[Congressional Record Volume 150, Number 7 (Wednesday, January 28, 2004)]
[Senate]
[Pages S294-S304]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PENSION FUNDING EQUITY ACT OF 2003
The PRESIDING OFFICER. Under the previous order, the Senate will
resume consideration of H.R. 3108, which the clerk will report.
The assistant legislative clerk read as follows:
A bill (H.R. 3108) to amend the Employee Retirement Income
Security Act of 1974 and the Internal Revenue Code of 1986 to
temporarily replace the 30-year Treasury rate with a rate
based on long-term corporate bonds for certain pension plan
funding requirements and other provisions, and for other
purposes.
Pending:
Grassley amendment No. 2233, of a perfecting nature.
Kyl amendment No. 2236 (to amendment No. 2233), to restrict
an employer that elected an alternative deficit reduction
contribution from applying for a funding waiver.
The PRESIDING OFFICER. Under the previous order, prior to a vote in
relationship to amendment No. 2236, there will be 30 minutes equally
divided between the chairman and ranking member or their designees,
with the initial 10 minutes under the control of the Senator from
Arizona, Mr. Kyl.
The Senator from Minnesota.
Mr. COLEMAN. Mr. President, I yield myself 5 minutes of the manager's
time on this bill.
The PRESIDING OFFICER. The Senator is recognized for 5 minutes.
Mr. COLEMAN. I thank the Chair.
Mr. President, Minnesota is home to Northwest Airlines as well as
Ispat Inland Steel Mining Company. I rise today in support of the
pension legislation before us and to urge my fellow colleagues to vote
for this bill today.
Let me be clear. This legislation is about protecting American
workers
[[Page S295]]
and their pension benefits. We are discussing this today because of the
long arm of September 11 that continues to swipe through the economic
landscape and affect the hard-working people of this country.
On January 1, 2000, airline workers' pension plans were over 100
percent funded and business was good for their companies. This, of
course, changed dramatically in the days following September 11, and
the economy is now beginning to show signs of life again.
The airline industry, because of its cyclical nature, always reacts
strongly to the economy. This, coupled with the rise in costs because
of new security measures, a dropoff in passengers, and Eisenhower
administration interest rates, has made it difficult, if not
impossible, for airlines to keep their pensions fully funded.
With regard to steel, Ispat Inland Mining Company is a key component
of one of the largest operating integrated steel manufacturers in the
Nation and a highly productive mine in my State. Ispat Inland Mining
Company and its parent company employ close to 7,000 people who have
had the benefit of a defined pension plan since 1936. While funding of
this plan has often exceeded 100 percent of the total obligations,
funding levels have never fallen below 90 percent of the obligation
until 2003. I think all my colleagues are aware of the impact that the
economy and foreign imports have had on the steel industry in the last
couple of years.
The problem for these companies is the deficit reduction
contribution, DRC, which requires companies to close the underfunded
gap on an accelerated basis. This results in materially higher pension
contributions during periods of economic decline. So what sounds like
tough medicine turns out to be poison--poison--for the airline and
steel workers. A major risk is that the accelerated deficit reduction
contributions could force the airlines and steel companies to seek
chapter 11 protection, force them into bankruptcy. Companies, such as
Northwest, that are coming back could be forced into bankruptcy by this
required accelerated payment.
Unfortunately, I think many understand that in chapter 11 bankruptcy
the most likely outcome is the termination of pension plans and the
transfer of unfunded liabilities to the PBGC. In effect, we would be
destroying the very pension plans that Congress is seeking to preserve.
We must take immediate action to ensure that pension plan termination
is a phrase that never enters the corporate boardroom. People who have
invested their lives in a company should not have to live in fear that
they will be left out in the cold when they retire.
This legislation represents a commonsense approach to help solve the
problem. We are providing temporary 2-year relief from some of the
cashflow requirements of the DRC, and during this period it is
important to understand that companies are still going to make their
normal required pension contributions. Pension benefits being accrued
by active workers will continue to be funded during this temporary
period and lessen any potential risk to the PBGC. I reiterate that the
relief is for a portion of the deficit reduction contribution payment,
not the regular pension payment. Pension payments are going to be made.
I am also extremely pleased that my amendment to include iron ore in
the definition of steel was included in the managers' amendment.
Minnesota is the largest producer of iron ore and taconite in the
United States. These products are essential for integrated steel
companies. Advances in technology have found a use for a lower grade
iron ore called taconite. Taconite is crushed, processed into hard,
marble-size pellets, and shipped to steel mills. The taconite pellets
are melted in blast furnaces and then blown with oxygen to make steel.
As a result, a healthy steel industry means a more viable taconite
industry and more jobs for this economy.
The AFL-CIO, the Airline Pilots Association, and the International
Association of Machine and Aerospace Workers support this legislation.
With this bill, we are not letting businesses off the hook but we are
taking the appropriate steps to provide retirement security for
constituents across this Nation.
Again, I urge my colleagues to support this bipartisan legislation
that will help restore long-term health to American businesses and
protect the retirement money for millions of American workers.
Mr. President, I yield the floor.
The PRESIDING OFFICER. Who yields time?
The Senator from Pennsylvania.
Mr. SPECTER. Mr. President, I yield myself 10 minutes.
The PRESIDING OFFICER. Without objection, the Senator from
Pennsylvania is recognized.
Mr. SPECTER. Mr. President, I have sought recognition to comment
about an amendment which I have offered on behalf of U.S. Airways. It
is an amendment which provides that the pension plan would be
reinstated. It had been required to fund it within a 5-year period. The
amendment would allow up to 30 years. It would actually save the
Pension Benefit Guaranty Corporation money.
The complexity had arisen as to whether this amendment was relevant.
As the Congressional Record will show, I spoke about the amendment on
Monday explaining what the amendment sought to do and detailing the
history as to what had happened with a bill offered by Senator Santorum
and myself last January 9, and in the hearing of the subcommittee which
I chair on January 14.
I had a series of conversations with the Parliamentarian as to
whether the amendment was relevant. I sought unanimous consent on
Monday to set aside the pending second-degree amendment and an
objection was raised. Then a little after 4 yesterday afternoon, I
consulted with the Parliamentarian, who had not yet reached a decision,
and suggested that my staffer confer with the Deputy Parliamentarian,
which was done yesterday afternoon.
I was surprised to find a unanimous consent agreement entered into
which precluded the amendment. I have a call in to the chairman of the
Finance Committee, Senator Grassley. If possible, I ask if he would
come to the floor so we can discuss this matter. The issue was also
presented to Senator Kennedy. If possible, I ask that he come to the
floor. We are operating under a very tight time constraint with the
agreement now calling for a vote on the pending amendment by about
11:40, and then votes sequencing to final passage.
As a matter of basic fairness, I think we are entitled to have a
vote. I am not unaware of the fact that there will be a later pension
bill, but this matter is of great importance to my constituents. The
U.S. Airways pilots, under the revised plan, sought to have their
pensions reduced to about 25 percent when it was not possible to
reinstate the earlier plan with an extension of up to 30 years. I think
they are entitled to a vote, and we will be back on this matter if we
are not able to get a vote today.
When the Parliamentarian is under active consideration and the
Senator from Pennsylvania, myself, is pursuing the matter, it seems to
me as a matter of basic fairness we ought not to be foreclosed. So I
intend to go to the Finance Committee now to talk to Senator Grassley
to see if we can get a resolution by the Finance Committee, but that is
the essence of the situation.
To repeat, I think we are entitled to a vote. For the record, I know
Senator Reid is prepared to object, but I ask unanimous consent that I
be permitted to offer this amendment with a 10-minute time agreement
which will not delay the final passage of the bill.
The PRESIDING OFFICER. Is there objection? The Senator from Nevada.
Mr. REID. Reserving the right to object, we have objections from the
majority and minority now on the Finance Committee and also from the
majority on the HELP Committee. So based upon that, I object.
The PRESIDING OFFICER. The objection is heard.
Mr. SPECTER. I understand the reasons of the Senator from Nevada. As
I said, I am going to be on my way to the Finance Committee to see if I
can get a change of decision by the Finance Committee so we can offer
this amendment.
The PRESIDING OFFICER. Who yields time?
Mr. SPECTER. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
[[Page S296]]
The assistant legislative clerk proceeded to call the roll.
Mr. SPECTER. I ask unanimous consent that the order for the quorum
call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 2263
Mr. SPECTER. Mr. President, there have been a series of discussions,
and we have worked out an accommodation to permit me to introduce the
amendment on behalf of US Airways pilots. We will handle the vote on a
division vote so that there is at least a semblance of what has
occurred.
At this point, I ask unanimous consent I be permitted to call up
amendment No. 2263 and that there be a division vote and I be permitted
to speak under this unanimous consent request for up to 8 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Pennsylvania [Mr. Specter] proposes an
amendment numbered 2263.
Mr. SPECTER. Mr. President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To provide for the restoration of certain plans terminating
in 2003)
At the appropriate place, insert:
SEC. __. RESTORATION OF CERTAIN PLANS TERMINATING IN 2003.
(a) In General.--The provisions of subsection (b) shall
apply to any defined benefit plan that was--
(1) maintained by a commercial passenger air carrier,
(2) maintained for the benefit of such carrier's employees
pursuant to a collective bargaining agreement, and
(3) terminated during the calendar year 2003.
