trator of a plan described in paragraph (4) shall, 
upon termination of the plan, provide the corporation 
information with respect to benefits of a missing par-
ticipant or beneficiary if the plan transfers such bene-
fits—
‘‘(A) to the corporation, or 
‘‘(B) to an entity other than the corporation 
or a plan described in paragraph (4)(B)(ii).
‘‘(3) PAYMENT BY THE CORPORATION.—If bene-
fits of a missing participant or beneficiary were 
transferred to the corporation under paragraph (1), 
the corporation shall, upon location of the participant 
or beneficiary, pay to the participant or beneficiary 
the amount transferred (or the appropriate survivor 
benefit) either—
‘‘(A) in a single sum (plus interest), or 
‘‘(B) in such other form as is specified in 
regulations of the corporation. 
‘‘(4) PLANS DESCRIBED.—A plan is described in 
this paragraph if—
‘‘(A) the plan is a pension plan (within the 
meaning of section 3(2))—
‘‘(i) to which the provisions of this sec-
tion do not apply (without regard to this 
subsection), and
‘‘(ii) which is not a plan described in 
paragraphs (2) through (11) of section 
4021(b), and 
‘‘(B) at the time the assets are to be distrib-
uted upon termination, the plan—
‘‘(i) has one or more missing partici-
pants or beneficiaries, and 
‘‘(ii) has not provided for the transfer 
of assets to pay the benefits of all missing 
participants and beneficiaries to another 
pension plan (within the meaning of section 
3(2)). 
‘‘(5) CERTAIN PROVISIONS NOT TO APPLY.—Sub-
sections (a)(1) and (a)(3) shall not apply to a plan 
described in paragraph (4).’’. 
(b) CONFORMING AMENDMENTS.—Section 206(f) of 
such Act (29 U.S.C. 1056(f)) is amended—
(1) by striking ‘‘title IV’’ and inserting ‘‘section 
4050’’; and 
(2) by striking ‘‘the plan shall provide that,’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to distributions made after final regula-
tions implementing subsections (c) and (d) of section 4050 
of the Employee Retirement Income Security Act of 1974 
(as added by subsection (a)), respectively, are prescribed.
SEC. 210. REDUCED PBGC PREMIUM FOR NEW PLANS OF 
SMALL EMPLOYERS. 
(a) IN
GENERAL.—Subparagraph (A) of section 
4006(a)(3) of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1306(a)(3)(A)) is amended—
(1) in clause (i), by inserting ‘‘other than a new 
single-employer plan (as defined in subparagraph 
(F)) maintained by a small employer (as so de-
fined),’’ after ‘‘single-employer plan,’’, 
(2) in clause (iii), by striking the period at the 
end and inserting ‘‘, and’’, and 
(3) by adding at the end the following new 
clause: 
‘‘(iv) in the case of a new single-employer plan 
(as defined in subparagraph (F)) maintained by a 
small employer (as so defined) for the plan year, $5 
for each individual who is a participant in such plan 
during the plan year.’’. 
(b) DEFINITION OF NEW SINGLE-EMPLOYER PLAN.—
Section 4006(a)(3) of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1306(a)(3)) is amended by 
adding at the end the following new subparagraph: 
‘‘(F)(i) For purposes of this paragraph, a single-em-
ployer plan maintained by a contributing sponsor shall be 
treated as a new single-employer plan for each of its first 
5 plan years if, during the 36-month period ending on the
date of the adoption of such plan, the sponsor or any mem-
ber of such sponsor’s controlled group (or any predecessor 
of either) did not establish or maintain a plan to which 
this title applies with respect to which benefits were accrued 
for substantially the same employees as are in the new sin-
gle-employer plan. 
‘‘(ii)(I) For purposes of this paragraph, the term 
‘small employer’ means an employer which on the first day 
of any plan year has, in aggregation with all members of 
the controlled group of such employer, 100 or fewer employ-
ees. 
