133
year beginning after December
31, 1994, as the rate of interest
used by the plan to determine
current liability for the first plan
year beginning after December
31, 1992, is of the weighted aver-
age 
under 
subsection
(b)(5)(B)(ii)(I) for such first plan
year beginning after December
31, 1992.
‘‘(E) OPTIONAL
RULE
FOR
ADDI-
TIONAL UNFUNDED OLD LIABILITY.—
‘‘(i) IN GENERAL.—If an election
is made under clause (ii), the
term ‘additional unfunded old li-
ability’ means (in lieu of the addi-
tional unfunded old liability de-
scribed in clause (ii) of subpara-
graph (D)), the amount (if any) by
which—
‘‘(I) the unfunded current
liability of the plan as of the
beginning of the first plan
year beginning after Decem-
ber 31, 1994, valued using the
134
assumptions 
required 
by
paragraph (7)(C) as in effect
for plan years beginning after
December 31, 1994, exceeds
‘‘(II) the unamortized por-
tion of the unfunded old li-
ability under the plan as of
the beginning of the first plan
year beginning after Decem-
ber 31, 1994.
‘‘(ii) ELECTION.—
‘‘(I) An employer may ir-
revocably elect, at such time
and in such manner as shall
be prescribed by the Sec-
retary, to apply the provisions
of this subparagraph as of the
beginning of the first plan
year beginning after Decem-
ber 31, 1994.
‘‘(II) If an election is made
under this clause, the in-
crease under paragraph (1)
for any plan year beginning
after December 31, 1994, and
135
before January 1, 2002, shall
not be less than the increase
that would be required under
paragraph (1) if the provi-
sions of this title as in effect
for plan years beginning be-
fore January 1, 1995, had re-
mained in effect.’’
(5) APPLICABLE
PERCENTAGE
FOR
DE-
TERMINING
UNFUNDED
NEW
LIABILITY
AMOUNT.—Subparagraph (C) of section
412(l)(4) of such Code 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
412(l)(5) of such Code is amended—
(i) by striking ‘‘greater of’’ and
inserting 
‘‘greatest 
of’’ 
before
clause (i);
(ii) by striking ‘‘or’’ at the end
of clause (i);
136
(iii) by striking the period at
the end of clause (ii) and insert-
ing ‘‘, or’’; and
(iv) by adding after clause (ii)
the following new clause:
‘‘(iii) the additional amount
that would be determined under
paragraph (4)(A) if the unpredict-
able contingent event benefit li-
abilities were included in un-
funded 
new 
liability 
notwith-
standing paragraph (4)(B)(ii).’’
(B) Paragraph (5) of section 412(l)
of such Code is amended by adding at
the end the following new subpara-
graph:
‘‘(E) 
LIMITATION.—The 
present
value of the amounts described in
subparagraph (A) with respect to any
one event shall not exceed the unpre-
dictable contingent event benefit li-
abilities attributable to that event.’’
(C) 
Clause 
(ii) 
of 
section
412(m)(4)(D) of such Code is amend-
ed—
137
(i) by striking ‘‘greater of’’ and
inserting 
‘‘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 in-
serting ‘‘, or’’; and
(iv) by adding after subclause
(II) the following new subclause:
‘‘(III) 25 percent of the
amount 
determined 
under
subsection (l)(5)(A)(iii) for the
plan year.’’
(7) REQUIRED INTEREST RATE AND MOR-
TALITY ASSUMPTIONS FOR DETERMINING CUR-
RENT LIABILITY.—Subparagraph (C) of sec-
tion 412(l)(7) of such Code is amended to
read as follows:
‘‘(C) INTEREST RATE AND MORTALITY
ASSUMPTIONS USED.—Effective for plan
years beginning after December 31,
1994—
‘‘(i) the rate of interest used to
determine current liability under
138
this subsection shall be the rate
of interest used under subsection
(b)(5), except that the highest rate
in the permissible range under
subparagraph (B)(ii) thereof shall
not exceed 105 percent of the
weighted average referred to in
such subparagraph, and
‘‘(ii) the mortality table used
to 
determine 
current 
liability
under this subsection shall be the
table prescribed by the Secretary.
The table prescribed under clause (ii)
shall be based on the prevailing com-
missioners’ standard table (described
in section 807(d)(5)(A)) used to deter-
mine reserves for group annuity con-
tracts issued on the date as of which
current liability is determined (with-
out regard to any other subparagraph
of section 807(d)(5)). The Secretary
shall prescribe separate tables, which
may be used instead of the table de-
scribed in the preceding sentence, to
calculate mortality rates for partici-
139
pants who satisfy the definition of
disability under titles II and XVI of
the Social Security Act and the regu-
lations thereunder.’’
(8) TRANSITION RULE.—Section 412(l) of
such Code is amended by adding at the
end the following new paragraph:
‘‘(9) PHASE-IN OF INCREASES IN FUNDING
REQUIRED BY RETIREMENT PROTECTION ACT
OF 1994.—
‘‘(A) IN GENERAL.—For any appli-
cable plan year, at the election of the
employer, the increase under para-
graph (1) shall not exceed the greater
of—
‘‘(i) the increase that would be
required under paragraph (1) if
the provisions of this title as in
effect for plan years beginning be-
fore January 1, 1995, had re-
mained in effect, or
‘‘(ii) the amount which, after
taking 
into 
account 
charges
(other than the additional charge
under this subsection) and credits
140
under subsection (b), is necessary
to increase the funded current li-
ability percentage (taking into ac-
count the expected increase in
current liability due to benefits
accruing during the plan year) for
the applicable plan year to a per-
centage equal to the sum of the
initial funded current liability
percentage of the plan plus the
applicable number of percentage
points for such applicable plan
year.
