[Congressional Record (Bound Edition), Volume 150 (2004), Part 1]
[Senate]
[Pages 489-499]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   PENSION FUNDING EQUITY ACT OF 2003

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of H.R. 3108, which the clerk will report.
  The assistant legislative clerk read as follows:

       A bill (H.R. 3108) to amend the Employee Retirement Income 
     Security Act of 1974 and the Internal Revenue Code of 1986 to 
     temporarily replace the 30-year Treasury rate with a rate 
     based on long-term corporate bonds for certain pension plan 
     funding requirements and other provisions, and for other 
     purposes.

  Pending:

       Grassley amendment No. 2233, of a perfecting nature.
       Kyl amendment No. 2236 (to amendment No. 2233), to restrict 
     an employer that elected an alternative deficit reduction 
     contribution from applying for a funding waiver.

  The PRESIDING OFFICER. Under the previous order, prior to a vote in 
relationship to amendment No. 2236, there will be 30 minutes equally 
divided between the chairman and ranking member or their designees, 
with the initial 10 minutes under the control of the Senator from 
Arizona, Mr. Kyl.
  The Senator from Minnesota.
  Mr. COLEMAN. Mr. President, I yield myself 5 minutes of the manager's 
time on this bill.
  The PRESIDING OFFICER. The Senator is recognized for 5 minutes.
  Mr. COLEMAN. I thank the Chair.
  Mr. President, Minnesota is home to Northwest Airlines as well as 
Ispat Inland Steel Mining Company. I rise today in support of the 
pension legislation before us and to urge my fellow colleagues to vote 
for this bill today.
  Let me be clear. This legislation is about protecting American 
workers and their pension benefits. We are discussing this today 
because of the long arm of September 11 that continues to swipe through 
the economic landscape and affect the hard-working people of this 
country.
  On January 1, 2000, airline workers' pension plans were over 100 
percent funded and business was good for their companies. This, of 
course, changed dramatically in the days following September 11, and 
the economy is now beginning to show signs of life again.
  The airline industry, because of its cyclical nature, always reacts 
strongly to the economy. This, coupled with the rise in costs because 
of new security measures, a dropoff in passengers, and Eisenhower 
administration interest rates, has made it difficult, if not 
impossible, for airlines to keep their pensions fully funded.
  With regard to steel, Ispat Inland Mining Company is a key component 
of one of the largest operating integrated steel manufacturers in the 
Nation and a highly productive mine in my State. Ispat Inland Mining 
Company and its parent company employ close to 7,000 people who have 
had the benefit of a defined pension plan since 1936. While funding of 
this plan has often exceeded 100 percent of the total obligations, 
funding levels have never fallen below 90 percent of the obligation 
until 2003. I think all my colleagues are aware of the impact that the 
economy and foreign imports have had on the steel industry in the last 
couple of years.

[[Page 490]]

  The problem for these companies is the deficit reduction 
contribution, DRC, which requires companies to close the underfunded 
gap on an accelerated basis. This results in materially higher pension 
contributions during periods of economic decline. So what sounds like 
tough medicine turns out to be poison--poison--for the airline and 
steel workers. A major risk is that the accelerated deficit reduction 
contributions could force the airlines and steel companies to seek 
chapter 11 protection, force them into bankruptcy. Companies, such as 
Northwest, that are coming back could be forced into bankruptcy by this 
required accelerated payment.
  Unfortunately, I think many understand that in chapter 11 bankruptcy 
the most likely outcome is the termination of pension plans and the 
transfer of unfunded liabilities to the PBGC. In effect, we would be 
destroying the very pension plans that Congress is seeking to preserve.
  We must take immediate action to ensure that pension plan termination 
is a phrase that never enters the corporate boardroom. People who have 
invested their lives in a company should not have to live in fear that 
they will be left out in the cold when they retire.
  This legislation represents a commonsense approach to help solve the 
problem. We are providing temporary 2-year relief from some of the 
cashflow requirements of the DRC, and during this period it is 
important to understand that companies are still going to make their 
normal required pension contributions. Pension benefits being accrued 
by active workers will continue to be funded during this temporary 
period and lessen any potential risk to the PBGC. I reiterate that the 
relief is for a portion of the deficit reduction contribution payment, 
not the regular pension payment. Pension payments are going to be made.
  I am also extremely pleased that my amendment to include iron ore in 
the definition of steel was included in the managers' amendment. 
Minnesota is the largest producer of iron ore and taconite in the 
United States. These products are essential for integrated steel 
companies. Advances in technology have found a use for a lower grade 
iron ore called taconite. Taconite is crushed, processed into hard, 
marble-size pellets, and shipped to steel mills. The taconite pellets 
are melted in blast furnaces and then blown with oxygen to make steel. 
As a result, a healthy steel industry means a more viable taconite 
industry and more jobs for this economy.
  The AFL-CIO, the Airline Pilots Association, and the International 
Association of Machine and Aerospace Workers support this legislation.
  With this bill, we are not letting businesses off the hook but we are 
taking the appropriate steps to provide retirement security for 
constituents across this Nation.
  Again, I urge my colleagues to support this bipartisan legislation 
that will help restore long-term health to American businesses and 
protect the retirement money for millions of American workers.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, I yield myself 10 minutes.
  The PRESIDING OFFICER. Without objection, the Senator from 
Pennsylvania is recognized.
  Mr. SPECTER. Mr. President, I have sought recognition to comment 
about an amendment which I have offered on behalf of U.S. Airways. It 
is an amendment which provides that the pension plan would be 
reinstated. It had been required to fund it within a 5-year period. The 
amendment would allow up to 30 years. It would actually save the 
Pension Benefit Guaranty Corporation money.
  The complexity had arisen as to whether this amendment was relevant. 
As the Congressional Record will show, I spoke about the amendment on 
Monday explaining what the amendment sought to do and detailing the 
history as to what had happened with a bill offered by Senator Santorum 
and myself last January 9, and in the hearing of the subcommittee which 
I chair on January 14.
  I had a series of conversations with the Parliamentarian as to 
whether the amendment was relevant. I sought unanimous consent on 
Monday to set aside the pending second-degree amendment and an 
objection was raised. Then a little after 4 yesterday afternoon, I 
consulted with the Parliamentarian, who had not yet reached a decision, 
and suggested that my staffer confer with the Deputy Parliamentarian, 
which was done yesterday afternoon.
  I was surprised to find a unanimous consent agreement entered into 
which precluded the amendment. I have a call in to the chairman of the 
Finance Committee, Senator Grassley. If possible, I ask if he would 
come to the floor so we can discuss this matter. The issue was also 
presented to Senator Kennedy. If possible, I ask that he come to the 
floor. We are operating under a very tight time constraint with the 
agreement now calling for a vote on the pending amendment by about 
11:40, and then votes sequencing to final passage.
  As a matter of basic fairness, I think we are entitled to have a 
vote. I am not unaware of the fact that there will be a later pension 
bill, but this matter is of great importance to my constituents. The 
U.S. Airways pilots, under the revised plan, sought to have their 
pensions reduced to about 25 percent when it was not possible to 
reinstate the earlier plan with an extension of up to 30 years. I think 
they are entitled to a vote, and we will be back on this matter if we 
are not able to get a vote today.
  When the Parliamentarian is under active consideration and the 
Senator from Pennsylvania, myself, is pursuing the matter, it seems to 
me as a matter of basic fairness we ought not to be foreclosed. So I 
intend to go to the Finance Committee now to talk to Senator Grassley 
to see if we can get a resolution by the Finance Committee, but that is 
the essence of the situation.
  To repeat, I think we are entitled to a vote. For the record, I know 
Senator Reid is prepared to object, but I ask unanimous consent that I 
be permitted to offer this amendment with a 10-minute time agreement 
which will not delay the final passage of the bill.
  The PRESIDING OFFICER. Is there objection? The Senator from Nevada.
  Mr. REID. Reserving the right to object, we have objections from the 
majority and minority now on the Finance Committee and also from the 
majority on the HELP Committee. So based upon that, I object.
  The PRESIDING OFFICER. The objection is heard.
  Mr. SPECTER. I understand the reasons of the Senator from Nevada. As 
I said, I am going to be on my way to the Finance Committee to see if I 
can get a change of decision by the Finance Committee so we can offer 
this amendment.
  The PRESIDING OFFICER. Who yields time?
  Mr. SPECTER. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. SPECTER. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 2263

  Mr. SPECTER. Mr. President, there have been a series of discussions, 
and we have worked out an accommodation to permit me to introduce the 
amendment on behalf of US Airways pilots. We will handle the vote on a 
division vote so that there is at least a semblance of what has 
occurred.
  At this point, I ask unanimous consent I be permitted to call up 
amendment No. 2263 and that there be a division vote and I be permitted 
to speak under this unanimous consent request for up to 8 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Pennsylvania [Mr. Specter] proposes an 
     amendment numbered 2263.


