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‘‘(I) 90 percent of the current li-
ability of the plan (including the ex-
pected increase in current liability due
to benefits accruing during the plan
year), over
‘‘(II) the value of the plan’s as-
sets determined under paragraph (2).
‘‘(ii) CURRENT LIABILITY; ASSETS.—
For purposes of clause (i)—
‘‘(I) the term ‘current liability’
has the meaning given such term by
subsection (l)(7) (without regard to
subparagraph (D) thereof), and
‘‘(II) assets shall not be reduced
by any credit balance in the funding
standard account.’’
(C) Subparagraph (B) of section 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 subparagraphs (C)
and (D) thereof) and using the rate of interest
used under subsection (b)(5)(B).’’
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(11) REFERENCE TO ACT.—Section 404(g)(4)
is amended by striking ‘‘the Single-Employer Pen-
sion Plan Amendments Act of 1986’’ and inserting
‘‘the Retirement Protection Act of 1994’’.
(b) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to plan years beginning after December
31, 1994.
(2) REFERENCE.—The amendment made by
subsection (a)(11) shall take effect on the date of
the enactment of this Act.
SEC. 752. LIMITATION ON CHANGES IN CURRENT LIABILITY
ASSUMPTIONS.
(a) IN GENERAL.—Paragraph (5) of section 412(c)
is amended—
(1) by striking ‘‘If the funding method’’ and in-
serting the following:
‘‘(A) IN GENERAL.—If the funding meth-
od’’, and
(2) by adding at the end the following new sub-
paragraph:
‘‘(B) APPROVAL REQUIRED FOR CERTAIN
CHANGES
IN
ASSUMPTIONS
BY
CERTAIN
SIN-
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GLE-EMPLOYER
PLANS
SUBJECT
TO
ADDI-
TIONAL FUNDING REQUIREMENT.—
‘‘(i) IN GENERAL.—No actuarial as-
sumption (other than the assumptions de-
scribed in subsection (l)(7)(C)) used to de-
termine the current liability for a plan to
which this subparagraph applies may be
changed without the approval of the Sec-
retary.
‘‘(ii) PLANS
TO
WHICH
SUBPARA-
GRAPH APPLIES.—This subparagraph shall
apply to a plan only if—
‘‘(I) the plan is a defined benefit
plan (other than a multiemployer
plan) to which title IV of the Em-
ployee Retirement Income Security
Act of 1974 applies;
‘‘(II) the aggregate unfunded
vested benefits as of the close of the
preceding plan year (as determined
under section 4006(a)(3)(E)(iii) of the
Employee Retirement Income Security
Act of 1974) of such plan and all
other plans maintained by the contrib-
uting sponsors (as defined in section
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4001(a)(13) of such Act) and mem-
bers of such sponsors’ controlled
groups 
(as 
defined 
in 
section
4001(a)(14) of such Act) which are
covered by title IV of such Act (dis-
regarding plans with no unfunded
vested benefits) exceed $50,000,000;
and
‘‘(III) the change in assumptions
(determined after taking into account
any changes in interest rate and mor-
tality table) results in a decrease in
the unfunded current liability of the
plan for the current plan year that ex-
ceeds $50,000,000, or that exceeds
$5,000,000 and that is 5 percent or
more of the current liability of the
plan before such change.’’
(b) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendment made by
this section shall apply to changes in assumptions
for plan years beginning after October 28, 1993.
(2) CERTAIN CHANGES CEASE TO BE EFFEC-
TIVE.—In the case of changes in assumptions for
plan years beginning after December 31, 1992, and
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on or before October 28, 1993, such changes shall
cease to be effective for plan years beginning after
December 31, 1994, if—
(A) such change would have required the
approval of the Secretary of the Treasury had
such amendment applied to such change, and
(B) such change is not so approved.
SEC. 753. ANTICIPATION OF BARGAINED BENEFIT IN-
CREASES.
(a) IN GENERAL.—Section 412(c) is amended by
adding at the end the following new paragraph:
‘‘(12) ANTICIPATION
OF
BENEFIT
INCREASES
EFFECTIVE IN THE FUTURE.—In determining pro-
jected benefits, the funding method of a collectively
bargained plan described in section 413(a) (other
than a multiemployer plan) shall anticipate benefit
increases scheduled to take effect during the term of
the collective bargaining agreement applicable to the
plan.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to plan years beginning after De-
cember 31, 1994, with respect to collective bargaining
agreements in effect on or after January 1, 1995.
