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Amendment No. 3430, As Modified

Sen. Johnny Isakson

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Mr. President, I ask unanimous consent that my amendment No. 3430 be modified with the changes at the desk.

Without objection, it is so ordered.

The amendment, as modified, is as follows:

Strike title III and insert the following:

(a) Amendments to ERISA.-- (1) In general.--Paragraph (2) of section 303(c) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1083(c)) is amended by adding at the end the following subparagraph: ``(D) Special election for eligible plan years.-- ``(i) In general.--If a plan sponsor elects to apply this subparagraph with respect to the shortfall amortization base of a plan for any eligible plan year (in this subparagraph and paragraph (7) referred to as an `election year'), then, notwithstanding subparagraphs (A) and (B)-- ``(I) the shortfall amortization installments with respect to such base shall be determined under clause (ii) or (iii), whichever is specified in the election, and ``(II) the shortfall amortization installment for any plan year in the 9-plan-year period described in clause (ii) or the 15-plan-year period described in clause (iii), respectively, with respect to such shortfall amortization base is the annual installment determined under the applicable clause for that year for that base. ``(ii) 2 plus 7 amortization schedule.--The shortfall amortization installments determined under this clause are-- ``(I) in the case of the first 2 plan years in the 9-plan- year period beginning with the election year, interest on the shortfall amortization base of the plan for the election year (determined using the effective interest rate for the plan for the election year), and ``(II) in the case of the last 7 plan years in such 9-plan- year period, the amounts necessary to amortize the remaining balance of the shortfall amortization base of the plan for the election year in level annual installments over such last 7 plan years (using the segment rates under subparagraph (C) for the election year). ``(iii) 15-year amortization.--The shortfall amortization installments determined under this subparagraph are the amounts necessary to amortize the shortfall amortization base of the plan for the election year in level annual installments over the 15-plan-year period beginning with the election year (using the segment rates under subparagraph (C) for the election year). ``(iv) Election.-- ``(I) In general.--The plan sponsor of a plan may elect to have this subparagraph apply to not more than 2 eligible plan years with respect to the plan, except that in the case of a plan described in section 106 of the Pension Protection Act of 2006, the plan sponsor may only elect to have this subparagraph apply to a plan year beginning in 2011. ``(II) Amortization schedule.--Such election shall specify whether the amortization schedule under clause (ii) or (iii) shall apply to an election year, except that if a plan sponsor elects to have this subparagraph apply to 2 eligible plan years, the plan sponsor must elect the same schedule for both years. ``(III) Other rules.--Such election shall be made at such time, and in such form and manner, as shall be prescribed by the Secretary of the Treasury, and may be revoked only with the consent of the Secretary of the Treasury. The Secretary of the Treasury shall, before granting a revocation request, provide the Pension Benefit Guaranty Corporation an opportunity to comment on the conditions applicable to the treatment of any portion of the election year shortfall amortization base that remains unamortized as of the revocation date. ``(v) Eligible plan year.--For purposes of this subparagraph, the term `eligible plan year' means any plan year beginning in 2008, 2009, 2010, or 2011, except that a plan year shall only be treated as an eligible plan year if the due date under subsection (j)(1) for the payment of the minimum required contribution for such plan year occurs on or after the date of the enactment of this subparagraph. ``(vi) Reporting.--A plan sponsor of a plan who makes an election under clause (i) shall-- ``(I) give notice of the election to participants and beneficiaries of the plan, and ``(II) inform the Pension Benefit Guaranty Corporation of such election in such form and manner as the Director of the Pension Benefit Guaranty Corporation may prescribe. ``(vii) Increases in required installments in certain cases.--For increases in required contributions in cases of excess compensation or extraordinary dividends or stock redemptions, see paragraph (7).''. (2) Increases in required installments in certain cases.-- Section 303(c) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1083(c)) is amended by adding at the end the following paragraph: ``(7) Increases in alternate required installments in cases of excess compensation or extraordinary dividends or stock redemptions.-- ``(A) In general.--If there is an installment acceleration amount with respect to a plan for any plan year in the restriction period with respect to an election year under paragraph (2)(D), then the shortfall amortization installment otherwise determined and payable under such paragraph for such plan year shall, subject to the limitation under subparagraph (B), be increased by such amount. ``(B) Total installments limited to shortfall base.