(b) Restoration of Plan.--The Pension Benefit Guaranty
Corporation shall restore any plan described in subsection
(a), pursuant to the terms described in subsection (g), and
the control of the plan's assets and liabilities shall be
transferred to the employer. The date of restoration shall be
not later than 60 days after the date the terms of the plan
are determined pursuant to subsection (g).
(c) Exclusion of Expected Increase in Current Liability.--
In applying section 412(l)(1)(A)(i) of the Internal Revenue
Code of 1986 and section 302(d)(1)(A)(i) of the Employee
Retirement Income Security Act of 1974 with respect to a plan
restored under subsection (b), any expected increase in
current liability due to benefits accruing during each plan
year as described in section 412(1)(2)(C) of such Code and
section 302(d)(2)(C) of such Act shall be excluded.
(d) Amortization of Unfunded Amounts Under Restoration
Payment Schedule.--
(1) Post-restoration initial unfunded accrued liability.--
In the case of a plan restored under subsection (b)--
(A) the initial post-restoration valuation date for a plan
described in subsection (a) shall be January 1 of the
calendar year following the date of restoration,
(B) the initial restoration amortization base for a plan
described in subsection (a) shall be an amount equal to the
excess of--
(i) the accrued benefit liabilities returned by the
Corporation, over
(ii) the market value of plan assets returned by the
Corporation, and
(C) the initial restoration amortization base shall be
amortized in level annual installments over a period
determined pursuant to subsection (g) but not to exceed 30
years after the initial post-restoration valuation date, and
the funding standard account of the plan under section 412 of
such Code and section 302 of such Act shall be charged with
such installments.
(2) Unfunded section 412(l) restoration liability.--For
purposes of section 412 of such Code and section 302 of such
Act, in the case of a plan restored under subsection (b)--
(A) the initial post-restoration valuation date for a plan
described in subsection (a) shall be January 1 of the
calendar year following the date of restoration,
(B) the unfunded section 412(l) restoration liability shall
be an amount equal to the excess of--
(i) the current liability returned by the Corporation, over
(ii) the market value of plan assets returned by the
Corporation, and
(C) the unfunded section 412(l) restoration liability
amount shall be equal to the unfunded section 412(l)
restoration liability amortized in level annual installments
over a period determined pursuant to subsection (g) but not
to exceed 30 years after the initial post-restoration
valuation date.
(3) Rules of special application.--In applying the 30-year
amortization described in paragraph (1)(C) or (2)(C)--
(A) the assumed interest rate for purposes of paragraph
(1)(C) shall be the valuation interest rate used to determine
the accrued liability under section 412(c) of such Code and
section 302(c) of such Act,
(B) the assumed interest rate for purposes of paragraph
(2)(C) shall be the interest rate used to determine current
liability as of the initial post-restoration valuation date
under section 412(l) of such Code and section 302(d) of such
Act,
(C) the actuarial value of assets as of the initial post-
restoration valuation date shall be reset to the market value
of assets with a 5-year phase-in of unexpected investment
gains or losses on a prospective basis, and
(D) for plans using the frozen initial liability (FIL)
funding method in accordance with section 412(c) of such Code
and section 302(c) of such Act, the initial unfunded
liability used to determine normal cost shall be reset to the
initial restoration amortization base.
(e) Quarterly Contributions.--The requirements of section
412(m) of such Code and section 302(e) of such Act shall not
apply to a plan restored under subsection (b) until the plan
year beginning on the initial post-restoration valuation
date. The required annual payment for that year shall be the
lesser of--
(1) the amount determined under section 412(m)(4)(B)(i) of
such Code and section 302(e)(4)(B)(i) of such Act, or
(2) 100 percent of the amount required to be contributed
under the plan for the plan year beginning January 1, 2003,
and ending on the date of plan termination.
(f) Resetting of Funding Standard Account Balances.--In the
case of a plan restored under subsection (b), any accumulated
funding deficiency or credit balance in the funding standard
account under section 412 of such Code or section 302 of such
Act shall be set equal to zero as of the initial post-
restoration valuation date.
(g) Terms of Restored Plan.--
(1) In general.--The terms of a plan which is restored
pursuant to subsection (b) shall be determined by mutual
agreement of the employer and the collective bargaining
representative of employees covered by the plan. If such
parties are unable to reach mutual agreement on such terms,
then the terms of the restored plan will be determined by a
neutral arbitrator. The neutral arbitrator will be selected
by the parties within 7 days after the earlier of the date
the parties reach an impasse or 60 days after the date of the
enactment of this Act. The neutral arbitrator will be
selected by the parties from a panel of neutrals provided by
the National Mediation Board. The neutral arbitrator will
render his or her determination not later than 120 days after
the date of the enactment of this Act. Such determination
shall be final and binding on the parties.
(2) Specific terms.--The terms of the restored plan are
subject to the following:
(A) Benefits under the restored plan for any participant or
group of participants may not be greater than, but may be
less than, those under the plan prior to its termination, and
forms of distribution under the restored plan for any
participant or group of participants may exclude forms
available under the plan prior to its termination, and any
such reductions in benefits or forms of distribution shall be
deemed to comply with section 411(d)(6) of such Code and
section 204(g) of such Act.
(B) For any participant, benefits under the restored plan
shall be offset by the value of contributions made on behalf
of such participant to any defined contribution pension plan
established by the parties in conjunction with the
termination of the restored plan.
(C) The amortization periods for the initial restoration
amortization base and the unfunded section 412(l) restoration
liability shall not exceed 30 years.
(D) The minimum required cost of the restored plan shall
not be less than the greater of--
(i) the projected cost of any defined contribution pension
plan established in conjunction with the termination of the
restored plan, or
(ii) the amount allowed as costs under the employer's
original plan of reorganization for all of the employer's
retirement plans minus the minimum required cost determined
as of the plan restoration date of all of the employer's
retirement plans excluding the restored plan.
(h) PBGC Liability Limited.--In the case of any plan which
is described in subsection (a), which is restored pursuant to
subsection (b), and which subsequently terminates with a date
of plan termination before the end of the fifth calendar year
after the date of restoration, section 4022 of the Employee
Retirement Income Security Act of 1974 shall be applied as if
the plan had been amended to provide that participants would
receive no credit for benefit accrual purposes under the plan
for service on and after the first day of the plan year
beginning after the date of the enactment of this Act.
(i) Effective Date.--This section shall apply to plan years
beginning after December 31, 2002.
Mr. SPECTER. Mr. President, this amendment would do justice to the US
Airways pilots who have been very unfairly treated by what has happened
to the pension with US Airways.
The airline has had great problems, as have all the airlines,
following 9/11. They have been in bankruptcy and have been
restructuring their operation. There have been tremendous concessions
made by employees of US Airways and the pilots pension was abrogated.
[[Page S297]]
On January 9, 2003, Senator Santorum and I introduced S. 119, which
would have allowed the US Airways pension plan to have up to 30 years
to meet its obligations instead of the 5-year period. The requirement
of the 5-year period made it impossible for the pension plan to be
continued. My Subcommittee on Labor, Health and Human Services and
Education held a hearing on January 14, 2003, and explored the options.
The PBGC declined to honor the request of the US Airways pilots. We
have now offered an amendment, which is now pending, which would grant
up to 30 years for the pension plan to be funded. We call for a
reinstatement of the earlier plan. In the interim, US Airways has
offered an additional benefit and we would agree to an offset of that
against the amendment which we are now offering.
How much time do I have remaining?
The PRESIDING OFFICER. Five minutes.
Mr. SPECTER. I reserve the remainder of my time until I hear the
arguments in opposition to the amendment.
The PRESIDING OFFICER. Who seeks recognition?
Mr. REID. Is the Senate in a quorum call?
The PRESIDING OFFICER. No.
Mr. REID. I suggest to my friend from Pennsylvania it appears as if
there will be no one speaking in opposition of the argument. It has
been argued several times before. We should move on. We have people who
are calling both cloakrooms because of the prearranged vote 20 minutes
ago. They have schedules--some downtown, some up here--and I wonder if
the Senator could move forward on his final remarks.
Mr. SPECTER. Mr. President, I offer one additional argument; that is,
if the amendment of the Senator from Iowa, Mr. Grassley, had been
adopted in a timely way, US Airways would have been able to meet its
pension obligations. We intend to revisit this on the pension bill
which will be coming up at a later time. I have no illusions about the
likelihood of success today.
However, US Airways pilots have been unfairly treated. When the plan
was changed, they got about 25 percent on the dollar. When US Airways
would have an obligation to fund the plan, but for a 30-year period, it
would save money for the Pension Benefit Guaranty Corporation and they
would not have to make payments. So it would be a win-win situation at
all times.
That concludes my argument. I am ready for the vote.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
The Senator has requested a division vote. All those Senators in favor
of the amendment will rise and stand until counted.
All those opposed will rise and stand until counted.
On a division, the amendment was rejected.
Mr. REID. I move to reconsider the vote.
Mr. DORGAN. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Amendment No. 2236
Mr. REID. Mr. President, any time we have is yielded back.
