109 HR 4055 IH: Employees’ Pension Security Act of 2005
U.S. House of Representatives
2005-10-07
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.This Act may be cited as the Employees’ Pension Security Act of 2005
.
<enum>I</enum><header>Trusteeship of single-employer plans</header>
<section id="H0F4D39BF55694E5091AECDFB8365587F"><enum>101</enum><header>Requirements relating to trusteeship of single-employer plans</header>
<subsection id="H42EB01DDA1B94E2590EA4540E4DF3B1"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 403(a) of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1103">29 U.S.C. 1103(a)</external-xref>) is amended—</text>
<paragraph id="HB40BC59340234227AD1F64E5A018BA98"><enum>(1)</enum><text display-inline="yes-display-inline">by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively;</text></paragraph>
<paragraph id="H39E152C8823F4D6A81EE63B8262D6C46"><enum>(2)</enum><text display-inline="yes-display-inline">by inserting ‘‘(1)’’ after ‘‘(a)’’; and </text></paragraph>
<paragraph id="HE521A88A3CCC415EA35554433EF91B00"><enum>(3)</enum><text>by adding at the end the following new paragraph: </text>
<quoted-block style="traditional" id="H22FD9F4994314605B05422F03EB55B92" display-inline="no-display-inline">
<paragraph id="H4485B367665441979ECC00F1E3F13952" indent="up1"><enum>(2)</enum>
<subparagraph id="H6A326AC9DB00495B8E8769CBC20189B8" display-inline="yes-display-inline"><enum>(A)</enum><text>The assets of a pension plan which is a single-employer plan shall be held in trust by a joint board of trustees, which shall consist of two or more trustees representing on an equal basis the interests of the employer or employers maintaining the plan and the interests of the participants and their beneficiaries.</text></subparagraph>
<subparagraph id="H98F7BA761E7046DEB51FC7FA03B88294" indent="up1"><enum>(B)</enum>
<clause id="H030465A3E5B340A1B526635ED82F7B3B" display-inline="yes-display-inline"><enum>(i)</enum><text display-inline="yes-display-inline">Except as provided in clause (ii), in any case in which the plan is maintained pursuant to one or more collective bargaining agreements between one or more employee organizations and one or more employers, the trustees representing the interests of the participants and their beneficiaries pursuant to subparagraph (A) shall be designated by such employee organizations.</text></clause>
<clause id="H4F151F60BAEE45BDBF81C14E4DED5B9" indent="up1"><enum>(ii)</enum><text display-inline="yes-display-inline">Clause (i) shall not apply with respect to a plan described in such clause if the employee organization (or all employee organizations, if more than one) referred to in such clause file with the Secretary, in such form and manner as shall be prescribed in regulations of the Secretary, a written waiver of their rights under clause (i).</text></clause>
<clause id="H181ADEB7732342549CAB66671939E574" indent="up1"><enum>(iii)</enum><text display-inline="yes-display-inline">In any case in which clause (i) does not apply with respect to a pension plan which is a single-employer plan because the plan is not described in clause (i) or because of a waiver filed pursuant to clause (ii), the trustee or trustees representing the interests of the participants and their beneficiaries shall consist of one or more participants under the plan elected to serve as such in accordance with this clause. The Secretary shall provide by regulation for a secret ballot of the participants under the plan for purposes of such election, and for certification of the results thereof to the participants (and any employee organization referred to in clause (ii)) and to the employer.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H367BD7E5D37642A19CE943AE25A35B98"><enum>(b)</enum><header>Conforming amendments</header><text display-inline="yes-display-inline">Section 403(a)(1) of such Act (as redesignated under subsection (a)) is amended—</text>
<paragraph id="HA742CA6515994E489894CEE55235A455"><enum>(1)</enum><text display-inline="yes-display-inline">by striking ‘‘Such trustee or trustees’’ and inserting ‘‘Except as provided in paragraph (2), such trustee or trustees’’;</text></paragraph>