-- Subject to rules prescribed by the Secretary of the Treasury, if a shortfall amortization installment with respect to any shortfall amortization base for an election year is required to be increased for any plan year under subparagraph (A)-- ``(i) such increase shall not result in the amount of such installment exceeding the present value of such installment and all succeeding installments with respect to such base (determined without regard to such increase but after application of clause (ii)), and ``(ii) subsequent shortfall amortization installments with respect to such base shall, in reverse order of the otherwise required installments, be reduced to the extent necessary to limit the present value of such subsequent shortfall amortization installments (after application of this paragraph) to the present value of the remaining unamortized shortfall amortization base. ``(C) Installment acceleration amount.--For purposes of this paragraph-- ``(i) In general.--The term `installment acceleration amount' means, with respect to any plan year in a restriction period with respect to an election year, the sum of-- ``(I) the aggregate amount of excess employee compensation determined under subparagraph (D) with respect to all employees for the plan year, plus ``(II) the aggregate amount of extraordinary dividends and redemptions determined under subparagraph (E) for the plan year. ``(ii) Annual limitation.--The installment acceleration amount for any plan year shall not exceed the excess (if any) of-- ``(I) the sum of the shortfall amortization installments for the plan year and all preceding plan years in the amortization period elected under paragraph (2)(D) with respect to the shortfall amortization base with respect to an election year, determined without regard to paragraph (2)(D) and this paragraph, over ``(II) the sum of the shortfall amortization installments for such plan year and all such preceding plan years, determined after application of paragraph (2)(D) (and in the case of any preceding plan year, after application of this paragraph). ``(iii) Carryover of excess installment acceleration amounts.-- ``(I) In general.--If the installment acceleration amount for any plan year (determined without regard to clause (ii)) exceeds the limitation under clause (ii), then, subject to subclause (II), such excess shall be treated as an installment acceleration amount with respect to the succeeding plan year. ``(II) Cap to apply.--If any amount treated as an installment acceleration amount under subclause (I) or this subclause with respect any succeeding plan year, when added to other installment acceleration amounts (determined without regard to clause (ii)) with respect to the plan year, exceeds the limitation under clause (ii), the portion of such amount representing such excess shall be treated as an installment acceleration amount with respect to the next succeeding plan year. ``(III) Limitation on years to which amounts carried for.-- No amount shall be carried under subclause (I) or (II) to a plan year which begins after the first plan year following the last plan year in the restriction period (or after the second plan year following such last plan year in the case of an election year with respect to which 15-year amortization was elected under paragraph (2)(D)). ``(IV) Ordering rules.--For purposes of applying subclause (II), installment acceleration amounts for the plan year (determined without regard to any carryover under this clause) shall be applied first against the limitation under clause (ii) and then carryovers to such plan year shall be applied against such limitation on a first-in, first-out basis. ``(D) Excess employee compensation.--For purposes of this paragraph-- ``(i) In general.--The term `excess employee compensation' means, with respect to any employee for any plan year, the excess (if any) of-- ``(I) the aggregate amount includible in income under chapter 1 of the Internal Revenue Code of 1986 for remuneration during the calendar year in which such plan year begins for services performed by the employee for the plan sponsor (whether or not performed during such calendar year), over ``(II) $1,000,000. ``(ii) Amounts set aside for nonqualified deferred compensation.--If during any calendar year assets are set aside or reserved (directly or indirectly) in a trust (or other arrangement as determined by the Secretary of the Treasury), or transferred to such a trust or other arrangement, by a plan sponsor for purposes of paying deferred compensation of an employee under a nonqualified deferred compensation plan (as defined in section 409A of such Code) of the plan sponsor, then, for purposes of clause (i), the amount of such assets shall be treated as remuneration of the employee includible in income for the calendar year unless such amount is otherwise includible in income for such year. An amount to which the preceding sentence applies shall not be taken into account under this paragraph for any subsequent calendar year. ``(iii) Only remuneration for certain post-2009 services counted.--Remuneration shall be taken into account under clause (i) only to the extent attributable to services performed by the employee for the plan sponsor after February