The PRESIDING OFFICER. All time is yielded back. The question is on
agreeing to the amendment.
Mr. REID. Mr. President, if the Presiding Officer would yield, we
have a unanimous consent request.
Unanimous Consent Agreement--Executive Calendar
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, as in executive session, I ask unanimous
consent that following the vote on passage of the pension rate bill
today, the Senate proceed to executive session to consider the
following nomination on today's Executive Calendar: calendar No. 425,
the nomination of Gary L. Sharpe to be a U.S. District Judge for the
Northern District of New York.
I further ask unanimous consent that the Senate proceed to a vote on
the confirmation of the nomination; further, that following the vote,
the President be immediately notified of the Senate's action, and the
Senate then return to legislative session. I further ask consent that
there be 4 minutes equally divided between the chairman and ranking
member before the vote.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Amendment No. 2236
The PRESIDING OFFICER. The question is now on agreeing to the
amendment of the Senator from Arizona.
The amendment (No. 2236) was rejected.
Mr. DURBIN. Mr. President, I rise in support of the Grassley-Baucus-
Gregg-Kennedy amendment. I commend the Finance and HELP Committees for
working together in a bipartisan effort to secure the pensions of
almost 45 million workers.
This legislation is vital to preserving defined benefit pension
plans, which provide retirees with a monthly benefit that is secured by
the Pension Benefit Guaranty Corporation. Nearly 35 million workers and
retirees are covered by single employer plans, and an additional 9.7
million are covered by multiemployer plans. In all, one in five workers
participates in a defined benefit plan.
Unfortunately, these defined benefit pension plans are facing several
challenges due to the following ``perfect storm'' of economic
conditions: the downturn in the stock market was the longest since the
Great Depression; the 30-year Treasury bond interest rates have been at
historically low levels; and the weak economy has made it even more
difficult for companies to make payments and pay the excise taxes as
currently required by law.
As a result of these circumstances, many pension plans are under-
funded, and this legislation would help companies weather this storm.
There are three main components of this legislation. The first is a 2-
year replacement of the 30-year Treasury bond rate used to calculate
employers' contributions to pension plans with a corporate bond rate.
The second is partial, temporary relief from deficit reduction
contributions. The third is relief for multiemployer plans, which often
aid low-wage workers, as well as workers in short-term or seasonal
employment.
I support all three of these provisions and would like to speak in
particular about the need for deficit reduction contribution relief.
This relief would aid companies that had well-funded pension plans as
recently as 2000, but, due to the current economic storm, need
assistance now. The assistance we are providing is temporary--only for
2 years--and partial. It would allow troubled industries, such as
airlines and steel, to regain their financial footing by providing
relief of up to 80 percent in 2004 and up to 60 percent in 2005.
I understand that there are concerns regarding liability to the PBGC.
If a company we are providing relief to now is forced to terminate its
pension later, PBGC would takeover the pension, and the liability would
be increased by the amount of DRC relief that the company had received.
However, this does not take into consideration that if we do not
provide companies with DRC relief now, they may be unable to pay their
DRC surcharges and therefore will be more likely to have their pensions
involuntarily terminated in the first place.
Furthermore, the DRC provision in the Pension Funding Equity Act
would ensure that no plan will lose ground. Companies that receive DRC
relief would be required to contribute at least the amount necessary to
fund the expected increase in current liability that results from
benefits that have accrued during the year.
Finally, I know that several Cabinet Secretaries have expressed their
opposition to DRC relief. However, the White House, in its Statement of
Administration Policy, also has acknowledged that ``The DRC is part of
a flawed system of funding rules that should be reviewed and
reformed.'' Although the White House would prefer to address DRC
changes in the context of broader pension reform, we must provide aid
to these companies and their workers now. For example, United Airlines,
based in my home State of Illinois, would benefit from the DRC relief
in this legislation, and as a result, the pensions of the almost
130,000 participants in United's pension plans, including over 22,000
participants in Illinois, would be more secure.
Overall, the Grassley-Baucus-Gregg-Kennedy amendment will provide
necessary relief for the 45 million workers
[[Page S298]]
who participate in our single and multi-employer pension plans. I urge
my colleagues to join me in preserving the future of these defined
benefit pension plans and supporting this important legislation.
amendment no. 2233
The PRESIDING OFFICER. The question is on agreeing to the amendment
of the Senator from Iowa.
The amendment (No. 2233), as amended, was agreed to.
multiemployer relief
Mr. BAUCUS. This amendment provides short-term relief for
multiemployer pension plans that are struggling to cope with
unprecedented losses on their equity investments in the first few years
of this decade. The temporary funding relief would help plans deal with
the investment losses they suffered through 2002, by letting them
postpone amortization of the portion of those losses that would
otherwise be recognized for funding purposes in any two of the plan
years beginning after June 30, 2002 and before July 1, 2006.
Mr. GREGG. That is correct. The proposed relief would permit a short-
term postponement of the losses that count toward the required funding
in any two of the plan years beginning after June 30, 2002 and before
July 1, 2006. The relief may be taken for no more than 2 years.
Mr. KENNEDY. Yes. For funding purposes, most multiemployer plans
recognize investment losses gradually over a period of years. So, part
of a plan's investment losses incurred in 2000, for example, would
first be recognized under the funding rules in the 2001 plan year. The
portion of those losses that show up in the funding requirements during
the relief period would be eligible for the relief.
Mr. GRASSLEY. As this discussion demonstrates, the focus of the
relief is on the portion of the loss that would be recognized for any
of the plan years for which the relief is available. That is what the
language means when it refers to losses ``for the plan year.''
amendment no. 2233
Mr. BAUCUS. This amendment specifically addresses the problems faced
by the steel and airline industry. However, I also have concerns about
other types of companies. Some of these companies should be allowed to
access the DRC relief that is in this bill. I believe my colleagues
share my concerns, and that is why we have included an application
process in this amendment.
Mr. GREGG. That is correct. We have included the application process
in this amendment so that other types of companies will also be allowed
to access the DRC relief in this bill. This application process should
allow other employers to receive relief, just like the steel and
airline companies.
Mr. KENNEDY. This application process is a fundamental piece of the
amendment. It would not be fair to exclude all other employers from the
DRC relief. There are many companies in other industries that really
need this relief, and we have provided access though the application
process.
Mr. GRASSLEY. We have all agreed on the importance of this piece of
the amendment, and we all understand that it is not intended to be
window dressing. We expect that Treasury will adhere to the legislative
intent in crafting this proposal, and implement the application process
in a way that allows other employers to receive real relief, much like
the steel and industry industries will receive.
Ms. SNOWE. I share my colleagues' concern, particularly with respect
to how this application process would apply to small businesses. It is
very important that other companies have access to this relief. The
application process must provide a means of bringing relief to small
companies.
Mr. JEFFORDS. Mr. President, today, I am pleased to see that the
Senate is taking action on the Pension Equity Act of 2003.
As many of my colleagues are aware, the pension discount rate relief
initiative, enacted in 2001, expired last month. Passage of H.R. 3108
will provide a resolution to this very serious issue. This bill
replaces the outdated 30-year Treasury bill rate with a rate based on a
composite of investment grade long-term corporate bonds. Failure to act
on this bill will cause the statutory rate that pension plans must use
to calculate their assets and liabilities to return to the old 30-year
rate. Companies with pension plans will shortly have to begin making
large contributions to their plans in the year to come.
An amendment to H.R. 3108 will provide relief from the deficit
reduction contribution, DRC, requirements that certain plans are now
facing. Under the current pension funding rules, companies that offer
defined benefit pension plans are required to make additional
contributions to those plans when they are less than 90 percent funded.
A pension plan's funding level is determined by comparing the plan's
current assets to its promised benefits and then calculated as to
whether the two will match up by the time the promised benefits are
due.
The recent drop in the stock market, low interest rates, and generous
pension benefits agreed to in better times have caused many defined
benefit pension plans to fall well beneath the 90 percent threshold. As
a result, many companies are being required to make substantial
contributions at the time they can least afford them. The Finance
Committee reported bill, which I support, included fair DRC relief.
While I support these provisions related to pensions, I am
disappointed that this body has not worked to enact further reforms.
Two months ago, I, along with Senators Snowe and Hatch, introduced S.
1912, the Retirement Account Portability Act of 2003. In brief, this
bill will make a number of improvements in the retirement savings
system to help families preserve retirement assets. It will, for
example, enhance the portability of retirement savings by expanding
rollover options in traditional IRAs, Roth IRAs, and SIMPLE Plans. The
bill also clarifies that when employees are permitted to make after-tax
contributions to retirement plans, those after-tax amounts may be
rolled over into other retirement plans eligible to receive such
rollovers. This clarification will make it easier for workers to move
all elements of their 401(k) or 403(b) savings when they change jobs
and move between the private sector and the tax-exempt sector.
In addition, the bill builds on defined contribution plan reforms
enacted in 2001 by requiring a shortened vesting schedule for employer
nonelective contributions, such as profit-sharing contributions, to
defined contribution plans. As a result, employer contributions will
become employee property more quickly, helping workers to build more
meaningful retirement benefits. This new vesting schedule corresponds
to rules for 401(k) matching contributions enacted in 2001.
