Union Calendar No. 391
103D CONGRESS
2D SESSION
H. R. 3396
[Report No. 103–632, Parts I and II]
A BILL
To amend the Employee Retirement Income Secu-
rity Act of 1974 and the Internal Revenue Code
of 1986 to provide security for workers, to im-
prove pension plan funding, to limit growth in in-
surance exposure, to protect the single-employer
plan termination insurance program, and for
other purposes.
AUGUST 26, 1994
Reported with an amendment, committed to the Commit-
tee of the Whole House on the State of the Union, and
ordered to be printed
IB
Union Calendar No. 391
103D CONGRESS
2D SESSION
H. R. 3396
[Report No. 103–632, Parts I and II]
To amend the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code of 1986 to provide security for workers, to im-
prove pension plan funding, to limit growth in insurance exposure, to
protect the single-employer plan termination insurance program, and
for other purposes.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 28, 1993
Mr. FORD of Michigan (for himself and Mr. ROSTENKOWSKI) (both by re-
quest) introduced the following bill; which was referred jointly to the
Committees on Education and Labor and Ways and Means
JULY 19, 1994
Additional sponsors: Mr. PICKLE, Mr. HOUGHTON, and Mr. ZELIFF
JULY 29, 1994
Reported from the Committee on Ways and Means with an amendment
[Strike out all after the enacting clause and insert the part printed in italic]
AUGUST 26, 1994
Reported from the Committee on Education and Labor with an amendment,
committed to the Committee of the Whole House on the State of the
Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in bold face roman]
[For text of introduced bill, see copy of bill as introduced on October 28, 1993]
A BILL
To amend the Employee Retirement Income Security Act
of 1974 and the Internal Revenue Code of 1986 to
provide security for workers, to improve pension plan
funding, to limit growth in insurance exposure, to protect
the single-employer plan termination insurance program,
and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Retirement Protection Act of 1994’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title and table of contents.
TITLE I—PENSION PLAN FUNDING
SUBTITLE A—AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986
Sec. 101. Minimum funding requirements.
Sec. 102. Limitation on changes in current liability assumptions.
Sec. 103. Anticipation of bargained benefit increases.
Sec. 104. Modification of quarterly contribution requirement.
Sec. 105. Exceptions to excise tax on nondeductible contributions.
SUBTITLE B—AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974
Sec. 121. Minimum funding requirements.
Sec. 122. Limitation on changes in current liability assumptions.
Sec. 123. Anticipation of bargained benefit increases.
Sec. 124. Modification of quarterly contribution requirement.
TITLE II—AMENDMENTS RELATED TO TITLE IV OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974
Sec. 201. Reportable events.
Sec. 202. Alternative to involuntary termination.
Sec. 203. Certain information required to be furnished to PBGC.
Sec. 204. Liability upon liquidation of contributing sponsor or controlled group
member where plan remains ongoing.
Sec. 205. Enforcement of minimum funding requirements.
Sec. 206. Remedies for noncompliance with requirements for standard termi-
nation.
Sec. 207. Prohibition on benefit increases where plan sponsor is in bankruptcy.
Sec. 208. Substantial owner benefits.
Sec. 209. Phase-out of variable rate premium cap.
(A) by striking ‘‘plus’’ at the end of sub-
paragraph (A),
(B) by striking the period at the end of sub-
paragraph (B) and inserting ‘‘, plus’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(C) the expected increase in current liabil-
ity due to benefits accruing during the plan
year.’’
(4) INCREASE IN CURRENT LIABILITY DUE TO
CHANGE IN REQUIRED ASSUMPTIONS.—
(A) Paragraph (3) of section 412(l) of such
Code is amended by adding at the end the follow-
ing new subparagraph:
‘‘(D) 
SPECIAL
RULE
FOR
REQUIRED
CHANGES IN ACTUARIAL ASSUMPTIONS.—
‘‘(i) IN GENERAL.—The unfunded old
liability amount with respect to any plan
for any plan year shall be increased by the
amount necessary to amortize the amount of
additional unfunded old liability under the
plan in equal annual installments over a
period of 12 plan years (beginning with the
first plan year beginning after December
31, 1994).
‘‘(ii) ADDITIONAL UNFUNDED OLD LI-
ABILITY.—For purposes of clause (i), the
term ‘additional unfunded old liability’
means the amount (if any) by which—
‘‘(I) the current liability of the
plan as of the beginning of the first
plan year beginning after December
31, 1994, valued using the assumptions
required by paragraph (7)(C) as in ef-
fect for plan years beginning after De-
cember 31, 1994, exceeds
‘‘(II) the current liability of the
plan as of the beginning of such first
plan year, valued using the same as-
sumptions used under subclause (I)
(other than the assumptions required
by paragraph (7)(C)), using the prior
interest rate, and using such mortality
assumptions as were used to determine
current liability for the first plan year
beginning after December 31, 1992.
‘‘(iii) PRIOR
INTEREST
RATE.—For
purposes of clause (ii), the term ‘prior in-
terest rate’ means the rate of interest that is
the same percentage of the weighted average
under subsection (b)(5)(B)(ii)(I) for the
first plan year beginning after December
31, 1994, as the rate of interest used by the
plan to determine current liability for the
first plan year beginning after December
31, 1992, is of the weighted average under
subsection (b)(5)(B)(ii)(I) for such first
plan year beginning after December 31,
1992.’’
(5) APPLICABLE PERCENTAGE FOR DETERMINING
UNFUNDED NEW LIABILITY AMOUNT.—Subparagraph
(C) of section 412(l)(4) of such Code is amended—
(A) by striking ‘‘.25’’ and inserting ‘‘.40’’,
and
(B) by striking ‘‘35’’ and inserting ‘‘60’’.
(6) 
UNPREDICTABLE
CONTINGENT
EVENT
AMOUNT.—
(A) Subparagraph (A) of section 412(l)(5)
of such Code is amended—
(i) by striking ‘‘greater of’’ and insert-
ing ‘‘greatest of’’ before clause (i);
(ii) by striking ‘‘or’’ at the end of
clause (i);
(iii) by striking the period at the end
of clause (ii) and inserting ‘‘, or’’; and
(iv) by adding after clause (ii) the fol-
lowing new clause:
‘‘(iii) the additional amount that
would be determined under paragraph
(4)(A) if the unpredictable contingent event
benefit liabilities were included in unfunded
new liability notwithstanding paragraph
(4)(B)(ii).’’
(B) Paragraph (5) of section 412(l) of such
Code is amended by adding at the end the follow-
ing new subparagraph:
‘‘(E) LIMITATION.—The present value of the
amounts described in subparagraph (A) with re-
spect to any one event shall not exceed the unpre-
dictable contingent event benefit liabilities at-
tributable to that event.’’
(C) Clause (ii) of section 412(m)(4)(D) of
such Code is amended—
(i) by striking ‘‘greater of’’ and insert-
ing ‘‘greatest of’’ before subclause (I);
(ii) by striking ‘‘or’’ at the end of
subclause (I);
(iii) by striking the period at the end
of subclause (II) and inserting ‘‘, or’’; and
The table prescribed under clause (ii) shall be
based on the prevailing commissioners’ standard
table (described in section 807(d)(5)(A)) used to
determine reserves for group annuity contracts
issued on the date as of which current liability
is determined (without regard to any other sub-
paragraph of section 807(d)(5)).’’
(8) TRANSITION RULE.—Section 412(l) of such
Code is amended by adding at the end the following
new paragraph:
‘‘(9) PHASEIN OF INCREASES IN FUNDING RE-
QUIRED BY RETIREMENT PROTECTION ACT OF 1994.—
‘‘(A) IN
GENERAL.—For any applicable
plan year, at the election of the employer, the in-
crease under paragraph (1) shall not exceed the
greater of—
‘‘(i) the increase that would be required
under paragraph (1) if the provisions of
this title as in effect for plan years begin-
ning before January 1, 1995, had remained
in effect, or
‘‘(ii) the amount which, after taking
into account charges (other than the addi-
tional charge under this subsection) and
credits under subsection (b), is necessary to
increase the funded current liability per-
centage (taking into account the expected
increase in current liability due to benefits
accruing during the plan year) for the ap-
plicable plan year to a percentage equal to
the sum of the initial funded current liabil-
ity percentage of the plan plus the applica-
ble number of percentage points for such ap-
plicable plan year.
‘‘(B) APPLICABLE NUMBER OF PERCENTAGE
POINTS.—
‘‘(i) INITIAL FUNDED CURRENT LIABIL-
ITY
PERCENTAGE
OF
PERCENT
OR
LESS.—Except as provided in clause (ii),
for plans with an initial funded current li-
ability percentage of 75 percent or less, the
applicable number of percentage points for
the applicable plan year is:
‘‘In the case
The applicable
of applicable
number of
plan years
percentage
beginning in:
points is:
1995 ..........................................................
1996 ..........................................................
1997 ..........................................................
1998 ..........................................................
1999 ..........................................................
2000 ..........................................................
2001 ..........................................................
24.
‘‘(ii) OTHER CASES.—In the case of a
plan to which this clause applies, the appli-
cable number of percentage points for any
such applicable plan year is the sum of—
‘‘(I) 2 percentage points;
‘‘(II) the applicable number of
percentage points (if any) under this
clause for the preceding applicable
plan year;
‘‘(III) the product of .10 multi-
plied by the excess (if any) of (a) 85
percentage points over (b) the sum of
the initial funded current liability per-
centage and the number determined
under subclause (II);
‘‘(IV) for applicable plan years
beginning in 2000, 1 percentage point;
and
‘‘(V) for applicable plan years be-
ginning in 2001, 2 percentage points.
‘‘(iii) PLANS
TO
WHICH
CLAUSE
(ii)
APPLIES.—
‘‘(I) IN
GENERAL.—Clause (ii)
shall apply to a plan for an applicable
plan year if the initial funded current
liability percentage of such plan is
more than 75 percent.
‘‘(II) PLANS
INITIALLY
UNDER
CLAUSE
(i).—In the case of a plan
which (but for this subclause) has an
initial funded current liability per-
centage of 75 percent or less, clause (ii)
(and not clause (i)) shall apply to such
plan with respect to applicable plan
years beginning after the first applica-
ble plan year for which the sum of the
initial funded current liability per-
centage and the applicable number of
percentage points (determined under
clause (i)) exceeds 75 percent. For pur-
poses of applying clause (ii) to such a
plan, the initial funded current liabil-
ity percentage of such plan shall be
treated as being the sum referred to in
the preceding sentence.
‘‘(C) DEFINITIONS.—For purposes of this
paragraph—
‘‘(i) The term ‘applicable plan year’
means a plan year beginning after Decem-
ber 31, 1994, and before January 1, 2002.
‘‘(ii) The term ‘initial funded current
liability percentage’ means the funded cur-
rent liability percentage as of the first day
of the first plan year beginning after De-
cember 31, 1994.’’
(9) LIQUIDITY REQUIREMENT.—
(A) Section 412(m) of such Code is amend-
ed by redesignating paragraph (5) as paragraph
(6) and by inserting after paragraph (4) the fol-
lowing new paragraph:
‘‘(5) LIQUIDITY REQUIREMENT.—
‘‘(A) IN GENERAL.—A plan to which this
paragraph applies shall be treated as failing to
pay the full amount of any required installment
to the extent that the value of the liquid assets
paid in such installment is less than the liquid-
ity shortfall (whether or not such liquidity short-
fall exceeds the amount of such installment re-
quired to be paid but for this paragraph).
‘‘(B) PLANS
TO
WHICH
PARAGRAPH
AP-
PLIES.—This paragraph shall apply to a defined
benefit plan to which subsection (l) applies and
which—
‘‘(i) is required to pay installments
under this subsection for a plan year, and
‘‘(ii) has a liquidity shortfall for any
quarter during such plan year.
‘‘(C) PERIOD
OF
UNDERPAYMENT.—For
purposes of paragraph (1), any portion of an in-
stallment that is treated as not paid under sub-
paragraph (A) shall continue to be treated as
unpaid until the close of the quarter in which the
due date for such installment occurs.
‘‘(D) LIMITATION
ON
INCREASE.—If the
amount of any required installment is increased
by reason of subparagraph (A), in no event shall
such increase exceed the amount which, when
added to prior installments for the plan year, is
necessary to increase the funded current liability
percentage (taking into account the expected in-
crease in current liability due to benefits accru-
ing during the plan year) to 100 percent.
‘‘(E) DEFINITIONS.—For purposes of this
paragraph—
‘‘(i) LIQUIDITY SHORTFALL.—The term
‘liquidity shortfall’ means, with respect to
any required installment, an amount equal
to the excess (as of the last day of the quar-
ter for which such installment is made) of
the base amount with respect to such quar-
ter over the value (as of such last day) of
the plan’s liquid assets.
‘‘(ii) BASE AMOUNT.—
‘‘(I) IN GENERAL.—The term ‘base
amount’ means, with respect to any
quarter, an amount equal to 3 times
the sum of the adjusted disbursements
from the plan for the 12 months ending
on the last day of such quarter.
‘‘(II) 
SPECIAL
RULE.—If 
the
amount determined under clause (i)
exceeds an amount equal to 2 times the
sum of the adjusted disbursements from
the plan for the 36 months ending on
the last day of the quarter and an en-
rolled actuary certifies to the Secretary
that such excess is the result of non-
recurring 
circumstances, 
the 
base
amount with respect to such quarter
shall be determined without regard to
amounts related to those nonrecurring
circumstances.
‘‘(iii) 
DISBURSEMENTS
FROM
THE
PLAN.—The term ‘disbursements from the
plan’ means all disbursements from the
trust, including purchases of annuities,
payments of single sums and other benefits,
and administrative expenses.
‘‘(iv) ADJUSTED
DISBURSEMENTS.—
The term ‘adjusted disbursements’ means
disbursements from the plan reduced by the
product of—
‘‘(I) the plan’s funded current li-
ability percentage (as defined in sub-
section (l)(8)) for the plan year, and
‘‘(II) the sum of the purchases of
annuities, payments of single sums,
and such other disbursements as the
Secretary shall provide in regulations.
‘‘(v) LIQUID ASSETS.—The term ‘liq-
uid assets’ means cash, marketable securi-
ties and such other assets as specified by the
Secretary in regulations.
‘‘(vi) QUARTER.—The term ‘quarter’
means, with respect to any required install-
ment, the 3-month period preceding the
month in which the due date for such in-
stallment occurs.
‘‘(F) REGULATIONS.—The Secretary may
prescribe such regulations as are necessary to
carry out this paragraph.’’
(B) EXCISE
TAX
ON
UNPAID
LIQUIDITY
SHORTFALL.—
(i) Subsection (e) of section 4971 of
such Code is amended by striking ‘‘(a) or
(b)’’ wherever it appears and replacing it
with ‘‘(a), (b) or (f)’’.
(ii) Section 4971 of such Code is
amended by redesignating subsection (f) as
subsection (g) and adding a new subsection
(f) to read as follows:
‘‘(f) FAILURE TO PAY LIQUIDITY SHORTFALL.—
‘‘(1) IN
GENERAL.—In the case of a plan to
which section 412(m)(5) applies, there is hereby im-
posed a tax of 10 percent of the excess (if any) of—
‘‘(A) the amount of the liquidity shortfall
for any quarter, over
‘‘(B) the amount of such shortfall which is
paid by the required installment under section
412(m) for such quarter (but only if such install-
ment is paid on or before the due date for such
installment).
‘‘(2) ADDITIONAL TAX.—If the plan has a liquid-
ity shortfall as of the close of any quarter and as of
the close of each of the following 4 quarters, there is
hereby imposed a tax equal to 100 percent of the
amount on which tax was imposed by paragraph (1)
for such first quarter.
‘‘(3) DEFINITIONS AND SPECIAL RULE.—
‘‘(A) LIQUIDITY
SHORTFALL; QUARTER.—
For purposes of this subsection, the terms ‘liquid-
ity shortfall’ and ‘quarter’ have the respective
meanings given such terms by section 412(m)(5).
