[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 991 Introduced in Senate (IS)]







109th CONGRESS
  1st Session
                                 S. 991

To amend title I of the Employee Retirement Income Security Act of 1974 
to limit the availability of benefits under an employer's nonqualified 
  deferred compensation plans in the event that any of the employer's 
   defined benefit pension plans are subjected to a distress or PBGC 
     termination in connection with bankruptcy reorganization or a 
   conversion to a cash balance plan, to provide appropriate funding 
    restrictions in connection with the maintenance of nonqualified 
deferred compensation plans, and to provide for appropriate disclosure 
       with respect to nonqualified deferred compensation plans.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 10, 2005

   Mr. Kennedy (for himself, Mr. Durbin, Mr. Harkin, and Mr. Akaka) 
introduced the following bill; which was read twice and referred to the 
          Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
To amend title I of the Employee Retirement Income Security Act of 1974 
to limit the availability of benefits under an employer's nonqualified 
  deferred compensation plans in the event that any of the employer's 
   defined benefit pension plans are subjected to a distress or PBGC 
     termination in connection with bankruptcy reorganization or a 
   conversion to a cash balance plan, to provide appropriate funding 
    restrictions in connection with the maintenance of nonqualified 
deferred compensation plans, and to provide for appropriate disclosure 
       with respect to nonqualified deferred compensation plans.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Pension Fairness 
and Full Disclosure Act of 2005''.
    (b) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purpose.
         TITLE I--FAIRNESS IN PLAN TERMINATIONS AND CONVERSIONS

Sec. 101. Termination fairness standard for nonqualified deferred 
                            compensation plans in connection with 
                            pension plan terminations based on 
                            bankruptcy reorganization or in connection 
                            with conversions to cash balance plans.
Sec. 102. Penalty on funding nonqualified deferred compensation plans 
                            in the event of a pension plan termination 
                            based on bankruptcy reorganization or a 
                            conversion of a pension plan to a cash 
                            balance plan.
                     TITLE II--FAIRNESS IN FUNDING

Sec. 201. Treatment under ERISA of employers that fund nonqualified 
                            deferred compensation plans while 
                            maintaining underfunded defined benefit 
                            plans.
Sec. 202. Penalty on funding nonqualified deferred compensation plans 
                            while maintaining underfunded defined 
                            benefit plans.
                   TITLE III--FAIRNESS IN DISCLOSURE

Sec. 301. Disclosure with respect to benefits under nonqualified 
                            deferred compensation plans.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds as follows:
            (1) The pension system sponsored by private employers is in 
        a weakened state due to industry-wide crises, changing market 
        forces, and the pressures of globalization.
            (2) Employers increasingly are terminating or reducing the 
        benefits provided under traditional defined benefit pension 
        plans.
            (3) More than 44,000,000 workers, retirees, and their 
        families depend on defined benefit pension plans as a critical 
        component of their retirement security in addition to Social 
        Security.
            (4) Many defined benefit pension plans are underfunded and 
        the Pension Benefit Guaranty Corporation, the agency that 
        insures traditional pensions, has also gone into deficit.
            (5) Congress in enacting the Employee Retirement Income 
        Security Act of 1974 intended employers to adequately fund 
        their pension plans and did not intend for the Pension Benefit 
        Guaranty Corporation to be used as a means for restructuring 
        companies to escape their unfunded pension liabilities, or 
        circumvent collective bargaining obligations.
            (6) Cash balance pension plans often reduce traditional 
        defined benefit pension obligations and adequate standards do 
        not exist to adequately protect the pensions of pension plan 
        participants, particularly older participants.
            (7) Corporate executives often preserve or enhance 
        executive pension and other benefits at the same time the 
        benefits of non-highly paid employees are reduced.
    (b) Purpose.--It is the purpose of this Act to better protect the 
retirement benefits afforded to workers and retirees by protecting the 
solvency of the Pension Benefit Guaranty Corporation and ensuring 
equitable treatment of corporate executives as compared to treatment 
provided to other employees when restructuring employers shift unfunded 
pension liabilities onto the Pension Benefit Guaranty Corporation or 
convert to cash balance pension plans without adequately protecting the 
retirement security of older workers.

