I
103D CONGRESS
2D SESSION
H. R. 3396
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
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 1993’’.
(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. Recognition of Already 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. Recognition of Already 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 Bank-
ruptcy.
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 to Maximum Guarantee of Disability Benefits.
TITLE IV—MISCELLANEOUS AMENDMENTS
Sec. 401. ERISA Citation.
Sec. 402 Definition of Contributing Sponsor.
Sec. 403. Recovery Ratio under ERISA Section 4022(c).
Sec. 404. Distress Termination Criteria for Banking Institutions.
Sec. 405. Single Sum Distributions.
Sec. 406. Adjustments to Lien for Missed Minimum Funding Contributions.
Sec. 407. Rounding Rules for Cost of Living Adjustments.
Sec. 408. Limitation on Cross-Testing in Defined Contribution Plans.
Sec. 409. Funding of Restored Plans.
TITLE V—EFFECTIVE DATES
Sec. 501. Effective Dates.
TITLE I—PENSION PLAN
FUNDING
Subtitle A—Amendments to the
Internal Revenue Code of 1986
SEC. 101. MINIMUM FUNDING REQUIREMENTS.
(a) AMENDMENTS
TO ADDITIONAL FUNDING RE-
QUIREMENTS FOR SINGLE-EMPLOYER PLANS.—
(1) RELATIONSHIP
OF
ADDITIONAL
FUNDING
REQUIREMENT
TO
FUNDING
STANDARD
ACCOUNT
CHARGES AND CREDITS.—
(A) Clause (ii) of section 412(l)(1)(A) of
the Internal Revenue Code of 1986 is amended
to read as follows:
‘‘(ii) the sum of the charges for such
plan years under subsection (b)(2), re-
duced by the sum of the credits for such
plan year under subparagraph (B) of sub-
section (b)(3), and’’.
(B) The last sentence in section 412(l)(1)
is amended to read as follows: ‘‘Such increase
shall not exceed the amount necessary to in-
crease the funded current liability percentage
(taking into account the expected increase in
current liability due to benefits accruing during
the plan year) to 100 percent, reduced by the
amount described in clause (ii) of paragraph
(A).’’
(2) AMENDMENT TO DEFICIT REDUCTION CON-
TRIBUTION.—Paragraph (2) of section 412(l) of the
Code is amended—
(A) by striking the period and inserting ‘‘,
and’’ at the end of subparagraph (B); and
(B) by adding at the end thereof a new
subparagraph (C) to read as follows:
‘‘(C) the expected increase in current li-
ability due to benefits accruing during the plan
year.’’
(3) INCREASE IN CURRENT LIABILITY DUE TO
CHANGE IN REQUIRED ASSUMPTIONS.—
(A) Paragraph (3) of section 412(l) of the
Code is amended by adding at the end thereof
a new subparagraph to read as follows:
‘‘(D) 
SPECIAL
RULE
FOR
REQUIRED
CHANGES IN ACTUARIAL ASSUMPTIONS.—
‘‘(i) 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 un-
funded old liability under the plan, deter-
mined under clause (ii), in equal annual in-
stallments over a period of 12 plan years
(beginning with the first plan year begin-
ning after December 31, 1994).
‘‘(ii) 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 assump-
tions required in paragraph (7)(C) of
this subsection as in effect for plan
years beginning after December 31,
1994, exceeds
‘‘(II) the current liability of the
plan as of the beginning of the first
plan year beginning after December
31, 1994, valued using the prior inter-
est rate and using such mortality as-
sumptions as were used to determine
current liability for the first plan year
beginning after December 31, 1992.
‘‘(iii) 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 paragraph (5) of
subsection (b) for the first plan year begin-
ning after December 31, 1994 as the rate
of interest that was used by the plan to de-
termine current liability for the first plan
year beginning after December 31, 1992
was of the weighted average under such
paragraph (5) of subsection (b) for such
first plan year beginning after December
31, 1992. With the exception of assump-
tions concerning the rate of interest and
mortality, the assumptions used for deter-
mining current liability under subclause (I)
of clause (ii) shall also be used to deter-
mine current liability under subclause (II)
of clause (ii).’’
(4) APPLICABLE PERCENTAGE FOR DETERMIN-
ING UNFUNDED NEW LIABILITY AMOUNT.—Clause
(ii) of section 412(l)(4)(C) of the Code is amended
by replacing ‘‘35’’ with ‘‘60’’.
(5) 
UNPREDICTABLE
CONTINGENT
EVENT
AMOUNT.—
(A) Paragraph (5)(A) of section 412(l) of
the Code is amended—
(i) by inserting ‘‘greatest of’’ for
‘‘greater 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 a new clause (iii) to
read as follows:
‘‘(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 the
Code is amended by adding a new subpara-
graph (E) to read as follows:
‘‘(E) LIMITATION.—The present value of
the amounts described in subparagraph (A)
with respect to any one event shall not exceed
the unpredictable contingent event benefit li-
abilities attributable to that event.’’
reduced by the amount determined under
paragraph (1)(A)(ii).
‘‘(B)(i) Except as provided in clause (iii),
for plans with an initial funded current liability
percentage that is equal to or less than 75 per-
cent, the applicable number of percentage
points for the applicable plan year is:
‘‘In the case of applicable
plan years beginning in:
The applicable number of per-
cent point is:
1995 ...............................................
1996 ...............................................
1997 ...............................................
1998 ...............................................
1999 ...............................................
2000 ...............................................
2001 ...............................................
24.
‘‘(ii) For plans with an initial funded cur-
rent liability percentage that is equal to or
greater than 85 percent, the applicable number
of percentage points for the applicable plan
year is:
‘‘In the case of applicable
plan years beginning in:
The applicable number of per-
centage points is:
1995 ...............................................
1996 ...............................................
1997 ...............................................
1998 ...............................................
1999 ...............................................
2000 ...............................................
2001 ...............................................
15.
‘‘(iii) For plans with an initial funded cur-
rent liability percentage that is greater than 75
percent but less than 85 percent, or for plans
with an initial funded current liability percent-
age equal to or less than 75 percent for which,
as of a later applicable plan year, the sum of
the initial funded current liability percentage
and the applicable number of percentage points
attributable to the previous applicable plan year
exceed 75 percent, the applicable number of
percentage points for any such applicable plan
year is the sum of—
‘‘(I) 2 percentage points;
‘‘(II) the applicable number of per-
centage points attributable to the previous
applicable plan year (except that such
number for the applicable plan year begin-
ning in 1995 is zero);
‘‘(III) the product of .10 multiplied by
the excess, if any, of (a) 85 percentage
over (b) the sum of the initial funded cur-
rent liability percentage and the number
under subclause (II);
‘‘(IV) for applicable plan years begin-
ning in 2000, 1 percentage point; and
‘‘(V) for applicable plan years begin-
ning in 2001, 2 percentage points.