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SEC. 754. MODIFICATION OF QUARTERLY CONTRIBUTION
REQUIREMENT.
(a) IN GENERAL.—Paragraph (1) of section 412(m)
is amended—
(1) by inserting ‘‘which has a funded current li-
ability percentage (as defined in subsection (l)(8))
for the preceding plan year of less than 100 per-
cent’’ before ‘‘fails’’, and
(2) by striking ‘‘any plan year’’ and inserting
‘‘the plan year’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to plan years beginning after the
date of enactment of this Act.
SEC. 755. EXCEPTIONS TO EXCISE TAX ON NONDEDUCTIBLE
CONTRIBUTIONS.
(a) IN GENERAL.—Section 4972(c) is amended by
adding at the end the following new paragraph:
‘‘(6) EXCEPTIONS.—In determining the amount
of nondeductible contributions for any taxable year,
there shall not be taken into account—
‘‘(A) contributions that would be deduct-
ible under section 404(a)(1)(D) if the plan had
more than 100 participants if—
‘‘(i) the plan is covered under section
4021 of the Employee Retirement Income
Security Act of 1974, and
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(as added by this section) shall apply to taxable
years ending on or after the date of enactment of
this Act.
(2) 
SECTION
4972(c)(6)(B).—Section
4972(c)(6)(B) of such Code (as added by this sec-
tion) shall apply to taxable years ending on or after
December 31, 1992.
Subpart B—Amendments to the Employee
Retirement Income Security Act of 1974
SEC. 761. MINIMUM FUNDING REQUIREMENTS.
(a) AMENDMENTS
TO ADDITIONAL FUNDING RE-
QUIREMENTS FOR SINGLE-EMPLOYER PLANS.—
(1) LIMITATIONS ON ADDITIONAL FUNDING RE-
QUIREMENT FOR CERTAIN PLANS.—
(A) IN GENERAL.—Paragraph (1) of sec-
tion 302(d) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1082(d)) is
amended by striking ‘‘which has an unfunded
current liability’’ and inserting ‘‘to which this
subsection applies under paragraph (9)’’.
(B) PLANS TO WHICH REQUIREMENT AP-
PLIES.—Section 302(d) of such Act is amended
by adding at the end the following new para-
graph:
‘‘(9) APPLICABILITY OF SUBSECTION.—
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‘‘(A) IN GENERAL.—Except as provided in
paragraph (6)(A), this subsection shall apply to
a plan for any plan year if its funded current
liability percentage for such year is less than 90
percent.
‘‘(B) EXCEPTION FOR CERTAIN PLANS AT
LEAST
PERCENT
FUNDED.—Subparagraph
(A) shall not apply to a plan for a plan year
if—
‘‘(i) the funded current liability per-
centage for the plan year is at least 80
percent, and
‘‘(ii) such percentage for each of the
2 immediately preceding plan years (or
each of the 2d and 3d immediately preced-
ing plan years) is at least 90 percent.
‘‘(C) FUNDED
CURRENT
LIABILITY
PER-
CENTAGE.—For purposes of subparagraphs (A)
and (B), the term ‘funded current liability per-
centage’ has the meaning given such term by
paragraph (8)(B), except that such percentage
shall be determined for any plan year—
‘‘(i) without regard to paragraph
(8)(E), and
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‘‘(ii) by using the rate of interest
which is the highest rate allowable for the
plan year under paragraph (7)(C).
‘‘(D) TRANSITION RULES.—For purposes
of this paragraph:
‘‘(i) 
FUNDED
PERCENTAGE
FOR
YEARS BEFORE 1995.—The funded current
liability percentage for any plan year be-
ginning before January 1, 1995, shall be
treated as not less than 90 percent only if
for such plan year the plan met one of the
following requirements (as in effect for
such year):
‘‘(I) The full-funding limitation
under subsection (c)(7) for the plan
was zero.
‘‘(II) The plan had no additional
funding requirement under this sub-
section (or would have had no such
requirement if its funded current li-
ability percentage had been deter-
mined under subparagraph (C)).
‘‘(III) The plan’s additional fund-
ing requirement under this subsection
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did not exceed the lesser of 0.5 per-
cent of current liability or $5,000,000.
