Title II — Funding rules, withdrawal liability, and other reforms

S. 5045 · 116th Congress · Dec 17, 2020 · Lineage

II Funding rules, withdrawal liability, and other reforms

A Minimum funding standard for multiemployer plans

Sec. 201 Valuation of plan liabilities

(a)

Amendments to Internal Revenue Code of 1986—

(1)

Charges to funding standard account— Subparagraph (B) of section 431(b)(2) of the Internal Revenue Code of 1986 is amended—

(A)

by striking “and” at the end of clause (iii),

(B)

by redesignating clause (iv) as clause (v),

(C)

by striking “actuarial assumptions” in clause (v), as so redesignated, and inserting “actuarial assumptions not described in clause (iv)”, and

(D)

by inserting after clause (iii) the following new clause:

“(iv) separately, with respect to each plan year, an amount equal to the excess, if any, of—

“(I) the net increase (if any) in the unfunded past service liability resulting from a reduction in the interest rate under paragraph (6)(A) from the rate which applied for the preceding year, over

“(II) the amount in the investment risk reduction subaccount under paragraph (9),”

(2)

Credits to funding standard account— Clause (iii) of section 431(b)(3)(B) of such Code is amended by inserting “, except that any amount of net gain resulting from an increase in the interest rate from the rate which applied for the preceding year shall first be offset against any unamortized amounts charged under paragraph (2)(B)(iv)” after “15 plan years”.

(3)

Interest— Paragraph (6) of section 431(b) of such Code is amended to read as follows:

“(6) Interest

“(A) In general—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 the unfunded past service liability. Notwithstanding any other provision of this section, the interest rate used shall not exceed—

“(i) 7.5 percent for actuarial valuations for plan years beginning after December 31, 2020, and before January 1, 2024,

“(ii) 7.25 percent for actuarial valuations for plan years beginning after December 31, 2023, and before January 1, 2028,

“(iii) 7.0 percent for actuarial valuations for plan years beginning after December 31, 2027, and before January 1, 2032,

“(iv) 6.75 percent for actuarial valuations for plan years beginning after December 31, 2031, and before January 1, 2036, and

“(v) 6.5 percent for actuarial valuations for plan years beginning after December 31, 2035.

“(B) Interest rate for determining normal cost—Notwithstanding any other provision of this section, the interest rate used for determining the normal cost to be charged under paragraph (2) for the plan year shall be equal to the least of—

“(i) the interest rate applicable under subparagraph (A) for the plan year,

“(ii) a rate equal to the 24-month average of the third segment rate (as defined in section 430(h)(2)(C)(iii)), as of the date the determination is made, without regard to section 430(h)(2)(C)(iv), increased by 2 percent, or

“(iii) 5.5 percent.

“(C) Exception for certain partitioned plans—Notwithstanding subparagraph (A), in the case of a plan which has been partitioned under section 4233A of the Employee Retirement Income Security Act of 1974, the rate of interest used to determine normal cost under subparagraph (B) shall also be used to determine the unfunded past service liability of the plan.

“(D) Exception for plans using a spread-gain method—Notwithstanding subparagraph (B), and except as noted in subparagraph (C), in the case of a plan which uses a funding method other than the unit credit method or entry-age normal method—

“(i) the normal cost and past service liability shall be calculated using interest rates under subparagraph (A),

“(ii) an additional normal cost component shall be calculated in the same manner as under paragraph (9)(B)(i) based on the unit credit method, and

“(iii) the amount determined under clause (ii) shall be added to the otherwise calculated normal cost under the funding method in lieu of the credit under paragraph (9)(B)(i).”

(4)

Investment risk reduction subaccount— Subsection (b) of section 431 of such Code is amended by adding at the end the following new paragraph:

“(9) Investment risk reduction subaccount—For purposes of this part—

“(A) In general—The funding standard account shall include an investment risk reduction subaccount used solely to offset losses attributable to reductions in the rate of interest used to determine the unfunded past service liability of the plan over time.

“(B) Annual adjustments—For a plan year, the investment risk reduction subaccount shall be—

“(i) credited with the net change (if any) in the normal cost for the immediately preceding plan year due to recalculation to reflect the difference in interest rates under paragraphs (6)(A) and (6)(B),

“(ii) charged with the amount of any reduction applied under paragraph (2)(B)(iv)(II), or, in the case of a plan using a spread-gain method, an amount equal to the lesser of—

“(I) the entire remaining balance of such subaccount immediately before the charge, or

“(II) the amount of the increase in the present value of benefits resulting from a decrease in the interest rate from the rate which applied for the preceding year,

“(iii) at the election of the plan sponsor, and pursuant to regulations to be issued by the Secretary, credited with the net decrease in the unfunded past service liability (or present value of benefits, in the case of a plan using a spread-gain method) resulting from an increase in the interest rate under paragraph (6)(A), not to exceed the amount of any previous charges to the account under clause (ii), reduced by any previous credits under this clause, and

“(iv) adjusted with interest at the rate under paragraph (6)(A), as applicable.”

(5)

Determinations to be made under funding method— Paragraph (1) of section 431(c) of such Code is amended to read as follows:

“(1) Determinations to be made under funding method

“(A) In general—For purposes of this part, normal costs, accrued liability, and experience gains and losses used to determine the unfunded past service liability for the plan shall be determined under the funding method used to determine costs under the plan and based on the interest rate under subparagraph (A) (or subparagraph (C), if applicable) of subsection (b)(6).

“(B) Adjustments for funding standard account normal cost—Notwithstanding subparagraph (A), in the case of a plan using the unit credit funding method or the entry-age normal funding method, the normal cost for a plan year to be charged to the funding standard account under subsection (b)(2) shall be determined under the funding method used to determine costs under the plan and based on the interest rate under subsection (b)(6)(B).”

(b)

Amendments to Employee Retirement Income Security Act of 1974—

(1)

Charges to funding standard account— Subparagraph (B) of section 304(b)(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1084(b)(2)) is amended—

(A)

by striking “and” at the end of clause (iii),

(B)

by redesignating clause (iv) as clause (v),

(C)

by striking “actuarial assumptions” in clause (v), as so redesignated, and inserting “actuarial assumptions not described in clause (iv)”, and

(D)

by inserting after clause (iii) the following new clause:

“(iv) separately, with respect to each plan year, an amount equal to the excess, if any, of—

“(I) the net increase (if any) in the unfunded past service liability resulting from a reduction in the interest rate under paragraph (6)(A) from the rate which applied for the preceding year, over

“(II) the amount in the investment risk reduction subaccount under paragraph (9),”

(2)

Credits to funding standard account— Clause (iii) of section 304(b)(3)(B) of such Act (29 U.S.C. 1084(b)(3)(B)) is amended by inserting “, except that any amount of net gain resulting from an increase in the interest rate from the rate which applied for the preceding year shall first be offset against any unamortized amounts charged under paragraph (2)(B)(iv)” after “15 plan years”.

(3)

Interest—

(A)

In general— Paragraph (6) of section 304(b) of such Act (29 U.S.C. 1084(b)) is amended to read as follows:

“(6) Interest

“(i) 7.5 percent for actuarial valuations for plan years beginning after December 31, 2020, and before January 1, 2024,

“(ii) 7.25 percent for actuarial valuations for plan years beginning after December 31, 2023, and before January 1, 2028,

“(iii) 7.0 percent for actuarial valuations for plan years beginning after December 31, 2027, and before January 1, 2032,

“(iv) 6.75 percent for actuarial valuations for plan years beginning after December 31, 2031, and before January 1, 2036, and

“(v) 6.5 percent for actuarial valuations for plan years beginning after December 31, 2035.

“(i) the interest rate applicable under subparagraph (A) for the plan year,

“(ii) a rate equal to the 24-month average of the third segment rate (as defined in section 303(h)(2)(C)(iii)), as of the date the determination is made, without regard to section 303(h)(2)(C)(iv), increased by 2 percent, or

“(iii) 5.5 percent.

“(C) Exception for certain partitioned plans—Notwithstanding subparagraph (A), in the case of a plan which has been partitioned under section 4233A, the rate of interest used to determine normal cost under subparagraph (B) shall also be used to determine the unfunded past service liability of the plan.

“(i) the normal cost and past service liability shall be calculated using interest rates under subparagraph (A),

“(ii) an additional normal cost component shall be calculated in the same manner as under paragraph (9)(B)(i) based on the unit credit method, and

“(iii) the amount determined under clause (ii) shall be added to the otherwise calculated normal cost under the funding method in lieu of the credit under paragraph (9)(B)(i).”

(B)

Conforming amendment— Subparagraph (A) of section 4233A(h)(4) of such Act, as added by this Act, is amended by inserting “, consistent with section 304(b)(6)(C)” before the period.

(4)

Investment risk reduction subaccount— Subsection (b) of section 304 of such Act (29 U.S.C. 1084) is amended by adding at the end the following new paragraph:

“(9) Investment risk reduction subaccount—For purposes of this part—

“(B) Annual adjustments—For a plan year, the investment risk reduction subaccount shall be—

“(ii) charged with the amount of any reduction applied under paragraph (2)(B)(iv)(II), or, in the case of a plan using a spread-gain method, an amount equal to the lesser of—

“(I) the entire remaining balance of such subaccount immediately before the charge, or

“(II) the amount of the increase in the present value of benefits resulting from a decrease in the interest rate from the rate which applied for the preceding year,

“(iii) at the election of the plan sponsor, and pursuant to regulations to be issued by the Secretary of the Treasury, credited with the net decrease in the unfunded past service liability (or present value of benefits, in the case of a plan using a spread-gain method) resulting from an increase in the interest rate under paragraph (6)(A), not to exceed the amount of any previous charges to the account under clause (ii), reduced by any previous credits under this clause, and

“(iv) adjusted with interest at the rate under paragraph (6)(A), as applicable.”

(5)

Determinations to be made under funding method— Paragraph (1) of section 304(c) of such Act (29 U.S.C. 1084(c)) is amended to read as follows:

“(1) Determinations to be made under funding method

(c)

Plan petitions To increase interest assumptions—

(1)

In general— Pursuant to regulations to be issued by the Secretary of the Treasury (or such Secretary's delegate), a multiemployer plan must petition the Secretary of the Treasury (or delegate) for any increase in the interest assumption made after a 30-year amortization base is established in accordance with section 431(b)(2)(B)(iv) of the Internal Revenue Code of 1986 and section 304(b)(2)(B)(iv) of the Employee Retirement Income Security Act of 1974 (as added by this Act). The Secretary of the Treasury (or delegate) shall approve such request upon a determination that the change is reasonably supported by changes in the financial markets or changes in the plan’s asset allocation, and is consistent with the manner in which prior changes in interest rate assumptions were determined since the date of the enactment of this Act.

(2)

Approval— If the Secretary of the Treasury (or such Secretary's delegate) does not approve or deny any petition submitted pursuant to paragraph (1) within 180 days of receiving such petition, such petition shall be deemed to have been approved.

(d)

Effective date— The amendments made by this section shall apply to plan years beginning after December 31, 2020.

B Additional funding rules for multiemployer plans

I Plan status amendments

Sec. 211 Amendments to Internal Revenue Code of 1986

(a)

Rules applying to all multiemployer plans—

(1)

In general— Subsection (a) of section 432 of the Internal Revenue Code of 1986 is amended—

(A)

by striking “a multiemployer plan in effect on July 16, 2006—” and inserting “any multiemployer plan—”,

(B)

by redesignating paragraphs (1), (2), and (3) as paragraphs (2), (3), and (4), respectively,

(C)

by inserting before paragraph (2), as so redesignated, the following new paragraph:

“(1) the rules of subsection (c) shall apply,”

(D)

by striking “subsection (c)” in paragraph (2)(A), as so redesignated, and inserting “subsection (d)”,

(E)

by striking “subsection (d)” in paragraph (2)(B), as so redesignated, and inserting “subsection (e)”,

(F)

by striking “subsection (e)” in paragraph (3)(A), as so redesignated, and inserting “subsection (f)”,

(G)

by striking “subsection (f)” in paragraph (3)(B), as so redesignated, and inserting “subsection (g)”, and

(H)

by striking “subsection (e)(9)” in paragraph (4)(B), as so redesignated, and inserting “subsection (f)(9)”.

(2)

Rules of immediate application— Section 432 of such Code is amended—

(A)

by redesignating subsections (c), (d), (e), (f), (g), (h), (i), and (j) as subsections (d), (e), (f), (g), (h), (i), (j), and (k), respectively, and

(B)

by inserting after subsection (b) the following new subsection:

“(c) Rules applying to all multiemployer plans

“(1) Benefit increases

“(A) Increases by plan amendment—The plan sponsor of any multiemployer plan shall not adopt a plan amendment which increases plan liabilities (as determined as of the date of the adoption of the amendment) due to any increase in benefits, any change in the accrual rate of benefits, or any change in the rate at which benefits become nonforfeitable, unless—

“(i) if the plan is in unrestricted status as of the adoption of such amendment, the plan actuary certifies in accordance with subsection (b)(4) that the increase in liabilities will not cause the plan to no longer be in unrestricted status,

“(ii) if the plan is in stable status as of the adoption of such amendment, the plan actuary certifies in accordance with subsection (b)(4) that any such increase or change in benefits will be paid from additional contributions not required by any collective bargaining agreement in effect as of the adoption of the amendment,

“(iii) if the plan is in endangered status as of the adoption of such amendment, the plan actuary certifies in accordance with subsection (b)(4) that any such increase or change in benefits will be paid from additional contributions not contemplated in any current funding improvement plan, or

“(iv) the increase or change in benefits is required by law or is a de minimis change.

“(B) Increases under critical or critical and declining status—Unless required as a condition of qualification under part I of this subchapter or to comply with other applicable law, in the case of a plan which is in critical or critical and declining status, no increase in benefits, change in the accrual rate of benefits, or change in the rate at which benefits become nonforfeitable which increases plan liabilities shall take effect while the plan is in such status, without regard to whether such increase or change would otherwise occur under the provisions of the plan, unless the increase in plan liabilities due to the change is de minimis.

“(2) Contribution reductions—The plan sponsor of any multiemployer plan shall not accept any collective bargaining agreement or participation agreement which reduces the rate of contributions under the plan for any participants, suspends contributions with respect to any period of service, or directly or indirectly excludes younger, probationary, or newly hired employees from participation in the plan, unless—

“(A) the plan is in unrestricted status as of the adoption of such agreement and the plan actuary certifies in accordance with subsection (b)(4) that the reduction in contributions will not cause the plan to no longer be in unrestricted status,

“(B) the reduction in contributions is accompanied by a reduction in future accruals for the affected participants, and the plan actuary certifies in accordance with subsection (b)(4) that the combined effect of the changes in contributions and benefits is not projected to reduce the funded percentage of the plan in any year, or

“(C) subject to regulations issued by the Secretary, the plan sponsor reasonably determines that the acceptance of such an agreement is in the best interests of plan participants and beneficiaries and that rejection of the agreement would have an adverse financial effect on the plan.”

(3)

Stable and unrestricted plans— Subsection (b) of section 432 of such Code is amended—

(A)

by striking “endangered and critical” in the heading,

(B)

by redesignating paragraphs (1), (2), (3), (4), (5), and (6) as paragraphs (2), (3), (4), (5), (6), and (7), respectively, and

(C)

by inserting before paragraph (2) the following new paragraph:

“(1) Stable and unrestricted status

“(A) Stable—A multiemployer plan is in stable status for a plan year if, as determined by the plan actuary under paragraph (4), the plan is not in unrestricted status for the plan year, is not in endangered, critical, or critical and declining status for the plan year, and is not described in paragraph (6).

“(B) Unrestricted—A multiemployer plan is in unrestricted status for a plan year if, as determined by the plan actuary under paragraph (4)—

“(i) the plan is not in endangered, critical, or critical and declining status for the plan year,

“(ii) the plan is not described in paragraph (6), and

“(iii) as of the beginning of the plan year—

“(I) the plan's current liability funded percentage for such plan year is at least 70 percent and the plan's projected funded percentage as of the first day of the 15th succeeding plan year is at least 115 percent, or

“(II) the plan's current liability funded percentage for such plan year is at least 80 percent.

“(C) Current liability funded percentage—For purposes of this section, the term current liability funded percentage means the percentage equal to a fraction the numerator of which is the value of plan assets (as determined for purposes of section 431(c)(6)(A)(ii)(II)) and the denominator of which is the current liabilities of the plan (as defined in section 431(c)(6)(D)).”

(4)

Amendment to annual certification by plan actuary— Subparagraph (A) of paragraph (4) (as redesignated by paragraph (3)) of section 432(b) of such Code is amended by inserting “whether or not the plan is in unrestricted or stable status for such plan year,” in clause (i) before “whether or not the plan is in endangered status”.

(5)

Conforming amendments—

(A)

Paragraphs (2) and (3) of section 432(b) of such Code, as redesignated by paragraph (3), are each amended by striking “paragraph (3)” and inserting “paragraph (4)”.

(B)

Section 432(b)(2) of such Code, as so redesignated and amended, is further amended by striking “paragraph (5)” and inserting “paragraph (6)”.

(C)

Section 432(b)(4) of such Code, as so redesignated, is amended—

(i)

by striking “paragraph (4)” in subparagraph (B)(iv) thereof and inserting “paragraph (5)”,

(ii)

by striking “subsection (e)(9)” both places it appears in subparagraph (B)(v) and inserting “subsection (f)(9)”,

(iii)

by striking “subsection (e)(3)(A)(ii)” in subparagraph (B)(v) and inserting “subsection (f)(3)(A)(ii)”,

(iv)

by striking “subsection (e)” in subparagraph (B)(v) and inserting “subsection (f)”,

(v)

by striking “paragraph (4)” each place it appears in subparagraphs (D)(i) and (D)(v) thereof and inserting “paragraph (5)”,

(vi)

by striking “subsection (e)(8)” in subparagraph (D)(ii)(I) thereof and inserting “subsection (f)(8)”,

(vii)

by striking “paragraph (5)” in subparagraph (D)(iii) thereof and inserting “paragraph (6)”, and

(viii)

by striking “(iii) In the case of” in subparagraph (D)(iii) thereof and inserting “(iii) Special rule.—”.