<paragraph id="HE40E74A247D3445E9705AA3EF1C80040"><enum>(2)</enum><text>by striking ‘‘fiduciary, and upon acceptance’’ and inserting ‘‘fiduciary. Upon acceptance’’; and</text></paragraph>
<paragraph id="H0EFA1997313F4B269659F5624D90C1FA"><enum>(3)</enum><text>in subparagraph (A) (as so redesignated), by striking ‘‘the plan’’ the first place it appears and inserting ‘‘in the case of a plan other than a pension plan which is a single-employer plan, the plan’’.</text></paragraph></subsection></section>
<section id="H6B382A790C5E4B800025B54C74E6FC55"><enum>102.</enum><header>Effective date</header><text display-inline="no-display-inline">The amendments made by this title shall apply with respect to plan years beginning after 180 days after the date of the enactment of this Act. The Secretary of Labor shall prescribe the initial regulations necessary to carry out the provisions of such amendments not later than 90 days after the date of the enactment of this Act.</text></section>
<enum>II</enum><header>Disclosure of pension plan fiscal health</header>
<section id="HA4C9A04B47B84350AC6C67887CE86CE9"><enum>201.</enum><header>Pension benefit information</header>
<subsection id="HFCBB0CBB1C6F47F9B300458C6604CC08"><enum>(a)</enum><header>Pension benefit statements required on periodic basis</header>
<paragraph id="HF26F4874F3134281B78C2C66A8CACCEF"><enum>(1)</enum><header>In general</header><text>Subsection (a) of section 105 of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1025">29 U.S.C. 1025</external-xref>) is amended—</text>
<subparagraph id="HC48ECC9A713E4C55B4A9BC99B5FBCB8"><enum>(A)</enum><text>by striking <quote>shall furnish to any plan participant or beneficiary who so requests in writing,</quote> and inserting <quote>shall furnish at least once every 3 years, in the case of a participant in a defined benefit plan who has attained age 35, and annually, in the case of an individual account plan, to each plan participant, and shall furnish to any plan participant or beneficiary who so requests,</quote>, and</text></subparagraph>
<subparagraph id="HEC7D5497CA2F4C5680665188CF0700FB"><enum>(B)</enum><text>by adding at the end the following flush sentence:</text>
<quoted-block style="traditional" id="HB2ABECB0F6594FFBAC91A62E41419C63" display-inline="no-display-inline"><quoted-block-continuation-text quoted-block-continuation-text-level="subsection">Information furnished under the preceding sentence to a participant in a defined benefit plan (other than at the request of the participant) may be based on reasonable estimates determined under regulations prescribed by the Secretary.</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="H6C5DFC615F7D439885AD20408CEC22FA"><enum>(2)</enum><header>Model statement</header><text>Section 105 of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1025">29 U.S.C. 1025</external-xref>) is amended by adding at the end the following new subsection:</text>
<quoted-block style="traditional" id="HBDBCF4837D1E4A8FAE0013FD97C78377" display-inline="no-display-inline">
<subsection id="H8EE1BD814D8A418CB78967E166C01406"><enum>(e)</enum><text display-inline="yes-display-inline">The Secretary of Labor shall develop a model benefit statement which shall be used by plan administrators in complying with the requirements of subsection (a). Such statement shall include—</text>
<paragraph id="HD6B37B1919494614BED199604B1B1176"><enum>(1)</enum><text>the amount of nonforfeitable accrued benefits as of the statement date which is payable at normal retirement age under the plan,</text></paragraph>
<paragraph id="H1F0C9C29C89A4013B68EAB5D167ED2E1"><enum>(2)</enum><text>the amount of accrued benefits which are forfeitable but which may become nonforfeitable under the terms of the plan,</text></paragraph>
<paragraph id="H79A6E61754264A588FF3089B95000024"><enum>(3)</enum><text>the amount or percentage of any reduction due to integration of the benefit with the participant's Social Security benefits or similar governmental benefits,</text></paragraph>
