[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3157 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 3157

 To amend the Employee Retirement Income Security Act of 1974 and the 
   Internal Revenue Code of 1986 to allow time for pensions to fund 
benefit obligations in light of economic circumstances in the financial 
                markets of 2008, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 23, 2010

   Mr. Casey (for himself, Mr. Brown of Ohio, Ms. Stabenow, and Mr. 
    Burris) introduced the following bill; which was read twice and 
  referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
 To amend the Employee Retirement Income Security Act of 1974 and the 
   Internal Revenue Code of 1986 to allow time for pensions to fund 
benefit obligations in light of economic circumstances in the financial 
                markets of 2008, 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 ``Create Jobs and Save Benefits Act of 
2010''.

SEC. 2. MULTIEMPLOYER PLAN MERGERS AND ALLIANCES.

    (a) Multiemployer Plan Alliances.--
            (1) Amendments to erisa.--
                    (A) Section 4231 of the Employee Retirement Income 
                Security Act of 1974 is amended by adding at the end 
                the following new subsection:
    ``(e) Multiemployer Plan Alliances.--
            ``(1) In general.--The plan sponsor of a multiemployer plan 
        into which another multiemployer plan (referred to in this 
        subsection as the `allied plan') has been merged in accordance 
        with this section may designate the merger as an alliance to 
        which the rules of this subsection apply by amending such 
        sponsor's plan--
                    ``(A) to identify the allied plan, and
                    ``(B) to delineate the terms of operation of the 
                alliance, including the allocation of employer 
                contributions and experience gains and losses between 
                the merged plan and the frozen allied plan.
            ``(2) Applicable provisions.--Except to the extent 
        otherwise provided in the plan amendment under paragraph (1), 
        sections 302, 304, and 305, part 1 of subtitle E, sections 
        4244A and 4281, part 3 of subtitle E, and section 4261 shall 
        apply to the frozen allied plan and the plan into which the 
        allied plan was merged as if they were separate plans.
            ``(3) Frozen allied plan.--
                    ``(A) In general.--The term `frozen allied plan' 
                means a plan--
                            ``(i) which comprises the assets and 
                        liabilities of the allied plan as if it had 
                        been amended, effective immediately before the 
                        effective date of the merger, to cease all 
                        benefit accruals, and
                            ``(ii) which is treated in part as a 
                        separate plan from the merged plan, as provided 
                        in subparagraphs (B) and (C) and paragraph (2).
                    ``(B) Employers maintaining plan.--The employers 
                that were obligated to contribute to the allied plan 
                immediately before the effective date of the merger, 
                and any successors thereto whether by sale, 
                reorganization, or otherwise, shall be considered to be 
                the employers maintaining the frozen allied plan to the 
                extent they continue to have an obligation to 
                contribute with respect to participants or facilities 
                covered by the allied plan before such effective date.
                    ``(C) Participants and beneficiaries.--The 
                participants and beneficiaries of the allied plan 
                immediately before the effective date of the merger 
                shall be considered to be the participants and 
                beneficiaries of the frozen allied plan on and after 
                such date.
            ``(4) Treatment of merged plan as single plan.--Except as 
        provided in paragraphs (2) and (3), the allied plan and the 
        plan into which it has been merged shall be treated as a single 
        plan.
            ``(5) Other rules.--
                    ``(A) Adoption of initial plan amendment.--The plan 
                amendment initially designating a merger as an 
                alliance, identifying the allied plan, and delineating 
                the terms of the alliance must be adopted by no later 
                than the last day of the plan year in which the merger 
                takes effect.
                    ``(B) Subsequent amendments.--The initial plan 
                amendment described in subparagraph (A) may 
                subsequently be modified or repealed, except that the 
                plan shall give notice of any such change to the 
                employers and participants with respect to the allied 
                plan at least 15 days before such subsequent amendment 
                takes effect.
