I 
109TH CONGRESS 
2D SESSION 
H. R. 4 
To provide economic security for all Americans, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 28, 2006 
Mr. BOEHNER (for himself, Mr. THOMAS, Mr. MCKEON, Mr. KLINE, and Mr. 
CAMP) introduced the following bill; which was referred to the Committee 
on Ways and Means, and in addition to the Committee on Education and 
the Workforce, for a period to be subsequently determined by the Speak-
er, in each case for consideration of such provisions as fall within the ju-
risdiction of the committee concerned 
JULY 28, 2006 
The Committees on Ways and Means and Education and the Workforce 
discharged; considered and passed 
A BILL 
To provide economic security for all Americans, and for 
other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Pension Protection Act of 2006’’. 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
(b) TABLE OF CONTENTS.—The table of contents for 
this Act (other than so much of title XIV as follows section 
1401) is as follows: 
Sec. 1. Short title and table of contents. 
TITLE I—REFORM OF FUNDING RULES FOR SINGLE-EMPLOYER 
DEFINED BENEFIT PENSION PLANS 
Subtitle A—Amendments to Employee Retirement Income Security Act of 
1974 
Sec. 101. Minimum funding standards. 
Sec. 102. Funding rules for single-employer defined benefit pension plans. 
Sec. 103. Benefit limitations under single-employer plans. 
Sec. 104. Special rules for multiple employer plans of certain cooperatives. 
Sec. 105. Temporary relief for certain PBGC settlement plans. 
Sec. 106. Special rules for plans of certain government contractors. 
Sec. 107. Technical and conforming amendments. 
Subtitle B—Amendments to Internal Revenue Code of 1986 
Sec. 111. Minimum funding standards. 
Sec. 112. Funding rules for single-employer defined benefit pension plans. 
Sec. 113. Benefit limitations under single-employer plans. 
Sec. 114. Technical and conforming amendments. 
Sec. 115. Modification of transition rule to pension funding requirements. 
Sec. 116. Restrictions on funding of nonqualified deferred compensation plans 
by employers maintaining underfunded or terminated single- 
employer plans. 
TITLE II—FUNDING RULES FOR MULTIEMPLOYER DEFINED 
BENEFIT PLANS AND RELATED PROVISIONS 
Subtitle A—Amendments to Employee Retirement Income Security Act of 
1974 
Sec. 201. Funding rules for multiemployer defined benefit plans. 
Sec. 202. Additional funding rules for multiemployer plans in endangered or 
critical status. 
Sec. 203. Measures to forestall insolvency of multiemployer plans. 
Sec. 204. Withdrawal liability reforms. 
Sec. 205. Prohibition on retaliation against employers exercising their rights to 
petition the Federal government. 
Sec. 206. Special rule for certain benefits funded under an agreement approved 
by the Pension Benefit Guaranty Corporation. 
Subtitle B—Amendments to Internal Revenue Code of 1986 
Sec. 211. Funding rules for multiemployer defined benefit plans. 
Sec. 212. Additional funding rules for multiemployer plans in endangered or 
critical status. 
Sec. 213. Measures to forestall insolvency of multiemployer plans. 
Sec. 214. Exemption from excise taxes for certain multiemployer pension plans. 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6211
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
Subtitle C—Sunset of Additional Funding Rules 
Sec. 221. Sunset of additional funding rules. 
TITLE III—INTEREST RATE ASSUMPTIONS 
Sec. 301. Extension of replacement of 30-year Treasury rates. 
Sec. 302. Interest rate assumption for determination of lump sum distributions. 
Sec. 303. Interest rate assumption for applying benefit limitations to lump sum 
distributions. 
TITLE IV—PBGC GUARANTEE AND RELATED PROVISIONS 
Sec. 401. PBGC premiums. 
Sec. 402. Special funding rules for certain plans maintained by commercial air-
lines. 
Sec. 403. Limitation on PBGC guarantee of shutdown and other benefits. 
