‘‘(III) for plans with post-retire-
ment medical benefits, plan assets
used to fund post-retirement medical
benefits can be distributed only for
post-retirement medical benefits.
If any plan participant, including an owner,
dies prior to using all the post-retirement med-
ical benefits to which he or she is entitled under
the plan, the unused amounts revert to the
trust (a forfeiture). If a participating business
owner terminates participation in the plan due
to insolvency, sale, merger-acquisition or other
Treasury-approved event, plan assets attrib-
utable to post-retirement medical benefits must
remain in the plan until/unless they are paid in
the form of medical expense reimbursement
post-retirement.
‘‘(F) ROLLOVER.—Subparagraph (A) shall
not apply to a 10 or more employer plan unless
the plan permits plan participants to transfer
benefits from such plan to a similar multiple
employer welfare benefit plan. No amount shall
be includible in the gross income of a plan par-
ticipant by reason of such a transfer.
‘‘(G) BENEFIT
LIMITATIONS.—Subpara-
graph (A) shall not apply to a 10 or more em-
ployer plan unless benefits payable to plan par-
ticipants are limited to the following:
‘‘(i) 
DEATH
BENEFITS.—Minimum
death benefit amounts are determined ei-
ther by the plan formula or, if greater, by
the minimum issue amounts determined by
the plan’s life insurance provider.
‘‘(ii) SEVERANCE
BENEFITS.—Max-
imum severance benefits are determined in
accordance with Department of Labor reg-
ulations and may not exceed 200 percent
of so much of the annual compensation as
does not exceed the limitation under sec-
tion 401(a)(17).
‘‘(iii) 
POST-RETIREMENT
MEDICAL
BENEFITS.—Benefits may not be paid
prior to normal retirement age. Normal re-
tirement age would be the year of eligi-
bility for medicare, or total and permanent
disability as defined under the Social Secu-
rity Act. Assets funding post-retirement
medical benefits revert to the plan if not
paid prior to death to a participating eligi-
ble employee. Assets used to fund post-re-
tirement medical benefits are payable to
the estate of a deceased eligible partici-
pating employee to pay any uncovered
medical expenses of the deceased employee
participant’s estate.
‘‘(H) DEDUCTION
LIMITATIONS.—Deduc-
tions for contributions to a 10 or more em-
ployer plan trust shall not exceed—
‘‘(i) for insured death benefits, of
which the plan trustee is the sole life in-
surance policy owner—
‘‘(I) in the case of term insur-
ance, the annual term premium,
‘‘(II) in the case of a whole life
insurance policy, the level annual pre-
mium to normal retirement age, or
‘‘(III) in the case of universal life
insurance, the guideline level annual
premium (as defined in section 7702),
‘‘(ii) 
for 
severance 
benefits, 
an
amount determined using reasonable actu-
arial principles needed to fund the pur-
chase of the level of benefits as stated in
the plan document, but no prefunding of
the benefit in excess of the amount needed
to fund the current benefit amount would
be permitted, and
‘‘(iii) for medical, health, and dis-
ability benefits, an amount required to pay
an insurance company premium, or in the
case of a self-funded plan, amounts needed
to cover the anticipated liability, but such
contributions would be forfeited to the wel-
fare benefit trust if the employer plan par-
ticipant dies or terminates prior to pay-
ment of these benefits, or if the employer
terminates participation in the welfare ben-
efit trust.
‘‘(I) FORFEITURE
POOL.—Subparagraph
(A) shall not apply to a 10 or more employer
plan unless all assets in the forfeiture pool are
used in a nondiscriminatory manner for the
benefit of participating employees.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall take effect on the date of first committee
action, but benefits earned as of that date may be funded
at the level at which they exist as of such date with de-
ductible contributions if the plans are brought into compli-
ance with the rules of such amendment within 24 months
after such date of enactment.
Æ