[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4275 Enrolled Bill (ENR)]

        H.R.4275

                     One Hundred Thirteenth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

           Begun and held at the City of Washington on Friday,
           the third day of January, two thousand and fourteen


                                 An Act


 
  To amend the Employee Retirement Income Security Act of 1974 and the 
   Internal Revenue Code of 1986 to provide for cooperative and small 
                     employer charity pension 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 ``Cooperative and 
Small Employer Charity Pension Flexibility Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Congressional findings and declarations of policy.
Sec. 3. Effective date.

 TITLE I--AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 
                          AND OTHER PROVISIONS

Sec. 101. Definition of cooperative and small employer charity pension 
          plans.
Sec. 102. Funding rules applicable to cooperative and small employer 
          charity pension plans.
Sec. 103. Elections.
Sec. 104. Transparency.
Sec. 105. Sponsor education and assistance.

          TITLE II--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

Sec. 201. Definition of cooperative and small employer charity pension 
          plans.
Sec. 202. Funding rules applicable to cooperative and small employer 
          charity pension plans.
Sec. 203. Election not to be treated as a CSEC plan.
SEC. 2. CONGRESSIONAL FINDINGS AND DECLARATIONS OF POLICY.
    Congress finds as follows:
        (1) Defined benefit pension plans are a cost-effective way for 
    cooperative associations and charities to provide their employees 
    with economic security in retirement.
        (2) Many cooperative associations and charitable organizations 
    are only able to provide their employees with defined benefit 
    pension plans because those organizations are able to pool their 
    resources using the multiple employer plan structure.
        (3) The pension funding rules should encourage cooperative 
    associations and charities to continue to provide their employees 
    with pension benefits.
SEC. 3. EFFECTIVE DATE.
    Unless otherwise specified in this Act, the provisions of this Act 
shall apply to years beginning after December 31, 2013.

TITLE I--AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 
                          AND OTHER PROVISIONS

    SEC. 101. DEFINITION OF COOPERATIVE AND SMALL EMPLOYER CHARITY 
      PENSION PLANS.
    Section 210 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1060) is amended by adding at the end the following new 
subsection:
    ``(f) Cooperative and Small Employer Charity Pension Plans.--
        ``(1) In general.--For purposes of this title, except as 
    provided in this subsection, a CSEC plan is an employee pension 
    benefit plan (other than a multiemployer plan) that is a defined 
    benefit plan--
            ``(A) to which section 104 of the Pension Protection Act of 
        2006 applies, without regard to--
                ``(i) section 104(a)(2) of such Act;
                ``(ii) the amendments to such section 104 by section 
            202(b) of the Preservation of Access to Care for Medicare 
            Beneficiaries and Pension Relief Act of 2010; and
                ``(iii) paragraph (3)(B); or
            ``(B) that, as of June 25, 2010, was maintained by more 
        than one employer and all of the employers were organizations 
        described in section 501(c)(3) of the Internal Revenue Code of 
        1986.
        ``(2) Aggregation.--All employers that are treated as a single 
    employer under subsection (b) or (c) of section 414 of the Internal 
    Revenue Code of 1986 shall be treated as a single employer for 
    purposes of determining if a plan was maintained by more than one 
    employer under paragraph (1)(B).''.
    SEC. 102. FUNDING RULES APPLICABLE TO COOPERATIVE AND SMALL 
      EMPLOYER CHARITY PENSION PLANS.
    (a) In General.--Part 3 of title I of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1081 et seq.) is amended by 
adding at the end the following new section:
    ``SEC. 306. MINIMUM FUNDING STANDARDS.
    ``(a) General Rule.--For purposes of section 302, the term 
`accumulated funding deficiency' for a CSEC plan means the excess of 
the total charges to the funding standard account for all plan years 
(beginning with the first plan year to which section 302 applies) over 
the total credits to such account for such years or, if less, the 
excess of the total charges to the alternative minimum funding standard 
account for such plan years over the total credits to such account for 
such years.
    ``(b) Funding Standard Account.--
        ``(1) Account required.--Each plan to which this section 
    applies shall establish and maintain a funding standard account. 
    Such account shall be credited and charged solely as provided in 
    this section.
        ``(2) Charges to account.--For a plan year, the funding 
    standard account shall be charged with the sum of--
            ``(A) the normal cost of the plan for the plan year,
            ``(B) the amounts necessary to amortize in equal annual 
        installments (until fully amortized)--
                ``(i) in the case of a plan in existence on January 1, 
            1974, the unfunded past service liability under the plan on 
            the first day of the first plan year to which section 302 
            applies, over a period of 40 plan years,
                ``(ii) in the case of a plan which comes into existence 
            after January 1, 1974, but before the first day of the 
            first plan year beginning after December 31, 2013, the 
            unfunded past service liability under the plan on the first 
            day of the first plan year to which section 302 applies, 
            over a period of 30 plan years,
                ``(iii) separately, with respect to each plan year, the 
            net increase (if any) in unfunded past service liability 
            under the plan arising from plan amendments adopted in such 
            year, over a period of 15 plan years,
                ``(iv) separately, with respect to each plan year, the 
            net experience loss (if any) under the plan, over a period 
            of 5 plan years, and
                ``(v) separately, with respect to each plan year, the 
            net loss (if any) resulting from changes in actuarial 
            assumptions used under the plan, over a period of 10 plan 
            years,
            ``(C) the amount necessary to amortize each waived funding 
        deficiency (within the meaning of section 302(c)(3)) for each 
        prior plan year in equal annual installments (until fully 
        amortized) over a period of 5 plan years,
            ``(D) the amount necessary to amortize in equal annual 
        installments (until fully amortized) over a period of 5 plan 
        years any amount credited to the funding standard account under 
        paragraph (3)(D), and
            ``(E) the amount necessary to amortize in equal annual 
        installments (until fully amortized) over a period of 20 years 
        the contributions which would be required to be made under the 
        plan but for the provisions of section 302(c)(7)(A)(i)(I) (as 
        in effect on the day before the enactment of the Pension 
        Protection Act of 2006).
        ``(3) Credits to account.--For a plan year, the funding 
    standard account shall be credited with the sum of--
            ``(A) the amount considered contributed by the employer to 
        or under the plan for the plan year,
            ``(B) the amount necessary to amortize in equal annual 
        installments (until fully amortized)--
                ``(i) separately, with respect to each plan year, the 
            net decrease (if any) in unfunded past service liability 
            under the plan arising from plan amendments adopted in such 
            year, over a period of 15 plan years,
                ``(ii) separately, with respect to each plan year, the 
            net experience gain (if any) under the plan, over a period 
            of 5 plan years, and
                ``(iii) separately, with respect to each plan year, the 
            net gain (if any) resulting from changes in actuarial 
            assumptions used under the plan, over a period of 10 plan 
            years,
            ``(C) the amount of the waived funding deficiency (within 
        the meaning of section 302(c)(3)) for the plan year, and
            ``(D) in the case of a plan year for which the accumulated 
        funding deficiency is determined under the funding standard 
        account if such plan year follows a plan year for which such 
        deficiency was determined under the alternative minimum funding 
        standard, the excess (if any) of any debit balance in the 
        funding standard account (determined without regard to this 
        subparagraph) over any debit balance in the alternative minimum 
        funding standard account.
        ``(4) Combining and offsetting amounts to be amortized.--Under 
    regulations prescribed by the Secretary of the Treasury, amounts 
    required to be amortized under paragraph (2) or paragraph (3), as 
    the case may be--
            ``(A) may be combined into one amount under such paragraph 
        to be amortized over a period determined on the basis of the 
        remaining amortization period for all items entering into such 
        combined amount, and
            ``(B) may be offset against amounts required to be 
        amortized under the other such paragraph, with the resulting 
        amount to be amortized over a period determined on the basis of 
        the remaining amortization periods for all items entering into 
        whichever of the two amounts being offset is the greater.
        ``(5) Interest.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        the funding standard account (and items therein) shall be 
        charged or credited (as determined under regulations prescribed 
        by the Secretary of the Treasury) with interest at the 
        appropriate rate consistent with the rate or rates of interest 
        used under the plan to determine costs.
            ``(B) Exception.--The interest rate used for purposes of 
        computing the amortization charge described in subsection 
        (b)(2)(C) or for purposes of any arrangement under subsection 
        (d) for any plan year shall be the greater of--
                ``(i) 150 percent of the Federal mid-term rate (as in 
            effect under section 1274 of the Internal Revenue Code of 
            1986 for the 1st month of such plan year), or
                ``(ii) the rate of interest determined under 
            subparagraph (A).
        ``(6) Amortization schedules in effect.--Amortization schedules 
    for amounts described in paragraphs (2) and (3) that are in effect 
    as of the last day of the last plan year beginning before January 
    1, 2014, by reason of section 104 of the Pension Protection Act of 
    2006 shall remain in effect pursuant to their terms and this 
    section, except that such amounts shall not be amortized again 
    under this section.
    ``(c) Special Rules.--
        ``(1) Determinations to be made under funding method.--For 
    purposes of this section, normal costs, accrued liability, past 
    service liabilities, and experience gains and losses shall be 
    determined under the funding method used to determine costs under 
    the plan.
        ``(2) Valuation of assets.--
            ``(A) In general.--For purposes of this section, the value 
        of the plan's assets shall be determined on the basis of any 
        reasonable actuarial method of valuation which takes into 
        account fair market value and which is permitted under 
        regulations prescribed by the Secretary of the Treasury.
            ``(B) Dedicated bond portfolio.--The Secretary of the 
        Treasury may by regulations provide that the value of any 
        dedicated bond portfolio of a plan shall be determined by using 
        the interest rate under section 302(b)(5) (as in effect on the 
        day before the enactment of the Pension Protection Act of 
        2006).
        ``(3) Actuarial assumptions must be reasonable.--For purposes 
    of this section, all costs, liabilities, rates of interest, and 
    other factors under the plan shall be determined on the basis of 
    actuarial assumptions and methods--
            ``(A) each of which is reasonable (taking into account the 
        experience of the plan and reasonable expectations), and
            ``(B) which, in combination, offer the actuary's best 
        estimate of anticipated experience under the plan.
        ``(4) Treatment of certain changes as experience gain or 
    loss.--For purposes of this section, if--
            ``(A) a change in benefits under the Social Security Act or 
        in other retirement benefits created under Federal or State 
        law, or
            ``(B) a change in the definition of the term `wages' under 
        section 3121 of the Internal Revenue Code of 1986 or a change 
        in the amount of such wages taken into account under 
        regulations prescribed for purposes of section 401(a)(5) of 
        such Code,
    results in an increase or decrease in accrued liability under a 
    plan, such increase or decrease shall be treated as an experience 
    loss or gain.
        ``(5) Funding method and plan year.--
            ``(A) Funding methods available.--All funding methods 
        available to CSEC plans under section 302 (as in effect on the 
        day before the enactment of the Pension Protection Act of 2006) 
        shall continue to be available under this section.
            ``(B) Changes.--If the funding method for a plan is 
        changed, the new funding method shall become the funding method 
        used to determine costs and liabilities under the plan only if 
        the change is approved by the Secretary of the Treasury. If the 
        plan year for a plan is changed, the new plan year shall become 
        the plan year for the plan only if the change is approved by 
        the Secretary of the Treasury.
            ``(C) Approval required for certain changes in assumptions 
        by certain single-employer plans subject to additional funding 
        requirement.--
                ``(i) In general.--No actuarial assumption (other than 
            the assumptions described in subsection (h)(3)) used to 
            determine the current liability for a plan to which this 
            subparagraph applies may be changed without the approval of 
            the Secretary of the Treasury.
                ``(ii) Plans to which subparagraph applies.--This 
            subparagraph shall apply to a plan only if--

                    ``(I) the plan is a CSEC plan,
                    ``(II) the aggregate unfunded vested benefits as of 
                the close of the preceding plan year (as determined 
                under section 4006(a)(3)(E)(iii)) of such plan and all 
                other plans maintained by the contributing sponsors (as 
                defined in section 4001(a)(13)) and members of such 
                sponsors' controlled groups (as defined in section 
                4001(a)(14)) which are covered by title IV 
                (disregarding plans with no unfunded vested benefits) 
                exceed $50,000,000, and
                    ``(III) the change in assumptions (determined after 
                taking into account any changes in interest rate and 
                mortality table) results in a decrease in the funding 
                shortfall of the plan for the current plan year that 
                exceeds $50,000,000, or that exceeds $5,000,000 and 
                that is 5 percent or more of the current liability of 
                the plan before such change.

