To amend the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 to make technical modifications relating to the Worker, Retiree, and Employer Recovery Act of 2008 and the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Pension Technical Modifications 
Act''.

SEC. 2. ELECTIVE EXCLUSION OF PLAN INVESTMENT EXPENSES IN DETERMINING 
              TARGET NORMAL COST.

    (a) Amendment to ERISA.--Section 303(b)(1)(A)(ii) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1083(b)(1)(A)(ii)) is 
amended by inserting ``(excluding, to the extent elected by the plan 
sponsor, plan investment expenses)'' after ``plan year''.
    (b) Amendment to 1986 Code.--Clause (ii) of section 430(b)(1)(A) of 
the Internal Revenue Code of 1986 is amended by inserting ``(excluding, 
to the extent elected by the plan sponsor, plan investment expenses)'' 
after ``plan year''.
    (c) Effective Date.--
            (1) In general.--The amendments made by subsections (a) and 
        (b) shall take effect as if included in sections 102 and 112, 
        respectively, of the Pension Protection Act of 2006.
            (2) Special rule for closed plan years.--In the case of a 
        plan year ending before the date of the enactment of this Act, 
        any election pursuant to the amendments made by this section 
        with respect to such plan year must be made not later than 180 
        days after such date.

SEC. 3. DEFINITION OF ELIGIBLE PLAN YEAR.

    (a) Amendment to ERISA.--Clause (v) of section 303(c)(2)(D) of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 
1083(c)(2)(D)), as added by section 201(a)(1) of the Preservation of 
Access to Care for Medicare Beneficiaries and Pension Relief Act of 
2010, is amended--
            (1) by striking ``on or after the date of the enactment of 
        this subparagraph'' and inserting ``on or after June 25, 2010 
        (March 10, 2010, in the case of an eligible plan)'', and
            (2) by adding at the end the following new sentence: ``For 
        purposes of the preceding sentence, a plan shall be treated as 
        an eligible plan only if, as of the date of the election with 
        respect to the plan under clause (i)--
                    ``(A) the plan sponsor is not a debtor in a case 
                under title 11, United States Code, or similar Federal 
                or State law,
                    ``(B) there are no unpaid minimum required 
                contributions with respect to the plan for purposes of 
                section 4971 of the Internal Revenue Code of 1986 
                (imposing an excise tax when minimum required 
                contributions are not paid by the due date for the plan 
                year),
                    ``(C) there are no outstanding liens in favor of 
                the plan under subsection (k), and
                    ``(D) the plan sponsor has not initiated a distress 
                termination of the plan under section 4041.''.
    (b) Amendment to 1986 Code.--Clause (v) of section 430(c)(2)(D) of 
the Internal Revenue Code of 1986, as added by section 201(b)(1) of the 
Preservation of Access to Care for Medicare Beneficiaries and Pension 
Relief Act of 2010, is amended--
            (1) by striking ``on or after the date of the enactment of 
        this subparagraph'' and inserting ``on or after June 25, 2010 
        (March 10, 2010, in the case of an eligible plan)'', and
            (2) by adding at the end the following new sentence: ``For 
        purposes of the preceding sentence, a plan shall be treated as 
        an eligible plan only if, as of the date of the election with 
        respect to the plan under clause (i)--
                    ``(A) the plan sponsor is not a debtor in a case 
                under title 11, United States Code, or similar Federal 
                or State law,
                    ``(B) there are no unpaid minimum required 
                contributions with respect to the plan for purposes of 
                section 4971 (imposing an excise tax when minimum 
                required contributions are not paid by the due date for 
                the plan year),
                    ``(C) there are no outstanding liens in favor of 
                the plan under subsection (k), and
                    ``(D) the plan sponsor has not initiated a distress 
                termination of the plan under section 4041 of the 
                Employee Retirement Income Security Act of 1974.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendments made by the provisions of the 
Preservation of Access to Care for Medicare Beneficiaries and Pension 
Relief Act of 2010 to which the amendments relate.

SEC. 4. ELIGIBLE CHARITY PLANS.

    (a) Definition of Eligible Charity Plans.--Section 104(d) of the 
Pension Protection Act of 2006, as added by section 202(b) of the 
Preservation of Access to Care for Medicare Beneficiaries and Pension 
Relief Act of 2010, is amended--
            (1) by inserting ``, if the plan sponsor so elects,'' after 
        ``shall'', and
            (2) by adding at the end the following: ``Any election made 
        under the preceding sentence shall be made at such time and in 
        such form and manner as shall be prescribed by the Secretary of 
        the Treasury and, for elections with respect to plan years 
        beginning more than 1 year after the date of the enactment of 
        the Pension Technical Modifications Act, may be revoked only 
        with the consent of the Secretary.''.
    (b) Application of New Rules to Eligible Charity Plans.--Paragraph 
(2) of section 202(c) of the Preservation of Access to Care for 
Medicare Beneficiaries and Pension Relief Act of 2010 is amended to 
read as follows:
            ``(2) Eligible charity plans.--The amendments made by 
        subsection (b) shall apply to plan years beginning after 
        December 31, 2010, except that a plan sponsor may elect to 
        apply such amendments to plan years beginning after an earlier 
        date.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the provisions of the Preservation of Access 
to Care for Medicare Beneficiaries and Pension Relief Act of 2010 to 
which they relate.

SEC. 5. SUSPENSION OF CERTAIN FUNDING LEVEL LIMITATIONS.

