[Congressional Record Volume 166, Number 214 (Thursday, December 17, 2020)]
[Senate]
[Pages S7592-S7634]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTION
By Mrs. FEINSTEIN (for herself and Ms. Cortez Masto):
S. 5041. A bill to establish the Advisory Committee on Climate Risk
on the Financial Stability Oversight Council; to the Committee on
Banking, Housing, and Urban Affairs.
Ms. FEINSTEIN. Mr. President, I rise to speak in support of the
``Addressing Climate Financial Risk Act,'' which I introduced today.
Background
The average global temperature has increased by over 3 degrees
Fahrenheit in parts of my home State of California over the last
century, and 2020 is on track to be the hottest year on record. Climate
change is driving the increasing frequency and severity of wildfires,
floods, droughts, and other natural disasters and extreme weather
events.
In California, wildfires in particular have become a major annual
concern. This year alone, wildfires have burned 4.1 million acres of
California forests and destroyed more than 10,000 structures, including
more than 5,000 homes.
The damage and risk generated by these events--in addition to the
changes needed to transition to a lower-carbon economy--threaten to
severely disrupt real estate values in high-risk areas, make insuring
against risk increasingly unaffordable, and dramatically change whole
sectors of the economy.
Need for Legislation
Unfortunately, U.S. Federal financial regulators have not done enough
to ensure that they fully understand and are appropriately acting on
the risk that climate change poses to the stability of the U.S.
financial system.
Therefore, I believe there are a series of simple steps we should
take to ensure that U.S. financial regulators are well-equipped to
mitigate climate financial risk.
This bill would make five main improvements to the U.S. financial
regulatory system.
First, it would establish a permanent committee on the Financial
Stability Oversight Council (FSOC)--which Congress has charged with
identifying risks to the U.S. financial system--made up of experts in
climate science, climate economics, and climate financial risk.
This committee would assist FSOC in publishing a report that assesses
the ability of the U.S. financial regulatory system to mitigate climate
financial risk and makes recommendations for improving its ability to
do so.
Second, the bill would require each Federal bank and credit union
regulatory agency to update its supervisory guidance to include climate
financial risk, and to develop a strategy to identify and mitigate
climate financial risk.
Third, the bill would require FSOC to specify how it will take
climate financial risk into account when making decisions on whether to
subject nonbank financial firms to additional oversight by the Federal
Reserve Board.
Fourth, the bill would mandate a report from the Federal Insurance
Office on how to modernize and improve the regulation of climate
financial risk insurance regulation in the United States.
Finally, the bill would express the sense of Congress that climate
change is a global problem, and that U.S. financial regulators should
join international organizations focused on addressing climate
financial risk and work with financial regulators in other countries to
the extent possible and consistent with U.S. law.
Conclusion
Climate change is real. It's happening now and it will have a
profound effect on our financial system if we continue to do nothing.
We must act to ensure that federal financial regulators have expertise
in climate financial risk and develop approaches to mitigate that risk.
I hope my colleagues will join me in support of this bill. Thank you,
Mr. President, and I yield the floor.
______
By Mr. GRASSLEY (for himself and Mr. Alexander):
S. 5045. A bill to amend the Internal Revenue Code of 1986 and the
Employee Retirement Income Security Act of 1974 to reform the treatment
of multiemployer plans, to ensure the ability of the Pension Benefit
Guaranty Corporation to provide guaranteed benefits of retirees, and
for other purposes; to the Committee on Finance.
Mr. GRASSLEY. Mr. President, in late June, I came to the floor to
speak about the need to fix the multiemployer pension system and how
that system is failing its employees and retirees. I spoke about the
need to secure retirement benefits for the millions of Americans who
will start to see plans fail and benefits cut in the coming years if
Congress doesn't fix this problem.
For the past 2 weeks, Chairman Alexander and I were negotiating with
our Democratic colleagues to do just that--fix the system so future
retirees and retirees now would not lose out on what they were
promised. Those negotiations were very constructive, and I believe that
both sides worked in good faith. While both sides agreed to make
significant changes, in the end, we weren't able to find a compromise
that satisfied our respective principles and objectives for resolving
this situation.
Here is the hang up--time. Now at the end of the session, with the
end-of-the-year agenda and adjournment of the Congress, we just ran out
of time. So in the midst of yearend appropriations and COVID relief
negotiations, there simply wasn't enough time to reconcile our
differences on how to fix this failing system.
My hope had been to use the last 8 months to negotiate a solution in
a thoughtful and measured manner, instead of like now, in the heat of a
complex yearend bill. But sadly, those 8 months didn't produce results.
From the beginning, we have agreed that Federal funds will be needed
to solve the crisis in the short term--yes, money from the Treasury for
pension plans that are in trouble now. But we have been equally
resolute that reforms are essential to ensure the system can be self-
sustaining in the long term. So we were trying to find a short-term
solution that would involve the injection of Federal dollars, but we
wanted a long-term solution that would make sure that private pension
plans were self-sustaining and not relying upon the Federal Treasury.
Otherwise, taxpayers will be perpetually subsidizing a private sector
system of employee benefit promises.
Last November, Chairman Alexander and I presented our comprehensive
approach to rescue and reform the multiemployer pension system, which
we have been working on and improving ever since. The product was
improved with an amazing amount of input from workers, retirees,
unions, employers, actuaries, academics, plan officials, and even
members of the general public. Something as big as this needed to
involve all of those people being at the table.
Today, Chairman Alexander and I will introduce a revised version of
that plan, the Chris Allen Multiemployer Pension Recapitalization and
Reform Act. This legislation served as the basis for our recent
negotiations and is the product of years of work with Chairman
Alexander to produce a serious, responsible plan that can provide
relief to failing plans and to protect retirees' benefits.
It is also designed to ensure the long-term solvency of the Pension
Benefit Guaranty Corporation's multiemployer insurance fund, based on
the many comments and proposals we received to the original Grassley-
Alexander plan released last November.
We believe this legislation would ensure that the PBGC's
multiemployer insurance fund remains solvent over the long term after
the initial rescue of the currently failing plans. But, most
importantly, this legislation would reform the system to prevent this
from happening again.
I would also like to note that the bill is named after Chris Allen,
who was a
[[Page S7593]]
dedicated member of my Finance Committee staff, who passed away nearly
1 year ago at too young of an age. Chris poured thousands of hours of
work into developing, drafting, and perfecting the Grassley-Alexander
plan. I am grateful for all the work that Chris did, and I am proud
this legislation bears his name.
I am also grateful to Andy Banducci, who helped us continue Chris's
work while on detail to the committee from the PBGC for several months
earlier this year. His expertise and commitment, especially during the
pandemic, were essential to bringing this legislation to completion.
Lastly, Mark Warren of the Finance Committee staff has led my team on
this very important issue with the help of Jamie Cummins.
This bill would not be possible without their efforts. So I thank
Mark, Jamie, Andy, and Chris for their dedicated service.
Let me close by stressing two points for my Democratic colleagues. I
appreciate the Democrats' professional and good-faith effort to try to
find an agreement to this important issue. Although we were not able to
reconcile our differences before the clock ran out, we need to carry
that work forward, and I remain ready to continue that discussion. I
want to make clear that, while the last 2 years I have been chairman of
the Finance Committee, I won't be chairman the next 2 years, and we
will be working under the leadership of the next chairman, Senator
Crapo, if Republicans continue to be in the majority.
These issues are not simple, and as I said in June, delaying the
solution is only going to make the whole effort more costly. We should
continue to work together to find a solution for the 10 million workers
and retirees in these multiemployer plans. America's retirees deserve
it.
Mr. President. I ask that the text of the bill be printed in the
Record.ZPERSONAL COMPUTER\J\019060-A17DE6-023-*****-*****-Payroll No.:
09409 -Name: debjd c6 -Folios: 15/wS-15/w430S [pickup] -Date: 12/18/20
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S. 5045
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Chris
Allen Multiemployer Pension Recapitalization and Reform Act
of 2020''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--RESTRUCTURING PENSION INSURANCE FOR MULTIEMPLOYER DEFINED
BENEFIT PENSION PLANS
Subtitle A--Special Partitions of Eligible Multiemployer Plans
Sec. 101. Special partitions of eligible multiemployer plans.
Subtitle B--PBGC Reforms
Sec. 111. Guarantee rate increase for plans receiving financial
assistance.
Sec. 112. Amendment to definition of insolvency.
Sec. 113. Termination of multiemployer plans.
Sec. 114. Benefits under certain terminated plans.
Subtitle C--Pension Insurance Modeling
Sec. 121. Pension insurance modeling.
TITLE II--FUNDING RULES, WITHDRAWAL LIABILITY, AND OTHER REFORMS
Subtitle A--Minimum Funding Standard for Multiemployer Plans
Sec. 201. Valuation of plan liabilities.
Subtitle B--Additional Funding Rules for Multiemployer Plans
PART I--Plan Status Amendments
Sec. 211. Amendments to Internal Revenue Code of 1986.
Sec. 212. Amendments to Employee Retirement Income Security Act of
1974.
Sec. 213. Transition rules.
PART II--Provisions Relating to Plan Mergers
Sec. 221. Provisions relating to plan mergers and consolidations.
Sec. 222. Clarification of PBGC financial assistance for plan mergers
and partitions.
Sec. 223. Restoration not required for certain mergers.
PART III--Withdrawal Liability Reform
Sec. 231. Withdrawal liability reform.
TITLE III--PLAN GOVERNANCE, DISCLOSURE, AND OTHER REFORMS FOR
MULTIEMPLOYER DEFINED BENEFIT PENSION PLANS
Subtitle A--Plan Governance and Operations for Multiemployer Plans
Sec. 301. Independent trustees.
Sec. 302. Investigatory authority.
Sec. 303. Conditions on financial assistance.
Sec. 304. Excise tax on excess compensation of covered employees of
partitioned multiemployer plans.
Subtitle B--Reportable Events for Multiemployer Plans
Sec. 311. Reportable events.
Subtitle C--Funding Notices to Participants in Multiemployer Plans
Sec. 321. Improved multiemployer plan disclosure.
Sec. 322. Penalties for failure to provide notices.
Subtitle D--Consistency of Criminal Penalties
Sec. 331. Consistency of criminal penalties.
TITLE IV--OTHER MULTIEMPLOYER PLAN REFORMS
Sec. 401. Clarification of fiduciary duty of retiree representative who
is a trustee.
Sec. 402. Safe harbors.
Sec. 403. Clarification of notice and comment process.
Sec. 404. Protection of participants receiving disability benefits.
Sec. 405. Model notice.
TITLE V--ALTERNATIVE PLAN STRUCTURES
Sec. 501. Composite plans.
Sec. 502. Application of certain requirements to composite plans.
Sec. 503. Treatment of composite plans under title IV.
Sec. 504. Conforming changes.
Sec. 505. Effective date.
TITLE VI--FINANCIAL PROVISIONS
Sec. 601. Additional premiums.
Sec. 602. Funding.
Sec. 603. Composite plan transition fee.
TITLE I--RESTRUCTURING PENSION INSURANCE FOR MULTIEMPLOYER DEFINED
BENEFIT PENSION PLANS
Subtitle A--Special Partitions of Eligible Multiemployer Plans
SEC. 101. SPECIAL PARTITIONS OF ELIGIBLE MULTIEMPLOYER PLANS.
(a) In General.--Title IV of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1301 et seq.) is amended by
inserting after section 4233 the following:
``SEC. 4233A. SPECIAL PARTITIONS OF ELIGIBLE MULTIEMPLOYER
PLANS.
``(a) In General.--
``(1) Requirement to order partition.--Upon the application
by the plan sponsor of an eligible multiemployer plan
described in subsection (b) for a partition of the plan, the
corporation shall order a partition of the plan in accordance
with this section, provided the other requirements in this
section are met. The corporation shall make a determination
regarding the application not later than 150 days after the
date such application was filed (or, if later, the date such
application was completed) in accordance with regulations
that shall be issued by the corporation under subsection (h).
``(2) Notification of participants.--Not later than 30 days
after submitting an application for partition of a plan under
paragraph (1), the plan sponsor of the plan shall notify the
participants and beneficiaries of such application, in the
form and manner prescribed by the corporation.
``(3) Implementation of transfer.--The corporation shall
implement the partition order issued under this section not
later than 60 days after the completion of the corporation's
determination under paragraph (1).
``(4) Filing date of application.--Partitions under this
section shall apply only with respect to any eligible
multiemployer plan whose plan sponsor files an application
that is determined by the corporation to be complete pursuant
to regulations issued by the corporation under subsection
(h)(1) and that is filed by the later of the time specified
in such regulations or 1 year after the corporation issues
such regulations.
``(b) Eligible Multiemployer Plan.--For purposes of this
section--
``(1) In general.--The term `eligible multiemployer plan'
means a multiemployer plan that meets any of the following
conditions:
``(A) The plan became insolvent ( as described in section
4245(b), as in effect the day before the date of enactment of
this section) on or after December 16, 2014, and prior to the
date of enactment of this section and has not terminated.
``(B) The plan--
``(i)(I) was certified, in the most recent annual
certification filed pursuant to section 305(b)(3) (as in
effect on the day before the date of enactment of this
section) before the date of enactment of this section, to be
in critical and declining status (as defined in section
305(b)(6), as so in effect), and has not terminated as of
such date;
``(II) implemented a suspension of benefits under section
305(e)(9) (as in effect on the day before the date of
enactment of this section) prior to the date of enactment of
this section;
``(III)(aa) was certified, in the most recent annual
certification filed pursuant to section 305(b)(3) (as so in
effect) before the date of enactment of this section, to be
in critical status (as defined in section 305(b)(2), as so in
effect), and has not terminated as of such date;
``(bb) has a funded percentage that is less than 40 percent
on a current liability basis, based on the most recent Form
5500, Schedule MB, line 1b(1) for current value of assets and
line 1d(2)(a) for current liability, filed before the date of
enactment of this section; and
``(cc) has an active to inactive participant ratio that is
below 40 percent as of the most recent Form 5500 filed before
the date of enactment of this section; or
``(IV)(aa) was certified, in the most recent annual
certification filed pursuant to section 305(b)(3) (as so in
effect) before the date of
[[Page S7594]]
enactment of this section, to be in critical status (as
defined in section 305(b)(2), as so in effect) and has not
terminated before such date,
``(bb) has an active to total participant ratio that is
below 20 percent as of the most recent Form 5500 filed before
the date of enactment of the section; and
``(cc) has more than 100,000 participants as of the most
recent Form 5500 filed before the date of enactment of the
section; and
``(ii) is not the plan described in section 9701(a)(3) of
the Internal Revenue Code of 1986, determined without regard
to the limitation on participation to individuals who retired
in 1976 and thereafter.
``(2) Eligible plans required to file for partition.--
``(A) In general.--An eligible multiemployer plan (other
than a plan eligible under paragraph (1)(B)(i)(II)) shall
file with the corporation for partition under this section.
If an eligible plan required under the preceding sentence to
file for partition does not so file in a timely manner, the
plan is subject to termination under section 4042.
``(B) Exception.--If a plan is reasonably determined to be
ineligible for future adjustments under subsection
(j)(3)(C)(iii)--
``(i) subparagraph (A) shall not apply to such plan, and
``(ii) such plan may withdraw the partition application
(or, as provided by the corporation in regulations, not
submit such application at all).
``(c) Conditions for Partition.--
``(1) Rate of accruals.--
``(A) In general.--As a condition of any partition under
this section, the rate of future accruals, during the period
beginning on the date of the partition order and ending 15
years after the effective date of the partition, shall not
exceed the lesser of--
``(i) a monthly benefit (payable as a single life annuity
commencing at the participant's normal retirement age) equal
or equivalent to 1 percent of the annual contributions
required to be made with respect to a participant as of the
first day of the first plan year that begins after the date
of enactment of this section; or
``(ii) the accrual rate under the plan on such first day.
``(B) Determination of equivalent rate.--The plan sponsor
may determine the equivalent rate of future accruals based on
the standard or average contribution base units which the
plan sponsor determines to be representative for active
participants and such other factors as the plan sponsor
determines to be relevant. Such determinations by the plan
sponsor may be made on the basis of individual active
participants, groups of active participants, or all active
participants in total.
``(C) Special rule for future accruals.--To the extent that
the rate of future accruals exceeds the limitation determined
under this paragraph, the plan sponsor shall adjust the rate
of future accruals in accordance with this paragraph
effective as of the date of the partition order.
``(2) Elimination of adjustable benefits.--As a condition
of any partition under this section, the plan sponsor of an
eligible multiemployer plan shall eliminate all adjustable
benefits in the nature of an early retirement subsidy
(including a subsidized early retirement actuarial reduction
factor) for all participants not in pay status as of the date
of the partition application. Nothing in this paragraph shall
affect the right of a participant to receive an unsubsidized
early retirement benefit.
``(d) Successor Plans and Original Plans.--
``(1) In general.--The plan created by the partition order
is a successor plan to which section 4022A applies.
``(2) Plan sponsor and plan administrator.--The plan
sponsor of an eligible multiemployer plan prior to partition
and the administrator of such plan shall be the plan sponsor
and the administrator, respectively, of the original plan and
the successor plan created by the partition order.
``(3) Original plan.--The remaining plan after benefits
have been transferred to the successor plan pursuant to the
partition order is the original plan. Benefit payments made
by the successor plan shall not constitute a reduction in
benefits with respect to the original plan.
``(e) Financial Assistance to Successor Plans From the
Corporation.--
``(1) In general.--Upon approval of an application filed
pursuant to subsection (i), the corporation shall provide
financial assistance to each successor plan of an eligible
multiemployer plan.
``(2) Nonapplicability of repayment rule.--Financial
assistance provided to a successor plan pursuant to this
subsection shall not be subject to the requirements of
section 4261(b)(2), except that the corporation may condition
receipt of financial assistance under this subsection on
reasonable terms consistent with regulations prescribed by
the corporation to prevent abuse of the multiemployer plan
program or prevent unreasonable risk of loss to the
corporation.
``(f) Payment Requirements of Original Plan.--For each
participant or beneficiary of the plan whose benefit or
portion thereof was transferred to the successor plan, the
original plan shall pay a monthly benefit to such participant
or beneficiary for each month in which such benefit is in pay
status following the effective date of such partition in an
amount equal to the excess of--
``(1) the monthly benefit that would be paid to the
participant or beneficiary under the terms of the original
plan had the transfer of benefits not occurred (taking into
account any applicable benefit reductions or plan amendments
following the effective date of the partition); over
``(2) the monthly benefit for such participant or
beneficiary that is paid by the successor plan.
``(g) Transfer of Benefits.--
``(1) In general.--A partition order under subsection (a)
shall provide for a transfer of benefits from the original
plan to the successor plan in the amount necessary for the
original plan to be projected to remain solvent indefinitely,
as defined in section 1.432(e)(9)-1(d)(5)(ii) of title 26,
Code of Federal Regulations (excluding subparagraph (A)(2)),
as in effect on the date on which such regulations were
issued, using actuarial and other assumptions to be
promulgated by the corporation in the regulations described
in subsection (h)(4). Such transfer amounts shall be
determined without respect to the amount guaranteed under
section 4022A.
``(2) Considerations.--
``(A) In general.--In determining the transfer amount under
paragraph (1), the corporation shall take into account all
obligations of the original plan, including the payment of
benefits required under subsection (f) in excess of the
amount paid by the successor plan and all plan expenses and
premium amounts.
``(B) Projection of assets and liabilities.--The amount of
the transfer of benefits shall be based on a projection of
plan assets and liabilities to the projected partition date,
as specified in the partition application, and--
``(i) the projection of plan assets shall be based on the
fair market value of plan assets as of the end of the last
plan year preceding the date of the application, with
appropriate adjustments for actual or anticipated plan
experience through the projected partition date; and
``(ii) the projection of plan liabilities shall be based on
the participant data used in the most recently completed
actuarial valuation.
``(3) Special rule for insolvent plans.--With respect to an
insolvent plan described in subsection (b)(1)(A), the
corporation shall provide financial assistance to the
original plan, as needed for the plan to pay to each
participant and beneficiary in the successor plan the excess,
if any, of--
``(A) the monthly benefit that would be paid to the
participant or beneficiary under the terms of the original
plan, prior to insolvency, had the transfer of benefits not
occurred (taking into account any applicable benefit
reductions or plan amendments following the effective date of
the partition); over
``(B) the monthly benefit for such participant or
beneficiary that is paid by the successor plan.
``(h) Regulations.--
``(1) In general.--The corporation shall issue regulations
on the requirements for partition applications not later than
180 days after the date of enactment of this section. By
regulation, the corporation may assign eligible multiemployer
plans into groups, based on plan size (prioritizing larger
plans), projected date of plan insolvency (prioritizing plans
expected to become insolvent within 5 years), or such other
factors as the corporation deems appropriate, for determining
when an application for partition under this section may be
filed. Any regulations issued under this section shall be
interim final or final regulations.
``(2) Effect of no regulation.--If the corporation does not
issue regulations within 180 days after the date of enactment
of this section, any applications for partition under this
section filed after the date that is 180 days after such date
of enactment (and prior to the date regulations are issued)
shall be deemed to be approved.
``(3) Rules for determining participants and
beneficiaries.--The regulations under this subsection shall
include rules for determining which participants and
beneficiaries are included in the transfer of benefits.
``(4) Actuarial assumptions.--The regulations under this
subsection shall prescribe acceptable actuarial assumptions,
for purposes of an application, relating to the following:
``(A) Future investment returns which must be consistent
with the applicable discount rate under section 304, except
that--
``(i) in no case shall the assumption for future returns be
less than 5.5 percent for purposes of determining the initial
partition amount; and
``(ii) in no case, while the partition amount is being
determined or while the partition is in effect, shall the
assumption used for determining adjustments under subsection
(j) be less than the lesser of--
``(I) the rate equal to the 24-month average of the third
segment rate (as defined in section 303(h)(2)(C)(iii)), as of
the date the determination is made, without regard to section
303(h)(2)(C)(iv), increased by 2 percent; or
``(II) 5.5 percent.
``(B) Future contribution base units.
``(C) Future contribution rate increases, taking into
account the adopted rehabilitation plan.
``(D) Future withdrawal liability payments.
``(E) Future administrative expenses.
``(F) Mortality.
``(G) Any other assumptions deemed by the corporation to be
material.
[[Page S7595]]
``(5) Rules relating to assumptions.--
``(A) Information required.--For purposes of paragraph (4),
when prescribing acceptable actuarial assumptions, the
corporation shall not require a plan sponsor to obtain data
or other information that a plan sponsor should not
reasonably be expected to have in its possession, unless it
can be obtained with reasonable effort and expense.
``(B) Economic activity assumption.--For purposes of
paragraph (4)(B), an assumption related to future
contribution base units shall be considered reasonable and
appropriate for purposes of the application under this
section, provided that--
``(i) if the recent experience of the plan has been
declining contribution base units, the plan actuary may
assume future contribution base units will continue to
decline at the same annualized trend as over the 5
immediately preceding plan years unless such assumption is
unreasonable based on criteria which may be prescribed by the
corporation by regulation, and
``(ii) if the recent experience of the plan has been
increasing, or neither increasing nor decreasing,
contribution base units, the plan actuary may assume future
contribution base units will remain unchanged indefinitely,
unless such assumption is unreasonable based on criteria the
corporation may prescribe.
``(6) Determination of benefits guarantees.--The
regulations under this subsection shall include rules for
determining the amounts of benefits guaranteed under section
4022A, including acceptable methods to approximate credited
service for participants and beneficiaries in pay status
where records cannot reasonably be obtained by the plan
administrator.
``(i) Partition Applications.--
``(1) In general.--An application for partition under this
section submitted by a plan sponsor shall be filed
electronically and contain the required information set forth
in regulations promulgated by the corporation.
``(2) Approval standards.--The corporation shall approve a
partition application if the applying plan meets the
requirements for a partition under this section.
``(3) Evaluation of initial transfer.--In reviewing an
application under this section, the plan shall propose the
initial amount of the transfer of benefits under the
partition order that is required under subsection (g)(1) and
the corporation shall review and modify the amount, if
applicable, pursuant to its regulations.
``(4) Determinations by the corporation.--
``(A) Determination of ineligibility.--If the corporation
determines the plan to be ineligible under subsection (b) for
a partition under this section, the corporation shall notify
the plan sponsor in writing of such determination not later
than 30 days after the application is filed. Such notice
shall specify the reasons the plan is ineligible for a
special partition. The applicant plan will have a period of
at least 60 days, or longer if specified by the Corporation
through regulations, to modify its application, which shall
be subject to expedited review by the corporation and, for
purposes of satisfying the 1-year filing requirement for
special partition, will relate back to the date the
application was initially filed.
``(B) Incomplete applications.--If the corporation
determines the application by the plan sponsor lacks
information necessary for the corporation to approve or deny
the application, the corporation shall notify the plan
sponsor in writing, detailing which components are missing,
not later than 30 days after the application is filed.
Nothing in the preceding sentence shall prevent the
corporation from asking the plan sponsor at a later date for
additional information necessary to determine the partition
amount.
``(C) Factual submissions by plan sponsor.--The factual
submissions made by a plan sponsor in a partition
application, including participant data and benefit
calculations, shall be presumed to be correct, unless clearly
erroneous.
``(j) Post-partition Adjustments.--
``(1) Process for adjustments.--
``(A) In general.--After benefits have been transferred
under the partition order, the corporation shall, at least
every third year thereafter, adjust the transfer of benefits,
as necessary to enable the original plan to be projected to
remain solvent indefinitely, consistent with limitations on
guaranteed benefits (if applicable under paragraph (3)(C)).
The adjustments shall be made based on such procedures as the
corporation shall prescribe by regulation.
``(B) Plans projected to be insolvent.--If the original
plan is not projected to be solvent 30 years after any
adjustment review date (without regard to whether or not an
adjustment takes place in connection with such date), taking
into account the adjustments permitted by this paragraph,
such plan shall electronically file a report with the
corporation, as the corporation shall require by regulation.
If the plan subsequently reports for 3 consecutive years for
which an adjustment review is conducted that the plan is not
projected to be solvent 30 years after the date of each such
adjustment review, the plan shall be terminated.
``(2) Basis for adjustment.--The adjustment shall be based
solely on, as applicable, updated participant data,
calculations of guaranteed benefits for participants and
beneficiaries covered under the successor plan, contribution
experience, current actuarial assumptions (if changed since
the initial transfer of benefits), and changes in the market
value of the original plan's assets.
``(3) Limitations on adjustment.--
``(A) In general.--The corporation shall not adjust under
paragraph (1) the transfer of benefits to provide additional
financial assistance if the corporation determines that the
original plan or the bargaining parties committed an abuse of
the multiemployer program with respect to the original plan
or otherwise unreasonably took actions (or avoided taking
actions) with the result that there is an increased risk of
loss to the corporation with respect to the successor plan or
the original plan.
``(B) End of adjustment authority.-- No adjustments under
paragraph (1) to the transfer of benefits shall be allowed
with respect to any plan year beginning 30 or more years
after the date of the partition.
``(C) Aggregate limits.--If the initial transfer of
benefits from the plan under subsection (g)--
``(i) was less than 100 percent of the amount of benefits
under the plan guaranteed under section 4022A for each
participant, any adjustment under paragraph (1) shall not
result in a benefit for any participant in the successor plan
in excess of 100 percent of the participant's guaranteed
benefit, determined as of the date of the initial transfer;
``(ii) was equal to or greater than 100 percent of the
amount of benefits so guaranteed, any adjustment under
paragraph (1) shall not result in a benefit for any
participant in the successor plan in excess of the amount of
the participant's benefit subject to the initial transfer;
and
``(iii) was less than 5 percent of the amount of benefits
so guaranteed, there shall be no adjustment under paragraph
(1).
``(4) Terminated and insolvent plans.--With respect to an
original plan partitioned under this section that
subsequently is terminated or becomes insolvent, the benefits
transferred under the partition order shall revert to the
original plan, the partition shall be reversed, and financial
assistance provided pursuant to the partition order shall
cease.
``(5) Regulations.--The corporation shall promulgate
regulations describing the process and requirements for
reporting and the circumstances under which plans will be
terminated in accordance with the provisions of section 4041A
pursuant to this subsection.
``(k) Plans That Implemented Suspension of Benefits.--
``(1) In general.--An eligible multiemployer plan described
in subsection (b)(1)(B)(i)(II) may be approved for a
partition under this section only if it unwinds the
suspension, and, if applicable, the previous partition
described in such subsection in accordance with regulations
to be issued by the corporation, in consultation with the
Secretary of the Treasury. The unwinding of a suspension or
partition described in such subsection must be contingent
upon the corporation's approval of the application for
partition under this section.
``(2) Timing of unwinding of suspension of benefits.--In
the case of a partition described in paragraph (1), the
suspension of benefits shall be unwound retroactively.
Benefits shall be restored to pre-suspension levels as of the
effective date of the partition under this section and
participants who are receiving benefits on the date of
enactment of this section shall, beginning not later than 180
days after the approval of a partition order under this
section, receive a special payment, payable over a period not
to exceed 2 years, equal to the amount of benefits previously
suspended as prescribed in regulations. Such plans are
subject to the requirements of subsection (c).
``(l) Fiduciary Protection.--Plan participants and
beneficiaries shall not have a claim under section 409 or
section 502 of this Act against plan fiduciaries with respect
to an application for partition assistance made in good faith
or the allocation of benefit liabilities between the
successor plan and the original plan.
``(m) Effect of Partition on Withdrawal Liability.--
``(1) In general.--A partition order under this section is
taken into account in determining withdrawal liability under
section 4201 of an employer that contributes to the original
plan, provided that the employer remains a contributing
employer to the original plan (and in compliance with any
applicable funding improvement or rehabilitation plan) for a
period of 15 years following the effective date of the
liability transfer.
``(2) Withdrawals after less than 15 years.--
``(A) In general.--If an employer completely withdraws or
partially withdraws from a plan that was partitioned under
this section at any time within the 15-year period described
in paragraph (1), the transfer of benefits under subsection
(g) shall not be taken into account in computing the
employer's complete or partial withdrawal liability, and the
amount of the annual withdrawal liability payment amount
otherwise determined shall be increased by 10 percent.
``(B) Exception.--Subparagraph (A) shall not apply--
``(i) if the complete or partial withdrawal is due to a
decertification, a change in bargaining representatives,
disclaimer of interest, or because of an event described in
section 4218; or
``(ii) in the case of a partial withdrawal due to a
bargaining unit or facility take-out if the contribution base
units for the plan year immediately following the year of the
partial withdrawal are at least 97 percent of the
[[Page S7596]]
contribution base units for the plan year immediately
preceding the year of the partial withdrawal.
``(3) Exception.-- Paragraphs (1) and (2) shall not apply
to an employer that first had an obligation to contribute to
the plan partitioned under this section after the date of
enactment of this section.
``(n) Restrictions on Benefit Improvements.--
``(1) Increase in plan liabilities.--
``(A) In general.--If the plan sponsor adopts a plan
amendment that increases plan liabilities (due to any
increase in benefits, any change in the accrual of benefits,
or any change in the rate at which benefits become
nonforfeitable) that takes effect after the effective date of
the partition, the original plan shall make payments to the
corporation for each year during the 20-year period following
the effective date of the benefit increase. For purposes of
this paragraph, an increase in benefits due to an increase in
the contribution rate or compensation shall be considered a
prohibited increase in benefits.
``(B) Exception for certain accruals.--Subparagraph (A)
shall not apply to any change in future accruals after the
end of the 15-year period during which such accruals are
limited under subsection (c).
``(2) Amount payable to corporation.--The amount paid by
the original plan to the corporation under paragraph (1) each
year shall be equal to the lesser of--
``(A) the total value of the increase in benefit payments
for the year that is attributable to the benefit improvement;
or
``(B) the total benefit payments from the successor plan
for such year.
``(3) Timing of payment.--Payments under paragraph (2)
shall be made by the original plan at the time of, and in
addition to, any premium imposed by the corporation on the
plan.
``(4) PBGC authority.--The corporation is authorized to
bring an action against the original plan to prevent or
correct any and all actions by plan sponsors, a principal
purpose of which is to evade or avoid payments due to the
corporation under paragraph (2), or that may have the effect
of evading or avoiding such payments. Payments under
paragraph (2) shall be determined without regard to such
actions by plan sponsors.
``(5) Exception for certain changes.--The requirements of
this subsection do not apply to an increase or change in
benefits that is required by law or that is a de minimis
change, as determined by the corporation.
``(o) Post-partition Disclosures.--Not later than 90 days
after the first day of each plan year beginning after the
effective date of a partition under this section, the plan
sponsor of the original plan shall electronically file with
the corporation a report including the following information:
``(1) The estimated funded percentage (as defined in
section 305(k)(2)) as of the first day of such plan year, and
the underlying actuarial value of assets and liabilities
taken into account in determining such percentage.
``(2) The estimated amount of all investment returns for
the original plan during the preceding plan year.
``(3) The market value of the assets of the plan
(determined as provided in paragraph (1)) as of the last day
of the plan year preceding such plan year.
``(4) The total value of all contributions made by
employers and employees during the plan year preceding such
plan year.
``(5) The total value of all benefits paid during the plan
year preceding such plan year.
``(6) Cash flow projections for such plan year and the 29
succeeding plan years, and the assumptions used in making
such projections.
``(7) Funding standard account projections for such plan
year and the 9 succeeding plan years, and the assumptions
used in making such projections.
``(8) Any significant reduction in the number of active
participants during the plan year preceding such plan year,
and the reason for such reduction.
``(9) A list of employers that withdrew from the plan in
the plan year preceding such plan year, and the resulting
reduction in contributions.
``(10) A list of employers that paid withdrawal liability
to the plan during the plan year preceding such plan year
and, for each employer, a total assessment of the withdrawal
liability paid, the annual payment amount, and the number of
years remaining in the payment schedule with respect to such
withdrawal liability.
``(11) Any material changes to benefits, accrual rates, or
contribution rates during the plan year preceding such plan
year, and whether such changes relate to the conditions of
the partition assistance.
``(12) Details regarding any funding improvement plan or
rehabilitation plan and updates to such plan.
``(13) The number of participants and beneficiaries during
the plan year preceding such plan year who are active
participants, the number of participants and beneficiaries in
pay status, and the number of terminated vested participants
and beneficiaries.
``(14) For--
``(A) the first plan year after the effective date of the
partition, a list of all employers that contributed to the
plan during the plan year; and
``(B) subsequent plan years, changes to the list of
contributing employers.
``(15) The information contained on the most recent annual
return under section 6058 of the Internal Revenue Code of
1986 and actuarial report under section 6059 of such Code of
the plan.
``(16) Copies of the plan document and amendments, other
retirement benefit or ancillary benefit plans relating to the
plan and contribution obligations under such plans, a
breakdown of administrative expenses of the plan, participant
census data and distribution of benefits, the most recent
actuarial valuation report as of the plan year, financial
reports, and copies of the portions of collective bargaining
agreements relating to plan contributions, funding coverage,
or benefits, and such other information as the corporation
may reasonably require.
``(17) A list of the employers that contributed more than 5
percent of total contributions to the plan during the
preceding plan year, and the amount contributed by each such
employer.
Any information or documentary material submitted to the
corporation pursuant to this subsection that could identify
individual employers, if clearly designated by the person
making the submission as confidential (on each page in the
case of a document, and in the file name in the case of a
digital file), shall be exempt from disclosure under section
552 of title 5, United States Code, and no such information
or documentary material may be made public except as may be
relevant to any administrative or judicial action or
proceeding, including an informal rulemaking.
``(p) Restrictions on Contribution Decreases.--
``(1) In general.--Subject to paragraph (2), except in any
plan year in which the plan is certified by the plan actuary
as in unrestricted status pursuant to section 305(b)(1)(B),
the plan sponsor of an original plan may not accept a
collective bargaining agreement with respect to such original
plan that includes a reduction in employer contribution
rates.
``(2) Exception.--Under a process to be promulgated by
regulation by the corporation, a plan sponsor of an original
plan may petition the corporation for the authority to
approve a collective bargaining agreement that contemplates a
reduction in employer contribution rates. Such regulation
shall include a requirement that a plan petitioning for such
authority demonstrate that its existing contribution rates
are higher than contribution rates paid on behalf of other
workers covered by collective bargaining agreements in the
same industry in nearby localities. The corporation shall
approve the petition if the plan sponsor demonstrates that
the reduction in contribution rates improves the long-term
funding or solvency of the plan, and does not increase the
corporation's expected loss with respect to the plan.
``(q) Effect on Accumulated Funding Deficiency.--Any
accumulated funding deficiency (as defined in section 304(a))
of a plan shall be reduced to zero as of the first day of the
plan year during which the partition under this section is
effective.
``(r) Coordination of Reporting and Disclosure
Requirements.--The corporation, the Secretary, and the
Secretary of the Treasury may, individually or collectively,
promulgate regulations to reduce reporting and disclosure
obligations for successor plans, including coordinating with
reporting and disclosure by original plans.''.
(b) Conforming Amendment.--Section 4233 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1413) is
amended by adding at the end the following:
``(g) This section shall not apply to an eligible
multiemployer plan described in section 4233A(b) that
receives a special partition under that section.''.
(c) Clerical Amendment.--The table of contents in section 1
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1001 et seq.) is amended by inserting after the item
relating to section 4233 the following:
``4233A. Special partitions of eligible multiemployer plans.''.
Subtitle B--PBGC Reforms
SEC. 111. GUARANTEE RATE INCREASE FOR PLANS RECEIVING
FINANCIAL ASSISTANCE.
(a) In General.--Section 4022A(c)(1) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1322(c)(1))
is amended by striking subparagraph (A) and inserting the
following:
``(A) 100 percent of the accrual rate up to $15, plus 75
percent of the lesser of--
``(i) $54.67, or
``(ii) the accrual rate, if any, in excess of $15, and''.
(b) Effective Dates.--
(1) In general.--The amendments made by this section shall
apply to financial assistance provided by the Pension Benefit
Guaranty Corporation--
(A) to plans that become insolvent after the date of the
enactment of this Act; or
(B) pursuant to a special partition under section 4233A of
the Employee Retirement Income Security Act of 1974, as added
by this Act.
(2) Exception for partitions on or before date of
enactment.--The amendments made by this section shall not
apply to financial assistance provided by the Pension Benefit
Guaranty Corporation pursuant to a partition of a
multiemployer plan occurring on or before the date of the
enactment of this Act.
SEC. 112. AMENDMENT TO DEFINITION OF INSOLVENCY.
(a) Amendments to Employee Retirement Income Security Act
of 1974.--Section 4245
[[Page S7597]]
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1426) is amended--
(1) by amending subsection (a) to read as follows:
``(a) Notwithstanding sections 203 and 204, an insolvent
multiemployer plan shall suspend the payments of benefits
which are not basic benefits, in accordance with this
section, and terminate the plan under section 4041A(a)(4).'';
(2) in subsection (b)--
(A) by striking paragraphs (1) and (2) and inserting the
following:
``(1) a multiemployer plan is insolvent if the plan's
available resources in any of the next 5 plan years are
projected not to be sufficient to pay benefits under the plan
when due for the plan year;'';
(B) by redesignating paragraphs (3) and (4) as paragraphs
(2) and (3), respectively; and
(C) in paragraph (2), as so redesignated, by inserting
``expected'' before ``contributions'';
(3) by striking subsection (c);
(4) by redesignating subsections (d) through (g) as
subsections (c) through (f), respectively;
(5) in subsection (c), as so redesignated--
(A) in paragraph (1)--
(i) by striking ``critical status, as described in
subsection 305(b)(2),)'' and inserting ``such critical
status)'';
(ii) by striking ``3 times'' and inserting ``10 times'';
and
(iii) by striking ``5 plan years'' each place such term
appears and inserting ``8 plan years'';
(B) in paragraph (2)--
(i) by striking ``plan's available resources are not
sufficient to pay benefits under the plan when due for the
next plan year'' and inserting ``plan will be insolvent in
any of the next 10 plan years''; and
(ii) by inserting ``and the corporation'' before the period
at the end;
(C) by striking paragraph (3); and
(D) by redesignating paragraph (4) as paragraph (3).
(6) in subsection (d), as so redesignated--
(A) in paragraph (1)--
(i) by striking ``subsection (d)(1) or (2)'' and inserting
``subsection (c)(1) or (2)''; and
(ii) by striking ``Treasury,'' in subparagraph (A) and
inserting ``Treasury and'';
(B) in paragraph (2)--
(i) by striking ``resource benefit level determined in
writing for that insolvency year'' and inserting ``reduction
of benefit payments to the level of basic benefits and the
termination of the plan under section 4041A(a)(4) as of the
first day of the seventh full plan month of the plan's first
insolvency year under subsection (b)(3)''; and
(ii) by striking ``each insolvency year'' and inserting
``the first insolvency year'';
(C) by striking paragraph (3); and
(D) by redesignating paragraphs (4) and (5) as paragraphs
(3) and (4), respectively;
(7) in subsection (e), as so redesignated--
(A) in paragraph (1) by striking ``, for which the resource
benefit level is above the level of basic benefits,''; and
(B) by striking paragraph (2) and inserting after paragraph
(1) the following new paragraph:
``(2) A plan sponsor who has determined that the plan's
available resources for an insolvency year are below the
level of basic benefits shall apply for financial assistance
from the corporation under section 4261.''; and
(8) in subsection (f), as so redesignated, by striking
``Subsections (a) and (c)'' and inserting ``Subsection (a)''.
(b) Amendments to Internal Revenue Code of 1986.--Section
418E of the Internal Revenue Code of 1986 is amended--
(1) by amending subsection (a) to read as follows:
``(a) Suspension of Certain Benefit Payments;
Termination.--Notwithstanding section 411, an insolvent
multiemployer plan shall suspend the payments of benefits
which are not basic benefits, in accordance with this
section, and terminate the plan under section 4041A(a)(4) of
the Employee Retirement Income Security Act of 1974.'';
(2) in subsection (b)--
(A) by striking paragraphs (1) and (2) and inserting the
following:
``(1) Insolvent multiemployer plan.--A multiemployer plan
is insolvent if the plan's available resources in any of the
next 5 plan years are projected not to be sufficient to pay
benefits under the plan when due for the plan year.'';
(B) by redesignating paragraphs (3) and (4) as paragraphs
(2) and (3), respectively; and
(C) in paragraph (2), as so redesignated, by inserting
``expected'' before ``contributions'';
(3) by striking subsection (c);
(4) by redesignating subsections (d) through (h) as
subsections (c) through (g), respectively;
(5) in subsection (c), as so redesignated--
(A) in paragraph (1)--
(i) by striking ``critical status, as described in
subsection 432(b)(2))'' and inserting ``such critical
status)'';
(ii) by striking ``3 times'' and inserting ``10 times'';
and
(iii) by striking ``5 plan years'' each place such term
appears and inserting ``8 plan years'';
(B) in paragraph (2)--
(i) by striking ``plan's available resources are not
sufficient to pay benefits under the plan when due for the
next plan year'' and inserting ``plan will be insolvent in
any of the next 10 plan years''; and
(ii) by inserting ``and the corporation'' before the period
at the end;
(C) by striking paragraph (3); and
(D) by redesignating paragraph (4) as paragraph (3);
(6) in subsection (d), as so redesignated--
(A) in paragraph (1), by striking ``subsection (d)(1) or
(2)'' and inserting ``subsection (c)(1) or (2)'';
(B) in paragraph (2)--
(i) by striking ``resource benefit level determined in
writing for that insolvency year'' and inserting ``reduction
of benefit payments to the level of basic benefits and the
termination of the plan under section 4041A(a)(4) of the
Employee Retirement Income Security Act of 1974 as of the
first day of the seventh full plan month of the plan's first
insolvency year under subsection (b)(3)'';
(ii) by striking ``each insolvency year'' and inserting
``the first insolvency year''; and
(iii) by striking ``Resource benefit level'' in the heading
and inserting ``Notice of insolvency'';
(C) by striking paragraph (3); and
(D) by redesignating paragraphs (4) and (5) as paragraphs
(3) and (4), respectively;
(7) in subsection (e), as so redesignated--
(A) in paragraph (1) by striking ``, for which the resource
benefit level is above the level of basic benefits,''; and
(B) by striking paragraph (2) and inserting after paragraph
(1) the following new paragraph:
``(2) Plans without available resources.--A plan sponsor
who has determined that the plan's available resources for an
insolvency year are below the level of basic benefits shall
apply for financial assistance from the Pension Benefit
Guaranty Corporation under section 4261 of the Employee
Retirement Income Security Act of 1974.''; and
(8) in subsection (g), as so redesignated, by striking
``Subsections (a) and (c)'' and inserting ``Subsection (a)''.
(c) Regulations.--The Pension Benefit Guaranty Corporation
shall issue regulations implementing the amendments made by
this section. Such regulations shall address the assumptions
a plan may use in projecting whether a plan's available
resources in any of the next 5 plan years are projected not
to be sufficient to pay benefits under the plan when due.
SEC. 113. TERMINATION OF MULTIEMPLOYER PLANS.
(a) Termination by Court Order.--Section 4041A of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1341a) is amended by adding at the end the following:
``(g) Effect of Termination Order.--If a court orders the
termination of a multiemployer plan under section 4042--
``(1) the corporation shall determine whether the
termination of such plan shall be carried out in accordance
with paragraph (1) or (2) of subsection (a) (and such
termination shall be treated as described in whichever of
such paragraphs is applicable under the determination), and
``(2) the plan shall take such actions as the corporation
determines necessary to implement the corporation's
determination under paragraph (1) by such date as the
corporation specifies in such determination.''.
(b) Termination by Reason of Insolvency.--
(1) In general.--Section 4041A(a) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1341a(a))
is amended--
(A) in paragraph (2), by striking ``or'' at the end;
(B) in paragraph (3)--
(i) by striking ``section 4203(b)(1)'' and inserting
``section 4021(b)(1)''; and
(ii) by striking the period and inserting ``; or''; and
(C) by adding at the end the following:
``(4) becoming insolvent (within the meaning of section
4245(b)(1).''.
(2) Time of termination.--Section 4041A(b) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1341a(b))
is amended by adding at the end the following new paragraphs:
``(3) Except as provided in paragraph (4), the date on
which a plan terminates under paragraph (4) of subsection (a)
is the first day of the seventh full plan month of the plan's
first insolvency year under section 4245(b)(3).
