Title: GROW Act
Policy area: Labor and Employment

Summary:
Giving Retirement Options to Workers Act of 2018 or the GROW Act
This bill amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code to authorize a new composite multiemployer pension plan, which combines features of defined benefit and defined contribution pension plans.
Under a composite plan, employer contributions are set at a fixed rate. Benefits are based on a formula, are paid to participants in the form of life annuities (except for benefits that may be immediately distributed from certain plans with a low value), and may be reduced based on the plan's funded status.
The plan sponsor must take corrective actions through a realignment program whenever the plan's projected funded ratio is below 120% for the plan year. The realignment program may include measures such as benefit reductions or proposed contribution increases.
A composite plan is not covered by the Pension Benefit Guaranty Corporation (PBGC) or required to pay PBGC premiums. The plan sponsors are also not subject to liability for withdrawing from the plan.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4997 Introduced in House (IH)]

<DOC>






115th CONGRESS
  2d Session
                                H. R. 4997

 To amend the Employee Retirement Income Security Act of 1974 and the 
      Internal Revenue Code of 1986 to authorize a new composite 
       multiemployer pension plan design, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 13, 2018

  Mr. Roe of Tennessee (for himself and Mr. Norcross) introduced the 
 following bill; which was referred to the Committee on Education and 
the Workforce, and in addition to the Committee on Ways and Means, for 
a period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
 To amend the Employee Retirement Income Security Act of 1974 and the 
      Internal Revenue Code of 1986 to authorize a new composite 
       multiemployer pension plan design, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Giving Retirement Options to Workers 
Act of 2018'' or the ``GROW Act''.

SEC. 2. COMPOSITE PLANS.

    (a) Amendment to the Employee Retirement Income Security Act of 
1974.--
            (1) In general.--Title I of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1001 et seq.) is amended by 
        adding at the end the following:

               ``PART 8--COMPOSITE PLANS AND LEGACY PLANS

``SEC. 801. COMPOSITE PLAN DEFINED.

    ``(a) In General.--For purposes of this Act, the term `composite 
plan' means a pension plan--
            ``(1) which is a multiemployer plan that is neither a 
        defined benefit plan nor a defined contribution plan;
            ``(2) the terms of which provide that the plan is a 
        composite plan for purposes of this title with respect to which 
        not more than one multiemployer defined benefit plan is treated 
        as a legacy plan within the meaning of section 805, unless 
        there is more than one legacy plan following a merger of 
        composite plans under section 806;
            ``(3) which provides systematically for the payment of 
        benefits--
                    ``(A) objectively calculated pursuant to a formula 
                enumerated in the plan document with respect to plan 
                participants after retirement, for life; and
                    ``(B) in the form of life annuities, except for 
                benefits which under section 203(e) may be immediately 
                distributed without the consent of the participant;
            ``(4) for which the plan contributions for the first plan 
        year are at least 120 percent of the normal cost for the plan 
        year;
            ``(5) which requires--
                    ``(A) an annual valuation of the liability of the 
                plan as of a date within the plan year to which the 
                valuation refers or within one month prior to the 
                beginning of such year;
                    ``(B) an annual actuarial determination of the 
                plan's current funded ratio and projected funded ratio 
                under section 802(a);
                    ``(C) corrective action through a realignment 
                program pursuant to section 803 whenever the plan's 
                projected funded ratio is below 120 percent for the 
                plan year; and
                    ``(D) an annual notification to each participant 
                describing the participant's benefits under the plan 
                and explaining that such benefits may be subject to 
                reduction under a realignment program pursuant to 
                section 803 based on the plan's funded status in future 
                plan years; and
            ``(6) the board of trustees of which includes at least one 
        retiree or beneficiary in pay status during each plan year 
        following the first plan year in which at least 5 percent of 
        the participants in the plan are retirees or beneficiaries in 
        pay status.
    ``(b) Transition From a Multiemployer Defined Benefit Plan.--
            ``(1) In general.--The plan sponsor of a defined benefit 
        plan that is a multiemployer plan may, subject to paragraph 
        (2), amend the plan to incorporate the features of a composite 
        plan as a component of the multiemployer plan separate from the 
        defined benefit plan component, except in the case of a defined 
        benefit plan for which the plan actuary has certified under 
        section 305(b)(3) that the plan is or will be in critical 
        status for the plan year in which such amendment would become 
        effective or for any of the succeeding 5 plan years.
            ``(2) Requirements.--Any amendment pursuant to paragraph 
        (1) to incorporate the features of a composite plan as a 
        component of a multiemployer plan shall--
                    ``(A) apply with respect to all collective 
                bargaining agreements providing for contributions to 
                the multiemployer plan on or after the effective date 
                of the amendment;
                    ``(B) apply with respect to all participants in the 
                multiemployer plan for whom contributions are made to 
                the multiemployer plan on or after the effective date 
                of the amendment;
                    ``(C) specify that the effective date of the 
                amendment is--
                            ``(i) the first day of a specified plan 
                        year following the date of the adoption of the 
                        amendment, except that the plan sponsor may 
                        alternatively provide for a separate effective 
                        date with respect to each collective bargaining 
                        agreement under which contributions to the 
                        multiemployer plan are required, which shall 
                        occur on the first day of the first plan year 
                        beginning after the termination, or if earlier, 
                        the re-opening, of each such agreement, or such 
                        earlier date as the parties to the agreement 
                        and the plan sponsor of the multiemployer plan 
                        shall agree to; and
                            ``(ii) not later than the first day of the 
                        fifth plan year beginning on or after the date 
                        of the adoption of the amendment;
                    ``(D) specify that, as of the amendment's effective 
                date, no further benefits shall accrue under the 
                defined benefit component of the multiemployer plan; 
                and
                    ``(E) specify that, as of the amendment's effective 
                date, the plan sponsor of the multiemployer plan shall 
                be the plan sponsor of both the composite plan 
                component and the defined benefit plan component of the 
                plan.
            ``(3) Special rules.--If a multiemployer plan is amended 
        pursuant to paragraph (1)--
                    ``(A) the requirements of this title and title IV 
                shall be applied to the composite plan component and 
                the defined benefit plan component of the multiemployer 
                plan as if each such component were maintained as a 
                separate plan; and
                    ``(B) the assets of the composite plan component 
                and the defined benefit plan component of the plan 
                shall be held in a single trust forming part of the 
                plan under which the trust instrument expressly 
                provides--
                            ``(i) for separate accounts (and 
                        appropriate records) to be maintained to 
                        reflect the interest which each of the plan 
                        components has in the trust, including separate 
                        accounting for additions to the trust for the 
                        benefit of each plan component, disbursements 
                        made from each plan component's account in the 
                        trust, investment experience of the trust 
                        allocable to that account, and administrative 
                        expenses (whether direct expenses or shared 
                        expenses allocated proportionally), and 
                        permits, but does not require, the pooling of 
                        some or all of the assets of the two plan 
                        components for investment purposes; and
                            ``(ii) that the assets of each of the two 
                        plan components shall be held, invested, 
                        reinvested, managed, administered and 
                        distributed for the exclusive benefit of the 
                        participants and beneficiaries of each such 
                        plan component, and in no event shall the 
                        assets of one of the plan components be 
                        available to pay benefits due under the other 
                        plan component.
            ``(4) Not a termination event.--Notwithstanding section 
        4041A, an amendment pursuant to paragraph (1) to incorporate 
        the features of a composite plan as a component of a 
        multiemployer plan does not constitute termination of the 
        multiemployer plan.
            ``(5) Notice to the secretary.--
                    ``(A) Notice.--The plan sponsor of a composite plan 
                shall provide notice to the Secretary of the intent to 
                establish the composite plan (or, in the case of a 
                composite plan incorporated as a component of a 
                multiemployer plan as described in paragraph (1), the 
                intent to amend the multiemployer plan to incorporate 
                such composite plan) at least 30 days prior to the 
                effective date of such establishment or amendment.
                    ``(B) Certification.--In the case of a composite 
                plan incorporated as a component of a multiemployer 
                plan as described in paragraph (1), such notice shall 
                include a certification by the plan actuary under 
                section 305(b)(3) that the effective date of the 
                amendment occurs in a plan year for which the 
                multiemployer plan is not in critical status for that 
                plan year and any of the succeeding 5 plan years.
            ``(6) References to composite plan component.--As used in 
        this part, the term `composite plan' includes a composite plan 
        component added to a defined benefit plan pursuant to paragraph 
        (1).
            ``(7) Rule of construction.--Paragraph (2)(A) shall not be 
        construed as preventing the plan sponsor of a multiemployer 
        plan from adopting an amendment pursuant to paragraph (1) 
        because some collective bargaining agreements are amended to 
        cease any covered employer's obligation to contribute to the 
        multiemployer plan before or after the plan amendment is 
        effective. Paragraph (2)(B) shall not be construed as 
        preventing the plan sponsor of a multiemployer plan from 
        adopting an amendment pursuant to paragraph (1) because some 
        participants cease to have contributions made to the 
        multiemployer plan on their behalf before or after the plan 
        amendment is effective.
    ``(c) Coordination With Funding Rules.--Except as otherwise 
provided in this title, sections 302, 304, and 305 shall not apply to a 
composite plan.
    ``(d) Treatment of a Composite Plan.--For purposes of this Act 
(other than sections 302 and 4245), a composite plan shall be treated 
as if it were a defined benefit plan unless a different treatment is 
provided for under applicable law.

``SEC. 802. FUNDED RATIOS; ACTUARIAL ASSUMPTIONS.

