[Congressional Record Volume 148, Number 68 (Thursday, May 23, 2002)]
[Senate]
[Pages S4852-S4853]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself, Mr. Kerry, and Mr. Torricelli):
  S. 2563. A bill to amend the Internal Revenue Code of 1986 and the 
Employee Retirement Income Security Act of 1974 with respect to the 
interest rate range for additional funding requirements, and for other 
purposes; to the Committee on Finance.
  Mr. GRASSLEY. Mr. President, I am today introducing a bill on behalf 
of myself and Senators Kerry and Torricelli, to accomplish two 
objectives related to defined benefit pension plans.
  First, my bill will permit defined benefit plans to use an 
appropriate adjusted interest rate for purposes of calculating 
contributions to their plan due for plan year 2001. We made this change 
in the economic stimulus bill that passed earlier this year for the 
years 2002 and 2003, but failed to pick up the 2001 plan year.
  My colleagues may think that such a change should have been made a 
year ago. Defined benefit pension plan contributions for 2001 are due 
in most cases, 8\1/2\ months after the close of the plan year. By that 
measure, this change is still timely. I would also draw the attention 
of my colleagues to the fact that this adjustment is necessary to 
correct for the very low 30-year Treasury bond rates that have resulted 
from the buy-back and discontinuation of these bonds.
  It is also important to note that this change will not affect the way 
in which pension payouts are made to participants. It will simply 
affect contributions to plans and premiums paid to the Pension Benefit 
Guaranty Corporation by plan sponsors.
  Second, the bill would make permanent a special rule for certain 
interstate bus lines that was put in place in the 1997 tax bill. That 
rule allows interstate bus lines with frozen pension plans to use 
generally applicable

[[Page S4853]]

ERISA funding rules for their plan, rather than those mandated by the 
pension the GATT which were enacted in 1994.
  The change we make for interstate bus lines with frozen defined 
benefit plans is unique to this group. Generally the GATT made useful 
changes to pension law that made plans more secure for participants. 
The use of standardized interest rates and mortality tables has helped 
establish a baseline so that plan sponsors understand our expectations 
of how they must fund their plans.
  I ask unanimous consent that the text of this bill, along with a 
letter of support from the Amalgamated Transit Union, be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2563

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

     SECTION 1. INTEREST RATE RANGE FOR ADDITIONAL FUNDING 
                   REQUIREMENTS.

       (a) In General.--Subclause (III) of section 412(l)(7)(C)(i) 
     of the Internal Revenue Code of 1986 is amended--
       (1) by striking ``2002 or 2003'' in the text and inserting 
     ``2001, 2002, or 2003'', and
       (2) by striking ``2002 and 2003'' in the heading and 
     inserting ``2001, 2002, and 2003''.
       (b) Special Rule.--Subclause (III) of section 
     302(d)(7)(C)(i) of the Employee Retirement Income Security 
     Act of 1974 (29 U.S.C. 1082(d)(7)(C)(i)) is amended--
       (1) by striking ``2002 or 2003'' in the text and inserting 
     ``2001, 2002, or 2003'', and
       (2) by striking ``2002 and 2003'' in the heading and 
     inserting ``2001, 2002, and 2003''.
       (c) PBGC.--Subclause (IV) of section 4006(a)(3)(E)(iii) of 
     such Act (29 U.S.C. 1306(a)(3)(E)(iii)) is amended to read as 
     follows--
       ``(IV) In the case of plan years beginning after December 
     31, 2001, and before January 1, 2004, subclause (II) shall be 
     applied by substituting `100 percent' for `85 percent' and by 
     substituting `115 percent' for `100 percent'. Subclause (III) 
     shall be applied for such years without regard to the 
     preceding sentence. Any reference to this clause or this 
     subparagraph by any other sections or subsections (other than 
     sections 4005, 4010, 4011 and 4043) shall be treated as a 
     reference to this clause or this subparagraph without regard 
     to this subclause.''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect as if included in the amendments made by 
     section 405 of the Job Creation and Worker Assistance Act of 
     2002.

     SEC. 2. AMENDMENTS TO RETIREMENT PROTECTION ACT OF 1994.

       (a) Transition Rule Made Permanent.--Paragraph (1) of 
     section 769(c) of the Retirement Protection Act of 1994 is 
     amended--
       (1) by striking ``transition'' each place it appears in the 
     heading and the text, and
       (2) by striking ``for any plan year beginning after 1996 
     and before 2010''.
       (b) Special Rules.--Paragraph (2) of section 769(c) of the 
     Retirement Protection Act of 1994 is amended to read as 
     follows:
       ``(2) Special rules.--The rules described in this paragraph 
     are as follows:
       ``(A) For purposes of section 412(l)(9)(A) of the Internal 
     Revenue Code of 1986 and section 302(d)(9)(A) of the Employee 
     Retirement Income Security Act of 1974, the funded current 
     liability percentage for any plan year shall be treated as 
     not less than 90 percent.
       ``(B) For purposes of section 412(m) of the Internal 
     Revenue Code of 1986 and section 302(e) of the Employee 
     Retirement Income Security Act of 1974, the funded current 
     liability percentage for any plan year shall be treated as 
     not less than 100 percent.
       ``(C) For purposes of determining unfunded vested benefits 
     under section 4006(a)(3)(E)(iii) of the Employee Retirement 
     Income Security Act of 1974, the mortality table shall be the 
     mortality table used by the plan.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning after December 31, 2001.
                                  ____



                                    Amalgamated Transit Union,

                                      Washington, DC, May 3, 2002.
     Hon. Charles Grassley,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senator Grassley: On behalf of the Amalgamated Transit 
     Union (ATU), I write to express our support for your proposed 
     Senate bill to apply recent changes made to the Tax Code to 
     the year 2001 and to make permanent the relief for certain 
     interstate bus company pension plans from GATT-mandated 
     funding requirements. (Reference #FRA02.196)
       We believe the relief provided in this bill for interstate 
     bus companies with frozen pension plans, such as Greyhound, 
     is crucial to protect the affected employees' pension rights 
     and ensure the continued vitality of this nationwide 
     transportation system. With respect to the provisions 
     extending the thirty-year Treasury fix to 2001, we certainly 
     understand the need for and also support this provision.
       As you know, ATU represents over 5,000 current Greyhound 
     employees, as well as 13,000 retirees. Greyhound and its 
     drivers serve over 4,000 communities nationwide, most of 
     which have no other form of intercity public transportation. 
     The continuance of these essential public transportation 
     services provided by Greyhound and its drivers, however, is 
     being threatened by federal pension funding requirements that 
     fail to recognize the uniqueness of the ATU-Greyhound pension 
     plan.
       The jointly-administered defined benefit pension plan for 
     Greyhound bus drivers has been frozen to new participants 
     since 1983. The plan has 14,000 participants, all but 1,000 
     of which are retired. As a result, the average age of plan 
     participants is over 70 years, and their mortality rate is 
     far higher than that predicted by the mortality table that 
     current law requires the plan administrator to use in 
     determining funding requirements. Without legislative change, 
     this requirement will force Greyhound to make unnecessary 
     pension contributions with capita that is needed to operate 
     and maintain its vital nationwide transportation system and 
     to address new security threats facing the industry. These 
     changes will benefit our retirees and our active members as 
     well.
       We applaud your leadership in the effort to provide this 
     necessary relief. As this is a top-priority for the ATU, I 
     want to personally thank you for all your efforts in this 
     matter. Please let us know how we can help you as this bill 
     moves forth.
           Sincerely,
                                                       Jim LaSala,
                                          International President.
                                 ______