``(4)(A) In the case of a multiemployer plan which is an
insolvent plan on the date of enactment of this paragraph--
``(i) paragraph (4) of subsection (a) shall apply to such
plan unless such plan applies for, and receives, a special
partition under section 4233A, and
``(ii) the date on which plan terminates shall be
determined under subparagraph (B).
``(B) In the case of a plan described in subparagraph (A),
the date on which a plan terminates under paragraph (4) of
subsection (a) is--
``(i) if the plan is not eligible for a special partition
under section 4233A, the first day of the seventh full plan
month following such date of enactment, except that such plan
may, notwithstanding the amendment required to be adopted by
the plan under section 4245(a), continue to provide service
credit solely for purposes of vesting under the plan until
such time as the plan's available resources are not
sufficient to pay benefits under the plan, and
``(ii) if the plan applies for such special partition but
the corporation does not approve it, the first day of the
seventh full plan month following the final determination of
the corporation disallowing such special partition.''.
(3) Adoption of amendment providing for no service
credit.--Section 4245(a) of such
[[Page S7598]]
Act (29 U.S.C. 1426(a)), as amended by this Act, is amended
by adding at the end the following: ``The insolvent
multiemployer plan shall also, at the time of becoming
insolvent, adopt an amendment which provides that
participants will receive no credit for any purpose under the
plan for service with any employer after the date specified
in 4041A(b)(3) or (4), whichever is applicable.''
(4) Other amendments.--Section 4041A of such Act of 1974
(29 U.S.C. 1341a) is amended--
(A) in subsection (c)--
(i) in the matter preceding paragraph (1)--
(I) by striking ``Except'' and inserting ``Consistent with
the provisions of section 4281, and except''; and
(II) by striking ``paragraph (2)'' and inserting
``paragraph (1), (2), or (4)'';
(ii) in paragraph (1), by striking ``and'' at the end;
(iii) by redesignating paragraph (2) as paragraph (3); and
(iv) by inserting after paragraph (1) the following:
``(2) suspend the payment of benefits in excess of the
level of basic benefits, and'';
(B) by striking subsection (d) and redesignating
subsections (e) and (f) as subsections (d) and (e),
respectively; and
(C) in subsection (d), as so redesignated--
(i) by striking ``paragraph (1) or (3)'' and inserting
``paragraph (1), (3), or (4)'';
(ii) by striking ``termination date, unless'' and inserting
``termination date and the total contribution amount shall be
not less than the average amount of the highest 3
contributions in the previous 10 years, unless''; and
(iii) by adding at the end the following new sentence:
``Any liability under section 4201 due by an employer that
withdraws from the plan after the plan termination date shall
be offset by the contributions made under this subsection
subsequent to the plan termination.''.
(c) Pooling of Assets.--Section 4041A of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1341a), as
amended by this section, is further amended by adding at the
end the following:
``(g) Pooling of Assets.--Notwithstanding any other
provision of this title, the corporation is authorized to
pool assets of terminated or insolvent multiemployer plans
with fewer than 5,000 participants or to consolidate such
plans by merger, for purposes of administration, investment,
payment of liabilities of all such plans, and such other
purposes as it determinates to be appropriate in the
administration of this title, if it determines that such
action would reduce administrative expenses or avoid an
increased risk of loss. The corporation may exercise this
consolidation authority by administrative action without
petitioning a court for an order to replace the plan's
governing board of trustees, including receivership by the
corporation, or to consolidate or merge any plans.''.
(d) Effective Date.--The amendments made by this section
shall take effect on the date of enactment of this section,
except that the amendments made by subsection (b) shall also
apply to multiemployer plans that are insolvent on such date.
SEC. 114. BENEFITS UNDER CERTAIN TERMINATED PLANS.
Section 4281 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1441) is amended--
(1) in subsection (a), by striking ``section 4041A(d)'' and
inserting ``Section 4041A(c)'';
(2) by striking subsections (b), (c), and (d); and
(3) by inserting after subsection (a) the following:
``(b)(1) If a plan has been terminated pursuant to
paragraph (1), (2), or (4) of section 4041A(a), the plan
sponsor shall amend the plan to suspend benefits in excess of
the level of basic benefits.
``(2) Any plan amendment required by this subsection shall,
in accordance with regulations prescribed by the corporation,
take effect not later than 6 months after the date on which
the plan is terminated.
``(c)(1) The value of nonforfeitable benefits under a
terminated plan described in subsection (a), and the value of
the plan's assets, shall be determined in writing, in
accordance with regulations prescribed by the corporation, as
of the end of the plan year during which section 4041A(c)
becomes applicable to such plan.
``(2) For purposes of this subsection, plan assets include
outstanding claims for withdrawal liability (within the
meaning of section 4001(a)(12).
``(3) If, according to the determination made under
paragraph (1), the value of plan assets is sufficient to pay
nonforfeitable benefits, the plan sponsor shall use the plan
assets to purchase irrevocable commitments to provide such
benefits from an insurer or otherwise distribute plan assets
in satisfaction of the plan's obligations with respect to
nonforfeitable benefits, in accordance with all applicable
regulations.
``(d)(1) If, according to the determination made under
subsection (c)(1), the value of nonforfeitable benefits
exceeds the value of the plan's assets, the plan sponsor
shall amend the plan to reduce benefits under the plan as
provided in paragraph (2).
``(2) Any plan amendment required by paragraph (1) shall,
in accordance with regulations prescribed by the
corporation--
``(A) reduce benefits to the extent necessary to eliminate
any benefits that are not nonforfeitable;
``(B) reduce accrued benefits to the extent that those
benefits are not eligible for the corporation's guarantee
under section 4022A(b); and
``(C) suspend payment of benefits which are not basic
benefits under section 4022A(c).
``(e) The powers and duties under this section of a sponsor
of a plan that is terminated as described in section 4041A,
before or after the plan begins receiving financial
assistance under section 4261, shall be prescribed by the
corporation, and the corporation shall prescribe by
regulation the requirements which assure that plan
participants and beneficiaries receive adequate notice of any
suspension of benefits.''.
Subtitle C--Pension Insurance Modeling
SEC. 121. PENSION INSURANCE MODELING.
Section 40233(a) of the Moving Ahead for Progress in the
21st Century Act (126 Stat. 857; Public Law 112-141) is
amended--
(1) in the subsection heading, by striking ``Annual'';
(2) by striking ``The Pension'' and inserting ``Not later
than January 1, 2025, and not less frequently than once every
5 years thereafter, the Pension'';
(3) by striking ``an annual peer review'' and inserting ``a
peer review''; and
(4) by striking the third sentence.
TITLE II--FUNDING RULES, WITHDRAWAL LIABILITY, AND OTHER REFORMS
Subtitle A--Minimum Funding Standard for Multiemployer Plans
SEC. 201. VALUATION OF PLAN LIABILITIES.
(a) Amendments to Internal Revenue Code of 1986.--
(1) Charges to funding standard account.--Subparagraph (B)
of section 431(b)(2) of the Internal Revenue Code of 1986 is
amended--
(A) by striking ``and'' at the end of clause (iii),
(B) by redesignating clause (iv) as clause (v),
(C) by striking ``actuarial assumptions'' in clause (v), as
so redesignated, and inserting ``actuarial assumptions not
described in clause (iv)'', and
(D) by inserting after clause (iii) the following new
clause:
``(iv) separately, with respect to each plan year, an
amount equal to the excess, if any, of--
``(I) the net increase (if any) in the unfunded past
service liability resulting from a reduction in the interest
rate under paragraph (6)(A) from the rate which applied for
the preceding year, over
``(II) the amount in the investment risk reduction
subaccount under paragraph (9),
over a period of 30 years, and''.
(2) Credits to funding standard account.--Clause (iii) of
section 431(b)(3)(B) of such Code is amended by inserting ``,
except that any amount of net gain resulting from an increase
in the interest rate from the rate which applied for the
preceding year shall first be offset against any unamortized
amounts charged under paragraph (2)(B)(iv)'' after ``15 plan
years''.
(3) Interest.--Paragraph (6) of section 431(b) of such Code
is amended to read as follows:
``(6) Interest.--
``(A) In general.--The funding standard account (and items
therein) shall be charged or credited (as determined under
regulations prescribed by the Secretary) with interest at the
appropriate rate consistent with the rate or rates of
interest used under the plan to determine the unfunded past
service liability. Notwithstanding any other provision of
this section, the interest rate used shall not exceed--
``(i) 7.5 percent for actuarial valuations for plan years
beginning after December 31, 2020, and before January 1,
2024,
``(ii) 7.25 percent for actuarial valuations for plan years
beginning after December 31, 2023, and before January 1,
2028,
``(iii) 7.0 percent for actuarial valuations for plan years
beginning after December 31, 2027, and before January 1,
2032,
``(iv) 6.75 percent for actuarial valuations for plan years
beginning after December 31, 2031, and before January 1,
2036, and
``(v) 6.5 percent for actuarial valuations for plan years
beginning after December 31, 2035.
Notwithstanding subsection (c), the plan sponsor may direct
the plan actuary to use any rate which is not lower than the
rate determined under subparagraph (B) (without regard to
this sentence) and not greater than the rate determined under
the preceding sentence. for the plan year. Nothing in this
subparagraph shall require a plan to take into account the
interest rate limitation for subsequent years under the
preceding sentence in determining actuarial valuations as of
any given year.
``(B) Interest rate for determining normal cost.--
Notwithstanding any other provision of this section, the
interest rate used for determining the normal cost to be
charged under paragraph (2) for the plan year shall be equal
to the least of--
``(i) the interest rate applicable under subparagraph (A)
for the plan year,
``(ii) a rate equal to the 24-month average of the third
segment rate (as defined in section 430(h)(2)(C)(iii)), as of
the date the determination is made, without regard to section
430(h)(2)(C)(iv), increased by 2 percent, or
``(iii) 5.5 percent.
``(C) Exception for certain partitioned plans.--
Notwithstanding subparagraph (A), in the case of a plan which
has been partitioned under section 4233A of the Employee
Retirement Income Security Act of 1974, the rate of interest
used to determine normal cost under subparagraph (B) shall
also be
[[Page S7599]]
used to determine the unfunded past service liability of the
plan.
``(D) Exception for plans using a spread-gain method.--
Notwithstanding subparagraph (B), and except as noted in
subparagraph (C), in the case of a plan which uses a funding
method other than the unit credit method or entry-age normal
method--
``(i) the normal cost and past service liability shall be
calculated using interest rates under subparagraph (A),
``(ii) an additional normal cost component shall be
calculated in the same manner as under paragraph (9)(B)(i)
based on the unit credit method, and
``(iii) the amount determined under clause (ii) shall be
added to the otherwise calculated normal cost under the
funding method in lieu of the credit under paragraph
(9)(B)(i).''.
(4) Investment risk reduction subaccount.--Subsection (b)
of section 431 of such Code is amended by adding at the end
the following new paragraph:
``(9) Investment risk reduction subaccount.--For purposes
of this part--
``(A) In general.--The funding standard account shall
include an investment risk reduction subaccount used solely
to offset losses attributable to reductions in the rate of
interest used to determine the unfunded past service
liability of the plan over time.
``(B) Annual adjustments.--For a plan year, the investment
risk reduction subaccount shall be--
``(i) credited with the net change (if any) in the normal
cost for the immediately preceding plan year due to
recalculation to reflect the difference in interest rates
under paragraphs (6)(A) and (6)(B),
``(ii) charged with the amount of any reduction applied
under paragraph (2)(B)(iv)(II), or, in the case of a plan
using a spread-gain method, an amount equal to the lesser
of--
``(I) the entire remaining balance of such subaccount
immediately before the charge, or
``(II) the amount of the increase in the present value of
benefits resulting from a decrease in the interest rate from
the rate which applied for the preceding year,
``(iii) at the election of the plan sponsor, and pursuant
to regulations to be issued by the Secretary, credited with
the net decrease in the unfunded past service liability (or
present value of benefits, in the case of a plan using a
spread-gain method) resulting from an increase in the
interest rate under paragraph (6)(A), not to exceed the
amount of any previous charges to the account under clause
(ii), reduced by any previous credits under this clause, and
``(iv) adjusted with interest at the rate under paragraph
(6)(A), as applicable.''.
(5) Determinations to be made under funding method.--
Paragraph (1) of section 431(c) of such Code is amended to
read as follows:
``(1) Determinations to be made under funding method.--
``(A) In general.--For purposes of this part, normal costs,
accrued liability, and experience gains and losses used to
determine the unfunded past service liability for the plan
shall be determined under the funding method used to
determine costs under the plan and based on the interest rate
under subparagraph (A) (or subparagraph (C), if applicable)
of subsection (b)(6).
``(B) Adjustments for funding standard account normal
cost.--Notwithstanding subparagraph (A), in the case of a
plan using the unit credit funding method or the entry-age
normal funding method, the normal cost for a plan year to be
charged to the funding standard account under subsection
(b)(2) shall be determined under the funding method used to
determine costs under the plan and based on the interest rate
under subsection (b)(6)(B).''.
(b) Amendments to Employee Retirement Income Security Act
of 1974.--
(1) Charges to funding standard account.--Subparagraph (B)
of section 304(b)(2) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1084(b)(2)) is amended--
(A) by striking ``and'' at the end of clause (iii),
(B) by redesignating clause (iv) as clause (v),
(C) by striking ``actuarial assumptions'' in clause (v), as
so redesignated, and inserting ``actuarial assumptions not
described in clause (iv)'', and
(D) by inserting after clause (iii) the following new
clause:
``(iv) separately, with respect to each plan year, an
amount equal to the excess, if any, of--
``(I) the net increase (if any) in the unfunded past
service liability resulting from a reduction in the interest
rate under paragraph (6)(A) from the rate which applied for
the preceding year, over
``(II) the amount in the investment risk reduction
subaccount under paragraph (9),
over a period of 30 years, and''.
(2) Credits to funding standard account.--Clause (iii) of
section 304(b)(3)(B) of such Act (29 U.S.C. 1084(b)(3)(B)) is
amended by inserting ``, except that any amount of net gain
resulting from an increase in the interest rate from the rate
which applied for the preceding year shall first be offset
against any unamortized amounts charged under paragraph
(2)(B)(iv)'' after ``15 plan years''.
(3) Interest.--
(A) In general.--Paragraph (6) of section 304(b) of such
Act (29 U.S.C. 1084(b)) is amended to read as follows:
``(6) Interest.--
``(A) In general.--The funding standard account (and items
therein) shall be charged or credited (as determined under
regulations prescribed by the Secretary) with interest at the
appropriate rate consistent with the rate or rates of
interest used under the plan to determine the unfunded past
service liability. Notwithstanding any other provision of
this section, this interest rate shall not exceed--
``(i) 7.5 percent for actuarial valuations for plan years
beginning after December 31, 2020, and before January 1,
2024,
``(ii) 7.25 percent for actuarial valuations for plan years
beginning after December 31, 2023, and before January 1,
2028,
``(iii) 7.0 percent for actuarial valuations for plan years
beginning after December 31, 2027, and before January 1,
2032,
``(iv) 6.75 percent for actuarial valuations for plan years
beginning after December 31, 2031, and before January 1,
2036, and
``(v) 6.5 percent for actuarial valuations for plan years
beginning after December 31, 2035.
Notwithstanding subsection (c), the plan sponsor may direct
the plan actuary to use any rate which is not lower than the
rate determined under subparagraph (B) (without regard to
this sentence) and not greater than the rate determined under
the preceding sentence. for the plan year. Nothing in this
subparagraph shall require a plan to take into account the
interest rate limitation for subsequent years under the
preceding sentence in determining actuarial valuations as of
any given year.
``(B) Interest rate for determining normal cost.--
Notwithstanding any other provision of this section, the
interest rate used for determining the normal cost to be
charged under paragraph (2) for the plan year shall be equal
to the least of--
``(i) the interest rate applicable under subparagraph (A)
for the plan year,
``(ii) a rate equal to the 24-month average of the third
segment rate (as defined in section 303(h)(2)(C)(iii)), as of
the date the determination is made, without regard to section
303(h)(2)(C)(iv), increased by 2 percent, or
``(iii) 5.5 percent.
``(C) Exception for certain partitioned plans.--
Notwithstanding subparagraph (A), in the case of a plan which
has been partitioned under section 4233A, the rate of
interest used to determine normal cost under subparagraph (B)
shall also be used to determine the unfunded past service
liability of the plan.
``(D) Exception for plans using a spread-gain method.--
Notwithstanding subparagraph (B), and except as noted in
subparagraph (C), in the case of a plan which uses a funding
method other than the unit credit method or entry-age normal
method--
``(i) the normal cost and past service liability shall be
calculated using interest rates under subparagraph (A),
``(ii) an additional normal cost component shall be
calculated in the same manner as under paragraph (9)(B)(i)
based on the unit credit method, and
``(iii) the amount determined under clause (ii) shall be
added to the otherwise calculated normal cost under the
funding method in lieu of the credit under paragraph
(9)(B)(i).''.
(B) Conforming amendment.--Subparagraph (A) of section
4233A(h)(4) of such Act, as added by this Act, is amended by
inserting ``, consistent with section 304(b)(6)(C)'' before
the period.
(4) Investment risk reduction subaccount.--Subsection (b)
of section 304 of such Act (29 U.S.C. 1084) is amended by
adding at the end the following new paragraph:
``(9) Investment risk reduction subaccount.--For purposes
of this part--
``(A) In general.--The funding standard account shall
include an investment risk reduction subaccount used solely
to offset losses attributable to reductions in the rate of
interest used to determine the unfunded past service
liability of the plan over time.
``(B) Annual adjustments.--For a plan year, the investment
risk reduction subaccount shall be--
``(i) credited with the net change (if any) in the normal
cost for the immediately preceding plan year due to
recalculation to reflect the difference in interest rates
under paragraphs (6)(A) and (6)(B),
``(ii) charged with the amount of any reduction applied
under paragraph (2)(B)(iv)(II), or, in the case of a plan
using a spread-gain method, an amount equal to the lesser
of--
``(I) the entire remaining balance of such subaccount
immediately before the charge, or
``(II) the amount of the increase in the present value of
benefits resulting from a decrease in the interest rate from
the rate which applied for the preceding year,
``(iii) at the election of the plan sponsor, and pursuant
to regulations to be issued by the Secretary of the Treasury,
credited with the net decrease in the unfunded past service
liability (or present value of benefits, in the case of a
plan using a spread-gain method) resulting from an increase
in the interest rate under paragraph (6)(A), not to exceed
the amount of any previous charges to the account under
clause (ii), reduced by any previous credits under this
clause, and
``(iv) adjusted with interest at the rate under paragraph
(6)(A), as applicable.''.
(5) Determinations to be made under funding method.--
Paragraph (1) of section 304(c) of such Act (29 U.S.C.
1084(c)) is amended to read as follows:
[[Page S7600]]
``(1) Determinations to be made under funding method.--
``(A) In general.--For purposes of this part, normal costs,
accrued liability, and experience gains and losses used to
determine the unfunded past service liability for the plan
shall be determined under the funding method used to
determine costs under the plan and based on the interest rate
under subparagraph (A) (or subparagraph (C), if applicable)
of subsection (b)(6).
``(B) Adjustments for funding standard account normal
cost.--Notwithstanding subparagraph (A), in the case of a
plan using the unit credit funding method or the entry-age
normal funding method, the normal cost for a plan year to be
charged to the funding standard account under subsection
(b)(2) shall be determined under the funding method used to
determine costs under the plan and based on the interest rate
under subsection (b)(6)(B).''.
(c) Plan Petitions to Increase Interest Assumptions.--
(1) In general.--Pursuant to regulations to be issued by
the Secretary of the Treasury (or such Secretary's delegate),
a multiemployer plan must petition the Secretary of the
Treasury (or delegate) for any increase in the interest
assumption made after a 30-year amortization base is
established in accordance with section 431(b)(2)(B)(iv) of
the Internal Revenue Code of 1986 and section
304(b)(2)(B)(iv) of the Employee Retirement Income Security
Act of 1974 (as added by this Act). The Secretary of the
Treasury (or delegate) shall approve such request upon a
determination that the change is reasonably supported by
changes in the financial markets or changes in the plan's
asset allocation, and is consistent with the manner in which
prior changes in interest rate assumptions were determined
since the date of the enactment of this Act.
(2) Approval.--If the Secretary of the Treasury (or such
Secretary's delegate) does not approve or deny any petition
submitted pursuant to paragraph (1) within 180 days of
receiving such petition, such petition shall be deemed to
have been approved.
(d) Effective Date.--The amendments made by this section
shall apply to plan years beginning after December 31, 2020.
Subtitle B--Additional Funding Rules for Multiemployer Plans
PART I--PLAN STATUS AMENDMENTS
SEC. 211. AMENDMENTS TO INTERNAL REVENUE CODE OF 1986.
(a) Rules Applying to All Multiemployer Plans.--
(1) In general.--Subsection (a) of section 432 of the
Internal Revenue Code of 1986 is amended--
(A) by striking ``a multiemployer plan in effect on July
16, 2006--'' and inserting ``any multiemployer plan--'',
(B) by redesignating paragraphs (1), (2), and (3) as
paragraphs (2), (3), and (4), respectively,
(C) by inserting before paragraph (2), as so redesignated,
the following new paragraph:
``(1) the rules of subsection (c) shall apply,'',
(D) by striking ``subsection (c)'' in paragraph (2)(A), as
so redesignated, and inserting ``subsection (d)'',
(E) by striking ``subsection (d)'' in paragraph (2)(B), as
so redesignated, and inserting ``subsection (e)'',
(F) by striking ``subsection (e)'' in paragraph (3)(A), as
so redesignated, and inserting ``subsection (f)'',
(G) by striking ``subsection (f)'' in paragraph (3)(B), as
so redesignated, and inserting ``subsection (g)'', and
(H) by striking ``subsection (e)(9)'' in paragraph (4)(B),
as so redesignated, and inserting ``subsection (f)(9)''.
(2) Rules of immediate application.--Section 432 of such
Code is amended--
(A) by redesignating subsections (c), (d), (e), (f), (g),
(h), (i), and (j) as subsections (d), (e), (f), (g), (h),
(i), (j), and (k), respectively, and
(B) by inserting after subsection (b) the following new
subsection:
``(c) Rules Applying to All Multiemployer Plans.--
``(1) Benefit increases.--
``(A) Increases by plan amendment.--The plan sponsor of any
multiemployer plan shall not adopt a plan amendment which
increases plan liabilities (as determined as of the date of
the adoption of the amendment) due to any increase in
benefits, any change in the accrual rate of benefits, or any
change in the rate at which benefits become nonforfeitable,
unless--
``(i) if the plan is in unrestricted status as of the
adoption of such amendment, the plan actuary certifies in
accordance with subsection (b)(4) that the increase in
liabilities will not cause the plan to no longer be in
unrestricted status,
``(ii) if the plan is in stable status as of the adoption
of such amendment, the plan actuary certifies in accordance
with subsection (b)(4) that any such increase or change in
benefits will be paid from additional contributions not
required by any collective bargaining agreement in effect as
of the adoption of the amendment,
``(iii) if the plan is in endangered status as of the
adoption of such amendment, the plan actuary certifies in
accordance with subsection (b)(4) that any such increase or
change in benefits will be paid from additional contributions
not contemplated in any current funding improvement plan, or
``(iv) the increase or change in benefits is required by
law or is a de minimis change.
``(B) Increases under critical or critical and declining
status.--Unless required as a condition of qualification
under part I of this subchapter or to comply with other
applicable law, in the case of a plan which is in critical or
critical and declining status, no increase in benefits,
change in the accrual rate of benefits, or change in the rate
at which benefits become nonforfeitable which increases plan
liabilities shall take effect while the plan is in such
status, without regard to whether such increase or change
would otherwise occur under the provisions of the plan,
unless the increase in plan liabilities due to the change is
de minimis.
``(2) Contribution reductions.--The plan sponsor of any
multiemployer plan shall not accept any collective bargaining
agreement or participation agreement which reduces the rate
of contributions under the plan for any participants,
suspends contributions with respect to any period of service,
or directly or indirectly excludes younger, probationary, or
newly hired employees from participation in the plan,
unless--
``(A) the plan is in unrestricted status as of the adoption
of such agreement and the plan actuary certifies in
accordance with subsection (b)(4) that the reduction in
contributions will not cause the plan to no longer be in
unrestricted status,
``(B) the reduction in contributions is accompanied by a
reduction in future accruals for the affected participants,
and the plan actuary certifies in accordance with subsection
(b)(4) that the combined effect of the changes in
contributions and benefits is not projected to reduce the
funded percentage of the plan in any year, or
``(C) subject to regulations issued by the Secretary, the
plan sponsor reasonably determines that the acceptance of
such an agreement is in the best interests of plan
participants and beneficiaries and that rejection of the
agreement would have an adverse financial effect on the
plan.''.
(3) Stable and unrestricted plans.--Subsection (b) of
section 432 of such Code is amended--
(A) by striking ``Endangered and Critical'' in the heading,
(B) by redesignating paragraphs (1), (2), (3), (4), (5),
and (6) as paragraphs (2), (3), (4), (5), (6), and (7),
respectively, and
(C) by inserting before paragraph (2) the following new
paragraph:
``(1) Stable and unrestricted status.--
``(A) Stable.--A multiemployer plan is in stable status for
a plan year if, as determined by the plan actuary under
paragraph (4), the plan is not in unrestricted status for the
plan year, is not in endangered, critical, or critical and
declining status for the plan year, and is not described in
paragraph (6).
``(B) Unrestricted.--A multiemployer plan is in
unrestricted status for a plan year if, as determined by the
plan actuary under paragraph (4)--
``(i) the plan is not in endangered, critical, or critical
and declining status for the plan year,
``(ii) the plan is not described in paragraph (6), and
``(iii) as of the beginning of the plan year--
``(I) the plan's current liability funded percentage for
such plan year is at least 70 percent and the plan's
projected funded percentage as of the first day of the 15th
succeeding plan year is at least 115 percent, or
``(II) the plan's current liability funded percentage for
such plan year is at least 80 percent.
``(C) Current liability funded percentage.--For purposes of
this section, the term `current liability funded percentage'
means the percentage equal to a fraction the numerator of
which is the value of plan assets (as determined for purposes
of section 431(c)(6)(A)(ii)(II)) and the denominator of which
is the current liabilities of the plan (as defined in section
431(c)(6)(D)).''.
(4) Amendment to annual certification by plan actuary.--
Subparagraph (A) of paragraph (4) (as redesignated by
paragraph (3)) of section 432(b) of such Code is amended by
inserting ``whether or not the plan is in unrestricted or
stable status for such plan year,'' in clause (i) before
``whether or not the plan is in endangered status''.
(5) Conforming amendments.--
(A) Paragraphs (2) and (3) of section 432(b) of such Code,
as redesignated by paragraph (3), are each amended by
striking ``paragraph (3)'' and inserting ``paragraph (4)''.
(B) Section 432(b)(2) of such Code, as so redesignated and
amended, is further amended by striking ``paragraph (5)'' and
inserting ``paragraph (6)''.
(C) Section 432(b)(4) of such Code, as so redesignated, is
amended--
(i) by striking ``paragraph (4)'' in subparagraph (B)(iv)
thereof and inserting ``paragraph (5)'',
(ii) by striking ``subsection (e)(9)'' both places it
appears in subparagraph (B)(v) and inserting ``subsection
(f)(9)'',
(iii) by striking ``subsection (e)(3)(A)(ii)'' in
subparagraph (B)(v) and inserting ``subsection
(f)(3)(A)(ii)'',
(iv) by striking ``subsection (e)'' in subparagraph (B)(v)
and inserting ``subsection (f)'',
(v) by striking ``paragraph (4)'' each place it appears in
subparagraphs (D)(i) and (D)(v) thereof and inserting
``paragraph (5)'',
(vi) by striking ``subsection (e)(8)'' in subparagraph
(D)(ii)(I) thereof and inserting ``subsection (f)(8)'',
(vii) by striking ``paragraph (5)'' in subparagraph
(D)(iii) thereof and inserting ``paragraph (6)'', and
[[Page S7601]]
(viii) by striking ``(iii) In the case of'' in subparagraph
(D)(iii) thereof and inserting ``(iii) Special rule.--''.
(D) Section 432(b)(5) of such Code, as redesignated by
paragraph (3), is amended--
(i) by striking ``paragraph (2)'' and inserting ``paragraph
(3)'',
(ii) by striking ``paragraph (3)(B)(iv)'' and inserting
``paragraph (4)(B)(iv)'',
(iii) by striking ``paragraph (3)'' in subparagraph (A)
thereof and inserting ``paragraph (4)'',
(iv) by striking ``paragraph (3)(A)'' in subparagraph (A)
thereof and inserting ``paragraph (4)(A)'',
(v) by striking ``paragraph (2)'' in subparagraph (B)
thereof and inserting ``paragraph (3)'', and
(vi) by striking ``subsection (e)(4)(B)'' in subparagraph
(C) thereof and inserting ``subsection (f)(4)(B)''.
(E) Section 432(b)(6)(A) of such Code, as so redesignated,
is amended--
(i) by striking ``paragraph (3)(A)'' and inserting
``paragraph (4)(A)'',
(ii) by striking ``paragraph (1)(A)'' and inserting
``paragraph (2)(A)'', and
(iii) by striking ``paragraph (1)(B)'' and inserting
``paragraph (2)(B)''.
(F) Section 432(b)(7) of such Code, as so redesignated, is
amended by striking ``paragraph (2)'' and inserting
``paragraph (3)''.
(G) Paragraphs (1)(A), (4)(A)(ii), (4)(C)(i), (4)(C)(ii),
(4)(D), (5)(A)(i), (5)(B), and (8) of subsection (d), and
subsections (e)(2), (f)(1)(A), (f)(4)(B)(i),
(f)(4)(B)(ii)(I), (f)(5), and (g)(3) of section 432 of such
Code, as respectively redesignated by paragraph (2), are each
amended by striking ``subsection (b)(3)(A)'' and inserting
``subsection (b)(4)(A)''.
(H) Section 432(d)(3)(A)(i)(I) of such Code, as so
redesignated, is amended by striking ``paragraph (b)(3)'' and
inserting ``subsection (b)(4)''.
(I) Section 432(d)(4)(D) of such Code, as so redesignated,
is amended by striking ``subsection (d)'' and inserting
``subsection (e)''.
(J) Section 432(e) of such Code, as so redesignated, is
amended to read as follows:
``(e) Rules for Operation of Plan During Adoption and
Improvement Periods.--A plan may not be amended after the
date of the adoption of a funding improvement plan under
subsection (d) so as to be inconsistent with the funding
improvement plan or the requirements of subsection (c).''.
(K) Clauses (i)(I) and (ii)(I) of section 432(f)(4)(B) of
such Code, as so redesignated, are each amended by striking
``subsection (b)(2)'' and inserting ``subsection (b)(3)''.
(L) Subsections (f)(8)(A)(ii) and (g)(2)(A) of section 432
of such Code, as so redesignated, are each amended by
striking ``subsection (b)(3)(D)'' and inserting ``subsection
(b)(4)(D)''.
(M) Section 432(f)(9)(J) of such Code, as so redesignated,
is amended--
(i) by striking ``subsection (b)(3)'' and inserting
``subsection (b)(4)'', and
(ii) by striking ``paragraphs (1) and (2)'' in clause (i)
thereof and inserting ``paragraphs (2) and (3)''.
(N) Subparagraphs (A) and (B) of section 432(g)(1) of such
Code, as so redesignated, are each amended by striking
``subsection (e)'' and inserting ``subsection (f)''.
(O) Paragraph (2)(A) of section 432(g) of such Code, as so
redesignated, is amended by striking ``(b)(3)(D)'' and
inserting ``(b)(4)(D)''.
(P) Section 432(h) of such Code, as so redesignated, is
amended--
(i) by striking ``subsection (e)(8) or (f)'' in paragraph
(1) thereof and inserting ``subsection (f)(8) or (g)'',
(ii) by striking ``subsection (e)(9)'' in paragraph (1)
thereof and inserting ``subsection (f)(9)'',
(iii) by striking ``subsection (e)(7)'' in paragraph (2)
thereof and inserting ``subsection (f)(7)'', and
(iv) by striking ``rehabilitation plan'' and all that
follows in paragraph (3)(B) thereof and inserting
``rehabilitation plan. The preceding sentence shall not apply
to any increase in contribution requirements due to increased
levels of work, employment, or periods for which compensation
is provided, except to the extent such an increase is used to
provide an increased accrual rate of benefits or change in
the rate at which benefits become nonforfeitable which
increases plan liabilities.''.
(Q) Section 432(i) of such Code, as so redesignated, is
amended--
(i) by striking ``subsection (c)'' and inserting
``subsection (d)'', and
(ii) by striking ``subsection (e)'' and inserting
``subsection (f)''.
(R) Section 432(j)(2) of such Code, as so redesignated, is
amended by striking ``subsections (c) and (e)'' and inserting
``subsections (d) and (f)''.
(S) Section 412(b)(3) of such Code is amended by striking
``section 432(e)'' and inserting ``section 432(f)''.
(T) Section 418E of such Code, as amended by this Act, is
further amended--
(i) by striking ``432(b)(2)'' each place it appears in
subsections (c)(1), (c)(2), (d)(1), and (d)(2), as
redesignated by section 112, and inserting ``432(b)(3)'', and
(ii) by striking ``432(e)(9)'' in subsection (g), as so
redesignated, and inserting ``432(f)(9)''.
(U) Section 4971(g) of such Code is amended--
(i) by striking ``432(e)'' in paragraph (3)(B)(i) and
inserting ``432(f)'',
(ii) by striking ``432(b)(3)(A)(ii)'' in paragraph
(3)(B)(ii) and inserting ``432(b)(4)(A)(i)(II)'',
(iii) by striking ``432(e)(1)(A)'' in paragraph (4)(B)(ii)
and inserting ``432(f)(1)(A)'', and
(iv) by striking ``432(j)(9)'' in paragraph (4)(C)(ii) and
inserting ``432(k)(9)''.
(V) Subsection (c)(1) of section 4980I of such Code, as
added by this Act, is amended by adding at the end the
following: ``Such term shall not include such an original
plan for any plan year in which the plan is in unrestricted
status (as defined in section 432(b)(1)(B)).''.
(W) The heading of section 432 of such Code is amended by
striking ``in endangered status or critical status''.
(6) Withdrawal liability determination for plans emerging
from endangered or critical status.--Section 432(h) of such
Code, as redesignated by paragraph (2) and as amended by
paragraph (5), is further amended by striking paragraph (4)
and by inserting after paragraph (3) the following new
paragraph:
``(4) Emergence from endangered or critical status.--
``(A) In general.--In the case of increases in the
contribution rate (or other increases in contribution
requirements unless due to increased levels of work,
employment, or periods for which compensation is provided)
disregarded pursuant to paragraph (3), this subsection shall
cease to apply as of the later of--
``(i) the end of the first plan year following the plan
year in which the plan is no longer in endangered or critical
status, or
``(ii) the end of the plan year which includes the
expiration date of the first collective bargaining agreement
requiring plan contributions which expires after the plan is
no longer in endangered or critical status.
``(B) Highest contribution rate.--Notwithstanding
subparagraph (A), once the plan emerges from endangered or
critical status--
``(i) increases in the contribution rate disregarded
pursuant to paragraph (3) shall continue to be disregarded in
determining the highest contribution rate under section
4219(c) of such Act for plan years during which the plan was
in endangered or critical status, and
``(ii) the highest contribution rate for purposes of such
section shall be the greater of--
``(I) the sum of--
``(aa) the employer's contribution rate as of the later of
the last day of the last plan year ending before December 31,
2014, and the last day of the plan year for which the
employer first had an obligation to contribute to the plan,
and
``(bb) any contribution increases determined in accordance
with this section after such later date and before the date
the employer withdraws from the plan, or
``(II) the highest contribution rate for any plan year
after the plan year which includes the earlier of--
``(aa) the expiration date of the first collective
bargaining agreement applicable to the withdrawing employer
requiring plan contributions which expires after the plan is
no longer in endangered or critical status, or
``(bb) the date as of which the withdrawing employer
negotiated a contribution rate effective after the plan year
in which the plan is no longer in endangered or critical
status.''.
(7) Effective date.--The amendments made by this subsection
shall take effect on the date of the enactment of this Act.
(b) Determination of Endangered Status.--Paragraph (2) of
section 432(b) of the Internal Revenue Code of 1986, as
redesignated by subsection (a)(3), is amended to read as
follows:
``(2) Endangered status.--A multiemployer plan is in
endangered status for a plan year if, as determined by the
plan actuary under paragraph (5), the plan is not in critical
or declining status for the plan year and is not described in
paragraph (7), and, as of the beginning of the plan year--
``(A) the plan's funded percentage for such plan year is
less than 80 percent,
``(B) the plan is projected to have an accumulated funding
deficiency for any of the 9 succeeding plan years, taking
into account any extension of amortization periods under
section 431(d), or
``(C) the plan's projected funded percentage as of the
first day of the 15th succeeding plan year is less than 100
percent.''.
(c) Determination of Critical Status.--Paragraph (3) of
section 432(b) of the Internal Revenue Code of 1986, as
redesignated by subsection (a)(3), is amended to read as
follows:
``(3) Critical status.--
``(A) In general.--A multiemployer plan is in critical
status for a plan year if, as determined by the plan actuary
under paragraph (5), the plan is not in declining status for
the plan year and, as of the beginning of the plan year--
``(i) the plan's funded percentage is less than 65 percent,
``(ii) the plan has an accumulated funding deficiency for
the plan year, or is projected to have such an accumulated
funding deficiency for any of the 6 succeeding plan years,
taking into account any extension of amortization periods
under section 431(d), or
``(iii) the plan's projected funded percentage as of the
first day of the 15th succeeding plan year is less than 80
percent.
``(B) Original plans.--Notwithstanding subparagraph (A), a
multiemployer plan which is an original plan pursuant to
section 4233A(d)(3) of the Employee Retirement Income
Security Act of 1974 shall be treated as being in critical
status for the period of 15 consecutive plan years beginning
with the
[[Page S7602]]
plan year that includes the date of the partition under such
section 4233A.''.
(d) Declining Status.--
(1) In general.--
(A) The following provisions of section 432 of the Internal
Revenue Code of 1986 are each amended by striking ``critical
and declining'' each place it appears and inserting
``declining'':
(i) Subsection (a)(4) (as redesignated by subsection
(a)(1)).
(ii) Subparagraphs (A) and (B)(i) of subsection (b)(1), as
added by subsection (a)(3).
(iii) Subsection (b)(4)(B)(v) (as redesignated by
subsection (a)(3)), and the heading thereof.
(iv) Paragraph (1)(B), and the heading of such paragraph
(1)(B), of subsection (c), as added by subsection (a)(2).
(v) The heading of paragraph (9) of subsection (f) (as
redesignated by subsection (a)(2)).
(vi) Subparagraphs (A), (C), (G)(i), and (J) of subsection
(f)(9) (as so redesignated).
(vii) Subsection (h)(1) (as so redesignated).
(B) Section 418E(g) of such Code, as amended by section 112
and subsection (a), is further amended by striking ``critical
and declining status'' and inserting ``declining status''.
(2) Determination of declining status.--
(A) In general.--Subsection (b) of section 432 of such Code
is amended--
(i) by striking paragraph (7), as redesignated by
subsection (a)(3),
(ii) by redesignating paragraphs (4), (5), and (6), as so
redesignated, as paragraphs (5), (6), and (7), respectively,
and
(iii) by inserting after paragraph (3), as so redesignated,
the following new paragraph:
``(4) Declining status.--A multiemployer plan is in
declining status for a plan year if--
``(A) as determined by the plan actuary under paragraph
(5), as of the beginning of the plan year the plan is
projected to become insolvent within the plan year or any of
the 29 succeeding plan years,
``(B) the plan is otherwise in critical status for the plan
year as determined by the plan actuary under paragraph (5),
and the plan sponsor determines that, based on reasonable
actuarial assumptions and upon exhaustion of all reasonable
measures, the plan cannot reasonably be expected to emerge
from critical status within the next 30 plan years, or
``(C) the plan has a funded percentage for the plan year
which is greater than the projected funded percentage as of
the first day of the 15th succeeding plan year, unless the
funded percentage for the plan year is 100 percent or greater
and the projected funded percentage as of the first day of
such 15th succeeding plan year is less than 100 percent.''.
(B) Conforming amendments.--
(i) Paragraph (1) of section 432(b) of such Code, as added
by subsection (a)(3), is amended--
(I) by striking ``paragraph (4)'' each place it appears in
subparagraphs (A) and (B) and inserting ``paragraph (5)'',
and
(II) by striking ``paragraph (6)'' each place it appears in
subparagraphs (A) and (B) and inserting ``paragraph (7)''.
(ii) Subsection (c) of section 432 of such Code, as added
by subsection (a)(2), is amended by striking ``(b)(4)'' each
place it appears in paragraphs (1)(A)(i), (1)(A)(ii),
(1)(A)(iii), (2)(A), and (2)(B) and inserting ``(b)(5)''.
(iii) Section 432(b)(5) of such Code, as further
redesignated by subparagraph (A) and as amended by section
321 and subsection (a), is further amended--
(I) by striking ``paragraph (5)'' in subparagraph (B)(iv)
thereof and inserting ``paragraph (6)'',
(II) by striking ``paragraph (5)'' each place it appears in
subparagraphs (D)(i) and (D)(vi) thereof and inserting
``paragraph (6)'', and
(III) by striking ``paragraph (6)'' in subparagraph (D)(iv)
thereof and inserting ``paragraph (7)''.
(iv) Section 432(b)(6) of such Code, as so further
redesignated and amended, is further amended--
(I) by striking ``paragraph (4)(B)(iv)'' and inserting
``paragraph (5)(B)(iv)'',
(II) by striking ``paragraph (4)'' in subparagraph (A)
thereof and inserting ``paragraph (5)'', and
(III) by striking ``paragraph (4)(A)'' in subparagraph (A)
thereof and inserting ``paragraph (5)(A)''.
(v) Section 432(b)(7)(A) of such Code, as so further
redesignated and amended, is further amended--
(I) by striking ``paragraph (4)(A)'' and inserting
``paragraph (5)(A)'', and
(II) by striking ``either paragraph (2)(A) or paragraph
(2)(B)'' and inserting ``any subparagraph of paragraph (2)''.
(vi) Section 432(b)(7)(B) of such Code, as so further
redesignated, is amended by striking ``critical or
endangered'' and inserting ``endangered, critical, or
declining''.
(vii) Paragraphs (1)(A), (4)(A)(ii), (4)(C)(i), (4)(C)(ii),
(4)(D), and (8) of subsection (d), and subsections (f)(1)(A),
(f)(4)(B)(i), (f)(4)(B)(ii)(I), (f)(5), and (g)(3) of section
432 of such Code, as redesignated and amended by subsection
(a), are each further amended by striking ``subsection
(b)(4)(A)'' and inserting ``subsection (b)(5)(A)''.
(viii) Section 432(d)(3)(A)(i)(I) of such Code, as so
redesignated and amended, is further amended by striking
``subsection (b)(4)'' and inserting ``subsection (b)(5)''.
(ix) Subsections (f)(8)(A)(ii) and (g)(2)(A) of section 432
of such Code, as so redesignated and amended, are each
further amended by striking ``subsection (b)(4)(D)'' and
inserting ``subsection (b)(5)(D)''.
(x) Section 432(f)(9)(J) of such Code, as so redesignated
and amended, is further amended by striking ``subsection
(b)(4)'' and inserting ``subsection (b)(5)''.
(3) Solvency plan.--
(A) In general.--Paragraph (4) (as redesignated by
subsection (a)(1) and amended by paragraph (1)) of section
432(a) of such Code is amended--
(i) by redesignating subparagraph (B) as subparagraph (D),
and
(ii) by striking subparagraph (A) and inserting before
subparagraph (D) (as so redesignated) the following new
subparagraphs:
``(A) the plan sponsor shall adopt and implement a solvency
plan in accordance with the requirements of subsection (h),
``(B) any rehabilitation plan in place as of the date the
plan enters declining status shall continue to apply
throughout the solvency plan adoption period,
``(C) the requirements of subsection (i) and paragraphs (6)
and (7) of subsection (f) shall apply during the solvency
plan adoption period and the solvency attainment period,
and''.
(B) Adoption of plan.--Section 432 of such Code, as amended
by this section, is further amended--
(i) by redesignating subsection (l), as added by title V of
this Act, as subsection (n), and by further redesignating
subsections (h), (i), (j), and (k), as redesignated by
subsection (a)(2), as subsections (j), (k), (l), and (m),
respectively, and
(ii) by inserting after subsection (g), as redesignated by
subsection (a)(2), the following new subsections:
``(h) Solvency Plan Must Be Adopted for Multiemployer Plans
in Declining Status.--
``(1) In general.--In any case in which a multiemployer
plan is in declining status for a plan year, the plan
sponsor, in accordance with this subsection--
``(A) shall adopt a solvency plan not later than 240 days
following the required date for the actuarial certification
of declining status under subsection (b)(5)(A), and
``(B) within 30 days after the adoption of the solvency
plan shall provide to the bargaining parties 1 or more
schedules showing revised benefit structures, revised
contribution structures, or both, which, if adopted, may
reasonably be expected to enable the multiemployer plan to
meet the requirements of paragraph (3), including--
``(i) one default proposal under which--
``(I) all adjustable benefits in the form of early
retirement subsidies (including early reduction factors which
are not provided on an actuarially equivalent basis) under
the plan are eliminated, and
``(II) the future monthly benefit accrual rate under the
plan is reduced to the equivalent of 1 percent of annual
contributions (or, if lower, the current accrual rate) based
on the contribution rate in effect as of the later of the
first day of the plan year in which the plan enters declining
status or the date of a partition under section 4233A of the
Employee Retirement Income Security Act of 1974, and
which may also include reduction or elimination of any other
adjustable benefits under the plan, and
``(ii) any additional schedules which reduce or eliminate
adjustable benefits under the plan which the plan sponsor
deems appropriate to provide as an alternative to the default
proposal.
No schedule provided to or adopted by the bargaining parties
shall provide for a monthly benefit accrual rate in excess of
the rate described in subparagraph (B)(i)(II).
``(2) Exception for years after process begins.--Paragraph
(1) shall not apply to a plan year if such year is in a
solvency plan adoption period or solvency attainment period
by reason of the plan being in declining status for a
preceding plan year, except that the next update of the
solvency plan shall fulfill the requirement of paragraph
(1)(B)(i). For purposes of this section, such preceding plan
year shall be the initial determination year with respect to
the solvency plan to which it relates.