         TITLE I--FAIRNESS IN PLAN TERMINATIONS AND CONVERSIONS

SEC. 101. TERMINATION FAIRNESS STANDARD FOR NONQUALIFIED DEFERRED 
              COMPENSATION PLANS IN CONNECTION WITH PENSION PLAN 
              TERMINATIONS BASED ON BANKRUPTCY REORGANIZATION OR IN 
              CONNECTION WITH CONVERSIONS TO CASH BALANCE PLANS.

    (a) In General.--Section 206 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1056) is amended by adding at the end 
the following new subsection:
    ``(g) Termination Fairness Standard for Nonqualified Deferred 
Compensation Plans in Connection With Pension Plan Terminations Based 
on Bankruptcy Reorganization or in Connection With Conversions to Cash 
Balance Plans.--
            ``(1) In general.--In any case in which a corporation is a 
        plan sponsor of a defined benefit plan with respect to which a 
        plan amendment is adopted that has the effect of--
                    ``(A) implementing a distress termination of the 
                plan under section 4041(c) based on bankruptcy 
                reorganization or a termination of the plan initiated 
                by the Pension Benefit Guaranty Corporation under 
                section 4042 based on bankruptcy reorganization, in any 
                case in which the plan is not sufficient for guaranteed 
                benefits (within the meaning of section 4041(d)(2)) as 
                of the proposed termination date; or
                    ``(B) converting such plan to a cash balance plan, 
                in any case in which the amendment--
                            ``(i) results in a significant reduction in 
                        the rate of future benefit accruals (within the 
                        meaning of section 204(h)(1)) of participants 
                        with at least 10 years of service under the 
                        plan; or
                            ``(ii) does not provide for an election by 
                        affected participants with at least 10 years of 
                        service under the plan (and their 
                        beneficiaries) to retain coverage under the 
                        terms of the plan as in effect immediately 
                        prior to the amendment,
        any covered deferred compensation plan established or 
        maintained by such plan sponsor after the date of the adoption 
        of such plan amendment shall meet the termination fairness 
        standard of this subsection with respect to such plan 
        amendment.
            ``(2) Termination fairness standard.--A covered deferred 
        compensation plan established or maintained by a plan sponsor 
        described in paragraph (1) meets the termination fairness 
        standard of this subsection with respect to a plan amendment 
        described in paragraph (1) if, during the 5-year period 
        beginning on the date of the adoption of such plan amendment--
                    ``(A) no amount of deferred compensation accrues to 
                a disqualified individual under the terms of such 
                covered deferred compensation plan (irrespective of 
                whether the accrual in deferred compensation is 
                expressed in the form of a promise, a guarantee, or any 
                other representation); and
                    ``(B) in the case of a covered deferred 
                compensation plan established during or after the 1-
                year period preceding the notice date (or any amendment 
                to a covered deferred compensation plan if such 
                amendment is adopted during or after such 1-year 
                period), no distribution of accrued deferred 
                compensation is made under such plan (or such 
                amendment) to a disqualified individual.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) Cash balance plan.--
                            ``(i) In general.--The term `cash balance 
                        plan' means a defined benefit plan under which 
                        the accrued benefit is expressed to 
                        participants and beneficiaries as an amount 
                        other than an annual benefit commencing at 
                        normal retirement age.
                            ``(ii) Regulations to include similar or 
                        other hybrid plans.--The Secretary shall issue 
                        regulations which provide that a defined 
                        benefit plan (or any portion of such a plan) 
                        which has an effect similar to a plan described 
                        in clause (i) shall be treated as a cash 
                        balance plan. Such regulations may provide that 
                        if a plan sponsor represents in communications 
                        to participants and beneficiaries that a plan 
                        amendment results in a plan being described in 
                        the preceding sentence, such plan shall be 
                        treated as a cash balance plan.
                    ``(B) Notice date.--The term `notice date' means, 
                with respect to an amendment described in paragraph 
                (1)--
                            ``(i) in the case of a distress termination 
                        under section 4041(c), the date of the advance 
                        notice of intent to terminate provided pursuant 
                        to section 4041(a)(2);
                            ``(ii) in the case of a termination 
                        initiated by the Pension Benefit Guaranty 
                        Corporation under section 4042, the date of the 
                        application to the court under section 4042(c); 
                        and
                            ``(iii) in the case of a conversion to a 
                        cash balance plan, the date of the adoption of 
                        the amendment.
                    ``(C) Covered deferred compensation plan.--
                            ``(i) In general.--The term `covered 
                        deferred compensation plan' means any plan 
                        providing for the deferral of compensation of a 
                        disqualified individual, whether or not--
                                    ``(I) compensation of the 
                                disqualified individual which is 
                                deferred under such plan is subject to 
                                substantial risk of forfeiture;
                                    ``(II) the disqualified 
                                individual's rights to the compensation 
                                deferred under the plan are no greater 
                                than the rights of a general creditor 
                                of the plan sponsor;
                                    ``(III) all amounts set aside 
                                (directly or indirectly) for purposes 
                                of paying the deferred compensation 
                                (including income), and all income 
                                attributable to such amounts, remain 
                                (until made available to the 
                                disqualified individual or other 
                                beneficiary) solely the property of the 
                                plan sponsor (without being restricted 
                                to the provision of benefits under the 