‘‘(ii) SPECIAL
RULE
FOR
1995
AND
1996.—For purposes of determining wheth-
er subparagraph (B) applies to any plan
year beginning in 1995 or 1996, a plan
shall be treated as meeting the require-
ments of subparagraph (B)(ii) if the plan
met the requirements of clause (i) of this
subparagraph for any two of the plan years
beginning in 1992, 1993, and 1994
(whether or not consecutive).’’
(2) RELATIONSHIP
OF
ADDITIONAL
FUNDING
REQUIREMENT
TO
FUNDING
STANDARD
ACCOUNT
CHARGES AND CREDITS.—
(A) Clause (ii) of section 302(d)(1)(A) of
such Act is amended to read as follows:
‘‘(ii) the sum of the charges for such
plan year under subsection (b)(2), reduced
by the sum of the credits for such plan
year under subparagraph (B) of subsection
(b)(3), plus’’.
(B) The last sentence in section 302(d)(1)
of such Act is amended to read as follows:
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‘‘Such increase shall not exceed the amount which,
after taking into account charges (other than the ad-
ditional charge under this subsection) and credits
under subsection (b), is necessary to increase the
funded current liability percentage (taking into ac-
count the expected increase in current liability due
to benefits accruing during the plan year) to 100
percent.’’
(3) AMENDMENT TO DEFICIT REDUCTION CON-
TRIBUTION.—Paragraph (2) of section 302(d) of
such Act is amended—
(A) by striking ‘‘plus’’ at the end of sub-
paragraph (A);
(B) by striking the period at the end of
subparagraph (B) and inserting ‘‘, plus’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(C) the expected increase in current li-
ability due to benefits accruing during the plan
year.’’
(4) 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 the
following new subparagraphs:
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‘‘(D) 
SPECIAL
RULE
FOR
REQUIRED
CHANGES IN ACTUARIAL ASSUMPTIONS.—
‘‘(i) IN GENERAL.—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 unfunded old liability under
the plan in equal annual installments over
a period of 12 plan years (beginning with
the first plan year beginning after Decem-
ber 31, 1994).
‘‘(ii) ADDITIONAL UNFUNDED OLD LI-
ABILITY.—For purposes of clause (i), 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 by paragraph (7)(C) as
in effect for plan years beginning
after December 31, 1994, exceeds
‘‘(II) the current liability of the
plan as of the beginning of such first
plan year, valued using the same as-
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sumptions used under subclause (I)
(other than the assumptions required
by paragraph (7)(C)), using the prior
interest rate, and using such mortality
assumptions as were used to deter-
mine current liability for the first plan
year beginning after December 31,
1992.
‘‘(iii) PRIOR
INTEREST
RATE.—For
purposes of clause (ii), the term ‘prior in-
terest rate’ means the rate of interest that
is the same percentage of the weighted av-
erage under subsection (b)(5)(B)(ii)(I) for
the first plan year beginning after Decem-
ber 31, 1994, as the rate of interest used
by the plan to determine current liability
for the first plan year beginning after De-
cember 31, 1992, is of the weighted aver-
age under subsection (b)(5)(B)(ii)(I) for
such first plan year beginning after De-
cember 31, 1992.
‘‘(E) OPTIONAL
RULE
FOR
ADDITIONAL
UNFUNDED OLD LIABILITY.—
‘‘(i) IN
GENERAL.—If an employer
makes an election under clause (ii), the ad-
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ditional unfunded old liability for purposes
of subparagraph (D) shall be the amount
(if any) by which—
‘‘(I) the unfunded current liabil-
ity of the plan as of the beginning of
the first plan year beginning after De-
cember 31, 1994, valued using the as-
sumptions 
required 
by 
paragraph
(7)(C) as in effect for plan years be-
ginning after December 31, 1994, ex-
ceeds
‘‘(II) the unamortized portion of
the unfunded old liability under the
plan as of the beginning of the first
plan year beginning after December
31, 1994.
‘‘(ii) ELECTION.—
‘‘(I) An employer may irrevocably
elect to apply the provisions of this
subparagraph as of the beginning of
the first plan year beginning after De-
cember 31, 1994.
‘‘(II) If an election is made under
this clause, the increase under para-
graph (1) for any plan year beginning
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after December 31, 1994, and before
January 1, 2002, to which this sub-
section applies (without regard to this
subclause) shall not be less than the
increase that would be required under
paragraph (1) if the provisions of this
title as in effect for the last plan year
beginning before January 1, 1995,
had remained in effect.’’
