I
104TH CONGRESS
1ST SESSION
H. R. 35
To amend the Employee Retirement Income Security Act of 1974 to provide
security for workers, to improve pension plan funding, to limit growth
in insurance exposure, to protect the single-employer plan termination
insurance program, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 4, 1995
Mr. FAWELL introduced the following bill; which was referred to the
Committee on Economic and Educational Opportunities
A BILL
To amend the Employee Retirement Income Security Act
of 1974 to provide security for workers, to improve pen-
sion plan funding, to limit growth in insurance exposure,
to protect the single-employer plan termination insurance
program, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Retirement Protection Act of 1995’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title and table of contents.
Sec. 2. Amendment of ERISA.
TITLE I—PENSION PLAN FUNDING
Sec. 101. Minimum funding requirements.
Sec. 102. Limitation on changes in current liability assumptions.
Sec. 103. Anticipation of bargained benefit increases.
Sec. 104. Modification of quarterly contribution requirement.
TITLE II—AMENDMENTS RELATED TO TITLE IV OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974
Sec. 201. Reportable events.
Sec. 202. Alternative to involuntary termination.
Sec. 203. Certain information required to be furnished to PBGC.
Sec. 204. Liability upon liquidation of contributing sponsor or controlled group
member if plan remains ongoing.
Sec. 205. Enforcement of minimum funding requirements.
Sec. 206. Remedies for noncompliance with requirements for standard termi-
nation.
Sec. 207. Prohibition on benefit increases where plan sponsor is insolvent.
Sec. 208. Substantial owner benefits.
TITLE III—MISCELLANEOUS AMENDMENTS
Sec. 301. Recovery ratio under ERISA section 4022(c).
Sec. 302. Rules governing computation of amounts payable by corporation.
Sec. 303. Distress termination criteria for certain financial institutions.
Sec. 304. Single sum distributions.
Sec. 305. Adjustments to lien for missed minimum funding contributions.
Sec. 306. Funding of restored plans.
TITLE IV—EFFECTIVE DATE
Sec. 401. Effective date.
SEC. 2. AMENDMENT OF ERISA.
The sections of the Employee Retirement Income Se-
curity Act of 1974 which are amended by the subsequent
provisions of this Act are amended so as to read as such
sections would read if the Uruguay Round Agreements
Act had not been enacted. References to such sections in
the subsequent provisions of this Act shall be deemed ref-
erences to such sections as amended by this section. This
section shall be effective as if included in the Uruguay
Round Agreements Act.
TITLE I—PENSION PLAN
FUNDING
SEC. 101. MINIMUM FUNDING REQUIREMENTS.
(a) AMENDMENTS
TO ADDITIONAL FUNDING RE-
QUIREMENTS FOR SINGLE-EMPLOYER PLANS.—
(1) 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:
‘‘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.’’
(2) 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.’’
(3) 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 subparagraph:
‘‘(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, 1995).
‘‘(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, 1995, valued using the assump-
tions required by paragraph (7)(C) as
in effect for plan years beginning
after December 31, 1995, exceeds
‘‘(II) the current liability of the
plan as of the beginning of such first
plan year, valued using the same as-
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, 1995, 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.’’
(4) APPLICABLE PERCENTAGE FOR DETERMIN-
ING UNFUNDED NEW LIABILITY AMOUNT.—Subpara-
graph (C) of section 302(d)(4) of such Act is
amended by striking ‘‘35’’ and inserting ‘‘60’’.
(5) 
UNPREDICTABLE
CONTINGENT
EVENT
AMOUNT.—
(A) Subparagraph (A) of section 302(d)(5)
of such Act is amended—
(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—
(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.’’
(6) REQUIRED INTEREST RATE AND MORTALITY
ASSUMPTIONS FOR DETERMINING CURRENT LIABIL-
ITY.—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, 1995—
‘‘(i) the rate of interest used to deter-
mine current liability under this subsection
shall be the rate of interest used under
subsection (b)(5), except that the highest
rate in the permissible range under sub-
paragraph (B)(ii) thereof shall not exceed
100 percent of the weighted average re-
ferred to in such subparagraph, and
‘‘(ii) the mortality table used to deter-
mine current liability under this subsection
shall be the table prescribed by the Sec-
retary.
The table prescribed under clause (ii) shall be
based on the prevailing commissioners’ stand-
ard table used to determine reserves for group
annuity contracts issued on the date as of
which current liability is determined. The Sec-
retary shall prescribe separate tables, which
may be used instead of the table described in
the preceding sentence, to calculate mortality
rates for participants who satisfy the definition
of disability under titles II and XVI of the So-
cial Security Act and the regulations there-
under.’’
