[Congressional Record Volume 149, Number 125 (Thursday, September 11, 2003)]
[Senate]
[Pages S11418-S11419]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BAYH (for himself and Mr. Kerry):
  S. 1610. A bill to amend the Employee Retirement Income Security Act 
of 1974 and the Internal Revenue Code of 1986 to ensure the adequate 
funding of pension plans, and for other purposes; to the Committee on 
Finance.
  Mr. BAYH. Mr. President, I ask unanimous consent that the text of the 
bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1610

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Defined Benefit Pension Plan 
     Reform Act of 2003''.

     SEC. 2. MULTIEMPLOYER PLAN EMERGENCY INVESTMENT LOSS RULE.

       (a) Amendment to the Internal Revenue Code of 1986.--
     Section 412(b)(7) of the Internal Revenue Code of 1986 
     (relating to special rules for multiemployer plans) is 
     amended by adding at the end the following:
       ``(F) Emergency investment loss method.--
       ``(i) In general.--In lieu of amortizing net experience 
     loss as prescribed in paragraph (2)(B)(iv), a multiemployer 
     plan may elect to use the emergency investment loss method 
     described in this subparagraph, starting with the first plan 
     year in which there is an emergency investment loss.
       ``(ii) Emergency investment loss.--An emergency investment 
     loss for any plan year beginning on or after July 1, 1999, 
     and ending before January 1, 2004, is the amount (if any) by 
     which--

       ``(I) the fair market value of the plan's assets as of the 
     last day of the plan year, is less than
       ``(II) the fair market value which would have been 
     determined if the plan's earnings for the plan year had been 
     equal to the projected investment return based on the 
     actuarial interest rate under paragraph (5)(A) for the plan 
     year, applied to the fair market value of assets as of the 
     beginning of the year and noninvestment cash flows during the 
     year.

       ``(iii) Amortization of emergency investment loss.--The 
     funding standard account shall be charged with the amounts 
     necessary to amortize in equal annual installments (until 
     fully amortized) the plan's emergency investment loss over a 
     period of 30 plan years.
       ``(iv) Treatment of adjusted net actuarial experience.--If 
     an election is in effect for any plan year described in 
     clause (ii)--

       ``(I) any net experience gain otherwise determined for such 
     year under paragraph (2)(B)(iv) shall be increased by an 
     amount equal to the emergency investment loss for such year, 
     and
       ``(II) any net experience loss otherwise determined for 
     such year under paragraph (3)(B)(ii) shall be reduced by the 
     emergency investment loss for such year, except that if such 
     emergency investment loss exceeds such net experience loss, 
     the excess shall be treated as a net experience gain for such 
     year for purposes of paragraph (2)(B)(iv).''

       (b) Amendment to the Employee Retirement Income Security 
     Act of 1974.--Section 302(b)(7) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1082(b)(7)) is amended 
     by adding at the end the following:
       ``(F)(i) In lieu of amortizing net experience loss as 
     prescribed in paragraph (2)(B)(iv), a multiemployer plan may 
     elect to use the emergency investment loss method described 
     in this subparagraph, starting with the first plan year in 
     which there is an emergency investment loss.
       ``(ii) An emergency investment loss for any plan year 
     beginning on or after July 1, 1999, and ending before January 
     1, 2004, is the amount (if any) by which--
       ``(I) the fair market value of the plan's assets as of the 
     last day of the plan year, is less than
       ``(II) the fair market value which would have been 
     determined if the plan's earnings for the plan year had been 
     equal to the projected investment return based on the 
     actuarial interest rate under paragraph (5)(A) for the plan 
     year, applied to the fair market value of assets as of the 
     beginning of the year and noninvestment cash flows during the 
     year.
       ``(iii) The funding standard account shall be charged with 
     the amounts necessary to amortize in equal annual 
     installments (until fully amortized) the plan's emergency 
     investment loss over a period of 30 plan years.
       ``(iv) If an election is in effect for any plan year 
     described in clause (ii)--
       ``(I) any net experience gain otherwise determined for such 
     year under paragraph (2)(B)(iv) shall be increased by an 
     amount equal to the emergency investment loss for such year, 
     and
       ``(II) any net experience loss otherwise determined for 
     such year under paragraph (3)(B)(ii) shall be reduced by the 
     emergency

[[Page S11419]]

     investment loss for such year, except that if such emergency 
     investment loss exceeds such net experience loss, the excess 
     shall be treated as a net experience gain for such year for 
     purposes of paragraph (2)(B)(iv).''
       (c) Election Procedure.--
       (1) In general.--The Secretary of the Treasury shall 
     prescribe a procedure under which multiemployer plans that 
     elect to use the emergency investment loss method described 
     in section 412(b)(7)(F) of the Internal Revenue Code of 1986 
     and section 302(b)(7)(F) of the Employee Retirement Income 
     Security Act of 1974 may do so either by starting the special 
     amortization periods in the actuarial valuations for each of 
     the affected plan years or by starting with a cumulative 
     emergency investment loss and adjusted net actuarial 
     experience (based on the outstanding balance of the 
     experience gain bases for the affected plan years, reduced by 
     the cumulative emergency investment loss) in the actuarial 
     valuation for the last plan year ending before January 1, 
     2004.
       (2) Filing period.--The procedures described in paragraph 
     (1) shall provide a period of not less than 210 days after 
     the date of enactment of this Act for multiemployer plans to 
     file Schedule Bs (relating to actuarial information under the 
     plan) to the Form 5500 Annual Reports for the plan years for 
     which the emergency investment loss method is elected, 
     including amended Schedule Bs for annual reports previously 
     filed.
       (d) Effective Date.--The amendments made by this section 
     shall apply to years beginning after June 30, 1999.