‘‘(II) In the case of a plan maintained by two or more 
contributing sponsors that are not part of the same con-
trolled group, the employees of all contributing sponsors and 
controlled groups of such sponsors shall be aggregated for 
purposes of determining whether any contributing sponsor 
is a small employer.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to plans first effective after December 
31, 2003. 
SEC. 211. REDUCTION OF ADDITIONAL PBGC PREMIUM FOR 
NEW AND SMALL PLANS. 
(a) NEW
PLANS.—Subparagraph (E) of section 
4006(a)(3) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1306(a)(3)(E)) is amended by add-
ing at the end the following new clause: 
‘‘(v) In the case of a new defined benefit plan, the 
amount determined under clause (ii) for any plan year 
shall be an amount equal to the product of the amount de-
termined under clause (ii) and the applicable percentage. 
For purposes of this clause, the term ‘applicable percentage’ 
means—
‘‘(I) 0 percent, for the first plan year. 
‘‘(II) 20 percent, for the second plan year. 
‘‘(III) 40 percent, for the third plan year. 
‘‘(IV) 60 percent, for the fourth plan year. 
‘‘(V) 80 percent, for the fifth plan year. 
For purposes of this clause, a defined benefit plan (as de-
fined in section 3(35)) maintained by a contributing spon-
sor shall be treated as a new defined benefit plan for each 
of its first 5 plan years if, during the 36-month period end-
ing on the date of the adoption of the plan, the sponsor 
and each member of any controlled group including the 
sponsor (or any predecessor of either) did not establish or 
maintain a plan to which this title applies with respect 
to which benefits were accrued for substantially the same 
employees as are in the new plan.’’. 
(b) SMALL PLANS.—Paragraph (3) of section 4006(a) 
of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1306(a)), as amended by section 210(b), is 
amended—
(1) by striking ‘‘The’’ in subparagraph (E)(i) 
and inserting ‘‘Except as provided in subparagraph 
(G), the’’, and
(2) by inserting after subparagraph (F) the fol-
lowing new subparagraph: 
‘‘(G)(i) In the case of an employer who has 25 or fewer 
employees on the first day of the plan year, the additional 
premium determined under subparagraph (E) for each par-
ticipant shall not exceed $5 multiplied by the number of 
participants in the plan as of the close of the preceding plan 
year. 
‘‘(ii) For purposes of clause (i), whether an employer 
has 25 or fewer employees on the first day of the plan year 
is determined by taking into consideration all of the em-
ployees of all members of the contributing sponsor’s con-
trolled group. In the case of a plan maintained by two or 
more contributing sponsors, the employees of all contrib-
uting sponsors and their controlled groups shall be aggre-
gated for purposes of determining whether the 25-or-fewer-
employees limitation has been satisfied.’’. 
(c) EFFECTIVE DATES.—
(1) SUBSECTION (a).—The amendments made by 
subsection (a) shall apply to plans first effective after 
December 31, 2003. 
(2) SUBSECTION (b).—The amendments made by 
subsection (b) shall apply to plan years beginning 
after December 31, 2003. 
SEC. 212. AUTHORIZATION FOR PBGC TO PAY INTEREST ON 
PREMIUM OVERPAYMENT REFUNDS. 
(a) IN GENERAL.—Section 4007(b) of the Employment 
Retirement Income Security Act of 1974 (29 U.S.C. 
1307(b)) is amended—
(1) by striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’, and 
(2) by inserting at the end the following new 
paragraph: 
‘‘(2) The corporation is authorized to pay, subject to 
regulations prescribed by the corporation, interest on the 
amount of any overpayment of premium refunded to a des-
ignated payor. Interest under this paragraph shall be cal-
culated at the same rate and in the same manner as interest 
is calculated for underpayments under paragraph (1).’’. 
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to interest accruing for periods be-
ginning not earlier than the date of the enactment of this 
Act.
SEC. 213. SUBSTANTIAL OWNER BENEFITS IN TERMINATED 
PLANS. 