[[Page 491]]

  Mr. SPECTER. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

 (Purpose: To provide for the restoration of certain plans terminating 
                                in 2003)

       At the appropriate place, insert:

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

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

  Mr. SPECTER. Mr. President, this amendment would do justice to the US 
Airways pilots who have been very unfairly treated by what has happened 
to the pension with US Airways.
  The airline has had great problems, as have all the airlines, 
following 9/11. They have been in bankruptcy and have been 
restructuring their operation. There have been tremendous concessions 
made by employees of US Airways and the pilots pension was abrogated.
  On January 9, 2003, Senator Santorum and I introduced S. 119, which 
would have allowed the US Airways pension plan to have up to 30 years 
to meet its obligations instead of the 5-year period. The requirement 
of the 5-year period made it impossible for the pension plan to be 
continued. My Subcommittee on Labor, Health and Human Services and 
Education held a hearing on January 14, 2003, and explored the options.
  The PBGC declined to honor the request of the US Airways pilots. We 
have now offered an amendment, which is now pending, which would grant 
up to 30 years for the pension plan to be funded. We call for a 
reinstatement of the earlier plan. In the interim, US Airways has 
offered an additional benefit and we would agree to an offset of

[[Page 492]]

that against the amendment which we are now offering.
  How much time do I have remaining?
  The PRESIDING OFFICER. Five minutes.
  Mr. SPECTER. I reserve the remainder of my time until I hear the 
arguments in opposition to the amendment.
  The PRESIDING OFFICER. Who seeks recognition?
  Mr. REID. Is the Senate in a quorum call?
  The PRESIDING OFFICER. No.
  Mr. REID. I suggest to my friend from Pennsylvania it appears as if 
there will be no one speaking in opposition of the argument. It has 
been argued several times before. We should move on. We have people who 
are calling both cloakrooms because of the prearranged vote 20 minutes 
ago. They have schedules--some downtown, some up here--and I wonder if 
the Senator could move forward on his final remarks.
  Mr. SPECTER. Mr. President, I offer one additional argument; that is, 
if the amendment of the Senator from Iowa, Mr. Grassley, had been 
adopted in a timely way, US Airways would have been able to meet its 
pension obligations. We intend to revisit this on the pension bill 
which will be coming up at a later time. I have no illusions about the 
likelihood of success today.
  However, US Airways pilots have been unfairly treated. When the plan 
was changed, they got about 25 percent on the dollar. When US Airways 
would have an obligation to fund the plan, but for a 30-year period, it 
would save money for the Pension Benefit Guaranty Corporation and they 
would not have to make payments. So it would be a win-win situation at 
all times.
  That concludes my argument. I am ready for the vote.
  The PRESIDING OFFICER. The question is on agreeing to the amendment. 
The Senator has requested a division vote. All those Senators in favor 
of the amendment will rise and stand until counted.
  All those opposed will rise and stand until counted.
  On a division, the amendment was rejected.
  Mr. REID. I move to reconsider the vote.
  Mr. DORGAN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 2236

  Mr. REID. Mr. President, any time we have is yielded back.
  The PRESIDING OFFICER. All time is yielded back. The question is on 
agreeing to the amendment.
  Mr. REID. Mr. President, if the Presiding Officer would yield, we 
have a unanimous consent request.


            Unanimous Consent Agreement--Executive Calendar

  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, as in executive session, I ask unanimous 
consent that following the vote on passage of the pension rate bill 
today, the Senate proceed to executive session to consider the 
following nomination on today's Executive Calendar: calendar No. 425, 
the nomination of Gary L. Sharpe to be a U.S. District Judge for the 
Northern District of New York.
  I further ask unanimous consent that the Senate proceed to a vote on 
the confirmation of the nomination; further, that following the vote, 
the President be immediately notified of the Senate's action, and the 
Senate then return to legislative session. I further ask consent that 
there be 4 minutes equally divided between the chairman and ranking 
member before the vote.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.


                           Amendment No. 2236

  The PRESIDING OFFICER. The question is now on agreeing to the 
amendment of the Senator from Arizona.
  The amendment (No. 2236) was rejected.
  Mr. DURBIN. Mr. President, I rise in support of the Grassley-Baucus-
Gregg-Kennedy amendment. I commend the Finance and HELP Committees for 
working together in a bipartisan effort to secure the pensions of 
almost 45 million workers.
  This legislation is vital to preserving defined benefit pension 
plans, which provide retirees with a monthly benefit that is secured by 
the Pension Benefit Guaranty Corporation. Nearly 35 million workers and 
retirees are covered by single employer plans, and an additional 9.7 
million are covered by multiemployer plans. In all, one in five workers 
participates in a defined benefit plan.
  Unfortunately, these defined benefit pension plans are facing several 
challenges due to the following ``perfect storm'' of economic 
conditions: the downturn in the stock market was the longest since the 
Great Depression; the 30-year Treasury bond interest rates have been at 
historically low levels; and the weak economy has made it even more 
difficult for companies to make payments and pay the excise taxes as 
currently required by law.
  As a result of these circumstances, many pension plans are under-
funded, and this legislation would help companies weather this storm. 
There are three main components of this legislation. The first is a 2-
year replacement of the 30-year Treasury bond rate used to calculate 
employers' contributions to pension plans with a corporate bond rate. 
The second is partial, temporary relief from deficit reduction 
contributions. The third is relief for multiemployer plans, which often 
aid low-wage workers, as well as workers in short-term or seasonal 
employment.
  I support all three of these provisions and would like to speak in 
particular about the need for deficit reduction contribution relief. 
This relief would aid companies that had well-funded pension plans as 
recently as 2000, but, due to the current economic storm, need 
assistance now. The assistance we are providing is temporary--only for 
2 years--and partial. It would allow troubled industries, such as 
airlines and steel, to regain their financial footing by providing 
relief of up to 80 percent in 2004 and up to 60 percent in 2005.
  I understand that there are concerns regarding liability to the PBGC. 
If a company we are providing relief to now is forced to terminate its 
pension later, PBGC would takeover the pension, and the liability would 
be increased by the amount of DRC relief that the company had received. 
However, this does not take into consideration that if we do not 
provide companies with DRC relief now, they may be unable to pay their 
DRC surcharges and therefore will be more likely to have their pensions 
involuntarily terminated in the first place.
  Furthermore, the DRC provision in the Pension Funding Equity Act 
would ensure that no plan will lose ground. Companies that receive DRC 
relief would be required to contribute at least the amount necessary to 
fund the expected increase in current liability that results from 
benefits that have accrued during the year.
  Finally, I know that several Cabinet Secretaries have expressed their 
opposition to DRC relief. However, the White House, in its Statement of 
Administration Policy, also has acknowledged that ``The DRC is part of 
a flawed system of funding rules that should be reviewed and 
reformed.'' Although the White House would prefer to address DRC 
changes in the context of broader pension reform, we must provide aid 
to these companies and their workers now. For example, United Airlines, 
based in my home State of Illinois, would benefit from the DRC relief 
in this legislation, and as a result, the pensions of the almost 
130,000 participants in United's pension plans, including over 22,000 
participants in Illinois, would be more secure.
  Overall, the Grassley-Baucus-Gregg-Kennedy amendment will provide 
necessary relief for the 45 million workers who participate in our 
single and multi-employer pension plans. I urge my colleagues to join 
me in preserving the future of these defined benefit pension plans and 
supporting this important legislation.


                           amendment no. 2233

  The PRESIDING OFFICER. The question is on agreeing to the amendment 
of the Senator from Iowa.
  The amendment (No. 2233), as amended, was agreed to.

[[Page 493]]




                          multiemployer relief

  Mr. BAUCUS. This amendment provides short-term relief for 
multiemployer pension plans that are struggling to cope with 
unprecedented losses on their equity investments in the first few years 
of this decade. The temporary funding relief would help plans deal with 
the investment losses they suffered through 2002, by letting them 
postpone amortization of the portion of those losses that would 
otherwise be recognized for funding purposes in any two of the plan 
years beginning after June 30, 2002 and before July 1, 2006.
  Mr. GREGG. That is correct. The proposed relief would permit a short-
term postponement of the losses that count toward the required funding 
in any two of the plan years beginning after June 30, 2002 and before 
July 1, 2006. The relief may be taken for no more than 2 years.
  Mr. KENNEDY. Yes. For funding purposes, most multiemployer plans 
recognize investment losses gradually over a period of years. So, part 
of a plan's investment losses incurred in 2000, for example, would 
first be recognized under the funding rules in the 2001 plan year. The 
portion of those losses that show up in the funding requirements during 
the relief period would be eligible for the relief.
  Mr. GRASSLEY. As this discussion demonstrates, the focus of the 
relief is on the portion of the loss that would be recognized for any 
of the plan years for which the relief is available. That is what the 
language means when it refers to losses ``for the plan year.''