<paragraph id="H95922CB5D04242FEA5B57BE55164DF1D"><enum>(4)</enum><text>the percentage of the net return on investment of plan assets for the preceding plan year (or, with respect to investments directed by the participant, the net return on investment of plan assets for such year so directed), and, stated separately, the administrative and transaction fees incurred in connection with such investment,</text></paragraph>
<paragraph id="HCC6F95B78AF04251AD78387270EBDDED"><enum>(5)</enum><text>in the case of an individual account plan, the percentage of assets in the individual account that consists of employer securities and employer real property (as defined in paragraphs (1) and (2), respectively, of section 407(d)), as determined as of the most recent valuation date of the plan,</text></paragraph>
<paragraph id="H569E44E140B141ED9725B7C064E7285F"><enum>(6)</enum><text>information on how to contact the Social Security Administration to obtain a participant's personal earnings and benefit estimate statement,</text></paragraph>
<paragraph id="HA26330EBA3904CD8A0EF8770AEDD4DA6"><enum>(7)</enum><text>information on early retirement benefit and joint and survivor annuity reductions, and</text></paragraph>
<paragraph id="HA629044A66624361BBE785DE66698E49"><enum>(8)</enum><text>a notice advising participants and beneficiaries of the importance of diversifying the investment of the assets in their accounts.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HB5BB5680401F4F429CB49771FCFA01E0"><enum>(3)</enum><header>Rule for multiemployer plans</header><text>Subsection (d) of section 105 of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1025">29 U.S.C. 1025</external-xref>) is amended to read as follows:</text>
<quoted-block style="traditional" id="H64C1BACEB0E745C6882B55DAB777406C" display-inline="no-display-inline">
<subsection id="H49236ED0147C45A0848D885670814BCE"><enum>(d)</enum><text>Each administrator of a plan to which more than 1 unaffiliated employer is required to contribute shall furnish a statement described in subsection (a) to any plan participant or beneficiary who so requests in writing.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HD7A5ECD36EA948CE9D10052C35EDFC47"><enum>(b)</enum><header>Disclosure of benefit calculations</header>
<paragraph id="H1ADED70EC69B4D35A2A5CD1BB689BD82"><enum>(1)</enum><header>In general</header><text>Section 105 of such Act (as amended by subsection (a)) is amended further— </text>
<subparagraph id="HDBDF98CD1AAF463A8C56E5BB93B669B6"><enum>(A)</enum><text>by redesignating subsections (b), (c), (d), and (e) as subsections (c), (d), (e), and (f), respectively; and</text></subparagraph>
<subparagraph id="H702FB9B87CAE413F9F43E70083595ED2"><enum>(B)</enum><text>by inserting after subsection (a) the following new subsection:</text>
<quoted-block style="traditional" id="H63B1677B45E24010B03537703619B26" display-inline="no-display-inline">
<subsection id="H730C7DFFB822429182ED9F5964C99D94"><enum>(b)</enum>
<paragraph id="HEF60775CD5D146DD9226B109FC5C5853" display-inline="yes-display-inline"><enum>(1)</enum><text>In the case of a participant or beneficiary who is entitled to a distribution of a benefit under an employee pension benefit plan, the administrator of such plan shall provide to the participant or beneficiary the information described in paragraph (2) upon the written request of the participant or beneficiary.</text></paragraph>
<paragraph id="H09CD28D174864E1D8E1235836E9BDF00" indent="up1"><enum>(2)</enum><text>The information described in this paragraph includes—</text>
<subparagraph id="H9571A78ABF594A80A204C32CEB5477F"><enum>(A)</enum><text>a worksheet explaining how the amount of the distribution was calculated and stating the assumptions used for such calculation,</text></subparagraph>
<subparagraph id="HC6C6BE3BBCB9454397007CCE3CEB09BB"><enum>(B)</enum><text>upon written request of the participant or beneficiary, any documents relating to the calculation (if available), and</text></subparagraph>
<subparagraph id="H40614245614F4A158066679738B6E9B3"><enum>(C)</enum><text>such other information as the Secretary may prescribe.</text></subparagraph><continuation-text continuation-text-level="paragraph"> Any information provided under this paragraph shall be in a form calculated to be understood by the average plan participant.</continuation-text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="H8C365FC4ABE844B29EDED0179787CE2E"><enum>(2)</enum><header>Conforming amendments</header>
