1255 
for the following plan year, such reasonable 
measures may also include— 
‘‘(i) a further reduction in the rate of 
future benefit accruals without regard to 
the limitation applicable under subpara-
graph (B)(ii); or 
‘‘(ii) a reduction of core benefits; 
provided that such reductions shall be equitably 
distributed across the participant and bene-
ficiary population, taking into account factors, 
with respect to participants and beneficiaries 
and their benefits, that may include one or 
more of the factors listed in subclauses (I) 
through (X) of section 305(e)(9)(D)(vi), to the 
extent necessary to enable the plan to achieve 
a projected funded ratio of at least 120 percent 
for the following plan year, or at the election of 
the plan sponsor, a projected funded ratio of at 
least 100 percent for the following plan year 
and a current funded ratio of at least 90 per-
cent. 
‘‘(3) ADJUSTABLE
BENEFIT
DEFINED.—For 
purposes of this part, the term ‘adjustable benefit’ 
means— 
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‘‘(A) benefits, rights, and features under 
the plan, including post-retirement death bene-
fits, 60-month guarantees, disability benefits 
not yet in pay status, and similar benefits; 
‘‘(B) any early retirement benefit or retire-
ment-type subsidy (within the meaning of sec-
tion 204(g)(2)(A)) and any benefit payment op-
tion (other than the qualified joint and survivor 
annuity); and 
‘‘(C) benefit increases that were adopted 
(or, if later, took effect) less than 60 months 
before the first day such realignment program 
took effect. 
‘‘(4) CORE BENEFIT DEFINED.—For purposes 
of this part, the term ‘core benefit’ means a partici-
pant’s accrued benefit payable in the normal form of 
an annuity commencing at normal retirement age, 
determined without regard to— 
‘‘(A) any early retirement benefits, retire-
ment-type subsidies, or other benefits, rights, or 
features that may be associated with that ben-
efit; and 
‘‘(B) any cost-of-living adjustments or ben-
efit increases effective after the date of retire-
ment. 
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‘‘(5) COORDINATION WITH CONTRIBUTION IN-
CREASES.— 
‘‘(A) IN
GENERAL.—A realignment pro-
gram may provide that some or all of the ben-
efit modifications described in the program will 
only take effect if the bargaining parties fail to 
agree to specified levels of increases in contribu-
tions to the plan, effective as of specified dates. 
‘‘(B) INDEPENDENT
BENEFIT
MODIFICA-
TIONS.—If a realignment program adopts any 
changes to the benefit formula that are inde-
pendent of potential contribution increases, 
such changes shall take effect not later than 
180 days after the first day of the first plan 
year that begins following the adoption of the 
realignment program. 
‘‘(C) CONDITIONAL
BENEFIT
MODIFICA-
TIONS.—If a realignment program adopts any 
changes to the benefit formula that take effect 
only if the bargaining parties fail to agree to 
contribution increases, such changes shall take 
effect not later than the first day of the first 
plan year beginning after the third anniversary 
of the date of adoption of the realignment pro-
gram. 
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‘‘(D) REVOCATION OF CERTAIN BENEFIT 
MODIFICATIONS.—Benefit 
modifications 
de-
scribed in subparagraph (C) may be revoked, in 
whole or in part, and retroactively or prospec-
tively, when contributions to the plan are in-
creased, as specified in the realignment pro-
gram, including any amendments thereto. The 
preceding sentence shall not apply unless the 
contribution increases are to be effective not 
later than the fifth anniversary of the first day 
of the first plan year that begins after the 
adoption of the realignment program. 
‘‘(b) NOTICE.— 
‘‘(1) IN GENERAL.—In any case in which it is 
certified under section 802(a) that the projected 
funded ratio is less than 120 percent, the plan spon-
sor shall, not later than 30 days after the date of 
the certification, provide notification of the current 
and projected funded ratios to the participants and 
beneficiaries, the bargaining parties, and the Sec-
retary. Such notice shall include— 
‘‘(A) an explanation that contribution rate 
increases or benefit reductions may be nec-
essary; 
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‘‘(B) a description of the types of benefits 
that might be reduced; and 
‘‘(C) an estimate of the contribution in-
creases and benefit reductions that may be nec-
essary to achieve a projected funded ratio of 
120 percent. 
‘‘(2) NOTICE OF BENEFIT MODIFICATIONS.— 
‘‘(A) IN GENERAL.—No modifications may 
be made that reduce the rate of future benefit 
accrual or that reduce core benefits or adjust-
able benefits unless notice of such reduction has 
been given at least 180 days before the general 
effective date of such reduction for all partici-
pants and beneficiaries to— 
‘‘(i) plan participants and bene-
ficiaries; 
‘‘(ii) each employer who has an obliga-
tion to contribute to the composite plan; 
and 
‘‘(iii) 
each 
employee 
organization 
which, for purposes of collective bar-
gaining, represents plan participants em-
ployed by such employers. 
