[Congressional Record (Bound Edition), Volume 150 (2004), Part 1]
[Senate]
[Pages 442-445]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 2262. 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 
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.--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 while the 
     employer was in bankruptcy under chapter 11 of title 11 of 
     the United States Code.

[[Page 443]]

       (b) Restoration of Plan.--The Pension Benefit Guaranty 
     Corporation shall restore any plan described in subsection 
     (a), pursuant to the terms described in subsection (g), and 
     the control of the plan's assets and liabilities shall be 
     transferred to the employer. The date of restoration shall be 
     not later than 60 days after the date the terms of the plan 
     are determined pursuant to subsection (g).
       (c) Exclusion of Expected Increase in Current Liability.--
     In applying section 412(l)(1)(A)(i) of the Internal Revenue 
     Code of 1986 and section 302(d)(1)(A)(i) of the Employee 
     Retirement Income Security Act of 1974 with respect to a plan 
     restored under subsection (b), any expected increase in 
     current liability due to benefits accruing during each plan 
     year as described in section 412(1)(2)(C) of such Code and 
     section 302(d)(2)(C) of such Act shall be excluded.
       (d) Amortization of Unfunded Amounts Under Restoration 
     Payment Schedule.--
       (1) Post-restoration initial unfunded accrued liability.--
     In the case of a plan restored under subsection (b)--
       (A) the initial post-restoration valuation date for a plan 
     described in subsection (a) shall be January 1 of the 
     calendar year following the date of restoration,
       (B) the initial restoration amortization base for a plan 
     described in subsection (a) shall be an amount equal to the 
     excess of--
       (i) the accrued benefit liabilities returned by the 
     Corporation, over
       (ii) the market value of plan assets returned by the 
     Corporation, and
       (C) the initial restoration amortization base shall be 
     amortized in level annual installments over a period 
     determined pursuant to subsection (g) but not to exceed 30 
     years after the initial post-restoration valuation date, and 
     the funding standard account of the plan under section 412 of 
     such Code and section 302 of such Act shall be charged with 
     such installments.
       (2) Unfunded section 412(l) restoration liability.--For 
     purposes of section 412 of such Code and section 302 of such 
     Act, in the case of a plan restored under subsection (b)--
       (A) the initial post-restoration valuation date for a plan 
     described in subsection (a) shall be January 1 of the 
     calendar year following the date of restoration,
       (B) the unfunded section 412(l) restoration liability shall 
     be an amount equal to the excess of--
       (i) the current liability returned by the Corporation, over
       (ii) the market value of plan assets returned by the 
     Corporation, and
       (C) the unfunded section 412(l) restoration liability 
     amount shall be equal to the unfunded section 412(l) 
     restoration liability amortized in level annual installments 
     over a period determined pursuant to subsection (g) but not 
     to exceed 30 years after the initial post-restoration 
     valuation date.
       (3) Rules of special application.--In applying the 30-year 
     amortization described in paragraph (1)(C) or (2)(C)--
       (A) the assumed interest rate for purposes of paragraph 
     (1)(C) shall be the valuation interest rate used to determine 
     the accrued liability under section 412(c) of such Code and 
     section 302(c) of such Act,
       (B) the assumed interest rate for purposes of paragraph 
     (2)(C) shall be the interest rate used to determine current 
     liability as of the initial post-restoration valuation date 
     under section 412(l) of such Code and section 302(d) of such 
     Act,
       (C) the actuarial value of assets as of the initial post-
     restoration valuation date shall be reset to the market value 
     of assets with a 5-year phase-in of unexpected investment 
     gains or losses on a prospective basis, and
       (D) for plans using the frozen initial liability (FIL) 
     funding method in accordance with section 412(c) of such Code 
     and section 302(c) of such Act, the initial unfunded 
     liability used to determine normal cost shall be reset to the 
     initial restoration amortization base.
       (e) Quarterly Contributions.--The requirements of section 
     412(m) of such Code and section 302(e) of such Act shall not 
     apply to a plan restored under subsection (b) until the plan 
     year beginning on the initial post-restoration valuation 
     date. The required annual payment for that year shall be the 
     lesser of--
       (1) the amount determined under section 412(m)(4)(B)(i) of 
     such Code and section 302(e)(4)(B)(i) of such Act, or
       (2) 100 percent of the amount required to be contributed 
     under the plan for the plan year beginning January 1, 2003, 
     and ending on the date of plan termination.
       (f) Resetting of Funding Standard Account Balances.--In the 
     case of a plan restored under subsection (b), any accumulated 
     funding deficiency or credit balance in the funding standard 
     account under section 412 of such Code or section 302 of such 
     Act shall be set equal to zero as of the initial post-
     restoration valuation date.
       (g) Terms of Restored Plan.--
       (1) In general.--The terms of a plan which is restored 
     pursuant to subsection (b) shall be determined by mutual 
     agreement of the employer and the collective bargaining 
     representative of employees covered by the plan. If such 
     parties are unable to reach mutual agreement on such terms, 
     then the terms of the restored plan will be determined by a 
     neutral arbitrator. The neutral arbitrator will be selected 
     by the parties within 7 days after the earlier of the date 
     the parties reach an impasse or 60 days after the date of the 
     enactment of this Act. The neutral arbitrator will be 
     selected by the parties from a panel of neutrals provided by 
     the National Mediation Board. The neutral arbitrator will 
     render his or her determination not later than 120 days after 
     the date of the enactment of this Act. Such determination 
     shall be final and binding on the parties.
       (2) Specific terms.--The terms of the restored plan are 
     subject to the following:
       (A) Benefits under the restored plan for any participant or 
     group of participants may not be greater than, but may be 
     less than, those under the plan prior to its termination, and 
     forms of distribution under the restored plan for any 
     participant or group of participants may exclude forms 
     available under the plan prior to its termination, and any 
     such reductions in benefits or forms of distribution shall be 
     deemed to comply with section 411(d)(6) of such Code and 
     section 204(g) of such Act.
       (B) For any participant, benefits under the restored plan 
     shall be offset by the value of contributions made on behalf 
     of such participant to any defined contribution pension plan 
     established by the parties in conjunction with the 
     termination of the restored plan.
       (C) The amortization periods for the initial restoration 
     amortization base and the unfunded section 412(l) restoration 
     liability shall not exceed 30 years.
       (D) The minimum required cost of the restored plan shall 
     not be less than the greater of--
       (i) the projected cost of any defined contribution pension 
     plan established in conjunction with the termination of the 
     restored plan, or
       (ii) the amount allowed as costs under the employer's 
     original plan of reorganization for all of the employer's 
     retirement plans minus the minimum required cost determined 
     as of the plan restoration date of all of the employer's 
     retirement plans excluding the restored plan.
       (h) PBGC Liability Limited.--In the case of any plan which 
     is described in subsection (a), which is restored pursuant to 
     subsection (b), and which subsequently terminates with a date 
     of plan termination before the end of the fifth calendar year 
     after the date of restoration, section 4022 of the Employee 
     Retirement Income Security Act of 1974 shall be applied as if 
     the plan had been amended to provide that participants would 
     receive no credit for benefit accrual purposes under the plan 
     for service on and after the first day of the plan year 
     beginning after the date of the enactment of this Act.
       (i) Effective Date.--This section shall apply to plan years 
     beginning after December 31, 2002.
                                 ______
                                 