<subparagraph id="H4BC9256CD5CC4E31B300DEB85401EFA1"><enum>(A)</enum><text>Section 101(a)(2) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1021">29 U.S.C. 1021(a)(2)</external-xref>) is amended by striking <quote>105(a) and (c)</quote> and inserting <quote>105(a), (b), and (d)</quote>.</text></subparagraph>
<subparagraph id="H8FDB4EC4F4BD49C293F2EEF6F1C1C104"><enum>(B)</enum><text>Section 105(c) of such Act (as redesignated by paragraph (1)(A) of this subsection) is amended by inserting <quote>or (b)</quote> after <quote>subsection (a)</quote>.</text></subparagraph>
<subparagraph id="H0D6B9FA3C9E0447AB067837870511C88"><enum>(C)</enum><text>Section 106(b) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1026">29 U.S.C. 1026(b)</external-xref>) is amended by striking <quote>sections 105(a) and 105(c)</quote> and inserting <quote>subsections (a), (b), and (d) of section 105</quote>.</text></subparagraph></paragraph></subsection>
<subsection id="H7DE35CC7ACB541AD892CE46D705B249D"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply with respect to requests for statements received on or after January 1, 2006.</text></subsection></section>
<section id="H4A3D6B4944B94C76AE001FB719339C91"><enum>202.</enum><header>Provision to participants and beneficiaries of material investment information in accurate form</header>
<subsection id="H31CC2E1F24894C98A7625CD8AB325372"><enum>(a)</enum><header>In general</header><text>Section 404(c) of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1104">29 U.S.C. 1104(c)</external-xref>) is amended by adding at the end the following new paragraph:</text>
<quoted-block style="traditional" id="H1BF14E6FF85446F5BDAE86CFB786DE8E" display-inline="no-display-inline">
<paragraph id="H5B941DD765D44B9A8D12D1511FE9B2EF" indent="up1"><enum>(4)</enum><text>The plan sponsor and plan administrator of a pension plan described in paragraph (1) shall have a fiduciary duty to ensure that each participant and beneficiary under the plan, in connection with the investment by the participant or beneficiary of plan assets in the exercise of his or her control over assets in his account, is provided with all material investment information regarding investment of such assets to the extent that the provision of such information is generally required to be disclosed by the plan sponsor to investors in connection with such an investment under applicable securities laws. The provision by the plan sponsor or plan administrator of any misleading investment information shall be treated as a violation of this paragraph.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HDEA8F4549BCA4727B0FA6D5CC146330"><enum>(b)</enum><header>Enforcement</header>
<paragraph id="H61A8EE8815E64C479918F5DC16C8773F"><enum>(1)</enum><header>In general</header><text>Section 502(c) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1132">29 U.S.C. 1132(c)</external-xref>) is amended—</text>
<subparagraph id="H568BC74AF67543F48E13F235AA3977A"><enum>(A)</enum><text>by redesignating paragraph (8) as paragraph (9); and</text></subparagraph>
<subparagraph id="HD05AA28FC4B44E7EA400DB22A3063E08"><enum>(B)</enum><text>by inserting after paragraph (7) the following new paragraph:</text>
<quoted-block style="traditional" id="HA8B6FC7CEA4645E69412576633DFC8C5" display-inline="no-display-inline">
<paragraph id="H840D232015CF4DAEA9A948002B2E492F" indent="up1"><enum>(8)</enum><text>The Secretary may assess a civil penalty against any person of up to $1,000 a day from the date of the person's failure or refusal to comply with the requirements of section 404(c)(4) until such failure or refusal is corrected.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="H1FC9D1745AB34833B8054FB1887F9616"><enum>(2)</enum><header>Conforming amendment</header><text>Section 502(a)(6) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1132">29 U.S.C. 1132(a)(6)</external-xref>) is amended by striking <quote>(6), or (7)</quote> and inserting <quote>(6), (7), or (8)</quote>. </text></paragraph></subsection>