                           amendment no. 2233

  Mr. BAUCUS. This amendment specifically addresses the problems faced 
by the steel and airline industry. However, I also have concerns about 
other types of companies. Some of these companies should be allowed to 
access the DRC relief that is in this bill. I believe my colleagues 
share my concerns, and that is why we have included an application 
process in this amendment.
  Mr. GREGG. That is correct. We have included the application process 
in this amendment so that other types of companies will also be allowed 
to access the DRC relief in this bill. This application process should 
allow other employers to receive relief, just like the steel and 
airline companies.
  Mr. KENNEDY. This application process is a fundamental piece of the 
amendment. It would not be fair to exclude all other employers from the 
DRC relief. There are many companies in other industries that really 
need this relief, and we have provided access though the application 
process.
  Mr. GRASSLEY. We have all agreed on the importance of this piece of 
the amendment, and we all understand that it is not intended to be 
window dressing. We expect that Treasury will adhere to the legislative 
intent in crafting this proposal, and implement the application process 
in a way that allows other employers to receive real relief, much like 
the steel and industry industries will receive.
  Ms. SNOWE. I share my colleagues' concern, particularly with respect 
to how this application process would apply to small businesses. It is 
very important that other companies have access to this relief. The 
application process must provide a means of bringing relief to small 
companies.
  Mr. JEFFORDS. Mr. President, today, I am pleased to see that the 
Senate is taking action on the Pension Equity Act of 2003.
  As many of my colleagues are aware, the pension discount rate relief 
initiative, enacted in 2001, expired last month. Passage of H.R. 3108 
will provide a resolution to this very serious issue. This bill 
replaces the outdated 30-year Treasury bill rate with a rate based on a 
composite of investment grade long-term corporate bonds. Failure to act 
on this bill will cause the statutory rate that pension plans must use 
to calculate their assets and liabilities to return to the old 30-year 
rate. Companies with pension plans will shortly have to begin making 
large contributions to their plans in the year to come.
  An amendment to H.R. 3108 will provide relief from the deficit 
reduction contribution, DRC, requirements that certain plans are now 
facing. Under the current pension funding rules, companies that offer 
defined benefit pension plans are required to make additional 
contributions to those plans when they are less than 90 percent funded. 
A pension plan's funding level is determined by comparing the plan's 
current assets to its promised benefits and then calculated as to 
whether the two will match up by the time the promised benefits are 
due.
  The recent drop in the stock market, low interest rates, and generous 
pension benefits agreed to in better times have caused many defined 
benefit pension plans to fall well beneath the 90 percent threshold. As 
a result, many companies are being required to make substantial 
contributions at the time they can least afford them. The Finance 
Committee reported bill, which I support, included fair DRC relief.
  While I support these provisions related to pensions, I am 
disappointed that this body has not worked to enact further reforms. 
Two months ago, I, along with Senators Snowe and Hatch, introduced S. 
1912, the Retirement Account Portability Act of 2003. In brief, this 
bill will make a number of improvements in the retirement savings 
system to help families preserve retirement assets. It will, for 
example, enhance the portability of retirement savings by expanding 
rollover options in traditional IRAs, Roth IRAs, and SIMPLE Plans. The 
bill also clarifies that when employees are permitted to make after-tax 
contributions to retirement plans, those after-tax amounts may be 
rolled over into other retirement plans eligible to receive such 
rollovers. This clarification will make it easier for workers to move 
all elements of their 401(k) or 403(b) savings when they change jobs 
and move between the private sector and the tax-exempt sector.
  In addition, the bill builds on defined contribution plan reforms 
enacted in 2001 by requiring a shortened vesting schedule for employer 
nonelective contributions, such as profit-sharing contributions, to 
defined contribution plans. As a result, employer contributions will 
become employee property more quickly, helping workers to build more 
meaningful retirement benefits. This new vesting schedule corresponds 
to rules for 401(k) matching contributions enacted in 2001.
  The bill also helps preserve retirement savings by allowing plans to 
designate default IRAs or annuity contracts to which employee rollovers 
may be directed. Employers should be more willing to establish default 
IRA and annuity rollover options as a result, making it easier for 
employees to keep savings in the retirement system when they change 
jobs.
  For workers who leave a job without claiming their retirement 
benefits, the bill improves on the automatic rollover provisions 
enacted in 2001, by allowing certain small distributions from 
retirement plans to be sent to the Pension Benefit Guaranty 
Corporation, PBGC, ensuring that participants are ultimately reunited 
with their earned benefits. The bill also expands the scope of the 
PBGC's successful Missing Participants Program that matches workers 
with lost pension benefits.
  The Retirement Account Portability Act of 2003 will benefit employees 
of State and local governments, including teachers, through a number of 
this bill's technical corrections that will facilitate the purchase of 
service credits in public pension programs, allowing State and local 
employees to more easily attain a full pension in the jurisdiction 
where they conclude their career. The bill also contains provisions 
that will clarify eligibility rights of certain State and local 
employees who participate in a section 457 deferred compensation plan.
  As this body moves to pass H.R. 3108 today, I thank Senators Grassley 
and Baucus for their hard work on this legislation. I also thank 
Senators Gregg and Kennedy for their contributions to this initiative. 
I look forward to working with my distinguished chairmen and ranking 
members of the HELP and Finance Committees in moving S. 1912 and other 
measures that will proactively improve the mechanisms we use for 
pension and retirement plans.
  Mrs. BOXER. Mr. President, we need to ensure that the retirement 
benefits

[[Page 494]]

Americans have been promised are secure. The bipartisan Pension Funding 
Equity Act of 2003 is a first step toward improving retirement security 
for Americans, and I support it.
  As you know, the legislation will help stabilize the traditional 
pension plans known as defined benefit plans that cover almost 45 
million Americans. These plans are in trouble because historically low 
interest rates and the last few years of decline in the stock market 
have combined to leave them underfunded.
  To help stabilize these plans, the Pension Funding Equity Act 
provides temporary contribution relief for both single-employer plans 
and multi-employer plans. Of the 45 million working Americans 
participating in defined benefit pension plans, 35 million of them are 
covered by single-employer plans and 9.7 million are covered by multi-
employer plans. Defined benefit plans promise workers a monthly 
retirement benefit that these 45 million workers are counting on. It 
would be tragic if these funds went bankrupt--or if employers gave them 
up.
  Of the millions of workers participating in defined benefit pension 
plans, 40 percent are in construction, 30 percent are in retail and 
service industries, and 10 percent are in trucking services. These 
workers are the backbone of our labor force, and the first step toward 
ensuring their retirement security depends on passage of this 
legislation.
  I urge my colleagues to support the Pension Funding Equity Act of 
2003.
  The PRESIDING OFFICER. The question is on the engrossment of the 
amendment and third reading of the bill.
  The amendment was ordered to be engrossed, and the bill to be read a 
third time.
  The bill was read a third time.
  Mr. GRASSLEY. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The bill having been read the third time, the question is, Shall the 
bill, as amended, pass?
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. McCONNELL. I announce that the Senator from Georgia (Mr. 
Chambliss) is necessarily absent.
  Mr. REID. I announce that the Senator from Montana (Mr. Baucus), the 
Senator from North Carolina (Mr. Edwards), the Senator from 
Massachusetts (Mr. Kerry), and the Senator from Connecticut (Mr. 
Lieberman) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
Massachusetts (Mr. Kerry) would vote ``yea.''
  The PRESIDING OFFICER (Ms. Murkowski). Are there any other Senators 
in the Chamber desiring to vote?
  The result was announced--yeas 86, nays 9, as follows:

                       [Rollcall Vote No. 5 Leg.]

