In the Senate of the United States,
March 3, 2006.
Resolved, That the bill from the House of Representa-
tives (H.R. 2830) entitled ‘‘An Act to amend the Employee
Retirement Income Security Act of 1974 and the Internal
Revenue Code of 1986 to reform the pension funding rules,
and for other purposes.’’, do pass with the following
AMENDMENT:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Pension Security and Transparency Act of 2005’’.
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(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title and table of contents.
TITLE I—FUNDING AND DEDUCTION RULES FOR SINGLE-
EMPLOYER DEFINED BENEFIT PLANS AND RELATED PROVISIONS
Subtitle A—Amendments to Employee Retirement Income Security Act of 1974
Sec. 101. Minimum funding standards.
Sec. 102. Funding rules for single-employer defined benefit pension plans.
Sec. 103. Benefit limitations under single-employer plans.
Sec. 104. Technical and conforming amendments.
Sec. 105. Special rules for multiple employer plans of certain cooperatives.
Sec. 106. Temporary relief for certain rescued plans.
Subtitle B—Amendments to Internal Revenue Code of 1986
Sec. 111. Modifications of the minimum funding standards.
Sec. 112. Funding rules applicable to single-employer pension plans.
Sec. 113. Benefit limitations under single-employer plans.
Sec. 114. Increase in deduction limit for single-employer plans.
Sec. 115. Technical and conforming amendments.
Subtitle C—Interest Rate Assumptions and Deductible Amounts for 2006
Sec. 121. Extension of replacement of 30-year Treasury rates.
Sec. 122. Deduction limits for plan contributions.
Sec. 123. Updating deduction rules for combination of plans.
TITLE II—FUNDING AND DEDUCTION RULES FOR MULTIEMPLOYER
DEFINED BENEFIT PLANS AND RELATED PROVISIONS
Subtitle A—Funding Rules
PART I—AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974
Sec. 201. Funding rules for multiemployer defined benefit plans.
Sec. 202. Additional funding rules for multiemployer plans in endangered or crit-
ical status.
Sec. 203. Measures to forestall insolvency of multiemployer plans.
Sec. 204. Special rule for certain benefits funded under an agreement approved
by the Pension Benefit Guaranty Corporation.
Sec. 205. Withdrawal liability reforms.
PART II—AMENDMENTS TO INTERNAL REVENUE CODE OF 1986
Sec. 211. Funding rules for multiemployer defined benefit plans.
Sec. 212. Additional funding rules for multiemployer plans in endangered or crit-
ical status.
PART III—SUNSET OF FUNDING RULES
Sec. 216. Sunset of funding rules.
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Subtitle B—Deduction and Related Provisions
Sec. 221. Deduction limits for multiemployer plans.
Sec. 222. Transfer of excess pension assets to multiemployer health plan.
TITLE III—INTEREST RATE ASSUMPTIONS
Sec. 301. Interest rate assumption for determination of lump sum distributions.
Sec. 302. Interest rate assumption for applying benefit limitations to lump sum
distributions.
Sec. 303. Restrictions on funding of nonqualified deferred compensation plans by
employers maintaining underfunded or terminated single-em-
ployer plans.
Sec. 304. Modification of pension funding requirements for plans subject to cur-
rent transition rule.
TITLE IV—IMPROVEMENTS IN PBGC GUARANTEE PROVISIONS
Sec. 401. Increases in PBGC premiums.
Sec. 402. Authority to enter alternative funding agreements to prevent plan ter-
minations.
Sec. 403. Special funding rules for plans maintained by commercial airlines that
are amended to cease future benefit accruals.
Sec. 404. Limitation on PBGC guarantee of shutdown and other benefits.
Sec. 405. Rules relating to bankruptcy of employer.
Sec. 406. PBGC premiums for new plans of small employers.
Sec. 407. PBGC premiums for small and new plans.
Sec. 408. Authorization for PBGC to pay interest on premium overpayment re-
funds.
Sec. 409. Rules for substantial owner benefits in terminated plans.
Sec. 410. Acceleration of PBGC computation of benefits attributable to recoveries
from employers.
Sec. 411. Treatment of certain plans where cessation or change in membership of
a controlled group.
Sec. 412. Effect of title.
Sec. 413. Age requirement for employers.
TITLE V—DISCLOSURE
Sec. 501. Defined benefit plan funding notice.
Sec. 502. Access to multiemployer pension plan information.
Sec. 503. Additional annual reporting requirements.
Sec. 504. Timing of annual reporting requirements.
Sec. 505. Section 4010 filings with the PBGC.
Sec. 506. Disclosure of termination information to plan participants.
Sec. 507. Benefit suspension notice.
Sec. 508. Study and report by Government Accountability Office.
TITLE VI—TREATMENT OF CASH BALANCE AND OTHER HYBRID
DEFINED BENEFIT PENSION PLANS
Sec. 601. Prospective application of age discrimination, conversion, and present
value assumption rules.
Sec. 602. Regulations relating to mergers and acquisitions.