                                plan);
                                    ``(IV) the amounts referred to in 
                                subclause (III) are available to 
                                satisfy the claims of the plan 
                                sponsor's general creditors at all 
                                times (not merely after bankruptcy or 
                                insolvency); and
                                    ``(V) some or all of the 
                                compensation of the disqualified 
                                individual which is deferred under such 
                                plan is guaranteed by an insurance 
                                company, insurance service, or other 
                                similar organization.
                            ``(ii) Exception for qualified plans.--Such 
                        term shall not include a plan that is--
                                    ``(I) described in section 
                                219(g)(5)(A) of the Internal Revenue 
                                Code of 1986; or
                                    ``(II) an eligible deferred 
                                compensation plan (as defined in 
                                section 457(b) of such Code) of an 
                                eligible employer described in section 
                                457(e)(1)(A) of such Code.
                            ``(iii) Plan includes arrangements, etc.--
                        For purposes of this subparagraph, the term 
                        `plan' includes any agreement or arrangement.
                    ``(D) Disqualified individual.--The term 
                `disqualified individual' means a director or executive 
                officer of the plan sponsor.
                    ``(E) Termination based on bankruptcy 
                reorganization.--A termination of a plan which is a 
                distress termination under section 4041(c) or a 
                termination instituted by the Pension Benefit Guaranty 
                Corporation under section 4042 shall be treated as 
                based on bankruptcy reorganization if such termination 
                is based in whole or in part on the filing, by or 
                against any person who is a contributing sponsor of 
                such plan or a member of such sponsor's controlled 
                group, of a petition seeking reorganization in a case 
                under title 11, United States Code, or under any 
                similar law of a State or political subdivision of a 
                State (or such a case in which liquidation is sought 
                has been converted to a case in which reorganization is 
                sought).
                    ``(F) Title iv terminology.--Any term used in this 
                subsection which is defined in section 4001(a) shall 
                have the meaning provided such term in section 4001(a).
            ``(4) Special rules.--
                    ``(A) Coordinated benefits.--If the benefits of 2 
                or more defined benefit plans established or maintained 
                by an employer are coordinated in such a manner as to 
                have the effect of the adoption of an amendment 
                described in paragraph (1), the sponsor of the defined 
                benefit plan or plans providing for such coordination 
                shall be treated as having adopted such a plan 
                amendment as of the date such coordination begins.
                    ``(B) Multiple amendments.--The Secretary shall 
                issue regulations to prevent the avoidance of the 
                purposes of this subsection through the use of 2 or 
                more plan amendments rather than a single amendment.
                    ``(C) Controlled groups, etc.--For purposes of this 
                subsection, all persons treated as a single employer 
                under subsection (b), (c), (m), or (o) of section 414 
                of the Internal Revenue Code of 1986 shall be treated 
                as 1 employer.
                    ``(D) Treatment of earnings.--References to 
                deferred compensation shall be treated as including 
                references to income attributable to such compensation 
                or such income.
            ``(5) Waiver.--
                    ``(A) In general.--In the case of any plan 
                amendment having the effect of a termination described 
                in paragraph (1)(A), the Secretary may waive the 
                application of any requirement of the termination 
                fairness standard of section paragraph (2) with respect 
                to any disqualified individual who first commences 
                service for the plan sponsor after the notice date with 
                respect to such plan amendment. The Secretary may grant 
                any such waiver in the case of any such plan amendment 
                with respect to any such disqualified individual only 
                after consultation with the Pension Benefit Guaranty 
                Corporation.
                    ``(B) Requirements for waiver.--A waiver may be 
                granted under subparagraph (A) only--
                            ``(i) upon the filing with the Secretary by 
                        the plan sponsor of an application for such 
                        waiver, in such form and manner as shall be 
                        prescribed in regulations of the Secretary;
                            ``(ii) upon a showing, to the satisfaction 
                        of the Secretary, that such waiver is a 
                        business necessity for the plan sponsor, as 
                        determined under such regulations, and is in 
                        the interest of plan participants and 
                        beneficiaries, as determined under such 
                        regulations; and
                            ``(iii) after the participants, in such 
                        form and manner as shall be provided in such 
                        regulations, have been notified of the filing 
                        of the application for the waiver and have been 
                        provided a reasonable opportunity to provide in 
                        advance comments to the Secretary regarding the 
                        proposed waiver.
            ``(6) Effect of waiver granted by secretary.--To the extent 
        that any requirement of the termination fairness standard of 
        this section is waived by the Secretary with respect to any 
        disqualified individual under paragraph (5) in the case of any 
        plan amendment having the effect of a termination described in 
        paragraph (1)(A), such requirement under the termination 
        fairness standard of paragraph (2) shall not apply with respect 
        to such individual in the case of such plan amendment.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to--
            (1) plan amendments adopted on or after May 10, 2005; and
            (2) plan amendments adopted before such date implementing a 
        plan termination as described in section 206(g)(1) of the 
        Employee Retirement Income Security Act of 1974 (as added by 
        this section) based on a bankruptcy reorganization in a case 
        under title 11 of the United States Code (or under any similar 
        law of a State or a political subdivision of a State) pending 
        on such date.