    ``(a) Certification of Funded Ratios.--
            ``(1) In general.--Not later than the one-hundred twentieth 
        day of each plan year of a composite plan, the plan actuary of 
        the composite plan shall certify to the Secretary, the 
        Secretary of the Treasury, and the plan sponsor the plan's 
        current funded ratio and projected funded ratio for the plan 
        year.
            ``(2) Determination of current funded ratio and projected 
        funded ratio.--For purposes of this section:
                    ``(A) Current funded ratio.--The current funded 
                ratio is the ratio (expressed as a percentage) of--
                            ``(i) the value of the plan's assets as of 
                        the first day of the plan year; to
                            ``(ii) the plan actuary's best estimate of 
                        the present value of the plan liabilities as of 
                        the first day of the plan year.
                    ``(B) Projected funded ratio.--The projected funded 
                ratio is the current funded ratio projected to the 
                first day of the fifteenth plan year following the plan 
                year for which the determination is being made.
            ``(3) Consideration of contribution rate increases.--For 
        purposes of projections under this subsection, the plan sponsor 
        may anticipate contribution rate increases beyond the term of 
        the current collective bargaining agreement and any agreed-to 
        supplements, up to a maximum of 2.5 percent per year, 
        compounded annually, unless it would be unreasonable under the 
        circumstances to assume that contributions would increase by 
        that amount.
    ``(b) Actuarial Assumptions and Methods.--For purposes of this 
part:
            ``(1) In general.--All costs, liabilities, rates of 
        interest and other factors under the plan shall be determined 
        for a plan year on the basis of actuarial assumptions and 
        methods--
                    ``(A) each of which is reasonable (taking into 
                account the experience of the plan and reasonable 
                expectations);
                    ``(B) which, in combination, offer the actuary's 
                best estimate of anticipated experience under the plan; 
                and
                    ``(C) with respect to which any change from the 
                actuarial assumptions and methods used in the previous 
                plan year shall be certified by the plan actuary and 
                the actuarial rationale for such change provided in the 
                annual report required by section 103.
            ``(2) Fair market value of assets.--The value of the plan's 
        assets shall be taken into account on the basis of their fair 
        market value.
            ``(3) Determination of normal cost and plan liabilities.--A 
        plan's normal cost and liabilities shall be based on the most 
        recent actuarial valuation required under section 801(a)(5)(A) 
        and the unit credit funding method.
            ``(4) Time when certain contributions deemed made.--Any 
        contributions for a plan year made by an employer after the 
        last day of such plan year, but not later than two and one-half 
        months after such day, shall be deemed to have been made on 
        such last day. For purposes of this paragraph, such two and 
        one-half month period may be extended for not more than six 
        months under regulations prescribed by the Secretary of the 
        Treasury.
            ``(5) Additional actuarial assumptions.--Except where 
        otherwise provided in this part, the provisions of section 
        305(b)(3)(B) shall apply to any determination or projection 
        under this part.

``SEC. 803. REALIGNMENT PROGRAM.

    ``(a) Realignment Program.--
            ``(1) Adoption.--In any case in which the plan actuary 
        certifies under section 802(a) that the plan's projected funded 
        ratio is below 120 percent for the plan year, the plan sponsor 
        shall adopt a realignment program under paragraph (2) not later 
        than 210 days after the due date of the certification required 
        under such section 802(a). The plan sponsor shall adopt an 
        updated realignment program for each succeeding plan year for 
        which a certification described in the preceding sentence is 
        made.
            ``(2) Content of realignment program.--
                    ``(A) In general.--A realignment program adopted 
                under this paragraph is a written program which 
                consists of all reasonable measures, including options 
                or a range of options to be undertaken by the plan 
                sponsor or proposed to the bargaining parties, 
                formulated, based on reasonably anticipated experience 
                and reasonable actuarial assumptions, to enable the 
                plan to achieve a projected funded ratio of at least 
                120 percent for the following plan year.
                    ``(B) Initial program elements.--Reasonable 
                measures under a realignment program described in 
                subparagraph (A) may include any of the following:
                            ``(i) Proposed contribution increases.
                            ``(ii) A reduction in the rate of future 
                        benefit accruals, so long as the resulting rate 
                        is not less than 1 percent of the contributions 
                        on which benefits are based as of the start of 
                        the plan year (or the equivalent standard 
                        accrual rate as described in section 
                        305(e)(6)).
                            ``(iii) A modification or elimination of 
                        adjustable benefits of participants that are 
                        not in pay status before the date of the notice 
                        required under subsection (b)(1).
                            ``(iv) Any other lawfully available 
                        measures not specifically described in this 
                        subparagraph or subparagraph (C) or (D) that 
                        the plan sponsor determines are reasonable.
                    ``(C) Additional program elements.--If the plan 
                sponsor has determined that all reasonable measures 
                available under subparagraph (B) will not enable the 
                plan to achieve a projected funded ratio of at least 
                120 percent for the following plan year, such 
                reasonable measures may also include--
                            ``(i) a reduction of accrued benefits that 
                        are not in pay status by the date of the notice 
                        required under subsection (b)(1); or
                            ``(ii) a reduction of any benefits of 
                        participants that are in pay status before the 
                        date of the notice required under subsection 
                        (b)(1) other than core benefits as defined in 
                        paragraph (4).
                    ``(D) Additional reductions.--In the case of a 
                composite plan for which the plan sponsor has 
                determined that all reasonable measures available under 
                subparagraphs (B) and (C) will not enable the plan to 
                achieve a projected funded ratio of at least 120 
                percent 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 subparagraph 
                        (B)(ii); or
                            ``(ii) a reduction of core benefits;
                provided that such reductions shall be equitably 
                distributed across the participant and beneficiary 
                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 percent.
            ``(3) Adjustable benefit defined.--For purposes of this 
        part, the term `adjustable benefit' means--
                    ``(A) benefits, rights, and features under the 
                plan, including post-retirement death benefits, 60-
                month guarantees, disability benefits not yet in pay 
                status, and similar benefits;
                    ``(B) any early retirement benefit or retirement-
                type subsidy (within the meaning of section 
                204(g)(2)(A)) and any benefit payment option (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 participant'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, retirement-
                type subsidies, or other benefits, rights, or features 
                that may be associated with that benefit; and
                    ``(B) any cost-of-living adjustments or benefit 
                increases effective after the date of retirement.
            ``(5) Coordination with contribution increases.--
                    ``(A) In general.--A realignment program may 
                provide that some or all of the benefit modifications 
                described in the program will only take effect if the 
                bargaining parties fail to agree to specified levels of 
                increases in contributions to the plan, effective as of 
                specified dates.
                    ``(B) Independent benefit modifications.--If a 
                realignment program adopts any changes to the benefit 
                formula that are independent 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 modifications.--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 program.
                    ``(D) Revocation of certain benefit 
                modifications.--Benefit modifications described in 
                subparagraph (C) may be revoked, in whole or in part, 
                and retroactively or prospectively, when contributions 
                to the plan are increased, as specified in the 
                realignment program, 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 sponsor 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 Secretary. 
        Such notice shall include--
                    ``(A) an explanation that contribution rate 
                increases or benefit reductions may be necessary;
                    ``(B) a description of the types of benefits that 
                might be reduced; and
                    ``(C) an estimate of the contribution increases and 
                benefit reductions that may be necessary 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 adjustable benefits unless 
                notice of such reduction has been given at least 180 
                days before the general effective date of such 
                reduction for all participants and beneficiaries to--
                            ``(i) plan participants and beneficiaries;
                            ``(ii) each employer who has an obligation 
                        to contribute to the composite plan; and
                            ``(iii) each employee organization which, 
                        for purposes of collective bargaining, 
                        represents plan participants employed by such 
                        employers.
                    ``(B) Content of notice.--The notice under 
                subparagraph (A) shall contain--
                            ``(i) sufficient information to enable 
                        participants and beneficiaries to understand 
                        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 beneficiary would 
                        otherwise have been eligible for as of the 
                        general effective date described in 
                        subparagraph (A); and
                            ``(ii) information as to the rights and 
                        remedies of plan participants and beneficiaries 
                        as well as how to contact the Department 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 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 include.
            ``(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 benefits 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 current plan year is at 
        least 120 percent;
            ``(3) in any case in which, after taking the benefit 
        increase or new benefits into account, the current 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 benefits as in effect for the 
        entire plan year.
    ``(b) Additional Requirements Where Core Benefits Reduced.--If a 
plan has been amended to reduce core benefits pursuant to a realignment 
program under section 803(a)(2)(D), such plan may not be subsequently 
amended to increase core benefits unless the amendment--
            ``(1) increases the level of future benefit payments only; 
        and
            ``(2) provides for an equitable distribution of benefit 
        increases across the participant and beneficiary population, 
        taking into account the extent to which the benefits of 
        participants were previously reduced 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 condition of qualification under part I of subchapter D 
of chapter 1 of the Internal Revenue Code of 1986 or to comply with 
other applicable law.
    ``(d) Exception Where Maximum Deductible Limit Applies.--Subsection 
(a) shall not apply in connection with a plan amendment if and to the 
extent that contributions to the composite plan would not be deductible 
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 Modifications.--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 purposes of this section--
            ``(1) if two or more plan amendments increasing benefits or 
        establishing new benefits are adopted in a plan year, such 
        amendments shall be treated as 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 single benefit increase, 
        irrespective of whether the increases 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 connection 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 composite plan under which the employees 
        who were eligible 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 composite plan component 
        pursuant to section 801(b), paragraph (1) shall be applied by 
        substituting `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 considered eligible to accrue a 
        benefit under a composite plan as of the first day in which the 
        employee completes an hour of service under a collective 
        bargaining agreement that provides for contributions to and 
        accruals under the composite plan in lieu of accruals 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 meaning 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 composite plan 
        shall not accept or recognize a collective 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 treated as a legacy 
                plan with respect to such composite 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, including employers 
                whose employees are not participants in the legacy 
                plan, to provide contributions to the legacy plan with 
                respect to such composite plan in a manner that 
                satisfies the transition contribution requirements of 
                subsection (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 provide notification of such failure and the 
        reasons for such determination--
                    ``(A) to the parties to the agreement;
                    ``(B) to active participants of the composite plan 
                who have ceased to accrue or otherwise 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 February 
        5, 2018, ceases to have an obligation to contribute to a 
        multiemployer defined benefit plan, no employees employed 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 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 legacy plan with respect to employees 
        employed by an employer that is or will be contributing to a 
        composite 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 contribute 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 Treasury, 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.--
            ``(1) In general.--A collective bargaining agreement 
        satisfies the transition contribution requirements 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 established 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 exclusion 
                        of younger or newly hired employees of the 
                        employer from being taken into account in 
                        determining contributions owed to the legacy 
                        plan.
            ``(2) Transition contribution rate.--
                    ``(A) In general.--The transition contribution rate 
                for a plan year is the contribution rate that, as 
                certified by the actuary of the legacy plan in 
                accordance with the principles in section 305(b)(3)(B), 
                is reasonably expected to be adequate--
                            ``(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 liability 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 legacy plan's benefits, or 
                        changes in funding method over a period of 15 
                        plan years beginning 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 contribution rate for 
                the plan year in which such rate is first established.
                    ``(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 transition 
                contribution rate for each such employer.
                    ``(C) Rate applicable to employer.--
                            ``(i) In general.--Except as provided by 
                        clause (ii), the transition contribution rate 
                        applicable to an employer for a plan year is 
                        the rate in effect for the plan year of the 
                        legacy plan that commences on or after 180 days 
                        before the earlier of--
                                    ``(I) the effective date of the 
                                collective 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 
                                contribution 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 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 composite plan 
                for the plan year.
                    ``(E) Other actuarial assumptions and methods.--
                Except as provided in subparagraph (A), the 
                determination of the transition contribution rate for a 
                plan year shall be based on actuarial assumptions and 
                methods consistent with the minimum funding 
                determinations made under section 304 (or, if 
                applicable, section 305) with respect to the legacy 
                plan for the plan year.
                    ``(F) Adjustments in rate.--The plan sponsor of a 
                legacy plan from time to time may adjust the transition 
                contribution rate or rates applicable to an employer 
                under this paragraph by increasing some rates and 
                decreasing others if the actuary certifies that such 
                adjusted rates in combination will produce projected 
                contribution income for the plan year beginning on or 
                after the date of certification that is not less than 
                would be produced by the transition contribution rates 
                in effect at the time of the certification.
                    ``(G) Notice of transition contribution rate.--The 
                plan sponsor of a legacy plan shall provide notice to 
                the parties to collective bargaining agreements 
                pursuant to which contributions are made to the legacy 
                plan of changes to the transition contribution rate 
                requirements at least 30 days before the beginning of 
                the plan year for which the rate is effective.
                    ``(H) Notice to composite plan sponsor.--Not later 
                than 30 days after a determination by the plan sponsor 
                of a legacy plan that a collective bargaining agreement 
                provides for a rate of contributions that is below the 
                transition contribution rate applicable to one or more 
                employers that are parties to the collective bargaining 
                agreement, the plan sponsor of the legacy plan shall 
                notify the plan sponsor of any composite plan under 
                which employees of such employer would otherwise be 
                eligible to accrue a benefit.
            ``(3) Correction procedures.--Pursuant to standards 
        prescribed by the Secretary, the plan sponsor of a composite 
        plan shall adopt rules and procedures that give the parties to 
        the collective bargaining agreement notice of the failure of 
        such agreement to satisfy the transition contribution 
        requirements of this subsection, and a reasonable opportunity 
        to correct such failure, not to exceed 180 days from the date 
        of notice given under subsection (b)(2).
            ``(4) Supplemental contributions.--A collective bargaining 
        agreement may provide for supplemental contributions to the 
        legacy plan for a plan year in excess of the transition 
        contribution rate determined under paragraph (2), regardless of 
        whether the legacy plan is in endangered or critical status for 
        such plan year.
    ``(e) Nonapplication of Composite Plan Restrictions.--
            ``(1) In general.--The provisions of subsections (a), (b), 
        and (c) shall not apply with respect to a collective bargaining 
        agreement, to the extent the agreement, or a predecessor 
        agreement, provides or provided for contributions to a defined 
        benefit plan that is a legacy plan, as of the first day of the 
        first plan year following a plan year for which the plan 
        actuary certifies that the plan is fully funded, has been fully 
        funded for at least three out of the immediately preceding 5 
        plan years, and is projected to remain fully funded for at 
        least the following 4 plan years.
            ``(2) Determination of fully funded.--A plan is fully 
        funded for purposes of paragraph (1) if, as of the valuation 
        date of the plan for a plan year, the value of the plan's 
        assets equals or exceeds the present value of the plan's 
        liabilities, determined in accordance with the rules prescribed 
        by the Pension Benefit Guaranty Corporation under sections 
        4219(c)(1)(D) and 4281 for multiemployer plans terminating by 
        mass withdrawal, as in effect for the date of the 
        determination, except the plan's reasonable assumption 
        regarding the starting date of benefits may be used.
            ``(3) Other applicable rules.--Except as provided in 
        paragraph (2), actuarial determinations and projections under 
        this section shall be based on the rules in section 305(b)(3) 
        and section 802(b).