(B) Clause (i) of section 302(d)(4)(B) of
such Act is amended by inserting ‘‘, the
unamortized portion of the additional unfunded
old liability,’’ after ‘‘old liability’’.
(5) APPLICABLE PERCENTAGE FOR DETERMIN-
ING UNFUNDED NEW LIABILITY AMOUNT.—Subpara-
graph (C) of section 302(d)(4) of such Act is
amended—
(A) by striking ‘‘.25’’ and inserting ‘‘.40’’,
and
(B) by striking ‘‘35’’ and inserting ‘‘60’’.
(6) 
UNPREDICTABLE
CONTINGENT
EVENT
AMOUNT.—
(A) Subparagraph (A) of section 302(d)(5)
of such Act is amended—
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(i) by striking ‘‘greater of’’ and insert-
ing ‘‘greatest 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 after clause (ii) the fol-
lowing new clause:
‘‘(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 at the end the
following new subparagraph:
‘‘(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.’’
(C) Clause (ii) of section 302(e)(4)(D) of
such Act is amended—
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(i) by striking ‘‘greater of’’ and insert-
ing ‘‘greatest of’’ before subclause (I);
(ii) by striking ‘‘or’’ at the end of
subclause (I);
(iii) by striking the period at the end
of subclause (II) and inserting ‘‘, or’’; and
(iv) by adding after subclause (II) the
following new clause:
‘‘(III) 25 percent of the amount
determined 
under 
subsection
(d)(5)(A)(iii) for the plan year.’’
(7) REQUIRED INTEREST RATE AND MORTALITY
ASSUMPTIONS FOR DETERMINING CURRENT LIABIL-
ITY.—
(A) IN
GENERAL.—Subparagraph (C) of
section 302(d)(7) 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) INTEREST RATE.—
‘‘(I) IN GENERAL.—The rate of
interest used to determine current li-
ability under this subsection shall be
the rate of interest used under sub-
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section (b)(5), except that the highest
rate in the permissible range under
subparagraph (B)(ii) thereof shall not
exceed the specified percentage under
subclause (II) of the weighted average
referred to in such subparagraph.
‘‘(II) SPECIFIED PERCENTAGE.—
For purposes of subclause (I), the
specified percentage shall be deter-
mined as follows:
‘‘In the case of plan years be-
ginning in calendar year:
The specified percentage is:
1995 ..................................................................................
109
1996 ..................................................................................
108
1997 ..................................................................................
107
1998 ..................................................................................
106
1999 and thereafter ......................................................
105.
‘‘(ii) MORTALITY TABLES.—
‘‘(I) COMMISSIONERS’ STANDARD
TABLE.—In the case of plan years be-
ginning before the first plan year to
which the first tables prescribed under
subclause (II) apply, the mortality
table used in determining current li-
ability under this subsection shall be
the table prescribed by the Secretary
of the Treasury which is based on the
prevailing 
commissioners’ 
standard
table 
(described 
in 
section
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807(d)(5)(A) of the Internal Revenue
Code of 1986) used to determine re-
serves for group annuity contracts is-
sued on January 1, 1993.
‘‘(II) 
SECRETARIAL
AUTHOR-
ITY.—The Secretary of the Treasury
may by regulation prescribe for plan
years beginning after December 31,
1999, mortality tables to be used in
determining current liability under
this subsection. Such tables shall be
based upon the actual experience of
pension plans and projected trends in
such experience. In prescribing such
tables, the Secretary of the Treasury
shall take into account results of
available independent studies of mor-
tality of individuals covered by pen-
sion plans.
‘‘(III) PERIODIC
REVIEW.—The
Secretary of the Treasury shall peri-
odically (at least every 5 years) review
any tables in effect under this sub-
section and shall, to the extent the
Secretary determines necessary, by
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regulation update the tables to reflect
the actual experience of pension plans
and projected trends in such experi-
ence.
‘‘(iii) SEPARATE MORTALITY TABLES
FOR
THE
DISABLED.—Notwithstanding
clause (ii)—
‘‘(I) IN GENERAL.—In the case
of plan years beginning after Decem-
ber 31, 1995, the Secretary of the
Treasury shall establish mortality ta-
bles which may be used (in lieu of the
tables under clause (ii)) to determine
current liability under this subsection
for individuals who are entitled to
benefits under the plan on account of
disability. Such Secretary shall estab-
lish separate tables for individuals
whose disabilities occur in plan years
beginning before January 1, 1995,
and for individuals whose disabilities
occur in plan years beginning on or
after such date.