<subsection id="H027333C36E324C76878C547BB6F97F5F"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply with respect to investments made on or after the date of the enactment of this Act.</text></subsection></section>
<enum>III</enum><header>Strengthened protections against abuse of the bankruptcy and termination process</header>
<section id="H5FE4865295BF494D9BCEFFF649843132"><enum>301.</enum><header>Additional requirements for termination</header>
<subsection id="HDBF4E0C6C6584129B5D5A97F258C614C"><enum>(a)</enum><header>Additional requirements for distress termination</header><text display-inline="yes-display-inline">Section 4041(c)(2)(B) of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1341">29 U.S.C. 1341(c)(2)(B)</external-xref>) is amended by adding at the end the following:</text>
<quoted-block style="OLC" id="HC4352B4CDF694C07A632F35100C47CCD" display-inline="no-display-inline">
<clause id="HF9B3851BFC994E7FA596A2B0573922CE"><enum>(iv)</enum><header>Additional requirements</header><text display-inline="yes-display-inline">Notwithstanding any other provision of this section, unless the corporation or the court, in the case of a distress termination pursuant to clause (ii), has determined that reasonable efforts to consider available alternatives to termination (including, but not limited to, alternatives described in section 4042(c)(4)) have been undertaken by such person (and, in the case of a plan maintained pursuant to a collective bargaining agreement, have been undertaken by the bargaining parties in good faith bargaining), the plan may not be terminated. A participant or beneficiary of the plan or an employee organization representing such participants or beneficiaries may bring an action in the appropriate court to challenge such determination by the corporation and seek equitable relief or must be afforded an opportunity to be heard by the appropriate court if a court is making such determination.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H23E8684E06584887B68F0074F4F8573"><enum>(b)</enum><header>Additional requirements for court decrees</header><text display-inline="yes-display-inline">Section 4042(c) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1342">29 U.S.C. 1342(c)</external-xref>) is amended—</text>
<paragraph id="H85323E00933F4709895E4155A35F9ECD"><enum>(1)</enum><text>by inserting after the first sentence the following new sentences: ‘‘The court may not enter such a decree unless that court has found that reasonable efforts to consider available alternatives to termination (including, but not limited to, alternatives described in paragraph (4) have been undertaken by the plan sponsor (and, in the case of a plan maintained pursuant to a collective bargaining agreement, have been undertaken by the bargaining parties in good faith bargaining). There is a presumption that a plan need not be terminated if the plan sponsor can continue in business outside a case under title 11, United States Code (or under any similar law of a State or a political subdivision of a State), in which reorganization is sought without terminating the plan.’’; and</text></paragraph>
<paragraph id="H7D0FD2A832164D3F95FC56BD71274B6C"><enum>(2)</enum><text>in the sentence following the sentences inserted by paragraph (1), by striking <quote>the preceding sentence</quote> and inserting <quote>the first sentence of this subsection,</quote>. </text></paragraph></subsection>
<subsection id="HC22A3F5BD4CA4D0F0000ED8FED1EB408"><enum>(c)</enum><header>Right to intervene to challenge court decree</header><text display-inline="yes-display-inline">Section 4042(c) of such Act (as amended by subsection (b)) is further amended by inserting after the fourth sentence the following new sentence: ‘‘If any party consisting of the plan sponsor, a plan participant, or (in the case of a plan maintained pursuant to a collective bargaining agreement) the employee organization representing plan participants for purposes of collective bargaining disagrees with any such determination by the corporation, such party may intervene in the proceeding to challenge the determinations of the corporation.’’.</text></subsection>