‘‘(D) DEFINITIONS.—For purposes of this
paragraph:
‘‘(i) ‘Applicable plan year’ means a
plan year beginning after December 31,
1994, and before January 1, 2002.
‘‘(ii) ‘Initial funded current liability
percentage’ means the funded current li-
ability percentage as of the first day of the
first plan year beginning after December
31, 1994.’’
(8) THREE-YEAR SOLVENCY REQUIREMENT.—
(A) Section 412(m) of such Code is
amended by adding at the end thereof a new
paragraph (6) to read as follows:
‘‘(6) THREE-YEAR SOLVENCY REQUIREMENT.—
‘‘(A) IN
GENERAL.—This paragraph ap-
plies to a defined benefit plan that—
‘‘(i) is required to make quarterly con-
tributions under this subsection for a plan
year, and
‘‘(ii) has liquid assets as of the last
day of the last month preceding the quar-
terly installment date that are less than
the base amount for the quarter.
‘‘(B) AMOUNT OF QUARTERLY CONTRIBU-
TION.—The amount of the required installment
that is due for any quarter under this sub-
section is the greater of the amount under this
subsection (without regard to this paragraph)
or the quarterly solvency payment. Such
amount, when added to prior installments for
the plan year, shall not exceed the amount nec-
essary to increase the funded currently liability
percentage (taking into account the expected in-
crease in current liability due to benefits accru-
ing during the plan year) to 100 percent.
‘‘(C) DEFINITIONS.—For purposes of this
paragraph:
‘‘(i) BASE
AMOUNT.—‘Base amount’
means an amount that is the product of
three multiplied by the sum of the adjusted
disbursements from the plan for the 12
months ending on the last day of the last
month preceding the quarterly installment
due date. If the amount computed under
the previous sentence exceeds the product
of two multiplied by the sum of adjusted
disbursements for the 36 months ending
on the last day of the last month preceding
the quarterly installment due date, and an
enrolled actuary certifies to the Secretary
that the excess is the result of non-
recurring circumstances, the base amount
shall exclude amounts related to those non-
recurring circumstances.
‘‘(ii) DISBURSEMENTS
FROM
THE
PLAN.—The term ‘disbursements from the
plan’ means all disbursements from the
trust, including purchases of annuities,
payment of single sums and the benefit
payments, and administrative expenses.
‘‘(iii) ADJUSTED
DISBURSEMENTS.—
‘Adjusted 
disbursements’ 
means 
the
amount of disbursements reduced by the
product of the plan’s funded current liabil-
ity percentage (as defined in subsection
(1)(8)(B)) for the plan year multiplied by
the sum of annuity purchases, single sum
distributions, and such other disburse-
ments as the Secretary shall provide in
regulations.
‘‘(iv) LIQUID ASSETS.—‘Liquid assets’
means cash, marketable securities and
such other assets as specified by the Sec-
retary.
‘‘(v) QUARTERLY
SOLVENCY
PAY-
MENT.—‘Quarterly 
solvency 
payment’
means an amount of liquid assets equal to
the difference between the plan’s liquid as-
sets and the base amount, as of the last
day of a quarter.
‘‘(D) EFFECT
OF
SOLVENCY
CONTRIBU-
TION.—
‘‘(i) A quarterly solvency payment
shall be treated in the same manner as a
quarterly required installment, except that
paragraph (2)(C) shall be applied by ap-
plying contributions to the latest outstand-
ing quarterly solvency payment. For pur-
poses of paragraph (2)(B), a quarterly sol-
vency payment that is not paid timely shall
not be considered paid until the earlier of
the last day of a later quarter for which ei-
ther (I) the plan does not have a quarterly
solvency payment required, or (II) the sol-
vency payment for such later quarter is
paid timely.
‘‘(ii) The Secretary shall provide such
rules as are necessary to avoid duplication
or omission of any factors in the deter-
mination and application of this require-
ment.’’
(B) EXCISE TAX ON UNPAID QUARTERLY
SOLVENCY PAYMENTS.—
(i) Subsection (e) of section 4971 of
the Code is amended by striking ‘‘(a) or
(b)’’ wherever it appears and replacing it
with ‘‘(a), (b) or (f)’’.
(ii) Section 4971 of the Code is
amended by redesignating subsection (f) as
subsection (g) and adding a new subsection
(f) to read as follows:
‘‘(f)(1) For each quarter of the plan year of a plan
to which section 412 applies, there is imposed a tax of
10 percent of the amount of any outstanding quarterly
solvency payments, as described in section 412(m)(6). A
quarterly solvency payment shall no longer be considered
outstanding on the earlier of the last day of a later quarter
for which either (A) the plan does not have a quarterly
solvency payment required, or (B) the solvency payment
for such later quarter is paid timely.
‘‘(2) If by the end of the fourth quarter following the
quarter for which a quarterly solvency payment was due,
either the plan has a quarterly solvency payment due, or
the solvency payment for such later quarter was not paid
timely, (A) there is hereby imposed a tax equal to 100
percent of the unpaid solvency payment for such earlier
quarter, and (B) the quarterly solvency payment for such
earlier quarter shall no longer be considered outstanding.’’
(C) OUTSTANDING QUARTERLY SOLVENCY
PAYMENTS.—Section 401(a) of such Code is
amended by adding a new paragraph (32) at
the end thereof to read as follows:
‘‘(32) OUTSTANDING
QUARTERLY
SOLVENCY
PAYMENTS.—A trust forming part of a pension plan
shall not be treated as failing to constitute a quali-
fied trust under this section merely because the pen-
sion plan of which such trust is a part ceases to
make prohibited payments during a period in which
a quarterly solvency payment, as defined in section
412(m)(6), is outstanding. A prohibited payment is
any payment, in excess of the monthly amount paid
under a single life annuity (plus any social security
supplements, 
within 
the 
meaning 
of 
section
411(a)(9)), to a participant or beneficiary whose an-
nuity starting date, as defined in section 417(f)(2),
occurs during the period in which there are out-
standing quarterly solvency payments, any purchase
during such period of an irrevocable commitment
from an insurer to pay benefits, and such other pay-
ments as provided by the Secretary. For purposes of
this subsection, a quarterly solvency payment shall
no longer be considered outstanding on the earlier of
the last day of a later quarter for which either (A)
the plan does not have a quarterly solvency payment
required, or (B) the solvency payment for such later
quarter is paid timely.’’
(9) AMENDMENT TO FULL FUNDING DEFINI-
TION.—
(A) 
Subclause 
(I) 
of 
subsection
412(c)(7)(A)(i) is amended by inserting ‘‘(in-
cluding the expected increase in current liability
due to benefits accruing during the plan year)’’
after ‘‘current liability’’.