Sec. 404. Rules relating to bankruptcy of employer. 
Sec. 405. PBGC premiums for small plans. 
Sec. 406. Authorization for PBGC to pay interest on premium overpayment re-
funds. 
Sec. 407. Rules for substantial owner benefits in terminated plans. 
Sec. 408. Acceleration of PBGC computation of benefits attributable to recov-
eries from employers. 
Sec. 409. Treatment of certain plans where cessation or change in membership 
of a controlled group. 
Sec. 410. Missing participants. 
Sec. 411. Director of the Pension Benefit Guaranty Corporation. 
Sec. 412. Inclusion of information in the PBGC annual report. 
TITLE V—DISCLOSURE 
Sec. 501. Defined benefit plan funding notice. 
Sec. 502. Access to multiemployer pension plan information. 
Sec. 503. Additional annual reporting requirements. 
Sec. 504. Electronic display of annual report information. 
Sec. 505. Section 4010 filings with the PBGC. 
Sec. 506. Disclosure of termination information to plan participants. 
Sec. 507. Notice of freedom to divest employer securities. 
Sec. 508. Periodic pension benefit statements. 
Sec. 509. Notice to participants or beneficiaries of blackout periods. 
TITLE VI—INVESTMENT ADVICE, PROHIBITED TRANSACTIONS, 
AND FIDUCIARY RULES 
Subtitle A—Investment Advice 
Sec. 601. Prohibited transaction exemption for provision of investment advice. 
Subtitle B—Prohibited Transactions 
Sec. 611. Prohibited transaction rules relating to financial investments. 
Sec. 612. Correction period for certain transactions involving securities and 
commodities. 
Subtitle C—Fiduciary and Other Rules 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6211
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
Sec. 621. Inapplicability of relief from fiduciary liability during suspension of 
ability of participant or beneficiary to direct investments. 
Sec. 622. Increase in maximum bond amount. 
Sec. 623. Increase in penalties for coercive interference with exercise of ERISA 
rights. 
Sec. 624. Treatment of investment of assets by plan where participant fails to 
exercise investment election. 
Sec. 625. Clarification of fiduciary rules. 
TITLE VII—BENEFIT ACCRUAL STANDARDS 
Sec. 701. Benefit accrual standards. 
Sec. 702. Regulations relating to mergers and acquisitions. 
TITLE VIII—PENSION RELATED REVENUE PROVISIONS 
Subtitle A—Deduction Limitations 
Sec. 801. Increase in deduction limit for single-employer plans. 
Sec. 802. Deduction limits for multiemployer plans. 
Sec. 803. Updating deduction rules for combination of plans. 
Subtitle B—Certain Pension Provisions Made Permanent 
Sec. 811. Pensions and individual retirement arrangement provisions of Eco-
nomic Growth and Tax Relief Reconciliation Act of 2001 made 
permanent. 
Sec. 812. Saver’s credit. 
Subtitle C—Improvements in Portability, Distribution, and Contribution Rules 
Sec. 821. Clarifications regarding purchase of permissive service credit. 
Sec. 822. Allow rollover of after-tax amounts in annuity contracts. 
Sec. 823. Clarification of minimum distribution rules for governmental plans. 
Sec. 824. Allow direct rollovers from retirement plans to Roth IRAs. 
Sec. 825. Eligibility for participation in retirement plans. 
Sec. 826. Modifications of rules governing hardships and unforseen financial 
emergencies. 
Sec. 827. Penalty-free withdrawals from retirement plans for individuals called 
to active duty for at least 179 days. 
Sec. 828. Waiver of 10 percent early withdrawal penalty tax on certain dis-
tributions of pension plans for public safety employees. 
Sec. 829. Allow rollovers by nonspouse beneficiaries of certain retirement plan 
distributions. 
Sec. 830. Direct payment of tax refunds to individual retirement plans. 
Sec. 831. Allowance of additional IRA payments in certain bankruptcy cases. 
