[Congressional Record (Bound Edition), Volume 160 (2014), Part 4]
[House]
[Pages 4712-4724]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  1715
     COOPERATIVE AND SMALL EMPLOYER CHARITY PENSION FLEXIBILITY ACT

  Mrs. BROOKS of Indiana. Madam Speaker, I move to suspend the rules 
and pass the bill (H.R. 4275) to amend the Employee Retirement Income 
Security Act of 1974 and the Internal Revenue Code of 1986 to provide 
for cooperative and small employer charity pension plans.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 4275

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the 
     ``Cooperative and Small Employer Charity Pension Flexibility 
     Act''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Congressional findings and declarations of policy.
Sec. 3. Effective date.

TITLE I--AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 
                          AND OTHER PROVISIONS

Sec. 101. Definition of cooperative and small employer charity pension 
              plans.
Sec. 102. Funding rules applicable to cooperative and small employer 
              charity pension plans.
Sec. 103. Elections.
Sec. 104. Transparency.
Sec. 105. Sponsor education and assistance.

         TITLE II--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

Sec. 201. Definition of cooperative and small employer charity pension 
              plans.
Sec. 202. Funding rules applicable to cooperative and small employer 
              charity pension plans.
Sec. 203. Election not to be treated as a CSEC plan.

     SEC. 2. CONGRESSIONAL FINDINGS AND DECLARATIONS OF POLICY.

       Congress finds as follows:
       (1) Defined benefit pension plans are a cost-effective way 
     for cooperative associations and charities to provide their 
     employees with economic security in retirement.
       (2) Many cooperative associations and charitable 
     organizations are only able to provide their employees with 
     defined benefit pension plans because those organizations are 
     able to pool their resources using the multiple employer plan 
     structure.
       (3) The pension funding rules should encourage cooperative 
     associations and charities to continue to provide their 
     employees with pension benefits.

     SEC. 3. EFFECTIVE DATE.

       Unless otherwise specified in this Act, the provisions of 
     this Act shall apply to years beginning after December 31, 
     2013.

[[Page 4713]]



TITLE I--AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 
                          AND OTHER PROVISIONS

     SEC. 101. DEFINITION OF COOPERATIVE AND SMALL EMPLOYER 
                   CHARITY PENSION PLANS.

       Section 210 of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1060) is amended by adding at the end the 
     following new subsection:
       ``(f) Cooperative and Small Employer Charity Pension 
     Plans.--
       ``(1) In general.--For purposes of this title, except as 
     provided in this subsection, a CSEC plan is an employee 
     pension benefit plan (other than a multiemployer plan) that 
     is a defined benefit plan--
       ``(A) to which section 104 of the Pension Protection Act of 
     2006 applies, without regard to--
       ``(i) section 104(a)(2) of such Act;
       ``(ii) the amendments to such section 104 by section 202(b) 
     of the Preservation of Access to Care for Medicare 
     Beneficiaries and Pension Relief Act of 2010; and
       ``(iii) paragraph (3)(B); or
       ``(B) that, as of June 25, 2010, was maintained by more 
     than one employer and all of the employers were organizations 
     described in section 501(c)(3) of the Internal Revenue Code 
     of 1986.
       ``(2) Aggregation.--All employers that are treated as a 
     single employer under subsection (b) or (c) of section 414 of 
     the Internal Revenue Code of 1986 shall be treated as a 
     single employer for purposes of determining if a plan was 
     maintained by more than one employer under paragraph 
     (1)(B).''.

     SEC. 102. FUNDING RULES APPLICABLE TO COOPERATIVE AND SMALL 
                   EMPLOYER CHARITY PENSION PLANS.

       (a) In General.--Part 3 of title I of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1081 et 
     seq.) is amended by adding at the end the following new 
     section:

     ``SEC. 306. MINIMUM FUNDING STANDARDS.

       ``(a) General Rule.--For purposes of section 302, the term 
     `accumulated funding deficiency' for a CSEC plan means the 
     excess of the total charges to the funding standard account 
     for all plan years (beginning with the first plan year to 
     which section 302 applies) over the total credits to such 
     account for such years or, if less, the excess of the total 
     charges to the alternative minimum funding standard account 
     for such plan years over the total credits to such account 
     for such years.
       ``(b) Funding Standard Account.--
       ``(1) Account required.--Each plan to which this section 
     applies shall establish and maintain a funding standard 
     account. Such account shall be credited and charged solely as 
     provided in this section.
       ``(2) Charges to account.--For a plan year, the funding 
     standard account shall be charged with the sum of--
       ``(A) the normal cost of the plan for the plan year,
       ``(B) the amounts necessary to amortize in equal annual 
     installments (until fully amortized)--
       ``(i) in the case of a plan in existence on January 1, 
     1974, the unfunded past service liability under the plan on 
     the first day of the first plan year to which section 302 
     applies, over a period of 40 plan years,
       ``(ii) in the case of a plan which comes into existence 
     after January 1, 1974, but before the first day of the first 
     plan year beginning after December 31, 2013, the unfunded 
     past service liability under the plan on the first day of the 
     first plan year to which section 302 applies, over a period 
     of 30 plan years,
       ``(iii) separately, with respect to each plan year, the net 
     increase (if any) in unfunded past service liability under 
     the plan arising from plan amendments adopted in such year, 
     over a period of 15 plan years,
       ``(iv) separately, with respect to each plan year, the net 
     experience loss (if any) under the plan, over a period of 5 
     plan years, and
       ``(v) separately, with respect to each plan year, the net 
     loss (if any) resulting from changes in actuarial assumptions 
     used under the plan, over a period of 10 plan years,
       ``(C) the amount necessary to amortize each waived funding 
     deficiency (within the meaning of section 302(c)(3)) for each 
     prior plan year in equal annual installments (until fully 
     amortized) over a period of 5 plan years,
       ``(D) the amount necessary to amortize in equal annual 
     installments (until fully amortized) over a period of 5 plan 
     years any amount credited to the funding standard account 
     under paragraph (3)(D), and
       ``(E) the amount necessary to amortize in equal annual 
     installments (until fully amortized) over a period of 20 
     years the contributions which would be required to be made 
     under the plan but for the provisions of section 
     302(c)(7)(A)(i)(I) (as in effect on the day before the 
     enactment of the Pension Protection Act of 2006).
       ``(3) Credits to account.--For a plan year, the funding 
     standard account shall be credited with the sum of--
       ``(A) the amount considered contributed by the employer to 
     or under the plan for the plan year,
       ``(B) the amount necessary to amortize in equal annual 
     installments (until fully amortized)--
       ``(i) separately, with respect to each plan year, the net 
     decrease (if any) in unfunded past service liability under 
     the plan arising from plan amendments adopted in such year, 
     over a period of 15 plan years,
       ``(ii) separately, with respect to each plan year, the net 
     experience gain (if any) under the plan, over a period of 5 
     plan years, and
       ``(iii) separately, with respect to each plan year, the net 
     gain (if any) resulting from changes in actuarial assumptions 
     used under the plan, over a period of 10 plan years,
       ``(C) the amount of the waived funding deficiency (within 
     the meaning of section 302(c)(3)) for the plan year, and
       ``(D) in the case of a plan year for which the accumulated 
     funding deficiency is determined under the funding standard 
     account if such plan year follows a plan year for which such 
     deficiency was determined under the alternative minimum 
     funding standard, the excess (if any) of any debit balance in 
     the funding standard account (determined without regard to 
     this subparagraph) over any debit balance in the alternative 
     minimum funding standard account.
       ``(4) Combining and offsetting amounts to be amortized.--
     Under regulations prescribed by the Secretary of the 
     Treasury, amounts required to be amortized under paragraph 
     (2) or paragraph (3), as the case may be--
       ``(A) may be combined into one amount under such paragraph 
     to be amortized over a period determined on the basis of the 
     remaining amortization period for all items entering into 
     such combined amount, and
       ``(B) may be offset against amounts required to be 
     amortized under the other such paragraph, with the resulting 
     amount to be amortized over a period determined on the basis 
     of the remaining amortization periods for all items entering 
     into whichever of the two amounts being offset is the 
     greater.
       ``(5) Interest.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the funding standard account (and items therein) shall be 
     charged or credited (as determined under regulations 
     prescribed by the Secretary of the Treasury) with interest at 
     the appropriate rate consistent with the rate or rates of 
     interest used under the plan to determine costs.
       ``(B) Exception.--The interest rate used for purposes of 
     computing the amortization charge described in subsection 
     (b)(2)(C) or for purposes of any arrangement under subsection 
     (d) for any plan year shall be the greater of--
       ``(i) 150 percent of the Federal mid-term rate (as in 
     effect under section 1274 of the Internal Revenue Code of 
     1986 for the 1st month of such plan year), or
       ``(ii) the rate of interest determined under subparagraph 
     (A).
       ``(6) Amortization schedules in effect.--Amortization 
     schedules for amounts described in paragraphs (2) and (3) 
     that are in effect as of the last day of the last plan year 
     beginning before January 1, 2014, by reason of section 104 of 
     the Pension Protection Act of 2006 shall remain in effect 
     pursuant to their terms and this section, except that such 
     amounts shall not be amortized again under this section.
       ``(c) Special Rules.--
       ``(1) Determinations to be made under funding method.--For 
     purposes of this section, normal costs, accrued liability, 
     past service liabilities, and experience gains and losses 
     shall be determined under the funding method used to 
     determine costs under the plan.
       ``(2) Valuation of assets.--
       ``(A) In general.--For purposes of this section, the value 
     of the plan's assets shall be determined on the basis of any 
     reasonable actuarial method of valuation which takes into 
     account fair market value and which is permitted under 
     regulations prescribed by the Secretary of the Treasury.
       ``(B) Dedicated bond portfolio.--The Secretary of the 
     Treasury may by regulations provide that the value of any 
     dedicated bond portfolio of a plan shall be determined by 
     using the interest rate under section 302(b)(5) (as in effect 
     on the day before the enactment of the Pension Protection Act 
     of 2006).
       ``(3) Actuarial assumptions must be reasonable.--For 
     purposes of this section, all costs, liabilities, rates of 
     interest, and other factors under the plan shall be 
     determined on the basis of actuarial assumptions and 
     methods--
       ``(A) each of which is reasonable (taking into account the 
     experience of the plan and reasonable expectations), and
       ``(B) which, in combination, offer the actuary's best 
     estimate of anticipated experience under the plan.
       ``(4) Treatment of certain changes as experience gain or 
     loss.--For purposes of this section, if--
       ``(A) a change in benefits under the Social Security Act or 
     in other retirement benefits created under Federal or State 
     law, or
       ``(B) a change in the definition of the term `wages' under 
     section 3121 of the Internal Revenue Code of 1986 or a change 
     in the amount of such wages taken into account under 
     regulations prescribed for purposes of section 401(a)(5) of 
     such Code,
     results in an increase or decrease in accrued liability under 
     a plan, such increase or decrease shall be treated as an 
     experience loss or gain.
       ``(5) Funding method and plan year.--
       ``(A) Funding methods available.--All funding methods 
     available to CSEC plans

[[Page 4714]]

     under section 302 (as in effect on the day before the 
     enactment of the Pension Protection Act of 2006) shall 
     continue to be available under this section.
       ``(B) Changes.--If the funding method for a plan is 
     changed, the new funding method shall become the funding 
     method used to determine costs and liabilities under the plan 
     only if the change is approved by the Secretary of the 
     Treasury. If the plan year for a plan is changed, the new 
     plan year shall become the plan year for the plan only if the 
     change is approved by the Secretary of the Treasury.
       ``(C) Approval required for certain changes in assumptions 
     by certain single-employer plans subject to additional 
     funding requirement.--
       ``(i) In general.--No actuarial assumption (other than the 
     assumptions described in subsection (h)(3)) used to determine 
     the current liability for a plan to which this subparagraph 
     applies may be changed without the approval of the Secretary 
     of the Treasury.
       ``(ii) Plans to which subparagraph applies.--This 
     subparagraph shall apply to a plan only if--

       ``(I) the plan is a CSEC plan,
       ``(II) the aggregate unfunded vested benefits as of the 
     close of the preceding plan year (as determined under section 
     4006(a)(3)(E)(iii)) of such plan and all other plans 
     maintained by the contributing sponsors (as defined in 
     section 4001(a)(13)) and members of such sponsors' controlled 
     groups (as defined in section 4001(a)(14)) which are covered 
     by title IV (disregarding plans with no unfunded vested 
     benefits) exceed $50,000,000, and
       ``(III) the change in assumptions (determined after taking 
     into account any changes in interest rate and mortality 
     table) results in a decrease in the funding shortfall of the 
     plan for the current plan year that exceeds $50,000,000, or 
     that exceeds $5,000,000 and that is 5 percent or more of the 
     current liability of the plan before such change.