                    ``(C) Discretion to treat mergers differently.--The 
                plan sponsor of a multiemployer plan may, in its 
                discretion, treat some mergers as alliances and others 
                as full mergers, and may prescribe different terms of 
                operation for different alliances, if the basis for 
                such disparate treatment is not unreasonable.''.
                    (B) Subsection (b) of section 4231 of such Act is 
                amended by striking ``and'' at the end of paragraph 
                (3), by striking the period at the end of paragraph (4) 
                and inserting ``; and'', and by adding at the end the 
                following new paragraph:
            ``(5) a merger that is designated as an alliance under 
        subsection (e) shall not be treated as failing to meet any of 
        the criteria of this subsection solely because benefits under 
        the allied plan are, or are expected to be, reduced or 
        eliminated pursuant to section 305 as a result of the 
        endangered or critical status of the frozen allied plan.''.
                    (C) Section 404(a) of such Act is amended by adding 
                at the end the following new paragraph:
            ``(3) With respect to a merger of multiemployer plans, 
        including a merger that is designated as an alliance under 
        section 4231(e), the plan sponsors of a plan which is merging 
        with another plan shall be considered to meet the requirements 
        of paragraph (1)(A) if such plan sponsors determine that the 
        merger is not reasonably likely to be adverse to the long-term 
        interests of the participants and beneficiaries of the plan for 
        which such plan sponsors are responsible prior to such 
        merger.''.
                    (D) Section 4231(c) of such Act is amended by 
                striking ``The merger of multiemployer plans or the 
                transfer'' and inserting ``The merger of multiemployer 
                plans, including a merger that is designated as an 
                alliance, or the transfer''.
            (2) Amendment to internal revenue code of 1986.--Section 
        412 of the Internal Revenue Code of 1986 is amended by adding 
        at the end the following new subsection:
    ``(f) Multiemployer Plan Alliances.--
            ``(1) In general.--Except to the extent otherwise provided 
        in the plan amendment under section 4231(e)(1) of the Employee 
        Retirement Income Security Act of 1974 designating a 
        multiemployer plan merger as an alliance, this section and 
        sections 431 and 432 shall apply to the frozen allied plan and 
        the plan into which the allied plan was merged as if they were 
        separate plans.
            ``(2) Employers maintaining plan.--The employers that were 
        obligated to contribute to the allied plan immediately before 
        the effective date of the merger, and any successors thereto 
        whether by sale, reorganization, or otherwise, shall be 
        considered to be the employers maintaining the frozen allied 
        plan to the extent they continue to have an obligation to 
        contribute with respect to participants or facilities covered 
        by the allied plan before such effective date.
            ``(3) Participants and beneficiaries.--The participants and 
        beneficiaries of the allied plan immediately before the 
        effective date of the merger shall be considered to be the 
        participants and beneficiaries of the frozen allied plan on and 
        after such date.
            ``(4) Treatment of merged plan as single plan.--Except as 
        provided in paragraphs (2) and (3) of section 4231(e) of the 
        Employee Retirement Income Security Act of 1974, the allied 
        plan and the plan into which it has been merged shall be 
        treated as a single plan.
            ``(5) Alliance; allied plan; frozen allied plan.--For 
        purposes of this subsection, the terms `alliance', `allied 
        plan', and `frozen allied plan' shall have the same meanings as 
        when used in section 4231(e) of the Employee Retirement Income 
        Security Act of 1974.''.
    (b) PBGC Assistance for Multiemployer Plan Mergers.--Section 4231 
of the Employee Retirement Income Security Act of 1974, as amended by 
subsection (a), is amended by adding at the end the following new 
subsection:
    ``(f) Facilitated Mergers.--
            ``(1) In general.--When requested to do so by the plan 
        sponsors, the corporation shall take reasonable actions to 
        promote and facilitate the merger of two or more multiemployer 
        plans, including a merger that is designated as an alliance 
        under subsection (e), if it determines that the transaction is 
        in the interests of the participants and beneficiaries of at 
        least one of the plans and is not reasonably expected to be 
        adverse to the long-term interests of the participants and 
        beneficiaries of the other plan or plans. Such facilitation may 
        include training, technical assistance, mediation, 
        communication with stakeholders, and support with related 
        requests to other government agencies.