The bill also helps preserve retirement savings by allowing plans to
designate default IRAs or annuity contracts to which employee rollovers
may be directed. Employers should be more willing to establish default
IRA and annuity rollover options as a result, making it easier for
employees to keep savings in the retirement system when they change
jobs.
For workers who leave a job without claiming their retirement
benefits, the bill improves on the automatic rollover provisions
enacted in 2001, by allowing certain small distributions from
retirement plans to be sent to the Pension Benefit Guaranty
Corporation, PBGC, ensuring that participants are ultimately reunited
with their earned benefits. The bill also expands the scope of the
PBGC's successful Missing Participants Program that matches workers
with lost pension benefits.
The Retirement Account Portability Act of 2003 will benefit employees
of State and local governments, including teachers, through a number of
this bill's technical corrections that will facilitate the purchase of
service credits in public pension programs, allowing State and local
employees to more easily attain a full pension in the jurisdiction
where they conclude their career. The bill also contains provisions
that will clarify eligibility rights of certain State and local
employees who participate in a section 457 deferred compensation plan.
As this body moves to pass H.R. 3108 today, I thank Senators Grassley
and Baucus for their hard work on this legislation. I also thank
Senators Gregg and Kennedy for their contributions to this initiative.
I look forward to working with my distinguished chairmen and ranking
members of the HELP and Finance Committees in moving S. 1912 and other
measures that will
[[Page S299]]
proactively improve the mechanisms we use for pension and retirement
plans.
Mrs. BOXER. Mr. President, we need to ensure that the retirement
benefits Americans have been promised are secure. The bipartisan
Pension Funding Equity Act of 2003 is a first step toward improving
retirement security for Americans, and I support it.
As you know, the legislation will help stabilize the traditional
pension plans known as defined benefit plans that cover almost 45
million Americans. These plans are in trouble because historically low
interest rates and the last few years of decline in the stock market
have combined to leave them underfunded.
To help stabilize these plans, the Pension Funding Equity Act
provides temporary contribution relief for both single-employer plans
and multi-employer plans. Of the 45 million working Americans
participating in defined benefit pension plans, 35 million of them are
covered by single-employer plans and 9.7 million are covered by multi-
employer plans. Defined benefit plans promise workers a monthly
retirement benefit that these 45 million workers are counting on. It
would be tragic if these funds went bankrupt--or if employers gave them
up.
Of the millions of workers participating in defined benefit pension
plans, 40 percent are in construction, 30 percent are in retail and
service industries, and 10 percent are in trucking services. These
workers are the backbone of our labor force, and the first step toward
ensuring their retirement security depends on passage of this
legislation.
I urge my colleagues to support the Pension Funding Equity Act of
2003.
The PRESIDING OFFICER. The question is on the engrossment of the
amendment and third reading of the bill.
The amendment was ordered to be engrossed, and the bill to be read a
third time.
The bill was read a third time.
Mr. GRASSLEY. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The bill having been read the third time, the question is, Shall the
bill, as amended, pass?
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. McCONNELL. I announce that the Senator from Georgia (Mr.
Chambliss) is necessarily absent.
Mr. REID. I announce that the Senator from Montana (Mr. Baucus), the
Senator from North Carolina (Mr. Edwards), the Senator from
Massachusetts (Mr. Kerry), and the Senator from Connecticut (Mr.
Lieberman) are necessarily absent.
I further announce that, if present and voting, the Senator from
Massachusetts (Mr. Kerry) would vote ``yea.''
The PRESIDING OFFICER (Ms. Murkowski). Are there any other Senators
in the Chamber desiring to vote?
The result was announced--yeas 86, nays 9, as follows:
[Rollcall Vote No. 5 Leg.]
YEAS--86
Akaka
Alexander
Allard
Allen
Bayh
Bennett
Biden
Bingaman
Bond
Boxer
Breaux
Brownback
Bunning
Burns
Byrd
Campbell
Cantwell
Carper
Clinton
Cochran
Coleman
Collins
Conrad
Cornyn
Corzine
Craig
Crapo
Daschle
Dayton
DeWine
Dodd
Dole
Domenici
Dorgan
Durbin
Enzi
Feingold
Feinstein
Frist
Graham (FL)
Graham (SC)
Grassley
Gregg
Hagel
Harkin
Hatch
Hollings
Hutchison
Inouye
Jeffords
Johnson
Kennedy
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lincoln
Lott
Lugar
McConnell
Mikulski
Miller
Murkowski
Murray
Nelson (FL)
Nelson (NE)
Pryor
Reed
Reid
Roberts
Rockefeller
Santorum
Sarbanes
Schumer
Shelby
Smith
Snowe
Specter
Stabenow
Stevens
Sununu
Talent
Voinovich
Warner
Wyden
NAYS--9
Chafee
Ensign
Fitzgerald
Inhofe
Kyl
McCain
Nickles
Sessions
Thomas
NOT VOTING--5
Baucus
Chambliss
Edwards
Kerry
Lieberman
The bill (H.R. 3108), as amended, was passed, as follows:
H.R. 3108
Resolved, That the bill from the House of Representatives
(H.R. 3108) entitled ``An Act to amend the Employee
Retirement Income Security Act of 1974 and the Internal
Revenue Code of 1986 to temporarily replace the 30-year
Treasury rate with a rate based on long-term corporate bonds
for certain pension plan funding requirements and other
provisions, and for other purposes.'', do pass with the
following amendment:
Page 2, line 3, strike out all after ``SECTION'' and
insert:
1. SHORT TITLE.
This Act may be cited as the ``Pension Stability Act''.
SEC. 2. TEMPORARY REPLACEMENT OF INTEREST RATE ON 30-YEAR
TREASURY SECURITIES WITH INTEREST RATE ON
CONSERVATIVELY INVESTED LONG-TERM CORPORATE
BONDS.
(a) Internal Revenue Code of 1986.--
(1) Determination of permissible range.--
(A) In general.--Section 412(b)(5)(B)(ii) of the Internal
Revenue Code of 1986 is amended--
(i) in subclause (I), by inserting ``or (III)'' after
``subclause (II)'';
(ii) by redesignating subclause (II) as subclause (III);
(iii) by inserting after subclause (I) the following new
subclause:
``(II) Special rule for 2004 and 2005.--In the case of plan
years beginning in 2004 or 2005, the term `permissible range'
means a rate of interest which is not above, and not more
than 10 percent below, the weighted average of the
conservative long-term corporate bond rates during the 4-year
period ending on the last day before the beginning of the
plan year. The Secretary shall, by regulation, prescribe a
method for periodically determining conservative long-term
bond rates for purposes of this paragraph. Such rates shall
reflect the rates of interest on amounts invested
conservatively in long-term corporate bonds and shall be
based on the use of 2 or more indices that are in the top 2
quality levels available reflecting average maturities of 20
years or more.''; and
(iv) in subclause (III), as so redesignated--
(I) by inserting ``or (II)'' after ``subclause (I)'' the
first place it appears; and
(II) by striking ``subclause (I)'' the second place it
appears and inserting ``such subclause''.
(2) Determination of current liability.--Section
412(l)(7)(C)(i) of such Code is amended by adding at the end
the following new subclause:
``(IV) Special rule for 2004 and 2005.--For plan years
beginning in 2004 or 2005, notwithstanding subclause (I), the
rate of interest used to determine current liability under
this subsection shall be the rate of interest under
subsection (b)(5).''.
(3) Conforming amendment.--Section 412(m)(7) of such Code
is amended to read as follows:
``(7) Special rule for 2002.--In any case in which the
interest rate used to determine current liability is
determined under subsection (l)(7)(C)(i)(III), for purposes
of applying paragraphs (1) and (4)(B)(ii) for plan years
beginning in 2002, the current liability of the plan for the
preceding plan year shall be redetermined using 120 percent
as the specified percentage determined under subsection
(l)(7)(C)(i)(II).''.
(4) Limitation on certain assumptions.--Section
415(b)(2)(E)(ii) of such Code is amended by inserting ``,
except that in the case of plan years beginning in 2004 or
2005, `5.5 percent' shall be substituted for `5 percent' in
clause (i)'' before the period at the end.
(5) Election to disregard modification for deduction
purposes.--Section 404(a)(1) of such Code is amended by
adding at the end the following new subparagraph:
``(F) Election to disregard modified interest rate.--An
employer may elect to disregard subsections (b)(5)(B)(ii)(II)
and (l)(7)(C)(i) of section 412 solely for purposes of
determining the interest rate used in calculating the maximum
amount of the deduction allowable under this section for
contributions to a plan to which such subsections apply.''
(b) Employee Retirement Income Security Act of 1974.--
(1) Determination of permissible range.--
(A) In general.--Section 302(b)(5)(B)(ii) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1082(b)(5)(B)(ii)) is amended--
(i) in subclause (I), by inserting ``or (III)'' after
``subclause (II)'';
(ii) by redesignating subclause (II) as subclause (III);
(iii) by inserting after subclause (I) the following new
subclause:
``(II) Special rule for years 2004 and 2005.--In the case
of plan years beginning in 2004 or 2005, the term
`permissible range' means a rate of interest which is not
above, and not more than 10 percent below, the weighted
average of the conservative long-term corporate bond rates
(as determined under section 412(b)(5)(B)(ii)(II) of the
Internal Revenue Code of 1986) during the 4-year period
ending on the last day before the beginning of the plan
year.''; and
(iv) in subclause (III), as so redesignated--
(I) by inserting ``or (II)'' after ``subclause (I)'' the
first place it appears; and
(II) by striking ``subclause (I)'' the second place it
appears and inserting ``such subclause''.