       ``(6) Full funding.--If, as of the close of a plan year, a 
     plan would (without regard to this paragraph) have an 
     accumulated funding deficiency (determined without regard to 
     the alternative minimum funding standard account permitted 
     under subsection (e)) in excess of the full funding 
     limitation--
       ``(A) the funding standard account shall be credited with 
     the amount of such excess, and
       ``(B) all amounts described in paragraphs (2)(B), (C), and 
     (D) and (3)(B) of subsection (b) which are required to be 
     amortized shall be considered fully amortized for purposes of 
     such paragraphs.
       ``(7) Full-funding limitation.--For purposes of paragraph 
     (6), the term `full-funding limitation' means the excess (if 
     any) of--
       ``(A) the accrued liability (including normal cost) under 
     the plan (determined under the entry age normal funding 
     method if such accrued liability cannot be directly 
     calculated under the funding method used for the plan), over
       ``(B) the lesser of--
       ``(i) the fair market value of the plan's assets, or
       ``(ii) the value of such assets determined under paragraph 
     (2).
       ``(C) Minimum amount.--
       ``(i) In general.--In no event shall the full-funding 
     limitation determined under subparagraph (A) be less than the 
     excess (if any) of--

       ``(I) 90 percent of the current liability (determined 
     without regard to paragraph (4) of subsection (h)) of the 
     plan (including the expected increase in such current 
     liability due to benefits accruing during the plan year), 
     over
       ``(II) the value of the plan's assets determined under 
     paragraph (2).

       ``(ii) Assets.--For purposes of clause (i), assets shall 
     not be reduced by any credit balance in the funding standard 
     account.
       ``(8) Annual valuation.--
       ``(A) In general.--For purposes of this section, a 
     determination of experience gains and losses and a valuation 
     of the plan's liability shall be made not less frequently 
     than once every year, except that such determination shall be 
     made more frequently to the extent required in particular 
     cases under regulations prescribed by the Secretary of the 
     Treasury.
       ``(B) Valuation date.--
       ``(i) Current year.--Except as provided in clause (ii), the 
     valuation referred to in subparagraph (A) shall be made as of 
     a date within the plan year to which the valuation refers or 
     within one month prior to the beginning of such year.
       ``(ii) Use of prior year valuation.--The valuation referred 
     to in subparagraph (A) may be made as of a date within the 
     plan year prior to the year to which the valuation refers if, 
     as of such date, the value of the assets of the plan are not 
     less than 100 percent of the plan's current liability.
       ``(iii) Adjustments.--Information under clause (ii) shall, 
     in accordance with regulations, be actuarially adjusted to 
     reflect significant differences in participants.
       ``(iv) Limitation.--A change in funding method to use a 
     prior year valuation, as provided in clause (ii), may not be 
     made unless as of the valuation date within the prior plan 
     year, the value of the assets of the plan are not less than 
     125 percent of the plan's current liability.
       ``(9) Time when certain contributions deemed made.--For 
     purposes of this section, any contributions for a plan year 
     made by an employer during the period--
       ``(A) beginning on the day after the last day of such plan 
     year, and
       ``(B) ending on the day which is 8\1/2\ months after the 
     close of the plan year,
     shall be deemed to have been made on such last day.
       ``(10) Anticipation of benefit increases effective in the 
     future.--In determining projected benefits, the funding 
     method of a collectively bargained CSEC plan described in 
     section 413(a) of the Internal Revenue Code of 1986 shall 
     anticipate benefit increases scheduled to take effect during 
     the term of the collective bargaining agreement applicable to 
     the plan.
       ``(d) Extension of Amortization Periods.--The period of 
     years required to amortize any unfunded liability (described 
     in any clause of subsection (b)(2)(B)) of any plan may be 
     extended by the Secretary of the Treasury for a period of 
     time (not in excess of 10 years) if such Secretary determines 
     that such extension would carry out the purposes of this Act 
     and provide adequate protection for participants under the 
     plan and their beneficiaries, and if such Secretary 
     determines that the failure to permit such extension would 
     result in--
       ``(1) a substantial risk to the voluntary continuation of 
     the plan, or
       ``(2) a substantial curtailment of pension benefit levels 
     or employee compensation.
       ``(e) Alternative Minimum Funding Standard.--
       ``(1) In general.--A CSEC plan which uses a funding method 
     that requires contributions in all years not less than those 
     required under the entry age normal funding method may 
     maintain an alternative minimum funding standard account for 
     any plan year. Such account shall be credited and charged 
     solely as provided in this subsection.
       ``(2) Charges and credits to account.--For a plan year the 
     alternative minimum funding standard account shall be--
       ``(A) charged with the sum of--
       ``(i) the lesser of normal cost under the funding method 
     used under the plan or normal cost determined under the unit 
     credit method,
       ``(ii) the excess, if any, of the present value of accrued 
     benefits under the plan over the fair market value of the 
     assets, and
       ``(iii) an amount equal to the excess (if any) of credits 
     to the alternative minimum standard account for all prior 
     plan years over charges to such account for all such years, 
     and
       ``(B) credited with the amount considered contributed by 
     the employer to or under the plan for the plan year.
       ``(3) Interest.--The alternative minimum funding standard 
     account (and items therein) shall be charged or credited with 
     interest in the manner provided under subsection (b)(5) with 
     respect to the funding standard account.
       ``(f) Quarterly Contributions Required.--
       ``(1) In general.--If a CSEC plan which has a funded 
     current liability percentage for the preceding plan year of 
     less than 100 percent fails to pay the full amount of a 
     required installment for the plan year, then the rate of 
     interest charged to the funding standard account under 
     subsection (b)(5) with respect to the amount of the 
     underpayment for the period of the underpayment shall be 
     equal to the greater of--
       ``(A) 175 percent of the Federal mid-term rate (as in 
     effect under section 1274 of the Internal Revenue Code of 
     1986 for the 1st month of such plan year), or
       ``(B) the rate of interest used under the plan in 
     determining costs.
       ``(2) Amount of underpayment, period of underpayment.--For 
     purposes of paragraph (1)--
       ``(A) Amount.--The amount of the underpayment shall be the 
     excess of--
       ``(i) the required installment, over
       ``(ii) the amount (if any) of the installment contributed 
     to or under the plan on or before the due date for the 
     installment.
       ``(B) Period of underpayment.--The period for which 
     interest is charged under this subsection with regard to any 
     portion of the underpayment shall run from the due date for 
     the installment to the date on which such portion is 
     contributed to or under the plan (determined without regard 
     to subsection (c)(9)).
       ``(C) Order of crediting contributions.--For purposes of 
     subparagraph (A)(ii), contributions shall be credited against 
     unpaid required installments in the order in which such 
     installments are required to be paid.
       ``(3) Number of required installments; due dates.--For 
     purposes of this subsection--
       ``(A) Payable in 4 installments.--There shall be 4 required 
     installments for each plan year.
       ``(B) Time for payment of installments.--


 
    ``In the case of the following required
                 installments:                       The due date is:
 
1st............................................                 April 15
2nd............................................                  July 15
3rd............................................               October 15

[[Page 4715]]

 
4th............................................        January 15 of the
                                                         following year.
 

       ``(4) Amount of required installment.--For purposes of this 
     subsection--
       ``(A) In general.--The amount of any required installment 
     shall be 25 percent of the required annual payment.
       ``(B) Required annual payment.--For purposes of 
     subparagraph (A), the term `required annual payment' means 
     the lesser of--
       ``(i) 90 percent of the amount required to be contributed 
     to or under the plan by the employer for the plan year under 
     section 302 (without regard to any waiver under subsection 
     (c) thereof), or
       ``(ii) 100 percent of the amount so required for the 
     preceding plan year.
     Clause (ii) shall not apply if the preceding plan year was 
     not a year of 12 months.
       ``(5) Liquidity requirement.--
       ``(A) In general.--A plan to which this paragraph applies 
     shall be treated as failing to pay the full amount of any 
     required installment to the extent that the value of the 
     liquid assets paid in such installment is less than the 
     liquidity shortfall (whether or not such liquidity shortfall 
     exceeds the amount of such installment required to be paid 
     but for this paragraph).
       ``(B) Plans to which paragraph applies.--This paragraph 
     shall apply to a CSEC plan other than a plan described in 
     section 302(d)(6)(A) (as in effect on the day before the 
     enactment of the Pension Protection Act of 2006) which--
       ``(i) is required to pay installments under this subsection 
     for a plan year, and
       ``(ii) has a liquidity shortfall for any quarter during 
     such plan year.
       ``(C) Period of underpayment.--For purposes of paragraph 
     (1), any portion of an installment that is treated as not 
     paid under subparagraph (A) shall continue to be treated as 
     unpaid until the close of the quarter in which the due date 
     for such installment occurs.
       ``(D) Limitation on increase.--If the amount of any 
     required installment is increased by reason of subparagraph 
     (A), in no event shall such increase exceed the amount which, 
     when added to prior installments for the plan year, is 
     necessary to increase the funded current liability percentage 
     (taking into account the expected increase in current 
     liability due to benefits accruing during the plan year) to 
     100 percent.
       ``(E) Definitions.--For purposes of this paragraph--
       ``(i) Liquidity shortfall.--The term `liquidity shortfall' 
     means, with respect to any required installment, an amount 
     equal to the excess (as of the last day of the quarter for 
     which such installment is made) of the base amount with 
     respect to such quarter over the value (as of such last day) 
     of the plan's liquid assets.
       ``(ii) Base amount.--

       ``(I) In general.--The term `base amount' means, with 
     respect to any quarter, an amount equal to 3 times the sum of 
     the adjusted disbursements from the plan for the 12 months 
     ending on the last day of such quarter.
       ``(II) Special rule.--If the amount determined under 
     subclause (I) exceeds an amount equal to 2 times the sum of 
     the adjusted disbursements from the plan for the 36 months 
     ending on the last day of the quarter and an enrolled actuary 
     certifies to the satisfaction of the Secretary of the 
     Treasury that such excess is the result of nonrecurring 
     circumstances, the base amount with respect to such quarter 
     shall be determined without regard to amounts related to 
     those nonrecurring circumstances.

       ``(iii) Disbursements from the plan.--The term 
     `disbursements from the plan' means all disbursements from 
     the trust, including purchases of annuities, payments of 
     single sums and other benefits, and administrative expenses.
       ``(iv) Adjusted disbursements.--The term `adjusted 
     disbursements' means disbursements from the plan reduced by 
     the product of--

       ``(I) the plan's funded current liability percentage for 
     the plan year, and
       ``(II) the sum of the purchases of annuities, payments of 
     single sums, and such other disbursements as the Secretary of 
     the Treasury shall provide in regulations.

       ``(v) Liquid assets.--The term `liquid assets' means cash, 
     marketable securities and such other assets as specified by 
     the Secretary of the Treasury in regulations.
       ``(vi) Quarter.--The term `quarter' means, with respect to 
     any required installment, the 3-month period preceding the 
     month in which the due date for such installment occurs.
       ``(F) Regulations.--The Secretary of the Treasury may 
     prescribe such regulations as are necessary to carry out this 
     paragraph.
       ``(6) Fiscal years and short years.--
       ``(A) Fiscal years.--In applying this subsection to a plan 
     year beginning on any date other than January 1, there shall 
     be substituted for the months specified in this subsection, 
     the months which correspond thereto.
       ``(B) Short plan year.--This subsection shall be applied to 
     plan years of less than 12 months in accordance with 
     regulations prescribed by the Secretary of the Treasury.
       ``(g) Imposition of Lien Where Failure To Make Required 
     Contributions.--
       ``(1) In general.--In the case of a plan to which this 
     section applies, if--
       ``(A) any person fails to make a required installment under 
     subsection (f) or any other payment required under this 
     section before the due date for such installment or other 
     payment, and
       ``(B) the unpaid balance of such installment or other 
     payment (including interest), when added to the aggregate 
     unpaid balance of all preceding such installments or other 
     payments for which payment was not made before the due date 
     (including interest), exceeds $1,000,000,
     then there shall be a lien in favor of the plan in the amount 
     determined under paragraph (3) upon all property and rights 
     to property, whether real or personal, belonging to such 
     person and any other person who is a member of the same 
     controlled group of which such person is a member.
       ``(2) Plans to which subsection applies.--This subsection 
     shall apply to a CSEC plan for any plan year for which the 
     funded current liability percentage of such plan is less than 
     100 percent. This subsection shall not apply to any plan to 
     which section 4021 does not apply (as such section is in 
     effect on the date of the enactment of the Retirement 
     Protection Act of 1994).
       ``(3) Amount of lien.--For purposes of paragraph (1), the 
     amount of the lien shall be equal to the aggregate unpaid 
     balance of required installments and other payments required 
     under this section (including interest)--
       ``(A) for plan years beginning after 1987, and
       ``(B) for which payment has not been made before the due 
     date.
       ``(4) Notice of failure; lien.--
       ``(A) Notice of failure.--A person committing a failure 
     described in paragraph (1) shall notify the Pension Benefit 
     Guaranty Corporation of such failure within 10 days of the 
     due date for the required installment or other payment.
       ``(B) Period of lien.--The lien imposed by paragraph (1) 
     shall arise on the due date for the required installment or 
     other payment and shall continue until the last day of the 
     first plan year in which the plan ceases to be described in 
     paragraph (1)(B). Such lien shall continue to run without 
     regard to whether such plan continues to be described in 
     paragraph (2) during the period referred to in the preceding 
     sentence.
       ``(C) Certain rules to apply.--Any amount with respect to 
     which a lien is imposed under paragraph (1) shall be treated 
     as taxes due and owing the United States and rules similar to 
     the rules of subsections (c), (d), and (e) of section 4068 
     shall apply with respect to a lien imposed by subsection (a) 
     and the amount with respect to such lien.
       ``(5) Enforcement.--Any lien created under paragraph (1) 
     may be perfected and enforced only by the Pension Benefit 
     Guaranty Corporation, or at the direction of the Pension 
     Benefit Guaranty Corporation, by any contributing employer 
     (or any member of the controlled group of the contributing 
     employer).
       ``(6) Definitions.--For purposes of this subsection--
       ``(A) Due date; required installment.--The terms `due date' 
     and `required installment' have the meanings given such terms 
     by subsection (f), except that in the case of a payment other 
     than a required installment, the due date shall be the date 
     such payment is required to be made under this section.
       ``(B) Controlled group.--The term `controlled group' means 
     any group treated as a single employer under subsections (b), 
     (c), (m), and (o) of section 414 of the Internal Revenue Code 
     of 1986.
       ``(h) Current Liability.--For purposes of this section--
       ``(1) In general.--The term `current liability' means all 
     liabilities to employees and their beneficiaries under the 
     plan.
       ``(2) Treatment of unpredictable contingent event 
     benefits.--
       ``(A) In general.--For purposes of paragraph (1), any 
     unpredictable contingent event benefit shall not be taken 
     into account until the event on which the benefit is 
     contingent occurs.
       ``(B) Unpredictable contingent event benefit.--The term 
     `unpredictable contingent event benefit' means any benefit 
     contingent on an event other than--
       ``(i) age, service, compensation, death, or disability, or
       ``(ii) an event which is reasonably and reliably 
     predictable (as determined by the Secretary of the Treasury).
       ``(3) Interest rate and mortality assumptions used.--
       ``(A) Interest rate.--The rate of interest used to 
     determine current liability under this section shall be the 
     third segment rate determined under section 303(h)(2)(C).
       ``(B) Mortality tables.--
       ``(i) Secretarial authority.--The Secretary of the Treasury 
     may by regulation prescribe mortality tables to be used in 
     determining current liability under this subsection. Such 
     tables shall be based upon the actual experience of pension 
     plans and projected trends in such experience. In prescribing 
     such tables, the Secretary of the