(D)

Section 432(b)(5) of such Code, as redesignated by paragraph (3), is amended—

(i)

by striking “paragraph (2)” and inserting “paragraph (3)”,

(ii)

by striking “paragraph (3)(B)(iv)” and inserting “paragraph (4)(B)(iv)”,

(iii)

by striking “paragraph (3)” in subparagraph (A) thereof and inserting “paragraph (4)”,

(iv)

by striking “paragraph (3)(A)” in subparagraph (A) thereof and inserting “paragraph (4)(A)”,

(v)

by striking “paragraph (2)” in subparagraph (B) thereof and inserting “paragraph (3)”, and

(vi)

by striking “subsection (e)(4)(B)” in subparagraph (C) thereof and inserting “subsection (f)(4)(B)”.

(E)

Section 432(b)(6)(A) of such Code, as so redesignated, is amended—

(i)

by striking “paragraph (3)(A)” and inserting “paragraph (4)(A)”,

(ii)

by striking “paragraph (1)(A)” and inserting “paragraph (2)(A)”, and

(iii)

by striking “paragraph (1)(B)” and inserting “paragraph (2)(B)”.

(F)

Section 432(b)(7) of such Code, as so redesignated, is amended by striking “paragraph (2)” and inserting “paragraph (3)”.

(G)

Paragraphs (1)(A), (4)(A)(ii), (4)(C)(i), (4)(C)(ii), (4)(D), (5)(A)(i), (5)(B), and (8) of subsection (d), and subsections (e)(2), (f)(1)(A), (f)(4)(B)(i), (f)(4)(B)(ii)(I), (f)(5), and (g)(3) of section 432 of such Code, as respectively redesignated by paragraph (2), are each amended by striking “subsection (b)(3)(A)” and inserting “subsection (b)(4)(A)”.

(H)

Section 432(d)(3)(A)(i)(I) of such Code, as so redesignated, is amended by striking “paragraph (b)(3)” and inserting “subsection (b)(4)”.

(I)

Section 432(d)(4)(D) of such Code, as so redesignated, is amended by striking “subsection (d)” and inserting “subsection (e)”.

(J)

Section 432(e) of such Code, as so redesignated, is amended to read as follows:

“(e) Rules for operation of plan during adoption and improvement periods—A plan may not be amended after the date of the adoption of a funding improvement plan under subsection (d) so as to be inconsistent with the funding improvement plan or the requirements of subsection (c).”

(K)

Clauses (i)(I) and (ii)(I) of section 432(f)(4)(B) of such Code, as so redesignated, are each amended by striking “subsection (b)(2)” and inserting “subsection (b)(3)”.

(L)

Subsections (f)(8)(A)(ii) and (g)(2)(A) of section 432 of such Code, as so redesignated, are each amended by striking “subsection (b)(3)(D)” and inserting “subsection (b)(4)(D)”.

(M)

Section 432(f)(9)(J) of such Code, as so redesignated, is amended—

(i)

by striking “subsection (b)(3)” and inserting “subsection (b)(4)”, and

(ii)

by striking “paragraphs (1) and (2)” in clause (i) thereof and inserting “paragraphs (2) and (3)”.

(N)

Subparagraphs (A) and (B) of section 432(g)(1) of such Code, as so redesignated, are each amended by striking “subsection (e)” and inserting “subsection (f)”.

(O)

Paragraph (2)(A) of section 432(g) of such Code, as so redesignated, is amended by striking “(b)(3)(D)” and inserting “(b)(4)(D)”.

(P)

Section 432(h) of such Code, as so redesignated, is amended—

(i)

by striking “subsection (e)(8) or (f)” in paragraph (1) thereof and inserting “subsection (f)(8) or (g)”,

(ii)

by striking “subsection (e)(9)” in paragraph (1) thereof and inserting “subsection (f)(9)”,

(iii)

by striking “subsection (e)(7)” in paragraph (2) thereof and inserting “subsection (f)(7)”, and

(iv)

by striking “rehabilitation plan” and all that follows in paragraph (3)(B) thereof and inserting “rehabilitation plan. The preceding sentence shall not apply to any increase in contribution requirements due to increased levels of work, employment, or periods for which compensation is provided, except to the extent such an increase is used to provide an increased accrual rate of benefits or change in the rate at which benefits become nonforfeitable which increases plan liabilities.”.

(Q)

Section 432(i) of such Code, as so redesignated, is amended—

(i)

by striking “subsection (c)” and inserting “subsection (d)”, and

(ii)

by striking “subsection (e)” and inserting “subsection (f)”.

(R)

Section 432(j)(2) of such Code, as so redesignated, is amended by striking “subsections (c) and (e)” and inserting “subsections (d) and (f)”.

(S)

Section 412(b)(3) of such Code is amended by striking “section 432(e)” and inserting “section 432(f)”.

(T)

Section 418E of such Code, as amended by this Act, is further amended—

(i)

by striking “432(b)(2)” each place it appears in subsections (c)(1), (c)(2), (d)(1), and (d)(2), as redesignated by section 112, and inserting “432(b)(3)”, and

(ii)

by striking “432(e)(9)” in subsection (g), as so redesignated, and inserting “432(f)(9)”.

(U)

Section 4971(g) of such Code is amended—

(i)

by striking “432(e)” in paragraph (3)(B)(i) and inserting “432(f)”,

(ii)

by striking “432(b)(3)(A)(ii)” in paragraph (3)(B)(ii) and inserting “432(b)(4)(A)(i)(II)”,

(iii)

by striking “432(e)(1)(A)” in paragraph (4)(B)(ii) and inserting “432(f)(1)(A)”, and

(iv)

by striking “432(j)(9)” in paragraph (4)(C)(ii) and inserting “432(k)(9)”.

(V)

Subsection (c)(1) of section 4980I of such Code, as added by this Act, is amended by adding at the end the following: “Such term shall not include such an original plan for any plan year in which the plan is in unrestricted status (as defined in section 432(b)(1)(B)).”.

(W)

The heading of section 432 of such Code is amended by striking “in endangered status or critical status”.

(6)

Withdrawal liability determination for plans emerging from endangered or critical status— Section 432(h) of such Code, as redesignated by paragraph (2) and as amended by paragraph (5), is further amended by striking paragraph (4) and by inserting after paragraph (3) the following new paragraph:

“(4) Emergence from endangered or critical status

“(A) In general—In the case of increases in the contribution rate (or other increases in contribution requirements unless due to increased levels of work, employment, or periods for which compensation is provided) disregarded pursuant to paragraph (3), this subsection shall cease to apply as of the later of—

“(i) the end of the first plan year following the plan year in which the plan is no longer in endangered or critical status, or

“(ii) the end of the plan year which includes the expiration date of the first collective bargaining agreement requiring plan contributions which expires after the plan is no longer in endangered or critical status.

“(B) Highest contribution rate—Notwithstanding subparagraph (A), once the plan emerges from endangered or critical status—

“(i) increases in the contribution rate disregarded pursuant to paragraph (3) shall continue to be disregarded in determining the highest contribution rate under section 4219(c) of such Act for plan years during which the plan was in endangered or critical status, and

“(ii) the highest contribution rate for purposes of such section shall be the greater of—

“(I) the sum of—

“(aa) the employer's contribution rate as of the later of the last day of the last plan year ending before December 31, 2014, and the last day of the plan year for which the employer first had an obligation to contribute to the plan, and

“(bb) any contribution increases determined in accordance with this section after such later date and before the date the employer withdraws from the plan, or

“(II) the highest contribution rate for any plan year after the plan year which includes the earlier of—

“(aa) the expiration date of the first collective bargaining agreement applicable to the withdrawing employer requiring plan contributions which expires after the plan is no longer in endangered or critical status, or

“(bb) the date as of which the withdrawing employer negotiated a contribution rate effective after the plan year in which the plan is no longer in endangered or critical status.”

(7)

Effective date— The amendments made by this subsection shall take effect on the date of the enactment of this Act.

(b)

Determination of endangered status— Paragraph (2) of section 432(b) of the Internal Revenue Code of 1986, as redesignated by subsection (a)(3), is amended to read as follows:

“(2) Endangered status—A multiemployer plan is in endangered status for a plan year if, as determined by the plan actuary under paragraph (5), the plan is not in critical or declining status for the plan year and is not described in paragraph (7), and, as of the beginning of the plan year—

“(A) the plan’s funded percentage for such plan year is less than 80 percent,

“(B) the plan is projected to have an accumulated funding deficiency for any of the 9 succeeding plan years, taking into account any extension of amortization periods under section 431(d), or

“(C) the plan's projected funded percentage as of the first day of the 15th succeeding plan year is less than 100 percent.”

(c)

Determination of critical status— Paragraph (3) of section 432(b) of the Internal Revenue Code of 1986, as redesignated by subsection (a)(3), is amended to read as follows:

“(3) Critical status

“(A) In general—A multiemployer plan is in critical status for a plan year if, as determined by the plan actuary under paragraph (5), the plan is not in declining status for the plan year and, as of the beginning of the plan year—

“(i) the plan's funded percentage is less than 65 percent,

“(ii) the plan has an accumulated funding deficiency for the plan year, or is projected to have such an accumulated funding deficiency for any of the 6 succeeding plan years, taking into account any extension of amortization periods under section 431(d), or

“(iii) the plan's projected funded percentage as of the first day of the 15th succeeding plan year is less than 80 percent.

“(B) Original plans—Notwithstanding subparagraph (A), a multiemployer plan which is an original plan pursuant to section 4233A(d)(3) of the Employee Retirement Income Security Act of 1974 shall be treated as being in critical status for the period of 15 consecutive plan years beginning with the plan year that includes the date of the partition under such section 4233A.”

(d)

Declining status—

(1)

In general—

(A)

The following provisions of section 432 of the Internal Revenue Code of 1986 are each amended by striking “critical and declining” each place it appears and inserting “declining”:

(i)

Subsection (a)(4) (as redesignated by subsection (a)(1)).

(ii)

Subparagraphs (A) and (B)(i) of subsection (b)(1), as added by subsection (a)(3).

(iii)

Subsection (b)(4)(B)(v) (as redesignated by subsection (a)(3)), and the heading thereof.

(iv)

Paragraph (1)(B), and the heading of such paragraph (1)(B), of subsection (c), as added by subsection (a)(2).

(v)

The heading of paragraph (9) of subsection (f) (as redesignated by subsection (a)(2)).

(vi)

Subparagraphs (A), (C), (G)(i), and (J) of subsection (f)(9) (as so redesignated).

(vii)

Subsection (h)(1) (as so redesignated).

(B)

Section 418E(g) of such Code, as amended by section 112 and subsection (a), is further amended by striking “critical and declining status” and inserting “declining status”.

(2)

Determination of declining status—

(A)

In general— Subsection (b) of section 432 of such Code is amended—

(i)

by striking paragraph (7), as redesignated by subsection (a)(3),

(ii)

by redesignating paragraphs (4), (5), and (6), as so redesignated, as paragraphs (5), (6), and (7), respectively, and

(iii)

by inserting after paragraph (3), as so redesignated, the following new paragraph:

“(4) Declining status—A multiemployer plan is in declining status for a plan year if—

“(A) as determined by the plan actuary under paragraph (5), as of the beginning of the plan year the plan is projected to become insolvent within the plan year or any of the 29 succeeding plan years,

“(B) the plan is otherwise in critical status for the plan year as determined by the plan actuary under paragraph (5), and the plan sponsor determines that, based on reasonable actuarial assumptions and upon exhaustion of all reasonable measures, the plan cannot reasonably be expected to emerge from critical status within the next 30 plan years, or

“(C) the plan has a funded percentage for the plan year which is greater than the projected funded percentage as of the first day of the 15th succeeding plan year, unless the funded percentage for the plan year is 100 percent or greater and the projected funded percentage as of the first day of such 15th succeeding plan year is less than 100 percent.”

(B)

Conforming amendments—

(i)

Paragraph (1) of section 432(b) of such Code, as added by subsection (a)(3), is amended—

(I)

by striking “paragraph (4)” each place it appears in subparagraphs (A) and (B) and inserting “paragraph (5)”, and

(II)

by striking “paragraph (6)” each place it appears in subparagraphs (A) and (B) and inserting “paragraph (7)”.

(ii)

Subsection (c) of section 432 of such Code, as added by subsection (a)(2), is amended by striking “(b)(4)” each place it appears in paragraphs (1)(A)(i), (1)(A)(ii), (1)(A)(iii), (2)(A), and (2)(B) and inserting “(b)(5)”.

(iii)

Section 432(b)(5) of such Code, as further redesignated by subparagraph (A) and as amended by section 321 and subsection (a), is further amended—

(I)

by striking “paragraph (5)” in subparagraph (B)(iv) thereof and inserting “paragraph (6)”,

(II)

by striking “paragraph (5)” each place it appears in subparagraphs (D)(i) and (D)(vi) thereof and inserting “paragraph (6)”, and

(III)

by striking “paragraph (6)” in subparagraph (D)(iv) thereof and inserting “paragraph (7)”.

(iv)

Section 432(b)(6) of such Code, as so further redesignated and amended, is further amended—

(I)

by striking “paragraph (4)(B)(iv)” and inserting “paragraph (5)(B)(iv)”,

(II)

by striking “paragraph (4)” in subparagraph (A) thereof and inserting “paragraph (5)”, and

(III)

by striking “paragraph (4)(A)” in subparagraph (A) thereof and inserting “paragraph (5)(A)”.

(v)

Section 432(b)(7)(A) of such Code, as so further redesignated and amended, is further amended—

(I)

by striking “paragraph (4)(A)” and inserting “paragraph (5)(A)”, and

(II)

by striking “either paragraph (2)(A) or paragraph (2)(B)” and inserting “any subparagraph of paragraph (2)”.

(vi)

Section 432(b)(7)(B) of such Code, as so further redesignated, is amended by striking “critical or endangered” and inserting “endangered, critical, or declining”.

(vii)

Paragraphs (1)(A), (4)(A)(ii), (4)(C)(i), (4)(C)(ii), (4)(D), and (8) of subsection (d), and subsections (f)(1)(A), (f)(4)(B)(i), (f)(4)(B)(ii)(I), (f)(5), and (g)(3) of section 432 of such Code, as redesignated and amended by subsection (a), are each further amended by striking “subsection (b)(4)(A)” and inserting “subsection (b)(5)(A)”.

(viii)

Section 432(d)(3)(A)(i)(I) of such Code, as so redesignated and amended, is further amended by striking “subsection (b)(4)” and inserting “subsection (b)(5)”.

(ix)

Subsections (f)(8)(A)(ii) and (g)(2)(A) of section 432 of such Code, as so redesignated and amended, are each further amended by striking “subsection (b)(4)(D)” and inserting “subsection (b)(5)(D)”.

(x)

Section 432(f)(9)(J) of such Code, as so redesignated and amended, is further amended by striking “subsection (b)(4)” and inserting “subsection (b)(5)”.

(3)

Solvency plan—

(A)

In general— Paragraph (4) (as redesignated by subsection (a)(1) and amended by paragraph (1)) of section 432(a) of such Code is amended—

(i)

by redesignating subparagraph (B) as subparagraph (D), and

(ii)

by striking subparagraph (A) and inserting before subparagraph (D) (as so redesignated) the following new subparagraphs:

“(A) the plan sponsor shall adopt and implement a solvency plan in accordance with the requirements of subsection (h),

“(B) any rehabilitation plan in place as of the date the plan enters declining status shall continue to apply throughout the solvency plan adoption period,

“(C) the requirements of subsection (i) and paragraphs (6) and (7) of subsection (f) shall apply during the solvency plan adoption period and the solvency attainment period, and”

(B)

Adoption of plan— Section 432 of such Code, as amended by this section, is further amended—

(i)

by redesignating subsection (l), as added by title V of this Act, as subsection (n), and by further redesignating subsections (h), (i), (j), and (k), as redesignated by subsection (a)(2), as subsections (j), (k), (l), and (m), respectively, and

(ii)

by inserting after subsection (g), as redesignated by subsection (a)(2), the following new subsections:

“(h) Solvency plan must be adopted for multiemployer plans in declining status

“(1) In general—In any case in which a multiemployer plan is in declining status for a plan year, the plan sponsor, in accordance with this subsection—

“(A) shall adopt a solvency plan not later than 240 days following the required date for the actuarial certification of declining status under subsection (b)(5)(A), and

“(B) within 30 days after the adoption of the solvency plan shall provide to the bargaining parties 1 or more schedules showing revised benefit structures, revised contribution structures, or both, which, if adopted, may reasonably be expected to enable the multiemployer plan to meet the requirements of paragraph (3), including—

“(i) one default proposal under which—

“(I) all adjustable benefits in the form of early retirement subsidies (including early reduction factors which are not provided on an actuarially equivalent basis) under the plan are eliminated, and

“(II) the future monthly benefit accrual rate under the plan is reduced to the equivalent of 1 percent of annual contributions (or, if lower, the current accrual rate) based on the contribution rate in effect as of the later of the first day of the plan year in which the plan enters declining status or the date of a partition under section 4233A of the Employee Retirement Income Security Act of 1974, and

“(ii) any additional schedules which reduce or eliminate adjustable benefits under the plan which the plan sponsor deems appropriate to provide as an alternative to the default proposal.

