1.Treatment of liability for certain multiple employer plans
(a)In the case of an applicable pension plan—
(1)if an eligible employer elects the application of subsection (b), any liability of the employer with respect to the applicable pension plan shall be determined under subsection (b), and
(2)if an eligible employer does not make such election, any liability of the employer with respect to the applicable pension plan shall be determined under subsection (c).
(b)Election to spin off liability
(1)If an eligible employer elects, within 180 days after the date of the enactment of this Act, to have this subsection apply, the applicable pension plan shall be treated as having, effective January 1, 2006, spun off such employer's allocable portion of the plan's assets and liabilities to an eligible spunoff plan and the employer's liability with respect to the applicable pension plan shall be determined by reference to the eligible spunoff plan in the manner provided under paragraph (2). The employer's liability, as so determined, shall be in lieu of any other liability to the Pension Benefit Guaranty Corporation or to the applicable pension plan with respect to the applicable pension plan.
(2)Liability of employers electing spinoff
(A)Ongoing funding liability
(i)In the case of an eligible spunoff plan, the amendments made by section 401, and subtitles A and B of title I, of the Pension Protection Act of 2006 shall not apply to plan years beginning before the first plan year for which the plan ceases to be an eligible spunoff plan (or, if earlier, January 1, 2017), and except as provided in clause (ii), the employer maintaining such plan shall be liable for ongoing contributions to the eligible spunoff plan on the same terms and subject to the same conditions as under the provisions of the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 as in effect before such amendments. Such liability shall be in lieu of any other liability to the Pension Benefit Guaranty Corporation or to the applicable pension plan with respect to the applicable pension plan.
(ii)In applying section 302(b)(5)(B) of the Employee Retirement Income Security Act of 1974 and section 412(b)(5)(B) of the Internal Revenue Code of 1986 (as in effect before the amendments made by subtitles A and B of title I of the Pension Protection Act of 2006) and in applying section 4006(a)(3)(E)(iii) of such Act (as in effect before the amendments made by section 401 of such Act) to an eligible spunoff plan for plan years beginning after December 31, 2007, and before the first plan year to which such amendments apply, the third segment rate determined under section 303(h)(2)(C)(iii) of such Act and section 430(h)(2)(C)(iii) of such Code (as added by such amendments) shall be used in lieu of the interest rate otherwise used.
(B)If an eligible spunoff plan terminates under title IV of the Employee Retirement Income Security Act of 1974 on or before December 31, 2010, the liability of the employer maintaining such plan resulting from such termination under section 4062 of the Employee Retirement Income Security Act of 1974 shall be determined in accordance with the assumptions and methods described in subsection (c)(2)(A). The employer's liability, as so determined, shall be in lien of any other liability to the Pension Benefit Guaranty Corporation or to the applicable pension plan with respect to the applicable pension plan.
(c)Liability of employers not electing spinoff
(1)If an applicable pension plan is terminated under the Employee Retirement Income Security Act of 1974, an eligible employer which does not make the election described in subsection (b) shall be liable to the corporation with respect to the applicable pension plan (in lieu of any other liability to the Pension Benefit Guaranty Corporation or to the applicable pension plan with respect to the applicable pension plan ) in an amount equal to the fractional portion of the adjusted unfunded benefit liabilities of such plan as of December 31, 2005, determined without regard to any adjusted unfunded benefit liabilities to be transferred to an eligible spunoff plan pursuant to subsection (b).
(2)For purposes of this subsection—
(A)Adjusted unfunded benefit liabilitiesThe term adjusted unfunded benefit liabilities means the amount of unfunded benefit liabilities (as defined in section 4001(a)(18) of the Employee Retirement Income Security Act of 1974), except that the interest assumption shall be the rate of interest under section 302(b) of the Employee Retirement Income Security Act of 1974 and section 412(b) of the Internal Revenue Code of 1986, as in effect before the amendments made by the Pension Protection Act of 2006, for the most recent plan year for which such rate exists.
(B)The term fractional portion means a fraction, the numerator of which is the amount required to be contributed to the applicable pension plan for the 5 plan years ending before December 31, 2005, by such employer, and the denominator of which is the amount required to be contributed to such plan for such plan years by all employers which do not make the election described in subsection (b).
(d)For purposes of this section—
(1)The term applicable pension plan means a single employer plan which—
(A)was established in the State of Alaska on March 18, 1967, and
(B)as of January 1, 2005, had 2 or more contributing sponsors at least 2 of which were not under common control.
(2)The term allocable portion means, with respect to any eligible employer making an election under subsection (b), the portion of an applicable pension plan’s liabilities and assets which bears the same ratio to all such liabilities and assets as such employer's share (determined under subsection (c) as if no eligible employer made an election under subsection (b)) of the excess (if any) of—
(A)the liabilities of the plan, valued in accordance with subsection (c), over
(B)the assets of the plan, bears to the total amount of such excess.
(3)An eligible employer is an employer which participated in an eligible multiple employer plan on or after January 1, 2000.