‘‘(B) APPLICABLE
NUMBER
OF
PER-
CENTAGE POINTS.—
‘‘(i) INITIAL
FUNDED
CURRENT
LIABILITY
PERCENTAGE
OF
PER-
CENT
OR
LESS.—Except as pro-
vided in clause (ii), for plans with
an initial funded current liability
percentage of 75 percent or less,
the applicable number of percent-
age points for the applicable plan
year is as follows:
‘‘In the case of applicable
The applicable number of
plan years beginning in:
percentage points is:
1995 ......................................................
141
1996 ......................................................
1997 ......................................................
1998 ......................................................
1999 ......................................................
2000 ......................................................
2001 ......................................................
24.
‘‘(ii) OTHER CASES.—In the case
of a plan to which this clause ap-
plies, the applicable number of
percentage points for any such
applicable plan year is the sum
of—
‘‘(I) 2 percentage points;
‘‘(II) the applicable num-
ber of percentage points (if
any) under this clause for the
preceding 
applicable 
plan
year;
‘‘(III) the product of .10
multiplied by the excess (if
any) 
of 
(a) 
percentage
points over (b) the sum of the
initial funded current liability
percentage and the number
determined under subclause
(II);
142
‘‘(IV) for applicable plan
years beginning in 2000, 1 per-
centage point; and
‘‘(V) for applicable plan
years beginning in 2001, 2 per-
centage points.
‘‘(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 fund-
ed 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
143
which the sum of the initial
funded current liability per-
centage and the applicable
number of percentage points
(determined under clause (i))
exceeds 75 percent. For pur-
poses of applying clause (ii) to
such a plan, the initial funded
current liability percentage of
such plan shall be treated as
being the sum referred to in
the preceding sentence.
‘‘(C) DEFINITIONS.—For purposes
of this paragraph—
‘‘(i) The term ‘applicable plan
year’ means a plan year begin-
ning after December 31, 1994, and
before January 1, 2002.
‘‘(ii) The term ‘initial funded
current 
liability 
percentage’
means the funded current liabil-
ity percentage as of the first day
of the first plan year beginning
after December 31, 1994.’’
(9) LIQUIDITY REQUIREMENT.—
144
(A) Section 412(m) of such Code is
amended by redesignating paragraph
(5) as paragraph (6) and by inserting
after paragraph (4) the following new
paragraph:
‘‘(5) LIQUIDITY REQUIREMENT.—
‘‘(A) IN GENERAL.—A plan to which
this paragraph applies shall be treat-
ed as failing to pay the full amount of
any required installment to the ex-
tent that the value of the liquid assets
paid in such installment is less than
the liquidity shortfall (whether or not
such liquidity shortfall exceeds the
amount of such installment required
to be paid but for this paragraph).
‘‘(B) PLANS
TO
WHICH
PARAGRAPH
APPLIES.—This paragraph shall apply
to a defined benefit plan to which
subsection (l) applies and which—
‘‘(i) is required to pay install-
ments under this subsection for a
plan year, and
145
‘‘(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 subpara-
graph (A) shall continue to be treated
as unpaid until the close of the quar-
ter in which the due date for such in-
stallment occurs.
‘‘(D) LIMITATION
ON
INCREASE.—If
the amount of any required install-
ment is increased by reason of sub-
paragraph (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 current liability percent-
age (taking into account the expected
increase in current liability due to
benefits accruing during the plan
year) to 100 percent.
‘‘(E) DEFINITIONS.—For purposes
of this paragraph—
146
‘‘(i) LIQUIDITY SHORTFALL.—The
term ‘liquidity shortfall’ means,
with respect to any required in-
stallment, 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 respect 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 re-
spect 
to 
any 
quarter, 
an
amount equal to 3 times the
sum of the adjusted disburse-
ments 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 
disbursements
from the plan for the 36
147
months ending on the last day
of the quarter and an enrolled
actuary certifies to the Sec-
retary that such excess is the
result of nonrecurring cir-
cumstances, the base amount
with respect to such quarter
shall be determined without
regard to amounts related to
those 
nonrecurring 
cir-
cumstances.
‘‘(iii) DISBURSEMENTS FROM THE
PLAN.—The term ‘disbursements
from the plan’ means all disburse-
ments from the trust, including
purchases of annuities, payments
of single sums and other benefits,
and administrative expenses.
‘‘(iv) 
ADJUSTED
DISBURSE-
MENTS.—The term ‘adjusted dis-
bursements’ means disbursements
from the plan reduced by the
product of—
‘‘(I) the plan’s funded cur-
rent liability percentage (as
148
defined in subsection (l)(8))
for the plan year, and
‘‘(II) the sum of the pur-
chases of annuities, payments
of single sums, and such other
disbursements 
as 
the 
Sec-
retary shall provide in regula-
tions.
‘‘(v) LIQUID ASSETS.—The term
‘liquid assets’ means cash, mar-
ketable securities and such other
assets as specified by the Sec-
retary in regulations.
‘‘(vi) 
QUARTER.—The 
term
‘quarter’ means, with respect to
any required installment, the 3-
month 
period 
preceding 
the
month in which the due date for
such installment occurs.
‘‘(F) REGULATIONS.—The Secretary
may prescribe such regulations as are
necessary to carry out this para-
graph.’’
(B) EXCISE TAX ON UNPAID LIQUID-
ITY SHORTFALL.—
149
(i) Subsection (e) of section
4971 of such Code is amended by
striking ‘‘(a) or (b)’’ wherever it
appears and replacing it with
‘‘(a), (b) or (f)’’.
(ii) Section 4971 of such Code
is amended by redesignating sub-
section (f) as subsection (g) and
adding a new subsection (f) to
read as follows:
‘‘(f) FAILURE
TO
PAY
LIQUIDITY
SHORT-
FALL.—
‘‘(1) IN GENERAL.—In the case of a plan
to which section 412(m)(5) applies, there
is hereby imposed a tax of 10 percent of
the excess (if any) of—
‘‘(A) the amount of the liquidity
shortfall for any quarter, over
‘‘(B) the amount of such shortfall
which is paid by the required install-
ment under section 412(m) for such
quarter (but only if such installment
is paid on or before the due date for
such installment).