Sec. 832. Determination of average compensation for section 415 limits. 
Sec. 833. Inflation indexing of gross income limitations on certain retirement 
savings incentives. 
Subtitle D—Health and Medical Benefits 
Sec. 841. Use of excess pension assets for future retiree health benefits and col-
lectively bargained retiree health benefits. 
Sec. 842. Transfer of excess pension assets to multiemployer health plan. 
Sec. 843. Allowance of reserve for medical benefits of plans sponsored by bona 
fide associations. 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6211
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
Sec. 844. Treatment of annuity and life insurance contracts with a long-term 
care insurance feature. 
Sec. 845. Distributions from governmental retirement plans for health and 
Long-Term care insurance for public safety officers. 
Subtitle E—United States Tax Court Modernization 
Sec. 851. Cost-of-living adjustments for Tax Court judicial survivor annuities. 
Sec. 852. Cost of life insurance coverage for Tax Court judges age 65 or over. 
Sec. 853. Participation of Tax Court judges in the Thrift Savings Plan. 
Sec. 854. Annuities to surviving spouses and dependent children of special trial 
judges of the Tax Court. 
Sec. 855. Jurisdiction of Tax Court over collection due process cases. 
Sec. 856. Provisions for recall. 
Sec. 857. Authority for special trial judges to hear and decide certain employ-
ment status cases. 
Sec. 858. Confirmation of authority of Tax Court to apply doctrine of equitable 
recoupment. 
Sec. 859. Tax Court filing fee in all cases commenced by filing petition. 
Sec. 860. Expanded use of Tax Court practice fee for pro se taxpayers. 
Subtitle F—Other Provisions 
Sec. 861. Extension to all governmental plans of current moratorium on appli-
cation of certain nondiscrimination rules applicable to State 
and local plans. 
Sec. 862. Elimination of aggregate limit for usage of excess funds from black 
lung disability trusts. 
Sec. 863. Treatment of death benefits from corporate-owned life insurance. 
Sec. 864. Treatment of test room supervisors and proctors who assist in the ad-
ministration of college entrance and placement exams. 
Sec. 865. Grandfather rule for church plans which self-annuitize. 
Sec. 866. Exemption for income from leveraged real estate held by church 
plans. 
Sec. 867. Church plan rule. 
Sec. 868. Gratuitous transfer for benefits of employees. 
TITLE IX—INCREASE IN PENSION PLAN DIVERSIFICATION AND 
PARTICIPATION AND OTHER PENSION PROVISIONS 
Sec. 901. Defined contribution plans required to provide employees with free-
dom to invest their plan assets. 
Sec. 902. Increasing participation through automatic contribution arrange-
ments. 
Sec. 903. Treatment of eligible combined defined benefit plans and qualified 
cash or deferred arrangements. 
Sec. 904. Faster vesting of employer nonelective contributions. 
Sec. 905. Distributions during working retirement. 
Sec. 906. Treatment of certain pension plans of Indian tribal governments. 
TITLE X—PROVISIONS RELATING TO SPOUSAL PENSION 
PROTECTION 
Sec. 1001. Regulations on time and order of issuance of domestic relations or-
ders. 
Sec. 1002. Entitlement of divorced spouses to railroad retirement annuities 
independent of actual entitlement of employee. 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6211
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
Sec. 1003. Extension of tier II railroad retirement benefits to surviving former 
spouses pursuant to divorce agreements. 
Sec. 1004. Requirement for additional survivor annuity option. 
TITLE XI—ADMINISTRATIVE PROVISIONS 
Sec. 1101. Employee plans compliance resolution system. 
Sec. 1102. Notice and consent period regarding distributions. 
Sec. 1103. Reporting simplification. 
Sec. 1104. Voluntary early retirement incentive and employment retention 
plans maintained by local educational agencies and other enti-
ties. 
Sec. 1105. No reduction in unemployment compensation as a result of pension 
rollovers. 