``SEC. 806. MERGERS AND ASSET TRANSFERS OF COMPOSITE PLANS.

    ``(a) In General.--Assets and liabilities of a composite plan may 
only be merged with, or transferred to, another plan if--
            ``(1) the other plan is a composite plan;
            ``(2) the plan or plans resulting from the merger or 
        transfer is a composite plan;
            ``(3) no participant's accrued benefit or adjustable 
        benefit is lower immediately after the transaction than it was 
        immediately before the transaction; and
            ``(4) the value of the assets transferred in the case of a 
        transfer reasonably reflects the value of the amounts 
        contributed with respect to the participants whose benefits are 
        being transferred, adjusted for allocable distributions, 
        investment gains and losses, and administrative expenses.
    ``(b) Legacy Plan.--
            ``(1) In general.--After a merger or transfer involving a 
        composite plan, the legacy plan with respect to an employer 
        that is obligated to contribute to the resulting composite plan 
        is the legacy plan that applied to that employer immediately 
        before the merger or transfer.
            ``(2) Multiple legacy plans.--If an employer is obligated 
        to contribute to more than one legacy plan with respect to 
        employees eligible to accrue benefits under more than one 
        composite plan and there is a merger or transfer of such legacy 
        plans, the transition contribution rate applicable to the 
        legacy plan resulting from the merger or transfer with respect 
        to that employer shall be determined in accordance with the 
        provisions of section 805(d)(2)(B).''.
            (2) Penalties.--
                    (A) Civil enforcement of failure to comply with 
                realignment program.--Section 502(a) of such Act (29 
                U.S.C. 1132(a)) is amended--
                            (i) in paragraph (10), by striking ``or'' 
                        at the end;
                            (ii) in paragraph (11), by striking the 
                        period at the end and inserting ``; or''; and
                            (iii) by adding at the end the following:
            ``(12) in the case of a composite plan required to adopt a 
        realignment program under section 803, if the plan sponsor--
                    ``(A) has not adopted a realignment program under 
                that section by the deadline established in such 
                section; or
                    ``(B) fails to update or comply with the terms of 
                the realignment program in accordance with the 
                requirements of such section,
        by the Secretary, by an employer that has an obligation to 
        contribute with respect to the composite plan, or by an 
        employee organization that represents active participants in 
        the composite plan, for an order compelling the plan sponsor to 
        adopt a realignment program, or to update or comply with the 
        terms of the realignment program, in accordance with the 
        requirements of such section and the realignment program.''.
                    (B) Civil penalties.--Section 502(c) of such Act 
                (29 U.S.C. 1132(c)) is amended--
                            (i) by moving paragraphs (8), (10), and 
                        (12) each 2 ems to the left;
                            (ii) by redesignating paragraphs (9) 
                        through (12) as paragraphs (12) through (15), 
                        respectively; and
                            (iii) by inserting after paragraph (8) the 
                        following:
            ``(9) The Secretary may assess against any plan sponsor of 
        a composite plan a civil penalty of not more than $1,100 per 
        day for each violation by such sponsor--
                    ``(A) of the requirement under section 802(a) on 
                the plan actuary to certify the plan's current or 
                projected funded ratio by the date specified in such 
                subsection; or
                    ``(B) of the requirement under section 803 to adopt 
                a realignment program by the deadline established in 
                that section and to comply with its terms.
            ``(10)(A) The Secretary may assess against any plan sponsor 
        of a composite plan a civil penalty of not more than $100 per 
        day for each violation by such sponsor of the requirement under 
        section 803(b) to provide notice as described in such section, 
        except that no penalty may be assessed in any case in which the 
        plan sponsor exercised reasonable diligence to meet the 
        requirements of such section and--
                    ``(i) the plan sponsor did not know that the 
                violation existed; or
                    ``(ii) the plan sponsor provided such notice during 
                the 30-day period beginning on the first date on which 
                the plan sponsor knew, or in exercising reasonable due 
                diligence should have known, that such violation 
                existed.
            ``(B) In any case in which the plan sponsor exercised 
        reasonable diligence to meet the requirements of section 
        803(b)--
                    ``(i) the total penalty assessed under this 
                paragraph against such sponsor for a plan year may not 
                exceed $500,000; and
                    ``(ii) the Secretary may waive part or all of such 
                penalty to the extent that the payment of such penalty 
                would be excessive or otherwise inequitable relative to 
                the violation involved.
            ``(11) The Secretary may assess against any plan sponsor of 
        a composite plan a civil penalty of not more than $100 per day 
        for each violation by such sponsor of the notice requirements 
        under sections 801(b)(5) and 805(b)(2).''.
            (3) Conforming amendment.--The table of contents in section 
        1 of such Act (29 U.S.C. 1001 note) is amended by inserting 
        after the item relating to section 734 the following:

               ``Part 8--Composite Plans and Legacy Plans

``Sec. 801. Composite plan defined.
``Sec. 802. Funded ratios; actuarial assumptions.
``Sec. 803. Realignment program.
``Sec. 804. Limitation on increasing benefits.
``Sec. 805. Composite plan restrictions to preserve legacy plan 
                            funding.
``Sec. 806. Mergers and asset transfers of composite plans.''.
    (b) Amendment to the Internal Revenue Code of 1986.--
            (1) In general.--Part III of subchapter D of chapter 1 of 
        the Internal Revenue Code of 1986 is amended by adding at the 
        end the following:

             ``Subpart C--Composite Plans and Legacy Plans

``Sec. 437. Composite plan defined.
``Sec. 438. Funded ratios; actuarial assumptions.
``Sec. 439. Realignment program.
``Sec. 440. Limitation on increasing benefits.
``Sec. 440A. Composite plan restrictions to preserve legacy plan 
                            funding.
``Sec. 440B. Mergers and asset transfers of composite plans.

``SEC. 437. COMPOSITE PLAN DEFINED.