“(2) Exception for years after process begins—Paragraph (1) shall not apply to a plan year if such year is in a solvency plan adoption period or solvency attainment period by reason of the plan being in declining status for a preceding plan year, except that the next update of the solvency plan shall fulfill the requirement of paragraph (1)(B)(i). For purposes of this section, such preceding plan year shall be the initial determination year with respect to the solvency plan to which it relates.

“(3) Solvency plan—For purposes of this section, a solvency plan is a plan which consists of the actions, including options or a range of options to be proposed to the bargaining parties, formulated, based on reasonably anticipated experience and reasonable actuarial assumptions, to enable the plan to delay or avoid the projected insolvency.

“(4) Solvency attainment period—For purposes of this section—

“(A) In general—Except as provided in subparagraph (B), the solvency attainment period for any solvency plan adopted pursuant to this subsection is the period—

“(i) beginning on the first day of the first plan year of the multiemployer plan beginning after the earlier of—

“(I) the second anniversary of the date of the adoption of the solvency plan, or

“(II) the expiration of the collective bargaining agreements in effect on the due date for the actuarial certification of declining status for the initial determination year under subsection (b)(5)(A) and covering, as of such due date, at least 75 percent of the active participants in such plan, and

“(ii) ending on the date the plan either emerges from declining status or becomes insolvent.

“(B) Coordination with changes in status

“(i) Plans no longer in declining status—If the plan’s actuary certifies in accordance with subparagraph (C) for a plan year in any solvency plan adoption period or solvency attainment period that the plan is no longer in declining status, the solvency plan adoption period or solvency attainment period, whichever is applicable, shall end as of the date of such certification.

“(ii) Plans in critical or endangered status—If the plan’s actuary certifies under subsection (b)(5)(A) for the plan year described in clause (i) that the plan is in critical or endangered rather than declining status, the provisions of subsections (d) and (e), or subsections (f) and (g), whichever are applicable, shall be applied as if such plan year were an initial determination year, except that the plan may not be amended in a manner inconsistent with the solvency plan in effect for the preceding plan year until a new funding improvement plan or rehabilitation plan, whichever is applicable, is adopted.

“(C) Emergence—A plan in declining status shall remain in such status until a plan year for which the plan actuary certifies, in accordance with subsection (b)(5)(A), that the plan is not described in one or more of the subparagraphs in subsection (b)(4) as of the beginning of the plan year.

“(5) Updates to solvency plans and schedules

“(A) Solvency plan—The plan sponsor shall annually update the solvency plan and shall file the update with the plan’s annual report under section 104 of the Employee Retirement Income Security Act of 1974.

“(B) Schedules—The plan sponsor shall annually update any schedule of contribution rates provided under this subsection to reflect the experience of the plan.

“(C) Duration of schedule—A schedule of contribution rates provided by the plan sponsor and relied upon by bargaining parties in negotiating a collective bargaining agreement shall remain in effect for the duration of that collective bargaining agreement.

“(6) Imposition of schedule where failure to adopt solvency plan

“(A) Initial contribution schedule—If—

“(i) a collective bargaining agreement providing for contributions under a multiemployer plan that was in effect at the time the plan entered declining status expires, and

“(ii) after receiving one or more schedules from the plan sponsor under paragraph (1)(B), the bargaining parties with respect to such agreement fail to adopt a contribution schedule with terms consistent with the solvency plan and a schedule from the plan sponsor,

“(B) Subsequent contribution schedule—If—

“(i) a collective bargaining agreement providing for contributions under a multiemployer plan in accordance with a schedule provided by the plan sponsor pursuant to a solvency plan (or imposed under subparagraph (A)) expires while the plan is still in declining status, and

“(ii) after receiving one or more updated schedules from the plan sponsor under paragraph (5)(B), the bargaining parties with respect to such agreement fail to adopt a contribution schedule with terms consistent with the updated solvency plan and a schedule from the plan sponsor,

“(C) Date of implementation—The date specified in this subparagraph is the date which is 180 days after the date on which the collective bargaining agreement described in subparagraph (A) or (B) expires.

“(7) Solvency plan adoption period—For purposes of this section, the term solvency plan adoption period means the period beginning on the date of the certification under subsection (b)(5)(A) for the initial determination year and ending on the day before the first day of the solvency attainment period.

“(i) Rules for operation of plan during adoption and attainment periods

“(1) Compliance with solvency plan

“(A) In general—A plan may not be amended after the date of the adoption of a solvency plan under subsection (h) so as to be inconsistent with the solvency plan.

“(B) Special rules for benefit increases—A plan may not be amended after the date of the adoption of a solvency plan under subsection (h) so as to increase benefits, including future benefit accruals, unless the increase is required by law or is a de minimis change.

“(C) Special rules for increases in compensation or contribution rate—Any increase in employee compensation or contribution rates which takes effect after the first day of the plan year in which the plan enters declining status shall not give rise to an increase in benefits or future benefit accruals under the plan.

“(2) Restriction on lump sums and similar benefits

“(A) In general—Effective on the date the notice of certification of the plan’s declining status for the initial determination year under subsection (b)(5)(D) is sent, and notwithstanding section 411(d)(6), the plan shall not pay—

“(i) any payment, in excess of the monthly amount paid under a single life annuity (plus any social security supplements described in the last sentence of section 411(a)(9)), to a participant or beneficiary whose annuity starting date (as defined in section 417(f)(2)) occurs after the date such notice is sent,

“(ii) any payment for the purchase of an irrevocable commitment from an insurer to pay benefits, or

“(iii) any other payment specified by the Secretary by regulations,

“(B) Exception—Subparagraph (A) shall not apply to a benefit which under section 411(a)(11) may be immediately distributed without the consent of the participant or to any makeup payment in the case of a retroactive annuity starting date or any similar payment of benefits owed with respect to a prior period.

“(3) Special rules for plan adoption period—During the period beginning on the date of the certification under subsection (b)(5)(A) for the initial determination year and ending on the date of the adoption of a solvency plan—

“(A) the plan sponsor may not accept a collective bargaining agreement or participation agreement with respect to the multiemployer plan that provides for—

“(i) a reduction in the level of contributions for any participants,

“(ii) a suspension of contributions with respect to any period of service, or

“(iii) any new direct or indirect exclusion of younger or newly hired employees from plan participation,

“(B) no amendment of the plan which increases the liabilities of the plan by reason of any increase in benefits, any change in the accrual of benefits, or any change in the rate at which benefits become nonforfeitable under the plan may be adopted unless the amendment is required as a condition of qualification under part I of subchapter D of chapter 1 or to comply with other applicable law.”

(C)

Suspension of benefits— Section 432 of such Code, as amended by this section, is further amended—

(i)

by redesignating paragraph (9) of subsection (f) (as redesignated by subsection (a)(2)) as paragraph (8) of subsection (h) (as added by subparagraph (B)), and

(ii)

by moving such paragraph to the position immediately after paragraph (7) of such subsection (h).

(4)

Conforming amendments—

(A)

Subsection (a)(4)(D) of section 432 of such Code, as redesignated and amended by the preceding provisions of this section, is further amended by striking “subsection (f)(9)” and inserting “subsection (h)(8)”.

(B)

Paragraph (5) of section 432(b) of such Code, as so redesignated and as amended by section 321 and the preceding provisions of this section, is further amended—

(i)

by striking “critical” in subparagraph (A)(i)(I) and inserting “critical or declining”,

(ii)

by striking “funding improvement or rehabilitation period” in subparagraph (A)(i)(II) and inserting “funding improvement, rehabilitation, or solvency attainment period”,

(iii)

by striking “funding improvement or rehabilitation plan” in subparagraph (A)(i)(II) and inserting “funding improvement, rehabilitation, or solvency plan”,

(iv)

by striking “endangered or critical” in subparagraph (A)(i)(V)(bb) and inserting “endangered, critical, or declining”,

(v)

by striking “funding improvement plan or rehabilitation” in subparagraph (A)(iv) and inserting “funding improvement, rehabilitation, or solvency”,

(vi)

by striking “critical” each place it appears in subparagraph (A)(vi) and inserting “critical or declining”,

(vii)

by striking “rehabilitation period” in subparagraph (A)(vi) and inserting “rehabilitation or solvency attainment period”,

(viii)

by striking “as described in subsection (f)(9)” in subparagraph (B)(v),

(ix)

by inserting “if the plan is already in a rehabilitation period, and” before “if reasonable” in subparagraph (B)(v)(I),

(x)

by striking “subsection (f)(9)” in subparagraph (B)(v)(II) and inserting “subsection (h)(8)”,

(xi)

by striking “endangered or critical” both places it appears in subparagraph (D)(i) and inserting “endangered, critical, or declining”,

(xii)

by striking “endangered or critical” in the heading of subparagraph (D)(ii) and inserting “endangered, critical, or declining”,

(xiii)

by striking “endangered or critical” in subparagraph (D)(ii) and inserting “endangered, critical, or declining”,

(xiv)

by striking “funding improvement or rehabilitation plan” both places it appears in subclauses (I) and (II) of subparagraph (D)(ii) and inserting “funding improvement, rehabilitation, or solvency plan”, and

(xv)

by adding at the end of subparagraph (D) the following new clause:

“(vii) Notice of projection to be in declining status in a future plan year—In any case in which it is certified under subparagraph (A)(i) that a multiemployer plan will be in declining status for any of 5 succeeding plan years (but not for the current plan year), the plan sponsor shall, not later than 30 days after the date of the certification, provide notification of the projected declining status to the Pension Benefit Guaranty Corporation.”

(C)

Subparagraph (J) of section 432(h)(8) of such Code, as so redesignated and amended, is further amended—

(i)

by striking “critical” in the heading and inserting “declining”, and

(ii)

by striking “shall not emerge from critical status under paragraph (4)(B),” and inserting “shall not emerge from declining status”.

(D)

Subsection (j) of section 432 of such Code, as so redesignated and amended, is further amended—

(i)

by striking “(f)(8) or (g)” in paragraph (1) and inserting “(f)(8), (g), or (i)”,

(ii)

by striking “subsection (f)(9)” in paragraph (1) and inserting “subsection (h)(8)”,

(iii)

by striking “funding improvement or rehabilitation plan” in the heading of paragraph (3) and inserting “funding improvement, rehabilitation, or solvency”,

(iv)

by striking “funding improvement plan or rehabilitation plan” both places it appears in subparagraphs (A) and (B) of paragraph (3) and inserting “funding improvement, rehabilitation, or solvency plan”,

(v)

by striking “endangered or critical” in the heading of paragraph (4), as amended by subsection (a), and inserting “endangered, critical, or declining”,

(vi)

by striking “endangered or critical” each place it appears in paragraph (4), as so amended, and inserting “endangered, critical, or declining”, and

(vii)

by striking “critical or endangered” in paragraph (4) and inserting “endangered, critical, or declining”.

(E)

Subsection (k) of section 432 of such Code, as so redesignated and amended, is further amended—

(i)

by striking “or a rehabilitation plan under subsection (f)” and inserting “, a rehabilitation plan under subsection (f), or a solvency plan under subsection (h)”,

(ii)

by striking “endangered status or a plan in critical status” and inserting “endangered, critical, or declining status”,

(iii)

by striking “has not agreed on a funding improvement plan or rehabilitation plan” and inserting “has not agreed on a funding improvement, rehabilitation, or solvency plan (whichever is applicable)”, and

(iv)

by striking “adoption of a funding improvement plan or rehabilitation plan” and inserting “adoption of a funding improvement, rehabilitation, or solvency plan”.

(F)

Subsection (l) of section 432 of such Code, as so redesignated and amended, is further amended—

(i)

by striking “endangered status or in critical status” in paragraph (1) and inserting “endangered, critical, or declining status”,

(ii)

by striking “endangered or critical” in paragraph (1) and inserting “endangered, critical, or declining”, and

(iii)

by striking “(d) and (f)” in paragraph (2) and inserting “(d), (f), and (h)”.

(G)

Section 418E of such Code, as amended by section 112 and this section, is further amended—

(i)

by striking “432(b)(3)” each place it appears in subsections (c)(1), (c)(2), (d)(1), and (d)(2) and inserting “432(b)(3), or a plan in declining status, as described in section 432(b)(4)”, and

(ii)

by striking “432(f)(9)” in subsection (g) and inserting “432(h)(8)”.

(H)

Section 4971(g) of such Code, as amended by this section, is further amended—

(i)

by striking “endangered or critical” in the heading and inserting “endangered, critical, or declining”,

(ii)

by striking “critical status” in paragraph (1)(A) and inserting “critical or declining status”,

(iii)

by striking “or rehabilitation plan” in the heading of paragraph (2) and inserting “, rehabilitation, or solvency plan”,

(iv)

by striking “plan or rehabilitation plan” in paragraph (2)(A) and inserting “, rehabilitation, or solvency plan”,

(v)

by striking “rehabilitation plan” in paragraph (2)(C) and inserting “funding improvement, rehabilitation, or solvency plan”,

(vi)

by striking paragraph (3) and redesignating paragraphs (4), (5), and (6) as paragraphs (3), (4), and (5), respectively,

(vii)

by striking “rehabilitation plan” in the heading of paragraph (3), as so redesignated, and inserting “rehabilitation or solvency plan”,

(viii)

by striking “critical status” in paragraph (3)(A), as so redesignated, and inserting “critical or declining status”,

(ix)

by striking “rehabilitation plan” in paragraph (3)(A), as so redesignated, and inserting “rehabilitation or solvency plan”,

(x)

by striking “described in section 432(f)(1)(A) and ending on the day on which the rehabilitation plan is adopted” in paragraph (3)(B)(ii), as so redesignated, and inserting “described in section 432(f)(1)(A) or 432(h)(1)(A), whichever is applicable, and ending on the day on which the rehabilitation plan or solvency plan is adopted”,

(xi)

by striking “432(k)(9)” in paragraph (3)(C)(ii), as so redesignated, and inserting “432(n)(9)”, and

(xii)

by striking “or (3)” in paragraph (4), as so redesignated.

(e)

Adjustment of benefits—

(1)

In general— Section 432 of the Internal Revenue Code of 1986, as amended by this section, is further amended—

(A)

by further redesignating subsections (m) and (n), as redesignated by subsection (d), as subsections (n) and (o), respectively,

(B)

by redesignating paragraph (8) of subsection (f), as redesignated by subsection (a)(2), as subsection (m), and

(C)

by moving such subsection to the position immediately after subsection (l).

(2)

Clerical and conforming amendments—

(A)

The heading of subsection (m) of section 432 of such Code, as redesignated by paragraph (1), is amended to read as follows:

“(m) Adjustment of benefits”

(B)

The following provisions of such subsection (m) are amended as follows:

(i)

Subparagraphs (A), (B), and (C) are redesignated as paragraphs (1), (2), and (4), respectively, and moved 2 ems to the left.

(ii)

Clauses (i), (ii), (iii), and (iv) of paragraph (1) (as so redesignated) are redesignated as subparagraphs (A), (B), (C), and (D), respectively, and moved 2 ems to the left.

(iii)

Subclauses (I), (II), and (III) of paragraph (1)(D) (as so redesignated) are redesignated as clauses (i), (ii), and (iii), respectively, and moved 2 ems to the left.

(iv)

Clauses (i), (ii), and (iii) of paragraph (4) (as so redesignated) are redesignated as subparagraphs (A), (B), and (C), respectively, and moved 2 ems to the left, and the flush sentence at the end of subparagraph (C) (as so redesignated) is moved 2 ems to the left.

(v)

Subclauses (I), (II), and (III) of paragraph (4)(A) (as so redesignated) are redesignated as clauses (i), (ii), and (iii), respectively, and moved 2 ems to the left.

(vi)

Subclauses (I) and (II) of paragraph (4)(B) (as so redesignated) are redesignated as clauses (i) and (ii), respectively, and moved 2 ems to the left.

(vii)

Subclauses (I), (II), and (III) of paragraph (4)(C) (as so redesignated) are redesignated as clauses (i), (ii), and (iii), respectively, and moved 2 ems to the left.

(viii)

Paragraph (1)(A), as so redesignated, is amended by striking “subparagraph (C)” and inserting “paragraph (4)”.

(ix)

Paragraph (1)(B), as so redesignated, is amended by striking “clause (iv)(III)” and inserting “subparagraph (D)(iii)”.

(x)

Paragraph (1)(D), as so redesignated, is amended by striking “this paragraph” and inserting “this subsection”.

(xi)

Paragraph (2), as so redesignated, is amended—

(I)

by striking “subparagraph (A)(iv)(III)” and inserting “paragraph (1)(D)(iii)”, and

(II)

by striking “this paragraph” and inserting “this subsection”.

(xii)

Paragraph (4)(A), as so redesignated, is amended by striking “subparagraph (A)” and inserting “paragraph (1)”.

(xiii)

Paragraphs (4)(B) and (4)(C), as so redesignated, are each amended by striking “clause (i)” each place it appears and inserting “subparagraph (A)”.

(xiv)

The last sentence of paragraph (4)(C), as so redesignated, is amended—

(I)

by striking “subclause (I)” and inserting “clause (i)”, and

(II)

by striking “this subparagraph” and inserting “this paragraph”.

(3)

Application to all plans in endangered, critical, or declining status—

(A)

In general— Subparagraph (A) of section 432(m)(1) of such Code, as redesignated and amended by this section, is further amended—

(i)

by striking “the plan sponsor shall” and inserting “the plan sponsor of a multiemployer plan in endangered, critical, or declining status may”, and

(ii)

by striking “paragraph (1)(B)(i)” and inserting “subsection (d)(1)(B), (f)(1)(B), or (h)(1)(B), whichever is applicable”.