``(3) Solvency plan.--For purposes of this section, a
solvency plan is a plan which consists of the actions,
including options or a range of options to be proposed to the
bargaining parties, formulated, based on reasonably
anticipated experience and reasonable actuarial assumptions,
to enable the plan to delay or avoid the projected
insolvency.
``(4) Solvency attainment period.--For purposes of this
section--
``(A) In general.--Except as provided in subparagraph (B),
the solvency attainment period for any solvency plan adopted
pursuant to this subsection is the period--
``(i) beginning on the first day of the first plan year of
the multiemployer plan beginning after the earlier of--
``(I) the second anniversary of the date of the adoption of
the solvency plan, or
``(II) the expiration of the collective bargaining
agreements in effect on the due date for the actuarial
certification of declining status for the initial
determination year under subsection (b)(5)(A) and covering,
as of such due date, at least 75 percent of the active
participants in such plan, and
``(ii) ending on the date the plan either emerges from
declining status or becomes insolvent.
``(B) Coordination with changes in status.--
[[Page S7603]]
``(i) Plans no longer in declining status.--If the plan's
actuary certifies in accordance with subparagraph (C) for a
plan year in any solvency plan adoption period or solvency
attainment period that the plan is no longer in declining
status, the solvency plan adoption period or solvency
attainment period, whichever is applicable, shall end as of
the date of such certification.
``(ii) Plans in critical or endangered status.--If the
plan's actuary certifies under subsection (b)(5)(A) for the
plan year described in clause (i) that the plan is in
critical or endangered rather than declining status, the
provisions of subsections (d) and (e), or subsections (f) and
(g), whichever are applicable, shall be applied as if such
plan year were an initial determination year, except that the
plan may not be amended in a manner inconsistent with the
solvency plan in effect for the preceding plan year until a
new funding improvement plan or rehabilitation plan,
whichever is applicable, is adopted.
``(C) Emergence.--A plan in declining status shall remain
in such status until a plan year for which the plan actuary
certifies, in accordance with subsection (b)(5)(A), that the
plan is not described in one or more of the subparagraphs in
subsection (b)(4) as of the beginning of the plan year.
``(5) Updates to solvency plans and schedules.--
``(A) Solvency plan.--The plan sponsor shall annually
update the solvency plan and shall file the update with the
plan's annual report under section 104 of the Employee
Retirement Income Security Act of 1974.
``(B) Schedules.--The plan sponsor shall annually update
any schedule of contribution rates provided under this
subsection to reflect the experience of the plan.
``(C) Duration of schedule.--A schedule of contribution
rates provided by the plan sponsor and relied upon by
bargaining parties in negotiating a collective bargaining
agreement shall remain in effect for the duration of that
collective bargaining agreement.
``(6) Imposition of schedule where failure to adopt
solvency plan.--
``(A) Initial contribution schedule.--If--
``(i) a collective bargaining agreement providing for
contributions under a multiemployer plan that was in effect
at the time the plan entered declining status expires, and
``(ii) after receiving one or more schedules from the plan
sponsor under paragraph (1)(B), the bargaining parties with
respect to such agreement fail to adopt a contribution
schedule with terms consistent with the solvency plan and a
schedule from the plan sponsor,
the plan sponsor shall implement the schedule described in
paragraph (1)(B)(i) beginning on the date specified in
subparagraph (C).
``(B) Subsequent contribution schedule.--If--
``(i) a collective bargaining agreement providing for
contributions under a multiemployer plan in accordance with a
schedule provided by the plan sponsor pursuant to a solvency
plan (or imposed under subparagraph (A)) expires while the
plan is still in declining status, and
``(ii) after receiving one or more updated schedules from
the plan sponsor under paragraph (5)(B), the bargaining
parties with respect to such agreement fail to adopt a
contribution schedule with terms consistent with the updated
solvency plan and a schedule from the plan sponsor,
then the contribution schedule applicable under the expired
collective bargaining agreement, as updated and in effect on
the date the collective bargaining agreement expires, shall
be implemented by the plan sponsor beginning on the date
specified in subparagraph (C).
``(C) Date of implementation.--The date specified in this
subparagraph is the date which is 180 days after the date on
which the collective bargaining agreement described in
subparagraph (A) or (B) expires.
``(7) Solvency plan adoption period.--For purposes of this
section, the term `solvency plan adoption period' means the
period beginning on the date of the certification under
subsection (b)(5)(A) for the initial determination year and
ending on the day before the first day of the solvency
attainment period.
``(i) Rules for Operation of Plan During Adoption and
Attainment Periods.--
``(1) Compliance with solvency plan.--
``(A) In general.--A plan may not be amended after the date
of the adoption of a solvency plan under subsection (h) so as
to be inconsistent with the solvency plan.
``(B) Special rules for benefit increases.--A plan may not
be amended after the date of the adoption of a solvency plan
under subsection (h) so as to increase benefits, including
future benefit accruals, unless the increase is required by
law or is a de minimis change.
``(C) Special rules for increases in compensation or
contribution rate.--Any increase in employee compensation or
contribution rates which takes effect after the first day of
the plan year in which the plan enters declining status shall
not give rise to an increase in benefits or future benefit
accruals under the plan.
``(2) Restriction on lump sums and similar benefits.--
``(A) In general.--Effective on the date the notice of
certification of the plan's declining status for the initial
determination year under subsection (b)(5)(D) is sent, and
notwithstanding section 411(d)(6), the plan shall not pay--
``(i) any payment, in excess of the monthly amount paid
under a single life annuity (plus any social security
supplements described in the last sentence of section
411(a)(9)), to a participant or beneficiary whose annuity
starting date (as defined in section 417(f)(2)) occurs after
the date such notice is sent,
``(ii) any payment for the purchase of an irrevocable
commitment from an insurer to pay benefits, or
``(iii) any other payment specified by the Secretary by
regulations,
unless it is a de minimis amount.
``(B) Exception.--Subparagraph (A) shall not apply to a
benefit which under section 411(a)(11) may be immediately
distributed without the consent of the participant or to any
makeup payment in the case of a retroactive annuity starting
date or any similar payment of benefits owed with respect to
a prior period.
``(3) Special rules for plan adoption period.--During the
period beginning on the date of the certification under
subsection (b)(5)(A) for the initial determination year and
ending on the date of the adoption of a solvency plan--
``(A) the plan sponsor may not accept a collective
bargaining agreement or participation agreement with respect
to the multiemployer plan that provides for--
``(i) a reduction in the level of contributions for any
participants,
``(ii) a suspension of contributions with respect to any
period of service, or
``(iii) any new direct or indirect exclusion of younger or
newly hired employees from plan participation,
unless the plan sponsor reasonably determines that the
acceptance of such an agreement is in the best interests of
participants and beneficiaries and that rejection of such
agreement would adversely affect the plan, and
``(B) no amendment of the plan 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 may be adopted unless the amendment is
required as a condition of qualification under part I of
subchapter D of chapter 1 or to comply with other applicable
law.''.
(C) Suspension of benefits.--Section 432 of such Code, as
amended by this section, is further amended--
(i) by redesignating paragraph (9) of subsection (f) (as
redesignated by subsection (a)(2)) as paragraph (8) of
subsection (h) (as added by subparagraph (B)), and
(ii) by moving such paragraph to the position immediately
after paragraph (7) of such subsection (h).
(4) Conforming amendments.--
(A) Subsection (a)(4)(D) of section 432 of such Code, as
redesignated and amended by the preceding provisions of this
section, is further amended by striking ``subsection (f)(9)''
and inserting ``subsection (h)(8)''.
(B) Paragraph (5) of section 432(b) of such Code, as so
redesignated and as amended by section 321 and the preceding
provisions of this section, is further amended--
(i) by striking ``critical'' in subparagraph (A)(i)(I) and
inserting ``critical or declining'',
(ii) by striking ``funding improvement or rehabilitation
period'' in subparagraph (A)(i)(II) and inserting ``funding
improvement, rehabilitation, or solvency attainment period'',
(iii) by striking ``funding improvement or rehabilitation
plan'' in subparagraph (A)(i)(II) and inserting ``funding
improvement, rehabilitation, or solvency plan'',
(iv) by striking ``endangered or critical'' in subparagraph
(A)(i)(V)(bb) and inserting ``endangered, critical, or
declining'',
(v) by striking ``funding improvement plan or
rehabilitation'' in subparagraph (A)(iv) and inserting
``funding improvement, rehabilitation, or solvency'',
(vi) by striking ``critical'' each place it appears in
subparagraph (A)(vi) and inserting ``critical or declining'',
(vii) by striking ``rehabilitation period'' in subparagraph
(A)(vi) and inserting ``rehabilitation or solvency attainment
period'',
(viii) by striking ``as described in subsection (f)(9)'' in
subparagraph (B)(v),
(ix) by inserting ``if the plan is already in a
rehabilitation period, and'' before ``if reasonable'' in
subparagraph (B)(v)(I),
(x) by striking ``subsection (f)(9)'' in subparagraph
(B)(v)(II) and inserting ``subsection (h)(8)'',
(xi) by striking ``endangered or critical'' both places it
appears in subparagraph (D)(i) and inserting ``endangered,
critical, or declining'',
(xii) by striking ``endangered or critical'' in the heading
of subparagraph (D)(ii) and inserting ``endangered, critical,
or declining'',
(xiii) by striking ``endangered or critical'' in
subparagraph (D)(ii) and inserting ``endangered, critical, or
declining'',
(xiv) by striking ``funding improvement or rehabilitation
plan'' both places it appears in subclauses (I) and (II) of
subparagraph (D)(ii) and inserting ``funding improvement,
rehabilitation, or solvency plan'', and
(xv) by adding at the end of subparagraph (D) the following
new clause:
``(vii) Notice of projection to be in declining status in a
future plan year.--In any case in which it is certified under
subparagraph (A)(i) that a multiemployer plan will be in
declining status for any of 5 succeeding plan years (but not
for the current plan year), the plan sponsor shall, not later
[[Page S7604]]
than 30 days after the date of the certification, provide
notification of the projected declining status to the Pension
Benefit Guaranty Corporation.''.
(C) Subparagraph (J) of section 432(h)(8) of such Code, as
so redesignated and amended, is further amended--
(i) by striking ``critical'' in the heading and inserting
``declining'', and
(ii) by striking ``shall not emerge from critical status
under paragraph (4)(B),'' and inserting ``shall not emerge
from declining status''.
(D) Subsection (j) of section 432 of such Code, as so
redesignated and amended, is further amended--
(i) by striking ``(f)(8) or (g)'' in paragraph (1) and
inserting ``(f)(8), (g), or (i)'',
(ii) by striking ``subsection (f)(9)'' in paragraph (1) and
inserting ``subsection (h)(8)'',
(iii) by striking ``funding improvement or rehabilitation
plan'' in the heading of paragraph (3) and inserting
``funding improvement, rehabilitation, or solvency'',
(iv) by striking ``funding improvement plan or
rehabilitation plan'' both places it appears in subparagraphs
(A) and (B) of paragraph (3) and inserting ``funding
improvement, rehabilitation, or solvency plan'',
(v) by striking ``endangered or critical'' in the heading
of paragraph (4), as amended by subsection (a), and inserting
``endangered, critical, or declining'',
(vi) by striking ``endangered or critical'' each place it
appears in paragraph (4), as so amended, and inserting
``endangered, critical, or declining'', and
(vii) by striking ``critical or endangered'' in paragraph
(4) and inserting ``endangered, critical, or declining''.
(E) Subsection (k) of section 432 of such Code, as so
redesignated and amended, is further amended--
(i) by striking ``or a rehabilitation plan under subsection
(f)'' and inserting ``, a rehabilitation plan under
subsection (f), or a solvency plan under subsection (h)'',
(ii) by striking ``endangered status or a plan in critical
status'' and inserting ``endangered, critical, or declining
status'',
(iii) by striking ``has not agreed on a funding improvement
plan or rehabilitation plan'' and inserting ``has not agreed
on a funding improvement, rehabilitation, or solvency plan
(whichever is applicable)'', and
(iv) by striking ``adoption of a funding improvement plan
or rehabilitation plan'' and inserting ``adoption of a
funding improvement, rehabilitation, or solvency plan''.
(F) Subsection (l) of section 432 of such Code, as so
redesignated and amended, is further amended--
(i) by striking ``endangered status or in critical status''
in paragraph (1) and inserting ``endangered, critical, or
declining status'',
(ii) by striking ``endangered or critical'' in paragraph
(1) and inserting ``endangered, critical, or declining'', and
(iii) by striking ``(d) and (f)'' in paragraph (2) and
inserting ``(d), (f), and (h)''.
(G) Section 418E of such Code, as amended by section 112
and this section, is further amended--
(i) by striking ``432(b)(3)'' each place it appears in
subsections (c)(1), (c)(2), (d)(1), and (d)(2) and inserting
``432(b)(3), or a plan in declining status, as described in
section 432(b)(4)'', and
(ii) by striking ``432(f)(9)'' in subsection (g) and
inserting ``432(h)(8)''.
(H) Section 4971(g) of such Code, as amended by this
section, is further amended--
(i) by striking ``Endangered or Critical'' in the heading
and inserting ``Endangered, Critical, or Declining'',
(ii) by striking ``critical status'' in paragraph (1)(A)
and inserting ``critical or declining status'',
(iii) by striking ``or rehabilitation plan'' in the heading
of paragraph (2) and inserting ``, rehabilitation, or
solvency plan'',
(iv) by striking ``plan or rehabilitation plan'' in
paragraph (2)(A) and inserting ``, rehabilitation, or
solvency plan'',
(v) by striking ``rehabilitation plan'' in paragraph (2)(C)
and inserting ``funding improvement, rehabilitation, or
solvency plan'',
(vi) by striking paragraph (3) and redesignating paragraphs
(4), (5), and (6) as paragraphs (3), (4), and (5),
respectively,
(vii) by striking ``rehabilitation plan'' in the heading of
paragraph (3), as so redesignated, and inserting
``rehabilitation or solvency plan'',
(viii) by striking ``critical status'' in paragraph (3)(A),
as so redesignated, and inserting ``critical or declining
status'',
(ix) by striking ``rehabilitation plan'' in paragraph
(3)(A), as so redesignated, and inserting ``rehabilitation or
solvency plan'',
(x) by striking ``described in section 432(f)(1)(A) and
ending on the day on which the rehabilitation plan is
adopted'' in paragraph (3)(B)(ii), as so redesignated, and
inserting ``described in section 432(f)(1)(A) or
432(h)(1)(A), whichever is applicable, and ending on the day
on which the rehabilitation plan or solvency plan is
adopted'',
(xi) by striking ``432(k)(9)'' in paragraph (3)(C)(ii), as
so redesignated, and inserting ``432(n)(9)'', and
(xii) by striking ``or (3)'' in paragraph (4), as so
redesignated.
(e) Adjustment of Benefits.--
(1) In general.--Section 432 of the Internal Revenue Code
of 1986, as amended by this section, is further amended--
(A) by further redesignating subsections (m) and (n), as
redesignated by subsection (d), as subsections (n) and (o),
respectively,
(B) by redesignating paragraph (8) of subsection (f), as
redesignated by subsection (a)(2), as subsection (m), and
(C) by moving such subsection to the position immediately
after subsection (l).
(2) Clerical and conforming amendments.--
(A) The heading of subsection (m) of section 432 of such
Code, as redesignated by paragraph (1), is amended to read as
follows:
``(m) Adjustment of Benefits.--''.
(B) The following provisions of such subsection (m) are
amended as follows:
(i) Subparagraphs (A), (B), and (C) are redesignated as
paragraphs (1), (2), and (4), respectively, and moved 2 ems
to the left.
(ii) Clauses (i), (ii), (iii), and (iv) of paragraph (1)
(as so redesignated) are redesignated as subparagraphs (A),
(B), (C), and (D), respectively, and moved 2 ems to the left.
(iii) Subclauses (I), (II), and (III) of paragraph (1)(D)
(as so redesignated) are redesignated as clauses (i), (ii),
and (iii), respectively, and moved 2 ems to the left.
(iv) Clauses (i), (ii), and (iii) of paragraph (4) (as so
redesignated) are redesignated as subparagraphs (A), (B), and
(C), respectively, and moved 2 ems to the left, and the flush
sentence at the end of subparagraph (C) (as so redesignated)
is moved 2 ems to the left.
(v) Subclauses (I), (II), and (III) of paragraph (4)(A) (as
so redesignated) are redesignated as clauses (i), (ii), and
(iii), respectively, and moved 2 ems to the left.
(vi) Subclauses (I) and (II) of paragraph (4)(B) (as so
redesignated) are redesignated as clauses (i) and (ii),
respectively, and moved 2 ems to the left.
(vii) Subclauses (I), (II), and (III) of paragraph (4)(C)
(as so redesignated) are redesignated as clauses (i), (ii),
and (iii), respectively, and moved 2 ems to the left.
(viii) Paragraph (1)(A), as so redesignated, is amended by
striking ``subparagraph (C)'' and inserting ``paragraph
(4)''.
(ix) Paragraph (1)(B), as so redesignated, is amended by
striking ``clause (iv)(III)'' and inserting ``subparagraph
(D)(iii)''.
(x) Paragraph (1)(D), as so redesignated, is amended by
striking ``this paragraph'' and inserting ``this
subsection''.
(xi) Paragraph (2), as so redesignated, is amended--
(I) by striking ``subparagraph (A)(iv)(III)'' and inserting
``paragraph (1)(D)(iii)'', and
(II) by striking ``this paragraph'' and inserting ``this
subsection''.
(xii) Paragraph (4)(A), as so redesignated, is amended by
striking ``subparagraph (A)'' and inserting ``paragraph
(1)''.
(xiii) Paragraphs (4)(B) and (4)(C), as so redesignated,
are each amended by striking ``clause (i)'' each place it
appears and inserting ``subparagraph (A)''.
(xiv) The last sentence of paragraph (4)(C), as so
redesignated, is amended--
(I) by striking ``subclause (I)'' and inserting ``clause
(i)'', and
(II) by striking ``this subparagraph'' and inserting ``this
paragraph''.
(3) Application to all plans in endangered, critical, or
declining status.--
(A) In general.--Subparagraph (A) of section 432(m)(1) of
such Code, as redesignated and amended by this section, is
further amended--
(i) by striking ``the plan sponsor shall'' and inserting
``the plan sponsor of a multiemployer plan in endangered,
critical, or declining status may'', and
(ii) by striking ``paragraph (1)(B)(i)'' and inserting
``subsection (d)(1)(B), (f)(1)(B), or (h)(1)(B), whichever is
applicable''.
(B) Conforming amendment.--Subparagraph (B) of section
432(m)(1) of such Code, as redesignated and amended by this
section, is further amended by striking ``critical'' both
places it appears and inserting ``endangered, critical, or
declining''.
(4) Additional adjustable benefits.--
(A) In general.--Subparagraph (D) of section 432(m)(1) of
such Code, as redesignated by this section, is amended--
(i) by inserting ``, including early reduction factors
which are not provided on an actuarially equivalent basis,''
after ``(i))'' in clause (ii), as so redesignated,
(ii) by striking ``and'' at the end of clause (ii) (as so
redesignated),
(iii) by striking ``that would not be eligible'' and all
that follows through the period in clause (iii) (as so
redesignated) and inserting ``which were adopted (or, if
later, took effect) less than 120 months before the first day
of the first plan year in which the plan was in endangered,
critical, or declining status,'', and
(iv) by adding at the end the following new clauses:
``(iv) any one-time bonus payment or `thirteenth check'
provision, and
``(v) benefits granted for periods of service prior to
participation in the plan.''.
(B) Conforming amendments.--
(i) Subparagraph (B) of section 432(m)(1) of such Code, as
redesignated and amended by this section, is further amended
by striking ``subparagraph (D)(iii)'' and inserting ``clause
(iii), (iv), or (v) of subparagraph (D)''.
(ii) Paragraph (2) of section 432(m) of such Code, as
amended by paragraph (2)(B), is further amended by striking
``paragraph (1)(D)(iii)'' and inserting ``clause (iii), (iv),
or (v) of paragraph (1)(D)''.
(5) Rules relating to suspension of benefits upon return to
work.--Subsection (m) of section 432 of such Code, as
redesignated and amended by this section, is further
[[Page S7605]]
amended by inserting after paragraph (2) the following new
paragraph:
``(3) Rules relating to suspension of benefits upon return
to work.--The plan sponsor of a multiemployer plan in
endangered, critical, or declining status may amend rules
regarding the suspension of a participant's benefits upon a
return to work after commencement of benefits, or the
commencement of benefits after normal retirement age
(including in the case of continued employment after normal
retirement age). Any such changes shall apply only to future
payments of benefits.''.
(6) Additional conforming amendments.--
(A) Clause (iii) of section 432(b)(5)(D) of such Code, as
redesignated and amended by this section, is further
amended--
(i) by striking ``critical'' in the heading and inserting
``endangered, critical, or declining'',
(ii) by striking ``critical status'' both places it appears
and inserting ``endangered, critical, or declining status'',
and
(iii) by striking ``subsection (f)(8)'' in subclause (I)
and inserting ``subsection (m)(1)(D)''.
(B) Subsection (j) of section 432 of such Code, as amended
by subsection (d), is further amended by striking ``(f)(8),
(g), or (i)'' and inserting ``(e), (g), (i), or (m)''.
(f) Elections to Be in Critical or Endangered Status.--
(1) In general.--Paragraph (6) of section 432(b) of the
Internal Revenue Code of 1986, as redesignated and amended by
this section, is further amended--
(A) by striking ``is not in critical status'' in
subparagraph (A) and inserting ``is not in critical or
declining status'',
(B) by striking ``but that is projected'' in subparagraph
(A) and inserting ``but--
``(i) that is projected'',
(C) by striking ``5 plan years may, not later than'' in
subparagraph (A) and inserting ``5 plan years, or
``(ii) that is in endangered status and is not reasonably
projected to be able to emerge from endangered status within
the funding improvement period under the funding improvement
plan in effect,
may, not later than'', and
(D) by striking ``under paragraph (3)'' in subparagraph (B)
and inserting ``under paragraph (3) or for endangered status
under paragraph (2)''.
(2) Election to be in endangered status.--Subsection (b) of
section 432 of such Code, as so redesignated and amended, is
further amended by adding at the end the following new
paragraph:
``(8) Election to be in endangered status.--Notwithstanding
paragraph (2)--
``(A) the plan sponsor of a multiemployer plan that is not
in endangered, critical, or declining status for a plan year
but that is projected by the plan actuary, pursuant to the
determination under paragraph (5), to be in endangered status
in any of the 5 succeeding plan years, may, not later than 30
days after the date of the certification under paragraph
(5)(A), elect to be in endangered status effective for the
current plan year,
``(B) the plan year in which the plan sponsor elects to be
in endangered status under subparagraph (A) shall be treated
for purposes of this section as the first year in which the
plan is in endangered status, regardless of the date on which
the plan first satisfies the criteria for endangered status
under paragraph (2), and
``(C) a plan that is in endangered status under this
paragraph shall not emerge from endangered status unless the
plan's actuary certifies under paragraph (5)(A) that the plan
is no longer in endangered status and is not in critical or
declining status.''.
(g) Amendments Relating to Funding Improvement Plan.--
(1) In general.--Paragraph (1) of section 432(d) of the
Internal Revenue Code of 1986, as redesignated and amended by
this section, is further amended--
(A) by striking the last sentence, and
(B) in subparagraph (B), by striking ``funding improvement
plan--'' and all that follows and inserting ``funding
improvement plan, shall provide to the bargaining parties 1
or more schedules showing revised benefit structures, revised
contribution structures, or both, which, if adopted, may
reasonably be expected to enable the multiemployer plan to
meet the requirements of paragraph (3), including--
``(i) one default proposal under which--
``(I) all adjustable benefits in the form of early
retirement subsidies (including early reduction factors which
are not provided on an actuarially equivalent basis) under
the plan are eliminated, and
``(II) the future monthly benefit accrual rate under the
plan is reduced to the equivalent of 1 percent of annual
contributions (or, if lower, the accrual rate as of the date
of the enactment of the Chris Allen Multiemployer Pension
Recapitalization and Reform Act of 2020) based on the
contribution rate in effect as of the first day of the plan
year in which the plan enters endangered status, and
which may also include reduction or elimination of any other
adjustable benefits under the plan, and
``(ii) any additional schedules which reduce or eliminate
adjustable benefits under the plan which the plan sponsor
deems appropriate to provide as an alternative to the default
proposal.''.
(2) Funding improvement plan.--Paragraph (3) of section
432(d) of such Code, as so redesignated and amended, is
further amended--
(A) by striking ``For purposes of this section--'' and all
that follows through ``which consists of'' in subparagraph
(A) and inserting ``For purposes of this section, a funding
improvement plan is a plan which consists of'', and
(B) by striking ``formulated to provide'' and all that
follows and inserting ``formulated, based on reasonably
anticipated experience and reasonable actuarial assumptions,
to--
``(A) enable the plan to no longer be in endangered status
(as certified by the plan actuary) by the end of the funding
improvement period, and
``(B) avoid any accumulated funding deficiencies during the
funding improvement period (taking into account any extension
of amortization periods under section 431(d)).''.
(3) Funding improvement period.--Paragraph (4) of section
432(d) of such Code, as so redesignated and amended, is
further amended by striking subparagraph (B) and inserting
after subparagraph (A) the following new subparagraph:
``(B) New period based on adverse experience.--
``(i) In general.--If the plan's actuary determines
necessary based on adverse plan experience, the plan sponsor
may provide for a new 10-year period as of the first day of
any plan year in the original funding improvement period, but
only if the plan is still projected to meet the requirements
of the funding improvement plan and emerge from endangered
status at the end of the new funding improvement period.
``(ii) Limitation.--A plan sponsor may provide a new 10-
year period under clause (i) not more than 1 time in any 20-
consecutive-year period, unless the plan sponsor submits to
the Secretary an application for an additional new period.
Such application shall include a certification that the plan
is projected to emerge from endangered status in the proposed
new 10-year period and a description of key assumptions, to
be specified in regulations promulgated by the Secretary in
consultation with the Pension Benefit Guaranty
Corporation.''.
(4) Conforming amendments.--
(A) Subparagraph (C) of section 432(d)(4) of such Code, as
so redesignated and amended, is further amended--
(i) by striking ``critical status'' both places it appears
in clauses (i) and (ii) and inserting ``critical or declining
status'',
(ii) by striking ``rehabilitation period'' in clause (ii)
and inserting ``rehabilitation or solvency attainment
period'', and
(iii) by striking ``critical status'' in the heading of
clause (ii) and inserting ``critical or declining status''.
(B) Subsection (d) of section 432 of such Code, as so
redesignated and amended, is further amended by striking
paragraph (5) and by redesignating paragraphs (6), (7), and
(8) as paragraphs (5), (6), and (7), respectively.
(C) Paragraph (6) of section 432(d) of such Code, as so
redesignated, is amended--
(i) by striking ``(1)(B)(i)(I)'' in subparagraph (A) and
inserting ``(1)(B)(i)'', and
(ii) by striking ``paragraph (6)(B)'' in subparagraph
(B)(ii) and inserting ``paragraph (5)(B)''.
(D) Paragraph (2) of section 432(d) of such Code, as so
redesignated, is amended by inserting ``, except that the
next update of the funding improvement plan shall fulfill the
requirement of paragraph (1)(B)(i)'' after ``for a preceding
plan year''.
(h) Amendments Relating to Rehabilitation Plan.--
(1) In general.--Paragraph (1) of section 432(f) of the
Internal Revenue Code of 1986, as redesignated and amended by
this section, is further amended--
(A) by striking the last 2 sentences, and
(B) in subparagraph (B), by striking ``rehabilitation
plan--'' and all that follows and inserting ``rehabilitation
plan, shall provide to the bargaining parties 1 or more
schedules showing revised benefit structures, revised
contribution structures, or both, which, if adopted, may
reasonably be expected to enable the multiemployer plan to
meet the requirements of paragraph (3), including--
``(i) one default proposal under which--
``(I) all adjustable benefits in the form of early
retirement subsidies (including early reduction factors which
are not provided on an actuarially equivalent basis) under
the plan are eliminated, and
``(II) the future monthly benefit accrual rate under the
plan is reduced to the equivalent of 1 percent of annual
contributions (or, if lower, the accrual rate as of the date
of the enactment of the Chris Allen Multiemployer Pension
Recapitalization and Reform Act of 2020) based on the
contribution rate in effect as of the first day of the plan
year in which the plan enters critical status, and
which may also include reduction or elimination of any other
adjustable benefits under the plan, and
``(ii) any additional schedules which reduce or eliminate
adjustable benefits under the plan which the plan sponsor
deems appropriate to provide as an alternative to the default
proposal.
In the case of a plan adopting a rehabilitation plan
described in paragraph (3)(A)(ii), no schedule provided to or
adopted by the bargaining parties shall provide for a monthly
benefit accrual rate in excess of the rate described in
subparagraph (B)(i)(II).''.
(2) Rehabilitation plan.--
(A) In general.--Subparagraph (A) of section 432(f)(3) of
such Code, as so redesignated, is amended--
[[Page S7606]]
(i) by striking ``and may include'' and all that follows
through ``such actions'' in clause (i),
(ii) by inserting ``, while delaying insolvency for as long
as possible and maximizing the income of the plan, including
income after insolvency'' before the period in clause (ii),
and
(iii) by striking ``(1)(B)(i)'' in the last sentence and
inserting ``(1)(B)''.
(B) Conforming amendments.--Clause (i) of section
432(f)(3)(C) of such Code, as so redesignated, is amended--
(i) by striking ``(1)(B)(i)'' in subclause (II) and
inserting ``(1)(B)'', and
(ii) by striking ``the last sentence of paragraph (1)'' and
inserting ``paragraph (1)(B)(i)''.
(3) Rehabilitation period.--
(A) In general.--Subparagraph (A) of section 432(f)(4) of
such Code, as so redesignated and amended, is further
amended--
(i) by striking ``The rehabilitation period'' and inserting
``Except as otherwise provided in this subparagraph, the
rehabilitation period'', and
(ii) by adding at the end the following: ``If, upon
exhaustion of all reasonable measures, the plan is not
reasonably expected to emerge from critical status by the end
of such 10-year period, the rehabilitation period shall be
extended to take into account the projected date of emergence
from critical status (if the rehabilitation plan remained in
effect until such date) or the projected date of insolvency
(if applicable) (unless the plan enters declining status).''.
(B) Emergence from critical status.--Subparagraph (B) of
section 432(f)(4) of such Code, as so redesignated and
amended, is further amended--
(i) by inserting ``and is not in declining status,'' after
the comma in clause (i)(I),
(ii) by striking subclause (III) of clause (i) and
inserting the following:
``(III) the plan's projected funded percentage as of the
first day of the 15th succeeding plan year is at least 100
percent and is projected to increase after such date.'',
(iii) by striking ``that--'' and all that follows through
``regardless of whether'' in clause (ii)(I) and inserting
``that the plan meets the requirements of subclauses (II) and
(III) of clause (i), regardless of whether'', and
(iv) by striking ``unless--'' and all that follows in
clause (ii)(II) and inserting ``unless, as of such plan year,
the plan fails to meet the requirements of subclause (II) or
(III) of clause (i).''.
(4) Rules relating to benefit increases during
rehabilitation period.--Subparagraph (B) of section 432(g)(1)
of such Code, as so redesignated and amended, is further
amended by striking ``unless'' and all that follows and
inserting ``unless the amendment is required as a condition
of qualification under part I of subchapter D of chapter 1 or
to comply with other applicable law, or the amendment
provides for only a de minimis increase in the liabilities of
the plan.''.
(5) Conforming amendments.--
(A) Paragraph (6) of section 432(f) of such Code, as so
redesignated, is amended by striking ``the last sentence of
paragraph (1)'' and inserting ``paragraph (1)(B)(i)''.
(B) Paragraph (2) of section 432(f) of such Code, as so
redesignated, is amended by inserting ``, except that the
next update of the rehabilitation plan shall fulfill the
requirement of paragraph (1)(B)(i)'' after ``for a preceding
plan year''.
(i) Actuarial Assumptions.--
(1) In general.--Subsection (n) of section 432 of the
Internal Revenue Code of 1986, as redesignated by subsections
(a), (d), and (e), is amended--
(A) by striking ``Method'' in the heading and inserting
``Method and Assumptions'', and
(B) by adding at the end the following new paragraph:
``(11) Actuarial assumptions.--
``(A) In general.--The actuarial assumptions relied upon
for purposes of this section by a plan actuary shall be
individually reasonable and, in the aggregate, shall be
reasonable and (with the exception of assumptions regarding
future contributions) represent the actuary's best estimate
of future plan experience, within limitations prescribed by
the Secretary. A plan actuary shall avoid conservatism or
optimism in individual assumptions to the extent that they
would result in a set of assumptions that is unreasonable in
the aggregate.
``(B) Investment returns.--The investment return assumption
for projecting plan assets may differ from the actuarial
valuation interest rate. In selecting the investment return
assumption for projecting plan assets, the plan actuary shall
estimate the expected return of the plan's investments as
currently invested and as expected to be invested in the
future, consistent with the plan's adopted investment policy,
if applicable. It is reasonable for an actuary to expect that
the plan's investment decisions will consider risk, expected
returns over time, and expected future benefit payments. The
investment return assumption shall not exceed the interest
rate used to determine past service liability under section
431(b)(6).
``(C) Contributions.--
``(i) In general.--The plan actuary shall develop
assumptions for the projection of future contributions,
including assumptions regarding industry activity among
contributing employers and contribution rates, based on
information provided by the plan sponsor, which must act
reasonably and in good faith. The plan actuary shall certify
the reasonableness of all assumptions.
``(ii) Projected industry activity.--Any projection of
activity in the industry or industries covered by the plan,
including future covered employment and contribution levels,
shall be based on information provided by the plan sponsor
acting reasonably and in good faith.
``(iii) Future contribution base units.--
``(I) Declining contribution base units.--If recent
experience of the plan has been declining contribution base
units, the plan actuary may assume future contribution base
units will continue to decline at the same annualized trend
as over the 5 immediately preceding plan years, unless the
actuary determines that there have been significant changes
that would make such assumption unreasonable.
``(II) Flat or increasing contribution base units.--If
recent experience of the plan has been increasing, or neither
increasing nor decreasing, contribution base units, the plan
actuary may assume future contribution base units will remain
unchanged indefinitely, unless the actuary determines that
there have been significant changes that would make such
assumption unreasonable.
``(iv) Future contribution rates.--
``(I) In general.--Projections of contributions shall be
based on the contribution rates consistent with the terms of
collective bargaining and participation agreements currently
in effect.
``(II) Future increases in accordance with correction
plans.--If reasonable and applicable, the plan actuary may
assume future increases in contribution rates consistent with
the adopted funding improvement plan, rehabilitation plan, or
solvency plan.
``(III) Additional factors.--Information provided by the
plan sponsor to the plan actuary in setting the assumption
regarding future increases in contribution rates shall take
into account the ability of the participating employers to
make contributions at the scheduled rates over time,
considering relevant factors such as projected industry
activity, the financial strength of participating employers,
market competition, and the scheduled contribution rate to
the plan relative to the overall wage package.
``(D) Assumptions for developing schedules.--All schedules
under any funding improvement plan, rehabilitation plan, or
solvency plan must be developed based on the same set of
actuarial assumptions unless it would be unreasonable to do
so, taking into account the anticipated impact of the
schedules on participant behavior and employer
participation.''.
(2) Additions to form 5500 schedule mb.--Subparagraph (B)
of section 432(b)(5) of such Code, as redesignated and
amended by this section, is further amended by adding at the
end the following new clause:
``(vi) Additional attachments.--The plan actuary shall
attach to the certification required under subparagraph (A)--
``(I) documentation supporting the certification of status
under subparagraph (A), including projections of the funding
standard account, funded percentage, and solvency of the
plan,
``(II) a clear description of the key assumptions used in
performing the projections, including investment returns,
contribution base units, and contribution rates,
``(III) a 5-year history of contributions, including
contribution base units, average contribution rates, and
withdrawal liability payments, and a comparison of such
contribution base units, rates, and payments to projections
made by the plan, and
``(IV) an alternate projection of the funding standard
account, funded percentage, and solvency, based on the
following assumptions:
``(aa) Annual future investment returns on plan assets
equal the actuarial interest rate assumption minus 1 percent.
``(bb) Future contribution base units projected using a
trend equal to the lesser of--
``(AA) the annualized trend of actual contribution base
units over the 5 preceding plan years, and
``(BB) no change in future contribution base units.
``(cc) No increases in future contribution rates beyond
those consistent with the collective bargaining agreements
and participation agreements in effect for the plan year.
``(dd) The withdrawal from the plan of the employer which
has contributed the greatest total amount of contributions
over the 5 preceding plan years, if such employer has
contributed at least 10 percent of the total contributions to
the plan over such 5 plan years and such employer has a below
investment grade credit rating (but only if obtaining the
credit rating of such employer is not an undue burden).
``(ee) If such credit rating cannot be obtained without
undue burden, the withdrawal of the employer which has
contributed the greatest total amount of contributions over
the 5 preceding plan years, if such employer has contributed
at least 10 percent of the total contributions to the plan
over such 5 plan years without regard to collection of any
withdrawal liability.
``(ff) If no employer has contributed at least 10 percent
of the total contributions to the plan over the 5 preceding
plan years, the
[[Page S7607]]
withdrawal of the employer which contributed the greatest
total amount of contributions for the current plan year,
without regard to collection of any withdrawal liability,
unless the employer contributed less than 1 percent of the
total contributions to the plan for such plan year.
``(gg) Other assumptions consistent with the projection
based on the actuary's best estimate assumptions.''.
(3) Conforming amendments.--
(A) Section 432(b)(5)(B)(i) of such Code, as redesignated
by this section, is amended by striking ``assumptions'' and
inserting ``assumptions meeting the requirements of
subsection (n)(11)''.
(B) Section 432(b)(5)(A)(vi) of such Code, as amended by
this section and section 321, is further amended by striking
``reasonable actuarial assumptions'' and inserting
``assumptions meeting the requirements of subsection
(n)(11)''.
(C) Paragraph (3) of section 432(d) of such Code, as
amended by subsection (g), is further amended by striking
``reasonable actuarial assumptions'' and inserting
``assumptions meeting the requirements of subsection
(n)(11)''.
(D) Clause (i) of section 432(f)(3)(A) of such Code, as
amended by subsection (h), is further amended by striking
``reasonable actuarial assumptions'' and inserting
``assumptions meeting the requirements of subsection
(n)(11)''.
(E) Section 432(h)(3) of such Code, as added by subsection
(d), is amended by striking ``reasonable actuarial
assumptions'' and inserting ``assumptions meeting the
requirements of subsection (n)(11)''.
(j) Conforming Amendments Relating to Legacy Plans.--
(1) Subsections (a)(3)(F), (b)(1)(B)(i), (b)(1)(H)(iv), and
(d)(6)(A) of section 411 of the Internal Revenue Code of
1986, as amended by title V, are each further amended by
striking ``432(f)'' each place it appears and inserting
``432(h)(8)''.
(2) Sections 431(b)(10), 440A(d)(2)(D), and 440A(d)(4) of
such Code, as added by title V, are each amended by striking
``endangered or critical'' and inserting ``endangered,
critical, or declining''.
(3) Section 437(b)(1) of such Act, as so added, is amended
by striking ``endangered or critical'' both places it appears
and inserting ``endangered, critical, or declining''.
(4) Sections 437(b)(5)(B) and 440A(b)(1)(A) of such Code,
as so added, are each amended by striking ``endangered or
critical'' and inserting ``endangered, critical, or
declining''.
(5) Sections 437(b)(1), 437(b)(5)(B), 440A(b)(1)(A), and
440A(e)(3) of such Code, as so added, are each amended by
striking ``432(b)(4)'' and inserting ``432(b)(5)''.
(6) Sections 438(b)(5) and 440A(d)(2)(A) of such Code, as
so added, are each amended by striking ``432(b)(4)(B)'' and
inserting ``432(b)(5)(B)''.
(7) Section 438(b)(1) of such Code, as so added, is amended
by striking ``and'' at the end of subparagraph (B), by
striking the period at the end of subparagraph (C) and
inserting ``, and'', and by adding at the end the following
new subparagraph:
``(D) consistent with the principles of subparagraphs (B),
(C), and (D) of section 432(n)(11).''.
(8) Section 439(a)(2)(D) of such Code, as so added, is
amended by striking ``432(f)(9)(D)(vi)'' and inserting
``432(h)(8)(D)(vi)''.
(9) Section 439(a)(3) of such Code, as so added, is amended
by striking ``432(f)(8)'' and inserting ``432(m)(1)(D)''.
(10) Section 440A(d)(2)(D) of such Code, as so added and
amended, is further amended by striking ``funding improvement
or rehabilitation plan'' and inserting ``funding improvement,
rehabilitation, or solvency plan''.
(k) Effective Date.--Except as otherwise provided in
subsection (a)(7), the amendments made by this section shall
apply to plan years beginning after December 31, 2020.
(l) Credit Ratings.--No requirement of section 939 or 939A
of the Dodd-Frank Wall Street Reform and Consumer Protection
Act (124 Stat. 1887; 15 U.S.C. 78o-7 note) shall apply with
respect to the amendment made by subsection (i)(2).
SEC. 212. AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974.
(a) Rules Applying to All Multiemployer Plans.--
(1) In general.--Subsection (a) of section 305 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1085) is amended--
(A) by striking ``a multiemployer plan in effect on July
16, 2006--'' and inserting ``any multiemployer plan--'',
(B) by redesignating paragraphs (1), (2), and (3) as
paragraphs (2), (3), and (4), respectively,
(C) by inserting before paragraph (2), as so redesignated,
the following new paragraph:
``(1) the rules of subsection (c) shall apply,'',
(D) by striking ``subsection (c)'' in paragraph (2)(A), as
so redesignated, and inserting ``subsection (d)'',
(E) by striking ``subsection (d)'' in paragraph (2)(B), as
so redesignated, and inserting ``subsection (e)'',
(F) by striking ``subsection (e)'' in paragraph (3)(A), as
so redesignated, and inserting ``subsection (f)'',
(G) by striking ``subsection (f)'' in paragraph (3)(B), as
so redesignated, and inserting ``subsection (g)'', and
(H) by striking ``subsection (e)(9)'' in paragraph (4)(B),
as so redesignated, and inserting ``subsection (f)(9)''.
(2) Rules of immediate application.--Section 305 of such
Act (29 U.S.C. 1085) is amended--
(A) by redesignating subsections (c), (d), (e), (f), (g),
(h), (i), and (j) as subsections (d), (e), (f), (g), (h),
(i), (j), and (k), respectively, and
(B) by inserting after subsection (b) the following new
subsection:
``(c) Rules Applying to All Multiemployer Plans.--
``(1) Benefit increases.--
``(A) Increases by plan amendment.--The plan sponsor of any
multiemployer plan shall not adopt a plan amendment which
increases plan liabilities (as determined as of the date of
the adoption of the amendment) due to any increase in
benefits, any change in the accrual rate of benefits, or any
change in the rate at which benefits become nonforfeitable,
unless--
``(i) if the plan is in unrestricted status as of the
adoption of such amendment, the plan actuary certifies in
accordance with subsection (b)(4) that the increase in
liabilities will not cause the plan to no longer be in
unrestricted status,
``(ii) if the plan is in stable status as of the adoption
of such amendment, the plan actuary certifies in accordance
with subsection (b)(4) that any such increase or change in
benefits will be paid from additional contributions not
required by any collective bargaining agreement in effect as
of the adoption of the amendment,
``(iii) if the plan is in endangered status as of the
adoption of such amendment, the plan actuary certifies in
accordance with subsection (b)(4) that any such increase or
change in benefits will be paid from additional contributions
not contemplated in any current funding improvement plan, or
``(iv) the increase or change in benefits is required by
law or is a de minimis change.
``(B) Increases under critical or critical and declining
status.--Unless required as a condition of qualification
under part I of subchapter D of chapter 1 of the Internal
Revenue Code of 1986 or to comply with other applicable law,
in the case of a plan which is in critical or critical and
declining status, no increase in benefits, change in the
accrual rate of benefits, or change in the rate at which
benefits become nonforfeitable which increases plan
liabilities shall take effect while the plan is in such
status, without regard to whether such increase or change
would otherwise occur under the provisions of the plan,
unless the increase in plan liabilities due to the change is
de minimis.
``(2) Contribution reductions.--The plan sponsor of any
multiemployer plan shall not accept any collective bargaining
agreement or participation agreement which reduces the rate
of contributions under the plan for any participants,
suspends contributions with respect to any period of service,
or directly or indirectly excludes younger, probationary, or
newly hired employees from participation in the plan,
unless--
``(A) the plan is in unrestricted status as of the adoption
of such agreement and the plan actuary certifies in
accordance with subsection (b)(4) that the reduction in
contributions will not cause the plan to no longer be in
unrestricted status,
``(B) the reduction in contributions is accompanied by a
reduction in future accruals for the affected participants,
and the plan actuary certifies in accordance with subsection
(b)(4) that the combined effect of the changes in
contributions and benefits is not projected to reduce the
funded percentage of the plan in any year, or
``(C) subject to regulations issued by the Secretary of the
Treasury, the plan sponsor reasonably determines that the
acceptance of such an agreement is in the best interests of
plan participants and beneficiaries and that rejection of the
agreement would have an adverse financial effect on the
plan.''.
(3) Stable and unrestricted plans.--Subsection (b) of
section 305 of such Act (29 U.S.C. 1085) is amended--
(A) by striking ``Endangered and Critical'' in the heading,
(B) by redesignating paragraphs (1), (2), (3), (4), (5),
and (6) as paragraphs (2), (3), (4), (5), (6), and (7),
respectively, and
(C) by inserting before paragraph (2) the following new
paragraph:
``(1) Stable and unrestricted status.--
``(A) Stable.--A multiemployer plan is in stable status for
a plan year if, as determined by the plan actuary under
paragraph (4), the plan is not in unrestricted status for the
plan year, is not in endangered, critical, or critical and
declining status for the plan year, and is not described in
paragraph (6).