            ``(2) Financial assistance.--In order to facilitate a 
        merger, including a merger designated as an alliance under 
        subsection (e), which it determines is reasonably necessary to 
        enable one or more of the plans involved to avoid or postpone 
        insolvency, the corporation may provide financial assistance to 
        the merged plan if it reasonably expects that such financial 
        assistance will reduce the corporation's likely long-term loss 
        with respect to the plans involved.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as of the first day of the first plan year beginning on or after 
January 1, 2009.

SEC. 3. STRENGTHENING PARTICIPANTS' BENEFIT PROTECTIONS.

    (a) Increase in Multiemployer Benefit Guarantee.--Paragraph (1) of 
section 4022A(c) of the Employee Retirement Income Security Act of 1974 
is amended to read as follows:
    ``(c)(1) Except as provided in subsection (g), the monthly benefit 
of a participant or a beneficiary which is guaranteed under this 
section by the corporation with respect to a plan is the product of the 
number of the participant's years of credited service multiplied by the 
sum of--
            ``(A) 100 percent of the accrual rate up to $11, plus 75 
        percent of the lesser of--
                    ``(i) $33, or
                    ``(ii) the accrual rate, if any, in excess of $11, 
                and
            ``(B) 50 percent of the lesser of--
                    ``(i) $40 or
                    ``(ii) the accrual rate, if any, in excess of 
                $44.''.
    (b) Increase in Annual Premium Rate Payable.--Subparagraph (A) of 
section 4006(a)(3) of the Employee Retirement Income Security Act of 
1974 is amended--
            (1) by inserting ``and before January 1, 2011,'' after 
        ``December 31, 2005,'' in clause (iv),
            (2) by striking ``or'' at the end of clause (iii),
            (3) by striking the period at the end of clause (iv) and 
        inserting ``, or'', and
            (4) by adding at the end the following new clause:
                            ``(v) in the case of a multiemployer plan, 
                        for plan years beginning after December 31, 
                        2010, $16.00 for each individual who is a 
                        participant in such plan during the applicable 
                        plan year.''.
    (c) Certain Partitions of Eligible Multiemployer Plans.--
            (1) Partitions.--Section 4233 of the Employee Retirement 
        Income Security Act of 1974 is amended by adding at the end the 
        following new subsection:
    ``(g) Interim Partition of Eligible Multiemployer Plans.--
            ``(1) In general.--Notwithstanding the preceding 
        subsections, if, within the 180-day period beginning on the 
        first day of the first plan year beginning after the date of 
        the enactment of the Create Jobs and Save Benefits Act of 2010, 
        the plan sponsor of an eligible multiemployer plan provides to 
        the corporation written notice that such plan elects a 
        partition under this subsection, the corporation shall order a 
        partition of such plan. A partition ordered under the preceding 
        sentence shall be effective on the first day of the calendar 
        month designated by the corporation which is after September 
        2011 and before March 2012. The written notice required by the 
        first sentence of this paragraph shall include the 
        certifications described in paragraph (2) and a list, certified 
        by the plan sponsor, of eligible partition employers.