(B)

Conforming amendment— Subparagraph (B) of section 432(m)(1) of such Code, as redesignated and amended by this section, is further amended by striking “critical” both places it appears and inserting “endangered, critical, or declining”.

(4)

Additional adjustable benefits—

(A)

In general— Subparagraph (D) of section 432(m)(1) of such Code, as redesignated by this section, is amended—

(i)

by inserting “, including early reduction factors which are not provided on an actuarially equivalent basis,” after “(i))” in clause (ii), as so redesignated,

(ii)

by striking “and” at the end of clause (ii) (as so redesignated),

(iii)

by striking “that would not be eligible” and all that follows through the period in clause (iii) (as so redesignated) and inserting “which were adopted (or, if later, took effect) less than 120 months before the first day of the first plan year in which the plan was in endangered, critical, or declining status,”, and

(iv)

by adding at the end the following new clauses:

“(iv) any one-time bonus payment or “thirteenth check” provision, and

“(v) benefits granted for periods of service prior to participation in the plan.”

(B)

Conforming amendments—

(i)

Subparagraph (B) of section 432(m)(1) of such Code, as redesignated and amended by this section, is further amended by striking “subparagraph (D)(iii)” and inserting “clause (iii), (iv), or (v) of subparagraph (D)”.

(ii)

Paragraph (2) of section 432(m) of such Code, as amended by paragraph (2)(B), is further amended by striking “paragraph (1)(D)(iii)” and inserting “clause (iii), (iv), or (v) of paragraph (1)(D)”.

(5)

Rules relating to suspension of benefits upon return to work— Subsection (m) of section 432 of such Code, as redesignated and amended by this section, is further amended by inserting after paragraph (2) the following new paragraph:

“(3) Rules relating to suspension of benefits upon return to work—The plan sponsor of a multiemployer plan in endangered, critical, or declining status may amend rules regarding the suspension of a participant's benefits upon a return to work after commencement of benefits, or the commencement of benefits after normal retirement age (including in the case of continued employment after normal retirement age). Any such changes shall apply only to future payments of benefits.”

(6)

Additional conforming amendments—

(A)

Clause (iii) of section 432(b)(5)(D) of such Code, as redesignated and amended by this section, is further amended—

(i)

by striking “critical” in the heading and inserting “endangered, critical, or declining”,

(ii)

by striking “critical status” both places it appears and inserting “endangered, critical, or declining status”, and

(iii)

by striking “subsection (f)(8)” in subclause (I) and inserting “subsection (m)(1)(D)”.

(B)

Subsection (j) of section 432 of such Code, as amended by subsection (d), is further amended by striking “(f)(8), (g), or (i)” and inserting “(e), (g), (i), or (m)”.

(f)

Elections To be in critical or endangered status—

(1)

In general— Paragraph (6) of section 432(b) of the Internal Revenue Code of 1986, as redesignated and amended by this section, is further amended—

(A)

by striking “is not in critical status” in subparagraph (A) and inserting “is not in critical or declining status”,

(B)

by striking “but that is projected” in subparagraph (A) and inserting “but—

“(i) that is projected”

(C)

by striking “5 plan years may, not later than” in subparagraph (A) and inserting “5 plan years, or

“(ii) that is in endangered status and is not reasonably projected to be able to emerge from endangered status within the funding improvement period under the funding improvement plan in effect,”

(D)

by striking “under paragraph (3)” in subparagraph (B) and inserting “under paragraph (3) or for endangered status under paragraph (2)”.

(2)

Election to be in endangered status— Subsection (b) of section 432 of such Code, as so redesignated and amended, is further amended by adding at the end the following new paragraph:

“(8) Election to be in endangered status—Notwithstanding paragraph (2)—

“(A) the plan sponsor of a multiemployer plan that is not in endangered, critical, or declining status for a plan year but that is projected by the plan actuary, pursuant to the determination under paragraph (5), to be in endangered status in any of the 5 succeeding plan years, may, not later than 30 days after the date of the certification under paragraph (5)(A), elect to be in endangered status effective for the current plan year,

“(B) the plan year in which the plan sponsor elects to be in endangered status under subparagraph (A) shall be treated for purposes of this section as the first year in which the plan is in endangered status, regardless of the date on which the plan first satisfies the criteria for endangered status under paragraph (2), and

“(C) a plan that is in endangered status under this paragraph shall not emerge from endangered status unless the plan's actuary certifies under paragraph (5)(A) that the plan is no longer in endangered status and is not in critical or declining status.”

(g)

Amendments relating to funding improvement plan—

(1)

In general— Paragraph (1) of section 432(d) of the Internal Revenue Code of 1986, as redesignated and amended by this section, is further amended—

(A)

by striking the last sentence, and

(B)

in subparagraph (B), by striking “funding improvement plan—” and all that follows and inserting “funding improvement plan, shall provide to the bargaining parties 1 or more schedules showing revised benefit structures, revised contribution structures, or both, which, if adopted, may reasonably be expected to enable the multiemployer plan to meet the requirements of paragraph (3), including—

“(i) one default proposal under which—

“(II) the future monthly benefit accrual rate under the plan is reduced to the equivalent of 1 percent of annual contributions (or, if lower, the accrual rate as of the date of the enactment of the Chris Allen Multiemployer Pension Recapitalization and Reform Act of 2020) based on the contribution rate in effect as of the first day of the plan year in which the plan enters endangered status, and

“(ii) any additional schedules which reduce or eliminate adjustable benefits under the plan which the plan sponsor deems appropriate to provide as an alternative to the default proposal.”

(2)

Funding improvement plan— Paragraph (3) of section 432(d) of such Code, as so redesignated and amended, is further amended—

(A)

by striking “For purposes of this section—” and all that follows through “which consists of” in subparagraph (A) and inserting “For purposes of this section, a funding improvement plan is a plan which consists of”, and

(B)

by striking “formulated to provide” and all that follows and inserting “formulated, based on reasonably anticipated experience and reasonable actuarial assumptions, to—

“(A) enable the plan to no longer be in endangered status (as certified by the plan actuary) by the end of the funding improvement period, and

“(B) avoid any accumulated funding deficiencies during the funding improvement period (taking into account any extension of amortization periods under section 431(d)).”

(3)

Funding improvement period— Paragraph (4) of section 432(d) of such Code, as so redesignated and amended, is further amended by striking subparagraph (B) and inserting after subparagraph (A) the following new subparagraph:

“(B) New period based on adverse experience

“(i) In general—If the plan's actuary determines necessary based on adverse plan experience, the plan sponsor may provide for a new 10-year period as of the first day of any plan year in the original funding improvement period, but only if the plan is still projected to meet the requirements of the funding improvement plan and emerge from endangered status at the end of the new funding improvement period.

“(ii) Limitation—A plan sponsor may provide a new 10-year period under clause (i) not more than 1 time in any 20-consecutive-year period, unless the plan sponsor submits to the Secretary an application for an additional new period. Such application shall include a certification that the plan is projected to emerge from endangered status in the proposed new 10-year period and a description of key assumptions, to be specified in regulations promulgated by the Secretary in consultation with the Pension Benefit Guaranty Corporation.”

(4)

Conforming amendments—

(A)

Subparagraph (C) of section 432(d)(4) of such Code, as so redesignated and amended, is further amended—

(i)

by striking “critical status” both places it appears in clauses (i) and (ii) and inserting “critical or declining status”,

(ii)

by striking “rehabilitation period” in clause (ii) and inserting “rehabilitation or solvency attainment period”, and

(iii)

by striking “critical status” in the heading of clause (ii) and inserting “critical or declining status”.

(B)

Subsection (d) of section 432 of such Code, as so redesignated and amended, is further amended by striking paragraph (5) and by redesignating paragraphs (6), (7), and (8) as paragraphs (5), (6), and (7), respectively.

(C)

Paragraph (6) of section 432(d) of such Code, as so redesignated, is amended—

(i)

by striking “(1)(B)(i)(I)” in subparagraph (A) and inserting “(1)(B)(i)”, and

(ii)

by striking “paragraph (6)(B)” in subparagraph (B)(ii) and inserting “paragraph (5)(B)”.

(D)

Paragraph (2) of section 432(d) of such Code, as so redesignated, is amended by inserting “, except that the next update of the funding improvement plan shall fulfill the requirement of paragraph (1)(B)(i)” after “for a preceding plan year”.

(h)

Amendments relating to rehabilitation plan—

(1)

In general— Paragraph (1) of section 432(f) of the Internal Revenue Code of 1986, as redesignated and amended by this section, is further amended—

(A)

by striking the last 2 sentences, and

(B)

in subparagraph (B), by striking “rehabilitation plan—” and all that follows and inserting “rehabilitation plan, shall provide to the bargaining parties 1 or more schedules showing revised benefit structures, revised contribution structures, or both, which, if adopted, may reasonably be expected to enable the multiemployer plan to meet the requirements of paragraph (3), including—

“(i) one default proposal under which—

“(ii) any additional schedules which reduce or eliminate adjustable benefits under the plan which the plan sponsor deems appropriate to provide as an alternative to the default proposal.”

(2)

Rehabilitation plan—

(A)

In general— Subparagraph (A) of section 432(f)(3) of such Code, as so redesignated, is amended—

(i)

by striking “and may include” and all that follows through “such actions” in clause (i),

(ii)

by inserting “, while delaying insolvency for as long as possible and maximizing the income of the plan, including income after insolvency” before the period in clause (ii), and

(iii)

by striking “(1)(B)(i)” in the last sentence and inserting “(1)(B)”.

(B)

Conforming amendments— Clause (i) of section 432(f)(3)(C) of such Code, as so redesignated, is amended—

(i)

by striking “(1)(B)(i)” in subclause (II) and inserting “(1)(B)”, and

(ii)

by striking “the last sentence of paragraph (1)” and inserting “paragraph (1)(B)(i)”.

(3)

Rehabilitation period—

(A)

In general— Subparagraph (A) of section 432(f)(4) of such Code, as so redesignated and amended, is further amended—

(i)

by striking “The rehabilitation period” and inserting “Except as otherwise provided in this subparagraph, the rehabilitation period”, and

(ii)

by adding at the end the following: “If, upon exhaustion of all reasonable measures, the plan is not reasonably expected to emerge from critical status by the end of such 10-year period, the rehabilitation period shall be extended to take into account the projected date of emergence from critical status (if the rehabilitation plan remained in effect until such date) or the projected date of insolvency (if applicable) (unless the plan enters declining status).”.

(B)

Emergence from critical status— Subparagraph (B) of section 432(f)(4) of such Code, as so redesignated and amended, is further amended—

(i)

by inserting “and is not in declining status,” after the comma in clause (i)(I),

(ii)

by striking subclause (III) of clause (i) and inserting the following:

“(III) the plan's projected funded percentage as of the first day of the 15th succeeding plan year is at least 100 percent and is projected to increase after such date.”

(iii)

by striking “that—” and all that follows through “regardless of whether” in clause (ii)(I) and inserting “that the plan meets the requirements of subclauses (II) and (III) of clause (i), regardless of whether”, and

(iv)

by striking “unless—” and all that follows in clause (ii)(II) and inserting “unless, as of such plan year, the plan fails to meet the requirements of subclause (II) or (III) of clause (i).”.

(4)

Rules relating to benefit increases during rehabilitation period— Subparagraph (B) of section 432(g)(1) of such Code, as so redesignated and amended, is further amended by striking “unless” and all that follows and inserting “unless the amendment is required as a condition of qualification under part I of subchapter D of chapter 1 or to comply with other applicable law, or the amendment provides for only a de minimis increase in the liabilities of the plan.”.

(5)

Conforming amendments—

(A)

Paragraph (6) of section 432(f) of such Code, as so redesignated, is amended by striking “the last sentence of paragraph (1)” and inserting “paragraph (1)(B)(i)”.

(B)

Paragraph (2) of section 432(f) of such Code, as so redesignated, is amended by inserting “, except that the next update of the rehabilitation plan shall fulfill the requirement of paragraph (1)(B)(i)” after “for a preceding plan year”.

(i)

Actuarial assumptions—

(1)

In general— Subsection (n) of section 432 of the Internal Revenue Code of 1986, as redesignated by subsections (a), (d), and (e), is amended—

(A)

by striking “method” in the heading and inserting “method and assumptions”, and

(B)

by adding at the end the following new paragraph:

“(11) Actuarial assumptions

“(A) In general—The actuarial assumptions relied upon for purposes of this section by a plan actuary shall be individually reasonable and, in the aggregate, shall be reasonable and (with the exception of assumptions regarding future contributions) represent the actuary’s best estimate of future plan experience, within limitations prescribed by the Secretary. A plan actuary shall avoid conservatism or optimism in individual assumptions to the extent that they would result in a set of assumptions that is unreasonable in the aggregate.

“(B) Investment returns—The investment return assumption for projecting plan assets may differ from the actuarial valuation interest rate. In selecting the investment return assumption for projecting plan assets, the plan actuary shall estimate the expected return of the plan’s investments as currently invested and as expected to be invested in the future, consistent with the plan’s adopted investment policy, if applicable. It is reasonable for an actuary to expect that the plan’s investment decisions will consider risk, expected returns over time, and expected future benefit payments. The investment return assumption shall not exceed the interest rate used to determine past service liability under section 431(b)(6).

“(C) Contributions

“(i) In general—The plan actuary shall develop assumptions for the projection of future contributions, including assumptions regarding industry activity among contributing employers and contribution rates, based on information provided by the plan sponsor, which must act reasonably and in good faith. The plan actuary shall certify the reasonableness of all assumptions.

“(ii) Projected industry activity—Any projection of activity in the industry or industries covered by the plan, including future covered employment and contribution levels, shall be based on information provided by the plan sponsor acting reasonably and in good faith.

“(iii) Future contribution base units

“(I) Declining contribution base units—If recent experience of the plan has been declining contribution base units, the plan actuary may assume future contribution base units will continue to decline at the same annualized trend as over the 5 immediately preceding plan years, unless the actuary determines that there have been significant changes that would make such assumption unreasonable.

“(II) Flat or increasing contribution base units—If recent experience of the plan has been increasing, or neither increasing nor decreasing, contribution base units, the plan actuary may assume future contribution base units will remain unchanged indefinitely, unless the actuary determines that there have been significant changes that would make such assumption unreasonable.

“(iv) Future contribution rates

“(I) In general—Projections of contributions shall be based on the contribution rates consistent with the terms of collective bargaining and participation agreements currently in effect.

“(II) Future increases in accordance with correction plans—If reasonable and applicable, the plan actuary may assume future increases in contribution rates consistent with the adopted funding improvement plan, rehabilitation plan, or solvency plan.

“(III) Additional factors—Information provided by the plan sponsor to the plan actuary in setting the assumption regarding future increases in contribution rates shall take into account the ability of the participating employers to make contributions at the scheduled rates over time, considering relevant factors such as projected industry activity, the financial strength of participating employers, market competition, and the scheduled contribution rate to the plan relative to the overall wage package.

“(D) Assumptions for developing schedules—All schedules under any funding improvement plan, rehabilitation plan, or solvency plan must be developed based on the same set of actuarial assumptions unless it would be unreasonable to do so, taking into account the anticipated impact of the schedules on participant behavior and employer participation.”

(2)

Additions to Form 5500 Schedule MB— Subparagraph (B) of section 432(b)(5) of such Code, as redesignated and amended by this section, is further amended by adding at the end the following new clause:

“(vi) Additional attachments—The plan actuary shall attach to the certification required under subparagraph (A)—

“(I) documentation supporting the certification of status under subparagraph (A), including projections of the funding standard account, funded percentage, and solvency of the plan,

“(II) a clear description of the key assumptions used in performing the projections, including investment returns, contribution base units, and contribution rates,

“(III) a 5-year history of contributions, including contribution base units, average contribution rates, and withdrawal liability payments, and a comparison of such contribution base units, rates, and payments to projections made by the plan, and

“(IV) an alternate projection of the funding standard account, funded percentage, and solvency, based on the following assumptions:

“(aa) Annual future investment returns on plan assets equal the actuarial interest rate assumption minus 1 percent.

“(bb) Future contribution base units projected using a trend equal to the lesser of—

“(AA) the annualized trend of actual contribution base units over the 5 preceding plan years, and

“(BB) no change in future contribution base units.

“(cc) No increases in future contribution rates beyond those consistent with the collective bargaining agreements and participation agreements in effect for the plan year.

“(dd) The withdrawal from the plan of the employer which has contributed the greatest total amount of contributions over the 5 preceding plan years, if such employer has contributed at least 10 percent of the total contributions to the plan over such 5 plan years and such employer has a below investment grade credit rating (but only if obtaining the credit rating of such employer is not an undue burden).

“(ee) If such credit rating cannot be obtained without undue burden, the withdrawal of the employer which has contributed the greatest total amount of contributions over the 5 preceding plan years, if such employer has contributed at least 10 percent of the total contributions to the plan over such 5 plan years without regard to collection of any withdrawal liability.

“(ff) If no employer has contributed at least 10 percent of the total contributions to the plan over the 5 preceding plan years, the withdrawal of the employer which contributed the greatest total amount of contributions for the current plan year, without regard to collection of any withdrawal liability, unless the employer contributed less than 1 percent of the total contributions to the plan for such plan year.

“(gg) Other assumptions consistent with the projection based on the actuary’s best estimate assumptions.”

(3)

Conforming amendments—

(A)

Section 432(b)(5)(B)(i) of such Code, as redesignated by this section, is amended by striking “assumptions” and inserting “assumptions meeting the requirements of subsection (n)(11)”.

