‘‘(1) In the case of a plan other than a multi-
employer plan, the employer.
‘‘(2) In the case of a multiemployer plan, the
plan.
For purposes of the preceding sentence, all multiemployer
plans of which the same trust forms a part shall be treated
as 1 plan. For purposes of this paragraph, if not all per-
sons 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 prin-
ciples similar to the principles of section 1561.
‘‘(d) ELECTION TO CONTINUE BENEFIT ACCRUALS
UNDER FORMER DEFINED BENEFIT PLAN IN EVENT OF
SIGNIFICANT REDUCTIONS IN FUTURE BENEFIT ACCRU-
ALS.—In the case that an applicable pension plan adopts
an amendment which has the effect of significantly reduc-
ing the rate of future benefit accrual of 1 or more partici-
pants, the requirements of this subsection are met if the
plan administrator provides each participant who has a
nonforfeitable right to 100 percent of his accrued benefits
with—
‘‘(1) notice and a written statement of benefit
change which meets the requirements of section
401(a)(35), and
‘‘(2) an election to continue to accrue benefits
under such plan, determined under the terms of
such plan as in effect immediately before the effec-
tive date of such plan amendment.
‘‘(e) TIMING OF ELECTION.—Except as provided in
regulations, the election required by subsection (d) shall
be provided within a reasonable time before the effective
date of such amendment.
‘‘(f) PROTECTED ACCRUED BENEFIT.—For purposes
of this section, an accrued benefit shall include any early
retirement benefit or retirement-type subsidy (within the
meaning of section 411(d)(6)(B)(i)), but only with respect
to a participant who satisfies (either before or after the
effective date of the amendment) the conditions for the
benefit or subsidy under the terms of the plan as in effect
immediately before such date.
‘‘(g) APPLICABLE PENSION PLAN.—For purposes of
this section, the term ‘applicable pension plan’ means a
defined benefit plan that is subject to the notice require-
ments of section 401(a)(35).’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions for chapter 43 of subtitle D of such Code is
amended by adding at the end the following new
item:
‘‘Sec. 4980F. Failure to offer election to continue benefit accruals under former
defined benefit plan in event of significant reductions in future
benefit accruals.’’.
(d) EFFECTIVE DATES.—
(1) IN GENERAL.—The amendments made by
this section shall apply to plans and plan amend-
ments taking effect after December 31, 1998.
(2) SPECIAL RULE.—The period for providing
any notice required by the amendments made by this
section shall not end before the date which is 3
months after the date of the enactment of this Act.
SEC. 4. PREVENTION OF WEARING AWAY OF EMPLOYEE’S
ACCRUED BENEFIT.
(a) AMENDMENT TO INTERNAL REVENUE CODE.—
Section 411(d)(6) of the Internal Revenue Code of 1986
(relating to accrued benefit may not be decreased by
amendment) is amended by adding at the end the fol-
lowing new subparagraph:
‘‘(D) TREATMENT OF PLAN AMENDMENTS
WEARING AWAY ACCRUED BENEFIT.—
‘‘(i) IN
GENERAL.—For purposes of
subparagraph (A), a plan amendment
adopted by a large defined benefit plan
shall be treated as reducing accrued bene-
fits of a participant if, under the terms of
the plan after the adoption of the amend-
ment, the accrued benefit of the partici-
pant may at any time be less than the sum
of—
‘‘(I) the participant’s accrued
benefit for years of service before the
effective date of the amendment, de-
termined under the terms of the plan
as in effect immediately before the ef-
fective date, plus
‘‘(II) the participant’s accrued
benefit determined under the formula
applicable to benefit accruals under
the current plan as applied to years of
service after such effective date.
‘‘(ii) 
LARGE
DEFINED
BENEFIT
PLAN.—For purposes of this subpara-
graph, the term ‘large defined benefit plan’
means any defined benefit plan which had
100 or more participants who had accrued
a benefit under the plan (whether or not
vested) as of the last day of the plan year
preceding the plan year in which the plan
amendment becomes effective.
‘‘(iii) PROTECTED
ACCRUED
BEN-
EFIT.—For purposes of this subparagraph,
an accrued benefit shall include any early
retirement benefit or retirement-type sub-
sidy (within the meaning of subparagraph
(B)(i)), but only with respect to a partici-
pant who satisfies (either before or after
the effective date of the amendment) the
conditions for the benefit or subsidy under
the terms of the plan as in effect imme-
diately before such date.’’.
(b) AMENDMENT OF ERISA.—Section 204(g) of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1054(g)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(5)(A) For purposes of paragraph (1), a plan
amendment adopted by a large defined benefit plan shall
be treated as reducing accrued benefits of a participant
if, under the terms of the plan after the adoption of the
amendment, the accrued benefit of the participant may at
any time be less than the sum of—
‘‘(i) the participant’s accrued benefit for years
of service before the effective date of the amend-
ment, determined under the terms of the plan as in
effect immediately before the effective date, plus
‘‘(ii) the participant’s accrued benefit deter-
mined under the formula applicable to benefit accru-