under the plan are no greater than 
the rights of a general creditor of the 
plan sponsor, 
‘‘(III) all amounts set aside (di-
rectly or indirectly) for purposes of 
paying the deferred compensation (in-
cluding income), and all income at-
tributable to such amounts, remain 
(until made available to the disquali-
fied individual or other beneficiary) 
solely the property of the plan sponsor 
(without being restricted to the provi-
sion of benefits under the plan), 
‘‘(IV) the amounts referred to in 
subclause (III) are available to satisfy 
the claims of the plan sponsor’s gen-
eral creditors at all times (not merely 
after bankruptcy or insolvency), and 
‘‘(V) some or all of the com-
pensation of the disqualified individual 
which is deferred under such plan is 
guaranteed by an insurance company, 
insurance service, or other similar or-
ganization.
‘‘(ii) 
EXCEPTION
FOR
QUALIFIED 
PLANS.—Such term shall not include a 
plan that is— 
‘‘(I) 
described 
in 
section 
219(g)(5)(A) of the Internal Revenue 
Code of 1986, or 
‘‘(II) an eligible deferred com-
pensation plan (as defined in section 
457(b) of such Code) of an eligible 
employer 
described 
in 
section 
457(e)(1)(A) of such Code. 
‘‘(iii) 
PLAN
INCLUDES
ARRANGE-
MENTS, ETC.—For purposes of this sub-
paragraph, the term ‘plan’ includes any 
agreement or arrangement. 
‘‘(D) 
DISQUALIFIED
INDIVIDUAL.—The 
term ‘disqualified individual’ means a director 
or executive officer of the plan sponsor. 
‘‘(E) TERMINATION
BASED
ON
BANK-
RUPTCY REORGANIZATION.—A termination of a 
plan which is a distress termination under sec-
tion 4041(c) or a termination instituted by the 
Pension Benefit Guaranty Corporation under 
section 4042 is ‘based on bankruptcy reorga-
nization’ if such termination is based in whole
or in part on the filing, by or against any per-
son who is a contributing sponsor of such plan 
or a member of such sponsor’s controlled group, 
of a petition seeking reorganization in a case 
under title 11, United States Code, or under 
any similar law of a State or political subdivi-
sion of a State (or such a case in which liquida-
tion is sought has been converted to a case in 
which reorganization is sought). 
‘‘(F) TITLE IV TERMINOLOGY.—Any term 
used in this subsection which is defined in sec-
tion 4001(a) shall have the meaning provided 
such term in section 4001(a). 
‘‘(4) SPECIAL RULES.— 
‘‘(A) COORDINATED
BENEFITS.—If the 
benefits of 2 or more defined benefit plans es-
tablished or maintained by an employer are co-
ordinated in such a manner as to have the ef-
fect of the adoption of an amendment described 
in paragraph (1), the sponsor of the defined 
benefit plan or plans providing for such coordi-
nation shall be treated as having adopted such 
a plan amendment as of the date such coordina-
tion begins.
‘‘(B) MULTIPLE AMENDMENTS.—The Sec-
retary shall issue regulations to prevent the 
avoidance of the purposes of this subsection 
through the use of 2 or more plan amendments 
rather than a single amendment. 
‘‘(C) CONTROLLED
GROUPS, ETC.—For 
purposes of this subsection, all persons treated 
as a single employer under subsection (b), (c), 
(m), or (o) of section 414 of the Internal Rev-
enue Code of 1986 shall be treated as 1 em-
ployer. 
‘‘(D) TREATMENT
OF
EARNINGS.—Ref-
erences to deferred compensation shall be treat-
ed as including references to income attrib-
utable to such compensation or such income. 
‘‘(5) COORDINATION.—The Secretary and the 
Secretary of the Treasury shall ensure, through the 
execution of an interagency memorandum of under-
standing among such Secretaries, that regulations, 
rulings, and interpretations issued by such Secre-
taries relating to the same matter over which both 
such Secretaries have responsibility under this sub-
section and section 4980H of the Internal Revenue 
Code of 1986 are administered so as to have the 
same effect at all times.
‘‘(6) EFFECT
OF
WAIVER
GRANTED
BY
SEC-
RETARY OF THE TREASURY.—To the extent that any 
requirement of the termination fairness standard of 
section 4980H(a)(2) of the Internal Revenue Code 
of 1986 is waived by the Secretary of the Treasury 
with respect to any disqualified individual under sec-
tion 4980H(g) of such Code in the case of any plan 
amendment having the effect of a termination de-
scribed in paragraph (1)(A) of this subsection, such 
requirement under the termination fairness standard 
of paragraph (2) of this subsection shall not apply 
with respect to such individual in the case of such 
plan amendment.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to— 
(1) plan amendments adopted on or after May 
10, 2005, and 
(2) plan amendments adopted before such date 
implementing a plan termination as described in sec-
tion 206(g)(1) of the Employee Retirement Income 
Security Act of 1974 (as added by this section) 
based on a bankruptcy reorganization in a case 
under title 11 of the United States Code (or under 
any similar law of a State or a political subdivision 
of a State) pending on such date.