(B)

Section 432(b)(5)(A)(vi) of such Code, as amended by this section and section 321, is further amended by striking “reasonable actuarial assumptions” and inserting “assumptions meeting the requirements of subsection (n)(11)”.

(C)

Paragraph (3) of section 432(d) of such Code, as amended by subsection (g), is further amended by striking “reasonable actuarial assumptions” and inserting “assumptions meeting the requirements of subsection (n)(11)”.

(D)

Clause (i) of section 432(f)(3)(A) of such Code, as amended by subsection (h), is further amended by striking “reasonable actuarial assumptions” and inserting “assumptions meeting the requirements of subsection (n)(11)”.

(E)

Section 432(h)(3) of such Code, as added by subsection (d), is amended by striking “reasonable actuarial assumptions” and inserting “assumptions meeting the requirements of subsection (n)(11)”.

(j)

Conforming amendments relating to legacy plans—

(1)

Subsections (a)(3)(F), (b)(1)(B)(i), (b)(1)(H)(iv), and (d)(6)(A) of section 411 of the Internal Revenue Code of 1986, as amended by title V, are each further amended by striking “432(f)” each place it appears and inserting “432(h)(8)”.

(2)

Sections 431(b)(10), 440A(d)(2)(D), and 440A(d)(4) of such Code, as added by title V, are each amended by striking “endangered or critical” and inserting “endangered, critical, or declining”.

(3)

Section 437(b)(1) of such Act, as so added, is amended by striking “endangered or critical” both places it appears and inserting “endangered, critical, or declining”.

(4)

Sections 437(b)(5)(B) and 440A(b)(1)(A) of such Code, as so added, are each amended by striking “endangered or critical” and inserting “endangered, critical, or declining”.

(5)

Sections 437(b)(1), 437(b)(5)(B), 440A(b)(1)(A), and 440A(e)(3) of such Code, as so added, are each amended by striking “432(b)(4)” and inserting “432(b)(5)”.

(6)

Sections 438(b)(5) and 440A(d)(2)(A) of such Code, as so added, are each amended by striking “432(b)(4)(B)” and inserting “432(b)(5)(B)”.

(7)

Section 438(b)(1) of such Code, as so added, 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 adding at the end the following new subparagraph:

“(D) consistent with the principles of subparagraphs (B), (C), and (D) of section 432(n)(11).”

(8)

Section 439(a)(2)(D) of such Code, as so added, is amended by striking “432(f)(9)(D)(vi)” and inserting “432(h)(8)(D)(vi)”.

(9)

Section 439(a)(3) of such Code, as so added, is amended by striking “432(f)(8)” and inserting “432(m)(1)(D)”.

(10)

Section 440A(d)(2)(D) of such Code, as so added and amended, is further amended by striking “funding improvement or rehabilitation plan” and inserting “funding improvement, rehabilitation, or solvency plan”.

(k)

Effective date— Except as otherwise provided in subsection (a)(7), the amendments made by this section shall apply to plan years beginning after December 31, 2020.

(l)

Credit ratings— No requirement of section 939 or 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (124 Stat. 1887; 15 U.S.C. 78o–7 note) shall apply with respect to the amendment made by subsection (i)(2).

Sec. 212 Amendments to Employee Retirement Income Security Act of 1974

(a)

Rules applying to all multiemployer plans—

(1)

In general— Subsection (a) of section 305 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085) is amended—

(A)

by striking “a multiemployer plan in effect on July 16, 2006—” and inserting “any multiemployer plan—”,

(B)

by redesignating paragraphs (1), (2), and (3) as paragraphs (2), (3), and (4), respectively,

(C)

by inserting before paragraph (2), as so redesignated, the following new paragraph:

“(1) the rules of subsection (c) shall apply,”

(D)

by striking “subsection (c)” in paragraph (2)(A), as so redesignated, and inserting “subsection (d)”,

(E)

by striking “subsection (d)” in paragraph (2)(B), as so redesignated, and inserting “subsection (e)”,

(F)

by striking “subsection (e)” in paragraph (3)(A), as so redesignated, and inserting “subsection (f)”,

(G)

by striking “subsection (f)” in paragraph (3)(B), as so redesignated, and inserting “subsection (g)”, and

(H)

by striking “subsection (e)(9)” in paragraph (4)(B), as so redesignated, and inserting “subsection (f)(9)”.

(2)

Rules of immediate application— Section 305 of such Act (29 U.S.C. 1085) is amended—

(A)

by redesignating subsections (c), (d), (e), (f), (g), (h), (i), and (j) as subsections (d), (e), (f), (g), (h), (i), (j), and (k), respectively, and

(B)

by inserting after subsection (b) the following new subsection:

“(c) Rules applying to all multiemployer plans

“(1) Benefit increases

“(iv) the increase or change in benefits is required by law or is a de minimis change.

“(B) Increases under critical or critical and declining status—Unless 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, in the case of a plan which is in critical or critical and declining status, no increase in benefits, change in the accrual rate of benefits, or change in the rate at which benefits become nonforfeitable which increases plan liabilities shall take effect while the plan is in such status, without regard to whether such increase or change would otherwise occur under the provisions of the plan, unless the increase in plan liabilities due to the change is de minimis.

“(C) subject to regulations issued by the Secretary of the Treasury, the plan sponsor reasonably determines that the acceptance of such an agreement is in the best interests of plan participants and beneficiaries and that rejection of the agreement would have an adverse financial effect on the plan.”

(3)

Stable and unrestricted plans— Subsection (b) of section 305 of such Act (29 U.S.C. 1085) is amended—

(A)

by striking “endangered and critical” in the heading,

(B)

by redesignating paragraphs (1), (2), (3), (4), (5), and (6) as paragraphs (2), (3), (4), (5), (6), and (7), respectively, and

(C)

by inserting before paragraph (2) the following new paragraph:

“(1) Stable and unrestricted status

“(B) Unrestricted—A multiemployer plan is in unrestricted status for a plan year if, as determined by the plan actuary under paragraph (4)—

“(i) the plan is not in endangered, critical, or critical and declining status for the plan year,

“(ii) the plan is not described in paragraph (6), and

“(iii) as of the beginning of the plan year—

“(II) the plan's current liability funded percentage for such plan year is at least 80 percent.

“(C) Current liability funded percentage—For purposes of this section, the term current liability funded percentage means the percentage equal to a fraction the numerator of which is the value of plan assets (as determined for purposes of section 304(c)(6)(A)(ii)(II)) and the denominator of which is the current liabilities of the plan (as defined in section 304(c)(6)(D)).”

(4)

Amendment to annual certification by plan actuary— Subparagraph (A) of paragraph (4) (as redesignated by paragraph (3)) of section 305(b) of such Act (29 U.S.C. 1085(b)) is amended by inserting “whether or not the plan is in unrestricted or stable status for such plan year,” in clause (i) before “whether or not the plan is in endangered status”.

(5)

Conforming and technical amendments—

(A)

Technical correction— Section 305(b)(3)(B) of such Act (29 U.S.C. 1085(b)(3)(B)) is amended by redesignating the clause (iv) relating to projections of critical and declining status, as added by section 201(a)(5) of the Consolidated and Further Continuing Appropriations Act, 2015, as clause (v), and by moving such clause to the position immediately after clause (iv).

(B)

Conforming amendments—

(i)

Paragraphs (2) and (3) of section 305(b) of such Act (29 U.S.C. 1085(b)), as redesignated by paragraph (3), are each amended by striking “paragraph (3)” and inserting “paragraph (4)”.

(ii)

Section 305(b)(2) of such Act (29 U.S.C. 1085(b)(2)), as so redesignated and amended, is further amended by striking “paragraph (5)” and inserting “paragraph (6)”.

(iii)

Section 305(b)(4) of such Act (29 U.S.C. 1085(b)(4)), as so redesignated, is amended—

(I)

by striking “paragraph (4)” in subparagraph (B)(iv) thereof and inserting “paragraph (5)”,

(II)

by striking “subsection (e)(9)” both places it appears in subparagraph (B)(v), as redesignated by subparagraph (A), and inserting “subsection (f)(9)”,

(III)

by striking “subsection (e)(3)(A)(ii)” in subparagraph (B)(v), as so redesignated, and inserting “subsection (f)(3)(A)(ii)”,

(IV)

by striking “subsection (e)” in subparagraph (B)(v), as so redesignated, and inserting “subsection (f)”,

(V)

by striking “paragraph (4)” each place it appears in subparagraphs (D)(i) and (D)(v) thereof and inserting “paragraph (5)”,

(VI)

by striking “subsection (e)(8)” in subparagraph (D)(iii)(I) thereof and inserting “subsection (f)(8)”,

(VII)

by striking “paragraph (5)” in subparagraph (D)(iii) thereof and inserting “paragraph (6)”, and

(VIII)

by striking “(iii) In the case of” in subparagraph (D)(iii) thereof and inserting “(iii) Special rule.—”.

(iv)

Section 305(b)(5) of such Act (29 U.S.C. 1085(b)(5)), as redesignated by paragraph (3), is amended—

(I)

by striking “paragraph (2)” and inserting “paragraph (3)”,

(II)

by striking “paragraph (3)(B)(iv)” and inserting “paragraph (4)(B)(iv)”,

(III)

by striking “paragraph (3)” in subparagraph (A) thereof and inserting “paragraph (4)”,

(IV)

by striking “paragraph (3)(A)” in subparagraph (A) thereof and inserting “paragraph (4)(A)”,

(V)

by striking “paragraph (2)” in subparagraph (B) thereof and inserting “paragraph (3)”, and

(VI)

by striking “subsection (e)(4)(B)” in subparagraph (C) thereof and inserting “subsection (f)(4)(B)”.

(v)

Section 305(b)(6)(A) of such Act (29 U.S.C. 1085(b)(6)(A)), as so redesignated, is amended—

(I)

by striking “paragraph (3)(A)” and inserting “paragraph (4)(A)”,

(II)

by striking “paragraph (1)(A)” and inserting “paragraph (2)(A)”, and

(III)

by striking “paragraph (1)(B)” and inserting “paragraph (2)(B)”.

(vi)

Section 305(b)(7) of such Act (29 U.S.C. 1085(b)(7)), as so redesignated, is amended by striking “paragraph (2)” and inserting “paragraph (3)”.

(vii)

Paragraphs (1)(A), (4)(A)(ii), (4)(C)(i), (4)(C)(ii), (4)(D), (5)(A)(i), (5)(B), and (8) of subsection (d), and subsections (e)(2), (f)(1)(A), (f)(4)(B)(i), (f)(4)(B)(ii)(I), (f)(5), and (g)(3) of section 305 of such Act (29 U.S.C. 1085), as respectively redesignated by paragraph (2), are each amended by striking “subsection (b)(3)(A)” and inserting “subsection (b)(4)(A)”.

(viii)

Section 305(d)(3)(A)(i)(I) of such Act (29 U.S.C. 1085(d)(3)(A)(i)(I)), as so redesignated, is amended by striking “paragraph (b)(3)” and inserting “subsection (b)(4)”.

(ix)

Section 305(d)(4)(D) of such Act (29 U.S.C. 1085(d)(4)(D)), as so redesignated, is amended by striking “subsection (d)” and inserting “subsection (e)”.

(x)

Section 305(e) of such Act (29 U.S.C. 1085(e)), as so redesignated, is amended to read as follows:

(xi)

Clauses (i)(I) and (ii)(I) of section 305(f)(4)(B) of such Act (29 U.S.C. 1085(f)(4)(B)), as so redesignated, are each amended by striking “subsection (b)(2)” and inserting “subsection (b)(3)”.

(xii)

Subsections (f)(8)(A)(ii) and (g)(2)(A) of section 305 of such Act (29 U.S.C. 1085), as so redesignated, are each amended by striking “subsection (b)(3)(D)” and inserting “subsection (b)(4)(D)”.

(xiii)

Section 305(f)(9)(J) of such Act (29 U.S.C. 1085(f)(9)(J)), as so redesignated, is amended—

(I)

by striking “subsection (b)(3)” and inserting “subsection (b)(4)”, and

(II)

by striking “paragraphs (1) and (2)” in clause (i) thereof and inserting “paragraphs (2) and (3)”.

(xiv)

Subparagraphs (A) and (B) of section 305(g)(1) of such Act (29 U.S.C. 1085(g)(1)), as so redesignated, are each amended by striking “subsection (e)” and inserting “subsection (f)”.

(xv)

Paragraph (2)(A) of section 305(g) of such Act (29 U.S.C. 1085(g)), as so redesignated, is amended by striking “(b)(3)(D)” and inserting “(b)(4)(D)”.

(xvi)

Section 305(h) of such Act (29 U.S.C. 1085(h)), as so redesignated, is amended—

(I)

by striking “subsection (e)(8) or (f)” in paragraph (1) thereof and inserting “subsection (f)(8) or (g)”,

(II)

by striking “subsection (e)(9)” in paragraph (1) thereof and inserting “subsection (f)(9)”,

(III)

by striking “subsection (e)(7)” in paragraph (2) thereof and inserting “subsection (f)(7)”, and

(IV)

(xvii)

Section 305(i) of such Act (29 U.S.C. 1085(i)), as so redesignated, is amended—

(I)

by striking “subsection (c)” and inserting “subsection (d)”, and

(II)

by striking “subsection (e)” and inserting “subsection (f)”.

(xviii)

Section 305(j)(2) of such Act (29 U.S.C. 1085(j)(2)), as so redesignated, is amended by striking “subsections (c) and (e)” and inserting “subsections (d) and (f)”.

(xix)

Section 101(f)(2)(B) of such Act (29 U.S.C. 1021(f)(2)(B)) is amended—

(I)

by striking “305(i)” in clause (i)(II) and inserting “305(k)”, and

(II)

by striking “305(i)(8)” in clause (ii)(II) and inserting “305(k)(8)”.

(xx)

Section 103(f)(1)(B)(ii) of such Act (29 U.S.C. 1023(f)(1)(B)(ii)) is amended by striking “305(i)(2)” and inserting “305(k)(2)”.

(xxi)

Section 302(b)(3) of such Act (29 U.S.C. 1082) is amended by striking “section 305(e)” and inserting “section 305(f)”.

(xxii)

Section 4231(e)(2)(A) of such Act (29 U.S.C. 1411(e)(2)(A)) is amended by striking “section 305(b)(4)” and inserting “305(b)(7)”.

(xxiii)

Section 4233 of such Act (29 U.S.C. 1413) is amended—

(I)

by striking “305(e)(9)” each place it appears in subsections (b)(2) and (e)(1)(A) and inserting “305(f)(9)”, and

(II)

by striking “305(e)(9)(E)(vi)” in subsection (e)(2) and inserting “305(f)(9)(E)(vi)”.

(xxiv)

Section 4245 of such Act (29 U.S.C. 1426), as amended by this Act, is amended—

(I)

by striking “305(b)(2),,” in subsection (c)(1), as redesignated by section 112, and inserting “305(b)(3),”,

(II)

by striking “305(b)(2)” each place it appears in subsections (c)(2), (d)(1), and (d)(2), as so redesignated, and inserting “305(b)(3)”, and

(III)

by striking “305(e)(9)” in subsection (f), as so redesignated, and inserting “305(f)(9)”.

(xxv)

The heading of section 305 of such Act (29 U.S.C. 1085) is amended by striking “in endangered status or critical status”.

(6)

Withdrawal liability determination for plans emerging from endangered or critical status— Section 305(h) of such Act (29 U.S.C. 1085(h)), as redesignated by paragraph (2) and as amended by paragraph (5), is further amended by striking paragraph (4) and by inserting after paragraph (3) the following new paragraph:

“(4) Emergence from endangered or critical status

“(i) the end of the first plan year following the plan year in which the plan is no longer in endangered or critical status, or

“(B) Highest contribution rate—Notwithstanding subparagraph (A), once the plan emerges from endangered or critical status—

“(i) increases in the contribution rate disregarded pursuant to paragraph (3) shall continue to be disregarded in determining the highest contribution rate under section 4219(c) for plan years during which the plan was in endangered or critical status, and

“(ii) the highest contribution rate for purposes of such section shall be the greater of—

“(I) the sum of—

“(bb) any contribution increases determined in accordance with this section after such later date and before the date the employer withdraws from the plan, or

“(II) the highest contribution rate for any plan year after the plan year which includes the earlier of—

“(bb) the date as of which the withdrawing employer negotiated a contribution rate effective after the plan year in which the plan is no longer in endangered or critical status.”

(7)

Effective date— The amendments made by this subsection shall take effect on the date of the enactment of this Act.

(b)

Determination of endangered status— Paragraph (2) of section 305(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085(b)), as redesignated by subsection (a)(3), is amended to read as follows:

“(A) the plan’s funded percentage for such plan year is less than 80 percent,

“(B) the plan is projected to have an accumulated funding deficiency for any of the 9 succeeding plan years, taking into account any extension of amortization periods under section 304(d), or

“(C) the plan's projected funded percentage as of the first day of the 15th succeeding plan year is less than 100 percent.”

(c)

Determination of critical status— Paragraph (3) of section 305(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085(b)), as redesignated by subsection (a)(3), is amended to read as follows:

“(3) Critical status

“(i) the plan's funded percentage is less than 65 percent,

“(iii) the plan's projected funded percentage as of the first day of the 15th succeeding plan year is less than 80 percent.

“(B) Original plans—Notwithstanding subparagraph (A), a multiemployer plan which is an original plan pursuant to section 4233A(d)(3) shall be treated as being in critical status for the period of 15 consecutive plan years beginning with the plan year that includes the date of the partition under section 4233A.”

(d)

Declining status—

(1)

In general—

(A)

The following provisions of section 305 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085) are each amended by striking “critical and declining” each place it appears and inserting “declining”:

(i)

Subsection (a)(4) (as redesignated by subsection (a)(1)).