‘‘(II) SPECIAL
RULE
FOR
DIS-
ABILITIES OCCURRING AFTER 1994.—
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In the case of disabilities occurring in
plan years beginning after December
31, 1994, the tables under subclause
(I) shall apply only with respect to in-
dividuals described in such subclause
who are disabled within the meaning
of title II of the Social Security Act
and the regulations thereunder.
‘‘(III) PLAN
YEARS
BEGINNING
IN 1995.—In the case of any plan year
beginning in 1995, a plan may use its
own mortality assumptions for indi-
viduals who are entitled to benefits
under the plan on account of disabil-
ity.’’
(B) AMORTIZATION OF UNFUNDED MOR-
TALITY INCREASE AMOUNT.—
(i) IN
GENERAL.—Paragraph (2) of
section 302(d) of such Act, as amended by
paragraph (3), is amended by striking
‘‘plus’’ at the end of subparagraph (B), by
striking the period at the end of subpara-
graph (C) and inserting ‘‘, and’’, and by
adding at the end the following new sub-
paragraph:
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‘‘(D) the aggregate of the unfunded mor-
tality increase amounts.’’
(ii) UNFUNDED MORTALITY INCREASE
AMOUNT.—Section 302(d) of such Act, as
amended by paragraph (1), is amended by
adding at the end the following new para-
graph:
‘‘(10) 
UNFUNDED
MORTALITY
INCREASE
AMOUNT.—
‘‘(A) IN GENERAL.—The unfunded mortal-
ity increase amount with respect to each un-
funded mortality increase is the amount nec-
essary to amortize such increase in equal an-
nual installments over a period of 10 plan years
(beginning with the first plan year for which a
plan uses any new mortality table issued under
paragraph (7)(C)(ii)(II) or (III)).
‘‘(B) UNFUNDED MORTALITY INCREASE.—
For purposes of subparagraph (A), the term
‘unfunded mortality increase’ means an amount
equal to the excess of—
‘‘(i) the current liability of the plan
for the first plan year for which a plan
uses any new mortality table issued under
paragraph (7)(C)(ii)(II) or (III), over
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‘‘(ii) the current liability of the plan
for such plan year which would have been
determined if the mortality table in effect
for the preceding plan year had been
used.’’
(iii) 
CONFORMING
AMENDMENT.—
Clause (i) of section 302(d)(4)(B) of such
Act, as amended by paragraph (4)(B), is
amended by inserting ‘‘the unamortized
portion of each unfunded mortality in-
crease,’’ after ‘‘additional unfunded old li-
ability,’’.
(8) TRANSITION RULE.—Section 302(d) of such
Act, as amended by paragraph (7), is amended by
adding at the end the following new paragraph:
‘‘(11) PHASE-IN
OF
INCREASES
IN
FUNDING
REQUIRED
BY
RETIREMENT
PROTECTION
ACT
OF
1994.—
‘‘(A) IN
GENERAL.—For any applicable
plan year, at the election of the employer, the
increase under paragraph (1) shall not exceed
the greater of—
‘‘(i) the increase that would be re-
quired under paragraph (1) if the provi-
sions of this title as in effect for plan years
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beginning before January 1, 1995, had re-
mained in effect, or
‘‘(ii) the amount which, after taking
into account charges (other than the addi-
tional charge under this subsection) and
credits under subsection (b), is necessary
to increase the funded current liability per-
centage (taking into account the expected
increase in current liability due to benefits
accruing during the plan year) for the ap-
plicable plan year to a percentage equal to
the sum of the initial funded current liabil-
ity percentage of the plan plus the applica-
ble number of percentage points for such
applicable plan year.
‘‘(B) APPLICABLE NUMBER OF PERCENT-
AGE POINTS.—
‘‘(i) INITIAL
FUNDED
CURRENT
LI-
ABILITY PERCENTAGE OF 75 PERCENT OR
LESS.—Except as provided in clause (ii),
for plans with an initial funded current li-
ability percentage of 75 percent or less, the
applicable number of percentage points for
the applicable plan year is:
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‘‘In the case
The applicable
of applicable
number of
plan years
percentage
beginning in:
points is:
1995 .....................................................