‘‘(B) SPECIAL RULE.—If the tax imposed by
paragraph (2) is paid with respect to any li-
quidity shortfall for any quarter, no further tax
shall be imposed by this subsection on such short-
fall for such quarter.’’
(C) TREATMENT OF FAILURE TO MAKE CER-
TAIN PAYMENTS IF PLAN HAS LIQUIDITY SHORT-
FALL.—Section 401(a) of such Code is amended
by adding at the end the following new para-
graph:
‘‘(32) TREATMENT OF FAILURE TO MAKE CER-
TAIN
PAYMENTS
IF
PLAN
HAS
LIQUIDITY
SHORT-
FALL.—
‘‘(A) IN GENERAL.—A trust forming part of
a pension plan to which section 412(m)(5) ap-
plies shall not be treated as failing to constitute
a qualified trust under this section merely be-
cause such plan ceases to make any payment de-
scribed in subparagraph (B) during any period
that such plan has a liquidity shortfall (as de-
fined in section 412(m)(5)).
‘‘(B) PAYMENTS
DESCRIBED.—A payment
is described in this subparagraph if such pay-
ment is—
‘‘(i) any payment, in excess of the
monthly amount paid under a single life
annuity (plus any social security supple-
ments described in the last sentence of sec-
tion 411(a)(9)), to a participant or bene-
ficiary whose annuity starting date (as de-
fined in section 417(f)(2)) occurs during the
period referred to in subparagraph (A),
‘‘(ii) any payment for the purchase of
an irrevocable commitment from an insurer
to pay benefits, and
‘‘(iii) any other payment specified by
the Secretary by regulations.
‘‘(C) PERIOD
OF
SHORTFALL.—For pur-
poses of this paragraph, a plan has a liquidity
shortfall during the period that there is an
underpayment of an installment under section
412(m) by reason of paragraph (5)(A) thereof.’’
(10) AMENDMENT
TO
DEFINITION
OF
FULL
FUNDING LIMITATION.—
(A) Subparagraph (A) of section 412(c)(7)
of such Code is amended—
(i) by inserting ‘‘(including the ex-
pected increase in current liability due to
benefits accruing during the plan year)’’
after ‘‘current liability’’ in clause (i), and
(ii) by adding at the end the following
flush sentences:
‘‘In no event shall the excess described in the pre-
ceding sentence for any plan year be less than
the unfunded current liability (if any) of the
plan. For purposes of the preceding sentence, the
term ‘unfunded current liability’ has the mean-
ing given such term by subsection (l)(8) (deter-
mined without regard to subsection (l)(7)(D)).’’
(B) Subparagraph (B) of section 412(c)(7)
of such Code is amended to read as follows:
‘‘(B) CURRENT LIABILITY.—For purposes of
subparagraph (D) and subclause (I) of subpara-
graph (A)(i), the term ‘current liability’ has the
meaning given such term by subsection (l)(7)
(without regard to subparagraphs (C) and (D)
thereof) and using the rate of interest used under
subsection (b)(5)(B).’’
(b) EFFECTIVE DATE.—The amendments made by this
section shall apply to plan years beginning after December
31, 1994.
SEC. 102. LIMITATION ON CHANGES IN CURRENT LIABILITY
ASSUMPTIONS.
(a) IN GENERAL.—Paragraph (5) of section 412(c) of
the Internal Revenue Code of 1986 is amended—
(1) by striking ‘‘If the funding method’’ and in-
serting the following:
‘‘(A) IN GENERAL.—If the funding method’’,
and
(2) by adding at the end the following new sub-
paragraph:
‘‘(B) APPROVAL
REQUIRED
FOR
CERTAIN
CHANGES IN ASSUMPTIONS BY CERTAIN SINGLE
EMPLOYER
PLANS
SUBJECT
TO
ADDITIONAL
FUNDING REQUIREMENT.—
‘‘(i) IN
GENERAL.—No actuarial as-
sumption (other than the assumptions de-
scribed in subsection (l)(7)(C)) used to de-
termine the current liability for a plan to
which this subparagraph applies may be
changed without the approval of the Sec-
retary.
‘‘(ii) PLANS TO WHICH SUBPARAGRAPH
APPLIES.—This subparagraph shall apply
to a plan only if—
‘‘(I) subsection (l) applies to the
plan;
‘‘(II) the employer (within the
meaning of section 412(c)(11) (without
regard to subparagraph (B) thereof))
maintaining such plan is described in
section 4043(b)(1) of the Employee Re-
tirement Income Security Act of 1974;
and
‘‘(III) the change in assumptions
(determined after taking into account
any changes in interest rate and mor-
tality table) results in a decrease in the
unfunded current liability of the plan
for the current plan year that is
$50,000,000 or greater, or that is
$5,000,000 or greater and that is 5
percent or more of the current liability
of the plan before such change.’’
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendment made by this
section shall apply to changes in assumptions for
plan years beginning after October 28, 1993.
(2) CERTAIN
CHANGES
CEASE
TO
BE
EFFEC-
TIVE.—In the case of changes in assumptions for plan
years beginning after December 31, 1992, and on or
before October 28, 1993, such changes shall cease to be
effective for plan years beginning after December 31,
1994, if—
(A) such change would have required the
approval of the Secretary of the Treasury had
such amendment applied to such change, and
(B) such change is not so approved.
SEC. 103. ANTICIPATION OF BARGAINED BENEFIT IN-
CREASES.
(a) IN GENERAL.—Section 412(c) of the Internal Reve-
nue Code of 1986 is amended by adding at the end the fol-
lowing new paragraph:
‘‘(12) ANTICIPATION OF BENEFIT INCREASES EF-
FECTIVE IN THE FUTURE.—In determining projected
benefits, the funding method of a collectively bar-
gained plan described in section 413(a) (other than a
multiemployer plan) shall anticipate benefit increases
scheduled to take effect during the term of the collec-
tive bargaining agreement applicable to the plan.’’
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to plan years beginning after December
31, 1994, with respect to collective bargaining agreements
in effect on or after January 1, 1995.
SEC. 104. MODIFICATION OF QUARTERLY CONTRIBUTION
REQUIREMENT.
(a) IN GENERAL.—Paragraph (1) of section 412(m) of
the Internal Revenue Code of 1986 is amended—
(1) by inserting ‘‘which has a funded current li-
ability percentage (as defined in subsection (l)(8)) for
the preceding plan year of less than 100 percent’’ be-
fore ‘‘fails’’, and
(2) by striking ‘‘any plan year’’ and inserting
‘‘the plan year’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to plan years beginning after the date
of enactment of this Act.
SEC. 105. EXCEPTIONS TO EXCISE TAX ON NONDEDUCTIBLE
CONTRIBUTIONS.
(a) IN GENERAL.—Section 4972(c) of the Internal
Revenue Code of 1986 is amended by adding at the end
the following new paragraph:
‘‘(6) EXCEPTIONS.—In determining the amount
of nondeductible contributions for any taxable year,
there shall not be taken into account—
‘‘(A) contributions that would be deductible
under section 404(a)(1)(D) if the plan had more
than 100 participants if—
‘‘(i) the plan is covered under section
4021 of the Employee Retirement Income
Security Act of 1974, and
‘‘(ii) the plan is terminated under sec-
tion 4041(b) of such Act on or before the
last day of the taxable year, and
‘‘(B) contributions described in section
401(m)(4)(A) or 402(g)(3)(A) which—
‘‘(i) do not exceed 6 percent of com-
pensation (within the meaning of section
404(a)(7)(A)(i)) paid or accrued (during
the taxable year for which the contributions
were made) to beneficiaries under the plan,
and
‘‘(ii) are not deductible when contrib-
uted solely because of section 404(a)(7).
Subparagraph (B) shall apply to a defined bene-
fit plan only if such plan is described in section
404(a)(1)(D). For purposes of subparagraph (B),
the deductible limits under section 404(a)(7)
shall first be applied to amounts contributed to
a defined benefit plan and then to amounts de-
scribed in subparagraph (B).’’
(b) EFFECTIVE DATE.—
(1) SECTION 4972(c)(6)(A).—Section 4972(c)(6)(A)
of the Internal Revenue Code of 1986 (as added by
this section) shall apply to taxable years ending on
or after the date of enactment of this Act.
(2) SECTION 4972(c)(6)(B).—Section 4972(c)(6)(B)
of such Code (as added by this section) shall apply to
taxable years ending on or after December 31, 1992.
Subtitle B—Amendments to the Em-
ployee Retirement Income Secu-
rity Act of 1974
SEC. 121. MINIMUM FUNDING REQUIREMENTS.
(a) AMENDMENTS TO ADDITIONAL FUNDING REQUIRE-
MENTS FOR SINGLE-EMPLOYER PLANS.—
(1) LIMITATION
OF
ADDITIONAL
FUNDING
RE-
QUIREMENT TO PLANS HAVING A FUNDED CURRENT
LIABILITY PERCENTAGE OF LESS THAN 90 PERCENT.—
Paragraph (1) of section 302(d) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C.
1082(d)) is amended by striking ‘‘which has an un-
funded current liability’’ and inserting ‘‘which has a
funded current liability percentage of less than 90
percent’’.
(2) RELATIONSHIP OF ADDITIONAL FUNDING RE-
QUIREMENT
TO
FUNDING
STANDARD
ACCOUNT
CHARGES AND CREDITS.—
(A) Clause (ii) of section 302(d)(1)(A) of
such Act is amended to read as follows:
‘‘(ii) the sum of the charges for such
plan year under subsection (b)(2), reduced
by the sum of the credits for such plan year
under subparagraph (B) of subsection
(b)(3), plus’’.
(B) The last sentence in section 302(d)(1) of
such Act is amended to read as follows:
‘‘Such increase shall not exceed the amount which,
after taking into account charges (other than the ad-
ditional charge under this subsection) and credits
under subsection (b), is necessary to increase the
funded current liability percentage (taking into ac-
count the expected increase in current liability due to
benefits accruing during the plan year) to 100 per-
cent.’’
(3) AMENDMENT TO DEFICIT REDUCTION CON-
TRIBUTION.—Paragraph (2) of section 302(d) of such
Act is amended—
(A) by striking ‘‘plus’’ at the end of sub-
paragraph (A);
(B) by striking the period at the end of sub-
paragraph (B) and inserting ‘‘, plus’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(C) the expected increase in current liabil-
ity due to benefits accruing during the plan
year.’’
(4) INCREASE IN CURRENT LIABILITY DUE TO
CHANGE IN REQUIRED ASSUMPTIONS.—
(A) Paragraph (3) of section 302(d) of such
Act is amended by adding at the end the follow-
ing new subparagraph:
‘‘(D) 
SPECIAL
RULE
FOR
REQUIRED
CHANGES IN ACTUARIAL ASSUMPTIONS.—
‘‘(i) IN GENERAL.—The unfunded old
liability amount with respect to any plan
for any plan year shall be increased by the
amount necessary to amortize the amount of
additional unfunded old liability under the
plan in equal annual installments over a
period of 12 plan years (beginning with the
first plan year beginning after December
31, 1994).
‘‘(ii) ADDITIONAL UNFUNDED OLD LI-
ABILITY.—For purposes of clause (i), the
term ‘additional unfunded old liability’
means the amount (if any) by which—
‘‘(I) the current liability of the
plan as of the beginning of the first
plan year beginning after December
31, 1994, valued using the assumptions
required by paragraph (7)(C) as in ef-
fect for plan years beginning after De-
cember 31, 1994, exceeds
‘‘(II) the current liability of the
plan as of the beginning of such first
plan year, valued using the same as-
sumptions used under subclause (I)
(other than the assumptions required
by paragraph (7)(C)), using the prior
interest rate, and using such mortality
assumptions as were used to determine
current liability for the first plan year
beginning after December 31, 1992.
‘‘(iii) PRIOR
INTEREST
RATE.—For
purposes of clause (ii), the term ‘prior in-
terest rate’ means the rate of interest that is
the same percentage of the weighted average
under subsection (b)(5)(B)(ii)(I) for the
first plan year beginning after December
31, 1994, as the rate of interest used by the
plan to determine current liability for the
first plan year beginning after December
31, 1992, is of the weighted average under
subsection (b)(5)(B)(ii)(I) for such first
plan year beginning after December 31,
1992.’’
(5) APPLICABLE PERCENTAGE FOR DETERMINING
UNFUNDED NEW LIABILITY AMOUNT.—Subparagraph
(C) of section 302(d)(4) of such Act is amended—
(A) by striking ‘‘.25’’ and inserting ‘‘.40’’,
and
(B) by striking ‘‘35’’ and inserting ‘‘60’’.
(6) 
UNPREDICTABLE
CONTINGENT
EVENT
AMOUNT.—
(A) Subparagraph (A) of section 302(d)(5)
of such Act is amended—
(i) by striking ‘‘greater of’’ and insert-
ing ‘‘greatest of’’ before clause (i);
(ii) by striking ‘‘or’’ at the end of
clause (i);
(iii) by striking the period at the end
of clause (ii) and inserting ‘‘, or’’; and
(iv) by adding after clause (ii) the fol-
lowing new clause:
‘‘(iii) the additional amount that
would be determined under paragraph
(4)(A) if the unpredictable contingent event
benefit liabilities were included in unfunded
new liability notwithstanding paragraph
(4)(B)(ii).’’
(B) Paragraph (5) of section 302(d) of such
Act is amended by adding at the end the follow-
ing new subparagraph:
‘‘(E) LIMITATION.—The present value of the
amounts described in subparagraph (A) with re-
spect to any one event shall not exceed the unpre-
dictable contingent event benefit liabilities at-
tributable to that event.’’
(C) Clause (ii) of section 302(e)(4)(D) of
such Act is amended—
(i) by striking ‘‘greater of’’ and insert-
ing ‘‘greatest of’’ before subclause (I);
(ii) by striking ‘‘or’’ at the end of
subclause (I);
(iii) by striking the period at the end
of subclause (II) and inserting ‘‘, or’’; and
(iv) by adding after subclause (II) the
following new clause:
‘‘(III) 25 percent of the amount
determined 
under 
subsection
(d)(5)(A)(iii) for the plan year.’’
(7) REQUIRED INTEREST RATE AND MORTALITY
ASSUMPTIONS
FOR
DETERMINING
CURRENT
LIABIL-
ITY.—Subparagraph (C) of section 302(d)(7) of such
Act is amended to read as follows:
‘‘(C) INTEREST RATE AND MORTALITY AS-
SUMPTIONS USED.—Effective for plan years be-
ginning after December 31, 1994—
‘‘(i) the rate of interest used to deter-
mine current liability under this subsection
shall be the rate of interest used under sub-
section (b)(5), except that the highest rate in
the permissible range under subparagraph
(B)(ii) thereof shall not exceed 100 percent
of the weighted average referred to in such
subparagraph, and
‘‘(ii) the mortality table used to deter-
mine current liability under this subsection
shall be the table prescribed by the Sec-
retary of the Treasury.
The table prescribed under clause (ii) shall be
based on the prevailing commissioners’ standard
table (described in section 807(d)(5)(A) of the In-
ternal Revenue Code of 1986) used to determine
reserves for group annuity contracts issued on
the date as of which current liability is deter-
mined (without regard to any other subpara-
graph of section 807(d)(5) of such Code).’’
(8) TRANSITION RULE.—Section 302(d) of such
Act is amended by adding at the end the following
new paragraph:
‘‘(9) PHASEIN OF INCREASES IN FUNDING RE-
QUIRED BY RETIREMENT PROTECTION ACT OF 1994.—
‘‘(A) IN
GENERAL.—For any applicable
plan year, at the election of the employer, the in-
crease under paragraph (1) shall not exceed the
greater of—
‘‘(i) the increase that would be required
under paragraph (1) if the provisions of
this title as in effect for plan years begin-
ning before January 1, 1995, had remained
in effect, or
‘‘(ii) the amount which, after taking
into account charges (other than the addi-
tional charge under this subsection) and
credits under subsection (b), is necessary to
increase the funded current liability per-
centage (taking into account the expected
increase in current liability due to benefits
accruing during the plan year) for the ap-
plicable plan year to a percentage equal to
the sum of the initial funded current liabil-
ity percentage of the plan plus the applica-
ble number of percentage points for such ap-
plicable plan year.