                                YEAS--86

     Akaka
     Alexander
     Allard
     Allen
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Brownback
     Bunning
     Burns
     Byrd
     Campbell
     Cantwell
     Carper
     Clinton
     Cochran
     Coleman
     Collins
     Conrad
     Cornyn
     Corzine
     Craig
     Crapo
     Daschle
     Dayton
     DeWine
     Dodd
     Dole
     Domenici
     Dorgan
     Durbin
     Enzi
     Feingold
     Feinstein
     Frist
     Graham (FL)
     Graham (SC)
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Hollings
     Hutchison
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lincoln
     Lott
     Lugar
     McConnell
     Mikulski
     Miller
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Santorum
     Sarbanes
     Schumer
     Shelby
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Talent
     Voinovich
     Warner
     Wyden

                                NAYS--9

     Chafee
     Ensign
     Fitzgerald
     Inhofe
     Kyl
     McCain
     Nickles
     Sessions
     Thomas

                             NOT VOTING--5

     Baucus
     Chambliss
     Edwards
     Kerry
     Lieberman
  The bill (H.R. 3108), as amended, was passed, as follows:

                               H.R. 3108

       Resolved, That the bill from the House of Representatives 
     (H.R. 3108) entitled ``An Act to amend the Employee 
     Retirement Income Security Act of 1974 and the Internal 
     Revenue Code of 1986 to temporarily replace the 30-year 
     Treasury rate with a rate based on long-term corporate bonds 
     for certain pension plan funding requirements and other 
     provisions, and for other purposes.'', do pass with the 
     following amendment:
       Page 2, line 3, strike out all after ``SECTION'' and 
     insert:

     1. SHORT TITLE.

       This Act may be cited as the ``Pension Stability Act''.

     SEC. 2. TEMPORARY REPLACEMENT OF INTEREST RATE ON 30-YEAR 
                   TREASURY SECURITIES WITH INTEREST RATE ON 
                   CONSERVATIVELY INVESTED LONG-TERM CORPORATE 
                   BONDS.

       (a) Internal Revenue Code of 1986.--
       (1) Determination of permissible range.--
       (A) In general.--Section 412(b)(5)(B)(ii) of the Internal 
     Revenue Code of 1986 is amended--
       (i) in subclause (I), by inserting ``or (III)'' after 
     ``subclause (II)'';
       (ii) by redesignating subclause (II) as subclause (III);
       (iii) by inserting after subclause (I) the following new 
     subclause:

       ``(II) Special rule for 2004 and 2005.--In the case of plan 
     years beginning in 2004 or 2005, the term `permissible range' 
     means a rate of interest which is not above, and not more 
     than 10 percent below, the weighted average of the 
     conservative long-term corporate bond rates during the 4-year 
     period ending on the last day before the beginning of the 
     plan year. The Secretary shall, by regulation, prescribe a 
     method for periodically determining conservative long-term 
     bond rates for purposes of this paragraph. Such rates shall 
     reflect the rates of interest on amounts invested 
     conservatively in long-term corporate bonds and shall be 
     based on the use of 2 or more indices that are in the top 2 
     quality levels available reflecting average maturities of 20 
     years or more.''; and

       (iv) in subclause (III), as so redesignated--

       (I) by inserting ``or (II)'' after ``subclause (I)'' the 
     first place it appears; and
       (II) by striking ``subclause (I)'' the second place it 
     appears and inserting ``such subclause''.

       (2) Determination of current liability.--Section 
     412(l)(7)(C)(i) of such Code is amended by adding at the end 
     the following new subclause:

       ``(IV) Special rule for 2004 and 2005.--For plan years 
     beginning in 2004 or 2005, notwithstanding subclause (I), the 
     rate of interest used to determine current liability under 
     this subsection shall be the rate of interest under 
     subsection (b)(5).''.

       (3) Conforming amendment.--Section 412(m)(7) of such Code 
     is amended to read as follows:
       ``(7) Special rule for 2002.--In any case in which the 
     interest rate used to determine current liability is 
     determined under subsection (l)(7)(C)(i)(III), for purposes 
     of applying paragraphs (1) and (4)(B)(ii) for plan years 
     beginning in 2002, the current liability of the plan for the 
     preceding plan year shall be redetermined using 120 percent 
     as the specified percentage determined under subsection 
     (l)(7)(C)(i)(II).''.
       (4) Limitation on certain assumptions.--Section 
     415(b)(2)(E)(ii) of such Code is amended by inserting ``, 
     except that in the case of plan years beginning in 2004 or 
     2005, `5.5 percent' shall be substituted for `5 percent' in 
     clause (i)'' before the period at the end.
       (5) Election to disregard modification for deduction 
     purposes.--Section 404(a)(1) of such Code is amended by 
     adding at the end the following new subparagraph:
       ``(F) Election to disregard modified interest rate.--An 
     employer may elect to disregard subsections (b)(5)(B)(ii)(II) 
     and (l)(7)(C)(i) of section 412 solely for purposes of 
     determining the interest rate used in calculating the maximum 
     amount of the deduction allowable under this section for 
     contributions to a plan to which such subsections apply.''
       (b) Employee Retirement Income Security Act of 1974.--
       (1) Determination of permissible range.--
       (A) In general.--Section 302(b)(5)(B)(ii) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 
     1082(b)(5)(B)(ii)) is amended--
       (i) in subclause (I), by inserting ``or (III)'' after 
     ``subclause (II)'';
       (ii) by redesignating subclause (II) as subclause (III);
       (iii) by inserting after subclause (I) the following new 
     subclause:
       ``(II) Special rule for years 2004 and 2005.--In the case 
     of plan years beginning in 2004 or 2005, the term 
     `permissible range' means a rate of interest which is not 
     above, and not more than 10 percent below, the weighted 
     average of the conservative long-term corporate bond rates 
     (as determined under section 412(b)(5)(B)(ii)(II) of the 
     Internal Revenue Code of 1986) during the 4-year period 
     ending on the last day before the beginning of the plan 
     year.''; and
       (iv) in subclause (III), as so redesignated--

       (I) by inserting ``or (II)'' after ``subclause (I)'' the 
     first place it appears; and
       (II) by striking ``subclause (I)'' the second place it 
     appears and inserting ``such subclause''.

       (2) Determination of current liability.--Section 
     302(d)(7)(C)(i) of such Act (29 U.S.C.

[[Page 495]]

     1082(d)(7)(C)(i)) is amended by adding at the end the 
     following new subclause:

       ``(IV) Special rule for 2004 and 2005.--For plan years 
     beginning in 2004 or 2005, notwithstanding subclause (I), the 
     rate of interest used to determine current liability under 
     this subsection shall be the rate of interest under 
     subsection (b)(5).''.

       (3) Conforming amendment.--Section 302(e)(7) of such Act 
     (29 U.S.C. 1082(e)(7)) is amended to read as follows:
       ``(7) Special rule for 2002.--In any case in which the 
     interest rate used to determine current liability is 
     determined under subsection (d)(7)(C)(i)(III), for purposes 
     of applying paragraphs (1) and (4)(B)(ii) for plan years 
     beginning in 2002, the current liability of the plan for the 
     preceding plan year shall be redetermined using 120 as the 
     specified percentage determined under subsection 
     (d)(7)(C)(i)(II).''.
       (4) PBGC.--Section 4006(a)(3)(E)(iii) of such Act (29 
     U.S.C. 1306(a)(3)(E)(iii)) is amended by adding at the end 
     the following new subclause:
       ``(V) In the case of plan years beginning in 2004 or 2005, 
     the annual yield taken into account under subclause (II) 
     shall be the annual yield computed by using the conservative 
     long-term corporate bond rate (as determined under section 
     412(b)(5)(B)(ii)(II) of the Internal Revenue Code of 1986) 
     for the month preceding the month in which the plan year 
     begins.''
       (c) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to plan years 
     beginning after December 31, 2003.
       (2) Lookback rules.--For purposes of applying subsections 
     (l)(9)(B)(ii) and (m)(1) of section 412 of the Internal 
     Revenue Code of 1986, and subsections (d)(9)(B)(ii) and 
     (e)(1) of section 302 of the Employee Retirement Income 
     Security Act of 1974 to plan years beginning after December 
     31, 2003, the amendments made by this section may be applied 
     as if such amendments had been in effect for all years 
     beginning before such date.
       (3) Transition rule for section 415 limitation.--In the 
     case of any participant or beneficiary receiving a 
     distribution after December 31, 2003 and before January 1, 
     2005, the amount payable under any form of benefit subject to 
     section 417(b)(3) of the Internal Revenue Code of 1986 and 
     subject to adjustment under section 415(b)(2)(B) of such Code 
     shall not, solely by reason of the amendment made by 
     subsection (a)(4), be less than the amount that would have 
     been so payable had the amount payable been determined using 
     the applicable interest rate in effect as of the last day of 
     the last plan year beginning before January 1, 2004.

     SEC. 3. ELECTION OF ALTERNATIVE DEFICIT REDUCTION 
                   CONTRIBUTION.

