II 111th CONGRESS 2d Session S. 3006 IN THE SENATE OF THE UNITED STATES February 9 (legislative day, February 8), 2010 Mr. Schumer 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 allow multiemployer plans to amortize losses from certain fraudulent investment schemes over a 40-year period.

1.

Amortization of losses from qualified fraudulent investment schemes

(a)

Amendment to ERISA

Section 304(b) of the Employee Retirement Income Security Act of 1974 is amended by adding at the end the following new paragraph: (8)

Amortization of losses from qualified fraudulent investment schemes

(A)

Plan sponsor election

Notwithstanding any other provision of this subsection, the plan sponsor of a multiemployer plan may elect to charge the total amount of the net investment losses (if any) which are incurred in either or both of the first two plan years ending after August 31, 2008, and which are attributable to losses from qualified fraudulent investment schemes as an item separate from other experience losses, to be amortized in equal annual installments (until fully amortized) over a period of 40 plan years. (B)

Losses from qualified fraudulent investment schemes

For purposes of this paragraph, the determination as to whether losses are from qualified fraudulent investment schemes shall be determined under rules prescribed by the Secretary that are substantially similar to the rules prescribed by the Secretary for purposes of determining whether a loss from such an arrangement is a theft loss for purposes of section 165 of the Internal Revenue Code of 1986. . (b)

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 new paragraph: (8)

Amortization of losses from qualified fraudulent investment schemes

(A)

Plan sponsor election

Notwithstanding any other provision of this subsection, the plan sponsor of a multiemployer plan may elect to charge the total amount of the net investment losses (if any) which are incurred in either or both of the first two plan years ending after August 31, 2008, and which are attributable to losses from qualified fraudulent investment schemes as an item separate from other experience losses, to be amortized in equal annual installments (until fully amortized) over a period of 40 plan years. (B)

Losses from qualified fraudulent investment schemes

For purposes of this paragraph, the determination as to whether losses are from qualified fraudulent investment schemes shall be determined under rules prescribed by the Secretary that are substantially similar to the rules prescribed by the Secretary for purposes of determining whether a loss from such an arrangement is a theft loss for purposes of section 165 of the Internal Revenue Code of 1986. . (c)

Effective date

The amendments made by this section shall take effect as of the first day of the first plan year beginning after August 31, 2008, except that any election a plan makes pursuant to this section that affects the plan's funding standard account for the first plan year beginning after August 31, 2008, shall be disregarded for purposes of applying the provisions of section 305 of the Employee Retirement Income Security Act of 1974 and section 432 of the Internal Revenue Code of 1986 to such plan year.