    ``(a) In General.--For purposes of this title, the term `composite 
plan' means a pension plan--
            ``(1) which is a multiemployer plan that is neither a 
        defined benefit plan nor a defined contribution plan,
            ``(2) the terms of which provide that the plan is a 
        composite plan for purposes of this title with respect to which 
        not more than one multiemployer defined benefit plan is treated 
        as a legacy plan within the meaning of section 440A, unless 
        there is more than one legacy plan following a merger of 
        composite plans under section 440B,
            ``(3) which provides systematically for the payment of 
        benefits--
                    ``(A) objectively calculated pursuant to a formula 
                enumerated in the plan document with respect to plan 
                participants after retirement, for life, and
                    ``(B) in the form of life annuities, except for 
                benefits which under section 411(a)(11) may be 
                immediately distributed without the consent of the 
                participant,
            ``(4) for which the plan contributions for the first plan 
        year are at least 120 percent of the normal cost for the plan 
        year,
            ``(5) which requires--
                    ``(A) an annual valuation of the liability of the 
                plan as of a date within the plan year to which the 
                valuation refers or within one month prior to the 
                beginning of such year,
                    ``(B) an annual actuarial determination of the 
                plan's current funded ratio and projected funded ratio 
                under section 438(a),
                    ``(C) corrective action through a realignment 
                program pursuant to section 439 whenever the plan's 
                projected funded ratio is below 120 percent for the 
                plan year, and
                    ``(D) an annual notification to each participant 
                describing the participant's benefits under the plan 
                and explaining that such benefits may be subject to 
                reduction under a realignment program pursuant to 
                section 439 based on the plan's funded status in future 
                plan years, and
            ``(6) the board of trustees of which includes at least one 
        retiree or beneficiary in pay status during each plan year 
        following the first plan year in which at least 5 percent of 
        the participants in the plan are retirees or beneficiaries in 
        pay status.
    ``(b) Transition From a Multiemployer Defined Benefit Plan.--
            ``(1) In general.--The plan sponsor of a defined benefit 
        plan that is a multiemployer plan may, subject to paragraph 
        (2), amend the plan to incorporate the features of a composite 
        plan as a component of the multiemployer plan separate from the 
        defined benefit plan component, except in the case of a defined 
        benefit plan for which the plan actuary has certified under 
        section 432(b)(3) that the plan is or will be in critical 
        status for the plan year in which such amendment would become 
        effective or for any of the succeeding 5 plan years.
            ``(2) Requirements.--Any amendment pursuant to paragraph 
        (1) to incorporate the features of a composite plan as a 
        component of a multiemployer plan shall--
                    ``(A) apply with respect to all collective 
                bargaining agreements providing for contributions to 
                the multiemployer plan on or after the effective date 
                of the amendment,
                    ``(B) apply with respect to all participants in the 
                multiemployer plan for whom contributions are made to 
                the multiemployer plan on or after the effective date 
                of the amendment,
                    ``(C) specify that the effective date of the 
                amendment is--
                            ``(i) the first day of a specified plan 
                        year following the date of the adoption of the 
                        amendment, except that the plan sponsor may 
                        alternatively provide for a separate effective 
                        date with respect to each collective bargaining 
                        agreement under which contributions to the 
                        multiemployer plan are required, which shall 
                        occur on the first day of the first plan year 
                        beginning after the termination, or if earlier, 
                        the re-opening, of each such agreement, or such 
                        earlier date as the parties to the agreement 
                        and the plan sponsor of the multiemployer plan 
                        shall agree to, and
                            ``(ii) not later than the first day of the 
                        fifth plan year beginning on or after the date 
                        of the adoption of the amendment,
                    ``(D) specify that, as of the amendment's effective 
                date, no further benefits shall accrue under the 
                defined benefit component of the multiemployer plan, 
                and
                    ``(E) specify that, as of the amendment's effective 
                date, the plan sponsor of the multiemployer plan shall 
                be the plan sponsor of both the composite plan 
                component and the defined benefit plan component of the 
                plan.
            ``(3) Special rules.--If a multiemployer plan is amended 
        pursuant to paragraph (1)--
                    ``(A) the requirements of this title shall be 
                applied to the composite plan component and the defined 
                benefit plan component of the multiemployer plan as if 
                each such component were maintained as a separate plan, 
                and
                    ``(B) the assets of the composite plan component 
                and the defined benefit plan component of the plan 
                shall be held in a single trust forming part of the 
                plan under which the trust instrument expressly 
                provides--
                            ``(i) for separate accounts (and 
                        appropriate records) to be maintained to 
                        reflect the interest which each of the plan 
                        components has in the trust, including separate 
                        accounting for additions to the trust for the 
                        benefit of each plan component, disbursements 
                        made from each plan component's account in the 
                        trust, investment experience of the trust 
                        allocable to that account, and administrative 
                        expenses (whether direct expenses or shared 
                        expenses allocated proportionally), and 
                        permits, but does not require, the pooling of 
                        some or all of the assets of the two plan 
                        components for investment purposes, and
                            ``(ii) that the assets of each of the two 
                        plan components shall be held, invested, 
                        reinvested, managed, administered and 
                        distributed for the exclusive benefit of the 
                        participants and beneficiaries of each such 
                        plan component, and in no event shall the 
                        assets of one of the plan components be 
                        available to pay benefits due under the other 
                        plan component.
            ``(4) Not a termination event.--Notwithstanding section 
        4041A of the Employee Retirement Income Security Act of 1974, 
        an amendment pursuant to paragraph (1) to incorporate the 
        features of a composite plan as a component of a multiemployer 
        plan does not constitute termination of the multiemployer plan.
            ``(5) Notice to the secretary.--
                    ``(A) Notice.--The plan sponsor of a composite plan 
                shall provide notice to the Secretary of the intent to 
                establish the composite plan (or, in the case of a 
                composite plan incorporated as a component of a 
                multiemployer plan as described in paragraph (1), the 
                intent to amend the multiemployer plan to incorporate 
                such composite plan) at least 30 days prior to the 
                effective date of such establishment or amendment.
                    ``(B) Certification.--In the case of a composite 
                plan incorporated as a component of a multiemployer 
                plan as described in paragraph (1), such notice shall 
                include a certification by the plan actuary under 
                section 432(b)(3) that the effective date of the 
                amendment occurs in a plan year for which the 
                multiemployer plan is not in critical status for that 
                plan year and any of the succeeding 5 plan years.
            ``(6) References to composite plan component.--As used in 
        this subpart, the term `composite plan' includes a composite 
        plan component added to a defined benefit plan pursuant to 
        paragraph (1).
            ``(7) Rule of construction.--Paragraph (2)(A) shall not be 
        construed as preventing the plan sponsor of a multiemployer 
        plan from adopting an amendment pursuant to paragraph (1) 
        because some collective bargaining agreements are amended to 
        cease any covered employer's obligation to contribute to the 
        multiemployer plan before or after the plan amendment is 
        effective. Paragraph (2)(B) shall not be construed as 
        preventing the plan sponsor of a multiemployer plan from 
        adopting an amendment pursuant to paragraph (1) because some 
        participants cease to have contributions made to the 
        multiemployer plan on their behalf before or after the plan 
        amendment is effective.
    ``(c) Coordination With Funding Rules.--Except as otherwise 
provided in this title, sections 412, 431, and 432 shall not apply to a 
composite plan.
    ``(d) Treatment of a Composite Plan.--For purposes of this title 
(other than sections 412 and 418E), a composite plan shall be treated 
as if it were a defined benefit plan unless a different treatment is 
provided for under applicable law.

``SEC. 438. FUNDED RATIOS; ACTUARIAL ASSUMPTIONS.

    ``(a) Certification of Funded Ratios.--
            ``(1) In general.--Not later than the one-hundred twentieth 
        day of each plan year of a composite plan, the plan actuary of 
        the composite plan shall certify to the Secretary, the 
        Secretary of Labor, and the plan sponsor the plan's current 
        funded ratio and projected funded ratio for the plan year.
            ``(2) Determination of current funded ratio and projected 
        funded ratio.--For purposes of this section--
                    ``(A) Current funded ratio.--The current funded 
                ratio is the ratio (expressed as a percentage) of--
                            ``(i) the value of the plan's assets as of 
                        the first day of the plan year, to
                            ``(ii) the plan actuary's best estimate of 
                        the present value of the plan liabilities as of 
                        the first day of the plan year.
                    ``(B) Projected funded ratio.--The projected funded 
                ratio is the current funded ratio projected to the 
                first day of the fifteenth plan year following the plan 
                year for which the determination is being made.
            ``(3) Consideration of contribution rate increases.--For 
        purposes of projections under this subsection, the plan sponsor 
        may anticipate contribution rate increases beyond the term of 
        the current collective bargaining agreement and any agreed-to 
        supplements, up to a maximum of 2.5 percent per year, 
        compounded annually, unless it would be unreasonable under the 
        circumstances to assume that contributions would increase by 
        that amount.
    ``(b) Actuarial Assumptions and Methods.--For purposes of this 
part--
            ``(1) In general.--All costs, liabilities, rates of 
        interest, and other factors under the plan shall be determined 
        for a plan year on the basis of actuarial assumptions and 
        methods--
                    ``(A) each of which is reasonable (taking into 
                account the experience of the plan and reasonable 
                expectations),
                    ``(B) which, in combination, offer the actuary's 
                best estimate of anticipated experience under the plan, 
                and
                    ``(C) with respect to which any change from the 
                actuarial assumptions and methods used in the previous 
                plan year shall be certified by the plan actuary and 
                the actuarial rationale for such change provided in the 
                annual report required by section 6058.
            ``(2) Fair market value of assets.--The value of the plan's 
        assets shall be taken into account on the basis of their fair 
        market value.
            ``(3) Determination of normal cost and plan liabilities.--A 
        plan's normal cost and liabilities shall be based on the most 
        recent actuarial valuation required under section 437(a)(5)(A) 
        and the unit credit funding method.
            ``(4) Time when certain contributions deemed made.--Any 
        contributions for a plan year made by an employer after the 
        last day of such plan year, but not later than two and one-half 
        months after such day, shall be deemed to have been made on 
        such last day. For purposes of this paragraph, such two and 
        one-half month period may be extended for not more than six 
        months under regulations prescribed by the Secretary.
            ``(5) Additional actuarial assumptions.--Except where 
        otherwise provided in this subpart, the provisions of section 
        432(b)(3)(B) shall apply to any determination or projection 
        under this subpart.