150
‘‘(2) ADDITIONAL TAX.—If the plan has a
liquidity shortfall as of the close of any
quarter and as of the close of each of the
following 4 quarters, there is hereby im-
posed a tax equal to 100 percent of the
amount on which tax was imposed by
paragraph (1) for such first quarter.
‘‘(3) DEFINITIONS AND SPECIAL RULE.—
‘‘(A) LIQUIDITY
SHORTFALL; QUAR-
TER.—For purposes of this subsection,
the terms ‘liquidity shortfall’ and
‘quarter’ have the respective mean-
ings given such terms by section
412(m)(5).
‘‘(B) SPECIAL RULE.—If the tax im-
posed by paragraph (2) is paid with
respect to any liquidity shortfall for
any quarter, no further tax shall be
imposed by this subsection on such
shortfall for such quarter.’’
(C) TREATMENT
OF
FAILURE
TO
MAKE CERTAIN PAYMENTS IF PLAN HAS
LIQUIDITY
SHORTFALL.—Section 401(a)
of such Code is amended by adding at
the end the following new paragraph:
151
‘‘(32) TREATMENT OF FAILURE TO MAKE
CERTAIN PAYMENTS IF PLAN HAS LIQUIDITY
SHORTFALL.—
‘‘(A) IN GENERAL.—A trust forming
part of a pension plan to which sec-
tion 412(m)(5) applies shall not be
treated as failing to constitute a
qualified trust under this section
merely because such plan ceases to
make any payment described in sub-
paragraph (B) during any period that
such plan has a liquidity shortfall (as
defined in section 412(m)(5)).
‘‘(B) PAYMENTS DESCRIBED.—A pay-
ment is described in this subpara-
graph if such payment is—
‘‘(i) any payment, in excess of
the monthly amount paid under a
single life annuity (plus any social
security supplements described in
the 
last 
sentence 
of 
section
411(a)(9)), to a participant or ben-
eficiary whose annuity starting
date 
(as 
defined 
in 
section
417(f)(2)) occurs during the pe-
152
riod referred to in subparagraph
(A),
‘‘(ii) any payment for the pur-
chase of an irrevocable commit-
ment from an insurer to pay bene-
fits, and
‘‘(iii) any other payment speci-
fied by the Secretary by regula-
tions.
‘‘(C) PERIOD
OF
SHORTFALL.—For
purposes of this paragraph, a plan
has a liquidity shortfall during the
period that there is an underpayment
of 
an 
installment 
under 
section
412(m) by reason of paragraph (5)(A)
thereof.’’
(10) AMENDMENT
TO
DEFINITION
OF
FULL FUNDING LIMITATION.—
(A) Subparagraph (A) of section
412(c)(7) of such Code is amended—
(i) by inserting ‘‘(including
the expected increase in current
liability due to benefits accruing
during the plan year)’’ after ‘‘cur-
rent liability’’ in clause (i), and
153
(ii) by adding at the end the
following flush sentences:
‘‘In no event shall the excess de-
scribed in the preceding sentence for
any plan year be less than the excess
(if any) of 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 the value of the plan’s
assets determined under paragraph
(2). For purposes of the preceding
sentence, the term ‘current liability’
has the meaning given such term by
subsection (l)(7) (determined without
regard to subsection (l)(7)(D)), and as-
sets shall not be reduced by any cred-
it balance in the funding standard ac-
count.’’.
(B) Subparagraph (B) of section
412(c)(7) of such Code is amended to
read as follows:
‘‘(B) CURRENT LIABILITY.—For pur-
poses 
of 
subparagraph 
(D) 
and
subclause (I) of subparagraph (A)(i),
154
the term ‘current liability’ has the
meaning given such term by sub-
section (l)(7) (without regard to sub-
paragraphs (C) and (D) thereof) and
using the rate of interest used under
subsection (b)(5)(B).’’
(b) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendments
made by this section shall apply to plan
years beginning after December 31, 1994.
(2) DELAY IN EFFECTIVE DATE FOR DIS-
ABLED
LIVES.—For plan years beginning
before January 1, 1996, current liability
may be determined using a plan’s own
mortality assumptions for purposes of
calculating the mortality rates of dis-
abled lives.
SEC. 122. LIMITATION ON CHANGES IN CURRENT LIABILITY
ASSUMPTIONS.
(a) IN GENERAL.—Paragraph (5) of section
412(c) of the Internal Revenue Code of 1986 is
amended—
(1) by striking ‘‘If the funding meth-
od’’ and inserting the following:
155
‘‘(A) 
IN
GENERAL.—If 
the 
funding
method’’, and
(2) by adding at the end the following
new subparagraph:
‘‘(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 assump-
tions 
described 
in 
subsection
(l)(7)(C)) used to determine the cur-
rent liability for a plan to which this
subparagraph 
applies 
may 
be
changed without the approval of the
Secretary.
‘‘(ii) PLANS
TO
WHICH
SUBPARA-
GRAPH
APPLIES.—This subparagraph
shall apply to a plan only if—
‘‘(I) subsection (l) applies to
the plan;
‘‘(II) the employer (within the
meaning 
of 
section 
412(c)(11)
(without regard to subparagraph
(B) thereof)) maintaining such
156
plan 
is 
described 
in 
section
4043(b)(1) of the Employee Retire-
ment Income Security Act of 1974;
and
‘‘(III) the change in assump-
tions (determined after taking
into account any changes in inter-
est rate and mortality table) re-
sults 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
current liability of the plan be-
fore such change.’’
(b) EFFECTIVE DATE.—
(1) 
IN
GENERAL.—The 
amendment
made by this section shall apply to
changes in assumptions for plan years be-
ginning after October 28, 1993.