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TITLE VII—DIVERSIFICATION RIGHTS AND OTHER PARTICIPANT
PROTECTIONS UNDER DEFINED CONTRIBUTION PLANS
Sec. 701. Defined contribution plans required to provide employees with freedom
to invest their plan assets.
Sec. 702. Notice of freedom to divest employer securities or real property.
Sec. 703. Periodic pension benefit statements.
Sec. 704. Notice to participants or beneficiaries of blackout periods.
Sec. 705. Allowance of, and credit for, additional IRA payments in certain bank-
ruptcy cases.
Sec. 706. Inapplicability of relief from fiduciary liability during suspension of
ability of participant or beneficiary to direct investments.
Sec. 707. Increase in maximum bond amount.
TITLE VIII—INFORMATION TO ASSIST PENSION PLAN
PARTICIPANTS
Sec. 801. Defined contribution plans required to provide adequate investment
education to participants.
Sec. 802. Independent investment advice provided to plan participants.
Sec. 803. Treatment of qualified retirement planning services.
Sec. 804. Increase in penalties for coercive interference with exercise of ERISA
rights.
Sec. 805. Administrative provision.
TITLE IX—PROVISIONS RELATING TO SPOUSAL PENSION
PROTECTION
Sec. 901. Regulations on time and order of issuance of domestic relations orders.
Sec. 902. Entitlement of divorced spouses to railroad retirement annuities inde-
pendent of actual entitlement of employee.
Sec. 903. Extension of tier II railroad retirement benefits to surviving former
spouses pursuant to divorce agreements.
Sec. 904. Requirement for additional survivor annuity option.
TITLE X—IMPROVEMENTS IN PORTABILITY AND DISTRIBUTION
RULES
Sec. 1001. Clarifications regarding purchase of permissive service credit.
Sec. 1002. Allow rollover of after-tax amounts in annuity contracts.
Sec. 1003. Clarification of minimum distribution rules for governmental plans.
Sec. 1004. Waiver of 10 percent early withdrawal penalty tax on certain dis-
tributions of pension plans for public safety employees.
Sec. 1005. Allow rollovers by nonspouse beneficiaries of certain retirement plan
distributions.
Sec. 1006. Faster vesting of employer nonelective contributions.
Sec. 1007. Allow direct rollovers from retirement plans to Roth IRAS.
Sec. 1008. Elimination of higher penalty on certain simple plan distributions.
Sec. 1009. Simple plan portability.
Sec. 1010. Eligibility for participation in retirement plans.
Sec. 1011. Transfers to the PBGC.
Sec. 1012. Missing participants.
Sec. 1013. Modifications of rules governing hardships and unforseen financial
emergencies.
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TITLE XI—ADMINISTRATIVE PROVISIONS
Sec. 1101. Employee plans compliance resolution system.
Sec. 1102. Notice and consent period regarding distributions.
Sec. 1103. Reporting simplification.
Sec. 1104. Voluntary early retirement incentive and employment retention plans
maintained by local educational agencies and other entities.
Sec. 1105. No reduction in unemployment compensation as a result of pension
rollovers.
Sec. 1106. Withholding on distributions from governmental section 457 plans.
Sec. 1107. Treatment of defined benefit plan as governmental plan.
Sec. 1108. Increasing participation in cash or deferred plans through automatic
contribution arrangements.
Sec. 1109. Treatment of investment of assets by plan where participant fails to
exercise investment election.
Sec. 1110. Clarification of fiduciary rules.
TITLE XII—UNITED STATES TAX COURT MODERNIZATION
Sec. 1200. Amendment of 1986 Code.
Sec. 1201. Annuities for survivors of Tax Court judges who are assassinated.
Sec. 1202. Cost-of-living adjustments for Tax Court judicial survivor annuities.
Sec. 1203. Life insurance coverage for Tax Court judges.
Sec. 1204. Cost of life insurance coverage for Tax Court judges age 65 or over.
Sec. 1205. Modification of timing of lump-sum payment of judges’ accrued an-
nual leave.
Sec. 1206. Participation of Tax Court judges in the Thrift Savings Plan.
Sec. 1207. Exemption of teaching compensation of retired judges from limitation
on outside earned income.
Sec. 1208. General provisions relating to Magistrate Judges of the Tax Court.
Sec. 1209. Annuities to surviving spouses and dependent children of Magistrate
Judges of the Tax Court.
Sec. 1210. Retirement and annuity program.
Sec. 1211. Incumbent Magistrate Judges of the Tax Court.
Sec. 1212. Provisions for recall.
Sec. 1213. Effective date.
TITLE XIII—OTHER PROVISIONS
Subtitle A—Administrative Provision
Sec. 1301. Provisions relating to plan amendments.
Sec. 1302. Authority to the Secretary of Labor, Secretary of the Treasury, and
the Pension Benefit Guaranty Corporation to postpone certain
deadlines.
Subtitle B—Governmental Pension Plan Equalization
Sec. 1311. Definition of governmental plan.