       (a) Amendment of 1986 Code.--Section 412(l) of the Internal 
     Revenue Code of 1986 (relating to applicability of 
     subsection) is amended by adding at the end the following new 
     paragraph:
       ``(12) Alternative increase for certain plans meeting 
     requirements in 2000.--
       ``(A) In general.--In the case of a defined benefit plan 
     established and maintained by an applicable employer, if this 
     subsection did not apply to the plan for the plan year 
     beginning in 2000 (determined without regard to paragraph 
     (6)), then, at the election of the employer, the increased 
     amount under paragraph (1) for any applicable plan year shall 
     be the greater of--
       ``(i) 20 percent (40 percent in the case of an applicable 
     plan year beginning after December 27, 2004) of the increased 
     amount under paragraph (1) determined without regard to this 
     paragraph, or
       ``(ii) the increased amount which would be determined under 
     paragraph (1) if the deficit reduction contribution under 
     paragraph (2) for the applicable plan year were determined 
     without regard to subparagraphs (A), (B), and (D) of 
     paragraph (2).
       ``(B) Restrictions on benefit increases.--No amendment 
     which increases the liabilities of the plan by reason of any 
     increase in benefits, any change in the accrual of benefits, 
     or any change in the rate at which benefits become 
     nonforfeitable shall be adopted during any applicable plan 
     year, unless--
       ``(i) the funded current liability percentage (as defined 
     in paragraph (8)(B)) as of the end of such plan year is 
     projected (taking into account the effect of the amendment) 
     to be at least 75 percent,
       ``(ii) the amendment provides for an increase in benefits 
     under a formula which is not based on a participant's 
     compensation, but only if the rate of such increase is not in 
     excess of the contemporaneous rate of increase in average 
     wages of participants covered by the amendment,
       ``(iii) the amendment is required by a collective 
     bargaining agreement which is in effect on the date of 
     enactment of this subparagraph, or
       ``(iv) the amendment is otherwise described in subparagraph 
     (A) or (C) of subsection (f)(2).

     If a plan is amended during any applicable plan year in 
     violation of the preceding sentence, any election under this 
     paragraph shall not apply to any applicable plan year ending 
     on or after the date on which such amendment is adopted.
       ``(C) Applicable employer.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `applicable employer' means an 
     employer which is--

       ``(I) a commercial passenger airline,
       ``(II) primarily engaged in the production or manufacture 
     of a steel mill product, or the mining or processing of iron 
     ore or beneficiated iron ore products, or
       ``(III) an organization described in section 501(c)(5) and 
     which established the plan to which this paragraph applies on 
     June 30, 1955.

       ``(ii) Other employers may apply for relief.--

       ``(I) In general.--Except as provided in subclause (II), an 
     employer other than an employer described in clause (i) shall 
     be treated as an applicable employer if the employer files an 
     application (at such time and in such manner as the Secretary 
     may prescribe) to be treated as an applicable employer for 
     purposes of this paragraph.
       ``(II) Exception.--Subclause (I) shall not apply to an 
     employer if, within 90 days of the filing of the application, 
     the Secretary determines (taking into account the application 
     of this paragraph) that there is a reasonable likelihood that 
     the employer will be unable to make future required 
     contributions to the plan in a timely manner.

       ``(D) Applicable plan year.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `applicable plan year' means 
     any plan year beginning after December 27, 2003, and before 
     December 28, 2005, for which the employer elects the 
     application of this paragraph.
       ``(ii) Limitation on number of years which may be 
     elected.--An election may not be made under this paragraph 
     with respect to more than 2 plan years.
       ``(E) Election.--An election under this paragraph shall be 
     made at such time and in such manner as the Secretary may 
     prescribe.''
       (b) Amendment of ERISA.--Section 302(d) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1082(d)) is 
     amended by adding at the end the following new paragraph:
       ``(12) Alternative increase for certain plans meeting 
     requirements in 2000.--
       ``(A) In general.--In the case of a defined benefit plan 
     established and maintained by an applicable employer, if this 
     subsection did not apply to the plan for the plan year 
     beginning in 2000 (determined without regard to paragraph 
     (6)), then, at the election of the employer, the increased 
     amount under paragraph (1) for any applicable plan year shall 
     be the greater of--
       ``(i) 20 percent (40 percent in the case of an applicable 
     plan year beginning after December 27, 2004) of the increased 
     amount under paragraph (1) determined without regard to this 
     paragraph, or
       ``(ii) the increased amount which would be determined under 
     paragraph (1) if the deficit reduction contribution under 
     paragraph (2) for the applicable plan year were determined 
     without regard to subparagraphs (A), (B), and (D) of 
     paragraph (2).
       ``(B) Restrictions on benefit increases.--No amendment 
     which increases the liabilities of the plan by reason of any 
     increase in benefits, any change in the accrual of benefits, 
     or any change in the rate at which benefits become 
     nonforfeitable under the plan shall be adopted during any 
     applicable plan year, unless--
       ``(i) the funded current liability percentage (as defined 
     in paragraph (8)(B)) as of the end of such plan year is 
     projected (taking into account the effect of the amendment) 
     to be at least 75 percent,
       ``(ii) the amendment provides for an increase in benefits 
     under a formula which is not based on a participant's 
     compensation, but only if the rate of such increase is not in 
     excess of the contemporaneous rate of increase in average 
     wages of participants covered by the amendment,
       ``(iii) the amendment is required by a collective 
     bargaining agreement which is in effect on the date of 
     enactment of this subparagraph, or
       ``(iv) the amendment is otherwise described in subparagraph 
     (A) or (C) of section 304(b)(2).

     If a plan is amended during any applicable plan year in 
     violation of the preceding sentence, any election under this 
     paragraph shall not apply to any applicable plan year ending 
     on or after the date on which such amendment is adopted.
       ``(C) Applicable employer.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `applicable employer' means an 
     employer which is--

       ``(I) a commercial passenger airline,
       ``(II) primarily engaged in the production or manufacture 
     of a steel mill product, or the mining or processing of iron 
     ore or beneficiated iron ore products, or
       ``(III) an organization described in section 501(c)(5) of 
     the Internal Revenue Code of 1986 and which established the 
     plan to which this paragraph applies on June 30, 1955.

       ``(ii) Other employers may apply for relief.--

       ``(I) In general.--Except as provided in subclause (II), an 
     employer other than an employer described in clause (i) shall 
     be treated as an applicable employer if the employer files an 
     application (at such time and in such manner as the Secretary 
     of the Treasury may prescribe) to be treated as an applicable 
     employer for purposes of this paragraph.
       ``(II) Exception.--Subclause (I) shall not apply to an 
     employer if, within 90 days of the filing of the application, 
     the Secretary of the Treasury determines (taking into account 
     the application of this paragraph) that there is a reasonable 
     likelihood that the employer will be unable to make future 
     required contributions to the plan in a timely manner.

       ``(D) Applicable plan year.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `applicable plan year' means 
     any plan year beginning after December 27, 2003, and before 
     December 28, 2005, for which the employer elects the 
     application of this paragraph.
       ``(ii) Limitation on number of years which may be 
     elected.--An election may not be made

[[Page 496]]

     under this paragraph with respect to more than 2 plan years.
       ``(E) Notice requirements for plans electing alternative 
     deficit reduction contributions.--
       ``(i) In general.--If an employer elects an alternative 
     deficit reduction contribution under this paragraph and 
     section 412(l)(12) of the Internal Revenue Code of 1986 for 
     any year, the employer shall provide, within 30 days (120 
     days in the case of an employer described in subparagraph 
     (C)(ii)) of filing the election for such year, written notice 
     of the election to participants and beneficiaries and to the 
     Pension Benefit Guaranty Corporation.
       ``(ii) Notice to participants and beneficiaries.--The 
     notice under clause (i) to participants and beneficiaries 
     shall include with respect to any election--

       ``(I) the due date of the alternative deficit reduction 
     contribution and the amount by which such contribution was 
     reduced from the amount which would have been owed if the 
     election were not made, and
       ``(II) a description of the benefits under the plan which 
     are eligible to be guaranteed by the Pension Benefit Guaranty 
     Corporation and an explanation of the limitations on the 
     guarantee and the circumstances under which such limitations 
     apply, including the maximum guaranteed monthly benefits 
     which the Pension Benefit Guaranty Corporation would pay if 
     the plan terminated while underfunded.

       ``(iii) Notice to pbgc.--The notice under clause (i) to the 
     Pension Benefit Guaranty Corporation shall include--

       ``(I) the information described in clause (ii)(I),
       ``(II) the number of years it will take to restore the plan 
     to full funding if the employer only makes the required 
     contributions, and
       ``(III) information as to how the amount by which the plan 
     is underfunded compares with the capitalization of the 
     employer making the election.