(ii)

Subparagraphs (A) and (B)(i) of subsection (b)(1), as added by subsection (a)(3).

(iii)

Subsection (b)(4)(B)(v) (as redesignated by subsection (a)(3)).

(iv)

The heading of clause (v) of subsection (b)(4)(B), as redesignated by subsection (a)(3).

(v)

Paragraph (1)(B), and the heading of such paragraph (1)(B), of subsection (c), as added by subsection (a)(2).

(vi)

The heading of paragraph (9) of subsection (f) (as redesignated by subsection (a)(2)).

(vii)

Subparagraphs (A), (C), (G)(i), and (J) of subsection (f)(9) (as so redesignated).

(viii)

Subsection (h)(1) (as so redesignated).

(B)

Subsections (c), as amended by section 221, and (e)(2)(A), as amended by this section, of section 4231 of such Act (29 U.S.C. 1411(e)(2)(A)) are each further amended by striking “critical and declining status” and inserting “declining status”.

(C)

Section 4233(b)(1) of such Act (29 U.S.C. 1413(b)(1)) is amended by striking “critical and declining status” and inserting “declining status”.

(D)

Section 4245(f) of such Act (29 U.S.C. 1426), as amended by section 112 and subsection (a), is further amended by striking “critical and declining status” and inserting “declining status”.

(2)

Determination of declining status—

(A)

In general— Subsection (b) of section 305 of such Act (29 U.S.C. 1085) is amended—

(i)

by striking paragraph (7), as redesignated by subsection (a)(3),

(ii)

by redesignating paragraphs (4), (5), and (6), as so redesignated, as paragraphs (5), (6), and (7), respectively, and

(iii)

by inserting after paragraph (3), as so redesignated, the following new paragraph:

“(4) Declining status—A multiemployer plan is in declining status for a plan year if—

(B)

Conforming amendments—

(i)

Paragraph (1) of section 305(b) of such Act (29 U.S.C. 1085), as added by subsection (a)(3), is amended—

(I)

by striking “paragraph (4)” each place it appears in subparagraphs (A) and (B) and inserting “paragraph (5)”, and

(II)

by striking “paragraph (6)” each place it appears in subparagraphs (A) and (B) and inserting “paragraph (7)”.

(ii)

Subsection (c) of section 305 of such Act (29 U.S.C. 1085), as added by subsection (a)(2), is amended by striking “(b)(4)” each place it appears in paragraphs (1)(A)(i), (1)(A)(ii), (1)(A)(iii), (2)(A), and (2)(B) and inserting “(b)(5)”.

(iii)

Section 305(b)(5) of such Act (29 U.S.C. 1085(b)(5)), as further redesignated by subparagraph (A) and as amended by section 321 and subsection (a), is further amended—

(I)

by striking “paragraph (5)” in subparagraph (B)(iv) thereof and inserting “paragraph (6)”,

(II)

by striking “paragraph (5)” each place it appears in subparagraphs (D)(i) and (D)(vi) thereof and inserting “paragraph (6)”, and

(III)

by striking “paragraph (6)” in subparagraph (D)(iv) thereof and inserting “paragraph (7)”.

(iv)

Section 305(b)(6) of such Act (29 U.S.C. 1085(b)(6)), as so further redesignated and amended, is further amended—

(I)

by striking “paragraph (4)(B)(iv)” and inserting “paragraph (5)(B)(iv)”,

(II)

by striking “paragraph (4)” in subparagraph (A) thereof and inserting “paragraph (5)”, and

(III)

by striking “paragraph (4)(A)” in subparagraph (A) thereof and inserting “paragraph (5)(A)”.

(v)

Section 305(b)(7)(A) of such Act (29 U.S.C. 1085(b)(7)(A)), as so further redesignated and amended, is further amended—

(I)

by striking “paragraph (4)(A)” and inserting “paragraph (5)(A)”, and

(II)

by striking “either paragraph (2)(A) or paragraph (2)(B)” and inserting “any subparagraph of paragraph (2)”.

(vi)

Section 305(b)(7)(B) of such Act (29 U.S.C. 1085(b)(7)(B)), as so further redesignated, is amended by striking “critical or endangered” and inserting “endangered, critical, or declining”.

(vii)

Paragraphs (1)(A), (4)(A)(ii), (4)(C)(i), (4)(C)(ii), (4)(D), and (8) of subsection (d), and subsections (f)(1)(A), (f)(4)(B)(i), (f)(4)(B)(ii)(I), (f)(5), and (g)(3) of section 305 of such Act (29 U.S.C. 1085), as redesignated and amended by subsection (a), are each further amended by striking “subsection (b)(4)(A)” and inserting “subsection (b)(5)(A)”.

(viii)

Section 305(d)(3)(A)(i)(I) of such Act (29 U.S.C. 1085(d)(3)(A)(i)(I)), as so redesignated and amended, is further amended by striking “subsection (b)(4)” and inserting “subsection (b)(5)”.

(ix)

Subsections (f)(8)(A)(ii) and (g)(2)(A) of section 305 of such Act (29 U.S.C. 1085), as so redesignated and amended, are each further amended by striking “subsection (b)(4)(D)” and inserting “subsection (b)(5)(D)”.

(x)

Section 305(f)(9)(J) of such Act (29 U.S.C. 1085(f)(9)(J)), as so redesignated and amended, is further amended by striking “subsection (b)(4)” and inserting “subsection (b)(5)”.

(xi)

Section 4231(e)(2)(A) of such Act (29 U.S.C. 1411(e)(2)(A)), as amended by this section, is further amended by striking “305(b)(7)” and inserting “305(b)(4)”.

(3)

Solvency plan—

(A)

In general— Paragraph (4) (as redesignated by subsection (a)(1) and amended by paragraph (1)) of section 305(a) of such Act (29 U.S.C. 1085(a)) is amended—

(i)

by redesignating subparagraph (B) as subparagraph (D), and

(ii)

by striking subparagraph (A) and inserting before subparagraph (D) (as so redesignated) the following new subparagraphs:

“(A) the plan sponsor shall adopt and implement a solvency plan in accordance with the requirements of subsection (h),

“(B) any rehabilitation plan in place as of the date the plan enters declining status shall continue to apply throughout the solvency plan adoption period,

“(C) the requirements of subsection (i) and paragraphs (6) and (7) of subsection (f) shall apply during the solvency plan adoption period and the solvency attainment period, and”

(B)

Adoption of plan— Section 305 of such Act (29 U.S.C. 1085), as amended by this section, is further amended—

(i)

(ii)

by inserting after subsection (g), as redesignated by subsection (a)(2), the following new subsections:

“(h) Solvency plan must be adopted for multiemployer plans in declining status

“(1) In general—In any case in which a multiemployer plan is in declining status for a plan year, the plan sponsor, in accordance with this subsection—

“(A) shall adopt a solvency plan not later than 240 days following the required date for the actuarial certification of declining status under subsection (b)(5)(A), and

“(i) one default proposal under which—

“(ii) any additional schedules which reduce or eliminate adjustable benefits under the plan which the plan sponsor deems appropriate to provide as an alternative to the default proposal.

“(4) Solvency attainment period—For purposes of this section—

“(A) In general—Except as provided in subparagraph (B), the solvency attainment period for any solvency plan adopted pursuant to this subsection is the period—

“(i) beginning on the first day of the first plan year of the multiemployer plan beginning after the earlier of—

“(I) the second anniversary of the date of the adoption of the solvency plan, or

“(ii) ending on the date the plan either emerges from declining status or becomes insolvent.

“(B) Coordination with changes in status

“(5) Updates to solvency plans and schedules

“(A) Solvency plan—The plan sponsor shall annually update the solvency plan and shall file the update with the plan’s annual report under section 104.

“(B) Schedules—The plan sponsor shall annually update any schedule of contribution rates provided under this subsection to reflect the experience of the plan.

“(6) Imposition of schedule where failure to adopt solvency plan

“(A) Initial contribution schedule—If—

“(i) a collective bargaining agreement providing for contributions under a multiemployer plan that was in effect at the time the plan entered declining status expires, and

“(B) Subsequent contribution schedule—If—

“(i) Rules for operation of plan during adoption and attainment periods

“(1) Compliance with solvency plan

“(A) In general—A plan may not be amended after the date of the adoption of a solvency plan under subsection (h) so as to be inconsistent with the solvency plan.

“(2) Restriction on lump sums and similar benefits

“(i) any payment, in excess of the monthly amount paid under a single life annuity (plus any social security supplements described in the last sentence of section 204(b)(1)(G)), to a participant or beneficiary whose annuity starting date (as defined in section 205(h)(2)) occurs after the date such notice is sent,

“(ii) any payment for the purchase of an irrevocable commitment from an insurer to pay benefits, or

“(iii) any other payment specified by the Secretary of the Treasury by regulations,

“(B) Exception—Subparagraph (A) shall not apply to a benefit which under section 203(e) may be immediately distributed without the consent of the participant or to any makeup payment in the case of a retroactive annuity starting date or any similar payment of benefits owed with respect to a prior period.

“(A) the plan sponsor may not accept a collective bargaining agreement or participation agreement with respect to the multiemployer plan that provides for—

“(i) a reduction in the level of contributions for any participants,

“(ii) a suspension of contributions with respect to any period of service, or

“(iii) any new direct or indirect exclusion of younger or newly hired employees from plan participation,

(C)

Suspension of benefits— Section 305 of such Act (29 U.S.C. 1085), as amended by this section, is further amended—

(i)

by redesignating paragraph (9) of subsection (f) (as redesignated by subsection (a)(2)) as paragraph (8) of subsection (h) (as added by subparagraph (B)), and

(ii)

by moving such paragraph to the position immediately after paragraph (7) of such subsection (h).

(4)

Conforming amendments—

(A)

Subsection (a)(4)(D) of section 305 of such Act (29 U.S.C. 1085), as redesignated and amended by the preceding provisions of this section, is further amended by striking “subsection (f)(9)” and inserting “subsection (h)(8)”.

(B)

Paragraph (5) of section 305(b) of such Act (29 U.S.C. 1085(b)), as so redesignated and as amended by section 321 and the preceding provisions of this section, is further amended—

(i)

by striking “critical” in subparagraph (A)(i)(I) and inserting “critical or declining”,

(ii)

by striking “funding improvement or rehabilitation period” in subparagraph (A)(i)(II) and inserting “funding improvement, rehabilitation, or solvency attainment period”,

(iii)

by striking “funding improvement or rehabilitation plan” in subparagraph (A)(i)(II) and inserting “funding improvement, rehabilitation, or solvency plan”,

(iv)

by striking “endangered or critical” in subparagraph (A)(i)(V)(bb) and inserting “endangered, critical, or declining”,

(v)

by striking “funding improvement plan or rehabilitation” in subparagraph (A)(iv) and inserting “funding improvement, rehabilitation, or solvency”,

(vi)

by striking “critical” each place it appears in subparagraph (A)(vi) and inserting “critical or declining”,

(vii)

by striking “rehabilitation period” in subparagraph (A)(vi) and inserting “rehabilitation or solvency attainment period”,

(viii)

by striking “as described in subsection (f)(9)” in subparagraph (B)(v),

(ix)

by inserting “if the plan is already in a rehabilitation period, and” before “if reasonable” in subparagraph (B)(v)(I),

(x)

by striking “subsection (f)(9)” in subparagraph (B)(v)(II) and inserting “subsection (h)(8)”,

(xi)

by striking “endangered or critical” both places it appears in subparagraph (D)(i) and inserting “endangered, critical, or declining”,

(xii)

by striking “endangered or critical” in the heading of subparagraph (D)(ii) and inserting “endangered, critical, or declining”,

(xiii)

by striking “endangered or critical” in subparagraph (D)(ii) and inserting “endangered, critical, or declining”,

(xiv)

(xv)

by adding at the end of subparagraph (D) the following new clause:

(C)

Subparagraph (J) of section 305(h)(8) of such Act (29 U.S.C. 1085(h)(8)), as so redesignated and amended, is further amended—

(i)

by striking “critical” in the heading and inserting “declining”, and

(ii)

by striking “shall not emerge from critical status under paragraph (4)(B),” and inserting “shall not emerge from declining status”.

(D)

Subsection (j) of section 305 of such Act (29 U.S.C. 1085), as so redesignated and amended, is further amended—

(i)

by striking “(f)(8) or (g)” in paragraph (1) and inserting “(f)(8), (g), or (i)”,

(ii)

by striking “subsection (f)(9)” in paragraph (1) and inserting “subsection (h)(8)”,

(iii)

by striking “funding improvement or rehabilitation plan” in the heading of paragraph (3) and inserting “funding improvement, rehabilitation, or solvency”,

(iv)

(v)

by striking “endangered or critical” in the heading of paragraph (4), as amended by subsection (a), and inserting “endangered, critical, or declining”,

(vi)

by striking “endangered or critical” each place it appears in paragraph (4), as so amended, and inserting “endangered, critical, or declining”, and

(vii)

by striking “critical or endangered” in paragraph (4) and inserting “endangered, critical, or declining”.

(E)

Subsection (k) of section 305 of such Act (29 U.S.C. 1085), as so redesignated and amended, is further amended—

(i)

by striking “or a rehabilitation plan under subsection (f)” and inserting “, a rehabilitation plan under subsection (f), or a solvency plan under subsection (h)”,

(ii)

by striking “endangered status or a plan in critical status” and inserting “endangered, critical, or declining status”,

(iii)

(iv)

by striking “adoption of a funding improvement plan or rehabilitation plan” and inserting “adoption of a funding improvement, rehabilitation, or solvency plan”.

(F)

Subsection (l) of section 305 of such Act (29 U.S.C. 1085), as so redesignated and amended, is further amended—

(i)

by striking “endangered status or in critical status” in paragraph (1) and inserting “endangered, critical, or declining status”,

(ii)

by striking “endangered or critical” in paragraph (1) and inserting “endangered, critical, or declining”, and

(iii)

by striking “(d) and (f)” in paragraph (2) and inserting “(d), (f), and (h)”.

(G)

Section 101(f)(2)(B) of such Act (29 U.S.C. 1021(f)(2)(B)), as amended by this section, is amended—

(i)

by striking “305(k)” in clause (i)(II) and inserting “305(m)”, and

(ii)

by striking “305(k)(8)” in clause (ii)(II) and inserting “305(m)(8)”.

(H)

Section 101(k)(1)(K) of such Act (29 U.S.C. 1021(k)(1)(K)) is amended—

(i)

by striking “critical or endangered” and inserting “endangered, critical, or declining”, and

(ii)

by striking “funding improvement or rehabilitation” both places it appears and inserting “funding improvement, rehabilitation, or solvency”.

(I)

Section 103(f)(1)(B)(ii) of such Act (29 U.S.C. 1023(f)(1)(B)(ii)), as amended by this section, is amended by striking “305(k)(2)” and inserting “305(m)(2)”.

(J)

Section 103(f)(2)(G) of such Act (29 U.S.C. 1023(f)(2)(G)) is amended—

(i)

by striking “critical or endangered” and inserting “endangered, critical, or declining”, and

(ii)

by striking “funding improvement or rehabilitation” and inserting “funding improvement, rehabilitation, or solvency”.

(K)

Section 104(d)(1)(E) of such Act (29 U.S.C. 1024(d)(1)(E)) is amended—

(i)

by striking “critical or endangered” and inserting “endangered, critical, or declining”, and

(ii)

by striking “funding improvement or rehabilitation” and inserting “funding improvement, rehabilitation, or solvency”.

(L)

Section 502(a)(10) of such Act (29 U.S.C. 1132(a)(10)) is amended—

(i)

by striking “endangered or critical” and inserting “endangered, critical, or declining”, and

(ii)

by striking “funding improvement or rehabilitation” each place it appears and inserting “funding improvement, rehabilitation, or solvency”.

(M)

Section 502(c)(8) of such Act (29 U.S.C. 1132(c)(8)) is amended—

(i)

by striking “funding improvement plan or rehabilitation” in subparagraph (A) and inserting “funding improvement, rehabilitation, or solvency”,

(ii)

by striking “endangered or critical” in subparagraph (A) and inserting “endangered, critical, or declining”,

(iii)

by striking “which is not in seriously endangered status” in subparagraph (B), and

(iv)

by striking “meet the applicable benchmarks” in subparagraph (B) and inserting “emerge from endangered status”.

(N)

Section 4233 of such Act (29 U.S.C. 1413), as amended by this section, is further amended—

(i)

by striking “305(f)(9)” each place it appears in subsections (b)(2) and (e)(1)(A) and inserting “305(h)(8)”, and

(ii)

by striking “305(f)(9)(E)(vi)” in subsection (e)(2) and inserting “305(h)(8)(E)(vi)”.

(O)

Section 4233(m)(1) of such Act, as added by this Act, is amended by striking “funding improvement or rehabilitation” and inserting “funding improvement, rehabilitation, or solvency”.

(P)

Section 4233A(h)(4)(C) of such Act, as added by this Act, is amended by striking “rehabilitation plan” and inserting “rehabilitation or solvency plan”.

(Q)

Section 4233A(m)(1) of such Act, as added by this Act, is amended by striking “funding improvement or rehabilitation” and inserting “funding improvement, rehabilitation, or solvency”.

(R)

Section 4233A(o)(1) of such Act, as added by this Act, is amended by striking “305(k)(2)” and inserting “305(m)(2)”.

(S)

Section 4233A(o)(12) of such Act, as added by this Act, is amended by striking “funding improvement plan or rehabilitation” and inserting “funding improvement, rehabilitation, or solvency”.