(2) CERTAIN CHANGES CEASE TO BE EF-
FECTIVE.—In the case of changes in as-
sumptions for plan years beginning after
December 31, 1992, and on or before Oc-
157
tober 28, 1993, such changes shall cease
to be effective for plan years beginning
after December 31, 1994, if—
(A) such change would have re-
quired the approval of the Secretary
of the Treasury had such amendment
applied to such change, and
(B) such change is not so ap-
proved.
SEC. 123. ANTICIPATION OF BARGAINED BENEFIT IN-
CREASES.
(a) IN GENERAL.—Section 412(c) of the In-
ternal Revenue Code of 1986 is amended by
adding at the end the following new para-
graph:
‘‘(12) ANTICIPATION
OF
BENEFIT
IN-
CREASES EFFECTIVE IN THE FUTURE.—In de-
termining projected benefits, the funding
method of a collectively bargained plan
described in section 413(a) (other than a
multiemployer plan) shall anticipate ben-
efit increases scheduled to take effect
during the term of the collective bargain-
ing agreement applicable to the plan.’’
158
(b) EFFECTIVE
DATE.—The amendment
made by this section shall apply to plan years
beginning after December 31, 1994, with re-
spect to collective bargaining agreements in
effect on or after January 1, 1995.
SEC. 124. MODIFICATION OF QUARTERLY CONTRIBUTION
REQUIREMENT.
(a) IN GENERAL.—Paragraph (1) of section
412(m) of the Internal Revenue Code of 1986
is amended—
(1) by inserting ‘‘which has a funded
current liability percentage (as defined in
subsection (l)(8)) for the preceding plan
year of less than 100 percent’’ before
‘‘fails’’, and
(2) by striking ‘‘any plan year’’ and in-
serting ‘‘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. 125. EXCEPTIONS TO EXCISE TAX ON NONDEDUCTIBLE
CONTRIBUTIONS.
(a) IN GENERAL.—Section 4972(c) of the In-
ternal Revenue Code of 1986 is amended by
159
adding at the end the following new para-
graph:
‘‘(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
deductible under section 404(a)(1)(D)
if the plan had more than 100 partici-
pants if—
‘‘(i) the plan is covered under
section 4021 of the Employee Re-
tirement Income Security Act of
1974, and
‘‘(ii) the plan is terminated
under section 4041(b) of such Act
on or before the last day of the
taxable year, and
‘‘(B) contributions to a defined
contribution plan which—
‘‘(i) do not exceed 6 percent of
compensation (within the mean-
ing of section 404(a)(7)(A)(i)) paid
or accrued (during the taxable
year for which the contributions
160
were made) to beneficiaries under
the plan, and
‘‘(ii) are not deductible when
contributed solely because of sec-
tion 404(a)(7).
If one or more defined benefit plans were
taken into account in determining the
amount allowable as a deduction under
section 404 for contributions to any de-
fined contribution plan, subparagraph
(B) shall apply only if all such defined
benefit plans are described in section
404(a)(1)(D). For purposes of subpara-
graph (B), the deductible limits under
section 404(a)(7) shall first be applied to
amounts contributed to a defined benefit
plan and then to amounts described in
subparagraph (B).’’
(b) EFFECTIVE DATE.—
(1) 
SECTION
4972(c)(6)(A).—Section
4972(c)(6)(A) of the Internal Revenue
Code of 1986 (as added by this section)
shall apply to taxable years ending on or
after the date of enactment of this Act.
161
(2) 
SECTION
4972(c)(6)(B).—Section
4972(c)(6)(B) of such Code (as added by
this section) shall apply to taxable years
ending on or after December 31, 1992.
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 REPORTING.—Section 4043(a) of the
Employee Retirement Income Security Act of
1974 (29 U.S.C. 1343(a)) is amended—
(1) in the first sentence, by inserting
‘‘or the contributing sponsor’’ before
‘‘knows or has reason to know’’;
(2) in the first sentence, by inserting
‘‘, unless a notice otherwise required
under this subsection has already been
provided with respect to such event’’ be-
fore the period at the end; and
(3) by striking the last sentence.
(b) NOTIFICATION THAT EVENT IS ABOUT TO
OCCUR.—Section 4043 of such Act is amended
by redesignating subsections (b), (c), and (d)
162
as (c), (d), and (e), respectively, and by insert-
ing after subsection (a) the following new sub-
section:
‘‘(b)(1) The requirements of this sub-
section shall be applicable to a contributing
sponsor only if the aggregate unfunded vested
benefits at the end of the preceding plan year
(as 
determined 
under 
section
4006(a)(3)(E)(iii)) of plans which are main-
tained by such sponsor and the members of
such sponsor’s controlled group and are cov-
ered by this title exceed $50,000,000 (taking
into account only those plans with unfunded
vested benefits).
‘‘(2) No later than 30 days prior to the ef-
fective date of an event described in para-
graph (9), (10), (11), (12), or (13) of subsection
(c), a contributing sponsor to which the re-
quirements of this subsection apply shall no-
tify the corporation that the event is about to
occur.
‘‘(3) The corporation may waive the re-
quirement of this subsection with respect to
any or all reportable events with respect to
any contributing sponsor.’’
163
(c) NEW REPORTABLE EVENTS.—Subsection
(c) of section 4043 of such Act (as redesignated
by subsection (b)) is amended—
(1) by striking the ‘‘or’’ at the end of
paragraph (8);
(2) by striking paragraph (9); and
(3) by inserting after paragraph (8)
the following new paragraphs:
‘‘(9) when, as a result of an event, a
person ceases to be a member of the con-
trolled 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 extraor-
dinary 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
164
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 contrib-
uting sponsor and all members of its con-
trolled group;
‘‘(12) when, in any 12-month period,
an aggregate of 3 percent or more of the
benefit liabilities of a plan covered by
this title and maintained by a contribut-
ing sponsor or a member of its controlled
group are transferred to a person that is
not a member of the controlled group or
to a plan or plans maintained by a person
or persons that are not such a contribut-
ing sponsor or a member of its controlled
group; or
‘‘(13) when any other event occurs
that may be indicative of a need to termi-
nate 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
the following new subsection:
‘‘(f) Any information or documentary ma-
terial submitted to the corporation pursuant
165
to this section or section 4050(c) shall be ex-
empt from disclosure under section 552 of
title 5, United States Code, and no such infor-
mation or documentary material may be made
public, except as may be relevant to any ad-
ministrative or judicial action or proceeding.