(a) MODIFICATION OF PHASE-IN OF GUARANTEE.—
Section 4022(b)(5) of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1322(b)(5)) is amended to 
read as follows: 
‘‘(5)(A) For purposes of this paragraph, the term ‘ma-
jority owner’ means an individual who, at any time during 
the 60-month period ending on the date the determination 
is being made—
‘‘(i) owns the entire interest in an unincor-
porated trade or business, 
‘‘(ii) in the case of a partnership, is a partner 
who owns, directly or indirectly, 50 percent or more 
of either the capital interest or the profits interest in 
such partnership, or 
‘‘(iii) in the case of a corporation, owns, directly 
or indirectly, 50 percent or more in value of either the 
voting stock of that corporation or all the stock of that 
corporation. 
For purposes of clause (iii), the constructive ownership 
rules of section 1563(e) of the Internal Revenue Code of 
1986 shall apply (determined without regard to section 
1563(e)(3)(C)).
‘‘(B) In the case of a participant who is a majority 
owner, the amount of benefits guaranteed under this section 
shall equal the product of—
‘‘(i) a fraction (not to exceed 1) the numerator 
of which is the number of years from the later of the 
effective date or the adoption date of the plan to the 
termination date, and the denominator of which is 
10, and 
‘‘(ii) the amount of benefits that would be guar-
anteed under this section if the participant were not 
a majority owner.’’. 
(b) MODIFICATION OF ALLOCATION OF ASSETS.—
(1) Section 4044(a)(4)(B) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 
1344(a)(4)(B)) is amended by striking ‘‘section 
4022(b)(5)’’ and inserting ‘‘section 4022(b)(5)(B)’’. 
(2) Section 4044(b) of such Act (29 U.S.C. 
1344(b)) is amended—
(A) by striking ‘‘(5)’’ in paragraph (2) and 
inserting ‘‘(4), (5),’’, and 
(B) 
by 
redesignating 
paragraphs 
(3) 
through (6) as paragraphs (4) through (7), re-
spectively, and by inserting after paragraph (2) 
the following new paragraph:
‘‘(3) If assets available for allocation under 
paragraph (4) of subsection (a) are insufficient to sat-
isfy in full the benefits of all individuals who are de-
scribed in that paragraph, the assets shall be allocated 
first to benefits described in subparagraph (A) of that 
paragraph. Any remaining assets shall then be allo-
cated to benefits described in subparagraph (B) of 
that paragraph. If assets allocated to such subpara-
graph (B) are insufficient to satisfy in full the bene-
fits described 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 subparagraph.’’. 
(c) CONFORMING AMENDMENTS.—
(1) Section 4021 of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1321) is 
amended—
(A) in subsection (b)(9), by striking ‘‘as de-
fined in section 4022(b)(6)’’, and 
(B) by adding at the end the following new 
subsection: 
‘‘(d) For purposes of subsection (b)(9), the term ‘sub-
stantial owner’ means an individual who, at any time dur-
ing the 60-month period ending on the date the determina-
tion is being made—
‘‘(1) owns the entire interest in an unincor-
porated trade or business, 
‘‘(2) in the case of a partnership, is a partner 
who owns, directly or indirectly, more than 10 per-
cent of either the capital interest or the profits inter-
est in such partnership, or 
‘‘(3) in the case of a corporation, owns, directly 
or indirectly, more than 10 percent in value of either
the voting stock of that corporation or all the stock 
of that corporation. 
For purposes of paragraph (3), the constructive ownership 
rules of section 1563(e) of the Internal Revenue Code of 
1986 shall apply (determined without regard to section 
1563(e)(3)(C)).’’. 
(2) Section 4043(c)(7) of such Act (29 U.S.C. 
1343(c)(7)) is amended by striking ‘‘section 4022(b)(6)’’ 
and inserting ‘‘section 4021(d)’’. 