    (a) Limitations on Benefit Accruals.--Section 203 of the Worker, 
Retiree, and Employer Recovery Act of 2008 is amended--
            (1) by striking ``the first plan year beginning during the 
        period beginning on October 1, 2008, and ending on September 
        30, 2009'' and inserting ``any plan year beginning during the 
        period beginning on October 1, 2008, and ending on December 31, 
        2011'';
            (2) by striking ``substituting'' and all that follows 
        through ``for such plan year'' and inserting ``substituting for 
        such percentage the plan's adjusted funding target attainment 
        percentage for the last plan year ending before September 30, 
        2009,''; and
            (3) by striking ``for the preceding plan year is greater'' 
        and inserting ``for such last plan year is greater''.
    (b) Social Security Level-Income Options.--
            (1) Amendment to erisa.--Section 206(g)(3)(E) of the 
        Employee Retirement Income Security Act of 1974 is amended by 
        adding at the end the following new sentence: ``For purposes of 
        applying clause (i) payments under a social security leveling 
        option shall be treated as not in excess of the monthly amount 
        paid under a single life annuity (plus an amount not in excess 
        of a social security supplement described in the last sentence 
        of section 204(b)(1)(G)).''.
            (2) Amendment to 1986 code.--Section 436(d)(5) of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following new sentence: ``For purposes of applying 
        subparagraph (A) payments under a social security leveling 
        option shall be treated as not in excess of the monthly amount 
        paid under a single life annuity (plus an amount not in excess 
        of a social security supplement described in the last sentence 
        of section 411(a)(9)).''.
            (3) Effective date.--
                    (A) In general.--The amendments made by this 
                subsection shall apply to annuity payments the annuity 
                starting date for which occurs on or after January 1, 
                2012.
                    (B) Permitted application.--A plan shall not be 
                treated as failing to meet the requirements of sections 
                206(g) of the Employee Retirement Income Security Act 
                of 1974 (as amended by this subsection) and section 
                436(d) of the Internal Revenue Code of 1986 (as so 
                amended) if the plan sponsor elects to apply the 
                amendments made by this subsection to payments the 
                annuity starting date for which occurs during elected 
                months prior to January 1, 2012.
    (c) Repeal of Related Provisions.--The provisions of, and the 
amendments made by, section 203 of the Preservation of Access to Care 
for Medicare Beneficiaries and Pension Relief Act of 2010 are repealed 
and the Employee Retirement Income Security Act of 1974, the Internal 
Revenue Code of 1986, and the Worker, Retiree, and Employer Recovery 
Act of 2008 (Public Law 110-458; 122 Stat. 5118) shall be applied as if 
such section had never been enacted.
    (d) Plans Maintained by Charities.--
            (1) Amendment to erisa.--Section 303(f)(3)(D)(i) of the 
        Employee Retirement and Income Security Act of 1974 (29 U.S.C. 
        1083(f)(3)(D)(i)) is amended by striking ``September 1, 2011'' 
        and inserting ``January 1, 2012''.
            (2) Amendment to 1986 code.--Clause (i) of section 
        430(f)(3)(D) of the Internal Revenue Code of 1986 is amended by 
        striking ``September 1, 2011'' and inserting ``January 1, 
        2012''.

Summary: Pension Technical Modifications Act - Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code with respect to the formula for the target normal plan cost element in the larger formula for determining the minimum required employer contribution for a plan year of a single-employer defined benefit pension plan. Revises the formula for the target normal cost to allow a plan sponsor to elect to exclude plan investment expenses from the amount of plan-related expenses expected to be paid from plan assets during the plan year.

Makes technical amendments to ERISA and the Internal Revenue Code, as amended by the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (PACMBPRA), regarding the election to apply specified requirements in an eligible plan year with respect to the shortfall amortization base in minimum funding standards for such plans.

Treats a plan as eligible for such an election only if: (1) the plan sponsor is not a debtor in a case under bankruptcy law or similar federal or state law, (2) there are no unpaid minimum required contributions with respect to the plan for purposes of the excise tax when minimum required contributions are not paid when due, (3) there are no outstanding liens in favor of the plan for a person's failure to make required contributions, and (4) the plan sponsor has not initiated a distress termination of the plan.

Amends the Pension Protection Act of 2006 (PPA), as amended by PACMBPRA, to allow plan sponsors to elect to treat a certain kind of plan as an eligible charity plan instead of requiring them to, as under current law. Permits such an election to be revoked, however, only with the consent of the Secretary of the Treasury. Postpones to plan years beginning after December 31, 2010, the authorization for such an election.

Amends the Worker, Retiree, and Employer Recovery Act of 2008 to extend through plan years beginning during the period October 1, 2008-December 31, 2011, certain funding-based limits on benefit accruals for single-employer plans with severe funding shortfalls. Revises the adjusted funding target attainment percentage factor in such limits for that period.

Amends ERISA and the Internal Revenue Code with respect to the allowance of a one-time prohibited payment by a single-employer plan. Declares that payments under a Social Security leveling option shall be treated as not in excess of the monthly amount paid under a single life annuity (plus an amount not in excess of a Social Security supplement).

Extends from September 1, 2011, through December 31, 2011, the special rule and ratio for certain years of eligible charity plans which excludes such plans from the authority of a plan sponsor to elect to credit against the minimum required contribution for the current plan year all or a portion of the prefunding balance or the funding standard carryover balance for the year.