(7) TRANSITION RULE.—Section 302(d) of such
Act is amended by adding at the end the following
new paragraph:
‘‘(9) PHASEIN OF INCREASES IN FUNDING RE-
QUIRED
BY
RETIREMENT
PROTECTION
ACT
OF
1995.—
‘‘(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
beginning before January 1, 1996, 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
BHLESS.—Except as provided in clause
(ii), for plans with an initial funded cur-
rent liability percentage of 75 percent or
less, the applicable number of percentage
points for the applicable plan year is:
The applicable
‘‘In the case of
number of
applicable plan years
percentage
beginning in:
points is:
1996 .................................................
1997 .................................................
1998 .................................................
1999 .................................................
2000 .................................................
2001 .................................................
2002 .................................................
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.
‘‘(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
sum referred to in the preceding sen-
tence.
‘‘(C) DEFINITIONS.—For purposes of this
paragraph—
‘‘(i) The term ‘applicable plan year’
means a plan year beginning after Decem-
ber 31, 1995, and before January 1, 2003.
‘‘(ii) The term ‘initial funded current
liability percentage’ means the funded cur-
rent liability percentage as of the first day
of the first plan year beginning after De-
cember 31, 1995.’’
(8) LIQUIDITY REQUIREMENT.—
(A) Section 302(e) of such Act 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 treated as failing to
pay the full amount of any required installment
to the extent that the value of the liquid assets
paid in such installment is less than the liquid-
ity shortfall (whether or not such liquidity
shortfall exceeds the amount of such install-
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 to which subsection (d) ap-
plies and 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
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
months ending on the last day of the
quarter and an enrolled actuary cer-
tifies to the Secretary 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,
and such other disbursements as the
Secretary shall provide in regulations.
‘‘(v) LIQUID ASSETS.—The term ‘liq-
uid assets’ means cash, marketable securi-
ties and such other assets as specified by
the Secretary in regulations.
‘‘(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 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 204 of the Employee Re-
tirement Income Security Act of 1974 (29
U.S.C. 1054) is amended by redesignating
subsection (i) as (j) and inserting a new
subsection (i) to read as follows:
‘‘(i) LIMITATION ON DISTRIBUTIONS OTHER THAN
LIFE ANNUITIES PAID BY THE PLAN.—
‘‘(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 by regulations.
‘‘(3) PERIOD OF SHORTFALL.—For purposes of
this subsection, a plan has a liquidity shortfall dur-
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 thereof a new sub-
section (m) to read as follows:
‘‘(m) In the case of a distribution to a pension plan
participant or beneficiary in violation of section 204(i) 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.’’
(9) AMENDMENT
TO
DEFINITION
OF
FULL
FUNDING LIMITATION.—
(A) Subparagraph (A) of section 302(c)(7)
of such Act is amended—
(i) by inserting ‘‘(including the ex-
pected increase in current liability due to
benefits accruing during the plan year)’’
after ‘‘current liability’’ in clause (i), and
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall apply to plan years beginning after
December 31, 1995.
(2) DELAY IN EFFECTIVE DATE FOR DISABLED
LIVES.—For plan years beginning before January 1,
1997, current liability may be determined using a
plan’s own assumptions for purposes of calculating
the mortality rates of disabled lives.
SEC. 102. 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 SINGLE
EMPLOYER
PLANS
SUBJECT
TO
ADDITIONAL
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.
‘‘(ii) PLANS
TO
WHICH
SUBPARA-
GRAPH APPLIES.—This subparagraph shall
apply to a plan only if—
‘‘(I) subsection (d) applies to the
plan;
‘‘(II) the employer (within the
meaning of section 302(c)(11) (with-
out regard to subparagraph (B) there-
of)) maintaining such plan is de-
scribed in section 4043(b)(1); 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 is
$50,000,000 or greater, or that is
$5,000,000 or greater and that is 5
percent or more of the current liabil-
ity 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, 1995, if—
(A) such change would have required the
approval of the Secretary had such amendment
applied to such change, and
(B) such change is not so approved.
SEC. 103. 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:
‘‘(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 amendments made by
this section shall apply to plan years beginning after De-
cember 31, 1995 with respect to collective bargaining
agreements in effect on or after January 1, 1996.
SEC. 104. 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’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to plan years beginning after the
date of enactment of this Act.