       ``(F) Election.--An election under this paragraph shall be 
     made at such time and in such manner as the Secretary of the 
     Treasury may prescribe.''
       (c) Effect of Election.--An election under section 
     412(l)(12) of the Internal Revenue Code of 1986 or section 
     302(d)(12) of the Employee Retirement Income Security Act of 
     1974 (as added by this section) with respect to a plan shall 
     not invalidate any obligation (pursuant to a collective 
     bargaining agreement in effect on the date of the election) 
     to provide benefits, to change the accrual of benefits, or to 
     change the rate at which benefits become nonforfeitable under 
     the plan .
       (d) Penalty for Failing To Provide Notice.--Section 
     502(c)(3) of the Employee Retirement Income Security Act of 
     1974 (29 U.S.C. 1132(c)(3)) is amended by inserting ``or who 
     fails to meet the requirements of section 302(d)(12)(E) with 
     respect to any participant or beneficiary'' after 
     ``101(e)(2)''.

     SEC. 4. MULTIEMPLOYER PLAN FUNDING NOTICES.

       (a) In General.--Section 104 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 104) is amended by 
     redesignating subsection (d) as subsection (e) and by 
     inserting after subsection (c) the following new subsection:
       ``(d) Multiemployer Defined Benefit Plan Funding Notices.--
       ``(1) In general.--The administrator of a defined benefit 
     plan which is a multiemployer plan shall for each plan year 
     provide a plan funding notice to each plan participant and 
     beneficiary, to each labor organization representing such 
     participants or beneficiaries, and to each employer that has 
     an obligation to contribute under the plan.
       ``(2) Information contained in notices.--
       ``(A) Identifying information.--Each notice required under 
     paragraph (1) shall contain identifying information, 
     including the name of the plan, the address and phone number 
     of the plan administrator and the plan's principal 
     administrative officer, each plan sponsor's employer 
     identification number, and the plan number of the plan.
       ``(B) Specific information.--A plan funding notice under 
     paragraph (1) shall include--
       ``(i) a statement as to whether the plan's funded current 
     liability percentage (as defined in section 302(d)(8)(B)) for 
     the plan year to which the notice relates is at least 100 
     percent (and, if not, the actual percentage);
       ``(ii) a statement of the value of the plan's assets, the 
     amount of benefit payments, and the ratio of the assets to 
     the payments for the plan year to which the report relates;
       ``(iii) a summary of the rules governing insolvent 
     multiemployer plans, including the limitations on benefit 
     payments and any potential benefit reductions and suspensions 
     (and the potential effects of such limitations, reductions, 
     and suspensions on the plan); and
       ``(iv) a general description of the benefits under the plan 
     which are eligible to be guaranteed by the Pension Benefit 
     Guaranty Corporation, along with an explanation of the 
     limitations on the guarantee and the circumstances under 
     which such limitations apply.
       ``(C) Other information.--Each notice under paragraph (1) 
     shall include any additional information which the plan 
     administrator elects to include to the extent not 
     inconsistent with regulations prescribed by the Secretary.
       ``(3) Time for providing notice.--Any notice under 
     paragraph (1) shall be provided no later than two months 
     after the deadline (including extensions) for filing the 
     annual report for the plan year to which the notice relates.
       ``(4) Form and manner.--Any notice under paragraph (1)--
       ``(A) shall be provided in a form and manner prescribed in 
     regulations of the Secretary,
       ``(B) shall be written in a manner so as to be understood 
     by the average plan participant, and
       ``(C) may be provided in written, electronic, or other 
     appropriate form to the extent such form is reasonably 
     accessible to persons to whom the notice is required to be 
     provided.''
       (b) Penalties.--Section 502(c)(1) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1132(c)(1)) 
     is amended by striking ``or section 101(e)(1)'' and inserting 
     ``, section 101(e)(1), or section 104(d)''.
       (c) Regulations and Model Notice.--The Secretary of Labor 
     shall, not later than 1 year after the date of the enactment 
     of this Act, issue regulations (including a model notice) 
     necessary to implement the amendments made by this section.
       (d) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning after December 31, 2004.

     SEC. 5. AMORTIZATION HIATUS FOR NET EXPERIENCE LOSSES IN 
                   MULTIEMPLOYER PLANS.

       (a) Amendments to the Employee Retirement Income Security 
     Act of 1974.--
       (1) In general.--Section 302(b)(7) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C.1082(b)(7)) 
     is amended by adding at the end the following new 
     subparagraph:
       ``(F)(i) If a multiemployer plan has a net experience loss 
     for any plan year beginning after June 30, 2002, and before 
     July 1, 2006--
       ``(I) the plan may elect to have the 15-year amortization 
     period under paragraph (2)(B)(iv) with respect to the loss 
     begin in any plan year selected by the plan from among the 3 
     immediately succeeding plan years, and
       ``(II) if the plan makes an election under subclause (I) 
     for any plan year, the net experience loss for the year 
     shall, for purposes of determining any charge to the funding 
     standard account, or interest, with respect to the loss, be 
     treated in the same manner as if it were a net experience 
     loss occurring in the year selected by the plan under 
     subclause (I) (without regard to any net experience loss or 
     gain otherwise determined for such year).

     Notwithstanding the preceding sentence, a plan may elect to 
     have this subparagraph apply to net experience losses for 
     only 2 plan years beginning after June 30, 2002, and before 
     July 1, 2006.
       ``(ii) An amendment which increases the liabilities of the 
     plan by reason of any increase in benefits, any change in the 
     accrual of benefits, or any change in the rate at which 
     benefits become nonforfeitable under the plan shall not take 
     effect for any plan year in the hiatus period, unless--
       ``(I) the funded current liability percentage (as defined 
     in subsection (d)(8)(B)) as of the end of the plan year is 
     projected (taking into account the effect of the amendment) 
     to be at least 75 percent,
       ``(II) the plan's actuary certifies that, due to an 
     increase in contribution rates, the normal cost attributable 
     to the benefit increase or other change is expected to be 
     fully funded in the year following the year the increase or 
     other change takes effect, and any increase in the plan's 
     accrued liabilities attributable to the benefit increase or 
     other change is expected to be fully funded by the end of the 
     third plan year following the end of the last hiatus period 
     of the plan, or
       ``(III) the plan amendment is otherwise described in 
     subparagraph (A) or (C) of section 304(b)(2).
       ``(iii) Clause (ii) shall not apply to an increase in 
     benefits for a group of participants resulting solely from a 
     collectively bargained increase in the contributions made on 
     their behalf.
       ``(iv) For purposes of this subparagraph, the term `hiatus 
     period' means any period during which the amortization of a 
     net experience loss is suspended by reason of this 
     subparagraph.
       ``(v) Interest accrued on any net experience loss during a 
     hiatus period shall be charged to a reconciliation account 
     and not to the funding standard account.
       ``(vi) If a plan elects an amortization hiatus under this 
     subparagraph and section 412(b)(7)(F) of the Internal Revenue 
     Code of 1986 for any plan year, the plan administrator shall 
     provide, within 30 days of filing the election for such year, 
     written notice of the election to participants and 
     beneficiaries, to each labor organization representing such 
     participants or beneficiaries, and to each employer that has 
     an obligation to contribute under the plan. Such notice shall 
     include with respect to any election the amount of the net 
     experience loss to be deferred and the period of the 
     deferral. Such notice shall also include the maximum 
     guaranteed monthly benefits which the Pension Benefit 
     Guaranty Corporation would pay if the plan terminated while 
     underfunded.
       ``(vii) An election under this subparagraph shall be made 
     at such time and in such manner as the Secretary, after 
     consultation with the Secretary of the Treasury, may 
     prescribe.''
       (2) Penalty.--Section 502(c)(4) of such Act (29 U.S.C. 
     1132(c)(4)) is amended to read as follows:
       ``(4) The Secretary may assess a civil penalty of not more 
     than $1,000 a day for each violation by any person of section 
     302(b)(7)(F)(vi).''
       (b) Amendments to the Internal Revenue Code of 1986.--
       (1) In general.--Section 412(b)(7) of the Internal Revenue 
     Code of 1986 (relating to special rules for multiemployer 
     plans) is amended by adding at the end the following new 
     subparagraph:

[[Page 497]]

       ``(F) Amortization hiatus.--
       ``(i) In general.--If a multiemployer plan has a net 
     experience loss for any plan year beginning after June 30, 
     2002, and before July 1, 2006--

       ``(I) the plan may elect to have the 15-year amortization 
     period under paragraph (2)(B)(iv) with respect to the loss 
     begin in any plan year selected by the plan from among the 3 
     immediately succeeding plan years, and
       ``(II) if the plan makes an election under subclause (I) 
     for any plan year, the net experience loss for the year 
     shall, for purposes of determining any charge to the funding 
     standard account, or interest, with respect to the loss, be 
     treated in the same manner as if it were a net experience 
     loss occurring in the year selected by the plan under 
     subclause (I) (without regard to any net experience loss or 
     gain otherwise determined for such year).