‘‘(B) CONTENT
OF
NOTICE.—The notice 
under subparagraph (A) shall contain— 
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‘‘(i) sufficient information to enable 
participants and beneficiaries to under-
stand the effect of any reduction on their 
benefits, including an illustration of any 
affected benefit or subsidy, on an annual 
or monthly basis that a participant or ben-
eficiary would otherwise have been eligible 
for as of the general effective date de-
scribed in subparagraph (A); and 
‘‘(ii) information as to the rights and 
remedies of plan participants and bene-
ficiaries as well as how to contact the De-
partment of Labor for further information 
and assistance, where appropriate. 
‘‘(C) FORM
AND
MANNER.—Any notice 
under subparagraph (A)— 
‘‘(i) shall be provided in a form and 
manner prescribed in regulations of the 
Secretary of Labor; 
‘‘(ii) shall be written in a manner so 
as to be understood by the average plan 
participant. 
‘‘(3) MODEL NOTICES.—The Secretary shall— 
‘‘(A) prescribe model notices that the plan 
sponsor of a composite plan may use to satisfy 
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1261 
the notice requirements under this subsection; 
and 
‘‘(B) by regulation enumerate any details 
related to the elements listed in paragraph (1) 
that any notice under this subsection must in-
clude. 
‘‘(4) DELIVERY
METHOD.—Any notice under 
this part shall be provided in writing and may also 
be provided in electronic form to the extent that the 
form is reasonably accessible to persons to whom the 
notice is provided. 
‘‘SEC. 804. LIMITATION ON INCREASING BENEFITS. 
‘‘(a) LEVEL OF CURRENT FUNDED RATIOS.—Except 
as provided in subsections (c), (d), and (e), no plan 
amendment increasing benefits or establishing new bene-
fits under a composite plan may be adopted for a plan 
year unless— 
‘‘(1) the plan’s current funded ratio is at least 
110 percent (without regard to the benefit increase 
or new benefits); 
‘‘(2) taking the benefit increase or new benefits 
into account, the current funded ratio is at least 100 
percent and the projected funded ratio for the cur-
rent plan year is at least 120 percent; 
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1262 
‘‘(3) in any case in which, after taking the ben-
efit increase or new benefits into account, the cur-
rent funded ratio is less than 140 percent and the 
projected funded ratio is less than 140 percent, the 
benefit increase or new benefits are projected by the 
plan actuary to increase the present value of the 
plan’s liabilities for the plan year by not more than 
3 percent; and 
‘‘(4) expected contributions for the current plan 
year are at least 120 percent of normal cost for the 
plan year, determined using the unit credit funding 
method and treating the benefit increase or new ben-
efits as in effect for the entire plan year. 
‘‘(b) ADDITIONAL REQUIREMENTS WHERE CORE 
BENEFITS REDUCED.—If a plan has been amended to re-
duce core benefits pursuant to a realignment program 
under section 803(a)(2)(D), such plan may not be subse-
quently amended to increase core benefits unless the 
amendment— 
‘‘(1) increases the level of future benefit pay-
ments only; and 
‘‘(2) provides for an equitable distribution of 
benefit increases across the participant and bene-
ficiary population, taking into account the extent to 
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1263 
which the benefits of participants were previously re-
duced pursuant to such realignment program. 
‘‘(c) EXCEPTION TO COMPLY WITH APPLICABLE 
LAW.—Subsection (a) shall not apply in connection with 
a plan amendment if the amendment is required as a con-
dition of qualification under part I of subchapter D of 
chapter 1 of the Internal Revenue Code of 1986 or to com-
ply with other applicable law. 
‘‘(d) EXCEPTION WHERE MAXIMUM DEDUCTIBLE 
LIMIT APPLIES.—Subsection (a) shall not apply in con-
nection with a plan amendment if and to the extent that 
contributions to the composite plan would not be deduct-
ible for the plan year under section 404(a)(1)(E) of the 
Internal Revenue Code of 1986 if the plan amendment is 
not adopted. 
‘‘(e) EXCEPTION FOR CERTAIN BENEFIT MODIFICA-
TIONS.—Subsection (a) shall not apply in connection with 
a plan amendment under section 803(a)(5)(C), regarding 
conditional benefit modifications. 