``SEC. 439. REALIGNMENT PROGRAM.

    ``(a) Realignment Program.--
            ``(1) Adoption.--In any case in which the plan actuary 
        certifies under section 438(a) that the plan's projected funded 
        ratio is below 120 percent for the plan year, the plan sponsor 
        shall adopt a realignment program under paragraph (2) not later 
        than 210 days after the due date of the certification required 
        under section 438(a). The plan sponsor shall adopt an updated 
        realignment program for each succeeding plan year for which a 
        certification described in the preceding sentence is made.
            ``(2) Content of realignment program.--
                    ``(A) In general.--A realignment program adopted 
                under this paragraph is a written program which 
                consists of all reasonable measures, including options 
                or a range of options to be undertaken by the plan 
                sponsor or proposed to the bargaining parties, 
                formulated, based on reasonably anticipated experience 
                and reasonable actuarial assumptions, to enable the 
                plan to achieve a projected funded ratio of at least 
                120 percent for the following plan year.
                    ``(B) Initial program elements.--Reasonable 
                measures under a realignment program described in 
                subparagraph (A) may include any of the following:
                            ``(i) Proposed contribution increases.
                            ``(ii) A reduction in the rate of future 
                        benefit accruals, so long as the resulting rate 
                        shall not be less than 1 percent of the 
                        contributions on which benefits are based as of 
                        the start of the plan year (or the equivalent 
                        standard accrual rate as described in section 
                        432(e)(6)).
                            ``(iii) A modification or elimination of 
                        adjustable benefits of participants that are 
                        not in pay status before the date of the notice 
                        required under subsection (b)(1).
                            ``(iv) Any other legally available measures 
                        not specifically described in this subparagraph 
                        or subparagraph (C) or (D) that the plan 
                        sponsor determines are reasonable.
                    ``(C) Additional program elements.--If the plan 
                sponsor has determined that all reasonable measures 
                available under subparagraph (B) will not enable the 
                plan to achieve a projected funded ratio of at least 
                120 percent the following plan year, such reasonable 
                measures may also include--
                            ``(i) a reduction of accrued benefits that 
                        are not in pay status by the date of the notice 
                        required under subsection (b)(1), or
                            ``(ii) a reduction of any benefits of 
                        participants that are in pay status before the 
                        date of the notice required under subsection 
                        (b)(1) other than core benefits as defined in 
                        paragraph (4).
                    ``(D) Additional reductions.--In the case of a 
                composite plan for which the plan sponsor has 
                determined that all reasonable measures available under 
                subparagraphs (B) and (C) will not enable the plan to 
                achieve a projected funded ratio of at least 120 
                percent 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 subparagraph 
                        (B)(ii), or
                            ``(ii) a reduction of core benefits,
                provided that such reductions shall be equitably 
                distributed across the participant and beneficiary 
                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 432(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 percent.
            ``(3) Adjustable benefit defined.--For purposes of this 
        subpart, the term `adjustable benefit' means--
                    ``(A) benefits, rights, and features under the 
                plan, including post-retirement death benefits, 60-
                month guarantees, disability benefits not yet in pay 
                status, and similar benefits,
                    ``(B) any early retirement benefit or retirement-
                type subsidy (within the meaning of section 
                411(d)(6)(B)(i)) and any benefit payment option (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 subpart, 
        the term `core benefit' means a participant'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, retirement-
                type subsidies, or other benefits, rights, or features 
                that may be associated with that benefit, and
                    ``(B) any cost-of-living adjustments or benefit 
                increases effective after the date of retirement.
            ``(5) Coordination with contribution increases.--
                    ``(A) In general.--A realignment program may 
                provide that some or all of the benefit modifications 
                described in the program will only take effect if the 
                bargaining parties fail to agree to specified levels of 
                increases in contributions to the plan, effective as of 
                specified dates.
                    ``(B) Independent benefit modifications.--If a 
                realignment program adopts any changes to the benefit 
                formula that are independent of potential contribution 
                increases, such changes shall take effect not later 
                than 180 days following the first day of the first plan 
                year that begins following the adoption of the 
                realignment program.
                    ``(C) Conditional benefit modifications.--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 program.
                    ``(D) Revocation of certain benefit 
                modifications.--Benefit modifications described in 
                paragraph (3) may be revoked, in whole or in part, and 
                retroactively or prospectively, when contributions to 
                the plan are increased, as specified in the realignment 
                program, 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 438(a) that the projected funded ratio is less 
        than 120 percent, the plan sponsor 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 Secretary. 
        Such notice shall include--
                    ``(A) an explanation that contribution rate 
                increases or benefit reductions may be necessary,
                    ``(B) a description of the types of benefits that 
                might be reduced, and
                    ``(C) an estimate of the contribution increases and 
                benefit reductions that may be necessary 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 adjustable benefits unless 
                notice of such reduction has been given at least 180 
                days before the general effective date of such 
                reduction for all participants and beneficiaries to--
                            ``(i) plan participants and beneficiaries,
                            ``(ii) each employer who has an obligation 
                        to contribute to the composite plan, and
                            ``(iii) each employee organization which, 
                        for purposes of collective bargaining, 
                        represents plan participants employed by such 
                        employers.
                    ``(B) Content of notice.--The notice under 
                subparagraph (A) shall contain--
                            ``(i) sufficient information to enable 
                        participants and beneficiaries to understand 
                        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 beneficiary would 
                        otherwise have been eligible for as of the 
                        general effective date described in 
                        subparagraph (A), and
                            ``(ii) information as to the rights and 
                        remedies of plan participants and beneficiaries 
                        as well as how to contact the Department 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 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 include.
            ``(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. 440. 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 benefits 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 current plan year is at 
        least 120 percent,
            ``(3) in any case in which, after taking the benefit 
        increase or new benefits into account, the current funded ratio 
        is less than 140 percent or 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 benefits as in effect for the 
        entire plan year.
    ``(b) Additional Requirements Where Core Benefits Reduced.--If a 
plan has been amended to reduce core benefits pursuant to a realignment 
program under section 439(a)(2)(D), such plan may not be subsequently 
amended to increase core benefits unless the amendment--
            ``(1) increases the level of future benefit payments only, 
        and
            ``(2) provides for an equitable distribution of benefit 
        increases across the participant and beneficiary population, 
        taking into account the extent to which the benefits of 
        participants were previously reduced 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 condition of qualification under part I of subchapter D 
of chapter 1 or to comply with other applicable law.
    ``(d) Exception Where Maximum Deductible Limit Applies.--Subsection 
(a) shall not apply in connection with a plan amendment if and to the 
extent that contributions to the composite plan would not be deductible 
for the plan year under section 404(a)(1)(E) if the plan amendment is 
not adopted. The Secretary of the Treasury shall issue regulations to 
implement this paragraph.
    ``(e) Exception for Certain Benefit Modifications.--Subsection (a) 
shall not apply in connection with a plan amendment under section 
439(a)(5)(C), regarding conditional benefit modifications.
    ``(f) Treatment of Plan Amendments.--For purposes of this section--
            ``(1) if two or more plan amendments increasing benefits or 
        establishing new benefits are adopted in a plan year, such 
        amendments shall be treated as 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 single benefit increase, 
        irrespective of whether the increases 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 connection with a plan 
        amendment if they have been agreed to in writing or otherwise 
        formalized by the date the plan amendment is adopted.

``SEC. 440A. COMPOSITE PLAN RESTRICTIONS TO PRESERVE LEGACY PLAN 
              FUNDING.