[[Page 4716]]

     Treasury shall take into account results of available 
     independent studies of mortality of individuals covered by 
     pension plans.
       ``(ii) Periodic review.--The Secretary of the Treasury 
     shall periodically (at least every 5 years) review any tables 
     in effect under this subsection and shall, to the extent the 
     Secretary of the Treasury determines necessary, by regulation 
     update the tables to reflect the actual experience of pension 
     plans and projected trends in such experience.
       ``(C) Separate mortality tables for the disabled.--
     Notwithstanding subparagraph (B)--
       ``(i) In general.--In the case of plan years beginning 
     after December 31, 1995, the Secretary of the Treasury shall 
     establish mortality tables which may be used (in lieu of the 
     tables under subparagraph (B)) to determine current liability 
     under this subsection for individuals who are entitled to 
     benefits under the plan on account of disability. The 
     Secretary of the Treasury shall establish separate tables for 
     individuals whose disabilities occur in plan years beginning 
     before January 1, 1995, and for individuals whose 
     disabilities occur in plan years beginning on or after such 
     date.
       ``(ii) Special rule for disabilities occurring after 
     1994.--In the case of disabilities occurring in plan years 
     beginning after December 31, 1994, the tables under clause 
     (i) shall apply only with respect to individuals described in 
     such subclause who are disabled within the meaning of title 
     II of the Social Security Act and the regulations thereunder.
       ``(4) Certain service disregarded.--
       ``(A) In general.--In the case of a participant to whom 
     this paragraph applies, only the applicable percentage of the 
     years of service before such individual became a participant 
     shall be taken into account in computing the current 
     liability of the plan.
       ``(B) Applicable percentage.--For purposes of this 
     subparagraph, the applicable percentage shall be determined 
     as follows:


 
                                                      The applicable
     ``If the years of participation  are:            percentage is:
 
1..............................................                       20
2..............................................                       40
3..............................................                       60
4..............................................                       80
5 or more......................................                     100.
 

       ``(C) Participants to whom paragraph applies.--This 
     subparagraph shall apply to any participant who, at the time 
     of becoming a participant--
       ``(i) has not accrued any other benefit under any defined 
     benefit plan (whether or not terminated) maintained by the 
     employer or a member of the same controlled group of which 
     the employer is a member,
       ``(ii) who first becomes a participant under the plan in a 
     plan year beginning after December 31, 1987, and
       ``(iii) has years of service greater than the minimum years 
     of service necessary for eligibility to participate in the 
     plan.
       ``(D) Election.--An employer may elect not to have this 
     subparagraph apply. Such an election, once made, may be 
     revoked only with the consent of the Secretary of the 
     Treasury.
       ``(i) Funded Current Liability Percentage.--For purposes of 
     this section, the term `funded current liability percentage' 
     means, with respect to any plan year, the percentage which--
       ``(1) the value of the plan's assets determined under 
     subsection (c)(2), is of
       ``(2) the current liability under the plan.
       ``(j) Funding Restoration Status.--Notwithstanding any 
     other provisions of this section--
       ``(1) Normal cost payment.--
       ``(A) In general.--In the case of a CSEC plan that is in 
     funding restoration status for a plan year, for purposes of 
     section 302, the term `accumulated funding deficiency' means, 
     for such plan year, the greater of--
       ``(i) the amount described in subsection (a), or
       ``(ii) the excess of the normal cost of the plan for the 
     plan year over the amount actually contributed to or under 
     the plan for the plan year.
       ``(B) Normal cost.--In the case of a CSEC plan that uses a 
     spread gain funding method, for purposes of this subsection, 
     the term `normal cost' means normal cost as determined under 
     the entry age normal funding method.
       ``(2) Plan amendments.--In the case of a CSEC plan that is 
     in funding restoration status for a plan year, no amendment 
     to such plan may take effect during such plan year if such 
     amendment has the effect of increasing liabilities of the 
     plan by means of increases in benefits, establishment of new 
     benefits, changing the rate of benefit accrual, or changing 
     the rate at which benefits become nonforfeitable. This 
     paragraph shall not apply to any plan amendment that is 
     required to comply with any applicable law. This paragraph 
     shall cease to apply with respect to any plan year, effective 
     as of the first day of the plan year (or if later, the 
     effective date of the amendment) upon payment by the plan 
     sponsor of a contribution to the plan (in addition to any 
     contribution required under this section without regard to 
     this paragraph) in an amount equal to the increase in the 
     funding liability of the plan attributable to the plan 
     amendment.
       ``(3) Funding restoration plan.--The sponsor of a CSEC plan 
     shall establish a written funding restoration plan within 180 
     days of the receipt by the plan sponsor of a certification 
     from the plan actuary that the plan is in funding restoration 
     status for a plan year. Such funding restoration plan shall 
     consist of actions that are calculated, based on reasonably 
     anticipated experience and reasonable actuarial assumptions, 
     to increase the plan's funded percentage to 100 percent over 
     a period that is not longer than the greater of 7 years or 
     the shortest amount of time practicable. Such funding 
     restoration plan shall take into account contributions 
     required under this section (without regard to this 
     paragraph). If a plan remains in funding restoration status 
     for 2 or more years, such funding restoration plan shall be 
     updated each year after the 1st such year within 180 days of 
     receipt by the plan sponsor of a certification from the plan 
     actuary that the plan remains in funding restoration status 
     for the plan year.
       ``(4) Annual certification by plan actuary.--Not later than 
     the 90th day of each plan year of a CSEC plan, the plan 
     actuary shall certify to the plan sponsor whether or not the 
     plan is in funding restoration status for the plan year, 
     based on the plan's funded percentage as of the beginning of 
     the plan year. For this purpose, the actuary may conclusively 
     rely on an estimate of--
       ``(A) the plan's funding liability, based on the funding 
     liability of the plan for the preceding plan year and on 
     reasonable actuarial estimates, assumptions, and methods, and
       ``(B) the amount of any contributions reasonably 
     anticipated to be made for the preceding plan year.
     Contributions described in subparagraph (B) shall be taken 
     into account in determining the plan's funded percentage as 
     of the beginning of the plan year.
       ``(5) Definitions.--For purposes of this subsection--
       ``(A) Funding restoration status.--A CSEC plan shall be 
     treated as in funding restoration status for a plan year if 
     the plan's funded percentage as of the beginning of such plan 
     year is less than 80 percent.
       ``(B) Funded percentage.--The term `funded percentage' 
     means the ratio (expressed as a percentage) which--
       ``(i) the value of plan assets (as determined under 
     subsection (c)(2)), bears to
       ``(ii) the plan's funding liability.
       ``(C) Funding liability.--The term `funding liability' for 
     a plan year means the present value of all benefits accrued 
     or earned under the plan as of the beginning of the plan 
     year, based on the assumptions used by the plan pursuant to 
     this section, including the interest rate described in 
     subsection (b)(5)(A) (without regard to subsection 
     (b)(5)(B)).
       ``(D) Spread gain funding method.--The term `spread gain 
     funding method' has the meaning given such term under rules 
     and forms issued by the Secretary of the Treasury.''.
       (b) Separate Rules for CSEC Plans.--
       (1) In general.--Paragraph (2) of section 302(a) of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1082(a)) is amended by striking ``and'' at the end of 
     subparagraph (B), by striking the period at the end of 
     subparagraph (C) and inserting ``, and'', and by inserting at 
     the end thereof the following new subparagraph:
       ``(D) in the case of a CSEC plan, the employers make 
     contributions to or under the plan for any plan year which, 
     in the aggregate, are sufficient to ensure that the plan does 
     not have an accumulated funding deficiency under section 306 
     as of the end of the plan year.''.
       (2) Conforming amendments.--Section 302 of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1082) is 
     amended--
       (A) by striking ``multiemployer plan'' the first place it 
     appears in clause (i) of subsection (c)(1)(A) and the last 
     place it appears in paragraph (2) of subsection (d), and 
     inserting ``multiemployer plan or a CSEC plan'',
       (B) by striking ``303(j)'' in paragraph (1) of subsection 
     (b) and inserting ``303(j) or under section 306(f)'',
       (C)(i) by striking ``and'' at the end of clause (i) of 
     subsection (c)(1)(B),
       (ii) by striking the period at the end of clause (ii) of 
     subsection (c)(1)(B), and inserting ``, and'', and
       (iii) by inserting the following new clause after clause 
     (ii) of subsection (c)(1)(B):
       ``(iii) in the case of a CSEC plan, the funding standard 
     account shall be credited under section 306(b)(3)(C) with the 
     amount of the waived funding deficiency and such amount shall 
     be amortized as required under section 306(b)(2)(C).'',
       (D) by striking ``under paragraph (1)'' in clause (i) of 
     subsection (c)(4)(A) and inserting ``under paragraph (1) or 
     for granting an extension under section 306(d)'',
       (E) by striking ``waiver under this subsection'' in 
     subparagraph (B) of subsection (c)(4) and inserting ``waiver 
     under this subsection or an extension under 306(d)'',
       (F) by striking ``waiver or modification'' in subclause (I) 
     of subsection (c)(4)(B)(i) and inserting ``waiver, 
     modification, or extension'',
       (G) by striking ``waivers'' in the heading of subsection 
     (c)(4)(C) and of clause (ii) of subsection (c)(4)(C) and 
     inserting ``waivers or extensions'',

[[Page 4717]]

       (H) by striking ``section 304(d)'' in subparagraph (A) of 
     subsection (c)(7) and in paragraph (2) of subsection (d) and 
     inserting ``section 304(d) or section 306(d)'',
       (I) by striking ``and'' at the end of subclause (I) of 
     subsection (c)(4)(C)(i) and adding ``or the accumulated 
     funding deficiency under section 306, whichever is 
     applicable,'',
       (J) by striking ``303(e)(2),'' in subclause (II) of 
     subsection (c)(4)(C)(i) and inserting ``303(e)(2) or 
     306(b)(2)(C), whichever is applicable, and'',
       (K) by adding immediately after subclause (II) of 
     subsection (c)(4)(C)(i) the following new subclause:

       ``(III) the total amounts not paid by reason of an 
     extension in effect under section 306(d),'',

       (L) by striking ``for waivers of'' in clause (ii) of 
     subsection (c)(4)(C) and inserting ``for waivers or 
     extensions with respect to'', and
       (M) by striking ``single-employer plan'' in subparagraph 
     (A) of subsection (a)(2) and in clause (i) of subsection 
     (c)(1)(B) and inserting ``single-employer plan (other than a 
     CSEC plan)''.
       (3) Benefit restrictions.--Subsection (g) of section 206 of 
     the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1056) is amended by adding at the end thereof the 
     following new paragraph:
       ``(12) CSEC plans.--This subsection shall not apply to a 
     CSEC plan (as defined in section 210(f)).''.
       (4) Benefit increases.--Paragraph (3) of section 204(i) of 
     the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1054(i)) is amended by striking ``multiemployer 
     plans'' and inserting ``multiemployer plans or CSEC plans''.
       (5) Section 103.--Subparagraph (B) of section 103(d)(8) of 
     the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1023(d)(8)) is amended by striking ``303(h) and 
     304(c)(3)'' and inserting ``303(h), 304(c)(3), and 
     306(c)(3)''.
       (6) Section 502.--Subsection (c) of section 502 of the 
     Employee Retirement Income Security Act of 1974 is amended--
       (A) by redesignating the last paragraph as paragraph (11), 
     and
       (B) by adding at the end the following new paragraph:
       ``(12) The Secretary may assess a civil penalty against any 
     sponsor of a CSEC plan of up to $100 a day from the date of 
     the plan sponsor's failure to comply with the requirements of 
     section 306(j)(3) to establish or update a funding 
     restoration plan.''.
       (7) Section 4003.--Subparagraph (B) of section 4003(e)(1) 
     of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1303(e)(1)) is amended by striking ``303(k)(1)(A) and 
     (B) of this Act or section 430(k)(1)(A) and (B) of the 
     Internal Revenue Code of 1986'' and inserting ``303(k)(1)(A) 
     and (B) or 306(g)(1)(A) and (B) of this Act or section 
     430(k)(1)(A) and (B) or 433(g)(1)(A) and (B) of the Internal 
     Revenue Code of 1986''.
       (8) Section 4010.--Paragraph (2) of section 4010(b) of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1310(b)) is amended by striking ``303(k)(1)(A) and (B) of 
     this Act or section 430(k)(1)(A) and (B) of the Internal 
     Revenue Code of 1986'' and inserting ``303(k)(1)(A) and (B) 
     or 306(g)(1)(A) and (B) of this Act or section 430(k)(1)(A) 
     and (B) or 433(g)(1)(A) and (B) of the Internal Revenue Code 
     of 1986''.
       (9) Section 4071.--Section 4071 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1371) is amended by 
     striking ``section 303(k)(4)'' and inserting ``section 
     303(k)(4) or 306(g)(4)''.