‘‘(B) APPLICABLE NUMBER OF PERCENTAGE
POINTS.—
‘‘(i) INITIAL FUNDED CURRENT LIABIL-
ITY
PERCENTAGE
OF
PERCENT
OR
LESS.—Except as provided in clause (ii),
for plans with an initial funded current li-
ability percentage of 75 percent or less, the
applicable number of percentage points for
the applicable plan year is:
‘‘In the case
The applicable
of applicable
number of
plan years
percentage
beginning in:
points is:
1995 ..........................................................
1996 ..........................................................
1997 ..........................................................
1998 ..........................................................
1999 ..........................................................
2000 ..........................................................
2001 ..........................................................
24.
‘‘(ii) OTHER CASES.—In the case of a plan
to which this clause applies, the applicable num-
ber of percentage points for any such applicable
plan year is the sum of—
‘‘(I) 2 percentage points;
‘‘(II) the applicable number of
percentage points (if any) under this
clause for the preceding applicable
plan year;
‘‘(III) the product of .10 multi-
plied by the excess (if any) of (a) 85
percentage points over (b) the sum of
the initial funded current liability per-
centage and the number determined
under subclause (II);
‘‘(IV) for applicable plan years
beginning in 2000, 1 percentage point;
and
‘‘(V) for applicable plan years be-
ginning in 2001, 2 percentage points.
‘‘(iii) PLANS
TO
WHICH
CLAUSE
(ii)
APPLIES.—
‘‘(I) IN
GENERAL.—Clause (ii)
shall apply to a plan for an applicable
plan year if the initial funded current
liability percentage of such plan is
more than 75 percent.
‘‘(II) PLANS
INITIALLY
UNDER
CLAUSE
(i).—In the case of a plan
which (but for this subclause) has an
initial funded current liability per-
centage of 75 percent or less, clause (ii)
(and not clause (i)) shall apply to such
plan with respect to applicable plan
years beginning after the first applica-
ble plan year for which the sum of the
initial funded current liability per-
centage and the applicable number of
percentage points (determined under
clause (i)) exceeds 75 percent. For pur-
poses of applying clause (ii) to such a
plan, the initial funded current liabil-
ity percentage of such plan shall be
treated as being the sum referred to in
the preceding sentence.
‘‘(C) DEFINITIONS.—For purposes of this
paragraph—
‘‘(i) The term ‘applicable plan year’
means a plan year beginning after Decem-
ber 31, 1994, and before January 1, 2002.
‘‘(ii) The term ‘initial funded current
liability percentage’ means the funded cur-
rent liability percentage as of the first day
of the first plan year beginning after De-
cember 31, 1994.’’
(9) LIQUIDITY REQUIREMENT.—
(A) Section 302(e) of such Act is amended
by redesignating paragraph (5) as paragraph
(6) and by inserting after paragraph (4) the fol-
lowing new paragraph:
‘‘(5) LIQUIDITY REQUIREMENT.—
‘‘(A) IN GENERAL.—A plan to which this
paragraph applies shall be treated as failing to
pay the full amount of any required installment
to the extent that the value of the liquid assets
paid in such installment is less than the liquid-
ity shortfall (whether or not such liquidity short-
fall exceeds the amount of such installment re-
quired to be paid but for this paragraph).
‘‘(B) PLANS
TO
WHICH
PARAGRAPH
AP-
PLIES.—This paragraph shall apply to a defined
benefit plan to which subsection (d) applies and
which—
‘‘(i) is required to pay installments
under this subsection for a plan year, and
‘‘(ii) has a liquidity shortfall for any
quarter during such plan year.
‘‘(C) PERIOD
OF
UNDERPAYMENT.—For
purposes of paragraph (1), any portion of an in-
stallment that is treated as not paid under sub-
paragraph (A) shall continue to be treated as
unpaid until the close of the quarter in which the
due date for such installment occurs.
‘‘(D) LIMITATION
ON
INCREASE.—If the
amount of any required installment is increased
by reason of subparagraph (A), in no event shall
such increase exceed the amount which, when
added to prior installments for the plan year, is
necessary to increase the funded current liability
percentage (taking into account the expected in-
crease in current liability due to benefits accru-
ing during the plan year) to 100 percent.
‘‘(E) DEFINITIONS.—For purposes of this
paragraph—
‘‘(i) LIQUIDITY SHORTFALL.—The term
‘liquidity shortfall’ means, with respect to
any required installment, an amount equal
to the excess (as of the last day of the quar-
ter for which such installment is made) of
the base amount with respect to such quar-
ter over the value (as of such last day) of
the plan’s liquid assets.
‘‘(ii) BASE AMOUNT.—
‘‘(I) IN GENERAL.—The term ‘base
amount’ means, with respect to any
quarter, an amount equal to 3 times
the sum of the adjusted disbursements
from the plan for the 12 months ending
on the last day of such quarter.
‘‘(II) 
SPECIAL
RULE.—If 
the
amount determined under clause (i)
exceeds an amount equal to 2 times the
sum of the adjusted disbursements from
the plan for the 36 months ending on
the last day of the quarter and an en-
rolled actuary certifies to the Secretary
of the Treasury that such excess is the
result of nonrecurring circumstances,
the base amount with respect to such
quarter shall be determined without re-
gard to amounts related to those non-
recurring circumstances.
‘‘(iii) 
DISBURSEMENTS
FROM
THE
PLAN.—The term ‘disbursements from the
plan’ means all disbursements from the
trust, including purchases of annuities,
payments of single sums and other benefits,
and administrative expenses.
‘‘(iv) ADJUSTED
DISBURSEMENTS.—
The term ‘adjusted disbursements’ means
disbursements from the plan reduced by the
product of—
‘‘(I) the plan’s funded current li-
ability percentage (as defined in sub-
section (d)(8)) for the plan year, and
‘‘(II) the sum of the purchases of
annuities, payments of single sums,
and such other disbursements as the
Secretary of the Treasury shall provide
in regulations.
‘‘(v) LIQUID ASSETS.—The term ‘liq-
uid assets’ means cash, marketable securi-
ties and such other assets as specified by the
Secretary of the Treasury in regulations.
‘‘(vi) QUARTER.—The term ‘quarter’
means, with respect to any required install-
ment, the 3-month period preceding the
month in which the due date for such in-
stallment occurs.
‘‘(F) REGULATIONS.—The Secretary of the
Treasury may prescribe such regulations as are
necessary to carry out this paragraph.’’
(B) LIMITATION ON DISTRIBUTIONS OTHER
THAN LIFE ANNUITIES PAID BY THE PLAN.—
(i) Section 204 of the Employee Retire-
ment Income Security Act of 1974 (29
U.S.C. 1054) is amended by redesignating
subsection (i) as (j) and inserting a new
subsection (i) to read as follows:
‘‘(i) LIMITATION
ON DISTRIBUTIONS OTHER THAN
LIFE ANNUITIES PAID BY THE PLAN.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of this Part, the fiduciary of a pension plan
that is subject to the additional funding requirements
of section 302(d) shall not permit a prohibited pay-
ment to be made from a plan during a period in
which such plan has a liquidity shortfall (as defined
in section 302(e)(5)).
‘‘(2) PROHIBITED
PAYMENT.—For purposes of
paragraph 
(1), 
the 
term 
‘prohibited 
payment’
means—
‘‘(A) any payment, in excess of the monthly
amount paid under a single life annuity (plus
any social security supplements described in the
last sentence of section 204(b)(1)(G)), to a par-
ticipant or beneficiary whose annuity starting
date (as defined in section 205(h)(2)), that oc-
curs during the period referred to in paragraph
(1),
‘‘(B) any payment for the purchase of an
irrevocable commitment from an insurer to pay
benefits, and
‘‘(C) any other payment specified by the
Secretary of the Treasury by regulations.
‘‘(3) PERIOD OF SHORTFALL.—For purposes of
this subsection, a plan has a liquidity shortfall dur-
ing the period that there is an underpayment of an
installment under section 302(e) by reason of para-
graph (5)(A) thereof.
‘‘(4) COORDINATION WITH OTHER PROVISIONS.—
Compliance with this subsection shall not constitute a
violation of any other provision of this Act.’’
(ii) Section 502 of such Act is amended
by adding at the end thereof a new sub-
section (m) to read as follows:
‘‘(m) In the case of a distribution to a pension plan
participant or beneficiary in violation of section 204(i) by
a plan fiduciary, the Secretary shall assess a penalty
against such fiduciary in an amount equal to the value of
the distribution. Such penalty shall not exceed $10,000 for
each such distribution.’’
(10) AMENDMENT
TO
DEFINITION
OF
FULL
FUNDING LIMITATION.—
(A) Subparagraph (A) of section 302(c)(7)
of such Act is amended—
(i) by inserting ‘‘(including the ex-
pected increase in current liability due to
benefits accruing during the plan year)’’
after ‘‘current liability’’ in clause (i), and
(ii) by adding at the end the following
flush sentences:
‘‘In no event shall the excess described in the pre-
ceding sentence for any plan year be less than
the unfunded current liability (if any) of the
plan. For purposes of the preceding sentence, the
term ‘unfunded current liability’ has the mean-
ing given such term by subsection (d)(8) (deter-
mined without regard to subsection (d)(7)(D)).’’
(B) Subparagraph (B) of section 302(c)(7)
of such Act is amended to read as follows:
‘‘(B) CURRENT LIABILITY.—For purposes of
subparagraph (D) and subclause (I) of subpara-
graph (A)(i), the term ‘current liability’ has the
meaning given such term by subsection (d)(7)
(without regard to subparagraphs (C) and (D)
thereof) and using the rate of interest used under
subsection (b)(5)(B).’’
(b) EFFECTIVE DATE.—The amendments made by this
section shall apply to plan years beginning after December
31, 1994.
SEC. 122. LIMITATION ON CHANGES IN CURRENT LIABILITY
ASSUMPTIONS.
(a) Paragraph (5) of section 302(c) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1082(c)(5)) is amended—
(1) by striking ‘‘If the funding method’’ and in-
serting the following:
‘‘(A) IN GENERAL.—If the funding method’’,
and
(2) by adding at the end the following new sub-
paragraph:
‘‘(B) APPROVAL
REQUIRED
FOR
CERTAIN
CHANGES IN ASSUMPTIONS BY CERTAIN SINGLE
EMPLOYER
PLANS
SUBJECT
TO
ADDITIONAL
FUNDING REQUIREMENT.—
‘‘(i) IN
GENERAL.—No actuarial as-
sumption (other than the assumptions de-
scribed in subsection (d)(7)(C)) used to de-
termine the current liability for a plan to
which this subparagraph applies may be
changed without the approval of the Sec-
retary of the Treasury.
‘‘(ii) PLANS TO WHICH SUBPARAGRAPH
APPLIES.—This subparagraph shall apply
to a plan only if—
‘‘(I) subsection (d) applies to the
plan;
‘‘(II) the employer (within the
meaning of section 302(c)(11) (without
regard to subparagraph (B) thereof))
maintaining such plan is described in
section 4043(b)(1); and
‘‘(III) the change in assumptions
(determined after taking into account
any changes in interest rate and mor-
tality table) results in a decrease in the
unfunded current liability of the plan
for the current plan year that is
$50,000,000 or greater, or that is
$5,000,000 or greater and that is 5
percent or more of the current liability
of the plan before such change.’’
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendment made by this
section shall apply to changes in assumptions for
plan years beginning after October 28, 1993.
(2) CERTAIN
CHANGES
CEASE
TO
BE
EFFEC-
TIVE.—In the case of changes in assumptions for plan
years beginning after December 31, 1992, and on or
before October 28, 1993, such changes shall cease to be
effective for plan years beginning after December 31,
1994, if—
(A) such change would have required the
approval of the Secretary of the Treasury had
such amendment applied to such change, and
(B) such change is not so approved.
SEC. 123. ANTICIPATION OF BARGAINED BENEFIT IN-
CREASES.
(a) IN GENERAL.—Section 302(c) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1082(c))
is amended by adding at the end the following new para-
graph:
‘‘(12) ANTICIPATION OF BENEFIT INCREASES EF-
FECTIVE IN THE FUTURE.—In determining projected
benefits, the funding method of a collectively bar-
gained plan described in section 413(a) of the Inter-
nal Revenue Code of 1986 (other than a multiem-
ployer plan) shall anticipate benefit increases sched-
uled to take effect during the term of the collective
bargaining agreement applicable to the plan.’’
(b) EFFECTIVE DATE.—The amendments made by this
section shall apply to plan years beginning after December
31, 1994 with respect to collective bargaining agreements
in effect on or after January 1, 1995.
SEC. 124. MODIFICATION OF QUARTERLY CONTRIBUTION
REQUIREMENT.
(a) IN GENERAL.—Paragraph (1) of section 302(e) of
the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1082(e)) is amended—
(1) by inserting ‘‘which has a funded current li-
ability percentage (as defined in subsection (d)(8)) for
the preceding plan year of less than 100 percent’’ be-
fore ‘‘fails’’, and
(2) by striking ‘‘any plan year’’ and inserting
‘‘the plan year’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to plan years beginning after the date
of enactment of this Act.
TITLE II—AMENDMENTS RELAT-
ED TO TITLE IV OF THE EM-
PLOYEE 
RETIREMENT 
IN-
COME SECURITY ACT OF 1974
SEC. 201. REPORTABLE EVENTS.
(a) RESPONSIBILITY FOR REPORTABLE EVENTS RE-
PORTING.—Section 4043(a) of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1343(a)) is amend-
ed—
(1) in the first sentence, by inserting ‘‘or the con-
tributing sponsor’’ before ‘‘knows or has reason to
know’’;
(2) in the first sentence, by inserting ‘‘, unless a
notice otherwise required under this subsection has al-
ready been provided with respect to such event’’ before
the period at the end; and
(3) by striking the last sentence.
(b) NOTIFICATION
THAT
EVENT
IS
ABOUT
TO
OCCUR.—Section 4043 of such Act is amended by redesig-
nating subsections (b), (c), and (d) as (c), (d), and (e), re-
spectively, and by inserting after subsection (a) the follow-
ing new subsection:
‘‘(b)(1) The requirements of this subsection shall be ap-
plicable to a contributing sponsor only if the aggregate un-
funded vested benefits at the close of the preceding plan year
(as determined under section 4006(a)(3)(E)(iii)) of plans
maintained by such sponsor and the members of such spon-
sor’s controlled group that are covered by this title (taking
into account only those plans with unfunded vested benefits)
exceed $50,000,000.
‘‘(2) No later than 30 days prior to the effective date
of an event described in paragraph (9), (10), (11), (12),
or (13) of subsection (c), a contributing sponsor to which
the requirements of this subsection apply shall notify the
corporation that the event is about to occur.
‘‘(3) The corporation may waive the requirement of
this subsection with respect to any or all reportable events
with respect to any contributing sponsor.’’