(T)

Section 4245 of such Act (29 U.S.C. 1426), as amended by section 112 and this section, is further amended—

(i)

by striking “305(b)(3)” each place it appears in subsections (c)(1), (c)(2), (d)(1), and (d)(2) and inserting “305(b)(3), or a plan in declining status, as described in section 305(b)(4)”, and

(ii)

by striking “305(f)(9)” in subsection (f) and inserting “305(h)(8)”.

(e)

Adjustment of benefits—

(1)

In general— Section 305 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085), as amended by this section, is further amended—

(A)

by further redesignating subsections (m) and (n), as redesignated by subsection (d), as subsections (n) and (o), respectively,

(B)

by redesignating paragraph (8) of subsection (f), as redesignated by subsection (a)(2), as subsection (m), and

(C)

by moving such subsection to the position immediately after subsection (l).

(2)

Clerical and conforming amendments—

(A)

The heading of subsection (m) of section 305 of such Act (29 U.S.C. 1085), as redesignated by paragraph (1), is amended to read as follows:

“(m) Adjustment of benefits”

(B)

The following provisions of such subsection (m) are amended as follows:

(i)

Subparagraphs (A), (B), and (C) are redesignated as paragraphs (1), (2), and (4), respectively, and moved 2 ems to the left.

(ii)

Clauses (i), (ii), (iii), and (iv) of paragraph (1) (as so redesignated) are redesignated as subparagraphs (A), (B), (C), and (D), respectively, and moved 2 ems to the left.

(iii)

Subclauses (I), (II), and (III) of paragraph (1)(D) (as so redesignated) are redesignated as clauses (i), (ii), and (iii), respectively, and moved 2 ems to the left.

(iv)

(v)

Subclauses (I), (II), and (III) of paragraph (4)(A) (as so redesignated) are redesignated as clauses (i), (ii), and (iii), respectively, and moved 2 ems to the left.

(vi)

Subclauses (I) and (II) of paragraph (4)(B) (as so redesignated) are redesignated as clauses (i) and (ii), respectively, and moved 2 ems to the left.

(vii)

Subclauses (I), (II), and (III) of paragraph (4)(C) (as so redesignated) are redesignated as clauses (i), (ii), and (iii), respectively, and moved 2 ems to the left.

(viii)

Paragraph (1)(A), as so redesignated, is amended by striking “subparagraph (C)” and inserting “paragraph (4)”.

(ix)

Paragraph (1)(B), as so redesignated, is amended by striking “clause (iv)(III)” and inserting “subparagraph (D)(iii)”.

(x)

Paragraph (1)(D), as so redesignated, is amended by striking “this paragraph” and inserting “this subsection”.

(xi)

Paragraph (2), as so redesignated, is amended—

(I)

by striking “subparagraph (A)(iv)(III)” and inserting “paragraph (1)(D)(iii)”, and

(II)

by striking “this paragraph” and inserting “this subsection”.

(xii)

Paragraph (4)(A), as so redesignated, is amended by striking “subparagraph (A)” and inserting “paragraph (1)”.

(xiii)

Paragraphs (4)(B) and (4)(C), as so redesignated, are each amended by striking “clause (i)” each place it appears and inserting “subparagraph (A)”.

(xiv)

The last sentence of paragraph (4)(C), as so redesignated, is amended—

(I)

by striking “subclause (I)” and inserting “clause (i)”, and

(II)

by striking “this subparagraph” and inserting “this paragraph”.

(3)

Application to all plans in endangered, critical, or declining status—

(A)

In general— Subparagraph (A) of section 305(m)(1) of such Act (29 U.S.C. 1085(m)(1)), as redesignated and amended by this section, is further amended—

(i)

by striking “the plan sponsor shall” and inserting “the plan sponsor of a multiemployer plan in endangered, critical, or declining status may”, and

(ii)

by striking “paragraph (1)(B)(i)” and inserting “subsection (d)(1)(B), (f)(1)(B), or (h)(1)(B), whichever is applicable”.

(B)

Conforming amendments— Subparagraph (B) of section 305(m)(1) of such Act (29 U.S.C. 1085(m)(1)), as redesignated and amended by this section, is further amended by striking “critical” both places it appears and inserting “endangered, critical, or declining”.

(4)

Additional adjustable benefits—

(A)

In general— Subparagraph (D) of section 305(m)(1) of such Act (29 U.S.C. 1085(m)(1)), as redesignated by this section, is amended—

(i)

by inserting “, including early reduction factors which are not provided on an actuarially equivalent basis,” after “(i))” in clause (ii), as so redesignated,

(ii)

by striking “and” at the end of clause (ii) (as so redesignated),

(iii)

(iv)

by adding at the end the following new clauses:

“(iv) any one-time bonus payment or “thirteenth check” provision, and

“(v) benefits granted for periods of service prior to participation in the plan.”

(B)

Conforming amendments—

(i)

Subparagraph (B) of section 305(m)(1) of such Act (29 U.S.C. 1085), as redesignated and amended by this section, is further amended by striking “subparagraph (D)(iii)” and inserting “clause (iii), (iv), or (v) of subparagraph (D)”.

(ii)

Paragraph (2) of section 305(m) of such Act (29 U.S.C. 1085), as amended by paragraph (2)(B), is further amended by striking “paragraph (1)(D)(iii)” and inserting “clause (iii), (iv), or (v) of paragraph (1)(D)”.

(iii)

Section 4233A(o)(1) of such Act, as added by this Act and as amended by this section, is further amended by striking “305(m)(2)” and inserting “305(n)(2)”.

(5)

Rules relating to suspension of benefits upon return to work— Subsection (m) of section 305 of such Act (29 U.S.C. 1085), as redesignated and amended by this section, is further amended by inserting after paragraph (2) the following new paragraph:

(6)

Additional conforming amendments—

(A)

Clause (iii) of section 305(b)(5)(D) of such Act (29 U.S.C. 1085(b)(5)(D)), as redesignated and amended by this section, is further amended—

(i)

by striking “critical” in the heading and inserting “endangered, critical, or declining”,

(ii)

by striking “critical status” both places it appears and inserting “endangered, critical, or declining status”, and

(iii)

by striking “subsection (f)(8)” in subclause (I) and inserting “subsection (m)(1)(D)”.

(B)

Subsection (j) of section 305 of such Act (29 U.S.C. 1085), as amended by subsection (d), is further amended by striking “(f)(8), (g), or (i)” and inserting “(e), (g), (i), or (m)”.

(C)

Section 101(f)(2)(B) of such Act (29 U.S.C. 1021(f)(2)(B)), as amended by this section, is amended—

(i)

by striking “305(m)” in clause (i)(II) and inserting “305(n)”, and

(ii)

by striking “305(m)(8)” in clause (ii)(II) and inserting “305(n)(8)”.

(D)

Section 103(f)(1)(B)(ii) of such Act (29 U.S.C. 1023(f)(1)(B)(ii)), as amended by this section, is amended by striking “305(m)(2)” and inserting “305(n)(2)”.

(f)

Elections To be in critical or endangered status—

(1)

In general— Paragraph (6) of section 305(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085(b)), as redesignated and amended by this section, is further amended—

(A)

by striking “is not in critical status” in subparagraph (A) and inserting “is not in critical or declining status”,

(B)

by striking “but that is projected” in subparagraph (A) and inserting “but—

“(i) that is projected”

(C)

by striking “5 plan years may, not later than” in subparagraph (A) and inserting “5 plan years, or

“(ii) that is in endangered status and is not reasonably projected to be able to emerge from endangered status within the funding improvement period under the funding improvement plan in effect,”

(D)

by striking “under paragraph (3)” in subparagraph (B) and inserting “under paragraph (3) or for endangered status under paragraph (2)”.

(2)

Election to be in endangered status— Subsection (b) of section 305 of such Act (29 U.S.C. 1085), as so redesignated and amended, is further amended by adding at the end the following new paragraph:

“(8) Election to be in endangered status—Notwithstanding paragraph (2)—

(g)

Amendments relating to funding improvement plan—

(1)

In general— Paragraph (1) of section 305(d) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085(d)), as redesignated and amended by this section, is further amended—

(A)

by striking the last sentence, and

(B)

“(i) one default proposal under which—

“(ii) any additional schedules which reduce or eliminate adjustable benefits under the plan which the plan sponsor deems appropriate to provide as an alternative to the default proposal.”

(2)

Funding improvement plan— Paragraph (3) of section 305(d) of such Act (29 U.S.C. 1085(d)), as so redesignated and amended, is further amended—

(A)

(B)

by striking “formulated to provide” and all that follows and inserting “formulated, based on reasonably anticipated experience and reasonable actuarial assumptions, to—

“(A) enable the plan to emerge from endangered status by the end of the funding improvement period, and

“(B) avoid any accumulated funding deficiencies during the funding improvement period (taking into account any extension of amortization periods under section 304(d)).”

(3)

Funding improvement period— Paragraph (4) of section 305(d) of such Act (29 U.S.C. 1085(d)(4)), as so redesignated and amended, is further amended by striking subparagraph (B) and inserting after subparagraph (A) the following new subparagraph:

“(B) New period based on adverse experience

(4)

Conforming amendments—

(A)

Subparagraph (C) of section 305(d)(4) of such Act (29 U.S.C. 1085(d)(4)), as so redesignated and amended, is further amended—

(i)

by striking “critical status” both places it appears in clauses (i) and (ii) and inserting “critical or declining status”,

(ii)

by striking “rehabilitation period” in clause (ii) and inserting “rehabilitation or solvency attainment period”, and

(iii)

by striking “critical status” in the heading of clause (ii) and inserting “critical or declining status”.

(B)

Subsection (d) of section 305 of such Act (29 U.S.C. 1085), as so redesignated and amended, is further amended by striking paragraph (5) and by redesignating paragraphs (6), (7), and (8) as paragraphs (5), (6), and (7), respectively.

(C)

Paragraph (6) of section 305(d) of such Act (29 U.S.C. 1085(d)), as so redesignated, is amended—

(i)

by striking “(1)(B)(i)(I)” in subparagraph (A) and inserting “(1)(B)(i)”, and

(ii)

by striking “paragraph (6)(B)” in subparagraph (B)(ii) and inserting “paragraph (5)(B)”.

(D)

Paragraph (2) of section 305(d) of such Act (29 U.S.C. 1085(d)), as so redesignated, is amended by inserting “, except that the next update of the funding improvement plan shall fulfill the requirement of paragraph (1)(B)(i)” after “for a preceding plan year”.

(h)

Amendments relating to rehabilitation plan—

(1)

In general— Paragraph (1) of section 305(f) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085(f)), as redesignated and amended by this section, is further amended—

(A)

by striking the last 2 sentences, and

(B)

“(i) one default proposal under which—

“(ii) any additional schedules which reduce or eliminate adjustable benefits under the plan which the plan sponsor deems appropriate to provide as an alternative to the default proposal.”

(2)

Rehabilitation plan—

(A)

In general— Subparagraph (A) of section 305(f)(3) of such Act (29 U.S.C. 1085(f)(3)), as so redesignated, is amended—

(i)

by striking “and may include” and all that follows through “such actions” in clause (i),

(ii)

by inserting “, while delaying insolvency for as long as possible and maximizing the income of the plan, including income after insolvency” before the period in clause (ii), and

(iii)

by striking “(1)(B)(i)” in the last sentence and inserting “(1)(B)”.

(B)

Conforming amendments— Clause (i) of section 305(f)(3)(C) of such Act (29 U.S.C. 1085(f)(3)(C)), as so redesignated, is amended—

(i)

by striking “(1)(B)(i)” in subclause (II) and inserting “(1)(B)”, and

(ii)

by striking “the last sentence of paragraph (1)” and inserting “paragraph (1)(B)(i)”.

(3)

Rehabilitation period—

(A)

In general— Subparagraph (A) of section 305(f)(4) of such Act (29 U.S.C. 1085(f)(4)), as so redesignated and amended, is further amended—

(i)

by striking “The rehabilitation period” and inserting “Except as otherwise provided in this subparagraph, the rehabilitation period”, and

(ii)

(B)

Emergence from critical status— Subparagraph (B) of section 305(f)(4) of such Act (29 U.S.C. 1085(f)(4)), as so redesignated and amended, is further amended—

(i)

by inserting “and is not in declining status,” after the comma in clause (i)(I),

(ii)

by striking subclause (III) of clause (i) and inserting the following:

“(III) the plan's projected funded percentage as of the first day of the 15th succeeding plan year is at least 100 percent and is projected to increase after such date.”

(iii)

(iv)

(4)

Rules relating to benefit increases during rehabilitation period— Subparagraph (B) of section 305(g)(1) of such Act (29 U.S.C. 1085(g)(1)), as so redesignated and amended, is further amended by striking “unless” and all that follows and inserting “unless 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, or the amendment provides for only a de minimis increase in the liabilities of the plan.”.

(5)

Conforming amendments—

(A)

Paragraph (6) of section 305(f) of such Act (29 U.S.C. 1085(f)), as so redesignated, is amended by striking “the last sentence of paragraph (1)” and inserting “paragraph (1)(B)(i)”.

(B)

Paragraph (2) of section 305(f) of such Act (29 U.S.C. 1085(f)), as so redesignated, is amended by inserting “, except that the next update of the rehabilitation plan shall fulfill the requirement of paragraph (1)(B)(i)” after “for a preceding plan year”.

(i)

Actuarial assumptions—

(1)

In general— Subsection (n) of section 305 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085), as redesignated by subsections (a), (d), and (e), is amended—

(A)

by striking “method” in the heading and inserting “method and assumptions”, and

(B)

by adding at the end the following new paragraph:

“(11) Actuarial assumptions

“(A) In general—The actuarial assumptions relied upon for purposes of this section by a plan actuary shall be individually reasonable and, in the aggregate, shall be reasonable and (with the exception of assumptions regarding future contributions) represent the actuary’s best estimate of future plan experience, within limitations prescribed by the Secretary of the Treasury. A plan actuary shall avoid conservatism or optimism in individual assumptions to the extent that they would result in a set of assumptions that is unreasonable in the aggregate.

“(C) Contributions

“(iii) Future contribution base units

“(iv) Future contribution rates

“(I) In general—Projections of contributions shall be based on the contribution rates consistent with the terms of collective bargaining and participation agreements currently in effect.

(2)

Additions to Form 5500 Schedule MB— Subparagraph (B) of section 305(b)(5) of such Act (29 U.S.C. 1085(b)(5)), as redesignated and amended by this section, is further amended by adding at the end the following new clause:

“(vi) Additional attachments—The plan actuary shall attach to the certification required under subparagraph (A)—

“(I) documentation supporting the certification of status under subparagraph (A)(i), including projections of the funding standard account, funded percentage, and solvency of the plan,

“(II) a clear description of the key assumptions used in performing the projections, including investment returns, contribution base units, and contribution rates,

“(IV) an alternate projection of the funding standard account, funded percentage, and solvency, based on the following assumptions:

“(aa) Annual future investment returns on plan assets equal the actuarial interest rate assumption minus 1 percent.

“(bb) Future contribution base units projected using a trend equal to the lesser of—

“(AA) the annualized trend of actual contribution base units over the 5 preceding plan years, and

“(BB) no change in future contribution base units.

“(cc) No increases in future contribution rates beyond those consistent with the collective bargaining agreements and participation agreements in effect for the plan year.

“(gg) Other assumptions consistent with the projection based on the actuary’s best estimate assumptions.”

(3)

Conforming amendments—

(A)

Section 305(b)(5)(B)(i) of such Act (29 U.S.C. 1085(b)(5)(B)(i)), as redesignated by this section, is amended by striking “assumptions” and inserting “assumptions meeting the requirements of subsection (n)(11)”.

(B)

Section 305(b)(5)(A)(vi) of such Act (29 U.S.C. 1085(b)(5)(A)(vi), as amended by this section and section 321, is further amended by striking “reasonable actuarial assumptions” and inserting “assumptions meeting the requirements of subsection (n)(11)”.

(C)

Paragraph (3) of section 305(d) of such Act (29 U.S.C. 1085(d)), as amended by subsection (g), is further amended by striking “reasonable actuarial assumptions” and inserting “assumptions meeting the requirements of subsection (n)(11)”.

(D)

Clause (i) of section 305(f)(3)(A) of such Act (29 U.S.C. 1085(f)(3)(A)), as amended by subsection (h), is further amended by striking “reasonable actuarial assumptions” and inserting “assumptions meeting the requirements of subsection (n)(11)”.

(E)

Section 305(h)(3) of such Act (29 U.S.C. 1085(h)(3)), as added by subsection (d), is amended by striking “reasonable actuarial assumptions” and inserting “assumptions meeting the requirements of subsection (n)(11)”.

(j)

Conforming amendments relating to premiums— Paragraph (10) of section 4006(a) of such Act (29 U.S.C. 1306(a)), as added by this Act, is amended—

(1)

by striking “305(b)(7)” in subparagraph (B)(iii) thereof and inserting “305(b)(4)”,

(2)

by striking “critical and declining” in subparagraph (B)(iii) thereof and inserting “declining”, and

(3)

by striking “305(f)(9)” in subparagraph (C) and inserting “305(h)(8)”.

(k)

Conforming amendments relating to composite and legacy plans—

(1)

Sections 203(a)(3)(E)(ii), 204(b)(1)(B)(i), 204(b)(1)(H)(v), and 204(g)(1) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1053(a)(3)(E)(ii), 1054(b)(1)(B)(i), 1054(b)(1)(H)(v), and 1054(g)(1)), as amended by title V, are each further amended by striking “305(f)” each place it appears and inserting “305(h)(8)”.

(2)

Sections 304(b)(10), 805(d)(2)(D), and 805(d)(4) of such Act, as added by title V, are each amended by striking “endangered or critical” and inserting “endangered, critical, or declining”.