     SEC. 3. MORTALITY TABLE ADJUSTMENT.

       (a) Amendment to the Internal Revenue Code of 1986.--
     Section 412(l)(7)(C) of the Internal Revenue Code of 1986 is 
     amended by adding at the end the following:
       ``(iv) Separate mortality tables for blue-collar and white-
     collar workers.--

       ``(I) In general.--Notwithstanding clause (ii), in the case 
     of plan years beginning after December 31, 2003, the 
     Secretary shall establish separate mortality tables for blue-
     collar workers and white-collar workers which may be used (in 
     lieu of the tables under clause (ii)) to determine current 
     liability under this subsection. For this purpose, the 
     Secretary shall take into account the Society of Actuaries 
     RP-2000 Mortality Table, as adjusted to take into account the 
     collar adjustment prescribed in such table to reflect the 
     workforce covered by the plan.
       ``(II) Classification of workers.--For purposes of this 
     clause, individuals shall be classified as blue-collar or 
     white-collar workers under rules prescribed by the Secretary. 
     In prescribing such rules, the Secretary shall treat 
     professional employees (within the meaning of section 410) as 
     white-collar workers.
       ``(III) Consistent use.--If an employer elects to use the 
     tables prescribed under subclause (I) for any plan 
     established or maintained by the employer, the employer shall 
     use the tables for all such plans other than a plan for which 
     use of the tables is prohibited under regulations prescribed 
     by the Secretary.''.

       (b) Amendment to the Employee Retirement Income Security 
     Act of 1974.--Section 302(d)(7)(C) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1082(d)(7)(C)) is 
     amended by adding at the end the following:
       ``(iv) Separate mortality tables for blue-collar and white-
     collar workers.--

       ``(I) In general.--Notwithstanding clause (ii), in the case 
     of plan years beginning after December 31, 2003, the 
     Secretary of the Treasury shall establish separate mortality 
     tables for blue-collar workers and white-collar workers which 
     may be used (in lieu of the tables under clause (ii)) to 
     determine current liability under this subsection. For this 
     purpose, the Secretary of the Treasury shall take into 
     account the Society of Actuaries RP-2000 Mortality Table, as 
     adjusted to take into account the collar adjustment 
     prescribed in such table to reflect the workforce covered by 
     the plan.
       ``(II) Classification of workers.--For purposes of this 
     clause, individuals shall be classified as blue-collar or 
     white-collar workers under rules prescribed by the Secretary 
     of the Treasury. In prescribing such rules, the Secretary of 
     the Treasury shall treat professional employees (within the 
     meaning of section 410 of the Internal Revenue Code of 1986) 
     as white-collar workers.
       ``(III) Consistent use.--If an employer elects to use the 
     tables prescribed under subclause (I) for any plan 
     established or maintained by the employer, the employer shall 
     use the tables for all such plans other than a plan for which 
     use of the tables is prohibited under regulations prescribed 
     by the Secretary of the Treasury.''.

       (c) Effective Date.--The amendments made by this section 
     shall be effective as of the date of the enactment of this 
     Act.

     SEC. 4. MODIFICATION OF FULL-FUNDING LIMITATION FOR PURPOSES 
                   OF DEDUCTION LIMITS ON EMPLOYER PENSION 
                   CONTRIBUTIONS.

       (a) In General.--Section 404(a)(1)(A) of the Internal 
     Revenue Code of 1986 (relating to limitation on deductibility 
     of employer contributions) is amended by adding at the end 
     the following: ``In determining the full funding limitation 
     for purposes of the preceding sentence for any year beginning 
     after December 31, 2003, the amount determined under section 
     412(c)(7)(A)(i) shall in no event be treated as being less 
     than 130 percent of current liability (including the expected 
     increase in current liability due to benefits accruing during 
     the year).''
       (b) Effective Date.--The amendments made by this section 
     shall apply to years beginning after December 31, 2003.

     SEC. 5. REQUIRED NOTIFICATION OF PARTICIPANTS AND 
                   BENEFICIARIES OF PLAN TERMINATIONS BY PENSION 
                   BENEFIT GUARANTY CORPORATION.

       (a) In General.--Section 4042(b) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1342(b)) is amended by 
     adding at the end the following:
       ``(4)(A) Not later than 30 days after the corporation 
     notifies a plan administrator under this subsection regarding 
     the commencement of proceedings to terminate a plan under 
     this section, the corporation shall provide notice of such 
     proceedings to affected parties as provided in this 
     paragraph. The notice shall state that such termination is 
     intended, the proposed termination date, and the procedure 
     for such termination under this section.
       ``(B) Upon notice to the plan of the commencement of 
     proceedings, the plan administrator shall provide the 
     corporation with a list of the names and addresses of all 
     participants and beneficiaries of the plan.
       ``(C) The corporation shall provide--
       ``(i) written notice to each affected party of the plan; 
     and
       ``(ii) notice in the 2 newspapers with the largest 
     circulation in the area of the majority of the affected 
     parties.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to proceedings commenced after the date of 
     enactment of this Act.
                                 ______