H. R. 2488—155 
‘‘In the case of any plan year 
The applicable 
beginning in— 
percentage is— 
2001 .............................................................................................
160
2002 .............................................................................................
165
2003 .............................................................................................
170.’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to plan years beginning after December 31, 2000. 
SEC. 1242. MAXIMUM CONTRIBUTION DEDUCTION RULES MODIFIED 
AND APPLIED TO ALL DEFINED BENEFIT PLANS. 
(a) IN
GENERAL.—Subparagraph (D) of section 404(a)(1) 
(relating to special rule in case of certain plans) is amended to 
read as follows: 
‘‘(D) SPECIAL RULE IN CASE OF CERTAIN PLANS.— 
‘‘(i) IN GENERAL.—In the case of any defined benefit 
plan, except as provided in regulations, the maximum 
amount deductible under the limitations of this para-
graph shall not be less than the unfunded termination 
liability (determined as if the proposed termination 
date referred to in section 4041(b)(2)(A)(i)(II) of the 
Employee Retirement Income Security Act of 1974 were 
the last day of the plan year). 
‘‘(ii) PLANS WITH LESS THAN 100 PARTICIPANTS.— 
For purposes of this subparagraph, in the case of a 
plan which has less than 100 participants for the plan 
year, termination liability shall not include the liability 
attributable to benefit increases for highly com-
pensated employees (as defined in section 414(q)) 
resulting from a plan amendment which is made or 
becomes effective, whichever is later, within the last 
2 years before the termination date. 
‘‘(iii) RULE FOR DETERMINING NUMBER OF PARTICI-
PANTS.—For purposes of determining whether a plan 
has more than 100 participants, all defined benefit 
plans maintained by the same employer (or any 
member of such employer’s controlled group (within 
the meaning of section 412(l)(8)(C))) shall be treated 
as one plan, but only employees of such member or 
employer shall be taken into account. 
‘‘(iv) PLANS ESTABLISHED AND MAINTAIN BY PROFES-
SIONAL SERVICE EMPLOYERS.—Clause (i) shall not apply 
to a plan described in section 4021(b)(13) of the 
Employee Retirement Income Security Act of 1974.’’. 
(b) CONFORMING AMENDMENT.—Paragraph (6) of section 4972(c) 
is amended to read as follows: 
‘‘(6) EXCEPTIONS.—In determining the amount of non-
deductible contributions for any taxable year, there shall not 
be taken into account so much of the contributions to one 
or more defined contribution plans which are not deductible 
when contributed solely because of section 404(a)(7) as does 
not exceed the greater of— 
‘‘(A) the amount of contributions not in excess of 6 
percent of compensation (within the meaning of section 
404(a)) paid or accrued (during the taxable year for which 
the contributions were made) to beneficiaries under the 
plans, or 
‘‘(B) the sum of— 
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H. R. 2488—156 
‘‘(i) the amount of contributions described in sec-
tion 401(m)(4)(A), plus 
‘‘(ii) the amount of contributions described in sec-
tion 402(g)(3)(A). 
For purposes of this paragraph, 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).’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to plan years beginning after December 31, 2000. 
SEC. 1243. MISSING PARTICIPANTS. 
(a) IN GENERAL.—Section 4050 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1350) is amended by redesig-
nating subsection (c) as subsection (e) and by inserting after sub-
section (b) the following: 
‘‘(c) MULTIEMPLOYER PLANS.—The corporation shall prescribe 
rules similar to the rules in subsection (a) for multiemployer plans 
covered by this title that terminate under section 4041A. 
‘‘(d) PLANS NOT OTHERWISE SUBJECT TO TITLE.— 
‘‘(1) TRANSFER TO CORPORATION.—The plan administrator 
of a plan described in paragraph (4) may elect to transfer 
a missing participant’s benefits to the corporation upon termi-
nation of the plan. 
‘‘(2) INFORMATION
TO
THE
CORPORATION.—To the extent 
provided in regulations, the plan administrator of a plan 
described in paragraph (4) shall, upon termination of the plan, 
provide the corporation information with respect to benefits 
of a missing participant if the plan transfers such benefits— 
‘‘(A) to the corporation, or 
‘‘(B) to an entity other than the corporation or a plan 
described in paragraph (4)(B)(ii). 
‘‘(3) PAYMENT
BY
THE
CORPORATION.—If benefits of a 
missing participant were transferred to the corporation under 
paragraph (1), the corporation shall, upon location of the partici-
pant or beneficiary, pay to the participant or beneficiary the 
amount transferred (or the appropriate survivor benefit) 
either— 
‘‘(A) in a single sum (plus interest), or 
‘‘(B) in such other form as is specified in regulations 
of the corporation. 
‘‘(4) PLANS DESCRIBED.—A plan is described in this para-
graph if— 
‘‘(A) the plan is a pension plan (within the meaning 
of section 3(2))— 
‘‘(i) to which the provisions of this section do not 
apply (without regard to this subsection), and 
‘‘(ii) which is not a plan described in paragraphs 
(2) through (11) of section 4021(b), and 
‘‘(B) at the time the assets are to be distributed upon 
termination, the plan— 
‘‘(i) has missing participants, and 
‘‘(ii) has not provided for the transfer of assets 
to pay the benefits of all missing participants to 
another pension plan (within the meaning of section 
3(2)). 
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H. R. 2488—157 
‘‘(5) CERTAIN PROVISIONS NOT TO APPLY.—Subsections (a)(1) 
and (a)(3) shall not apply to a plan described in paragraph 
(4).’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to distributions made after final regulations imple-
menting subsections (c) and (d) of section 4050 of the Employee 
Retirement Income Security Act of 1974 (as added by subsection 
(a)), respectively, are prescribed. 