            ``(2) Eligible multiemployer plan.--An eligible 
        multiemployer plan is a multiemployer plan as to which--
                    ``(A) the plan actuary has certified pursuant to 
                section 305(b) that the plan is in critical status 
                (within the meaning of section 305(b)(2)) for the plan 
                year in which the notice described in paragraph (1) is 
                provided to the corporation, and the plan sponsor has 
                certified, consistent with projections provided by the 
                plan actuary, that--
                            ``(i) a substantial reduction in the amount 
                        of aggregate contributions under the plan has 
                        resulted or will result--
                                    ``(I) from cases or proceedings 
                                under title 11, United States Code, 
                                with respect to employers which were 
                                participating in the plan, or
                                    ``(II) from the complete withdrawal 
                                of employers from the plan without 
                                payment of the full amount of such 
                                employers' allocable amount of unfunded 
                                vested benefits under section 4211,
                        as compared to the amount of aggregate 
                        contributions that would have been made under 
                        the plan but for such cases or proceedings,
                            ``(ii) the plan is likely to become 
                        insolvent,
                            ``(iii) contributions under the plan will 
                        have to be significantly increased to prevent 
                        the plan from becoming insolvent,
                            ``(iv) as of the last day of each of the 2 
                        plan years immediately preceding the plan year 
                        in which the notice described in paragraph (1) 
                        is provided to the corporation--
                                    ``(I) the ratio of the number of 
                                retirees, beneficiaries of deceased 
                                participants, and terminated vested 
                                participants in the plan to the number 
                                of the active participants in the plan 
                                for each such year was not less than 2 
                                to 1, and
                                    ``(II) the ratio of benefit 
                                payments made by the plan for each such 
                                year to contributions required to be 
                                made to the plan under section 304 or 
                                305(e), whichever is applicable, for 
                                each such year was not less than 2 to 
                                1, and
                            ``(v) partition would significantly reduce 
                        the likelihood that the plan will become 
                        insolvent, or
                    ``(B) the plan actuary has certified pursuant to 
                section 305(b) that the plan is in endangered status 
                (within the meaning of section 305(b)(1)) for the plan 
                year in which the notice described in paragraph (1) is 
                provided to the corporation, and the plan sponsor has 
                certified, consistent with projections provided by the 
                plan actuary, that--
                            ``(i) clauses (i), (ii), (iii), and (v) of 
                        subparagraph (A) apply to the plan,
                            ``(ii) as of the last day of each of the 2 
                        plan years immediately preceding the plan year 
                        in which the notice described in paragraph (1) 
                        is provided to the corporation--
                                    ``(I) the ratio of the number of 
                                retirees, beneficiaries of deceased 
                                participants, and terminated vested 
                                participants in the plan to the number 
                                of the active participants in the plan 
                                for each such year was not less than 10 
                                to 1, and
                                    ``(II) the ratio of benefit 
                                payments made by the plan for each such 
                                year to contributions required to be 
                                made to the plan under section 304 for 
                                each such year was not less than 2 to 
                                1, and
                            ``(iii) the plan suffered a substantial 
                        reduction in the amount of contribution base 
                        units under the plan as a result of declining 
                        employment within the industry of employers 
                        covered by the plan.
            ``(3) Eligible partition employer.--For purposes of this 
        subsection, the term `eligible partition employer' means an 
        employer which, before the date the notice described in 
        paragraph (1) is provided to the corporation with respect to an 
        eligible multiemployer plan in which the employer 
        participates--
                    ``(A) ceased contributions to such eligible 
                multiemployer plan as a result of a case or proceeding 
                under title 11, United States Code, with respect to 
                such employer, or
                    ``(B) withdrew completely from such plan without 
                paying the full amount of the employer's allocable 
                amount of unfunded vested benefits determined under 
                section 4211.
            ``(4) Transfers under partition order.--
                    ``(A) Scope of partition order.--The corporation's 
                partition order issued under paragraph (1) shall 
                provide for--
                            ``(i) a transfer, as of the date of the 
                        partition, of the nonforfeitable benefits 
                        directly attributable to service with eligible 
                        partition employers, and
                            ``(ii) a transfer of assets in an amount 
                        equal to the greater of--
                                    ``(I) the amount of assets 
                                attributable to any withdrawal 
                                liability payments by such employers, 
                                as adjusted by any gains or losses 
                                thereon and reduced by any benefit 
                                payments made with regard to service 
                                with such employers, or
                                    ``(II) the present value, as 
                                determined by the plan actuary of the 
                                eligible multiemployer plan, of all 
                                nonforfeitable benefits directly 
                                attributable to service with eligible 
                                partition employers which are expected 
                                to be paid within 60 months of the 
                                effective date of the partition order.