1996 .....................................................
1997 .....................................................
1998 .....................................................
1999 .....................................................
2000 .....................................................
2001 .....................................................
24.
‘‘(ii) OTHER CASES.—In the case of a
plan to which this clause applies, the appli-
cable number of percentage points for any
such applicable plan year is the sum of—
‘‘(I) 2 percentage points;
‘‘(II) the applicable number of
percentage points (if any) under this
clause for the preceding applicable
plan year;
‘‘(III) the product of .10 multi-
plied by the excess (if any) of (a) 85
percentage points over (b) the sum of
the initial funded current liability per-
centage and the number determined
under subclause (II);
‘‘(IV) for applicable plan years
beginning in 2000, 1 percentage
point; and
‘‘(V) for applicable plan years be-
ginning in 2001, 2 percentage points.
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‘‘(iii) PLANS TO WHICH CLAUSE (ii)
APPLIES.—
‘‘(I) IN
GENERAL.—Clause (ii)
shall apply to a plan for an applicable
plan year if the initial funded current
liability percentage of such plan is
more than 75 percent.
‘‘(II) PLANS
INITIALLY
UNDER
CLAUSE
(i).—In the case of a plan
which (but for this subclause) has an
initial funded current liability percent-
age of 75 percent or less, clause (ii)
(and not clause (i)) shall apply to
such plan with respect to applicable
plan years beginning after the first
applicable plan year for which the
sum of the initial funded current li-
ability percentage and the applicable
number of percentage points (deter-
mined under clause (i)) exceeds 75
percent. For purposes of applying
clause (ii) to such a plan, the initial
funded current liability percentage of
such plan shall be treated as being the
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ment required to be paid but for this para-
graph).
‘‘(B) PLANS
TO
WHICH
PARAGRAPH
AP-
PLIES.—This paragraph shall apply to a de-
fined benefit plan (other than a multiemployer
plan or a plan described in subsection
(d)(6)(A)) which—
‘‘(i) is required to pay installments
under this subsection for a plan year, and
‘‘(ii) has a liquidity shortfall for any
quarter during such plan year.
‘‘(C) PERIOD
OF
UNDERPAYMENT.—For
purposes of paragraph (1), any portion of an
installment that is treated as not paid under
subparagraph (A) shall continue to be treated
as unpaid until the close of the quarter in
which the due date for such installment occurs.
‘‘(D) LIMITATION
ON
INCREASE.—If the
amount of any required installment is increased
by reason of subparagraph (A), in no event
shall such increase exceed the amount which,
when added to prior installments for the plan
year, is necessary to increase the funded cur-
rent liability percentage (taking into account
the expected increase in current liability due to
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benefits accruing during the plan year) to 100
percent.
‘‘(E) DEFINITIONS.—For purposes of this
paragraph—
‘‘(i) 
LIQUIDITY
SHORTFALL.—The
term ‘liquidity shortfall’ means, with re-
spect to any required installment, an
amount equal to the excess (as of the last
day of the quarter for which such install-
ment is made) of the base amount with re-
spect to such quarter over the value (as of
such last day) of the plan’s liquid assets.
‘‘(ii) BASE AMOUNT.—
‘‘(I) IN
GENERAL.—The term
‘base amount’ means, with respect to
any quarter, an amount equal to 3
times the sum of the adjusted dis-
bursements from the plan for the 12
months ending on the last day of such
quarter.
‘‘(II) SPECIAL
RULE.—If the
amount determined under clause (i)
exceeds an amount equal to 2 times
the sum of the adjusted disburse-
ments from the plan for the 36
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months ending on the last day of the
quarter and an enrolled actuary cer-
tifies to the satisfaction of the Sec-
retary of the Treasury that such ex-
cess is the result of nonrecurring cir-
cumstances, the base amount with re-
spect to such quarter shall be deter-
mined without regard to amounts re-
lated 
to 
those 
nonrecurring 
cir-
cumstances.
‘‘(iii) DISBURSEMENTS
FROM
THE
PLAN.—The term ‘disbursements from the
plan’ means all disbursements from the
trust, including purchases of annuities,
payments of single sums and other bene-
fits, and administrative expenses.