‘‘(f) TREATMENT OF PLAN AMENDMENTS.—For pur-
poses of this section— 
‘‘(1) if two or more plan amendments increas-
ing benefits or establishing new benefits are adopted 
in a plan year, such amendments shall be treated as 
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1264 
a single amendment adopted on the last day of the 
plan year; 
‘‘(2) all benefit increases and new benefits 
adopted in a single amendment are treated as a sin-
gle benefit increase, irrespective of whether the in-
creases and new benefits take effect in more than 
one plan year; and 
‘‘(3) increases in contributions or decreases in 
plan liabilities which are scheduled to take effect in 
future plan years may be taken into account in con-
nection with a plan amendment if they have been 
agreed to in writing or otherwise formalized by the 
date the plan amendment is adopted. 
‘‘SEC. 805. COMPOSITE PLAN RESTRICTIONS TO PRESERVE 
LEGACY PLAN FUNDING. 
‘‘(a) TREATMENT AS A LEGACY PLAN.— 
‘‘(1) IN GENERAL.—For purposes of this part 
and parts 2 and 3, a defined benefit plan shall be 
treated as a legacy plan with respect to the com-
posite plan under which the employees who were eli-
gible to accrue a benefit under the defined benefit 
plan become eligible to accrue a benefit under such 
composite plan. 
‘‘(2) COMPONENT
PLANS.—In any case in 
which a defined benefit plan is amended to add a 
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1265 
composite plan component pursuant to section 
801(b), paragraph (1) shall be applied by sub-
stituting ‘defined benefit component’ for ‘defined 
benefit plan’ and ‘composite plan component’ for 
‘composite plan’. 
‘‘(3) ELIGIBLE TO ACCRUE A BENEFIT.—For 
purposes of paragraph (1), an employee is consid-
ered eligible to accrue a benefit under a composite 
plan as of the first day in which the employee com-
pletes an hour of service under a collective bar-
gaining agreement that provides for contributions to 
and accruals under the composite plan in lieu of ac-
cruals under the legacy plan. 
‘‘(4) COLLECTIVE BARGAINING AGREEMENT.— 
As used in this part, the term ‘collective bargaining 
agreement’ includes any agreement under which an 
employer has an obligation to contribute to a plan. 
‘‘(5) OTHER TERMS.—Any term used in this 
part which is not defined in this part and which is 
also used in section 305 shall have the same mean-
ing provided such term in such section. 
‘‘(b) RESTRICTIONS ON ACCEPTANCE BY COMPOSITE 
PLAN OF AGREEMENTS AND CONTRIBUTIONS.— 
‘‘(1) IN GENERAL.—The plan sponsor of a com-
posite plan shall not accept or recognize a collective 
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1266 
bargaining agreement (or any modification to such 
agreement), and no contributions may be accepted 
and no benefits may be accrued or otherwise earned 
under the agreement— 
‘‘(A) in any case in which the plan actuary 
of any defined benefit plan that would be treat-
ed as a legacy plan with respect to such com-
posite 
plan 
has 
certified 
under 
section 
305(b)(3) that such defined benefit plan is or 
will be in critical status for the plan year in 
which such agreement would take effect or for 
any of the succeeding 5 plan years; and 
‘‘(B) unless the agreement requires each 
employer who is a party to such agreement, in-
cluding employers whose employees are not par-
ticipants in the legacy plan, to provide contribu-
tions to the legacy plan with respect to such 
composite plan in a manner that satisfies the 
transition contribution requirements of sub-
section (d). 
‘‘(2) NOTICE.—Not later than 30 days after a 
determination by a plan sponsor of a composite plan 
that an agreement fails to satisfy the requirements 
described in paragraph (1), the plan sponsor shall 
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1267 
provide notification of such failure and the reasons 
for such determination— 
‘‘(A) to the parties to the agreement; 
‘‘(B) to active participants of the com-
posite plan who have ceased to accrue or other-
wise earn benefits with respect to service with 
an employer pursuant to paragraph (1); and 
‘‘(C) to the Secretary, the Secretary of the 
Treasury, and the Pension Benefit Guaranty 
Corporation. 
‘‘(3) LIMITATION ON RETROACTIVE EFFECT.— 
This subsection shall not apply to benefits accrued 
before the date on which notice is provided under 
paragraph (2). 
‘‘(c) RESTRICTION
ON
ACCRUAL
OF
BENEFITS 
UNDER A COMPOSITE PLAN.— 
‘‘(1) IN GENERAL.—In any case in which an 
employer, under a collective bargaining agreement 
entered into after the date of enactment of the Giv-
ing Retirement Options to Workers Act of 2020, 
ceases to have an obligation to contribute to a multi-
employer defined benefit plan, no employees em-
ployed by the employer may accrue or otherwise earn 
benefits under any composite plan, with respect to 
service with that employer, for a 60-month period 
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beginning on the date on which the employer entered 
into such collective bargaining agreement. 