(B) Section 412(c)(7) is further amended
by inserting in flush language after subpara-
graph (A), a sentence to read as follows: ‘‘In
any plan year in which a plan has unfunded
current liability under subsection (l)(8), the
amount in this subparagraph (A) shall not be
less than such unfunded current liability.’’
(C) 
Subparagraph 
(B) 
of 
subsection
412(c)(7) is amended to read as follows:
‘‘(B) CURRENT LIABILITY.—For purposes
of subparagraph (D) and subclause (I) of sub-
paragraph (A)(i), the term ‘current liability’
has the meaning given such term by subsection
(l)(7) (without regard to the interest rate and
mortality assumptions required therein, and
without regard to subparagraph (D) thereof).’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall be effective for plan years beginning after
December 31, 1994.
SEC. 102. LIMITATION ON CHANGES IN CURRENT LIABILITY
ASSUMPTIONS.
(a) Section 412(c) is amended by redesignating para-
graph (5) as subparagraph (5)(A), and by adding a new
subparagraph (5)(B) to read as follows:
‘‘(B)(i) CHANGE
IN
ASSUMPTIONS
RE-
QUIRES
APPROVAL.—If the actuarial assump-
tions (other than the assumptions described in
subsection (l)(7)(C)) used to determine the cur-
rent liability for a plan are changed, the new
actuarial assumptions shall become the actuar-
ial assumptions used to determine current li-
ability for the plan only if the change is ap-
proved by the Secretary.
‘‘(ii) Clause (i) shall not apply unless—
‘‘(I) the plan is subject to the require-
ments of subsection (l);
‘‘(II) the requirements of section
4043(b)(1) of the Employee Retirement
Income Security Act of 1974 are met; and
‘‘(III) the change in assumptions (de-
termined after taking into account any
changes in interest rate and mortality
table) results in a decrease in the un-
funded 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 cur-
rent liability of the plan before such
change.’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall be effective with respect to assumption
changes in plan years beginning after October 28, 1993.
Assumption changes made in plan years beginning after
December 31, 1992 that would have required approval
under this amended section had it been in effect at the
time of such changes, shall not be effective for plan years
beginning after December 31, 1994 unless approved by
the Secretary.
SEC. 
103. 
RECOGNITION 
OF 
ALREADY 
BARGAINED
CHANGES IN LIABILITY.
(a) Section 412(c) is amended by adding a new para-
graph (12) at the end thereof to read as follows:
‘‘(12) 
PLAN
LIABILITIES
ARISING
FROM
AMENDMENTS EFFECTIVE IN THE FUTURE.—A col-
lectively bargained plan described in section 413(a)
shall anticipate benefit increases scheduled to take
effect during the term of the collective bargaining
agreement applicable to the plan at the same time
and in the same manner as if the plan amendment
implementing the provision of the collective bargain-
ing agreement were adopted by the parties when the
parties entered into the collective bargaining agree-
ment.’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall be effective for 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) Section 412(m) of the Internal Revenue Code of
1986, as amended by section 101 of this Act, is further
amended by adding at the end thereof a new paragraph
(7) to read as follows:
‘‘(7) APPLICABILITY
OF
THIS
SUBSECTION.—
This subsection applies only with respect to a plan
year for which the funded current liability percent-
age of such plan (within the meaning of subsection
(l)(8)(B)) for the preceding plan year is less than
100 percent.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall be effective for plan years beginning after
the date of enactment of this Act.
SEC. 105. EXCEPTIONS TO EXCISE TAX ON NONDEDUCTIBLE
CONTRIBUTIONS.
(a) Section 4972(c) of the Internal Revenue Code of
1986 is amended by adding a new paragraph (6) to read
as follows:
‘‘(6) EXCEPTIONS.—In determining the amount
of nondeductible contributions for any taxable year,
there shall not be taken into account—
‘‘(A) Any contributions that would be de-
ductible under section 404(a)(1)(D) if the plan
had more than 100 participants provided that
(i) the plan is covered under section 4021 of
the Employee Retirement Income Security Act
of 1974, and (ii) the plan is terminated under
section 4041(a)(2) of such Act during the plan
year ending with or within the taxable year or
during a previous plan year.
‘‘(B) Any contributions described in sec-
tion 401(m)(4)(A) or 402(g)(3)(A) that do not
exceed 6 percent of compensation, as defined in
section 404(a)(7)(A)(i), that are not deductible
merely because of section 404(a)(7). For pur-
poses of the preceding sentence, the deductible
limits under section 404(a)(7) shall first be ap-
plied to amounts contributed to a defined bene-
fit plan and then to amounts described in the
preceding sentence. This subparagraph shall
apply only if the defined benefit plan is a plan
with more than 100 participants, as described
in section 404(a)(1)(D).’’
(b) Section 4972(c)(6)(A) as added by this section
shall be effective for taxable years ending on or after the
date of enactment of this Act. Section 4972(c)(6)(B) as
added by this section shall apply for taxable years ending
on or after December 31, 1992.
Subtitle B—Amendments to the
Employee 
Retirement 
Income
Security Act of 1974
SEC. 121. MINIMUM FUNDING REQUIREMENTS.
(a) AMENDMENTS
TO ADDITIONAL FUNDING RE-
QUIREMENTS FOR SINGLE-EMPLOYER PLANS.—
(1) RELATIONSHIP
OF
ADDITIONAL
FUNDING
REQUIREMENT
TO
FUNDING
STANDARD
ACCOUNT
CHARGES AND CREDITS.—
(A) Clause (ii) of section 302(d)(1)(A) of
the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1082(d)) is amended to
read as follows:
‘‘(ii) the sum of the charges for such
plan years under subsection (b)(2), re-
duced by the sum of the credits for such
plan year under subparagraph (B) of sub-
section (b)(3), and’’.
(B) The last sentence in section 302(d)(1)
is amended to read as follows: ‘‘Such increase
shall not exceed the amount necessary to in-
crease the funded current liability percentage
(taking into account the expected increase in
current liability due to benefits accruing during
the plan year) to 100 percent, reduced by the
amount described in clause (ii) of paragraph
(A).’’
(2) AMENDMENT TO DEFICIT REDUCTION CON-
TRIBUTION.—Paragraph (2) of section 302(d) of
such Act is amended—
(A) by striking the period and inserting ‘‘,
and’’ at the end of subparagraph (B); and
(B) by adding at the end thereof a new
subparagraph (C) to read as follows:
‘‘(C) the expected increase in current li-
ability due to benefits accruing during the plan
year.’’