(a) In General.--Title I of the Pension Protection Act of 2006 is amended by redesignating section 107 as section 108 and by inserting the following after section 106:

(a) In General.-- (1) Amendment to erisa.--Section 206(g)(9) of the Employee Retirement Income Security Act of 1974 is amended by adding at the end the following: ``(D) Special rule for certain years.--Solely for purposes of any applicable provision-- ``(i) In general.--For plan years beginning on or after October 1, 2008, and before October 1, 2010, the adjusted funding target attainment percentage of a plan shall be the greater of-- ``(I) such percentage, as determined without regard to this subparagraph, or ``(II) the adjusted funding target attainment percentage for such plan for the plan year beginning after October 1, 2007, and before October 1, 2008, as determined under rules prescribed by the Secretary of the Treasury. ``(ii) Special rule.--In the case of a plan for which the valuation date is not the first day of the plan year-- ``(I) clause (i) shall apply to plan years beginning after December 31, 2007, and before January 1, 2010, and ``(II) clause (i)(II) shall apply based on the last plan year beginning before November 1, 2007, as determined under rules prescribed by the Secretary of the Treasury. ``(iii) Applicable provision.--For purposes of this subparagraph, the term `applicable provision' means-- ``(I) paragraph (3), but only for purposes of applying such paragraph to a payment which, as determined under rules prescribed by the Secretary of the Treasury, is a payment under a social security leveling option which accelerates payments under the plan before, and reduces payments after, a participant starts receiving social security benefits in order to provide substantially similar aggregate payments both before and after such benefits are received, and ``(II) paragraph (4).''. (2) Amendment to internal revenue code of 1986.--Section 436(j) of the Internal Revenue Code of 1986 is amended by adding at the end the following: ``(3) Special rule for certain years.--Solely for purposes of any applicable provision-- ``(A) In general.--For plan years beginning on or after October 1, 2008, and before October 1, 2010, the adjusted funding target attainment percentage of a plan shall be the greater of-- ``(i) such percentage, as determined without regard to this paragraph, or ``(ii) the adjusted funding target attainment percentage for such plan for the plan year beginning after October 1, 2007, and before October 1, 2008, as determined under rules prescribed by the Secretary. ``(B) Special rule.--In the case of a plan for which the valuation date is not the first day of the plan year-- ``(i) subparagraph (A) shall apply to plan years beginning after December 31, 2007, and before January 1, 2010, and ``(ii) subparagraph (A)(ii) shall apply based on the last plan year beginning before November 1, 2007, as determined under rules prescribed by the Secretary. ``(C) Applicable provision.--For purposes of this paragraph, the term `applicable provision' means-- ``(i) subsection (d), but only for purposes of applying such paragraph to a payment which, as determined under rules prescribed by the Secretary, is a payment under a social security leveling option which accelerates payments under the plan before, and reduces payments after, a participant starts receiving social security benefits in order to provide substantially similar aggregate payments both before and after such benefits are received, and ``(ii) subsection (e).''. (b) Interaction With Wrera Rule.--Section 203 of the Worker, Retiree, and Employer Recovery Act of 2008 shall apply to a plan for any plan year in lieu of the amendments made by this section applying to sections 206(g)(4) of the Employee Retirement Income Security Act of 1974 and 436(e) of the Internal Revenue Code of 1986 only to the extent that such section produces a higher adjusted funding target attainment percentage for such plan for such year. (c) Effective Date.-- (1) In general.--Except as provided in paragraph (2), the amendments made by this section shall apply to plan years beginning on or after October 1, 2008. (2) Special rule.--In the case of a plan for which the valuation date is not the first day of the plan year, the amendments made by this section shall apply to plan years beginning after December 31, 2007.