(3)

Section 801(b)(1) of such Act, as so added, is amended by striking “endangered or critical” both places it appears and inserting “endangered, critical, or declining”.

(4)

Sections 801(b)(1), 801(b)(5)(B), 805(b)(1)(A), and 805(e)(3) of such Act, as so added, are each amended by striking “305(b)(4)” and inserting “305(b)(5)”.

(5)

Sections 801(b)(5)(B) and 805(b)(1)(A) of such Act, as so added, are each amended by striking “endangered or critical” and inserting “endangered, critical, or declining”.

(6)

Section 802(b)(1) of such Act, as so added, 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 adding at the end the following new subparagraph:

“(D) consistent with the principles of subparagraphs (B), (C), and (D) of section 305(n)(11).”

(7)

Sections 802(b)(5) and 805(d)(2)(A) of such Act, as so added, are each amended by striking “305(b)(4)(B)” and inserting “305(b)(5)(B)”.

(8)

Section 803(a)(2)(D) of such Act, as so added, is amended by striking “305(f)(9)(D)(vi)” and inserting “305(h)(8)(D)(vi)”.

(9)

Section 803(a)(3) of such Act, as so added, is amended by striking “305(f)(8)” and inserting “305(m)(1)(D)”.

(10)

Section 805(d)(2)(D) of such Act, as so added and amended, is further amended by striking “funding improvement or rehabilitation plan” and inserting “funding improvement, rehabilitation, or solvency plan”.

(l)

Additional conforming amendments—

(1)

Section 502(c) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1132(c)) is amended—

(A)

in paragraph (7)(B), as added by section 322, by striking “305(b)(4)(D)” and inserting “305(b)(5)(D)”, and

(B)

in paragraph (14), as so added and as redesignated by section 501—

(i)

by striking “305(b)(4)(D)” in subparagraph (A) and inserting “305(b)(5)(D)”, and

(ii)

by striking “305(b)(4)” in subparagraph (B) and inserting “305(b)(5)”.

(2)

Section 4003(g) of such Act (29 U.S.C. 1303(g)), as added by section 321, is amended by striking “section 305(b)(4)(A)” and inserting “section 305(b)(5)(A)”.

(3)

Section 4042(b)(2)(B)(i) of such Act (29 U.S.C. 1342(b)(2)(B)), as added by section 301, is amended—

(A)

by striking “critical and declining” and inserting “declining”, and

(B)

by striking “(7)” and inserting “(4)”.

(m)

Effective date— Except as otherwise provided in subsection (a)(7), the amendments made by this section shall apply to plan years beginning after December 31, 2020.

(n)

Sec. 213 Transition rules

(a)

Plans in endangered status—

(1)

In general— In the case of a multiemployer plan which is in endangered status as of the date of the enactment of this Act, and is on schedule as of such date to meet the applicable benchmarks in accordance with the plan's funding improvement plan—

(A)

Election to apply law before amendment— The plan sponsor may elect to remain in endangered status and to apply section 432 of the Internal Revenue Code of 1986 and section 305 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085) as in effect before January 1, 2021, to the plan, but only if the plan continues to meet such applicable benchmarks.

(B)

Transitional effective date— If the plan sponsor does not make the election under paragraph (1)—

(i)

section 432 of such Code and section 305 of such Act as in effect on January 1, 2021, shall apply to such plan as of the first day of the first plan year beginning after December 31, 2020, and

(ii)

section 432(d)(1)(B)(i)(II) of such Code and section 305(d)(1)(B)(i)(II) of such Act, as amended by sections 211(g) and 212(g), respectively, shall each apply to such plan by substituting “the date of the enactment of the Chris Allen Multiemployer Pension Recapitalization and Reform Act of 2020” for “the first day of the plan year in which the plan enters endangered status”.

(2)

Plans entering endangered status between enactment and January 1, 2021— In the case of a multiemployer plan which enters endangered status after the date of the enactment of this Act and before January 1, 2021—

(A)

section 432 of such Code and section 305 of such Act as in effect on January 1, 2021, shall apply to such plan as if already in effect, and

(i)

(b)

Plans in critical or critical and declining status—

(1)

In general— In the case of a qualified critical multiemployer plan—

(A)

Election to apply law before amendment— The plan sponsor may elect to remain in critical or critical and declining status and to apply section 432 of the Internal Revenue Code of 1986 and section 305 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085) as in effect before January 1, 2021, to the plan, but only if the plan continues to make scheduled progress under the plan's rehabilitation plan.

(B)

Transitional effective date— If the plan sponsor does not make the election under paragraph (1)—

(i)

section 432 of such Code and section 305 of such Act as in effect on January 1, 2021, shall apply to such plan as of the first day of the first plan year beginning after December 31, 2020,

(ii)

section 432(f)(1)(B)(i)(II) of such Code and section 305(f)(1)(B)(i)(II) of such Act, as amended by sections 211(h) and 212(h), respectively, shall each apply to such plan by substituting “the date of the enactment of the Chris Allen Multiemployer Pension Recapitalization and Reform Act of 2020” for “the first day of the plan year in which the plan enters critical status”, and

(iii)

section 432(h)(1)(B)(i)(II) of such Code and section 305(h)(1)(B)(i)(II) of such Act, as amended by sections 211(d)(3) and 212(d)(3), respectively, shall each apply to such plan by substituting “the date of the enactment of the Chris Allen Multiemployer Pension Recapitalization and Reform Act of 2020” for “the first day of the plan year in which the plan enters declining status”.

(C)

Application of premium amendments— A plan with respect to which the plan sponsor makes the election under subparagraph (A) shall be treated as described in clause (iii) of section 4006(a)(10)(B) of the Employee Retirement Income Security Act of 1974 until such time as the plan emerges from critical and declining status pursuant to section 432 of such Code and section 305 of such Act as in effect before January 1, 2021.

(2)

Plans entering critical or critical and declining status between enactment and January 1, 2021— In the case of a multiemployer plan which enters critical or critical and declining status after the date of the enactment of this Act and before January 1, 2021—

(A)

section 432 of such Code and section 305 of such Act as in effect on January 1, 2021, shall apply to such plan as if already in effect,

(B)

(C)

(3)

Qualified critical multiemployer plan— For purposes of this subsection, the term qualified critical multiemployer plan means a multiemployer plan which is in critical or critical and declining status as of the date of the enactment of this Act, and is making scheduled progress under the plan's rehabilitation plan, but only if the rehabilitation plan (as in effect without regard to the amendments made by this Act) targets emergence from critical status not later than 3 years after the end of the rehabilitation period as in effect with respect to such plan on the date of the enactment of this Act.

(c)

Election—

(1)

In general— An election under subsection (a)(1)(A) or (b)(1)(A) shall be made—

(A)

by notice to the Secretary of the Treasury and the Pension Benefit Guaranty Corporation, in such manner as the Secretary of the Treasury may prescribe, and

(B)

not later than the due date for the notice of endangered status or critical status for the first plan year beginning after December 31, 2020.

(2)

Periods after election— After making a timely election under paragraph (1)—

(A)

the plan sponsor shall annually review and update (if necessary) the plan's funding improvement plan or rehabilitation plan, and

(B)

the plan actuary shall certify annually whether the plan is making scheduled progress under the funding improvement plan or rehabilitation plan.

(d)

Definitions— Any term used in this section which is also used in section 432 of the Internal Revenue Code of 1986 or section 305 of the Employee Retirement Income Security Act of 1974 (before or after the amendments made by this Act) shall have the same meaning as when used in such sections.

II Provisions relating to plan mergers

Sec. 221 Provisions relating to plan mergers and consolidations

(a)

In general— Section 4231(c) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1411(c)) is amended—

(1)

by striking “section 406(a) or section 406(b)(2)” and inserting “section 404, 406(a), or 406(b)(2)”, and

(2)

by adding at the end the following: “The corporation shall prescribe safe harbor provisions whereby a merger of multiemployer plans or the transfer of assets or liabilities between multiemployer plans, where one of the plans is in critical and declining status pursuant to section 305 and one is in stable or unrestricted status pursuant to such section, shall be deemed to satisfy the requirements of this section. Notwithstanding the preceding sentences, the implementation of such merger or transfer shall be subject to the rules of section 404.”.

(b)

Calculation of withdrawal liability—

(1)

In general— Section 4231 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1411) is amended by adding at the end the following new subsection:

“(f) Calculation of withdrawal liability post-Merger—The corporation shall prescribe the methods and conditions under which employers contributing to plans which are in stable or unrestricted status under section 305 when such plan merges with a plan in declining status under such section will not be allocated the unfunded vested benefits of the plan in declining status (as determined immediately before the merger).”

(2)

Effective date— The amendment made by this section shall apply to plan mergers after December 31, 2020.

Sec. 222 Clarification of PBGC financial assistance for plan mergers and partitions

(a)

In general— Paragraph (2) of section 4231(e) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1411(e)) is amended—

(1)

by striking the semicolon in subparagraph (B)(ii) and inserting “, determined solely with respect to the liabilities and assets of the plan which was in critical and declining status prior to the merger; and”; and

(2)

by striking subparagraph (C) and redesignating subparagraph (D) as subparagraph (C).

(b)

Partitions— Section 4233(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1413(b)) is amended by striking paragraph (4), by adding “and” at the end of paragraph (3)(B), and by redesignating paragraph (5) as paragraph (4).

(c)

Conforming amendment relating to status changes— Section 4231(e)(2)(B)(ii) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1411(e)(2)(B)(ii)), as amended by subsection (a), is further amended by striking “critical and declining” and inserting “declining”.

(d)

Effective dates—

(1)

In general— The amendments made by subsections (a) and (b) shall apply to plan mergers and partitions taking effect after the date of the enactment of this Act.

(2)

Conforming amendment— The amendment made by subsection (c) shall apply to plan mergers taking effect in plan years beginning after December 31, 2020.

Sec. 223 Restoration not required for certain mergers

(a)

Amendment of Internal Revenue Code of 1986— Clause (ii) of section 432(f)(9)(C) of the Internal Revenue Code of 1986, as redesignated by section 211(a) and as in effect before the amendments made by section 211 other than subsection (a) thereof, is amended by adding at the end the following flush language:

(b)

Amendment of ERISA— Clause (ii) of section 305(f)(9)(C) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085(f)(9)(C)), as redesignated by section 212(a) and as in effect before the amendments made by section 212 other than subsection (a) thereof, is amended by adding at the end the following flush language:

(c)

Effective date— The amendments made by subsections (a) and (b) shall apply to plan mergers taking effect after the date of the enactment of this Act.

III Withdrawal liability reform

Sec. 231 Withdrawal liability reform

(a)

Withdrawal liability definition— Section 4201(b)(1) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1381(b)(1)) is amended to read as follows:

“(1) Determination of withdrawal liability

“(A) In general—The withdrawal liability of an employer to a plan is the applicable amount determined under subparagraph (B), adjusted—

“(i) first, in the case of a partial withdrawal, in accordance with section 4206;

“(ii) second, by any de minimis reduction applicable under section 4209; and

“(iii) third, in accordance with section 4225.

“(B) Applicable amount—The applicable amount determined under this subparagraph is the lesser of—

“(i) the amount determined under section 4211 to be the allocable amount of unfunded vested benefits; or

“(ii) the present value of a series of 20 equal annual payments in the amount determined with respect to the employer under section 4219(c)(1)(C).

“(C) Plans for which 25 payments required

“(i) In general—A multiemployer plan is described in this subparagraph if the plan—

“(I) is certified to be in declining status (or, for plan years prior to 2021, in critical or declining status) for the plan year in which the employer’s withdrawal occurs; or

“(II) terminates as described in section 4041A(a) or 4042.

“(ii) Special rule for terminations—Clause (i)(II) shall apply to each employer who withdraws from a plan during a period of 3 consecutive plan years that includes the withdrawal of every employer from the plan, or the cessation of the obligation of all employers to contribute under the plan, as described in section 4041A(a)(2). For purposes of this clause, withdrawal by an employer from a plan, during a period of 3 consecutive plan years within which substantially all the employers who have an obligation to contribute under the plan withdraw, shall be presumed to be a withdrawal pursuant to an agreement or arrangement, unless the employer proves otherwise by a preponderance of the evidence.

“(D) Present value—For purposes of subparagraph (B)(ii), the present value of the annual payments shall be determined based on the assumptions used for the most recent actuarial valuation for the plan used to determine unfunded past service liability for funding purposes.”

(b)

De minimis rule— Section 4209 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1389) is amended—

(1)

in subsection (a)—

(A)

in the matter preceding paragraph (1), by striking “unfunded vested benefits allocable under section 4211 to” and inserting “applicable amount determined under section 4201(b)(1)(B) with respect to”;

(B)

in paragraph (2), by striking “$50,000” and inserting “$100,000”; and

(C)

in the flush text following paragraph (2)—

(i)

by striking “the unfunded vested benefits” and inserting “such applicable amount”; and

(ii)

by striking “$100,000” and inserting “$200,000”;

(2)

in subsection (b)—

(A)

in the matter preceding paragraph (1), by striking “amount determined under section 4211” and inserting “applicable amount determined under section 4201(b)(1)(B) with respect to an employer”;

(B)

in paragraph (2)(B), by striking “$100,000” and inserting “$250,000”; and

(C)

in the flush text at the end—

(i)

by striking “the amount determined under section 4211 for” and inserting “such applicable amount with respect to”; and

(ii)

by striking “$150,000” and inserting “$500,000”.

(c)

Payment of withdrawal liability— Section 4219(c)(1) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1399(c)(1)) is amended—

(1)

by striking so much of paragraph (1) as precedes subparagraph (C) and inserting:

“(1)

“(A)

“(i) Subject to subparagraph (B), an employer shall pay its liability determined under section 4201(b)(1) in level annual payments determined under subparagraph (C) over the applicable period of years determined under clause (ii), calculated as if the first payment were made on the first day of the plan year following the plan year in which the withdrawal occurs and as if each subsequent payment were made on the first day of each subsequent plan year. Actual payment shall commence in accordance with paragraph (2).

“(ii) For purposes of clause (i), if the applicable amount used under section 4201(b)(1)(A) is the amount determined—

“(I) under section 4201(b)(1)(B)(i), the applicable period of years is the period of years necessary to amortize such amount in level annual payments determined under subparagraph (C), or

“(II) under section 4201(b)(1)(B)(ii), the applicable period of years is 20 years (25 years if the plan is described in section 4201(b)(1)(C)).

“(iii) For purposes of clause (ii)(I), the determination of the amortization period described in clause (i) shall be based on the assumptions used for the most recent actuarial valuation for the plan to determine unfunded past service liability for funding purposes.

“(B)

“(i) If any adjustment is required to the withdrawal liability amount by reason of clause (i), (ii), or (iii) of section 4210(b)(1)(A), modifications shall be made under subparagraph (A) to reflect such adjustments in accordance with this subparagraph and in such manner as the corporation shall provide.

“(ii) In the case of a partial withdrawal described in section 4205(a), the amount of each annual payment shall be the product of—

“(I) the amount determined under subparagraph (C) (determined without regard to this subparagraph), multiplied by

“(II) the fraction determined under section 4206(a)(2).

“(iii) In the case of a de minimis reduction under section 4209, the period of years described in subparagraph (A)(ii)(I) shall be adjusted so that the withdrawal liability amount, as reduced under such section, is amortized in level annual payments determined under subparagraph (C).”

(2)

in subparagraph (C)—

(A)

in clause (i)(I)—

(i)

by striking “3” and inserting “5”; and

(ii)

by striking “10” and inserting “20”; and

(B)

by striking clause (iii); and

(3)

by striking subparagraphs (D) and (E) and inserting the following:

“(D)

“(i) In the case of a subsequent partial withdrawal or a complete withdrawal that was preceded by one or more partial withdrawals, the amount of the annual payment with respect to the subsequent partial withdrawal or complete withdrawal shall be reduced by the amounts of the payments determined under subparagraph (B)(ii) with respect to each of the preceding partial withdrawals.

“(ii) The amount of any reductions described in clause (i) shall be phased out consistent with the method and period of time being used by the plan to allocate unfunded vested benefits under section 4211.

“(iii) The corporation may prescribe regulations as may be necessary to provide for proper adjustments in the reduction in the payment amount under clauses (i) and (ii).”

(d)

Amendment of plan— Section 4211(c)(1) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1391(c)(1)) is amended—

(1)

by inserting “(A)” after “(c)(1)”,

(2)

by striking “(b) or (d). A plan” and inserting “(b) or (d).

“(B) A multiemployer plan”

(3)

by striking “, to the extent provided” and all that follows and inserting “to provide—

“(i) that the amount of the unfunded vested benefits allocable to an employer that withdraws from the plan is an amount determined under paragraph (5) of this subsection, rather than under subsection (b), or

“(ii) to the extent provided in regulations prescribed by the corporation, that the amount of the unfunded vested benefits allocable to an employer not described in section 4203(b)(1)(A) shall be determined in a manner different from that provided in subsection (b).”

Title II — Funding rules, withdrawal liability, and other reforms

II Funding rules, withdrawal liability, and other reforms

A Minimum funding standard for multiemployer plans

Sec. 201 Valuation of plan liabilities

B Additional funding rules for multiemployer plans

I Plan status amendments

Sec. 211 Amendments to Internal Revenue Code of 1986

Sec. 212 Amendments to Employee Retirement Income Security Act of 1974

Sec. 213 Transition rules

II Provisions relating to plan mergers

Sec. 221 Provisions relating to plan mergers and consolidations

Sec. 222 Clarification of PBGC financial assistance for plan mergers and partitions

Sec. 223 Restoration not required for certain mergers

III Withdrawal liability reform

Sec. 231 Withdrawal liability reform

Cite this provision

Incoming references