(c) NEW REPORTABLE EVENTS.—Subsection (c) of sec-
tion 4043 of such Act (as redesignated by subsection (b))
is amended—
(1) by striking the ‘‘or’’ at the end of paragraph
(8);
(2) by striking paragraph (9); and
(3) by inserting after paragraph (8) the follow-
ing new paragraphs:
‘‘(9) when, as a result of an event, a person
ceases to be a member of the controlled group;
‘‘(10) when a contributing sponsor or a member
of a contributing sponsor’s controlled group liquidates
in a case under title 11, United States Code, or under
any similar Federal law or law of a State or political
subdivision of a State;
‘‘(11) when a contributing sponsor or a member
of a contributing sponsor’s controlled group declares
an extraordinary dividend (as defined in section
1059(c) of the Internal Revenue Code of 1986) or re-
deems, in any 12-month period, an aggregate of 10
percent or more of the total combined voting power of
all classes of stock entitled to vote, or an aggregate of
10 percent of more of the total value of shares of all
classes of stock, of a contributing sponsor and all
members of its controlled group;
‘‘(12) when, in any 12-month period, an aggre-
gate of 3 percent or more of the benefit liabilities of
a plan covered by this title and maintained by a con-
tributing sponsor or a member of its controlled group
are transferred to a person that is not a member of
the controlled group or to a plan or plans maintained
by a person or persons that are not such a contribut-
ing sponsor or a member of its controlled group; or
‘‘(13) when any other event occurs that may be
indicative of a need to terminate the plan and that
is prescribed by the corporation in regulations.’’
(d) DISCLOSURE EXEMPTION.—Section 4043 of such
Act is amended by adding at the end the following new sub-
section:
‘‘(f) Any information or documentary material sub-
mitted to the corporation pursuant to subsection (c) or sub-
section 4050(c)(2) shall be exempt from disclosure under
section 552 of title 5, United States Code, and no such in-
formation or documentary material may be made public,
except as may be relevant to any administrative or judicial
action or proceeding. Nothing in this section is intended
to prevent disclosure to either body of Congress or to any
duly authorized committee or subcommittee of the Con-
gress.’’
(e) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Subsection (a) of section 4043 of such Act,
and subsections (d) and (e) of such section 4043 (as
redesignated by subsection (b)) are amended by strik-
ing ‘‘subsection (b)’’ each place it appears and insert-
ing ‘‘subsection (c)’’.
(2) Section 4042(a)(3) of such Act is amended by
striking ‘‘4043(b)(7)’’ and inserting ‘‘4043(c)(7)’’.
(f) EFFECTIVE DATE.—The amendments made by this
section shall be effective for events occurring 60 days or
more after the date of enactment of this Act.
SEC. 202. ALTERNATIVE TO INVOLUNTARY TERMINATION.
(a) IN GENERAL.—Subtitle C of title IV of the Em-
ployee Retirement Income Security Act of 1974 (29 U.S.C.
1341 et seq.) is amended by adding at the end the following
new section:
‘‘SEC. 4050. JUDICIAL RELIEF OTHER THAN INVOLUNTARY
TERMINATION.
‘‘(a) INSTITUTION OF PROCEEDINGS.—
‘‘(1) IN GENERAL.—Whenever the corporation de-
termines (without regard to the potential availability
of relief under this section) that, upon the occurrence
of an event described in paragraph (9), (10), (11),
(12), or (13) of section 4043(c), the possible long-run
loss of the corporation with respect to a plan may
reasonably be expected to increase unreasonably if the
plan is not terminated, the corporation may, in its
discretion, institute proceedings under this section as
an alternative to instituting proceedings under sec-
tion 4042 to terminate the plan.
‘‘(2) LIMITATION.—In the case of an event de-
scribed in paragraph (9) or (13) of section 4043(c),
this section shall apply only if, immediately after the
effective date of the event, the total revenues, the total
operating income, or the total assets of a contributing
sponsor and all members of its controlled group would
be less than 90 percent of the total revenues, the total
operating income, or the total assets, respectively, of
a contributing sponsor and all members of its con-
trolled group immediately before the effective date of
the event. For purposes of this paragraph, all events
occurring in any 12-month period shall be treated as
a single event.
‘‘(b) Whenever the corporation makes a determination
under subsection (a), it may, upon notice to a contributing
sponsor, apply to the appropriate United States district
court for such legal or equitable relief as the corporation
deems appropriate and consistent with its duties under this
title. The court shall consider the interests of both the par-
ticipants and the corporation, and shall grant such relief,
if any, as it determines is necessary to protect those inter-
ests without interfering unreasonably with the business of
the contributing sponsor or members of its controlled group.
‘‘(c)(1) In any case in which the corporation is pro-
vided with a notice required by subsection 4043(b) within
the time specified in that subsection, the corporation may
bring an action under this section no later than 30 days
after the date such notice is received. Notwithstanding the
preceding sentence, the corporation may, no later than 30
days after the date such notice is received, require the sub-
mission of additional information or documentary mate-
rial, in which case an action under this section may be
brought no later than 20 days after the corporation receives
all the information and documentary material it had re-
quired.
‘‘(2) A person who has provided a notice as described
in paragraph (1) may elect, upon further notice to the cor-
poration, to proceed with an event prior to the expiration
of the time periods described in paragraph (1). In the case
of such an election, an action under this section may be
brought at any time within the period specified in sub-
section 4003(e)(6).
‘‘(3) In any case in which the corporation is not pro-
vided with a notice required by subsection (b) of section
4043 by the time specified in that subsection, in any case
in which a person fails or refuses to provide the additional
information or documentary material required by the cor-
poration under paragraph (1), or in any case in which a
person proceeds with an event without providing the cor-
poration with the further notice required under paragraph
(2) with respect to such event, an action under this section
may be brought at any time within the time period speci-
fied in subsection 4003(e)(6).
‘‘(4) Except as provided in paragraph (1), (2), or (3),
an action under this section may not be brought after the
effective date of the event giving rise to the transaction.
‘‘(5) For purposes of applying subsection 4003(e)(6)
to paragraphs (2) and (3), a cause of action shall be deemed
to arise on the effective date of the event.
‘‘(d) Nothing in this section shall limit the authority
of the corporation to initiate proceedings to terminate a
plan under section 4042, or to initiate proceedings or to
seek relief under any other provision of this title or any
other law.’’
(b) CONFORMING AMENDMENT.—Section 4042(a) of
such Act (29 U.S.C. 1342(a)) is amended by inserting, after
‘‘determines’’ the first place it appears, the following:
‘‘(without regard to the potential availability of relief under
section 4050)’’.
(c) CLERICAL AMENDMENT.—The table of contents
contained in section 1 of such Act is amended by inserting
after the item relating to section 4049 the following new
item:
‘‘Sec. 4050. Judicial relief other than involuntary termination.’’
(d) EFFECTIVE DATE.—The amendments made by this
section shall be effective for events occurring 60 days or
more after the date of the enactment of this Act.
SEC. 203. CERTAIN INFORMATION REQUIRED TO BE FUR-
NISHED TO PBGC.
(a) GENERAL RULE.—Subtitle A of title IV of the Em-
ployee Retirement Income Security Act of 1974 (29 U.S.C.
1301 et seq.) is amended by adding at the end the following
new section:
‘‘SEC. 4010. AUTHORITY TO REQUIRE CERTAIN INFORMA-
TION.
‘‘(a) INFORMATION
REQUIRED.—Each person de-
scribed in subsection (b) shall provide the corporation an-
nually, on or before a date specified by the corporation in
regulations, with—
‘‘(1) such records, documents, or other informa-
tion that the corporation specifies in regulations as
necessary to determine the liabilities and assets of
plans covered by this title; and
‘‘(2) copies of such person’s audited (or, if un-
available, unaudited) financial statements, and such
other financial information as the corporation may
prescribe in regulations.
‘‘(b) PERSONS REQUIRED TO PROVIDE INFORMA-
TION.—The persons covered by subsection (a) are each con-
tributing sponsor, and each member of a contributing spon-
sor’s controlled group, of a single-employer plan covered by
this title, if—
‘‘(1) the aggregate unfunded vested benefits at the
end of the preceding plan year (as determined under
section 4006(a)(3)(E)(iii)) of plans maintained by
the contributing sponsor and the members of its con-
trolled group exceed $50,000,000 (taking into account
only those plans of the contributing sponsor and its
controlled group with unfunded vested benefits);
‘‘(2) the conditions for imposition of a lien de-
scribed in section 302(f)(1)(A) and (B) of this Act or
section 412(n)(1)(A) and (B) of the Internal Revenue
Code of 1986 have been met with respect to any plan
maintained by the contributing sponsor or any mem-
ber of its controlled group; or
‘‘(3) minimum funding waivers in excess of
$1,000,000 have been granted with respect to any
plan maintained by the contributing sponsor or any
member of its controlled group, and any portion
thereof is still outstanding.
‘‘(c) INFORMATION EXEMPT FROM DISCLOSURE RE-
QUIREMENTS.—Any information or documentary material
submitted to the corporation pursuant to this section shall
be exempt from disclosure under section 552 of title 5,
United States Code, and no such information or documen-
tary material may be made public, except as may be rel-
evant to any administrative or judicial action or proceed-
ing. Nothing in this section is intended to prevent disclosure
to either body of Congress or to any duly authorized com-
mittee or subcommittee of the Congress.’’
(b) CLERICAL AMENDMENT.—The table of contents
contained in section 1 of such Act is amended by inserting
after the item relating to section 4009 the following new
item:
‘‘Sec. 4010. Authority to require certain information.’’
(c) EFFECTIVE DATE.—The amendments made by this
section shall be effective on the date of enactment of this
Act.
SEC. 204. LIABILITY UPON LIQUIDATION OF CONTRIBUTING
SPONSOR OR CONTROLLED GROUP MEMBER
WHERE PLAN REMAINS ONGOING.
(a) IN GENERAL.—Section 4062 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1362) is
amended by adding at the end the following new subsection:
‘‘(f) LIABILITY ON LIQUIDATION OF CONTRIBUTING
SPONSOR OR CONTROLLED GROUP MEMBER.—
‘‘(1) IN GENERAL.—In any case in which all or
substantially all of the assets of a person who is a
contributing sponsor of a single-employer plan, or a
member of a controlled group of a contributing spon-
sor of a single-employer plan, are liquidated in a case
under title 11, United States Code, or under any
similar Federal law or law of a State or political sub-
division of a State, but the plan is not terminated,
such person shall be deemed liable under subsection
(b) as if the plan had terminated under section
4041(c) in the course of such liquidation and as if the
termination date were the date determined by the cor-
poration as the date on which the liquidation was
initiated.
‘‘(2) LIMITED JOINT AND SEVERAL LIABILITY.—
The liability under this subsection shall be joint and
several only among the members of the controlled
group (including, where applicable, the contributing
sponsor) who are liquidating as described in para-
graph (1).
‘‘(3) APPLICABILITY
OF
OTHER
PROVISIONS.—
Except as provided in paragraph (2), any provision
of this Act or any other provision of law that applies
to liability under the preceding subsections of this sec-
tion upon termination of a plan shall apply in the
same manner and to the same extent to the liability
established under this subsection. For purposes of this
paragraph, the date referred to in paragraph (1) shall
be deemed the termination date.
‘‘(4) LIABILITY OWED TO PLAN; TRANSFER OF LI-
ABILITY PAYMENTS TO THE ONGOING PLAN WHERE
COLLECTED BY THE CORPORATION.—The liability es-
tablished under this subsection shall be owed to the
plan, and may be collected by either the plan or the
corporation. The corporation shall pay to the plan
any amounts collected by the corporation in satisfac-
tion of the liability established under this subsection
in connection with such plan.
‘‘(5) REGULATIONS.—The corporation may pre-
scribe regulations under this subsection, including—
‘‘(A) rules governing—
‘‘(i) the determination of whether and
when a liquidation referred to in this sub-
section has occurred, and
‘‘(ii) the assignment of the plan’s or
corporation’s claim to liability payments
under this subsection to other members of
the controlled group as a means of collecting
such payments, subject to the transfer of
such payments to the plan, and
‘‘(B) rules providing alternative arrange-
ments for making liability payments under this
subsection.’’
(b) CONFORMING AMENDMENT.—Section 4062(a) of
such Act is amended—
(1) in paragraph (1), by striking ‘‘and’’ after
‘‘subsection (b),’’;
(2) in paragraph (2), by striking the period after
‘‘subsection (c)’’ and inserting ’’, and’’; and
(3) by adding at the end the following new para-
graph:
‘‘(3) liability to the plan, to the extent provided
in subsection (f).’’
(c) 
COORDINATION
WITH
MINIMUM
FUNDING
RULES.—
(1) 1986 CODE.—Section 412(c) of the Internal
Revenue Code of 1986 is amended by adding at the
end the following new paragraph:
‘‘(13) TREATMENT OF LIABILITY ON LIQUIDATION
OF EMPLOYER.—Any amount paid to a plan pursu-
ant to section 4062(f) of the Employee Retirement In-
come Security Act of 1974—
‘‘(A) shall be treated as not contributed by
the employer for purposes of subsection (b)(3)(A),
and
‘‘(B) shall be treated as a net experience
gain of the plan under subsection (b)(3)(B)(ii).’’
(2) ERISA.—Section 302(c) of the Employee Re-
tirement Income Security Act of 1974 is amended by
adding at the end the following new paragraph:
‘‘(13) TREATMENT OF LIABILITY ON LIQUIDATION
OF EMPLOYER.—Any amount paid to a plan pursu-
ant to section 4062(f)—
‘‘(A) shall be treated as not contributed by
the employer for purposes of subsection (b)(3)(A),
and
‘‘(B) shall be treated as a net experience
gain of the plan under subsection (b)(3)(B)(ii).’’
(d) EFFECTIVE DATE.—The amendments made by this
section shall be effective for liquidations initiated on or
after the date of enactment of this Act.
SEC. 205. ENFORCEMENT OF MINIMUM FUNDING REQUIRE-
MENTS.
(a) IN GENERAL.—Paragraph (1) of section 4003(e)
of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1303(e)(1)) is amended—
(1) by inserting ‘‘(A)’’ after ‘‘enforce’’; and
(2) by striking the period after ‘‘title’’ and in-
serting ‘‘, and (B) in the case of a plan which is cov-
ered under this title (other than a multiemployer
plan) and for which the conditions for imposition of
a lien described in section 302(f)(1)(A) and (B) of
this Act or section 412(n)(1)(A) and (B) of the Inter-
nal Revenue Code of 1986 have been met, section 302
of this Act and section 412 of such Code.’’
(b) EFFECTIVE DATE.—The amendments made by this
section shall be effective for installments and other pay-
ments required under section 302 of the Employee Retire-
ment Income Security Act of 1974 or section 412 of the In-
ternal Revenue Code of 1986 that become due on or after
the date of the enactment of this Act.
SEC. 206. REMEDIES FOR NONCOMPLIANCE WITH REQUIRE-
MENTS FOR STANDARD TERMINATION.
(a) 
NOTICE
OF
NONCOMPLIANCE.—Section
4041(b)(2)(C)(i) of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1341(b)(2)(C)(i)) is amended—
(1) by striking subclause (I) and inserting the
following new subclause:
‘‘(I) it determines, based on the
notice sent under paragraph (2)(A) of
subsection (b), that there is reason to
believe that the plan is not sufficient
for benefit liabilities, or’’;
(2) by striking the period at the end of subclause
(II) and inserting ‘‘, or’’; and
(3) by adding at the end the following new
subclause:
‘‘(III) it determines that any
other requirement of subparagraph (A)
or (B) of this paragraph or of sub-
section (a)(2) has not been met, unless
it further determines that the issuance
of such notice would be inconsistent
with the interests of participants and
beneficiaries.’’
(b) EFFECTIVE DATE.—The amendments made by this
section shall apply to any plan termination under section
4041(b) of the Employee Retirement Income Security Act
of 1974 with respect to which the Pension Benefit Guaranty
Corporation has not, as of the date of enactment of this
Act, issued a notice of noncompliance that has become final,
or otherwise issued a final determination that the plan ter-
mination is nullified.
SEC. 207. PROHIBITION ON BENEFIT INCREASES WHERE
PLAN SPONSOR IS IN BANKRUPTCY.
(a) AMENDMENT TO THE EMPLOYEE RETIREMENT IN-
COME SECURITY ACT OF 1974.—Section 204 of the Em-
ployee Retirement Income Security Act of 1974 (29 U.S.C.