‘‘(2) NOTICE OF CESSATION OF OBLIGATION.— 
Within 30 days of determining that an employer has 
ceased to have an obligation to contribute to a leg-
acy plan with respect to employees employed by an 
employer that is or will be contributing to a com-
posite plan with respect to service of such employees, 
the plan sponsor of the legacy plan shall notify the 
plan sponsor of the composite plan of that cessation. 
‘‘(3) NOTICE OF CESSATION OF ACCRUALS.— 
Not later than 30 days after determining that an 
employer has ceased to have an obligation to con-
tribute to a legacy plan, the plan sponsor of the 
composite plan shall notify the bargaining parties, 
the active participants affected by the cessation of 
accruals, the Secretary, the Secretary of the Treas-
ury, and the Pension Benefit Guaranty Corporation 
of the cessation of accruals, the period during which 
such cessation is in effect, and the reasons therefor. 
‘‘(4) LIMITATION ON RETROACTIVE EFFECT.— 
This subsection shall not apply to benefits accrued 
before the date on which notice is provided under 
paragraph (3). 
‘‘(d) TRANSITION CONTRIBUTION REQUIREMENTS.— 
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‘‘(1) IN
GENERAL.—A collective bargaining 
agreement satisfies the transition contribution re-
quirements of this subsection if the agreement— 
‘‘(A) authorizes payment of contributions 
to a legacy plan at a rate or rates equal to or 
greater than the transition contribution rate es-
tablished by the legacy plan under paragraph 
(2); and 
‘‘(B) does not provide for— 
‘‘(i) a suspension of contributions to 
the legacy plan with respect to any period 
of service; or 
‘‘(ii) any new direct or indirect exclu-
sion of younger or newly hired employees 
of the employer from being taken into ac-
count in determining contributions owed to 
the legacy plan. 
‘‘(2) TRANSITION CONTRIBUTION RATE.— 
‘‘(A) IN
GENERAL.—The transition con-
tribution rate for a plan year is the contribution 
rate that, as certified by the actuary of the leg-
acy plan in accordance with the principles in 
section 305(b)(3)(B), is reasonably expected to 
be adequate— 
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‘‘(i) to fund the normal cost for the 
plan year; 
‘‘(ii) to amortize the plan’s unfunded 
liabilities in level annual installments over 
25 years, beginning with the plan year in 
which the transition contribution rate is 
first established; and 
‘‘(iii) to amortize any subsequent 
changes in the legacy plan’s unfunded li-
ability due to experience gains or losses 
(including investment gains or losses, gains 
or losses due to contributions greater or 
less than the contributions made under the 
prior transition contribution rate, and 
other actuarial gains or losses), changes in 
actuarial assumptions, changes to the leg-
acy plan’s benefits, or changes in funding 
method over a period of 15 plan years be-
ginning with the plan year in which such 
change in unfunded liability is incurred. 
The transition contribution rate for any plan 
year may not be less than the transition con-
tribution rate for the plan year in which such 
rate is first established. 
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‘‘(B) MULTIPLE RATES.—If different rates 
of contribution are payable to the legacy plan 
by different employers or for different classes of 
employees, the certification shall specify a tran-
sition contribution rate for each such employer. 
‘‘(C) RATE APPLICABLE TO EMPLOYER.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided by clause (ii), the transition con-
tribution rate applicable to an employer for 
a plan year is the rate in effect for the 
plan year of the legacy plan that com-
mences on or after 180 days before the 
earlier of— 
‘‘(I) the effective date of the col-
lective bargaining agreement pursuant 
to which the employer contributes to 
the legacy plan; or 
‘‘(II) 5 years after the last plan 
year for which the transition contribu-
tion rate applicable to the employer 
was established or updated. 
‘‘(ii) 
EXCEPTION.—The 
transition 
contribution rate applicable to an employer 
for the first plan year beginning on or 
after the commencement of the employer’s 
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1272 
obligation to contribute to the composite 
plan is the rate in effect for the plan year 
of the legacy plan that commences on or 
after 180 days before such first plan year. 
‘‘(D) EFFECT OF LEGACY PLAN FINANCIAL 
CIRCUMSTANCES.—If the plan actuary of the 
legacy plan has certified under section 305 that 
the plan is in endangered or critical status for 
a plan year, the transition contribution rate for 
the following plan year is the rate determined 
with respect to the employer under the legacy 
plan’s funding improvement or rehabilitation 
plan under section 305, if greater than the rate 
otherwise determined, but in no event greater 
than 75 percent of the sum of the contribution 
rates applicable to the legacy plan and the com-
posite plan for the plan year. 
‘‘(E) OTHER
ACTUARIAL
ASSUMPTIONS 
AND
METHODS.—Except as provided in sub-
paragraph (A), the determination of the transi-
tion contribution rate for a plan year shall be 
based on actuarial assumptions and methods 
consistent with the minimum funding deter-
minations made under section 304 (or, if appli-
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