Nothing in this section is intended to prevent
disclosure to either body of Congress or to
any duly authorized committee or subcommit-
tee of the Congress.’’
(e) TECHNICAL
AND CONFORMING AMEND-
MENTS.—
(1) Subsection (a) of section 4043 of
such Act, and subsections (d) and (e) of
such section 4043 (as redesignated by
subsection (b)) are amended by striking
‘‘subsection (b)’’ each place it appears
and inserting ‘‘subsection (c)’’.
(2) Section 4042(a)(3) of such Act is
amended by striking ‘‘4043(b)(7)’’ and in-
serting ‘‘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.
166
SEC. 202. ALTERNATIVE TO INVOLUNTARY TERMINATION.
(a) IN GENERAL.—Subtitle C of title IV of
the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1341 et seq.) is amended
by adding at the end the following new sec-
tion:
‘‘JUDICIAL RELIEF OTHER THAN INVOLUNTARY
TERMINATION
‘‘SEC. 4050. (a) INSTITUTION
OF PROCEED-
INGS.—
‘‘(1) IN GENERAL.—Whenever the cor-
poration determines (without regard to
the potential availability of relief under
this section) that, upon the occurrence of
an event described in paragraph (9), (10),
(11), (12), or (13) of section 4043(c), the
possible long-run loss of the corporation
with respect to a plan may reasonably be
expected to increase unreasonably if the
plan is not terminated, the corporation
may, in its discretion, institute proceed-
ings under this section as an alternative
to instituting proceedings under section
4042 to terminate the plan.
‘‘(2) LIMITATION.—In the case of an
event described in paragraph (9) or (13)
167
of section 4043(c), this section shall apply
only if, immediately after the effective
date of the event, the total revenues, the
total operating income, or the total assets
of a contributing sponsor and all mem-
bers of its controlled group would be less
than 90 percent of the total revenues, the
total operating income, or the total as-
sets, respectively, of a contributing spon-
sor and all members of its controlled
group immediately before the effective
date of the event. For purposes of this
paragraph, all events occurring in any 12-
month period shall be treated as a single
event.
‘‘(b) Whenever the corporation makes a
determination under subsection (a), it may,
upon notice to a contributing sponsor, apply
to the appropriate United States district court
for such legal or equitable relief as the cor-
poration deems appropriate and consistent
with its duties under this title. The court shall
grant such relief as it determines necessary to
protect the interests of the participants or to
avoid any unreasonable deterioration of the
168
financial condition of the plan or any unrea-
sonable increase in the liability of the fund,
without interfering unreasonably with the
business of the contributing sponsor or mem-
bers of its controlled group.
‘‘(c)(1) In any case in which the corpora-
tion is provided 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
submission of additional information or docu-
mentary material, in which case an action
under this section may be brought no later
than 20 days after the corporation receives all
the information and documentary material it
had required.
‘‘(2) After a notice described in paragraph
(1) is provided to the corporation, a person
may elect, upon further notice to the corpora-
tion, to proceed with an event prior to the ex-
piration of the time periods described in para-
169
graph (1). In the case of such an election, an
action under this section may be brought at
any time within the period specified in sub-
section 4003(e)(6).
‘‘(3) In any case in which the corporation
is not provided with a notice required by sub-
section (b) of section 4043 by the time speci-
fied in that subsection, in any case in which
a person fails or refuses to provide the addi-
tional information or documentary material
required by the corporation under paragraph
(1), or in any case in which a person proceeds
with an event without providing the corpora-
tion with the further notice required under
paragraph (2) with respect to such event, 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
170
action shall be deemed to arise on the effec-
tive date of the event.
‘‘(d) Nothing in this section shall limit the
authority of the corporation to initiate pro-
ceedings to terminate a plan under section
4042, or to initiate proceedings or to seek re-
lief 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 place 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 60 days or more after the
date of the enactment of this Act.
171
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 (29 U.S.C. 1301 et seq.) is amended
by adding at the end the following new sec-
tion:
‘‘SEC. 4010. AUTHORITY TO REQUIRE CERTAIN INFORMA-
TION.
‘‘(a) INFORMATION REQUIRED.—Each person
described in subsection (b) shall provide the
corporation annually, on or before a date
specified by the corporation in regulations,
with—
‘‘(1) 
such 
records, 
documents, 
or
other information 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 unavailable, unaudited) financial
statements, and such other financial in-
formation as the corporation may pre-
scribe in regulations.
‘‘(b) PERSONS REQUIRED TO PROVIDE INFOR-
MATION.—The persons covered by subsection
172
(a) are each contributing sponsor, and each
member of a contributing sponsor’s controlled
group, of a single-employer plan covered by
this title, if—
‘‘(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 
which 
are
maintained by the contributing sponsor
and the members of its controlled group
and are covered by this title exceed
$50,000,000 (taking into account only
those plans of the contributing sponsor
and its controlled group with unfunded
vested benefits); or
‘‘(2) the conditions for imposition of a
lien described in section 302(f)(1)(A) and
(B) of this Act or section 412(n)(1)(A) and
(B) of the Internal Revenue Code of 1986
have been met with respect to any plan
maintained by the contributing sponsor
or any member of its controlled group; or
‘‘(3) minimum funding waivers in ex-
cess of $1,000,000 have been granted with
respect to any plan maintained by the
173
contributing sponsor or any member of
its controlled group, and any portion
thereof is still outstanding.
‘‘(c) INFORMATION EXEMPT FROM DISCLO-
SURE REQUIREMENTS.—Any information or doc-
umentary material submitted to the corpora-
tion pursuant to this section 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 administra-
tive or judicial action or proceeding. 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.