     SEC. 103. ELECTIONS.

       (a) Election Not To Be Treated as a CSEC Plan.--Subsection 
     (f) of section 210 of the Employee Retirement Income Security 
     Act of 1974, as added by section 101, is amended by adding at 
     the end the following new paragraph:
       ``(3) Election.--
       ``(A) In general.--If a plan falls within the definition of 
     a CSEC plan under this subsection (without regard to this 
     paragraph), such plan shall be a CSEC plan unless the plan 
     sponsor elects not later than the close of the first plan 
     year of the plan beginning after December 31, 2013, not to be 
     treated as a CSEC plan. An election under the preceding 
     sentence shall take effect for such plan year and, once made, 
     may be revoked only with the consent of the Secretary of the 
     Treasury.
       ``(B) Special rule.--If a plan described in subparagraph 
     (A) is treated as a CSEC plan, section 104 of the Pension 
     Protection Act of 2006, as amended by the Preservation of 
     Access to Care for Medicare Beneficiaries and Pension Relief 
     Act of 2010, shall cease to apply to such plan as of the 
     first date as of which such plan is treated as a CSEC 
     plan.''.
       (b) Election To Cease To Be Treated as an Eligible Charity 
     Plan.--Subsection (d) of section 104 of the Pension 
     Protection Act of 2006, as added by section 202 of the 
     Preservation of Access to Care for Medicare Beneficiaries and 
     Pension Relief Act of 2010, is amended--
       (1) by striking ``For purposes of'' and inserting ``(1) In 
     general.--For purposes of'', and
       (2) by adding at the end the following:
       ``(2) Election not to be an eligible charity plan.--A plan 
     sponsor may elect for a plan to cease to be treated as an 
     eligible charity plan for plan years beginning after December 
     31, 2013. Such election shall be made at such time and in 
     such form and manner as shall be prescribed by the Secretary 
     of the Treasury. Any such election may be revoked only with 
     the consent of the Secretary of the Treasury.
       ``(3) Election to use funding options available to other 
     plan sponsors.--
       ``(A) A plan sponsor that makes the election described in 
     paragraph (2) may elect for a plan to apply the rules 
     described in subparagraphs (B), (C), and (D) for plan years 
     beginning after December 31, 2013. Such election shall be 
     made at such time and in such form and manner as shall be 
     prescribed by the Secretary of the Treasury. Any such 
     election may be revoked only with the consent of the 
     Secretary of the Treasury.
       ``(B) Under the rules described in this subparagraph, for 
     the first plan year beginning after December 31, 2013, a plan 
     has--
       ``(i) an 11-year shortfall amortization base,
       ``(ii) a 12-year shortfall amortization base, and
       ``(iii) a 7-year shortfall amortization base.
       ``(C) Under the rules described in this subparagraph, 
     section 303(c)(2)(A) and (B) of the Employee Retirement 
     Income Security Act of 1974, and section 430(c)(2)(A) and (B) 
     of the Internal Revenue Code of 1986 shall be applied by--
       ``(i) in the case of an 11-year shortfall amortization 
     base, substituting `11-plan-year period' for `7-plan-year 
     period' wherever such phrase appears, and
       ``(ii) in the case of a 12-year shortfall amortization 
     base, substituting `12-plan-year period' for `7-plan-year 
     period' wherever such phrase appears.
       ``(D) Under the rules described in this subparagraph, 
     section 303(c)(7) of the Employee Retirement Income Security 
     Act of 1974 and section 430(c)(7) of the Internal Revenue 
     Code of 1986 shall apply to a plan for which an election has 
     been made under subparagraph (A). Such provisions shall apply 
     in the following manner:
       ``(i) The first plan year beginning after December 31, 
     2013, shall be treated as an election year, and no other plan 
     years shall be so treated.
       ``(ii) All references in section 303(c)(7) of such Act and 
     section 430(c)(7) of such Code to `February 28, 2010' or 
     `March 1, 2010' shall be treated as references to `February 
     28, 2013' or `March 1, 2013', respectively.
       ``(E) For purposes of this paragraph, the 11-year 
     amortization base is an amount, determined for the first plan 
     year beginning after December 31, 2013, equal to the 
     unamortized principal amount of the shortfall amortization 
     base (as defined in section 303(c)(3) of the Employee 
     Retirement Income Security Act of 1974 and section 430(c)(3) 
     of the Internal Revenue Code of 1986) that would have applied 
     to the plan for the first plan beginning after December 31, 
     2009, if--
       ``(i) the plan had never been an eligible charity plan,
       ``(ii) the plan sponsor had made the election described in 
     section 303(c)(2)(D)(i) of the Employee Retirement Income 
     Security Act of 1974 and in section 430(c)(2)(D)(i) of the 
     Internal Revenue Code of 1986 to have section 303(c)(2)(D)(i) 
     of such Act and section 430(c)(2)(D)(iii) of such Code apply 
     with respect to the shortfall amortization base for the first 
     plan year beginning after December 31, 2009, and
       ``(iii) no event had occurred under paragraph (6) or (7) of 
     section 303(c) of such Act or paragraph (6) or (7) of section 
     430(c) of such Code that, as of the first day of the first 
     plan year beginning after December 31, 2013, would have 
     modified the shortfall amortization base or the shortfall 
     amortization installments with respect to the first plan year 
     beginning after December 31, 2009.
       ``(F) For purposes of this paragraph, the 12-year 
     amortization base is an amount, determined for the first plan 
     year beginning after December 31, 2013, equal to the 
     unamortized principal amount of the shortfall amortization 
     base (as defined in section 303(c)(3) of the Employee 
     Retirement Income Security Act of 1974 and section 430(c)(3) 
     of the Internal Revenue Code of 1986) that would have applied 
     to the plan for the first plan beginning after December 31, 
     2010, if--
       ``(i) the plan had never been an eligible charity plan,
       ``(ii) the plan sponsor had made the election described in 
     section 303(c)(2)(D)(i) of the Employee Retirement Income 
     Security Act of 1974 and in section 430(c)(2)(D)(i) of the 
     Internal Revenue Code of 1986 to have section 303(c)(2)(D)(i) 
     of such Act and section 430(c)(2)(D)(iii) of such Code apply 
     with respect to the shortfall amortization base for the first 
     plan year beginning after December 31, 2010, and
       ``(iii) no event had occurred under paragraph (6) or (7) of 
     section 303(c) of such Act or paragraph (6) or (7) of section 
     430(c) of such Code that, as of the first day of the first 
     plan year beginning after December 31, 2013, would have 
     modified the shortfall amortization base or the shortfall 
     amortization installments with respect to the first plan year 
     beginning after December 31, 2010.
       ``(G) For purposes of this paragraph, the 7-year shortfall 
     amortization base is an amount, determined for the first plan 
     year beginning after December 31, 2013, equal to--

[[Page 4718]]

       ``(i) the shortfall amortization base for the first plan 
     year beginning after December 31, 2013, without regard to 
     this paragraph, minus
       ``(ii) the sum of the 11-year shortfall amortization base 
     and the 12-year shortfall amortization base.
       ``(4) Retroactive election.--Not later than December 31, 
     2014, a plan sponsor may make a one-time, irrevocable, 
     retroactive election to not be treated as an eligible charity 
     plan. Such election shall be effective for plan years 
     beginning after December 31, 2007, and shall be made by 
     providing reasonable notice to the Secretary of the 
     Treasury.''.
       (c) Deemed Election.--For purposes of the Internal Revenue 
     Code of 1986, sections 4(b)(2) and 4021(b)(3) of the Employee 
     Retirement Income Security Act of 1974, and all other 
     purposes, a plan shall be deemed to have made an irrevocable 
     election under section 410(d) of the Internal Revenue Code of 
     1986 if--
       (1) the plan was established before January 1, 2014;
       (2) the plan falls within the definition of a CSEC plan;
       (3) the plan sponsor does not make an election under 
     section 210(f)(3)(A) of the Employee Retirement Income 
     Security Act of 1974 and section 414(y)(3)(A) of the Internal 
     Revenue Code of 1986, as added by this Act; and
       (4) the plan, plan sponsor, administrator, or fiduciary 
     remits one or more premium payments for the plan to the 
     Pension Benefit Guaranty Corporation for a plan year 
     beginning after December 31, 2013.
       (d) Effective Date.--The amendments made by this section 
     shall apply as of the date of enactment of this Act.

     SEC. 104. TRANSPARENCY.

       (a) Notice to Participants.--
       (1) In general.--Paragraph (2) of section 101(f) of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1021(f)) is amended by adding at the end the following new 
     subparagraph:
       ``(E) Effect of csec plan rules on plan funding.--In the 
     case of a CSEC plan, each notice under paragraph (1) shall 
     include--
       ``(i) a statement that different rules apply to CSEC plans 
     than apply to single-employer plans,
       ``(ii) for the first 2 plan years beginning after December 
     31, 2013, a statement that, as a result of changes in the law 
     made by the Cooperative and Small Employer Charity Pension 
     Flexibility Act, the contributions to the plan may have 
     changed, and
       ``(iii) in the case of a CSEC plan that is in funding 
     restoration status for the plan year, a statement that the 
     plan is in funding restoration status for such plan year.
     A copy of the statement required under clause (iii) shall be 
     provided to the Secretary, the Secretary of the Treasury, and 
     the Director of the Pension Benefit Guaranty Corporation.''.
       (2) Model notice.--The Secretary of Labor may modify the 
     model notice required to be published under section 501(c) of 
     the Pension Protection Act of 2006 to include the information 
     described in section 101(f)(2)(E) of the Employee Retirement 
     Income Security Act of 1974, as added by this subsection.
       (b) Notice of Failure To Meet Minimum Funding Standards.--
       (1) Pending waivers.--Paragraph (2) of section 101(d) of 
     the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1021(d)) is amended by striking ``303'' and inserting 
     ``303 or 306''.
       (2) Definitions.--Paragraph (3) of section 101(d) of the 
     Employee Retirement Income Security Act of 1974 (21 U.S.C. 
     1021(d)) is amended by striking ``303(j)'' and inserting 
     ``303(j) or 306(f), whichever is applicable''.
       (c) Additional Reporting Requirements.--Section 103 of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1023) is amended by adding at the end the following new 
     subsection:
       ``(g) Additional Information With Respect to Multiple 
     Employer Plans.--With respect to any multiple employer plan, 
     an annual report under this section for a plan year shall 
     include a list of participating employers and a good faith 
     estimate of the percentage of total contributions made by 
     such participating employers during the plan year.''.

     SEC. 105. SPONSOR EDUCATION AND ASSISTANCE.

       (a) Definition.--In this section, the term ``CSEC plan'' 
     has the meaning given that term in subsection (f)(1) of 
     section 210 of the Employee Retirement Income Security Act of 
     1974 (29 U.S.C. 1060(f)(1)) (as added by this Act).
       (b) Education.--The Participant and Plan Sponsor Advocate 
     established under section 4004 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1304) shall make 
     itself available to assist CSEC plan sponsors and 
     participants as part of the duties it performs under the 
     general supervision of the Board of Directors under section 
     4004(b) of such Act (29 U.S.C. 1304(b)).

         TITLE II--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

     SEC. 201. DEFINITION OF COOPERATIVE AND SMALL EMPLOYER 
                   CHARITY PENSION PLANS.