<subsection id="HA1F0CE769F964927A030AAC434D97F75"><enum>(d)</enum><header>Consideration of alternatives by corporation and plan sponsor</header><text display-inline="yes-display-inline">Section 4042(c) of such Act (as amended by the preceding provisions of this section) is further amended by adding after the seventh sentence the following: ‘‘The corporation and the plan administrator may proceed with such an agreement only if they have made reasonable efforts to consider available alternatives to termination (including, but not limited to, alternatives described in paragraph (4) of this subsection) and the plan participants and beneficiaries have been provided with at least 60 days notice before such agreement is given effect. During such 60-day period, a participant or beneficiary of the plan or an employee organization representing such participants or beneficiaries may bring an action in the appropriate court to seek appropriate equitable relief if such reasonable efforts have not been made.’’.</text></subsection>
<subsection id="H9F0767C1DFB946FA876F00F52B14F139"><enum>(e)</enum><header>Efforts by the corporation at consultation with parties</header><text display-inline="yes-display-inline">Section 4042(c) of such Act is amended by adding at the end the following new paragraph:</text>
<quoted-block style="traditional" id="H677978D29C89472D939DBAECAAF0A8BF" display-inline="no-display-inline">
<paragraph id="H4CF1F7F24CF244DAAEFBED52D2BAB44C" indent="up1"><enum>(4)</enum>
<subparagraph id="HD92471F28C81427AB748EB9BDEAE017" display-inline="yes-display-inline"><enum>(A)</enum><text display-inline="yes-display-inline">Prior to making any determination referred to in the preceding provisions of this subsection, the corporation shall consult with the plan participants and (in the case of a plan maintained pursuant to a collective bargaining agreement) the employee organization representing plan participants for purposes of collective bargaining to determine whether there are any reasonable available alternatives to termination (including, but not limited to, alternatives described subparagraph (B). </text></subparagraph>
<subparagraph id="H78611A8BCC134266B4450000635310C6" indent="up1"><enum>(B)</enum><text display-inline="yes-display-inline">The reasonable alternatives to termination referred to in subparagraph (A) consist of measures which are in the best interest of plan participants and which include (but are not limited to) the following:—</text>
<clause id="H712728938DB44561A573BE8D71139973"><enum>(i)</enum><text display-inline="yes-display-inline">Financing or loans sought by any member of the plan sponsor’s controlled group, with or without assistance from the corporation, in order to obtain plan financing, including back-up guarantees to any such financing which the corporation is hereby authorized to provide for such purpose.</text></clause>
<clause id="H638D6C2FB7BF4866A6CCBFB0D21C77D4"><enum>(ii)</enum><text display-inline="yes-display-inline">New plan structures agreed to by the parties, such as transfer of plan liabilities to multiemployer plans, new benefit formulas for new hires or non-vested participants, or other plan restructuring alternatives agreed to by the parties.</text></clause>
<clause id="H70D05DFDF706471DA2250430563FA829"><enum>(iii)</enum><text display-inline="yes-display-inline">Reinsurance which the corporation is hereby authorized to obtain for the plan.</text></clause>
<clause id="H7BD8D974200D4649B3D85E65305C00EA"><enum>(iv)</enum><text display-inline="yes-display-inline">An agreement by the parties authorizing alternative funding schedules, approved by the corporation, which would modify plan funding, subject to the minimum funding requirements for the plan under part 3 of subtitle B of title I.</text></clause>
<clause id="H9BF0C6B0335A40069287559CD210B69B"><enum>(v)</enum><text display-inline="yes-display-inline">Purchase by the plan sponsor of an annuity contract to cover liabilities of the plan, which the corporation is hereby authorized to guarantee as necessary to secure such a contract.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H69412C6176B94E50B8BF38B2AC07696D"><enum>(f)</enum><header>Notice of right to challenge determinations relating to plan termination</header>
