[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4275 Received in Senate (RDS)]

113th CONGRESS
  2d Session
                                H. R. 4275


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 25, 2014

                                Received

_______________________________________________________________________

                                 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.

            Passed the House of Representatives March 24, 2014.

            Attest:

                                                 KAREN L. HAAS,

                                                                 Clerk.