(3) 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
thereof a new subparagraph to read as follows:
‘‘(D) 
SPECIAL
RULE
FOR
REQUIRED
CHANGES IN ACTUARIAL ASSUMPTIONS.—
‘‘(i) 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 un-
funded old liability under the plan, deter-
mined under clause (ii), in equal annual in-
stallments over a period of 12 plan years
(beginning with the first plan year begin-
ning after December 31, 1994).
‘‘(ii) 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 assump-
tions required in paragraph (7)(C) of
this subsection as in effect for plan
years beginning after December 31,
1994, exceeds
‘‘(II) the current liability of the
plan as of the beginning of the first
plan year beginning after December
31, 1994, valued using the prior inter-
est rate and using such mortality as-
sumptions as were used to determine
current liability for the first plan year
beginning after December 31, 1992.
‘‘(iii) 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 paragraph (5) of
subsection (b) for the first plan year begin-
ning after December 31, 1994 as the rate
of interest that was used by the plan to de-
termine current liability for the first plan
year beginning after December 31, 1992
was of the weighted average under such
paragraph (5) of subsection (b) for such
first plan year beginning after December
31, 1992. With the exception of assump-
tions concerning the rate of interest and
mortality, the assumptions used for deter-
mining current liability under subclause (I)
of clause (ii) shall also be used to deter-
mine current liability under subclause (II)
of clause (ii).’’
(4) APPLICABLE PERCENTAGE FOR DETERMIN-
ING UNFUNDED NEW LIABILITY AMOUNT.—Clause
(ii) of section 302(d)(4)(C) of such Act is amended
by replacing ‘‘35’’ with ‘‘60’’.
(5) 
UNPREDICTABLE
CONTINGENT
EVENT
AMOUNT.—
(A) Paragraph (5)(A) of section 302(d) of
such Act is amended—
(i) by inserting ‘‘greatest of’’ for
‘‘greater 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 a new clause (iii) to
read as follows:
‘‘(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 a new subpara-
graph (E) to read as follows:
‘‘(E) LIMITATION.—The present value of
the amounts described in subparagraph (A)
with respect to any one event shall not exceed
the unpredictable contingent event benefit li-
abilities attributable to that event.’’
(6) REQUIRED INTEREST RATE AND MORTALITY
ASSUMPTIONS FOR DETERMINING CURRENT LIABIL-
ITY.—Paragraph (7)(C) of section 302(d) 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
subsection (b)(5), except the permissible
range under subparagraph (B)(ii) of such
subsection (b)(5) shall not exceed 100 per-
cent 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 prevailing commissioners’
standard 
table 
(described 
in 
section
807(d)(5)(A) of the Internal Revenue Code
of 1986) that would be used to determine
reserves for group annuity contracts issued
on the date as of which current liability is
determined (without regard to any other
subparagraph of section 807(d)(5) of the
Internal Revenue Code of 1986).’’
(7) TRANSITION RULE.—Section 302(d) of such
Act is amended by adding at the end thereof a new
paragraph (9) to read as follows:
‘‘(9) ADDITIONAL LIMITATIONS.—
‘‘(A) For any applicable plan year, at the
election of the employer (in such manner as is
prescribed by the Secretary of the Treasury),
the increase under paragraph (1) shall not ex-
ceed the greater of—
‘‘(i) the increase that would have been
required under the provisions of such para-
graph (1) as in effect for plan years begin-
ning before January 1, 1995 if such provi-
sions had remained in effect for the appli-
cable plan year, or
‘‘(ii) the amount necessary to increase
the funded current liability percentage
(taking into account the expected increase
in current liability due to benefits accruing
during the plan year) for the applicable
plan year to a funded current liability per-
centage equal to the sum of the initial
funded current liability percentage of the
plan plus the applicable number of percent-
age points for such applicable plan year,
reduced by the amount determined under
paragraph (1)(A)(ii).
‘‘(B)(i) Except as provided in clause (iii),
for plans with an initial funded current liability
percentage that is equal to or less than 75 per-
cent, the applicable number of percentage
points for the applicable plan year is:
‘‘In the case of applicable
plan years beginning in:
The applicable number of per-
centage points is:
1995 ...............................................
1996 ...............................................
1997 ...............................................
1998 ...............................................
1999 ...............................................
2000 ...............................................
2001 ...............................................
24.
‘‘(ii) For plans with an initial funded cur-
rent liability percentage that is equal to or
greater than 85 percent, the applicable number
of percentage points for the applicable plan
year is:
‘‘In the case of applicable
plan years beginning in:
The applicable number of per-
centage points is:
1995 ...............................................
1996 ...............................................
1997 ...............................................
1998 ...............................................
1999 ...............................................
2000 ...............................................
2001 ...............................................
15.
‘‘(iii) For plans with an initial funded cur-
rent liability percentage that is greater than 75
percent but less than 85 percent, or for plans
with an initial funded current liability percent-
age equal to or less than 75 percent for which,
as of a later applicable plan year, the sum of
the initial funded current liability percentage
and the applicable number of percentage points
attributable to the previous applicable plan year
exceed 75 percent, the applicable number of
percentage points for any such applicable plan
year is the sum of:
‘‘(I) 2 percentage points;
‘‘(II) the applicable number of per-
centage points attributable to the previous
applicable plan year (except that such
number for the applicable plan year begin-
ning in 1995 is zero);
‘‘(III) the product of .10 multiplied by
the excess, if any, of (a) 85 percent over
(b) the sum of the initial funded current li-
ability percentage and the number under
subclause (II);
‘‘(IV) for applicable plan years begin-
ning in 2000, 1 percentage point; and
‘‘(V) for applicable plan years begin-
ning in 2001, 2 percentage points.
‘‘(D) DEFINITIONS.—For purposes of this
paragraph:
‘‘(i) ‘Applicable plan year’ means a
plan year beginning after December 31,
1994, and before January 1, 2002.
‘‘(ii) ‘Initial funded current liability
percentage’ means the funded current li-
ability percentage as of the first day of the
first plan year beginning after December
31, 1994.’’
(8) THREE-YEAR SOLVENCY REQUIREMENT.—
(A) Section 302(e) of such Act is amended
by adding at the end thereof a new paragraph
(6) to read as follows:
‘‘(6) THREE-YEAR SOLVENCY REQUIREMENT.—
‘‘(A) IN
GENERAL.—This paragraph ap-
plies to a defined benefit plan that—
‘‘(i) is required to make quarterly con-
tributions under this subsection for a plan
year, and
‘‘(ii) has liquid assets as of the last
day of the last month preceding the quar-
terly installment date that are less than
the base amount for the quarter.
‘‘(B) AMOUNT OF QUARTERLY CONTRIBU-
TION.—The amount of the required installment
that is due for any quarter under this sub-
section is the greater of the amount under this
subsection (without regard to this paragraph)
or the quarterly solvency payment. Such
amount, when added to prior installments for
the plan year, shall not exceed the amount nec-
essary 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.