(a) Amendment to Erisa.--Paragraph (3) of section 303(f) of the Employee Retirement Income Security Act of 1974 is amended by adding the following at the end thereof: ``(D) Special rule for certain years of plans maintained by charities.-- ``(i) In general.--For purposes of applying subparagraph (C) for plan years beginning after August 31, 2009, and before September 1, 2011, the ratio determined under such subparagraph for the preceding plan year shall be the greater of-- ``(I) such ratio, as determined without regard to this subparagraph, or ``(II) the ratio for such plan for the plan year beginning after August 31, 2007, and before September 1, 2008, as determined under rules prescribed by the Secretary of the Treasury. ``(ii) Special rule.--In the case of a plan for which the valuation date is not the first day of the plan year-- ``(I) clause (i) shall apply to plan years beginning after December 31, 2008, and before January 1, 2011, and ``(II) clause (i)(II) shall apply based on the last plan year beginning before September 1, 2007, as determined under rules prescribed by the Secretary of the Treasury. ``(iii) Limitation to charities.--This subparagraph shall not apply to any plan unless such plan is maintained exclusively by one or more organizations described in section 501(c)(3) of the Internal Revenue Code of 1986.''. (b) Amendment to Internal Revenue Code of 1986.--Paragraph (3) of section 430(f) of the Internal Revenue Code of 1986 is amended by adding the following at the end thereof: ``(D) Special rule for certain years of plans maintained by charities.-- ``(i) In general.--For purposes of applying subparagraph (C) for plan years beginning after August 31, 2009, and before September 1, 2011, the ratio determined under such subparagraph for the preceding plan year of a plan shall be the greater of-- ``(I) such ratio, as determined without regard to this subsection, or ``(II) the ratio for such plan for the plan year beginning after August 31, 2007 and before September 1, 2008, as determined under rules prescribed by the Secretary. ``(ii) Special rule.--In the case of a plan for which the valuation date is not the first day of the plan year-- ``(I) clause (i) shall apply to plan years beginning after December 31, 2007, and before January 1, 2010, and ``(II) clause (i)(II) shall apply based on the last plan year beginning before September 1, 2007, as determined under rules prescribed by the Secretary. ``(iii) Limitation to charities.--This subparagraph shall not apply to any plan unless such plan is maintained exclusively by one or more organizations described in section 501(c)(3).''. (c) Effective Date.-- (1) In general.--Except as provided in paragraph (2), the amendments made by this section shall apply to plan years beginning after August 31, 2009. (2) Special rule.--In the case of a plan for which the valuation date is not the first day of the plan year, the amendments made by this section shall apply to plan years beginning after December 31, 2008.