        ``(6) Full funding.--If, as of the close of a plan year, a plan 
    would (without regard to this paragraph) have an accumulated 
    funding deficiency (determined without regard to the alternative 
    minimum funding standard account permitted under subsection (e)) in 
    excess of the full funding limitation--
            ``(A) the funding standard account shall be credited with 
        the amount of such excess, and
            ``(B) all amounts described in paragraphs (2)(B), (C), and 
        (D) and (3)(B) of subsection (b) which are required to be 
        amortized shall be considered fully amortized for purposes of 
        such paragraphs.
        ``(7) Full-funding limitation.--For purposes of paragraph (6), 
    the term `full-funding limitation' means the excess (if any) of--
            ``(A) the accrued liability (including normal cost) under 
        the plan (determined under the entry age normal funding method 
        if such accrued liability cannot be directly calculated under 
        the funding method used for the plan), over
            ``(B) the lesser of--
                ``(i) the fair market value of the plan's assets, or
                ``(ii) the value of such assets determined under 
            paragraph (2).
            ``(C) Minimum amount.--
                ``(i) In general.--In no event shall the full-funding 
            limitation determined under subparagraph (A) be less than 
            the excess (if any) of--

                    ``(I) 90 percent of the current liability 
                (determined without regard to paragraph (4) of 
                subsection (h)) of the plan (including the expected 
                increase in such current liability due to benefits 
                accruing during the plan year), over
                    ``(II) the value of the plan's assets determined 
                under paragraph (2).

                ``(ii) Assets.--For purposes of clause (i), assets 
            shall not be reduced by any credit balance in the funding 
            standard account.
        ``(8) Annual valuation.--
            ``(A) In general.--For purposes of this section, a 
        determination of experience gains and losses and a valuation of 
        the plan's liability shall be made not less frequently than 
        once every year, except that such determination shall be made 
        more frequently to the extent required in particular cases 
        under regulations prescribed by the Secretary of the Treasury.
            ``(B) Valuation date.--
                ``(i) Current year.--Except as provided in clause (ii), 
            the valuation referred to in subparagraph (A) shall be made 
            as of a date within the plan year to which the valuation 
            refers or within one month prior to the beginning of such 
            year.
                ``(ii) Use of prior year valuation.--The valuation 
            referred to in subparagraph (A) may be made as of a date 
            within the plan year prior to the year to which the 
            valuation refers if, as of such date, the value of the 
            assets of the plan are not less than 100 percent of the 
            plan's current liability.
                ``(iii) Adjustments.--Information under clause (ii) 
            shall, in accordance with regulations, be actuarially 
            adjusted to reflect significant differences in 
            participants.
                ``(iv) Limitation.--A change in funding method to use a 
            prior year valuation, as provided in clause (ii), may not 
            be made unless as of the valuation date within the prior 
            plan year, the value of the assets of the plan are not less 
            than 125 percent of the plan's current liability.
        ``(9) Time when certain contributions deemed made.--For 
    purposes of this section, any contributions for a plan year made by 
    an employer during the period--
            ``(A) beginning on the day after the last day of such plan 
        year, and
            ``(B) ending on the day which is 8\1/2\ months after the 
        close of the plan year,
    shall be deemed to have been made on such last day.
        ``(10) Anticipation of benefit increases effective in the 
    future.--In determining projected benefits, the funding method of a 
    collectively bargained CSEC plan described in section 413(a) of the 
    Internal Revenue Code of 1986 shall anticipate benefit increases 
    scheduled to take effect during the term of the collective 
    bargaining agreement applicable to the plan.
    ``(d) Extension of Amortization Periods.--The period of years 
required to amortize any unfunded liability (described in any clause of 
subsection (b)(2)(B)) of any plan may be extended by the Secretary of 
the Treasury for a period of time (not in excess of 10 years) if such 
Secretary determines that such extension would carry out the purposes 
of this Act and provide adequate protection for participants under the 
plan and their beneficiaries, and if such Secretary determines that the 
failure to permit such extension would result in--
        ``(1) a substantial risk to the voluntary continuation of the 
    plan, or
        ``(2) a substantial curtailment of pension benefit levels or 
    employee compensation.
    ``(e) Alternative Minimum Funding Standard.--
        ``(1) In general.--A CSEC plan which uses a funding method that 
    requires contributions in all years not less than those required 
    under the entry age normal funding method may maintain an 
    alternative minimum funding standard account for any plan year. 
    Such account shall be credited and charged solely as provided in 
    this subsection.
        ``(2) Charges and credits to account.--For a plan year the 
    alternative minimum funding standard account shall be--
            ``(A) charged with the sum of--
                ``(i) the lesser of normal cost under the funding 
            method used under the plan or normal cost determined under 
            the unit credit method,
                ``(ii) the excess, if any, of the present value of 
            accrued benefits under the plan over the fair market value 
            of the assets, and
                ``(iii) an amount equal to the excess (if any) of 
            credits to the alternative minimum standard account for all 
            prior plan years over charges to such account for all such 
            years, and
            ``(B) credited with the amount considered contributed by 
        the employer to or under the plan for the plan year.
        ``(3) Interest.--The alternative minimum funding standard 
    account (and items therein) shall be charged or credited with 
    interest in the manner provided under subsection (b)(5) with 
    respect to the funding standard account.
    ``(f) Quarterly Contributions Required.--
        ``(1) In general.--If a CSEC plan which has a funded current 
    liability percentage for the preceding plan year of less than 100 
    percent fails to pay the full amount of a required installment for 
    the plan year, then the rate of interest charged to the funding 
    standard account under subsection (b)(5) with respect to the amount 
    of the underpayment for the period of the underpayment shall be 
    equal to the greater of--
            ``(A) 175 percent of the Federal mid-term rate (as in 
        effect under section 1274 of the Internal Revenue Code of 1986 
        for the 1st month of such plan year), or
            ``(B) the rate of interest used under the plan in 
        determining costs.
        ``(2) Amount of underpayment, period of underpayment.--For 
    purposes of paragraph (1)--
            ``(A) Amount.--The amount of the underpayment shall be the 
        excess of--
                ``(i) the required installment, over
                ``(ii) the amount (if any) of the installment 
            contributed to or under the plan on or before the due date 
            for the installment.
            ``(B) Period of underpayment.--The period for which 
        interest is charged under this subsection with regard to any 
        portion of the underpayment shall run from the due date for the 
        installment to the date on which such portion is contributed to 
        or under the plan (determined without regard to subsection 
        (c)(9)).
            ``(C) Order of crediting contributions.--For purposes of 
        subparagraph (A)(ii), contributions shall be credited against 
        unpaid required installments in the order in which such 
        installments are required to be paid.
        ``(3) Number of required installments; due dates.--For purposes 
    of this subsection--
            ``(A) Payable in 4 installments.--There shall be 4 required 
        installments for each plan year.
            ``(B) Time for payment of installments.--


 
   ``In the case of the following required
                installments:                                           The due date is:
 
1st..........................................  April 15
2nd..........................................  July 15
3rd..........................................  October 15
4th..........................................  January 15 of the following year.
 


        ``(4) Amount of required installment.--For purposes of this 
    subsection--
            ``(A) In general.--The amount of any required installment 
        shall be 25 percent of the required annual payment.
            ``(B) Required annual payment.--For purposes of 
        subparagraph (A), the term `required annual payment' means the 
        lesser of--
                ``(i) 90 percent of the amount required to be 
            contributed to or under the plan by the employer for the 
            plan year under section 302 (without regard to any waiver 
            under subsection (c) thereof), or
                ``(ii) 100 percent of the amount so required for the 
            preceding plan year.
        Clause (ii) shall not apply if the preceding plan year was not 
        a year of 12 months.
        ``(5) Liquidity requirement.--
            ``(A) In general.--A plan to which this paragraph applies 
        shall be treated as failing to pay the full amount of any 
        required installment to the extent that the value of the liquid 
        assets paid in such installment is less than the liquidity 
        shortfall (whether or not such liquidity shortfall exceeds the 
        amount of such installment required to be paid but for this 
        paragraph).
            ``(B) Plans to which paragraph applies.--This paragraph 
        shall apply to a CSEC plan other than a plan described in 
        section 302(d)(6)(A) (as in effect on the day before the 
        enactment of the Pension Protection Act of 2006) which--
                ``(i) is required to pay installments under this 
            subsection for a plan year, and
                ``(ii) has a liquidity shortfall for any quarter during 
            such plan year.
            ``(C) Period of underpayment.--For purposes of paragraph 
        (1), any portion of an installment that is treated as not paid 
        under subparagraph (A) shall continue to be treated as unpaid 
        until the close of the quarter in which the due date for such 
        installment occurs.
            ``(D) Limitation on increase.--If the amount of any 
        required installment is increased by reason of subparagraph 
        (A), in no event shall such increase exceed the amount which, 
        when added to prior installments for the plan year, is 
        necessary to increase the funded current liability percentage 
        (taking into account the expected increase in current liability 
        due to benefits accruing during the plan year) to 100 percent.
            ``(E) Definitions.--For purposes of this paragraph--
                ``(i) Liquidity shortfall.--The term `liquidity 
            shortfall' means, with respect to any required installment, 
            an amount equal to the excess (as of the last day of the 
            quarter for which such installment is made) of the base 
            amount with respect to such quarter over the value (as of 
            such last day) of the plan's liquid assets.
                ``(ii) Base amount.--

                    ``(I) In general.--The term `base amount' means, 
                with respect to any quarter, an amount equal to 3 times 
                the sum of the adjusted disbursements from the plan for 
                the 12 months ending on the last day of such quarter.
                    ``(II) Special rule.--If the amount determined 
                under subclause (I) exceeds an amount equal to 2 times 
                the sum of the adjusted disbursements from the plan for 
                the 36 months ending on the last day of the quarter and 
                an enrolled actuary certifies to the satisfaction of 
                the Secretary of the Treasury that such excess is the 
                result of nonrecurring circumstances, the base amount 
                with respect to such quarter shall be determined 
                without regard to amounts related to those nonrecurring 
                circumstances.

                ``(iii) Disbursements from the plan.--The term 
            `disbursements from the plan' means all disbursements from 
            the trust, including purchases of annuities, payments of 
            single sums and other benefits, and administrative 
            expenses.
                ``(iv) Adjusted disbursements.--The term `adjusted 
            disbursements' means disbursements from the plan reduced by 
            the product of--

                    ``(I) the plan's funded current liability 
                percentage for the plan year, and
                    ``(II) the sum of the purchases of annuities, 
                payments of single sums, and such other disbursements 
                as the Secretary of the Treasury shall provide in 
                regulations.

