I 
108TH CONGRESS 
1ST SESSION H. R. 1677
To amend the Employee Retirement Income Security Act of 1974 and the 
Internal Revenue Code of 1986 to protect pension benefits of employees 
in defined benefit plans and to direct the Secretary of the Treasury 
to enforce the age discrimination requirements of the Internal Revenue 
Code of 1986. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 8, 2003
Mr. SANDERS (for himself, Mr. GEORGE MILLER of California, Mr. VIS-
CLOSKY, Mr. EMANUEL, Mr. SERRANO, Mr. ENGEL, Mr. GRIJALVA, Mr. 
ORTIZ, Mr. BROWN of Ohio, Mr. PETRI, Mr. OBERSTAR, Mr. TAYLOR of 
Mississippi, Mr. HINCHEY, Mr. TOWNS, Mr. ROSS, Mr. DELAHUNT, Mr. 
OLVER, Mr. PAYNE, Mr. ANDREWS, Mr. WYNN, Ms. SCHAKOWSKY, Mr. 
STRICKLAND, Mr. GUTIERREZ, Ms. NORTON, Ms. SOLIS, Mr. WEXLER, 
Mr. SCHIFF, Ms. SLAUGHTER, Mr. MEEHAN, Mr. NADLER, Mr. RAHALL, 
Mr. GOODE, Mr. BACA, Mr. KUCINICH, Mr. COSTELLO, Mr. MARKEY, 
Ms. KILPATRICK, Ms. LEE, Mr. OBEY, Mr. GREEN of Texas, Mr. 
DEUTSCH, Mr. MICHAUD, Mrs. JONES of Ohio, Mr. UDALL of New Mex-
ico, Mr. WEINER, Mr. DEFAZIO, Mr. PALLONE, Mr. MCGOVERN, Mrs. 
NAPOLITANO, Mr. THOMPSON of Mississippi, Mr. JEFFERSON, Mr. 
REYES, Mr. CUMMINGS, Mr. OWENS, Ms. HOOLEY of Oregon, Ms. 
MILLENDER-MCDONALD, Mr. DOGGETT, Ms. WOOLSEY, Mr. PASCRELL, 
Ms. BALDWIN, Ms. BORDALLO, Mr. RYAN of Ohio, Ms. DELAURO, Mr. 
FRANK of Massachusetts, Mr. ABERCROMBIE, Mr. RODRIGUEZ, Ms. 
JACKSON-LEE of Texas, Ms. CARSON of Indiana, Mr. DAVIS of Illinois, 
Mr. FILNER, Mr. HOEFFEL, Mr. LANGEVIN, Mr. LYNCH, Mr. HASTINGS 
of Florida, Mr. SCOTT of Georgia, Mr. CAPUANO, Mr. BISHOP of New 
York, Mr. DINGELL, Ms. MCCOLLUM, Mr. TIERNEY, Mr. KENNEDY of 
Rhode Island, Mr. RUSH, Mr. SPRATT, Mr. KILDEE, Mr. BERRY, Mr. 
LAMPSON, Mr. SCOTT of Virginia, Ms. KAPTUR, Mr. CROWLEY, Ms. 
ESHOO, Mrs. MALONEY, Mr. UDALL of Colorado, Mrs. MCCARTHY of 
New York, Mr. INSLEE, Mr. CONYERS, Mr. LANTOS, Mr. MCINTYRE, Mr. 
HOLT, Mr. BLUMENAUER, Mr. MEEK of Florida, Mr. BOEHLERT, Mr. 
FARR, Mr. HOLDEN, Mr. ACKERMAN, Ms. LINDA T. SA´NCHEZ of Cali-
fornia, Mrs. CHRISTENSEN, Mr. ROTHMAN, Mr. MURTHA, Ms. MCCAR-
THY of Missouri, Mrs. DAVIS of California, Ms. VELA´ZQUEZ, Mrs. CAPPS, 
Mr. DOYLE, Mr. MENENDEZ, Mr. CASE, Mr. ALLEN, and Mr. BERMAN) 
introduced the following bill; which was referred to the Committee on
Education and the Workforce, 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 juris-
diction of the committee concerned 
A BILL 
To amend the Employee Retirement Income Security Act 
of 1974 and the Internal Revenue Code of 1986 to 
protect pension benefits of employees in defined benefit 
plans and to direct the Secretary of the Treasury to 
enforce the age discrimination requirements of the Inter-
nal Revenue Code of 1986.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Pension Benefits Pro-
tection Act of 2003’’. 