       Section 414 of the Internal Revenue Code of 1986 is amended 
     by adding at the end the following new subsection:
       ``(y) Cooperative and Small Employer Charity Pension 
     Plans.--
       ``(1) In general.--For purposes of this title, except as 
     provided in this subsection, a CSEC plan is a defined benefit 
     plan (other than a multiemployer plan)--
       ``(A) to which section 104 of the Pension Protection Act of 
     2006 applies, without regard to--
       ``(i) section 104(a)(2) of such Act;
       ``(ii) the amendments to such section 104 by section 202(b) 
     of the Preservation of Access to Care for Medicare 
     Beneficiaries and Pension Relief Act of 2010; and
       ``(iii) paragraph (3)(B); or
       ``(B) that, as of June 25, 2010, was maintained by more 
     than one employer and all of the employers were organizations 
     described in section 501(c)(3).
       ``(2) Aggregation.--All employers that are treated as a 
     single employer under subsection (b) or (c) shall be treated 
     as a single employer for purposes of determining if a plan 
     was maintained by more than one employer under paragraph 
     (1)(B).''.

     SEC. 202. FUNDING RULES APPLICABLE TO COOPERATIVE AND SMALL 
                   EMPLOYER CHARITY PENSION PLANS.

       (a) In General.--Subpart A of part III of subchapter D of 
     chapter 1 of subtitle A of the Internal Revenue Code of 1986 
     is amended by adding at the end the following new section:

     ``SEC. 433. MINIMUM FUNDING STANDARDS.

       ``(a) General Rule.--For purposes of section 412, the term 
     `accumulated funding deficiency' for a CSEC plan means the 
     excess of the total charges to the funding standard account 
     for all plan years (beginning with the first plan year to 
     which section 412 applies) over the total credits to such 
     account for such years or, if less, the excess of the total 
     charges to the alternative minimum funding standard account 
     for such plan years over the total credits to such account 
     for such years.
       ``(b) Funding Standard Account.--
       ``(1) Account required.--Each plan to which this section 
     applies shall establish and maintain a funding standard 
     account. Such account shall be credited and charged solely as 
     provided in this section.
       ``(2) Charges to account.--For a plan year, the funding 
     standard account shall be charged with the sum of--
       ``(A) the normal cost of the plan for the plan year,
       ``(B) the amounts necessary to amortize in equal annual 
     installments (until fully amortized)--
       ``(i) in the case of a plan in existence on January 1, 
     1974, the unfunded past service liability under the plan on 
     the first day of the first plan year to which section 412 
     applies, over a period of 40 plan years,
       ``(ii) in the case of a plan which comes into existence 
     after January 1, 1974, but before the first day of the first 
     plan year beginning after December 31, 2013, the unfunded 
     past service liability under the plan on the first day of the 
     first plan year to which section 412 applies, over a period 
     of 30 plan years,
       ``(iii) separately, with respect to each plan year, the net 
     increase (if any) in unfunded past service liability under 
     the plan arising from plan amendments adopted in such year, 
     over a period of 15 plan years,
       ``(iv) separately, with respect to each plan year, the net 
     experience loss (if any) under the plan, over a period of 5 
     plan years, and
       ``(v) separately, with respect to each plan year, the net 
     loss (if any) resulting from changes in actuarial assumptions 
     used under the plan, over a period of 10 plan years,
       ``(C) the amount necessary to amortize each waived funding 
     deficiency (within the meaning of section 412(c)(3)) for each 
     prior plan year in equal annual installments (until fully 
     amortized) over a period of 5 plan years,
       ``(D) the amount necessary to amortize in equal annual 
     installments (until fully amortized) over a period of 5 plan 
     years any amount credited to the funding standard account 
     under paragraph (3)(D), and
       ``(E) the amount necessary to amortize in equal annual 
     installments (until fully amortized) over a period of 20 
     years the contributions which would be required to be made 
     under the plan but for the provisions of section 
     412(c)(7)(A)(i)(I) (as in effect on the day before the 
     enactment of the Pension Protection Act of 2006).
       ``(3) Credits to account.--For a plan year, the funding 
     standard account shall be credited with the sum of--
       ``(A) the amount considered contributed by the employer to 
     or under the plan for the plan year,
       ``(B) the amount necessary to amortize in equal annual 
     installments (until fully amortized)--
       ``(i) separately, with respect to each plan year, the net 
     decrease (if any) in unfunded past service liability under 
     the plan arising from plan amendments adopted in such year, 
     over a period of 15 plan years,
       ``(ii) separately, with respect to each plan year, the net 
     experience gain (if any) under the plan, over a period of 5 
     plan years, and
       ``(iii) separately, with respect to each plan year, the net 
     gain (if any) resulting from changes in actuarial assumptions 
     used under the plan, over a period of 10 plan years,
       ``(C) the amount of the waived funding deficiency (within 
     the meaning of section 412(c)(3)) for the plan year, and

[[Page 4719]]

       ``(D) in the case of a plan year for which the accumulated 
     funding deficiency is determined under the funding standard 
     account if such plan year follows a plan year for which such 
     deficiency was determined under the alternative minimum 
     funding standard, the excess (if any) of any debit balance in 
     the funding standard account (determined without regard to 
     this subparagraph) over any debit balance in the alternative 
     minimum funding standard account.
       ``(4) Combining and offsetting amounts to be amortized.--
     Under regulations prescribed by the Secretary, amounts 
     required to be amortized under paragraph (2) or paragraph 
     (3), as the case may be--
       ``(A) may be combined into one amount under such paragraph 
     to be amortized over a period determined on the basis of the 
     remaining amortization period for all items entering into 
     such combined amount, and
       ``(B) may be offset against amounts required to be 
     amortized under the other such paragraph, with the resulting 
     amount to be amortized over a period determined on the basis 
     of the remaining amortization periods for all items entering 
     into whichever of the two amounts being offset is the 
     greater.
       ``(5) Interest.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the funding standard account (and items therein) shall be 
     charged or credited (as determined under regulations 
     prescribed by the Secretary) with interest at the appropriate 
     rate consistent with the rate or rates of interest used under 
     the plan to determine costs.
       ``(B) Exception.--The interest rate used for purposes of 
     computing the amortization charge described in subsection 
     (b)(2)(C) or for purposes of any arrangement under subsection 
     (d) for any plan year shall be the greater of--
       ``(i) 150 percent of the Federal mid-term rate (as in 
     effect under section 1274 for the 1st month of such plan 
     year), or
       ``(ii) the rate of interest determined under subparagraph 
     (A).
       ``(6) Amortization schedules in effect.--Amortization 
     schedules for amounts described in paragraphs (2) and (3) 
     that are in effect as of the last day of the last plan year 
     beginning before January 1, 2014, by reason of section 104 of 
     the Pension Protection Act of 2006 shall remain in effect 
     pursuant to their terms and this section, except that such 
     amounts shall not be amortized again under this section.
       ``(c) Special Rules.--
       ``(1) Determinations to be made under funding method.--For 
     purposes of this section, normal costs, accrued liability, 
     past service liabilities, and experience gains and losses 
     shall be determined under the funding method used to 
     determine costs under the plan.
       ``(2) Valuation of assets.--
       ``(A) In general.--For purposes of this section, the value 
     of the plan's assets shall be determined on the basis of any 
     reasonable actuarial method of valuation which takes into 
     account fair market value and which is permitted under 
     regulations prescribed by the Secretary.
       ``(B) Dedicated bond portfolio.--The Secretary may by 
     regulations provide that the value of any dedicated bond 
     portfolio of a plan shall be determined by using the interest 
     rate under section 412(b)(5) (as in effect on the day before 
     the enactment of the Pension Protection Act of 2006).
       ``(3) Actuarial assumptions must be reasonable.--For 
     purposes of this section, all costs, liabilities, rates of 
     interest, and other factors under the plan shall be 
     determined on the basis of actuarial assumptions and 
     methods--
       ``(A) each of which is reasonable (taking into account the 
     experience of the plan and reasonable expectations), and
       ``(B) which, in combination, offer the actuary's best 
     estimate of anticipated experience under the plan.
       ``(4) Treatment of certain changes as experience gain or 
     loss.--For purposes of this section, if--
       ``(A) a change in benefits under the Social Security Act or 
     in other retirement benefits created under Federal or State 
     law, or
       ``(B) a change in the definition of the term `wages' under 
     section 3121 or a change in the amount of such wages taken 
     into account under regulations prescribed for purposes of 
     section 401(a)(5),
     results in an increase or decrease in accrued liability under 
     a plan, such increase or decrease shall be treated as an 
     experience loss or gain.
       ``(5) Funding method and plan year.--
       ``(A) Funding methods available.--All funding methods 
     available to CSEC plans under section 412 (as in effect on 
     the day before the enactment of the Pension Protection Act of 
     2006) shall continue to be available under this section.
       ``(B) Changes.--If the funding method for a plan is 
     changed, the new funding method shall become the funding 
     method used to determine costs and liabilities under the plan 
     only if the change is approved by the Secretary. If the plan 
     year for a plan is changed, the new plan year shall become 
     the plan year for the plan only if the change is approved by 
     the Secretary.
       ``(C) Approval required for certain changes in assumptions 
     by certain single-employer plans subject to additional 
     funding requirement.--
       ``(i) In general.--No actuarial assumption (other than the 
     assumptions described in subsection (h)(3)) used to determine 
     the current liability for a plan to which this subparagraph 
     applies may be changed without the approval of the Secretary.
       ``(ii) Plans to which subparagraph applies.--This 
     subparagraph shall apply to a plan only if--

       ``(I) the plan is a CSEC plan,
       ``(II) the aggregate unfunded vested benefits as of the 
     close of the preceding plan year (as determined under section 
     4006(a)(3)(E)(iii) of the Employee Retirement Income Security 
     Act of 1974) of such plan and all other plans maintained by 
     the contributing sponsors (as defined in section 4001(a)(13) 
     of such Act) and members of such sponsors' controlled groups 
     (as defined in section 4001(a)(14) of such Act) which are 
     covered by title IV (disregarding plans with no unfunded 
     vested benefits) exceed $50,000,000, and
       ``(III) the change in assumptions (determined after taking 
     into account any changes in interest rate and mortality 
     table) results in a decrease in the funding shortfall of the 
     plan for the current plan year that exceeds $50,000,000, or 
     that exceeds $5,000,000 and that is 5 percent or more of the 
     current liability of the plan before such change.

       ``(6) Full funding.--If, as of the close of a plan year, a 
     plan would (without regard to this paragraph) have an 
     accumulated funding deficiency (determined without regard to 
     the alternative minimum funding standard account permitted 
     under subsection (e)) in excess of the full funding 
     limitation--
       ``(A) the funding standard account shall be credited with 
     the amount of such excess, and
       ``(B) all amounts described in paragraphs (2)(B), (C), and 
     (D) and (3)(B) of subsection (b) which are required to be 
     amortized shall be considered fully amortized for purposes of 
     such paragraphs.
       ``(7) Full-funding limitation.--For purposes of paragraph 
     (6), the term `full-funding limitation' means the excess (if 
     any) of--
       ``(A) the accrued liability (including normal cost) under 
     the plan (determined under the entry age normal funding 
     method if such accrued liability cannot be directly 
     calculated under the funding method used for the plan), over
       ``(B) the lesser of--
       ``(i) the fair market value of the plan's assets, or
       ``(ii) the value of such assets determined under paragraph 
     (2).
       ``(C) Minimum amount.--
       ``(i) In general.--In no event shall the full-funding 
     limitation determined under subparagraph (A) be less than the 
     excess (if any) of--

       ``(I) 90 percent of the current liability (determined 
     without regard to paragraph (4) of subsection (h)) of the 
     plan (including the expected increase in such current 
     liability due to benefits accruing during the plan year), 
     over
       ``(II) the value of the plan's assets determined under 
     paragraph (2).

       ``(ii) Assets.--For purposes of clause (i), assets shall 
     not be reduced by any credit balance in the funding standard 
     account.
       ``(8) Annual valuation.--
       ``(A) In general.--For purposes of this section, a 
     determination of experience gains and losses and a valuation 
     of the plan's liability shall be made not less frequently 
     than once every year, except that such determination shall be 
     made more frequently to the extent required in particular 
     cases under regulations prescribed by the Secretary.
       ``(B) Valuation date.--
       ``(i) Current year.--Except as provided in clause (ii), the 
     valuation referred to in subparagraph (A) shall be made as of 
     a date within the plan year to which the valuation refers or 
     within one month prior to the beginning of such year.
       ``(ii) Use of prior year valuation.--The valuation referred 
     to in subparagraph (A) may be made as of a date within the 
     plan year prior to the year to which the valuation refers if, 
     as of such date, the value of the assets of the plan are not 
     less than 100 percent of the plan's current liability.
       ``(iii) Adjustments.--Information under clause (ii) shall, 
     in accordance with regulations, be actuarially adjusted to 
     reflect significant differences in participants.
       ``(iv) Limitation.--A change in funding method to use a 
     prior year valuation, as provided in clause (ii), may not be 
     made unless as of the valuation date within the prior plan 
     year, the value of the assets of the plan are not less than 
     125 percent of the plan's current liability.
       ``(9) Time when certain contributions deemed made.--For 
     purposes of this section, any contributions for a plan year 
     made by an employer during the period--
       ``(A) beginning on the day after the last day of such plan 
     year, and
       ``(B) ending on the day which is 8\1/2\ months after the 
     close of the plan year,
     shall be deemed to have been made on such last day.
       ``(10) Anticipation of benefit increases effective in the 
     future.--In determining projected benefits, the funding 
     method of a collectively bargained CSEC plan described in 
     section 413(a) shall anticipate benefit increases scheduled 
     to take effect during the term of the collective bargaining 
     agreement applicable to the plan.