SEC. 1244. EXCISE TAX RELIEF FOR SOUND PENSION FUNDING. 
(a) IN GENERAL.—Subsection (c) of section 4972 (relating to 
nondeductible contributions) is amended by adding at the end the 
following new paragraph: 
‘‘(7) DEFINED BENEFIT PLAN EXCEPTION.—In determining 
the amount of nondeductible contributions for any taxable year, 
an employer may elect for such year not to take into account 
any contributions to a defined benefit plan except to the extent 
that such contributions exceed the full-funding limitation (as 
defined in section 412(c)(7), determined without regard to 
subparagraph (A)(i)(I) thereof). For purposes of this paragraph, 
the deductible limits under section 404(a)(7) shall first be 
applied to amounts contributed to defined contribution plans 
and then to amounts described in this paragraph. If an 
employer makes an election under this paragraph for a taxable 
year, paragraph (6) shall not apply to such employer for such 
taxable year.’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to years beginning after December 31, 2000. 
SEC. 1245. EXCISE TAX ON FAILURE TO PROVIDE NOTICE BY DEFINED 
BENEFIT PLANS SIGNIFICANTLY REDUCING FUTURE 
BENEFIT ACCRUALS. 
(a) AMENDMENT
TO 1986 CODE.—Chapter 43 of subtitle D 
(relating to qualified pension, etc., plans) is amended by adding 
at the end the following new section: 
‘‘SEC. 4980F. FAILURE OF APPLICABLE PLANS REDUCING BENEFIT 
ACCRUALS TO SATISFY NOTICE REQUIREMENTS. 
‘‘(a) IMPOSITION OF TAX.—There is hereby imposed a tax on 
the failure of any applicable pension plan to meet the requirements 
of subsection (e) with respect to any applicable individual. 
‘‘(b) AMOUNT OF TAX.— 
‘‘(1) IN GENERAL.—The amount of the tax imposed by sub-
section (a) on any failure with respect to any applicable indi-
vidual shall be $100 for each day in the noncompliance period 
with respect to such failure. 
‘‘(2) NONCOMPLIANCE PERIOD.—For purposes of this section, 
the term ‘noncompliance period’ means, with respect to any 
failure, the period beginning on the date the failure first occurs 
and ending on the date the failure is corrected. 
‘‘(c) LIMITATIONS ON AMOUNT OF TAX.— 
‘‘(1) OVERALL LIMITATION FOR UNINTENTIONAL FAILURES.— 
In the case of failures that are due to reasonable cause and 
not to willful neglect, the tax imposed by subsection (a) for 
failures during the taxable year of the employer (or, in the 
case of a multiemployer plan, the taxable year of the trust 
forming part of the plan) shall not exceed $500,000. For pur-
poses of the preceding sentence, all multiemployer plans of 
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H. R. 2488—158 
which the same trust forms a part shall be treated as one 
plan. For purposes of this paragraph, if not all persons who 
are treated as a single employer for purposes of this section 
have the same taxable year, the taxable years taken into 
account shall be determined under principles similar to the 
principles of section 1561. 
‘‘(2) WAIVER BY SECRETARY.—In the case of a failure which 
is due to reasonable cause and not to willful neglect, the Sec-
retary may waive part or all of the tax imposed by subsection 
(a) to the extent that the payment of such tax would be exces-
sive relative to the failure involved. 
‘‘(d) LIABILITY FOR TAX.—The following shall be liable for the 
tax imposed by subsection (a): 
‘‘(1) In the case of a plan other than a multiemployer 
plan, the employer. 
‘‘(2) In the case of a multiemployer plan, the plan. 
‘‘(e) 
NOTICE
REQUIREMENTS
FOR
PLANS
SIGNIFICANTLY 
REDUCING BENEFIT ACCRUALS.— 
‘‘(1) IN GENERAL.—If an applicable pension plan is amended 
to provide for a significant reduction in the rate of future 
benefit accrual, the plan administrator shall provide written 
notice to each applicable individual (and to each employee 
organization representing applicable individuals). 
‘‘(2) NOTICE.—The notice required by paragraph (1) shall 
be written in a manner calculated to be understood by the 
average plan participant and shall provide sufficient informa-
tion (as determined in accordance with regulations prescribed 
by the Secretary) to allow applicable individuals to understand 
the effect of the plan amendment. 
‘‘(3) TIMING OF NOTICE.—Except as provided in regulations, 
the notice required by paragraph (1) shall be provided within 
a reasonable time before the effective date of the plan amend-
ment. 
‘‘(4) DESIGNEES.—Any notice under paragraph (1) may be 
provided to a person designated, in writing, by the person 
to which it would otherwise be provided. 
‘‘(5) NOTICE
BEFORE
ADOPTION
OF
AMENDMENT.—A plan 
shall not be treated as failing to meet the requirements of 
paragraph (1) merely because notice is provided before the 
adoption of the plan amendment if no material modification 
of the amendment occurs before the amendment is adopted. 
‘‘(f ) APPLICABLE INDIVIDUAL; APPLICABLE PENSION PLAN.—For 
purposes of this section— 
‘‘(1) APPLICABLE INDIVIDUAL.—The term ‘applicable indi-
vidual’ means, with respect to any plan amendment— 
‘‘(A) any participant in the plan, and 
‘‘(B) any beneficiary who is an alternate payee (within 
the meaning of section 414(p)(8)) under an applicable quali-
fied domestic relations order (within the meaning of section 
414(p)(1)(A)), 
who may reasonably be expected to be affected by such plan 
amendment. 
‘‘(2) APPLICABLE PENSION PLAN.—The term ‘applicable pen-
sion plan’ means— 
‘‘(A) any defined benefit plan, or 
‘‘(B) an individual account plan which is subject to 
the funding standards of section 412, 
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