     Notwithstanding the preceding sentence, a plan may elect to 
     have this subparagraph apply to net experience losses for 
     only 2 plan years beginning after June 30, 2002, and before 
     July 1, 2006.
       ``(ii) Restrictions on benefit increases.--An amendment 
     which increases the liabilities of the plan by reason of any 
     increase in benefits, any change in the accrual of benefits, 
     or any change in the rate at which benefits become 
     nonforfeitable under the plan shall not take effect for any 
     plan year in the hiatus period, unless--

       ``(I) the funded current liability percentage (as defined 
     in subsection (l)(8)(B)) as of the end of the plan year is 
     projected (taking into account the effect of the amendment) 
     to be at least 75 percent,
       ``(II) the plan's actuary certifies that, due to an 
     increase in contribution rates, the normal cost attributable 
     to the benefit increase or other change is expected to be 
     fully funded in the year following the year in which the 
     increase or other change takes effect, and any increase in 
     the plan's accrued liabilities attributable to the benefit 
     increase or other change is expected to be fully funded by 
     the end of the third plan year following the end of the last 
     hiatus period of the plan, or
       ``(III) the plan amendment is otherwise described in 
     subparagraph (A) or (C) of subsection (f)(2).

       ``(iii) Collectively bargained increases in 
     contributions.--Clause (ii) shall not apply to an increase in 
     benefits for a group of participants resulting solely from a 
     collectively bargained increase in the contributions made on 
     their behalf.
       ``(iv) Hiatus period defined.--For purposes of this 
     subparagraph, the term `hiatus period' means any period 
     during which the amortization of a net experience loss is 
     suspended by reason of this subparagraph.
       ``(v) Interest accrued during hiatus.--Interest accrued on 
     any net experience loss during a hiatus period shall be 
     charged to a reconciliation account and not to the funding 
     standard account.
       ``(vi) Election.--An election under this subparagraph shall 
     be made at such time and in such manner as the Secretary of 
     Labor, after consultation with the Secretary, may 
     prescribe.''
       (2) Qualification requirement.--Section 401(a) of such Code 
     is amended by inserting after paragraph (34) the following 
     new paragraph:
       ``(35) Benefit increases in certain multiemployer plans.--A 
     trust which is part of a plan shall not constitute a 
     qualified trust under this section if the plan adopts an 
     amendment during a hiatus period (within the meaning of 
     section 412(b)(7)(F)(iv)) which the plan is prohibited from 
     adopting by reason of section 412(b)(7)(F)(ii).''.

     SEC. 6. 2-YEAR EXTENSION OF TRANSITION RULE TO PENSION 
                   FUNDING REQUIREMENTS.

       (a) In General.--Section 769(c) of the Retirement 
     Protection Act of 1994, as added by section 1508 of the 
     Taxpayer Relief Act of 1997, is amended--
       (1) by inserting ``except as provided in paragraph (3),'' 
     before ``the transition rules'', and
       (2) by adding at the end the following:
       ``(3) Special rules.--In the case of plan years beginning 
     in 2004 and 2005, the following transition rules shall apply 
     in lieu of the transition rules described in paragraph (2):
       ``(A) For purposes of section 412(l)(9)(A) of the Internal 
     Revenue Code of 1986 and section 302(d)(9)(A) of the Employee 
     Retirement Income Security Act of 1974, the funded current 
     liability percentage for any plan year shall be treated as 
     not less than 90 percent.
       ``(B) For purposes of section 412(m) of the Internal 
     Revenue Code of 1986 and section 302(e) of the Employee 
     Retirement Income Security Act of 1974, the funded current 
     liability percentage for any plan year shall be treated as 
     not less than 100 percent.
       ``(C) For purposes of determining unfunded vested benefits 
     under section 4006(a)(3)(E)(iii) of the Employee Retirement 
     Income Security Act of 1974, the mortality table shall be the 
     mortality table used by the plan.''
       (b) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning after December 31, 2003.

     SEC. 7. PROCEDURES APPLICABLE TO DISPUTES INVOLVING PENSION 
                   PLAN WITHDRAWAL LIABILITY.

       (a) In General.--Section 4221 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1401) is amended by 
     adding at the end the following new subsection:
       ``(f) Procedures Applicable to Certain Disputes.--
       ``(1) In general.--If--
       ``(A) a plan sponsor of a plan determines that--
       ``(i) a complete or partial withdrawal of an employer has 
     occurred, or
       ``(ii) an employer is liable for withdrawal liability 
     payments with respect to the complete or partial withdrawal 
     of an employer from the plan,
       ``(B) such determination is based in whole or in part on a 
     finding by the plan sponsor under section 4212(c) that a 
     principal purpose of a transaction that occurred before 
     January 1, 1999, was to evade or avoid withdrawal liability 
     under this subtitle, and
       ``(C) such transaction occurred at least 5 years before the 
     date of the complete or partial withdrawal,

     then the special rules under paragraph (2) shall be used in 
     applying subsections (a) and (d) of this section and section 
     4219(c) to the employer.
       ``(2) Special rules.--
       ``(A) Determination.--Notwithstanding subsection (a)(3)--
       ``(i) a determination by the plan sponsor under paragraph 
     (1)(B) shall not be presumed to be correct, and
       ``(ii) the plan sponsor shall have the burden to establish, 
     by a preponderance of the evidence, the elements of the claim 
     under section 4212(c) that a principal purpose of the 
     transaction was to evade or avoid withdrawal liability under 
     this subtitle.

     Nothing in this subparagraph shall affect the burden of 
     establishing any other element of a claim for withdrawal 
     liability under this subtitle.
       ``(B) Procedure.--Notwithstanding subsection (d) and 
     section 4219(c), if an employer contests the plan sponsor's 
     determination under paragraph (1) through an arbitration 
     proceeding pursuant to subsection (a), or through a claim 
     brought in a court of competent jurisdiction, the employer 
     shall not be obligated to make any withdrawal liability 
     payments until a final decision in the arbitration 
     proceeding, or in court, upholds the plan sponsor's 
     determination.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to any employer that receives a notification 
     under section 4219(b)(1) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1399(b)(1)) after October 31, 
     2003.

     SEC. 8. SENSE OF THE SENATE ON STATUS OF PRIVATE PENSION 
                   PLANS.

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

     SEC. 9. EXTENSION OF TRANSFERS OF EXCESS PENSION ASSETS TO 
                   RETIREE HEALTH ACCOUNTS.

       (a) Amendment of Internal Revenue Code of 1986.--Paragraph 
     (5) of section 420(b) of the

[[Page 498]]

     Internal Revenue Code of 1986 (relating to expiration) is 
     amended by striking ``December 31, 2005'' and inserting 
     ``December 31, 2013''.
       (b) Amendments of ERISA.--
       (1) Section 101(e)(3) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1021(e)(3)) is amended by 
     striking ``Tax Relief Extension Act of 1999'' and inserting 
     ``Pension Stability Act''.
       (2) Section 403(c)(1) of such Act (29 U.S.C. 1103(c)(1)) is 
     amended by striking ``Tax Relief Extension Act of 1999'' and 
     inserting ``Pension Stability Act''.
       (3) Paragraph (13) of section 408(b) of such Act (29 U.S.C. 
     1108(b)(3)) is amended--
       (A) by striking ``January 1, 2006'' and inserting ``January 
     1, 2014'', and
       (B) by striking ``Tax Relief Extension Act of 1999'' and 
     inserting ``Pension Stability Act''.

     SEC. 10. CLARIFICATION OF EXEMPTION FROM TAX FOR SMALL 
                   PROPERTY AND CASUALTY INSURANCE COMPANIES.

       (a) In General.--Section 501(c)(15)(A) of the Internal 
     Revenue Code of 1986 is amended to read as follows:
       ``(A) Insurance companies (as defined in section 816(a)) 
     other than life (including interinsurers and reciprocal 
     underwriters) if--
       ``(i) the gross receipts for the taxable year do not exceed 
     $600,000, and
       ``(ii) more than 50 percent of such gross receipts consist 
     of premiums.''.
       (b) Controlled Group Rule.--Section 501(c)(15)(C) of the 
     Internal Revenue Code of 1986 is amended by inserting ``, 
     except that in applying section 1563 for purposes of section 
     831(b)(2)(B)(ii), subparagraphs (B) and (C) of section 
     1563(b)(2) shall be disregarded'' before the period at the 
     end.
       (c) Conforming Amendment.--Clause (i) of section 
     831(b)(2)(A) of the Internal Revenue Code of 1986 is amended 
     by striking ``exceed $350,000 but''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2003.