``(B) Unrestricted.--A multiemployer plan is in
unrestricted status for a plan year if, as determined by the
plan actuary under paragraph (4)--
``(i) the plan is not in endangered, critical, or critical
and declining status for the plan year,
``(ii) the plan is not described in paragraph (6), and
``(iii) as of the beginning of the plan year--
``(I) the plan's current liability funded percentage for
such plan year is at least 70 percent and the plan's
projected funded percentage as of the first day of the 15th
succeeding plan year is at least 115 percent, or
``(II) the plan's current liability funded percentage for
such plan year is at least 80 percent.
``(C) Current liability funded percentage.--For purposes of
this section, the term `current liability funded percentage'
means
[[Page S7608]]
the percentage equal to a fraction the numerator of which is
the value of plan assets (as determined for purposes of
section 304(c)(6)(A)(ii)(II)) and the denominator of which is
the current liabilities of the plan (as defined in section
304(c)(6)(D)).''.
(4) Amendment to annual certification by plan actuary.--
Subparagraph (A) of paragraph (4) (as redesignated by
paragraph (3)) of section 305(b) of such Act (29 U.S.C.
1085(b)) is amended by inserting ``whether or not the plan is
in unrestricted or stable status for such plan year,'' in
clause (i) before ``whether or not the plan is in endangered
status''.
(5) Conforming and technical amendments.--
(A) Technical correction.--Section 305(b)(3)(B) of such Act
(29 U.S.C. 1085(b)(3)(B)) is amended by redesignating the
clause (iv) relating to projections of critical and declining
status, as added by section 201(a)(5) of the Consolidated and
Further Continuing Appropriations Act, 2015, as clause (v),
and by moving such clause to the position immediately after
clause (iv).
(B) Conforming amendments.--
(i) Paragraphs (2) and (3) of section 305(b) of such Act
(29 U.S.C. 1085(b)), as redesignated by paragraph (3), are
each amended by striking ``paragraph (3)'' and inserting
``paragraph (4)''.
(ii) Section 305(b)(2) of such Act (29 U.S.C. 1085(b)(2)),
as so redesignated and amended, is further amended by
striking ``paragraph (5)'' and inserting ``paragraph (6)''.
(iii) Section 305(b)(4) of such Act (29 U.S.C. 1085(b)(4)),
as so redesignated, is amended--
(I) by striking ``paragraph (4)'' in subparagraph (B)(iv)
thereof and inserting ``paragraph (5)'',
(II) by striking ``subsection (e)(9)'' both places it
appears in subparagraph (B)(v), as redesignated by
subparagraph (A), and inserting ``subsection (f)(9)'',
(III) by striking ``subsection (e)(3)(A)(ii)'' in
subparagraph (B)(v), as so redesignated, and inserting
``subsection (f)(3)(A)(ii)'',
(IV) by striking ``subsection (e)'' in subparagraph (B)(v),
as so redesignated, and inserting ``subsection (f)'',
(V) by striking ``paragraph (4)'' each place it appears in
subparagraphs (D)(i) and (D)(v) thereof and inserting
``paragraph (5)'',
(VI) by striking ``subsection (e)(8)'' in subparagraph
(D)(iii)(I) thereof and inserting ``subsection (f)(8)'',
(VII) by striking ``paragraph (5)'' in subparagraph
(D)(iii) thereof and inserting ``paragraph (6)'', and
(VIII) by striking ``(iii) In the case of'' in subparagraph
(D)(iii) thereof and inserting ``(iii) Special rule.--''.
(iv) Section 305(b)(5) of such Act (29 U.S.C. 1085(b)(5)),
as redesignated by paragraph (3), is amended--
(I) by striking ``paragraph (2)'' and inserting ``paragraph
(3)'',
(II) by striking ``paragraph (3)(B)(iv)'' and inserting
``paragraph (4)(B)(iv)'',
(III) by striking ``paragraph (3)'' in subparagraph (A)
thereof and inserting ``paragraph (4)'',
(IV) by striking ``paragraph (3)(A)'' in subparagraph (A)
thereof and inserting ``paragraph (4)(A)'',
(V) by striking ``paragraph (2)'' in subparagraph (B)
thereof and inserting ``paragraph (3)'', and
(VI) by striking ``subsection (e)(4)(B)'' in subparagraph
(C) thereof and inserting ``subsection (f)(4)(B)''.
(v) Section 305(b)(6)(A) of such Act (29 U.S.C.
1085(b)(6)(A)), as so redesignated, is amended--
(I) by striking ``paragraph (3)(A)'' and inserting
``paragraph (4)(A)'',
(II) by striking ``paragraph (1)(A)'' and inserting
``paragraph (2)(A)'', and
(III) by striking ``paragraph (1)(B)'' and inserting
``paragraph (2)(B)''.
(vi) Section 305(b)(7) of such Act (29 U.S.C. 1085(b)(7)),
as so redesignated, is amended by striking ``paragraph (2)''
and inserting ``paragraph (3)''.
(vii) Paragraphs (1)(A), (4)(A)(ii), (4)(C)(i), (4)(C)(ii),
(4)(D), (5)(A)(i), (5)(B), and (8) of subsection (d), and
subsections (e)(2), (f)(1)(A), (f)(4)(B)(i),
(f)(4)(B)(ii)(I), (f)(5), and (g)(3) of section 305 of such
Act (29 U.S.C. 1085), as respectively redesignated by
paragraph (2), are each amended by striking ``subsection
(b)(3)(A)'' and inserting ``subsection (b)(4)(A)''.
(viii) Section 305(d)(3)(A)(i)(I) of such Act (29 U.S.C.
1085(d)(3)(A)(i)(I)), as so redesignated, is amended by
striking ``paragraph (b)(3)'' and inserting ``subsection
(b)(4)''.
(ix) Section 305(d)(4)(D) of such Act (29 U.S.C.
1085(d)(4)(D)), as so redesignated, is amended by striking
``subsection (d)'' and inserting ``subsection (e)''.
(x) Section 305(e) of such Act (29 U.S.C. 1085(e)), as so
redesignated, is amended to read as follows:
``(e) Rules for Operation of Plan During Adoption and
Improvement Periods.--A plan may not be amended after the
date of the adoption of a funding improvement plan under
subsection (d) so as to be inconsistent with the funding
improvement plan or the requirements of subsection (c).''.
(xi) Clauses (i)(I) and (ii)(I) of section 305(f)(4)(B) of
such Act (29 U.S.C. 1085(f)(4)(B)), as so redesignated, are
each amended by striking ``subsection (b)(2)'' and inserting
``subsection (b)(3)''.
(xii) Subsections (f)(8)(A)(ii) and (g)(2)(A) of section
305 of such Act (29 U.S.C. 1085), as so redesignated, are
each amended by striking ``subsection (b)(3)(D)'' and
inserting ``subsection (b)(4)(D)''.
(xiii) Section 305(f)(9)(J) of such Act (29 U.S.C.
1085(f)(9)(J)), as so redesignated, is amended--
(I) by striking ``subsection (b)(3)'' and inserting
``subsection (b)(4)'', and
(II) by striking ``paragraphs (1) and (2)'' in clause (i)
thereof and inserting ``paragraphs (2) and (3)''.
(xiv) Subparagraphs (A) and (B) of section 305(g)(1) of
such Act (29 U.S.C. 1085(g)(1)), as so redesignated, are each
amended by striking ``subsection (e)'' and inserting
``subsection (f)''.
(xv) Paragraph (2)(A) of section 305(g) of such Act (29
U.S.C. 1085(g)), as so redesignated, is amended by striking
``(b)(3)(D)'' and inserting ``(b)(4)(D)''.
(xvi) Section 305(h) of such Act (29 U.S.C. 1085(h)), as so
redesignated, is amended--
(I) by striking ``subsection (e)(8) or (f)'' in paragraph
(1) thereof and inserting ``subsection (f)(8) or (g)'',
(II) by striking ``subsection (e)(9)'' in paragraph (1)
thereof and inserting ``subsection (f)(9)'',
(III) by striking ``subsection (e)(7)'' in paragraph (2)
thereof and inserting ``subsection (f)(7)'', and
(IV) by striking ``rehabilitation plan'' and all that
follows in paragraph (3)(B) thereof and inserting
``rehabilitation plan. The preceding sentence shall not apply
to any increase in contribution requirements due to increased
levels of work, employment, or periods for which compensation
is provided, except to the extent such an increase is used to
provide an increased accrual rate of benefits or change in
the rate at which benefits become nonforfeitable which
increases plan liabilities.''.
(xvii) Section 305(i) of such Act (29 U.S.C. 1085(i)), as
so redesignated, is amended--
(I) by striking ``subsection (c)'' and inserting
``subsection (d)'', and
(II) by striking ``subsection (e)'' and inserting
``subsection (f)''.
(xviii) Section 305(j)(2) of such Act (29 U.S.C.
1085(j)(2)), as so redesignated, is amended by striking
``subsections (c) and (e)'' and inserting ``subsections (d)
and (f)''.
(xix) Section 101(f)(2)(B) of such Act (29 U.S.C.
1021(f)(2)(B)) is amended--
(I) by striking ``305(i)'' in clause (i)(II) and inserting
``305(k)'', and
(II) by striking ``305(i)(8)'' in clause (ii)(II) and
inserting ``305(k)(8)''.
(xx) Section 103(f)(1)(B)(ii) of such Act (29 U.S.C.
1023(f)(1)(B)(ii)) is amended by striking ``305(i)(2)'' and
inserting ``305(k)(2)''.
(xxi) Section 302(b)(3) of such Act (29 U.S.C. 1082) is
amended by striking ``section 305(e)'' and inserting
``section 305(f)''.
(xxii) Section 4231(e)(2)(A) of such Act (29 U.S.C.
1411(e)(2)(A)) is amended by striking ``section 305(b)(4)''
and inserting ``305(b)(7)''.
(xxiii) Section 4233 of such Act (29 U.S.C. 1413) is
amended--
(I) by striking ``305(e)(9)'' each place it appears in
subsections (b)(2) and (e)(1)(A) and inserting ``305(f)(9)'',
and
(II) by striking ``305(e)(9)(E)(vi)'' in subsection (e)(2)
and inserting ``305(f)(9)(E)(vi)''.
(xxiv) Section 4245 of such Act (29 U.S.C. 1426), as
amended by this Act, is amended--
(I) by striking ``305(b)(2),,'' in subsection (c)(1), as
redesignated by section 112, and inserting ``305(b)(3),'',
(II) by striking ``305(b)(2)'' each place it appears in
subsections (c)(2), (d)(1), and (d)(2), as so redesignated,
and inserting ``305(b)(3)'', and
(III) by striking ``305(e)(9)'' in subsection (f), as so
redesignated, and inserting ``305(f)(9)''.
(xxv) The heading of section 305 of such Act (29 U.S.C.
1085) is amended by striking ``in endangered status or
critical status''.
(6) Withdrawal liability determination for plans emerging
from endangered or critical status.--Section 305(h) of such
Act (29 U.S.C. 1085(h)), as redesignated by paragraph (2) and
as amended by paragraph (5), is further amended by striking
paragraph (4) and by inserting after paragraph (3) the
following new paragraph:
``(4) Emergence from endangered or critical status.--
``(A) In general.--In the case of increases in the
contribution rate (or other increases in contribution
requirements unless due to increased levels of work,
employment, or periods for which compensation is provided)
disregarded pursuant to paragraph (3), this subsection shall
cease to apply as of the later of--
``(i) the end of the first plan year following the plan
year in which the plan is no longer in endangered or critical
status, or
``(ii) the end of the plan year which includes the
expiration date of the first collective bargaining agreement
requiring plan contributions which expires after the plan is
no longer in endangered or critical status.
``(B) Highest contribution rate.--Notwithstanding
subparagraph (A), once the plan emerges from endangered or
critical status--
``(i) increases in the contribution rate disregarded
pursuant to paragraph (3) shall continue to be disregarded in
determining the highest contribution rate under section
4219(c) for plan years during which the plan was in
endangered or critical status, and
``(ii) the highest contribution rate for purposes of such
section shall be the greater of--
``(I) the sum of--
``(aa) the employer's contribution rate as of the later of
the last day of the last plan year ending before December 31,
2014, and the
[[Page S7609]]
last day of the plan year for which the employer first had an
obligation to contribute to the plan, and
``(bb) any contribution increases determined in accordance
with this section after such later date and before the date
the employer withdraws from the plan, or
``(II) the highest contribution rate for any plan year
after the plan year which includes the earlier of--
``(aa) the expiration date of the first collective
bargaining agreement applicable to the withdrawing employer
requiring plan contributions which expires after the plan is
no longer in endangered or critical status, or
``(bb) the date as of which the withdrawing employer
negotiated a contribution rate effective after the plan year
in which the plan is no longer in endangered or critical
status.''.
(7) Effective date.--The amendments made by this subsection
shall take effect on the date of the enactment of this Act.
(b) Determination of Endangered Status.--Paragraph (2) of
section 305(b) of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1085(b)), as redesignated by subsection
(a)(3), is amended to read as follows:
``(2) Endangered status.--A multiemployer plan is in
endangered status for a plan year if, as determined by the
plan actuary under paragraph (5), the plan is not in critical
or declining status for the plan year and is not described in
paragraph (7), and, as of the beginning of the plan year--
``(A) the plan's funded percentage for such plan year is
less than 80 percent,
``(B) the plan is projected to have an accumulated funding
deficiency for any of the 9 succeeding plan years, taking
into account any extension of amortization periods under
section 304(d), or
``(C) the plan's projected funded percentage as of the
first day of the 15th succeeding plan year is less than 100
percent.''.
(c) Determination of Critical Status.--Paragraph (3) of
section 305(b) of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1085(b)), as redesignated by subsection
(a)(3), is amended to read as follows:
``(3) Critical status.--
``(A) In general.--A multiemployer plan is in critical
status for a plan year if, as determined by the plan actuary
under paragraph (5), the plan is not in declining status for
the plan year and, as of the beginning of the plan year--
``(i) the plan's funded percentage is less than 65 percent,
``(ii) the plan has an accumulated funding deficiency for
the plan year, or is projected to have such an accumulated
funding deficiency for any of the 6 succeeding plan years,
taking into account any extension of amortization periods
under section 304(d), or
``(iii) the plan's projected funded percentage as of the
first day of the 15th succeeding plan year is less than 80
percent.
``(B) Original plans.--Notwithstanding subparagraph (A), a
multiemployer plan which is an original plan pursuant to
section 4233A(d)(3) shall be treated as being in critical
status for the period of 15 consecutive plan years beginning
with the plan year that includes the date of the partition
under section 4233A.''.
(d) Declining Status.--
(1) In general.--
(A) The following provisions of section 305 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1085) are
each amended by striking ``critical and declining'' each
place it appears and inserting ``declining'':
(i) Subsection (a)(4) (as redesignated by subsection
(a)(1)).
(ii) Subparagraphs (A) and (B)(i) of subsection (b)(1), as
added by subsection (a)(3).
(iii) Subsection (b)(4)(B)(v) (as redesignated by
subsection (a)(3)).
(iv) The heading of clause (v) of subsection (b)(4)(B), as
redesignated by subsection (a)(3).
(v) Paragraph (1)(B), and the heading of such paragraph
(1)(B), of subsection (c), as added by subsection (a)(2).
(vi) The heading of paragraph (9) of subsection (f) (as
redesignated by subsection (a)(2)).
(vii) Subparagraphs (A), (C), (G)(i), and (J) of subsection
(f)(9) (as so redesignated).
(viii) Subsection (h)(1) (as so redesignated).
(B) Subsections (c), as amended by section 221, and
(e)(2)(A), as amended by this section, of section 4231 of
such Act (29 U.S.C. 1411(e)(2)(A)) are each further amended
by striking ``critical and declining status'' and inserting
``declining status''.
(C) Section 4233(b)(1) of such Act (29 U.S.C. 1413(b)(1))
is amended by striking ``critical and declining status'' and
inserting ``declining status''.
(D) Section 4245(f) of such Act (29 U.S.C. 1426), as
amended by section 112 and subsection (a), is further amended
by striking ``critical and declining status'' and inserting
``declining status''.
(2) Determination of declining status.--
(A) In general.--Subsection (b) of section 305 of such Act
(29 U.S.C. 1085) is amended--
(i) by striking paragraph (7), as redesignated by
subsection (a)(3),
(ii) by redesignating paragraphs (4), (5), and (6), as so
redesignated, as paragraphs (5), (6), and (7), respectively,
and
(iii) by inserting after paragraph (3), as so redesignated,
the following new paragraph:
``(4) Declining status.--A multiemployer plan is in
declining status for a plan year if--
``(A) as determined by the plan actuary under paragraph
(5), as of the beginning of the plan year the plan is
projected to become insolvent within the plan year or any of
the 29 succeeding plan years,
``(B) the plan is otherwise in critical status for the plan
year as determined by the plan actuary under paragraph (5),
and the plan sponsor determines that, based on reasonable
actuarial assumptions and upon exhaustion of all reasonable
measures, the plan cannot reasonably be expected to emerge
from critical status within the next 30 plan years, or
``(C) the plan has a funded percentage for the plan year
which is greater than the projected funded percentage as of
the first day of the 15th succeeding plan year, unless the
funded percentage for the plan year is 100 percent or greater
and the projected funded percentage as of the first day of
such 15th succeeding plan year is less than 100 percent.''.
(B) Conforming amendments.--
(i) Paragraph (1) of section 305(b) of such Act (29 U.S.C.
1085), as added by subsection (a)(3), is amended--
(I) by striking ``paragraph (4)'' each place it appears in
subparagraphs (A) and (B) and inserting ``paragraph (5)'',
and
(II) by striking ``paragraph (6)'' each place it appears in
subparagraphs (A) and (B) and inserting ``paragraph (7)''.
(ii) Subsection (c) of section 305 of such Act (29 U.S.C.
1085), as added by subsection (a)(2), is amended by striking
``(b)(4)'' each place it appears in paragraphs (1)(A)(i),
(1)(A)(ii), (1)(A)(iii), (2)(A), and (2)(B) and inserting
``(b)(5)''.
(iii) Section 305(b)(5) of such Act (29 U.S.C. 1085(b)(5)),
as further redesignated by subparagraph (A) and as amended by
section 321 and subsection (a), is further amended--
(I) by striking ``paragraph (5)'' in subparagraph (B)(iv)
thereof and inserting ``paragraph (6)'',
(II) by striking ``paragraph (5)'' each place it appears in
subparagraphs (D)(i) and (D)(vi) thereof and inserting
``paragraph (6)'', and
(III) by striking ``paragraph (6)'' in subparagraph (D)(iv)
thereof and inserting ``paragraph (7)''.
(iv) Section 305(b)(6) of such Act (29 U.S.C. 1085(b)(6)),
as so further redesignated and amended, is further amended--
(I) by striking ``paragraph (4)(B)(iv)'' and inserting
``paragraph (5)(B)(iv)'',
(II) by striking ``paragraph (4)'' in subparagraph (A)
thereof and inserting ``paragraph (5)'', and
(III) by striking ``paragraph (4)(A)'' in subparagraph (A)
thereof and inserting ``paragraph (5)(A)''.
(v) Section 305(b)(7)(A) of such Act (29 U.S.C.
1085(b)(7)(A)), as so further redesignated and amended, is
further amended--
(I) by striking ``paragraph (4)(A)'' and inserting
``paragraph (5)(A)'', and
(II) by striking ``either paragraph (2)(A) or paragraph
(2)(B)'' and inserting ``any subparagraph of paragraph (2)''.
(vi) Section 305(b)(7)(B) of such Act (29 U.S.C.
1085(b)(7)(B)), as so further redesignated, is amended by
striking ``critical or endangered'' and inserting
``endangered, critical, or declining''.
(vii) Paragraphs (1)(A), (4)(A)(ii), (4)(C)(i), (4)(C)(ii),
(4)(D), and (8) of subsection (d), and subsections (f)(1)(A),
(f)(4)(B)(i), (f)(4)(B)(ii)(I), (f)(5), and (g)(3) of section
305 of such Act (29 U.S.C. 1085), as redesignated and amended
by subsection (a), are each further amended by striking
``subsection (b)(4)(A)'' and inserting ``subsection
(b)(5)(A)''.
(viii) Section 305(d)(3)(A)(i)(I) of such Act (29 U.S.C.
1085(d)(3)(A)(i)(I)), as so redesignated and amended, is
further amended by striking ``subsection (b)(4)'' and
inserting ``subsection (b)(5)''.
(ix) Subsections (f)(8)(A)(ii) and (g)(2)(A) of section 305
of such Act (29 U.S.C. 1085), as so redesignated and amended,
are each further amended by striking ``subsection (b)(4)(D)''
and inserting ``subsection (b)(5)(D)''.
(x) Section 305(f)(9)(J) of such Act (29 U.S.C.
1085(f)(9)(J)), as so redesignated and amended, is further
amended by striking ``subsection (b)(4)'' and inserting
``subsection (b)(5)''.
(xi) Section 4231(e)(2)(A) of such Act (29 U.S.C.
1411(e)(2)(A)), as amended by this section, is further
amended by striking ``305(b)(7)'' and inserting
``305(b)(4)''.
(3) Solvency plan.--
(A) In general.--Paragraph (4) (as redesignated by
subsection (a)(1) and amended by paragraph (1)) of section
305(a) of such Act (29 U.S.C. 1085(a)) is amended--
(i) by redesignating subparagraph (B) as subparagraph (D),
and
(ii) by striking subparagraph (A) and inserting before
subparagraph (D) (as so redesignated) the following new
subparagraphs:
``(A) the plan sponsor shall adopt and implement a solvency
plan in accordance with the requirements of subsection (h),
``(B) any rehabilitation plan in place as of the date the
plan enters declining status shall continue to apply
throughout the solvency plan adoption period,
``(C) the requirements of subsection (i) and paragraphs (6)
and (7) of subsection (f) shall apply during the solvency
plan adoption period and the solvency attainment period,
and''.
(B) Adoption of plan.--Section 305 of such Act (29 U.S.C.
1085), as amended by this section, is further amended--
(i) by redesignating subsection (l), as added by title V of
this Act, as subsection (n), and by further redesignating
subsections (h), (i), (j), and (k), as redesignated by
subsection
[[Page S7610]]
(a)(2), as subsections (j), (k), (l), and (m), respectively,
and
(ii) by inserting after subsection (g), as redesignated by
subsection (a)(2), the following new subsections:
``(h) Solvency Plan Must Be Adopted for Multiemployer Plans
in Declining Status.--
``(1) In general.--In any case in which a multiemployer
plan is in declining status for a plan year, the plan
sponsor, in accordance with this subsection--
``(A) shall adopt a solvency plan not later than 240 days
following the required date for the actuarial certification
of declining status under subsection (b)(5)(A), and
``(B) within 30 days after the adoption of the solvency
plan shall provide to the bargaining parties 1 or more
schedules showing revised benefit structures, revised
contribution structures, or both, which, if adopted, may
reasonably be expected to enable the multiemployer plan to
meet the requirements of paragraph (3), including--
``(i) one default proposal under which--
``(I) all adjustable benefits in the form of early
retirement subsidies (including early reduction factors which
are not provided on an actuarially equivalent basis) under
the plan are eliminated, and
``(II) the future monthly benefit accrual rate under the
plan is reduced to the equivalent of 1 percent of annual
contributions (or, if lower, the current accrual rate) based
on the contribution rate in effect as of the later of the
first day of the plan year in which the plan enters declining
status or the date of a partition under section 4233A, and
which may also include reduction or elimination of any other
adjustable benefits under the plan, and
``(ii) any additional schedules which reduce or eliminate
adjustable benefits under the plan which the plan sponsor
deems appropriate to provide as an alternative to the default
proposal.
No schedule provided to or adopted by the bargaining parties
shall provide for a monthly benefit accrual rate in excess of
the rate described in subparagraph (B)(i)(II).
``(2) Exception for years after process begins.--Paragraph
(1) shall not apply to a plan year if such year is in a
solvency plan adoption period or solvency attainment period
by reason of the plan being in declining status for a
preceding plan year, except that the next update of the
solvency plan shall fulfill the requirement of paragraph
(1)(B)(i). For purposes of this section, such preceding plan
year shall be the initial determination year with respect to
the solvency plan to which it relates.
``(3) Solvency plan.--For purposes of this section, a
solvency plan is a plan which consists of the actions,
including options or a range of options to be proposed to the
bargaining parties, formulated, based on reasonably
anticipated experience and reasonable actuarial assumptions,
to enable the plan to delay or avoid the projected
insolvency.
``(4) Solvency attainment period.--For purposes of this
section--
``(A) In general.--Except as provided in subparagraph (B),
the solvency attainment period for any solvency plan adopted
pursuant to this subsection is the period--
``(i) beginning on the first day of the first plan year of
the multiemployer plan beginning after the earlier of--
``(I) the second anniversary of the date of the adoption of
the solvency plan, or
``(II) the expiration of the collective bargaining
agreements in effect on the due date for the actuarial
certification of declining status for the initial
determination year under subsection (b)(5)(A) and covering,
as of such due date, at least 75 percent of the active
participants in such plan, and
``(ii) ending on the date the plan either emerges from
declining status or becomes insolvent.
``(B) Coordination with changes in status.--
``(i) Plans no longer in declining status.--If the plan's
actuary certifies in accordance with subparagraph (C) for a
plan year in any solvency plan adoption period or solvency
attainment period that the plan is no longer in declining
status, the solvency plan adoption period or solvency
attainment period, whichever is applicable, shall end as of
the date of such certification.
``(ii) Plans in critical or endangered status.--If the
plan's actuary certifies under subsection (b)(5)(A) for the
plan year described in clause (i) that the plan is in
critical or endangered rather than declining status, the
provisions of subsections (d) and (e), or subsections (f) and
(g), whichever are applicable, shall be applied as if such
plan year were an initial determination year, except that the
plan may not be amended in a manner inconsistent with the
solvency plan in effect for the preceding plan year until a
new funding improvement plan or rehabilitation plan,
whichever is applicable, is adopted.
``(C) Emergence.--A plan in declining status shall remain
in such status until a plan year for which the plan actuary
certifies, in accordance with subsection (b)(5)(A), that the
plan is not described in one or more of the subparagraphs in
subsection (b)(4) as of the beginning of the plan year.
``(5) Updates to solvency plans and schedules.--
``(A) Solvency plan.--The plan sponsor shall annually
update the solvency plan and shall file the update with the
plan's annual report under section 104.
``(B) Schedules.--The plan sponsor shall annually update
any schedule of contribution rates provided under this
subsection to reflect the experience of the plan.
``(C) Duration of schedule.--A schedule of contribution
rates provided by the plan sponsor and relied upon by
bargaining parties in negotiating a collective bargaining
agreement shall remain in effect for the duration of that
collective bargaining agreement.
``(6) Imposition of schedule where failure to adopt
solvency plan.--
``(A) Initial contribution schedule.--If--
``(i) a collective bargaining agreement providing for
contributions under a multiemployer plan that was in effect
at the time the plan entered declining status expires, and
``(ii) after receiving one or more schedules from the plan
sponsor under paragraph (1)(B), the bargaining parties with
respect to such agreement fail to adopt a contribution
schedule with terms consistent with the solvency plan and a
schedule from the plan sponsor,
the plan sponsor shall implement the schedule described in
paragraph (1)(B)(i) beginning on the date specified in
subparagraph (C).
``(B) Subsequent contribution schedule.--If--
``(i) a collective bargaining agreement providing for
contributions under a multiemployer plan in accordance with a
schedule provided by the plan sponsor pursuant to a solvency
plan (or imposed under subparagraph (A)) expires while the
plan is still in declining status, and
``(ii) after receiving one or more updated schedules from
the plan sponsor under paragraph (5)(B), the bargaining
parties with respect to such agreement fail to adopt a
contribution schedule with terms consistent with the updated
solvency plan and a schedule from the plan sponsor,
then the contribution schedule applicable under the expired
collective bargaining agreement, as updated and in effect on
the date the collective bargaining agreement expires, shall
be implemented by the plan sponsor beginning on the date
specified in subparagraph (C).
``(C) Date of implementation.--The date specified in this
subparagraph is the date which is 180 days after the date on
which the collective bargaining agreement described in
subparagraph (A) or (B) expires.
``(7) Solvency plan adoption period.--For purposes of this
section, the term `solvency plan adoption period' means the
period beginning on the date of the certification under
subsection (b)(5)(A) for the initial determination year and
ending on the day before the first day of the solvency
attainment period.
``(i) Rules for Operation of Plan During Adoption and
Attainment Periods.--
``(1) Compliance with solvency plan.--
``(A) In general.--A plan may not be amended after the date
of the adoption of a solvency plan under subsection (h) so as
to be inconsistent with the solvency plan.
``(B) Special rules for benefit increases.--A plan may not
be amended after the date of the adoption of a solvency plan
under subsection (h) so as to increase benefits, including
future benefit accruals, unless the increase is required by
law or is a de minimis change.
``(C) Special rules for increases in compensation or
contribution rate.--Any increase in employee compensation or
contribution rates which takes effect after the first day of
the plan year in which the plan enters declining status shall
not give rise to an increase in benefits or future benefit
accruals under the plan.
``(2) Restriction on lump sums and similar benefits.--
``(A) In general.--Effective on the date the notice of
certification of the plan's declining status for the initial
determination year under subsection (b)(5)(D) is sent, and
notwithstanding section 204(g), the plan shall not pay--
``(i) any payment, in excess of the monthly amount paid
under a single life annuity (plus any social security
supplements described in the last sentence of section
204(b)(1)(G)), to a participant or beneficiary whose annuity
starting date (as defined in section 205(h)(2)) occurs after
the date such notice is sent,
``(ii) any payment for the purchase of an irrevocable
commitment from an insurer to pay benefits, or
``(iii) any other payment specified by the Secretary of the
Treasury by regulations,
unless it is a de minimis amount.
``(B) Exception.--Subparagraph (A) shall not apply to a
benefit which under section 203(e) may be immediately
distributed without the consent of the participant or to any
makeup payment in the case of a retroactive annuity starting
date or any similar payment of benefits owed with respect to
a prior period.
``(3) Special rules for plan adoption period.--During the
period beginning on the date of the certification under
subsection (b)(5)(A) for the initial determination year and
ending on the date of the adoption of a solvency plan--
``(A) the plan sponsor may not accept a collective
bargaining agreement or participation agreement with respect
to the multiemployer plan that provides for--
``(i) a reduction in the level of contributions for any
participants,
``(ii) a suspension of contributions with respect to any
period of service, or
``(iii) any new direct or indirect exclusion of younger or
newly hired employees from plan participation,
unless the plan sponsor reasonably determines that the
acceptance of such an agreement is in the best interests of
participants and beneficiaries and that rejection of such
[[Page S7611]]
agreement would adversely affect the plan, and
``(B) no amendment of the plan 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 may be adopted unless the amendment is
required as a condition of qualification under part I of
subchapter D of chapter 1 of the Internal Revenue Code of
1986 or to comply with other applicable law.''.
(C) Suspension of benefits.--Section 305 of such Act (29
U.S.C. 1085), as amended by this section, is further
amended--
(i) by redesignating paragraph (9) of subsection (f) (as
redesignated by subsection (a)(2)) as paragraph (8) of
subsection (h) (as added by subparagraph (B)), and
(ii) by moving such paragraph to the position immediately
after paragraph (7) of such subsection (h).
(4) Conforming amendments.--
(A) Subsection (a)(4)(D) of section 305 of such Act (29
U.S.C. 1085), as redesignated and amended by the preceding
provisions of this section, is further amended by striking
``subsection (f)(9)'' and inserting ``subsection (h)(8)''.
(B) Paragraph (5) of section 305(b) of such Act (29 U.S.C.
1085(b)), as so redesignated and as amended by section 321
and the preceding provisions of this section, is further
amended--
(i) by striking ``critical'' in subparagraph (A)(i)(I) and
inserting ``critical or declining'',
(ii) by striking ``funding improvement or rehabilitation
period'' in subparagraph (A)(i)(II) and inserting ``funding
improvement, rehabilitation, or solvency attainment period'',
(iii) by striking ``funding improvement or rehabilitation
plan'' in subparagraph (A)(i)(II) and inserting ``funding
improvement, rehabilitation, or solvency plan'',
(iv) by striking ``endangered or critical'' in subparagraph
(A)(i)(V)(bb) and inserting ``endangered, critical, or
declining'',
(v) by striking ``funding improvement plan or
rehabilitation'' in subparagraph (A)(iv) and inserting
``funding improvement, rehabilitation, or solvency'',
(vi) by striking ``critical'' each place it appears in
subparagraph (A)(vi) and inserting ``critical or declining'',
(vii) by striking ``rehabilitation period'' in subparagraph
(A)(vi) and inserting ``rehabilitation or solvency attainment
period'',
(viii) by striking ``as described in subsection (f)(9)'' in
subparagraph (B)(v),
(ix) by inserting ``if the plan is already in a
rehabilitation period, and'' before ``if reasonable'' in
subparagraph (B)(v)(I),
(x) by striking ``subsection (f)(9)'' in subparagraph
(B)(v)(II) and inserting ``subsection (h)(8)'',
(xi) by striking ``endangered or critical'' both places it
appears in subparagraph (D)(i) and inserting ``endangered,
critical, or declining'',
(xii) by striking ``endangered or critical'' in the heading
of subparagraph (D)(ii) and inserting ``endangered, critical,
or declining'',
(xiii) by striking ``endangered or critical'' in
subparagraph (D)(ii) and inserting ``endangered, critical, or
declining'',
(xiv) by striking ``funding improvement or rehabilitation
plan'' both places it appears in subclauses (I) and (II) of
subparagraph (D)(ii) and inserting ``funding improvement,
rehabilitation, or solvency plan'', and
(xv) by adding at the end of subparagraph (D) the following
new clause:
``(vii) Notice of projection to be in declining status in a
future plan year.--In any case in which it is certified under
subparagraph (A)(i) that a multiemployer plan will be in
declining status for any of 5 succeeding plan years (but not
for the current plan year), the plan sponsor shall, not later
than 30 days after the date of the certification, provide
notification of the projected declining status to the Pension
Benefit Guaranty Corporation.''.
(C) Subparagraph (J) of section 305(h)(8) of such Act (29
U.S.C. 1085(h)(8)), as so redesignated and amended, is
further amended--
(i) by striking ``critical'' in the heading and inserting
``declining'', and
(ii) by striking ``shall not emerge from critical status
under paragraph (4)(B),'' and inserting ``shall not emerge
from declining status''.
(D) Subsection (j) of section 305 of such Act (29 U.S.C.
1085), as so redesignated and amended, is further amended--
(i) by striking ``(f)(8) or (g)'' in paragraph (1) and
inserting ``(f)(8), (g), or (i)'',
(ii) by striking ``subsection (f)(9)'' in paragraph (1) and
inserting ``subsection (h)(8)'',
(iii) by striking ``funding improvement or rehabilitation
plan'' in the heading of paragraph (3) and inserting
``funding improvement, rehabilitation, or solvency'',
(iv) by striking ``funding improvement plan or
rehabilitation plan'' both places it appears in subparagraphs
(A) and (B) of paragraph (3) and inserting ``funding
improvement, rehabilitation, or solvency plan'',
(v) by striking ``endangered or critical'' in the heading
of paragraph (4), as amended by subsection (a), and inserting
``endangered, critical, or declining'',
(vi) by striking ``endangered or critical'' each place it
appears in paragraph (4), as so amended, and inserting
``endangered, critical, or declining'', and
(vii) by striking ``critical or endangered'' in paragraph
(4) and inserting ``endangered, critical, or declining''.
(E) Subsection (k) of section 305 of such Act (29 U.S.C.
1085), as so redesignated and amended, is further amended--
(i) by striking ``or a rehabilitation plan under subsection
(f)'' and inserting ``, a rehabilitation plan under
subsection (f), or a solvency plan under subsection (h)'',
(ii) by striking ``endangered status or a plan in critical
status'' and inserting ``endangered, critical, or declining
status'',
(iii) by striking ``has not agreed on a funding improvement
plan or rehabilitation plan'' and inserting ``has not agreed
on a funding improvement, rehabilitation, or solvency plan
(whichever is applicable)'', and
(iv) by striking ``adoption of a funding improvement plan
or rehabilitation plan'' and inserting ``adoption of a
funding improvement, rehabilitation, or solvency plan''.
(F) Subsection (l) of section 305 of such Act (29 U.S.C.
1085), as so redesignated and amended, is further amended--
(i) by striking ``endangered status or in critical status''
in paragraph (1) and inserting ``endangered, critical, or
declining status'',
(ii) by striking ``endangered or critical'' in paragraph
(1) and inserting ``endangered, critical, or declining'', and
(iii) by striking ``(d) and (f)'' in paragraph (2) and
inserting ``(d), (f), and (h)''.
(G) Section 101(f)(2)(B) of such Act (29 U.S.C.
1021(f)(2)(B)), as amended by this section, is amended--
(i) by striking ``305(k)'' in clause (i)(II) and inserting
``305(m)'', and
(ii) by striking ``305(k)(8)'' in clause (ii)(II) and
inserting ``305(m)(8)''.
(H) Section 101(k)(1)(K) of such Act (29 U.S.C.
1021(k)(1)(K)) is amended--
(i) by striking ``critical or endangered'' and inserting
``endangered, critical, or declining'', and
(ii) by striking ``funding improvement or rehabilitation''
both places it appears and inserting ``funding improvement,
rehabilitation, or solvency''.
(I) Section 103(f)(1)(B)(ii) of such Act (29 U.S.C.
1023(f)(1)(B)(ii)), as amended by this section, is amended by
striking ``305(k)(2)'' and inserting ``305(m)(2)''.
(J) Section 103(f)(2)(G) of such Act (29 U.S.C.
1023(f)(2)(G)) is amended--
(i) by striking ``critical or endangered'' and inserting
``endangered, critical, or declining'', and
(ii) by striking ``funding improvement or rehabilitation''
and inserting ``funding improvement, rehabilitation, or
solvency''.
(K) Section 104(d)(1)(E) of such Act (29 U.S.C.
1024(d)(1)(E)) is amended--
(i) by striking ``critical or endangered'' and inserting
``endangered, critical, or declining'', and
(ii) by striking ``funding improvement or rehabilitation''
and inserting ``funding improvement, rehabilitation, or
solvency''.
(L) Section 502(a)(10) of such Act (29 U.S.C. 1132(a)(10))
is amended--
(i) by striking ``endangered or critical'' and inserting
``endangered, critical, or declining'', and
(ii) by striking ``funding improvement or rehabilitation''
each place it appears and inserting ``funding improvement,
rehabilitation, or solvency''.
(M) Section 502(c)(8) of such Act (29 U.S.C. 1132(c)(8)) is
amended--
(i) by striking ``funding improvement plan or
rehabilitation'' in subparagraph (A) and inserting ``funding
improvement, rehabilitation, or solvency'',
(ii) by striking ``endangered or critical'' in subparagraph
(A) and inserting ``endangered, critical, or declining'',
(iii) by striking ``which is not in seriously endangered
status'' in subparagraph (B), and
(iv) by striking ``meet the applicable benchmarks'' in
subparagraph (B) and inserting ``emerge from endangered
status''.
(N) Section 4233 of such Act (29 U.S.C. 1413), as amended
by this section, is further amended--
(i) by striking ``305(f)(9)'' each place it appears in
subsections (b)(2) and (e)(1)(A) and inserting ``305(h)(8)'',
and
(ii) by striking ``305(f)(9)(E)(vi)'' in subsection (e)(2)
and inserting ``305(h)(8)(E)(vi)''.
(O) Section 4233(m)(1) of such Act, as added by this Act,
is amended by striking ``funding improvement or
rehabilitation'' and inserting ``funding improvement,
rehabilitation, or solvency''.
(P) Section 4233A(h)(4)(C) of such Act, as added by this
Act, is amended by striking ``rehabilitation plan'' and
inserting ``rehabilitation or solvency plan''.
(Q) Section 4233A(m)(1) of such Act, as added by this Act,
is amended by striking ``funding improvement or
rehabilitation'' and inserting ``funding improvement,
rehabilitation, or solvency''
(R) Section 4233A(o)(1) of such Act, as added by this Act,
is amended by striking ``305(k)(2)'' and inserting
``305(m)(2)''.
(S) Section 4233A(o)(12) of such Act, as added by this Act,
is amended by striking ``funding improvement plan or
rehabilitation'' and inserting ``funding improvement,
rehabilitation, or solvency''.
(T) Section 4245 of such Act (29 U.S.C. 1426), as amended
by section 112 and this section, is further amended--
(i) by striking ``305(b)(3)'' each place it appears in
subsections (c)(1), (c)(2), (d)(1), and (d)(2) and inserting
``305(b)(3), or a plan in declining status, as described in
section 305(b)(4)'', and
(ii) by striking ``305(f)(9)'' in subsection (f) and
inserting ``305(h)(8)''.
(e) Adjustment of Benefits.--
[[Page S7612]]
(1) In general.--Section 305 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1085), as amended by
this section, is further amended--
(A) by further redesignating subsections (m) and (n), as
redesignated by subsection (d), as subsections (n) and (o),
respectively,
(B) by redesignating paragraph (8) of subsection (f), as
redesignated by subsection (a)(2), as subsection (m), and
(C) by moving such subsection to the position immediately
after subsection (l).
(2) Clerical and conforming amendments.--
(A) The heading of subsection (m) of section 305 of such
Act (29 U.S.C. 1085), as redesignated by paragraph (1), is
amended to read as follows:
``(m) Adjustment of Benefits.--''.
(B) The following provisions of such subsection (m) are
amended as follows:
(i) Subparagraphs (A), (B), and (C) are redesignated as
paragraphs (1), (2), and (4), respectively, and moved 2 ems
to the left.
(ii) Clauses (i), (ii), (iii), and (iv) of paragraph (1)
(as so redesignated) are redesignated as subparagraphs (A),
(B), (C), and (D), respectively, and moved 2 ems to the left.
(iii) Subclauses (I), (II), and (III) of paragraph (1)(D)
(as so redesignated) are redesignated as clauses (i), (ii),
and (iii), respectively, and moved 2 ems to the left.
(iv) Clauses (i), (ii), and (iii) of paragraph (4) (as so
redesignated) are redesignated as subparagraphs (A), (B), and
(C), respectively, and moved 2 ems to the left, and the flush
sentence at the end of subparagraph (C) (as so redesignated)
is moved 2 ems to the left.
(v) Subclauses (I), (II), and (III) of paragraph (4)(A) (as
so redesignated) are redesignated as clauses (i), (ii), and
(iii), respectively, and moved 2 ems to the left.
(vi) Subclauses (I) and (II) of paragraph (4)(B) (as so
redesignated) are redesignated as clauses (i) and (ii),
respectively, and moved 2 ems to the left.
(vii) Subclauses (I), (II), and (III) of paragraph (4)(C)
(as so redesignated) are redesignated as clauses (i), (ii),
and (iii), respectively, and moved 2 ems to the left.
(viii) Paragraph (1)(A), as so redesignated, is amended by
striking ``subparagraph (C)'' and inserting ``paragraph
(4)''.
(ix) Paragraph (1)(B), as so redesignated, is amended by
striking ``clause (iv)(III)'' and inserting ``subparagraph
(D)(iii)''.
(x) Paragraph (1)(D), as so redesignated, is amended by
striking ``this paragraph'' and inserting ``this
subsection''.
(xi) Paragraph (2), as so redesignated, is amended--
(I) by striking ``subparagraph (A)(iv)(III)'' and inserting
``paragraph (1)(D)(iii)'', and
(II) by striking ``this paragraph'' and inserting ``this
subsection''.
(xii) Paragraph (4)(A), as so redesignated, is amended by
striking ``subparagraph (A)'' and inserting ``paragraph
(1)''.
(xiii) Paragraphs (4)(B) and (4)(C), as so redesignated,
are each amended by striking ``clause (i)'' each place it
appears and inserting ``subparagraph (A)''.
(xiv) The last sentence of paragraph (4)(C), as so
redesignated, is amended--
(I) by striking ``subclause (I)'' and inserting ``clause
(i)'', and
(II) by striking ``this subparagraph'' and inserting ``this
paragraph''.
(3) Application to all plans in endangered, critical, or
declining status.--
(A) In general.--Subparagraph (A) of section 305(m)(1) of
such Act (29 U.S.C. 1085(m)(1)), as redesignated and amended
by this section, is further amended--
(i) by striking ``the plan sponsor shall'' and inserting
``the plan sponsor of a multiemployer plan in endangered,
critical, or declining status may'', and
(ii) by striking ``paragraph (1)(B)(i)'' and inserting
``subsection (d)(1)(B), (f)(1)(B), or (h)(1)(B), whichever is
applicable''.
(B) Conforming amendments.--Subparagraph (B) of section
305(m)(1) of such Act (29 U.S.C. 1085(m)(1)), as redesignated
and amended by this section, is further amended by striking
``critical'' both places it appears and inserting
``endangered, critical, or declining''.
(4) Additional adjustable benefits.--
(A) In general.--Subparagraph (D) of section 305(m)(1) of
such Act (29 U.S.C. 1085(m)(1)), as redesignated by this
section, is amended--
(i) by inserting ``, including early reduction factors
which are not provided on an actuarially equivalent basis,''
after ``(i))'' in clause (ii), as so redesignated,
(ii) by striking ``and'' at the end of clause (ii) (as so
redesignated),
(iii) by striking ``that would not be eligible'' and all
that follows through the period in clause (iii) (as so
redesignated) and inserting ``which were adopted (or, if
later, took effect) less than 120 months before the first day
of the first plan year in which the plan was in endangered,
critical, or declining status,'', and
(iv) by adding at the end the following new clauses:
``(iv) any one-time bonus payment or `thirteenth check'
provision, and
``(v) benefits granted for periods of service prior to
participation in the plan.''.
(B) Conforming amendments.--
(i) Subparagraph (B) of section 305(m)(1) of such Act (29
U.S.C. 1085), as redesignated and amended by this section, is
further amended by striking ``subparagraph (D)(iii)'' and
inserting ``clause (iii), (iv), or (v) of subparagraph (D)''.
(ii) Paragraph (2) of section 305(m) of such Act (29 U.S.C.
1085), as amended by paragraph (2)(B), is further amended by
striking ``paragraph (1)(D)(iii)'' and inserting ``clause
(iii), (iv), or (v) of paragraph (1)(D)''.
(iii) Section 4233A(o)(1) of such Act, as added by this Act
and as amended by this section, is further amended by
striking ``305(m)(2)'' and inserting ``305(n)(2)''.
(5) Rules relating to suspension of benefits upon return to
work.--Subsection (m) of section 305 of such Act (29 U.S.C.