[[Page 4720]]

       ``(d) Extension of Amortization Periods.--The period of 
     years required to amortize any unfunded liability (described 
     in any clause of subsection (b)(2)(B)) of any plan may be 
     extended by the Secretary for a period of time (not in excess 
     of 10 years) if the Secretary determines that such extension 
     would carry out the purposes of the Employee Retirement 
     Income Security Act of 1974 and provide adequate protection 
     for participants under the plan and their beneficiaries, and 
     if the Secretary determines that the failure to permit such 
     extension would result in--
       ``(1) a substantial risk to the voluntary continuation of 
     the plan, or
       ``(2) a substantial curtailment of pension benefit levels 
     or employee compensation.
       ``(e) Alternative Minimum Funding Standard.--
       ``(1) In general.--A CSEC plan which uses a funding method 
     that requires contributions in all years not less than those 
     required under the entry age normal funding method may 
     maintain an alternative minimum funding standard account for 
     any plan year. Such account shall be credited and charged 
     solely as provided in this subsection.
       ``(2) Charges and credits to account.--For a plan year the 
     alternative minimum funding standard account shall be--
       ``(A) charged with the sum of--
       ``(i) the lesser of normal cost under the funding method 
     used under the plan or normal cost determined under the unit 
     credit method,
       ``(ii) the excess, if any, of the present value of accrued 
     benefits under the plan over the fair market value of the 
     assets, and
       ``(iii) an amount equal to the excess (if any) of credits 
     to the alternative minimum standard account for all prior 
     plan years over charges to such account for all such years, 
     and
       ``(B) credited with the amount considered contributed by 
     the employer to or under the plan for the plan year.
       ``(3) Interest.--The alternative minimum funding standard 
     account (and items therein) shall be charged or credited with 
     interest in the manner provided under subsection (b)(5) with 
     respect to the funding standard account.
       ``(f) Quarterly Contributions Required.--
       ``(1) In general.--If a CSEC plan which has a funded 
     current liability percentage for the preceding plan year of 
     less than 100 percent fails to pay the full amount of a 
     required installment for the plan year, then the rate of 
     interest charged to the funding standard account under 
     subsection (b)(5) with respect to the amount of the 
     underpayment for the period of the underpayment shall be 
     equal to the greater of--
       ``(A) 175 percent of the Federal mid-term rate (as in 
     effect under section 1274 for the 1st month of such plan 
     year), or
       ``(B) the rate of interest used under the plan in 
     determining costs.
       ``(2) Amount of underpayment, period of underpayment.--For 
     purposes of paragraph (1)--
       ``(A) Amount.--The amount of the underpayment shall be the 
     excess of--
       ``(i) the required installment, over
       ``(ii) the amount (if any) of the installment contributed 
     to or under the plan on or before the due date for the 
     installment.
       ``(B) Period of underpayment.--The period for which 
     interest is charged under this subsection with regard to any 
     portion of the underpayment shall run from the due date for 
     the installment to the date on which such portion is 
     contributed to or under the plan (determined without regard 
     to subsection (c)(9)).
       ``(C) Order of crediting contributions.--For purposes of 
     subparagraph (A)(ii), contributions shall be credited against 
     unpaid required installments in the order in which such 
     installments are required to be paid.
       ``(3) Number of required installments; due dates.--For 
     purposes of this subsection--
       ``(A) Payable in 4 installments.--There shall be 4 required 
     installments for each plan year.
       ``(B) Time for payment of installments.--


 
    ``In the case of the following required
                 installments:                       The due date is:
 
1st............................................                 April 15
2nd............................................                  July 15
3rd............................................               October 15
4th............................................        January 15 of the
                                                         following year.
 

       ``(4) Amount of required installment.--For purposes of this 
     subsection--
       ``(A) In general.--The amount of any required installment 
     shall be 25 percent of the required annual payment.
       ``(B) Required annual payment.--For purposes of 
     subparagraph (A), the term `required annual payment' means 
     the lesser of--
       ``(i) 90 percent of the amount required to be contributed 
     to or under the plan by the employer for the plan year under 
     section 412 (without regard to any waiver under subsection 
     (c) thereof), or
       ``(ii) 100 percent of the amount so required for the 
     preceding plan year.
     Clause (ii) shall not apply if the preceding plan year was 
     not a year of 12 months.
       ``(5) Liquidity requirement.--
       ``(A) In general.--A plan to which this paragraph applies 
     shall be treated as failing to pay the full amount of any 
     required installment to the extent that the value of the 
     liquid assets paid in such installment is less than the 
     liquidity shortfall (whether or not such liquidity shortfall 
     exceeds the amount of such installment required to be paid 
     but for this paragraph).
       ``(B) Plans to which paragraph applies.--This paragraph 
     shall apply to a CSEC plan other than a plan described in 
     section 412(l)(6)(A) (as in effect on the day before the 
     enactment of the Pension Protection Act of 2006) which--
       ``(i) is required to pay installments under this subsection 
     for a plan year, and
       ``(ii) has a liquidity shortfall for any quarter during 
     such plan year.
       ``(C) Period of underpayment.--For purposes of paragraph 
     (1), any portion of an installment that is treated as not 
     paid under subparagraph (A) shall continue to be treated as 
     unpaid until the close of the quarter in which the due date 
     for such installment occurs.
       ``(D) Limitation on increase.--If the amount of any 
     required installment is increased by reason of subparagraph 
     (A), in no event shall such increase exceed the amount which, 
     when added to prior installments for the plan year, is 
     necessary to increase the funded current liability percentage 
     (taking into account the expected increase in current 
     liability due to benefits accruing during the plan year) to 
     100 percent.
       ``(E) Definitions.--For purposes of this paragraph--
       ``(i) Liquidity shortfall.--The term `liquidity shortfall' 
     means, with respect to any required installment, an amount 
     equal to the excess (as of the last day of the quarter for 
     which such installment is made) of the base amount with 
     respect to such quarter over the value (as of such last day) 
     of the plan's liquid assets.
       ``(ii) Base amount.--

       ``(I) In general.--The term `base amount' means, with 
     respect to any quarter, an amount equal to 3 times the sum of 
     the adjusted disbursements from the plan for the 12 months 
     ending on the last day of such quarter.
       ``(II) Special rule.--If the amount determined under 
     subclause (I) exceeds an amount equal to 2 times the sum of 
     the adjusted disbursements from the plan for the 36 months 
     ending on the last day of the quarter and an enrolled actuary 
     certifies to the satisfaction of the Secretary that such 
     excess is the result of nonrecurring circumstances, the base 
     amount with respect to such quarter shall be determined 
     without regard to amounts related to those nonrecurring 
     circumstances.

       ``(iii) Disbursements from the plan.--The term 
     `disbursements from the plan' means all disbursements from 
     the trust, including purchases of annuities, payments of 
     single sums and other benefits, and administrative expenses.
       ``(iv) Adjusted disbursements.--The term `adjusted 
     disbursements' means disbursements from the plan reduced by 
     the product of--

       ``(I) the plan's funded current liability percentage for 
     the plan year, and
       ``(II) the sum of the purchases of annuities, payments of 
     single sums, and such other disbursements as the Secretary 
     shall provide in regulations.

       ``(v) Liquid assets.--The term `liquid assets' means cash, 
     marketable securities and such other assets as specified by 
     the Secretary in regulations.
       ``(vi) Quarter.--The term `quarter' means, with respect to 
     any required installment, the 3-month period preceding the 
     month in which the due date for such installment occurs.
       ``(F) Regulations.--The Secretary may prescribe such 
     regulations as are necessary to carry out this paragraph.
       ``(6) Fiscal years and short years.--
       ``(A) Fiscal years.--In applying this subsection to a plan 
     year beginning on any date other than January 1, there shall 
     be substituted for the months specified in this subsection, 
     the months which correspond thereto.
       ``(B) Short plan year.--This subsection shall be applied to 
     plan years of less than 12 months in accordance with 
     regulations prescribed by the Secretary.
       ``(g) Imposition of Lien Where Failure To Make Required 
     Contributions.--
       ``(1) In general.--In the case of a plan to which this 
     section applies, if--
       ``(A) any person fails to make a required installment under 
     subsection (f) or any other payment required under this 
     section before the due date for such installment or other 
     payment, and
       ``(B) the unpaid balance of such installment or other 
     payment (including interest), when added to the aggregate 
     unpaid balance of all preceding such installments or other 
     payments for which payment was not made before the due date 
     (including interest), exceeds $1,000,000,
     then there shall be a lien in favor of the plan in the amount 
     determined under paragraph (3) upon all property and rights 
     to property, whether real or personal, belonging to such 
     person and any other person who is a member of the same 
     controlled group of which such person is a member.

[[Page 4721]]

       ``(2) Plans to which subsection applies.--This subsection 
     shall apply to a CSEC plan for any plan year for which the 
     funded current liability percentage of such plan is less than 
     100 percent. This subsection shall not apply to any plan to 
     which section 4021 of the Employee Retirement Income Security 
     Act of 1974 does not apply (as such section is in effect on 
     the date of the enactment of the Retirement Protection Act of 
     1994).
       ``(3) Amount of lien.--For purposes of paragraph (1), the 
     amount of the lien shall be equal to the aggregate unpaid 
     balance of required installments and other payments required 
     under this section (including interest)--
       ``(A) for plan years beginning after 1987, and
       ``(B) for which payment has not been made before the due 
     date.
       ``(4) Notice of failure; lien.--
       ``(A) Notice of failure.--A person committing a failure 
     described in paragraph (1) shall notify the Pension Benefit 
     Guaranty Corporation of such failure within 10 days of the 
     due date for the required installment or other payment.
       ``(B) Period of lien.--The lien imposed by paragraph (1) 
     shall arise on the due date for the required installment or 
     other payment and shall continue until the last day of the 
     first plan year in which the plan ceases to be described in 
     paragraph (1)(B). Such lien shall continue to run without 
     regard to whether such plan continues to be described in 
     paragraph (2) during the period referred to in the preceding 
     sentence.
       ``(C) Certain rules to apply.--Any amount with respect to 
     which a lien is imposed under paragraph (1) shall be treated 
     as taxes due and owing the United States and rules similar to 
     the rules of subsections (c), (d), and (e) of section 4068 of 
     the Employee Retirement Income Security Act of 1974 shall 
     apply with respect to a lien imposed by subsection (a) and 
     the amount with respect to such lien.
       ``(5) Enforcement.--Any lien created under paragraph (1) 
     may be perfected and enforced only by the Pension Benefit 
     Guaranty Corporation, or at the direction of the Pension 
     Benefit Guaranty Corporation, by any contributing employer 
     (or any member of the controlled group of the contributing 
     employer).
       ``(6) Definitions.--For purposes of this subsection--
       ``(A) Due date; required installment.--The terms `due date' 
     and `required installment' have the meanings given such terms 
     by subsection (f), except that in the case of a payment other 
     than a required installment, the due date shall be the date 
     such payment is required to be made under this section.
       ``(B) Controlled group.--The term `controlled group' means 
     any group treated as a single employer under subsections (b), 
     (c), (m), and (o) of section 414.
       ``(h) Current Liability.--For purposes of this section--
       ``(1) In general.--The term `current liability' means all 
     liabilities to employees and their beneficiaries under the 
     plan.
       ``(2) Treatment of unpredictable contingent event 
     benefits.--
       ``(A) In general.--For purposes of paragraph (1), any 
     unpredictable contingent event benefit shall not be taken 
     into account until the event on which the benefit is 
     contingent occurs.
       ``(B) Unpredictable contingent event benefit.--The term 
     `unpredictable contingent event benefit' means any benefit 
     contingent on an event other than--
       ``(i) age, service, compensation, death, or disability, or
       ``(ii) an event which is reasonably and reliably 
     predictable (as determined by the Secretary).
       ``(3) Interest rate and mortality assumptions used.--
       ``(A) Interest rate.--The rate of interest used to 
     determine current liability under this section shall be the 
     third segment rate determined under section 430(h)(2)(C).
       ``(B) Mortality tables.--
       ``(i) Secretarial authority.--The Secretary may by 
     regulation prescribe mortality tables to be used in 
     determining current liability under this subsection. Such 
     tables shall be based upon the actual experience of pension 
     plans and projected trends in such experience. In prescribing 
     such tables, the Secretary shall take into account results of 
     available independent studies of mortality of individuals 
     covered by pension plans.
       ``(ii) Periodic review.--The Secretary shall periodically 
     (at least every 5 years) review any tables in effect under 
     this subsection and shall, to the extent the Secretary 
     determines necessary, by regulation update the tables to 
     reflect the actual experience of pension plans and projected 
     trends in such experience.
       ``(C) Separate mortality tables for the disabled.--
     Notwithstanding subparagraph (B)--
       ``(i) In general.--In the case of plan years beginning 
     after December 31, 1995, the Secretary shall establish 
     mortality tables which may be used (in lieu of the tables 
     under subparagraph (B)) to determine current liability under 
     this subsection for individuals who are entitled to benefits 
     under the plan on account of disability. The Secretary shall 
     establish separate tables for individuals whose disabilities 
     occur in plan years beginning before January 1, 1995, and for 
     individuals whose disabilities occur in plan years beginning 
     on or after such date.
       ``(ii) Special rule for disabilities occurring after 
     1994.--In the case of disabilities occurring in plan years 
     beginning after December 31, 1994, the tables under clause 
     (i) shall apply only with respect to individuals described in 
     such subclause who are disabled within the meaning of title 
     II of the Social Security Act and the regulations thereunder.
       ``(4) Certain service disregarded.--
       ``(A) In general.--In the case of a participant to whom 
     this paragraph applies, only the applicable percentage of the 
     years of service before such individual became a participant 
     shall be taken into account in computing the current 
     liability of the plan.
       ``(B) Applicable percentage.--For purposes of this 
     subparagraph, the applicable percentage shall be determined 
     as follows:


 
                                                      The applicable
     ``If the years of participation  are:            percentage is:
 
1..............................................                       20
2..............................................                       40
3..............................................                       60
4..............................................                       80
5 or more......................................                     100.
 