                ``(v) Liquid assets.--The term `liquid assets' means 
            cash, marketable securities and such other assets as 
            specified by the Secretary of the Treasury in regulations.
                ``(vi) Quarter.--The term `quarter' means, with respect 
            to any required installment, the 3-month period preceding 
            the month in which the due date for such installment 
            occurs.
            ``(F) Regulations.--The Secretary of the Treasury may 
        prescribe such regulations as are necessary to carry out this 
        paragraph.
        ``(6) Fiscal years and short years.--
            ``(A) Fiscal years.--In applying this subsection to a plan 
        year beginning on any date other than January 1, there shall be 
        substituted for the months specified in this subsection, the 
        months which correspond thereto.
            ``(B) Short plan year.--This subsection shall be applied to 
        plan years of less than 12 months in accordance with 
        regulations prescribed by the Secretary of the Treasury.
    ``(g) Imposition of Lien Where Failure To Make Required 
Contributions.--
        ``(1) In general.--In the case of a plan to which this section 
    applies, if--
            ``(A) any person fails to make a required installment under 
        subsection (f) or any other payment required under this section 
        before the due date for such installment or other payment, and
            ``(B) the unpaid balance of such installment or other 
        payment (including interest), when added to the aggregate 
        unpaid balance of all preceding such installments or other 
        payments for which payment was not made before the due date 
        (including interest), exceeds $1,000,000,
    then there shall be a lien in favor of the plan in the amount 
    determined under paragraph (3) upon all property and rights to 
    property, whether real or personal, belonging to such person and 
    any other person who is a member of the same controlled group of 
    which such person is a member.
        ``(2) Plans to which subsection applies.--This subsection shall 
    apply to a CSEC plan for any plan year for which the funded current 
    liability percentage of such plan is less than 100 percent. This 
    subsection shall not apply to any plan to which section 4021 does 
    not apply (as such section is in effect on the date of the 
    enactment of the Retirement Protection Act of 1994).
        ``(3) Amount of lien.--For purposes of paragraph (1), the 
    amount of the lien shall be equal to the aggregate unpaid balance 
    of required installments and other payments required under this 
    section (including interest)--
            ``(A) for plan years beginning after 1987, and
            ``(B) for which payment has not been made before the due 
        date.
        ``(4) Notice of failure; lien.--
            ``(A) Notice of failure.--A person committing a failure 
        described in paragraph (1) shall notify the Pension Benefit 
        Guaranty Corporation of such failure within 10 days of the due 
        date for the required installment or other payment.
            ``(B) Period of lien.--The lien imposed by paragraph (1) 
        shall arise on the due date for the required installment or 
        other payment and shall continue until the last day of the 
        first plan year in which the plan ceases to be described in 
        paragraph (1)(B). Such lien shall continue to run without 
        regard to whether such plan continues to be described in 
        paragraph (2) during the period referred to in the preceding 
        sentence.
            ``(C) Certain rules to apply.--Any amount with respect to 
        which a lien is imposed under paragraph (1) shall be treated as 
        taxes due and owing the United States and rules similar to the 
        rules of subsections (c), (d), and (e) of section 4068 shall 
        apply with respect to a lien imposed by subsection (a) and the 
        amount with respect to such lien.
        ``(5) Enforcement.--Any lien created under paragraph (1) may be 
    perfected and enforced only by the Pension Benefit Guaranty 
    Corporation, or at the direction of the Pension Benefit Guaranty 
    Corporation, by any contributing employer (or any member of the 
    controlled group of the contributing employer).
        ``(6) Definitions.--For purposes of this subsection--
            ``(A) Due date; required installment.--The terms `due date' 
        and `required installment' have the meanings given such terms 
        by subsection (f), except that in the case of a payment other 
        than a required installment, the due date shall be the date 
        such payment is required to be made under this section.
            ``(B) Controlled group.--The term `controlled group' means 
        any group treated as a single employer under subsections (b), 
        (c), (m), and (o) of section 414 of the Internal Revenue Code 
        of 1986.
    ``(h) Current Liability.--For purposes of this section--
        ``(1) In general.--The term `current liability' means all 
    liabilities to employees and their beneficiaries under the plan.
        ``(2) Treatment of unpredictable contingent event benefits.--
            ``(A) In general.--For purposes of paragraph (1), any 
        unpredictable contingent event benefit shall not be taken into 
        account until the event on which the benefit is contingent 
        occurs.
            ``(B) Unpredictable contingent event benefit.--The term 
        `unpredictable contingent event benefit' means any benefit 
        contingent on an event other than--
                ``(i) age, service, compensation, death, or disability, 
            or
                ``(ii) an event which is reasonably and reliably 
            predictable (as determined by the Secretary of the 
            Treasury).
        ``(3) Interest rate and mortality assumptions used.--
            ``(A) Interest rate.--The rate of interest used to 
        determine current liability under this section shall be the 
        third segment rate determined under section 303(h)(2)(C).
            ``(B) Mortality tables.--
                ``(i) Secretarial authority.--The Secretary of the 
            Treasury may by regulation prescribe mortality tables to be 
            used in determining current liability under this 
            subsection. Such tables shall be based upon the actual 
            experience of pension plans and projected trends in such 
            experience. In prescribing such tables, the Secretary of 
            the Treasury shall take into account results of available 
            independent studies of mortality of individuals covered by 
            pension plans.
                ``(ii) Periodic review.--The Secretary of the Treasury 
            shall periodically (at least every 5 years) review any 
            tables in effect under this subsection and shall, to the 
            extent the Secretary of the Treasury determines necessary, 
            by regulation update the tables to reflect the actual 
            experience of pension plans and projected trends in such 
            experience.
            ``(C) Separate mortality tables for the disabled.--
        Notwithstanding subparagraph (B)--
                ``(i) In general.--In the case of plan years beginning 
            after December 31, 1995, the Secretary of the Treasury 
            shall establish mortality tables which may be used (in lieu 
            of the tables under subparagraph (B)) to determine current 
            liability under this subsection for individuals who are 
            entitled to benefits under the plan on account of 
            disability. The Secretary of the Treasury shall establish 
            separate tables for individuals whose disabilities occur in 
            plan years beginning before January 1, 1995, and for 
            individuals whose disabilities occur in plan years 
            beginning on or after such date.
                ``(ii) Special rule for disabilities occurring after 
            1994.--In the case of disabilities occurring in plan years 
            beginning after December 31, 1994, the tables under clause 
            (i) shall apply only with respect to individuals described 
            in such subclause who are disabled within the meaning of 
            title II of the Social Security Act and the regulations 
            thereunder.
        ``(4) Certain service disregarded.--
            ``(A) In general.--In the case of a participant to whom 
        this paragraph applies, only the applicable percentage of the 
        years of service before such individual became a participant 
        shall be taken into account in computing the current liability 
        of the plan.
            ``(B) Applicable percentage.--For purposes of this 
        subparagraph, the applicable percentage shall be determined as 
        follows:


 
  ``If the years of participation  are:    The applicable percentage is:
 
1.......................................                              20
2.......................................                              40
3.......................................                              60
4.......................................                              80
5 or more...............................                            100.
 


            ``(C) Participants to whom paragraph applies.--This 
        subparagraph shall apply to any participant who, at the time of 
        becoming a participant--
                ``(i) has not accrued any other benefit under any 
            defined benefit plan (whether or not terminated) maintained 
            by the employer or a member of the same controlled group of 
            which the employer is a member,
                ``(ii) who first becomes a participant under the plan 
            in a plan year beginning after December 31, 1987, and
                ``(iii) has years of service greater than the minimum 
            years of service necessary for eligibility to participate 
            in the plan.
            ``(D) Election.--An employer may elect not to have this 
        subparagraph apply. Such an election, once made, may be revoked 
        only with the consent of the Secretary of the Treasury.
    ``(i) Funded Current Liability Percentage.--For purposes of this 
section, the term `funded current liability percentage' means, with 
respect to any plan year, the percentage which--
        ``(1) the value of the plan's assets determined under 
    subsection (c)(2), is of
        ``(2) the current liability under the plan.
    ``(j) Funding Restoration Status.--Notwithstanding any other 
provisions of this section--
        ``(1) Normal cost payment.--
            ``(A) In general.--In the case of a CSEC plan that is in 
        funding restoration status for a plan year, for purposes of 
        section 302, the term `accumulated funding deficiency' means, 
        for such plan year, the greater of--
                ``(i) the amount described in subsection (a), or
                ``(ii) the excess of the normal cost of the plan for 
            the plan year over the amount actually contributed to or 
            under the plan for the plan year.
            ``(B) Normal cost.--In the case of a CSEC plan that uses a 
        spread gain funding method, for purposes of this subsection, 
        the term `normal cost' means normal cost as determined under 
        the entry age normal funding method.
        ``(2) Plan amendments.--In the case of a CSEC plan that is in 
    funding restoration status for a plan year, no amendment to such 
    plan may take effect during such plan year if such amendment has 
    the effect of increasing liabilities of the plan by means of 
    increases in benefits, establishment of new benefits, changing the 
    rate of benefit accrual, or changing the rate at which benefits 
    become nonforfeitable. This paragraph shall not apply to any plan 
    amendment that is required to comply with any applicable law. This 
    paragraph shall cease to apply with respect to any plan year, 
    effective as of the first day of the plan year (or if later, the 
    effective date of the amendment) upon payment by the plan sponsor 
    of a contribution to the plan (in addition to any contribution 
    required under this section without regard to this paragraph) in an 
    amount equal to the increase in the funding liability of the plan 
    attributable to the plan amendment.
        ``(3) Funding restoration plan.--The sponsor of a CSEC plan 
    shall establish a written funding restoration plan within 180 days 
    of the receipt by the plan sponsor of a certification from the plan 
    actuary that the plan is in funding restoration status for a plan 
    year. Such funding restoration plan shall consist of actions that 
    are calculated, based on reasonably anticipated experience and 
    reasonable actuarial assumptions, to increase the plan's funded 
    percentage to 100 percent over a period that is not longer than the 
    greater of 7 years or the shortest amount of time practicable. Such 
    funding restoration plan shall take into account contributions 
    required under this section (without regard to this paragraph). If 
    a plan remains in funding restoration status for 2 or more years, 
    such funding restoration plan shall be updated each year after the 
    1st such year within 180 days of receipt by the plan sponsor of a 
    certification from the plan actuary that the plan remains in 
    funding restoration status for the plan year.
        ``(4) Annual certification by plan actuary.--Not later than the 
    90th day of each plan year of a CSEC plan, the plan actuary shall 
    certify to the plan sponsor whether or not the plan is in funding 
    restoration status for the plan year, based on the plan's funded 
    percentage as of the beginning of the plan year. For this purpose, 
    the actuary may conclusively rely on an estimate of--
            ``(A) the plan's funding liability, based on the funding 
        liability of the plan for the preceding plan year and on 
        reasonable actuarial estimates, assumptions, and methods, and
            ``(B) the amount of any contributions reasonably 
        anticipated to be made for the preceding plan year.
    Contributions described in subparagraph (B) shall be taken into 
    account in determining the plan's funded percentage as of the 
    beginning of the plan year.
        ``(5) Definitions.--For purposes of this subsection--
            ``(A) Funding restoration status.--A CSEC plan shall be 
        treated as in funding restoration status for a plan year if the 
        plan's funded percentage as of the beginning of such plan year 
        is less than 80 percent.
            ``(B) Funded percentage.--The term `funded percentage' 
        means the ratio (expressed as a percentage) which--
                ``(i) the value of plan assets (as determined under 
            subsection (c)(2)), bears to
                ``(ii) the plan's funding liability.
            ``(C) Funding liability.--The term `funding liability' for 
        a plan year means the present value of all benefits accrued or 
        earned under the plan as of the beginning of the plan year, 
        based on the assumptions used by the plan pursuant to this 
        section, including the interest rate described in subsection 
        (b)(5)(A) (without regard to subsection (b)(5)(B)).
            ``(D) Spread gain funding method.--The term `spread gain 
        funding method' has the meaning given such term under rules and 
        forms issued by the Secretary of the Treasury.''.
    (b) Separate Rules for CSEC Plans.--
        (1) In general.--Paragraph (2) of section 302(a) of the 
    Employee Retirement Income Security Act of 1974 (29 U.S.C. 1082(a)) 
    is amended by striking ``and'' at the end of subparagraph (B), by 
    striking the period at the end of subparagraph (C) and inserting 
    ``, and'', and by inserting at the end thereof the following new 
    subparagraph:
            ``(D) in the case of a CSEC plan, the employers make 
        contributions to or under the plan for any plan year which, in 
        the aggregate, are sufficient to ensure that the plan does not 
        have an accumulated funding deficiency under section 306 as of 
        the end of the plan year.''.
        (2) Conforming amendments.--Section 302 of the Employee 
    Retirement Income Security Act of 1974 (29 U.S.C. 1082) is 
    amended--
            (A) by striking ``multiemployer plan'' the first place it 
        appears in clause (i) of subsection (c)(1)(A) and the last 
        place it appears in paragraph (2) of subsection (d), and 
        inserting ``multiemployer plan or a CSEC plan'',
            (B) by striking ``303(j)'' in paragraph (1) of subsection 
        (b) and inserting ``303(j) or under section 306(f)'',
            (C)(i) by striking ``and'' at the end of clause (i) of 
        subsection (c)(1)(B),
            (ii) by striking the period at the end of clause (ii) of 
        subsection (c)(1)(B), and inserting ``, and'', and
            (iii) by inserting the following new clause after clause 
        (ii) of subsection (c)(1)(B):
                ``(iii) in the case of a CSEC plan, the funding 
            standard account shall be credited under section 
            306(b)(3)(C) with the amount of the waived funding 
            deficiency and such amount shall be amortized as required 
            under section 306(b)(2)(C).'',
            (D) by striking ``under paragraph (1)'' in clause (i) of 
        subsection (c)(4)(A) and inserting ``under paragraph (1) or for 
        granting an extension under section 306(d)'',
            (E) by striking ``waiver under this subsection'' in 
        subparagraph (B) of subsection (c)(4) and inserting ``waiver 
        under this subsection or an extension under 306(d)'',
            (F) by striking ``waiver or modification'' in subclause (I) 
        of subsection (c)(4)(B)(i) and inserting ``waiver, 
        modification, or extension'',
            (G) by striking ``waivers'' in the heading of subsection 
        (c)(4)(C) and of clause (ii) of subsection (c)(4)(C) and 
        inserting ``waivers or extensions'',
            (H) by striking ``section 304(d)'' in subparagraph (A) of 
        subsection (c)(7) and in paragraph (2) of subsection (d) and 
        inserting ``section 304(d) or section 306(d)'',
            (I) by striking ``and'' at the end of subclause (I) of 
        subsection (c)(4)(C)(i) and adding ``or the accumulated funding 
        deficiency under section 306, whichever is applicable,'',
            (J) by striking ``303(e)(2),'' in subclause (II) of 
        subsection (c)(4)(C)(i) and inserting ``303(e)(2) or 
        306(b)(2)(C), whichever is applicable, and'',
            (K) by adding immediately after subclause (II) of 
        subsection (c)(4)(C)(i) the following new subclause:

                    ``(III) the total amounts not paid by reason of an 
                extension in effect under section 306(d),'',

            (L) by striking ``for waivers of'' in clause (ii) of 
        subsection (c)(4)(C) and inserting ``for waivers or extensions 
        with respect to'', and
            (M) by striking ``single-employer plan'' in subparagraph 
        (A) of subsection (a)(2) and in clause (i) of subsection 
        (c)(1)(B) and inserting ``single-employer plan (other than a 
        CSEC plan)''.
        (3) Benefit restrictions.--Subsection (g) of section 206 of the 
    Employee Retirement Income Security Act of 1974 (29 U.S.C. 1056) is 
    amended by adding at the end thereof the following new paragraph:
        ``(12) CSEC plans.--This subsection shall not apply to a CSEC 
    plan (as defined in section 210(f)).''.
        (4) Benefit increases.--Paragraph (3) of section 204(i) of the 
    Employee Retirement Income Security Act of 1974 (29 U.S.C. 1054(i)) 
    is amended by striking ``multiemployer plans'' and inserting 
    ``multiemployer plans or CSEC plans''.
        (5) Section 103.--Subparagraph (B) of section 103(d)(8) of the 
    Employee Retirement Income Security Act of 1974 (29 U.S.C. 
    1023(d)(8)) is amended by striking ``303(h) and 304(c)(3)'' and 
    inserting ``303(h), 304(c)(3), and 306(c)(3)''.
        (6) Section 502.--Subsection (c) of section 502 of the Employee 
    Retirement Income Security Act of 1974 is amended--
            (A) by redesignating the last paragraph as paragraph (11), 
        and
            (B) by adding at the end the following new paragraph:
        ``(12) The Secretary may assess a civil penalty against any 
    sponsor of a CSEC plan of up to $100 a day from the date of the 
    plan sponsor's failure to comply with the requirements of section 
    306(j)(3) to establish or update a funding restoration plan.''.
        (7) Section 4003.--Subparagraph (B) of section 4003(e)(1) of 
    the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
    1303(e)(1)) is amended by striking ``303(k)(1)(A) and (B) of this 
    Act or section 430(k)(1)(A) and (B) of the Internal Revenue Code of 
    1986'' and inserting ``303(k)(1)(A) and (B) or 306(g)(1)(A) and (B) 
    of this Act or section 430(k)(1)(A) and (B) or 433(g)(1)(A) and (B) 
    of the Internal Revenue Code of 1986''.
        (8) Section 4010.--Paragraph (2) of section 4010(b) of the 
    Employee Retirement Income Security Act of 1974 (29 U.S.C. 1310(b)) 
    is amended by striking ``303(k)(1)(A) and (B) of this Act or 
    section 430(k)(1)(A) and (B) of the Internal Revenue Code of 1986'' 
    and inserting ``303(k)(1)(A) and (B) or 306(g)(1)(A) and (B) of 
    this Act or section 430(k)(1)(A) and (B) or 433(g)(1)(A) and (B) of 
    the Internal Revenue Code of 1986''.
        (9) Section 4071.--Section 4071 of the Employee Retirement 
    Income Security Act of 1974 (29 U.S.C. 1371) is amended by striking 
    ``section 303(k)(4)'' and inserting ``section 303(k)(4) or 
    306(g)(4)''.
    SEC. 103. ELECTIONS.
    (a) Election Not To Be Treated as a CSEC Plan.--Subsection (f) of 
section 210 of the Employee Retirement Income Security Act of 1974, as 
added by section 101, is amended by adding at the end the following new 
paragraph:
        ``(3) Election.--
            ``(A) In general.--If a plan falls within the definition of 
        a CSEC plan under this subsection (without regard to this 
        paragraph), such plan shall be a CSEC plan unless the plan 
        sponsor elects not later than the close of the first plan year 
        of the plan beginning after December 31, 2013, not to be 
        treated as a CSEC plan. An election under the preceding 
        sentence shall take effect for such plan year and, once made, 
        may be revoked only with the consent of the Secretary of the 
        Treasury.
            ``(B) Special rule.--If a plan described in subparagraph 
        (A) is treated as a CSEC plan, section 104 of the Pension 
        Protection Act of 2006, as amended by the Preservation of 
        Access to Care for Medicare Beneficiaries and Pension Relief 
        Act of 2010, shall cease to apply to such plan as of the first 
        date as of which such plan is treated as a CSEC plan.''.
    (b) Election To Cease To Be Treated as an Eligible Charity Plan.--
Subsection (d) of section 104 of the Pension Protection Act of 2006, as 
added by section 202 of the Preservation of Access to Care for Medicare 
Beneficiaries and Pension Relief Act of 2010, is amended--
        (1) by striking ``For purposes of'' and inserting ``(1) In 
    general.--For purposes of'', and
        (2) by adding at the end the following:
        ``(2) Election not to be an eligible charity plan.--A plan 
    sponsor may elect for a plan to cease to be treated as an eligible 
    charity plan for plan years beginning after December 31, 2013. Such 
    election shall be made at such time and in such form and manner as 
    shall be prescribed by the Secretary of the Treasury. Any such 
    election may be revoked only with the consent of the Secretary of 
    the Treasury.
        ``(3) Election to use funding options available to other plan 
    sponsors.--
            ``(A) A plan sponsor that makes the election described in 
        paragraph (2) may elect for a plan to apply the rules described 
        in subparagraphs (B), (C), and (D) for plan years beginning 
        after December 31, 2013. Such election shall be made at such 
        time and in such form and manner as shall be prescribed by the 
        Secretary of the Treasury. Any such election may be revoked 
        only with the consent of the Secretary of the Treasury.
            ``(B) Under the rules described in this subparagraph, for 
        the first plan year beginning after December 31, 2013, a plan 
        has--
                ``(i) an 11-year shortfall amortization base,
                ``(ii) a 12-year shortfall amortization base, and
                ``(iii) a 7-year shortfall amortization base.
            ``(C) Under the rules described in this subparagraph, 
        section 303(c)(2)(A) and (B) of the Employee Retirement Income 
        Security Act of 1974, and section 430(c)(2)(A) and (B) of the 
        Internal Revenue Code of 1986 shall be applied by--
                ``(i) in the case of an 11-year shortfall amortization 
            base, substituting `11-plan-year period' for `7-plan-year 
            period' wherever such phrase appears, and
                ``(ii) in the case of a 12-year shortfall amortization 
            base, substituting `12-plan-year period' for `7-plan-year 
            period' wherever such phrase appears.
            ``(D) Under the rules described in this subparagraph, 
        section 303(c)(7) of the Employee Retirement Income Security 
        Act of 1974 and section 430(c)(7) of the Internal Revenue Code 
        of 1986 shall apply to a plan for which an election has been 
        made under subparagraph (A). Such provisions shall apply in the 
        following manner:
                ``(i) The first plan year beginning after December 31, 
            2013, shall be treated as an election year, and no other 
            plan years shall be so treated.
                ``(ii) All references in section 303(c)(7) of such Act 
            and section 430(c)(7) of such Code to `February 28, 2010' 
            or `March 1, 2010' shall be treated as references to 
            `February 28, 2013' or `March 1, 2013', respectively.
            ``(E) For purposes of this paragraph, the 11-year 
        amortization base is an amount, determined for the first plan 
        year beginning after December 31, 2013, equal to the 
        unamortized principal amount of the shortfall amortization base 
        (as defined in section 303(c)(3) of the Employee Retirement 
        Income Security Act of 1974 and section 430(c)(3) of the 
        Internal Revenue Code of 1986) that would have applied to the 
        plan for the first plan beginning after December 31, 2009, if--
                ``(i) the plan had never been an eligible charity plan,
                ``(ii) the plan sponsor had made the election described 
            in section 303(c)(2)(D)(i) of the Employee Retirement 
            Income Security Act of 1974 and in section 430(c)(2)(D)(i) 
            of the Internal Revenue Code of 1986 to have section 
            303(c)(2)(D)(i) of such Act and section 430(c)(2)(D)(iii) 
            of such Code apply with respect to the shortfall 
            amortization base for the first plan year beginning after 
            December 31, 2009, and
                ``(iii) no event had occurred under paragraph (6) or 
            (7) of section 303(c) of such Act or paragraph (6) or (7) 
            of section 430(c) of such Code that, as of the first day of 
            the first plan year beginning after December 31, 2013, 
            would have modified the shortfall amortization base or the 
            shortfall amortization installments with respect to the 
            first plan year beginning after December 31, 2009.
            ``(F) For purposes of this paragraph, the 12-year 
        amortization base is an amount, determined for the first plan 
        year beginning after December 31, 2013, equal to the 
        unamortized principal amount of the shortfall amortization base 
        (as defined in section 303(c)(3) of the Employee Retirement 
        Income Security Act of 1974 and section 430(c)(3) of the 
        Internal Revenue Code of 1986) that would have applied to the 
        plan for the first plan beginning after December 31, 2010, if--
                ``(i) the plan had never been an eligible charity plan,
                ``(ii) the plan sponsor had made the election described 
            in section 303(c)(2)(D)(i) of the Employee Retirement 
            Income Security Act of 1974 and in section 430(c)(2)(D)(i) 
            of the Internal Revenue Code of 1986 to have section 
            303(c)(2)(D)(i) of such Act and section 430(c)(2)(D)(iii) 
            of such Code apply with respect to the shortfall 
            amortization base for the first plan year beginning after 
            December 31, 2010, and
                ``(iii) no event had occurred under paragraph (6) or 
            (7) of section 303(c) of such Act or paragraph (6) or (7) 
            of section 430(c) of such Code that, as of the first day of 
            the first plan year beginning after December 31, 2013, 
            would have modified the shortfall amortization base or the 
            shortfall amortization installments with respect to the 
            first plan year beginning after December 31, 2010.
            ``(G) For purposes of this paragraph, the 7-year shortfall 
        amortization base is an amount, determined for the first plan 
        year beginning after December 31, 2013, equal to--
                ``(i) the shortfall amortization base for the first 
            plan year beginning after December 31, 2013, without regard 
            to this paragraph, minus
                ``(ii) the sum of the 11-year shortfall amortization 
            base and the 12-year shortfall amortization base.
        ``(4) Retroactive election.--Not later than December 31, 2014, 
    a plan sponsor may make a one-time, irrevocable, retroactive 
    election to not be treated as an eligible charity plan. Such 
    election shall be effective for plan years beginning after December 
    31, 2007, and shall be made by providing reasonable notice to the 
    Secretary of the Treasury.''.
    (c) Deemed Election.--For purposes of the Internal Revenue Code of 
1986, sections 4(b)(2) and 4021(b)(3) of the Employee Retirement Income 
Security Act of 1974, and all other purposes, a plan shall be deemed to 
have made an irrevocable election under section 410(d) of the Internal 
Revenue Code of 1986 if--
        (1) the plan was established before January 1, 2014;
        (2) the plan falls within the definition of a CSEC plan;
        (3) the plan sponsor does not make an election under section 
    210(f)(3)(A) of the Employee Retirement Income Security Act of 1974 
    and section 414(y)(3)(A) of the Internal Revenue Code of 1986, as 
    added by this Act; and
        (4) the plan, plan sponsor, administrator, or fiduciary remits 
    one or more premium payments for the plan to the Pension Benefit 
    Guaranty Corporation for a plan year beginning after December 31, 
    2013.
    (d) Effective Date.--The amendments made by this section shall 
apply as of the date of enactment of this Act.
    SEC. 104. TRANSPARENCY.
    (a) Notice to Participants.--
        (1) In general.--Paragraph (2) of section 101(f) of the 
    Employee Retirement Income Security Act of 1974 (29 U.S.C. 1021(f)) 
    is amended by adding at the end the following new subparagraph:
            ``(E) Effect of csec plan rules on plan funding.--In the 
        case of a CSEC plan, each notice under paragraph (1) shall 
        include--
                ``(i) a statement that different rules apply to CSEC 
            plans than apply to single-employer plans,
                ``(ii) for the first 2 plan years beginning after 
            December 31, 2013, a statement that, as a result of changes 
            in the law made by the Cooperative and Small Employer 
            Charity Pension Flexibility Act, the contributions to the 
            plan may have changed, and
                ``(iii) in the case of a CSEC plan that is in funding 
            restoration status for the plan year, a statement that the 
            plan is in funding restoration status for such plan year.
        A copy of the statement required under clause (iii) shall be 
        provided to the Secretary, the Secretary of the Treasury, and 
        the Director of the Pension Benefit Guaranty Corporation.''.
        (2) Model notice.--The Secretary of Labor may modify the model 
    notice required to be published under section 501(c) of the Pension 
    Protection Act of 2006 to include the information described in 
    section 101(f)(2)(E) of the Employee Retirement Income Security Act 
    of 1974, as added by this subsection.
    (b) Notice of Failure To Meet Minimum Funding Standards.--
        (1) Pending waivers.--Paragraph (2) of section 101(d) of the 
    Employee Retirement Income Security Act of 1974 (29 U.S.C. 1021(d)) 
    is amended by striking ``303'' and inserting ``303 or 306''.
        (2) Definitions.--Paragraph (3) of section 101(d) of the 
    Employee Retirement Income Security Act of 1974 (21 U.S.C. 1021(d)) 
    is amended by striking ``303(j)'' and inserting ``303(j) or 306(f), 
    whichever is applicable''.
    (c) Additional Reporting Requirements.--Section 103 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1023) is amended by 
adding at the end the following new subsection:
    ``(g) Additional Information With Respect to Multiple Employer 
Plans.--With respect to any multiple employer plan, an annual report 
under this section for a plan year shall include a list of 
participating employers and a good faith estimate of the percentage of 
total contributions made by such participating employers during the 
plan year.''.
    SEC. 105. SPONSOR EDUCATION AND ASSISTANCE.
    (a) Definition.--In this section, the term ``CSEC plan'' has the 
meaning given that term in subsection (f)(1) of section 210 of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1060(f)(1)) 
(as added by this Act).
    (b) Education.--The Participant and Plan Sponsor Advocate 
established under section 4004 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1304) shall make itself available to 
assist CSEC plan sponsors and participants as part of the duties it 
performs under the general supervision of the Board of Directors under 
section 4004(b) of such Act (29 U.S.C. 1304(b)).