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 RE-
PORTING.—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’’
before 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 redesig-
nating subsections (b), (c), and (d) as (c), (d), and (e),
respectively, and by inserting after subsection (a) the fol-
lowing new subsection:
‘‘(b)(1) The requirements of this subsection 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 maintained by such sponsor and the mem-
bers of such sponsor’s controlled group and are covered
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 effective date
of an event described in paragraph (9), (10), (11), (12),
or (13) of subsection (c), a contributing sponsor to which
the requirements of this subsection apply shall notify the
corporation that the event is about to occur.
‘‘(3) The corporation may waive the requirement of
this subsection with respect to any or all reportable events
with respect to any contributing sponsor.’’
(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 para-
graph (8);
(2) by striking paragraph (9); and
(3) by inserting after paragraph (8) the follow-
ing new paragraphs:
‘‘(9) when, as a result of an event, a person
ceases to be a member of the controlled 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 extraordinary dividend or redeems, in any 12-
month period, an aggregate of 10 percent or more
of the total combined voting power of all classes 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 contributing sponsor and all members of
its controlled group;
‘‘(12) when, in any 12-month period, an aggre-
gate of 3 percent or more of the benefit liabilities of
a plan covered by this title and maintained by a con-
tributing sponsor or a member of its controlled
group are transferred to a person that is not a mem-
ber of the controlled group or to a plan or plans
maintained by a person or persons that are not such
a contributing sponsor or a member of its controlled
group; or
‘‘(13) when any other event occurs that may be
indicative of a need to terminate 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 material sub-
mitted to the corporation pursuant to this section or sec-
tion 4050(c)(2) shall be exempt from disclosure, and no
such information or documentary material may be made
public, except as may be relevant to any administrative
or judicial action or proceeding. Nothing in this section
is intended to prevent disclosure to either body of Con-
gress or to any duly authorized committee or subcommit-
tee of the Congress.’’
(e) TECHNICAL AND CONFORMING AMENDMENTS.—
(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 
inserting
‘‘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.
SEC. 202. ALTERNATIVE TO INVOLUNTARY TERMINATION.
(a) IN GENERAL.—Subtitle C of title IV of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1341 et seq.) is amended by adding at the end
the following new section:
‘‘SEC. 4050. JUDICIAL RELIEF OTHER THAN INVOLUNTARY
TERMINATION.
‘‘(a) INSTITUTION OF PROCEEDINGS.—
‘‘(1) IN GENERAL.—Whenever the corporation
determines (without regard to the potential availabil-
ity of relief under this section) that, upon the occur-
rence 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 unrea-
sonably if the plan is not terminated, the corporation
may, in its discretion, institute proceedings under
this section as an alternative to instituting proceed-
ings under section 4042 to terminate the plan.
‘‘(2) LIMITATION.—In the case of an event de-
scribed in paragraph (9) or (13) 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 con-
tributing sponsor and all members of its controlled
group would be less than 90 percent of the total rev-
enues, the total operating income, or the total as-
sets, respectively, of a contributing sponsor 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 pe-
riod shall be treated as a single event.
‘‘(b) Whenever the corporation makes a determina-
tion under subsection (a), it may, upon notice to a contrib-
uting sponsor, apply to the appropriate United States dis-
trict court for such legal or equitable relief as the corpora-
tion deems appropriate and consistent with its duties
under this title. The court shall grant such relief as it de-
termines necessary to protect the interests of the partici-
pants or to avoid any unreasonable deterioration of the
financial condition of the plan or any unreasonable in-
crease in the liability of the fund, without interfering un-
reasonably with the business of the contributing sponsor
or members of its controlled group.
‘‘(c)(1) In any case in which the corporation is pro-
vided 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 sub-
mission of additional information or documentary mate-
rial, in which case an action under this section may be
brought no later than 20 days after the corporation re-
ceives all the information and documentary material it had
required.
‘‘(2) After a notice described in paragraph (1) is pro-
vided to the corporation, a person may elect, upon further
notice to the corporation, to proceed with an event prior
to the expiration of the time periods described in para-
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 subsection 4003(e)(6).
‘‘(3) In any case in which the corporation is not pro-
vided with a notice required by subsection (b) of section
4043 by the time specified in that subsection, in any case
in which a person fails or refuses to provide the additional
information or documentary material required by the cor-
poration under paragraph (1), or in any case in which a
person proceeds with an event without providing the cor-
poration 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 speci-
fied 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 action shall be
deemed to arise on the effective date of the event.
