I
104TH CONGRESS
2D SESSION
H. R. 4162
To amend the Employee Retirement Income Security Act of 1974 to provide
continued participation under a defined benefit plan to employees who
are terminated from employment within seven years of attaining normal
retirement age under the plan.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 24, 1996
Mr. TORRICELLI introduced the following bill; which was referred to the
Committee on Economic and Educational Opportunities
A BILL
To amend the Employee Retirement Income Security Act
of 1974 to provide continued participation under a de-
fined benefit plan to employees who are terminated from
employment within seven years of attaining normal re-
tirement age under the plan.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Continued Participa-
tion Pension Act of 1996’’.
SEC. 2. CONTINUED PARTICIPATION IN DEFINED BENEFIT
PLANS.
Part 2 of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1051 et seq.) is amended by redes-
ignating section 211 as section 212 and by inserting after
section 210 (29 U.S.C. 1060) the following new section:
‘‘CONTINUED PARTICIPATION IN DEFINED BENEFIT
PLANS FOR CERTAIN INDIVIDUALS
‘‘SEC. 211. (a) IN GENERAL.—A defined benefit plan
shall provide, in accordance with this section, that each
qualified beneficiary who would lose eligibility to accrue
benefits under the plan as a result of a qualifying event,
may elect, within the election period, continued participa-
tion under the plan.
‘‘(b) CONTINUED PARTICIPATION.—For purposes of
this section, the term ‘continued participation’ means con-
tinued accrual of benefits by a qualified beneficiary in ac-
cordance with section 204(b)(1), if the following require-
ments are met:
‘‘(1) DETERMINATION OF SERVICE.—A partici-
pant shall be treated as having not incurred a break
in service with the employer or employers maintain-
ing the plan. The period of continued participation
shall be deemed to constitute service with the em-
ployer or employers maintaining the plan for the
purpose of determining the nonforfeitability of the
have reached) normal retirement age under the
plan.
‘‘(B) END OF PLAN.—The date on which
the employer ceases to provide any defined ben-
efit plan to any employee.
‘‘(C) FAILURE TO PAY CONTRIBUTION.—
The date on which benefits cease to accrue
under the plan by reason of a failure to make
timely payment of any contribution required
under the plan with respect to the qualified
beneficiary.
‘‘(4) CONTRIBUTION REQUIREMENTS.—
‘‘(A) IN GENERAL.—A qualified beneficiary
electing continued participation is liable to the
defined benefit plan for funding any obligation
of the plan to provide the benefits described in
paragraph (1). The plan shall allocate to quali-
fied beneficiaries the amount of applicable con-
tribution attributable to employer contributions
and mandatory employee contributions under
the plan, in the same manner that employer
contributions and mandatory employee con-
tributions are allocated to similarly situated
beneficiaries with respect to whom a qualifying
event has not occurred. The plan shall provide
for benefit accruals attributable to voluntary
employee contributions only to the extent such
benefit accruals attributable to such contribu-
tions were available to the participant prior to
the qualifying event. For purposes of computing
the beneficiary’s contributions, the participant
shall be deemed to have received compensation
during the period of continued participation, at
the rate in effect prior to the occurrence of the
qualifying event, as if the participant had con-
tinued in service under the plan at the rate of
1,000 hours of work during any 12-month pe-
riod.
‘‘(B) LIMITATION.—For any period of con-
tinued participation, the contribution made by
the qualified beneficiary—
‘‘(i) shall not exceed 102 percent of
the applicable contribution for such period,
and
‘‘(ii) may, at the election of the payor,
be made in monthly installments.
In no event may the plan require the payment
of any contribution before the day which is 45
days after the day on which the qualified bene-
ficiary made the initial election for continued
participation.
‘‘(c) ELECTION PERIOD.—
‘‘(1) IN GENERAL.—The election period—
‘‘(A) begins not later than the date on
which benefits accrual would, but for continued
participation in accordance with the section,
cease, and
‘‘(B) is of at least 90 days’ duration.
‘‘(2) EFFECT OF ELECTION ON OTHER BENE-
FICIARIES.—Except as otherwise specified in an elec-
tion, any election of continued participation by a
qualified beneficiary shall be deemed to include an
election of continued participation on behalf of any
other qualified beneficiary who would cease to be a
beneficiary under the plan by reason of the qualify-
ing event.
‘‘(d) EXCEPTION FOR CERTAIN PLANS.—Subsection
(a) shall not apply to any defined benefit plan for any cal-
endar year if all employers maintaining such plan nor-
mally employed fewer than 20 employees on a typical busi-
ness day during the preceding calendar year.
‘‘(e) DEFINITIONS.—For purposes of this section—
‘‘(1) APPLICABLE CONTRIBUTION.—The appli-
cable contribution for any period of continued par-
ticipation of qualified beneficiaries shall be equal to
the actuarial value of benefit accruals attributable to
the period of continued participation, as determined
under regulations of the Secretary.
‘‘(2) 
QUALIFIED
BENEFICIARY.—The 
term
‘qualified beneficiary’ means any beneficiary under
the plan on the day before the qualifying event, in-
cluding the participant in the case of a qualifying
event described in paragraph (3)(A).
‘‘(3) QUALIFYING EVENT.—The term ‘qualify-
ing event’ means any of the following events occur-
ring within seven years of attainment by the partici-
pant of normal retirement age, which, but for the
continued participation provided under this section,
would result in the cessation of benefit accruals of
a qualified beneficiary:
‘‘(A) The termination (other than by rea-
son of such employee’s gross misconduct), or
reduction of hours, of the participant’s employ-
ment.
‘‘(B) The death of the participant.’’.
SEC. 3. EFFECTIVE DATES.
(a) GENERAL RULE.—This Act shall apply to plan
years beginning on or after July 1, 1996.
(b) SPECIAL RULE FOR COLLECTIVE BARGAINING
AGREEMENTS.—In the case of a defined benefit plan
maintained pursuant to one or more collective bargaining
agreements between employee representatives and one or
more employers ratified before the date of the enactment
of this Act, this section shall not apply to plan years begin-
ning before the later of—
(1) the date on which the last of the collective
bargaining agreements relating to the plan termi-
nates (determined without regard to any extension
thereof agreed to after the date of the enactment of
this Act), or
(2) January 1, 2000.
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