    ``(a) Treatment as a Legacy Plan.--
            ``(1) In general.--For purposes of this subchapter, a 
        defined benefit plan shall be treated as a legacy plan with 
        respect to the composite plan under which the employees who 
        were eligible 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 composite plan component 
        pursuant to section 437(b), paragraph (1) shall be applied by 
        substituting `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 considered eligible to accrue a 
        benefit under a composite plan as of the first day in which the 
        employee completes an hour of service under a collective 
        bargaining agreement that provides for contributions to and 
        accruals under the composite plan in lieu of accruals under the 
        legacy plan.
            ``(4) Collective bargaining agreement.--As used in this 
        subpart, 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 subpart which is 
        not defined in this part and which is also used in section 432 
        shall have the same meaning 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 composite plan 
        shall not accept or recognize a collective 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 treated as a legacy 
                plan with respect to such composite plan has certified 
                under section 432(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, including employers 
                whose employees are not participants in the legacy 
                plan, to provide contributions to the legacy plan with 
                respect to such composite plan in a manner that 
                satisfies the transition contribution requirements of 
                subsection (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 provide notification of such failure and the 
        reasons for such determination to--
                    ``(A) the parties to the agreement,
                    ``(B) active participants of the composite plan who 
                have ceased to accrue or otherwise earn benefits with 
                respect to service with an employer pursuant to 
                paragraph (1), and
                    ``(C) the Secretary of Labor, 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 February 
        5, 2018, ceases to have an obligation to contribute to a 
        multiemployer defined benefit plan, no employees employed 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 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 legacy plan with respect to employees 
        employed by an employer that is or will be contributing to a 
        composite 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 contribute 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 Labor, 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.--
            ``(1) In general.--A collective bargaining agreement 
        satisfies the transition contribution requirements of this 
        subsection if the agreement--
                    ``(A) authorizes for payment of contributions to a 
                legacy plan at a rate or rates equal to or greater than 
                the transition contribution rate established 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 exclusion 
                        of younger or newly hired employees of the 
                        employer from being taken into account in 
                        determining contributions owed to the legacy 
                        plan.
            ``(2) Transition contribution rate.--
                    ``(A) In general.--The transition contribution rate 
                for a plan year is the contribution rate that, as 
                certified by the actuary of the legacy plan in 
                accordance with the principles in section 432(b)(3)(B), 
                is reasonably expected to be adequate--
                            ``(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 liability 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 legacy plan's benefits, or 
                        changes in funding method over a period of 15 
                        plan years beginning 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 contribution rate for 
                the plan year in which such rate is first established.
                    ``(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 transition 
                contribution rate for each such employer.
                    ``(C) Rate applicable to employer.--
                            ``(i) In general.--Except as provided by 
                        clause (ii), the transition contribution rate 
                        applicable to an employer for a plan year is 
                        the rate in effect for the plan year of the 
                        legacy plan that commences on or after 180 days 
                        before the earlier of--
                                    ``(I) the effective date of the 
                                collective 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 
                                contribution 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 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 432 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 432, 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 composite plan 
                for the plan year.
                    ``(E) Other actuarial assumptions and methods.--
                Except as provided in subparagraph (A), the 
                determination of the transition contribution rate for a 
                plan year shall be based on actuarial assumptions and 
                methods consistent with the minimum funding 
                determinations made under section 431 (or, if 
                applicable, section 432) with respect to the legacy 
                plan for the plan year.
                    ``(F) Adjustments in rate.--The plan sponsor of a 
                legacy plan from time to time may adjust the transition 
                contribution rate or rates applicable to an employer 
                under this paragraph by increasing some rates and 
                decreasing others if the actuary certifies that such 
                adjusted rates in combination will produce projected 
                contribution income for the plan year beginning on or 
                after the date of certification that is not less than 
                would be produced by the transition contribution rates 
                in effect at the time of the certification.
                    ``(G) Notice of transition contribution rate.--The 
                plan sponsor of a legacy plan shall provide notice to 
                the parties to collective bargaining agreements 
                pursuant to which contributions are made to the legacy 
                plan of changes to the transition contribution rate 
                requirements at least 30 days before the beginning of 
                the plan year for which the rate is effective.
                    ``(H) Notice to composite plan sponsor.--Not later 
                than 30 days after a determination by the plan sponsor 
                of a legacy plan that a collective bargaining agreement 
                provides for a rate of contributions that is below the 
                transition contribution rate applicable to one or more 
                employers that are parties to the collective bargaining 
                agreement, the plan sponsor of the legacy plan shall 
                notify the plan sponsor of any composite plan under 
                which employees of such employer would otherwise be 
                eligible to accrue a benefit.
            ``(3) Correction procedures.--Pursuant to standards 
        prescribed by the Secretary of Labor, the plan sponsor of a 
        composite plan shall adopt rules and procedures that give the 
        parties to the collective bargaining agreement notice of the 
        failure of such agreement to satisfy the transition 
        contribution requirements of this subsection, and a reasonable 
        opportunity to correct such failure, not to exceed 180 days 
        from the date of notice given under subsection (b)(2).
            ``(4) Supplemental contributions.--A collective bargaining 
        agreement may provide for supplemental contributions to the 
        legacy plan for a plan year in excess of the transition 
        contribution rate determined under paragraph (2), regardless of 
        whether the legacy plan is in endangered or critical status for 
        such plan year.
    ``(e) Nonapplication of Composite Plan Restrictions.--
            ``(1) In general.--The provisions of subsections (a), (b), 
        and (c) shall not apply with respect to a collective bargaining 
        agreement, to the extent the agreement, or a predecessor 
        agreement, provides or provided for contributions to a defined 
        benefit plan that is a legacy plan, as of the first day of the 
        first plan year following a plan year for which the plan 
        actuary certifies that the plan is fully funded, has been fully 
        funded for at least three out of the immediately preceding 5 
        plan years, and is projected to remain fully funded for at 
        least the following 4 plan years.
            ``(2) Determination of fully funded.--A plan is fully 
        funded for purposes of paragraph (1) if, as of the valuation 
        date of the plan for a plan year, the value of the plan's 
        assets equals or exceeds the present value of the plan's 
        liabilities, determined in accordance with the rules prescribed 
        by the Pension Benefit Guaranty Corporation under sections 
        4219(c)(1)(D) and 4281 of Employee Retirement Income and 
        Security Act for multiemployer plans terminating by mass 
        withdrawal, as in effect for the date of the determination, 
        except the plan's reasonable assumption regarding the starting 
        date of benefits may be used.
            ``(3) Other applicable rules.--Except as provided in 
        paragraph (2), actuarial determinations and projections under 
        this section shall be based on the rules in section 432(b)(3) 
        and section 438(b).

``SEC. 440B. MERGERS AND ASSET TRANSFERS OF COMPOSITE PLANS.

    ``(a) In General.--Assets and liabilities of a composite plan may 
only be merged with, or transferred to, another plan if--
            ``(1) the other plan is a composite plan,
            ``(2) the plan or plans resulting from the merger or 
        transfer is a composite plan,
            ``(3) no participant's accrued benefit or adjustable 
        benefit is lower immediately after the transaction than it was 
        immediately before the transaction, and
            ``(4) the value of the assets transferred in the case of a 
        transfer reasonably reflects the value of the amounts 
        contributed with respect to the participants whose benefits are 
        being transferred, adjusted for allocable distributions, 
        investment gains and losses, and administrative expenses.
    ``(b) Legacy Plan.--
            ``(1) In general.--After a merger or transfer involving a 
        composite plan, the legacy plan with respect to an employer 
        that is obligated to contribute to the resulting composite plan 
        is the legacy plan that applied to that employer immediately 
        before the merger or transfer.
            ``(2) Multiple legacy plans.--If an employer is obligated 
        to contribute to more than one legacy plan with respect to 
        employees eligible to accrue benefits under more than one 
        composite plan and there is a merger or transfer of such legacy 
        plans, the transition contribution rate applicable to the 
        legacy plan resulting from the merger or transfer with respect 
        to that employer shall be determined in accordance with the 
        provisions of section 440A(d)(2)(B).''.
            (2) Clerical amendment.--The table of subparts for part III 
        of subchapter D of chapter 1 of the Internal Revenue Code of 
        1986 is amended by adding at the end the following new item:

            ``subpart c. composite plans and legacy plans''.

    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after the date of the enactment of this 
Act.

SEC. 3. APPLICATION OF CERTAIN REQUIREMENTS TO COMPOSITE PLANS.

    (a) Amendments to the Employee Retirement Income Security Act of 
1974.--
            (1) Treatment for purposes of funding notices.--Section 
        101(f) of the Employee Retirement Income Security Act of 1974 
        (29 U.S.C. 1021(f)) is amended--
                    (A) in paragraph (1) by striking ``title IV 
                applies'' and inserting ``title IV applies or which is 
                a composite plan''; and
                    (B) by adding at the end the following:
            ``(5) Application to composite plans.--The provisions of 
        this subsection shall apply to a composite plan only to the 
        extent prescribed by the Secretary in regulations that take 
        into account the differences between a composite plan and a 
        defined benefit plan that is a multiemployer plan.''.
            (2) Treatment for purposes of annual report.--Section 103 
        of the Employee Retirement Income Security Act of 1974 (29 
        U.S.C. 1023) is amended--
                    (A) in subsection (d) by adding at the end the 
                following sentence: ``The provisions of this subsection 
                shall apply to a composite plan only to the extent 
                prescribed by the Secretary in regulations that take 
                into account the differences between a composite plan 
                and a defined benefit plan that is a multiemployer 
                plan.'';
                    (B) in subsection (f) by adding at the end the 
                following:
            ``(3) Additional information for composite plans.--With 
        respect to any composite plan--
                    ``(A) the provisions of paragraph (1)(A) shall 
                apply by substituting `current funded ratio and 
                projected funded ratio (as such terms are defined in 
                section 802(a)(2))' for `funded percentage' each place 
                it appears; and
                    ``(B) the provisions of paragraph (2) shall apply 
                only to the extent prescribed by the Secretary in 
                regulations that take into account the differences 
                between a composite plan and a defined benefit plan 
                that is a multiemployer plan.''; and
                    (C) by adding at the end the following:
    ``(h) Composite Plans.--A multiemployer plan that incorporates the 
features of a composite plan as provided in section 801(b) shall be 
treated as a single plan for purposes of the report required by this 
section, except that separate financial statements and actuarial 
statements shall be provided under paragraphs (3) and (4) of subsection 
(a) for the defined benefit plan component and for the composite plan 
component of the multiemployer plan.''.
            (3) Treatment for purposes of pension benefit statements.--
        Section 105(a) of the Employee Retirement Income Security Act 
        of 1974 (29 U.S.C. 1025(a)) is amended by adding at the end the 
        following:
            ``(4) Composite plans.--For purposes of this subsection, a 
        composite plan shall be treated as a defined benefit plan to 
        the extent prescribed by the Secretary in regulations that take 
        into account the differences between a composite plan and a 
        defined benefit plan that is a multiemployer plan.''.
    (b) Amendments to the Internal Revenue Code of 1986.--Section 6058 
of the Internal Revenue Code of 1986 is amended by redesignating 
subsection (f) as subsection (g) and by inserting after subsection (e) 
the following:
    ``(f) Composite Plans.--A multiemployer plan that incorporates the 
features of a composite plan as provided in section 437(b) shall be 
treated as a single plan for purposes of the return required by this 
section, except that separate financial statements shall be provided 
for the defined benefit plan component and for the composite plan 
component of the multiemployer plan.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after the date of the enactment of this 
Act.

SEC. 4. TREATMENT OF COMPOSITE PLANS UNDER TITLE IV.