‘‘(C) DEFINITIONS.—For purposes of this
paragraph:
‘‘(i) BASE
AMOUNT.—‘Base amount’
means an amount that is the product of
three multiplied by the sum of the adjusted
disbursements from the plan for the 12
months ending on the last day of the last
month preceding the quarterly installment
due date. If the amount computed under
the previous sentence exceeds the product
of two multiplied by the sum of adjusted
disbursements for the 36 months ending
on the last day of the last month preceding
the quarterly installment due date, and an
enrolled actuary certifies to the Secretary
of the Treasury that the excess is the re-
sult of nonrecurring circumstances, the
base amount shall exclude amounts related
to those nonrecurring circumstances.
‘‘(ii) DISBURSEMENTS
FROM
THE
PLAN.—The term ‘disbursements from the
plan’ means all disbursements from the
trust, including purchases of annuities,
payment of single sums and other benefit
payments, and administrative expenses.
‘‘(iii) ADJUSTED
DISBURSEMENTS.—
‘Adjusted 
disbursements’ 
means 
the
amount of disbursements reduced by the
product of the plan’s funded current liabil-
ity percentage (as defined in subsection
(d)(8)(B)) for the plan year multiplied by
the sum of annuity purchases, single sum
distributions, and such other disburse-
ments as the Secretary of the Treasury
shall provide in regulations.
‘‘(iv) LIQUID ASSETS.—‘Liquid assets’
means cash, marketable securities and
such other assets as specified by the Sec-
retary of the Treasury.
‘‘(v) QUARTERLY
SOLVENCY
PAY-
MENT.—‘Quarterly 
solvency 
payment’
means an amount of liquid assets equal to
the difference between the plan’s liquid as-
sets and the base amount, as of the last
day of a quarter.
‘‘(D) EFFECT
OF
SOLVENCY
CONTRIBU-
TION.—
‘‘(i) A quarterly solvency payment
shall be treated in the same manner as a
quarterly required installment, except that
paragraph (2)(C) shall be applied by ap-
plying contributions to the latest outstand-
ing quarterly solvency payment. For pur-
poses of paragraph (2)(B), a quarterly sol-
vency payment that is not paid timely shall
not be considered paid until the earlier of
the last day of a later quarter for which (I)
the plan does not have a quarterly solvency
payment required, or (II) the solvency pay-
ment for such later quarter is paid timely.
‘‘(ii) The Secretary of the Treasury
shall provide such rules as are necessary to
avoid duplication or omission of any fac-
tors in the determination and application
of this requirement.’’
(B) 
LIMITATION
ON
DISTRIBUTIONS
OTHER THAN LIFE ANNUITIES PAID BY THE
PLAN.—
(i) Section 204 of the Employee Re-
tirement 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) Notwithstanding any other provi-
sion of this Part, the fiduciary of a pension
plan that is subject to the additional fund-
ing requirements of section 302(d) shall
not permit a prohibited payment to be
made from a plan during a period in which
a quarterly solvency payment, as defined in
section 302(e)(6), is outstanding. A pro-
hibited payment is any payment, in excess
of the monthly amount paid under a single
life annunity (plus any social security sup-
plements, within the meaning of section
204(b)(1)(G)), to a participant or bene-
ficiary whose annuity starting date, as de-
fined in section 205(h)(2), occurs during
the period in which there are outstanding
quarterly solvency payments, any purchase
during such period of an irrevocable com-
mitment from an insurer to pay benefits,
and such other payments as provided by
the Secretary of the Treasury. For pur-
poses of this subsection, a quarterly sol-
vency payment shall no longer be consid-
ered outstanding on the earlier of the last
day of a later quarter for which either (I)
the plan does not have a quarterly solvency
payment required, or (II) the solvency pay-
ment for such later quarter is paid timely.
Compliance with this subsection shall not
constitute a violation of any other provi-
sion of this Act.’’
(ii) Section 502 of such Act is amend-
ed 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.’’
(9) AMENDMENT TO FULL FUNDING DEFINI-
TION.—
(A) 
Subclause 
(I) 
of 
subsection
302(c)(7)(A)(i) of such Act is amended by in-
serting ‘‘(including the expected increase in cur-
rent liability due to benefits accruing during the
plan year)’’ after ‘‘current liability’’.
(B) Section 302(c)(7) is further amended
by inserting in flush language after subpara-
graph (A), a new sentence to read as follows:
‘‘In any plan year in which a plan has unfunded
current liability under subsection (d)(8), the
amount in this subparagraph (A) shall not be
less than such unfunded current liability.’’
(C) 
Subparagraph 
(B) 
of 
subsection
302(c)(7) is amended to read as follows:
‘‘(B) CURRENT LIABILITY.—For purposes
of subparagraph (D) and subclause (I) of sub-
paragraph (A)(i), the term ‘current liability’
has the meaning given such term by subsection
(d)(7) (without regard to the interest rate and
mortality assumptions required therein, and
without regard to subparagraph (D) thereof).’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall be effective for plan years beginning after
December 31, 1994.
SEC. 122. LIMITATION ON CHANGES IN CURRENT LIABILITY
ASSUMPTIONS.
(a) Section 302(c) of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1082(c)) is amend-
ed by redesignating paragraph (5) as subparagraph
(5)(A), and adding a new subparagraph (5)(B) to read
as follows:
‘‘(B)(i) CHANGE
IN
ASSUMPTIONS
RE-
QUIRES
APPROVAL.—If the actuarial assump-
tions (other than the assumptions described in
subsection (d)(7)(C)) used to determine the
current liability for a plan are changed, the new
actuarial assumptions shall become the actuar-
ial assumptions used to determine current li-
ability for the plan only if the change is ap-
proved by the Secretary of the Treasury.
‘‘(ii) Clause (i) shall not apply unless—
‘‘(I) the plan is subject to the require-
ments of subsection (d);
‘‘(II) the requirements of section
4043(b)(1) are met; and
‘‘(III) the change in assumptions (de-
termined after taking into account any
changes in interest rate and mortality
table) results in a decrease in the un-
funded 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 cur-
rent liability of the plan before such
change.’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall be effective with respect to assumption
changes in plan years beginning after October 28, 1993.
Assumption changes made in plan years beginning after
December 31, 1992 that would have required approval
under this amended section had it been in effect at the
time of such changes, shall not be effective for plan years
beginning after December 31, 1994 unless approved by
the Secretary of the Treasury.
SEC. 
123. 
RECOGNITION 
OF 
ALREADY 
BARGAINED
CHANGES IN LIABILITY.