1085), as redesignated and amended by this section, is
further amended by inserting after paragraph (2) the
following new paragraph:
``(3) Rules relating to suspension of benefits upon return
to work.--The plan sponsor of a multiemployer plan in
endangered, critical, or declining status may amend rules
regarding the suspension of a participant's benefits upon a
return to work after commencement of benefits, or the
commencement of benefits after normal retirement age
(including in the case of continued employment after normal
retirement age). Any such changes shall apply only to future
payments of benefits.''.
(6) Additional conforming amendments.--
(A) Clause (iii) of section 305(b)(5)(D) of such Act (29
U.S.C. 1085(b)(5)(D)), as redesignated and amended by this
section, is further amended--
(i) by striking ``critical'' in the heading and inserting
``endangered, critical, or declining'',
(ii) by striking ``critical status'' both places it appears
and inserting ``endangered, critical, or declining status'',
and
(iii) by striking ``subsection (f)(8)'' in subclause (I)
and inserting ``subsection (m)(1)(D)''.
(B) Subsection (j) of section 305 of such Act (29 U.S.C.
1085), as amended by subsection (d), is further amended by
striking ``(f)(8), (g), or (i)'' and inserting ``(e), (g),
(i), or (m)''.
(C) Section 101(f)(2)(B) of such Act (29 U.S.C.
1021(f)(2)(B)), as amended by this section, is amended--
(i) by striking ``305(m)'' in clause (i)(II) and inserting
``305(n)'', and
(ii) by striking ``305(m)(8)'' in clause (ii)(II) and
inserting ``305(n)(8)''.
(D) Section 103(f)(1)(B)(ii) of such Act (29 U.S.C.
1023(f)(1)(B)(ii)), as amended by this section, is amended by
striking ``305(m)(2)'' and inserting ``305(n)(2)''.
(f) Elections to Be in Critical or Endangered Status.--
(1) In general.--Paragraph (6) of section 305(b) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1085(b)), as redesignated and amended by this section, is
further amended--
(A) by striking ``is not in critical status'' in
subparagraph (A) and inserting ``is not in critical or
declining status'',
(B) by striking ``but that is projected'' in subparagraph
(A) and inserting ``but--
``(i) that is projected'',
(C) by striking ``5 plan years may, not later than'' in
subparagraph (A) and inserting ``5 plan years, or
``(ii) that is in endangered status and is not reasonably
projected to be able to emerge from endangered status within
the funding improvement period under the funding improvement
plan in effect,
may, not later than'', and
(D) by striking ``under paragraph (3)'' in subparagraph (B)
and inserting ``under paragraph (3) or for endangered status
under paragraph (2)''.
(2) Election to be in endangered status.--Subsection (b) of
section 305 of such Act (29 U.S.C. 1085), as so redesignated
and amended, is further amended by adding at the end the
following new paragraph:
``(8) Election to be in endangered status.--Notwithstanding
paragraph (2)--
``(A) the plan sponsor of a multiemployer plan that is not
in endangered, critical, or declining status for a plan year
but that is projected by the plan actuary, pursuant to the
determination under paragraph (5), to be in endangered status
in any of the 5 succeeding plan years, may, not later than 30
days after the date of the certification under paragraph
(5)(A), elect to be in endangered status effective for the
current plan year,
``(B) the plan year in which the plan sponsor elects to be
in endangered status under subparagraph (A) shall be treated
for purposes of this section as the first year in which the
plan is in endangered status, regardless of the date on which
the plan first satisfies the criteria for endangered status
under paragraph (2), and
``(C) a plan that is in endangered status under this
paragraph shall not emerge from endangered status unless the
plan's actuary certifies under paragraph (5)(A) that the plan
is no longer in endangered status and is not in critical or
declining status.''.
(g) Amendments Relating to Funding Improvement Plan.--
(1) In general.--Paragraph (1) of section 305(d) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1085(d)), as redesignated and amended by this section, is
further amended--
(A) by striking the last sentence, and
(B) in subparagraph (B), by striking ``funding improvement
plan--'' and all that follows and inserting ``funding
improvement plan, shall provide to the bargaining parties 1
or more schedules showing revised benefit structures, revised
contribution structures, or both, which, if adopted, may
reasonably be expected to enable the multiemployer plan to
meet the requirements of paragraph (3), including--
``(i) one default proposal under which--
[[Page S7613]]
``(I) all adjustable benefits in the form of early
retirement subsidies (including early reduction factors which
are not provided on an actuarially equivalent basis) under
the plan are eliminated, and
``(II) the future monthly benefit accrual rate under the
plan is reduced to the equivalent of 1 percent of annual
contributions (or, if lower, the accrual rate as of the date
of the enactment of the Chris Allen Multiemployer Pension
Recapitalization and Reform Act of 2020) based on the
contribution rate in effect as of the first day of the plan
year in which the plan enters endangered status, and
which may also include reduction or elimination of any other
adjustable benefits under the plan, and
``(ii) any additional schedules which reduce or eliminate
adjustable benefits under the plan which the plan sponsor
deems appropriate to provide as an alternative to the default
proposal.''.
(2) Funding improvement plan.--Paragraph (3) of section
305(d) of such Act (29 U.S.C. 1085(d)), as so redesignated
and amended, is further amended--
(A) by striking ``For purposes of this section--'' and all
that follows through ``which consists of'' in subparagraph
(A) and inserting ``For purposes of this section, a funding
improvement plan is a plan which consists of'', and
(B) by striking ``formulated to provide'' and all that
follows and inserting ``formulated, based on reasonably
anticipated experience and reasonable actuarial assumptions,
to--
``(A) enable the plan to emerge from endangered status by
the end of the funding improvement period, and
``(B) avoid any accumulated funding deficiencies during the
funding improvement period (taking into account any extension
of amortization periods under section 304(d)).''.
(3) Funding improvement period.--Paragraph (4) of section
305(d) of such Act (29 U.S.C. 1085(d)(4)), as so redesignated
and amended, is further amended by striking subparagraph (B)
and inserting after subparagraph (A) the following new
subparagraph:
``(B) New period based on adverse experience.--
``(i) In general.--If the plan's actuary determines
necessary based on adverse plan experience, the plan sponsor
may provide for a new 10-year period as of the first day of
any plan year in the original funding improvement period, but
only if the plan is still projected to meet the requirements
of the funding improvement plan and emerge from endangered
status at the end of the new funding improvement period.
``(ii) Limitation.--A plan sponsor may provide a new 10-
year period under clause (i) not more than 1 time in any 20-
consecutive-year period, unless the plan sponsor submits to
the Secretary an application for an additional new period.
Such application shall include a certification that the plan
is projected to emerge from endangered status in the proposed
new 10-year period and a description of key assumptions, to
be specified in regulations promulgated by the Secretary in
consultation with the Pension Benefit Guaranty
Corporation.''.
(4) Conforming amendments.--
(A) Subparagraph (C) of section 305(d)(4) of such Act (29
U.S.C. 1085(d)(4)), as so redesignated and amended, is
further amended--
(i) by striking ``critical status'' both places it appears
in clauses (i) and (ii) and inserting ``critical or declining
status'',
(ii) by striking ``rehabilitation period'' in clause (ii)
and inserting ``rehabilitation or solvency attainment
period'', and
(iii) by striking ``critical status'' in the heading of
clause (ii) and inserting ``critical or declining status''.
(B) Subsection (d) of section 305 of such Act (29 U.S.C.
1085), as so redesignated and amended, is further amended by
striking paragraph (5) and by redesignating paragraphs (6),
(7), and (8) as paragraphs (5), (6), and (7), respectively.
(C) Paragraph (6) of section 305(d) of such Act (29 U.S.C.
1085(d)), as so redesignated, is amended--
(i) by striking ``(1)(B)(i)(I)'' in subparagraph (A) and
inserting ``(1)(B)(i)'', and
(ii) by striking ``paragraph (6)(B)'' in subparagraph
(B)(ii) and inserting ``paragraph (5)(B)''.
(D) Paragraph (2) of section 305(d) of such Act (29 U.S.C.
1085(d)), as so redesignated, is amended by inserting ``,
except that the next update of the funding improvement plan
shall fulfill the requirement of paragraph (1)(B)(i)'' after
``for a preceding plan year''.
(h) Amendments Relating to Rehabilitation Plan.--
(1) In general.--Paragraph (1) of section 305(f) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1085(f)), as redesignated and amended by this section, is
further amended--
(A) by striking the last 2 sentences, and
(B) in subparagraph (B), by striking ``rehabilitation
plan--'' and all that follows and inserting ``rehabilitation
plan, shall provide to the bargaining parties 1 or more
schedules showing revised benefit structures, revised
contribution structures, or both, which, if adopted, may
reasonably be expected to enable the multiemployer plan to
meet the requirements of paragraph (3), including--
``(i) one default proposal under which--
``(I) all adjustable benefits in the form of early
retirement subsidies (including early reduction factors which
are not provided on an actuarially equivalent basis) under
the plan are eliminated, and
``(II) the future monthly benefit accrual rate under the
plan is reduced to the equivalent of 1 percent of annual
contributions (or, if lower, the accrual rate as of the date
of the enactment of the Chris Allen Multiemployer Pension
Recapitalization and Reform Act of 2020) based on the
contribution rate in effect as of the first day of the plan
year in which the plan enters critical status, and
which may also include reduction or elimination of any other
adjustable benefits under the plan, and
``(ii) any additional schedules which reduce or eliminate
adjustable benefits under the plan which the plan sponsor
deems appropriate to provide as an alternative to the default
proposal.
In the case of a plan adopting a rehabilitation plan
described in paragraph (3)(A)(ii), no schedule provided to or
adopted by the bargaining parties shall provide for a monthly
benefit accrual rate in excess of the rate described in
subparagraph (B)(i)(II).''.
(2) Rehabilitation plan.--
(A) In general.--Subparagraph (A) of section 305(f)(3) of
such Act (29 U.S.C. 1085(f)(3)), as so redesignated, is
amended--
(i) by striking ``and may include'' and all that follows
through ``such actions'' in clause (i),
(ii) by inserting ``, while delaying insolvency for as long
as possible and maximizing the income of the plan, including
income after insolvency'' before the period in clause (ii),
and
(iii) by striking ``(1)(B)(i)'' in the last sentence and
inserting ``(1)(B)''.
(B) Conforming amendments.--Clause (i) of section
305(f)(3)(C) of such Act (29 U.S.C. 1085(f)(3)(C)), as so
redesignated, is amended--
(i) by striking ``(1)(B)(i)'' in subclause (II) and
inserting ``(1)(B)'', and
(ii) by striking ``the last sentence of paragraph (1)'' and
inserting ``paragraph (1)(B)(i)''.
(3) Rehabilitation period.--
(A) In general.--Subparagraph (A) of section 305(f)(4) of
such Act (29 U.S.C. 1085(f)(4)), as so redesignated and
amended, is further amended--
(i) by striking ``The rehabilitation period'' and inserting
``Except as otherwise provided in this subparagraph, the
rehabilitation period'', and
(ii) by adding at the end the following: ``If, upon
exhaustion of all reasonable measures, the plan is not
reasonably expected to emerge from critical status by the end
of such 10-year period, the rehabilitation period shall be
extended to take into account the projected date of emergence
from critical status (if the rehabilitation plan remained in
effect until such date) or the projected date of insolvency
(if applicable) (unless the plan enters declining status).''.
(B) Emergence from critical status.--Subparagraph (B) of
section 305(f)(4) of such Act (29 U.S.C. 1085(f)(4)), as so
redesignated and amended, is further amended--
(i) by inserting ``and is not in declining status,'' after
the comma in clause (i)(I),
(ii) by striking subclause (III) of clause (i) and
inserting the following:
``(III) the plan's projected funded percentage as of the
first day of the 15th succeeding plan year is at least 100
percent and is projected to increase after such date.'',
(iii) by striking ``that--'' and all that follows through
``regardless of whether'' in clause (ii)(I) and inserting
``that the plan meets the requirements of subclauses (II) and
(III) of clause (i), regardless of whether'', and
(iv) by striking ``unless--'' and all that follows in
clause (ii)(II) and inserting ``unless, as of such plan year,
the plan fails to meet the requirements of subclause (II) or
(III) of clause (i).''.
(4) Rules relating to benefit increases during
rehabilitation period.--Subparagraph (B) of section 305(g)(1)
of such Act (29 U.S.C. 1085(g)(1)), as so redesignated and
amended, is further amended by striking ``unless'' and all
that follows and inserting ``unless the amendment is required
as a condition of qualification under part I of subchapter D
of chapter 1 of the Internal Revenue Code of 1986 or to
comply with other applicable law, or the amendment provides
for only a de minimis increase in the liabilities of the
plan.''.
(5) Conforming amendments.--
(A) Paragraph (6) of section 305(f) of such Act (29 U.S.C.
1085(f)), as so redesignated, is amended by striking ``the
last sentence of paragraph (1)'' and inserting ``paragraph
(1)(B)(i)''.
(B) Paragraph (2) of section 305(f) of such Act (29 U.S.C.
1085(f)), as so redesignated, is amended by inserting ``,
except that the next update of the rehabilitation plan shall
fulfill the requirement of paragraph (1)(B)(i)'' after ``for
a preceding plan year''.
(i) Actuarial Assumptions.--
(1) In general.--Subsection (n) of section 305 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1085), as redesignated by subsections (a), (d), and (e), is
amended--
(A) by striking ``Method'' in the heading and inserting
``Method and Assumptions'', and
(B) by adding at the end the following new paragraph:
``(11) Actuarial assumptions.--
``(A) In general.--The actuarial assumptions relied upon
for purposes of this section
[[Page S7614]]
by a plan actuary shall be individually reasonable and, in
the aggregate, shall be reasonable and (with the exception of
assumptions regarding future contributions) represent the
actuary's best estimate of future plan experience, within
limitations prescribed by the Secretary of the Treasury. A
plan actuary shall avoid conservatism or optimism in
individual assumptions to the extent that they would result
in a set of assumptions that is unreasonable in the
aggregate.
``(B) Investment returns.--The investment return assumption
for projecting plan assets may differ from the actuarial
valuation interest rate. In selecting the investment return
assumption for projecting plan assets, the plan actuary shall
estimate the expected return of the plan's investments as
currently invested and as expected to be invested in the
future, consistent with the plan's adopted investment policy,
if applicable. It is reasonable for an actuary to expect that
the plan's investment decisions will consider risk, expected
returns over time, and expected future benefit payments. The
investment return assumption shall not exceed the interest
rate used to determine past service liability under section
431(b)(6).
``(C) Contributions.--
``(i) In general.--The plan actuary shall develop
assumptions for the projection of future contributions,
including assumptions regarding industry activity among
contributing employers and contribution rates, based on
information provided by the plan sponsor, which must act
reasonably and in good faith. The plan actuary shall certify
the reasonableness of all assumptions.
``(ii) Projected industry activity.--Any projection of
activity in the industry or industries covered by the plan,
including future covered employment and contribution levels,
shall be based on information provided by the plan sponsor
acting reasonably and in good faith.
``(iii) Future contribution base units.--
``(I) Declining contribution base units.--If recent
experience of the plan has been declining contribution base
units, the plan actuary may assume future contribution base
units will continue to decline at the same annualized trend
as over the 5 immediately preceding plan years, unless the
actuary determines that there have been significant changes
that would make such assumption unreasonable.
``(II) Flat or increasing contribution base units.--If
recent experience of the plan has been increasing, or neither
increasing nor decreasing, contribution base units, the plan
actuary may assume future contribution base units will remain
unchanged indefinitely, unless the actuary determines that
there have been significant changes that would make such
assumption unreasonable.
``(iv) Future contribution rates.--
``(I) In general.--Projections of contributions shall be
based on the contribution rates consistent with the terms of
collective bargaining and participation agreements currently
in effect.
``(II) Future increases in accordance with correction
plans.--If reasonable and applicable, the plan actuary may
assume future increases in contribution rates consistent with
the adopted funding improvement plan, rehabilitation plan, or
solvency plan.
``(III) Additional factors.--Information provided by the
plan sponsor to the plan actuary in setting the assumption
regarding future increases in contribution rates shall take
into account the ability of the participating employers to
make contributions at the scheduled rates over time,
considering relevant factors such as projected industry
activity, the financial strength of participating employers,
market competition, and the scheduled contribution rate to
the plan relative to the overall wage package.
``(D) Assumptions for developing schedules.--All schedules
under any funding improvement plan, rehabilitation plan, or
solvency plan must be developed based on the same set of
actuarial assumptions unless it would be unreasonable to do
so, taking into account the anticipated impact of the
schedules on participant behavior and employer
participation.''.
(2) Additions to form 5500 schedule mb.--Subparagraph (B)
of section 305(b)(5) of such Act (29 U.S.C. 1085(b)(5)), as
redesignated and amended by this section, is further amended
by adding at the end the following new clause:
``(vi) Additional attachments.--The plan actuary shall
attach to the certification required under subparagraph (A)--
``(I) documentation supporting the certification of status
under subparagraph (A)(i), including projections of the
funding standard account, funded percentage, and solvency of
the plan,
``(II) a clear description of the key assumptions used in
performing the projections, including investment returns,
contribution base units, and contribution rates,
``(III) a 5-year history of contributions, including
contribution base units, average contribution rates, and
withdrawal liability payments, and a comparison of such
contribution base units, rates, and payments to projections
made by the plan, and
``(IV) an alternate projection of the funding standard
account, funded percentage, and solvency, based on the
following assumptions:
``(aa) Annual future investment returns on plan assets
equal the actuarial interest rate assumption minus 1 percent.
``(bb) Future contribution base units projected using a
trend equal to the lesser of--
``(AA) the annualized trend of actual contribution base
units over the 5 preceding plan years, and
``(BB) no change in future contribution base units.
``(cc) No increases in future contribution rates beyond
those consistent with the collective bargaining agreements
and participation agreements in effect for the plan year.
``(dd) The withdrawal from the plan of the employer which
has contributed the greatest total amount of contributions
over the 5 preceding plan years, if such employer has
contributed at least 10 percent of the total contributions to
the plan over such 5 plan years and such employer has a below
investment grade credit rating (but only if obtaining the
credit rating of such employer is not an undue burden).
``(ee) If such credit rating cannot be obtained without
undue burden, the withdrawal of the employer which has
contributed the greatest total amount of contributions over
the 5 preceding plan years, if such employer has contributed
at least 10 percent of the total contributions to the plan
over such 5 plan years without regard to collection of any
withdrawal liability.
``(ff) If no employer has contributed at least 10 percent
of the total contributions to the plan over the 5 preceding
plan years, the withdrawal of the employer which contributed
the greatest total amount of contributions for the current
plan year, without regard to collection of any withdrawal
liability, unless the employer contributed less than 1
percent of the total contributions to the plan for such plan
year.
``(gg) Other assumptions consistent with the projection
based on the actuary's best estimate assumptions.''.
(3) Conforming amendments.--
(A) Section 305(b)(5)(B)(i) of such Act (29 U.S.C.
1085(b)(5)(B)(i)), as redesignated by this section, is
amended by striking ``assumptions'' and inserting
``assumptions meeting the requirements of subsection
(n)(11)''.
(B) Section 305(b)(5)(A)(vi) of such Act (29 U.S.C.
1085(b)(5)(A)(vi), as amended by this section and section
321, is further amended by striking ``reasonable actuarial
assumptions'' and inserting ``assumptions meeting the
requirements of subsection (n)(11)''.
(C) Paragraph (3) of section 305(d) of such Act (29 U.S.C.
1085(d)), as amended by subsection (g), is further amended by
striking ``reasonable actuarial assumptions'' and inserting
``assumptions meeting the requirements of subsection
(n)(11)''.
(D) Clause (i) of section 305(f)(3)(A) of such Act (29
U.S.C. 1085(f)(3)(A)), as amended by subsection (h), is
further amended by striking ``reasonable actuarial
assumptions'' and inserting ``assumptions meeting the
requirements of subsection (n)(11)''.
(E) Section 305(h)(3) of such Act (29 U.S.C. 1085(h)(3)),
as added by subsection (d), is amended by striking
``reasonable actuarial assumptions'' and inserting
``assumptions meeting the requirements of subsection
(n)(11)''.
(j) Conforming Amendments Relating to Premiums.--Paragraph
(10) of section 4006(a) of such Act (29 U.S.C. 1306(a)), as
added by this Act, is amended--
(1) by striking ``305(b)(7)'' in subparagraph (B)(iii)
thereof and inserting ``305(b)(4)'',
(2) by striking ``critical and declining'' in subparagraph
(B)(iii) thereof and inserting ``declining'', and
(3) by striking ``305(f)(9)'' in subparagraph (C) and
inserting ``305(h)(8)''.
(k) Conforming Amendments Relating to Composite and Legacy
Plans.--
(1) Sections 203(a)(3)(E)(ii), 204(b)(1)(B)(i),
204(b)(1)(H)(v), and 204(g)(1) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1053(a)(3)(E)(ii),
1054(b)(1)(B)(i), 1054(b)(1)(H)(v), and 1054(g)(1)), as
amended by title V, are each further amended by striking
``305(f)'' each place it appears and inserting ``305(h)(8)''.
(2) Sections 304(b)(10), 805(d)(2)(D), and 805(d)(4) of
such Act, as added by title V, are each amended by striking
``endangered or critical'' and inserting ``endangered,
critical, or declining''.
(3) Section 801(b)(1) of such Act, as so added, is amended
by striking ``endangered or critical'' both places it appears
and inserting ``endangered, critical, or declining''.
(4) Sections 801(b)(1), 801(b)(5)(B), 805(b)(1)(A), and
805(e)(3) of such Act, as so added, are each amended by
striking ``305(b)(4)'' and inserting ``305(b)(5)''.
(5) Sections 801(b)(5)(B) and 805(b)(1)(A) of such Act, as
so added, are each amended by striking ``endangered or
critical'' and inserting ``endangered, critical, or
declining''.
(6) Section 802(b)(1) of such Act, as so added, is amended
by striking ``and'' at the end of subparagraph (B), by
striking the period at the end of subparagraph (C) and
inserting ``; and'', and by adding at the end the following
new subparagraph:
``(D) consistent with the principles of subparagraphs (B),
(C), and (D) of section 305(n)(11).''.
(7) Sections 802(b)(5) and 805(d)(2)(A) of such Act, as so
added, are each amended by striking ``305(b)(4)(B)'' and
inserting ``305(b)(5)(B)''.
(8) Section 803(a)(2)(D) of such Act, as so added, is
amended by striking ``305(f)(9)(D)(vi)'' and inserting
``305(h)(8)(D)(vi)''.
(9) Section 803(a)(3) of such Act, as so added, is amended
by striking ``305(f)(8)'' and inserting ``305(m)(1)(D)''.
[[Page S7615]]
(10) Section 805(d)(2)(D) of such Act, as so added and
amended, is further amended by striking ``funding improvement
or rehabilitation plan'' and inserting ``funding improvement,
rehabilitation, or solvency plan''.
(l) Additional Conforming Amendments.--
(1) Section 502(c) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1132(c)) is amended--
(A) in paragraph (7)(B), as added by section 322, by
striking ``305(b)(4)(D)'' and inserting ``305(b)(5)(D)'', and
(B) in paragraph (14), as so added and as redesignated by
section 501--
(i) by striking ``305(b)(4)(D)'' in subparagraph (A) and
inserting ``305(b)(5)(D)'', and
(ii) by striking ``305(b)(4)'' in subparagraph (B) and
inserting ``305(b)(5)''.
(2) Section 4003(g) of such Act (29 U.S.C. 1303(g)), as
added by section 321, is amended by striking ``section
305(b)(4)(A)'' and inserting ``section 305(b)(5)(A)''.
(3) Section 4042(b)(2)(B)(i) of such Act (29 U.S.C.
1342(b)(2)(B)), as added by section 301, is amended--
(A) by striking ``critical and declining'' and inserting
``declining'', and
(B) by striking ``(7)'' and inserting ``(4)''.
(m) Effective Date.--Except as otherwise provided in
subsection (a)(7), the amendments made by this section shall
apply to plan years beginning after December 31, 2020.
(n) Credit Ratings.--No requirement of section 939 or 939A
of the Dodd-Frank Wall Street Reform and Consumer Protection
Act (124 Stat. 1887; 15 U.S.C. 78o-7 note) shall apply with
respect to the amendment made by subsection (i)(2).
SEC. 213. TRANSITION RULES.
(a) Plans in Endangered Status.--
(1) In general.--In the case of a multiemployer plan which
is in endangered status as of the date of the enactment of
this Act, and is on schedule as of such date to meet the
applicable benchmarks in accordance with the plan's funding
improvement plan--
(A) Election to apply law before amendment.--The plan
sponsor may elect to remain in endangered status and to apply
section 432 of the Internal Revenue Code of 1986 and section
305 of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1085) as in effect before January 1, 2021, to the
plan, but only if the plan continues to meet such applicable
benchmarks.
(B) Transitional effective date.--If the plan sponsor does
not make the election under paragraph (1)--
(i) section 432 of such Code and section 305 of such Act as
in effect on January 1, 2021, shall apply to such plan as of
the first day of the first plan year beginning after December
31, 2020, and
(ii) section 432(d)(1)(B)(i)(II) of such Code and section
305(d)(1)(B)(i)(II) of such Act, as amended by sections
211(g) and 212(g), respectively, shall each apply to such
plan by substituting ``the date of the enactment of the Chris
Allen Multiemployer Pension Recapitalization and Reform Act
of 2020'' for ``the first day of the plan year in which the
plan enters endangered status''.
In the case of any plan with respect to which the plan
sponsor makes the election under subparagraph (A) but which
fails to continue to meet the applicable benchmarks under the
funding improvement plan, this subparagraph shall apply to
such plan by substituting ``the plan year after the first
plan year for which the plan fails to meet the applicable
benchmarks'' for ``the first plan year beginning after
December 31, 2020''.
(2) Plans entering endangered status between enactment and
january 1, 2021.--In the case of a multiemployer plan which
enters endangered status after the date of the enactment of
this Act and before January 1, 2021--
(A) section 432 of such Code and section 305 of such Act as
in effect on January 1, 2021, shall apply to such plan as if
already in effect, and
(i) section 432(d)(1)(B)(i)(II) of such Code and section
305(d)(1)(B)(i)(II) of such Act, as amended by sections
211(g) and 212(g), respectively, shall each apply to such
plan by substituting ``the date of the enactment of the Chris
Allen Multiemployer Pension Recapitalization and Reform Act
of 2020'' for ``the first day of the plan year in which the
plan enters endangered status''.
(b) Plans in Critical or Critical and Declining Status.--
(1) In general.--In the case of a qualified critical
multiemployer plan--
(A) Election to apply law before amendment.--The plan
sponsor may elect to remain in critical or critical and
declining status and to apply section 432 of the Internal
Revenue Code of 1986 and section 305 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1085) as in
effect before January 1, 2021, to the plan, but only if the
plan continues to make scheduled progress under the plan's
rehabilitation plan.
(B) Transitional effective date.--If the plan sponsor does
not make the election under paragraph (1)--
(i) section 432 of such Code and section 305 of such Act as
in effect on January 1, 2021, shall apply to such plan as of
the first day of the first plan year beginning after December
31, 2020,
(ii) section 432(f)(1)(B)(i)(II) of such Code and section
305(f)(1)(B)(i)(II) of such Act, as amended by sections
211(h) and 212(h), respectively, shall each apply to such
plan by substituting ``the date of the enactment of the Chris
Allen Multiemployer Pension Recapitalization and Reform Act
of 2020'' for ``the first day of the plan year in which the
plan enters critical status'', and
(iii) section 432(h)(1)(B)(i)(II) of such Code and section
305(h)(1)(B)(i)(II) of such Act, as amended by sections
211(d)(3) and 212(d)(3), respectively, shall each apply to
such plan by substituting ``the date of the enactment of the
Chris Allen Multiemployer Pension Recapitalization and Reform
Act of 2020'' for ``the first day of the plan year in which
the plan enters declining status''.
In the case of any plan with respect to which the plan
sponsor makes the election under subparagraph (A) but which
fails to continue to make scheduled progress under the
rehabilitation plan, this subparagraph shall apply to such
plan by substituting ``the plan year after the first plan
year for which the plan fails to make scheduled progress
under the rehabilitation plan'' for ``the first plan year
beginning after December 31, 2020''.
(C) Application of premium amendments.--A plan with respect
to which the plan sponsor makes the election under
subparagraph (A) shall be treated as described in clause
(iii) of section 4006(a)(10)(B) of the Employee Retirement
Income Security Act of 1974 until such time as the plan
emerges from critical and declining status pursuant to
section 432 of such Code and section 305 of such Act as in
effect before January 1, 2021.
(2) Plans entering critical or critical and declining
status between enactment and january 1, 2021.--In the case of
a multiemployer plan which enters critical or critical and
declining status after the date of the enactment of this Act
and before January 1, 2021--
(A) section 432 of such Code and section 305 of such Act as
in effect on January 1, 2021, shall apply to such plan as if
already in effect,
(B) section 432(f)(1)(B)(i)(II) of such Code and section
305(f)(1)(B)(i)(II) of such Act, as amended by sections
211(h) and 212(h), respectively, shall each apply to such
plan by substituting ``the date of the enactment of the Chris
Allen Multiemployer Pension Recapitalization and Reform Act
of 2020'' for ``the first day of the plan year in which the
plan enters critical status'', and
(C) section 432(h)(1)(B)(i)(II) of such Code and section
305(h)(1)(B)(i)(II) of such Act, as amended by sections
211(d)(3) and 212(d)(3), respectively, shall each apply to
such plan by substituting ``the date of the enactment of the
Chris Allen Multiemployer Pension Recapitalization and Reform
Act of 2020'' for ``the first day of the plan year in which
the plan enters declining status''.
(3) Qualified critical multiemployer plan.--For purposes of
this subsection, the term ``qualified critical multiemployer
plan'' means a multiemployer plan which is in critical or
critical and declining status as of the date of the enactment
of this Act, and is making scheduled progress under the
plan's rehabilitation plan, but only if the rehabilitation
plan (as in effect without regard to the amendments made by
this Act) targets emergence from critical status not later
than 3 years after the end of the rehabilitation period as in
effect with respect to such plan on the date of the enactment
of this Act.
(c) Election.--
(1) In general.--An election under subsection (a)(1)(A) or
(b)(1)(A) shall be made--
(A) by notice to the Secretary of the Treasury and the
Pension Benefit Guaranty Corporation, in such manner as the
Secretary of the Treasury may prescribe,
(B) not later than the due date for the notice of
endangered status or critical status for the first plan year
beginning after December 31, 2020.
(2) Periods after election.--After making a timely election
under paragraph (1)--
(A) the plan sponsor shall annually review and update (if
necessary) the plan's funding improvement plan or
rehabilitation plan, and
(B) the plan actuary shall certify annually whether the
plan is making scheduled progress under the funding
improvement plan or rehabilitation plan.
(d) Definitions.--Any term used in this section which is
also used in section 432 of the Internal Revenue Code of 1986
or section 305 of the Employee Retirement Income Security Act
of 1974 (before or after the amendments made by this Act)
shall have the same meaning as when used in such sections.
PART II--PROVISIONS RELATING TO PLAN MERGERS
SEC. 221. PROVISIONS RELATING TO PLAN MERGERS AND
CONSOLIDATIONS.
(a) In General.--Section 4231(c) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1411(c)) is amended--
(1) by striking ``section 406(a) or section 406(b)(2)'' and
inserting ``section 404, 406(a), or 406(b)(2)'', and
(2) by adding at the end the following: ``The corporation
shall prescribe safe harbor provisions whereby a merger of
multiemployer plans or the transfer of assets or liabilities
between multiemployer plans, where one of the plans is in
critical and declining status pursuant to section 305 and one
is in stable or unrestricted status pursuant to such section,
shall be deemed to satisfy the requirements of this section.
Notwithstanding the preceding sentences, the implementation
of such merger or transfer shall be subject to the rules of
section 404.''.
(b) Calculation of Withdrawal Liability.--
(1) In general.--Section 4231 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1411) is amended by
adding at the end the following new subsection:
``(f) Calculation of Withdrawal Liability Post-merger.--The
corporation shall
[[Page S7616]]
prescribe the methods and conditions under which employers
contributing to plans which are in stable or unrestricted
status under section 305 when such plan merges with a plan in
declining status under such section will not be allocated the
unfunded vested benefits of the plan in declining status (as
determined immediately before the merger).''.
(2) Effective date.--The amendment made by this section
shall apply to plan mergers after December 31, 2020.
SEC. 222. CLARIFICATION OF PBGC FINANCIAL ASSISTANCE FOR PLAN
MERGERS AND PARTITIONS.
(a) In General.--Paragraph (2) of section 4231(e) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1411(e)) is amended--
(1) by striking the semicolon in subparagraph (B)(ii) and
inserting ``, determined solely with respect to the
liabilities and assets of the plan which was in critical and
declining status prior to the merger; and''; and
(2) by striking subparagraph (C) and redesignating
subparagraph (D) as subparagraph (C).
(b) Partitions.--Section 4233(b) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1413(b)) is amended by
striking paragraph (4), by adding ``and'' at the end of
paragraph (3)(B), and by redesignating paragraph (5) as
paragraph (4).
(c) Conforming Amendment Relating to Status Changes.--
Section 4231(e)(2)(B)(ii) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1411(e)(2)(B)(ii)), as
amended by subsection (a), is further amended by striking
``critical and declining'' and inserting ``declining''.
(d) Effective Dates.--
(1) In general.--The amendments made by subsections (a) and
(b) shall apply to plan mergers and partitions taking effect
after the date of the enactment of this Act.
(2) Conforming amendment.--The amendment made by subsection
(c) shall apply to plan mergers taking effect in plan years
beginning after December 31, 2020.
SEC. 223. RESTORATION NOT REQUIRED FOR CERTAIN MERGERS.
(a) Amendment of Internal Revenue Code of 1986.--Clause
(ii) of section 432(f)(9)(C) of the Internal Revenue Code of
1986, as redesignated by section 211(a) and as in effect
before the amendments made by section 211 other than
subsection (a) thereof, is amended by adding at the end the
following flush language:
``If, during the period of the benefit suspension, the plan
merges with a plan which is in stable or unrestricted status,
nothing in this clause shall be construed to require the plan
formed by the merger to restore the suspension of
benefits.''.
(b) Amendment of ERISA.--Clause (ii) of section
305(f)(9)(C) of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1085(f)(9)(C)), as redesignated by section
212(a) and as in effect before the amendments made by section
212 other than subsection (a) thereof, is amended by adding
at the end the following flush language:
``If, during the period of the benefit suspension, the plan
merges with a plan which is in stable or unrestricted status,
nothing in this clause shall be construed to require the plan
formed by the merger to restore the suspension of
benefits.''.
(c) Effective Date.--The amendments made by subsections (a)
and (b) shall apply to plan mergers taking effect after the
date of the enactment of this Act.
PART III--WITHDRAWAL LIABILITY REFORM
SEC. 231. WITHDRAWAL LIABILITY REFORM.
(a) Withdrawal Liability Definition.--Section 4201(b)(1) of
the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1381(b)(1)) is amended to read as follows:
``(1) Determination of withdrawal liability.--
``(A) In general.--The withdrawal liability of an employer
to a plan is the applicable amount determined under
subparagraph (B), adjusted--
``(i) first, in the case of a partial withdrawal, in
accordance with section 4206;
``(ii) second, by any de minimis reduction applicable under
section 4209; and
``(iii) third, in accordance with section 4225.
``(B) Applicable amount.-- The applicable amount determined
under this subparagraph is the lesser of--
``(i) the amount determined under section 4211 to be the
allocable amount of unfunded vested benefits; or
``(ii) the present value of a series of 20 equal annual
payments in the amount determined with respect to the
employer under section 4219(c)(1)(C).
In the case of an employer withdrawing from a multiemployer
plan described in subparagraph (C), clause (i) shall be
applied by substituting `25' for `20'.
``(C) Plans for which 25 payments required.--
``(i) In general.--A multiemployer plan is described in
this subparagraph if the plan--
``(I) is certified to be in declining status (or, for plan
years prior to 2021, in critical or declining status) for the
plan year in which the employer's withdrawal occurs; or
``(II) terminates as described in section 4041A(a) or 4042.
``(ii) Special rule for terminations.--Clause (i)(II) shall
apply to each employer who withdraws from a plan during a
period of 3 consecutive plan years that includes the
withdrawal of every employer from the plan, or the cessation
of the obligation of all employers to contribute under the
plan, as described in section 4041A(a)(2). For purposes of
this clause, withdrawal by an employer from a plan, during a
period of 3 consecutive plan years within which substantially
all the employers who have an obligation to contribute under
the plan withdraw, shall be presumed to be a withdrawal
pursuant to an agreement or arrangement, unless the employer
proves otherwise by a preponderance of the evidence.
``(D) Present value.--For purposes of subparagraph (B)(ii),
the present value of the annual payments shall be determined
based on the assumptions used for the most recent actuarial
valuation for the plan used to determine unfunded past
service liability for funding purposes.''.
(b) De Minimis Rule.--Section 4209 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1389) is
amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1), by striking
``unfunded vested benefits allocable under section 4211 to''
and inserting ``applicable amount determined under section
4201(b)(1)(B) with respect to'';
(B) in paragraph (2), by striking ``$50,000'' and inserting
``$100,000''; and
(C) in the flush text following paragraph (2)--
(i) by striking ``the unfunded vested benefits'' and
inserting ``such applicable amount''; and
(ii) by striking ``$100,000'' and inserting ``$200,000'';
(2) in subsection (b)--
(A) in the matter preceding paragraph (1), by striking
``amount determined under section 4211'' and inserting
``applicable amount determined under section 4201(b)(1)(B)
with respect to an employer'';
(B) in paragraph (2)(B), by striking ``$100,000'' and
inserting ``$250,000''; and
(C) in the flush text at the end--
(i) by striking ``the amount determined under section 4211
for'' and inserting ``such applicable amount with respect
to''; and
(ii) by striking ``$150,000'' and inserting ``$500,000''.
(c) Payment of Withdrawal Liability.--Section 4219(c)(1) of
the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1399(c)(1)) is amended--
(1) by striking so much of paragraph (1) as precedes
subparagraph (C) and inserting:
``(1)(A)(i) Subject to subparagraph (B), an employer shall
pay its liability determined under section 4201(b)(1) in
level annual payments determined under subparagraph (C) over
the applicable period of years determined under clause (ii),
calculated as if the first payment were made on the first day
of the plan year following the plan year in which the
withdrawal occurs and as if each subsequent payment were made
on the first day of each subsequent plan year. Actual payment
shall commence in accordance with paragraph (2).
``(ii) For purposes of clause (i), if the applicable amount
used under section 4201(b)(1)(A) is the amount determined--
``(I) under section 4201(b)(1)(B)(i), the applicable period
of years is the period of years necessary to amortize such
amount in level annual payments determined under subparagraph
(C), or
``(II) under section 4201(b)(1)(B)(ii), the applicable
period of years is 20 years (25 years if the plan is
described in section 4201(b)(1)(C)).
``(iii) For purposes of clause (ii)(I), the determination
of the amortization period described in clause (i) shall be
based on the assumptions used for the most recent actuarial
valuation for the plan to determine unfunded past service
liability for funding purposes.
``(B)(i) If any adjustment is required to the withdrawal
liability amount by reason of clause (i), (ii), or (iii) of
section 4210(b)(1)(A), modifications shall be made under
subparagraph (A) to reflect such adjustments in accordance
with this subparagraph and in such manner as the corporation
shall provide.
``(ii) In the case of a partial withdrawal described in
section 4205(a), the amount of each annual payment shall be
the product of--
``(I) the amount determined under subparagraph (C)
(determined without regard to this subparagraph), multiplied
by
``(II) the fraction determined under section 4206(a)(2).
``(iii) In the case of a de minimis reduction under section
4209, the period of years described in subparagraph
(A)(ii)(I) shall be adjusted so that the withdrawal liability
amount, as reduced under such section, is amortized in level
annual payments determined under subparagraph (C).''.
(2) in subparagraph (C)--
(A) in clause (i)(I)--
(i) by striking ``3'' and inserting ``5''; and
(ii) by striking ``10'' and inserting ``20''; and
(B) by striking clause (iii);
(3) by striking subparagraphs (D) and(E) and inserting the
following:
``(D)(i) In the case of a subsequent partial withdrawal or
a complete withdrawal that was preceded by one or more
partial withdrawals, the amount of the annual payment with
respect to the subsequent partial withdrawal or complete
withdrawal shall be reduced by the amounts of the payments
determined under subparagraph (B)(ii) with respect to each of
the preceding partial withdrawals.
``(ii) The amount of any reductions described in clause (i)
shall be phased out consistent with the method and period of
time being used by the plan to allocate unfunded vested
benefits under section 4211.
[[Page S7617]]
``(iii) The corporation may prescribe regulations as may be
necessary to provide for proper adjustments in the reduction
in the payment amount under clauses (i) and (ii).''.
(d) Amendment of Plan.--Section 4211(c)(1) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1391(c)(1))
is amended--
(1) by inserting ``(A)'' after ``(c)(1)'',
(2) by striking ``(b) or (d). A plan'' and inserting ``(b)
or (d).
``(B) A multiemployer plan'', and
(3) by striking ``, to the extent provided'' and all that
follows and inserting ``to provide--
``(i) that the amount of the unfunded vested benefits
allocable to an employer that withdraws from the plan is an
amount determined under paragraph (5) of this subsection,
rather than under subsection (b), or
``(ii) to the extent provided in regulations prescribed by
the corporation, that the amount of the unfunded vested
benefits allocable to an employer not described in section
4203(b)(1)(A) shall be determined in a manner different from
that provided in subsection (b).''.
TITLE III--PLAN GOVERNANCE, DISCLOSURE, AND OTHER REFORMS FOR
MULTIEMPLOYER DEFINED BENEFIT PENSION PLANS
Subtitle A--Plan Governance and Operations for Multiemployer Plans
SEC. 301. INDEPENDENT TRUSTEES.
Section 4042 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1342) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1), by striking ``a
plan'' and inserting ``a single-employer or multiemployer
plan'';
(B) in paragraph (3)--
(i) by inserting ``with respect to a single-employer plan''
before the comma; and
(ii) by striking ``or'';
(C) in paragraph (4), by striking the period at the end and
inserting ``, or''; and
(D) by inserting after paragraph (4) the following:
``(5) in the case of a multiemployer plan--
``(A) such plan is an eligible multiemployer plan as
defined in section 4233A which fails to apply for a special
partition under such section, or
``(B) termination of the plan would protect the interests
of participants and beneficiaries.'';
(2) in subsection (b)--
(A) in paragraph (2)--
(i) in subparagraph (A)--
(I) by inserting ``or remove'' after ``appoint'',
(II) by inserting ``or removal'' after ``appointment'', and
(III) by striking ``and'' at the end;
(ii) by striking subparagraph (B) and inserting the
following:
``(B) upon the petition of the corporation, the appropriate
United States district court shall appoint a trustee proposed
by the corporation for--
``(i) any multiemployer plan which is in critical status or
critical and declining status (as defined in paragraph (3) or
(7), respectively, of section 305(b)), if the court finds the
appointment of the trustee would help prevent an abuse of the
multiemployer insurance program or any unreasonable increase
in the liability of the fund, and
``(ii) any multiemployer plan which has terminated under
section 4041A(a), unless a party opposing appointment of a
trustee shows that such appointment would be materially
adverse to the interests of the plan participants and
beneficiaries in the aggregate, and''; and
(iii) by adding at the end the following:
``(C) in the case of a special partition of a plan under
section 4233A, the corporation may remove and appoint
trustees subject to the provisions of paragraph (5).''; and
(B) by adding at the end the following:
``(4)(A) A trustee appointed to a multiemployer plan under
paragraph (2)(B), (2)(C), or (3) shall report plan activity
to the corporation, in the form and manner provided for in
the judicial or administrative order or agreement appointing
the trustee. A trustee so appointed may remain a trustee
engaged in the ongoing governance of a multiemployer plan
whether or not the corporation initiates plan termination
proceedings under subsection (c).
``(B) Notwithstanding plan or trust documents to the
contrary, in addition to any powers described in subsection
(d), the order or agreement appointing a trustee under
paragraph (2)(B), (2)(C), or (3) may include authority for
the corporation to monitor and oversee plan activity and to
review and approve trustee decisions related to funding or
financial activities of the plan.
``(5)(A) The corporation may remove any trustees of an
original plan that received a special partition under section
4233A if the corporation determines that the actions of such
trustees unreasonably increased the risk of loss to
participants in the plan or to the corporation, and may
appoint 1 or more new trustees as replacements.
``(B) The corporation may appoint a special master, which
may be an employee of the corporation, the duties of whom
shall be disclosed to participants and contributing employers
in accordance with regulations to be issued by the
corporation, with respect to each original plan, as defined
in section 4233A. Such special master shall be invited to
every meeting of the plan's board of trustees or any
committees thereof; shall be furnished any requested
actuarial or financial information by the plan or agents
thereof; shall receive all creditable complaints or other
information from participants, beneficiaries, employers, plan
employees and contractors, and any other person regarding the
plan's operations; and shall furnish the corporation with
semiannual reports of the board's activities, the plan's
performance, and the potential liabilities of the corporation
with respect to the plan. The trustees shall provide the
special master with not less than 30 days notice prior to
taking any action that could increase the risk of loss to the
corporation, and the special master shall report such
potential action to the corporation within 5 days of
receiving such notice from the trustees.'';
(3) in subsection (c)(1)--
(A) in the second sentence, by striking ``subsection (b)''
and inserting ``subsection (b)(1)''; and
(B) in the third sentence, by inserting ``, including, in
the case of a multiemployer plan, by requiring the withdrawal
of employers'' before the period; and
(4) in subsection (d)(1)--
(A) in subparagraph (A), by striking ``subsection (b)'' in
the second sentence and inserting ``subsection (b)(1)''; and
(B) in subparagraph (B), by striking ``If'' and inserting
``If a trustee is appointed under paragraph (2) or (3) of
subsection (b), or if''.
SEC. 302. INVESTIGATORY AUTHORITY.
Section 4003(a) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1303(a)) is amended to read as
follows:
``(a)(1) The corporation may, in its discretion,
investigate any facts, conditions, practices, or matters as
the corporation determines necessary or proper to aid in--
``(A) the enforcement of any provision of this title or any
rule or regulation thereunder;
``(B) the prescribing of rules and regulations under this
title; or
``(C) evaluating the corporation's liability or potential
liability with respect to a plan.