(d) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall 
apply to plan terminations—
(A) under section 4041(c) of the Employee 
Retirement Income Security Act of 1974 (29 
U.S.C. 1341(c)) with respect to which notices of 
intent to terminate are provided under section
4041(a)(2) of such Act (29 U.S.C. 1341(a)(2)) 
after December 31, 2003, and 
(B) under section 4042 of such Act (29 
U.S.C. 1342) with respect to which proceedings 
are instituted by the corporation after such date. 
(2) CONFORMING
AMENDMENTS.—The amend-
ments made by subsection (c) shall take effect on Jan-
uary 1, 2004. 
SEC. 214. BENEFIT SUSPENSION NOTICE. 
(a) MODIFICATION OF REGULATION.—The Secretary of 
Labor shall modify the regulation under subparagraph (B) 
of section 203(a)(3) of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1053(a)(3)(B)) to provide 
that the notification required by such regulation in connec-
tion with any suspension of benefits described in such sub-
paragraph—
(1) in the case of an employee who returns to 
service described in section 203(a)(3)(B)(i) or (ii) of 
such Act after commencement of payment of benefits 
under the plan, shall be made during the first cal-
endar month or the first 4 or 5-week payroll period 
ending in a calendar month in which the plan with-
holds payments, and 
(2) in the case of any employee who is not de-
scribed in paragraph (1)—
(A) may be included in the summary plan 
description for the plan furnished in accordance 
with section 104(b) of such Act (29 U.S.C. 
1024(b)), rather than in a separate notice, and 
(B) need not include a copy of the relevant 
plan provisions. 
(b) EFFECTIVE DATE.—The modification made under 
this section shall apply to plan years beginning after De-
cember 31, 2003. 
SEC. 215. STUDIES. 
(a) 
MODEL
SMALL
EMPLOYER
GROUP
PLANS 
STUDY.—As soon as practicable after the date of the enact-
ment of this Act, the Secretary of Labor, in consultation 
with the Secretary of the Treasury, shall conduct a study 
to determine—
(1) the most appropriate form or forms of—
(A) employee pension benefit plans which 
would—
(i) be simple in form and easily main-
tained by multiple small employers, and 
(ii) provide for ready portability of 
benefits for all participants and bene-
ficiaries,
(B) alternative arrangements providing 
comparable benefits which may be established by 
employee or employer associations, and 
(C) alternative arrangements providing 
comparable benefits to which employees may con-
tribute in a manner independent of employer 
sponsorship, and 
(2) appropriate methods and strategies for mak-
ing pension plan coverage described in paragraph (1) 
more widely available to American workers. 
(b) MATTERS TO BE CONSIDERED.—In conducting the 
study under subsection (a), the Secretary of Labor shall con-
sider the adequacy and availability of existing employee 
pension benefit plans and the extent to which existing mod-
els may be modified to be more accessible to both employees 
and employers. 
(c) REPORT.—Not later than 18 months after the date 
of the enactment of this Act, the Secretary of Labor shall 
report the results of the study under subsection (a), together 
with the Secretary’s recommendations, to the Committee on 
Education and the Workforce and the Committee on Ways 
and Means of the House of Representatives and the Com-
mittee on Health, Education, Labor, and Pensions and the 
Committee on Finance of the Senate. Such recommenda-
tions shall include one or more model plans described in
subsection (a)(1)(A) and model alternative arrangements 
described in subsections (a)(1)(B) and (a)(1)(C) which may 
serve as the basis for appropriate administrative or legisla-
tive action. 
(d) STUDY ON EFFECT OF LEGISLATION.—Not later 
than 5 years after the date of the enactment of this Act, 
the Secretary of Labor shall submit to the Committee on 
Education and the Workforce of the House of Representa-
tives and the Committee on Health, Education, Labor, and 
Pensions of the Senate a report on the effect of the provi-
sions of this Act and title VI of the Economic Growth and 
Tax Relief Reconciliation Act of 2001 on pension plan cov-
erage, including any change in—
(1) the extent of pension plan coverage for low 
and middle-income workers, 
(2) the levels of pension plan benefits generally, 
(3) the quality of pension plan coverage gen-
erally, 
(4) workers’ access to and participation in pen-
sion plans, and 
(5) retirement security.