(a) Section 302(c) of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1082(c)) is amend-
ed by adding a new paragraph (12) at the end thereof
to read as follows:
‘‘(12) 
PLAN
LIABILITIES
ARISING
FROM
AMENDMENTS EFFECTIVE IN THE FUTURE.—A col-
lectively bargained plan described in section 413(a)
of the Internal Revenue Code of 1986 shall antici-
pate benefit increases scheduled to take effect during
the term of the collective bargaining agreement ap-
plicable to the plan at the same time and in the
same manner as if the plan amendment implement-
ing the provision of the collective bargaining agree-
ment were adopted by the parties when the parties
entered into the collective bargaining agreement.’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall be effective for 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) Section 302(e) of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1082(e)), as
amended by section 121 of this Act, is further amended
by adding at the end thereof a new paragraph (7) to read
as follows:
‘‘(7) APPLICABILITY
OF
THIS
SUBSECTION.—
This subsection applies only with respect to a plan
year for which the funded current liability percent-
age of such plan (within the meaning of subsection
(d)(8)(B)) for the preceding plan year is less than
100 percent.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall be effective for 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
Income Security Act of 1974 (29 U.S.C. 1343(a)) is
amended—
(1) by inserting ‘‘, unless a notice has already
been provided with respect to such event’’ before the
period at the end of the first sentence;
(2) by inserting ‘‘or the contributing sponsor’’
before ‘‘knows or has reason to know’’; 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 a new subsection (b) to read
as follows:
‘‘(b)(1) The requirement of this subsection shall be
applicable to a contributing sponsor only if the aggregate
unfunded 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 sponsor’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 paragraphs (9) and (13) of sub-
section (c) of this section, a contributing sponsor described
in paragraph (1) of this subsection shall notify the cor-
poration that the event is about to occur.
‘‘(3) The corporation is authorized to waive the re-
quirement of this subsection with respect to any or all re-
portable events with respect to any contributing sponsor.’’
(c) 
NEW
REPORTABLE
EVENTS.—Subsection
4043(c), as redesignated, is amended—
(1) by striking the ‘‘or’’ at the end of para-
graph (8); and
(2) by striking paragraph (9) and inserting,
after paragraph (8), new paragraphs (9) through
(13) to read as follows:
‘‘(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
redeems, 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 mem-
ber of the controlled group or to a plan or plans
maintained by a person or persons that are not such
contributing 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 a new subsection
(f) to read as follows:
‘‘(f) Any information or documentary material sub-
mitted to the corporation pursuant to subsection (c) or
subsection 4050(c)(2) shall be exempt from disclosure
under section 552 of title 5, United States Code, and no
such information 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 Con-
gress or to any duly authorized committee or subcommit-
tee of the Congress.’’
(e) TECHNICAL AND CONFORMING AMENDMENTS.—
Subsection (a) of section 4043 of such Act, and sub-
sections (d) and (e) of such section 4043, as redesignated
by this Act, are amended by replacing ‘‘subsection (b)’’
each time it appears with ‘‘subsection (c)’’. Section
4042(a)(3) of such Act is amended by replacing
‘‘4043(b)(7)’’ with ‘‘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) GENERAL RULE.—Subtitle C of title IV of the
Employee Retirement Income Security Act of 1974 is
amended by adding at the end thereof a new section 4050
to read as follows:
‘‘SEC. 4050. JUDICIAL RELIEF OTHER THAN INVOLUNTARY
TERMINATION.
‘‘(a)(1) Whenever the corporation determines (with-
out regard to the potential availability of relief under this
section) that, upon the occurrence of an event described
in section 4043(c) (9) through (13), the possible long-run
loss of the corporation with respect to a plan may reason-
ably be expected to increase unreasonably if the plan is
not terminated, the corporation may, in its discretion, in-
stitute proceedings under this section as an alternative to
instituting proceedings under section 4042 to terminate
the plan.
‘‘(2) In the case of an event described in section
4043(c) (9) or (13), this section shall apply only if, imme-
diately after the effective date of the event, the total reve-
nues, 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, respec-
tively, of a contributing sponsor and all members of its
controlled group immediately before the effective date of
the event. For purposes of this paragraph, all events oc-
curring in any 12-month period shall be treated as a single
event.
‘‘(b) Whenever the corporation makes a determina-
tion under subsection (a), it may, upon notice to a contrib-
uting sponsor, apply to the appropriate United States dis-
trict court for such legal or equitable relief as the corpora-
tion deems appropriate and consistent with its duties
under this title. The court shall consider the interests of
both the participants and the corporation, and shall grant
such relief, if any, as it determines is necessary to protect
those interests 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 re-
ceives all the information and documentary material it had
required.
‘‘(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 that
event, an action under this section may be brought at any
time within the period specified in subsection 4003(e)(6).
‘‘(3) In any case in which the corporation is not pro-
vided with a notice required by subsection 4043(b) by the
time specified in that subsection, where a person fails or
refuses to provide the additional information or documen-
tary material required by the corporation under paragraph
(1), or where a person proceeds with the event without
providing the corporation with the further notice required
under paragraph (2), an action under this section may be
brought at any time within the time period specified 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 time 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 4048 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 on or
after 60 days after 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
Employee Retirement Income Security Act of 1974 is
amended by adding at the end thereof a new section 4010
to read as follows:
‘‘SEC. 4010. AUTHORITY TO REQUIRE CERTAIN INFORMA-
TION.
‘‘(a) Each person described in subsection (b) shall
provide the corporation annually, on or before a date spec-
ified 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) The persons covered by subsection (a) are each
contributing sponsor, and each member of a contributing
sponsor’s controlled group, of a single-employer plan cov-
ered by this title, where—
‘‘(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 main-
tained by the contributing sponsor and the members
of its controlled group (taking into account only
those plans of the contributing sponsor and its con-
trolled group with unfunded vested benefits) exceed
$50,000,000; or
‘‘(2) the conditions for imposition of a lien de-
scribed in section 302(f)(1)(A) and (B) or section
412(n)(1)(A) and (B) of the Internal Revenue Code
of 1986 have been met with respect to any such
plan; or
‘‘(3) minimum funding waivers in excess of
$1,000,000 have been granted with respect to any
such plan, and any portion thereof is still outstand-
ing.
‘‘(c) Any information or documentary material sub-
mitted 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 disclo-
sure to either body of Congress or to any duly authorized
committee 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 thereof a new subsection
(f) to read as follows:
‘‘(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
sponsor 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
subdivision of a State, but the plan is not termi-
nated, such person shall be deemed liable under sub-
section (b) as if the plan had terminated under sec-
tion 4041(c) in the course of such liquidation and as
if the termination date were the date determined by
the corporation as the date on which the liquidation
was initiated.