(a) Adjustments.-- (1) Amendment to erisa.--Section 304(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1084(b)) is amended by adding at the end the following new paragraph: ``(8) Special relief rules.--Notwithstanding any other provision of this subsection-- ``(A) Amortization of net investment losses.-- ``(i) In general.--A multiemployer plan with respect to which the solvency test under subparagraph (C) is met may treat the portion of any experience loss or gain attributable to net investment losses incurred in either or both of the first two plan years ending after August 31, 2008, as an item separate from other experience losses, to be amortized in equal annual installments (until fully amortized) over the period-- ``(I) beginning with the plan year in which such portion is first recognized in the actuarial value of assets, and ``(II) ending with the last plan year in the 30-plan year period beginning with the plan year in which such net investment loss was incurred. ``(ii) Coordination with extensions.--If this subparagraph applies for any plan year-- ``(I) no extension of the amortization period under clause (i) shall be allowed under subsection (d), and ``(II) if an extension was granted under subsection (d) for any plan year before the election to have this subparagraph apply to the plan year, such extension shall not result in such amortization period exceeding 30 years. ``(iii) Net investment losses.--For purposes of this subparagraph-- ``(I) In general.--Net investment losses shall be determined in the manner prescribed by the Secretary of the Treasury on the basis of the difference between actual and expected returns (including any difference attributable to any criminally fraudulent investment arrangement). ``(II) Criminally fraudulent investment arrangements.--The determination as to whether an arrangement is a criminally fraudulent investment arrangement shall be made under rules substantially similar to the rules prescribed by the Secretary of the Treasury for purposes of section 165 of the Internal Revenue Code of 1986. ``(B) Expanded smoothing period.-- ``(i) In general.--A multiemployer plan with respect to which the solvency test under subparagraph (C) is met may change its asset valuation method in a manner which-- ``(I) spreads the difference between expected and actual returns for either or both of the first 2 plan years ending after August 31, 2008, over a period of not more than 10 years, ``(II) provides that for either or both of the first 2 plan years ending after August 31, 2008, the value of plan assets at any time shall not be less than 80 percent or greater than 130 percent of the fair market value of such assets at such time, or ``(III) makes both changes described in subclauses (I) and (II) to such method. ``(ii) Asset valuation methods.--If this subparagraph applies for any plan year-- ``(I) the Secretary of the Treasury shall not treat the asset valuation method of the plan as unreasonable solely because of the changes in such method described in clause (i), and ``(II) such changes shall be deemed approved by such Secretary under section 302(d)(1) and section 412(d)(1) of such Code. ``(iii) Amortization of reduction in unfunded accrued liability.--If this subparagraph and subparagraph (A) both apply for any plan year, the plan shall treat any reduction in unfunded accrued liability resulting from the application of this subparagraph as a separate experience amortization base, to be amortized in equal annual installments (until fully amortized) over a period of 30 plan years rather than the period such liability would otherwise be amortized over. ``(C) Solvency test.--The solvency test under this paragraph is met only if the plan actuary certifies that the plan is projected to have sufficient assets to timely pay expected benefits and anticipated expenditures over the amortization period, taking into account the changes in the funding standard account under this paragraph. ``(D) Restriction on benefit increases.--If subparagraph (A) or (B) apply to a multiemployer plan for any plan year, then, in addition to any other applicable restrictions on benefit increases, a plan amendment increasing benefits may not go into effect during either of the 2 plan years immediately following such plan year unless-- ``(i) the plan actuary certifies that-- ``(I) any such increase is paid for out of additional contributions not allocated to the plan immediately before the application of this paragraph to the plan, and ``(II) the plan's funded percentage and projected credit balances for such 2 plan years are reasonably expected to be at least as high as such percentage and balances would have been if the benefit increase had not been adopted, or ``(ii) the amendment is required as a condition of qualification under part I of subchapter D of chapter 1 of the Internal Revenue Code of 1986 or to comply with other applicable law. ``(E) Reporting.--A plan sponsor of a plan to which this paragraph applies shall-- ``(i) give notice of such application to participants and beneficiaries of the plan, and ``(ii) inform the Pension Benefit Guaranty Corporation of such application in such form and manner as the Director of the Pension Benefit Guaranty Corporation may prescribe.''. (2) Amendment to internal revenue code of 1986.--Section 431(b) is amended by adding at the end the following new paragraph: ``(8) Special relief rules.--Notwithstanding any other provision of this subsection-- ``(A) Amortization of net investment losses.-- ``(i) In general.