    (a) Definition.--Section 4001(a) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1301(a)) is amended by striking the 
period at the end of paragraph (21) and inserting a semicolon and by 
adding at the end the following:
            ``(22) Composite plan.--The term `composite plan' has the 
        meaning set forth in section 801.''.
    (b) Composite Plans Disregarded for Calculating Premiums.--Section 
4006(a) of such Act (29 U.S.C. 1306(a)) is amended by adding at the end 
the following:
            ``(9) The composite plan component of a multiemployer plan 
        shall be disregarded in determining the premiums due under this 
        section from the multiemployer plan.''.
    (c) Composite Plans Not Covered.--Section 4021(b)(1) of such Act 
(29 U.S.C. 1321(b)(1)) is amended by striking ``Act'' and inserting 
``Act, or a composite plan, as defined in paragraph (43) of section 3 
of this Act''.
    (d) No Withdrawal Liability.--Section 4201 of such Act (29 U.S.C. 
1381) is amended by adding at the end the following:
    ``(c) Contributions by an employer to the composite plan component 
of a multiemployer plan shall not be taken into account for any purpose 
under this title.''.
    (e) No Withdrawal Liability for Certain Plans.--Section 4201 of 
such Act (29 U.S.C. 1381) is further amended by adding at the end the 
following:
    ``(d) Contributions by an employer to a multiemployer plan 
described in the except clause of section 3(35) of this Act pursuant to 
a collective bargaining agreement that specifically designates that 
such contributions shall be allocated to the separate defined 
contribution accounts of participants under the plan shall not be taken 
into account with respect to the defined benefit portion of the plan 
for any purpose under this title (including the determination of the 
employer's highest contribution rate under section 4219), even if, 
under the terms of the plan, participants have the option to transfer 
assets in their separate defined contribution accounts to the defined 
benefit portion of the plan in return for service credit under the 
defined benefit portion, at rates established by the plan sponsor.
    ``(e) A legacy plan created under section 805 shall be deemed to 
have no unfunded vested benefits for purposes of this part, for each 
plan year following a period of 5 consecutive plan years for which--
            ``(1) the plan was fully funded within the meaning of 
        section 805 for at least 3 of the plan years during that 
        period, ending with a plan year for which the plan is fully 
        funded;
            ``(2) the plan had no unfunded vested benefits for at least 
        3 of the plan years during that period, ending with a plan year 
        for which the plan is fully funded; and
            ``(3) the plan is projected to be fully funded and to have 
        no unfunded vested benefits for the following four plan 
        years.''.
    (f) No Withdrawal Liability for Employers Contributing to Certain 
Fully Funded Legacy Plans.--Section 4211 of such Act (29 U.S.C. 1382) 
is amended by adding at the end the following:
    ``(g) No amount of unfunded vested benefits shall be allocated to 
an employer that has an obligation to contribute to a legacy plan 
described in subsection (e) of section 4201 for each plan year for 
which such subsection applies.''.
    (g) No Obligation To Contribute.--Section 4212 of such Act (29 
U.S.C. 1392) is amended by adding at the end the following:
    ``(d) No Obligation To Contribute.--An employer shall not be 
treated as having an obligation to contribute to a multiemployer 
defined benefit plan within the meaning of subsection (a) solely 
because--
            ``(1) in the case of a multiemployer plan that includes a 
        composite plan component, the employer has an obligation to 
        contribute to the composite plan component of the plan;
            ``(2) the employer has an obligation to contribute to a 
        composite plan that is maintained pursuant to one or more 
        collective bargaining agreements under which the multiemployer 
        defined benefit plan is or previously was maintained; or
            ``(3) the employer contributes or has contributed under 
        section 805(d) to a legacy plan associated with a composite 
        plan pursuant to a collective bargaining agreement but 
        employees of that employer were not eligible to accrue benefits 
        under the legacy plan with respect to service with that 
        employer.''.
    (h) No Inference.--Nothing in the amendment made by subsection (e) 
shall be construed to create an inference with respect to the treatment 
under title IV of the Employee Retirement Income Security Act of 1974, 
as in effect before such amendment, of contributions by an employer to 
a multiemployer plan described in the except clause of section 3(35) of 
such Act that are made before the effective date of subsection (e) 
specified in subsection (h)(2).
    (i) Effective Date.--
            (1) In general.--Except as provided in subparagraph (2), 
        the amendments made by this section shall apply to plan years 
        beginning after the date of the enactment of this Act.
            (2) Special rule for section 414(k) multiemployer plans.--
        The amendment made by subsection (e) shall apply only to 
        required contributions payable for plan years beginning after 
        the date of the enactment of this Act.

SEC. 5. CONFORMING CHANGES.