SEC. 102. PENALTY ON FUNDING NONQUALIFIED DEFERRED COMPENSATION PLANS 
              IN THE EVENT OF A PENSION PLAN TERMINATION BASED ON 
              BANKRUPTCY REORGANIZATION OR A CONVERSION OF A PENSION 
              PLAN TO A CASH BALANCE PLAN.

    (a) In General.--Section 502 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1132) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (8), by striking ``; or'' and 
                inserting a semicolon;
                    (B) in paragraph (9), by striking the period and 
                inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(10) by a fiduciary of a defined benefit plan described 
        in section 206(g) to enjoin any act or practice that violates 
        such section and to obtain relief described under subsection 
        (c)(8).''; and
            (2) in subsection (c), by--
                    (A) redesignating paragraph (8) as paragraph (9); 
                and
                    (B) inserting after paragraph (7) the following:
            ``(8) In an action pursuant to subsection (a)(10), if the 
        court finds a violation of section 206(g), the court shall 
        order the plan sponsor to pay to the defined benefit plan an 
        amount equal to the amount of the accrual described in section 
        206(g)(2)(A) comprising the failure or the amount of the 
        distribution described in section 206(g)(2)(B) comprising the 
        failure, whichever is applicable.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to--
            (1) plan amendments adopted on or after May 10, 2005; and
            (2) plan amendments adopted before such date implementing a 
        plan termination as described in section 206(g)(1) of the 
        Employee Retirement Income Security Act of 1974 (as added by 
        this section) based on a bankruptcy reorganization in a case 
        under title 11 of the United States Code (or under any similar 
        law of a State or a political subdivision of a State) pending 
        on such date.

                     TITLE II--FAIRNESS IN FUNDING

SEC. 201. PROHIBITION UNDER ERISA AGAINST FUNDING NONQUALIFIED DEFERRED 
              COMPENSATION PLANS WHILE MAINTAINING UNDERFUNDED DEFINED 
              BENEFIT PLANS.

    (a) In General.--Part 3 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 is amended--
            (1) by redesignating section 308 as section 309; and
            (2) by inserting after section 307 the following new 
        section:

``SEC. 308. FUNDING REQUIREMENTS WITH RESPECT TO UNDERFUNDED SINGLE-
              EMPLOYER DEFINED BENEFIT PLAN VIOLATED BY FUNDING OF 
              COVERED DEFERRED COMPENSATION PLAN.