  SA 2263. 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 
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.--The provisions of subsection (b) shall 
     apply to any defined benefit plan that was--
       (1) maintained by a commercial passenger air carrier,
       (2) maintained for the benefit of such carrier's employees 
     pursuant to a collective bargaining agreement, and
       (3) terminated during the calendar year 2003.
       (b) Restoration of Plan.--The Pension Benefit Guaranty 
     Corporation shall restore any plan described in subsection 
     (a), pursuant to the terms described in subsection (g), and 
     the control of the plan's assets and liabilities shall be 
     transferred to the employer. The date of restoration shall be 
     not later than 60 days after the date the terms of the plan 
     are determined pursuant to subsection (g).
       (c) Exclusion of Expected Increase in Current Liability.--
     In applying section 412(l)(1)(A)(i) of the Internal Revenue 
     Code of 1986 and section 302(d)(1)(A)(i) of the Employee 
     Retirement Income Security Act of 1974 with respect to a plan 
     restored under subsection (b), any expected increase in 
     current liability due to benefits accruing during each plan 
     year as described in section 412(1)(2)(C) of such Code and 
     section 302(d)(2)(C) of such Act shall be excluded.
       (d) Amortization of Unfunded Amounts Under Restoration 
     Payment Schedule.--
       (1) Post-restoration initial unfunded accrued liability.--
     In the case of a plan restored under subsection (b)--
       (A) the initial post-restoration valuation date for a plan 
     described in subsection (a) shall be January 1 of the 
     calendar year following the date of restoration,
       (B) the initial restoration amortization base for a plan 
     described in subsection (a) shall be an amount equal to the 
     excess of--

