I 
111TH CONGRESS 
2D SESSION 
H. R. 4608 
To amend the Employee Retirement Income Security Act of 1974 and the 
Internal Revenue Code of 1986 to allow multiemployer plans to amortize 
losses from certain fraudulent investment schemes over a 40-year period. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 4, 2010 
Mr. MAFFEI introduced the following bill; which was referred to the Com-
mittee on Education and Labor, and in addition to the Committee on 
Ways and Means, for a period to be subsequently determined by the 
Speaker, in each case for consideration of such provisions as fall within 
the jurisdiction of the committee concerned 
A BILL 
To amend the Employee Retirement Income Security Act 
of 1974 and the Internal Revenue Code of 1986 to 
allow multiemployer plans to amortize losses from certain 
fraudulent investment schemes over a 40-year period. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. AMORTIZATION OF LOSSES FROM QUALIFIED 
FRAUDULENT INVESTMENT SCHEMES. 
(a) AMENDMENT TO ERISA.—Section 304(b) of the 
Employee Retirement Income Security Act of 1974 is 
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amended by adding at the end the following new para-
graph: 
‘‘(8) AMORTIZATION OF LOSSES FROM QUALI-
FIED FRAUDULENT INVESTMENT SCHEMES.— 
‘‘(A) PLAN SPONSOR ELECTION.—Notwith-
standing any other provision of this subsection, 
the plan sponsor of a multiemployer plan may 
elect to charge the total amount of the net in-
vestment losses (if any) which are incurred in 
either or both of the first two plan years ending 
after August 31, 2008, and which are attrib-
utable to losses from qualified fraudulent in-
vestment schemes as an item separate from 
other experience losses, to be amortized in equal 
annual installments (until fully amortized) over 
a period of 40 plan years. 
‘‘(B) LOSSES FROM QUALIFIED FRAUDU-
LENT INVESTMENT SCHEMES.—For purposes of 
this paragraph, the determination as to whether 
losses are from qualified fraudulent investment 
schemes shall be determined under rules pre-
scribed by the Secretary that are substantially 
similar to the rules prescribed by the Secretary 
for purposes of determining whether a loss from 
such an arrangement is a theft loss for pur-
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poses of section 165 of the Internal Revenue 
Code of 1986.’’. 
(b) AMENDMENT TO INTERNAL REVENUE CODE OF 
1986.—Section 431(b) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
paragraph: 
‘‘(8) AMORTIZATION OF LOSSES FROM QUALI-
FIED FRAUDULENT INVESTMENT SCHEMES.— 
‘‘(A) PLAN SPONSOR ELECTION.—Notwith-
standing any other provision of this subsection, 
the plan sponsor of a multiemployer plan may 
elect to charge the total amount of the net in-
vestment losses (if any) which are incurred in 
either or both of the first two plan years ending 
after August 31, 2008, and which are attrib-
utable to losses from qualified fraudulent in-
vestment schemes as an item separate from 
other experience losses, to be amortized in equal 
annual installments (until fully amortized) over 
a period of 40 plan years. 
‘‘(B) LOSSES FROM QUALIFIED FRAUDU-
LENT INVESTMENT SCHEMES.—For purposes of 
this paragraph, the determination as to whether 
losses are from qualified fraudulent investment 
schemes shall be determined under rules pre-
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scribed by the Secretary that are substantially 
similar to the rules prescribed by the Secretary 
for purposes of determining whether a loss from 
such an arrangement is a theft loss for pur-
poses of section 165 of the Internal Revenue 
Code of 1986.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect as of the first day of the first 
plan year beginning after August 31, 2008, except that 
any election a plan makes pursuant to this section that 
affects the plan’s funding standard account for the first 
plan year beginning after August 31, 2008, shall be dis-
regarded for purposes of applying the provisions of section 
305 of the Employee Retirement Income Security Act of 
1974 and section 432 of the Internal Revenue Code of 
1986 to such plan year. 
Æ 
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