‘‘(d) Nothing in this section shall limit the authority
of the corporation to initiate proceedings to terminate a
plan under section 4042, or to initiate proceedings or to
seek relief 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 4049 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.
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 section:
‘‘SEC. 4010. AUTHORITY TO REQUIRE CERTAIN INFORMA-
TION.
‘‘(a) INFORMATION REQUIRED.—Each person de-
scribed in subsection (b) shall provide the corporation an-
nually, on or before a date specified by the corporation
in regulations, with—
‘‘(1) such records, documents, or other informa-
tion 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 un-
available, unaudited) financial statements, and such
other financial information as the corporation may
prescribe in regulations.
‘‘(b) PERSONS REQUIRED TO PROVIDE INFORMA-
TION.—The persons covered by subsection (a) are each
contributing sponsor, and each member of a contributing
sponsor’s controlled group, of a single-employer plan cov-
ered 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 de-
scribed in section 302(f)(1)(A) and (B) have been
met with respect to any plan maintained by the con-
tributing sponsor or any member of its controlled
group; or
‘‘(3) minimum funding waivers in excess of
$1,000,000 have been granted with respect to any
plan maintained by the contributing sponsor or any
member of its controlled group, and any portion
thereof is still outstanding.
‘‘(c) INFORMATION EXEMPT FROM DISCLOSURE RE-
QUIREMENTS.—Any information or documentary material
submitted to the corporation pursuant to this section shall
be exempt from disclosure under section 552 of title 5,
United States Code, and no such information or documen-
tary material may be made public, except as may be rel-
evant to any administrative or judicial action or proceed-
ing. 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.
SEC. 204. LIABILITY UPON LIQUIDATION OF CONTRIBUTING
SPONSOR OR CONTROLLED GROUP MEMBER
IF PLAN REMAINS ONGOING.
(a) IN GENERAL.—Section 4062 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1362)
is amended by adding at the end the following new sub-
section:
‘‘(f) LIABILITY ON LIQUIDATION OF CONTRIBUTING
SPONSOR OR CONTROLLED GROUP MEMBER.—
‘‘(1) IN GENERAL.—In any case in which all or
substantially all of the assets of a person who is a
contributing sponsor of a single-employer plan, or a
member of a controlled group of a contributing
sponsor of a single-employer plan, are liquidated 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, but the plan is not termi-
nated, such person shall be deemed liable under sub-
section (b) as if the plan had terminated under sec-
tion 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 initiated.
‘‘(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 (including, where applicable, the
contributing sponsor) who are liquidating as de-
scribed in paragraph (1).
‘‘(3) APPLICABILITY OF OTHER PROVISIONS.—
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 termination date.
‘‘(4) LIABILITY OWED TO PLAN; TRANSFER OF
LIABILITY
PAYMENTS
TO
THE
ONGOING
PLAN
WHERE COLLECTED BY THE CORPORATION.—The li-
ability 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 connection with such plan.
‘‘(5) REGULATIONS.—The corporation may pre-
scribe regulations under this subsection, including—
‘‘(A) rules governing—
‘‘(i) the determination of whether and
when a liquidation referred to in this sub-
section has occurred, and
‘‘(ii) the assignment of the plan’s or
corporation’s claim to liability payments
under this subsection to other members of
the controlled group as a means of collect-
ing such payments, subject to the transfer
of such payments to the plan, and
‘‘(B) rules providing alternative arrange-
ments 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),’’; and
(2) in paragraph (2), by striking the period
after ‘‘subsection (c)’’ and inserting ’’, 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.—Section 302(c) of the Employee Retirement In-
come 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 contributed by
the employer for purposes of subsection
(b)(3)(A), and
‘‘(B) shall be treated as a net experience
gain 
of 
the 
plan 
under 
subsection
(b)(3)(B)(ii).’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall be effective for liquidations initiated on
or after the date of enactment 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
(2) by striking the period after ‘‘title’’ and in-
serting ‘‘, and (B) in the case of a plan which is cov-
ered 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) have
been met, section 302.’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall be effective for installments and other
payments required under section 302 of the Employee Re-
tirement Income Security Act of 1974 that become due
on or after the date of the enactment 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—
(1) by striking subclause (I) and inserting the
following new subclause:
‘‘(I) it determines, based on the
notice sent under paragraph (2)(A) of
subsection (b), that there is reason to
believe that the plan is not sufficient
for benefit liabilities, or’’;
(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 subparagraph
(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 in-
consistent with the interests of par-
ticipants and beneficiaries.’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to any plan termination under sec-
tion 4041(b) of the Employee Retirement Income Security
Act of 1974 with respect to which the Pension Benefit
Guaranty Corporation has not, as of the date of enactment
of this Act, issued a notice of noncompliance that has be-
come final, or otherwise issued a final determination that
the plan termination is nullified.