1054), as amended by section 121 of this Act, is further
amended by redesignating subsection (j) as (k) and insert-
ing a new subsection (j) to read as follows:
‘‘(j)(1) In the case of a plan described in paragraph
(3) which is maintained by an employer that is a debtor
in a case under title 11, United States Code, or similar
Federal or State law, no amendment of the plan which in-
creases the liabilities of the plan by reason of—
‘‘(A) any increase in benefits,
‘‘(B) any change in the accrual of benefits, or
‘‘(C) any change in the rate at which benefits be-
come nonforfeitable under the plan,
with respect to employees of the debtor, shall be effective
prior to the effective date of such employer’s plan of reorga-
nization.
‘‘(2) Paragraph (1) shall not apply to any plan
amendment that—
‘‘(A) the Secretary of the Treasury determines to
be reasonable and that provides for only de minimis
increases in the liabilities of the plan with respect to
employees of the debtor,
‘‘(B) only repeals an amendment described in
section 302(c)(8),
‘‘(C) is required as a condition of qualification
under part I of subchapter D, of chapter 1, of the In-
ternal Revenue Code of 1986, or
‘‘(D) was adopted prior to, or pursuant to a col-
lective bargaining agreement entered into prior to, the
date on which the employer became a debtor in a case
under title 11, United States Code, or similar Federal
or State law.
‘‘(3) This subsection shall apply only to plans (other
than multiemployer plans) covered under section 4021 of
this Act for which the funded current liability percentage
(within the meaning of section 302(d)(8) of this Act) is less
than 100 percent after taking into account the effect of the
amendment.
‘‘(4) For purposes of this subsection, ‘employer’ has the
meaning set forth in section 302(c)(11)(A), without regard
to section 302(c)(11)(B).’’
(b) AMENDMENT TO INTERNAL REVENUE CODE OF
1986.—Section 401(a) of the Internal Revenue Code of
1986, as amended by section 101 of this Act, is further
amended by adding at the end the following new paragraph:
‘‘(33) PROHIBITION
ON
BENEFIT
INCREASES
WHILE SPONSOR IS IN BANKRUPTCY.—
‘‘(A) IN GENERAL.—A trust which is part of
a plan to which this paragraph applies shall not
constitute a qualified trust under this section if
an amendment to such plan is adopted while the
employer is a debtor in a case under title 11,
United States Code, or similar Federal or State
law, if such amendment increases liabilities of
the plan by reason of—
‘‘(i) any increase in benefits,
‘‘(ii) any change in the accrual of ben-
efits, or
‘‘(iii) any change in the rate at which
benefits become nonforfeitable under the
plan,
with respect to employees of the debtor, and such
amendment is effective prior to the effective date
of such employer’s plan of reorganization.
‘‘(B) EXCEPTIONS.—This paragraph shall
not apply to any plan amendment if—
‘‘(i) the plan, were such amendment to
take effect, would have a funded current li-
ability percentage (as defined in section
412(l)(8)) of 100 percent or more,
‘‘(ii) the Secretary determines that
such amendment is reasonable and provides
for only de minimis increases in the liabil-
ities of the plan with respect to employees
of the debtor,
‘‘(iii) such amendment only repeals an
amendment 
described 
in 
subsection
412(c)(8), or
‘‘(iv) such amendment is required as a
condition of qualification under this part.
‘‘(C) PLANS TO WHICH THIS PARAGRAPH
APPLIES.—This paragraph shall apply only to
plans (other than multiemployer plans) covered
under section 4021 of the Employee Retirement
Income Security Act of 1974.
‘‘(D) EMPLOYER.—For purposes of this
paragraph, the term ‘employer’ means the em-
ployer referred to in section 412(c)(11) (without
regard to subparagraph (B) thereof).’’
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to plan amendments adopted on or after
the date of enactment of this Act.
SEC. 208. SUBSTANTIAL OWNER BENEFITS.
(a) MODIFICATION OF PHASE-IN OF GUARANTEE.—
Section 4022(b)(5) of the Employee Retirement Income Se-
curity Act of 1974 is amended by striking subparagraphs
(B) and (C) and inserting the following new subpara-
graphs:
‘‘(B) For purposes of this title, the term ‘majority
owner’ has the same meaning as the term ‘substantial
owner’, if ‘50 percent or more’ is substituted for ‘more than
10 percent’ wherever such phrase appears in subparagraph
(A) of this paragraph.
‘‘(C) In the case of a participant who is a majority
owner, the amount of benefits guaranteed under this section
shall not exceed the product of—
‘‘(i) a fraction (not to exceed 1) the numerator
of which is the number of years from the later of the
effective date or the adoption date of the plan, and the
denominator of which is 30, and
‘‘(ii) the amount of the majority owner’s month-
ly benefits guaranteed under subsection (a) (as lim-
ited by paragraph (3) of this subsection).’’
(b) MODIFICATION OF ALLOCATION OF ASSETS.—
(1) Section 4044(a)(4)(B) of such Act (29 U.S.C.
1344(a)(4)(B)) is amended by adding ‘‘(C)’’ at the
end of ‘‘section 4022(b)(5)’’.
(2) Section 4044(b) of such Act is amended—
(A) in paragraph (2), by inserting ‘‘(4),’’
before ‘‘(5)’’, and by inserting a comma after
‘‘(5)’’;
(B) 
by 
redesignating 
paragraphs 
(3)
through (6) as paragraphs (4) through (7), re-
spectively; and
(C) by inserting a new paragraph (3) to
read as follows:
‘‘(3) If assets available for allocation under
paragraph (4) of subsection (a) are insufficient to sat-
isfy in full the benefits of all individuals who are de-
scribed in that paragraph, the assets shall be allocated
first to benefits described in subparagraph (A) of that
paragraph. Any remaining assets shall then be allo-
cated to subparagraph (B). If assets allocated to sub-
paragraph (B) are insufficient to satisfy in full the
benefits in that subparagraph, the assets shall be allo-
cated pro rata among individuals on the basis of the
present value (as of the termination date) of their re-
spective benefits described in that subparagraph.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall be effective for plan terminations under section
4041(c) of the Employee Retirement Income Security Act
of 1974 with respect to which notices of intent to terminate
are provided under section 4041(a)(2) of such Act, or under
section 4042 of such Act with respect to which proceedings
are instituted by the corporation, on or after the date of
enactment of this Act.
SEC. 209. PHASE-OUT OF VARIABLE RATE PREMIUM CAP.
(a) IN
GENERAL.—Subparagraph (E) of section
4006(a)(3) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1306(a)(3)(E)) is amended by strik-
ing clause (iv), and by redesignating clause (v) as clause
(iv).
(b) EFFECTIVE DATE.—The amendments made by this
section shall be effective on the date of enactment of this
Act, except that, for plan years beginning on or after July
1, 1994 and before July 1, 1996, the additional premium
payable with respect to any participant by reason of this
amendment shall not exceed the sum of—
(1) $53, and
(2) the product derived by multiplying—
(A) the excess (if any) of—
(i) the amount determined under
clause (ii) of section 4006(a)(3)(E) of the
Employee Retirement Income Security Act
of 1974, over
(ii) $53, by
(B) the applicable percentage.
For purposes of this subsection, the applicable per-
centage shall be the percentage specified in the follow-
ing table:
For the plan year beginning:
The applica-
ble percentage
is:
on or after
but before
July 1, 1994 ...........................
July 1, 1995 ..........................
20 percent
July 1, 1995 ...........................
July 1, 1996 ..........................
60 percent
TITLE III—PARTICIPANT
SERVICES
SEC. 301. DISCLOSURE TO PARTICIPANTS.
(a) PARTICIPANT NOTICE REQUIREMENT.—Subtitle A
of title IV of the Employee Retirement Income Security Act
of 1974 (as amended by section 203 of this Act) is further
amended by adding at the end the following new section:
‘‘SEC. 4011. NOTICE TO PARTICIPANTS.
‘‘(a) IN GENERAL.—The plan administrator of a plan
subject 
to 
the 
additional 
premium 
under 
section
4006(a)(3)(E) shall provide, in a form and manner and
at such time as prescribed in regulations of the corporation,
notice to plan participants and beneficiaries of the plan’s
funding status and the limits on the corporation’s guaranty
should the plan terminate while underfunded. Such notice
shall be written in a manner so as to be understood by the
average plan participant.
‘‘(b) EXCEPTION.—Subsection (a) shall not apply to
any plan which for the plan year has a funded current li-
ability percentage (as defined in section 302(d)(8) without
regard to subparagraph (E) thereof) of at least 90 percent.’’
(b) CLERICAL AMENDMENT.—The table of contents
contained in section 1 of such Act is amended by inserting
after the item relating to section 4010 (as added by section
203 of this Act) the following new item:
‘‘Sec. 4011. Notice to participants.’’
(c) EFFECTIVE DATE.—The amendment made by this
section shall be effective for plan years beginning after the
date of enactment of this Act.
SEC. 302. MISSING PARTICIPANTS.
(a) IN GENERAL.—Subtitle C of title IV of the Em-
ployee Retirement Income Security Act of 1974 (29 U.S.C.
1341 et seq.) is amended by adding at the end the following
new section:
‘‘SEC. 4051. MISSING PARTICIPANTS.
‘‘(a) GENERAL RULE.—
‘‘(1) PAYMENT TO THE CORPORATION.—A plan
administrator satisfies section 4041(b)(3)(A) in the
case of a missing participant only if the plan admin-
istrator—
‘‘(A) transfers the participant’s designated
benefit to the corporation or purchases an irrev-
ocable commitment from an insurer in accord-
ance with clause (i) of section 4041(b)(3)(A),
and
‘‘(B) provides the corporation such informa-
tion and certifications with respect to such des-
ignated benefits or irrevocable commitments as
the corporation shall specify.
‘‘(2) TREATMENT OF TRANSFERRED ASSETS.—A
transfer to the corporation under this section shall be
treated as a transfer of assets from a terminated plan
to the corporation as trustee, and shall be held with
assets of terminated plans for which the corporation
is trustee under section 4042, subject to the rules set
forth in that section.
‘‘(3) PAYMENT BY THE CORPORATION.—After a
missing participant whose designated benefit was
transferred to the corporation is located—
‘‘(A) in any case in which the plan could
have distributed the benefit of the missing partic-
ipant in a single sum without participant or
spousal consent under section 205(g), the cor-
poration shall pay the participant or beneficiary
a single sum benefit equal to the designated bene-
fit paid the corporation plus interest as specified
by the corporation, and
‘‘(B) in any other case, the corporation
shall pay a benefit based on the designated bene-
fit and the assumptions prescribed by the cor-
poration at the time that the corporation re-
ceived the designated benefit.
The corporation shall make payments under subpara-
graph (B) available in the same forms and at the
same times as a guaranteed benefit under section
4022 would be available to be paid, except that the
corporation may make a benefit available in the form
of a single sum if the plan provided a single sum ben-
efit (other than a single sum described in subsection
(b)(2)(A)).
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) MISSING PARTICIPANT.—The term ‘missing
participant’ means a participant or beneficiary
under a terminating plan whom the plan adminis-
trator cannot locate after a diligent search.
‘‘(2) DESIGNATED
BENEFIT.—The term ‘des-
ignated benefit’ means the single sum benefit the par-
ticipant would receive—
‘‘(A) under the plan’s assumptions, in the
case of a distribution that can be made without
participant or spousal consent under section
205(g);
‘‘(B) under the assumptions of the corpora-
tion in effect on the date that the designated ben-
efit is transferred to the corporation, in the case
of a plan that does not pay any single sums
other than those described in subparagraph (A);
or
‘‘(C) under the assumptions of the corpora-
tion or of the plan, whichever provides the higher
single sum, in the case of a plan that pays a sin-
gle sum other than those described in subpara-
graph (A).
‘‘(c) REGULATORY AUTHORITY.—The corporation shall
prescribe such regulations as are necessary to carry out the
purposes of this section, including rules relating to what
will be considered a diligent search, the amount payable
to the corporation, and the amount to be paid by the cor-
poration.’’
(b) CONFORMING TITLE IV AMENDMENTS.—
(1) AMENDMENT
TO
SECTION
4003.—Section
4003(a) of such Act (29 U.S.C. 1303(a)) is amended
in the second sentence by inserting before the period
the following: ‘‘and whether section 4051(a) has been
satisfied’’.
(2) AMENDMENT
TO
SECTION
4005.—Section
4005(b)(2)(A) of such Act (29 U.S.C. 1305(b)(2)(A))
is amended by inserting ‘‘or benefits payable under
section 4051’’ after ‘‘section 4022A’’.
(3) AMENDMENT
TO
SECTION
4041.—Section
4041(b)(3)(A)(ii) 
of 
such 
Act 
(29 
U.S.C.
1341(b)(3)(A)(ii)) is amended by adding at the end
the following new sentence: ‘‘A transfer of assets to the
corporation in accordance with section 4051 on behalf
of a missing participant shall satisfy this subpara-
graph with respect to such participant.’’
(c) CONFORMING ERISA AMENDMENTS.—
(1) The table of contents contained in section 1
of the Employee Retirement Income Security Act of
1974 is amended by inserting after the item related
to section 4050 (as added by section 202 of this Act)
the following new item:
‘‘Sec. 4051. Missing participants.’’
(2) Section 206 of such Act (29 U.S.C. 1056) is
amended by adding at the end the following new sub-
section:
‘‘(e) 
MISSING
PARTICIPANTS
IN
TERMINATED
PLANS.—In the case of a plan covered by title IV, the plan
shall provide that, upon termination of the plan, benefits
of missing participants shall be treated in accordance with
section 4051.’’
(d) CONFORMING INTERNAL REVENUE CODE AMEND-
MENTS.—Section 401(a) of the Internal Revenue Code of
1986, as amended by section 207 of this Act, is further
amended by inserting after paragraph (33) the following
new paragraph:
‘‘(34) BENEFITS OF MISSING PARTICIPANTS ON
PLAN TERMINATION.—In the case of a plan covered by
title IV of the Employee Retirement Income Security
Act of 1974, a trust forming part of such plan shall
not be treated as failing to constitute a qualified trust
under this section merely because the pension plan of
which such trust is a part, upon its termination,
transfers benefits of missing participants to the Pen-
sion Benefit Guaranty Corporation in accordance
with section 4051 of such Act.’’
(e) EFFECTIVE DATE.—The provisions of this section
shall be effective with respect to distributions that occur in
plan years commencing after final regulations implement-
ing these provisions are prescribed by the Pension Benefit
Guaranty Corporation.
SEC. 303. MODIFICATION OF MAXIMUM GUARANTEE FOR
DISABILITY BENEFITS.
(a) IN GENERAL.—Section 4022(b)(3) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1322(b)(3)) is amended by adding at the end the following
new sentences: ‘‘The maximum guaranteed monthly benefit
shall not be reduced solely on account of the age of a partici-
pant in the case of a benefit payable by reason of disability,
if the participant satisfies the definition of disability under
titles II and XVI of the Social Security Act, and the regula-
tions thereunder. If a benefit payable by reason of disability
is converted to an early or normal retirement benefit for
reasons other than a change in the health of the participant,
such early or normal retirement benefit shall be treated as
a continuation of the benefit payable by reason of disability
and this subparagraph shall continue to apply.’’
(b) EFFECTIVE DATE.—The amendment made by this
section shall be effective for plan terminations under section
4041(c) of the Employee Retirement Income Security Act
of 1974 with respect to which notices of intent to terminate
are provided under section 4041(a)(2) of such Act, or under
section 4042 of such Act with respect to which proceedings
are instituted by the corporation, on or after the date of
enactment of this Act.
TITLE IV—MISCELLANEOUS
AMENDMENTS
SEC. 401. ERISA CITATION.
(a) IN GENERAL.—Section 404(g)(4) of the Internal
Revenue Code of 1986 is amended by striking ‘‘the Single
Employer Pension Plan Amendments Act of 1986’’ and in-
serting ‘‘the Retirement Protection Act of 1994’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall be effective on the date of enactment of this
Act.
SEC. 402. DEFINITION OF CONTRIBUTING SPONSOR.
(a) IN GENERAL.—Paragraph (13) of section 4001(a)
of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1301(a)(13)) is amended by striking ‘‘means a
person—’’ and all that follows and inserting ‘‘means a per-
son described in section 302(c)(11)(A) of this Act (without
regard to section 302(c)(11)(B) of this Act) or section
412(c)(11)(A) of the Internal Revenue Code of 1986 (with-
out regard to section 412(c)(11)(B) of such Code).’’
(b) EFFECTIVE DATE.—The amendment made by this
section shall be effective as if included in the Pension Pro-
tection Act.
SEC. 403. DISTRESS TERMINATION CRITERIA FOR BANKING
INSTITUTIONS.
(a) CLARIFICATION
OF
DISTRESS
CRITERION.—
Subclause (I) of section 4041(c)(2)(B)(i) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1341(c)(2)(B)(i)) is amended by inserting after ‘‘under any
similar’’ the following: ‘‘Federal law or’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall be effective as if included in the Single-Em-
ployer Pension Plan Amendments Act of 1986.
SEC. 404. SINGLE SUM DISTRIBUTIONS.
(a) AMENDMENTS TO INTERNAL REVENUE CODE OF
1986 RELATING TO MINIMUM BENEFITS.—
(1) DETERMINATION
OF
PRESENT
VALUE
FOR
PURPOSES
OF
RESTRICTIONS
ON
MANDATORY
DIS-
TRIBUTIONS.—Subparagraph 
(B) 
of 
section
411(a)(11) of the Internal Revenue Code of 1986 is
amended to read as follows:
‘‘(B) 
DETERMINATION
OF
PRESENT
VALUE.—For purposes of subparagraph (A), the
present value shall be calculated in accordance
with section 417(e)(3).’’
(2) DETERMINATION
OF
PRESENT
VALUE
FOR
PURPOSES OF RESTRICTIONS ON CASH-OUTS.—Para-
graph (3) of section 417(e) of such Code is amended
to read as follows:
‘‘(3) DETERMINATION OF PRESENT VALUE.—
‘‘(A) IN GENERAL.—
‘‘(i) PRESENT VALUE.—Except as pro-
vided in subparagraph (B), for purposes of
paragraphs (1) and (2), the present value
shall not be less than the present value cal-
culated by using the applicable mortality
table and the applicable interest rate.
‘‘(ii) DEFINITIONS.—For purposes of
clause (i)—
‘‘(I) 
APPLICABLE
MORTALITY
TABLE.—The term ‘applicable mortal-
ity table’ means the table prescribed by
the Secretary. Such table shall be based
on 
the 
prevailing 
commissioners’
standard table (described in section
807(d)(5)(A)) used to determine re-
serves for group annuity contracts is-
sued on the date as of which present
value is being determined (without re-
gard to any other subparagraph of sec-
tion 807(d)(5)).
‘‘(II) 
APPLICABLE
INTEREST
RATE.—The term ‘applicable interest
rate’ means the annual rate of interest
on 30-year Treasury securities for the
month before the date of distribution or
such other time as the Secretary may
by regulations prescribe.
‘‘(B) EXCEPTION.—In the case of a dis-
tribution from a plan that was adopted and in
effect before the date of the enactment of the Re-
tirement Protection Act of 1994, the present
value of any distribution made before the earlier
of—
‘‘(i) the later of the date a plan amend-
ment applying subparagraph (A) is adopted
or made effective, or
‘‘(ii) the first day of the first plan year
beginning after December 31, 1999,
shall be calculated, for purposes of paragraphs
(1) and (2), using the interest rate determined
under the regulations of the Pension Benefit
Guaranty Corporation for determining the
present value of a lump sum distribution on
plan termination that were in effect on Septem-
ber 1, 1993, and using the provisions of the plan
as in effect on the day before such date of enact-
ment; but only if such provisions of the plan met
(B), (C), or (D), the mortality table used
shall be the table prescribed by the Sec-
retary. Such table shall be based on the pre-
vailing commissioners’ standard table (de-
scribed in section 807(d)(5)(A)) used to de-
termine reserves for group annuity con-
tracts issued on the date the adjustment is
being made (without regard to any other
subparagraph of section 807(d)(5)).’’
(c) AMENDMENTS TO EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974.—
(1) DETERMINATION
OF
PRESENT
VALUE
FOR
PURPOSES
OF
RESTRICTIONS
ON
MANDATORY
DIS-
TRIBUTIONS.—Section 203(e)(2) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C.
1053(e)(2)) is amended to read as follows:
‘‘(2) For purposes of paragraph (1), the present value
shall be calculated in accordance with section 205(g)(3).’’
(2) DETERMINATION
OF
PRESENT
VALUE
FOR
PURPOSES OF RESTRICTIONS ON CASH-OUTS.—Section
205(g)(3) of such Act (29 U.S.C. 1055(g)(3)) is
amended to read as follows:
‘‘(3) DETERMINATION OF PRESENT VALUE.—
‘‘(A) IN GENERAL.—
‘‘(i) PRESENT VALUE.—Except as pro-
vided in subparagraph (B), for purposes of
paragraphs (1) and (2), the present value
shall not be less than the present value cal-
culated by using the applicable mortality
table and the applicable interest rate.
‘‘(ii) DEFINITIONS.—For purposes of
clause (i)—
‘‘(I) 
APPLICABLE
MORTALITY
TABLE.—The term ‘applicable mortal-
ity table’ means the table prescribed by
the Secretary of the Treasury. Such
table shall be based on the prevailing
commissioners’ standard table (de-
scribed in section 807(d)(5)(A) of the
Internal Revenue Code of 1986) used to
determine reserves for group annuity
contracts issued on the date as of
which present value is being deter-
mined (without regard to any other
subparagraph of section 807(d)(5) of
such Code).
‘‘(II) 
APPLICABLE
INTEREST
RATE.—The term ‘applicable interest
rate’ means the annual rate of interest
on 30-year Treasury securities for the
month before the date of distribution or
such other time as the Secretary of the
Treasury may by regulations prescribe.
‘‘(B) EXCEPTION.—In the case of a dis-
tribution from a plan that was adopted and in
effect prior to the date of the enactment of the
Retirement Protection Act of 1994, the present
value of any distribution made before the earlier
of—
‘‘(i) the later of when a plan amend-
ment applying subparagraph (A) is adopted
or made effective, or
‘‘(ii) the first day of the first plan year
beginning after December 31, 1999,
shall be calculated, for purposes of paragraphs
(1) and (2), using the interest rate determined
under the regulations of the Pension Benefit
Guaranty Corporation for determining the
present value of a lump sum distribution on
plan termination that were in effect on Septem-
ber 1, 1993, and using the provisions of the plan
as in effect on the day before such date of enact-
ment; but only if such provisions of the plan met
the requirements of section 205(g)(3) as in effect
on the day before such date of enactment.’’
(d) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendments made by
this section shall apply to plan years and limitation
years beginning after December 31, 1994; except that
an employer may elect to treat the amendments made
by this section as being effective on or after the date
of enactment.
(2) NO REDUCTION IN ACCRUED BENEFITS.—A
participant’s accrued benefit shall not be considered
to be reduced in violation of section 411(d)(6) of the
Internal Revenue Code of 1986 or section 204(g) of
the Employee Retirement Income Security Act of
1974 merely because (A) the benefit is determined in
accordance with section 417(e)(3)(A) of such Code, as
amended by this Act, or section 205(g)(3) of the Em-
ployee Retirement Income Security Act of 1974, as
amended by this Act, or (B) the plan applies section
415(b)(2)(E) of such Code, as amended by this Act.
(3) SECTION 415.—
(A) NO
REDUCTION
REQUIRED.—An ac-
crued benefit shall not be required to be reduced
below the accrued benefit as of the last day of the
last plan year beginning before January 1, 1995,
merely because of the amendments made by sub-
section (b).
(B) TIMING OF PLAN AMENDMENT.—A plan
that operates in accordance with the amend-
ments made by subsection (b) shall not be treated
as failing to satisfy section 401(a) of the Inter-
nal Revenue Code of 1986 or as not being oper-
ated in accordance with the provisions of the
plan until such date as the Secretary of the
Treasury provides merely because the plan has
not been amended to include the amendments
made by subsection (b).
SEC. 405. ADJUSTMENTS TO LIEN FOR MISSED MINIMUM
FUNDING CONTRIBUTIONS.
(a) AMENDMENTS TO THE INTERNAL REVENUE CODE
OF 1986.—
(1) CLARIFICATION OF APPLICABILITY OF PROVI-
SION.—Paragraph (2) of section 412(n) of the Inter-
nal Revenue Code of 1986 is amended by adding at
the end the following new sentence: ‘‘This subsection
shall not apply to any plan to which section 4021 of
the Employee Retirement Income Security Act of
1974 does not apply (as such section is in effect on
the date of the enactment of the Retirement Protection
Act of 1994).’’.
(2) REPEAL OF $1,000,000 OFFSET.—Paragraph
(3) of section 412(n) of such Code is amended to read
as follows:
‘‘(3) AMOUNT OF LIEN.—For purposes of para-
graph (1), the amount of the lien shall be equal to the
aggregate unpaid balance of required installments
and other payments required under this section (in-
cluding interest)—
‘‘(A) for plan years beginning after 1987,
and
‘‘(B) for which payment has not been made
before the due date.’’
(3) 
REPEAL
OF
60-DAY
DELAY.—Section
412(n)(4)(B) of such Code is amended by striking
‘‘60th day following the’’.
(b) AMENDMENTS TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974.—
(1) CLARIFICATION OF APPLICABILITY OF PROVI-
SION.—Section 302(f)(1) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1082(f)(1))
is amended by striking ‘‘to which this section applies’’
and inserting ‘‘covered under section 4021 of this
Act’’.
(2) REPEAL OF $1,000,000 OFFSET.—Paragraph
(3) of section 302(f) of such Act is amended to read
as follows:
‘‘(3) AMOUNT OF LIEN.—For purposes of para-
graph (1), the amount of the lien shall be equal to the
aggregate unpaid balance of required installments
and other payments required under this section (in-
cluding interest)—
‘‘(A) for plan years beginning after 1987,
and
‘‘(B) for which payment has not been made
before the due date.’’
(3) 
REPEAL
OF
60-DAY
DELAY.—Section
302(f)(4)(B) of such Act is amended by striking ‘‘60th
day following the’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall be effective for installments and other pay-
ments required under section 412 of the Internal Revenue
Code of 1986 or under part 3 of subtitle B of the Employee
Retirement Income Security Act of 1974 that become due
on or after the date of enactment.
SEC. 406. ROUNDING RULES FOR COST-OF-LIVING ADJUST-
MENTS.
(a) COST-OF-LIVING ADJUSTMENT
FOR COMPENSA-
TION LIMIT.—Section 401(a)(17)(B) of the Internal Reve-
nue Code of 1986 is revised to read as follows:
‘‘(B) COST-OF-LIVING ADJUSTMENT.—The
Secretary shall adjust annually the $150,000
amount in subparagraph (A) for increases in the
cost-of-living at the same time and in the same
manner as adjustments under section 415(d); ex-
cept that the base period shall be the calendar
quarter beginning October 1, 1993, and any in-
crease which is not a multiple of $10,000 shall
be rounded to the next lowest multiple of
$10,000.’’
(b) COST-OF-LIVING ADJUSTMENT FOR MAXIMUM DE-
FINED BENEFIT AMOUNT AND MAXIMUM ANNUAL ADDI-
TION.—
(1) IN GENERAL.—Section 415(d) of such Code is
amended to read as follows:
‘‘(d) COST-OF-LIVING ADJUSTMENTS.—
‘‘(1) IN GENERAL.—The Secretary shall adjust
annually—
‘‘(A) the $90,000 amount in subsection
(b)(1)(A),
‘‘(B) in the case of a participant who sepa-
rated from service, the amount taken into ac-
count under subsection (b)(1)(B), and
‘‘(C) the $30,000 amount in subsection
(c)(1)(A),
for increases in the cost-of-living in accordance with
regulations prescribed by the Secretary.
‘‘(2) 
METHOD.—The 
regulations 
prescribed
under paragraph (1) shall provide for—
‘‘(A) an adjustment with respect to any cal-
endar year based on the increase in the applica-
ble index for the calendar quarter ending Sep-
tember 30 of the preceding calendar year over
such index for the base period, and
‘‘(B) adjustment procedures which are simi-
lar to the procedures used to adjust benefit
amounts under section 215(i)(2)(A) of the Social
Security Act.
‘‘(3) BASE PERIOD.—For purposes of paragraph
(2)—
‘‘(A) $90,000 AMOUNT.—The base period
taken into account for purposes of paragraph
(1)(A) is the calendar quarter beginning October
1, 1986.
‘‘(B) SEPARATIONS
AFTER
DECEMBER
31,
1994.—The base period taken into account for
purposes of paragraph (1)(B) with respect to in-
dividuals separating from service with the em-
ployer after December 31, 1994, is the calendar
quarter beginning July 1 of the calendar year
preceding the calendar year in which such sepa-
ration occurs.
‘‘(C) SEPARATIONS
BEFORE
JANUARY
1,
1995.—The base period taken into account for
purposes of paragraph (1)(B) with respect to in-
dividuals separating from service with the em-
ployer before January 1, 1995, is the calendar
quarter beginning October 1 of the calendar year
preceding the calendar year in which such sepa-
ration occurs.
‘‘(D) $30,000 AMOUNT.—The base period
taken into account for purposes of paragraph
(1)(C) is the calendar quarter beginning October
1, 1993.’’
‘‘(4) ROUNDING.—Any increase under subpara-
graph (A) or (C) of paragraph (1) which is not a
multiple of $5,000 shall be rounded to the next lowest
multiple of $5,000.’’
(2) 
CONFORMING
AMENDMENT.—Section
415(c)(1)(A) of such Code is amended by striking
‘‘(or, if greater, 1⁄4 of the dollar limitation in effect
under subsection (b)(1)(A))’’.
(c) COST-OF-LIVING ADJUSTMENT FOR MAXIMUM SAL-
ARY DEFERRAL.—Section 402(g)(5) of such Code is amend-
ed by inserting before the period ‘‘; except that any increase
under this paragraph which is not a multiple of $500 shall
be rounded to the next lowest multiple of $500’’.
(d) COST-OF-LIVING ADJUSTMENT FOR ELIGIBILITY
FOR SIMPLIFIED EMPLOYEE PENSIONS.—Section 408(k)(8)
of such Code is amended by inserting before the period ‘‘;
except that any increase in the $300 amount which is not
a multiple of $50 shall be rounded to the next lowest mul-
tiple of $50’’.
(e) EFFECTIVE DATE.—The amendments made by this
section shall apply to years beginning after December 31,
1994.
SEC. 407. FUNDING OF RESTORED PLANS.
Any changes made by this Act to section 412 of the
Internal Revenue Code of 1986 or to part 3 of subtitle B
of title I of the Employee Retirement Income Security Act
of 1974 shall not apply to a plan which is, on the date
of enactment of this Act, subject to a restoration payment
schedule order issued by the Pension Benefit Guaranty Cor-
poration that meets the requirements of section 1.412(c)(1)–
3 of the Treasury Regulations.
SEC. 408. STUDY OF FUNDING STATUS OF FEDERAL, STATE,
AND LOCAL GOVERNMENT PENSION PLANS.
(a) IN GENERAL.—The Comptroller General shall con-
duct a study of the underfunding of Federal, State, and
local government pension plans. Such study shall address
the causes and implications of such underfunding, as well
as the feasibility of requiring such plans to comply with
funding, reporting, and disclosure requirements imposed by
Federal law on private pension plans.
(b) REPORT.—The report of such study shall be sub-
mitted not later than April 1, 1995, to the Committee on
Ways and Means of the House of Representatives and the
Committee on Finance of the Senate.
TITLE V—EFFECTIVE DATES
SEC. 501. EFFECTIVE DATES.
Except as otherwise provided in this Act, the amend-
ments made by this Act shall be effective on the date of en-
actment of this Act.
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited
as the ‘‘Retirement Protection Act of 1994’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title and table of contents.
TITLE I—PENSION PLAN FUNDING
SUBTITLE A—AMENDMENTS TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974
Sec. 101. Minimum funding requirements.
Sec. 102. Limitation on changes in current liability assump-
tions.
Sec. 103. Anticipation of bargained benefit increases.
Sec. 104. Modification of quarterly contribution requirement.
SUBTITLE B—AMENDMENTS TO THE INTERNAL REVENUE CODE OF
1986
Sec. 121. Minimum funding requirements.
Sec. 122. Limitation on changes in current liability assump-
tions.
Sec. 123. Anticipation of bargained benefit increases.
Sec. 124. Modification of quarterly contribution requirement.
Sec. 125. Exceptions to excise tax on nondeductible contribu-
tions.
TITLE II—AMENDMENTS RELATED TO TITLE IV OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974
Sec. 201. Reportable events.
Sec. 202. Alternative to involuntary termination.
Sec. 203. Certain information required to be furnished to pbgc.
Sec. 204. Liability upon liquidation of contributing sponsor or
controlled group member if plan remains ongo-
ing.
Sec. 205. Enforcement of minimum funding requirements.
Sec. 206. Remedies for noncompliance with requirements for
standard termination.
Sec. 207. Prohibition on benefit increases where plan sponsor
is in bankruptcy.
Sec. 208. Substantial owner benefits.
Sec. 209. Phase-out of variable rate premium cap.
TITLE III—PARTICIPANT SERVICES
Sec. 301. Disclosure to participants.
Sec. 302. Missing participants.
Sec. 303. Modification of maximum guarantee for disability
benefits.
TITLE IV—MISCELLANEOUS AMENDMENTS
Sec. 401. ERISA citation.
Sec. 402. Definition of contributing sponsor.
Sec. 403. Technical corrections.
Sec. 404. Distress termination criteria for banking institutions.
Sec. 405. Single sum distributions.
Sec. 406. Adjustments to lien for missed minimum funding con-
tributions.
Sec. 407. Rounding rules for cost-of-living adjustments.
Sec. 408. Funding of restored plans.
Sec. 409. Study of funding status of federal, State, and local
government pension plans.
TITLE V—EFFECTIVE DATES AND RELATED RULES
Sec. 501. Effective dates.
Sec. 502. Delay in changes to prevailing commissioners’ table.
TITLE I—PENSION PLAN
FUNDING
Subtitle A—Amendments to the
Employee 
Retirement 
Income
Security Act of 1974
SEC. 101. MINIMUM FUNDING REQUIREMENTS.
(a) AMENDMENTS TO ADDITIONAL FUNDING
REQUIREMENTS FOR SINGLE-EMPLOYER PLANS.—
(1) LIMITATION OF ADDITIONAL FUNDING
REQUIREMENT TO PLANS HAVING A FUNDED
CURRENT
LIABILITY
PERCENTAGE
OF
LESS
THAN 90 PERCENT.—Paragraph (1) of sec-
tion 302(d) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C.
1082(d)) is amended by striking ‘‘which
has an unfunded current liability’’ and
inserting ‘‘which has a funded current li-
ability percentage of less than 90 percent
(determined without regard to paragraph
(8)(E))’’.
(2) RELATIONSHIP OF ADDITIONAL FUND-
ING
REQUIREMENT
TO
FUNDING
STANDARD
ACCOUNT CHARGES AND CREDITS.—
(A) 
Clause 
(ii) 
of 
section
302(d)(1)(A) of such Act is amended to
read as follows:
‘‘(ii)(I) for plan years begin-
ning prior to January 1, 2000, the
sum of the charges under sub-
section (b)(2) (other than 5 per-
cent of the charges established
prior to January 1, 1995, under
clauses (iv) and (v) of subsection
(b)(2)(B)), reduced by the sum of
the 
credits 
under 
subsection
(b)(3) (other than 5 percent of the
credits established prior to Janu-
ary 1, 1995, under clauses (ii) and
(iii) of subsection (b)(3)(B)), or
‘‘(II) for plan years beginning
after December 31, 1999, the sum
of the charges under subsection
(b)(2), reduced by the sum of the
credits under subparagraph (B) of
subsection (b)(3), plus’’.
(B) The last sentence in section
302(d)(1) of such Act is amended to
read as follows:
100
‘‘Such increase shall not exceed the
amount which, after taking into account
charges (other than the additional charge
under this subsection) and credits under
subsection (b), is necessary to increase
the funded current liability percentage
(taking into account the expected in-
crease in current liability due to benefits
accruing during the plan year) to 100 per-
cent.’’
(3) AMENDMENT TO DEFICIT REDUCTION
CONTRIBUTION.—Paragraph (2) of section
302(d) of such Act is amended—
(A) by striking ‘‘plus’’ at the end
of subparagraph (A);
(B) by striking the period at the
end of subparagraph (B) and insert-
ing ‘‘, and’’; and
(C) by adding at the end the fol-
lowing new subparagraph:
‘‘(C) the expected increase in cur-
rent liability due to benefits accruing
during the plan year.’’
(4) INCREASE IN UNFUNDED OLD LIABIL-
ITY.—
101
(A) 
Paragraph 
(3) 
of 
section
302(d) of such Act is amended by add-
ing at the end the following new sub-
paragraphs:
‘‘(D) SPECIAL
RULE
FOR
REQUIRED
CHANGES IN ACTUARIAL ASSUMPTIONS.—
‘‘(i) 
IN
GENERAL.—The 
un-
funded old liability amount with
respect to any plan for any plan
year shall be increased by the
amount necessary to amortize the
amount of additional unfunded
old liability under the plan in
equal annual installments over a
period of 12 plan years (beginning
with the first plan year beginning
after December 31, 1994).
‘‘(ii) ADDITIONAL UNFUNDED OLD
LIABILITY.—For purposes of clause
(i), the term ‘additional unfunded
old liability’ means the amount (if
any) by which—
‘‘(I) the current liability of
the plan as of the beginning
of the first plan year begin-
102
ning after December 31, 1994,
valued using the assumptions
required by paragraph (7)(C)
as in effect for plan years be-
ginning after December 31,
1994, exceeds
‘‘(II) the current liability
of the plan as of the begin-
ning of such first plan year,
valued using the same as-
sumptions 
used 
under
subclause (I) (other than the
assumptions 
required 
by
paragraph (7)(C)), using the
prior interest rate, and using
such mortality assumptions as
were used to determine cur-
rent liability for the first plan
year beginning after Decem-
ber 31, 1992.
‘‘(iii) PRIOR
INTEREST
RATE.—
For purposes of clause (ii), the
term ‘prior interest rate’ means
the rate of interest that is the
same percentage of the weighted
103
average 
under 
subsection
(b)(5)(B)(ii)(I) for the first plan
year beginning after December
31, 1994, as the rate of interest
used by the plan to determine
current liability for the first plan
year beginning after December
31, 1992, is of the weighted aver-
age 
under 
subsection
(b)(5)(B)(ii)(I) for such first plan
year beginning after December
31, 1992.
‘‘(E) OPTIONAL
RULE
FOR
ADDI-
TIONAL UNFUNDED OLD LIABILITY.—
‘‘(i) IN GENERAL.—If an election
is made under clause (ii), the
term ‘additional unfunded old li-
ability’ means (in lieu of the addi-
tional unfunded old liability de-
scribed in clause (ii) of subpara-
graph (D)), the amount (if any) by
which—
‘‘(I) the unfunded current
liability of the plan as of the
beginning of the first plan
104
year beginning after Decem-
ber 31, 1994, valued using the
assumptions 
required 
by
paragraph (7)(C) as in effect
for plan years beginning after
December 31, 1994, exceeds
‘‘(II) the unamortized por-
tion of the unfunded old li-
ability under the plan as of
the beginning of the first plan
year beginning after Decem-
ber 31, 1994.
‘‘(ii) ELECTION.—
‘‘(I) An employer may ir-
revocably elect, at such time
and in such manner as shall
be prescribed by the Sec-
retary of the Treasury, to
apply the provisions of this
subparagraph as of the begin-
ning of the first plan year be-
ginning after December 31,
1994.
‘‘(II) If an election is made
under this clause, the in-
105
crease under paragraph (1)
for any plan year beginning
after December 31, 1994, and
before January 1, 2002, shall
not be less than the increase
that would be required under
paragraph (1) if the provi-
sions of this title as in effect
for plan years beginning be-
fore January 1, 1995, had re-
mained in effect.’’
(5) APPLICABLE
PERCENTAGE
FOR
DE-
TERMINING
UNFUNDED
NEW
LIABILITY
AMOUNT.—Subparagraph (C) of section
302(d)(4) of such Act is amended—
(A) by striking ‘‘.25’’ and inserting
‘‘.40’’, and
(B) by striking ‘‘35’’ and inserting
‘‘60’’.
(6) UNPREDICTABLE CONTINGENT EVENT
AMOUNT.—
(A) Subparagraph (A) of section
302(d)(5) of such Act is amended—
106
(i) by striking ‘‘greater of’’ and
inserting 
‘‘greatest 
of’’ 
before
clause (i);
(ii) by striking ‘‘or’’ at the end
of clause (i);
(iii) by striking the period at
the end of clause (ii) and insert-
ing ‘‘, or’’; and
(iv) by adding after clause (ii)
the following new clause:
‘‘(iii) the additional amount
that would be determined under
paragraph (4)(A) if the unpredict-
able contingent event benefit li-
abilities were included in un-
funded 
new 
liability 
notwith-
standing paragraph (4)(B)(ii).’’
(B) 
Paragraph 
(5) 
of 
section
302(d) of such Act is amended by add-
ing at the end the following new sub-
paragraph:
‘‘(E) 
LIMITATION.—The 
present
value of the amounts described in
subparagraph (A) with respect to any
one event shall not exceed the unpre-
107
dictable contingent event benefit li-
abilities attributable to that event.’’
(C) 
Clause 
(ii) 
of 
section
302(e)(4)(D) of such Act is amended—
(i) by striking ‘‘greater of’’ and
inserting 
‘‘greatest 
of’’ 
before
subclause (I);
(ii) by striking ‘‘or’’ at the end
of subclause (I);
(iii) by striking the period at
the end of subclause (II) and in-
serting ‘‘, or’’; and
(iv) by adding after subclause
(II) the following new clause:
‘‘(III) 25 percent of the
amount 
determined 
under
subsection (d)(5)(A)(iii) for the
plan year.’’
(7) REQUIRED INTEREST RATE AND MOR-
TALITY ASSUMPTIONS FOR DETERMINING CUR-
RENT LIABILITY.—Subparagraph (C) of sec-
tion 302(d)(7) of such Act is amended to
read as follows:
‘‘(C) INTEREST RATE AND MORTALITY
ASSUMPTIONS USED.—Effective for plan
108
years beginning after December 31,
1994—
‘‘(i) the rate of interest used to
determine current liability under
this subsection shall be the rate
of interest used under subsection
(b)(5), except that the highest rate
in the permissible range under
subparagraph (B)(ii) thereof shall
not exceed 105 percent of the
weighted average referred to in
such subparagraph, and
‘‘(ii) the mortality table used
to 
determine 
current 
liability
under this subsection shall be the
table prescribed by the Secretary
of the Treasury.
The table prescribed under clause (ii)
shall be based on the prevailing com-
missioners’ standard table (described
in section 807(d)(5)(A) of the Internal
Revenue Code of 1986) used to deter-
mine reserves for group annuity con-
tracts issued on the date as of which
current liability is determined (with-
109
out regard to any other subparagraph
of section 807(d)(5) of such Code). The
Secretary shall prescribe separate ta-
bles, which may be used instead of
the table described in the preceding
sentence, to calculate mortality rates
for participants who satisfy the defi-
nition of disability under titles II and
XVI of the Social Security Act and the
regulations thereunder.’’
(8) TRANSITION
RULE.—Section 302(d)
of such Act is amended by adding at the
end the following new paragraph:
‘‘(9) PHASE-IN OF INCREASES IN FUNDING
REQUIRED BY RETIREMENT PROTECTION ACT
OF 1994.—
‘‘(A) IN GENERAL.—For any appli-
cable plan year, at the election of the
employer, the increase under para-
graph (1) shall not exceed the greater
of—
‘‘(i) the increase that would be
required under paragraph (1) if
the provisions of this title as in
effect for plan years beginning be-
110
fore January 1, 1995, had re-
mained in effect, or
‘‘(ii) the amount which, after
taking 
into 
account 
charges
(other than the additional charge
under this subsection) and credits
under subsection (b), is necessary
to increase the funded current li-
ability percentage (taking into ac-
count the expected increase in
current liability due to benefits
accruing during the plan year) for
the applicable plan year to a per-
centage equal to the sum of the
initial funded current liability
percentage of the plan plus the
applicable number of percentage
points for such applicable plan
year.
‘‘(B) APPLICABLE
NUMBER
OF
PER-
CENTAGE POINTS.—
‘‘(i) INITIAL
FUNDED
CURRENT
LIABILITY
PERCENTAGE
OF
PER-
CENT
OR
LESS.—Except as pro-
vided in clause (ii), for plans with
111
an initial funded current liability
percentage of 75 percent or less,
the applicable number of percent-
age points for the applicable plan
year is as follows:
‘‘In the case of applicable
The applicable number of
plan years beginning in:
percentage points is:
1995 ......................................................
1996 ......................................................
1997 ......................................................
1998 ......................................................
1999 ......................................................
2000 ......................................................
2001 ......................................................
24.
‘‘(ii) OTHER CASES.—In the case
of a plan to which this clause ap-
plies, the applicable number of
percentage points for any such
applicable plan year is the sum
of—
‘‘(I) 2 percentage points;
‘‘(II) the applicable num-
ber of percentage points (if
any) under this clause for the
preceding 
applicable 
plan
year;
‘‘(III) the product of .10
multiplied by the excess (if
any) 
of 
(a) 
percentage
points over (b) the sum of the
112
initial funded current liability
percentage and the number
determined under subclause
(II);
‘‘(IV) for applicable plan
years beginning in 2000, 1 per-
centage point; and
‘‘(V) for applicable plan
years beginning in 2001, 2 per-
centage points.
‘‘(iii) PLANS TO WHICH CLAUSE
(ii) APPLIES.—
‘‘(I) IN
GENERAL.—Clause
(ii) shall apply to a plan for
an applicable plan year if the
initial funded current liability
percentage of such plan is
more than 75 percent.
‘‘(II) 
PLANS
INITIALLY
UNDER CLAUSE (i).—In the case
of a plan which (but for this
subclause) has an initial fund-
ed current liability percent-
age of 75 percent or less,
clause (ii) (and not clause (i))
113
shall apply to such plan with
respect 
to 
applicable 
plan
years beginning after the first
applicable 
plan 
year 
for
which the sum of the initial
funded current liability per-
centage and the applicable
number of percentage points
(determined under clause (i))
exceeds 75 percent. For pur-
poses of applying clause (ii) to
such a plan, the initial funded
current liability percentage of
such plan shall be treated as
being the sum referred to in
the preceding sentence.
‘‘(C) DEFINITIONS.—For purposes
of this paragraph—
‘‘(i) The term ‘applicable plan
year’ means a plan year begin-
ning after December 31, 1994, and
before January 1, 2002.
‘‘(ii) The term ‘initial funded
current 
liability 
percentage’
means the funded current liabil-
114
ity percentage as of the first day
of the first plan year beginning
after December 31, 1994.’’
(9) LIQUIDITY REQUIREMENT.—
(A) Section 302(e) of such Act is
amended by redesignating paragraph
(5) as paragraph (6) and by inserting
after paragraph (4) the following new
paragraph:
‘‘(5) LIQUIDITY REQUIREMENT.—
‘‘(A) IN GENERAL.—A plan to which
this paragraph applies shall be treat-
ed as failing to pay the full amount of
any required installment to the ex-
tent that the value of the liquid assets
paid in such installment is less than
the liquidity shortfall (whether or not
such liquidity shortfall exceeds the
amount of such installment required
to be paid but for this paragraph).
‘‘(B) PLANS
TO
WHICH
PARAGRAPH
APPLIES.—This paragraph shall apply
to a defined benefit plan to which
subsection (d) applies and which—
115
‘‘(i) is required to pay install-
ments under this subsection for a
plan year, and
‘‘(ii) has a liquidity shortfall
for any quarter during such plan
year.
‘‘(C) PERIOD
OF
UNDERPAYMENT.—
For purposes of paragraph (1), any
portion of an installment that is
treated as not paid under subpara-
graph (A) shall continue to be treated
as unpaid until the close of the quar-
ter in which the due date for such in-
stallment occurs.
‘‘(D) LIMITATION
ON
INCREASE.—If
the amount of any required install-
ment is increased by reason of sub-
paragraph (A), in no event shall such
increase exceed the amount which,
when added to prior installments for
the plan year, is necessary to increase
the funded current liability percent-
age (taking into account the expected
increase in current liability due to
116
benefits accruing during the plan
year) to 100 percent.
‘‘(E) DEFINITIONS.—For purposes
of this paragraph—
‘‘(i) LIQUIDITY SHORTFALL.—The
term ‘liquidity shortfall’ means,
with respect to any required in-
stallment, an amount equal to the
excess (as of the last day of the
quarter for which such install-
ment is made) of the base amount
with respect to such quarter over
the value (as of such last day) of
the plan’s liquid assets.
‘‘(ii) BASE AMOUNT.—
‘‘(I) IN GENERAL.—The term
‘base amount’ means, with re-
spect 
to 
any 
quarter, 
an
amount equal to 3 times the
sum of the adjusted disburse-
ments from the plan for the 12
months ending on the last day
of such quarter.
‘‘(II) SPECIAL RULE.—If the
amount 
determined 
under
117
clause (i) exceeds an amount
equal to 2 times the sum of
the 
adjusted 
disbursements
from the plan for the 36
months ending on the last day
of the quarter and an enrolled
actuary certifies to the Sec-
retary of the Treasury that
such excess is the result of
nonrecurring 
circumstances,
the base amount with respect
to such quarter shall be deter-
mined 
without 
regard 
to
amounts related to those non-
recurring circumstances.
‘‘(iii) DISBURSEMENTS FROM THE
PLAN.—The term ‘disbursements
from the plan’ means all disburse-
ments from the trust, including
purchases of annuities, payments
of single sums and other benefits,
and administrative expenses.
‘‘(iv) 
ADJUSTED
DISBURSE-
MENTS.—The term ‘adjusted dis-
bursements’ means disbursements
118
from the plan reduced by the
product of—
‘‘(I) the plan’s funded cur-
rent liability percentage (as
defined in subsection (d)(8))
for the plan year, and
‘‘(II) the sum of the pur-
chases of annuities, payments
of single sums, and such other
disbursements 
as 
the 
Sec-
retary of the Treasury shall
provide in regulations.
‘‘(v) LIQUID ASSETS.—The term
‘liquid assets’ means cash, mar-
ketable securities and such other
assets as specified by the Sec-
retary of the Treasury in regula-
tions.
‘‘(vi) 
QUARTER.—The 
term
‘quarter’ means, with respect to
any required installment, the 3-
month 
period 
preceding 
the
month in which the due date for
such installment occurs.
119
‘‘(F) REGULATIONS.—The Secretary
of the Treasury may prescribe such
regulations as are necessary to carry
out this paragraph.’’
(B) LIMITATION
ON
DISTRIBUTIONS
OTHER
THAN
LIFE
ANNUITIES
PAID
BY
THE PLAN.—
(i) Section 206 of the Em-
ployee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1056) is
amended by adding at the end the
following new subsection:
‘‘(e) LIMITATION ON DISTRIBUTIONS OTHER
THAN LIFE ANNUITIES PAID BY THE PLAN.—
‘‘(1) 
IN
GENERAL.—Notwithstanding
any other provision of this part, the fidu-
ciary of a pension plan that is subject to
the additional funding requirements of
section 302(d) shall not permit a prohib-
ited payment to be made from a plan dur-
ing a period in which such plan has a li-
quidity shortfall (as defined in section
302(e)(5)).
120
‘‘(2) PROHIBITED
PAYMENT.—For pur-
poses of paragraph (1), the term ‘prohib-
ited payment’ means—
‘‘(A) any payment, in excess of the
monthly amount paid under a single
life annuity (plus any social security
supplements described in the last
sentence of section 204(b)(1)(G)), to a
participant or beneficiary whose an-
nuity starting date (as defined in sec-
tion 205(h)(2)), that occurs during the
period referred to in paragraph (1),
‘‘(B) any payment for the pur-
chase of an irrevocable commitment
from an insurer to pay benefits, and
‘‘(C) any other payment specified
by the Secretary of the Treasury by
regulations.
‘‘(3) PERIOD OF SHORTFALL.—For pur-
poses of this subsection, a plan has a li-
quidity shortfall during the period that
there is an underpayment of an install-
ment under section 302(e) by reason of
paragraph (5)(A) thereof.
121
‘‘(4) COORDINATION WITH OTHER PROVI-
SIONS.—Compliance with this subsection
shall not constitute a violation of any
other provision of this Act.’’
(ii) Section 502 of such Act is
amended by adding at the end
thereof a new subsection (m) to
read as follows:
‘‘(m) In the case of a distribution to a pen-
sion plan participant or beneficiary in viola-
tion of section 206(e) by a plan fiduciary, the
Secretary shall assess a penalty against such
fiduciary in an amount equal to the value of
the distribution. Such penalty shall not ex-
ceed $10,000 for each such distribution.’’
(10) AMENDMENT
TO
DEFINITION
OF
FULL FUNDING LIMITATION.—
(A) Subparagraph (A) of section
302(c)(7) of such Act is amended—
(i) by inserting ‘‘(including
the expected increase in current
liability due to benefits accruing
during the plan year)’’ after ‘‘cur-
rent liability’’ in clause (i), and
122
(ii) by adding at the end the
following flush sentences:
‘‘In no event shall the excess de-
scribed in the preceding sentence for
any plan year be less than the excess
(if any) of 90 percent of the current li-
ability of the plan (including the ex-
pected increase in current liability
due to benefits accruing during the
plan year) over the value of the plan’s
assets determined under paragraph
(2). For purposes of the preceding
sentence, the term ‘current liability’
has the meaning given such term by
subsection (d)(7) (determined without
regard to subsection (d)(7)(D)), and
assets shall not be reduced by any
credit balance in the funding stand-
ard account.’’.
(B) Subparagraph (B) of section
302(c)(7) of such Act is amended to
read as follows:
‘‘(B) 
CURRENT
LIABILITY.—For 
pur-
poses of subparagraph (D) and subclause
(I) of subparagraph (A)(i), the term ‘cur-
123
rent liability’ has the meaning given such
term by subsection (d)(7) (without regard
to subparagraphs (C) and (D) thereof)
and using the rate of interest used under
subsection (b)(5)(B).’’
(b) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendments
made by this section shall apply to plan
years beginning after December 31, 1994.
(2) DELAY IN EFFECTIVE DATE FOR DIS-
ABLED
LIVES.—For plan years beginning
before January 1, 1996, current liability
may be determined using a plan’s own
mortality assumptions for purposes of
calculating the mortality rates of dis-
abled lives.
SEC. 102. LIMITATION ON CHANGES IN CURRENT LIABILITY
ASSUMPTIONS.
(a) Paragraph (5) of section 302(c) of the
Employee Retirement Income Security Act of
1974 (29 U.S.C. 1082(c)(5)) is amended—
(1) by striking ‘‘If the funding meth-
od’’ and inserting the following:
‘‘(A) IN
GENERAL.—If the funding
method’’, and
124
(2) by adding at the end the following
new subparagraph:
‘‘(B) APPROVAL REQUIRED FOR CER-
TAIN CHANGES IN ASSUMPTIONS BY CER-
TAIN SINGLE EMPLOYER PLANS SUBJECT
TO
ADDITIONAL
FUNDING
REQUIRE-
MENT.—
‘‘(i) IN GENERAL.—No actuarial
assumption (other than the as-
sumptions 
described 
in 
sub-
section (d)(7)(C)) used to deter-
mine the current liability for a
plan to which this subparagraph
applies may be changed without
the approval of the Secretary of
the Treasury.
‘‘(ii) PLANS TO WHICH SUBPARA-
GRAPH
APPLIES.—This 
subpara-
graph shall apply to a plan only
if—
‘‘(I) subsection (d) applies
to the plan;
‘‘(II) the employer (within
the 
meaning 
of 
section
302(c)(11) (without regard to
125
subparagraph 
(B) 
thereof))
maintaining such plan is de-
scribed in section 4043(b)(1);
and
‘‘(III) the change in as-
sumptions (determined after
taking 
into 
account 
any
changes in interest rate and
mortality table) results in a
decrease in the unfunded cur-
rent liability of the plan for
the current plan year that is
$50,000,000 or greater, or that
is $5,000,000 or greater and
that is 5 percent or more of
the current liability of the
plan before such change.’’
(b) EFFECTIVE DATE.—
(1) 
IN
GENERAL.—The 
amendment
made by this section shall apply to
changes in assumptions for plan years be-
ginning after October 28, 1993.
(2) CERTAIN CHANGES CEASE TO BE EF-
FECTIVE.—In the case of changes in as-
sumptions for plan years beginning after
126
December 31, 1992, and on or before Oc-
tober 28, 1993, such changes shall cease
to be effective for plan years beginning
after December 31, 1994, if—
(A) such change would have re-
quired the approval of the Secretary
of the Treasury had such amendment
applied to such change, and
(B) such change is not so ap-
proved.
SEC. 103. ANTICIPATION OF BARGAINED BENEFIT IN-
CREASES.
(a) IN GENERAL.—Section 302(c) of the Em-
ployee Retirement Income Security Act of
1974 (29 U.S.C. 1082(c)) is amended by adding
at the end the following new paragraph:
‘‘(12) ANTICIPATION OF BENEFIT INCREASES
EFFECTIVE
IN
THE
FUTURE.—In determining
projected benefits, the funding method of a
collectively bargained plan described in sec-
tion 413(a) of the Internal Revenue Code of
1986 (other than a multiemployer plan) shall
anticipate benefit increases scheduled to take
effect during the term of the collective bar-
gaining agreement applicable to the plan.’’
127
(b) EFFECTIVE
DATE.—The amendments
made by this section shall apply to plan years
beginning after December 31, 1994 with re-
spect to collective bargaining agreements in
effect on or after January 1, 1995.
SEC. 104. MODIFICATION OF QUARTERLY CONTRIBUTION
REQUIREMENT.
(a) IN GENERAL.—Paragraph (1) of section
302(e) of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1082(e)) is amend-
ed—
(1) by inserting ‘‘which has a funded
current liability percentage (as defined in
subsection (d)(8)) for the preceding plan
year of less than 100 percent’’ before
‘‘fails’’, and
(2) by striking ‘‘any plan year’’ and in-
serting ‘‘the plan year’’.
(b) EFFECTIVE
DATE.—The amendment
made by this section shall apply to plan years
beginning after the date of enactment of this
Act.
128
Subtitle B—Amendments to the
Internal Revenue Code of 1986
SEC. 121. MINIMUM FUNDING REQUIREMENTS.
(a) AMENDMENTS TO ADDITIONAL FUNDING
REQUIREMENTS FOR SINGLE-EMPLOYER PLANS.—
(1) LIMITATION OF ADDITIONAL FUNDING
REQUIREMENT TO PLANS HAVING A FUNDED
CURRENT
LIABILITY
PERCENTAGE
OF
LESS
THAN 90 PERCENT.—Paragraph (1) of sec-
tion 412(l) of the Internal Revenue Code
of 1986 (relating to additional funding re-
quirements for plans which are not multi-
employer plans) is amended by striking
‘‘which has an unfunded current liability’’
and inserting ‘‘which has a funded cur-
rent liability percentage of less than 90
percent (determined without regard to
paragraph (8)(E))’’.
(2) RELATIONSHIP OF ADDITIONAL FUND-
ING
REQUIREMENT
TO
FUNDING
STANDARD
ACCOUNT CHARGES AND CREDITS.—
(A) 
Clause 
(ii) 
of 
section
412(l)(1)(A) of such Code is amended
to read as follows:
129
‘‘(ii)(I) for plan years begin-
ning prior to January 1, 2000, the
sum of the charges under sub-
section (b)(2) (other than 5 per-
cent of the charges established
prior to January 1, 1995, under
clauses (iv) and (v) of subsection
(b)(2)(B)), reduced by the sum of
the 
credits 
under 
subsection
(b)(3) (other than 5 percent of the
credits established prior to Janu-
ary 1, 1995, under clauses (ii) and
(iii) of subsection (b)(3)(B)), or
‘‘(II) for plan years beginning
after December 31, 1999, the sum
of the charges under subsection
(b)(2), reduced by the sum of the
credits under subparagraph (B) of
subsection (b)(3), plus’’.
(B) The last sentence in section
412(l)(1) of such Code is amended to
read as follows:
‘‘Such increase shall not exceed the
amount which, after taking into account
charges (other than the additional charge
130
under this subsection) and credits under
subsection (b), is necessary to increase
the funded current liability percentage
(taking into account the expected in-
crease in current liability due to benefits
accruing during the plan year) to 100 per-
cent.’’
(3) AMENDMENT TO DEFICIT REDUCTION
CONTRIBUTION.—Paragraph (2) of section
412(l) of such Code is amended—
(A) by striking ‘‘plus’’ at the end
of subparagraph (A),
(B) by striking the period at the
end of subparagraph (B) and insert-
ing ‘‘, and’’; and
(C) by adding at the end the fol-
lowing new subparagraph:
‘‘(C) the expected increase in cur-
rent liability due to benefits accruing
during the plan year.’’
(4) INCREASE IN UNFUNDED OLD LIABIL-
ITY.—
(A) Paragraph (3) of section 412(l)
of such Code is amended by adding at
131
the end the following new subpara-
graphs:
‘‘(D) SPECIAL
RULE
FOR
REQUIRED
CHANGES IN ACTUARIAL ASSUMPTIONS.—
‘‘(i) 
IN
GENERAL.—The 
un-
funded old liability amount with
respect to any plan for any plan
year shall be increased by the
amount necessary to amortize the
amount of additional unfunded
old liability under the plan in
equal annual installments over a
period of 12 plan years (beginning
with the first plan year beginning
after December 31, 1994).
‘‘(ii) ADDITIONAL UNFUNDED OLD
LIABILITY.—For purposes of clause
(i), the term ‘additional unfunded
old liability’ means the amount (if
any) by which—
‘‘(I) the current liability of
the plan as of the beginning
of the first plan year begin-
ning after December 31, 1994,
valued using the assumptions
132
required by paragraph (7)(C)
as in effect for plan years be-
ginning after December 31,
1994, exceeds
‘‘(II) the current liability
of the plan as of the begin-
ning of such first plan year,
valued using the same as-
sumptions 
used 
under
subclause (I) (other than the
assumptions 
required 
by
paragraph (7)(C)), using the
prior interest rate, and using
such mortality assumptions as
were used to determine cur-
rent liability for the first plan
year beginning after Decem-
ber 31, 1992.
‘‘(iii) PRIOR
INTEREST
RATE.—
For purposes of clause (ii), the
term ‘prior interest rate’ means
the rate of interest that is the
same percentage of the weighted
average 
under 
subsection
(b)(5)(B)(ii)(I) for the first plan