[Congressional Record (Bound Edition), Volume 150 (2004), Part 1]
[Senate]
[Pages 371-372]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 2235. Mr. SPECTER submitted an amendment intended to be proposed 
by him to the bill H.R. 3108, to amend the Employee Retirement Income 
Security Act of 1974 and the Internal Revenue Code of 1986 to 
temporarily replace the 30-year Treasury rate with a rate based on 
long-term corporate bonds for certain pension plan funding requirements

[[Page 372]]

and other provisions, and for other purposes; which was ordered to lie 
on the table; as follows;

       At the appropriate place, insert:

     SEC. __. RESTORATION OF CERTAIN PLANS TERMINATING IN 2003.

       (a) In General.--Notwithstanding any provision of the 
     Internal Revenue Code of 1986 or the Employee Retirement 
     Income Security Act of 1974, the provisions of subsection (b) 
     shall apply to any defined benefit plan that was--
       (1) maintained by a commercial passenger air carrier,
       (2) maintained for the benefit of such carrier's employees 
     pursuant to a collective bargaining agreement, and
       (3) terminated during the calendar year 2003.
       (b) Restoration of Plan.--The Pension Benefit Guaranty 
     Corporation shall restore any plan described in subsection 
     (a) to the plan's pre-termination status and the control of 
     the plan's assets and liabilities shall be transferred to the 
     employer, unless the collective bargaining agreement provides 
     that the plan should not be restored.
       (c) Exclusion of Expected Increase in Current Liability.--
     In applying section 412(l)(1)(A)(i) of such Code and section 
     302(d)(1)(A)(i) of such Act with respect to a plan restored 
     under subsection (b), any expected increase in current 
     liability due to benefits accruing during each plan year as 
     described in section 412(1)(2)(C) of such Code and section 
     302(d)(2)(C) of such Act shall be excluded.
       (d) Amortization of Unfunded Amounts Under Restoration 
     Payment Schedule.--
       (1) 2004 unfunded accrued liability.--In the case of a plan 
     restored under subsection (b)--
       (A) the initial post-restoration valuation date for a plan 
     described in subsection (a) shall be January 1, 2004,
       (B) the initial restoration amortization base for a plan 
     described in subsection (a) shall be an amount equal to the 
     excess of--
       (i) the accrued benefit liabilities returned by the 
     Corporation, over
       (ii) the market value of plan assets returned by the 
     Corporation, and
       (C) the initial restoration amortization base shall be 
     amortized in level annual installments over a period of 30 
     years after the initial post-restoration valuation date, and 
     the funding standard account of the plan under section 412 of 
     such Code and section 302 of such Act shall be charged with 
     such installments.
       (2) 2004 unfunded current liability.--In the case of a plan 
     restored under subsection (b)--
       (A) the initial post-restoration valuation date for a plan 
     described in subsection (a) shall be January 1, 2004,
       (B) in applying section 412(l)(1)(A)(i) of such Code and 
     section 302(d)(1)(A)(i) of such Act with respect to a plan 
     restored under subsection (b), the unfunded old liability 
     shall be an amount equal to the excess of--
       (i) the current liability returned by the Corporation, over
       (ii) the market value of plan assets returned by the 
     Corporation.
       (C) in applying section 412(l)(1)(A)(i) of such Code and 
     section 302(d)(1)(A) of such Act with respect to a plan 
     restored under subsection (b), the unfunded old liability 
     amount shall be equal to the unfunded old liability amortized 
     in level annual installments over a period of 30 years after 
     the initial post-restoration valuation date.
       (3) Rules of special application.--In applying the 30-year 
     amortization described in paragraph (1)(C) or (2)(C)--
       (A) the assumed interest rate for purposes of paragraph 
     (1)(C) shall be the valuation interest rate used to determine 
     the accrued liability under section 412(c) of such Code and 
     section 302(c) of such Act,
       (B) the assumed interest rate for purposes of paragraph 
     (2)(C) shall be the interest rate used to determine current 
     liability as of January 1, 2004, under section 412(l) of such 
     Code and section 302(d) of such Act,
       (C) the actuarial value of assets as of the initial post-
     restoration valuation date shall be reset to the market value 
     of assets with a 5-year phase-in of unexpected investment 
     gains or losses on a prospective basis, and
       (D) for plans using the frozen initial liability (FIL) 
     funding method in accordance with section 412(c) of such Code 
     and section 302(c) of such Act, the initial unfunded 
     liability used to determine normal cost shall be reset to the 
     initial restoration amortization base.
       (e) Quarterly Contributions.--The requirements of section 
     412(m) of such Code and section 302(e) of such Act shall not 
     apply to a plan restored under subsection (b) until the plan 
     year beginning on the initial post-restoration valuation 
     date. The required annual payment for that year shall be the 
     lesser of--
       (1) the amount determined under section 412(m)(4)(B)(i) of 
     such Code and section 302(e)(4)(B)(i) of such Act, or
       (2) 100 percent of the amount required to be contributed 
     under the plan for the plan year beginning January 1, 2003 
     and ending on the date of plan termination.
       (f) Resetting of Funding Standard Account Balances.--In the 
     case of a plan restored under subsection (b), any accumulated 
     funding deficiency or credit balance in the funding standard 
     account under section 412 of such Code or section 302 of such 
     Act shall be set equal to zero as of the initial post-
     restoration valuation date.
       (g) PBGC Liability Limited.--In the case of any plan which 
     is described in subsection (a), which is restored pursuant to 
     subsection (b), and which subsequently terminates with a date 
     of plan termination before December 31, 2008, section 4022 of 
     the Employee Retirement Income Security Act of 1974 shall be 
     applied as if the plan had been amended to provide that 
     participants would receive no credit for benefit accrual 
     purposes under the plan for service on and after the first 
     day of the plan year beginning after the date of the 
     enactment of this Act.
       (h) Effective Date.--This section shall apply to plan years 
     beginning after December 31, 2002.

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