--A multiemployer plan with respect to which the solvency test under subparagraph (C) is met may treat the portion of any experience loss or gain attributable to net investment losses incurred in either or both of the first two plan years ending after August 31, 2008, as an item separate from other experience losses, to be amortized in equal annual installments (until fully amortized) over the period-- ``(I) beginning with the plan year in which such portion is first recognized in the actuarial value of assets, and ``(II) ending with the last plan year in the 30-plan year period beginning with the plan year in which such net investment loss was incurred. ``(ii) Coordination with extensions.--If this subparagraph applies for any plan year-- ``(I) no extension of the amortization period under clause (i) shall be allowed under subsection (d), and ``(II) if an extension was granted under subsection (d) for any plan year before the election to have this subparagraph apply to the plan year, such extension shall not result in such amortization period exceeding 30 years. ``(iii) Net investment losses.--For purposes of this subparagraph-- ``(I) In general.--Net investment losses shall be determined in the manner prescribed by the Secretary on the basis of the difference between actual and expected returns (including any difference attributable to any criminally fraudulent investment arrangement). ``(II) Criminally fraudulent investment arrangements.--The determination as to whether an arrangement is a criminally fraudulent investment arrangement shall be made under rules substantially similar to the rules prescribed by the Secretary for purposes of section 165. ``(B) Expanded smoothing period.-- ``(i) In general.--A multiemployer plan with respect to which the solvency test under subparagraph (C) is met may change its asset valuation method in a manner which-- ``(I) spreads the difference between expected and actual returns for either or both of the first 2 plan years ending after August 31, 2008, over a period of not more than 10 years, ``(II) provides that for either or both of the first 2 plan years ending after August 31, 2008, the value of plan assets at any time shall not be less than 80 percent or greater than 130 percent of the fair market value of such assets at such time, or ``(III) makes both changes described in subclauses (I) and (II) to such method. ``(ii) Asset valuation methods.--If this subparagraph applies for any plan year-- ``(I) the Secretary shall not treat the asset valuation method of the plan as unreasonable solely because of the changes in such method described in clause (i), and ``(II) such changes shall be deemed approved by the Secretary under section 302(d)(1) of the Employee Retirement Income Security Act of 1974 and section 412(d)(1). ``(iii) Amortization of reduction in unfunded accrued liability.--If this subparagraph and subparagraph (A) both apply for any plan year, the plan shall treat any reduction in unfunded accrued liability resulting from the application of this subparagraph as a separate experience amortization base, to be amortized in equal annual installments (until fully amortized) over a period of 30 plan years rather than the period such liability would otherwise be amortized over. ``(C) Solvency test.--The solvency test under this paragraph is met only if the plan actuary certifies that the plan is projected to have sufficient assets to timely pay expected benefits and anticipated expenditures over the amortization period, taking into account the changes in the funding standard account under this paragraph. ``(D) Restriction on benefit increases.--If subparagraph (A) or (B) apply to a multiemployer plan for any plan year, then, in addition to any other applicable restrictions on benefit increases, a plan amendment increasing benefits may not go into effect during either of the 2 plan years immediately following such plan year unless-- ``(i) the plan actuary certifies that-- ``(I) any such increase is paid for out of additional contributions not allocated to the plan immediately before the application of this paragraph to the plan, and ``(II) the plan's funded percentage and projected credit balances for such 2 plan years are reasonably expected to be at least as high as such percentage and balances would have been if the benefit increase had not been adopted, or ``(ii) the amendment is required as a condition of qualification under part I of subchapter D or to comply with other applicable law. ``(E) Reporting.--A plan sponsor of a plan to which this paragraph applies shall-- ``(i) give notice of such application to participants and beneficiaries of the plan, and ``(ii) inform the Pension Benefit Guaranty Corporation of such application in such form and manner as the Director of the Pension Benefit Guaranty Corporation may prescribe.''. (b) Effective Dates.-- (1) In general.--The amendments made by this section shall take effect as of the first day of the first plan year ending after August 31, 2008, except that any election a plan makes pursuant to this section that affects the plan's funding standard account for the first plan year ending after August 31, 2008, shall be disregarded for purposes of applying the provisions of section 305 of the Employee Retirement Income Security Act of 1974 and section 432 of the Internal Revenue Code of 1986 to such plan year. (2) Restrictions on benefit increases.--Notwithstanding paragraph (1), the restrictions on plan amendments increasing benefits in sections 304(b)(8)(D) of such Act and 431(b)(8)(D) of such Code, as added by this section, shall take effect on the date of enactment of this Act.

Sen. Johnny Isakson

legislator photo

I suggest the absence of a quorum.

The clerk will call the roll.

The legislative clerk proceeded to call the roll.

Sen. Barbara Boxer

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Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Without objection, it is so ordered.