SEC. 2. PROPER ADMINISTRATION OF INTERNAL REVENUE 
LAWS AND NONDISCRIMINATION REQUIRE-
MENTS. 
(a) IN GENERAL.—The Employee Retirement Income 
Security Act of 1974, the Internal Revenue Code of 1986, 
and the Age Discrimination in Employment Act of 1967 
shall be applied and administered without regard to pro-
posed regulations of the Secretary of the Treasury, in-
cluded in proposed regulations published in the Federal 
Register on December 11, 2002 (relating to reductions of
accruals and allocations because of the attainment of any 
age; application of nondiscrimination cross-testing rules to 
cash balance plans) (67 FR 76123), which pertain to plan 
amendments adopting a cash balance formula, and with-
out regard to any other regulation which reaches the same 
or a similar result. The Secretary of the Treasury shall 
take no action in contravention of section 204(b)(1)(G), 
204(b)(1)(H)(i), or 204(g) of the Employee Retirement 
Income Security Act of 1974, section 411(b)(1)(G), 
411(b)(1)(H)(i), or 411(d)(6) of the Internal Revenue 
Code of 1986, or section 4(i)(1)(A) of the Age Discrimina-
tion in Employment Act of 1967. 
(b) DIRECTIVE.—The Secretary of the Treasury shall 
apply section 411(b)(1)(H) of the Internal Revenue Code 
of 1986 without regard to the portion of the preamble to 
Treasury Decision 8360 (56 Fed. Reg. 47524–47603, 
September 19, 1991) which relates to the allocation of in-
terest adjustments through normal retirement age under 
a cash balance plan, as such preamble is and has been 
since its adoption without the force of law. 
SEC. 3. PROTECTION OF PARTICIPANTS FROM CONVER-
SIONS TO HYBRID DEFINED BENEFIT PLANS. 
(a) ELECTION TO MAINTAIN RATE OF ACCRUAL IN 
EFFECT BEFORE PLAN AMENDMENT.—
(1) 
AMENDMENT
TO
ERISA.—Section 
204(b)(1) of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1054(b)(1)) is amended 
by adding at the end the following new subpara-
graph: 
‘‘(I)(i) Notwithstanding the preceding subpara-
graphs, in the case of a plan amendment to a defined ben-
efit plan—
‘‘(I) which has the effect of converting the plan 
to a plan under which the accrued benefit is ex-
pressed to participants and beneficiaries as an 
amount other than an annual benefit commencing at 
normal retirement age (or which has a similar effect 
as determined under regulations issued under clause 
(iv)), and 
‘‘(II) which has the effect of reducing the rate 
of future benefit accrual of 1 or more participants, 
such plan shall be treated as not satisfying the require-
ments of this paragraph unless such plan meets the re-
quirements of clause (ii). 
‘‘(ii) A plan meets the requirements of this clause if 
the plan provides each participant who has attained 40 
years of age or 10 years of service (as determined under 
section 203) under the plan at the time such amendment 
takes effect with—
‘‘(I) notice of the plan amendment indicating 
that it has such effect, including a comparison of the 
present and projected values of the accrued benefit 
determined both with and without regard to the plan 
amendment, and 
‘‘(II) an election upon retirement to either re-
ceive benefits under the terms of the plan as in ef-
fect at the time of retirement or to receive benefits 
under the terms of the plan as in effect immediately 
before the effective date of such plan amendment 
(taking into account all benefit accruals under such 
terms since such date).
‘‘(iii) For purposes of clause (i), an accrued benefit 
shall include any early retirement benefit or retirement-
type subsidy (within the meaning of subsection (g)(2)(A)), 
but only with respect to a participant who satisfies (either 
before or after the effective date of the amendment) the 
conditions for the benefit or subsidy under the terms of 
the plan as in effect immediately before such date. 