SEC. 216. INTEREST RATE RANGE FOR ADDITIONAL FUND-
ING REQUIREMENTS. 
(a) 
IN
GENERAL.—Subclause 
(III) 
of 
section 
412(l)(7)(C)(i) of the Internal Revenue Code of 1986 is 
amended—
(1) by striking ‘‘2002 or 2003’’ in the text and 
inserting ‘‘2001, 2002, or 2003’’, and 
(2) by striking ‘‘2002 AND 2003’’ in the heading 
and inserting ‘‘2001, 2002, AND 2003’’. 
(b) SPECIAL
RULE.—Subclause (III) of section 
302(d)(7)(C)(i) of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1082(d)(7)(C)(i)) is amended—
(1) by striking ‘‘2002 or 2003’’ in the text and 
inserting ‘‘2001, 2002, or 2003’’, and
(2) by striking ‘‘2002 AND 2003’’ in the heading 
and inserting ‘‘2001, 2002, AND 2003’’. 
(c) 
PBGC.—Subclause 
(IV) 
of 
section 
4006(a)(3)(E)(iii) 
of 
such 
Act 
(29 
U.S.C. 
1306(a)(3)(E)(iii)) is amended to read as follows—
‘‘(IV) In the case of plan years beginning after 
December 31, 2001, and before January 1, 2004, sub-
clause (II) shall be applied by substituting ‘100 per-
cent’ for ‘85 percent’ and by substituting ‘115 percent’ 
for ‘100 percent’. Subclause (III) shall be applied for 
such years without regard to the preceding sentence. 
Any reference to this clause or this subparagraph by
any other sections or subsections (other than sections 
4005, 4010, 4011 and 4043) shall be treated as a ref-
erence to this clause or this subparagraph without re-
gard to this subclause.’’. 
(d) EFFECTIVE DATE.—
(1) GENERAL RULE.—Subject to paragraph (2), 
the amendments made by this section shall take effect 
as if included in the amendments made by section 
405 of the Job Creation and Worker Assistance Act of 
2002. 
(2) ELECTION.—The plan sponsor or plan ad-
ministrator of a plan may elect whether to have the 
amendments made by subsections (a) and (b) apply. 
Such election shall be made in such manner and at 
such time as the Secretary of the Treasury or his dele-
gate may prescribe and, once made, may not be re-
voked. An election to apply such amendments shall 
not be treated as a prohibited change in actuarial as-
sumptions for purposes of reports required to be filed 
with the Secretary of Labor, the Secretary of Treas-
ury, or the Pension Benefit Guaranty Corporation.
TITLE III—GENERAL 
PROVISIONS 
SEC. 301. PROVISIONS RELATING TO PLAN AMENDMENTS. 
(a) IN GENERAL.—If this section applies to any pen-
sion plan or contract amendment—
(1) such pension plan or contract shall be treated 
as being operated in accordance with the terms of the 
plan during the period described in subsection 
(b)(2)(A), and 
(2) except as provided by the Secretary of the 
Treasury, such pension plan shall not fail to meet the 
requirements of section 411(d)(6) of the Internal Rev-
enue Code of 1986 and section 204(g) of the Employee 
Retirement Income Security Act of 1974 by reason of 
such amendment. 
(b) AMENDMENTS TO WHICH SECTION APPLIES.—
(1) IN GENERAL.—This section shall apply to 
any amendment to any pension plan or annuity con-
tract which is made—
(A) pursuant to any amendment made by 
this Act or by title VI of the Economic Growth 
and Tax Relief Reconciliation Act of 2001, or 
pursuant to any regulation issued by the Sec-
retary of the Treasury or the Secretary of Labor 
under this Act or such title VI, and