‘‘(2) APPLICABILITY OF OTHER PROVISIONS.—
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). Subject to that exception, any provision
of this Act or any other provision of law that applies
to liability under this section 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 ter-
mination date.
‘‘(3) LIABILITY OWED TO PLAN; TRANSFER OF
LIABILITY
PAYMENTS
TO
THE
ONGOING
PLAN
WHERE COLLECTED BY THE CORPORATION.—The li-
ability established 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
satisfaction of the liability established under this
subsection in connection with such plan.
‘‘(4) 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 collect-
ing 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) by striking ‘‘and’’ after ‘‘subsection (b),’’;
and
(2) by striking the period after ‘‘subsection (c)’’
and inserting ’’, and’’; and
(3) by adding a new paragraph (3) at the end
thereof to read as follows:
‘‘(3) liability to the plan, to the extent provided
in subsection (f).’’
(c) 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 by inserting ‘‘(i)’’ after
‘‘enforce’’ and by striking the period after ‘‘title’’ and in-
serting ‘‘, and (ii) in the case of a plan covered 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) or section 412(n)(1)(A) and (B) of
the Internal Revenue Code of 1986 have been met, section
302 of this Act and section 412 of the Internal Revenue
Code of 1986.’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall be effective for installments and other
payments required under section 302 of the Employee Re-
tirement Income Security Act of 1974 or section 412 of
the Internal 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 Se-
curity Act of 1974 (29 U.S.C. 1341(b)(2)(C)(i)) is amend-
ed—
(1) by revising subclause (I) to read as follows:
‘‘(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 that follows subclause
(II), and inserting ‘‘, or’’; and
(3) by adding a new subclause (III) to read as
follows:
‘‘(III) it determines that any
other requirement of subparagraph
(A) or (B) of this paragraph or of
subsection (a)(2) has not been met,
unless it further determines that the
issuance of such notice would be in-
consistent with the interests of par-
ticipants and beneficiaries.’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to any plan termination under sec-
tion 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 be-
come final, or otherwise issued a final determination that
the plan termination is nullified.
SEC. 207. PROHIBITION ON BENEFIT INCREASES WHERE
PLAN SPONSOR IS IN BANKRUPTCY.
(a) Section 204 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1054), as amended by
section 121(b) of this Act, is further amended by redesig-
nating subsection (j) as (k) and inserting 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
increases the liabilities of the plan by reason of any in-
crease in benefits, any change in the accrual of benefits,
or any change in the rate at which benefits become non-
forfeitable under the plan, with respect to employees of
the debtor, shall be effective prior to the effective date of
such employer’s plan of reorganization.
‘‘(2) Paragraph (1) shall not apply to any plan
amendment that—
‘‘(A) the Secretary of 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
Internal 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)(B) of this Act)
is less than 100 percent after taking into account the ef-
fect 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) Section 410(a) of the Internal Revenue Code of
1986, as amended by section 101(b) of this Act, is further
amended by adding at the end thereof a new paragraph
(33) to read as follows:
‘‘(33) PROHIBITION
ON
BENEFIT
INCREASES
WHILE SPONSOR IS IN BANKRUPTCY.—
‘‘(A) IN GENERAL.—A trust shall not con-
stitute a qualified trust under this section if the
plan of which such trust is a part is amended
while the employer is a debtor in a case under
title 11, United States Code, or similar federal
or state law, where such amendment increases
liabilities of the plan by reason of any increase
in benefits, any change in the accrual of bene-
fits, or any change in the rate at which benefits
become nonforfeitable under the plan, with re-
spect to employees of the debtor, and is effec-
tive prior to the effective date of such employ-
er’s plan of reorganization.
‘‘(B) EXCEPTIONS.—This paragraph shall
not apply to any plan amendment that—
‘‘(i) the Secretary 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,
‘‘(ii) only repeals an amendment de-
scribed in subsection 412(c)(8),
‘‘(iii) is required as a condition of
qualification under this part, or
‘‘(iv) was adopted 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.
‘‘(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 for which the
funded current liability percentage (within the
meaning of section 412(l)(8)(B)) is less than
100 percent after taking into account the effect
of the amendment.
‘‘(D) DEFINITIONS.—For purposes of this
paragraph, ‘employer’ has the meaning set
forth in section 412(c)(11)(A), without regard
to section 412(c)(11)(B).’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall be effective with respect to plan amend-
ments 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) is amended by revising subparagraphs
(B) and (C) to read as follows:
‘‘(B) For purposes of this title, the term
‘majority owner’ has the same meaning as the
and inserting a new paragraph (3) to read as
follows:
‘‘(3) If assets available for allocation under
paragraph (4) of subsection (a) are insufficient to
satisfy in full the benefits of all individuals who are
described in that paragraph, the assets shall be allo-
cated first to benefits described in subparagraph (A)
of that paragraph. Any remaining assets shall then
be allocated to subparagraph (B). If assets allocated
to subparagraph (B) are insufficient to satisfy in full
the benefits in that subparagraph, the assets shall
be allocated pro rata among individuals on the basis
of the present value (as of the termination date) of
their respective benefits described in that subpara-
graph.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall be effective for plan terminations under
section 4041(c) with respect to which notices of intent to
terminate are provided under section 4041(a)(2), or under
section 4042 with respect to which proceedings are insti-
tuted by the corporation, on or after the date of enactment
of this Act.
SEC. 209. PHASE-OUT OF VARIABLE RATE PREMIUM CAP.
(a) Subparagraph (E) of section 4006(a)(3) of the
Employee Retirement Income Security Act of 1974 is
amended by deleting clause (iv) and 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 pre-
mium payable with respect to any participant by reason
of this amendment shall not exceed the sum of—
(1) $53, and
(2) the excess (if any) of the amount deter-
mined under clause (ii) of section 4006(a)(3)(E) of
the Employee Retirement Income Security Act of
1974 over $53 multiplied by the applicable percent-
age. For purposes of this clause, the applicable per-
centage shall be as follows:
Plan year beginning:
The applicable
percentage is:
on or after
but before
July 1, 1994 .......................
July 1, 1995 .......................
July 1, 1995 .......................
July 1, 1996 .......................
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 thereof a new sec-
tion 4011 to read as follows:
‘‘SEC. 4011. NOTICE TO PARTICIPANTS.
‘‘The plan administrator of a plan subject to the ad-
ditional premium under section 4006(a)(3)(E) shall pro-
vide, in a form and manner and at such time as prescribed
in regulations of the corporation, notice to plan partici-
pants 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) 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 sec-
tion 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) Subtitle B of Title IV of the Employee Retirement
Income Security Act of 1974 is amended by adding a new
section 4031 at the end thereof to read as follows:
‘‘SEC. 4031. 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 infor-
mation and certifications with respect to such
designated benefits or irrevocable commitments
as the corporation shall specify.