‘‘(iv) ADJUSTED
DISBURSEMENTS.—
The term ‘adjusted disbursements’ means
disbursements from the plan reduced by
the product of—
‘‘(I) the plan’s funded current li-
ability percentage (as defined in sub-
section (d)(8)) for the plan year, and
‘‘(II) the sum of the purchases of
annuities, payments of single sums,
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and such other disbursements as the
Secretary of the Treasury shall pro-
vide in regulations.
‘‘(v) LIQUID ASSETS.—The term ‘liq-
uid assets’ means cash, marketable securi-
ties and such other assets as specified by
the Secretary of the Treasury in regula-
tions.
‘‘(vi) QUARTER.—The term ‘quarter’
means, with respect to any required install-
ment, the 3-month period preceding the
month in which the due date for such in-
stallment occurs.
‘‘(F) REGULATIONS.—The Secretary of the
Treasury may prescribe such regulations as are
necessary to carry out this paragraph.’’
(B) 
LIMITATION
ON
DISTRIBUTIONS
OTHER THAN LIFE ANNUITIES PAID BY THE
PLAN.—
(i) Section 206 of the Employee Re-
tirement Income Security Act of 1974 (29
U.S.C. 1056) is amended by adding at the
end the following new subsection:
‘‘(e) LIMITATION ON DISTRIBUTIONS OTHER THAN
LIFE ANNUITIES PAID BY THE PLAN.—
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‘‘(1) IN GENERAL.—Notwithstanding any other
provision of this part, the fiduciary of a pension plan
that is subject to the additional funding require-
ments of section 302(d) shall not permit a prohib-
ited payment to be made from a plan during a pe-
riod in which such plan has a liquidity shortfall (as
defined in section 302(e)(5)).
‘‘(2) PROHIBITED PAYMENT.—For purposes of
paragraph (1), the term ‘prohibited payment’
means—
‘‘(A) any payment, in excess of the month-
ly amount paid under a single life annuity (plus
any social security supplements described in the
last sentence of section 204(b)(1)(G)), to a par-
ticipant or beneficiary whose annuity starting
date (as defined in section 205(h)(2)), that oc-
curs during the period referred to in paragraph
(1),
‘‘(B) any payment for the purchase of an
irrevocable commitment from an insurer to pay
benefits, and
‘‘(C) any other payment specified by the
Secretary of the Treasury by regulations.
‘‘(3) PERIOD OF SHORTFALL.—For purposes of
this subsection, a plan has a liquidity shortfall dur-
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ing the period that there is an underpayment of an
installment under section 302(e) by reason of para-
graph (5)(A) thereof.
‘‘(4) COORDINATION
WITH
OTHER
PROVI-
SIONS.—Compliance with this subsection shall not
constitute a violation of any other provision of this
Act.’’
(ii) Section 502 of such Act is amend-
ed by adding at the end a new subsection
(m) to read as follows:
‘‘(m) In the case of a distribution to a pension plan
participant or beneficiary in violation of section 206(e) 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.’’
(10) AMENDMENT
TO
DEFINITION
OF
FULL-
FUNDING LIMITATION.—
(A) Subparagraph (A) of section 302(c)(7)
of such Act is amended by inserting ‘‘(including
the expected increase in current liability due to
benefits accruing during the plan year)’’ after
‘‘current liability’’ in clause (i).
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(C) Subparagraph (B) of section 302(c)(7)
of such Act 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 subparagraphs (C)
and (D) thereof) and using the rate of interest
used under subsection (b)(5)(B).’’
(11) DEFINITION
OF
CONTRIBUTING
SPON-
SOR.—Paragraph (13) of section 4001(a) of such
Act (29 U.S.C. 1301(a)(13)) is amended by striking
‘‘means a person—’’ and all that follows and insert-
ing 
‘‘means 
a 
person 
described 
in 
section
302(c)(11)(A) of this Act (without regard to section
302(c)(11)(B) of this Act) or section 412(c)(11)(A)
of the Internal Revenue Code of 1986 (without re-
gard to section 412(c)(11)(B) of such Code).’’
(b) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to plan years beginning after December
31, 1994.
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(2) CONTRIBUTING SPONSOR.—The amendment
made by subsection (a)(11) shall be effective as if
included in the Pension Protection Act.
SEC. 762. LIMITATION ON CHANGES IN CURRENT LIABILITY
ASSUMPTIONS.