<paragraph id="H5B24CEE680E94E4490E443D05309789C"><enum>(1)</enum><header>Procedure for standard terminations</header><text display-inline="yes-display-inline">Section 4041(a)(2)(B) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1341">29 U.S.C. 1341(a)(2)(B)</external-xref>) is amended in clause (i) by striking ‘‘and’’ at the end, in clause (ii)(V) by striking ‘‘require.’’ and inserting ‘‘require, and’’, and by inserting after clause (ii) the following new clause:</text>
<quoted-block style="OLC" id="H3E0040A4C1E547A2AED7204ED151E7AD" display-inline="no-display-inline">
<clause id="HB3ED086B67D84DF09249060198E297A1"><enum>(iii)</enum><text display-inline="yes-display-inline">the right of participants and beneficiaries to challenge determinations under this section.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H015C9B45AF964AA7B95BDD221276C1B9"><enum>(2)</enum><header>Termination proceedings for distress terminations and terminations commenced by the PBGC</header><text display-inline="yes-display-inline">Section 4042(a) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1342">29 U.S.C. 1342(a)</external-xref>) is amended by adding at the end the following new sentence: ‘‘Prior to commencing proceedings under this section with respect to any plan, the corporation shall provide notice to plan participants and beneficiaries of the right to challenge determinations under this section, written in a manner likely to be understood by the participant or beneficiary.’’.</text></paragraph></subsection> </section>
<section id="H2206D8CC39B24B13BA159DF049D2D4C"><enum>302.</enum><header>Effective date of title</header><text display-inline="no-display-inline">The amendments made by this title shall apply with respect to any plans undergoing termination proceedings pursuant to section 4041 or 4042 of the Employee Retirement Income Security Act of 1974 which are pending on or after June 29, 2005.</text></section>
<enum>IV</enum><header>Recovery of benefit liabilities which are not guaranteed</header>
<section id="HE856B702283A40ED85E51E6EE2021998" section-type="subsequent-section" display-inline="no-display-inline"><enum>401.</enum><header>Amendment to title 11 of the United States Code</header> <text display-inline="no-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/11/507">Section 507(a)(1)</external-xref> of title 11, United States Code, is amended by adding at the end the following:</text>
<quoted-block style="OLC" id="H25ADB0D130A243CC8081286EDEA48BFA" display-inline="no-display-inline">
<subparagraph id="H46D042595F784ACE8034851CCDEEA251"><enum>(D)</enum><text display-inline="yes-display-inline">Subject to subparagraphs (A), (B), and (C), allowed unsecured claims for benefit liabilities to participants and beneficiaries under a single-employer plan (as defined in section 4001(a)(15) of the Employee Retirement Income Security Act of 1974) in connection with the termination of the plan, in excess of the benefits payable to the participants and beneficiaries by the Pension Benefit Guaranty Corporation under section 4022 of the Employee Retirement Income Security Act of 1974 in connection with such termination.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="HEB319137B96443FC9BB3C0E41276E445"><enum>402.</enum><header>Effective date; application of amendment</header>
<subsection id="HB3812C0E81E247AC00BC12EB37A6AD88"><enum>(a)</enum><header>Effective date</header><text>Except as provided in subsection (b), section 401 and the amendment made by such section shall take effect on October 18, 2005, or the date of the enactment of this Act, whichever date is later.</text></subsection>
<subsection id="HBCF1367E46A3407291C9FE8572E5F71F"><enum>(b)</enum><header>Application of amendment</header><text>The amendment made by section 401 shall not apply with respect to cases commenced under title 11 of the United States Code before the effective date of this section.</text></subsection></section>