``(2) Any information or documentary material submitted to
the corporation pursuant to this section, if clearly
designated by the person making the submission as
confidential (on each page in the case of a document, and in
the file name in the case of a digital file), shall be exempt
from disclosure under section 552 of title 5, United States
Code, and no such information or documentary material may be
made public, except as may be relevant to any administrative
or judicial action or proceeding, including an informal
rulemaking.
``(3) The corporation may require or permit any person to
submit a statement in writing, under oath or otherwise as the
corporation determines, as to all facts and circumstances
concerning the matter to be investigated.
``(4) The corporation shall annually audit a statistically
significant number of plans terminating under section 4041(b)
to determine whether participants and beneficiaries have
received their benefit commitments and whether section
4050(a) has been satisfied. Each audit shall include a
statistically significant number of participants and
beneficiaries.''.
SEC. 303. CONDITIONS ON FINANCIAL ASSISTANCE.
(a) In General.--Section 4261(b) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1431(b)) is amended--
(1) in paragraph (1), by striking the period at the end and
inserting ``, or to prevent an abuse of the multiemployer
insurance program or any unreasonable increase in the
liability of the fund. The corporation shall provide the plan
sponsor written notice of each condition on financial
assistance and a written explanation of its determination. If
the sponsor fails to satisfy timely a condition on financial
assistance, the corporation may withhold financial assistance
until the condition is satisfied.''; and
(2) by adding at the end the following:
``(3) The conditions described in paragraph (1) may include
an offset for the guaranteed benefits of a participant whose
benefit in excess of the benefit guaranteed under this title
is provided by another plan, or in the case of a plan that
has not yet terminated, the cessation of future accruals or a
requirement that contribution amounts or annual withdrawal
liability payment amounts under section 4219 be maintained as
if the employer had withdrawn on the date of insolvency.''.
(b) Conforming Amendment.--Section 4261(a) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1431(a)) is
amended by striking ``section 4245(f) or section 4281(d)''
and inserting ``section 4245(e) or 4281''.
SEC. 304. EXCISE TAX ON EXCESS COMPENSATION OF COVERED
EMPLOYEES OF PARTITIONED MULTIEMPLOYER PLANS.
(a) In General.--Chapter 43 of the Internal Revenue Code of
1986 is amended by adding at the end the following new
section:
``SEC. 4980I. TAX ON EXCESS COMPENSATION OF COVERED EMPLOYEES
OF PARTITIONED MULTIEMPLOYER PLANS.
``(a) Tax Imposed.--In the case of an applicable
multiemployer plan, there is hereby imposed an excise tax for
each plan year in an amount equal to the product of--
``(1) the rate of tax under section 11 for taxable years
beginning in the calendar year in which such plan year
begins, and
``(2) so much of the remuneration paid by the applicable
multiemployer plan for the plan year with respect to
employment of any covered employee as exceeds $500,000.
For purposes of the preceding sentence, remuneration shall be
treated as paid when
[[Page S7618]]
there is no substantial risk of forfeiture (within the
meaning of section 457(f)(3)(B)) of the rights to such
remuneration.
``(b) Liability for Tax.--The applicable multiemployer plan
shall be liable for the tax imposed under subsection (a).
``(c) Definitions and Special Rules.--For purposes of this
section--
``(1) Applicable multiemployer plan.--The term `applicable
multiemployer plan' means any multiemployer plan which is an
original plan (as defined in section 4233A(d)(3) of the
Employee Retirement Income Security Act of 1974) with respect
to a multiemployer plan which was partitioned pursuant to an
order by the Pension Benefit Guaranty Corporation under
section 4233A of such Act.
``(2) Covered employee.--The term `covered employee' means
any employee (including any former employee) of an applicable
multiemployer plan if the employee--
``(A) is one of the 5 highest compensated employees of the
plan for the plan year, or
``(B) was a covered employee of the organization (or any
predecessor) for any preceding plan year beginning after the
date of the enactment of this section.
``(3) Remuneration.--The term `remuneration' means wages
(as defined in section 3401(a)).
``(d) Regulations.--The Secretary shall prescribe such
regulations as may be necessary to prevent avoidance of the
tax under this section, including regulations to prevent
avoidance of such tax through the performance of services
other than as an employee or by providing compensation
through a pass-through or other entity (including a related
entity) to avoid such tax.''.
(b) Conforming Amendment.--The table of sections for
chapter 43 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new item:
``Sec. 4980I. Tax on excess compensation of covered employees of
partitioned multiemployer plans.''.
(c) Effective Date.--The amendments made by this section
shall apply to plan years beginning after the date of
enactment of this Act.
Subtitle B--Reportable Events for Multiemployer Plans
SEC. 311. REPORTABLE EVENTS.
(a) Additional Reportable Events.--
(1) In general.--Section 4043(c) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1343(c)) is amended by
striking ``or'' at the end of paragraph (12), by
redesignating paragraph (13) as paragraph (17), and by
inserting after paragraph (12) the following new paragraphs:
``(13) when the plan sponsor of a multiemployer plan, or
such sponsor's delegate, convenes or otherwise takes action
to adopt any amendment (or accepts any collective bargaining
agreement) that would exclude newly hired employees from
participation in the plan, or any amendment (or agreement)
that would substantially reduce the rate of future benefit
accruals or the contribution rate for any participants under
the plan;
``(14) when--
``(A) the plan sponsor of a multiemployer plan, or such
sponsor's delegate, convenes or otherwise takes action to
adopt; or
``(B) the plan sponsor receives notice under subsection (f)
or otherwise becomes aware that the bargaining parties have
negotiated an agreement to adopt;
a new pension plan, including any plan a trust forming part
of which is a qualified trust under section 401(a) of the
Internal Revenue Code of 1986 and any plan treated as a
welfare plan by reason of section 3(2)(B)(ii), the expected
participants of which are expected to substantially overlap
with the active participants in a preexisting plan;
``(15) when an event pertaining to a multiemployer plan
occurs that is prescribed by the corporation in regulations,
if the event materially jeopardizes the security of
participant benefits or the financial condition of the plan,
or is likely to increase the risk of loss to the corporation;
``(16) when a multiemployer plan has, or will foreseeably
have, only one trustee or no trustees on its board; or''.
(2) Notification by bargaining parties.--Section 4043 of
such Act (29 U.S.C. 1343) is amended by redesignating
subsection (f) as subsection (g), and by inserting after
subsection (e) the following new subsection:
``(f) Notification by Bargaining Parties.--Not later than
60 days prior to the adoption of a new pension plan described
in subsection (c)(14), the bargaining parties shall notify
the plan sponsor of the negotiation of an agreement to adopt
such plan.''.
(3) Conforming amendment.--Section 4043(b)(3) of such Act
(29 U.S.C. 1343(b)(3)) is amended by striking ``(13)'' and
inserting ``(17)''.
(b) Application to Plans.--
(1) In general.--Section 4043(a) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1343(a)) is amended by
inserting ``, plan sponsor (in the case of a multiemployer
plan),'' after ``plan administrator''.
(2) Notification that event is about to occur.--Section
4043(b) of such Act (29 U.S.C. 1343(b)) is amended--
(A) in paragraph (1)--
(i) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii), respectively, and by moving such clauses 2 ems
to the right;
(ii) by striking ``shall be applicable to a contributing
sponsor'' and inserting ``shall be applicable--
``(A) to any plan sponsor of a multiemployer plan; and
``(B) to any contributing sponsor''; and
(iii) in the last sentence, by striking ``subparagraph
(B)'' and inserting ``clause (ii)'';
(B) by striking ``This subsection'' in paragraph (2) and
inserting ``In the case of a single-employer plan, this
subsection'';
(C) by striking ``any contributing sponsor'' in paragraph
(4) and inserting ``any plan sponsor of a multiemployer plan
or any contributing sponsor'';
(D) by redesignating paragraph (4), as so amended, as
paragraph (5); and
(E) by inserting after paragraph (3) the following new
paragraph:
``(4) No later than 60 days prior to an event described in
paragraph (13), (14)(A), (15), or (16) of subsection (c), the
plan sponsor of a multiemployer plan shall notify the
corporation that the event is about to occur.''.
(c) Technical Corrections.--
(1) Section 4045(c)(1) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1345(c)(1)) is amended by
striking ``4043(b)(7)'' and inserting ``4043(c)(7)''.
(2) Section 4065(2) of such Act (29 U.S.C. 1365(2)) is
amended by striking ``4043(b)'' and inserting ``4043(c)''.
(d) Effective Date.--The amendments made by this section
shall apply to reportable events (as defined in section
4043(c) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1343(c))) occurring after the date of the
enactment of this Act.
Subtitle C--Funding Notices to Participants in Multiemployer Plans
SEC. 321. IMPROVED MULTIEMPLOYER PLAN DISCLOSURE.
(a) Plan Funding Notices.--Section 101(f) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1021(f)) is
amended--
(1) in paragraph (2)(B)--
(A) in clause (iv), by striking ``setting forth'' and
inserting ``describing how a person may obtain information
regarding'';
(B) by striking clauses (v) and (vi);
(C) by redesignating clauses (vii) through (xi) as clauses
(v) through (ix), respectively;
(D) in clause (vi), as so redesignated--
(i) by striking ``(I) in the case of'' and inserting ``in
the case of'';
(ii) by striking ``, or'' and inserting a comma; and
(iii) by striking subclause (II); and
(E) by amending clause (vii), as so redesignated, to read
as follows:
``(vii)(I) in the case of a single-employer plan, a general
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, and
``(II) in the case of a multiemployer plan, a statement
that eligible benefits are guaranteed by the Pension Benefit
Guaranty Corporation, and a statement of how to obtain both a
general 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,''; and
(2) in paragraph (4)(C)--
(A) by striking ``(C) may be provided'' and inserting
``(C)(i) subject to clause (ii), may be provided'';
(B) by striking the period and inserting ``; and''; and
(C) by adding at the end the following:
``(ii) in the case of such a notice provided to the Pension
Benefit Guaranty Corporation, shall be in an electronic
format in such manner prescribed in regulations of such
Corporation.''.
(b) Disclosures by Plans Regarding Status.--
(1) Amendments to employee retirement income security act
of 1974.--Section 305(b)(4) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1085(b)(4)), as redesignated
by section 212(a) and as in effect before the amendments made
by section 212 other than subsection (a) thereof, is further
amended--
(A) in the paragraph heading, by striking ``by plan
actuary'' and inserting ``and report'';
(B) by amending subparagraph (A) to read as follows:
``(A) In general.--Not later than the 90th day of each plan
year of a multiemployer plan, the plan sponsor shall file, in
accordance with regulations prescribed by the ERISA agencies,
a report that contains--
``(i) documentation from the plan actuary certifying to the
ERISA agencies and to the plan sponsor--
``(I) whether or not the plan is in unrestricted or stable
status for such plan year, whether or not the plan is in
endangered status for such plan year and whether or not the
plan is or will be in critical status for such plan year or
any of the 5 succeeding plan years,
``(II) in the case of a plan which is in a funding
improvement or rehabilitation period, whether or not the plan
is making the scheduled progress in meeting the requirements
of its funding improvement or rehabilitation plan and, if
not, a summary of the primary reasons the plan is not making
the scheduled progress,
``(III) the funded percentage of the plan determined as of
the first day of the current plan year and the value of
assets and liabilities used to calculate such funded
percentage,
``(IV) a projection of the funding standard account on a
year-by-year basis for the current plan year and the 14
succeeding plan
[[Page S7619]]
years and a statement of the actuarial assumptions for such
projections, and
``(V)(aa) subject to item (bb), a projection of the cash
flow of the plan and actuarial assumptions for the current
plan year and 14 succeeding plan years, and
``(bb) in the case in which it is certified that a
multiemployer plan is or will be in endangered or critical
status for a plan year, the projection of the cash flow of
the plan and actuarial assumptions for the current year and
29 succeeding plan years,
``(ii) as of the last day of the prior plan year, a good
faith determination of--
``(I) the fair market value of the assets of the plan,
``(II) the number of participants who are--
``(aa) retired or separated from service and are receiving
benefits,
``(bb) retired or separated participants entitled to future
benefits, and
``(cc) active participants under the plan,
``(III) the total value of all benefits paid during the
prior plan year,
``(IV) the total value of all contributions and withdrawal
liability payments made to the plan during the prior plan
year, and
``(V) the total value of all investment gains or losses
during the prior plan year,
``(iii) a description of any material changes during the
previous plan year to the rates at which participants accrue
benefits or the rate at which employers contribute,
``(iv) a copy of any funding improvement plan or
rehabilitation plan, and any update thereto or modification
thereof, that was adopted under this section prior to the
filing of the report for the current plan year in accordance
with this subparagraph and, if applicable, after the filing
of the report required by this subparagraph for the prior
plan year,
``(v) in the case of any plan amendment, scheduled benefit
increase or reduction, or other known event taking effect in
the current plan year and having a material effect on plan
liabilities or assets for the year (as defined in regulations
by the ERISA agencies), an explanation of the amendment,
scheduled increase or reduction, or event, and a projection
to the end of such plan year of the effect of the amendment,
scheduled increase or reduction, or event on plan
liabilities,
``(vi) in the case of a multiemployer plan certified to be
in critical status for which the plan sponsor has determined
that, based on reasonable actuarial assumptions and upon
exhaustion of all reasonable measures, the plan cannot
reasonably be expected to emerge from critical status by the
end of the rehabilitation period, a description of all
reasonable measures, whether or not such measures were
implemented, and a summary of the consideration of such
measures,
``(vii) a statement, containing the information available
to the plan sponsor, describing--
``(I) the withdrawal of any employer during the prior plan
year and the percentage of total contributions made by that
employer during the prior plan year,
``(II) any material reduction in total contributions or
withdrawal liability payments of any employers and the reason
for such reduction, and a comparison to contributions
projected previously,
``(III) any material reduction in the number of active plan
participants and the reason for such reduction, and
``(IV) the annual withdrawal liability payment each
withdrawn employer is obligated to pay to the plan for the
plan year, whether that amount was collected by the plan (and
if not, the amount that was collected), and the remaining
years on the employer's obligation to make withdrawal
liability payments, and
``(viii) such other information as may be required by the
ERISA agencies by regulation.'';
(C) by striking subparagraph (C) and inserting the
following:
``(C) Form and manner.--The report required by subparagraph
(A) shall be filed electronically in accordance with
regulations prescribed by the ERISA agencies.''; and
(D) in subparagraph (D)--
(i) by redesignating clauses (ii), (iii), (iv), and (v) as
clauses (iii), (iv), (v), and (vi), respectively;
(ii) by inserting after clause (i) the following:
``(ii) Plans in endangered or critical status.--If it is
certified under subparagraph (A) that a multiemployer plan is
or will be in endangered or critical status, the plan sponsor
shall include in the notice under clause (i)--
``(I) a statement describing how a person may obtain a copy
of the plan's funding improvement or rehabilitation plan, as
appropriate, adopted under this section and the actuarial and
financial data that demonstrate any action taken by the plan
toward fiscal improvement,
``(II) a summary of any funding improvement or
rehabilitation plan, and any update thereto or modification
thereof, adopted under this section prior to the furnishing
of such notice,
``(III) a summary of the rules governing insolvency,
including the limitations on benefit payments, and
``(IV) a general 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.'';
(iii) in clause (v), as so redesignated--
(I) by striking ``The Secretary of the Treasury, in
consultation with the Secretary'' and inserting ``The ERISA
agencies''; and
(II) by striking ``(ii) and (iii)'' and inserting ``(ii),
(iii), and (iv)''; and
(E) by adding at the end the following:
``(E) Designation and coordination.--The ERISA agencies
shall--
``(i) designate one ERISA agency to receive the report
described in subparagraph (A) on behalf of all the ERISA
agencies, which shall each have full access to such report;
and
``(ii) consult with each other and develop rules,
regulations, practices, and forms, which to the extent
appropriate for the efficient administration of the
provisions of this paragraph are designed to replace
duplication of effort, duplication of reporting, conflicting
or overlapping requirements, and the burden of compliance
with such provisions by plan administrators and plan
sponsors.
``(F) ERISA agencies.--In this paragraph, the term `ERISA
agencies' means the Secretary, the Secretary of the Treasury,
and the Pension Benefit Guaranty Corporation.''.
(2) Amendments to 1986 code.--Section 432(b)(4) of the
Internal Revenue Code of 1986, as redesignated by section
211(a) and as in effect before the amendments made by section
211 other than subsection (a) thereof, is further amended--
(A) in the paragraph heading, by striking ``by plan
actuary'' and inserting ``and report'';
(B) by amending subparagraph (A) to read as follows:
``(A) In general.--Not later than the 90th day of each plan
year of a multiemployer plan, the plan sponsor shall file, in
accordance with regulations prescribed by the ERISA agencies,
a report that contains--
``(i) documentation from the plan actuary certifying to the
ERISA agencies and to the plan sponsor--
``(I) whether or not the plan is in unrestricted or stable
status for such plan year, whether or not the plan is in
endangered status for such plan year and whether or not the
plan is or will be in critical status for such plan year or
any of the 5 succeeding plan years,
``(II) in the case of a plan which is in a funding
improvement or rehabilitation period, whether or not the plan
is making the scheduled progress in meeting the requirements
of its funding improvement or rehabilitation plan and, if
not, a summary of the primary reasons the plan is not making
the scheduled progress,
``(III) the funded percentage of the plan determined as of
the first day of the current plan year and the value of
assets and liabilities used to calculate such funded
percentage,
``(IV) a projection of the funding standard account on a
year-by-year basis for the current plan year and the 14
succeeding plan years and a statement of the actuarial
assumptions for such projections, and
``(V)(aa) subject to item (bb), a projection of the cash
flow of the plan and actuarial assumptions for the current
plan year and 14 succeeding plan years, and
``(bb) in the case in which it is certified that a
multiemployer plan is or will be in endangered or critical
status for a plan year, the projection of the cash flow of
the plan and actuarial assumptions for the current year and
29 succeeding plan years,
``(ii) as of the last day of the prior plan year, a good
faith determination of--
``(I) the fair market value of the assets of the plan,
``(II) the number of participants who are--
``(aa) retired or separated from service and are receiving
benefits,
``(bb) retired or separated participants entitled to future
benefits, and
``(cc) active participants under the plan,
``(III) the total value of all benefits paid during the
prior plan year,
``(IV) the total value of all contributions and withdrawal
liability payments made to the plan during the prior plan
year, and
``(V) the total value of all investment gains or losses
during the prior plan year,
``(iii) a description of any material changes during the
previous plan year to the rates at which participants accrue
benefits or the rate at which employers contribute,
``(iv) a copy of any funding improvement plan or
rehabilitation plan, and any update thereto or modification
thereof, that was adopted under this section prior to the
filing of the report for the current plan year in accordance
with this subparagraph and, if applicable, after the filing
of the report required by this subparagraph for the prior
plan year,
``(v) in the case of any plan amendment, scheduled benefit
increase or reduction, or other known event taking effect in
the current plan year and having a material effect on plan
liabilities or assets for the year (as defined in regulations
by the ERISA agencies), an explanation of the amendment,
scheduled increase or reduction, or event, and a projection
to the end of such plan year of the effect of the amendment,
scheduled increase or reduction, or event on plan
liabilities,
``(vi) in the case of a multiemployer plan certified to be
in critical status for which the plan sponsor has determined
that, based on reasonable actuarial assumptions and upon
exhaustion of all reasonable measures, the plan cannot
reasonably be expected to emerge from critical status by the
end of the rehabilitation period, a description of all
[[Page S7620]]
reasonable measures, whether or not such measures were
implemented, and a summary of the consideration of such
measures,
``(vii) a statement, containing the information available
to the plan sponsor, describing--
``(I) the withdrawal of any employer during the prior plan
year and the percentage of total contributions made by that
employer during the prior plan year, and a comparison to
contributions projected previously.
``(II) any material reduction in total contributions or
withdrawal liability payments of any employers and the reason
for such reduction,
``(III) any material reduction in the number of active plan
participants and the reason for such reduction, and
``(IV) the annual withdrawal liability payment each
withdrawn employer is obligated to pay to the plan for the
plan year, whether that amount was collected by the plan (and
if not, the amount that was collected), and the remaining
years on the employer's obligation to make withdrawal
liability payments, and
``(viii) such other information as may be required by the
ERISA agencies by regulation.'';
(C) by striking subparagraph (C) and inserting the
following:
``(C) Form and manner.--The report required by subparagraph
(A) shall be filed electronically in accordance with
regulations prescribed by the ERISA agencies.'';
(D) in subparagraph (D)--
(i) by redesignating clauses (ii), (iii), (iv), and (v) as
clauses (iii), (iv), (v), and (vi), respectively;
(ii) by inserting after clause (i) the following:
``(ii) Plans in endangered or critical status.--If it is
certified under subparagraph (A) that a multiemployer plan is
or will be in endangered or critical status, the plan sponsor
shall include in the notice under clause (i)--
``(I) a statement describing how a person may obtain a copy
of the plan's funding improvement or rehabilitation plan, as
appropriate, adopted under this section and the actuarial and
financial data that demonstrate any action taken by the plan
toward fiscal improvement,
``(II) a summary of any funding improvement or
rehabilitation plan, and any update thereto or modification
thereof, adopted under this section prior to the furnishing
of such notice,
``(III) a summary of the rules governing insolvency,
including the limitations on benefit payments, and
``(IV) a general 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.''; and
(iii) in clause (v), as so redesignated--
(I) by striking ``The Secretary of the Treasury, in
consultation with the Secretary'' and inserting ``The ERISA
agencies''; and
(II) by striking ``(ii) and (iii)'' and inserting ``(ii),
(iii), and (iv)''; and
(E) by adding at the end the following:
``(E) Designation and coordination.--The ERISA agencies
shall--
``(i) designate one ERISA agency to receive the report
described in subparagraph (A) on behalf of all the ERISA
agencies, which shall each have full access to such report;
and
``(ii) consult with each other and develop rules,
regulations, practices, and forms, which to the extent
appropriate for the efficient administration of the
provisions of this paragraph are designed to replace
duplication of effort, duplication of reporting, conflicting
or overlapping requirements, and the burden of compliance
with such provisions by plan administrators and plan
sponsors.
``(F) ERISA agencies.--In this paragraph, the term `ERISA
agencies' means the Secretary, the Secretary of Labor, and
the Pension Benefit Guaranty Corporation.''.
(3) Investigations.--Section 4003 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1303) is
amended by adding at the end the following:
``(g) The corporation may investigate or review any facts,
conditions, practices, or other matters it determines
necessary or proper related to the actuarial certification
and report by multiemployer plans under section 305(b)(4)(A),
or to obtain such information as any duly authorized
committee or subcommittee of the Congress may request with
respect to such plans. Any information or documentary
material submitted to the corporation pursuant to this
section, if clearly designated by the person making the
submission as confidential (on each page in the case of a
document, and in the file name in the case of a digital
file), shall be exempt from disclosure under section 552 of
title 5, United States Code, and no such information or
documentary material may be made public, except as may be
relevant to any administrative or judicial action or
proceeding, including an informal rulemaking.''.
SEC. 322. PENALTIES FOR FAILURE TO PROVIDE NOTICES.
(a) In General.--Section 502(c) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1132) is amended--
(1) in paragraph (7)--
(A) by striking ``(7) The Secretary'' and inserting
``(7)(A) The Secretary''; and
(B) by adding at the end the following:
``(B) The Secretary may assess a civil penalty against a
plan sponsor of up to $110 per day from the date of the plan
administrator's or sponsor's failure or refusal to provide
the relevant notices under section 101(f) or section
305(b)(4)(D) to a recipient other than the Secretary or the
Pension Benefit Guaranty Corporation. For purposes of this
paragraph, each violation with respect to any single
recipient shall be treated as a separate violation.''; and
(2) by adding at the end the following:
``(13)(A) The Secretary may assess a civil penalty against
any plan sponsor of up to $2,140 per day from the date of the
plan sponsor's failure to file with the Secretary or the
Pension Benefit Guaranty Corporation the notice required
under section 305(b)(4)(D) or with the Pension Benefit
Guaranty Corporation the notice required under section
101(f).
``(B) The Secretary may assess a civil penalty against any
plan sponsor of up to $1,100 per day from the date of the
plan sponsor's failure to file with the ERISA agency
designated in accordance with subparagraph (E) of section
305(b)(4) the report under subparagraph (A) of such
section.''.
(b) Conforming Amendment.--Section 502(a)(6) of such Act is
amended by striking ``or (9)'' and inserting ``(9), (10), or
(13)''.
Subtitle D--Consistency of Criminal Penalties
SEC. 331. CONSISTENCY OF CRIMINAL PENALTIES.
Part I of title 18, United States Code, is amended--
(1) in section 664, in the first undesignated paragraph, by
striking ``five years'' and inserting ``10 years'';
(2) in section 1027, by striking ``five years'' and
inserting``10 years''; and
(3) in section 1954, in the undesignated matter following
paragraph (4), by striking ``three years'' and inserting ``10
years''.
TITLE IV--OTHER MULTIEMPLOYER PLAN REFORMS
SEC. 401. CLARIFICATION OF FIDUCIARY DUTY OF RETIREE
REPRESENTATIVE WHO IS A TRUSTEE.
(a) Amendment of Internal Revenue Code of 1986.--Subclause
(III) of section 432(f)(9)(B)(v) of the Internal Revenue Code
of 1986, as redesignated by section 211(a) and as in effect
before the amendments made by section 211 other than
subsection (a) thereof, is amended by striking the period and
inserting ``, or to any other duties performed by such person
pursuant to such person's role as a plan trustee.''.
(b) Amendment of Employee Retirement Income Security Act of
1974.--Subclause (III) of section 305(f)(9)(B)(v) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1085(f)(9)(B)(v)), as redesignated by section 212(a) and as
in effect before the amendments made by section 212 other
than subsection (a) thereof, is amended by striking the
period and inserting ``, or to any other duties performed by
such person pursuant to such person's role as a plan
trustee.''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
SEC. 402. SAFE HARBORS.
(a) Amendments to Internal Revenue Code of 1986.--
(1) Equitable distribution of benefit suspensions.--Clause
(vi) of section 432(f)(9)(D) of the Internal Revenue Code of
1986, as redesignated by section 211(a) and as in effect
before the amendments made by section 211 other than
subsection (a) thereof, is amended by adding at the end the
following flush language:
``For purposes of the preceding sentence, a suspension of
benefits in the form of a flat percentage reduction in
benefits which is applied in the same manner to all
participants and beneficiaries (before application of clauses
(ii) and (iii)) shall be treated as being equitably
distributed across the participant and beneficiary
population.''.
(2) Application assumptions.--Clause (v) of section
432(f)(9)(G) of such Code, as so redesignated and in effect,
is amended--
(A) by striking ``Standard for accepting'' in the heading
and inserting ``Standards for assumptions and accepting'',
and
(B) by striking ``In evaluating'' and inserting ``The
Secretary, in consultation with the Pension Benefit Guaranty
Corporation and the Secretary of Labor, shall promulgate
regulations regarding the actuarial assumptions that plans
may use for purposes of the application under this
subparagraph. Such regulations shall create safe harbors
regarding assumptions for future rate of investment returns,
future industry activity and contribution base units,
mortality, and other assumptions as determined by the
Secretary, and shall describe the situations in which
actuarial assumptions may change during review of an
application without the withdrawal and resubmission of the
application. In evaluating''.
(b) Amendments to Employee Retirement Income Security Act
of 1974.--
(1) Equitable distribution of benefit suspensions.--Clause
(vi) of section 305(f)(9)(D) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1085(f)(9)(D)), as
redesignated by section 212(a) and as in effect before the
amendments made by section 212 other than subsection (a)
thereof, is amended by adding at the end the following flush
language:
``For purposes of the preceding sentence, a suspension of
benefits in the form of a flat percentage reduction in
benefits which is applied in the same manner to all
participants and beneficiaries (before application of
[[Page S7621]]
clauses (ii) and (iii)) shall be treated as being equitably
distributed across the participant and beneficiary
population.''.
(2) Application assumptions.--Clause (v) of section
305(f)(9)(G) of such Act (29 U.S.C. 1085(f)(9)(G)), as so
redesignated and in effect, is amended--
(A) by striking ``Standard for accepting'' in the heading
and inserting ``Standards for assumptions and accepting'',
and
(B) by striking ``In evaluating'' and inserting ``The
Secretary of the Treasury, in consultation with the Pension
Benefit Guaranty Corporation and the Secretary of Labor,
shall promulgate regulations regarding the actuarial
assumptions that plans may use for purposes of the
application under this subparagraph. Such regulations shall
create safe harbors regarding assumptions for future rate of
investment returns, future industry activity and contribution
base units, mortality, and other assumptions as determined by
the Secretary, and shall describe the situations in which
actuarial assumptions may change during review of an
application without the withdrawal and resubmission of the
application. In evaluating''.
(c) Effective Dates.--
(1) In general.--The amendments made by subsections (a)(1)
and (b)(1) shall apply to suspensions of benefits taking
effect after the date of the enactment of this Act.
(2) Applications.--The amendments made by subsections
(a)(2) and (b)(2) shall apply to applications submitted after
the date of the enactment of this Act.
SEC. 403. CLARIFICATION OF NOTICE AND COMMENT PROCESS.
(a) Amendments to Internal Revenue Code of 1986.--
(1) Notice to participants.--Subparagraph (F) of section
432(f)(9) of the Internal Revenue Code of 1986, as
redesignated by section 211(a) and as in effect before the
amendments made by section 211 other than subsection (a)
thereof, is amended by adding at the end the following new
clause:
``(vi) De minimis changes.--Notice under clause (i) is not
required in the case of a change to a notice previously
issued, and an application previously submitted under
subparagraph (G), if such change would have a de minimis
effect on the suspension of benefits proposed, such as a
change of 5 percent or less (whether increase or decrease) of
a participant's post-suspension benefits.''.
(2) Solicitation of comments.--
(A) De minimis changes.--Clause (ii) of section
432(f)(9)(G) of such Code, as so redesignated and in effect,
is amended by adding at the end the following: ``The
preceding sentences shall not apply in the case of a
resubmission of an application previously submitted if such
change would have a de minimis effect on the suspension of
benefits proposed.''.
(B) Extension of period for correction of defect.--Clause
(iii) of section 432(f)(9)(G) of such Code, as so
redesignated and in effect, is amended by inserting after the
second sentence the following: ``If the only failure with
respect to an application is a failure to provide adequate
notice to participants under subparagraph (F), the Secretary
may extend the 225-day deadline for consideration of the
application by notice to the plan sponsor.''.
(b) Amendments to Employee Retirement Income Security Act
of 1974.--
(1) Notice to participants.--Subparagraph (F) of section
305(f)(9) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1085(f)(9)), as redesignated by section
212(a) and as in effect before the amendments made by section
212 other than subsection (a) thereof, is amended by adding
at the end the following new clause:
``(vi) De minimis changes.--Notice under clause (i) is not
required in the case of a change to a notice previously
issued, and an application previously submitted under
subparagraph (G), if such change would have a de minimis
effect on the suspension of benefits proposed, such as a
change of 5 percent or less (whether increase or decrease) of
a participant's post-suspension benefits.''.
(2) Solicitation of comments.--
(A) De minimis changes.--Clause (ii) of section
305(f)(9)(G) of such Act (29 U.S.C. 1085(f)(9)(G)), as so
redesignated and in effect, is amended by adding at the end
the following: ``The preceding sentences shall not apply in
the case of a resubmission of an application previously
submitted if such change would have a de minimis effect on
the suspension of benefits proposed.''.
(B) Extension of period for correction of defect.--Clause
(iii) of section 305(f)(9)(G) of such Act (29 U.S.C.
1085(f)(9)(G)), as so redesignated and in effect, is amended
by inserting after the second sentence the following: ``If
the only failure with respect to an application is a failure
to provide adequate notice to participants under subparagraph
(F), the Secretary may extend the 225-day deadline for
consideration of the application by notice to the plan
sponsor.''.
(c) Effective Date.--The amendments made by this section
shall apply to applications, or changes to applications,
submitted after the date of the enactment of this Act.
SEC. 404. PROTECTION OF PARTICIPANTS RECEIVING DISABILITY
BENEFITS.
(a) Amendment to Internal Revenue Code of 1986.--Clause
(iii) of section 432(f)(9)(D) of the Internal Revenue Code of
1986, as redesignated by section 211(a) and as in effect
before the amendments made by section 211 other than
subsection (a) thereof, is amended to read as follows:
``(iii) No benefits based on disability (as defined under
the plan) may be suspended under this paragraph if the
participant or beneficiary is disabled (as so defined) or
receiving disability benefits under the plan as of the date
of the suspension of benefits. No benefits under the plan may
be suspended under this paragraph of any participant or
beneficiary who is entitled to a benefit under title II of
the Social Security Act on the basis of a disability (as
defined in section 223(d)(2) of such Act) as of such date.''.
(b) Amendment to Employee Retirement Income Security Act of
1974.--Clause (iii) of section 305(f)(9)(D) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1085(f)(9)(D)), as redesignated by section 212(a) and as in
effect before the amendments made by section 212 other than
subsection (a) thereof, is amended to read as follows:
``(iii) No benefits based on disability (as defined under
the plan) may be suspended under this paragraph if the
participant or beneficiary is disabled (as so defined) or
receiving disability benefits under the plan as of the date
of the suspension of benefits. No benefits under the plan may
be suspended under this paragraph of any participant or
beneficiary who is entitled to a benefit under title II of
the Social Security Act on the basis of a disability (as
defined in section 223(d)(2) of such Act) as of such date.''.
(c) Effective Date.--The amendments made by this section
shall apply to suspensions of benefits taking effect after
the date of the enactment of this Act.
SEC. 405. MODEL NOTICE.
Not later than 1 year after the date of the enactment of
this Act, the Secretary of the Treasury, in consultation with
the Secretary of Labor and the Pension Benefit Guaranty
Corporation, shall develop a 1-page, plain-language, cover-
page format for the model notice under section
432(e)(9)(F)(v) of the Internal Revenue Code of 1986 (as in
effect on the day before the date of the enactment of this
Act) and section 305(e)(9)(F)(v) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1085(e)(9)(F)(v)), as
so in effect.
TITLE V--ALTERNATIVE PLAN STRUCTURES
SEC. 501. COMPOSITE PLANS.
(a) Amendment to the Employee Retirement Income Security
Act of 1974.--
(1) In general.--Title I of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1001 et seq.) is amended by
adding at the end the following:
``PART 8--COMPOSITE PLANS AND LEGACY PLANS
``SEC. 801. COMPOSITE PLAN DEFINED.
``(a) In General.--For purposes of this Act, the term
`composite plan' means a pension plan--
``(1) which is a multiemployer plan that is neither a
defined benefit plan nor a defined contribution plan;
``(2) the terms of which provide that the plan is a
composite plan for purposes of this title with respect to
which not more than one multiemployer defined benefit plan is
treated as a legacy plan within the meaning of section 805,
unless there is more than one legacy plan following a merger
of composite plans under section 806;
``(3) which provides systematically for the payment of
benefits--
``(A) objectively calculated pursuant to a nondiscretionary
formula specified in the plan document with respect to plan
participants for life; and
``(B) in the form of life annuities, except for benefits
which under section 203(e) may be immediately distributed
without the consent of the participant;
``(4) for which the anticipated employer contributions to
the plan for the first plan year are at least 120 percent of
the normal cost for the plan year;
``(5) which requires--
``(A) an annual valuation of the liability of the plan as
of a date within the plan year to which the valuation refers
or within one month prior to the beginning of such year;
``(B) an annual actuarial determination of the plan's
current funded ratio and projected funded ratio under section
802(a);
``(C) corrective action through a realignment program
pursuant to section 803 whenever the plan's projected funded
ratio is below 120 percent for the plan year; and
``(D) an annual notification to each participant describing
benefits under the plan and explaining that such benefits may
be subject to reduction under a realignment program pursuant
to section 803 based on the plan's funded status in future
plan years; and
``(6) the board of trustees of which includes at least one
retiree or beneficiary in pay status during each plan year
following the first plan year in which at least 5 percent of
the participants in the plan are retirees or beneficiaries in
pay status.
``(b) Transition From a Multiemployer Defined Benefit
Plan.--
``(1) In general.--The plan sponsor of a defined benefit
plan that is a multiemployer plan may, subject to paragraph
(2), amend the plan to incorporate the features of a
composite plan as a component of the multiemployer plan
separate from the defined benefit plan component, except in
the case of a defined benefit plan for which the plan actuary
has certified under section 305(b)(4) that the plan is or
will be in endangered or critical status for the plan year in
which such amendment would become effective or in endangered
or critical status for any of the succeeding 5 plan years.
[[Page S7622]]
``(2) Requirements.--Any amendment pursuant to paragraph
(1) to incorporate the features of a composite plan as a
component of a multiemployer plan shall--
``(A) apply with respect to all collective bargaining
agreements providing for contributions to the multiemployer
plan on or after the effective date of the amendment;
``(B) apply with respect to all participants in the
multiemployer plan for whom contributions are made to the
multiemployer plan on or after the effective date of the
amendment;
``(C) specify that the effective date of the amendment is--
``(i) the first day of a specified plan year following the
date of the adoption of the amendment, except that the plan
sponsor may alternatively provide for a separate effective
date with respect to each collective bargaining agreement
under which contributions to the multiemployer plan are
required, which shall occur on the first day of the first
plan year beginning after the termination, or if earlier, the
re-opening, of each such agreement, or such earlier date as
the parties to the agreement and the plan sponsor of the
multiemployer plan shall agree to; and
``(ii) not later than the first day of the fifth plan year
beginning on or after the date of the adoption of the
amendment;
``(D) specify that, as of the amendment's effective date,
no further benefits shall accrue under the defined benefit
component of the multiemployer plan; and
``(E) specify that, as of the amendment's effective date,
the plan sponsor of the multiemployer plan shall be the plan
sponsor of both the composite plan component and the defined
benefit plan component of the plan.
``(3) Special rules.--If a multiemployer plan is amended
pursuant to paragraph (1)--
``(A) the requirements of this title and title IV shall be
applied to the composite plan component and the defined
benefit plan component of the multiemployer plan as if each
such component were maintained as a separate plan; and
``(B) the assets of the composite plan component and the
defined benefit plan component of the plan shall be held in a
single trust forming part of the plan under which the trust
instrument expressly provides--
``(i) for separate accounts (and appropriate records) to be
maintained to reflect the interest which each of the plan
components has in the trust, including separate accounting
for additions to the trust for the benefit of each plan
component, disbursements made from each plan component's
account in the trust, investment experience of the trust
allocable to that account, and administrative expenses
(whether direct expenses or shared expenses allocated
proportionally), and permits, but does not require, the
pooling of some or all of the assets of the two plan
components for investment purposes, subject to the judgment
of the plan fiduciaries; and
``(ii) that the assets of each of the two plan components
shall be held, invested, reinvested, managed, administered
and distributed for the exclusive benefit of the participants
and beneficiaries of each such plan component, and in no
event shall the assets of one of the plan components be
available to pay benefits due under the other plan component.
``(4) Not a termination event.--Notwithstanding section
4041A, an amendment pursuant to paragraph (1) to incorporate
the features of a composite plan as a component of a
multiemployer plan does not constitute termination of the
multiemployer plan.
``(5) Notice to the secretary.--
``(A) Notice.--The plan sponsor of a composite plan shall
provide notice to the Secretary of the intent to establish
the composite plan (or, in the case of a composite plan
incorporated as a component of a multiemployer plan as
described in paragraph (1), the intent to amend the
multiemployer plan to incorporate such composite plan) at
least 30 days prior to the effective date of such
establishment or amendment.
``(B) Certification.--In the case of a composite plan
incorporated as a component of a multiemployer plan as
described in paragraph (1), such notice shall include a
certification by the plan actuary under section 305(b)(4)
that the effective date of the amendment occurs in a plan
year for which the multiemployer plan is not in endangered or
critical status for that plan year and any of the succeeding
5 plan years.
``(6) References to composite plan component.--As used in
this part, the term `composite plan' includes a composite
plan component added to a defined benefit plan pursuant to
paragraph (1).
``(7) Rule of construction.--Paragraph (2)(A) shall not be
construed as preventing the plan sponsor of a multiemployer
plan from adopting an amendment pursuant to paragraph (1)
because some collective bargaining agreements are amended to
cease any covered employer's obligation to contribute to the
multiemployer plan before or after the plan amendment is
effective. Paragraph (2)(B) shall not be construed as
preventing the plan sponsor of a multiemployer plan from
adopting an amendment pursuant to paragraph (1) because some
participants cease to have contributions made to the
multiemployer plan on their behalf before or after the plan
amendment is effective.
``(c) Coordination With Funding Rules.--Except as otherwise
provided in this part, sections 302, 304, and 305 shall not
apply to a composite plan.
``(d) Treatment of a Composite Plan.--For purposes of this
Act (other than sections 302 and 4245), a composite plan
shall be treated as if it were a defined benefit plan unless
a different treatment is provided for under applicable law.
``SEC. 802. FUNDED RATIOS; ACTUARIAL ASSUMPTIONS.
``(a) Certification of Funded Ratios.--
``(1) In general.--Not later than the one-hundred twentieth
day of each plan year of a composite plan, the plan actuary
of the composite plan shall certify to the Secretary, the
Secretary of the Treasury, and the plan sponsor the plan's
current funded ratio and projected funded ratio for the plan
year.
``(2) Determination of current funded ratio and projected
funded ratio.--For purposes of this section:
``(A) Current funded ratio.--The current funded ratio is
the ratio (expressed as a percentage) of--
``(i) the value of the plan's assets as of the first day of
the plan year; to
``(ii) the plan actuary's calculation of the present value
of the plan liabilities as of the first day of the plan year.
``(B) Projected funded ratio.--The projected funded ratio
is the funded ratio determined under subparagraph (A),
projected as of the first day of the fifteenth plan year
following the plan year for which the determination is being
made.
``(3) Consideration of contribution rate increases.--For
purposes of projections under this subsection, the plan
actuary may anticipate contribution rate increases beyond the
term of the current collective bargaining agreement and any
agreed-to supplements, if reasonable, not to exceed 2.5
percent per year, compounded annually.
``(b) Actuarial Assumptions and Methods.--For purposes of
this part:
``(1) In general.--All costs, liabilities, rates of
interest, and other factors under the plan shall be
determined for a plan year on the basis of actuarial
assumptions and methods--
``(A) each of which is reasonable (taking into account the
experience of the plan and reasonable expectations);
``(B) which, in combination, offer the actuary's best
estimate of anticipated experience under the plan; and
``(C) with respect to which any change from the actuarial
assumptions and methods used in the previous plan year shall
be certified by the plan actuary and the actuarial rationale
for such change provided in the annual report required by
section 103.
``(2) Fair market value of assets.--The value of the plan's
assets shall be taken into account on the basis of their fair
market value.
``(3) Determination of normal cost and plan liabilities.--A
plan's normal cost and liabilities shall be based--
``(A) on the most recent actuarial valuation required under
section 801(a)(5)(A) and the unit credit funding method; and
``(B) on rates of interest subject to section 304(b)(6).
``(4) Time when certain contributions deemed made.--Any
contributions for a plan year made by an employer after the
last day of such plan year, but not later than 2\1/2\ months
after such day, shall be deemed to have been made on such
last day. For purposes of this paragraph, such 2\1/2\-month
period may be extended to a total of not more than 120 days
under regulations prescribed by the Secretary of the
Treasury.
``(5) Additional actuarial assumptions.--Except where
otherwise provided in this part, the provisions of section
305(b)(4)(B) shall apply to any determination or projection
under this part.
``SEC. 803. REALIGNMENT PROGRAM.
``(a) Realignment Program.--
``(1) Adoption.--In any case in which the plan actuary
certifies under section 802(a) that the plan's projected
funded ratio is below 120 percent for the plan year, the plan
sponsor shall adopt a realignment program under paragraph (2)
not later than 210 days after the due date of the
certification required under such section 802(a). The plan
sponsor shall adopt an updated realignment program for each
succeeding plan year for which a certification described in
the preceding sentence is made.
``(2) Content of realignment program.--
``(A) In general.--A realignment program adopted under this
paragraph is a written program which consists of reasonable
measures, including options or a range of options to be
undertaken by the plan sponsor or proposed to the bargaining
parties, formulated, based on reasonably anticipated
experience and reasonable actuarial assumptions, to enable
the plan to achieve a projected funded ratio of at least 120
percent for the following plan year.
``(B) Initial program elements.--Reasonable measures under
a realignment program described in subparagraph (A) may
include any of the following:
``(i) Proposed contribution increases.
``(ii) A reduction in the rate of future benefit accruals,
so long as the resulting rate is not less than 1 percent of
the contributions on which benefits are based as of the start
of the plan year (or the equivalent standard accrual rate as
described in section 305(f)(6)).
``(iii) A modification or elimination of adjustable
benefits of participants that are not in pay status before
the date of the notice required under subsection (b)(1).
``(iv) Any other lawfully available measures not
specifically described in this subparagraph or subparagraph
(C) or (D) that the plan sponsor determines are reasonable.
[[Page S7623]]
``(C) Additional program elements.--If the plan sponsor has
determined that all reasonable measures available under
subparagraph (B) will not enable the plan to achieve a
projected funded ratio of at least 120 percent for the
following plan year, the realignment program may also
include--
``(i) a reduction of accrued benefits that are not in pay
status by the date of the notice required under subsection
(b)(1); or
``(ii) a reduction of any benefits of participants that are
in pay status before the date of the notice required under
subsection (b)(1) other than core benefits as defined in
paragraph (4).
``(D) Additional elements.--In the case of a composite plan
for which the plan sponsor has determined that all reasonable
measures available under subparagraphs (B) and (C) will not
enable the plan to achieve a projected funded ratio of at
least 120 percent for the following plan year, the
realignment program may also include--
``(i) a further reduction in the rate of future benefit
accruals without regard to the limitation applicable under
subparagraph (B)(ii); or
``(ii) a reduction of core benefits;
provided that such reductions shall be equitably distributed
across the participant and beneficiary population, taking
into account factors, with respect to participants and
beneficiaries and their benefits, that may include one or
more of the factors listed in subclauses (I) through (X) of
section 305(f)(9)(D)(vi), to the extent necessary to enable
the plan to achieve a projected funded ratio of at least 120
percent for the following plan year.
