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type of business in which the policyholder is engaged,
and
‘‘(5) that the applicable policyholder has a valid
consent for each insured employee (or, if all such con-
sents are not obtained, the number of insured employ-
ees for whom such consent was not obtained).
‘‘(b) RECORDKEEPING REQUIREMENT.—Each applica-
ble policyholder owning 1 or more employer-owned life in-
surance contracts during any year shall keep such records
as may be necessary for purposes of determining whether
the requirements of this section and section 101(j) are met.
‘‘(c) DEFINITIONS.—Any term used in this section
which is used in section 101(j) shall have the same meaning
given such term by section 101(j).’’.
(c) CONFORMING AMENDMENTS.—
(1) Paragraph (1) of section 101(a) of the Inter-
nal Revenue Code of 1986 is amended by striking
‘‘and subsection (f)’’ and inserting ‘‘subsection (f),
and subsection (j)’’.
(2) The table of sections for subpart A of part III
of subchapter A of chapter 61 of such Code is amend-
ed by inserting after the item relating to section
6039H the following new item:
‘‘Sec. 6039I. Returns and records with respect to employer-owned life insurance
contracts.’’.
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(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to life insurance contracts issued after
the date of the enactment of this Act, except for a contract
issued after such date pursuant to an exchange described
in section 1035 of the Internal Revenue Code of 1986 for
a contract issued on or prior to that date. For purposes
of the preceding sentence, any material increase in the
death benefit or other material change shall cause the con-
tract to be treated as a new contract except that, in the
case of a master contract (within the meaning of section
264(f)(4)(E) of such Code), the addition of covered lives
shall be treated as a new contract only with respect to such
additional covered lives.
Subtitle D—Other Related Pension
Provisions
PART I—HEALTH AND MEDICAL BENEFITS
SEC. 1331. USE OF EXCESS PENSION ASSETS FOR FUTURE
RETIREE HEALTH BENEFITS.
(a) IN GENERAL.—Section 420 of the Internal Revenue
Code of 1986 (relating to transfers of excess pension assets
to retiree health accounts), as amended by this Act, is
amended by adding at the end the following new subsection:
‘‘(f) QUALIFIED TRANSFER TO COVER FUTURE RE-
TIREE HEALTH COSTS.—
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‘‘(1) IN GENERAL.—An employer maintaining a
defined benefit plan (other than a multiemployer
plan) may elect for any taxable year to have the plan
make a qualified future transfer rather than a quali-
fied transfer for the taxable year. Except as provided
in this subsection, a qualified future transfer shall be
treated for purposes of this title and the Employee
Retirement Income Security Act of 1974 as if it were
a qualified transfer.
‘‘(2) QUALIFIED FUTURE TRANSFER.—For pur-
poses of this subsection—
‘‘(A) IN GENERAL.—The term ‘qualified fu-
ture transfer’ means a transfer which meets all
of the requirements for a qualified transfer, ex-
cept that—
‘‘(i) the determination of excess pen-
sion assets shall be made under subpara-
graph (B),
‘‘(ii) the limitation on the amount
transferred shall be made under subpara-
graph (C), and
‘‘(iii) the minimum cost requirements
of subsection (c)(3) shall be modified as pro-
vided under subparagraph (D).
‘‘(B) EXCESS PENSION ASSETS.—
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‘‘(i) IN GENERAL.—In determining ex-
cess pension assets for purposes of this sub-
section, subsection (e)(2) shall be applied by
substituting ‘115 percent’ for ‘125 percent’.
‘‘(ii) 
REQUIREMENT
TO
MAINTAIN
FUNDED STATUS.—If, as of any valuation
date of any plan year in the transfer pe-
riod, the amount determined under sub-
section (e)(2)(B) (after application of clause
(i)) exceeds the amount determined under
subsection (e)(2)(A), either—
‘‘(I) the employer maintaining the
plan shall make contributions to the
plan in an amount not less than the
amount required to reduce such excess
to zero as of such date, or
‘‘(II) there is transferred from the
health benefits account to the plan an
amount not less than the amount re-
quired to reduce such excess to zero as
of such date.
‘‘(C) 
LIMITATION
ON
AMOUNT
TRANS-
FERRED.—Notwithstanding subsection (b)(3), the
amount of the excess pension assets which may
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be transferred in a qualified future transfer shall
be equal to the sum of—
‘‘(i) if the transfer period includes the
taxable year of the transfer, the amount de-
termined under subsection (b)(3) for such
taxable year, plus
‘‘(ii) in the case of all other taxable
years in the transfer period, the sum of the
qualified current retiree health liabilities
which the plan reasonably estimates, in ac-
cordance with guidance issued by the Sec-
retary, will be incurred for each of such
years.
‘‘(D) MINIMUM COST REQUIREMENTS.—
‘‘(i) IN
GENERAL.—The requirements
of subsection (c)(3) shall be treated as met
if each group health plan or arrangement
under which applicable health benefits are
provided provides applicable health benefits
during the period beginning with the first
year of the transfer period and ending with
the last day of the 4th year following the
transfer period such that the annual aver-
age amount of such benefits provided during
such period is not less than the applicable