[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1610 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                S. 1610

 To amend the Employee Retirement Income Security Act of 1974 and the 
Internal Revenue Code of 1986 to ensure the adequate funding of pension 
                     plans, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 11, 2003

  Mr. Bayh (for himself and Mr. Kerry) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Employee Retirement Income Security Act of 1974 and the 
Internal Revenue Code of 1986 to ensure the adequate funding of pension 
                     plans, 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 ``Defined Benefit Pension Plan Reform 
Act of 2003''.

SEC. 2. MULTIEMPLOYER PLAN EMERGENCY INVESTMENT LOSS RULE.

    (a) Amendment to the Internal Revenue Code of 1986.--Section 
412(b)(7) of the Internal Revenue Code of 1986 (relating to special 
rules for multiemployer plans) is amended by adding at the end the 
following:
                    ``(F) Emergency investment loss method.--
                            ``(i) In general.--In lieu of amortizing 
                        net experience loss as prescribed in paragraph 
                        (2)(B)(iv), a multiemployer plan may elect to 
                        use the emergency investment loss method 
                        described in this subparagraph, starting with 
                        the first plan year in which there is an 
                        emergency investment loss.
                            ``(ii) Emergency investment loss.--An 
                        emergency investment loss for any plan year 
                        beginning on or after July 1, 1999, and ending 
                        before January 1, 2004, is the amount (if any) 
                        by which--
                                    ``(I) the fair market value of the 
                                plan's assets as of the last day of the 
                                plan year, is less than
                                    ``(II) the fair market value which 
                                would have been determined if the 
                                plan's earnings for the plan year had 
                                been equal to the projected investment 
                                return based on the actuarial interest 
                                rate under paragraph (5)(A) for the 
                                plan year, applied to the fair market 
                                value of assets as of the beginning of 
                                the year and noninvestment cash flows 
                                during the year.
                            ``(iii) Amortization of emergency 
                        investment loss.--The funding standard account 
                        shall be charged with the amounts necessary to 
                        amortize in equal annual installments (until 
                        fully amortized) the plan's emergency 
                        investment loss over a period of 30 plan years.
                            ``(iv) Treatment of adjusted net actuarial 
                        experience.--If an election is in effect for 
                        any plan year described in clause (ii)--
                                    ``(I) any net experience gain 
                                otherwise determined for such year 
                                under paragraph (2)(B)(iv) shall be 
                                increased by an amount equal to the 
                                emergency investment loss for such 
                                year, and
                                    ``(II) any net experience loss 
                                otherwise determined for such year 
                                under paragraph (3)(B)(ii) shall be 
                                reduced by the emergency investment 
                                loss for such year, except that if such 
                                emergency investment loss exceeds such 
                                net experience loss, the excess shall 
                                be treated as a net experience gain for 
                                such year for purposes of paragraph 
                                (2)(B)(iv).''
    (b) Amendment to the Employee Retirement Income Security Act of 
1974.--Section 302(b)(7) of the Employee Retirement Income Security Act 
of 1974 (29 U.S.C. 1082(b)(7)) is amended by adding at the end the 
following:
    ``(F)(i) In lieu of amortizing net experience loss as prescribed in 
paragraph (2)(B)(iv), a multiemployer plan may elect to use the 
emergency investment loss method described in this subparagraph, 
starting with the first plan year in which there is an emergency 
investment loss.
    ``(ii) An emergency investment loss for any plan year beginning on 
or after July 1, 1999, and ending before January 1, 2004, is the amount 
(if any) by which--
            ``(I) the fair market value of the plan's assets as of the 
        last day of the plan year, is less than
            ``(II) the fair market value which would have been 
        determined if the plan's earnings for the plan year had been 
        equal to the projected investment return based on the actuarial 
        interest rate under paragraph (5)(A) for the plan year, applied 
        to the fair market value of assets as of the beginning of the 
        year and noninvestment cash flows during the year.
    ``(iii) The funding standard account shall be charged with the 
amounts necessary to amortize in equal annual installments (until fully 
amortized) the plan's emergency investment loss over a period of 30 
plan years.
    ``(iv) If an election is in effect for any plan year described in 
clause (ii)--
            ``(I) any net experience gain otherwise determined for such 
        year under paragraph (2)(B)(iv) shall be increased by an amount 
        equal to the emergency investment loss for such year, and
            ``(II) any net experience loss otherwise determined for 
        such year under paragraph (3)(B)(ii) shall be reduced by the 
emergency investment loss for such year, except that if such emergency 
investment loss exceeds such net experience loss, the excess shall be 
treated as a net experience gain for such year for purposes of 
paragraph (2)(B)(iv).''
    (c) Election Procedure.--
            (1) In general.--The Secretary of the Treasury shall 
        prescribe a procedure under which multiemployer plans that 
        elect to use the emergency investment loss method described in 
        section 412(b)(7)(F) of the Internal Revenue Code of 1986 and 
        section 302(b)(7)(F) of the Employee Retirement Income Security 
        Act of 1974 may do so either by starting the special 
        amortization periods in the actuarial valuations for each of 
        the affected plan years or by starting with a cumulative 
        emergency investment loss and adjusted net actuarial experience 
        (based on the outstanding balance of the experience gain bases 
        for the affected plan years, reduced by the cumulative 
        emergency investment loss) in the actuarial valuation for the 
        last plan year ending before January 1, 2004.
            (2) Filing period.--The procedures described in paragraph 
        (1) shall provide a period of not less than 210 days after the 
        date of enactment of this Act for multiemployer plans to file 
        Schedule Bs (relating to actuarial information under the plan) 
        to the Form 5500 Annual Reports for the plan years for which 
        the emergency investment loss method is elected, including 
        amended Schedule Bs for annual reports previously filed.
    (d) Effective Date.--The amendments made by this section shall 
apply to years beginning after June 30, 1999.

