574 
such a plan) which has an effect similar to 
an applicable defined benefit plan.’’. 
(c) AMENDMENTS TO AGE DISCRIMINATION IN EM-
PLOYMENT ACT.—Section 4(i) of the Age Discrimination 
in Employment Act of 1967 (29 U.S.C. 623(i)) is amend-
ed by adding at the end the following new paragraph: 
‘‘(10) SPECIAL RULES RELATING TO AGE.— 
‘‘(A) COMPARISON
TO
SIMILARLY
SITU-
ATED YOUNGER INDIVIDUAL.— 
‘‘(i) IN GENERAL.—A plan shall not 
be treated as failing to meet the require-
ments of paragraph (1) if a participant’s 
accrued benefit, as determined as of any 
date under the terms of the plan, would be 
equal to or greater than that of any simi-
larly situated, younger individual who is or 
could be a participant. 
‘‘(ii) SIMILARLY SITUATED.—For pur-
poses of this subparagraph, a participant 
is similarly situated to any other individual 
if such participant is identical to such 
other individual in every respect (including 
period of service, compensation, position, 
date of hire, work history, and any other 
respect) except for age. 
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575 
‘‘(iii) DISREGARD
OF
SUBSIDIZED 
EARLY RETIREMENT BENEFITS.—In deter-
mining the accrued benefit as of any date 
for purposes of this clause, the subsidized 
portion of any early retirement benefit or 
retirement-type 
subsidy 
shall 
be 
dis-
regarded. 
‘‘(iv) ACCRUED
BENEFIT.—For pur-
poses of this subparagraph, the accrued 
benefit may, under the terms of the plan, 
be expressed as an annuity payable at nor-
mal retirement age, the balance of a hypo-
thetical account, or the current value of 
the accumulated percentage of the employ-
ee’s final average compensation. 
‘‘(B) 
APPLICABLE
DEFINED
BENEFIT 
PLANS.— 
‘‘(i) INTEREST CREDITS.— 
‘‘(I) IN GENERAL.—An applicable 
defined benefit plan shall be treated 
as failing to meet the requirements of 
paragraph (1) unless the terms of the 
plan provide that any interest credit 
(or an equivalent amount) for any 
plan year shall be at a rate which is 
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ccoleman on PROD1PC71 with BILLS
576 
not greater than a market rate of re-
turn. A plan shall not be treated as 
failing to meet the requirements of 
this subclause merely because the plan 
provides for a reasonable minimum 
guaranteed rate of return or for a 
rate of return that is equal to the 
greater of a fixed or variable rate of 
return. 
‘‘(II) PRESERVATION
OF
CAP-
ITAL.—An interest credit (or an 
equivalent amount) of less than zero 
shall in no event result in the account 
balance or similar amount being less 
than the aggregate amount of con-
tributions credited to the account. 
‘‘(III) MARKET
RATE
OF
RE-
TURN.—The Secretary of the Treas-
ury may provide by regulation for 
rules governing the calculation of a 
market rate of return for purposes of 
subclause (I) and for permissible 
methods of crediting interest to the 
account (including fixed or variable 
interest rates) resulting in effective 
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ccoleman on PROD1PC71 with BILLS
577 
rates of return meeting the require-
ments of subclause (I). 
‘‘(ii) SPECIAL RULE FOR PLAN CON-
VERSIONS.—If, after June 29, 2005, an 
applicable plan amendment is adopted, the 
plan shall be treated as failing to meet the 
requirements of paragraph (1)(H) unless 
the requirements of clause (iii) are met 
with respect to each individual who was a 
participant in the plan immediately before 
the adoption of the amendment. 
‘‘(iii) RATE OF BENEFIT ACCRUAL.— 
Subject to clause (iv), the requirements of 
this clause are met with respect to any 
participant if the accrued benefit of the 
participant under the terms of the plan as 
in effect after the amendment is not 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 before the amendment, 
plus 
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ccoleman on PROD1PC71 with BILLS
578 
‘‘(II) the participant’s accrued 
benefit for years of service after the 
effective date of the amendment, de-
termined under the terms of the plan 
as in effect after the amendment. 