(2) Determination of current liability.--Section
302(d)(7)(C)(i) of such Act (29 U.S.C. 1082(d)(7)(C)(i)) is
amended by adding at the end the following new subclause:
``(IV) Special rule for 2004 and 2005.--For plan years
beginning in 2004 or 2005, notwithstanding subclause (I), the
rate of interest used
[[Page S300]]
to determine current liability under this subsection shall be
the rate of interest under subsection (b)(5).''.
(3) Conforming amendment.--Section 302(e)(7) of such Act
(29 U.S.C. 1082(e)(7)) is amended to read as follows:
``(7) Special rule for 2002.--In any case in which the
interest rate used to determine current liability is
determined under subsection (d)(7)(C)(i)(III), for purposes
of applying paragraphs (1) and (4)(B)(ii) for plan years
beginning in 2002, the current liability of the plan for the
preceding plan year shall be redetermined using 120 as the
specified percentage determined under subsection
(d)(7)(C)(i)(II).''.
(4) PBGC.--Section 4006(a)(3)(E)(iii) of such Act (29
U.S.C. 1306(a)(3)(E)(iii)) is amended by adding at the end
the following new subclause:
``(V) In the case of plan years beginning in 2004 or 2005,
the annual yield taken into account under subclause (II)
shall be the annual yield computed by using the conservative
long-term corporate bond rate (as determined under section
412(b)(5)(B)(ii)(II) of the Internal Revenue Code of 1986)
for the month preceding the month in which the plan year
begins.''
(c) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to plan years
beginning after December 31, 2003.
(2) Lookback rules.--For purposes of applying subsections
(l)(9)(B)(ii) and (m)(1) of section 412 of the Internal
Revenue Code of 1986, and subsections (d)(9)(B)(ii) and
(e)(1) of section 302 of the Employee Retirement Income
Security Act of 1974 to plan years beginning after December
31, 2003, the amendments made by this section may be applied
as if such amendments had been in effect for all years
beginning before such date.
(3) Transition rule for section 415 limitation.--In the
case of any participant or beneficiary receiving a
distribution after December 31, 2003 and before January 1,
2005, the amount payable under any form of benefit subject to
section 417(b)(3) of the Internal Revenue Code of 1986 and
subject to adjustment under section 415(b)(2)(B) of such Code
shall not, solely by reason of the amendment made by
subsection (a)(4), be less than the amount that would have
been so payable had the amount payable been determined using
the applicable interest rate in effect as of the last day of
the last plan year beginning before January 1, 2004.
SEC. 3. ELECTION OF ALTERNATIVE DEFICIT REDUCTION
CONTRIBUTION.
(a) Amendment of 1986 Code.--Section 412(l) of the Internal
Revenue Code of 1986 (relating to applicability of
subsection) is amended by adding at the end the following new
paragraph:
``(12) Alternative increase for certain plans meeting
requirements in 2000.--
``(A) In general.--In the case of a defined benefit plan
established and maintained by an applicable employer, if this
subsection did not apply to the plan for the plan year
beginning in 2000 (determined without regard to paragraph
(6)), then, at the election of the employer, the increased
amount under paragraph (1) for any applicable plan year shall
be the greater of--
``(i) 20 percent (40 percent in the case of an applicable
plan year beginning after December 27, 2004) of the increased
amount under paragraph (1) determined without regard to this
paragraph, or
``(ii) the increased amount which would be determined under
paragraph (1) if the deficit reduction contribution under
paragraph (2) for the applicable plan year were determined
without regard to subparagraphs (A), (B), and (D) of
paragraph (2).
``(B) Restrictions on benefit increases.--No amendment
which increases the liabilities of the plan by reason of any
increase in benefits, any change in the accrual of benefits,
or any change in the rate at which benefits become
nonforfeitable shall be adopted during any applicable plan
year, unless--
``(i) the funded current liability percentage (as defined
in paragraph (8)(B)) as of the end of such plan year is
projected (taking into account the effect of the amendment)
to be at least 75 percent,
``(ii) the amendment provides for an increase in benefits
under a formula which is not based on a participant's
compensation, but only if the rate of such increase is not in
excess of the contemporaneous rate of increase in average
wages of participants covered by the amendment,
``(iii) the amendment is required by a collective
bargaining agreement which is in effect on the date of
enactment of this subparagraph, or
``(iv) the amendment is otherwise described in subparagraph
(A) or (C) of subsection (f)(2).
If a plan is amended during any applicable plan year in
violation of the preceding sentence, any election under this
paragraph shall not apply to any applicable plan year ending
on or after the date on which such amendment is adopted.
``(C) Applicable employer.--For purposes of this
paragraph--
``(i) In general.--The term `applicable employer' means an
employer which is--
``(I) a commercial passenger airline,
``(II) primarily engaged in the production or manufacture
of a steel mill product, or the mining or processing of iron
ore or beneficiated iron ore products, or
``(III) an organization described in section 501(c)(5) and
which established the plan to which this paragraph applies on
June 30, 1955.
``(ii) Other employers may apply for relief.--
``(I) In general.--Except as provided in subclause (II), an
employer other than an employer described in clause (i) shall
be treated as an applicable employer if the employer files an
application (at such time and in such manner as the Secretary
may prescribe) to be treated as an applicable employer for
purposes of this paragraph.
``(II) Exception.--Subclause (I) shall not apply to an
employer if, within 90 days of the filing of the application,
the Secretary determines (taking into account the application
of this paragraph) that there is a reasonable likelihood that
the employer will be unable to make future required
contributions to the plan in a timely manner.
``(D) Applicable plan year.--For purposes of this
paragraph--
``(i) In general.--The term `applicable plan year' means
any plan year beginning after December 27, 2003, and before
December 28, 2005, for which the employer elects the
application of this paragraph.
``(ii) Limitation on number of years which may be
elected.--An election may not be made under this paragraph
with respect to more than 2 plan years.
``(E) Election.--An election under this paragraph shall be
made at such time and in such manner as the Secretary may
prescribe.''
(b) Amendment of ERISA.--Section 302(d) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1082(d)) is
amended by adding at the end the following new paragraph:
``(12) Alternative increase for certain plans meeting
requirements in 2000.--
``(A) In general.--In the case of a defined benefit plan
established and maintained by an applicable employer, if this
subsection did not apply to the plan for the plan year
beginning in 2000 (determined without regard to paragraph
(6)), then, at the election of the employer, the increased
amount under paragraph (1) for any applicable plan year shall
be the greater of--
``(i) 20 percent (40 percent in the case of an applicable
plan year beginning after December 27, 2004) of the increased
amount under paragraph (1) determined without regard to this
paragraph, or
``(ii) the increased amount which would be determined under
paragraph (1) if the deficit reduction contribution under
paragraph (2) for the applicable plan year were determined
without regard to subparagraphs (A), (B), and (D) of
paragraph (2).
``(B) Restrictions on benefit increases.--No amendment
which increases the liabilities of the plan by reason of any
increase in benefits, any change in the accrual of benefits,
or any change in the rate at which benefits become
nonforfeitable under the plan shall be adopted during any
applicable plan year, unless--
``(i) the funded current liability percentage (as defined
in paragraph (8)(B)) as of the end of such plan year is
projected (taking into account the effect of the amendment)
to be at least 75 percent,
``(ii) the amendment provides for an increase in benefits
under a formula which is not based on a participant's
compensation, but only if the rate of such increase is not in
excess of the contemporaneous rate of increase in average
wages of participants covered by the amendment,
``(iii) the amendment is required by a collective
bargaining agreement which is in effect on the date of
enactment of this subparagraph, or
``(iv) the amendment is otherwise described in subparagraph
(A) or (C) of section 304(b)(2).
If a plan is amended during any applicable plan year in
violation of the preceding sentence, any election under this
paragraph shall not apply to any applicable plan year ending
on or after the date on which such amendment is adopted.
``(C) Applicable employer.--For purposes of this
paragraph--
``(i) In general.--The term `applicable employer' means an
employer which is--
``(I) a commercial passenger airline,
``(II) primarily engaged in the production or manufacture
of a steel mill product, or the mining or processing of iron
ore or beneficiated iron ore products, or
``(III) an organization described in section 501(c)(5) of
the Internal Revenue Code of 1986 and which established the
plan to which this paragraph applies on June 30, 1955.
``(ii) Other employers may apply for relief.--
``(I) In general.--Except as provided in subclause (II), an
employer other than an employer described in clause (i) shall
be treated as an applicable employer if the employer files an
application (at such time and in such manner as the Secretary
of the Treasury may prescribe) to be treated as an applicable
employer for purposes of this paragraph.
``(II) Exception.--Subclause (I) shall not apply to an
employer if, within 90 days of the filing of the application,
the Secretary of the Treasury determines (taking into account
the application of this paragraph) that there is a reasonable
likelihood that the employer will be unable to make future
required contributions to the plan in a timely manner.