174
SEC. 204. LIABILITY UPON LIQUIDATION OF CONTRIBUTING
SPONSOR OR CONTROLLED GROUP MEMBER
IF PLAN REMAINS ONGOING.
(a) IN GENERAL.—Section 4062 of the Em-
ployee Retirement Income Security Act of
1974 (29 U.S.C. 1362) is amended by adding at
the end the following new subsection:
‘‘(f) LIABILITY ON LIQUIDATION OF CONTRIB-
UTING SPONSOR OR CONTROLLED GROUP MEM-
BER.—
‘‘(1) IN
GENERAL.—In any case in
which—
‘‘(A) all or substantially all of the
assets of a person who is a contribut-
ing sponsor of a single-employer plan,
or a member of a controlled group of
a contributing sponsor of a single-em-
ployer plan, are liquidated—
‘‘(i) in a case under chapter 7
of title 11, United States Code,
‘‘(ii) in a case under chapter
11 of such title 11 in which—
‘‘(I) the plan confirmed
under such chapter 11 pro-
vides for the liquidation of all
175
or substantially all of the
property of the estate, and
‘‘(II) the debtor does not
engage in business after the
confirmation of such plan, or
‘‘(iii) under any similar Fed-
eral law or law of a State or polit-
ical subdivision of a State, and
‘‘(B) the single-employer plan is
not terminated,
such person shall be deemed liable under
subsection (b) as if the single-employer
plan 
had 
terminated 
under 
section
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 ini-
tiated.
‘‘(2) LIMITED JOINT AND SEVERAL LIABIL-
ITY.—The liability under this subsection
shall be joint and several only among the
members of the controlled group (includ-
ing, where applicable, the contributing
sponsor) who are liquidating as described
in paragraph (1).
176
‘‘(3) APPLICABILITY
OF
OTHER
PROVI-
SIONS.—Except as provided in paragraph
(2), any provision of this Act or any other
provision of law that applies to liability
under the preceding subsections of 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 termi-
nation date.
‘‘(4) LIABILITY OWED TO PLAN; TRANSFER
OF
LIABILITY
PAYMENTS
TO
THE
ONGOING
PLAN WHERE COLLECTED BY THE CORPORA-
TION.—The liability 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 con-
nection with such plan.
177
‘‘(5) REGULATIONS.—The corporation
may prescribe regulations under this sub-
section, including—
‘‘(A) rules governing—
‘‘(i) 
the 
determination 
of
whether and when a liquidation
referred to in this subsection has
occurred, and
‘‘(ii) the assignment of the
plan’s or corporation’s claim to li-
ability payments under this sub-
section to other members of the
controlled group as a means of
collecting such payments, subject
to the transfer of such payments
to the plan, and
‘‘(B) rules providing alternative
arrangements for making liability
payments under this subsection.’’
(b) 
CONFORMING
AMENDMENT.—Section
4062(a) of such Act is amended—
(1) in paragraph (1), by striking ‘‘and’’
after ‘‘subsection (b),’’;
178
(2) in paragraph (2), by striking the
period after ‘‘subsection (c)’’ and insert-
ing ’’, and’’; and
(3) by adding at the end the following
new paragraph:
‘‘(3) liability to the plan, to the extent
provided in subsection (f).’’
(c) COORDINATION WITH MINIMUM FUNDING
RULES.—
(1) ERISA.—Section 302(c) of the Em-
ployee Retirement Income Security Act of
1974 is amended by adding at the end the
following new paragraph:
‘‘(13) TREATMENT OF LIABILITY ON LIQUIDA-
TION
OF
EMPLOYER.—Any amount paid to a
plan pursuant to section 4062(f)—
‘‘(A) shall be treated as not contrib-
uted by the employer for purposes of sub-
section (b)(3)(A), and
‘‘(B) shall be treated as a net experi-
ence gain of the plan under subsection
(b)(3)(B)(ii).’’
(2) 1986 CODE.—Section 412(c) of the
Internal Revenue Code of 1986 is amend-
179
ed by adding at the end the following
new paragraph:
‘‘(13) TREATMENT OF LIABILITY ON LIQ-
UIDATION OF EMPLOYER.—Any amount paid
to a plan pursuant to section 4062(f) of
the Employee Retirement Income Secu-
rity Act of 1974—
‘‘(A) shall be treated as not con-
tributed by the employer for pur-
poses of subsection (b)(3)(A), and
‘‘(B) shall be treated as a net ex-
perience gain of the plan under sub-
section (b)(3)(B)(ii).’’
(d) EFFECTIVE
DATE.—The amendments
made by this section shall be effective for liq-
uidations initiated on or after the date of en-
actment 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—
(1) by inserting ‘‘(A)’’ after ‘‘enforce’’;
and
180
(2) by striking the period after ‘‘title’’
and inserting ‘‘, and (B) in the case of a
plan which is 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) of this Act 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 such Code.’’
(b) EFFECTIVE
DATE.—The amendments
made by this section shall be effective for in-
stallments and other payments required
under section 302 of the Employee Retirement
Income Security Act of 1974 or section 412 of
the Internal Revenue Code of 1986 that be-
come due on or after the date of the enact-
ment 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 Security Act of 1974 (29 U.S.C.
1341(b)(2)(C)(i)) is amended—
181
(1) by striking subclause (I) and in-
serting the following new subclause:
‘‘(I) it determines, based
on the notice sent under para-
graph (2)(A) of subsection (b),
that there is reason to believe
that the plan is not sufficient
for benefit liabilities,’’;
(2) by striking the period at the end
of subclause (II) and inserting ‘‘, or’’; and
(3) by adding at the end the following
new subclause:
‘‘(III) it determines that
any other requirement of sub-
paragraph (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 inconsistent with the inter-
ests of participants and bene-
ficiaries.’’