‘‘(iv) SPECIAL RULES FOR EARLY RE-
TIREMENT
SUBSIDIES.—For purposes of 
clause (iii)(I), the plan shall credit the ac-
cumulation account or similar amount with 
the amount of any early retirement benefit 
or retirement-type subsidy for the plan 
year in which the participant retires if, as 
of such time, the participant has met the 
age, years of service, and other require-
ments under the plan for entitlement to 
such benefit or subsidy. 
‘‘(v) 
APPLICABLE
PLAN
AMEND-
MENT.—For purposes of this subpara-
graph— 
‘‘(I) IN
GENERAL.—The term 
‘applicable plan amendment’ means 
an amendment to a defined benefit 
plan which has the effect of con-
verting the plan to an applicable de-
fined benefit plan. 
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ccoleman on PROD1PC71 with BILLS
579 
‘‘(II) SPECIAL
RULE
FOR
CO-
ORDINATED BENEFITS.—If the bene-
fits of 2 or more defined benefit plans 
established or maintained by an em-
ployer are coordinated in such a man-
ner as to have the effect of the adop-
tion of an amendment described in 
subclause (I), the sponsor of the de-
fined benefit plan or plans providing 
for such coordination shall be treated 
as having adopted such a plan amend-
ment as of the date such coordination 
begins. 
‘‘(III) 
MULTIPLE
AMEND-
MENTS.—The Secretary of the Treas-
ury shall issue regulations to prevent 
the avoidance of the purposes of this 
subparagraph through the use of 2 or 
more plan amendments rather than a 
single amendment. 
‘‘(IV) 
APPLICABLE
DEFINED 
BENEFIT PLAN.—For purposes of this 
subparagraph, the term ‘applicable de-
fined benefit plan’ has the meaning 
given such term by section 203(f)(3) 
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ccoleman on PROD1PC71 with BILLS
580 
of the Employee Retirement Income 
Security Act of 1974. 
‘‘(vi) 
TERMINATION
REQUIRE-
MENTS.—An applicable defined benefit 
plan shall not be treated as meeting the re-
quirements of clause (i) unless the plan 
provides that, upon the termination of the 
plan— 
‘‘(I) if the interest credit rate (or 
an equivalent amount) under the plan 
is a variable rate, the rate of interest 
used to determine accrued benefits 
under the plan shall be equal to the 
average of the rates of interest used 
under the plan during the 5-year pe-
riod ending on the termination date, 
and 
‘‘(II) the interest rate and mor-
tality table used to determine the 
amount of any benefit under the plan 
payable in the form of an annuity 
payable at normal retirement age 
shall be the rate and table specified 
under the plan for such purpose as of 
the termination date, except that if 
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such interest rate is a variable rate, 
the interest rate shall be determined 
under the rules of subclause (I). 
‘‘(C) CERTAIN
OFFSETS
PERMITTED.—A 
plan shall not be treated as failing to meet the 
requirements of paragraph (1) solely because 
the plan provides offsets against benefits under 
the plan to the extent such offsets are allowable 
in applying the requirements of section 401(a) 
of the Internal Revenue Code of 1986. 
‘‘(D) PERMITTED
DISPARITIES
IN
PLAN 
CONTRIBUTIONS
OR
BENEFITS.—A plan shall 
not be treated as failing to meet the require-
ments of paragraph (1) solely because the plan 
provides a disparity in contributions or benefits 
with respect to which the requirements of sec-
tion 401(l) of the Internal Revenue Code of 
1986 are met. 
‘‘(E) INDEXING PERMITTED.— 
‘‘(i) IN GENERAL.—A plan shall not 
be treated as failing to meet the require-
ments of paragraph (1) solely because the 
plan provides for indexing of accrued bene-
fits under the plan. 
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ccoleman on PROD1PC71 with BILLS
582 
‘‘(ii) PROTECTION
AGAINST
LOSS.— 
Except in the case of any benefit provided 
in the form of a variable annuity, clause (i) 
shall not apply with respect to any index-
ing which results in an accrued benefit less 
than the accrued benefit determined with-
out regard to such indexing. 
‘‘(iii) INDEXING.—For purposes of 
this subparagraph, the term ‘indexing’ 
means, in connection with an accrued ben-
efit, the periodic adjustment of the accrued 
benefit by means of the application of a 
recognized investment index or method-
ology. 
