the election of the participant,
the accrued benefit shall be determined
under the terms of the plan as in effect ei-
ther before or after the amendment.
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HR 2830 EAS
‘‘(D) 
METHOD
PRESCRIBED
BY
SEC-
RETARY.—The accrued benefit determined under
this subparagraph shall be determined under reg-
ulations prescribed by the Secretary which are
consistent with the purposes of this paragraph
and which may require a plan to provide a cred-
it of additional amounts or increases in initial
account balances in amounts substantially equiv-
alent to the benefits that would be required to be
provided to meet the requirements of subpara-
graphs (B) or (C).
‘‘(E) INCLUSION OF PRIOR ACCRUED BEN-
EFIT INTO INITIAL ACCOUNT BALANCE.—
‘‘(i) IN GENERAL.—If, for purposes of
subparagraphs (B), (C), or (D), an applica-
ble plan amendment provides that an
amount will be initially credited to a par-
ticipant’s accumulation account (or its
equivalent) on the effective date of the
amendment with respect to the participant’s
accrued benefit for periods before such date,
the requirements of such subparagraph shall
be treated as met with respect to such ac-
crued benefit if the amount initially cred-
ited is not less than the present value of the
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HR 2830 EAS
participant’s accrued benefit determined by
using the applicable mortality table and the
lower of the applicable interest rate under
section 417(e)(3)(A), or the interest rate
used to credit interest under the plan, as of
such date.
‘‘(ii) ADJUSTMENTS FOR CERTAIN SUB-
SIDIZED BENEFITS.—For purposes of sub-
paragraph (B), if any early retirement ben-
efit or retirement-type subsidy (within the
meaning of paragraph (6)(B)(i)) is not in-
cluded in the initial account balance under
clause (i), the plan shall credit the accumu-
lation account with the amount of such ben-
efit or subsidy for the plan year in which
the participant retires if, as of such time,
the participant has met the age, years of
service, and other requirements under the
plan for entitlement to such benefit or sub-
sidy.
‘‘(F) REQUIREMENTS WHERE PARTICIPANT
OFFERED CHOICE.—If a plan provides a partici-
pant with an election described in subparagraph
(B)(iii)(II) or (C)(ii), the following rules shall
apply:
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HR 2830 EAS
‘‘(i) NOTICE.—The plan shall not be
treated as meeting the requirements of either
such subparagraph unless the plan provides
the participant a notice of the right to make
such election which includes information
(meeting such requirements as may be pre-
scribed by the Secretary)—
‘‘(I) by which the participant
may project benefits under the for-
mulas from which the participant may
choose and may model the impact of
any such choice, and
‘‘(II) 
with 
respect 
to 
cir-
cumstances under which a participant
may not receive the projected accrued
benefits by reason of a plan termi-
nation or otherwise.
‘‘(ii) SIGNIFICANT REDUCTION OF RATE
OF ACCRUAL.—The plan shall provide that
if, during any of the first 5 plan years dur-
ing which such an election is in effect, the
plan adopts an amendment which results in
a significant reduction in the rate of future
benefit accrual (within the meaning of sec-
tion 4980F(e)), the accrued benefit of the
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HR 2830 EAS
participant shall be determined as if the
participant had made the election which re-
sulted in the greatest accrued benefit.
‘‘(iii) BENEFITS MUST NOT BE CONTIN-
GENT ON ELECTION.—The plan shall not be
treated as meeting the requirements of either
such subparagraph if any other benefit is
conditioned (directly or indirectly) on such
election.
‘‘(G) APPLICABLE PLAN AMENDMENT.—For
purposes of this paragraph—
‘‘(i) IN GENERAL.—The term ‘applica-
ble plan amendment’ means an amendment
to a defined benefit plan which has the ef-
fect of converting the plan to a cash balance
plan.
‘‘(ii) SPECIAL RULE FOR COORDINATED
BENEFITS.—If the benefits of 2 or more de-
fined benefit plans established or main-
tained by an employer are coordinated in
such a manner as to have the effect of the
adoption of an amendment described in
clause (i), the sponsor of the defined benefit
plan or plans providing for such coordina-
tion shall be treated as having adopted such
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HR 2830 EAS
a plan amendment as of the date such co-
ordination begins.
‘‘(iii) MULTIPLE
AMENDMENTS.—The
Secretary shall issue regulations to prevent
the avoidance of the purposes of this para-
graph through the use of 2 or more plan
amendments rather than a single amend-
ment.
‘‘(iv) CASH BALANCE PLAN.—For pur-
poses of this paragraph, the term ‘cash bal-
ance plan’ has the meaning given such term
by subsection (b)(5)(C).
‘‘(v) COORDINATION
WITH
ACCRUAL
AND NONDISCRIMINATION RULES.—If a plan
amendment is treated as meeting the re-
quirements of this paragraph with respect
to any participant because such participant
is eligible to continue to accrue benefits in
the same manner as under the terms of the
plan in effect before the amendment, the
Secretary shall prescribe regulations under
which—
‘‘(I) the plan shall not be treated
as failing to meet the requirements of
subparagraph (A), (B), or (C) of sec-
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HR 2830 EAS
tion 411(b)(1) if the requirements of
this paragraph are met, and
‘‘(II) the plan shall, subject to
such terms and conditions as may be
provided in such regulations, not be
treated as failing to meet the require-
ments of section 401(a)(4) merely be-
cause the plan provides any accrual or
benefit which is required to be provided
under subparagraph (B), (C), or (D)
or because only participants as of the
effective date of the amendment are so
eligible, except that this subclause shall
only apply if the plan met the require-
ments of section 401(a)(4) under the
terms of the plan as in effect before the
amendment.
‘‘(H) APPLICATION OF CERTAIN RULES TO
EARLY-RETIREMENT
BENEFITS.—Rules similar
to the rules of clauses (i), (ii), and (iii) of sub-
paragraph (B) and subparagraph (C) shall
apply in the case of any early retirement benefit
or retirement-type subsidy (within the meaning
of section 411(d)(6)(B)(i)).’’.