    (a) Definitions.--Section 3 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1002) is amended--
            (1) in paragraph (35), by inserting ``or a composite plan'' 
        after ``other than an individual account plan''; and
            (2) by adding at the end the following:
            ``(43) The term `composite plan' has the meaning given the 
        term in section 801(a).''.
    (b) Special Funding Rule for Certain Legacy Plans.--
            (1) Amendment to employee retirement income security act of 
        1974.--Section 304(b) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1084(b)) is amended by adding 
        at the end the following:
            ``(9) Special funding rule for certain legacy plans.--In 
        the case of a multiemployer defined benefit plan that has 
        adopted an amendment under section 801(b), in accordance with 
        which no further benefits shall accrue under the multiemployer 
        defined benefit plan, the plan sponsor may combine the 
        outstanding balance of all charge and credit bases and amortize 
        that combined base in level annual installments (until fully 
        amortized) over a period of 25 plan years beginning with the 
        plan year following the date all benefit accruals ceased.''.
            (2) Amendment to internal revenue code of 1986.--Section 
        431(b) of the Internal Revenue Code of 1986 is amended by 
        adding at the end the following:
            ``(9) Special funding rule for certain legacy plans.--In 
        the case of a multiemployer defined benefit plan that has 
        adopted an amendment under section 437(b), in accordance with 
        which no further benefits shall accrue under the multiemployer 
        defined benefit plan, the plan sponsor may combine the 
        outstanding balance of all charge and credit bases and amortize 
        that combined base in level annual installments (until fully 
        amortized) over a period of 25 plan years beginning with the 
        plan year following the date on which all benefit accruals 
        ceased.''.
    (c) Benefits After Merger, Consolidation, or Transfer of Assets.--
            (1) Amendment to employee retirement income security act of 
        1974.--Section 208 of the Employee Retirement Income Security 
        Act of 1974 (29 U.S.C. 1058) is amended--
                    (A) by striking so much of the first sentence as 
                precedes ``may not merge'' and inserting the following:
            ``(1) In general.--Except as provided in paragraph (2), a 
        pension plan may not merge, and''; and
                    (B) by striking the second sentence and adding at 
                the end the following:
            ``(2) Special requirements for multiemployer plans.--
        Paragraph (1) shall not apply to any transaction to the extent 
        that participants either before or after the transaction are 
        covered under a multiemployer plan to which title IV of this 
        Act applies or a composite plan.''.
            (2) Amendments to internal revenue code of 1986.--
                    (A) Qualification requirement.--Section 401(a)(12) 
                of the Internal Revenue Code of 1986 is amended--
                            (i) by striking ``(12) A trust'' and 
                        inserting the following:
            ``(12) Benefits after merger, consolidation, or transfer of 
        assets.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a trust'';
                            (ii) by striking the second sentence; and
                            (iii) by adding at the end the following:
                    ``(B) Special requirements for multiemployer 
                plans.--Subparagraph (A) shall not apply to any 
                multiemployer plan with respect to any transaction to 
                the extent that participants either before or after the 
                transaction are covered under a multiemployer plan to 
                which title IV of the Employee Retirement Income 
                Security Act of 1974 applies or a composite plan.''.
                    (B) Additional qualification requirement.--
                Paragraph (1) of section 414(l) of such Code is 
                amended--
                            (i) by striking ``(1) In general'' and all 
                        that follows through ``shall not constitute'' 
                        and inserting the following:
            ``(1) Benefit protections: merger, consolidation, 
        transfer.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a trust which forms a part of a plan 
                shall not constitute''; and
                            (ii) by striking the second sentence; and
                            (iii) by adding at the end the following:
                    ``(B) Special requirements for multiemployer 
                plans.--Subparagraph (A) does not apply to any 
                multiemployer plan with respect to any transaction to 
                the extent that participants either before or after the 
                transaction are covered under a multiemployer plan to 
                which title IV of the Employee Retirement Income 
                Security Act of 1974 applies or a composite plan.''.
    (d) Requirements for Status as a Qualified Plan.--
            (1) Requirement that actuarial assumptions be specified.--
        Section 401(a)(25) of the Internal Revenue Code of 1986 is 
        amended by inserting ``(in the case of a composite plan, 
        benefits objectively calculated pursuant to a formula)'' after 
        ``definitely determinable benefits''.
            (2) Missing participants in terminating composite plan.--
        Section 401(a)(34) of the Internal Revenue Code of 1986 is 
        amended by striking ``, a trust'' and inserting ``or a 
        composite plan, a trust''.
    (e) Deduction for Contributions to a Qualified Plan.--Section 
404(a)(1) of the Internal Revenue Code of 1986 is amended by 
redesignating subparagraph (E) as subparagraph (F) and by inserting 
after subparagraph (D) the following:
                    ``(E) Composite plans.--
                            ``(i) In general.--In the case of a 
                        composite plan, subparagraph (D) shall not 
                        apply and the maximum amount deductible for a 
                        plan year shall be the excess (if any) of--
                                    ``(I) 160 percent of the greater 
                                of--
                                            ``(aa) the current 
                                        liability of the plan 
                                        determined in accordance with 
                                        the principles of section 
                                        431(c)(6)(D), or
                                            ``(bb) the present value of 
                                        plan liabilities as determined 
                                        under section 438, over
                                    ``(II) the fair market value of the 
                                plan's assets, projected to the end of 
                                the plan year.
                            ``(ii) Special rules for predecessor 
                        multiemployer plan to composite plan.--
                                    ``(I) In general.--Except as 
                                provided in subclause (II), if an 
                                employer contributes to a composite 
                                plan with respect to its employees, 
                                contributions by that employer to a 
                                multiemployer defined benefit plan with 
                                respect to some or all of the same 
                                group of employees shall be deductible 
                                under sections 162 and this section, 
                                subject to the limits in subparagraph 
                                (D).
                                    ``(II) Transition contribution.--
                                The full amount of a contribution to 
                                satisfy the transition contribution 
                                requirement (as defined in section 
                                440A(d)) and allocated to the legacy 
                                defined benefit plan for the plan year 
                                shall be deductible for the employer's 
                                taxable year ending with or within the 
                                plan year.''.
    (f) Minimum Vesting Standards.--
            (1) Years of service under composite plans.--
                    (A) Employee retirement income security act of 
                1974.--Section 203 of the Employee Retirement Income 
                Security Act of 1974 (29 U.S.C. 1053) is amended by 
                inserting after subsection (f) the following:
    ``(g) Special Rules for Computing Years of Service Under Composite 
Plans.--
            ``(1) In general.--In determining a qualified employee's 
        years of service under a composite plan for purposes of this 
        section, the employee's years of service under a legacy plan 
        shall be treated as years of service earned under the composite 
        plan. For purposes of such determination, a composite plan 
        shall not be treated as a defined benefit plan pursuant to 
        section 801(d).
            ``(2) Qualified employee.--For purposes of this subsection, 
        an employee is a qualified employee if the employee first 
        completes an hour of service under the composite plan 
        (determined without regard to the provisions of this 
        subsection) within the 12-month period immediately preceding or 
        the 24-month period immediately following the date the employee 
        ceased to accrue benefits under the legacy plan.
            ``(3) Certification of years of service.--For purposes of 
        paragraph (1), the plan sponsor of the composite plan shall 
        rely on a written certification by the plan sponsor of the 
        legacy plan of the years of service the qualified employee 
        completed under the defined benefit plan as of the date the 
        employee satisfies the requirements of paragraph (2), 
        disregarding any years of service that had been forfeited under 
        the rules of the defined benefit plan before that date.
    ``(h) Special Rules for Computing Years of Service Under Legacy 
Plans.--
            ``(1) In general.--In determining a qualified employee's 
        years of service under a legacy plan for purposes of this 
        section, and in addition to any service under applicable 
        regulations, the employee's years of service under a composite 
        plan shall be treated as years of service earned under the 
        legacy plan. For purposes of such determination, a composite 
        plan shall not be treated as a defined benefit plan pursuant to 
        section 801(d).
            ``(2) Qualified employee.--For purposes of this subsection, 
        an employee is a qualified employee if the employee first 
        completes an hour of service under the composite plan 
        (determined without regard to the provisions of this 
        subsection) within the 12-month period immediately preceding or 
        the 24-month period immediately following the date the employee 
        ceased to accrue benefits under the legacy plan.
            ``(3) Certification of years of service.--For purposes of 
        paragraph (1), the plan sponsor of the legacy plan shall rely 
        on a written certification by the plan sponsor of the composite 
        plan of the years of service the qualified employee completed 
        under the composite plan after the employee satisfies the 
        requirements of paragraph (2), disregarding any years of 
        service that has been forfeited under the rules of the 
        composite plan.''.
                    (B) Internal revenue code of 1986.--Section 411(a) 
                of the Internal Revenue Code of 1986 is amended by 
                adding at the end the following:
            ``(14) Special rules for determining years of service under 
        composite plans.--
                    ``(A) In general.--In determining a qualified 
                employee's years of service under a composite plan for 
                purposes of this subsection, the employee's years of 
                service under a legacy plan shall be treated as years 
                of service earned under the composite plan. For 
                purposes of such determination, a composite plan shall 
                not be treated as a defined benefit plan pursuant to 
                section 437(d).
                    ``(B) Qualified employee.--For purposes of this 
                paragraph, an employee is a qualified employee if the 
                employee first completes an hour of service under the 
                composite plan (determined without regard to the 
                provisions of this paragraph) within the 12-month 
                period immediately preceding or the 24-month period 
                immediately following the date the employee ceased to 
                accrue benefits under the legacy plan.
                    ``(C) Certification of years of service.--For 
                purposes of subparagraph (A), the plan sponsor of the 
                composite plan shall rely on a written certification by 
                the plan sponsor of the legacy plan of the years of 
                service the qualified employee completed under the 
                legacy plan as of the date the employee satisfies the 
                requirements of subparagraph (B), disregarding any 
                years of service that had been forfeited under the 
                rules of the defined benefit plan before that date.
            ``(15) Special rules for computing years of service under 
        legacy plans.--
                    ``(A) In general.--In determining a qualified 
                employee's years of service under a legacy plan for 
                purposes of this section, and in addition to any 
                service under applicable regulations, the employee's 
                years of service under a composite plan shall be 
                treated as years of service earned under the legacy 
                plan. For purposes of such determination, a composite 
                plan shall not be treated as a defined benefit plan 
                pursuant to section 437(d).
                    ``(B) Qualified employee.--For purposes of this 
                paragraph, an employee is a qualified employee if the 
                employee first completes an hour of service under the 
                composite plan (determined without regard to the 
                provisions of this paragraph) within the 12-month 
                period immediately preceding or the 24-month period 
                immediately following the date the employee ceased to 
                accrue benefits under the legacy plan.
                    ``(C) Certification of years of service.--For 
                purposes of subparagraph (A), the plan sponsor of the 
                legacy plan shall rely on a written certification by 
                the plan sponsor of the composite plan of the years of 
                service the qualified employee completed under the 
                composite plan after the employee satisfies the 
                requirements of subparagraph (B), disregarding any 
                years of service that has been forfeited under the 
                rules of the composite plan.''.
            (2) Reduction of benefits.--
                    (A) Employee retirement income security act of 
                1974.--Section 203(a)(3)(E)(ii) of the Employee 
                Retirement Income Security Act of 1974 (29 U.S.C. 
                1053(a)(3)(E)(ii)) is amended--
                            (i) in subclause (I) by striking ``4244A'' 
                        and inserting ``305(e), 803,''; and
                            (ii) in subclause (II) by striking ``4245'' 
                        and inserting ``305(e), 4245,''.
                    (B) Internal revenue code of 1986.--Section 
                411(a)(3)(F) of the Internal Revenue Code of 1986 is 
                amended--
                            (i) in clause (i) by striking ``section 
                        418D or under section 4281 of the Employee 
                        Retirement Income Security Act of 1974'' and 
                        inserting ``section 432(e) or 439 or under 
                        section 4281 of the Employee Retirement Income 
                        Security Act of 1974''; and
                            (ii) in clause (ii) by inserting ``or 
                        432(e)'' after ``section 418E''.
            (3) Accrued benefit requirements.--
                    (A) Employee retirement income security act of 
                1974.--Section 204(b)(1)(B)(i) of the Employee 
                Retirement Income Security Act of 1974 (29 U.S.C. 
                1054(b)(1)(B)(i)) is amended by inserting ``, including 
                an amendment reducing or suspending benefits under 
                section 305(e), 803, 4245 or 4281,'' after ``any 
                amendment to the plan''.
                    (B) Internal revenue code of 1986.--Section 
                411(b)(1)(B)(i) of the Internal Revenue Code of 1986 is 
                amended by inserting ``, including an amendment 
                reducing or suspending benefits under section 418E, 
                432(e) or 439, or under section 4281 of the Employee 
                Retirement Income Security Act of 1974,'' after ``any 
                amendment to the plan''.
            (4) Additional accrued benefit requirements.--
                    (A) Employee retirement income security act of 
                1974.--Section 204(b)(1)(H)(v) of the Employee 
                Retirement Income Security Act of 1974 (29 U.S.C. 
                1053(b)(1)(H)(v)) is amended by inserting before the 
                period at the end the following: ``, or benefits are 
                reduced or suspended under section 305(e), 803, 4245, 
                or 4281''.
                    (B) Internal revenue code of 1986.--Section 
                411(b)(1)(H)(iv) of the Internal Revenue Code of 1986 
                is amended--
                            (i) in the heading by striking ``benefit'' 
                        and inserting ``benefit and the suspension and 
                        reduction of certain benefits''; and
                            (ii) in the text by inserting before the 
                        period at the end the following: ``, or 
                        benefits are reduced or suspended under section 
                        418E, 432(e), or 439, or under section 4281 of 
                        the Employee Retirement Income Security Act of 
                        1974''.
            (5) Accrued benefit not to be decreased by amendment.--
                    (A) Employee retirement income security act of 
                1974.--Section 204(g)(1) of the Employee Retirement 
                Income Security Act of 1974 (29 U.S.C. 1053(g)(1)) is 
                amended by inserting after ``302(d)(2)'' the following: 
                ``, 305(e), 803, 4245,''.
                    (B) Internal revenue code of 1986.--Section 
                411(d)(6)(A) of the Internal Revenue Code of 1986 is 
                amended by inserting after ``412(d)(2),'' the 
                following: ``418E, 432(e), or 439,''.
    (g) Certain Funding Rules Not Applicable.--
            (1) Employee retirement income security act of 1974.--
        Section 305 of the Employee Retirement Income Security Act of 
        1974 (29 U.S.C. 1085) is amended by adding at the end the 
        following:
    ``(k) Legacy Plans.--Sections 302, 304, and 305 shall not apply to 
an employer that has an obligation to contribute to a plan that is a 
legacy plan within the meaning of section 805(a) solely because the 
employer has an obligation to contribute to a composite plan described 
in section 801 that is associated with that legacy plan.''.
            (2) Internal revenue code of 1986.--Section 432 of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following:
    ``(k) Legacy Plans.--Sections 412, 431, and 432 shall not apply to 
an employer that has an obligation to contribute to a plan that is a 
legacy plan within the meaning of section 440A(a) solely because the 
employer has an obligation to contribute to a composite plan described 
in section 437 that is associated with that legacy plan.''.
    (h) Termination of Composite Plan.--Section 403(d) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1103(d) is amended--
            (1) in paragraph (1), by striking ``regulations of the 
        Secretary.'' and inserting ``regulations of the Secretary, or 
        as provided in paragraph (3).''; and
            (2) by adding at the end the following:
            ``(3) Section 4044(a) of this Act shall be applied in the 
        case of the termination of a composite plan by--
                    ``(A) limiting the benefits subject to paragraph 
                (3) thereof to benefits as defined in section 
                802(b)(3)(B); and
                    ``(B) including in the benefits subject to 
                paragraph (4) all other benefits (if any) of 
                individuals under the plan that would be guaranteed 
                under section 4022A if the plan were subject to title 
                IV.''.
    (i) Good Faith Compliance Prior to Guidance.--Where the 
implementation of any provision of law added or amended by this Act is 
subject to issuance of regulations by the Secretary of Labor, the 
Secretary of the Treasury, or the Pension Benefit Guaranty Corporation, 
a multiemployer plan shall not be treated as failing to meet the 
requirements of any such provision prior to the issuance of final 
regulations or other guidance to carry out such provision if such plan 
is operated in accordance with a reasonable, good faith interpretation 
of such provision.

SEC. 6. EFFECTIVE DATE.

    Unless otherwise specified, the amendments made by this Act shall 
apply to plan years beginning after the date of the enactment of this 
Act.
                                 <all>