``(D) Applicable plan year.--For purposes of this
paragraph--
``(i) In general.--The term `applicable plan year' means
any plan year beginning after December 27, 2003, and before
December 28, 2005, for which the employer elects the
application of this paragraph.
``(ii) Limitation on number of years which may be
elected.--An election may not be made under this paragraph
with respect to more than 2 plan years.
``(E) Notice requirements for plans electing alternative
deficit reduction contributions.--
``(i) In general.--If an employer elects an alternative
deficit reduction contribution under this paragraph and
section 412(l)(12) of the Internal Revenue Code of 1986 for
any year, the employer shall provide, within 30 days (120
days in the case of an employer described in subparagraph
(C)(ii)) of filing the election for such year, written notice
of the election to participants and beneficiaries and to the
Pension Benefit Guaranty Corporation.
[[Page S301]]
``(ii) Notice to participants and beneficiaries.--The
notice under clause (i) to participants and beneficiaries
shall include with respect to any election--
``(I) the due date of the alternative deficit reduction
contribution and the amount by which such contribution was
reduced from the amount which would have been owed if the
election were not made, and
``(II) a description of the benefits under the plan which
are eligible to be guaranteed by the Pension Benefit Guaranty
Corporation and an explanation of the limitations on the
guarantee and the circumstances under which such limitations
apply, including the maximum guaranteed monthly benefits
which the Pension Benefit Guaranty Corporation would pay if
the plan terminated while underfunded.
``(iii) Notice to pbgc.--The notice under clause (i) to the
Pension Benefit Guaranty Corporation shall include--
``(I) the information described in clause (ii)(I),
``(II) the number of years it will take to restore the plan
to full funding if the employer only makes the required
contributions, and
``(III) information as to how the amount by which the plan
is underfunded compares with the capitalization of the
employer making the election.
``(F) Election.--An election under this paragraph shall be
made at such time and in such manner as the Secretary of the
Treasury may prescribe.''
(c) Effect of Election.--An election under section
412(l)(12) of the Internal Revenue Code of 1986 or section
302(d)(12) of the Employee Retirement Income Security Act of
1974 (as added by this section) with respect to a plan shall
not invalidate any obligation (pursuant to a collective
bargaining agreement in effect on the date of the election)
to provide benefits, to change the accrual of benefits, or to
change the rate at which benefits become nonforfeitable under
the plan .
(d) Penalty for Failing To Provide Notice.--Section
502(c)(3) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1132(c)(3)) is amended by inserting ``or who
fails to meet the requirements of section 302(d)(12)(E) with
respect to any participant or beneficiary'' after
``101(e)(2)''.
SEC. 4. MULTIEMPLOYER PLAN FUNDING NOTICES.
(a) In General.--Section 104 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 104) is amended by
redesignating subsection (d) as subsection (e) and by
inserting after subsection (c) the following new subsection:
``(d) Multiemployer Defined Benefit Plan Funding Notices.--
``(1) In general.--The administrator of a defined benefit
plan which is a multiemployer plan shall for each plan year
provide a plan funding notice to each plan participant and
beneficiary, to each labor organization representing such
participants or beneficiaries, and to each employer that has
an obligation to contribute under the plan.
``(2) Information contained in notices.--
``(A) Identifying information.--Each notice required under
paragraph (1) shall contain identifying information,
including the name of the plan, the address and phone number
of the plan administrator and the plan's principal
administrative officer, each plan sponsor's employer
identification number, and the plan number of the plan.
``(B) Specific information.--A plan funding notice under
paragraph (1) shall include--
``(i) a statement as to whether the plan's funded current
liability percentage (as defined in section 302(d)(8)(B)) for
the plan year to which the notice relates is at least 100
percent (and, if not, the actual percentage);
``(ii) a statement of the value of the plan's assets, the
amount of benefit payments, and the ratio of the assets to
the payments for the plan year to which the report relates;
``(iii) a summary of the rules governing insolvent
multiemployer plans, including the limitations on benefit
payments and any potential benefit reductions and suspensions
(and the potential effects of such limitations, reductions,
and suspensions on the plan); and
``(iv) a general description of the benefits under the plan
which are eligible to be guaranteed by the Pension Benefit
Guaranty Corporation, along with an explanation of the
limitations on the guarantee and the circumstances under
which such limitations apply.
``(C) Other information.--Each notice under paragraph (1)
shall include any additional information which the plan
administrator elects to include to the extent not
inconsistent with regulations prescribed by the Secretary.
``(3) Time for providing notice.--Any notice under
paragraph (1) shall be provided no later than two months
after the deadline (including extensions) for filing the
annual report for the plan year to which the notice relates.
``(4) Form and manner.--Any notice under paragraph (1)--
``(A) shall be provided in a form and manner prescribed in
regulations of the Secretary,
``(B) shall be written in a manner so as to be understood
by the average plan participant, and
``(C) may be provided in written, electronic, or other
appropriate form to the extent such form is reasonably
accessible to persons to whom the notice is required to be
provided.''
(b) Penalties.--Section 502(c)(1) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1132(c)(1))
is amended by striking ``or section 101(e)(1)'' and inserting
``, section 101(e)(1), or section 104(d)''.
(c) Regulations and Model Notice.--The Secretary of Labor
shall, not later than 1 year after the date of the enactment
of this Act, issue regulations (including a model notice)
necessary to implement the amendments made by this section.
(d) Effective Date.--The amendments made by this section
shall apply to plan years beginning after December 31, 2004.
SEC. 5. AMORTIZATION HIATUS FOR NET EXPERIENCE LOSSES IN
MULTIEMPLOYER PLANS.
(a) Amendments to the Employee Retirement Income Security
Act of 1974.--
(1) In general.--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 new
subparagraph:
``(F)(i) If a multiemployer plan has a net experience loss
for any plan year beginning after June 30, 2002, and before
July 1, 2006--
``(I) the plan may elect to have the 15-year amortization
period under paragraph (2)(B)(iv) with respect to the loss
begin in any plan year selected by the plan from among the 3
immediately succeeding plan years, and
``(II) if the plan makes an election under subclause (I)
for any plan year, the net experience loss for the year
shall, for purposes of determining any charge to the funding
standard account, or interest, with respect to the loss, be
treated in the same manner as if it were a net experience
loss occurring in the year selected by the plan under
subclause (I) (without regard to any net experience loss or
gain otherwise determined for such year).
Notwithstanding the preceding sentence, a plan may elect to
have this subparagraph apply to net experience losses for
only 2 plan years beginning after June 30, 2002, and before
July 1, 2006.
``(ii) An amendment which increases the liabilities of the
plan by reason of any increase in benefits, any change in the
accrual of benefits, or any change in the rate at which
benefits become nonforfeitable under the plan shall not take
effect for any plan year in the hiatus period, unless--
``(I) the funded current liability percentage (as defined
in subsection (d)(8)(B)) as of the end of the plan year is
projected (taking into account the effect of the amendment)
to be at least 75 percent,
``(II) the plan's actuary certifies that, due to an
increase in contribution rates, the normal cost attributable
to the benefit increase or other change is expected to be
fully funded in the year following the year the increase or
other change takes effect, and any increase in the plan's
accrued liabilities attributable to the benefit increase or
other change is expected to be fully funded by the end of the
third plan year following the end of the last hiatus period
of the plan, or
``(III) the plan amendment is otherwise described in
subparagraph (A) or (C) of section 304(b)(2).
``(iii) Clause (ii) shall not apply to an increase in
benefits for a group of participants resulting solely from a
collectively bargained increase in the contributions made on
their behalf.
``(iv) For purposes of this subparagraph, the term `hiatus
period' means any period during which the amortization of a
net experience loss is suspended by reason of this
subparagraph.
``(v) Interest accrued on any net experience loss during a
hiatus period shall be charged to a reconciliation account
and not to the funding standard account.
``(vi) If a plan elects an amortization hiatus under this
subparagraph and section 412(b)(7)(F) of the Internal Revenue
Code of 1986 for any plan year, the plan administrator shall
provide, within 30 days of filing the election for such year,
written notice of the election to participants and
beneficiaries, to each labor organization representing such
participants or beneficiaries, and to each employer that has
an obligation to contribute under the plan. Such notice shall
include with respect to any election the amount of the net
experience loss to be deferred and the period of the
deferral. Such notice shall also include the maximum
guaranteed monthly benefits which the Pension Benefit
Guaranty Corporation would pay if the plan terminated while
underfunded.
``(vii) An election under this subparagraph shall be made
at such time and in such manner as the Secretary, after
consultation with the Secretary of the Treasury, may
prescribe.''
(2) Penalty.--Section 502(c)(4) of such Act (29 U.S.C.
1132(c)(4)) is amended to read as follows:
``(4) The Secretary may assess a civil penalty of not more
than $1,000 a day for each violation by any person of section
302(b)(7)(F)(vi).''