``(3) Adjustable benefit defined.--For purposes of this
part, the term `adjustable benefit' means--
``(A) benefits, rights, and features under the plan,
including post-retirement death benefits, disability benefits
not yet in pay status, and similar benefits,
``(B) any early retirement benefit or retirement-type
subsidy (within the meaning of section 204(g)(2)(A))
(including early reduction factors which are not provided on
an actuarially equivalent basis) and any benefit payment
option (other than the qualified joint and survivor annuity),
``(C) benefit increases which were adopted (or, if later,
took effect) less than 120 months before the first day of the
first plan year in which such realignment program took
effect,
``(D) any one-time bonus payment or `thirteenth check'
provision, and
``(E) benefits granted for period of service prior to
participation in the plan.
``(4) Core benefit defined.--For purposes of this part, the
term `core benefit' means a participant's accrued benefit
payable in the normal form of an annuity commencing at normal
retirement age, determined without regard to--
``(A) any early retirement benefits, retirement-type
subsidies, or other benefits, rights, or features that may be
associated with that benefit; and
``(B) any cost-of-living adjustments or benefit increases
effective after the date of retirement.
``(5) Coordination with contribution increases.--
``(A) In general.--A realignment program may provide that
some or all of the benefit modifications described in the
program will only take effect if the bargaining parties fail
to agree to specified levels of increases in contributions to
the plan, effective as of specified dates.
``(B) Independent benefit modifications.--If a realignment
program adopts any changes to the benefit formula that are
independent of potential contribution increases, such changes
shall take effect not later than 180 days after the first day
of the first plan year that begins following the adoption of
the realignment program.
``(C) Conditional benefit modifications.--If a realignment
program adopts any changes to the benefit formula that take
effect only if the bargaining parties fail to agree to
contribution increases, such changes shall take effect not
later than the first day of the first plan year beginning
after the third anniversary of the date of adoption of the
realignment program.
``(D) Revocation of certain benefit modifications.--Benefit
modifications described in subparagraph (C) may be revoked,
in whole or in part, and retroactively or prospectively, when
contributions to the plan are increased, as specified in the
realignment program, including any amendments thereto. The
preceding sentence shall not apply unless the contribution
increases are to be effective not later than the fifth
anniversary of the first day of the first plan year that
begins after the adoption of the realignment program.
``(b) Notice.--
``(1) In general.--In any case in which it is certified
under section 802(a) that the projected funded ratio is less
than 120 percent, the plan sponsor shall, not later than 30
days after the date of the certification, provide
notification of the current and projected funded ratios to
the participants and beneficiaries, the bargaining parties,
the Secretary of the Treasury, and the Secretary. Such notice
shall include--
``(A) an explanation that contribution rate increases or
benefit reductions may be necessary;
``(B) a description of the types of benefits that might be
reduced; and
``(C) an estimate of the contribution increases and benefit
reductions that may be necessary to achieve a projected
funded ratio of 120 percent.
``(2) Notice of benefit modifications.--
``(A) In general.--No modifications may be made that reduce
the rate of future benefit accrual or that reduce core
benefits or adjustable benefits unless notice of such
reduction has been given at least 180 days before the general
effective date of such reduction for all participants and
beneficiaries to--
``(i) plan participants and beneficiaries;
``(ii) each employer who has an obligation to contribute to
the composite plan; and
``(iii) each employee organization which, for purposes of
collective bargaining, represents plan participants employed
by such employers.
``(B) Content of notice.--The notice under subparagraph (A)
shall contain--
``(i) sufficient information to enable participants and
beneficiaries to understand the effect of any reduction on
their benefits, including an illustration of any affected
benefit or subsidy, on an annual or monthly basis that a
participant or beneficiary would otherwise have been eligible
for as of the general effective date described in
subparagraph (A); and
``(ii) information as to the rights and remedies of plan
participants and beneficiaries as well as how to contact the
Department of the Treasury for further information and
assistance, where appropriate.
``(C) Form and manner.--Any notice under subparagraph (A)--
``(i) shall be provided in a form and manner prescribed in
regulations of the Secretary of the Treasury;
``(ii) shall be written in a manner so as to be understood
by the average plan participant.
``(3) Model notices.--The Secretary of the Treasury shall--
``(A) prescribe model notices that the plan sponsor of a
composite plan may use to satisfy the notice requirements
under this subsection; and
``(B) by regulation enumerate any details related to the
elements listed in paragraph (1) that any notice under this
subsection must include.
``(4) Delivery method.--Any notice under this part shall be
provided in writing and may be provided in electronic form to
the extent that the form is reasonably accessible to persons
to whom the notice is provided.
``SEC. 804. LIMITATION ON INCREASING BENEFITS.
``(a) Level of Current Funded Ratios.--Except as provided
in subsections (c), (d), and (e), no plan amendment
increasing benefits or establishing new benefits under a
composite plan may be adopted for a plan year unless--
``(1) the plan's current funded ratio is at least 110
percent (without regard to the benefit increase or new
benefits);
``(2) taking the benefit increase or new benefits into
account, the current funded ratio is at least 100 percent and
the projected funded ratio for the current plan year is at
least 120 percent;
``(3) in any case in which, after taking the benefit
increase or new benefits into account, the current funded
ratio is less than 140 percent and the projected funded ratio
is less than 140 percent, the benefit increase or new
benefits are projected by the plan actuary to increase the
present value of the plan's liabilities for the plan year by
not more than 3 percent; and
``(4) expected contributions for the current plan year are
at least 120 percent of normal cost for the plan year,
determined using the unit credit funding method and treating
the benefit increase or new benefits as in effect for the
entire plan year.
``(b) Additional Requirements Where Core Benefits
Reduced.--If a plan has been amended to reduce core benefits
pursuant to a realignment program under section 803(a)(2)(D),
such plan may not be subsequently amended to increase core
benefits unless the amendment--
``(1) increases the level of future benefit payments only;
and
``(2) provides for an equitable distribution of benefit
increases across the participant and beneficiary population,
taking into account the extent to which the benefits of
participants were previously reduced pursuant to such
realignment program.
``(c) Exception To Comply With Applicable Law.--Subsection
(a) shall not apply in connection with a plan amendment if
the amendment is required as a condition of qualification
under part I of subchapter D of chapter 1 of the Internal
Revenue Code of 1986 or to comply with other applicable law.
``(d) Exception Where Maximum Deductible Limit Applies.--
Subsection (a) shall not apply in connection with a plan
amendment if and to the extent that contributions to the
composite plan would not be deductible for the plan year
under section 404(a)(1)(E) of the Internal Revenue Code of
1986 if the plan amendment is not adopted.
``(e) Exception for Certain Benefit Modifications.--
Subsection (a) shall not apply in connection with a plan
amendment under section 803(a)(5)(C), regarding conditional
benefit modifications.
``(f) Treatment of Plan Amendments.--For purposes of this
section--
``(1) if two or more plan amendments increasing benefits or
establishing new benefits are adopted in a plan year, such
amendments shall be treated as a single amendment adopted on
the last day of the plan year;
``(2) all benefit increases and new benefits adopted in a
single amendment are treated
[[Page S7624]]
as a single benefit increase, irrespective of whether the
increases and new benefits take effect in more than one plan
year; and
``(3) increases in contributions or decreases in plan
liabilities which are scheduled to take effect in future plan
years may be taken into account in connection with a plan
amendment if they have been agreed to in writing or otherwise
formalized by the date the plan amendment is adopted.
``SEC. 805. COMPOSITE PLAN RESTRICTIONS TO PRESERVE LEGACY
PLAN FUNDING.
``(a) Treatment as a Legacy Plan.--
``(1) In general.--For purposes of this part and parts 2
and 3, a defined benefit plan shall be treated as a legacy
plan with respect to the composite plan under which employees
who were eligible to accrue a benefit under the defined
benefit plan become eligible to accrue a benefit under such
composite plan.
``(2) Component plans.--In any case in which a defined
benefit plan is amended to add a composite plan component
pursuant to section 801(b), paragraph (1) shall be applied by
substituting `defined benefit component' for `defined benefit
plan' and `composite plan component' for `composite plan'.
``(3) Eligible to accrue a benefit.--For purposes of
paragraph (1), an employee is considered eligible to accrue a
benefit under a composite plan as of the first day in which
the employee completes an hour of service under a collective
bargaining agreement that provides for contributions to and
accruals under the composite plan in lieu of accruals under
the defined benefit plan.
``(4) Collective bargaining agreement.--As used in this
part, the term `collective bargaining agreement' includes any
agreement under which an employer has an obligation to
contribute to a plan.
``(5) Other terms.--Any term used in this part which is not
defined in this part and which is also used in section 305
shall have the same meaning provided such term in such
section.
``(b) Restrictions on Acceptance by Composite Plan of
Agreements and Contributions.--
``(1) In general.--The plan sponsor of a composite plan
shall not accept or recognize a collective bargaining
agreement (or any modification to such agreement), and no
contributions may be accepted and no benefits may be accrued
or otherwise earned under the agreement--
``(A) in any case in which the plan actuary of any defined
benefit plan that would be treated as a legacy plan with
respect to such composite plan has certified under section
305(b)(4) that such defined benefit plan is or will be in
endangered or critical status for the plan year in which such
agreement would take effect or for any of the succeeding 5
plan years; and
``(B) unless the agreement requires each employer who is a
party to such agreement, including employers whose employees
are not participants in the legacy plan, to provide
contributions to the legacy plan with respect to such
composite plan in a manner that satisfies the transition
contribution requirements of subsection (d).
``(2) Notice.--Not later than 30 days after a determination
by a plan sponsor of a composite plan that an agreement fails
to satisfy the requirements described in paragraph (1), the
plan sponsor shall provide notification of such failure and
the reasons for such determination--
``(A) to the parties to the agreement;
``(B) to active participants of the composite plan who have
ceased to accrue or otherwise earn benefits with respect to
service with an employer pursuant to paragraph (1); and
``(C) to the Secretary, the Secretary of the Treasury, and
the Pension Benefit Guaranty Corporation.
``(3) Limitation on retroactive effect.--This subsection
shall not apply to benefits accrued before the date on which
notice is provided under paragraph (2).
``(c) Restriction on Accrual of Benefits Under a Composite
Plan.--
``(1) In general.--In any case in which an employer, under
a collective bargaining agreement entered into after the date
of enactment of this part, ceases to have an obligation to
contribute to a multiemployer defined benefit plan, no
employees employed by the employer may accrue or otherwise
earn benefits under any composite plan, with respect to
service with that employer, for a 60-month period beginning
on the date on which the employer entered into such
collective bargaining agreement.
``(2) Notice of cessation of obligation.--Within 30 days of
determining that an employer has ceased to have an obligation
to contribute to a legacy plan with respect to employees
employed by an employer that is or will be contributing to a
composite plan with respect to service of such employees, the
plan sponsor of the legacy plan shall notify the plan sponsor
of the composite plan of that cessation.
``(3) Notice of cessation of accruals.--Not later than 30
days after determining that an employer has ceased to have an
obligation to contribute to a legacy plan, the plan sponsor
of the composite plan shall notify the bargaining parties,
the active participants affected by the cessation of
accruals, the Secretary, the Secretary of the Treasury, and
the Pension Benefit Guaranty Corporation of the cessation of
accruals, the period during which such cessation is in
effect, and the reasons therefor.
``(4) Limitation on retroactive effect.--This subsection
shall not apply to benefits accrued before the date on which
notice is provided under paragraph (3).
``(d) Transition Contribution Requirements.--
``(1) In general.--A collective bargaining agreement
satisfies the transition contribution requirements of this
subsection if the agreement--
``(A) authorizes payment of contributions to a legacy plan
at a rate, or multiple rates, as described in paragraph
(2)(B), equal to or greater than the transition contribution
rate established by the legacy plan under paragraph (2); and
``(B) does not provide for--
``(i) a suspension of contributions to the legacy plan with
respect to any period of service; or
``(ii) any new direct or indirect exclusion of younger or
newly hired employees of the employer from being taken into
account in determining contributions owed to the legacy plan.
``(2) Transition contribution rate.--
``(A) In general.--The transition contribution rate for a
plan year is the contribution rate that, as certified by the
actuary of the legacy plan in accordance with the principles
in section 305(b)(4)(B), is reasonably expected to be
adequate--
``(i) to fund the normal cost for the plan year;
``(ii) to amortize the plan's unfunded liabilities in level
annual installments over 25 years, beginning with the plan
year in which the transition contribution rate is first
established; and
``(iii) to amortize any subsequent changes in the legacy
plan's unfunded liability due to experience gains or losses
(including investment gains or losses, gains or losses due to
contributions greater or less than the contributions made
under the prior transition contribution rate, and other
actuarial gains or losses), changes in actuarial assumptions,
changes to the legacy plan's benefits, or changes in funding
method over a period of 15 plan years beginning with the plan
year following the plan year in which such change in unfunded
liability is incurred, unless otherwise prescribed.
The transition contribution rate for any plan year may not be
less than the transition contribution rate for the plan year
in which such rate is first established.
``(B) Multiple rates.--If different rates of contribution
are payable to the legacy plan by different employers or for
different classes of employees, the certification by the
actuary of the legacy plan shall specify a transition
contribution rate for each such employer or class of
employees.
``(C) Rate applicable to employer.--
``(i) In general.--Except as provided by clause (ii), the
transition contribution rate applicable to an employer for a
plan year is the rate in effect for the plan year of the
legacy plan that commences on or after 180 days before the
earlier of--
``(I) the effective date of the collective bargaining
agreement pursuant to which the employer contributes to the
legacy plan; or
``(II) 5 years after the last plan year for which the
transition contribution rate applicable to the employer was
established or updated.
``(ii) Exception.--The transition contribution rate
applicable to an employer for the first plan year beginning
on or after the commencement of the employer's obligation to
contribute to the composite plan is the rate in effect for
the plan year of the legacy plan that commences on or after
180 days before such first plan year.
``(D) Effect of legacy plan financial circumstances.--If
the plan actuary of the legacy plan has certified under
section 305 that the plan is in endangered or critical status
for a plan year, the transition contribution rate for the
following plan year is the rate determined with respect to
the employer under the legacy plan's funding improvement or
rehabilitation plan under section 305, if greater than the
rate otherwise determined, but in no event shall the
transition contribution rate be greater than 75 percent of
the sum of the contribution rates applicable to the legacy
plan and the composite plan for the plan year.
Notwithstanding the preceding sentence, if the transition
contribution rate in the prior year is more than 75 percent
of the sum of the contribution rates applicable to the legacy
plan and the composite plan for the prior plan year, the
transition contribution rate applicable to the legacy plan
shall not be subject to the 75-percent limitation, but shall
be neither increased nor reduced as a percentage of the sum
of the contribution rates applicable to the legacy plan and
the composite plan for the plan year.
``(E) Other actuarial assumptions and methods.--Except as
provided in subparagraph (A), the determination of the
transition contribution rate for a plan year shall be based
on actuarial assumptions and methods consistent with the
minimum funding determinations made under section 304 (or, if
applicable, section 305) with respect to the legacy plan for
the plan year.
``(F) Adjustments in rate.--The plan sponsor of a legacy
plan from time to time may adjust the transition contribution
rate or rates applicable to an employer under this paragraph
by increasing some rates and decreasing others if the actuary
certifies that such adjusted rates in combination will
produce projected contribution income for the plan year
beginning on or after the date of certification that is not
less than would be produced by the transition contribution
[[Page S7625]]
rates in effect at the time of the certification.
``(G) Notice of transition contribution rate.--The plan
sponsor of a legacy plan shall provide notice to the parties
to collective bargaining agreements pursuant to which
contributions are made to the legacy plan of changes to the
transition contribution rate requirements at least 30 days
before the beginning of the plan year for which the rate is
effective.
``(H) Notice to composite plan sponsor.--Not later than 30
days after a determination by the plan sponsor of a legacy
plan that a collective bargaining agreement provides for a
rate of contributions that is below the transition
contribution rate applicable to one or more employers that
are parties to the collective bargaining agreement, the plan
sponsor of the legacy plan shall notify the plan sponsor of
any composite plan under which employees of such employer
would otherwise be eligible to accrue a benefit.
``(3) Correction procedures.--Pursuant to standards
prescribed by the Secretary, the plan sponsor of a composite
plan shall adopt rules and procedures that give the parties
to the collective bargaining agreement notice of the failure
of such agreement to satisfy the transition contribution
requirements of this subsection, and a reasonable opportunity
to correct such failure, not to exceed 180 days from the date
of notice given under subsection (b)(2).
``(4) Supplemental contributions.--A collective bargaining
agreement may provide for supplemental contributions to the
legacy plan for a plan year in excess of the transition
contribution rate determined under paragraph (2), regardless
of whether the legacy plan is in endangered or critical
status for such plan year.
``(e) Nonapplication of Composite Plan Restrictions.--
``(1) In general.--The provisions of subsections (a), (b),
and (c) shall not apply with respect to a collective
bargaining agreement, to the extent the agreement, or a
predecessor agreement, provides or provided for contributions
to a defined benefit plan that is a legacy plan, as of the
first day of the first plan year following a plan year for
which the plan actuary certifies that the plan is fully
funded, has been fully funded for at least three out of the
immediately preceding 5 plan years, and is projected to
remain fully funded for at least the following 4 plan years.
``(2) Determination of fully funded.--A plan is fully
funded for purposes of paragraph (1) if, as of the valuation
date of the plan for a plan year, the value of the plan's
assets equals or exceeds the present value of the plan's
liabilities, determined in accordance with the rules
prescribed by the Pension Benefit Guaranty Corporation under
sections 4219(c)(1)(D) and 4281 for multiemployer plans
terminating by mass withdrawal, as in effect for the date of
the determination, except the plan's reasonable assumption
regarding the starting date of benefits may be used.
``(3) Other applicable rules.--Except as provided in
paragraph (2), actuarial determinations and projections under
this section shall be based on the rules in section 802(b).
``SEC. 806. MERGERS AND ASSET TRANSFERS OF COMPOSITE PLANS.
``(a) In General.--Assets and liabilities of a composite
plan may only be merged with, or transferred to, another plan
if--
``(1) the other plan is a composite plan;
``(2) the plan or plans resulting from the merger or
transfer is a composite plan;
``(3) no participant's accrued benefit or adjustable
benefit is lower immediately after the transaction than it
was immediately before the transaction; and
``(4) the value of the assets transferred in the case of a
transfer reasonably reflects the value of the amounts
contributed with respect to the participants whose benefits
are being transferred, adjusted for allocable distributions,
investment gains and losses, and administrative expenses.
A plan which is not a composite plan may not merge with or
transfer assets and liabilities to a composite plan.
``(b) Legacy Plan.--
``(1) In general.--After a merger or transfer involving a
composite plan, the legacy plan with respect to an employer
that is obligated to contribute to the resulting composite
plan is the legacy plan that applied to that employer
immediately before the merger or transfer.
``(2) Multiple legacy plans.--If an employer is obligated
to contribute to more than one legacy plan with respect to
employees eligible to accrue benefits under more than one
composite plan and there is a merger or transfer of such
legacy plans, the transition contribution rate applicable to
the legacy plan resulting from the merger or transfer with
respect to that employer shall be determined in accordance
with the provisions of section 805(d)(2)(B).''.
(2) Penalties.--
(A) Civil enforcement of failure to comply with realignment
program.--Section 502(a) of such Act (29 U.S.C. 1132(a)) is
amended--
(i) in paragraph (10), by striking ``or'' at the end;
(ii) in paragraph (11), by striking the period at the end
and inserting ``; or''; and
(iii) by adding at the end the following:
``(12) in the case of a composite plan required to adopt a
realignment program under section 803, if the plan sponsor--
``(A) has not adopted a realignment program under that
section by the deadline established in such section; or
``(B) fails to update or comply with the terms of the
realignment program in accordance with the requirements of
such section,
by the Secretary, by an employer that has an obligation to
contribute with respect to the composite plan, or by an
employee organization that represents active participants in
the composite plan, for an order compelling the plan sponsor
to adopt a realignment program, or to update or comply with
the terms of the realignment program, in accordance with the
requirements of such section and the realignment program.''.
(B) Civil penalties.--Section 502(c) of such Act (29 U.S.C.
1132(c)), as amended by this Act, is further amended--
(i) by moving paragraphs (8), (10), and (12) each 2 ems to
the left;
(ii) by redesignating paragraphs (9) through (13) as
paragraphs (12) through (16), respectively; and
(iii) by inserting after paragraph (8) the following:
``(9) The Secretary may assess against any plan sponsor of
a composite plan a civil penalty of not more than $2,140 per
day for each violation by such sponsor--
``(A) of the requirement under section 801(a)(5)(D) to
furnish an annual notification to each participant;
``(B) of the requirement under section 802(a) on the plan
actuary to certify the plan's current or projected funded
ratio by the date specified in such subsection; or
``(C) of the requirement under section 803 to adopt a
realignment program by the deadline established in that
section and to comply with its terms.
``(10)(A) The Secretary may assess against any plan sponsor
of a composite plan a civil penalty of not more than $100 per
day for each violation by such sponsor of the requirement
under section 803(b) to provide notice as described in such
section, except that no penalty may be assessed in any case
in which the plan sponsor exercised reasonable diligence to
meet the requirements of such section and--
``(i) the plan sponsor did not know that the violation
existed; or
``(ii) the plan sponsor provided such notice during the 30-
day period beginning on the first date on which the plan
sponsor knew, or in exercising reasonable due diligence
should have known, that such violation existed.
``(B) In any case in which the plan sponsor exercised
reasonable diligence to meet the requirements of section
803(b), the Secretary may waive part or all of such penalty
to the extent that the payment of such penalty would be
excessive or otherwise inequitable relative to the violation
involved.
``(11) The Secretary may assess against any plan sponsor of
a composite plan a civil penalty of not more than $100 per
day for each violation by such sponsor of the notice
requirements under sections 801(b)(5) and 805(b)(2).''.
(3) Authorities.--Section 101(a) of Reorganization Plan No.
4 of 1978 (29 U.S.C. 1001 note) is amended by striking
``Parts 2 and 3'' and inserting ``Parts 2, 3, and 8''.
(4) Conforming amendment.--The table of contents in section
1 of such Act (29 U.S.C. 1001 note) is amended by inserting
after the item relating to section 734 the following:
``Part 8--Composite Plans and Legacy Plans
``Sec. 801. Composite plan defined.
``Sec. 802. Funded ratios; actuarial assumptions.
``Sec. 803. Realignment program.
``Sec. 804. Limitation on increasing benefits.
``Sec. 805. Composite plan restrictions to preserve legacy plan
funding.
``Sec. 806. Mergers and asset transfers of composite plans.''.
(b) Amendment to the Internal Revenue Code of 1986.--
(1) In general.--Subchapter D of chapter 1 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following:
``PART IV--COMPOSITE PLANS AND LEGACY PLANS
``Sec. 437. Composite plan defined.
``Sec. 438. Funded ratios; actuarial assumptions.
``Sec. 439. Realignment program.
``Sec. 440. Limitation on increasing benefits.
``Sec. 440A. Composite plan restrictions to preserve legacy plan
funding.
``Sec. 440B. Mergers and asset transfers of composite plans.
``SEC. 437. COMPOSITE PLAN DEFINED.
``(a) In General.--For purposes of this title, the term
`composite plan' means a pension plan--
``(1) which is a multiemployer plan that is neither a
defined benefit plan nor a defined contribution plan,
``(2) the terms of which provide that the plan is a
composite plan for purposes of this title with respect to
which not more than one multiemployer defined benefit plan is
treated as a legacy plan within the meaning of section 440A,
unless there is more than one legacy plan following a merger
of composite plans under section 440B,
``(3) which provides systematically for the payment of
benefits--
``(A) objectively calculated pursuant to a nondiscretionary
formula specified in the plan document with respect to plan
participants for life; and
``(B) in the form of life annuities, except for benefits
which under section 411(a)(11) may be immediately distributed
without the consent of the participant;
``(4) for which the anticipated employer contributions to
the plan for the first plan
[[Page S7626]]
year are at least 120 percent of the normal cost for the plan
year;
``(5) which requires--
``(A) an annual valuation of the liability of the plan as
of a date within the plan year to which the valuation refers
or within one month prior to the beginning of such year,
``(B) an annual actuarial determination of the plan's
current funded ratio and projected funded ratio under section
438(a),
``(C) corrective action through a realignment program
pursuant to section 439 whenever the plan's projected funded
ratio is below 120 percent for the plan year, and
``(D) an annual notification to each participant describing
benefits under the plan and explaining that such benefits may
be subject to reduction under a realignment program pursuant
to section 439 based on the plan's funded status in future
plan years; and
``(6) the board of trustees of which includes at least one
retiree or beneficiary in pay status during each plan year
following the first plan year in which at least 5 percent of
the participants in the plan are retirees or beneficiaries in
pay status.
``(b) Transition From a Multiemployer Defined Benefit
Plan.--
``(1) In general.--The plan sponsor of a defined benefit
plan that is a multiemployer plan may, subject to paragraph
(2), amend the plan to incorporate the features of a
composite plan as a component of the multiemployer plan
separate from the defined benefit plan component, except in
the case of a defined benefit plan for which the plan actuary
has certified under section 432(b)(4) that the plan is or
will be in endangered or critical status for the plan year in
which such amendment would become effective or in endangered
or critical status for any of the succeeding 5 plan years.
``(2) Requirements.--Any amendment pursuant to paragraph
(1) to incorporate the features of a composite plan as a
component of a multiemployer plan shall--
``(A) apply with respect to all collective bargaining
agreements providing for contributions to the multiemployer
plan on or after the effective date of the amendment,
``(B) apply with respect to all participants in the
multiemployer plan for whom contributions are made to the
multiemployer plan on or after the effective date of the
amendment,
``(C) specify that the effective date of the amendment is--
``(i) the first day of a specified plan year following the
date of the adoption of the amendment, except that the plan
sponsor may alternatively provide for a separate effective
date with respect to each collective bargaining agreement
under which contributions to the multiemployer plan are
required, which shall occur on the first day of the first
plan year beginning after the termination, or if earlier, the
re-opening, of each such agreement, or such earlier date as
the parties to the agreement and the plan sponsor of the
multiemployer plan shall agree to, and
``(ii) not later than the first day of the fifth plan year
beginning on or after the date of the adoption of the
amendment,
``(D) specify that, as of the amendment's effective date,
no further benefits shall accrue under the defined benefit
component of the multiemployer plan, and
``(E) specify that, as of the amendment's effective date,
the plan sponsor of the multiemployer plan shall be the plan
sponsor of both the composite plan component and the defined
benefit plan component of the plan.
``(3) Special rules.--If a multiemployer plan is amended
pursuant to paragraph (1)--
``(A) the requirements of this title shall be applied to
the composite plan component and the defined benefit plan
component of the multiemployer plan as if each such component
were maintained as a separate plan, and
``(B) the assets of the composite plan component and the
defined benefit plan component of the plan shall be held in a
single trust forming part of the plan under which the trust
instrument expressly provides--
``(i) for separate accounts (and appropriate records) to be
maintained to reflect the interest which each of the plan
components has in the trust, including separate accounting
for additions to the trust for the benefit of each plan
component, disbursements made from each plan component's
account in the trust, investment experience of the trust
allocable to that account, and administrative expenses
(whether direct expenses or shared expenses allocated
proportionally), and permits, but does not require, the
pooling of some or all of the assets of the two plan
components for investment purposes, subject to the judgment
of the plan fiduciaries, and
``(ii) that the assets of each of the two plan components
shall be held, invested, reinvested, managed, administered
and distributed for the exclusive benefit of the participants
and beneficiaries of each such plan component, and in no
event shall the assets of one of the plan components be
available to pay benefits due under the other plan component.
``(4) Not a termination event.--Notwithstanding section
4041A of the Employee Retirement Income Security Act of 1974,
an amendment pursuant to paragraph (1) to incorporate the
features of a composite plan as a component of a
multiemployer plan does not constitute termination of the
multiemployer plan.
``(5) Notice to the secretary of labor.--
``(A) Notice.--The plan sponsor of a composite plan shall
provide notice to the Secretary of Labor of the intent to
establish the composite plan (or, in the case of a composite
plan incorporated as a component of a multiemployer plan as
described in paragraph (1), the intent to amend the
multiemployer plan to incorporate such composite plan) at
least 30 days prior to the effective date of such
establishment or amendment.
``(B) Certification.--In the case of a composite plan
incorporated as a component of a multiemployer plan as
described in paragraph (1), such notice shall include a
certification by the plan actuary under section 432(b)(4)
that the effective date of the amendment occurs in a plan
year for which the multiemployer plan is not in endangered or
critical status for that plan year and any of the succeeding
5 plan years.
``(6) References to composite plan component.--As used in
this part, the term `composite plan' includes a composite
plan component added to a defined benefit plan pursuant to
paragraph (1).
``(7) Rule of construction.--Paragraph (2)(A) shall not be
construed as preventing the plan sponsor of a multiemployer
plan from adopting an amendment pursuant to paragraph (1)
because some collective bargaining agreements are amended to
cease any covered employer's obligation to contribute to the
multiemployer plan before or after the plan amendment is
effective. Paragraph (2)(B) shall not be construed as
preventing the plan sponsor of a multiemployer plan from
adopting an amendment pursuant to paragraph (1) because some
participants cease to have contributions made to the
multiemployer plan on their behalf before or after the plan
amendment is effective.
``(c) Coordination With Funding Rules.--Except as otherwise
provided in this part, sections 412, 431, and 432 shall not
apply to a composite plan.
``(d) Treatment of a Composite Plan.--For purposes of this
title (other than sections 412 and 418E), a composite plan
shall be treated as if it were a defined benefit plan unless
a different treatment is provided for under applicable law.
``SEC. 438. FUNDED RATIOS; ACTUARIAL ASSUMPTIONS.
``(a) Certification of Funded Ratios.--
``(1) In general.--Not later than the one-hundred twentieth
day of each plan year of a composite plan, the plan actuary
of the composite plan shall certify to the Secretary, the
Secretary of Labor, and the plan sponsor the plan's current
funded ratio and projected funded ratio for the plan year.
``(2) Determination of current funded ratio and projected
funded ratio.--For purposes of this section--
``(A) Current funded ratio.--The current funded ratio is
the ratio (expressed as a percentage) of--
``(i) the value of the plan's assets as of the first day of
the plan year, to
``(ii) the plan actuary's calculation of the present value
of the plan liabilities as of the first day of the plan year.
``(B) Projected funded ratio.--The projected funded ratio
is the funded ratio determined under subparagraph (A),
projected as of the first day of the fifteenth plan year
following the plan year for which the determination is being
made.
``(3) Consideration of contribution rate increases.--For
purposes of projections under this subsection, the plan
actuary may anticipate contribution rate increases beyond the
term of the current collective bargaining agreement and any
agreed-to supplements, if reasonable, not to exceed 2.5
percent per year, compounded annually.
``(b) Actuarial Assumptions and Methods.--For purposes of
this part--
``(1) In general.--All costs, liabilities, rates of
interest, and other factors under the plan shall be
determined for a plan year on the basis of actuarial
assumptions and methods--
``(A) each of which is reasonable (taking into account the
experience of the plan and reasonable expectations),
``(B) which, in combination, offer the actuary's best
estimate of anticipated experience under the plan, and
``(C) with respect to which any change from the actuarial
assumptions and methods used in the previous plan year shall
be certified by the plan actuary and the actuarial rationale
for such change provided in the annual report required by
section 6058.
``(2) Fair market value of assets.--The value of the plan's
assets shall be taken into account on the basis of their fair
market value.
``(3) Determination of normal cost and plan liabilities.--A
plan's normal cost and liabilities shall be based on--
``(A) the most recent actuarial valuation required under
section 437(a)(5)(A) and the unit credit funding method; and
``(B) rates of interest subject to section 431(b)(6).
``(4) Time when certain contributions deemed made.--Any
contributions for a plan year made by an employer after the
last day of such plan year, but not later than 2\1/2\ months
after such day, shall be deemed to have been made on such
last day. For purposes of this paragraph, such 2\1/2\-month
period may be extended to a total of not more than 120 days
under regulations prescribed by the Secretary.
``(5) Additional actuarial assumptions.--Except where
otherwise provided in this part, the provisions of section
432(b)(4)(B) shall apply to any determination or projection
under this part.
``SEC. 439. REALIGNMENT PROGRAM.
``(a) Realignment Program.--
[[Page S7627]]
``(1) Adoption.--In any case in which the plan actuary
certifies under section 438(a) that the plan's projected
funded ratio is below 120 percent for the plan year, the plan
sponsor shall adopt a realignment program under paragraph (2)
not later than 210 days after the due date of the
certification required under section 438(a). The plan sponsor
shall adopt an updated realignment program for each
succeeding plan year for which a certification described in
the preceding sentence is made.
``(2) Content of realignment program.--
``(A) In general.--A realignment program adopted under this
paragraph is a written program which consists of reasonable
measures, including options or a range of options to be
undertaken by the plan sponsor or proposed to the bargaining
parties, formulated, based on reasonably anticipated
experience and reasonable actuarial assumptions, to enable
the plan to achieve a projected funded ratio of at least 120
percent for the following plan year.
``(B) Initial program elements.--Reasonable measures under
a realignment program described in subparagraph (A) may
include any of the following:
``(i) Proposed contribution increases.
``(ii) A reduction in the rate of future benefit accruals,
so long as the resulting rate shall not be less than 1
percent of the contributions on which benefits are based as
of the start of the plan year (or the equivalent standard
accrual rate as described in section 432(f)(6)).
``(iii) A modification or elimination of adjustable
benefits of participants that are not in pay status before
the date of the notice required under subsection (b)(1).
``(iv) Any other legally available measures not
specifically described in this subparagraph or subparagraph
(C) or (D) that the plan sponsor determines are reasonable.
``(C) Additional program elements.--If the plan sponsor has
determined that all reasonable measures available under
subparagraph (B) will not enable the plan to achieve a
projected funded ratio of at least 120 percent the following
plan year, such realignment program may also include--
``(i) a reduction of accrued benefits that are not in pay
status by the date of the notice required under subsection
(b)(1), or
``(ii) a reduction of any benefits of participants that are
in pay status before the date of the notice required under
subsection (b)(1) other than core benefits as defined in
paragraph (4).
``(D) Additional reductions.--In the case of a composite
plan for which the plan sponsor has determined that all
reasonable measures available under subparagraphs (B) and (C)
will not enable the plan to achieve a projected funded ratio
of at least 120 percent for the following plan year, the
realignment program may also include--
``(i) a further reduction in the rate of future benefit
accruals without regard to the limitation applicable under
subparagraph (B)(ii), or
``(ii) a reduction of core benefits,
provided that such reductions shall be equitably distributed
across the participant and beneficiary population, taking
into account factors, with respect to participants and
beneficiaries and their benefits, that may include one or
more of the factors listed in subclauses (I) through (X) of
section 432(f)(9)(D)(vi), to the extent necessary to enable
the plan to achieve a projected funded ratio of at least 120
percent for the following plan year.
``(3) Adjustable benefit defined.--For purposes of this
part, the term `adjustable benefit' means--
``(A) benefits, rights, and features under the plan,
including post-retirement death benefits, disability benefits
not yet in pay status, and similar benefits,
``(B) any early retirement benefit or retirement-type
subsidy (within the meaning of section 411(d)(6)(B)(i))
(including early reduction factors which are not provided on
an actuarially equivalent basis) and any benefit payment
option (other than the qualified joint and survivor annuity),
``(C) benefit increases which were adopted (or, if later,
took effect) less than 120 months before the first day of the
first plan year in which such realignment program took
effect,
``(D) any one-time bonus payment or `thirteenth check'
provision, and
``(E) benefits granted for period of service prior to
participation in the plan.
``(4) Core benefit defined.--For purposes of this part, the
term `core benefit' means a participant's accrued benefit
payable in the normal form of an annuity commencing at normal
retirement age, determined without regard to--
``(A) any early retirement benefits, retirement-type
subsidies, or other benefits, rights, or features that may be
associated with that benefit, and
``(B) any cost-of-living adjustments or benefit increases
effective after the date of retirement.
``(5) Coordination with contribution increases.--
``(A) In general.--A realignment program may provide that
some or all of the benefit modifications described in the
program will only take effect if the bargaining parties fail
to agree to specified levels of increases in contributions to
the plan, effective as of specified dates.
``(B) Independent benefit modifications.--If a realignment
program adopts any changes to the benefit formula that are
independent of potential contribution increases, such changes
shall take effect not later than 180 days following the first
day of the first plan year that begins following the adoption
of the realignment program.
``(C) Conditional benefit modifications.--If a realignment
program adopts any changes to the benefit formula that take
effect only if the bargaining parties fail to agree to
contribution increases, such changes shall take effect not
later than the first day of the first plan year beginning
after the third anniversary of the date of adoption of the
realignment program.
``(D) Revocation of certain benefit modifications.--Benefit
modifications described in paragraph (3) may be revoked, in
whole or in part, and retroactively or prospectively, when
contributions to the plan are increased, as specified in the
realignment program, including any amendments thereto. The
preceding sentence shall not apply unless the contribution
increases are to be effective not later than the fifth
anniversary of the first day of the first plan year that
begins after the adoption of the realignment program.
``(b) Notice.--
``(1) In general.--In any case in which it is certified
under section 438(a) that the projected funded ratio is less
than 120 percent, the plan sponsor shall, not later than 30
days after the date of the certification, provide
notification of the current and projected funded ratios to
the participants and beneficiaries, the bargaining parties,
the Secretary of Labor, and the Secretary. Such notice shall
include--
``(A) an explanation that contribution rate increases or
benefit reductions may be necessary,
``(B) a description of the types of benefits that might be
reduced, and
``(C) an estimate of the contribution increases and benefit
reductions that may be necessary to achieve a projected
funded ratio of 120 percent.
``(2) Notice of benefit modifications.--
``(A) In general.--No modifications may be made that reduce
the rate of future benefit accrual or that reduce core
benefits or adjustable benefits unless notice of such
reduction has been given at least 180 days before the general
effective date of such reduction for all participants and
beneficiaries to--
``(i) plan participants and beneficiaries,
``(ii) each employer who has an obligation to contribute to
the composite plan, and
``(iii) each employee organization which, for purposes of
collective bargaining, represents plan participants employed
by such employers.
``(B) Content of notice.--The notice under subparagraph (A)
shall contain--
``(i) sufficient information to enable participants and
beneficiaries to understand the effect of any reduction on
their benefits, including an illustration of any affected
benefit or subsidy, on an annual or monthly basis that a
participant or beneficiary would otherwise have been eligible
for as of the general effective date described in
subparagraph (A), and
``(ii) information as to the rights and remedies of plan
participants and beneficiaries as well as how to contact the
Department of the Treasury for further information and
assistance, where appropriate.
``(C) Form and manner.--Any notice under subparagraph (A)--
``(i) shall be provided in a form and manner prescribed in
regulations of the Secretary,
``(ii) shall be written in a manner so as to be understood
by the average plan participant.
``(3) Model notices.--The Secretary shall--
``(A) prescribe model notices that the plan sponsor of a
composite plan may use to satisfy the notice requirements
under this subsection, and
``(B) by regulation enumerate any details related to the
elements listed in paragraph (1) that any notice under this
subsection must include.
``(4) Delivery method.--Any notice under this part shall be
provided in writing and may be provided in electronic form to
the extent that the form is reasonably accessible to persons
to whom the notice is provided.
``SEC. 440. LIMITATION ON INCREASING BENEFITS.
``(a) Level of Current Funded Ratios.--Except as provided
in subsections (c), (d), and (e), no plan amendment
increasing benefits or establishing new benefits under a
composite plan may be adopted for a plan year unless--
``(1) the plan's current funded ratio is at least 110
percent (without regard to the benefit increase or new
benefits),
``(2) taking the benefit increase or new benefits into
account, the current funded ratio is at least 100 percent and
the projected funded ratio for the current plan year is at
least 120 percent,
``(3) in any case in which, after taking the benefit
increase or new benefits into account, the current funded
ratio is less than 140 percent or the projected funded ratio
is less than 140 percent, the benefit increase or new
benefits are projected by the plan actuary to increase the
present value of the plan's liabilities for the plan year by
not more than 3 percent, and
``(4) expected contributions for the current plan year are
at least 120 percent of normal cost for the plan year,
determined using the unit credit funding method and treating
the benefit increase or new benefits as in effect for the
entire plan year.
``(b) Additional Requirements Where Core Benefits
Reduced.--If a plan has been
[[Page S7628]]
amended to reduce core benefits pursuant to a realignment
program under section 439(a)(2)(D), such plan may not be
subsequently amended to increase core benefits unless the
amendment--
``(1) increases the level of future benefit payments only,
and
``(2) provides for an equitable distribution of benefit
increases across the participant and beneficiary population,
taking into account the extent to which the benefits of
participants were previously reduced pursuant to such
realignment program.
``(c) Exception To Comply With Applicable Law.--Subsection
(a) shall not apply in connection with a plan amendment if
the amendment is required as a condition of qualification
under part I of subchapter D of chapter 1 or to comply with
other applicable law.
``(d) Exception Where Maximum Deductible Limit Applies.--
Subsection (a) shall not apply in connection with a plan
amendment if and to the extent that contributions to the
composite plan would not be deductible for the plan year
under section 404(a)(1)(E) if the plan amendment is not
adopted. The Secretary of the Treasury shall issue
regulations to implement this paragraph.
``(e) Exception for Certain Benefit Modifications.--
Subsection (a) shall not apply in connection with a plan
amendment under section 439(a)(5)(C), regarding conditional
benefit modifications.
``(f) Treatment of Plan Amendments.--For purposes of this
section--
``(1) if two or more plan amendments increasing benefits or
establishing new benefits are adopted in a plan year, such
amendments shall be treated as a single amendment adopted on
the last day of the plan year,
``(2) all benefit increases and new benefits adopted in a
single amendment are treated as a single benefit increase,
irrespective of whether the increases and new benefits take
effect in more than one plan year, and
``(3) increases in contributions or decreases in plan
liabilities which are scheduled to take effect in future plan
years may be taken into account in connection with a plan
amendment if they have been agreed to in writing or otherwise
formalized by the date the plan amendment is adopted.
``SEC. 440A. COMPOSITE PLAN RESTRICTIONS TO PRESERVE LEGACY
PLAN FUNDING.
``(a) Treatment as a Legacy Plan.--
``(1) In general.--For purposes of this subchapter, a
defined benefit plan shall be treated as a legacy plan with
respect to the composite plan under which employees who were
eligible to accrue a benefit under the defined benefit plan
become eligible to accrue a benefit under such composite
plan.
``(2) Component plans.--In any case in which a defined
benefit plan is amended to add a composite plan component
pursuant to section 437(b), paragraph (1) shall be applied by
substituting `defined benefit component' for `defined benefit
plan' and `composite plan component' for `composite plan'.
``(3) Eligible to accrue a benefit.--For purposes of
paragraph (1), an employee is considered eligible to accrue a
benefit under a composite plan as of the first day in which
the employee completes an hour of service under a collective
bargaining agreement that provides for contributions to and
accruals under the composite plan in lieu of accruals under
the defined benefit plan.
``(4) Collective bargaining agreement.--As used in this
part, the term `collective bargaining agreement' includes any
agreement under which an employer has an obligation to
contribute to a plan.
``(5) Other terms.--Any term used in this part which is not
defined in this part and which is also used in section 432
shall have the same meaning provided such term in such
section.
``(b) Restrictions on Acceptance by Composite Plan of
Agreements and Contributions.--
``(1) In general.--The plan sponsor of a composite plan
shall not accept or recognize a collective bargaining
agreement (or any modification to such agreement), and no
contributions may be accepted and no benefits may be accrued
or otherwise earned under the agreement--
``(A) in any case in which the plan actuary of any defined
benefit plan that would be treated as a legacy plan with
respect to such composite plan has certified under section
432(b)(4) that such defined benefit plan is or will be in
endangered or critical status for the plan year in which such
agreement would take effect or for any of the succeeding 5
plan years, and
``(B) unless the agreement requires each employer who is a
party to such agreement, including employers whose employees
are not participants in the legacy plan, to provide
contributions to the legacy plan with respect to such
composite plan in a manner that satisfies the transition
contribution requirements of subsection (d).
``(2) Notice.--Not later than 30 days after a determination
by a plan sponsor of a composite plan that an agreement fails
to satisfy the requirements described in paragraph (1), the
plan sponsor shall provide notification of such failure and
the reasons for such determination to--
``(A) the parties to the agreement,
``(B) active participants of the composite plan who have
ceased to accrue or otherwise earn benefits with respect to
service with an employer pursuant to paragraph (1), and
``(C) the Secretary of Labor, the Secretary of the
Treasury, and the Pension Benefit Guaranty Corporation.
``(3) Limitation on retroactive effect.--This subsection
shall not apply to benefits accrued before the date on which
notice is provided under paragraph (2).
``(c) Restriction on Accrual of Benefits Under a Composite
Plan.--
``(1) In general.--In any case in which an employer, under
a collective bargaining agreement entered into after the date
of enactment of the Chris Allen Multiemployer Pension
Recapitalization and Reform Act of 2020, ceases to have an
obligation to contribute to a multiemployer defined benefit
plan, no employees employed by the employer may accrue or
otherwise earn benefits under any composite plan, with
respect to service with that employer, for a 60-month period
beginning on the date on which the employer entered into such
collective bargaining agreement.
``(2) Notice of cessation of obligation.--Within 30 days of
determining that an employer has ceased to have an obligation
to contribute to a legacy plan with respect to employees
employed by an employer that is or will be contributing to a
composite plan with respect to service of such employees, the
plan sponsor of the legacy plan shall notify the plan sponsor
of the composite plan of that cessation.
``(3) Notice of cessation of accruals.--Not later than 30
days after determining that an employer has ceased to have an
obligation to contribute to a legacy plan, the plan sponsor
of the composite plan shall notify the bargaining parties,
the active participants affected by the cessation of
accruals, the Secretary, the Secretary of Labor, and the
Pension Benefit Guaranty Corporation of the cessation of
accruals, the period during which such cessation is in
effect, and the reasons therefor.
``(4) Limitation on retroactive effect.--This subsection
shall not apply to benefits accrued before the date on which
notice is provided under paragraph (3).
