I 
109TH CONGRESS 
1ST SESSION H. R. 4274 
To amend the Internal Revenue Code of 1986 and the Employee Retirement 
Income Security Act of 1974 to provide for protections with respect 
to the accrued benefits of participants during conversions of pension 
plans to cash balance plans. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 9, 2005 
Mrs. JONES of Ohio introduced the following bill; which was referred to the 
Committee on Education and the Workforce, and in addition to the Com-
mittee 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 Internal Revenue Code of 1986 and the Em-
ployee Retirement Income Security Act of 1974 to pro-
vide for protections with respect to the accrued benefits 
of participants during conversions of pension plans to 
cash balance plans. 
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 ‘‘Preservation of De-
fined Benefit Plans Act of 2005’’.
SEC. 2. RULES RELATING TO REDUCTION IN ACCRUED BEN-
EFITS BECAUSE OF ATTAINMENT OF ANY 
AGE. 
(a) AMENDMENT TO INTERNAL REVENUE CODE OF 
1986.—Subparagraph (H) of section 411(b)(1) of the In-
ternal Revenue Code of 1986 (relating to continued ac-
crual beyond normal retirement age) is amended— 
(1) by striking the heading and inserting the 
following: ‘‘RULES RELATING TO REDUCTION IN AC-
CRUED BENEFITS BECAUSE OF ATTAINMENT OF ANY 
AGE.—’’; and 
(2) by adding at the end the following: 
‘‘(vi) COMPARISON TO SIMILARLY SIT-
UATED, YOUNGER INDIVIDUALS.— 
‘‘(I) IN
GENERAL.—A defined 
benefit plan under which the accrued 
benefit payable under the plan upon 
distribution (or any portion thereof) is 
expressed as the balance of an ac-
count maintained for the participant 
shall not be treated as age discrimina-
tory under the rules set forth in this 
subsection if the participant’s accrued 
benefit under the plan, as determined 
as of any date under the formula as 
set forth in the plan documents, would
be equal to or greater than that of 
any similarly situated younger indi-
vidual. 
‘‘(II) SIMILARLY SITUATED INDI-
VIDUAL.—For purposes of this clause, 
an individual is similarly situated to a 
participant if such individual is iden-
tical to such participant in every re-
spect (including period of service, 
compensation, position, date of hire, 
work history, and any other respect) 
except for age.’’. 
(b) AMENDMENT TO THE EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.—Section 204(b)(1)(H) 
of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1054(b)(1)(H)) is amended by adding at the 
end the following new clause: 
‘‘(vii)(I) A defined benefit plan under which the 
accrued benefit payable under the plan upon dis-
tribution (or any portion thereof) is expressed as the 
balance of an account maintained for the participant 
shall not be treated as age discriminatory under the 
rules set forth in this subsection if the participant’s 
accrued benefit under the plan, as determined as of 
any date under the formula as set forth in the plan
documents, would be equal to or greater than that 
of any similarly situated younger individual. 
‘‘(II) For purposes of this clause, an individual 
is similarly situated to a participant if such indi-
vidual is identical to such participant in every re-
spect (including period of service, compensation, po-
sition, date of hire, work history, and any other re-
spect) except for age.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning before, on, 
or after the date of the enactment of this Act. 
SEC. 3. DETERMINATIONS OF ACCRUED BENEFIT AS BAL-
ANCE OF BENEFIT ACCOUNT. 
(a) AMENDMENT TO INTERNAL REVENUE CODE OF 
1986.—Subsection (a) of section 411 of the Internal Rev-
enue Code of 1986 (relating to minimum vesting stand-
ards) is amended by adding at the end the following new 
paragraph: 
‘‘(13) MAINTENANCE
OF
NONFORFEITABILITY 
OF BENEFITS EXPRESSED AS ACCOUNT BALANCE.— 
‘‘(A) IN GENERAL.—A defined benefit plan 
under which the accrued benefit payable under 
the plan upon distribution (or any portion 
thereof) is expressed as the balance of an ac-
count maintained for the participant shall not
be treated as failing to meet the requirements 
of paragraph (2) or 417(e) solely because of the 
amount actually made available for such dis-
tribution under the terms of the plan, in any 
case in which— 
‘‘(i) the applicable interest rate that 
would be required to discount the partici-
pant’s accrued benefit projected under the 
terms of the plan to normal retirement age 
to a present value equal to the amount ac-
tually made available for distribution under 
the plan is not greater than 
‘‘(ii) a market rate of return. 
‘‘(B) REGULATIONS.—The Secretary may 
provide by regulation for rules governing the 
calculation of a market rate of return for pur-
poses of subparagraph (A) and for permissible 
methods of crediting interest to the account (in-
cluding variable interest rates) resulting in ef-
fective rates of return meeting the requirements 
of subparagraph (A).’’. 
(b) AMENDMENT TO EMPLOYEE RETIREMENT IN-
COME SECURITY ACT OF 1974.—Section 203 of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1053) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(f)(1) A defined benefit plan under which the ac-
crued benefit payable under the plan upon distribution (or 
any portion thereof) is expressed as the balance of an ac-
count maintained for the participant shall not be treated 
as failing to meet the requirements of subsection (a)(2) 
and section 205(g) solely because of the amount actually 
made available for such distribution under the terms of 
the plan, in any case in which— 
‘‘(A) the applicable interest rate that would be 
required to discount the participant’s accrued benefit 
projected under the terms of the plan to normal re-
tirement age to a present value equal to the amount 
actually made available for distribution under the 
plan is not greater than 
‘‘(B) a market rate of return. 
‘‘(2) The Secretary of the Treasury may provide by 
regulation for rules governing the calculation of a market 
rate of return for purposes of paragraph (1) and for per-
missible methods of crediting interest to the account (in-
cluding variable interest rates) resulting in effective rates 
of return meeting the requirements of paragraph (1).’’.