         TITLE II--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

    SEC. 201. DEFINITION OF COOPERATIVE AND SMALL EMPLOYER CHARITY 
      PENSION PLANS.
    Section 414 of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new subsection:
    ``(y) Cooperative and Small Employer Charity Pension Plans.--
        ``(1) In general.--For purposes of this title, except as 
    provided in this subsection, a CSEC plan is a defined benefit plan 
    (other than a multiemployer plan)--
            ``(A) to which section 104 of the Pension Protection Act of 
        2006 applies, without regard to--
                ``(i) section 104(a)(2) of such Act;
                ``(ii) the amendments to such section 104 by section 
            202(b) of the Preservation of Access to Care for Medicare 
            Beneficiaries and Pension Relief Act of 2010; and
                ``(iii) paragraph (3)(B); or
            ``(B) that, as of June 25, 2010, was maintained by more 
        than one employer and all of the employers were organizations 
        described in section 501(c)(3).
        ``(2) Aggregation.--All employers that are treated as a single 
    employer under subsection (b) or (c) shall be treated as a single 
    employer for purposes of determining if a plan was maintained by 
    more than one employer under paragraph (1)(B).''.
    SEC. 202. FUNDING RULES APPLICABLE TO COOPERATIVE AND SMALL 
      EMPLOYER CHARITY PENSION PLANS.
    (a) In General.--Subpart A of part III of subchapter D of chapter 1 
of subtitle A of the Internal Revenue Code of 1986 is amended by adding 
at the end the following new section:
    ``SEC. 433. MINIMUM FUNDING STANDARDS.
    ``(a) General Rule.--For purposes of section 412, the term 
`accumulated funding deficiency' for a CSEC plan means the excess of 
the total charges to the funding standard account for all plan years 
(beginning with the first plan year to which section 412 applies) over 
the total credits to such account for such years or, if less, the 
excess of the total charges to the alternative minimum funding standard 
account for such plan years over the total credits to such account for 
such years.
    ``(b) Funding Standard Account.--
        ``(1) Account required.--Each plan to which this section 
    applies shall establish and maintain a funding standard account. 
    Such account shall be credited and charged solely as provided in 
    this section.
        ``(2) Charges to account.--For a plan year, the funding 
    standard account shall be charged with the sum of--
            ``(A) the normal cost of the plan for the plan year,
            ``(B) the amounts necessary to amortize in equal annual 
        installments (until fully amortized)--
                ``(i) in the case of a plan in existence on January 1, 
            1974, the unfunded past service liability under the plan on 
            the first day of the first plan year to which section 412 
            applies, over a period of 40 plan years,
                ``(ii) in the case of a plan which comes into existence 
            after January 1, 1974, but before the first day of the 
            first plan year beginning after December 31, 2013, the 
            unfunded past service liability under the plan on the first 
            day of the first plan year to which section 412 applies, 
            over a period of 30 plan years,
                ``(iii) separately, with respect to each plan year, the 
            net increase (if any) in unfunded past service liability 
            under the plan arising from plan amendments adopted in such 
            year, over a period of 15 plan years,
                ``(iv) separately, with respect to each plan year, the 
            net experience loss (if any) under the plan, over a period 
            of 5 plan years, and
                ``(v) separately, with respect to each plan year, the 
            net loss (if any) resulting from changes in actuarial 
            assumptions used under the plan, over a period of 10 plan 
            years,
            ``(C) the amount necessary to amortize each waived funding 
        deficiency (within the meaning of section 412(c)(3)) for each 
        prior plan year in equal annual installments (until fully 
        amortized) over a period of 5 plan years,
            ``(D) the amount necessary to amortize in equal annual 
        installments (until fully amortized) over a period of 5 plan 
        years any amount credited to the funding standard account under 
        paragraph (3)(D), and
            ``(E) the amount necessary to amortize in equal annual 
        installments (until fully amortized) over a period of 20 years 
        the contributions which would be required to be made under the 
        plan but for the provisions of section 412(c)(7)(A)(i)(I) (as 
        in effect on the day before the enactment of the Pension 
        Protection Act of 2006).
        ``(3) Credits to account.--For a plan year, the funding 
    standard account shall be credited with the sum of--
            ``(A) the amount considered contributed by the employer to 
        or under the plan for the plan year,
            ``(B) the amount necessary to amortize in equal annual 
        installments (until fully amortized)--
                ``(i) separately, with respect to each plan year, the 
            net decrease (if any) in unfunded past service liability 
            under the plan arising from plan amendments adopted in such 
            year, over a period of 15 plan years,
                ``(ii) separately, with respect to each plan year, the 
            net experience gain (if any) under the plan, over a period 
            of 5 plan years, and
                ``(iii) separately, with respect to each plan year, the 
            net gain (if any) resulting from changes in actuarial 
            assumptions used under the plan, over a period of 10 plan 
            years,
            ``(C) the amount of the waived funding deficiency (within 
        the meaning of section 412(c)(3)) for the plan year, and
            ``(D) in the case of a plan year for which the accumulated 
        funding deficiency is determined under the funding standard 
        account if such plan year follows a plan year for which such 
        deficiency was determined under the alternative minimum funding 
        standard, the excess (if any) of any debit balance in the 
        funding standard account (determined without regard to this 
        subparagraph) over any debit balance in the alternative minimum 
        funding standard account.
        ``(4) Combining and offsetting amounts to be amortized.--Under 
    regulations prescribed by the Secretary, amounts required to be 
    amortized under paragraph (2) or paragraph (3), as the case may 
    be--
            ``(A) may be combined into one amount under such paragraph 
        to be amortized over a period determined on the basis of the 
        remaining amortization period for all items entering into such 
        combined amount, and
            ``(B) may be offset against amounts required to be 
        amortized under the other such paragraph, with the resulting 
        amount to be amortized over a period determined on the basis of 
        the remaining amortization periods for all items entering into 
        whichever of the two amounts being offset is the greater.
        ``(5) Interest.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        the funding standard account (and items therein) shall be 
        charged or credited (as determined under regulations prescribed 
        by the Secretary) with interest at the appropriate rate 
        consistent with the rate or rates of interest used under the 
        plan to determine costs.
            ``(B) Exception.--The interest rate used for purposes of 
        computing the amortization charge described in subsection 
        (b)(2)(C) or for purposes of any arrangement under subsection 
        (d) for any plan year shall be the greater of--
                ``(i) 150 percent of the Federal mid-term rate (as in 
            effect under section 1274 for the 1st month of such plan 
            year), or
                ``(ii) the rate of interest determined under 
            subparagraph (A).
        ``(6) Amortization schedules in effect.--Amortization schedules 
    for amounts described in paragraphs (2) and (3) that are in effect 
    as of the last day of the last plan year beginning before January 
    1, 2014, by reason of section 104 of the Pension Protection Act of 
    2006 shall remain in effect pursuant to their terms and this 
    section, except that such amounts shall not be amortized again 
    under this section.
    ``(c) Special Rules.--
        ``(1) Determinations to be made under funding method.--For 
    purposes of this section, normal costs, accrued liability, past 
    service liabilities, and experience gains and losses shall be 
    determined under the funding method used to determine costs under 
    the plan.
        ``(2) Valuation of assets.--
            ``(A) In general.--For purposes of this section, the value 
        of the plan's assets shall be determined on the basis of any 
        reasonable actuarial method of valuation which takes into 
        account fair market value and which is permitted under 
        regulations prescribed by the Secretary.
            ``(B) Dedicated bond portfolio.--The Secretary may by 
        regulations provide that the value of any dedicated bond 
        portfolio of a plan shall be determined by using the interest 
        rate under section 412(b)(5) (as in effect on the day before 
        the enactment of the Pension Protection Act of 2006).
        ``(3) Actuarial assumptions must be reasonable.--For purposes 
    of this section, all costs, liabilities, rates of interest, and 
    other factors under the plan shall be determined on the basis of 
    actuarial assumptions and methods--
            ``(A) each of which is reasonable (taking into account the 
        experience of the plan and reasonable expectations), and
            ``(B) which, in combination, offer the actuary's best 
        estimate of anticipated experience under the plan.
        ``(4) Treatment of certain changes as experience gain or 
    loss.--For purposes of this section, if--
            ``(A) a change in benefits under the Social Security Act or 
        in other retirement benefits created under Federal or State 
        law, or
            ``(B) a change in the definition of the term `wages' under 
        section 3121 or a change in the amount of such wages taken into 
        account under regulations prescribed for purposes of section 
        401(a)(5),
    results in an increase or decrease in accrued liability under a 
    plan, such increase or decrease shall be treated as an experience 
    loss or gain.
        ``(5) Funding method and plan year.--
            ``(A) Funding methods available.--All funding methods 
        available to CSEC plans under section 412 (as in effect on the 
        day before the enactment of the Pension Protection Act of 2006) 
        shall continue to be available under this section.
            ``(B) Changes.--If the funding method for a plan is 
        changed, the new funding method shall become the funding method 
        used to determine costs and liabilities under the plan only if 
        the change is approved by the Secretary. If the plan year for a 
        plan is changed, the new plan year shall become the plan year 
        for the plan only if the change is approved by the Secretary.
            ``(C) Approval required for certain changes in assumptions 
        by certain single-employer plans subject to additional funding 
        requirement.--
                ``(i) In general.--No actuarial assumption (other than 
            the assumptions described in subsection (h)(3)) used to 
            determine the current liability for a plan to which this 
            subparagraph applies may be changed without the approval of 
            the Secretary.
                ``(ii) Plans to which subparagraph applies.--This 
            subparagraph shall apply to a plan only if--