``(d) Transition Contribution Requirements.--
``(1) In general.--A collective bargaining agreement
satisfies the transition contribution requirements of this
subsection if the agreement--
``(A) authorizes for payment of contributions to a legacy
plan at a rate, or multiple rates, as described in paragraph
(2)(B), equal to or greater than the transition contribution
rate established under paragraph (2), and
``(B) does not provide for--
``(i) a suspension of contributions to the legacy plan with
respect to any period of service, or
``(ii) any new direct or indirect exclusion of younger or
newly hired employees of the employer from being taken into
account in determining contributions owed to the legacy plan.
``(2) Transition contribution rate.--
``(A) In general.--The transition contribution rate for a
plan year is the contribution rate that, as certified by the
actuary of the legacy plan in accordance with the principles
in section 432(b)(4)(B), is reasonably expected to be
adequate--
``(i) to fund the normal cost for the plan year,
``(ii) to amortize the plan's unfunded liabilities in level
annual installments over 25 years, beginning with the plan
year in which the transition contribution rate is first
established, and
``(iii) to amortize any subsequent changes in the legacy
plan's unfunded liability due to experience gains or losses
(including investment gains or losses, gains or losses due to
contributions greater or less than the contributions made
under the prior transition contribution rate, and other
actuarial gains or losses), changes in actuarial assumptions,
changes to the legacy plan's benefits, or changes in funding
method over a period of 15 plan years beginning with the plan
year following the plan year in which such change in unfunded
liability is incurred, unless otherwise prescribed.
The transition contribution rate for any plan year may not be
less than the transition contribution rate for the plan year
in which such rate is first established.
``(B) Multiple rates.--If different rates of contribution
are payable to the legacy plan by different employers or for
different classes of employees, the certification by the
actuary of the legacy plan shall specify a transition
contribution rate for each such employer or class of
employees.
``(C) Rate applicable to employer.--
``(i) In general.--Except as provided by clause (ii), the
transition contribution rate applicable to an employer for a
plan year is the rate in effect for the plan year of the
legacy plan that commences on or after 180 days before the
earlier of--
``(I) the effective date of the collective bargaining
agreement pursuant to which the employer contributes to the
legacy plan, or
``(II) 5 years after the last plan year for which the
transition contribution rate applicable to the employer was
established or updated.
``(ii) Exception.--The transition contribution rate
applicable to an employer for the first plan year beginning
on or after the commencement of the employer's obligation to
contribute to the composite plan is the rate in effect for
the plan year of the legacy plan that commences on or after
180 days before such first plan year.
``(D) Effect of legacy plan financial circumstances.--If
the plan actuary of the legacy plan has certified under
section 432 that the plan is in endangered or critical status
[[Page S7629]]
for a plan year, the transition contribution rate for the
following plan year is the rate determined with respect to
the employer under the legacy plan's funding improvement or
rehabilitation plan under section 432, if greater than the
rate otherwise determined, but in no event shall the
transition contribution rate be greater than 75 percent of
the sum of the contribution rates applicable to the legacy
plan and the composite plan for the plan year.
Notwithstanding the preceding sentence, if the transition
contribution rate in the prior year is more than 75 percent
of the sum of the contribution rates applicable to the legacy
plan and the composite plan for the prior plan year, the
transition contribution rate applicable to the legacy plan
shall not be subject to the 75-percent limitation, but shall
be neither increased nor reduced as a percentage of the sum
of the contribution rates applicable to the legacy plan and
the composite plan for the plan year.
``(E) Other actuarial assumptions and methods.--Except as
provided in subparagraph (A), the determination of the
transition contribution rate for a plan year shall be based
on actuarial assumptions and methods consistent with the
minimum funding determinations made under section 431 (or, if
applicable, section 432) with respect to the legacy plan for
the plan year.
``(F) Adjustments in rate.--The plan sponsor of a legacy
plan from time to time may adjust the transition contribution
rate or rates applicable to an employer under this paragraph
by increasing some rates and decreasing others if the actuary
certifies that such adjusted rates in combination will
produce projected contribution income for the plan year
beginning on or after the date of certification that is not
less than would be produced by the transition contribution
rates in effect at the time of the certification.
``(G) Notice of transition contribution rate.--The plan
sponsor of a legacy plan shall provide notice to the parties
to collective bargaining agreements pursuant to which
contributions are made to the legacy plan of changes to the
transition contribution rate requirements at least 30 days
before the beginning of the plan year for which the rate is
effective.
``(H) Notice to composite plan sponsor.--Not later than 30
days after a determination by the plan sponsor of a legacy
plan that a collective bargaining agreement provides for a
rate of contributions that is below the transition
contribution rate applicable to one or more employers that
are parties to the collective bargaining agreement, the plan
sponsor of the legacy plan shall notify the plan sponsor of
any composite plan under which employees of such employer
would otherwise be eligible to accrue a benefit.
``(3) Correction procedures.--Pursuant to standards
prescribed by the Secretary of Labor, the plan sponsor of a
composite plan shall adopt rules and procedures that give the
parties to the collective bargaining agreement notice of the
failure of such agreement to satisfy the transition
contribution requirements of this subsection, and a
reasonable opportunity to correct such failure, not to exceed
180 days from the date of notice given under subsection
(b)(2).
``(4) Supplemental contributions.--A collective bargaining
agreement may provide for supplemental contributions to the
legacy plan for a plan year in excess of the transition
contribution rate determined under paragraph (2), regardless
of whether the legacy plan is in endangered or critical
status for such plan year.
``(e) Nonapplication of Composite Plan Restrictions.--
``(1) In general.--The provisions of subsections (a), (b),
and (c) shall not apply with respect to a collective
bargaining agreement, to the extent the agreement, or a
predecessor agreement, provides or provided for contributions
to a defined benefit plan that is a legacy plan, as of the
first day of the first plan year following a plan year for
which the plan actuary certifies that the plan is fully
funded, has been fully funded for at least three out of the
immediately preceding 5 plan years, and is projected to
remain fully funded for at least the following 4 plan years.
``(2) Determination of fully funded.--A plan is fully
funded for purposes of paragraph (1) if, as of the valuation
date of the plan for a plan year, the value of the plan's
assets equals or exceeds the present value of the plan's
liabilities, determined in accordance with the rules
prescribed by the Pension Benefit Guaranty Corporation under
sections 4219(c)(1)(D) and 4281 of Employee Retirement Income
and Security Act for multiemployer plans terminating by mass
withdrawal, as in effect for the date of the determination,
except the plan's reasonable assumption regarding the
starting date of benefits may be used.
``(3) Other applicable rules.--Except as provided in
paragraph (2), actuarial determinations and projections under
this section shall be based on the rules in section 438(b).
``SEC. 440B. MERGERS AND ASSET TRANSFERS OF COMPOSITE PLANS.
``(a) In General.--Assets and liabilities of a composite
plan may only be merged with, or transferred to, another plan
if--
``(1) the other plan is a composite plan,
``(2) the plan or plans resulting from the merger or
transfer is a composite plan,
``(3) no participant's accrued benefit or adjustable
benefit is lower immediately after the transaction than it
was immediately before the transaction, and
``(4) the value of the assets transferred in the case of a
transfer reasonably reflects the value of the amounts
contributed with respect to the participants whose benefits
are being transferred, adjusted for allocable distributions,
investment gains and losses, and administrative expenses.
A plan which is not a composite plan may not merge with or
transfer assets and liabilities to a composite plan.
``(b) Legacy Plan.--
``(1) In general.--After a merger or transfer involving a
composite plan, the legacy plan with respect to an employer
that is obligated to contribute to the resulting composite
plan is the legacy plan that applied to that employer
immediately before the merger or transfer.
``(2) Multiple legacy plans.--If an employer is obligated
to contribute to more than one legacy plan with respect to
employees eligible to accrue benefits under more than one
composite plan and there is a merger or transfer of such
legacy plans, the transition contribution rate applicable to
the legacy plan resulting from the merger or transfer with
respect to that employer shall be determined in accordance
with the provisions of section 440A(d)(2)(B).''.
(2) Clerical amendment.--The table of parts for subchapter
D of chapter 1 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new item:
``Part IV--Composite Plans and Legacy Plans''.
(c) Effective Date.--The amendments made by this section
shall apply to plan years beginning after the date of the
enactment of this Act.
SEC. 502. APPLICATION OF CERTAIN REQUIREMENTS TO COMPOSITE
PLANS.
(a) Amendments to the Employee Retirement Income Security
Act of 1974.--
(1) Treatment for purposes of funding notices.--Section
101(f) of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1021(f)), as amended by this Act, is further
amended--
(A) in paragraph (1) by striking ``title IV applies'' and
inserting ``title IV applies or which is a composite plan'';
and
(B) by adding at the end the following:
``(5) Application to composite plans.--The provisions of
this subsection shall apply to a composite plan only to the
extent prescribed by the Secretary in regulations that take
into account the differences between a composite plan and a
defined benefit plan that is a multiemployer plan.''.
(2) Treatment for purposes of annual report.--Section 103
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1023) is amended--
(A) in subsection (d) by adding at the end the following
sentence: ``The provisions of this subsection shall apply to
a composite plan only to the extent prescribed by the
Secretary in regulations that take into account the
differences between a composite plan and a defined benefit
plan that is a multiemployer plan.'';
(B) in subsection (f) by adding at the end the following:
``(3) Additional information for composite plans.--With
respect to any composite plan--
``(A) the provisions of paragraph (1)(A) shall apply by
substituting `current funded ratio and projected funded ratio
(as such terms are defined in section 802(a)(2))' for `funded
percentage' each place it appears; and
``(B) the provisions of paragraph (2) shall apply only to
the extent prescribed by the Secretary in regulations that
take into account the differences between a composite plan
and a defined benefit plan that is a multiemployer plan.'';
and
(C) by adding at the end the following:
``(h) Composite Plans.--A multiemployer plan that
incorporates the features of a composite plan as provided in
section 801(b) shall be treated as a single plan for purposes
of the report required by this section, except that separate
financial statements and actuarial statements shall be
provided under paragraphs (3) and (4) of subsection (a) for
the defined benefit plan component and for the composite plan
component of the multiemployer plan.''.
(3) Treatment for purposes of pension benefit statements.--
Section 105(a) of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1025(a)) is amended by adding at the end
the following:
``(4) Composite plans.--For purposes of this subsection, a
composite plan shall be treated as a defined benefit plan to
the extent prescribed by the Secretary in regulations that
take into account the differences between a composite plan
and a defined benefit plan that is a multiemployer plan.''.
(b) Amendments to the Internal Revenue Code of 1986.--
Section 6058 of the Internal Revenue Code of 1986 is amended
by redesignating subsection (f) as subsection (g) and by
inserting after subsection (e) the following:
``(f) Composite Plans.--A multiemployer plan that
incorporates the features of a composite plan as provided in
section 437(b) shall be treated as a single plan for purposes
of the return required by this section, except that separate
financial statements shall be provided for the defined
benefit plan component and for the composite plan component
of the multiemployer plan.''.
(c) Effective Date.--The amendments made by this section
shall apply to plan years beginning after the date of the
enactment of this Act.
[[Page S7630]]
SEC. 503. TREATMENT OF COMPOSITE PLANS UNDER TITLE IV.
(a) Definition.--Section 4001(a) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1301(a)) is amended by
striking the period at the end of paragraph (21) and
inserting a semicolon and by adding at the end the following:
``(22) Composite plan.--The term `composite plan' has the
meaning set forth in section 801.''.
(b) Composite Plans Disregarded for Calculating Premiums.--
Section 4006(a) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1306(a)) is amended by adding at the
end the following:
``(9) The composite plan component of a multiemployer plan
shall be disregarded in determining the premiums due under
this section from the multiemployer plan.''.
(c) Composite Plans Not Covered.--Section 4021(b)(1) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1321(b)(1)) is amended by striking ``Act'' and inserting
``Act, or a composite plan, as defined in paragraph (43) of
section 3 of this Act''.
(d) No Withdrawal Liability.--Section 4201 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1381) is
amended by adding at the end the following:
``(c) Contributions by an employer to the composite plan
component of a multiemployer plan shall not be taken into
account for any purpose under this title.''.
(e) No Withdrawal Liability for Certain Plans.--Section
4201 of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1381) is further amended by adding at the end the
following:
``(d) Contributions by an employer to a multiemployer plan
described in the except clause of section 3(35) of this Act
pursuant to a collective bargaining agreement that
specifically designates that such contributions shall be
allocated to the separate defined contribution accounts of
participants under the plan shall not be taken into account
with respect to the defined benefit portion of the plan for
any purpose under this title (including the determination of
the employer's highest contribution rate under section 4219),
even if, under the terms of the plan, participants have the
option to transfer assets in their separate defined
contribution accounts to the defined benefit portion of the
plan in return for service credit under the defined benefit
portion, at rates established by the plan sponsor.
``(e) A legacy plan created under section 805 shall be
deemed to have no unfunded vested benefits for purposes of
this part, for each plan year following a period of 5
consecutive plan years for which--
``(1) the plan was fully funded within the meaning of
section 805 for at least 3 of the plan years during that
period, ending with a plan year for which the plan is fully
funded;
``(2) the plan had no unfunded vested benefits for at least
3 of the plan years during that period, ending with a plan
year for which the plan is fully funded; and
``(3) the plan is projected to be fully funded and to have
no unfunded vested benefits for the following four plan
years.''.
(f) No Withdrawal Liability for Employers Contributing to
Certain Fully Funded Legacy Plans.--Section 4211 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1382) is amended by adding at the end the following:
``(g) Legacy Plans.--No amount of unfunded vested benefits
shall be allocated to an employer that has an obligation to
contribute to a legacy plan described in subsection (e) of
section 4201 for each plan year for which such subsection
applies.''.
(g) No Obligation To Contribute.--Section 4212 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1392) is amended by adding at the end the following:
``(d) No Obligation To Contribute.--An employer shall not
be treated as having an obligation to contribute to a
multiemployer defined benefit plan within the meaning of
subsection (a) solely because--
``(1) in the case of a multiemployer plan that includes a
composite plan component, the employer has an obligation to
contribute to the composite plan component of the plan;
``(2) the employer has an obligation to contribute to a
composite plan that is maintained pursuant to one or more
collective bargaining agreements under which the
multiemployer defined benefit plan is or previously was
maintained; or
``(3) the employer contributes or has contributed under
section 805(d) to a legacy plan associated with a composite
plan pursuant to a collective bargaining agreement but
employees of that employer were not eligible to accrue
benefits under the legacy plan with respect to service with
that employer.''.
(h) No Inference.--Nothing in the amendment made by
subsection (e) shall be construed to create an inference with
respect to the treatment under title IV of the Employee
Retirement Income Security Act of 1974, as in effect before
such amendment, of contributions by an employer to a
multiemployer plan described in the except clause of section
3(35) of such Act that are made before the effective date of
subsection (e) specified in subsection (h)(2).
(i) Effective Date.--
(1) In general.--Except as provided in subparagraph (2),
the amendments made by this section shall apply to plan years
beginning after the date of the enactment of this Act.
(2) Special rule for section 414(k) multiemployer plans.--
The amendment made by subsection (e) shall apply only to
required contributions payable for plan years beginning after
the date of the enactment of this Act.
SEC. 504. CONFORMING CHANGES.
(a) Definitions.--
(1) Amendment to employee retirement income security act of
1974.--Section 3 of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1002) is amended--
(A) in paragraph (35), by inserting ``or a composite plan''
after ``other than an individual account plan''; and
(B) by adding at the end the following:
``(43) The term `composite plan' has the meaning given the
term in section 801(a).''.
(2) Amendment to internal revenue code of 1986.--Section
414(j) of the Internal Revenue Code of 1986 is amended by
inserting ``, other than a composite plan (as defined in
section 437(a)),'' after ``any plan''.
(b) Special Funding Rule for Certain Legacy Plans.--
(1) Amendment to employee retirement income security act of
1974.--Section 304(b) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1084(b)), as amended by this
Act, is amended by adding at the end the following:
``(10) Special funding rule for certain legacy plans.--In
the case of a multiemployer defined benefit plan that has
adopted an amendment under section 801(b), in accordance with
which no further benefits shall accrue under the
multiemployer defined benefit plan, the plan sponsor may
combine the outstanding balance of all charge and credit
bases and amortize that combined base in level annual
installments (until fully amortized) over a period of 25 plan
years beginning with the plan year following the date all
benefit accruals ceased, but only if the plan is not in
endangered or critical status under section 305.''.
(2) Amendment to internal revenue code of 1986.--Section
431(b) of the Internal Revenue Code of 1986, as amended by
this Act, is amended by adding at the end the following:
``(10) Special funding rule for certain legacy plans.--In
the case of a multiemployer defined benefit plan that has
adopted an amendment under section 437(b), in accordance with
which no further benefits shall accrue under the
multiemployer defined benefit plan, the plan sponsor may
combine the outstanding balance of all charge and credit
bases and amortize that combined base in level annual
installments (until fully amortized) over a period of 25 plan
years beginning with the plan year following the date on
which all benefit accruals ceased, but only if the plan is
not in endangered or critical status under section 432.''.
(c) Benefits After Merger, Consolidation, or Transfer of
Assets.--
(1) Amendment to employee retirement income security act of
1974.--Section 208 of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1058) is amended--
(A) by striking so much of the first sentence as precedes
``may not merge'' and inserting the following:
``(1) In general.--Except as provided in paragraph (2), a
pension plan may not merge, and''; and
(B) by striking the second sentence and adding at the end
the following:
``(2) Special requirements for multiemployer plans.--
Paragraph (1) shall not apply to any transaction to the
extent that participants either before or after the
transaction are covered under a multiemployer plan to which
title IV of this Act applies or a composite plan.''.
(2) Amendments to internal revenue code of 1986.--
(A) Qualification requirement.--Section 401(a)(12) of the
Internal Revenue Code of 1986 is amended--
(i) by striking ``(12) A trust'' and inserting the
following:
``(12) Benefits after merger, consolidation, or transfer of
assets.--
``(A) In general.--Except as provided in subparagraph (B),
a trust'';
(ii) by striking the second sentence; and
(iii) by adding at the end the following:
``(B) Special requirements for multiemployer plans.--
Subparagraph (A) shall not apply to any multiemployer plan
with respect to any transaction to the extent that
participants either before or after the transaction are
covered under a multiemployer plan to which title IV of the
Employee Retirement Income Security Act of 1974 applies or a
composite plan.''.
(B) Additional qualification requirement.--Paragraph (1) of
section 414(l) of such Code is amended--
(i) by striking ``(1) In general'' and all that follows
through ``shall not constitute'' and inserting the following:
``(1) Benefit protections: merger, consolidation,
transfer.--
``(A) In general.--Except as provided in subparagraph (B),
a trust which forms a part of a plan shall not constitute'';
and
(ii) by striking the second sentence; and
(iii) by adding at the end the following:
``(B) Special requirements for multiemployer plans.--
Subparagraph (A) does not apply to any multiemployer plan
with respect to any transaction to the extent that
participants either before or after the transaction are
covered under a multiemployer plan to which title IV of the
Employee Retirement Income Security Act of 1974 applies or a
composite plan.''.
(d) Requirements for Status as a Qualified Plan.--
(1) Requirement that actuarial assumptions be specified.--
Section 401(a)(25) of the Internal Revenue Code of 1986 is
amended by inserting ``(in the case of a composite plan,
[[Page S7631]]
benefits objectively calculated pursuant to a formula)''
after ``definitely determinable benefits''.
(2) Missing participants in terminating composite plan.--
Section 401(a)(34) of the Internal Revenue Code of 1986 is
amended by striking ``, a trust'' and inserting ``or a
composite plan, a trust''.
(e) Deduction for Contributions to a Qualified Plan.--
Section 404(a)(1) of the Internal Revenue Code of 1986 is
amended by redesignating subparagraph (E) as subparagraph (F)
and by inserting after subparagraph (D) the following:
``(E) Composite plans.--
``(i) In general.--In the case of a composite plan,
subparagraph (D) shall not apply and the maximum amount
deductible for a plan year shall be the excess (if any) of--
``(I) 140 percent of the greater of--
``(aa) the current liability of the plan determined in
accordance with the principles of section 431(c)(6)(D), or
``(bb) the present value of plan liabilities as determined
under section 438, over
``(II) the fair market value of the plan's assets,
projected to the end of the plan year.
``(ii) Special rules for predecessor multiemployer plan to
composite plan.--
``(I) In general.--Except as provided in subclause (II), if
an employer contributes to a composite plan with respect to
its employees, contributions by that employer to a legacy
plan with respect to some or all of the same group of
employees shall be deductible under sections 162 and this
section, subject to the limits in subparagraph (D).
``(II) Transition contribution.--The full amount of a
contribution to satisfy the transition contribution
requirement (as defined in section 440A(d)) and allocated to
the legacy defined benefit plan for the plan year shall be
deductible for the employer's taxable year ending with or
within the plan year.''.
(f) Minimum Vesting Standards.--
(1) Years of service under composite plans.--
(A) Employee retirement income security act of 1974.--
Section 203 of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1053) is amended by inserting after
subsection (f) the following:
``(g) Special Rules for Computing Years of Service Under
Composite Plans.--
``(1) In general.--In determining a qualified employee's
years of service under a composite plan for purposes of this
section, the employee's years of service under a legacy plan
shall be treated as years of service earned under the
composite plan. For purposes of such determination, a
composite plan shall not be treated as a defined benefit plan
pursuant to section 801(d).
``(2) Qualified employee.--For purposes of this subsection,
an employee is a qualified employee if the employee first
completes an hour of service under the composite plan
(determined without regard to the provisions of this
subsection) within the 12-month period immediately preceding
or the 24-month period immediately following the date the
employee ceased to accrue benefits under the legacy plan.
``(3) Certification of years of service.--For purposes of
paragraph (1), the plan sponsor of the composite plan shall
rely on a written certification by the plan sponsor of the
legacy plan of the years of service the qualified employee
completed under the defined benefit plan as of the date the
employee satisfies the requirements of paragraph (2),
disregarding any years of service that had been forfeited
under the rules of the defined benefit plan before that date
unless contrary to service records provided by the
participant. In the case of a conflict, the plan sponsor
shall evaluate the evidence and make a reasonable factual
determination.
``(h) Special Rules for Computing Years of Service Under
Legacy Plans.--
``(1) In general.--In determining a qualified employee's
years of service under a legacy plan for purposes of this
section, and in addition to any service under applicable
regulations, the employee's years of service under a
composite plan shall be treated as years of service earned
under the legacy plan. For purposes of such determination, a
composite plan shall not be treated as a defined benefit plan
pursuant to section 801(d).
``(2) Qualified employee.--For purposes of this subsection,
an employee is a qualified employee if the employee first
completes an hour of service under the composite plan
(determined without regard to the provisions of this
subsection) within the 12-month period immediately preceding
or the 24-month period immediately following the date the
employee ceased to accrue benefits under the legacy plan.
``(3) Certification of years of service.--For purposes of
paragraph (1), the plan sponsor of the legacy plan shall rely
on a written certification by the plan sponsor of the
composite plan of the years of service the qualified employee
completed under the composite plan after the employee
satisfies the requirements of paragraph (2), disregarding any
years of service that has been forfeited under the rules of
the composite plan unless contrary to service records
provided by the participant. In the case of a conflict, the
plan sponsor shall evaluate the evidence and make a
reasonable factual determination.''.
(B) Internal revenue code of 1986.--Section 411(a) of the
Internal Revenue Code of 1986 is amended by adding at the end
the following:
``(14) Special rules for determining years of service under
composite plans.--
``(A) In general.--In determining a qualified employee's
years of service under a composite plan for purposes of this
subsection, the employee's years of service under a legacy
plan shall be treated as years of service earned under the
composite plan. For purposes of such determination, a
composite plan shall not be treated as a defined benefit plan
pursuant to section 437(d).
``(B) Qualified employee.--For purposes of this paragraph,
an employee is a qualified employee if the employee first
completes an hour of service under the composite plan
(determined without regard to the provisions of this
paragraph) within the 12-month period immediately preceding
or the 24-month period immediately following the date the
employee ceased to accrue benefits under the legacy plan.
``(C) Certification of years of service.--For purposes of
subparagraph (A), the plan sponsor of the composite plan
shall rely on a written certification by the plan sponsor of
the legacy plan of the years of service the qualified
employee completed under the legacy plan as of the date the
employee satisfies the requirements of subparagraph (B),
disregarding any years of service that had been forfeited
under the rules of the defined benefit plan before that date
unless contrary to service records provided by the
participant. In the case of a conflict, the plan sponsor
shall evaluate the evidence and make a reasonable factual
determination.
``(15) Special rules for computing years of service under
legacy plans.--
``(A) In general.--In determining a qualified employee's
years of service under a legacy plan for purposes of this
section, and in addition to any service under applicable
regulations, the employee's years of service under a
composite plan shall be treated as years of service earned
under the legacy plan. For purposes of such determination, a
composite plan shall not be treated as a defined benefit plan
pursuant to section 437(d).
``(B) Qualified employee.--For purposes of this paragraph,
an employee is a qualified employee if the employee first
completes an hour of service under the composite plan
(determined without regard to the provisions of this
paragraph) within the 12-month period immediately preceding
or the 24-month period immediately following the date the
employee ceased to accrue benefits under the legacy plan.
``(C) Certification of years of service.--For purposes of
subparagraph (A), the plan sponsor of the legacy plan shall
rely on a written certification by the plan sponsor of the
composite plan of the years of service the qualified employee
completed under the composite plan after the employee
satisfies the requirements of subparagraph (B), disregarding
any years of service that has been forfeited under the rules
of the composite plan unless contrary to service records
provided by the participant. In the case of a conflict, the
plan sponsor shall evaluate the evidence and make a
reasonable factual determination.''.
(2) Reduction of benefits.--
(A) Employee retirement income security act of 1974.--
Section 203(a)(3)(E)(ii) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1053(a)(3)(E)(ii)) is
amended--
(i) in subclause (I) by striking ``4244A'' and inserting
``305(f), 803,''; and
(ii) in subclause (II) by striking ``4245'' and inserting
``305(f), 4245,''.
(B) Internal revenue code of 1986.--Section 411(a)(3)(F) of
the Internal Revenue Code of 1986 is amended--
(i) in clause (i) by striking ``section 418D or under
section 4281 of the Employee Retirement Income Security Act
of 1974'' and inserting ``section 432(f) or 439 or under
section 4281 of the Employee Retirement Income Security Act
of 1974''; and
(ii) in clause (ii) by inserting ``or 432(f)'' after
``section 418E''.
(3) Accrued benefit requirements.--
(A) Employee retirement income security act of 1974.--
Section 204(b)(1)(B)(i) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1054(b)(1)(B)(i)) is amended
by inserting ``, including an amendment reducing or
suspending benefits under section 305(f), 803, 4245 or
4281,'' after ``any amendment to the plan''.
(B) Internal revenue code of 1986.--Section 411(b)(1)(B)(i)
of the Internal Revenue Code of 1986 is amended by inserting
``, including an amendment reducing or suspending benefits
under section 418E, 432(f) or 439, or under section 4281 of
the Employee Retirement Income Security Act of 1974,'' after
``any amendment to the plan''.
(4) Additional accrued benefit requirements.--
(A) Employee retirement income security act of 1974.--
Section 204(b)(1)(H)(v) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1053(b)(1)(H)(v)) is amended
by inserting before the period at the end the following: ``,
or benefits are reduced or suspended under section 305(f),
803, 4245, or 4281''.
(B) Internal revenue code of 1986.--Section
411(b)(1)(H)(iv) of the Internal Revenue Code of 1986 is
amended--
(i) in the heading by striking ``benefit'' and inserting
``benefit and the suspension and reduction of certain
benefits''; and
(ii) in the text by inserting before the period at the end
the following: ``, or benefits are reduced or suspended under
section 418E, 432(f), or 439, or under section 4281 of the
Employee Retirement Income Security Act of 1974''.
[[Page S7632]]
(5) Accrued benefit not to be decreased by amendment.--
(A) Employee retirement income security act of 1974.--
Section 204(g)(1) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1053(g)(1)) is amended by inserting
after ``302(d)(2)'' the following: ``, 305(f), 803, 4245,''.
(B) Internal revenue code of 1986.--Section 411(d)(6)(A) of
the Internal Revenue Code of 1986 is amended by inserting
after ``412(d)(2),'' the following: ``418E, 432(f), or
439,''.
(g) Certain Funding Rules Not Applicable.--
(1) Employee retirement income security act of 1974.--
Section 305 of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1085), as amended by section 212(a) and as in
effect before the amendments made by section 212 other than
subsection (a) thereof, is further amended by adding at the
end the following:
``(l) Legacy Plans.--This section and sections 302 and 304
shall not apply to an employer that has an obligation to
contribute to a plan that is a legacy plan within the meaning
of section 805(a) solely because the employer has an
obligation to contribute to a composite plan described in
section 801 that is associated with that legacy plan.''.
(2) Internal revenue code of 1986.--Section 432 of the
Internal Revenue Code of 1986, as amended by section 211(a)
and as in effect before the amendments made by section 211
other than subsection (a) thereof, is further amended by
adding at the end the following:
``(l) Legacy Plans.--This section and sections 412 and 431
shall not apply to an employer that has an obligation to
contribute to a plan that is a legacy plan within the meaning
of section 440A(a) solely because the employer has an
obligation to contribute to a composite plan described in
section 437 that is associated with that legacy plan.''.
(h) Termination of Composite Plan.--Section 403(d) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1103(d) is amended--
(1) in paragraph (1), by striking ``regulations of the
Secretary.'' and inserting ``regulations of the Secretary, or
as provided in paragraph (3).''; and
(2) by adding at the end the following:
``(3) Section 4044(a) of this Act shall be applied in the
case of the termination of a composite plan by--
``(A) limiting the benefits subject to paragraph (3)
thereof to benefits as defined in section 802(b)(3)(B); and
``(B) including in the benefits subject to paragraph (4)
all other benefits (if any) of individuals under the plan
that would be guaranteed under section 4022A if the plan were
subject to title IV.''.
(i) Good Faith Compliance Prior to Guidance.--Where the
implementation of any provision of law added or amended by
this Act is subject to issuance of regulations by the
Secretary of Labor, the Secretary of the Treasury, or the
Pension Benefit Guaranty Corporation, a multiemployer plan
shall not be treated as failing to meet the requirements of
any such provision prior to the issuance of final regulations
or other guidance to carry out such provision if such plan is
operated in accordance with a reasonable, good faith
interpretation of such provision.
SEC. 505. EFFECTIVE DATE.
Unless otherwise specified, the amendments made by this
title shall apply to plan years beginning after the date of
the enactment of this title.
TITLE VI--FINANCIAL PROVISIONS
SEC. 601. ADDITIONAL PREMIUMS.
(a) Increase in Flat Dollar Premium Beginning in 2021.--
Section 4006(a)(3) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1306(a)(3)) is amended--
(1) in subparagraph (A)--
(A) in clause (vi)--
(i) by inserting ``and before January 1, 2021,'' after
``2014,''; and
(ii) by striking ``or'' at the end;
(B) by moving the margins of clause (vii) 2 ems to the
left;
(C) by redesignating clause (vii) as clause (ix); and
(D) by inserting after clause (vi) the following:
``(vii) in the case of a multiemployer plan, for plan years
beginning in calendar year 2021, for each individual who is a
participant in such plan during the plan year, the dollar
amount in effect under clause (i) for plan years beginning in
2021,''.
(b) Flat and Variable Rate Premium for Years After 2021.--
Section 4006(a)(3)) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1306(a)(3)), as amended by
subsection (a), is further amended--
(1) by inserting after clause (vii) of subparagraph (A) the
following:
``(viii) in the case of a multiemployer plan, for any plan
year beginning after December 31, 2021, an amount for each
individual who is a participant in such plan during the plan
year equal to the sum of--
``(I) the premium rate applicable under clause (i)(VIII),
plus
``(II) the additional premium (if any) determined under
subparagraph (N) for the plan year, or''; and
(2) by adding at the end the following:
``(N)(i) The additional premium determined under this
subparagraph with respect to any multiemployer plan for any
plan year shall be an amount equal to the least of--
``(I) the amount determined under clause (ii) for the plan
year divided by the number of participants in such plan as of
the close of the preceding plan year;
``(II) 10 percent of the historic base contributions
divided by the number of participants in such plan as of the
close of the preceding plan year; or
``(III) $250.
``(ii) The amount determined under this clause for any plan
year shall be an amount equal to $10 for each $1,000 (or
fraction thereof) of the multiemployer unfunded vested
benefits under the plan as of the close of the preceding plan
year. For purposes of this clause, the term `multiemployer
unfunded vested benefits' means, for a plan year, the excess
(if any) of--
``(I) the current liability of the plan as determined under
section 304(c)(6)(D) by taking into account only vested
benefits, over
``(II) the fair market value (as determined under section
304(c)(6)(A)(ii)(I)) of the plan assets for the plan year
which are held by the plan as of the valuation date.
``(iii) For purposes of clause (i)(II), the term `historic
base contributions' means the average amount of the
contributions, excluding any payments of withdrawal
liability, to the plan required to be reported by the plan on
Schedule MB of the 3 most recent Forms 5500 required to be
filed before the date of enactment of this subparagraph.
``(iv) For each plan year beginning after December 31,
2022, there shall be substituted for the dollar amount of
historic base contributions under clause (i)(II) and the
dollar amount specified in clause (i)(III) an amount equal to
the greater of--
``(I) the product derived by multiplying such dollar amount
for plan years beginning in that calendar year by the ratio
of--
``(aa) the national average wage index (as defined in
section 209(k)(1) of the Social Security Act) for the first
of the 2 calendar years preceding the calendar year in which
such plan year begins, to
``(bb) the national average wage index (as so defined) for
2020, or
``(II) such dollar amount in effect for plan years
beginning in the preceding calendar year.
If any amount determined under this clause is not a multiple
of $1, such product shall be rounded to the nearest multiple
of $1.''.
(c) Additional Premiums.--Section 4006(a) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1306(a)),
as amended by this Act, is further amended by adding at the
end the following:
``(10) Additional premiums payable by participants and
beneficiaries.--
``(A) In general.--In addition to the amounts payable under
paragraph (3), for plan years beginning after December 31,
2021, with respect to multiemployer plans, premiums shall be
payable to the corporation with respect to participants and
beneficiaries who are in pay status in accordance with this
paragraph.
``(B) Amounts payable.--Subject to subparagraphs (C), (D),
and (E), the monthly amount payable by each participant or
beneficiary who is in pay status is--
``(i) an amount equal to 3 percent of the participant's or
beneficiary's aggregate monthly benefit, in the case of a
plan in endangered status, as described in section 305(b)(2);
``(ii) an amount equal to 5 percent of the participant's or
beneficiary's aggregate monthly benefit, in the case of a
plan in critical status, as described in section 305(b)(3);
``(iii) an amount equal to 7 percent of the participant's
or beneficiary's aggregate monthly benefit, in the case of a
plan in critical and declining status (as described in
section 305(b)(7)), a plan that became an insolvent plan
after the date of enactment of this paragraph, or a plan that
has been terminated under section 4041A or 4042 but is not
insolvent, unless that plan is (or was) an original or
successor plan pursuant to a special partition order under
section 4233A; or
``(iv) notwithstanding clauses (i), (ii), or (iii), an
amount equal to 10 percent of the participant's or
beneficiary's aggregate monthly benefit, in the case of a
plan which is (or was) an original or successor plan pursuant
to a special partition order under section 4233A, regardless
of the status of the original or successor plan.
``(C) Coordination with suspension of benefits.--In the
case of any participant or beneficiary whose benefits are
suspended under section 305(f)(9), the percentage of benefits
payable under the applicable clause of subparagraph (B) with
respect to the participant or beneficiary shall be reduced
(but not below zero) by the percentage of benefits which were
so suspended.
``(D) Treatment of benefits based on disability.--No
benefits--
``(i) based on disability (as defined by the plan), or
``(ii) of a participant or beneficiary who is entitled to a
benefit under title II of the Social Security Act on the
basis of a disability (as defined in section 223(d)(2) of
such Act),
shall be included in the calculation of the participant's or
beneficiary's aggregate monthly benefit for purposes of
determining the payment due under subparagraph (B).
``(E) Phaseout of premium for those aged 75 and older.--
``(i) In general.--In the case of a participant or
beneficiary who has attained or will attain at least 75 years
of age in a plan year, the monthly amount payable by such
participant or beneficiary for months during such plan year
under this paragraph (determined without regard to this
subparagraph) shall be reduced by the applicable percentage
of such amount.
[[Page S7633]]
``(ii) Applicable percentage.-- For purposes of clause (i),
the applicable percentage for any month shall be determined
in accordance with the following table:
The applicable percentage is:ll attain during the plan year, age:
75.........................................................20 percent
76.........................................................40 percent
77.........................................................60 percent
78.........................................................80 percent
79 or older.............................................. 100 percent
``(F) Methods of collection.--The premiums payable under
subparagraph (B) shall be collected by the plan from
participants who are receiving benefits under the plan by
deducting the amount of the premium from the benefits as and
when paid, and holding such amounts in a separate account to
be remitted to the corporation annually, as prescribed by
regulations of the corporation. Amounts held in a separate
account under this subparagraph shall not accrue interest,
shall not be treated as assets of the plan, and shall not be
commingled with any other assets of the plan.
``(G) Plan amendments.--The administrator of each
multiemployer plan shall amend the plan documents to allow
for deductions from benefits pursuant to this paragraph.
``(H) Preemption.--This paragraph shall supersede any law
of a State which would directly or indirectly prohibit or
restrict an employer, plan, or labor organization from
withholding or remitting premium amounts in accordance with
this paragraph.
``(I) Determination of plan status.--
``(i) In general.--Except as otherwise provided by the
regulations issued pursuant to clause (ii), for purposes of
determining premiums due under this paragraph, the plan's
status shall be the status certified under section 305 for
the first plan year beginning on or after January 1, 2021.
``(ii) Subsequent changes in status.--The corporation shall
issue regulations regarding the timing required for
reflecting, in the amounts withheld, a revised plan status
certified at a later date. In no event shall such regulations
allow a delay of more than 90 days.
``(11) Additional premiums payable by employers and labor
organizations.--
``(A) In general.--In addition to the amounts payable under
paragraph (3), for plan years beginning after December 31,
2021, with respect to multiemployer plans, premiums shall be
payable to the corporation with respect to employers and
labor organizations in accordance with this paragraph.
``(B) Employers.--The monthly amount payable by employers,
for each employee participating in the plan (as determined
under subparagraph (D)) during that month is--
``(i) $1 in the case of a plan in unrestricted status
pursuant to section 305(b)(1)(B), or $1.50 in the case of a
plan in stable status pursuant to section 305(b)(1)(A), but
only if the plan is not an original plan or a successor plan
within the meaning of section 4233A; and
``(ii) $2.50 in any other case.
``(C) Labor organizations.--The monthly amount payable by
labor organizations, for each member paying dues and
participating in the plan (as determined under subparagraph
(D)) during that month is--
``(i) $1 in the case of a plan in unrestricted status
pursuant to section 305(b)(1)(B), or $1.50 in the case of a
plan in stable status pursuant to section 305(b)(1)(A), but
only if the plan is not an original plan or a successor plan
within the meaning of section 4233A; and
``(ii) $2.50 in any other case.
``(D) Persons participating in the plan.--For purposes of
subparagraphs (B) and (C), an employee or member
participating in the plan during any month is a person with
respect to whom the employer had an obligation to contribute
to the plan under the terms of a collective bargaining
agreement or other participation agreement for that month.
``(E) Remittance.--Premiums required under subparagraph (B)
or (C) shall be remitted to the plan monthly and held in a
separate account until remittance, as prescribed in
subparagraph (F). In the case of a participant or beneficiary
on whose behalf more than one employer contributed during a
month, the plan may elect to apportion the monthly amount to
the employers on a proportional basis. Amounts held in a
separate account under this subparagraph shall not accrue
interest, shall not be treated as assets of the plan, and
shall not be commingled with any other assets of the plan.
``(F) Submission to the corporation.--Each plan shall
submit the premiums under subparagraph (E) to the
corporation, on an annual basis, as prescribed by regulations
of the corporation.
``(G) Determination of plan status.--
``(i) In general.--Except as otherwise provided by the
regulations issued pursuant to clause (ii), for purposes of
determining premiums due under this paragraph, the plan's
status shall be the status certified under section 305 for
the first plan year beginning on or after January 1, 2021.
``(ii) Subsequent changes in status.--The corporation shall
issue regulations regarding the timing required for
reflecting, in the amounts due, a revised plan status
certified at a later date. In no event shall such regulations
allow a delay of more than 90 days.''.
(d) Payment of Premiums.--
(1) Applicability of premiums.--Section 4007(b) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1307(b)) is amended by adding at the end the following:
``(3)(A)(i) The following plans shall not owe a variable
rate premium determined under section 4006(a)(3)(N):
``(I) An insolvent plan that has commenced receiving
financial assistance.
``(II) A plan which is certified by the plan actuary under
section 305 as being in unrestricted status pursuant to
section 305(b)(1)(B), and which is not an original plan
within the meaning of section 4233A.
``(III) With respect to plan years beginning before January
1, 2025, a plan which is certified by the plan actuary under
section 305 as being in stable status pursuant to section
305(b)(1)(A), and which is not an original plan within the
meaning of section 4233A.
``(ii) An insolvent plan that has commenced receiving
financial assistance shall not owe the flat rate premium
under section 4006(a)(3)(A)(viii)(I).
``(B) In the case of a special partition under section
4233A, the original plan shall calculate and remit premiums
under section 4006 as if the original plan and successor plan
were one plan and the successor plan shall not be required to
remit any such premiums.
``(4) Paragraph (1) shall apply to the additional premiums
required by section 4006(a)(10) and (11).''.
(2) Authorized civil actions.--Section 4007(c) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1307(c)) is amended by inserting after the first sentence the
following: ``The corporation is authorized to bring a civil
action to prevent or correct any action by a designated
payor, if a principal purpose of the action by the designated
payor is to evade or avoid the payment of premiums, and the
corporation shall be authorized to recover the amount of
premium that should have been paid by such payor, plus a late
payment penalty and interest.''.
(e) Reporting on Premium Increases and Guarantee
Reductions.--Section 4008 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1308) is amended by adding at
the end the following:
``(c) Beginning with the report for fiscal year 2025, if
the corporation projects in its reporting under this section
that the corporation's multiemployer plan program will not
remain solvent for at least 10 years after the date of the
report, the corporation shall include in the report a
recommendation for a balanced combination of premium
increases and guarantee reductions needed to ensure solvency
for the next 20 years without respect to any loans under
section 4005. Such recommendations shall be automatically
adopted at the beginning of the next fiscal year unless
Congress takes other action.''.
(f) Delinquent Contributions.--
(1) In general.--Section 515 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1145) is amended--
(A) by striking ``contributions.--Every'', and inserting
``contributions and premiums.--
``(a) In General.--Every'', and
(B) by adding at the end the following new subsection:
``(b) Premiums.--Every employer or labor organization which
is obligated to remit premiums with respect to a
multiemployer plan under section 4006 shall remit such
premiums to the plan in accordance with the terms of the plan
and regulations issued by the corporation.''.
(2) Civil enforcement.--Section 502(g)(2)(A) of such Act
(29 U.S.C. 1132(g)(2)(A)) is amended by striking
``contributions,'' and inserting ``contributions or
premiums,''.
SEC. 602. FUNDING.
(a) Loans to the Corporation for the Fund to Pay Basic
Benefits.--Section 4005 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1305) is amended by adding at
the end the following:
``(i)(1) The corporation may borrow from the Secretary of
the Treasury such funds as are necessary to pay basic
benefits guaranteed under section 4022A or expenses related
to the corporation's multiemployer plan program if the
balance of assets in the revolving fund established under
subsection (a) for purposes of paying such benefits is
$500,000,000 or less within that year. The corporation may
invest amounts so borrowed in accordance with subsection
(b)(3)(A).
``(2) Amounts borrowed under this subsection shall be--
``(A) issued at an annual interest rate of 0 percent; and
``(B) repaid by the corporation--
``(i) beginning 20 years after the date on which the loan
is issued;
``(ii) over a period of not more than 20 years from
commencement of repayment; and
``(iii) out of the fund established under subsection (a) to
pay basic benefits guaranteed under section 4022A.
``(3) The corporation shall notify the Committee on Health,
Education, Labor, and Pensions and the Committee on Finance
of the Senate and the Committee on Education and Labor and
the Committee on Ways and Means of the House of
Representatives within 14 days of requesting a loan under
this subsection.
``(4) Beginning on January 1, 2021, if, as of the close of
any calendar year the outstanding balance of the loans
provided to the corporation during the previous year under
this subsection exceeded $2,000,000,000, the multiemployer
flat-rate premium rates applicable under section 4006(a)
solely for plan
[[Page S7634]]
years beginning in the immediately succeeding calendar year
shall be increased by 20 percent.''.
(b) Study on Funding for Basic Benefit Guarantee.--Section
4022A(f) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1322a(f)) is amended--
(1) by striking ``Committee on Labor and Human Resources''
each place such term appears and inserting ``Committee on
Health, Education, Labor, and Pensions'';
(2) in paragraph (1)(A)--
(A) in clause (i), by striking ``, and'' and inserting a
semicolon; and
(B) by inserting after clause (ii) the following:
``(iii) whether the Corporation projects that the loans
issued under section 4005(i) will be repaid in accordance
with the schedule set forth in paragraph (2)(B) of such
section; and'';
(3) in paragraph (2)--
(A) in subparagraph (A)--
(i) in the matter preceding clause (i), by inserting ``and
repayment of loans under section 4005(i)'' after
``multiemployer plans''; and
(ii) in clause (ii), by inserting ``, and repayment of any
loans issued under section 4005(i)'' before the comma at the
end; and
(B) in subparagraph (C), by striking ``second''; and
(4) in paragraph (3)(A)(ii), by inserting ``and repayment
of loans issued under section 4005(i)'' before the period.
SEC. 603. COMPOSITE PLAN TRANSITION FEE.
(a) In General.--Section 4006(a) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1306(a)), as amended
by this Act, is further is amended by adding at the end the
following:
``(12) Composite plan transition fee.--Notwithstanding
paragraph (9), in any year after 2024, a composite plan (as
defined in section 801(a)) shall remit to the legacy plan
(within the meaning of section 805) $15 per participant that
is not also a participant in the legacy plan. The legacy plan
shall remit such amount to the corporation in addition to its
premiums otherwise required under this section.''.
(b) Conforming Amendment.--Section 4007(b)(4) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1307(b)(4)), as added by section 601, is amended by inserting
``, and the transition fees required by section 4006(a)(12)''
before the period.
____________________