    ``(a) In General.--In any case in which, as of the valuation date 
for any plan year of a defined benefit plan which is a single-employer 
plan, the funded current liability percentage of such plan is less than 
75 percent, during the period beginning with such date and ending 
immediately before the valuation date for the following plan year--
            ``(1) the plan sponsor of such defined benefit plan (or any 
        member of the plan sponsor's controlled group) may not 
        contribute to a covered deferred compensation plan maintained 
        by the plan sponsor (or any such member); and
            ``(2) a disqualified individual may not accrue any amount 
        of deferred compensation under the terms of any covered 
        deferred compensation plan maintained by the plan sponsor of 
        such defined benefit plan (or by any member of the plan 
        sponsor's controlled group), irrespective of whether the 
        accrual in deferred compensation is expressed in the form of a 
        promise, a guarantee, or any other representation.
    ``(b) Definitions; Special Rule.--For purposes of this section--
            ``(1) The term `funded current liability percentage' has 
        the meaning provided in section 302(d)(8)(B).
            ``(2) The term `covered deferred compensation plan' has the 
        meaning provided in section 206(g)(3)(C).
            ``(3) The term `disqualified individual' has the meaning 
        provided in section 206(g)(3)(D).
            ``(4) The term `controlled group' has the meaning provided 
        in section 302(c)(11)(B)(ii).
            ``(5) Any reference to deferred compensation shall be 
        treated as including references to income attributable to such 
        compensation or income.
    ``(c) Waiver.--
            ``(1) In general.--The Secretary may waive the application 
        of any requirement with respect to any contribution described 
        in subsection (a)(1) or any accrual described in subsection 
        (a)(2). The Secretary may grant such waiver only after 
        consultation with the Pension Benefit Guaranty Corporation.
            ``(2) Requirements for waiver.--A waiver may be granted 
        under paragraph (1) only--
                    ``(A) upon the filing with the Secretary by the 
                plan sponsor of an application for such waiver, in such 
                form and manner as shall be prescribed in regulations 
                of the Secretary;
                    ``(B) upon a showing, to the satisfaction of the 
                Secretary, that such waiver is a business necessity for 
                the plan sponsor, as determined under such regulations, 
                and is in the interest of plan participants and 
                beneficiaries, as determined under such regulations; 
                and
                    ``(C) after the participants, in such form and 
                manner as shall be provided in such regulations, have 
                been notified of the filing of the application for the 
                waiver and have been provided a reasonable opportunity 
                to provide in advance comments to the Secretary 
                regarding the proposed waiver.
    ``(d) Effect of Waiver.--To the extent that a waiver is granted by 
the Secretary under subsection (c) with respect to any contribution 
described in subsection (a)(1) or any accrual described in subsection 
(a)(2), the requirements of subsection (a) shall not apply with respect 
to such contribution or accrual.''.
    (b) Clerical Amendment.--The table of contents in section 1 of such 
Act is amended by striking the item relating to section 308 and 
inserting the following new items:

        ``Sec. 308. Funding requirements with respect to underfunded 
                            single-employer defined benefit plan 
                            violated by funding of covered deferred 
                            compensation plan.
        ``Sec. 309. Effective dates.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to plan years beginning on or after January 1, 2006.

SEC. 202. PENALTY ON FUNDING NONQUALIFIED DEFERRED COMPENSATION PLANS 
              WHILE MAINTAINING UNDERFUNDED DEFINED BENEFIT PLANS.

    (a) In General.--Subsection 502 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1132) is amended--
            (1) in subsection (a)(10) (as added by section 101), by 
        inserting ``or 308'' after ``206(g)''; and
            (2) in subsection (c) (as amended by section 101), by 
        amending paragraph (8) to read as follows:
            ``(8) In an action pursuant to subsection (a)(10), if the 
        court finds a violation--
                    ``(A) of section 206(g), the court shall order the 
                plan sponsor to pay to the defined benefit plan an 
                amount equal to the amount of the accrual described in 
                section 206(g)(2)(A) comprising the failure or the 
                distribution described in section 206(g)(2)(B) 
                comprising the failure, whichever is applicable; and
                    ``(B) of section 308, the court shall order the 
                plan sponsor to pay to the defined benefit plan an 
                amount equal to the amount of any deferred compensation 
                accrued to a disqualified individual in violation of 
                such section.''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to plan years beginning on or after January 1, 2006.