‘‘(F) EARLY RETIREMENT BENEFIT OR RE-
TIREMENT-TYPE
SUBSIDY.—For purposes of 
this paragraph, the terms ‘early retirement ben-
efit’ and ‘retirement-type subsidy’ have the 
meaning 
given 
such 
terms 
in 
section 
203(g)(2)(A) of the Employee Retirement In-
come Security Act of 1974. 
‘‘(G) BENEFIT ACCRUED TO DATE.—For 
purposes of this paragraph, any reference to the 
accrued benefit shall be a reference to such ben-
efit accrued to date.’’. 
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(d) NO INFERENCE.—Nothing in the amendments 
made by this section shall be construed to create an infer-
ence with respect to— 
(1) the treatment of applicable defined benefit 
plans or conversions to applicable defined benefit 
plans under sections 204(b)(1)(H) of the Employee 
Retirement Income Security Act of 1974, 4(i)(1) of 
the Age Discrimination in Employment Act of 1967, 
and 411(b)(1)(H) of the Internal Revenue Code of 
1986, as in effect before such amendments, or 
(2) the determination of whether an applicable 
defined benefit plan fails to meet the requirements 
of sections 203(a)(2), 204(c), or 204(g) of the Em-
ployee Retirement Income Security Act of 1974 or 
sections 411(a)(2), 411(c), or 417(e) of such Code, 
as in effect before such amendments, solely because 
the present value of the accrued benefit (or any por-
tion thereof) of any participant is, under the terms 
of the plan, equal to the amount expressed as the 
balance in a hypothetical account or as an accumu-
lated percentage of the participant’s final average 
compensation. 
For purposes of this subsection, the term ‘‘applicable de-
fined benefit plan’’ has the meaning given such term by 
section 203(f)(3) of the Employee Retirement Income Se-
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ccoleman on PROD1PC71 with BILLS
584 
curity Act of 1974 and section 411(a)(13)(C) of such 
Code, as in effect after such amendments. 
(e) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to periods beginning on or 
after June 29, 2005. 
(2) PRESENT VALUE OF ACCRUED BENEFIT.— 
The amendments made by subsections (a)(2) and 
(b)(2) shall apply to distributions made after the 
date of the enactment of this Act. 
(3) VESTING AND INTEREST CREDIT REQUIRE-
MENTS.—In the case of a plan in existence on June 
29, 2005, the requirements of clause (i) of section 
411(b)(5)(B) of the Internal Revenue Code of 1986, 
clause (i) of section 204(b)(5)(B) of the Employee 
Retirement Income Security Act of 1974, and clause 
(i) of section 4(i)(10)(B) of the Age Discrimination 
in Employment Act of 1967 (as added by this Act) 
and the requirements of 203(f)(2) of the Employee 
Retirement Income Security Act of 1974 and section 
411(a)(13)(B) of the Internal Revenue Code of 1986 
(as so added) shall, for purposes of applying the 
amendments made by subsections (a) and (b), apply 
to years beginning after December 31, 2007, unless 
the plan sponsor elects the application of such re-
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ccoleman on PROD1PC71 with BILLS
585 
quirements for any period after June 29, 2005, and 
before the first year beginning after December 31, 
2007. 
(4) SPECIAL
RULE
FOR
COLLECTIVELY
BAR-
GAINED PLANS.—In the case of a plan maintained 
pursuant to 1 or more collective bargaining agree-
ments between employee representatives and 1 or 
more employers ratified on or before the date of the 
enactment of this Act, the requirements described in 
paragraph (3) shall, for purposes of applying the 
amendments made by subsections (a) and (b), not 
apply to plan years beginning before— 
(A) the earlier of— 
(i) the date on which the last of such 
collective bargaining agreements termi-
nates (determined without regard to any 
extension thereof on or after such date of 
enactment), or 
(ii) January 1, 2008, or 
(B) January 1, 2010. 
(5) CONVERSIONS.—The requirements of clause 
(ii) of section 411(b)(5)(B) of the Internal Revenue 
Code of 1986, clause (ii) of section 204(b)(5)(B) of 
the Employee Retirement Income Security Act of 
1974, and clause (ii) of section 4(i)(10)(B) of the 
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