SEC. 202. SCHEDULES REQUIRED TO BE PROVIDED BY MUL-
TIEMPLOYER PLANS IN ENDANGERED STA-
TUS. 
(a) 
AMENDMENTS
TO
ERISA.—Section 
305(c)(1)(B)(i) of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1085(c)(1)(B)(i)) is amend-
ed— 
(1) by striking ‘‘bargaining parties 1 or more 
schedules’’ 
and 
all 
that 
follows 
through 
‘‘including—’’ and inserting ‘‘bargaining parties—’’; 
(2) in subclause (I), by inserting after ‘‘(I)’’ the 
following: ‘‘a schedule showing revised benefit struc-
tures, revised contribution structures, or both, 
which, if adopted, may reasonably be expected to en-
able the multimeployer plan to meet the applicable 
benchmarks in accordance with the funding improve-
ment plan, including’’; and 
(3) by striking subclause (II) and inserting the 
following: 
‘‘(II) a schedule which would 
consist of a combination of benefit 
modifications and contribution in-
creases, and’’. 
(b) CONFORMING AMENDMENTS TO THE CODE.— 
Section 432(c)(1)(B)(i) of the Internal Revenue Code of 
1986 is amended— 
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(1) by striking ‘‘bargaining parties 1 or more 
schedules’’ 
and 
all 
that 
follows 
through 
‘‘including—’’ and inserting ‘‘bargaining parties—’’; 
(2) in subclause (I), by inserting after ‘‘(I)’’ the 
following: ‘‘a schedule showing revised benefit struc-
tures, revised contribution structures, or both, 
which, if adopted, may reasonably be expected to en-
able the multimeployer plan to meet the applicable 
benchmarks in accordance with the funding improve-
ment plan, including’’; and 
(3) by striking subclause (II) and inserting the 
following: 
‘‘(II) a schedule which would 
consist of a combination of benefit 
modifications and contribution in-
creases, and’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to funding improve-
ment plans adopted on or after the date of the enactment 
of this Act. 
SEC. 203. AMENDMENTS TO FUNDING RULES FOR MULTI-
EMPLOYER PLANS. 
(a) AMENDMENT RELATED TO SECTIONS 201 AND 
211.— 
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(1) IN GENERAL.—Section 201(b)(2)(A) of the 
Pension Protection Act of 2006 (Public Law 109– 
280; 120 Stat. 867) is amended by striking ‘‘has not 
used’’ and inserting ‘‘has not adopted, or ceased 
using,’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply as if included in the 
enactment of section 201 of the Pension Protection 
Act of 2006. 
(b) AMENDMENTS RELATED TO SECTIONS 202 AND 
212.— 
(1) AMENDMENTS TO THE EMPLOYEE RETIRE-
MENT INCOME SECURITY ACT OF 1974.— 
(A) Section 305(b)(3)(C) of the Employee 
Retirement Income Security Act of 1974 (29 
U.S.C. 1085(b)(3)(C)) is amended by striking 
‘‘section 101(b)(4)’’ and inserting ‘‘section 
101(b)(1)’’. 
(B) Section 305(b)(3)(D) of such Act (29 
U.S.C. 1085(b)(3)(D)) is amended by striking 
‘‘The Secretary’’ in clause (iii) and inserting 
‘‘The Secretary of the Treasury, in consultation 
with the Secretary’’. 
(C) Section 305(c)(7) of such Act (29 
U.S.C. 1085(c)(7)) is amended— 
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(i) by striking ‘‘to agree on’’ and all 
that follows in subparagraph (A)(ii) and 
inserting ‘‘to adopt a contribution schedule 
with terms consistent with the funding im-
provement plan and a schedule from the 
plan sponsor,’’, and 
(ii) by striking subparagraph (B) and 
inserting the following new subparagraph: 
‘‘(B) DATE
OF
IMPLEMENTATION.—The 
date specified in this subparagraph is the date 
which is 180 days after the date on which the 
collective bargaining agreement described in 
subparagraph (A) expires.’’, and 
(iii) by adding at the end the fol-
lowing new subparagraph: 
‘‘(C) FAILURE TO MAKE SCHEDULED CON-
TRIBUTIONS.—Any failure to make a contribu-
tion under a schedule of contribution rates pro-
vided under this paragraph shall be treated as 
a delinquent contribution under section 515 and 
shall be enforceable as such.’’. 
(D) Section 305(e) of such Act (29 U.S.C. 
1085(e)) is amended— 
(i) in paragraph (3)(C)— 
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(I) by striking all that follows ‘‘to 
adopt a’’ in clause (i)(II) and insert-
ing ‘‘to adopt a contribution schedule 
with terms consistent with the reha-
bilitation plan and a schedule from 
the plan sponsor under paragraph 
(1)(B)(i),’’, 
(II) by striking clause (ii) and in-
serting the following new clause: 
‘‘(ii) DATE
OF
IMPLEMENTATION.— 
The date specified in this clause is the date 
which is 180 days after the date on which 
the collective bargaining agreement de-
scribed in clause (i) expires.’’, and 
(III) by adding at the end the 
following new clause: 
‘‘(iii) FAILURE TO MAKE SCHEDULED 
CONTRIBUTIONS.—Any failure to make a 
contribution under a schedule of contribu-
tion rates provided under this subsection 
shall be treated as a delinquent contribu-
tion under section 515 and shall be en-
forceable as such.’’, 
(ii) in paragraph (4)— 
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(I) by striking ‘‘the date of’’ in 
subparagraph (A)(ii), and 
(II) by striking ‘‘and taking’’ in 
subparagraph (B) and inserting ‘‘but 
taking’’, 
(iii) in paragraph (6)— 
(I) 
by 
striking 
‘‘paragraph 
(1)(B)(i)’’ and inserting ‘‘the last sen-
tence of paragraph (1)’’, and 
(II) by striking ‘‘established’’ and 
inserting ‘‘establish’’, 
(iv) in paragraph (8)(C)(iii)— 
(I) by striking ‘‘the Secretary’’ in 
subclause (I) and inserting ‘‘the Sec-
retary of the Treasury, in consultation 
with the Secretary’’, and 
(II) by striking ‘‘Secretary’’ in 
the last sentence and inserting ‘‘Sec-
retary of the Treasury’’, and 
(v) by striking ‘‘an employer’s with-
drawal liability’’ in paragraph (9)(B) and 
inserting ‘‘the allocation of unfunded vest-
ed benefits to an employer’’. 
(E) Section 305(f)(2)(A)(i) of such Act 
(29 U.S.C. 1085(f)(2)(A)(i)) is amended by in-
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serting ‘‘to a participant or beneficiary whose 
annuity starting date (as defined in section 
205(h)(2)) occurs after such date,’’ after the 
comma at the end. 
(F) Section 305(g) of such Act (29 U.S.C. 
1085(g)) is amended by inserting ‘‘under sub-
section (c)’’ after ‘‘funding improvement plan’’ 
the first place it appears. 
(G) Section 302(b)(3) of such Act (29 
U.S.C. 1082(b)(3)) is amended by striking ‘‘the 
plan adopts’’ and inserting ‘‘the plan sponsor 
adopts’’. 
(H) Section 502(c)(2) of such Act (29 
U.S.C. 1132(c)(2)) is amended by striking 
‘‘101(b)(4)’’ and inserting ‘‘101(b)(1)’’. 
(I) Section 502(c)(8)(A) of such Act (29 
U.S.C. 1132(c)(8)(A)) is amended by inserting 
‘‘plan’’ after ‘‘multiemployer’’. 
(2) CONFORMING AMENDMENTS TO THE INTER-
NAL REVENUE CODE OF 1986.— 
(A) Section 432(b)(3)(C) of the Internal 
Revenue Code of 1986 is amended by striking 
‘‘section 101(b)(4)’’ and inserting ‘‘section 
101(b)(1)’’. 
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(B) Section 432(b)(3)(D)(iii) of such Code 
is amended by striking ‘‘The Secretary of 
Labor’’ and inserting ‘‘The Secretary, in con-
sultation with the Secretary of Labor’’. 
(C) Section 432(c) of such Code is amend-
ed— 
(i) in paragraph (3), by striking ‘‘sec-
tion 304(d)’’ in subparagraph (A)(ii) and 
inserting ‘‘section 431(d)’’, and 
(ii) in paragraph (7)— 
(I) by striking ‘‘to agree on’’ and 
all that follows in subparagraph 
(A)(ii) and inserting ‘‘to adopt a con-
tribution schedule with terms con-
sistent with the funding improvement 
plan and a schedule from the plan 
sponsor,’’, and 
(II) by striking subparagraph (B) 
and inserting the following new sub-
paragraph: 
‘‘(B) DATE
OF
IMPLEMENTATION.—The 
date specified in this subparagraph is the date 
which is 180 days after the date on which the 
collective bargaining agreement described in 
subparagraph (A) expires.’’. 
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(D) Section 432(e) of such Code is amend-
ed— 
(i) in paragraph (3)(C)— 
(I) by striking all that follows ‘‘to 
adopt a’’ in clause (i)(II) and insert-
ing ‘‘to adopt a contribution schedule 
with terms consistent with the reha-
bilitation plan and a schedule from 
the plan sponsor under paragraph 
(1)(B)(i),’’, and 
(II) by striking clause (ii) and in-
serting the following new clause: 
‘‘(ii) DATE
OF
IMPLEMENTATION.— 
The date specified in this clause is the date 
which is 180 days after the date on which 
the collective bargaining agreement de-
scribed in clause (i) expires.’’, 
(ii) in paragraph (4)— 
(I) by striking ‘‘the date of’’ in 
subparagraph (A)(ii), and 
(II) by striking ‘‘and taking’’ in 
subparagraph (B) and inserting ‘‘but 
taking’’, 
(iii) in paragraph (6)— 
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(I) 
by 
striking 
‘‘paragraph 
(1)(B)(i)’’ and inserting ‘‘the last sen-
tence of paragraph (1)’’, and 
(II) by striking ‘‘established’’ and 
inserting ‘‘establish’’, 
(iv) in paragraph (8)— 
(I) by striking ‘‘section 204(g)’’ 
in subparagraph (A)(i) and inserting 
‘‘section 411(d)(6)’’, 
(II) by inserting ‘‘of the Em-
ployee Retirement Income Security 
Act of 1974’’ after ‘‘4212(a)’’ in sub-
paragraph (C)(i)(II), 
(III) by striking ‘‘the Secretary 
of Labor’’ in subparagraph (C)(iii)(I) 
and inserting ‘‘the Secretary, in con-
sultation 
with 
the 
Secretary 
of 
Labor’’, and 
(IV) by striking ‘‘the Secretary of 
Labor’’ in the last sentence of sub-
paragraph (C)(iii) and inserting ‘‘the 
Secretary’’, and 
(v) by striking ‘‘an employer’s with-
drawal liability’’ in paragraph (9)(B) and 
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inserting ‘‘the allocation of unfunded vest-
ed benefits to an employer’’. 
(E) Section 432(f)(2)(A)(i) of such Code is 
amended— 
(i) by striking ‘‘section 411(b)(1)(A)’’ 
and inserting ‘‘section 411(a)(9)’’, and 
(ii) by inserting ‘‘to a participant or 
beneficiary whose annuity starting date (as 
defined in section 417(f)(2)) occurs after 
such date,’’ after the comma at the end. 
(F) Section 432(g) of such Code is amend-
ed by inserting ‘‘under subsection (c)’’ after 
‘‘funding improvement plan’’ the first place it 
appears. 
(G) Section 432(i) of such Code is amend-
ed— 
(i) by striking ‘‘section 412(a)’’ in 
paragraph (3) and inserting ‘‘section 
431(a)’’, and 
(ii) by striking paragraph (9) and in-
serting the following new paragraph: 
‘‘(9) PLAN SPONSOR.—For purposes of this sec-
tion, section 431, and section 4971(g)— 
‘‘(A) IN GENERAL.—The term ‘plan spon-
sor’ means, with respect to any multiemployer 
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plan, the association, committee, joint board of 
trustees, or other similar group of representa-
tives of the parties who establish or maintain 
the plan. 
‘‘(B) SPECIAL RULE FOR SECTION 404(c) 
PLANS.—In the case of a plan described in sec-
tion 404(c) (or a continuation of such plan), 
such term means the bargaining parties de-
scribed in paragraph (1).’’. 
(H) Section 412(b)(3) of such Code is 
amended by striking ‘‘the plan adopts’’ and in-
serting ‘‘the plan sponsor adopts’’. 
(I) Section 4971(g)(4) of such Code is 
amended— 
(i) in subparagraph (B)(ii), by strik-
ing ‘‘first day of’’ and inserting ‘‘day fol-
lowing the close of’’, and 
(ii) by striking clause (ii) of subpara-
graph (C) and inserting the following new 
clause: 
‘‘(ii) PLAN SPONSOR.—For purposes 
of clause (i), the term ‘plan sponsor’ has 
the meaning given such term by section 
432(i)(9).’’. 
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the enactment of sections 202 and 212, respec-
tively, of the Pension Protection Act of 2006. 
(B) The amendments made by paragraph 
(3) shall take effect as if included in the enact-
ment of section 212 of the Pension Protection 
Act of 2006. 
TITLE III—SINGLE-EMPLOYER 
MODIFICATIONS 
SEC. 301. ASSET SMOOTHING. 
(a) AMENDMENT TO ERISA.—The last sentence of 
section 303(g)(3)(B) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1083(g)(3)(B)) is amend-
ed to read as follows: ‘‘Any such averaging shall be ad-
justed for contributions, distributions, and expected earn-
ings (as determined by the plan’s actuary on the basis of 
an assumed earnings rate specified by the actuary but not 
in excess of the third segment rate applicable under sub-
section (h)(2)(C)(iii)), as specified by the Secretary of the 
Treasury.’’. 
(b) CONFORMING AMENDMENT TO INTERNAL REV-
ENUE CODE.—The last sentence of section 430(g)(3)(B) 
of the Internal Revenue Code of 1986 is amended to read 
as follows: ‘‘Any such averaging shall be adjusted for con-
tributions, distributions, and expected earnings (as deter-
mined by the plan’s actuary on the basis of an assumed 
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earnings rate specified by the actuary but not in excess 
of the third segment rate applicable under subsection 
(h)(2)(C)(iii)), as specified by the Secretary.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
subsections (a) and (b) shall apply as if included in the 
enactment of sections 102 and 112, respectively, of the 
Pension Protection Act of 2006. 
SEC. 302. PROHIBITED PAYMENTS. 
(a) AMENDMENT TO ERISA.—Paragraph (3) of sec-
tion 206(g) of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1056(g)(3)) is amended— 
(1) by striking subparagraph (C) and redesig-
nating subparagraphs (D) and (E) as subparagraphs 
(C) and (D), respectively; and 
(2) by striking subparagraph (A) and inserting 
the following: 
‘‘(A) FUNDING PERCENTAGE LESS THAN 
80 PERCENT.—A defined benefit plan which is 
a single-employer plan shall provide that, in any 
case in which the plan’s adjusted funding target 
attainment percentage for a plan year is less 
than 80 percent, the plan may not pay any pro-
hibited payment after the valuation date for the 
plan year to the extent the amount of the pay-
ment exceeds the product of–— 
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‘‘(i) the amount of the payment which 
could be made without regard to this sub-
section; multiplied by 
‘‘(ii) the plan’s adjusted funding tar-
get attainment percentage for the plan 
year.’’. 
(b) CONFORMING AMENDMENT TO INTERNAL REV-
ENUE CODE.—Subsection (d) of section 436 of the Inter-
nal Revenue Code of 1986 is amended— 
(1) by striking paragraph (3) and redesignating 
paragraphs (4) and (5) as subparagraphs (3) and 
(4), respectively; and 
(2) by striking paragraph (1) and inserting the 
following: 
‘‘(1) FUNDING
PERCENTAGE
LESS
THAN
PERCENT.—A defined benefit plan which is a single- 
employer plan shall provide that, in any case in 
which the plan’s adjusted funding target attainment 
percentage for a plan year is less than 80 percent, 
the plan may not pay any prohibited payment after 
the valuation date for the plan year to the extent the 
amount of the payment exceeds the product of— 
‘‘(A) the amount of the payment which 
could be made without regard to this sub-
section; multiplied by 
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‘‘(B) the plan’s adjusted funding target at-
tainment percentage for the plan year.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
subsections (a) and (b) shall apply as if included in the 
enactment of sections 103 and 113, respectively, of the 
Pension Protection Act of 2006. 
SEC. 303. CLARIFICATION OF AGE DISCRIMINATION RULES 
IN CONNECTION WITH THE YOUNG WOMEN’S 
CHRISTIAN ASSOCIATION PENSION PLAN. 
(a) PURPOSE.—The purpose of this section is to clar-
ify 
the 
age 
discrimination 
rules 
under 
section 
204(b)(1)(H) of the Employee Retirement Income Secu-
rity Act of 1974 and section 4(i)(1) of the Age Discrimina-
tion in Employment Act of 1967, as they relate, in connec-
tion with benefits provided under the Young Women’s 
Christian Association Pension Plan, to periods prior to 
June 29, 2005, during which violations of such rules are 
alleged to have occurred in civil actions commenced on or 
after April 25, 2007. 
(b) 
CLARIFICATION
OF
AGE
DISCRIMINATION 
RULES.—In the case of any civil action which— 
(1) is commenced on or after April 25, 2007, 
and 
(2) alleges a violation of section 204(b)(1)(H) 
of the Employee Retirement Income Security Act of 
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1974 (29 U.S.C. 1054(b)(1)(H)) or section 4(i)(1) 
of the Age Discrimination in Employment Act of 
1967 (29 U.S.C. 623(i)(1)) occurring before June 
29, 2005, with respect to any benefit provided under 
the Young Women’s Christian Association Pension 
Plan, 
such sections 204(b)(1)(H) and 4(i)(1) shall be applied 
as if paragraph (5) of section 204(b) of the Employee Re-
tirement Income Security Act of 1974 (as added by section 
701(a)(1) of the Pension Protection Act of 2006 (29 
U.S.C. 1054(b)(5); 120 Stat. 981) and paragraph (10) of 
section 4(i) of the Age Discrimination in Employment Act 
of 1967 (29 U.S.C. 623(i)(10); 120 Stat. 998) applied to 
any period in which such alleged violation occurred. 
(c) YOUNG WOMEN’S CHRISTIAN ASSOCIATION PEN-
SION PLAN.—For purposes of this section, the term 
‘‘Young Women’s Christian Association Pension Plan’’ 
means the defined benefit plan (as defined in section 3(35) 
of the Employee Retirement Income Security Act of 1974) 
established on January 1, 1926, and maintained by the 
Young Women’s Christian Association Retirement Fund, 
a corporation created by an Act of the State of New York 
which became law on April 12, 1924. 
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SEC. 304. PROHIBITED TRANSACTIONS EXEMPTION FOR DI-
VESTMENT OF EMPLOYER SECURITIES. 
(a) AMENDMENT TO THE EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.—Section 408(b) of the 
Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1108(b)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(21) PROHIBITED TRANSACTIONS EXEMPTION FOR 
DIVESTMENT OF EMPLOYER SECURITIES.—A transaction 
involving the sale of employer securities held in the ac-
count of a plan participant under the plan, if— 
‘‘(A) the proceeds from the sale are invested in 
the account, 
‘‘(B) 
the 
notice 
requirements 
of 
section 
404(c)(5)(B) are met in connection with the plan 
with respect to the plan year during which the trans-
action occurs, 
‘‘(C) under the plan— 
‘‘(i) the participant is treated as having 
elected to effect the transaction, in the absence 
of a specific election by the participant not to 
have the transaction effected, and 
‘‘(ii) participants are provided a reasonable 
period of time after the notice provided pursu-
ant to section 404(c)(5)(B) with respect to each 
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plan year and before the beginning of such plan 
year to make such a specific election, and 
‘‘(D) the transaction is consistent with regula-
tions which shall be promulgated by the Secretary 
and which shall take into account the importance of 
diversifying the investment of retirement account as-
sets as a plan participant nears retirement age.’’. 
(b) CONFORMING AMENDMENTS TO THE INTERNAL 
REVENUE CODE
OF 1986.—Subsection (d) of section 
4975 of the Internal Revenue Code of 1986 (relating to 
exemptions) is amended by striking ‘‘or’’ at the end of 
paragraph (22), by striking the period at the end of para-
graph (23) and inserting ‘‘,
or’’, and by adding at the 
end the following new paragraph: 
‘‘(24) PROHIBITED TRANSACTIONS EXEMPTION 
FOR
DIVESTMENT
OF
EMPLOYER
SECURITIES.—A 
transaction involving the sale of employer securities 
held in the account of a plan participant under the 
plan, if— 
‘‘(A) the proceeds from the sale are in-
vested in the account, 
‘‘(B) the notice requirements of section 
404(c)(5)(B) of the Employee Retirement In-
come Security Act of 1974 are met in connec-
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tion with the plan with respect to the plan year 
during which the transaction occurs, 
‘‘(C) under the plan— 
‘‘(i) the participant is treated as hav-
ing elected to effect the transaction, in the 
absence of a specific election by the partici-
pant not to have the transaction effected, 
and 
‘‘(ii) participants are provided a rea-
sonable period of time after the notice pro-
vided pursuant to section 404(c)(5)(B) of 
the Employee Retirement Income Security 
Act of 1974 with respect to each plan year 
and before the beginning of such plan year 
to make such a specific election, and 
‘‘(D) the transaction is consistent with reg-
ulations promulgated by the Secretary of Labor 
pursuant to section 408(b)(21)(D) of the Em-
ployee Retirement Income Security Act of 
1974.’’. 
(c) ISSUANCE OF REGULATIONS.—The Secretary of 
Labor shall issue initial final regulations pursuant to sec-
tion 408(b)(21)(D) of the Employee Retirement Income 
Security Act of 1974 (as added by this section) not later 
than 180 days after the date of the enactment of this Act. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to transactions occurring after the 
date of the enactment of this Act. 
SEC. 305. SPECIAL RULE RELATING TO AT-RISK STATUS 
FOR EMPLOYEES OFFERED EARLY RETIRE-
MENT IN 2006 OR 2007. 
(a) AMENDMENTS TO ERISA.—Section 303(i)(4)(C) 
of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1083(i)(4)(C)(i)) is amended— 
(1) in the heading, by inserting ‘‘OR 2007’’ after 
‘‘2006’’; 
(2) in clause (i)(II), by striking ‘‘2010’’ and in-
serting ‘‘2011’’; and 
(3) in clause (i)(III), by inserting ‘‘or 2007’’ 
after ‘‘2006’’ the first place it appears, and by strik-
ing ‘‘2006’’ the second place it appears and insert-
ing ‘‘2007’’. 
(b) CONFORMING AMENDMENTS TO THE INTERNAL 
REVENUE CODE OF 1986.—Section 430(i)(4)(C) of the 
Internal Revenue Code of 1986 (relating to special rule 
for employees offered early retirement in 2006) is amend-
ed— 
(1) in the heading, by inserting ‘‘OR 2007’’ after 
‘‘2006’’; 
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(2) in clause (i)(II), by striking ‘‘2010’’ and in-
serting ‘‘2011’’; and 
(3) in clause (ii)(III), by inserting ‘‘or 2007’’ 
after ‘‘2006’’ the first place it appears, and by strik-
ing ‘‘2006’’ the second place it appears and insert-
ing ‘‘2007’’. 
(c) EFFECTIVE DATE.—The amendments made by 
subsections (a) and (b) shall apply as if included in the 
enactment of sections 102 and 112, respectively, of the 
Pension Protection Act of 2006. 
SEC. 306. PHASE-IN OF FUNDING TARGET. 
(a) AMENDMENT TO ERISA.—Subparagraph (B) of 
section 303(c)(5) of the Employee Retirement Income Se-
curity Act of 1974 (as amended by this Act) is further 
amended— 
(1) by striking clause (iii) and redesignating 
clause (iv) as clause (iii); and 
(2) by striking clause (i) and inserting the fol-
lowing: 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (iii), in the case of plan 
years beginning after the applicable fund-
ing pre-effective date year (as defined in 
section 21(i)(1) of the Pension Protection 
Act Amendments of 2008) and before the 
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calendar year that is three years after the 
applicable funding effective date year (as 
defined in section 21(i)(2) of the Pension 
Protection Act Amendments of 2007), only 
the applicable percentage of the funding 
target shall be taken into account under 
paragraph (3)(A) in determining the fund-
ing shortfall for purposes of paragraph 
(3)(A) and subparagraph (A).’’. 
(b) CONFORMING AMENDMENT TO INTERNAL REV-
ENUE CODE.—Subparagraph (B) of section 430(c)(5) of 
the Internal Revenue Code of 1986 (as amended by this 
Act) is further amended— 
(1) by striking clause (iii) and redesignating 
clause (iv) as clause (iii); and 
(2) by striking clause (i) and inserting the fol-
lowing: 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (iii), in the case of plan 
years beginning after the applicable fund-
ing pre-effective date year (as defined in 
section 21(i)(1) of the Pension Protection 
Act Amendments of 2008) and before the 
calendar year that is three years after the 
applicable funding effective date year (as 
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defined in section 21(i)(2) of the Pension 
Protection Act Amendments of 2007), only 
the applicable percentage of the funding 
target shall be taken into account under 
paragraph (3)(A) in determining the fund-
ing shortfall for purposes of paragraph 
(3)(A) and subparagraph (A).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
subsections (a) and (b) shall apply as if included in the 
enactment of sections 102 and 112, respectively, of the 
Pension Protection Act of 2006. 
TITLE IV—SMALL EMPLOYER 
MODIFICATIONS 
SEC. 401. TREATMENT OF EMPLOYEES OF CERTAIN CO-
OPERATIVES AS AFFILIATED SERVICE GROUP 
EMPLOYEES. 
(a) IN GENERAL.—Section 210 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1060) 
is amended by adding at the end the following new sub-
section: 
‘‘(f) TREATMENT OF EMPLOYEES OF CERTAIN CO-
OPERATIVES AS AFFILIATED SERVICE GROUP EMPLOY-
EES.— 
‘‘(1) IN GENERAL.—For purposes of sections 
202, 203, and 204— 
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‘‘(A) all employees of all shareholders of a 
corporation which is an affiliated service group 
shall be treated as employed by such corpora-
tion as a single employer, and 
‘‘(B) a plan maintained by a corporation 
which is an affiliated service group shall be 
treated as a single-employer plan maintained by 
the corporation. 
‘‘(2) AFFILIATED SERVICE GROUP.—For pur-
poses of this subsection, the term ‘affiliated service 
group’ means a corporation if— 
‘‘(A) the corporation has at least 21 share-
holders and operates on a cooperative basis sub-
ject to the provisions of subchapter T of chap-
ter 1 of the Internal Revenue Code of 1986, 
‘‘(B) all shareholders of the corporation 
engage in business operations using the same 
four-digit North American Industrial Classifica-
tion System (NAIC) code root, and 
‘‘(C) the corporation assumes responsibility 
pursuant to a written agreement with each 
shareholder, with respect to all worksite em-
ployees providing services to such shareholder, 
for the provision of employee benefits.’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to plan years beginning on or after 
the date of the enactment of this Act. 
TITLE V—PROHIBITED 
TRANSACTIONS MODIFICATIONS 
SEC. 501. CLARIFICATION OF PARTIES IN INTEREST AF-
FECTED BY PROHIBITED TRANSACTION EX-
EMPTION FOR BLOCK TRADING. 
(a) AMENDMENT TO ERISA.—Section 408(b)(15)(A) 
of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1108(b)(15)(A)) is amended— 
(1) by striking ‘‘a party in interest (other than 
a fiduciary described in section 3(21)(A)) with re-
spect to a plan’’ and inserting ‘‘a party in interest 
(other than a fiduciary described in section 3(21)(A) 
who has investment discretion or provides invest-
ment advice with respect to the transaction)’’; and 
(2) in clause (i), by inserting ‘‘directed by a fi-
duciary described in section 3(21)(A)’’ after ‘‘block 
trade’’. 
(b) CONFORMING AMENDMENT
TO
THE CODE.— 
Paragraph (18) of section 4975(d) of the Internal Rev-
enue Code of 1986 (relating to exemptions from prohibited 
transactions) is amended— 
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(1) by striking ‘‘a party in interest (other than 
a fiduciary described in subsection (e)(3)(B))’’ and 
inserting ‘‘a disqualified person (other than a fidu-
ciary who has investment discretion or provides in-
vestment advice with respect to the transaction)’’; 
and 
(2) in subparagraph (A), by inserting ‘‘directed 
by a fiduciary described in subsection (e)(3)(B)’’ 
after ‘‘block trade’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply as if included in the enactment 
of section 601 of the Pension Protection Act of 2006. 
SEC. 502. CLARIFICATION OF SCOPE OF PROHIBITED 
TRANSACTION EXEMPTION FOR ELECTRONIC 
COMMUNICATION NETWORKS. 
(a) AMENDMENTS TO ERISA.—Section 408(b)(16) 
of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1108(b)) is amended— 
(1) in subparagraph (A), by inserting ‘‘ex-
change, automated quotation system,’’ after ‘‘elec-
tronic communication network,’’; 
(2) in subparagraph (D), by striking ‘‘if the 
party in interest has an ownership interest’’ and in-
serting ‘‘if the fiduciary directing the transaction 
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has an ownership interest of at least 10 percent by 
value’’; and 
(3) in subparagraph (E), by inserting after 
‘‘(E)’’ the following: ‘‘if the fiduciary directing the 
transaction has an ownership interest of at least 10 
percent by value in the system or venue described in 
subparagraph (A),’’. 
(b) CONFORMING AMENDMENTS TO CODE.—Para-
graph (19) of section 4975(d) of the Internal Revenue 
Code of 1986 (relating to exemptions from prohibited 
transactions) is amended— 
(1) in subparagraph (A), by inserting ‘‘ex-
change, automated quotation system,’’ after ‘‘elec-
tronic communication network,’’; 
(2) in subparagraph (D), by striking ‘‘if the 
party in interest has an ownership interest’’ and in-
serting ‘‘if the fiduciary directing the transaction 
has an ownership interest of at least 10 percent by 
value’’; and 
(3) in subparagraph (E), by inserting after 
‘‘(E)’’ the following: ‘‘if the fiduciary directing the 
transaction has an ownership interest of at least 10 
percent by value in the system or venue described in 
subparagraph (A),’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply as if included in the enactment 
of section 611 of the Pension Protection Act of 2006. 
SEC. 503. INCREASE IN MAXIMUM BOND AMOUNT FOR 
PLANS HOLDING EMPLOYER SECURITIES. 
(a) IN GENERAL.—Section 412(a) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 
1112(a)) is amended by striking the last sentence and in-
serting the following: ‘‘In any case in which a dedicated 
portfolio of plan assets is primarily invested in employer 
securities (within the meaning of section 407(d)(1)), if 
such employer securities have been contributed directly by 
the plan sponsor (or an affiliate (within the meaning of 
section 408(g)(11)(B)) of the plan sponsor) or the decision 
to purchase such employer securities has been made by 
an employee of the plan sponsor (or of such an affiliate 
of the plan sponsor), this subsection shall be applied in 
requiring each person who handles such plan assets to be 
bonded by substituting in this subsection ‘$1,000,000’ for 
‘$500,000’ each place it appears.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply as if included in the enactment 
of section 622 of the Pension Protection Act of 2006. 
Æ 
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