                    ``(I) the plan is a CSEC plan,
                    ``(II) the aggregate unfunded vested benefits as of 
                the close of the preceding plan year (as determined 
                under section 4006(a)(3)(E)(iii) of the Employee 
                Retirement Income Security Act of 1974) of such plan 
                and all other plans maintained by the contributing 
                sponsors (as defined in section 4001(a)(13) of such 
                Act) and members of such sponsors' controlled groups 
                (as defined in section 4001(a)(14) of such Act) which 
                are covered by title IV (disregarding plans with no 
                unfunded vested benefits) exceed $50,000,000, and
                    ``(III) the change in assumptions (determined after 
                taking into account any changes in interest rate and 
                mortality table) results in a decrease in the funding 
                shortfall of the plan for the current plan year that 
                exceeds $50,000,000, or that exceeds $5,000,000 and 
                that is 5 percent or more of the current liability of 
                the plan before such change.

        ``(6) Full funding.--If, as of the close of a plan year, a plan 
    would (without regard to this paragraph) have an accumulated 
    funding deficiency (determined without regard to the alternative 
    minimum funding standard account permitted under subsection (e)) in 
    excess of the full funding limitation--
            ``(A) the funding standard account shall be credited with 
        the amount of such excess, and
            ``(B) all amounts described in paragraphs (2)(B), (C), and 
        (D) and (3)(B) of subsection (b) which are required to be 
        amortized shall be considered fully amortized for purposes of 
        such paragraphs.
        ``(7) Full-funding limitation.--For purposes of paragraph (6), 
    the term `full-funding limitation' means the excess (if any) of--
            ``(A) the accrued liability (including normal cost) under 
        the plan (determined under the entry age normal funding method 
        if such accrued liability cannot be directly calculated under 
        the funding method used for the plan), over
            ``(B) the lesser of--
                ``(i) the fair market value of the plan's assets, or
                ``(ii) the value of such assets determined under 
            paragraph (2).
            ``(C) Minimum amount.--
                ``(i) In general.--In no event shall the full-funding 
            limitation determined under subparagraph (A) be less than 
            the excess (if any) of--

                    ``(I) 90 percent of the current liability 
                (determined without regard to paragraph (4) of 
                subsection (h)) of the plan (including the expected 
                increase in such current liability due to benefits 
                accruing during the plan year), over
                    ``(II) the value of the plan's assets determined 
                under paragraph (2).

                ``(ii) Assets.--For purposes of clause (i), assets 
            shall not be reduced by any credit balance in the funding 
            standard account.
        ``(8) Annual valuation.--
            ``(A) In general.--For purposes of this section, a 
        determination of experience gains and losses and a valuation of 
        the plan's liability shall be made not less frequently than 
        once every year, except that such determination shall be made 
        more frequently to the extent required in particular cases 
        under regulations prescribed by the Secretary.
            ``(B) Valuation date.--
                ``(i) Current year.--Except as provided in clause (ii), 
            the valuation referred to in subparagraph (A) shall be made 
            as of a date within the plan year to which the valuation 
            refers or within one month prior to the beginning of such 
            year.
                ``(ii) Use of prior year valuation.--The valuation 
            referred to in subparagraph (A) may be made as of a date 
            within the plan year prior to the year to which the 
            valuation refers if, as of such date, the value of the 
            assets of the plan are not less than 100 percent of the 
            plan's current liability.
                ``(iii) Adjustments.--Information under clause (ii) 
            shall, in accordance with regulations, be actuarially 
            adjusted to reflect significant differences in 
            participants.
                ``(iv) Limitation.--A change in funding method to use a 
            prior year valuation, as provided in clause (ii), may not 
            be made unless as of the valuation date within the prior 
            plan year, the value of the assets of the plan are not less 
            than 125 percent of the plan's current liability.
        ``(9) Time when certain contributions deemed made.--For 
    purposes of this section, any contributions for a plan year made by 
    an employer during the period--
            ``(A) beginning on the day after the last day of such plan 
        year, and
            ``(B) ending on the day which is 8\1/2\ months after the 
        close of the plan year,
    shall be deemed to have been made on such last day.
        ``(10) Anticipation of benefit increases effective in the 
    future.--In determining projected benefits, the funding method of a 
    collectively bargained CSEC plan described in section 413(a) shall 
    anticipate benefit increases scheduled to take effect during the 
    term of the collective bargaining agreement applicable to the plan.
    ``(d) Extension of Amortization Periods.--The period of years 
required to amortize any unfunded liability (described in any clause of 
subsection (b)(2)(B)) of any plan may be extended by the Secretary for 
a period of time (not in excess of 10 years) if the Secretary 
determines that such extension would carry out the purposes of the 
Employee Retirement Income Security Act of 1974 and provide adequate 
protection for participants under the plan and their beneficiaries, and 
if the Secretary determines that the failure to permit such extension 
would result in--
        ``(1) a substantial risk to the voluntary continuation of the 
    plan, or
        ``(2) a substantial curtailment of pension benefit levels or 
    employee compensation.
    ``(e) Alternative Minimum Funding Standard.--
        ``(1) In general.--A CSEC plan which uses a funding method that 
    requires contributions in all years not less than those required 
    under the entry age normal funding method may maintain an 
    alternative minimum funding standard account for any plan year. 
    Such account shall be credited and charged solely as provided in 
    this subsection.
        ``(2) Charges and credits to account.--For a plan year the 
    alternative minimum funding standard account shall be--
            ``(A) charged with the sum of--
                ``(i) the lesser of normal cost under the funding 
            method used under the plan or normal cost determined under 
            the unit credit method,
                ``(ii) the excess, if any, of the present value of 
            accrued benefits under the plan over the fair market value 
            of the assets, and
                ``(iii) an amount equal to the excess (if any) of 
            credits to the alternative minimum standard account for all 
            prior plan years over charges to such account for all such 
            years, and
            ``(B) credited with the amount considered contributed by 
        the employer to or under the plan for the plan year.
        ``(3) Interest.--The alternative minimum funding standard 
    account (and items therein) shall be charged or credited with 
    interest in the manner provided under subsection (b)(5) with 
    respect to the funding standard account.
    ``(f) Quarterly Contributions Required.--
        ``(1) In general.--If a CSEC plan which has a funded current 
    liability percentage for the preceding plan year of less than 100 
    percent fails to pay the full amount of a required installment for 
    the plan year, then the rate of interest charged to the funding 
    standard account under subsection (b)(5) with respect to the amount 
    of the underpayment for the period of the underpayment shall be 
    equal to the greater of--
            ``(A) 175 percent of the Federal mid-term rate (as in 
        effect under section 1274 for the 1st month of such plan year), 
        or
            ``(B) the rate of interest used under the plan in 
        determining costs.
        ``(2) Amount of underpayment, period of underpayment.--For 
    purposes of paragraph (1)--
            ``(A) Amount.--The amount of the underpayment shall be the 
        excess of--
                ``(i) the required installment, over
                ``(ii) the amount (if any) of the installment 
            contributed to or under the plan on or before the due date 
            for the installment.
            ``(B) Period of underpayment.--The period for which 
        interest is charged under this subsection with regard to any 
        portion of the underpayment shall run from the due date for the 
        installment to the date on which such portion is contributed to 
        or under the plan (determined without regard to subsection 
        (c)(9)).
            ``(C) Order of crediting contributions.--For purposes of 
        subparagraph (A)(ii), contributions shall be credited against 
        unpaid required installments in the order in which such 
        installments are required to be paid.
        ``(3) Number of required installments; due dates.--For purposes 
    of this subsection--
            ``(A) Payable in 4 installments.--There shall be 4 required 
        installments for each plan year.
            ``(B) Time for payment of installments.--


 
   ``In the case of the following required
                installments:                                           The due date is:
 
1st..........................................  April 15
2nd..........................................  July 15
3rd..........................................  October 15
4th..........................................  January 15 of the following year.
 


        ``(4) Amount of required installment.--For purposes of this 
    subsection--
            ``(A) In general.--The amount of any required installment 
        shall be 25 percent of the required annual payment.
            ``(B) Required annual payment.--For purposes of 
        subparagraph (A), the term `required annual payment' means the 
        lesser of--
                ``(i) 90 percent of the amount required to be 
            contributed to or under the plan by the employer for the 
            plan year under section 412 (without regard to any waiver 
            under subsection (c) thereof), or
                ``(ii) 100 percent of the amount so required for the 
            preceding plan year.
        Clause (ii) shall not apply if the preceding plan year was not 
        a year of 12 months.
        ``(5) Liquidity requirement.--
            ``(A) In general.--A plan to which this paragraph applies 
        shall be treated as failing to pay the full amount of any 
        required installment to the extent that the value of the liquid 
        assets paid in such installment is less than the liquidity 
        shortfall (whether or not such liquidity shortfall exceeds the 
        amount of such installment required to be paid but for this 
        paragraph).
            ``(B) Plans to which paragraph applies.--This paragraph 
        shall apply to a CSEC plan other than a plan described in 
        section 412(l)(6)(A) (as in effect on the day before the 
        enactment of the Pension Protection Act of 2006) which--
                ``(i) is required to pay installments under this 
            subsection for a plan year, and
                ``(ii) has a liquidity shortfall for any quarter during 
            such plan year.
            ``(C) Period of underpayment.--For purposes of paragraph 
        (1), any portion of an installment that is treated as not paid 
        under subparagraph (A) shall continue to be treated as unpaid 
        until the close of the quarter in which the due date for such 
        installment occurs.
            ``(D) Limitation on increase.--If the amount of any 
        required installment is increased by reason of subparagraph 
        (A), in no event shall such increase exceed the amount which, 
        when added to prior installments for the plan year, is 
        necessary to increase the funded current liability percentage 
        (taking into account the expected increase in current liability 
        due to benefits accruing during the plan year) to 100 percent.
            ``(E) Definitions.--For purposes of this paragraph--
                ``(i) Liquidity shortfall.--The term `liquidity 
            shortfall' means, with respect to any required installment, 
            an amount equal to the excess (as of the last day of the 
            quarter for which such installment is made) of the base 
            amount with respect to such quarter over the value (as of 
            such last day) of the plan's liquid assets.
                ``(ii) Base amount.--

                    ``(I) In general.--The term `base amount' means, 
                with respect to any quarter, an amount equal to 3 times 
                the sum of the adjusted disbursements from the plan for 
                the 12 months ending on the last day of such quarter.
                    ``(II) Special rule.--If the amount determined 
                under subclause (I) exceeds an amount equal to 2 times 
                the sum of the adjusted disbursements from the plan for 
                the 36 months ending on the last day of the quarter and 
                an enrolled actuary certifies to the satisfaction of 
                the Secretary that such excess is the result of 
                nonrecurring circumstances, the base amount with 
                respect to such quarter shall be determined without 
                regard to amounts related to those nonrecurring 
                circumstances.