SEC. 207. PROHIBITION ON BENEFIT INCREASES WHERE
PLAN SPONSOR IS INSOLVENT.
(a) IN GENERAL.—Section 204 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1054),
as amended by section 101 of this Act, is further amended
by redesignating subsection (j) as (k) and inserting a new
subsection (j) to read as follows:
‘‘(j)(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.
‘‘(2) Paragraph (1) shall not apply to any plan
amendment that—
‘‘(A) the Secretary determines to be reasonable
and that provides for only de minimis increases in
the liabilities of the plan with respect to employees
of the debtor,
‘‘(B) only repeals an amendment described 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 pursuant to a col-
lective bargaining agreement entered into prior to,
the date on which the employer became a debtor in
a case under title 11, United States Code, or similar
Federal or State law.
‘‘(3) This subsection shall apply only to plans (other
than multiemployer plans) covered under section 4021 of
this Act for which the funded current liability percentage
(within the meaning of section 302(d)(8) of this Act) is
less than 100 percent after taking into account the effect
of the amendment.
‘‘(4) For purposes of this subsection, ‘employer’ has
the meaning set forth in section 302(c)(11)(A), without
regard to section 302(c)(11)(B).’’
(b) EFFECTIVE DATE OF PLAN AMENDMENT.—Sec-
tion 4022 of the Employee Retirement Income 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 effective date
of a plan amendment described in section 204(j)(1) shall
be the effective date of the plan of reorganization of the
employer described in section 204(j)(1) or, if later, the ef-
fective date stated in such amendment.’’.
(c) 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 GUARANTEE.—
Section 4022(b)(5) of the Employee Retirement Income
Security Act of 1974 is amended by striking subpara-
graphs (B) and (C) and inserting the following new sub-
paragraphs:
‘‘(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’ wherever such phrase appears in sub-
paragraph (A) of this paragraph.
‘‘(C) In the case of a participant who is a majority
owner, the amount of benefits guaranteed under this sec-
tion 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 nu-
merator of which is the number of years from
the later of the effective 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 sub-
section).’’
(b) MODIFICATION OF ALLOCATION OF ASSETS.—
(1) Section 4044(a)(4)(B) of such Act (29
U.S.C. 1344(a)(4)(B)) is amended by adding ‘‘(C)’’
at the end of ‘‘section 4022(b)(5)’’.
(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), re-
spectively; 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 subparagraph (A)
of that paragraph. Any remaining assets shall then
be allocated to subparagraph (B). If assets allocated
to subparagraph (B) are insufficient to satisfy in full
the benefits in that subparagraph, the assets shall
be allocated pro rata among individuals on the basis
of the present value (as of the termination date) of
their respective benefits described in that subpara-
graph.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall be effective for plan terminations under
section 4041(c) of the Employee Retirement Income Secu-
rity 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.
TITLE III—MISCELLANEOUS
AMENDMENTS
SEC. 301. RECOVERY RATIO UNDER ERISA SECTION 4022(c).
(a) IN GENERAL.—Section 4022(c)(3) of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1322(c)(3)) is amended—
(1) by striking ‘‘(3)(A) Except as’’ and all that
follows through ‘‘the ration of—’’ in subparagraph
(C) and inserting the following:
‘‘(3) For purposes of this section, the term ‘recovery
ratio’ means, with respect to a terminated plan the ratio
of—’’; and
(2) by redesignating clauses (i) and (ii) in such
section 4022(c)(3) (as so amended) as subpara-
graphs (A) and (B), respectively.
(b) EFFECTIVE DATE.—The amendments made by
this section shall be effective as if included in the Pension
Protection Act.
SEC. 302. RULES GOVERNING COMPUTATION OF AMOUNTS
PAYABLE BY CORPORATION.
(a) PRIOR PLAN TERMINATIONS TAKEN INTO AC-
COUNT
IN
APPLYING
RECOVERY
RATIO.—Section
4022(c)(3)(B)(ii) of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1322(c)(3)(B)(ii)) is
amended to read as follows:
‘‘(ii) notices of intent to terminate were pro-
vided, or proceedings were instituted under section
4042, after December 17, 1987, and during the first
5 fiscal years of the 7-fiscal-year period ending with
the fiscal year preceding the fiscal year for which
the recovery ratio is being determined.’’