(b) Amendments to the Internal Revenue Code of 1986.--
(1) In general.--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 new
subparagraph:
``(F) Amortization hiatus.--
``(i) In general.--If a multiemployer plan has a net
experience loss for any plan year beginning after June 30,
2002, and before July 1, 2006--
``(I) the plan may elect to have the 15-year amortization
period under paragraph (2)(B)(iv) with respect to the loss
begin in any plan year selected by the plan from among the 3
immediately succeeding plan years, and
``(II) if the plan makes an election under subclause (I)
for any plan year, the net experience loss for the year
shall, for purposes of determining any charge to the funding
standard account, or interest, with respect to the loss, be
treated in the same manner as if it were a net experience
loss occurring in the year selected by the plan under
subclause (I) (without regard to any net experience loss or
gain otherwise determined for such year).
Notwithstanding the preceding sentence, a plan may elect to
have this subparagraph apply to net experience losses for
only 2 plan years beginning after June 30, 2002, and before
July 1, 2006.
[[Page S302]]
``(ii) Restrictions on benefit increases.--An amendment
which increases the liabilities of the plan by reason of any
increase in benefits, any change in the accrual of benefits,
or any change in the rate at which benefits become
nonforfeitable under the plan shall not take effect for any
plan year in the hiatus period, unless--
``(I) the funded current liability percentage (as defined
in subsection (l)(8)(B)) as of the end of the plan year is
projected (taking into account the effect of the amendment)
to be at least 75 percent,
``(II) the plan's actuary certifies that, due to an
increase in contribution rates, the normal cost attributable
to the benefit increase or other change is expected to be
fully funded in the year following the year in which the
increase or other change takes effect, and any increase in
the plan's accrued liabilities attributable to the benefit
increase or other change is expected to be fully funded by
the end of the third plan year following the end of the last
hiatus period of the plan, or
``(III) the plan amendment is otherwise described in
subparagraph (A) or (C) of subsection (f)(2).
``(iii) Collectively bargained increases in
contributions.--Clause (ii) shall not apply to an increase in
benefits for a group of participants resulting solely from a
collectively bargained increase in the contributions made on
their behalf.
``(iv) Hiatus period defined.--For purposes of this
subparagraph, the term `hiatus period' means any period
during which the amortization of a net experience loss is
suspended by reason of this subparagraph.
``(v) Interest accrued during hiatus.--Interest accrued on
any net experience loss during a hiatus period shall be
charged to a reconciliation account and not to the funding
standard account.
``(vi) Election.--An election under this subparagraph shall
be made at such time and in such manner as the Secretary of
Labor, after consultation with the Secretary, may
prescribe.''
(2) Qualification requirement.--Section 401(a) of such Code
is amended by inserting after paragraph (34) the following
new paragraph:
``(35) Benefit increases in certain multiemployer plans.--A
trust which is part of a plan shall not constitute a
qualified trust under this section if the plan adopts an
amendment during a hiatus period (within the meaning of
section 412(b)(7)(F)(iv)) which the plan is prohibited from
adopting by reason of section 412(b)(7)(F)(ii).''.
SEC. 6. 2-YEAR EXTENSION OF TRANSITION RULE TO PENSION
FUNDING REQUIREMENTS.
(a) In General.--Section 769(c) of the Retirement
Protection Act of 1994, as added by section 1508 of the
Taxpayer Relief Act of 1997, is amended--
(1) by inserting ``except as provided in paragraph (3),''
before ``the transition rules'', and
(2) by adding at the end the following:
``(3) Special rules.--In the case of plan years beginning
in 2004 and 2005, the following transition rules shall apply
in lieu of the transition rules described in paragraph (2):
``(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.''
(b) Effective Date.--The amendments made by this section
shall apply to plan years beginning after December 31, 2003.
SEC. 7. PROCEDURES APPLICABLE TO DISPUTES INVOLVING PENSION
PLAN WITHDRAWAL LIABILITY.
(a) In General.--Section 4221 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1401) is amended by
adding at the end the following new subsection:
``(f) Procedures Applicable to Certain Disputes.--
``(1) In general.--If--
``(A) a plan sponsor of a plan determines that--
``(i) a complete or partial withdrawal of an employer has
occurred, or
``(ii) an employer is liable for withdrawal liability
payments with respect to the complete or partial withdrawal
of an employer from the plan,
``(B) such determination is based in whole or in part on a
finding by the plan sponsor under section 4212(c) that a
principal purpose of a transaction that occurred before
January 1, 1999, was to evade or avoid withdrawal liability
under this subtitle, and
``(C) such transaction occurred at least 5 years before the
date of the complete or partial withdrawal,
then the special rules under paragraph (2) shall be used in
applying subsections (a) and (d) of this section and section
4219(c) to the employer.
``(2) Special rules.--
``(A) Determination.--Notwithstanding subsection (a)(3)--
``(i) a determination by the plan sponsor under paragraph
(1)(B) shall not be presumed to be correct, and
``(ii) the plan sponsor shall have the burden to establish,
by a preponderance of the evidence, the elements of the claim
under section 4212(c) that a principal purpose of the
transaction was to evade or avoid withdrawal liability under
this subtitle.
Nothing in this subparagraph shall affect the burden of
establishing any other element of a claim for withdrawal
liability under this subtitle.
``(B) Procedure.--Notwithstanding subsection (d) and
section 4219(c), if an employer contests the plan sponsor's
determination under paragraph (1) through an arbitration
proceeding pursuant to subsection (a), or through a claim
brought in a court of competent jurisdiction, the employer
shall not be obligated to make any withdrawal liability
payments until a final decision in the arbitration
proceeding, or in court, upholds the plan sponsor's
determination.''.
(b) Effective Date.--The amendments made by this section
shall apply to any employer that receives a notification
under section 4219(b)(1) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1399(b)(1)) after October 31,
2003.
SEC. 8. SENSE OF THE SENATE ON STATUS OF PRIVATE PENSION
PLANS.
(a) Findings.--Congress makes the following findings:-
(1) The private pension system is integral to the
retirement security of Americans, along with individual
savings and Social Security.
(2) The Pension Benefit Guaranty Corporation (PBGC) is
responsible for insuring the nation's private pension system,
and currently insures the pensions of 34,500,000 participants
in 29,500 single-employer plans, and 9,700,000 participants
in more than 1,600 multiemployer plans.
(3) The PBGC announced on January 15, 2004, that it
suffered a net loss in fiscal year 2003 of $7,600,000,000 for
single-employer pension plans, bringing the PBGC's deficit to
$11,200,000,000. This deficit is the PBGC's worst on record,
three times larger than the $3,600,000,000 deficit
experienced in fiscal year 2002.
(4) The PBGC also announced that the separate insurance
program for multiemployer pension plans sustained a net loss
of $419,000,000 in fiscal year 2003, resulting in a fiscal
year-end deficit of $261,000,000. The 2003 multiemployer plan
deficit is the first deficit in more than 20 years and is the
largest deficit on record.
(5) The PBGC estimates that the total underfunding in
multiemployer pension plans is roughly $100,000,000,000 and
in single-employer plans is approximately $400,000,000,000.
This underfunding is due in part to the recent decline in the
stock market and low interest rates, but is also due to
demographic changes. For example, in 1980, there were four
active workers for every one retiree in a multiemployer plan,
but in 2002, there was only one active worker for every one
retiree.
(6) This pension plan underfunding is concentrated in
mature and often-declining industries, where plan liabilities
will come due sooner.
(7) Neither the Senate Committee on Finance nor the Senate
Committee on Health, Education, Labor and Pensions (HELP),
the committees of jurisdiction over pension matters, has held
hearings this Congress nor reported legislation addressing
the funding of multiemployer pension plans;
(8) The Senate is concerned about the current funding
status of the private pension system, both single and multi-
employer plans;
(9) The Senate is concerned about the potential liabilities
facing the PBGC and, as a result, the potential burdens
facing healthy pension plans and taxpayers;
(b) Sense of the Senate.--It is the sense of the Senate
that the Committee on Finance and the Committee on Health,
Education, Labor and Pensions should conduct hearings on the
status of the multiemployer pension plans, and should work in
consultation with the Departments of Labor and Treasury on
permanent measures to strengthen the integrity of the private
pension system in order to protect the benefits of current
and future pension plan beneficiaries.
SEC. 9. EXTENSION OF TRANSFERS OF EXCESS PENSION ASSETS TO
RETIREE HEALTH ACCOUNTS.
(a) Amendment of Internal Revenue Code of 1986.--Paragraph
(5) of section 420(b) of the Internal Revenue Code of 1986
(relating to expiration) is amended by striking ``December
31, 2005'' and inserting ``December 31, 2013''.
(b) Amendments of ERISA.--
(1) Section 101(e)(3) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1021(e)(3)) is amended by
striking ``Tax Relief Extension Act of 1999'' and inserting
``Pension Stability Act''.
(2) Section 403(c)(1) of such Act (29 U.S.C. 1103(c)(1)) is
amended by striking ``Tax Relief Extension Act of 1999'' and
inserting ``Pension Stability Act''.
(3) Paragraph (13) of section 408(b) of such Act (29 U.S.C.
1108(b)(3)) is amended--
(A) by striking ``January 1, 2006'' and inserting ``January
1, 2014'', and
(B) by striking ``Tax Relief Extension Act of 1999'' and
inserting ``Pension Stability Act''.