Sec. 1312. Extension to all governmental plans of current moratorium on appli-
cation of certain nondiscrimination rules applicable to State
and local plans.
Sec. 1313. Clarification that tribal governments are subject to the same defined
benefit plan rules and regulations applied to State and other
local governments, their police and firefighters.
Sec. 1314. Effective date.
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Subtitle C—Miscellaneous Provisions
Sec. 1321. Transfer of excess funds from black lung disability trusts to United
Mine Workers of America Combined Benefit Fund.
Sec. 1322. Treatment of death benefits from corporate-owned life insurance.
Subtitle D—Other Related Pension Provisions
PART I—HEALTH AND MEDICAL BENEFITS
Sec. 1331. Use of excess pension assets for future retiree health benefits.
Sec. 1332. Special rules for funding of collectively bargained retiree health bene-
fits.
Sec. 1333. Allowance of reserve for medical benefits of plans sponsored by bona
fide associations.
PART II—CASH OR DEFERRED ARRANGEMENTS
Sec. 1336. Treatment of eligible combined defined benefit plans and qualified cash
or deferred arrangements.
Sec. 1337. State and local governments eligible to maintain section 401(k) plans.
PART III—EXCESS CONTRIBUTIONS
Sec. 1339. Excess contributions.
PART IV—OTHER PROVISIONS
Sec. 1341. Amendments relating to prohibited transactions.
Sec. 1342. Federal Task Force on Older Workers.
Sec. 1343. Technical corrections to Saver Act.
TITLE I—FUNDING AND DEDUC-
TION RULES FOR SINGLE-EM-
PLOYER 
DEFINED 
BENEFIT
PLANS AND RELATED PROVI-
SIONS
Subtitle A—Amendments to Em-
ployee Retirement Income Secu-
rity Act of 1974
SEC. 101. MINIMUM FUNDING STANDARDS.
(a) REPEAL OF EXISTING FUNDING RULES.—Sections
302 through 308 of the Employee Retirement Income Secu-
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rity Act of 1974 (29 U.S.C. 1082 through 1086) are re-
pealed.
(b) NEW MINIMUM FUNDING STANDARDS.—Part 3 of
subtitle B of title I of such Act (as amended by subsection
(a)) is amended by inserting after section 301 the following
new section:
‘‘MINIMUM FUNDING STANDARDS
‘‘SEC. 302. (a) REQUIREMENT TO MEET MINIMUM
FUNDING STANDARD.—
‘‘(1) IN GENERAL.—A plan to which this part
applies shall satisfy the minimum funding standard
applicable to the plan for any plan year.
‘‘(2) MINIMUM FUNDING STANDARD.—For pur-
poses of paragraph (1), a plan shall be treated as sat-
isfying the minimum funding standard for a plan
year if—
‘‘(A) in the case of a defined benefit plan
which is a single-employer plan, the employer
makes contributions to or under the plan for the
plan year which, in the aggregate, are not less
than the minimum required contribution deter-
mined under section 303 for the plan for the
plan year,
‘‘(B) in the case of a money purchase plan
which is a single-employer plan, the employer
makes contributions to or under the plan for the
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plan year which are required under the terms of
the plan, and
‘‘(C) in the case of a multiemployer plan,
the employers make contributions to or under the
plan for any plan year which, in the aggregate,
are sufficient to ensure that the plan does not
have an accumulated funding deficiency under
section 304 as of the end of the plan year.
‘‘(b) LIABILITY FOR CONTRIBUTIONS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the amount of any contribution required
by this section (including any required installments
under section 303(j)) shall be paid by the employer
responsible for making contributions to or under the
plan.
‘‘(2) JOINT AND SEVERAL LIABILITY WHERE EM-
PLOYER
MEMBER
OF
CONTROLLED
GROUP.—If the
employer referred to in paragraph (1) is a member of
a controlled group, each member of such group shall
be jointly and severally liable for payment of such
contributions.
‘‘(c) VARIANCE FROM MINIMUM FUNDING STAND-
ARDS.—
‘‘(1) WAIVER
IN
CASE
OF
BUSINESS
HARD-
SHIP.—
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‘‘(A) IN GENERAL.—If—
‘‘(i) an employer is (or in the case of
a multiemployer plan, 10 percent or more
of the number of employers contributing to
or under the plan are) unable to satisfy the
minimum funding standard for a plan year
without temporary substantial business
hardship (substantial business hardship in
the case of a multiemployer plan), and
‘‘(ii) application of the standard would
be adverse to the interests of plan partici-
pants in the aggregate,
the Secretary of the Treasury may, subject to
subparagraph (C), waive the requirements of
subsection (a) for such year with respect to all
or any portion of the minimum funding stand-
ard. The Secretary of the Treasury shall not
waive the minimum funding standard with re-
spect to a plan for more than 3 of any 15 (5 of
any 15 in the case of a multiemployer plan) con-
secutive plan years.
‘‘(B) EFFECTS OF WAIVER.—If a waiver is
granted under subparagraph (A) for any plan
year—