[[Page 444]]

       (i) the accrued benefit liabilities returned by the 
     Corporation, over
       (ii) the market value of plan assets returned by the 
     Corporation, and
       (C) the initial restoration amortization base shall be 
     amortized in level annual installments over a period 
     determined pursuant to subsection (g) but not to exceed 30 
     years after the initial post-restoration valuation date, and 
     the funding standard account of the plan under section 412 of 
     such Code and section 302 of such Act shall be charged with 
     such installments.
       (2) Unfunded section 412(l) restoration liability.--For 
     purposes of section 412 of such Code and section 302 of such 
     Act, in the case of a plan restored under subsection (b)--
       (A) the initial post-restoration valuation date for a plan 
     described in subsection (a) shall be January 1 of the 
     calendar year following the date of restoration,
       (B) the unfunded section 412(l) restoration liability shall 
     be an amount equal to the excess of--
       (i) the current liability returned by the Corporation, over
       (ii) the market value of plan assets returned by the 
     Corporation, and
       (C) the unfunded section 412(l) restoration liability 
     amount shall be equal to the unfunded section 412(l) 
     restoration liability amortized in level annual installments 
     over a period determined pursuant to subsection (g) but not 
     to exceed 30 years after the initial post-restoration 
     valuation date.
       (3) Rules of special application.--In applying the 30-year 
     amortization described in paragraph (1)(C) or (2)(C)--
       (A) the assumed interest rate for purposes of paragraph 
     (1)(C) shall be the valuation interest rate used to determine 
     the accrued liability under section 412(c) of such Code and 
     section 302(c) of such Act,
       (B) the assumed interest rate for purposes of paragraph 
     (2)(C) shall be the interest rate used to determine current 
     liability as of the initial post-restoration valuation date 
     under section 412(l) of such Code and section 302(d) of such 
     Act,
       (C) the actuarial value of assets as of the initial post-
     restoration valuation date shall be reset to the market value 
     of assets with a 5-year phase-in of unexpected investment 
     gains or losses on a prospective basis, and
       (D) for plans using the frozen initial liability (FIL) 
     funding method in accordance with section 412(c) of such Code 
     and section 302(c) of such Act, the initial unfunded 
     liability used to determine normal cost shall be reset to the 
     initial restoration amortization base.
       (e) Quarterly Contributions.--The requirements of section 
     412(m) of such Code and section 302(e) of such Act shall not 
     apply to a plan restored under subsection (b) until the plan 
     year beginning on the initial post-restoration valuation 
     date. The required annual payment for that year shall be the 
     lesser of--
       (1) the amount determined under section 412(m)(4)(B)(i) of 
     such Code and section 302(e)(4)(B)(i) of such Act, or
       (2) 100 percent of the amount required to be contributed 
     under the plan for the plan year beginning January 1, 2003, 
     and ending on the date of plan termination.
       (f) Resetting of Funding Standard Account Balances.--In the 
     case of a plan restored under subsection (b), any accumulated 
     funding deficiency or credit balance in the funding standard 
     account under section 412 of such Code or section 302 of such 
     Act shall be set equal to zero as of the initial post-
     restoration valuation date.
       (g) Terms of Restored Plan.--
       (1) In general.--The terms of a plan which is restored 
     pursuant to subsection (b) shall be determined by mutual 
     agreement of the employer and the collective bargaining 
     representative of employees covered by the plan. If such 
     parties are unable to reach mutual agreement on such terms, 
     then the terms of the restored plan will be determined by a 
     neutral arbitrator. The neutral arbitrator will be selected 
     by the parties within 7 days after the earlier of the date 
     the parties reach an impasse or 60 days after the date of the 
     enactment of this Act. The neutral arbitrator will be 
     selected by the parties from a panel of neutrals provided by 
     the National Mediation Board. The neutral arbitrator will 
     render his or her determination not later than 120 days after 
     the date of the enactment of this Act. Such determination 
     shall be final and binding on the parties.
       (2) Specific terms.--The terms of the restored plan are 
     subject to the following:
       (A) Benefits under the restored plan for any participant or 
     group of participants may not be greater than, but may be 
     less than, those under the plan prior to its termination, and 
     forms of distribution under the restored plan for any 
     participant or group of participants may exclude forms 
     available under the plan prior to its termination, and any 
     such reductions in benefits or forms of distribution shall be 
     deemed to comply with section 411(d)(6) of such Code and 
     section 204(g) of such Act.
       (B) For any participant, benefits under the restored plan 
     shall be offset by the value of contributions made on behalf 
     of such participant to any defined contribution pension plan 
     established by the parties in conjunction with the 
     termination of the restored plan.
       (C) The amortization periods for the initial restoration 
     amortization base and the unfunded section 412(l) restoration 
     liability shall not exceed 30 years.
       (D) The minimum required cost of the restored plan shall 
     not be less than the greater of--
       (i) the projected cost of any defined contribution pension 
     plan established in conjunction with the termination of the 
     restored plan, or
       (ii) the amount allowed as costs under the employer's 
     original plan of reorganization for all of the employer's 
     retirement plans minus the minimum required cost determined 
     as of the plan restoration date of all of the employer's 
     retirement plans excluding the restored plan.
       (h) PBGC Liability Limited.--In the case of any plan which 
     is described in subsection (a), which is restored pursuant to 
     subsection (b), and which subsequently terminates with a date 
     of plan termination before the end of the fifth calendar year 
     after the date of restoration, section 4022 of the Employee 
     Retirement Income Security Act of 1974 shall be applied as if 
     the plan had been amended to provide that participants would 
     receive no credit for benefit accrual purposes under the plan 
     for service on and after the first day of the plan year 
     beginning after the date of the enactment of this Act.
       (i) Effective Date.--This section shall apply to plan years 
     beginning after December 31, 2002.
                                 ______
                                 