SEC. 3. MORTALITY TABLE ADJUSTMENT.

    (a) Amendment to the Internal Revenue Code of 1986.--Section 
412(l)(7)(C) of the Internal Revenue Code of 1986 is amended by adding 
at the end the following:
                            ``(iv) Separate mortality tables for blue-
                        collar and white-collar workers.--
                                    ``(I) In general.--Notwithstanding 
                                clause (ii), in the case of plan years 
                                beginning after December 31, 2003, the 
                                Secretary shall establish separate 
                                mortality tables for blue-collar 
                                workers and white-collar workers which 
                                may be used (in lieu of the tables 
                                under clause (ii)) to determine current 
                                liability under this subsection. For 
                                this purpose, the Secretary shall take 
                                into account the Society of Actuaries 
                                RP-2000 Mortality Table, as adjusted to 
                                take into account the collar adjustment 
                                prescribed in such table to reflect the 
                                workforce covered by the plan.
                                    ``(II) Classification of workers.--
                                For purposes of this clause, 
                                individuals shall be classified as 
                                blue-collar or white-collar workers 
                                under rules prescribed by the 
                                Secretary. In prescribing such rules, 
                                the Secretary shall treat professional 
                                employees (within the meaning of 
                                section 410) as white-collar workers.
                                    ``(III) Consistent use.--If an 
                                employer elects to use the tables 
                                prescribed under subclause (I) for any 
                                plan established or maintained by the 
                                employer, the employer shall use the 
                                tables for all such plans other than a 
                                plan for which use of the tables is 
                                prohibited under regulations prescribed 
                                by the Secretary.''.
    (b) Amendment to the Employee Retirement Income Security Act of 
1974.--Section 302(d)(7)(C) of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1082(d)(7)(C)) is amended by adding at the end 
the following:
                            ``(iv) Separate mortality tables for blue-
                        collar and white-collar workers.--
                                    ``(I) In general.--Notwithstanding 
                                clause (ii), in the case of plan years 
                                beginning after December 31, 2003, the 
                                Secretary of the Treasury shall 
                                establish separate mortality tables for 
                                blue-collar workers and white-collar 
                                workers which may be used (in lieu of 
                                the tables under clause (ii)) to 
                                determine current liability under this 
                                subsection. For this purpose, the 
                                Secretary of the Treasury shall take 
                                into account the Society of Actuaries 
                                RP-2000 Mortality Table, as adjusted to 
                                take into account the collar adjustment 
                                prescribed in such table to reflect the 
                                workforce covered by the plan.
                                    ``(II) Classification of workers.--
                                For purposes of this clause, 
                                individuals shall be classified as 
                                blue-collar or white-collar workers 
                                under rules prescribed by the Secretary 
                                of the Treasury. In prescribing such 
                                rules, the Secretary of the Treasury 
                                shall treat professional employees 
                                (within the meaning of section 410 of 
                                the Internal Revenue Code of 1986) as 
                                white-collar workers.
                                    ``(III) Consistent use.--If an 
                                employer elects to use the tables 
                                prescribed under subclause (I) for any 
                                plan established or maintained by the 
                                employer, the employer shall use the 
                                tables for all such plans other than a 
                                plan for which use of the tables is 
                                prohibited under regulations prescribed 
                                by the Secretary of the Treasury.''.
    (c) Effective Date.--The amendments made by this section shall be 
effective as of the date of the enactment of this Act.

SEC. 4. MODIFICATION OF FULL-FUNDING LIMITATION FOR PURPOSES OF 
              DEDUCTION LIMITS ON EMPLOYER PENSION CONTRIBUTIONS.

    (a) In General.--Section 404(a)(1)(A) of the Internal Revenue Code 
of 1986 (relating to limitation on deductibility of employer 
contributions) is amended by adding at the end the following: ``In 
determining the full funding limitation for purposes of the preceding 
sentence for any year beginning after December 31, 2003, the amount 
determined under section 412(c)(7)(A)(i) shall in no event be treated 
as being less than 130 percent of current liability (including the 
expected increase in current liability due to benefits accruing during 
the year).''
    (b) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 2003.

SEC. 5. REQUIRED NOTIFICATION OF PARTICIPANTS AND BENEFICIARIES OF PLAN 
              TERMINATIONS BY PENSION BENEFIT GUARANTY CORPORATION.

    (a) In General.--Section 4042(b) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1342(b)) is amended by adding at the 
end the following:
    ``(4)(A) Not later than 30 days after the corporation notifies a 
plan administrator under this subsection regarding the commencement of 
proceedings to terminate a plan under this section, the corporation 
shall provide notice of such proceedings to affected parties as 
provided in this paragraph. The notice shall state that such 
termination is intended, the proposed termination date, and the 
procedure for such termination under this section.
    ``(B) Upon notice to the plan of the commencement of proceedings, 
the plan administrator shall provide the corporation with a list of the 
names and addresses of all participants and beneficiaries of the plan.
    ``(C) The corporation shall provide--
            ``(i) written notice to each affected party of the plan; 
        and
            ``(ii) notice in the 2 newspapers with the largest 
        circulation in the area of the majority of the affected 
        parties.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to proceedings commenced after the date of enactment of this Act.
                                 <all>