(a) IN GENERAL.—Paragraph (5) of section 302(c)
of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1082(c)(5)) is amended—
(1) by striking ‘‘If the funding method’’ and in-
serting the following:
‘‘(A) IN GENERAL.—If the funding meth-
od’’, and
(2) by adding at the end the following new sub-
paragraph:
‘‘(B) APPROVAL REQUIRED FOR CERTAIN
CHANGES
IN
ASSUMPTIONS
BY
CERTAIN
SIN-
GLE-EMPLOYER
PLANS
SUBJECT
TO
ADDI-
TIONAL FUNDING REQUIREMENT.—
‘‘(i) IN GENERAL.—No actuarial as-
sumption (other than the assumptions de-
scribed in subsection (d)(7)(C)) used to de-
termine the current liability for a plan to
which this subparagraph applies may be
changed without the approval of the Sec-
retary of the Treasury.
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‘‘(ii) PLANS
TO
WHICH
SUBPARA-
GRAPH APPLIES.—This subparagraph shall
apply to a plan only if—
‘‘(I) the plan is a defined benefit
plan (other than a multiemployer
plan) to which title IV applies;
‘‘(II) the aggregate unfunded
vested benefits as of the close of the
preceding plan year (as determined
under section 4006(a)(3)(E)(iii)) of
such plan and all other plans main-
tained by the contributing sponsors
(as defined in section 4001(a)(13))
and members of such sponsors’ con-
trolled groups (as defined in section
4001(a)(14)) which are covered by
title IV (disregarding plans with no
unfunded 
vested 
benefits) 
exceed
$50,000,000; and
‘‘(III) the change in assumptions
(determined after taking into account
any changes in interest rate and mor-
tality table) results in a decrease in
the unfunded current liability of the
plan for the current plan year that ex-
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ceeds $50,000,000, or that exceeds
$5,000,000 and that is 5 percent or
more of the current liability of the
plan before such change.’’
(b) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendment made by
this section shall apply to changes in assumptions
for plan years beginning after October 28, 1993.
(2) CERTAIN CHANGES CEASE TO BE EFFEC-
TIVE.—In the case of changes in assumptions for
plan years beginning after December 31, 1992, and
on or before October 28, 1993, such changes shall
cease to be effective for plan years beginning after
December 31, 1994, if—
(A) such change would have required the
approval of the Secretary of the Treasury had
such amendment applied to such change, and
(B) such change is not so approved.
SEC. 763. ANTICIPATION OF BARGAINED BENEFIT IN-
CREASES.
(a) IN GENERAL.—Section 302(c) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1082(c)) is amended by adding at the end the following
new paragraph:
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‘‘(12) ANTICIPATION
OF
BENEFIT
INCREASES
EFFECTIVE IN THE FUTURE.—In determining pro-
jected benefits, the funding method of a collectively
bargained plan described in section 413(a) of the In-
ternal Revenue Code of 1986 (other than a multiem-
ployer plan) shall anticipate benefit increases sched-
uled to take effect during the term of the collective
bargaining agreement applicable to the plan.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to plan years beginning after De-
cember 31, 1994 with respect to collective bargaining
agreements in effect on or after January 1, 1995.
SEC. 764. MODIFICATION OF QUARTERLY CONTRIBUTION
REQUIREMENT.
(a) IN GENERAL.—Paragraph (1) of section 302(e)
of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1082(e)) is amended—
(1) by inserting ‘‘which has a funded current li-
ability percentage (as defined in subsection (d)(8))
for the preceding plan year of less than 100 per-
cent’’ before ‘‘fails’’, and
(2) by striking ‘‘any plan year’’ and inserting
‘‘the plan year’’.
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(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to plan years beginning after the
date of enactment of this Act.
Subpart C—Other Funding Provisions
SEC. 766. PROHIBITION ON BENEFIT INCREASES WHERE
PLAN SPONSOR IS IN BANKRUPTCY.
(a) AMENDMENT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974.—Section 204 of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1054) is amended by redesignating subsection (i)
as (j) and inserting after subsection (h) the following new
subsection:
‘‘(i)(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—
‘‘(A) any increase in benefits,
‘‘(B) any change in the accrual of benefits, or
‘‘(C) any change in the rate at which benefits
become nonforfeitable under the plan,
with respect to employees of the debtor, shall be effective
prior to the effective date of such employer’s plan of reor-
ganization.