  SA 2264. Mr. GRASSLEY (for Mr. Nickles) proposed an amendment to 
amendment SA 2233 proposed by Mr. Grassley (for himself, Mr. Baucus, 
Mr. Gregg, and Mr. Kennedy) 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 and other provisions, and for other purposes; 
which was ordered to lie on the table; as follows:

       At the appropriate place, insert:

     SEC. __. SENSE OF THE SENATE ON STATUS OF PRIVATE PENSION 
                   PLANS.

       (a) Findings.--Congress makes the following findings:-
       (1) The private pension system is integral to the 
     retirement security of Americans, along with individual 
     savings and Social Security.
       (2) The Pension Benefit Guaranty Corporation (PBGC) is 
     responsible for insuring the nation's private pension system, 
     and currently insures the pensions of 34,500,000 participants 
     in 29,500 single-employer plans, and 9,700,000 participants 
     in more than 1,600 multiemployer plans.
       (3) The PBGC announced on January 15, 2004, that it 
     suffered a net loss in fiscal year 2003 of $7,600,000,000 for 
     single-employer pension plans, bringing the PBGC's deficit to 
     $11,200,000,000. This deficit is the PBGC's worst on record, 
     three times larger than the $3,600,000,000 deficit 
     experienced in fiscal year 2002.
       (4) The PBGC also announced that the separate insurance 
     program for multiemployer pension plans sustained a net loss 
     of $419,000,000 in fiscal year 2003, resulting in a fiscal 
     year-end deficit of $261,000,000. The 2003 multiemployer plan 
     deficit is the first deficit in more than 20 years and is the 
     largest deficit on record.
       (5) The PBGC estimates that the total underfunding in 
     multiemployer pension plans is roughly $100,000,000, and in 
     single-employer plans is approximately $400,000,000. This 
     underfunding is due in part to the recent decline in the 
     stock market and low interest rates, but is also due to 
     demographic changes. For example, in 1980, there were four 
     active workers for every one retiree in a multiemployer plan, 
     but in 2002, there were only two active workers for every one 
     retiree.
       (6) This pension plan underfunding is concentrated in 
     mature and often-declining industries, where plan liabilities 
     will come due sooner.
       (7) Neither the Senate Committee on Finance nor the Senate 
     Committee on Health, Education, Labor, and Pensions (HELP), 
     the committees of jurisdiction over pension matters, has held 
     hearings this Congress nor reported legislation addressing 
     the funding of multiemployer pension plans;
       (8) The Senate is concerned about the current funding 
     status of the private pension system, both single and multi-
     employer plans;
       (9) The Senate is concerned about the potential liabilities 
     facing the PBGC and, as a result, the potential burdens 
     facing healthy pension plans and taxpayers;
       (b) Sense of the Senate.--It is the sense of the Senate 
     that the Committee on Finance and the Committee on Health, 
     Education, Labor, and Pensions should conduct hearings on the 
     status of the multiemployer pension plans, and should work in 
     consultation with the Departments of Labor and Treasury on 
     permanent measures to strengthen the integrity of the private 
     pension system in order to protect the benefits of current 
     and future pension plan beneficiaries.

[[Page 445]]



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