(b) EFFECTIVE
DATE.—The amendments
made by this section shall apply to any plan
termination under section 4041(b) of the Em-
182
ployee Retirement Income Security Act of
1974 with respect to which the Pension Bene-
fit Guaranty Corporation has not, as of the
date of enactment of this Act, issued a notice
of noncompliance that has become 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) AMENDMENT TO THE EMPLOYEE RETIRE-
MENT INCOME SECURITY ACT OF 1974.—Section
204 of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1054) is amended by
redesignating subsections (i) and (j) as sub-
sections (j) and (k), respectively, and by in-
serting after subsection (h) the following new
subsection:
‘‘(i)(1) In the case of a plan described in
paragraph (3) which is maintained by an em-
ployer 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,
183
‘‘(B) any change in the accrual of ben-
efits, 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 reorganization.
‘‘(2) Paragraph (1) shall not apply to any
plan amendment that—
‘‘(A) the Secretary of the Treasury de-
termines to be reasonable and that pro-
vides for only de minimis increases in the
liabilities of the plan with respect to em-
ployees of the debtor,
‘‘(B) only repeals an amendment de-
scribed 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 pursu-
ant to a collective bargaining agreement
entered into prior to, the date on which
the employer became a debtor in a case
184
under title 11, United States Code, or
similar Federal or State law.
‘‘(3) This subsection shall apply only to
plans (other than multiemployer plans) cov-
ered under section 4021 of this Act for which
the funded current liability percentage (with-
in the meaning of section 302(d)(8) of this Act)
is less than 100 percent after taking into ac-
count the effect of the amendment.
‘‘(4) For purposes of this subsection, ‘em-
ployer’ has the meaning set forth in section
302(c)(11)(A), 
without 
regard 
to 
section
302(c)(11)(B).’’
(b) AMENDMENT
TO
INTERNAL
REVENUE
CODE OF 1986.—Section 401(a) of the Internal
Revenue Code of 1986, as amended by section
121 of this Act, is further amended by adding
at the end the following new paragraph:
‘‘(33) 
PROHIBITION
ON
BENEFIT
IN-
CREASES
WHILE
SPONSOR
IS
IN
BANK-
RUPTCY.—
‘‘(A) IN GENERAL.—A trust which is
part of a plan to which this para-
graph applies shall not constitute a
qualified trust under this section if
185
an amendment to such plan is adopt-
ed while the employer is a debtor in
a case under title 11, United States
Code, or similar Federal or State law,
if such amendment increases liabil-
ities of the plan by reason of—
‘‘(i) any increase in benefits,
‘‘(ii) any change in the accrual
of benefits, or
‘‘(iii) any change in the rate at
which benefits become nonforfeit-
able under the plan,
with respect to employees of the debt-
or, and such amendment is effective
prior to the effective date of such em-
ployer’s plan of reorganization.
‘‘(B) EXCEPTIONS.—This paragraph
shall not apply to any plan amend-
ment if—
‘‘(i) 
the 
plan, 
were 
such
amendment to take effect, would
have a funded current liability
percentage (as defined in section
412(l)(8)) of 100 percent or more,
186
‘‘(ii) the Secretary determines
that such amendment is reason-
able and provides for only de
minimis increases in the liabil-
ities of the plan with respect to
employees of the debtor,
‘‘(iii) such amendment only re-
peals an amendment described in
subsection 412(c)(8), or
‘‘(iv) such amendment is re-
quired as a condition of qualifica-
tion under this part.
‘‘(C) PLANS
TO
WHICH
THIS
PARA-
GRAPH APPLIES.—This paragraph shall
apply only to plans (other than multi-
employer plans) covered under sec-
tion 4021 of the Employee Retirement
Income Security Act of 1974.
‘‘(D) EMPLOYER.—For purposes of
this paragraph, the term ‘employer’
means the employer referred to in
section 412(c)(11) (without regard to
subparagraph (B) thereof).’’
(c) EFFECTIVE DATE OF PLAN AMENDMENT.—
Section 4022 of the Employee Retirement In-
187
come Security Act of 1974 (29 U.S.C. 1322) is
amended by inserting at the end the following
new subsection:
‘‘(f) For purposes of this section, the effec-
tive date of a plan amendment described in
section 204(i)(1) shall be the effective date of
the plan of reorganization of the employer de-
scribed in section 204(i)(1) or, if later, the ef-
fective date stated in such amendment.’’.
(d) EFFECTIVE
DATE.—The amendments
made by this section shall apply to plan
amendments adopted on or after the date of
enactment of this Act.
SEC. 208. SUBSTANTIAL OWNER BENEFITS.
(a) MODIFICATION OF PHASE-IN OF GUARAN-
TEE.—Section 4022(b)(5) of the Employee Re-
tirement Income Security Act of 1974 is
amended by striking subparagraphs (B) and
(C) and inserting the following new subpara-
graphs:
‘‘(B) For purposes of this title, the term
‘majority owner’ has the same meaning as the
term ‘substantial owner’, if ‘50 percent or
more’ is substituted for ‘more than 10 percent’
188
wherever such phrase appears in subpara-
graph (A) of this paragraph.
‘‘(C) In the case of a participant who is a
majority owner, the amount of benefits guar-
anteed under this section shall not exceed the
lesser of—
‘‘(i) the amount otherwise determined
under this subsection, or
‘‘(ii) the product of—
‘‘(I) a fraction (not to exceed 1)
the numerator of which is the num-
ber of years from the later of the ef-
fective date or the adoption date of
the plan, and the denominator of
which is 30, and
‘‘(II) the amount of the majority
owner’s monthly benefits guaranteed
under subsection (a) (as limited by
paragraph (3) of this subsection).’’
(b) MODIFICATION
OF ALLOCATION
OF AS-
SETS.—
(1) Section 4044(a)(4)(B) of such Act
(29 U.S.C. 1344(a)(4)(B)) is amended by in-
serting ‘‘(C)’’ after ‘‘section 4022(b)(5)’’.