       ``(C) Participants to whom paragraph applies.--This 
     subparagraph shall apply to any participant who, at the time 
     of becoming a participant--
       ``(i) has not accrued any other benefit under any defined 
     benefit plan (whether or not terminated) maintained by the 
     employer or a member of the same controlled group of which 
     the employer is a member,
       ``(ii) who first becomes a participant under the plan in a 
     plan year beginning after December 31, 1987, and
       ``(iii) has years of service greater than the minimum years 
     of service necessary for eligibility to participate in the 
     plan.
       ``(D) Election.--An employer may elect not to have this 
     subparagraph apply. Such an election, once made, may be 
     revoked only with the consent of the Secretary.
       ``(i) Funded Current Liability Percentage.--For purposes of 
     this section, the term `funded current liability percentage' 
     means, with respect to any plan year, the percentage which--
       ``(1) the value of the plan's assets determined under 
     subsection (c)(2), is of
       ``(2) the current liability under the plan.
       ``(j) Funding Restoration Status.--Notwithstanding any 
     other provisions of this section--
       ``(1) Normal cost payment.--
       ``(A) In general.--In the case of a CSEC plan that is in 
     funding restoration status for a plan year, for purposes of 
     section 412, the term `accumulated funding deficiency' means, 
     for such plan year, the greater of--
       ``(i) the amount described in subsection (a), or
       ``(ii) the excess of the normal cost of the plan for the 
     plan year over the amount actually contributed to or under 
     the plan for the plan year.
       ``(B) Normal cost.--In the case of a CSEC plan that uses a 
     spread gain funding method, for purposes of this subsection, 
     the term `normal cost' means normal cost as determined under 
     the entry age normal funding method.
       ``(2) Plan amendments.--In the case of a CSEC plan that is 
     in funding restoration status for a plan year, no amendment 
     to such plan may take effect during such plan year if such 
     amendment has the effect of increasing liabilities of the 
     plan by means of increases in benefits, establishment of new 
     benefits, changing the rate of benefit accrual, or changing 
     the rate at which benefits become nonforfeitable. This 
     paragraph shall not apply to any plan amendment that is 
     required to comply with any applicable law. This paragraph 
     shall cease to apply with respect to any plan year, effective 
     as of the first day of the plan year (or if later, the 
     effective date of the amendment) upon payment by the plan 
     sponsor of a contribution to the plan (in addition to any 
     contribution required under this section without regard to 
     this paragraph) in an amount equal to the increase in the 
     funding liability of the plan attributable to the plan 
     amendment.
       ``(3) Funding restoration plan.--The sponsor of a CSEC plan 
     shall establish a written funding restoration plan within 180 
     days of the receipt by the plan sponsor of a certification 
     from the plan actuary that the plan is in funding restoration 
     status for a plan year. Such funding restoration plan shall 
     consist of actions that are calculated, based on reasonably 
     anticipated experience and reasonable actuarial assumptions, 
     to increase the plan's funded percentage to 100 percent over 
     a period that is not longer than the greater of 7 years or 
     the shortest amount of time practicable. Such funding 
     restoration plan shall take into account contributions 
     required under this section (without regard to this 
     paragraph). If a plan remains in funding restoration status 
     for 2 or more years, such funding restoration plan shall be 
     updated each year after the 1st such year within 180 days of 
     receipt by the plan sponsor of a certification from the plan 
     actuary that the plan remains in funding restoration status 
     for the plan year.
       ``(4) Annual certification by plan actuary.--Not later than 
     the 90th day of each

[[Page 4722]]

     plan year of a CSEC plan, the plan actuary shall certify to 
     the plan sponsor whether or not the plan is in funding 
     restoration status for the plan year, based on the plan's 
     funded percentage as of the beginning of the plan year. For 
     this purpose, the actuary may conclusively rely on an 
     estimate of--
       ``(A) the plan's funding liability, based on the funding 
     liability of the plan for the preceding plan year and on 
     reasonable actuarial estimates, assumptions, and methods, and
       ``(B) the amount of any contributions reasonably 
     anticipated to be made for the preceding plan year.
     Contributions described in subparagraph (B) shall be taken 
     into account in determining the plan's funded percentage as 
     of the beginning of the plan year.
       ``(5) Definitions.--For purposes of this subsection--
       ``(A) Funding restoration status.--A CSEC plan shall be 
     treated as in funding restoration status for a plan year if 
     the plan's funded percentage as of the beginning of such plan 
     year is less than 80 percent.
       ``(B) Funded percentage.--The term `funded percentage' 
     means the ratio (expressed as a percentage) which--
       ``(i) the value of plan assets (as determined under 
     subsection (c)(2)), bears to
       ``(ii) the plan's funding liability.
       ``(C) Funding liability.--The term `funding liability' for 
     a plan year means the present value of all benefits accrued 
     or earned under the plan as of the beginning of the plan 
     year, based on the assumptions used by the plan pursuant to 
     this section, including the interest rate described in 
     subsection (b)(5)(A) (without regard to subsection 
     (b)(5)(B)).
       ``(D) Spread gain funding method.--The term `spread gain 
     funding method' has the meaning given such term under rules 
     and forms issued by the Secretary.
       ``(E) Plan sponsor.--The term `plan sponsor' means, with 
     respect to a CSEC plan, the association, committee, joint 
     board of trustees, or other similar group of representatives 
     of the parties who establish or maintain the plan.''.
       (b) CSEC Plans.--Section 413 of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following new 
     subsection:
       ``(d) CSEC Plans.--Notwithstanding any other provision of 
     this section, in the case of a CSEC plan--
       ``(1) Funding.--The requirements of section 412 shall be 
     determined as if all participants in the plan were employed 
     by a single employer.
       ``(2) Application of provisions.--Paragraphs (1), (2), (3), 
     and (5) of subsection (c) shall apply.
       ``(3) Deduction limitations.--Each applicable limitation 
     provided by section 404(a) shall be determined as if all 
     participants in the plan were employed by a single employer. 
     The amounts contributed to or under the plan by each employer 
     who maintains the plan (for the portion of the taxable year 
     included within a plan year) shall be considered not to 
     exceed such applicable limitation if the anticipated employer 
     contributions for such plan year of all employers (determined 
     in a reasonable manner not inconsistent with regulations 
     prescribed by the Secretary) do not exceed such limitation. 
     If such anticipated contributions exceed such limitation, the 
     portion of each such employer's contributions which is not 
     deductible under section 404 shall be determined in 
     accordance with regulations prescribed by the Secretary.
       ``(4) Allocations.--Allocations of amounts under paragraph 
     (3) and subsection (c)(5) among the employers maintaining the 
     plan shall not be inconsistent with the regulations 
     prescribed for this purpose by the Secretary.''.
       (c) Separate Rules for CSEC Plans.--
       (1) In general.--Paragraph (2) of section 412(a) of the 
     Internal Revenue Code of 1986 is amended by striking ``and'' 
     at the end of subparagraph (B), by striking the period at the 
     end of subparagraph (C) and inserting ``, and'', and by 
     inserting at the end thereof the following new subparagraph:
       ``(D) in the case of a CSEC plan, the employers make 
     contributions to or under the plan for any plan year which, 
     in the aggregate, are sufficient to ensure that the plan does 
     not have an accumulated funding deficiency under section 433 
     as of the end of the plan year.''.
       (2) Conforming amendments.--Section 412 of such Code is 
     amended--
       (A) by striking ``multiemployer plan'' in paragraph (A) of 
     subsection (a)(2), in clause (i) of subsection (c)(1)(B), the 
     first place it appears in clause (i) of subsection (c)(1)(A), 
     and the last place it appears in paragraph (2) of subsection 
     (d), and inserting ``multiemployer plan or a CSEC plan'',
       (B) by striking ``430(j)'' in paragraph (1) of subsection 
     (b) and inserting ``430(j) or under section 433(f)'',
       (C)(i) by striking ``and'' at the end of clause (i) of 
     subsection (c)(1)(B),
       (ii) by striking the period at the end of clause (ii) of 
     subsection (c)(1)(B) and inserting ``, and'', and
       (iii) by inserting the following new clause after clause 
     (ii) of subsection (c)(1)(B):
       ``(iii) in the case of a CSEC plan, the funding standard 
     account shall be credited under section 433(b)(3)(C) with the 
     amount of the waived funding deficiency and such amount shall 
     be amortized as required under section 433(b)(2)(C).'',
       (D) by striking ``under paragraph (1)'' in clause (i) of 
     subsection (c)(4)(A) and inserting ``under paragraph (1) or 
     for granting an extension under section 433(d)'',
       (E) by striking ``waiver under this subsection'' in 
     subparagraph (B) of subsection (c)(4) and inserting ``waiver 
     under this subsection or an extension under 433(d)'',
       (F) by striking ``waiver or modification'' in subclause (I) 
     of subsection (c)(4)(B)(i) and inserting ``waiver, 
     modification, or extension'',
       (G) by striking ``waivers'' in the heading of subsection 
     (c)(4)(C) and of clause (ii) of subsection (c)(4)(C) and 
     inserting ``waivers or extensions'',
       (H) by striking ``section 431(d)'' in subparagraph (A) of 
     subsection (c)(7) and in paragraph (2) of subsection (d) and 
     inserting ``section 431(d) or section 433(d)'',
       (I) by striking ``and'' at the end of subclause (I) of 
     subsection (c)(4)(C)(i) and inserting ``or the accumulated 
     funding deficiency under section 433, whichever is 
     applicable,'',
       (J) by striking ``430(e)(2),'' in subclause (II) of 
     subsection (c)(4)(C)(i) and inserting ``430(e)(2) or 
     433(b)(2)(C), whichever is applicable, and'',
       (K) by adding immediately after subclause (II) of 
     subsection (c)(4)(C)(i) the following new subclause:

       ``(III) the total amounts not paid by reason of an 
     extension in effect under section 433(d),'', and