                   TITLE III--FAIRNESS IN DISCLOSURE

SEC. 301. DISCLOSURE WITH RESPECT TO BENEFITS UNDER NONQUALIFIED 
              DEFERRED COMPENSATION PLANS.

    (a) In General.--Section 101 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1021) is amended--
            (1) by redesignating subsection (j) as subsection (k); and
            (2) by inserting after subsection (i) the following new 
        subsection:
    ``(j) Disclosure With Respect to Benefits Under Covered Deferred 
Compensation Plans.--
            ``(1) In general.--In any case in which--
                    ``(A) an amendment to a pension plan is adopted 
                which has the effect of--
                            ``(i) eliminating future benefit accruals 
                        under the plan;
                            ``(ii) converting the plan to a cash 
                        balance plan in a case described in section 
                        206(g)(1)(B);
                            ``(iii) reducing the rate of future benefit 
                        accruals under the plan (in the case of a 
                        defined benefit plan); or
                            ``(iv) reducing future employer 
                        contributions under the plan (in the case of a 
                        defined contribution plan); or
                    ``(B) the plan administrator of a pension plan has 
                filed under section 4041(a)(2) a notice of intent to 
                terminate such plan in a distress termination under 
                section 4041(c) based on bankruptcy reorganization or, 
                in advance of filing such a notice, has filed a motion 
                with the court in the proceedings relating to such 
                bankruptcy reorganization seeking approval to commence 
                proceedings for such a distress termination,
        the plan administrator shall provide to each plan participant 
        and beneficiary a notice under this subsection with respect to 
        each covered deferred compensation plan maintained by the plan 
        sponsor of the pension plan (and each member of the plan 
        sponsor's controlled group).
            ``(2) Notice.--A notice required under this subsection with 
        respect to a covered deferred compensation plan shall set 
        forth, in language calculated to be understood by the average 
        pension plan participant--
                    ``(A) a complete summary description of the terms 
                of the covered deferred compensation plan;
                    ``(B) the actuarial present value of the benefit 
                liabilities of the covered deferred compensation plan, 
                as of the most recent valuation date of such plan;
                    ``(C) any additional cost to the plan sponsor (or 
                to the member of the plan sponsor's controlled group), 
                for the preceding plan year of such plan, of 
                maintaining such covered deferred compensation plan, 
                including tax expenditures attributable to the 
                maintenance of such plan (or, if not known on the date 
                of the notice, a reasonable estimation thereof); and
                    ``(D) in any case described in paragraph (1)(B)--
                            ``(i) a statement that the notice of intent 
                        to terminate or motion has been filed; and
                            ``(ii) a statement of the extent to which 
                        the actuarial present value of benefit 
                        liabilities of the pension plan referred to in 
                        paragraph (1)(B) is expected to be reduced by 
                        reason of the termination.
            ``(3) Timing of notice.--A notice under this subsection 
        shall be provided--
                    ``(A) not later than 15 days after--
                            ``(i) the date of the adoption of the 
                        amendment described in paragraph (1)(A); or
                            ``(ii) the date of the notice of intent to 
                        terminate described in paragraph (1)(B),
                (as the case may be), and
                    ``(B) in the same manner as is provided under 
                section 104(b)(1) with respect to summary descriptions 
                of plan modifications or changes.
            ``(4) Definitions; special rule.--For purposes of this 
        subsection--
                    ``(A) The term `cash balance plan' has the meaning 
                provided in section 206(g)(3)(A).
                    ``(B) The term `covered deferred compensation plan' 
                has the meaning provided in section 206(g)(3)(C).
                    ``(C) The term `controlled group' has the meaning 
                provided in section 302(c)(11)(B)(ii).
                    ``(D) Whether a termination of a plan which is a 
                distress termination under section 4041(c) is based on 
                bankruptcy reorganization shall be determined as 
                provided in section 206(g)(3)(E).''.
    (b) Enforcement.--Section 502(c)(1) of such Act (29 U.S.C. 
1132(c)(1)) is amended by striking ``or section 101(e)(1)'' and 
inserting ``or subsection (e)(1) or (j)(1) of section 101''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to--
            (1) plan amendments adopted on or after January 1, 2006; 
        and
            (2) notices of intent to terminate or motions (described in 
        section 101(j)(1)(B) of the Employee Retirement Income Security 
        Act of 1974) (as added by this section) filed on or after such 
        date.
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