‘‘(2) TREATMENT OF TRANSFERRED ASSETS.—
A transfer to the PBGC 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 cor-
poration is trustee under section 4042, subject to
the rules set out in that section.
‘‘(3) PAYMENT BY THE CORPORATION.—After a
missing participant whose designated benefit was
transferred to the corporation is located—
‘‘(A) if the plan could have distributed the
benefit of a missing participant in a single sum
without participant or spousal consent under
section 205(g), the corporation shall pay the
participant or beneficiary a single sum benefit
equal to the designated benefit paid the cor-
poration plus interest as specified by the cor-
poration.
‘‘(B) in the case of any other missing par-
ticipant, the corporation shall pay a benefit
based on the designated benefit and the as-
sumptions prescribed by the corporation at the
time that the corporation received the des-
ignated benefit. The corporation shall make
such payments 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 benefit (other
than a single sum described in subsection
(b)(2)(A)).
‘‘(b) DEFINITIONS.—
‘‘(1) A ‘missing participant’ means a partici-
pant or beneficiary under a terminating plan whom
the plan administrator cannot locate after a diligent
search.
‘‘(2) A ‘designated benefit’ means the single
sum benefit the participant 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 cor-
poration in effect on the date that the des-
ignated benefit is transferred to the corpora-
tion, in the case of a plan that does not pay any
single sums other than those described in sub-
paragraph (A); or
‘‘(C) under the assumptions of the cor-
poration or of the plan, whichever provides the
higher single sum, in the case of a plan that
does pay a single sum other than those de-
scribed in subparagraph (A).
‘‘(c) REGULATORY AUTHORITY.—The corporation
shall prescribe such regulations as are necessary to carry
out the purposes of this section, including rules as 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.—
Employee Retirement Income Security Act of 1974, the
plan shall provide that, upon termination of the plan, ben-
efits of missing participants shall be treated in accordance
with section 4031 of such Act.’’
‘‘(d) CONFORMING
INTERNAL
REVENUE
CODE
AMENDMENTS.—Section 401(a) of the Internal Revenue
Code of 1986, as amended by section 207 of this Act, is
further amended by adding at the end thereof a new para-
graph (34) to read as follows:
‘‘(34) 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 4031 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 imple-
menting these provisions are adopted by the Pension Ben-
efit Guaranty Corporation.
SEC. 303. MODIFICATION OF MAXIMUM GUARANTEE FOR
DISABILITY BENEFITS.
(a) 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 thereof two new sentences
to read as follows: ‘‘The maximum guaranteed monthly
benefit shall not be reduced solely on account of the age
of a participant in the case of a benefit payable by reason
of disability, provided that the participant satisfies the
definition of disability under titles II and XVI of the So-
cial Security Act, as amended, and the regulations there-
under. If a benefit payable by reason of disability is con-
verted 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 amendments made by
this section shall be effective for plan terminations under
section 4041(c) with respect to which notices of intent to
terminate are provided under section 4041(a)(2), or under
section 4042 with respect to which proceedings are insti-
tuted by the corporation, on or after the date of enactment
of this Act.
TITLE IV—MISCELLANEOUS
AMENDMENTS
SEC. 401. ERISA CITATION.
(a) Section 404(g)(4) of the Internal Revenue Code
of 1986 is amended by striking ‘‘the Single Employer Pen-
sion Plan Amendments Act of 1986’’ and inserting ‘‘the
Retirement Protection Act of 1993’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall be effective on the date of enactment of
this Act.
SEC. 402. DEFINITION OF CONTRIBUTING SPONSOR.
(a) Paragraph (13) of section 4001(a) of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1301(a)) is amended by deleting ‘‘means a per-
son—’’ and all that follows and inserting in lieu thereof
‘‘means a person described in section 302(c)(11)(A) (with-
out regard to section 302(c)(11)(B)) of this Act or section
412(c)(11)(A) (without regard to section 412(c)(11)(B))
of the Internal Revenue Code of 1986.’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall be effective as if included in the Pension
Protection Act.
SEC. 403. RECOVERY RATIO UNDER ERISA SECTION 4022(c).
(a) Sec. 4022(c)(3) of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1322(c)(3)) is
amended by deleting subparagraphs (A) and (B), and
amending subparagraph (C)—
(1) by deleting ‘‘(C)’’ and all that precedes
clause (i) and inserting in its place:
‘‘For purposes of this section, the term ‘recov-
ery ratio’ means, with respect to the termination of
such plan, the ratio of—’’; and
(2) by renumbering clauses (i) and (ii) as sub-
paragraphs (A) and (B), respectively.
(b) EFFECTIVE DATE.—The amendments made by
this section shall be effective as if included in the Pension
Protection Act.
SEC. 404. 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 words ‘‘Federal law or’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall be effective as if included in the Single-
Employer Pension Plan Amendments Act of 1986.
SEC. 405. SINGLE SUM DISTRIBUTIONS.
(a) MINIMUM BENEFITS.—
(1) Section 411(a)(11) of the Internal Revenue
Code of 1986 is amended by revising subparagraph
(B) to read as follows:
‘‘(B) 
DETERMINATION
OF
PRESENT
VALUE.—For purposes of subparagraph (A),
the present value shall be calculated in accord-
ance with section 417(e)(3).’’
(2) Section 417(e) of the Code is amended by
revising paragraph (3) to read as follows:
‘‘(3) DETERMINATION OF PRESENT VALUE.—
‘‘(A) IN GENERAL.—
‘‘(i) PRESENT
VALUE.—Except as
provided in subparagraph (B), for pur-
poses of paragraphs (1) and (2), the
present value shall not be less than the
present value calculated by using the appli-
cable mortality table and the applicable in-
terest rate.
‘‘(ii) DEFINITIONS.—For purposes of
clause (i), the term ‘applicable mortality
table’ means the prevailing Commissioner’s
standard 
table 
(described 
in 
section
807(d)(5)(A)) that would be used to deter-
mine reserves for group annuity contracts
issued on the date as of which present
value is being determined (without regard
to any other subparagraph of section
807(d)(5)), and the term ‘applicable inter-
est rate’ means the rate of interest on a
30-year Treasury security (as of the date
of distribution).
‘‘(B) EXCEPTION.—In the case of a dis-
tribution from a plan that was adopted and in
effect prior to the enactment of the Retirement
Protection Act of 1993, the present value of
any distribution made before the earlier of (i)
the later of when a plan amendment applying
subparagraph (A) is adopted or made effective
or (ii) the first day of the first plan year begin-
ning after December 31, 1999 shall be cal-
culated, 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 September 1, 1993 and
under the provisions of the plan and the Code
that were in effect immediately before such en-
actment, provided that such plan provisions sat-