Sec. 1106. Revocation of election relating to treatment as multiemployer plan. 
Sec. 1107. Provisions relating to plan amendments. 
TITLE XII—PROVISIONS RELATING TO EXEMPT ORGANIZATIONS 
Subtitle A—Charitable Giving Incentives 
Sec. 1201. Tax-free distributions from individual retirement plans for chari-
table purposes. 
Sec. 1202. Extension of modification of charitable deduction for contributions 
of food inventory. 
Sec. 1203. Basis adjustment to stock of S corporation contributing property. 
Sec. 1204. Extension of modification of charitable deduction for contributions 
of book inventory. 
Sec. 1205. Modification of tax treatment of certain payments to controlling ex-
empt organizations. 
Sec. 1206. Encouragement of contributions of capital gain real property made 
for conservation purposes. 
Sec. 1207. Excise taxes exemption for blood collector organizations. 
Subtitle B—Reforming Exempt Organizations 
PART 1—GENERAL REFORMS 
Sec. 1211. Reporting on certain acquisitions of interests in insurance contracts 
in which certain exempt organizations hold an interest. 
Sec. 1212. Increase in penalty excise taxes relating to public charities, social 
welfare organizations, and private foundations. 
Sec. 1213. Reform of charitable contributions of certain easements in registered 
historic districts and reduced deduction for portion of qualified 
conservation contribution attributable to rehabilitation credit. 
Sec. 1214. Charitable contributions of taxidermy property. 
Sec. 1215. Recapture of tax benefit for charitable contributions of exempt use 
property not used for an exempt use. 
Sec. 1216. Limitation of deduction for charitable contributions of clothing and 
household items. 
Sec. 1217. Modification of recordkeeping requirements for certain charitable 
contributions. 
Sec. 1218. Contributions of fractional interests in tangible personal property. 
Sec. 1219. Provisions relating to substantial and gross overstatements of valu-
ations. 
Sec. 1220. Additional standards for credit counseling organizations. 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6211
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
Sec. 1221. Expansion of the base of tax on private foundation net investment 
income. 
Sec. 1222. Definition of convention or association of churches. 
Sec. 1223. Notification requirement for entities not currently required to file. 
Sec. 1224. Disclosure to State officials relating to exempt organizations. 
Sec. 1225. Public disclosure of information relating to unrelated business in-
come tax returns. 
Sec. 1226. Study on donor advised funds and supporting organizations. 
PART 2—IMPROVED ACCOUNTABILITY OF DONOR ADVISED FUNDS 
Sec. 1231. Excise taxes relating to donor advised funds. 
Sec. 1232. Excess benefit transactions involving donor advised funds and spon-
soring organizations. 
Sec. 1233. Excess business holdings of donor advised funds. 
Sec. 1234. Treatment of charitable contribution deductions to donor advised 
funds. 
Sec. 1235. Returns of, and applications for recognition by, sponsoring organiza-
tions. 
PART 3—IMPROVED ACCOUNTABILITY OF SUPPORTING ORGANIZATIONS 
Sec. 1241. Requirements for supporting organizations. 
Sec. 1242. Excess benefit transactions involving supporting organizations. 
Sec. 1243. Excess business holdings of supporting organizations. 
Sec. 1244. Treatment of amounts paid to supporting organizations by private 
foundations. 
Sec. 1245. Returns of supporting organizations. 
TITLE XIII—OTHER PROVISIONS 
Sec. 1301. Technical corrections relating to mine safety. 
Sec. 1302. Going-to-the-sun road. 
Sec. 1303. Exception to the local furnishing requirement of the tax-exempt 
bond rules. 
Sec. 1304. Qualified tuition programs. 
TITLE XIV—TARIFF PROVISIONS 
Sec. 1401. Short title; table of contents. 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6211
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
TITLE I—REFORM OF FUNDING 
RULES 
FOR 
SINGLE-EM-
PLOYER 
DEFINED 
BENEFIT 
PENSION PLANS 
Subtitle A—Amendments to Em-
ployee Retirement Income Secu-
rity Act of 1974 
SEC. 101. MINIMUM FUNDING STANDARDS. 