189
(2) Section 4044(b) of such Act is
amended—
(A) in paragraph (2), by inserting
‘‘(4),’’ before ‘‘(5)’’, and by inserting a
comma after ‘‘(5)’’;
(B) by redesignating paragraphs
(3) through (6) as paragraphs (4)
through (7), respectively; and
(C) by 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 sub-
paragraph (A) of that paragraph. Any re-
maining assets shall then be allocated to
subparagraph (B). If assets allocated to
subparagraph (B) are insufficient to sat-
isfy in full the benefits in that subpara-
graph, the assets shall be allocated pro
rata among individuals on the basis of
the present value (as of the termination
190
date) of their respective benefits de-
scribed in that subparagraph.’’.
(c) EFFECTIVE
DATE.—The amendments
made by this section shall be effective for plan
terminations under section 4041(c) of the Em-
ployee Retirement Income Security Act of
1974 with respect to which notices of intent
to terminate are provided under section
4041(a)(2) of such Act, or under section 4042
of such Act with respect to which proceedings
are instituted by the corporation, on or after
the date of enactment of this Act.
SEC. 209. PHASE-OUT OF VARIABLE RATE PREMIUM CAP.
(a) IN GENERAL.—Subparagraph (E) of sec-
tion 4006(a)(3) of the Employee Retirement In-
come 
Security 
Act 
of 
1974 
(29 
U.S.C.
1306(a)(3)(E)) is amended by striking clause
(iv), and by 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
191
by reason of this amendment shall not exceed
the sum of—
(1) $53, and
(2) the product derived by multiply-
ing—
(A) the excess (if any) of—
(i) the amount determined
under 
clause 
(i) 
of 
section
4006(a)(3)(E) of the Employee Re-
tirement Income Security Act of
1974, over
(ii) $53, by
(B) the applicable percentage.
For purposes of this subsection, the ap-
plicable percentage shall be the percent-
age specified in the following table:
For the plan year beginning:
The applica-
ble percent-
age is:
on or after
but before
July 1, 1994 ..................
July 1, 1995 .................
20 percent
July 1, 1995 ..................
July 1, 1996 .................
60 percent
TITLE III—PARTICIPANT
SERVICES
SEC. 301. DISCLOSURE TO PARTICIPANTS.
(a) PARTICIPANT NOTICE REQUIREMENT.—
Subtitle A of title IV of the Employee Retire-
ment Income Security Act of 1974 (as amend-
192
ed by section 203 of this Act) is further
amended by adding at the end the following
new section:
‘‘SEC. 4011. NOTICE TO PARTICIPANTS.
‘‘(a) IN GENERAL.—The plan administrator
of a plan subject to the additional premium
under section 4006(a)(3)(E) shall provide, in a
form and manner and at such time as pre-
scribed in regulations of the corporation, no-
tice to plan participants and beneficiaries and
each employee organization representing par-
ticipants in the plan of the plan’s funding sta-
tus and the limits on the corporation’s guar-
anty under section 4022(b) should the plan
terminate while underfunded. Such notice
shall be written in a manner so as to be under-
stood by the average plan participant.
‘‘(b) EXCEPTION.—Subsection (a) shall not
apply to any plan which for the plan year has
a funded current liability percentage (as de-
fined in section 302(d)(8) without regard to
subparagraph (E) thereof) of at least 90 per-
cent.’’
(b) CONFORMING AMENDMENTS.—
193
(1) INFORMATION INCLUDED IN ANNUAL
REPORT.—Section 103(d)(11) of such Act
(29 U.S.C. 1023(d)(11)) is amended to read
as follows:
‘‘(11) In the case of a plan which must
notify 
participants 
and 
beneficiaries
under section 4011, the funded current li-
ability percentage, as determined for pur-
poses of such section.’’
(2) INFORMATION
FURNISHED
TO
PAR-
TICIPANTS.—Section 104(b)(3) of such Act
(29 U.S.C. 1024(b)(3)) is amended by strik-
ing ‘‘(including the percentage deter-
mined under section 103(d)(11))’’.
(c) 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 section 203 of this
Act) the following new item:
‘‘Sec. 4011. Notice to participants.’’
(d) EFFECTIVE
DATE.—The amendment
made by this section shall be effective for plan
years beginning after the date of enactment of
this Act.
194
SEC. 302. MISSING PARTICIPANTS.
(a) IN GENERAL.—Subtitle C of title IV of
the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1341 et seq.) (as amend-
ed by section 202(a) of this Act) is further
amended by adding at the end the following
new section:
‘‘MISSING PARTICIPANTS
‘‘SEC. 4051. (a) GENERAL RULE.—
‘‘(1) PAYMENT TO THE CORPORATION.—A
plan 
administrator 
satisfies 
section
4041(b)(3)(A) in the case of a missing par-
ticipant only if the plan administrator—
‘‘(A) transfers the participant’s
designated benefit to the corporation
or purchases an irrevocable commit-
ment from an insurer in accordance
with 
clause 
(i) 
of 
section
4041(b)(3)(A), and
‘‘(B) 
provides 
the 
corporation
such information and certifications
with respect to such designated bene-
fits or irrevocable commitments as
the corporation shall specify.
‘‘(2) TREATMENT
OF
TRANSFERRED
AS-
SETS.—A 
transfer 
to 
the 
corporation
195
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 corporation is trustee under
section 4042, subject to the rules set forth
in that section.
‘‘(3) PAYMENT BY THE CORPORATION.—
After a missing participant whose des-
ignated benefit was transferred to the
corporation is located—
‘‘(A) in any case in which the plan
could have distributed the benefit of
the missing participant in a single
sum without participant or spousal
consent under section 205(g), the cor-
poration shall pay the participant or
beneficiary a single sum benefit equal
to the designated benefit paid the
corporation plus interest as specified
by the corporation, and
‘‘(B) in any other case, the cor-
poration shall pay a benefit based on
the designated benefit and the as-
sumptions prescribed by the corpora-