‘‘(iv) The Secretary shall issue regulations under 
which any plan amendment which has an effect similar 
to the effect described in clause (i)(I) shall be treated as 
a plan amendment described in clause (i)(I). Such regula-
tions may provide that if a plan sponsor represents in com-
munications to participants and beneficiaries that a plan
amendment has an effect described in the preceding sen-
tence, such plan amendment shall be treated as a plan 
amendment described in clause (i)(I).’’. 
(2) AMENDMENT
TO
INTERNAL
REVENUE 
CODE.—Section 411(b)(1) of the Internal Revenue 
Code of 1986 (relating to accrued benefit require-
ments for defined benefit plans) is amended by add-
ing at the end the following new subparagraph: 
‘‘(I) ELECTION TO MAINTAIN RATE OF AC-
CRUAL
IN
EFFECT
BEFORE
CERTAIN
PLAN 
AMENDMENTS.—
‘‘(i) IN
GENERAL.—Notwithstanding 
the preceding subparagraphs, in the case 
of a plan amendment to a defined benefit 
plan—
‘‘(I) which has the effect of con-
verting the plan to a plan under which 
the accrued benefit is expressed to 
participants and beneficiaries as an 
amount other than an annual benefit 
commencing at normal retirement age 
(or which has a similar effect as de-
termined under regulations issued 
under clause (iv)), and
‘‘(II) which has the effect of re-
ducing the rate of future benefit ac-
crual of 1 or more participants, 
such plan shall be treated as not satisfying 
the requirements of this paragraph unless 
such plan meets the requirements of clause 
(ii). 
‘‘(ii) REQUIREMENTS.—A plan meets 
the requirements of this clause if the plan 
provides each participant who has attained 
40 years of age or 10 years of service (as 
determined under subsection (a)) under 
the plan at the time such amendment 
takes effect with—
‘‘(I) notice of the plan amend-
ment indicating that it has such ef-
fect, including a comparison of the 
present and projected values of the 
accrued benefit determined both with 
and without regard to the plan 
amendment, and 
‘‘(II) an election upon retirement 
to either receive benefits under the 
terms of the plan as in effect at the 
time of retirement or to receive bene-
fits under the terms of the plan as in 
effect immediately before the effective 
date of such plan amendment (taking 
into account all benefit accruals under 
such terms since such date). 
‘‘(iii) TREATMENT OF EARLY RETIRE-
MENT
BENEFITS
AND
RETIREMENT-TYPE 
SUBSIDIES.—For purposes of clause (i), an 
accrued benefit shall include any early re-
tirement benefit or retirement-type subsidy 
(within 
the 
meaning 
of 
subsection 
(d)(6)(B)(i)), but only with respect to a 
participant who satisfies (either before or 
after the effective date of the amendment) 
the conditions for the benefit or subsidy 
under the terms of the plan as in effect 
immediately before such date. 
‘‘(iv) REGULATIONS.—The Secretary 
shall issue regulations under which any 
plan amendment which has an effect simi-
lar to the effect described in clause (i)(I) 
shall be treated as a plan amendment de-
scribed in clause (i)(I). Such regulations 
may provide that if a plan sponsor rep-
resents in communications to participants
and beneficiaries that a plan amendment 
has an effect described in the preceding 
sentence, such plan amendment shall be 
treated as a plan amendment described in 
clause (i)(I).’’. 
(b) EFFECTIVE DATE AND RELATED RULES.—
(1) IN GENERAL.—The amendments made by 
this section apply to plan amendments taking effect 
before, on, or after the date of the enactment of this 
Act. 
(2) SPECIAL
RULE.—In the case of a plan 
amendment taking effect before 90 days after the 
date of the enactment of this Act, the requirements 
of section 204(b)(1)(I) of the Employee Retirement 
Income Security Act of 1974 (as added by this sec-
tion) and section 411(b)(1)(I) of the Internal Rev-
enue Code of 1986 (as added by this section) shall 
be treated as satisfied in connection with such plan 
amendment, in the case of any participant described 
in such sections 204(b)(1)(I) and 411(b)(1)(I) in 
connection with such plan amendment, if, as of the 
end of such 90-day period—
(A) the notice described in clause (i)(I) of 
such section 204(b)(1)(I) and clause (i)(I) of 
such section 411(b)(1)(I) in connection with
such plan amendment has been provided to 
such participant, and 
(B) the plan provides for the election de-
scribed in clause (i)(II) of such section 
204(b)(1)(I) and clause (i)(II) of such section 
411(b)(1)(I) in connection with such partici-
pant’s retirement under the plan. 
SEC. 4. PREVENTION OF WEARING AWAY OF EMPLOYEE’S 
ACCRUED BENEFIT. 
(a) AMENDMENT TO 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 fol-
lowing new paragraph: 
‘‘(6)(A) For purposes of paragraph (1), an applicable 
plan amendment adopted by a large defined benefit plan 
shall be treated as reducing accrued benefits of a partici-
pant if, under the terms of the plan after the adoption 
of the amendment, the accrued benefit of the participant 
may at any time be less than the sum of—
‘‘(i) the participant’s accrued benefit for years 
of service before the effective date of the amend-
ment, determined under the terms of the plan as in 
effect immediately before the effective date, plus 
‘‘(ii) the participant’s accrued benefit deter-
mined under the formula applicable to benefit accru-
als under the current plan as applied to years of 
service after such effective date. 
‘‘(B) For purposes of this paragraph—
‘‘(i) The term ‘applicable plan amendment’ 
means a plan amendment which has the effect of 
converting the plan to a plan under which the ac-
crued benefit is expressed to participants and bene-
ficiaries as an amount other than an annual benefit 
commencing at normal retirement age (or which has 
a similar effect as determined under regulations of 
the Secretary). 
‘‘(ii) The term ‘large defined benefit plan’ 
means any defined benefit plan which had 100 or 
more participants who had accrued a benefit under 
the plan (whether or not vested) as of the last day 
of the plan year preceding the plan year in which 
the plan amendment becomes effective. 
‘‘(iii) An accrued benefit shall include any early 
retirement benefit or retirement-type subsidy (within 
the meaning of paragraph (2)(A)), but only with re-
spect to a participant who satisfies (either before or 
after the effective date of the amendment) the condi-
tions for the benefit or subsidy under the terms of 
the plan as in effect immediately before such date.’’.
(b) AMENDMENT TO INTERNAL REVENUE CODE.—
Section 411(d)(6) of the Internal Revenue Code of 1986 
(relating to accrued benefit may not be decreased by 
amendment) is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(F) TREATMENT OF PLAN AMENDMENTS 
WEARING AWAY ACCRUED BENEFIT.—
‘‘(i) IN
GENERAL.—For purposes of 
subparagraph (A), an applicable plan 
amendment adopted by a large defined 
benefit plan shall be treated as reducing 
accrued benefits of a participant if, under 
the terms of the plan after the adoption of 
the amendment, the accrued benefit of the 
participant may at any time be less than 
the sum of—
‘‘(I) the participant’s accrued 
benefit for years of service before the 
effective date of the amendment, de-
termined under the terms of the plan 
as in effect immediately before the ef-
fective date, plus 
‘‘(II) the participant’s accrued 
benefit determined under the formula 
applicable to benefit accruals under
‘‘(III) 
PROTECTED
ACCRUED 
BENEFIT.—An accrued benefit shall 
include any early retirement benefit or 
retirement-type subsidy (within the 
meaning of subparagraph (B)(i)), but 
only with respect to a participant who 
satisfies (either before or after the ef-
fective date of the amendment) the 
conditions for the benefit or subsidy 
under the terms of the plan as in ef-
fect immediately before such date.’’. 
(c) EFFECTIVE DATE AND RELATED RULES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
apply to plan amendments taking effect before, on, 
or after the date of the enactment of this Act. 
(2) SPECIAL
RULE.—Notwithstanding para-
graph (1), the amendments made by this section 
shall not apply in connection with any participant 
with respect to any plan amendment which has 
taken effect before 90 days after the date of the en-
actment of this Act if, as of the end of such 90-day 
period, the plan provides that the participant’s ac-
crued benefit shall at no time be less than the sum 
described in section 204(g)(6)(A) of the Employee
Retirement Income Security Act of 1974 (as added 
by this section) or section 411(d)(6)(F)(i) of the In-
ternal Revenue Code of 1986 (as added by this sec-
tion) in connection with such plan amendment.
Æ