(b) CLARIFICATION UNDER DISTRESS TERMINATION
RULES OF DATE FOR DETERMINATIONS RELATING TO
SUBSEQUENT INSUFFICIENCY.—Section 4022(c) of such
Act (29 U.S.C. 1322(c)) is amended by adding at the end
the following new subsection:
‘‘(5) For purposes of this subsection, in the case of
a plan described in section 4041(c)(3)(C)(ii), the out-
standing amount of benefit liabilities and the value of the
recoveries of the corporation under section 4062, 4063,
or 4064 in connection with such plan shall be determined
as of the date described in section 4062(b)(1)(B).’’.
(c) INCLUSION OF TERMINATION PROCEEDINGS IN-
STITUTED BY CORPORATION IN TRANSITIONAL RULE.—
Section 9312(b)(3)(B)(i) of the Omnibus Budget Rec-
onciliation Act of 1987 (101 Stat. 1330–363) is amended
by inserting after ‘‘notices of intent to terminate were pro-
vided’’ the following: ‘‘, or proceedings were instituted
under section 4042 of ERISA,’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall be effective as if included in section 9312
of the Pension Protection Act (101 Stat. 1330–361).
SEC. 303. DISTRESS TERMINATION CRITERIA FOR CERTAIN
FINANCIAL INSTITUTIONS.
(a) CLARIFICATION
OF
DISTRESS
CRITERION.—
Subclause (I) of section 4041(c)(2)(B)(i) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1341(c)(2)(B)(i)) is amended by inserting after ‘‘under
any similar’’ the following: ‘‘Federal law or’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall be effective as if included in the Single
Employer Pension Plan Amendments Act of 1986.
SEC. 304. SINGLE SUM DISTRIBUTIONS.
(a) DETERMINATION OF PRESENT VALUE FOR PUR-
POSES
OF RESTRICTIONS
ON MANDATORY DISTRIBU-
TIONS.—Section 203(e)(2) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1053(e)(2)) is
amended to read as follows:
‘‘(2) For purposes of paragraph (1), the present value
shall be calculated in accordance with section 205(g)(3).’’
(b) DETERMINATION OF PRESENT VALUE FOR PUR-
POSES
OF
RESTRICTIONS
ON
CASH-OUTS.—Section
205(g)(3) of such Act (29 U.S.C. 1055(g)(3)) is amended
to read as follows:
‘‘(3) DETERMINATION OF PRESENT VALUE.—
‘‘(A) IN GENERAL.—
‘‘(i) PRESENT
VALUE.—Except as
provided in subparagraph (B), for pur-
poses of paragraphs (1) and (2), the
present value shall not be less than the
present value calculated by using the appli-
cable mortality table and the applicable in-
terest rate.
‘‘(ii) DEFINITIONS.—For purposes of
clause (i)—
‘‘(I) 
APPLICABLE
MORTALITY
TABLE.—The term ‘applicable mortal-
ity table’ means the table prescribed
by the Secretary. Such table shall be
based on the prevailing commis-
sioners’ standard table (described in
section 807(d)(5)(A) of the Internal
Revenue Code of 1986) used to deter-
mine reserves for group annuity con-
tracts issued on the date as of which
present value is being determined
(without regard to any other subpara-
graph of section 807(d)(5) of such
Code).
‘‘(II) 
APPLICABLE
INTEREST
RATE.—The term ‘applicable interest
rate’ means the annual rate of inter-
est on 30-year Treasury securities for
the month before the date of distribu-
tion or such other time as the Sec-
retary may by regulations prescribe.
‘‘(B) EXCEPTION.—In the case of a dis-
tribution from a plan that was adopted and in
effect prior to the date of the enactment of the
Retirement Protection Act of 1995, the present
value of any distribution made before the ear-
lier of—
‘‘(i) the later of when a plan amend-
ment applying subparagraph (A) is adopt-
ed or made effective, or
‘‘(ii) the first day of the first plan
year beginning after December 31, 2000,
shall be calculated, for purposes of paragraphs
(1) and (2), using the interest rates determined
under the regulations of the Pension Benefit
Guaranty Corporation for determining the
present value of a lump sum distribution on
plan termination that were in effect on Septem-
ber 1, 1993, and using the provisions of the
plan as in effect on the day before the date of
the enactment of the Retirement Protection Act
of 1995; but only if such provisions of the plan
met the requirements of section 205(g)(3) as in
effect on the day before such date of enact-
ment.’’
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall apply to plan years and limitation