       (L) by striking ``for waivers of'' in clause (ii) of 
     subsection (c)(4)(C) and inserting ``for waivers or 
     extensions with respect to''.
       (3) Benefit restrictions.--
       (A) In general.--Paragraph (29) of section 401(a) of such 
     Code is amended by striking ``multiemployer plan'' and 
     inserting ``multiemployer plan or a CSEC plan''.
       (B) Conforming change.--Subsection (a) of section 436 of 
     such Code is amended by striking ``single-employer plan'' and 
     inserting ``single-employer plan (other than a CSEC plan)''.
       (4) Benefit increases.--Subparagraph (C) of section 
     401(a)(33) of such Code is amended by striking 
     ``multiemployer plans'' and inserting ``multiemployer plans 
     or CSEC plans''.
       (5) Liquidity shortfalls.--
       (A) In general.--Subparagraph (A) of section 401(a)(32) of 
     such Code is amended by striking ``430(j)(4)'' each place it 
     appears and inserting ``430(j)(4) or 433(f)(5)''.
       (B) Period of shortfall.--Subparagraph (C) of section 
     401(a)(32) of such Code is amended by striking ``430(j)(3) by 
     reason of section 430(j)(4)(A) thereof'' and inserting 
     ``430(j)(3) or 433(f) by reason of section 430(j)(4)(A) or 
     433(f)(5), respectively''.
       (6) Deduction limits.--Subsection (o) of section 404 of 
     such Code is amended by adding at the end the following new 
     paragraph:
       ``(8) CSEC plans.--Solely for purposes of this subsection, 
     a CSEC plan shall be treated as though section 430 applied to 
     such plan and the minimum required contribution for any plan 
     year shall be the amount described in section 
     412(a)(2)(D).''.
       (7) Section 420.--Paragraph (5) of section 420(e) of such 
     Code is amended by striking ``section 430'' each place it 
     appears and inserting ``sections 430 and 433''.
       (8) Coordination with section 4971.--
       (A) Subsection (a) of section 4971 of such Code is amended 
     by striking ``and'' at the end of paragraph (1), by striking 
     the period at the end of paragraph (2) and inserting ``, 
     and'', and by adding at the end thereof the following new 
     paragraph:
       ``(3) in the case of a CSEC plan, 10 percent of the CSEC 
     accumulated funding deficiency as of the end of the plan year 
     ending with or within the taxable year.''.
       (B) Subsection (b) of section 4971 of such Code is 
     amended--
       (i) by striking ``or'' at the end of paragraph (1), by 
     adding ``or'' at the end of paragraph (2), and by inserting 
     immediately after paragraph (2) the following new paragraph:
       ``(3) a tax is imposed under subsection (a)(3) on any CSEC 
     accumulated funding deficiency and the CSEC accumulated 
     funding deficiency is not corrected within the taxable 
     period,'', and
       (ii) by striking ``minimum required contributions or 
     accumulated funding deficiency'' and inserting ``minimum 
     required contribution, accumulated funding deficiency, or 
     CSEC accumulated funding deficiency''.
       (C) Subsection (c) of section 4971 of such Code is 
     amended--
       (i) by striking ``accumulated funding deficiency'' each 
     place it appears in paragraph (2) and inserting ``accumulated 
     funding deficiency or CSEC accumulated funding deficiency'',
       (ii) by striking ``accumulated funding deficiency or unpaid 
     minimum required contribution'' each place it appears in 
     paragraph (3) and inserting ``accumulated funding deficiency, 
     CSEC accumulated funding deficiency, or unpaid minimum 
     required contribution'', and
       (iii) by adding at the end the following new paragraph:
       ``(5) CSEC accumulated funding deficiency.--The term `CSEC 
     accumulated funding deficiency' means the accumulated funding 
     deficiency determined under section 433.''.
       (D) Paragraph (1) of section 4971(d) of such Code is 
     amended by striking ``accumulated

[[Page 4723]]

     funding deficiency or unpaid minimum required contribution'' 
     and inserting ``accumulated funding deficiency, CSEC 
     accumulated funding deficiency, or unpaid minimum required 
     contribution''.
       (E) Subsection (f) of section 4971 of such Code is 
     amended--
       (i) by striking ``430(j)(4)'' in paragraph (1) and 
     inserting ``430(j)(4) or 433(f)'',
       (ii) by striking ``430(j)'' in paragraph (1)(B) and 
     inserting ``430(j) or 433(f), whichever is applicable'', and
       (iii) by striking ``412(m)(5)'' in paragraph (3)(A) and 
     inserting ``430(j) or 433(f), whichever is applicable''.
       (9) Excise tax on failure to adopt funding restoration 
     plan.--Section 4971 of such Code is amended by redesignating 
     subsection (h) as subsection (i), and by inserting after 
     subsection (g) the following new subsection:
       ``(h) Failure of a CSEC Plan Sponsor To Adopt Funding 
     Restoration Plan.--
       ``(1) In general.--In the case of a CSEC plan that is in 
     funding restoration status (within the meaning of section 
     433(j)(5)(A)), there is hereby imposed a tax on the failure 
     of such plan to adopt a funding restoration plan within the 
     time prescribed under section 433(j)(3).
       ``(2) Amount of tax.--The amount of the tax imposed under 
     paragraph (1) with respect to any plan sponsor for any 
     taxable year shall be the amount equal to $100 multiplied by 
     the number of days during the taxable year which are included 
     in the period beginning on the day following the close of the 
     180-day period described in section 433(j)(3) and ending on 
     the day on which the funding restoration plan is adopted.
       ``(3) Waiver by secretary.--In the case of a failure 
     described in paragraph (1) which the Secretary determines is 
     due to reasonable cause and not to willful neglect, the 
     Secretary may waive a portion or all of the tax imposed by 
     such paragraph.
       ``(4) Liability for tax.--The tax imposed by paragraph (1) 
     shall be paid by the plan sponsor (within the meaning of 
     section 433(j)(5)(E)).''.
       (10) Reporting.--
       (A) In general.--Paragraph (2) of section 6059(b) of such 
     Code is amended by striking ``430,'' and inserting ``430, the 
     accumulated funding deficiency under section 433,''.
       (B) Assumptions.--Subparagraph (B) of section 6059(b)(3) of 
     such Code is amended by striking ``430(h)(1) or 431(c)(3)'' 
     and inserting ``430(h)(1), 431(c)(3), or 433(c)(3)''.

     SEC. 203. ELECTION NOT TO BE TREATED AS A CSEC PLAN.

       (a) In General.--Section 414(y) of the Internal Revenue 
     Code of 1986, as added by section 201, is amended by adding 
     at the end the following new paragraph:
       ``(3) Election.--
       ``(A) In general.--If a plan falls within the definition of 
     a CSEC plan under this subsection (without regard to this 
     paragraph), such plan shall be a CSEC plan unless the plan 
     sponsor elects not later than the close of the first plan 
     year of the plan beginning after December 31, 2013, not to be 
     treated as a CSEC plan. An election under the preceding 
     sentence shall take effect for such plan year and, once made, 
     may be revoked only with the consent of the Secretary.
       ``(B) Special rule.--If a plan described in subparagraph 
     (A) is treated as a CSEC plan, section 104 of the Pension 
     Protection Act of 2006, as amended by the Preservation of 
     Access to Care for Medicare Beneficiaries and Pension Relief 
     Act of 2010, shall cease to apply to such plan as of the 
     first date as of which such plan is treated as a CSEC 
     plan.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply as of the date of enactment of this Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
Indiana (Mrs. Brooks) and the gentleman from California (Mr. George 
Miller) each will control 20 minutes.
  The Chair recognizes the gentlewoman from Indiana.


                             General Leave

  Mrs. BROOKS of Indiana. Madam Speaker, I ask unanimous consent that 
all Members may have 5 legislative days in which to revise and extend 
their remarks on H.R. 4275.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Indiana?
  There was no objection.
  Mrs. BROOKS of Indiana. Madam Speaker, I yield myself such time as I 
may consume.
  I rise in support of H.R. 4275, the Cooperative and Small Employer 
Charity Pension Flexibility Act.
  Madam Speaker, like most Members of this body, I meet with charities, 
schools, and cooperatives throughout my district on a routine basis 
when I am back home in Indiana. I often ask them what Washington can do 
to facilitate their mission or ask about the obstacles that they face 
when trying to serve their communities. To my surprise, frequently over 
this past year, their answers revolve around the uncertainty and the 
burden of their pension funding requirements.
  This was somewhat of a shock to me, but I soon found out that some 
charities, schools, and cooperatives are actually shutting down summer 
camps, cutting back on services to the community, or raising prices 
just to meet their pension obligations. And for what? To protect the 
Pension Benefit Guaranty Corporation because their plans are 
unsustainable or underfunded? No. It is because they will soon be 
lumped into more onerous funding requirements found in the Pension 
Protection Act, known as the PPA, and are making decisions today that 
reflect that assumption.
  In fact, Congress has already exempted these organizations and found 
that multiple employer cooperative and charity plans have unique 
missions, limited participation, and sufficient precautionary 
safeguards, and that, by design, pose little risk that they will be 
unable to pay benefits in the future.
  Unfortunately, this exemption is set to expire soon and will require 
pension providers to unnecessarily overfund their plans, rather than 
using those funds to support services to our communities.
  If this were allowed to happen, the results could be catastrophic. 
For instance, in my home State of Indiana, rural electric cooperatives 
alone could be forced to needlessly increase their pension 
contributions by up to 50 percent, costing them $12.7 million a year 
and adversely affecting over 1,800 employees in Indiana alone.
  Now, it is no secret that the PBGC is facing significant problems 
that require a comprehensive solution, and I applaud Dr. Roe, Chairman 
Kline, and Ranking Member Miller for their leadership on this issue. 
The bill, however, only affects 30 plans and just over 127,000 active 
employees, and the very design of the plan shelters the PBGC from 
almost all risk. However, without this bill, some Christian schools or 
some United Way chapters across the Nation will be forced to meet 
costly regulations directed toward at-risk, single-employer plans.
  Madam Speaker, forcing charities to overfund their already solvent 
plans is not only wrong from an actuarial standpoint, but from a moral 
one, as well. For instance, Jewish Federations across the United States 
don't needlessly overfund their pensions when that money could be going 
to their mission of providing urgent support for Jews in Ukraine or 
possibly helping Holocaust survivors age with dignity. These are the 
types of consequences that are going to take place if we don't pass 
this bill.
  And subjecting rural telecom companies to PPA rules would force them 
to shift funds from critical services and hurt their ability to provide 
pension benefits to their current workers.
  Our bill injects certainty and sensibility into the multiple-employer 
pension world by simply allowing plans that are already exempted from 
the PPA the flexibility to stay excluded permanently or elect into the 
PPA structure if they wish to do so. That is why it is called 
``flexibility.''
  This bill helps cooperatives, schools, and charities do what they do 
best: provide quality services that enrich our communities and our 
lives. This is something that government cannot do, and it is something 
we need to help facilitate.
  I urge all of our colleagues to support the Cooperative and Small 
Employer Charity Pension Flexibility Act, and I reserve the balance of 
my time.
  Mr. GEORGE MILLER of California. Madam Speaker, I yield myself such 
time as I may consume.
  Madam Speaker, I want to thank the chairman of the committee for 
bringing this bill to the floor and for Congresswoman Brooks' 
explanation of this legislation, the Cooperative and Small Employer 
Charity Pension Flexibility Act.
  As she has detailed, this is a small piece of legislation, but a very 
important piece of legislation to the existence of these plans and also 
to the priorities of the nonprofits that support those plans and the 
work that they do in our communities. And what has become clear is that 
we need this congressional action because the temporary exemption is 
going to expire,

[[Page 4724]]

and that would cause a hardship that Congresswoman Brooks has laid out.
  Without these changes, these plans, known as CSEC plans, will be 
forced to comply with Pension Protection Act funding rules, and many 
small, nonprofit employers will be unable to continue to provide those 
pension benefits.
  This legislation ensures that charities and cooperative associations 
will continue to be able to provide quality pension benefits to their 
employees by implementing pension funding rules that reflect the unique 
design of their plans.
  H.R. 4275 is supported by a wide variety of charitable organizations 
from across the country, including the United Way Worldwide and Girl 
Scouts of America and many others, and I would urge our colleagues to 
support this legislation so that we can make sure that these plans can 
continue to provide the benefits for their employees but also provide 
the services to their communities.
  With that, I yield back the balance of my time.
  Mrs. BROOKS of Indiana. I yield as much time as he might consume to 
the gentleman from Minnesota (Mr. Kline).
  Mr. KLINE. I thank the gentlelady.
  Madam Speaker, I rise in support of H.R. 4275. I want to thank my 
colleague, Representative Susan Brooks, for sponsoring the legislation 
and for her work on this important issue, and my friend and colleague, 
Mr. Miller, for his strong support.
  In recent years, Congress provided a limited number of charities and 
eligible cooperatives temporary exemption from Federal pension 
requirements. Our intent was to offer relief to those who faced 
unsustainable pension obligations. It is now time to provide the 
certainty and flexibility necessary to plan for the future.
  Without that certainty, important organizations, such as the Girl 
Scouts of Minnesota and Wisconsin River Valleys, would have to cut back 
services and support fewer young women. Without that certainty, farmers 
would face the prospect of raising food and dairy prices to help make 
ends meet. Without that certainty, religious charities would be 
hampered in their ability to serve local communities. And without that 
certainty, Madam Speaker, utility companies providing electricity to 
homes and businesses would have to consider raising rates just to meet 
their pension obligations.
  That is precisely the reality we now confront. We have a duty to 
enact responsible rules that provide certainty and protect the pension 
benefits of workers and retirees. The bill before us today is an 
attempt to do just that.
  This bill would provide certain multiple-employer pension plans 
greater flexibility to manage their obligations in a way that supports 
the goods and services their participants need to deliver.
  Again, I want to thank my friend and colleague, Mrs. Brooks, for her 
leadership on this issue, and I urge my colleagues to support the 
legislation.
  Mrs. BROOKS of Indiana. Madam Speaker, I yield myself the remainder 
of my time.
  I would like to thank my distinguished colleague from Wisconsin (Mr. 
Kind) for co-leading this important effort with me. He has worked 
tirelessly in championing and raising awareness about this issue. 
Without his work, we would not be here today, and I thank him for his 
passion and his expertise on this difficult subject.
  Congress faces many difficult challenges, but the fact that we can 
come together in a bipartisan way to craft solutions for our country 
should be the norm and not the exception for this body. I hope this 
will set an example for what we can accomplish when we put partisan 
bickering aside. I know there are other pressing issues we can work on 
together to move our Nation forward.
  In closing, I would just encourage my colleagues to support this 
commonsense bill that will save taxpayers money, enhance communities 
across America, and encourages co-ops and so many charities to continue 
to provide their employees with economic security in retirement.
  I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from Indiana (Mrs. Brooks) that the House suspend the rules 
and pass the bill, H.R. 4275.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

                          ____________________