                        For purposes of clause (ii)(II), the 
                        corporation shall reduce the 60 month period 
                        described therein as necessary in order to 
                        allow an eligible multiemployer plan to satisfy 
                        the requirements of paragraph (2)(A)(v) 
                        (including the requirements of such 
                        subparagraph as applied to such plan by 
                        paragraph (2)(B)(i)).
                    ``(B) Actuarial assumptions.--The present value of 
                the nonforfeitable benefits described in subparagraph 
                (A) shall be determined by the plan actuary on the 
                basis of the assumptions prescribed by the corporation 
                for purposes of section 4044. In determining the 
                benefits attributable to employment with eligible 
                partition employers, a plan may elect to attribute all 
                employment of a participant to the participant's most 
                recent employer under the plan, prorate a participant's 
                benefit among each of the participant's employers under 
                the plan based on the participant's length of covered 
                employment with each employer, or use any other 
                reasonable method approved by the corporation.
                    ``(C) Form of asset transfer.--Notwithstanding any 
                other provision of this Act or the Internal Revenue 
                Code of 1986--
                            ``(i) the transfer of assets required under 
                        subparagraph (A)(ii) may, at the discretion of 
                        the plan sponsor of the plan created by the 
                        partition, be accomplished by means of the 
                        transfer of an undivided interest in assets of 
                        the remaining eligible multiemployer plan equal 
                        in value, on the day before the transfer, to 
                        the amount required to be transferred, and
                            ``(ii) the combined assets of the remaining 
                        eligible multiemployer plan and of the plan 
                        created by the partition may, at the discretion 
                        of the plan sponsor of the plan created by the 
                        partition, continue to be managed and invested 
                        as a pooled fund under the eligible 
                        multiemployer plan's investment policies 
                        without taking the partition into account, 
                        provided that each plan's respective interest 
                        in the pooled investment fund is adjusted to 
                        reflect investment gains and losses of the fund 
                        as a whole and to reflect each plan's actual 
                        benefit payments and expenses of 
                        administration.
                    ``(D) Transfer in case of decline in 
                contributions.--As of the last day of each of the 3 
                plan years following the plan year of the effective 
                date of the corporation's partition order under 
                paragraph (1), the plan sponsor of the remaining 
                eligible multiemployer plan shall determine whether, 
                during such plan year, the total contributions under 
                the plan declined by 10 percent or more after the date 
                of such partition order as a result of events described 
                in paragraph (2)(A)(i). If such decline has occurred 
                during any such plan year, a transfer (in addition to 
                the transfers required under subparagraph (A)) shall be 
                made as of the last day of such plan year of--
                            ``(i) the nonforfeitable benefits directly 
                        attributable to service with employers that 
                        become eligible partition employers (as 
                        determined as of the last day of such plan 
                        year) after the date of such partition order, 
                        and
                            ``(ii) an amount equal to the greater of--
                                    ``(I) the amount of assets 
                                attributable to any withdrawal 
                                liability payments by such employers, 
                                as adjusted by any gains or losses 
                                thereon and reduced by any benefit 
                                payments made with regard to service 
                                with such employers, or
                                    ``(II) the present value, as 
                                determined by the plan actuary of the 
                                eligible multiemployer plan, of all 
                                nonforfeitable benefits directly 
                                attributable to service with eligible 
                                partition employers which are expected 
                                to be paid within 60 months of the last 
                                day of such plan year.
                    ``(E) Coordinated administration agreement.--The 
                plan created by the partition and the remaining 
                eligible multiemployer plan may enter into a 
                coordinated administration agreement for the efficient 
                processing of benefit payments and may remit benefit 
                payments to participants and beneficiaries with a 
                single, combined check or other combined means of 
                transfer.
            ``(5) Plan created by partition.--The plan created by the 
        partition shall be--
                    ``(A) a successor plan to which section 4022A 
                applies, and
                    ``(B) a terminated multiemployer plan to which 
                section 4041A(d) applies, with respect to which no 
                employer has withdrawal liability except as provided in 
                paragraph (7).
            ``(6) Administration and sponsorship of plan created by 
        partition.--The plan administrator and the plan sponsor of an 
        eligible multiemployer plan before a partition under paragraph 
        (1) shall be the plan administrator and the plan sponsor of the 
        plan created by such partition, unless the corporation orders 
        otherwise.
            ``(7) Employer withdrawal.--
                    ``(A) In general.--If an employer completely 
                withdraws (within the meaning of section 4203) from the 
                plan within 60 months of the corporation's partition 
                order under paragraph (1), the employer's withdrawal 
                liability to the plan shall be determined as if the 
                partition had not occurred.
                    ``(B) Payment of withdrawal liability.--In the case 
                of an employer that completely withdraws or partially 
                withdraws (within the meaning of section 4205) from the 
                plan after the effective date of the corporation's 
                partition order under paragraph (1), and an employer 
                that completely or partially withdraws before such date 
                whose withdrawal liability to the plan remains 
                outstanding as of such effective date, the withdrawal 
                liability of such employer shall be payable to, and 
                shall be collected by the plan sponsor of, the 
                remaining eligible multiemployer plan.
            ``(8) Limitation on benefit increases.--In the case of a 
        plan that elects a partition under this subsection, in addition 
        to any other applicable restrictions on benefit increases, such 
        plan may not adopt--
                    ``(A) an amendment which increases the liabilities 
                of the plan by reason of any increase in benefits,
                    ``(B) any change which has the effect of increasing 
                the accrual of benefits, or
                    ``(C) any change in the rate at which benefits 
                become nonforfeitable under the plan,
        for a period of 5 plan years immediately following the plan 
        year of the corporation's partition order under paragraph (1), 
        unless such amendment or change is required as a condition of 
        qualification under part I of subchapter D of chapter 1 of the 
        Internal Revenue Code of 1986 or to comply with other 
        applicable law.''.
            (2) Limitation on benefit increases following a 
        partition.--
                    (A) Amendment to erisa.--Section 305 of the 
                Employee Retirement Income Security Act of 1974 is 
                amended by adding at the end the following new 
                subsection:
    ``(j) Limitation on Benefit Increases Following Certain 
Partitions.--For limitations in the case of a plan that elects a 
partition under section 4233(g), see paragraph (8) thereof.''.
                    (B) Amendment to internal revenue code of 1986.--
                Section 432 of the Internal Revenue Code of 1986 is 
                amended by adding at the end the following new 
                subsection:
    ``(j) Limitation on Benefit Increases Following Certain 
Partitions.--In the case of a plan that elects a partition under 
section 4233(g) of the Employee Retirement Income Security Act of 1974, 
in addition to any other applicable restrictions on benefit increases, 
such plan may not adopt--
            ``(1) an amendment which increases the liabilities of the 
        plan by reason of any increase in benefits,
            ``(2) any change which has the effect of increasing the 
        accrual of benefits, or
            ``(3) any change in the rate at which benefits become 
        nonforfeitable under the plan,
for a period of 5 plan years immediately following the plan year of the 
partition order issued by the Pension Benefit Guarantee Corporation 
under paragraph (1) of such section, unless such amendment or change is 
required as a condition of qualification under part I of subchapter D 
of chapter 1 or to comply with other applicable law.''.
            (3) Effect of partition on premiums.--
                    (A) Clause (i) of section 4006(a)(3)(C) of the 
                Employee Retirement Income Security Act of 1974 is 
                amended by adding at the end the following: ``For 
                purposes of this subparagraph, the value of assets held 
                by the corporation and the basic benefits guaranteed 
                for multiemployer plans shall not include assets and 
                liabilities transferred pursuant to a partition order 
                under section 4233(g)(1).''
                    (B) Section 4022A(f) of such Act is amended by 
                adding at the end the following new paragraph:
    ``(5) Basic benefits guaranteed in connection with assets and 
liabilities transferred to the corporation pursuant to a partition 
order under section 4233(g)(1) shall be disregarded under paragraphs 
(1), (2), and (3).''.
            (4) PBGC guarantee of partitioned benefits.--
                    (A) Section 4022A of the Employee Retirement Income 
                Security Act of 1974 is amended by adding at the end 
                the following new subsection:
    ``(i) The monthly benefit of a participant or a beneficiary whose 
benefit was transferred pursuant to a partition under section 4233(g) 
which is guaranteed under this section by the corporation with respect 
to a plan is equal to the nonforfeitable benefits of such participant 
or beneficiary transferred pursuant to the partition.''.
                    (B) Section 4022A(c)(1) of such Act is amended by 
                striking ``subsection (g)'' and inserting ``subsections 
                (g) and (i)''.
            (5) Report to congress.--Not later than December 31, 2011, 
        the Secretary of the Treasury and the Secretary of Labor shall 
        submit a joint report to the Committee on Finance and the 
        Committee on Health, Education, Labor, and Pensions of the 
        Senate and the Committee on Ways and Means and the Committee on 
        Education and Labor of the House of Representatives regarding 
        the funding status of those plans that have received a 
        partition order under section 4233(g)(1) of the Employee 
        Retirement Income Security Act of 1974, the amount of assets 
        utilized in connection with any such partitions, and any 
        recommendations to extend such partitions or to further improve 
        current law with respect to such partitions.
            (6) Rehabilitation plan requirements.--
                    (A) Amendments to erisa.--
                            (i) Section 305(e)(3) of the Employee 
                        Retirement Income Security Act of 1974 is 
                        amended by adding at the end the following new 
                        subparagraph:
                    ``(D) Certain partitions.--Notwithstanding any 
                other provision of this section, in the case of an 
                eligible multiemployer plan whose plan sponsor elects a 
                partition under section 4233(g), the requirements of 
                subparagraph (A) shall not be applied to require any 
                action, option, or measure to be included in the plan's 
                rehabilitation plan to the extent such action, option, 
                or measure would, in the reasonable determination of 
                the plan sponsor, adversely affect the future level of 
                covered employment under the plan.''.
                            (ii) Section 305(e)(4) of such Act is 
                        amended by adding at the end the following new 
                        subparagraph:
                    ``(C) Coordination with section 4233(g).--The 
                modification of a rehabilitation plan by the plan 
                sponsor of a plan that elects a partition under section 
                4233(g) shall not affect the rehabilitation period of 
                such plan, and any change to the rehabilitation plan to 
                reflect the effect of such partition shall constitute 
                an update of the rehabilitation plan as in effect on 
                the day before such partition.''.
                    (B) Amendments to the internal revenue code of 
                1986.--
                            (i) Section 432(e)(3) of the Internal 
                        Revenue Code of 1986 is amended by adding at 
                        the end the following new subparagraph:
                    ``(D) Certain partitions.--Notwithstanding any 
                other provision of this section, in the case of an 
                eligible multiemployer plan whose plan sponsor elects a 
                partition under section 4233(g) of the Employee 
                Retirement Income Security Act of 1974, the 
                requirements of subparagraph (A) shall not be applied 
                to require any action, option, or measure to be 
                included in the plan's rehabilitation plan to the 
                extent such action, option, or measure would, in the 
                reasonable determination of the plan sponsor, adversely 
                affect the future level of covered employment under the 
                plan.''.
                            (ii) Section 432(e)(4) of such Code is 
                        amended by adding at the end the following new 
                        subparagraph:
                    ``(C) Coordination with section 4233(g) of erisa.--
                The modification of a rehabilitation plan by the plan 
                sponsor of a plan that elects a partition under section 
                4233(g) of the Employee Retirement Income Security Act 
                of 1974 shall not affect the rehabilitation period of 
                such plan, and any change to the rehabilitation plan to 
                reflect the effect of such partition shall constitute 
                an update of the rehabilitation plan as in effect on 
                the day before such partition.''.
            (7) Enforcement.--Section 4003(f)(1) of the Employee 
        Retirement Income Security Act of 1974 is amended--
                    (A) by inserting ``(A)'' after ``(f)(1)'', and
                    (B) by adding at the end the following:
    ``(B) The plan sponsor of an eligible multiemployer plan that is 
adversely affected by the corporation's failure to issue a partition 
order as required under section 4233(g)(1) may bring an action against 
the corporation for appropriate equitable relief in the appropriate 
court. In any such action, the court may order the partition upon 
finding that the requirements of section 4233(g)(1) have been 
satisfied.''.
    (d) Financing for Partitions and Other Special Matters.--
            (1) Obligations of the corporation.--The second sentence of 
        section 4002(g)(2) of the Employee Retirement Income Security 
        Act of 1974 is amended to read as follows: ``The United States 
        Government is not liable for any obligation or liability 
        incurred by the corporation, except with respect to liabilities 
        transferred pursuant to a partition of a multiemployer plan 
        under section 4233(g).''
            (2) PBGC fund established.--Section 4005 of such Act is 
        amended by striking subsections (d) and (e), by redesignating 
        subsections (f) through (h) as subsections (e) through (g), 
        respectively, and by inserting after subsection (c) the 
        following new subsection:
    ``(d) Establishment of Fifth Fund; Purpose; Availability, etc.--
            ``(1) In general.--A fifth fund shall be established for 
        the purposes described in paragraph (2).
            ``(2) Use of fund.--The fund established by this subsection 
        shall be used to finance obligations undertaken by the 
        corporation under section 4233.
            ``(3) Credits to fund.--The fund established under this 
        subsection shall be credited with funds made available to the 
        corporation that are designated for special matters and the 
        earnings thereon, including any amounts received in connection 
        with a partition under section 4233(g), and shall not include 
        premiums paid under section 4007, employer liability or 
        withdrawal liability payments, the assets of terminated plans 
        or repayments of financial assistance under section 4261, or 
        other amounts received in connection with terminated or 
        insolvent plans.
            ``(4) Transactions with other funds.--Notwithstanding 
        paragraph (3), this fund may engage in transactions with the 
        other funds established under this section to the extent 
        reasonable and necessary to meet liquidity demands and to 
        maximize the ability of the corporation to accomplish its 
        mission under section 4002(a) without increasing the premiums 
        payable under section 4006.
            ``(5) Investments.--The corporation may invest amounts of 
        the fund in such obligations as the corporation considers 
        appropriate.
            ``(6) Obligations of united states.--Notwithstanding any 
        other provision of this title, obligations of the corporation 
        which are financed by the fund created by this subsection shall 
        be obligations of the United States.''.
            (3) Conforming amendments.--
                    (A) Section 4022A(g) of such Act is amended by 
                striking paragraph (2).
                    (B) Part 1 of subtitle E of title IV of such Act is 
                amended by striking section 4222, and the table of 
                contents for such Act is amended by striking the item 
                relating to section 4222.
    (e) Effective Dates.--
            (1) The amendments made by subsection (a) shall apply with 
        respect to plans that first apply for financial assistance from 
        the Pension Benefit Guarantee Corporation after the date of the 
        enactment of this Act.
            (2) The amendments made by subsection (b) shall apply to 
        plan years beginning after December 31, 2010.
            (3) The amendments made by subsections (c) and (d) shall 
        take effect on the date of the enactment of this Act.
                                 <all>