                ``(iii) Disbursements from the plan.--The term 
            `disbursements from the plan' means all disbursements from 
            the trust, including purchases of annuities, payments of 
            single sums and other benefits, and administrative 
            expenses.
                ``(iv) Adjusted disbursements.--The term `adjusted 
            disbursements' means disbursements from the plan reduced by 
            the product of--

                    ``(I) the plan's funded current liability 
                percentage for the plan year, and
                    ``(II) the sum of the purchases of annuities, 
                payments of single sums, and such other disbursements 
                as the Secretary shall provide in regulations.

                ``(v) Liquid assets.--The term `liquid assets' means 
            cash, marketable securities and such other assets as 
            specified by the Secretary in regulations.
                ``(vi) Quarter.--The term `quarter' means, with respect 
            to any required installment, the 3-month period preceding 
            the month in which the due date for such installment 
            occurs.
            ``(F) Regulations.--The Secretary may prescribe such 
        regulations as are necessary to carry out this paragraph.
        ``(6) Fiscal years and short years.--
            ``(A) Fiscal years.--In applying this subsection to a plan 
        year beginning on any date other than January 1, there shall be 
        substituted for the months specified in this subsection, the 
        months which correspond thereto.
            ``(B) Short plan year.--This subsection shall be applied to 
        plan years of less than 12 months in accordance with 
        regulations prescribed by the Secretary.
    ``(g) Imposition of Lien Where Failure To Make Required 
Contributions.--
        ``(1) In general.--In the case of a plan to which this section 
    applies, if--
            ``(A) any person fails to make a required installment under 
        subsection (f) or any other payment required under this section 
        before the due date for such installment or other payment, and
            ``(B) the unpaid balance of such installment or other 
        payment (including interest), when added to the aggregate 
        unpaid balance of all preceding such installments or other 
        payments for which payment was not made before the due date 
        (including interest), exceeds $1,000,000,
    then there shall be a lien in favor of the plan in the amount 
    determined under paragraph (3) upon all property and rights to 
    property, whether real or personal, belonging to such person and 
    any other person who is a member of the same controlled group of 
    which such person is a member.
        ``(2) Plans to which subsection applies.--This subsection shall 
    apply to a CSEC plan for any plan year for which the funded current 
    liability percentage of such plan is less than 100 percent. This 
    subsection shall not apply to any plan to which section 4021 of the 
    Employee Retirement Income Security Act of 1974 does not apply (as 
    such section is in effect on the date of the enactment of the 
    Retirement Protection Act of 1994).
        ``(3) Amount of lien.--For purposes of paragraph (1), the 
    amount of the lien shall be equal to the aggregate unpaid balance 
    of required installments and other payments required under this 
    section (including interest)--
            ``(A) for plan years beginning after 1987, and
            ``(B) for which payment has not been made before the due 
        date.
        ``(4) Notice of failure; lien.--
            ``(A) Notice of failure.--A person committing a failure 
        described in paragraph (1) shall notify the Pension Benefit 
        Guaranty Corporation of such failure within 10 days of the due 
        date for the required installment or other payment.
            ``(B) Period of lien.--The lien imposed by paragraph (1) 
        shall arise on the due date for the required installment or 
        other payment and shall continue until the last day of the 
        first plan year in which the plan ceases to be described in 
        paragraph (1)(B). Such lien shall continue to run without 
        regard to whether such plan continues to be described in 
        paragraph (2) during the period referred to in the preceding 
        sentence.
            ``(C) Certain rules to apply.--Any amount with respect to 
        which a lien is imposed under paragraph (1) shall be treated as 
        taxes due and owing the United States and rules similar to the 
        rules of subsections (c), (d), and (e) of section 4068 of the 
        Employee Retirement Income Security Act of 1974 shall apply 
        with respect to a lien imposed by subsection (a) and the amount 
        with respect to such lien.
        ``(5) Enforcement.--Any lien created under paragraph (1) may be 
    perfected and enforced only by the Pension Benefit Guaranty 
    Corporation, or at the direction of the Pension Benefit Guaranty 
    Corporation, by any contributing employer (or any member of the 
    controlled group of the contributing employer).
        ``(6) Definitions.--For purposes of this subsection--
            ``(A) Due date; required installment.--The terms `due date' 
        and `required installment' have the meanings given such terms 
        by subsection (f), except that in the case of a payment other 
        than a required installment, the due date shall be the date 
        such payment is required to be made under this section.
            ``(B) Controlled group.--The term `controlled group' means 
        any group treated as a single employer under subsections (b), 
        (c), (m), and (o) of section 414.
    ``(h) Current Liability.--For purposes of this section--
        ``(1) In general.--The term `current liability' means all 
    liabilities to employees and their beneficiaries under the plan.
        ``(2) Treatment of unpredictable contingent event benefits.--
            ``(A) In general.--For purposes of paragraph (1), any 
        unpredictable contingent event benefit shall not be taken into 
        account until the event on which the benefit is contingent 
        occurs.
            ``(B) Unpredictable contingent event benefit.--The term 
        `unpredictable contingent event benefit' means any benefit 
        contingent on an event other than--
                ``(i) age, service, compensation, death, or disability, 
            or
                ``(ii) an event which is reasonably and reliably 
            predictable (as determined by the Secretary).
        ``(3) Interest rate and mortality assumptions used.--
            ``(A) Interest rate.--The rate of interest used to 
        determine current liability under this section shall be the 
        third segment rate determined under section 430(h)(2)(C).
            ``(B) Mortality tables.--
                ``(i) Secretarial authority.--The Secretary may by 
            regulation prescribe mortality tables to be used in 
            determining current liability under this subsection. Such 
            tables shall be based upon the actual experience of pension 
            plans and projected trends in such experience. In 
            prescribing such tables, the Secretary shall take into 
            account results of available independent studies of 
            mortality of individuals covered by pension plans.
                ``(ii) Periodic review.--The Secretary shall 
            periodically (at least every 5 years) review any tables in 
            effect under this subsection and shall, to the extent the 
            Secretary determines necessary, by regulation update the 
            tables to reflect the actual experience of pension plans 
            and projected trends in such experience.
            ``(C) Separate mortality tables for the disabled.--
        Notwithstanding subparagraph (B)--
                ``(i) In general.--In the case of plan years beginning 
            after December 31, 1995, the Secretary shall establish 
            mortality tables which may be used (in lieu of the tables 
            under subparagraph (B)) to determine current liability 
            under this subsection for individuals who are entitled to 
            benefits under the plan on account of disability. The 
            Secretary shall establish separate tables for individuals 
            whose disabilities occur in plan years beginning before 
            January 1, 1995, and for individuals whose disabilities 
            occur in plan years beginning on or after such date.
                ``(ii) Special rule for disabilities occurring after 
            1994.--In the case of disabilities occurring in plan years 
            beginning after December 31, 1994, the tables under clause 
            (i) shall apply only with respect to individuals described 
            in such subclause who are disabled within the meaning of 
            title II of the Social Security Act and the regulations 
            thereunder.
        ``(4) Certain service disregarded.--
            ``(A) In general.--In the case of a participant to whom 
        this paragraph applies, only the applicable percentage of the 
        years of service before such individual became a participant 
        shall be taken into account in computing the current liability 
        of the plan.
            ``(B) Applicable percentage.--For purposes of this 
        subparagraph, the applicable percentage shall be determined as 
        follows:


 
  ``If the years of participation  are:    The applicable percentage is:
 
1.......................................                              20
2.......................................                              40
3.......................................                              60
4.......................................                              80
5 or more...............................                            100.
 


            ``(C) Participants to whom paragraph applies.--This 
        subparagraph shall apply to any participant who, at the time of 
        becoming a participant--
                ``(i) has not accrued any other benefit under any 
            defined benefit plan (whether or not terminated) maintained 
            by the employer or a member of the same controlled group of 
            which the employer is a member,
                ``(ii) who first becomes a participant under the plan 
            in a plan year beginning after December 31, 1987, and
                ``(iii) has years of service greater than the minimum 
            years of service necessary for eligibility to participate 
            in the plan.
            ``(D) Election.--An employer may elect not to have this 
        subparagraph apply. Such an election, once made, may be revoked 
        only with the consent of the Secretary.
    ``(i) Funded Current Liability Percentage.--For purposes of this 
section, the term `funded current liability percentage' means, with 
respect to any plan year, the percentage which--
        ``(1) the value of the plan's assets determined under 
    subsection (c)(2), is of
        ``(2) the current liability under the plan.
    ``(j) Funding Restoration Status.--Notwithstanding any other 
provisions of this section--
        ``(1) Normal cost payment.--
            ``(A) In general.--In the case of a CSEC plan that is in 
        funding restoration status for a plan year, for purposes of 
        section 412, the term `accumulated funding deficiency' means, 
        for such plan year, the greater of--
                ``(i) the amount described in subsection (a), or
                ``(ii) the excess of the normal cost of the plan for 
            the plan year over the amount actually contributed to or 
            under the plan for the plan year.
            ``(B) Normal cost.--In the case of a CSEC plan that uses a 
        spread gain funding method, for purposes of this subsection, 
        the term `normal cost' means normal cost as determined under 
        the entry age normal funding method.
        ``(2) Plan amendments.--In the case of a CSEC plan that is in 
    funding restoration status for a plan year, no amendment to such 
    plan may take effect during such plan year if such amendment has 
    the effect of increasing liabilities of the plan by means of 
    increases in benefits, establishment of new benefits, changing the 
    rate of benefit accrual, or changing the rate at which benefits 
    become nonforfeitable. This paragraph shall not apply to any plan 
    amendment that is required to comply with any applicable law. This 
    paragraph shall cease to apply with respect to any plan year, 
    effective as of the first day of the plan year (or if later, the 
    effective date of the amendment) upon payment by the plan sponsor 
    of a contribution to the plan (in addition to any contribution 
    required under this section without regard to this paragraph) in an 
    amount equal to the increase in the funding liability of the plan 
    attributable to the plan amendment.
        ``(3) Funding restoration plan.--The sponsor of a CSEC plan 
    shall establish a written funding restoration plan within 180 days 
    of the receipt by the plan sponsor of a certification from the plan 
    actuary that the plan is in funding restoration status for a plan 
    year. Such funding restoration plan shall consist of actions that 
    are calculated, based on reasonably anticipated experience and 
    reasonable actuarial assumptions, to increase the plan's funded 
    percentage to 100 percent over a period that is not longer than the 
    greater of 7 years or the shortest amount of time practicable. Such 
    funding restoration plan shall take into account contributions 
    required under this section (without regard to this paragraph). If 
    a plan remains in funding restoration status for 2 or more years, 
    such funding restoration plan shall be updated each year after the 
    1st such year within 180 days of receipt by the plan sponsor of a 
    certification from the plan actuary that the plan remains in 
    funding restoration status for the plan year.
        ``(4) Annual certification by plan actuary.--Not later than the 
    90th day of each plan year of a CSEC plan, the plan actuary shall 
    certify to the plan sponsor whether or not the plan is in funding 
    restoration status for the plan year, based on the plan's funded 
    percentage as of the beginning of the plan year. For this purpose, 
    the actuary may conclusively rely on an estimate of--
            ``(A) the plan's funding liability, based on the funding 
        liability of the plan for the preceding plan year and on 
        reasonable actuarial estimates, assumptions, and methods, and
            ``(B) the amount of any contributions reasonably 
        anticipated to be made for the preceding plan year.
    Contributions described in subparagraph (B) shall be taken into 
    account in determining the plan's funded percentage as of the 
    beginning of the plan year.
        ``(5) Definitions.--For purposes of this subsection--
            ``(A) Funding restoration status.--A CSEC plan shall be 
        treated as in funding restoration status for a plan year if the 
        plan's funded percentage as of the beginning of such plan year 
        is less than 80 percent.
            ``(B) Funded percentage.--The term `funded percentage' 
        means the ratio (expressed as a percentage) which--
                ``(i) the value of plan assets (as determined under 
            subsection (c)(2)), bears to
                ``(ii) the plan's funding liability.
            ``(C) Funding liability.--The term `funding liability' for 
        a plan year means the present value of all benefits accrued or 
        earned under the plan as of the beginning of the plan year, 
        based on the assumptions used by the plan pursuant to this 
        section, including the interest rate described in subsection 
        (b)(5)(A) (without regard to subsection (b)(5)(B)).
            ``(D) Spread gain funding method.--The term `spread gain 
        funding method' has the meaning given such term under rules and 
        forms issued by the Secretary.
            ``(E) Plan sponsor.--The term `plan sponsor' means, with 
        respect to a CSEC plan, the association, committee, joint board 
        of trustees, or other similar group of representatives of the 
        parties who establish or maintain the plan.''.
    (b) CSEC Plans.--Section 413 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(d) CSEC Plans.--Notwithstanding any other provision of this 
section, in the case of a CSEC plan--
        ``(1) Funding.--The requirements of section 412 shall be 
    determined as if all participants in the plan were employed by a 
    single employer.
        ``(2) Application of provisions.--Paragraphs (1), (2), (3), and 
    (5) of subsection (c) shall apply.
        ``(3) Deduction limitations.--Each applicable limitation 
    provided by section 404(a) shall be determined as if all 
    participants in the plan were employed by a single employer. The 
    amounts contributed to or under the plan by each employer who 
    maintains the plan (for the portion of the taxable year included 
    within a plan year) shall be considered not to exceed such 
    applicable limitation if the anticipated employer contributions for 
    such plan year of all employers (determined in a reasonable manner 
    not inconsistent with regulations prescribed by the Secretary) do 
    not exceed such limitation. If such anticipated contributions 
    exceed such limitation, the portion of each such employer's 
    contributions which is not deductible under section 404 shall be 
    determined in accordance with regulations prescribed by the 
    Secretary.
        ``(4) Allocations.--Allocations of amounts under paragraph (3) 
    and subsection (c)(5) among the employers maintaining the plan 
    shall not be inconsistent with the regulations prescribed for this 
    purpose by the Secretary.''.
    (c) Separate Rules for CSEC Plans.--
        (1) In general.--Paragraph (2) of section 412(a) of the 
    Internal Revenue Code of 1986 is amended by striking ``and'' at the 
    end of subparagraph (B), by striking the period at the end of 
    subparagraph (C) and inserting ``, and'', and by inserting at the 
    end thereof the following new subparagraph:
            ``(D) in the case of a CSEC plan, the employers make 
        contributions to or under the plan for any plan year which, in 
        the aggregate, are sufficient to ensure that the plan does not 
        have an accumulated funding deficiency under section 433 as of 
        the end of the plan year.''.
        (2) Conforming amendments.--Section 412 of such Code is 
    amended--
            (A) by striking ``multiemployer plan'' in paragraph (A) of 
        subsection (a)(2), in clause (i) of subsection (c)(1)(B), the 
        first place it appears in clause (i) of subsection (c)(1)(A), 
        and the last place it appears in paragraph (2) of subsection 
        (d), and inserting ``multiemployer plan or a CSEC plan'',
            (B) by striking ``430(j)'' in paragraph (1) of subsection 
        (b) and inserting ``430(j) or under section 433(f)'',
            (C)(i) by striking ``and'' at the end of clause (i) of 
        subsection (c)(1)(B),
            (ii) by striking the period at the end of clause (ii) of 
        subsection (c)(1)(B) and inserting ``, and'', and
            (iii) by inserting the following new clause after clause 
        (ii) of subsection (c)(1)(B):
                ``(iii) in the case of a CSEC plan, the funding 
            standard account shall be credited under section 
            433(b)(3)(C) with the amount of the waived funding 
            deficiency and such amount shall be amortized as required 
            under section 433(b)(2)(C).'',
            (D) by striking ``under paragraph (1)'' in clause (i) of 
        subsection (c)(4)(A) and inserting ``under paragraph (1) or for 
        granting an extension under section 433(d)'',
            (E) by striking ``waiver under this subsection'' in 
        subparagraph (B) of subsection (c)(4) and inserting ``waiver 
        under this subsection or an extension under 433(d)'',
            (F) by striking ``waiver or modification'' in subclause (I) 
        of subsection (c)(4)(B)(i) and inserting ``waiver, 
        modification, or extension'',
            (G) by striking ``waivers'' in the heading of subsection 
        (c)(4)(C) and of clause (ii) of subsection (c)(4)(C) and 
        inserting ``waivers or extensions'',
            (H) by striking ``section 431(d)'' in subparagraph (A) of 
        subsection (c)(7) and in paragraph (2) of subsection (d) and 
        inserting ``section 431(d) or section 433(d)'',
            (I) by striking ``and'' at the end of subclause (I) of 
        subsection (c)(4)(C)(i) and inserting ``or the accumulated 
        funding deficiency under section 433, whichever is 
        applicable,'',
            (J) by striking ``430(e)(2),'' in subclause (II) of 
        subsection (c)(4)(C)(i) and inserting ``430(e)(2) or 
        433(b)(2)(C), whichever is applicable, and'',
            (K) by adding immediately after subclause (II) of 
        subsection (c)(4)(C)(i) the following new subclause:

                    ``(III) the total amounts not paid by reason of an 
                extension in effect under section 433(d),'', and

            (L) by striking ``for waivers of'' in clause (ii) of 
        subsection (c)(4)(C) and inserting ``for waivers or extensions 
        with respect to''.
        (3) Benefit restrictions.--
            (A) In general.--Paragraph (29) of section 401(a) of such 
        Code is amended by striking ``multiemployer plan'' and 
        inserting ``multiemployer plan or a CSEC plan''.
            (B) Conforming change.--Subsection (a) of section 436 of 
        such Code is amended by striking ``single-employer plan'' and 
        inserting ``single-employer plan (other than a CSEC plan)''.
        (4) Benefit increases.--Subparagraph (C) of section 401(a)(33) 
    of such Code is amended by striking ``multiemployer plans'' and 
    inserting ``multiemployer plans or CSEC plans''.
        (5) Liquidity shortfalls.--
            (A) In general.--Subparagraph (A) of section 401(a)(32) of 
        such Code is amended by striking ``430(j)(4)'' each place it 
        appears and inserting ``430(j)(4) or 433(f)(5)''.
            (B) Period of shortfall.--Subparagraph (C) of section 
        401(a)(32) of such Code is amended by striking ``430(j)(3) by 
        reason of section 430(j)(4)(A) thereof'' and inserting 
        ``430(j)(3) or 433(f) by reason of section 430(j)(4)(A) or 
        433(f)(5), respectively''.
        (6) Deduction limits.--Subsection (o) of section 404 of such 
    Code is amended by adding at the end the following new paragraph:
        ``(8) CSEC plans.--Solely for purposes of this subsection, a 
    CSEC plan shall be treated as though section 430 applied to such 
    plan and the minimum required contribution for any plan year shall 
    be the amount described in section 412(a)(2)(D).''.
        (7) Section 420.--Paragraph (5) of section 420(e) of such Code 
    is amended by striking ``section 430'' each place it appears and 
    inserting ``sections 430 and 433''.
        (8) Coordination with section 4971.--
            (A) Subsection (a) of section 4971 of such Code is amended 
        by striking ``and'' at the end of paragraph (1), by striking 
        the period at the end of paragraph (2) and inserting ``, and'', 
        and by adding at the end thereof the following new paragraph:
        ``(3) in the case of a CSEC plan, 10 percent of the CSEC 
    accumulated funding deficiency as of the end of the plan year 
    ending with or within the taxable year.''.
            (B) Subsection (b) of section 4971 of such Code is 
        amended--
                (i) by striking ``or'' at the end of paragraph (1), by 
            adding ``or'' at the end of paragraph (2), and by inserting 
            immediately after paragraph (2) the following new 
            paragraph:
        ``(3) a tax is imposed under subsection (a)(3) on any CSEC 
    accumulated funding deficiency and the CSEC accumulated funding 
    deficiency is not corrected within the taxable period,'', and
                (ii) by striking ``minimum required contributions or 
            accumulated funding deficiency'' and inserting ``minimum 
            required contribution, accumulated funding deficiency, or 
            CSEC accumulated funding deficiency''.
            (C) Subsection (c) of section 4971 of such Code is 
        amended--
                (i) by striking ``accumulated funding deficiency'' each 
            place it appears in paragraph (2) and inserting 
            ``accumulated funding deficiency or CSEC accumulated 
            funding deficiency'',
                (ii) by striking ``accumulated funding deficiency or 
            unpaid minimum required contribution'' each place it 
            appears in paragraph (3) and inserting ``accumulated 
            funding deficiency, CSEC accumulated funding deficiency, or 
            unpaid minimum required contribution'', and
                (iii) by adding at the end the following new paragraph:
        ``(5) CSEC accumulated funding deficiency.--The term `CSEC 
    accumulated funding deficiency' means the accumulated funding 
    deficiency determined under section 433.''.
            (D) Paragraph (1) of section 4971(d) of such Code is 
        amended by striking ``accumulated funding deficiency or unpaid 
        minimum required contribution'' and inserting ``accumulated 
        funding deficiency, CSEC accumulated funding deficiency, or 
        unpaid minimum required contribution''.
            (E) Subsection (f) of section 4971 of such Code is 
        amended--
                (i) by striking ``430(j)(4)'' in paragraph (1) and 
            inserting ``430(j)(4) or 433(f)'',
                (ii) by striking ``430(j)'' in paragraph (1)(B) and 
            inserting ``430(j) or 433(f), whichever is applicable'', 
            and
                (iii) by striking ``412(m)(5)'' in paragraph (3)(A) and 
            inserting ``430(j) or 433(f), whichever is applicable''.
        (9) Excise tax on failure to adopt funding restoration plan.--
    Section 4971 of such Code is amended by redesignating subsection 
    (h) as subsection (i), and by inserting after subsection (g) the 
    following new subsection:
    ``(h) Failure of a CSEC Plan Sponsor To Adopt Funding Restoration 
Plan.--
        ``(1) In general.--In the case of a CSEC plan that is in 
    funding restoration status (within the meaning of section 
    433(j)(5)(A)), there is hereby imposed a tax on the failure of such 
    plan to adopt a funding restoration plan within the time prescribed 
    under section 433(j)(3).
        ``(2) Amount of tax.--The amount of the tax imposed under 
    paragraph (1) with respect to any plan sponsor for any taxable year 
    shall be the amount equal to $100 multiplied by the number of days 
    during the taxable year which are included in the period beginning 
    on the day following the close of the 180-day period described in 
    section 433(j)(3) and ending on the day on which the funding 
    restoration plan is adopted.
        ``(3) Waiver by secretary.--In the case of a failure described 
    in paragraph (1) which the Secretary determines is due to 
    reasonable cause and not to willful neglect, the Secretary may 
    waive a portion or all of the tax imposed by such paragraph.
        ``(4) Liability for tax.--The tax imposed by paragraph (1) 
    shall be paid by the plan sponsor (within the meaning of section 
    433(j)(5)(E)).''.
        (10) Reporting.--
            (A) In general.--Paragraph (2) of section 6059(b) of such 
        Code is amended by striking ``430,'' and inserting ``430, the 
        accumulated funding deficiency under section 433,''.
            (B) Assumptions.--Subparagraph (B) of section 6059(b)(3) of 
        such Code is amended by striking ``430(h)(1) or 431(c)(3)'' and 
        inserting ``430(h)(1), 431(c)(3), or 433(c)(3)''.
    SEC. 203. ELECTION NOT TO BE TREATED AS A CSEC PLAN.
    (a) In General.--Section 414(y) of the Internal Revenue Code of 
1986, as added by section 201, is amended by adding at the end the 
following new paragraph:
        ``(3) Election.--
            ``(A) In general.--If a plan falls within the definition of 
        a CSEC plan under this subsection (without regard to this 
        paragraph), such plan shall be a CSEC plan unless the plan 
        sponsor elects not later than the close of the first plan year 
        of the plan beginning after December 31, 2013, not to be 
        treated as a CSEC plan. An election under the preceding 
        sentence shall take effect for such plan year and, once made, 
        may be revoked only with the consent of the Secretary.
            ``(B) Special rule.--If a plan described in subparagraph 
        (A) is treated as a CSEC plan, section 104 of the Pension 
        Protection Act of 2006, as amended by the Preservation of 
        Access to Care for Medicare Beneficiaries and Pension Relief 
        Act of 2010, shall cease to apply to such plan as of the first 
        date as of which such plan is treated as a CSEC plan.''.
    (b) Effective Date.--The amendment made by this section shall apply 
as of the date of enactment of this Act.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.