SEC. 10. CLARIFICATION OF EXEMPTION FROM TAX FOR SMALL
PROPERTY AND CASUALTY INSURANCE COMPANIES.
(a) In General.--Section 501(c)(15)(A) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(A) Insurance companies (as defined in section 816(a))
other than life (including interinsurers and reciprocal
underwriters) if--
``(i) the gross receipts for the taxable year do not exceed
$600,000, and
``(ii) more than 50 percent of such gross receipts consist
of premiums.''.
(b) Controlled Group Rule.--Section 501(c)(15)(C) of the
Internal Revenue Code of 1986 is amended by inserting ``,
except that in applying section 1563 for purposes of section
[[Page S303]]
831(b)(2)(B)(ii), subparagraphs (B) and (C) of section
1563(b)(2) shall be disregarded'' before the period at the
end.
(c) Conforming Amendment.--Clause (i) of section
831(b)(2)(A) of the Internal Revenue Code of 1986 is amended
by striking ``exceed $350,000 but''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2003.
SEC. 11. DEFINITION OF INSURANCE COMPANY FOR SECTION 831.
(a) In General.--Section 831 of the Internal Revenue Code
of 1986 is amended by redesignating subsection (c) as
subsection (d) and by inserting after subsection (b) the
following new subsection:
``(c) Insurance Company Defined.--For purposes of this
section, the term `insurance company' has the meaning given
to such term by section 816(a)).''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2003.
SEC. 12. FUNDS FOR REBUILDING FISH STOCKS.
Section 105 of the Miscellaneous Appropriations and Offsets
Act, 2004 (division H of the Consolidated appropriations Act,
2004) is repealed.
Mr. LEVIN. I move to reconsider the vote.
Mr. NELSON of Florida. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The majority leader.
Mr. FRIST. Madam President, before we proceed to the next vote, I do
want to make a couple quick comments regarding the schedule.
First, I am very pleased with the bipartisan vote on the passage of
the pension bill. I congratulate the managers.
At this point, the regular order would be for the Senate to request a
conference with the House to reconcile the differences in the Senate
bill and the House bill. I understand from the Democratic leadership
that they have an objection to appointing conferees at this time. I
hope we can work this out. This is an important piece of legislation
that we need to address and clearly need to conference this matter with
the House.
Having said that, I will continue to talk with the Democratic leader
in an effort to proceed with the regular order on appointing conferees.
For the schedule, the next vote, which will occur shortly, will be
the last vote of the week. On Monday, we will proceed to consideration
of the highway bill. We will have a vote on Monday, and I expect that
vote to be in relation to a judicial nomination. We will be announcing
later in the day the timing of that vote.
Mr. KENNEDY. Mr. President, as we conclude our debate on this bill, I
thank all of my colleagues for the fruitful debate we have had on these
issues, which are vitally important to America's workers and their
families.
I thank Senator Frist and Senator Daschle for their leadership in
ensuring that this bill was passed quickly. I also thank my colleagues,
Senator Grassley, Senator Baucus, and Senator Gregg for working with me
to develop this moderate, bipartisan measure to protect our Nation's
pension plans. And I thank the following staff members for all of the
work they have done on this bill: Rohit Kumar, counsel and policy
adviser to Majority Leader Frist; Chuck Marr, economic policy adviser
to Minority Leader Daschle; David Thompson, labor and pensions policy
director for Senator Gregg; Diann Howland, pension policy adviser to
Senator Grassley; and Judy Miller, professional staff member for
Senator Baucus. I particularly thank my own staff--Holly Fechner, chief
labor counsel; Portia Wu, labor and pensions counsel; and Kathleen
Wildman, labor policy office staff assistant--for all of their hard
work on this issue.
Defined benefit pension plans provide certainty and security for
workers and retirees. I believe that we can--and we must--do more to
protect the security of America's workers and retirees. Americans who
have worked hard and played by the rules deserve to enjoy their old
age, to retire without having to worry whether they have enough money
to pay for their prescription drugs, to pay for electricity, or even to
pay for food.
There are many challenges facing our pension system. Our Nation's
pension participation rate is the lowest it has been in over a decade.
Part-time and low-wage workers continue to lag behind other workers in
pension coverage.
We must improve our pension system so that all workers can have a
pension. We must increase pension portability for workers--who may have
many jobs over a lifetime--without sacrificing security. We must ensure
that companies adequately fund their pension plans. We must encourage
companies to put more money into their pension plans when times are
good, instead of only penalizing them when times are bad.
By passing this bipartisan legislation, we are taking a much-needed
first step to stabilize our pension plans.
This legislation has three critical components to help defined
benefit pension plans. First, it temporarily replaces the 30-year
Treasury bond rate used to calculate employers' required contributions
to pension plans with a corporate bond rate. This will stabilize our
Nation's defined benefit pension plans and enable them to continue to
provide the benefits they have promised.
Second, it provides for additional deficit reduction contribution
relief to companies that had well-funded pension plans in the past and
need extra assistance now. This relief will help protect the pensions
and jobs of workers in these industries.
Finally, the bill includes important relief for multiemployer plans,
which fill major needs in our pension system. Multiemployer plans
provide pensions to many low-wage workers, as well as short-term and
seasonal workers who might not otherwise be able to earn a pension.
I thank all of my colleagues for the support they have given to this
bill. This is an important first step, but it is only a first step. I
hope my colleagues will join with me in the future to improve and
expand our defined benefit system, so that we can ensure that all
Americans receive the secure retirement they deserve.
Mr. ROCKEFELLER. Mr. President, I am very pleased that the Senate has
just passed the Pension Stability Act by an overwhelming margin. I
spoke yesterday on behalf of the legislation, because I understand how
important these changes are to the employers who offer defined benefit
pension plans and to the employees who are counting on those pension
benefits. I would like to just add a few words today to encourage the
House of Representatives to quickly approve the bill, as amended by the
Senate, and get this legislation to President Bush at the earliest
possible date.
The pension reforms provided in this bill are urgently needed. Many
large companies have contacted me to stress how important it is that
Congress act to update the interest rate used in calculating pension
liabilities. Continuing to require employers to use the outdated 30-
year Treasury rate would jeopardize pension plans for millions of
workers. I have also met with several executives from our Nation's
airlines. The temporary relief from deficit reduction contributions
provided by this bill is critically important to our struggling airline
industry.
As a result of both September 11 and the slow economy during the last
few years, our Nation's airlines have dealt with extremely difficult
business conditions. The industry has already laid off more than
200,000 people, and many airlines are struggling either to emerge from
bankruptcy or to avoid having to file for bankruptcy. By providing
airlines some breathing room when it comes to pension payments, we can
protect workers' benefits that might otherwise be cancelled and protect
workers' jobs that might otherwise be cut. Ultimately, this bill is an
effort to do what we can to take care of workers who have already seen
involuntary furloughs, seen their wages reduced, and seen their
pensions cut. In my judgment, preserving the benefits and rights of
workers who make our industries strong is crucial to strengthening our
economy.
This bill will help employers to honor their commitments to their
employees, many of whom have already sacrificed so much for their
companies. I am very pleased that by a vote of 86 to 9, my Senate
colleagues approved this bill. I hope that the House will listen to the
clear message that we sent today. For the sake of employers and their
employees, Congress and the President must enact these pension reforms
now.
(At the request of Mr. DASCHLE, the following statement was ordered
to be printed in the Record.)
Mr. KERRY. Mr. President, today the Senate passed critical
pension funding
[[Page S304]]
reform legislation that will protect millions of American workers from
losing their defined benefit pension plans. Although only a temporary
solution, the Pension Funding Equity Act is essential to prevent
companies from having to freeze or terminate their defined benefit
pension plans because of outdated rules that determine how their
pension plan liabilities are calculated.
Defined benefit pension plans are an essential component of
retirement security for over half of America's working men and women.
Unfortunately, trends show a decline in the use of defined benefit
pension plans, with only one quarter as many companies providing
defined benefit plans today as did 20 years ago. Since 2003, 3.3
million Americans having lost their pension coverage. The volatility in
the stock market in the last few years--in which Americans lost
billions in retirement assets--leaves little doubt that we must do more
to reverse the decline in the use of defined benefit pension plans and
expand the retirement security of defined benefit pension plans to more
Americans. The Pension Funding Equity Act is an important step towards
addressing this challenge.
In the last 3 years, companies that provide defined benefit pension
plans to their employees have come under extreme financial stress due
to the sluggish economy and changes in the interest rate that
determines their pension plan liability. The Pension Funding Equity Act
of 2003 provides much needed relief to help these companies maintain
retirement benefits for their employees as the country works towards
economic recovery. This legislation provides a temporary 2-year period
of funding relief by updating the interest rate that companies must use
when calculating the liabilities of their pension plans. A more
accurate mix of long-term corporate bond rates will replace the now
defunct 30-year Treasury rate in the calculation of pension plan
liabilities.
In addition to protecting the defined benefit plans of American
workers, the Pension Funding Equity Act is expected to provide $16
billion in additional savings to companies, which will facilitate job
creation by freeing up funds for additional wages and hiring.
I applaud the passage of the Pension Funding Equity Act and look
forward to working with my colleagues in crafting a long-term solution
to improve and expand our pension system.
____________________