(a) REPEAL OF EXISTING FUNDING RULES.—Sec-
tions 302 through 308 of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1082 through 
1086) are repealed. 
(b) NEW MINIMUM FUNDING STANDARDS.—Part 3 
of subtitle B of title I of such Act (as amended by sub-
section (a)) is amended by inserting after section 301 the 
following new section: 
‘‘SEC. 302. MINIMUM FUNDING STANDARDS. 
‘‘(a) REQUIREMENT TO MEET MINIMUM FUNDING 
STANDARD.— 
‘‘(1) IN GENERAL.—A plan to which this part 
applies shall satisfy the minimum funding standard 
applicable to the plan for any plan year. 
‘‘(2) MINIMUM FUNDING STANDARD.—For pur-
poses of paragraph (1), a plan shall be treated as 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
satisfying the minimum funding standard for a plan 
year if— 
‘‘(A) in the case of a defined benefit plan 
which is a single-employer plan, the employer 
makes contributions to or under the plan for 
the plan year which, in the aggregate, are not 
less than the minimum required contribution 
determined under section 303 for the plan for 
the plan year, 
‘‘(B) in the case of a money purchase plan 
which is a single-employer plan, the employer 
makes contributions to or under the plan for 
the plan year which are required under the 
terms of the plan, and 
‘‘(C) in the case of a multiemployer plan, 
the employers make contributions to or under 
the plan for any plan year which, in the aggre-
gate, are sufficient to ensure that the plan does 
not have an accumulated funding deficiency 
under section 304 as of the end of the plan 
year. 
‘‘(b) LIABILITY FOR CONTRIBUTIONS.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the amount of any contribution required 
by this section (including any required installments 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
under paragraphs (3) and (4) of section 303(j)) 
shall be paid by the employer responsible for making 
contributions to or under the plan. 
‘‘(2) JOINT
AND
SEVERAL
LIABILITY
WHERE 
EMPLOYER
MEMBER
OF
CONTROLLED
GROUP.—If 
the employer referred to in paragraph (1) is a mem-
ber of a controlled group, each member of such 
group shall be jointly and severally liable for pay-
ment of such contributions. 
‘‘(c) VARIANCE FROM MINIMUM FUNDING STAND-
ARDS.— 
‘‘(1) WAIVER
IN
CASE
OF
BUSINESS
HARD-
SHIP.— 
‘‘(A) IN GENERAL.—If— 
‘‘(i) an employer is (or in the case of 
a multiemployer plan, 10 percent or more 
of the number of employers contributing to 
or under the plan is) unable to satisfy the 
minimum funding standard for a plan year 
without temporary substantial business 
hardship (substantial business hardship in 
the case of a multiemployer plan), and 
‘‘(ii) application of the standard would 
be adverse to the interests of plan partici-
pants in the aggregate, 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
the Secretary of the Treasury may, subject to 
subparagraph (C), waive the requirements of 
subsection (a) for such year with respect to all 
or any portion of the minimum funding stand-
ard. The Secretary of the Treasury shall not 
waive the minimum funding standard with re-
spect to a plan for more than 3 of any 15 (5 
of any 15 in the case of a multiemployer plan) 
consecutive plan years. 
‘‘(B) EFFECTS OF WAIVER.—If a waiver is 
granted under subparagraph (A) for any plan 
year— 
‘‘(i) in the case of a single-employer 
plan, the minimum required contribution 
under section 303 for the plan year shall 
be reduced by the amount of the waived 
funding deficiency and such amount shall 
be amortized as required under section 
303(e), and 
‘‘(ii) in the case of a multiemployer 
plan, the funding standard account shall 
be credited under section 304(b)(3)(C) 
with the amount of the waived funding de-
ficiency and such amount shall be amor-
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS