412 
(A) in subsection (b)(9), by striking ‘‘as 
defined in section 4022(b)(6)’’, and 
(B) by adding at the end the following new 
subsection: 
‘‘(d) For purposes of subsection (b)(9), the term ‘sub-
stantial owner’ means an individual who, at any time dur-
ing the 60-month period ending on the date the determina-
tion is being made— 
‘‘(1) owns the entire interest in an unincor-
porated trade or business, 
‘‘(2) in the case of a partnership, is a partner 
who owns, directly or indirectly, more than 10 per-
cent of either the capital interest or the profits inter-
est in such partnership, or 
‘‘(3) in the case of a corporation, owns, directly 
or indirectly, more than 10 percent in value of either 
the voting stock of that corporation or all the stock 
of that corporation. 
For purposes of paragraph (3), the constructive ownership 
rules of section 1563(e) of the Internal Revenue Code of 
1986 (other than paragraph (3)(C) thereof) shall apply, 
including the application of such rules under section 
414(c) of such Code.’’ 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00412
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
413 
(2) Section 4043(c)(7) of such Act (29 U.S.C. 
1343(c)(7)) 
is 
amended 
by 
striking 
‘‘section 
4022(b)(6)’’ and inserting ‘‘section 4021(d)’’. 
(d) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to plan terminations— 
(A) under section 4041(c) of the Employee 
Retirement Income Security Act of 1974 (29 
U.S.C. 1341(c)) with respect to which notices 
of intent to terminate are provided under sec-
tion 4041(a)(2) of such Act (29 U.S.C. 
1341(a)(2)) after December 31, 2005, and 
(B) under section 4042 of such Act (29 
U.S.C. 1342) with respect to which notices of 
determination are provided under such section 
after such date. 
(2) CONFORMING AMENDMENTS.—The amend-
ments made by subsection (c) shall take effect on 
January 1, 2006. 
SEC. 408. ACCELERATION OF PBGC COMPUTATION OF BEN-
EFITS ATTRIBUTABLE TO RECOVERIES FROM 
EMPLOYERS. 
(a) MODIFICATION OF AVERAGE RECOVERY PER-
CENTAGE OF OUTSTANDING AMOUNT OF BENEFIT LI-
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00413
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
414 
ABILITIES PAYABLE BY CORPORATION TO PARTICIPANTS 
AND BENEFICIARIES.—Section 4022(c)(3)(B)(ii) of the 
Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1322(c)(3)(B)(ii)) is amended to read as follows: 
‘‘(ii) notices of intent to terminate 
were provided (or in the case of a termi-
nation by the corporation, a notice of de-
termination 
under 
section 
4042 
was 
issued) during the 5-Federal fiscal year pe-
riod ending with the third fiscal year pre-
ceding the fiscal year in which occurs the 
date of the notice of intent to terminate 
(or the notice of determination under sec-
tion 4042) with respect to the plan termi-
nation for which the recovery ratio is being 
determined.’’ 
(b) VALUATION OF SECTION 4062(c) LIABILITY FOR 
DETERMINING AMOUNTS PAYABLE BY CORPORATION TO 
PARTICIPANTS AND BENEFICIARIES.— 
(1) SINGLE-EMPLOYER PLAN BENEFITS GUAR-
ANTEED.—Section 4022(c)(3)(A) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 
13) is amended to read as follows: 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00414
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
415 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (C), the term ‘recovery ratio’ 
means the ratio which— 
‘‘(i) the sum of the values of all recov-
eries under section 4062, 4063, or 4064, 
determined by the corporation in connec-
tion with plan terminations described 
under subparagraph (B), bears to 
‘‘(ii) the sum of all unfunded benefit 
liabilities under such plans as of the termi-
nation date in connection with any such 
prior termination.’’. 
(2) ALLOCATION OF ASSETS.—Section 4044 of 
the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1362) is amended by adding at the 
end the following new subsection: 
‘‘(e) VALUATION OF SECTION 4062(c) LIABILITY FOR 
DETERMINING AMOUNTS PAYABLE BY CORPORATION TO 
PARTICIPANTS AND BENEFICIARIES.— 
‘‘(1) IN GENERAL.—In the case of a terminated 
plan, the value of the recovery of liability under sec-
tion 4062(c) allocable as a plan asset under this sec-
tion for purposes of determining the amount of ben-
efits payable by the corporation shall be determined 
by multiplying— 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00415
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
416 
‘‘(A) the amount of liability under section 
4062(c) as of the termination date of the plan, 
by 
‘‘(B) the applicable section 4062(c) recov-
ery ratio. 
‘‘(2) SECTION 4062(c) RECOVERY RATIO.—For 
purposes of this subsection— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (C), the term ‘section 4062(c) re-
covery ratio’ means the ratio which— 
‘‘(i) the sum of the values of all recov-
eries under section 4062(c) determined by 
the corporation in connection with plan 
terminations described under subparagraph 
(B), bears to 
‘‘(ii) the sum of all the amounts of li-
ability under section 4062(c) with respect 
to such plans as of the termination date in 
connection with any such prior termi-
nation. 
‘‘(B) PRIOR TERMINATIONS.—A plan ter-
mination described in this subparagraph is a 
termination with respect to which— 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00416
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
417 
‘‘(i) the value of recoveries under sec-
tion 4062(c) have been determined by the 
corporation, and 
‘‘(ii) notices of intent to terminate 
were provided (or in the case of a termi-
nation by the corporation, a notice of de-
termination 
under 
section 
4042 
was 
issued) during the 5-Federal fiscal year pe-
riod ending with the third fiscal year pre-
ceding the fiscal year in which occurs the 
date of the notice of intent to terminate 
(or the notice of determination under sec-
tion 4042) with respect to the plan termi-
nation for which the recovery ratio is being 
determined. 
‘‘(C) EXCEPTION.—In the case of a termi-
nated plan with respect to which the out-
standing amount of benefit liabilities exceeds 
$20,000,000, the term ‘section 4062(c) recovery 
ratio’ means, with respect to the termination of 
such plan, the ratio of— 
‘‘(i) the value of the recoveries on be-
half of the plan under section 4062(c), to 
‘‘(ii) the amount of the liability owed 
under section 4062(c) as of the date of 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00417
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
418 
plan termination to the trustee appointed 
under section 4042 (b) or (c). 
‘‘(3) SUBSECTION NOT TO APPLY.—This sub-
section shall not apply with respect to the deter-
mination of— 
‘‘(A) whether the amount of outstanding 
benefit liabilities exceeds $20,000,000, or 
‘‘(B) the amount of any liability under sec-
tion 4062 to the corporation or the trustee ap-
pointed under section 4042 (b) or (c). 
‘‘(4) DETERMINATIONS.—Determinations under 
this subsection shall be made by the corporation. 
Such determinations shall be binding unless shown 
by clear and convincing evidence to be unreason-
able.’’ 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply for any termination for which no-
tices of intent to terminate are provided (or in the case 
of a termination by the corporation, a notice of determina-
tion under section 4042 under the Employee Retirement 
Income Security Act of 1974 is issued) on or after the 
date which is 30 days after the date of enactment of this 
section. 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00418
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
419 
SEC. 409. TREATMENT OF CERTAIN PLANS WHERE CES-
SATION OR CHANGE IN MEMBERSHIP OF A 
CONTROLLED GROUP. 
(a) IN GENERAL.—Section 4041(b) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 
1341(b)) is amended by adding at the end the following 
new paragraph: 
‘‘(5) SPECIAL
RULE
FOR
CERTAIN
PLANS 
WHERE CESSATION OR CHANGE IN MEMBERSHIP OF 
A CONTROLLED GROUP.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), if— 
‘‘(i) there is transaction or series of 
transactions which result in a person ceas-
ing to be a member of a controlled group, 
and 
‘‘(ii) such person immediately before 
the transaction or series of transactions 
maintained a single-employer plan which is 
a defined benefit plan which is fully fund-
ed, 
then the interest rate used in determining 
whether the plan is sufficient for benefit liabil-
ities or to otherwise assess plan liabilities for 
purposes 
of 
this 
subsection 
or 
section 
4042(a)(4) shall be not less than the interest 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00419
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
420 
rate used in determining whether the plan is 
fully funded. 
‘‘(B) 
LIMITATIONS.—Subparagraph 
(A) 
shall not apply to any transaction or series of 
transactions unless— 
‘‘(i) any employer maintaining the 
plan immediately before or after such 
transaction or series of transactions— 
‘‘(I) has an outstanding senior 
unsecured debt instrument which is 
rated investment grade by each of the 
nationally recognized statistical rating 
organizations for corporate bonds that 
has issued a credit rating for such in-
strument, or 
‘‘(II) if no such debt instrument 
of such employer has been rated by 
such an organization but 1 or more of 
such organizations has made an issuer 
credit rating for such employer, all 
such organizations which have so 
rated the employer have rated such 
employer investment grade, and 
‘‘(ii) the employer maintaining the 
plan after the transaction or series of 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00420
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
421 
transactions employs at least 20 percent of 
the employees located in the United States 
who were employed by such employer im-
mediately before the transaction or series 
of transactions. 
‘‘(C) FULLY
FUNDED.—For purposes of 
subparagraph (A), a plan shall be treated as 
fully funded with respect to any transaction or 
series of transactions if— 
‘‘(i) in the case of a transaction or se-
ries of transactions which occur in a plan 
year beginning before January 1, 2008, 
the funded current liability percentage de-
termined under section 302(d) for the plan 
year is at least 100 percent, and 
‘‘(ii) in the case of a transaction or 
series of transactions which occur in a plan 
year beginning on or after such date, the 
funding target attainment percentage de-
termined under section 303 is, as of the 
valuation date for such plan year, at least 
100 percent. 
‘‘(D) 2 YEAR LIMITATION.—Subparagraph 
(A) shall not apply to any transaction or series 
of transaction if the plan referred to in sub-
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00421
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
422 
paragraph (A)(ii) is terminated under section 
4041(c) or 4042 after the close of the 2-year 
period beginning on the date on which the first 
such transaction occurs.’’ 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to any transaction or series of 
transactions occurring on and after the date of the enact-
ment of this Act. 
SEC. 410. MISSING PARTICIPANTS. 
(a) IN GENERAL.—Section 4050 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1350) 
is amended by redesignating subsection (c) as subsection 
(e) and by inserting after subsection (b) the following new 
subsections: 
‘‘(c) MULTIEMPLOYER
PLANS.—The corporation 
shall prescribe rules similar to the rules in subsection (a) 
for multiemployer plans covered by this title that termi-
nate under section 4041A. 
‘‘(d) PLANS NOT OTHERWISE SUBJECT TO TITLE.— 
‘‘(1) TRANSFER TO CORPORATION.—The plan 
administrator of a plan described in paragraph (4) 
may elect to transfer a missing participant’s benefits 
to the corporation upon termination of the plan. 
‘‘(2) INFORMATION TO THE CORPORATION.—To 
the extent provided in regulations, the plan adminis-
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00422
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
423 
trator of a plan described in paragraph (4) shall, 
upon termination of the plan, provide the corpora-
tion information with respect to benefits of a miss-
ing participant if the plan transfers such benefits— 
‘‘(A) to the corporation, or 
‘‘(B) to an entity other than the corpora-
tion or a plan described in paragraph (4)(B)(ii). 
‘‘(3) PAYMENT BY THE CORPORATION.—If ben-
efits of a missing participant were transferred to the 
corporation under paragraph (1), the corporation 
shall, upon location of the participant or beneficiary, 
pay to the participant or beneficiary the amount 
transferred (or the appropriate survivor benefit) ei-
ther— 
‘‘(A) in a single sum (plus interest), or 
‘‘(B) in such other form as is specified in 
regulations of the corporation. 
‘‘(4) PLANS DESCRIBED.—A plan is described 
in this paragraph if— 
‘‘(A) the plan is a pension plan (within the 
meaning of section 3(2))— 
‘‘(i) to which the provisions of this 
section do not apply (without regard to 
this subsection), and 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00423
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
424 
‘‘(ii) which is not a plan described in 
paragraphs (2) through (11) of section 
4021(b), and 
‘‘(B) at the time the assets are to be dis-
tributed upon termination, the plan— 
‘‘(i) has missing participants, and 
‘‘(ii) has not provided for the transfer 
of assets to pay the benefits of all missing 
participants to another pension plan (with-
in the meaning of section 3(2)). 
‘‘(5) CERTAIN PROVISIONS NOT TO APPLY.— 
Subsections (a)(1) and (a)(3) shall not apply to a 
plan described in paragraph (4).’’. 
(b) CONFORMING AMENDMENTS.—Section 206(f) of 
such Act (29 U.S.C. 1056(f)) is amended— 
(1) by striking ‘‘title IV’’ and inserting ‘‘section 
4050’’; and 
(2) by striking ‘‘the plan shall provide that,’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to distributions made after final 
regulations implementing subsections (c) and (d) of sec-
tion 4050 of the Employee Retirement Income Security 
Act of 1974 (as added by subsection (a)), respectively, are 
prescribed. 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00424
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS