† HR 3962 EAS 
‘‘(D) SPECIAL RULE FOR CERTAIN YEARS 
OF PLANS MAINTAINED BY CHARITIES.— 
‘‘(i) IN GENERAL.—For purposes of ap-
plying subparagraph (C) for plan years be-
ginning after August 31, 2009, and before 
September 1, 2011, the ratio determined 
under such subparagraph for the preceding 
plan year shall be the greater of— 
‘‘(I) such ratio, as determined 
without regard to this subparagraph, 
or 
‘‘(II) the ratio for such plan for 
the plan year beginning after August 
31, 2007, and before September 1, 
2008, as determined under rules pre-
scribed by the Secretary of the Treas-
ury. 
‘‘(ii) SPECIAL RULE.—In the case of a 
plan for which the valuation date is not the 
first day of the plan year— 
‘‘(I) clause (i) shall apply to plan 
years beginning after December 31, 
2008, and before January 1, 2011, and 
‘‘(II) clause (i)(II) shall apply 
based on the last plan year beginning
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before September 1, 2007, as deter-
mined under rules prescribed by the 
Secretary of the Treasury. 
‘‘(iii) LIMITATION
TO
CHARITIES.— 
This subparagraph shall not apply to any 
plan unless such plan is maintained exclu-
sively by one or more organizations de-
scribed in section 501(c)(3) of the Internal 
Revenue Code of 1986.’’. 
(b) AMENDMENT TO INTERNAL REVENUE CODE OF 
1986.—Paragraph (3) of section 430(f) of the Internal Rev-
enue Code of 1986 is amended by adding the following at 
the end thereof: 
‘‘(D) SPECIAL RULE FOR CERTAIN YEARS 
OF PLANS MAINTAINED BY CHARITIES.— 
‘‘(i) IN GENERAL.—For purposes of ap-
plying subparagraph (C) for plan years be-
ginning after August 31, 2009, and before 
September 1, 2011, the ratio determined 
under such subparagraph for the preceding 
plan year of a plan shall be the greater of— 
‘‘(I) such ratio, as determined 
without regard to this subsection, or 
‘‘(II) the ratio for such plan for 
the plan year beginning after August
† HR 3962 EAS 
31, 2007 and before September 1, 2008, 
as determined under rules prescribed 
by the Secretary. 
‘‘(ii) SPECIAL RULE.—In the case of a 
plan for which the valuation date is not the 
first day of the plan year— 
‘‘(I) clause (i) shall apply to plan 
years beginning after December 31, 
2007, and before January 1, 2010, and 
‘‘(II) clause (i)(II) shall apply 
based on the last plan year beginning 
before September 1, 2007, as deter-
mined under rules prescribed by the 
Secretary. 
‘‘(iii) LIMITATION
TO
CHARITIES.— 
This subparagraph shall not apply to any 
plan unless such plan is maintained exclu-
sively by one or more organizations de-
scribed in section 501(c)(3).’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall 
apply to plan years beginning after August 31, 2009. 
(2) SPECIAL RULE.—In the case of a plan for 
which the valuation date is not the first day of the
† HR 3962 EAS 
plan year, the amendments made by this section shall 
apply to plan years beginning after December 31, 
2008. 
Subtitle B—Multiemployer Plans 
SEC. 211. ADJUSTMENTS TO FUNDING STANDARD ACCOUNT 
RULES. 
(a) ADJUSTMENTS.— 
(1) AMENDMENT TO ERISA.—Section 304(b) of 
the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1084(b)) is amended by adding at 
the end the following new paragraph: 
‘‘(8) SPECIAL RELIEF RULES.—Notwithstanding 
any other provision of this subsection— 
‘‘(A) AMORTIZATION OF NET INVESTMENT 
LOSSES.— 
‘‘(i) IN
GENERAL.—A multiemployer 
plan with respect to which the solvency test 
under subparagraph (C) is met may treat 
the portion of any experience loss or gain 
attributable to net investment losses in-
curred in either or both of the first two plan 
years ending after August 31, 2008, as an 
item separate from other experience losses, 
to be amortized in equal annual install-
† HR 3962 EAS 
ments (until fully amortized) over the pe-
riod — 
‘‘(I) beginning with the plan year 
in which such portion is first recog-
nized in the actuarial value of assets, 
and 
‘‘(II) ending with the last plan 
year in the 30-plan year period begin-
ning with the plan year in which such 
net investment loss was incurred. 
‘‘(ii) COORDINATION
WITH
EXTEN-
SIONS.—If this subparagraph applies for 
any plan year— 
‘‘(I) no extension of the amortiza-
tion period under clause (i) shall be al-
lowed under subsection (d), and 
‘‘(II) if an extension was granted 
under subsection (d) for any plan year 
before the election to have this subpara-
graph apply to the plan year, such ex-
tension shall not result in such amorti-
zation period exceeding 30 years. 
‘‘(iii) NET INVESTMENT LOSSES.—For 
purposes of this subparagraph—
† HR 3962 EAS 
‘‘(I) IN
GENERAL.—Net invest-
ment losses shall be determined in the 
manner prescribed by the Secretary of 
the Treasury on the basis of the dif-
ference between actual and expected re-
turns (including any difference attrib-
utable to any criminally fraudulent in-
vestment arrangement). 
‘‘(II) CRIMINALLY
FRAUDULENT 
INVESTMENT ARRANGEMENTS.—The de-
termination as to whether an arrange-
ment is a criminally fraudulent invest-
ment arrangement shall be made under 
rules substantially similar to the rules 
prescribed by the Secretary of the 
Treasury for purposes of section 165 of 
the Internal Revenue Code of 1986. 
‘‘(B) EXPANDED SMOOTHING PERIOD.— 
‘‘(i) IN
GENERAL.—A multiemployer 
plan with respect to which the solvency test 
under subparagraph (C) is met may change 
its asset valuation method in a manner 
which— 
‘‘(I) spreads the difference between 
expected and actual returns for either
† HR 3962 EAS 
or both of the first 2 plan years ending 
after August 31, 2008, over a period of 
not more than 10 years, 
‘‘(II) provides that for either or 
both of the first 2 plan years beginning 
after August 31, 2008, the value of 
plan assets at any time shall not be 
less than 80 percent or greater than 
130 percent of the fair market value of 
such assets at such time, or 
‘‘(III) makes both changes de-
scribed in subclauses (I) and (II) to 
such method. 
‘‘(ii) ASSET VALUATION METHODS.—If 
this subparagraph applies for any plan 
year— 
‘‘(I) the Secretary of the Treasury 
shall not treat the asset valuation 
method of the plan as unreasonable 
solely because of the changes in such 
method described in clause (i), and 
‘‘(II) such changes shall be deemed 
approved by such Secretary under sec-
tion 302(d)(1) and section 412(d)(1) of 
such Code.
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‘‘(iii) AMORTIZATION
OF
REDUCTION 
IN UNFUNDED ACCRUED LIABILITY.—If this 
subparagraph and subparagraph (A) both 
apply for any plan year, the plan shall 
treat any reduction in unfunded accrued li-
ability resulting from the application of 
this subparagraph as a separate experience 
amortization base, to be amortized in equal 
annual installments (until fully amortized) 
over a period of 30 plan years rather than 
the period such liability would otherwise be 
amortized over. 
‘‘(C) SOLVENCY
TEST.—The solvency test 
under this paragraph is met only if the plan ac-
tuary certifies that the plan is projected to have 
sufficient assets to timely pay expected benefits 
and anticipated expenditures over the amortiza-
tion period, taking into account the changes in 
the funding standard account under this para-
graph. 
‘‘(D) 
RESTRICTION
ON
BENEFIT
IN-
CREASES.—If subparagraph (A) or (B) apply to 
a multiemployer plan for any plan year, then, 
in addition to any other applicable restrictions 
on benefit increases, a plan amendment increas-
† HR 3962 EAS 
ing benefits may not go into effect during either 
of the 2 plan years immediately following such 
plan year unless— 
‘‘(i) the plan actuary certifies that— 
‘‘(I) any such increase is paid for 
out of additional contributions not al-
located to the plan immediately before 
the application of this paragraph to 
the plan, and 
‘‘(II) the plan’s funded percentage 
and projected credit balances for such 2 
plan years are reasonably expected to 
be at least as high as such percentage 
and balances would have been if the 
benefit increase had not been adopted, 
or 
‘‘(ii) the amendment is required as a 
condition of qualification under part I of 
subchapter D of chapter 1 of the Internal 
Revenue Code of 1986 or to comply with 
other applicable law. 
‘‘(E) REPORTING.—A plan sponsor of a 
plan to which this paragraph applies shall—
† HR 3962 EAS 
‘‘(i) give notice of such application to 
participants and beneficiaries of the plan, 
and 
‘‘(ii) inform the Pension Benefit Guar-
anty Corporation of such application in 
such form and manner as the Director of 
the Pension Benefit Guaranty Corporation 
may prescribe.’’. 
(2) AMENDMENT TO INTERNAL REVENUE CODE 
OF 1986.—Section 431(b) is amended by adding at the 
end the following new paragraph: 
‘‘(8) SPECIAL RELIEF RULES.—Notwithstanding 
any other provision of this subsection— 
‘‘(A) AMORTIZATION OF NET INVESTMENT 
LOSSES.— 
‘‘(i) IN
GENERAL.—A multiemployer 
plan with respect to which the solvency test 
under subparagraph (C) is met may treat 
the portion of any experience loss or gain 
attributable to net investment losses in-
curred in either or both of the first two plan 
years ending after August 31, 2008, as an 
item separate from other experience losses, 
to be amortized in equal annual install-
† HR 3962 EAS 
ments (until fully amortized) over the pe-
riod — 
‘‘(I) beginning with the plan year 
in which such portion is first recog-
nized in the actuarial value of assets, 
and 
‘‘(II) ending with the last plan 
year in the 30-plan year period begin-
ning with the plan year in which such 
net investment loss was incurred. 
‘‘(ii) COORDINATION
WITH
EXTEN-
SIONS.—If this subparagraph applies for 
any plan year— 
‘‘(I) no extension of the amortiza-
tion period under clause (i) shall be al-
lowed under subsection (d), and 
‘‘(II) if an extension was granted 
under subsection (d) for any plan year 
before the election to have this subpara-
graph apply to the plan year, such ex-
tension shall not result in such amorti-
zation period exceeding 30 years. 
‘‘(iii) NET INVESTMENT LOSSES.—For 
purposes of this subparagraph—
† HR 3962 EAS 
‘‘(I) IN
GENERAL.—Net invest-
ment losses shall be determined in the 
manner prescribed by the Secretary on 
the basis of the difference between ac-
tual and expected returns (including 
any difference attributable to any 
criminally fraudulent investment ar-
rangement). 
‘‘(II) CRIMINALLY
FRAUDULENT 
INVESTMENT ARRANGEMENTS.—The de-
termination as to whether an arrange-
ment is a criminally fraudulent invest-
ment arrangement shall be made under 
rules substantially similar to the rules 
prescribed by the Secretary for pur-
poses of section 165. 
‘‘(B) EXPANDED SMOOTHING PERIOD.— 
‘‘(i) IN
GENERAL.—A multiemployer 
plan with respect to which the solvency test 
under subparagraph (C) is met may change 
its asset valuation method in a manner 
which— 
‘‘(I) spreads the difference between 
expected and actual returns for either 
or both of the first 2 plan years ending
† HR 3962 EAS 
after August 31, 2008, over a period of 
not more than 10 years, 
‘‘(II) provides that for either or 
both of the first 2 plan years beginning 
after August 31, 2008, the value of 
plan assets at any time shall not be 
less than 80 percent or greater than 
130 percent of the fair market value of 
such assets at such time, or 
‘‘(III) makes both changes de-
scribed in subclauses (I) and (II) to 
such method. 
‘‘(ii) ASSET VALUATION METHODS.—If 
this subparagraph applies for any plan 
year— 
‘‘(I) the Secretary shall not treat 
the asset valuation method of the plan 
as unreasonable solely because of the 
changes in such method described in 
clause (i), and 
‘‘(II) such changes shall be deemed 
approved by the Secretary under sec-
tion 302(d)(1) of the Employee Retire-
ment Income Security Act of 1974 and 
section 412(d)(1).
† HR 3962 EAS 
‘‘(iii) AMORTIZATION
OF
REDUCTION 
IN UNFUNDED ACCRUED LIABILITY.—If this 
subparagraph and subparagraph (A) both 
apply for any plan year, the plan shall 
treat any reduction in unfunded accrued li-
ability resulting from the application of 
this subparagraph as a separate experience 
amortization base, to be amortized in equal 
annual installments (until fully amortized) 
over a period of 30 plan years rather than 
the period such liability would otherwise be 
amortized over. 
‘‘(C) SOLVENCY
TEST.—The solvency test 
under this paragraph is met only if the plan ac-
tuary certifies that the plan is projected to have 
sufficient assets to timely pay expected benefits 
and anticipated expenditures over the amortiza-
tion period, taking into account the changes in 
the funding standard account under this para-
graph. 
‘‘(D) 
RESTRICTION
ON
BENEFIT
IN-
CREASES.—If subparagraph (A) or (B) apply to 
a multiemployer plan for any plan year, then, 
in addition to any other applicable restrictions 
on benefit increases, a plan amendment increas-
† HR 3962 EAS 
ing benefits may not go into effect during either 
of the 2 plan years immediately following such 
plan year unless— 
‘‘(i) the plan actuary certifies that— 
‘‘(I) any such increase is paid for 
out of additional contributions not al-
located to the plan immediately before 
the application of this paragraph to 
the plan, and 
‘‘(II) the plan’s funded percentage 
and projected credit balances for such 2 
plan years are reasonably expected to 
be at least as high as such percentage 
and balances would have been if the 
benefit increase had not been adopted, 
or 
‘‘(ii) the amendment is required as a 
condition of qualification under part I of 
subchapter D or to comply with other appli-
cable law. 
‘‘(E) REPORTING.—A plan sponsor of a 
plan to which this paragraph applies shall— 
‘‘(i) give notice of such application to 
participants and beneficiaries of the plan, 
and
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‘‘(ii) inform the Pension Benefit Guar-
anty Corporation of such application in 
such form and manner as the Director of 
the Pension Benefit Guaranty Corporation 
may prescribe.’’. 
(b) EFFECTIVE DATES.— 
(1) IN
GENERAL.—The amendments made by 
this section shall take effect as of the first day of the 
first plan year ending after August 31, 2008, except 
that any election a plan makes pursuant to this sec-
tion that affects the plan’s funding standard account 
for the first plan year beginning after August 31, 
2008, shall be disregarded for purposes of applying 
the provisions of section 305 of the Employee Retire-
ment Income Security Act of 1974 and section 432 of 
the Internal Revenue Code of 1986 to such plan year. 
(2) RESTRICTIONS
ON
BENEFIT
INCREASES.— 
Notwithstanding paragraph (1), the restrictions on 
plan amendments increasing benefits in sections 
304(b)(8)(D) of such Act and 431(b)(8)(D) of such 
Code, as added by this section, shall take effect on the 
date of enactment of this Act.
† HR 3962 EAS 
TITLE III—BUDGETARY 
PROVISIONS 
SEC. 301. BUDGETARY PROVISIONS. 
The budgetary effects of this Act, for the purpose of 
complying with the Statutory Pay-As-You-Go-Act of 2010, 
shall be determined by reference to the latest statement titled 
‘‘Budgetary Effects of PAYGO Legislation’’ for this Act, 
submitted for printing in the Congressional Record by the 
Chairman of the Senate Budget Committee, provided that 
such statement has been submitted prior to the vote on pas-
sage. 
Amend the title so as to read: ‘‘An Act to provide 
a physician payment update, to provide pension funding 
relief, and for other purposes.’’. 
Attest: 
Secretary.