     SEC. 11. DEFINITION OF INSURANCE COMPANY FOR SECTION 831.

       (a) In General.--Section 831 of the Internal Revenue Code 
     of 1986 is amended by redesignating subsection (c) as 
     subsection (d) and by inserting after subsection (b) the 
     following new subsection:
       ``(c) Insurance Company Defined.--For purposes of this 
     section, the term `insurance company' has the meaning given 
     to such term by section 816(a)).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2003.

     SEC. 12. FUNDS FOR REBUILDING FISH STOCKS.

       Section 105 of the Miscellaneous Appropriations and Offsets 
     Act, 2004 (division H of the Consolidated appropriations Act, 
     2004) is repealed.
  Mr. LEVIN. I move to reconsider the vote.
  Mr. NELSON of Florida. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The majority leader.
  Mr. FRIST. Madam President, before we proceed to the next vote, I do 
want to make a couple quick comments regarding the schedule.
  First, I am very pleased with the bipartisan vote on the passage of 
the pension bill. I congratulate the managers.
  At this point, the regular order would be for the Senate to request a 
conference with the House to reconcile the differences in the Senate 
bill and the House bill. I understand from the Democratic leadership 
that they have an objection to appointing conferees at this time. I 
hope we can work this out. This is an important piece of legislation 
that we need to address and clearly need to conference this matter with 
the House.
  Having said that, I will continue to talk with the Democratic leader 
in an effort to proceed with the regular order on appointing conferees.
  For the schedule, the next vote, which will occur shortly, will be 
the last vote of the week. On Monday, we will proceed to consideration 
of the highway bill. We will have a vote on Monday, and I expect that 
vote to be in relation to a judicial nomination. We will be announcing 
later in the day the timing of that vote.
  Mr. KENNEDY. Mr. President, as we conclude our debate on this bill, I 
thank all of my colleagues for the fruitful debate we have had on these 
issues, which are vitally important to America's workers and their 
families.
  I thank Senator Frist and Senator Daschle for their leadership in 
ensuring that this bill was passed quickly. I also thank my colleagues, 
Senator Grassley, Senator Baucus, and Senator Gregg for working with me 
to develop this moderate, bipartisan measure to protect our Nation's 
pension plans. And I thank the following staff members for all of the 
work they have done on this bill: Rohit Kumar, counsel and policy 
adviser to Majority Leader Frist; Chuck Marr, economic policy adviser 
to Minority Leader Daschle; David Thompson, labor and pensions policy 
director for Senator Gregg; Diann Howland, pension policy adviser to 
Senator Grassley; and Judy Miller, professional staff member for 
Senator Baucus. I particularly thank my own staff--Holly Fechner, chief 
labor counsel; Portia Wu, labor and pensions counsel; and Kathleen 
Wildman, labor policy office staff assistant--for all of their hard 
work on this issue.
  Defined benefit pension plans provide certainty and security for 
workers and retirees. I believe that we can--and we must--do more to 
protect the security of America's workers and retirees. Americans who 
have worked hard and played by the rules deserve to enjoy their old 
age, to retire without having to worry whether they have enough money 
to pay for their prescription drugs, to pay for electricity, or even to 
pay for food.
  There are many challenges facing our pension system. Our Nation's 
pension participation rate is the lowest it has been in over a decade. 
Part-time and low-wage workers continue to lag behind other workers in 
pension coverage.
  We must improve our pension system so that all workers can have a 
pension. We must increase pension portability for workers--who may have 
many jobs over a lifetime--without sacrificing security. We must ensure 
that companies adequately fund their pension plans. We must encourage 
companies to put more money into their pension plans when times are 
good, instead of only penalizing them when times are bad.
  By passing this bipartisan legislation, we are taking a much-needed 
first step to stabilize our pension plans.
  This legislation has three critical components to help defined 
benefit pension plans. First, it temporarily replaces the 30-year 
Treasury bond rate used to calculate employers' required contributions 
to pension plans with a corporate bond rate. This will stabilize our 
Nation's defined benefit pension plans and enable them to continue to 
provide the benefits they have promised.
  Second, it provides for additional deficit reduction contribution 
relief to companies that had well-funded pension plans in the past and 
need extra assistance now. This relief will help protect the pensions 
and jobs of workers in these industries.
  Finally, the bill includes important relief for multiemployer plans, 
which fill major needs in our pension system. Multiemployer plans 
provide pensions to many low-wage workers, as well as short-term and 
seasonal workers who might not otherwise be able to earn a pension.
  I thank all of my colleagues for the support they have given to this 
bill. This is an important first step, but it is only a first step. I 
hope my colleagues will join with me in the future to improve and 
expand our defined benefit system, so that we can ensure that all 
Americans receive the secure retirement they deserve.
  Mr. ROCKEFELLER. Mr. President, I am very pleased that the Senate has 
just passed the Pension Stability Act by an overwhelming margin. I 
spoke yesterday on behalf of the legislation, because I understand how 
important these changes are to the employers who offer defined benefit 
pension plans and to the employees who are counting on those pension 
benefits. I would like to just add a few words today to encourage the 
House of Representatives to quickly approve the bill, as amended by the 
Senate, and get this legislation to President Bush at the earliest 
possible date.
  The pension reforms provided in this bill are urgently needed. Many 
large companies have contacted me to stress how important it is that 
Congress act to update the interest rate used in calculating pension 
liabilities. Continuing to require employers to use the outdated 30-
year Treasury rate would jeopardize pension plans for millions of 
workers. I have also met with several executives from our Nation's 
airlines. The temporary relief from deficit reduction contributions 
provided by this

[[Page 499]]

bill is critically important to our struggling airline industry.
  As a result of both September 11 and the slow economy during the last 
few years, our Nation's airlines have dealt with extremely difficult 
business conditions. The industry has already laid off more than 
200,000 people, and many airlines are struggling either to emerge from 
bankruptcy or to avoid having to file for bankruptcy. By providing 
airlines some breathing room when it comes to pension payments, we can 
protect workers' benefits that might otherwise be cancelled and protect 
workers' jobs that might otherwise be cut. Ultimately, this bill is an 
effort to do what we can to take care of workers who have already seen 
involuntary furloughs, seen their wages reduced, and seen their 
pensions cut. In my judgment, preserving the benefits and rights of 
workers who make our industries strong is crucial to strengthening our 
economy.
  This bill will help employers to honor their commitments to their 
employees, many of whom have already sacrificed so much for their 
companies. I am very pleased that by a vote of 86 to 9, my Senate 
colleagues approved this bill. I hope that the House will listen to the 
clear message that we sent today. For the sake of employers and their 
employees, Congress and the President must enact these pension reforms 
now.
  (At the request of Mr. DASCHLE, the following statement was ordered 
to be printed in the Record.)
 Mr. KERRY. Mr. President, today the Senate passed critical 
pension funding reform legislation that will protect millions of 
American workers from losing their defined benefit pension plans. 
Although only a temporary solution, the Pension Funding Equity Act is 
essential to prevent companies from having to freeze or terminate their 
defined benefit pension plans because of outdated rules that determine 
how their pension plan liabilities are calculated.
  Defined benefit pension plans are an essential component of 
retirement security for over half of America's working men and women. 
Unfortunately, trends show a decline in the use of defined benefit 
pension plans, with only one quarter as many companies providing 
defined benefit plans today as did 20 years ago. Since 2003, 3.3 
million Americans having lost their pension coverage. The volatility in 
the stock market in the last few years--in which Americans lost 
billions in retirement assets--leaves little doubt that we must do more 
to reverse the decline in the use of defined benefit pension plans and 
expand the retirement security of defined benefit pension plans to more 
Americans. The Pension Funding Equity Act is an important step towards 
addressing this challenge.
  In the last 3 years, companies that provide defined benefit pension 
plans to their employees have come under extreme financial stress due 
to the sluggish economy and changes in the interest rate that 
determines their pension plan liability. The Pension Funding Equity Act 
of 2003 provides much needed relief to help these companies maintain 
retirement benefits for their employees as the country works towards 
economic recovery. This legislation provides a temporary 2-year period 
of funding relief by updating the interest rate that companies must use 
when calculating the liabilities of their pension plans. A more 
accurate mix of long-term corporate bond rates will replace the now 
defunct 30-year Treasury rate in the calculation of pension plan 
liabilities.
  In addition to protecting the defined benefit plans of American 
workers, the Pension Funding Equity Act is expected to provide $16 
billion in additional savings to companies, which will facilitate job 
creation by freeing up funds for additional wages and hiring.
  I applaud the passage of the Pension Funding Equity Act and look 
forward to working with my colleagues in crafting a long-term solution 
to improve and expand our pension system.

                          ____________________